Exhibit 4(h)4
RESTATEMENT AGREEMENT
DATED 17th November, 1997
relating to a BPS1,250,000,000
Credit Agreement dated 17th December, 1996
(as amended)
FOR
ENTERGY LONDON INVESTMENTS PLC
(formerly ENTERGY POWER UK PLC)
and
LONDON ELECTRICITY PLC
ARRANGED BY
ABN AMRO BANK N.V.
and
UNION BANK OF SWITZERLAND
Allen & Overy
London
INDEX
Clause Page
1. Interpretation 4
2. Amendments to and restatement of the Credit Agreement 4
3. Representations and warranties 5
4. Conditions precedent 5
5. Miscellaneous 5
6. Governing law 5
Schedules
1. BANKS 6
PART I - CONTINUING BANKS 6
PART II - NEW BANKS 6
PART III - RETIRING BANKS 7
2. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE 8
3. FORM OF RESTATED CREDIT AGREEMENT 10
SIGNATORIES 125
THIS RESTATEMENT AGREEMENT is dated 17th November, 1997 and
made between:-
(1) ENTERGY UK LIMITED (Registered No. 3386063) ("EUK");
(2) ENTERGY LONDON INVESTMENTS PLC (Registered No. 3261188)
(the "Company");
(3) LONDON ELECTRICITY plc (Registered No. 2366852) ("London
Electricity");
(4) ENTERGY UK FINANCE LIMITED (Registered No. 3385743),
ENTERGY LONDON HOLDINGS LIMITED (Registered No. 3385734),
ENTERGY LONDON LIMITED (Registered No. 3261305), ENTERGY
INTERNATIONAL INVESTMENTS NO. 1 LTD LLC and ENTERGY
INTERNATIONAL INVESTMENTS NO. 2 LTD LLC (the "Additional
Guarantors");
(5) ABN AMRO BANK N.V. and UNION BANK OF SWITZERLAND as
arrangers (in this capacity the "Arrangers");
(6) THE FINANCIAL INSTITUTIONS listed in Part I of Schedule 1
to this Restatement Agreement (the "Continuing Banks");
(7) THE FINANCIAL INSTITUTIONS listed in Part II of
Schedule 1 to this Restatement Agreement (the "New
Banks");
(8) THE FINANCIAL INSTITUTIONS listed in Part III of
Schedule 1 to this Restatement Agreement (the "Retiring
Banks"); and
(9) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
BACKGROUND:-
(A) By a credit agreement dated 17th December, 1996 (as
amended) (the "Credit Agreement"), the Continuing Banks
and the Retiring Banks agreed to make available to the
Company and London Electricity a BPS1,250,000,000
syndicated credit facility.
(B) The Company wishes to amend the Credit Agreement on the
terms below to reflect (inter alia) the change in the
corporate structure relating to its shareholding, the
refinancing of Facility B (as defined in the Credit
Agreement) and various other matters which have occurred
since the date of the Credit Agreement, and have
requested the other parties to the Credit Agreement to
amend it accordingly.
(C) The Retiring Banks have not agreed to the above request
of the Company and wish to withdraw from the Credit
Agreement.
(D) The Continuing Banks have agreed to the request and the
New Banks wish to join the Credit Agreement.
(E) The parties to this Restatement Agreement have agreed to
restate the Credit Agreement to reflect the above
arrangements.
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Terms defined
In this Restatement Agreement:-
(a) "Effective Date" means 21st November, 1997 or such
other date as the Agent (with the prior agreement of
the other Finance Parties) may agree;
(b) "EIL Facility Agreement" means the U.S.$120,000,000
Credit Agreement dated as of 17th November, 1997
between Entergy International Ltd LLC, the Banks (as
defined therein) and ABN AMRO Bank N.V. as
administrative agent;
(c) "Finance Parties" means the Arrangers, the
Continuing Banks, the Retiring Banks, the New Banks
and the Agent;
(d) "Obligors" means EUK, the Company, the Additional
Guarantors and London Electricity; and
(e) "Restated Credit Agreement" means the Credit
Agreement as restated and amended in the terms of
Schedule 3.
1.2 Interpretation
(a) Terms defined in the Credit Agreement shall, unless the
contrary intention appears or the context otherwise
requires, have the same meaning in this Restatement
Agreement.
(b) A reference to the "agreed form" is a reference to the
form of a document agreed by the Company and the Agent
prior to the date of this Agreement.
(c) Clauses 1.2 (Construction) of the Credit Agreement shall
apply to this Restatement Agreement, as though it were
set out in full in this Restatement Agreement, but as if
references in that clause to the Credit Agreement were
construed as references to this Restatement Agreement.
(d) This Restatement Agreement is a Finance Document.
2. AMENDMENTS TO AND RESTATEMENT OF THE CREDIT AGREEMENT
With effect on and from the Effective Date:-
(a) the Credit Agreement shall be amended and restated
in the form set out in Schedule 3 so that the rights
and obligations of the parties to this Restatement
Agreement (other than the Retiring Banks) shall be
governed by the terms of the Restated Credit
Agreement;
(b) each New Bank will become a Bank under the Restated
Credit Agreement with Commitments as set out
opposite its name in Part II of Schedule 1 to the
Restated Credit Agreement; and
(c) without prejudice to accrued rights and obligations,
the Retiring Banks shall cease to have any rights,
and be released from all obligations, under the
Credit Agreement.
Notwithstanding the current terms of the Credit
Agreement, accrued commitment fee under the Credit
Agreement will be payable on the Effective Date.
3. REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants to the Finance
Parties that the representations and warranties set out
in clause 16 (Representations and warranties) of the
Restated Credit Agreement are true and accurate in all
respects as at (unless expressly stated to be given at
the Effective Date) the date of this Restatement
Agreement and (in all cases) as at the Effective Date,
but as if references in the Restated Credit Agreement to
the Restated Credit Agreement were construed as
references to this Restatement Agreement.
4. CONDITIONS PRECEDENT
(a) Clause 2 above will only come into effect if the Agent
has received in form and substance satisfactory to the
Agent:
(i) all of the documents referred to in Part I of
Schedule 2; and
(ii) evidence that the conditions referred to in Part II
of Schedule 2 have been, or will on the Effective
Date be, satisfied.
The Agent shall promptly notify the other parties to this
Restatement Agreement of satisfaction of the above
conditions precedent.
(b) If the Effective Date shall not have occurred by the date
falling three months after the date of this Restatement
Agreement, this Restatement Agreement shall lapse and be
of no further effect.
5. MISCELLANEOUS
The provisions of Clauses 10 (Payments), 21 (Expenses),
22 (Stamp duties), 30 (Severability), 31 (Counterparts),
32 (Notices) and 33 (Jurisdiction) of the Restated Credit
Agreement shall apply to this Restatement Agreement as
though they were set out in full in this Restatement
Agreement, but as if references in those clauses to the
Restated Credit Agreement were construed as references to
this Restatement Agreement.
6. GOVERNING LAW
This Restatement Agreement is governed by English law.
This Restatement Agreement has been entered into on the date
stated at the beginning of this Restatement Agreement.
SCHEDULE 1
BANKS
PART I
CONTINUING BANKS
ABN AMRO Bank N.V.
Union Bank of Switzerland
Bayerische Landesbank Girozentrale London Branch
The Sanwa Bank, Limited
The Bank of Tokyo-Mitsubishi, Ltd
Barclays Bank PLC
CIBC Wood Gundy PLCplc
The Dai-Ichi Kangyo Bank, Limited
Den Danske Bank Aktieselskab
Deutsche Bank AG London
Dresdner Bank AG London Branch
Rabobank International, London Branch
(Cooperatieve Centrale Raiffeisen Boerenleenbank BA)
The Royal Bank of Scotland plc
Societe Generale
The Sumitomo Trust & Banking Co., Ltd
The Toronto-Dominion Bank
Westdeutsche Landesbank Girozentrale
Commonwealth Bank of Australia
Credit Lyonnais
The Fuji Bank, Limited
National Westminster Bank plc
The Sakura Bank, Limited
The Bank of New York
Midland Bank PLC
The Nikko Bank (UK) plc
The Sumitomo Bank, Limited
The Tokai Bank, Limited
The Toyo Trust and Banking Company, Limited
PART II
NEW BANKS
De Nationale Investeringsbank N.V., London Branch
ING Bank N.V., London Branch
Scotiabank Europe PLC
PART III
RETIRING BANKS
Bank of America National Trust and Savings Association
The Bank of Nova Scotia
Bayerische Hypotheken-und Wechsel-Bank AG
The Industrial Bank of Japan, Limited
Kredietbank N.V.
Union Bank of California, N.A.
SCHEDULE 2
CONDITIONS PRECEDENT TO THE EFFECTIVE DATE
PART I
1. A copy of the memorandum and articles of association,
certificate of incorporation and certificate of
incorporation on change of name (if any) of each Obligor
incorporated in England and the certificate of formation,
limited liability agreement and certificate of good
standing in respect of each Obligor formed under the laws
of the State of Delaware.
2. A copy of a resolution of the board of directors of each
Obligor incorporated in England, and a copy of a
resolution or consent of the member of each other
Obligor:-
(a) approving the terms of, and the transactions
contemplated by, and resolving that it execute this
Restatement Agreement;
(b) authorising a specified person or persons to
execute this Restatement Agreement on its behalf;
and
(c) authorising a specified person or persons, on
its behalf, to sign and/or despatch all documents
and notices to be signed and/or despatched by it
under or in connection with this Restatement
Agreement.
3. A copy of a resolution, passed by all the holders of the
issued or allotted shares in each Obligor incorporated in
England (other than London Electricity and EUK),
approving the terms of, and the transactions contemplated
by, the Restated Credit Agreement.
4. A certificate of an authorised signatory of each Obligor,
certifying the names and true signatures of the officers
or member of each Obligor authorised by the resolution or
consent referred to in paragraph 2 above.
5. Evidence (in the form of certificates from relevant
counsel or officers of the company concerned, supported
by, if applicable, entries on public record of that
company and payment instructions) that the corporate
structure contained in Schedule 7 to the Restatement
Agreement is correct, and that all the capital
arrangements referred to in that Schedule have been, or
will on the Effective Date be, fully implemented (whether
by way of share capital, capital contributions,
subordinated debt or otherwise).
6. Evidence that the conditions precedent to the initial
advance under the EIL Facility Agreement have been
satisfied or waived.
7. A copy of the BPS810,000,000 promissory note(s) from
Entergy London Holdings Limited to EUK and BPS810,000,000
plus the Sterling equivalent of at least U.S.$107,000,000
promissory note(s) from Entergy London Limited to Entergy
UK Finance Limited.
8. A Debenture executed by each Guarantor (other than the
Company).
9. A supplemental debenture executed by the Company,
amending and restating the Debenture dated 17th December,
1996, substantially in the agreed form.
10. Share certificates (and, if those share certificates are
not in the name of the Agent or its nominees, duly
executed stock transfer forms) for all the shares in
Entergy UK Limited, Entergy London Holdings Limited,
Entergy London Limited, Entergy UK Finance Limited and
the Company.
11. Completed form 395 in respect of each Debenture referred
to in paragraph 8 above.
12. The Intercreditor Agreement, duly executed by the
Obligors expressed to be party to it, substantially in
the agreed form.
13. A legal opinion of Richards, Layton & Finger, counsel of
the Obligors formed under the laws of the State of
Delaware, addressed to the Finance Parties, substantially
in the agreed form.
14. A legal opinion of Allen & Overy, English legal advisers
to the Arrangers, addressed to the Finance Parties,
substantially in the agreed form.
15. Novation agreements executed by the Company and,
respectively, ABN AMRO Bank N.V., Bank of America
National Trust and Savings Association and Union Bank of
Switzerland transferring the rights and obligations of
the Company under the existing Swap Documents with ABN
AMRO Bank N.V., Bank of America National Trust and
Savings Association and Union Bank of Switzerland to EUK,
substantially in the agreed form.
16. Evidence that CT Corporation has accepted its appointment
as process agent in New York for the purposes of
Clause 33 (Jurisdiction) of the Restated Credit
Agreement.
17. A copy of the indenture dated as of 1st November, 1997
between the Company and The Bank of New York, as trustee,
relating to the Subordinated Debentures and the
Subordinated Capital Security Guarantee.
18. A certificate of an authorised signatory of EUK
certifying that each copy document specified in this
Schedule 2 is correct, complete and in full force and
effect as at a date no earlier than the date of this
Restatement Agreement.
PART II
1. Payment of all amounts payable in respect of Facility B.
2. Payment of all amounts owing under the Finance Documents
to the Retiring Banks.
3. Payment of all accrued fees, costs and expenses of the
Agent (including reasonable legal fees and expenses of
the Agent) under this Restatement Agreement, to the
extent then due and payable.
SCHEDULE 3
FORM OF RESTATED CREDIT AGREEMENT
RESTATED CREDIT AGREEMENT
DATED 17th December, 1996
(as subsequently amended including by way of a Restatement
Agreement dated 17th November, 1997)
BPS1,010,000,000
CREDIT FACILITY
FOR
ENTERGY UK LIMITED
and
LONDON ELECTRICITY plc
GUARANTEED BY
ENTERGY LONDON INVESTMENTS PLC
ENTERGY UK FINANCE LIMITED
ENTERGY LONDON HOLDINGS LIMITED
ENTERGY LONDON LIMITED
ENTERGY INTERNATIONAL INVESTMENTS NO. 1 LTD LLC
ENTERGY INTERNATIONAL INVESTMENTS NO. 2 LTD LLC
ARRANGED BY
ABN AMRO BANK N.V.
and
UNION BANK OF SWITZERLAND
Allen & Overy
London
INDEX
Clause Page
1. INTERPRETATION 13
2. THE FACILITIES 31
3. PURPOSE AND AVAILABILITY 32
4. CONDITIONS PRECEDENT 32
5. UTILISATIONS 32
6. REPAYMENT 33
7. PREPAYMENT AND CANCELLATION 34
8. INTEREST PERIODS 35
9. INTEREST 36
10. PAYMENTS 38
11. TAXES 39
12. MARKET DISRUPTION 41
13. INCREASED COSTS 42
14. ILLEGALITY 43
15. GUARANTEE 44
16. REPRESENTATIONS AND WARRANTIES 46
17. UNDERTAKINGS 50
18. DEFAULT 66
19. THE AGENT AND THE ARRANGERS 72
20. FEES 76
21. EXPENSES 77
22. STAMP DUTIES 78
23. INDEMNITIES 78
24. EVIDENCE AND CALCULATIONS 79
25. AMENDMENTS AND WAIVERS 79
26. CHANGES TO THE PARTIES 80
27. DISCLOSURE OF INFORMATION 83
28. SET-OFF 83
29. PRO RATA SHARING 84
30. SEVERABILITY 85
31. COUNTERPARTS 85
32. NOTICES 85
33. JURISDICTION 86
34. GOVERNING LAW 87
SCHEDULES
1. PART I - ADDITIONAL GUARANTORS 88
PART II - BANKS AND COMMITMENTS 88
2. CALCULATION OF THE MLA COST 90
3. FORM OF REQUEST 92
4. FORM OF NOVATION CERTIFICATE 93
5. FORM OF DEBENTURE 94
6. FORM OF SUBORDINATION AGREEMENT 113
7. CORPORATE STRUCTURE 124
THIS AGREEMENT is dated 17th December, 1996 (as subsequently
amended, including by way of a Restatement Agreement dated
17th November, 1997) between:-
(1) ENTERGY UK LIMITED (Registered No. 3386063) ("EUK");
(2) ENTERGY LONDON INVESTMENTS PLC (Registered No. 3261188)
(the "Company");
(3) LONDON ELECTRICITY PLC (Registered No. 2366852) ("London
Electricity");
(4) THE COMPANIES listed in Part I of Schedule 1 as
additional guarantors (in this capacity the "Additional
Guarantors");
(5) ABN AMRO BANK N.V. and UNION BANK OF SWITZERLAND as
arrangers (in this capacity the "Arrangers");
(6) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule
1 as banks (the "Banks");
(7) BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION in
its capacity as party to a Swap Document ("B of A"); and
(8) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Definitions
In this Agreement:-
"Accounting Date"
means the last day of each financial quarter of the
Company.
"Accounting Period"
means any period of approximately three months or one
year ending on an Accounting Date for which accounts are
required to be prepared for the purposes of this
Agreement.
"Acquisition"
means the acquisition by the Company of the shares of
London Electricity.
"Act"
means the Electricity Act 1989 and, unless the context
otherwise requires, all subordinate legislation made
pursuant to it.
"Adjusted Capital and Reserves"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Affiliate"
means a Subsidiary or a Holding Company of a person and
any other Subsidiary of that Holding Company.
"Applicable Accounting Principles"
means:-
(a) in relation to accounts or financial statements or
Financial Indebtedness of London Electricity, UK
GAAP; and
(b) in relation to accounts or financial statements or
Financial Indebtedness of each other Obligor, US
GAAP.
"Auditors"
means Coopers & Lybrand or any other "Big Six" firm of
accountants or any other firm (approved by the Agent) of
independent public accountants of international standing
recognised and authorised by the Institute of Chartered
Accountants of England and Wales which is appointed by
the Company to audit the consolidated annual accounts of
the Company.
"Bonds"
means:
(a) the BPS100,000,000 8 per cent. bonds due 2003; and
(b) the BPS100,000,000 85/8 per cent. bonds due 2005,
issued by London Electricity.
"Borrower"
means, for Facility A, EUK or, for Facility C and subject
to Clause 2.4 (Release of London Electricity), London
Electricity.
"Borrowing"
means Financial Indebtedness (without double counting)
adjusted as follows:
(a) any interest, dividends, commission, fees or other
like financing charges, and any item falling within
paragraph (g) of the definition of Financial
Indebtedness, shall be excluded, save in each case
to the extent capitalised or more than 15 days
overdue for payment;
(b) in respect of any bonds, notes, debentures, loan
stocks and/or other debt securities issued at a
discount or redeemable at a premium and constituting
a Borrowing, the issue price thereof, together with
any applicable discount or premium recognised or
required by the Applicable Accounting Principles to
be recognised at the time of calculation (other than
amounts required by the Applicable Accounting
Principles to be accounted for as interest) in the
accounts of the relevant person (were any then to be
prepared), shall be included;
(c) in respect of paragraphs (d) and (e) of the
definition of Financial Indebtedness, only the
principal amount thereof as determined by the
Applicable Accounting Principles or (in the case of
paragraph (e)) the capitalised value (as so
determined) of any items falling thereunder shall be
included;
(d) any item falling within paragraph (f) of the
definition of Financial Indebtedness which is in
respect of any sum excluded by paragraph (a) or (c)
above shall be excluded; and
(e) any item falling within paragraph (f)(ii) of the
definition of Financial Indebtedness shall be
included only to the extent that the same has been
or (in accordance with the Applicable Accounting
Principles) ought to be given a value in the latest
or next Accounts, or in any notes to those Accounts.
"Business Day"
means a day (other than a Saturday or a Sunday) on which
banks are open for business in London.
"Capitalisation Ratio"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Commitment"
means, in respect of a Bank, its Facility A Commitment or
Facility C Commitment, as the case may be, and
"Commitments" means the aggregate of its Facility A
Commitment and Facility C Commitment.
"Consolidated EBITDA"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Consolidated Net Interest Payable"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Consolidated Net Total Borrowings"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Consolidated Total Interest Payable"
has the meaning given to it in Clause 17.26 (Financial
covenants).
"Dangerous Substance"
means any radioactive emissions, noise, any natural or
artificial substance (whether in the form of a solid,
liquid, gas or vapour) the generation, transportation,
storage, treatment, use or disposal of which (whether
alone or in combination with any other substance)
including (without limitation) any controlled, special,
hazardous, toxic, radioactive or dangerous substance or
waste, gives rise to a risk of causing harm to man or any
other living organism or damaging the Environment or
public health or welfare.
"Debenture"
means a debenture (as it may be amended) executed by a
Guarantor in favour of the Agent, substantially in the
form of Schedule 5.
"Default"
means an Event of Default or an event which, with the
giving of notice, expiry of any applicable grace period,
determination of materiality by the Majority Banks or
failure to create a first legal mortgage, in each case as
specified in Clause 18 (Default) (or any combination of
the foregoing), would constitute an Event of Default.
"Director General"
means the person appointed from time to time by the
Secretary of State to hold office as the Director General
of Electricity Supply for the purpose of the Act.
"Double Taxation Treaty"
means any convention between the government of the United
Kingdom and any other government for the avoidance of
double taxation and the prevention of fiscal evasion with
respect to taxes on income and capital gains.
"Drawdown Date"
means the date of the advance of a Loan.
"Effective Date"
has the meaning given to it in the Restatement Agreement.
"EIL Facility Agreement"
has the meaning given to it in the Restatement Agreement.
"ELC"
means Entergy London Capital L.P., a special purpose
Delaware limited partnership in which the Company is the
sole general partner.
"Environment"
means any of the following media, the air (including,
without limitation, the air within buildings and the air
within other natural or man-made structures above or
below ground), water (including, without limitation,
ground and surface water) and land (including, without
limitation, surface and sub-surface soil).
"Environmental Claim"
means any claim by any person:
(a) in respect of any loss or liability suffered or
incurred by that person as a result of or in
connection with any violation of Environmental Law;
or
(b) that arises as a result of or in connection with
Environmental Contamination and that could give rise
to any remedy or penalty (whether interim or final)
that may be enforced or assessed by private or
public legal action or administrative order or
proceedings, including, without limitation, any such
claim arising from injury to persons, property or
natural resources.
"Environmental Contamination"
means each of the following and their consequences:
(a) any release, emission, leakage or spillage of any
Dangerous Substance at or from any site owned,
occupied or used by any Obligor or any other member
of the Group into any part of the Environment; or
(b) any accident, fire, explosion or sudden event at any
site owned, occupied or used by any Obligor or any
other member of the Group which is directly or
indirectly caused by or attributable to any
Dangerous Substance; or
(c) any other pollution of the Environment.
"Environmental Law"
means all applicable laws (including, without limitation,
common law), regulations, directing codes of practice,
circulars, guidance notices and the like having legal
effect (whether in the United Kingdom or elsewhere)
concerning pollution or the protection of human health,
the Environment, the conditions of the work place or the
generation, transportation, storage, treatment or
disposal of Dangerous Substances.
"Environmental Licence"
means any authorisation required by any Environmental
Law.
"Event of Default"
means an event specified as such in Clause 18.1 (Events
of Default).
"Extraordinary Items"
has the meaning given to it in Clause 17.26 (Financial
Covenants).
"Facility"
means Facility A or Facility C.
"Facility A"
means the facility referred to as such in Clause 2.1(a)
(Facilities).
"Facility A Commitment"
means:
(a) in relation to a Bank which is a Bank on the
Effective Date, the amount in Sterling set opposite
its name in Part II of Schedule 1 under the heading
"Facility A Commitment"; and
(b) in relation to a Bank which becomes a Bank after the
Effective Date, the amount of a Facility A
Commitment acquired by it under Clause 26 (Changes
to the Parties),
to the extent not transferred, cancelled or reduced under
this Agreement.
"Facility A Final Repayment Date"
means 31st October, 2002.
"Facility A Loan"
means a loan made by the Banks under Facility A or the
principal amount outstanding of that loan.
"Facility C"
means the facility referred to as such in Clause 2.1(b)
(Facilities).
"Facility C Commitment"
means:
(a) in relation to a Bank which is a Bank on the
Effective Date, the amount in Sterling set out
opposite its name in Part II of Schedule 1 under the
heading "Facility C Commitment"; and
(b) in relation to a Bank which becomes a Bank after the
Effective Date, the amount of a Facility C
Commitment acquired by it under Clause 26 (Changes
to the Parties),
to the extent not transferred, cancelled or reduced under
this Agreement.
"Facility C Final Repayment Date"
means 17th December, 2001.
"Facility C Loan"
means a loan made by the Banks under Facility C or the
principal amount outstanding of that loan.
"Facility Office"
means the office notified by a Bank to the Agent:-
(a) on or before the date it becomes a Bank; or
(b) by not less than 5 Business Days' notice,
as the office through which it will perform all or any of
its obligations under this Agreement.
"Fee Letter"
means the letter dated the date of the Restatement
Agreement between the Arrangers and the Company, or the
letter dated the date of the Restatement Agreement
between the Company and the Agent, setting out the amount
of various fees referred to in Clause 20 (Fees).
"Final Repayment Date"
means the Facility A Final Repayment Date or the
Facility C Final Repayment Date.
"Finance Document"
means:-
(a) this Agreement;
(b) a Fee Letter;
(c) a Debenture;
(d) a Novation Certificate;
(e) a Subordination Agreement;
(f) a Swap Document;
(g) the Intercreditor Agreement; or
(h) any other document designated as such by the Agent
and an Obligor.
"Finance Party"
means an Arranger, a Bank, B of A or the Agent.
"Financial Indebtedness"
means any indebtedness for, or for interest or other
charges relating to, or otherwise in respect of or
pursuant to:-
(a) moneys borrowed or raised, including, without
limitation:
(i) monies raised by the sale of receivables or
other financial assets on terms (and to the
extent) that recourse may be had to the vendor
in the event of non-payment of those
receivables or financial assets when due;
(ii) monies raised under acceptance credit
facilities; and
(iii) monies raised through the issue of bonds,
notes, debentures, bills, loan stocks and other
debt securities (including any debt security
convertible, but not at the relevant time
converted, into share capital);
(b) the acquisition cost of assets or services to the
extent payable on deferred payment terms after the
time of acquisition or possession by the party
liable (whether or not evidenced by any bond, note,
debenture, bill, loan stock or other debt security),
excluding:
(i) retentions which are normal in the trade
concerned and not entered into primarily as a
means of raising finance;
(ii) any payment relating to construction works or
the acquisition of fixed assets which will
become payable only upon fulfilment of
conditions relating to or comprising completion
or commissioning of certain stages in such
works or in the supply programme or the
granting of any planning permission for such
works or fixed assets and which has not yet
become payable by reason of the non-fulfilment
of any such condition; and
(iii) any such cost payable on deferred payment
terms which are normal in the business
concerned and not entered into primarily as a
means of raising finance, and which do not
involve any deferral of payment of any sum for
more than six months;
(c) moneys received in consideration for the supply of
goods and/or services to the extent received more
than six months before the due date for their supply
(but excluding any liability in respect of bona fide
advance payments and deposits received from
customers in the ordinary course of trade);
(d) instalments under conditional sale agreements
entered into primarily as a method of raising
finance;
(e) payments under leases (whether in respect of land,
machinery, equipment or otherwise) and payments
under hire purchase agreements and similar
agreements and instruments, in each case where those
leases, agreements or instruments are treated as
finance leases in accordance with the Applicable
Accounting Principles;
(f) (i) any guarantee, indemnity, letter of credit or
other legally binding instrument to
assure payment of, or against loss in respect
of non-payment of, any of the indebtedness
specified in this definition and any counter-
indemnity in respect of any thereof; and/or
(ii) any legally binding agreement or other
instrument entered into in connection with any
of the indebtedness specified in this
definition requiring, or giving any person the
right (contingently or otherwise) to require,
that any other person invest in, make advances
to, purchase assets of or maintain the solvency
or financial condition of any other person;
and/or
(iii) any recourse under any form of assurance,
undertaking or support of a type referred to in
paragraph (b)(iii) of the definition of
"Project Finance Indebtedness";
(g) any interest rate and/or currency swap, and any
other interest or currency protection, hedging or
financial futures transaction or arrangement; or
(h) transactions which involve or have the commercial
effect of the borrowing of commodities as part of
an arrangement for or in substitution for the
raising of finance, the value of indebtedness
concerned for this purpose being the sum which must
be paid and/or the value in money terms of the
commodities which must be delivered by the
"borrower" to, or to the order of, the "lender",
but any Subordinated Debt, Project Finance Indebtedness
(other than indebtedness referred to in paragraph
(f)(iii) above) or indebtedness under any indemnity in
respect of any letter of credit issued in connection with
the Pooling and Settlement Agreement shall not constitute
Financial Indebtedness.
"Group"
means at any time the Company and its Subsidiaries at
that time.
"Guarantor"
means the Company or an Additional Guarantor.
"Holding Company"
has the meaning given to it in Section 736 of the
Companies Act 1985.
"Information Memorandum"
means the Information Memorandum dated October, 1997
prepared by the Borrowers in connection with the
Restatement Agreement.
"Intercompany Notes"
means the notes referred to in paragraph 7 of Part 1 of
Schedule 2 of the Restatement Agreement.
"Intercreditor Agreement"
means the agreement dated 17th November, 1997 between
EUK, the Guarantors and the Agent (in its capacity as
Agent under this Agreement and security trustee under the
Debentures) and ABN AMRO Bank N.V. (in its capacity as
administrative agent under the EIL Facility Agreement)
regulating enforcement of the Debentures and other
related matters.
"Interest Period"
means each period selected in accordance with Clause 8
(Interest Periods).
"LIBOR"
means the arithmetic mean (rounded upward to the nearest
four decimal places) of the rates, as supplied to the
Agent at its request, quoted by the Reference Banks to
leading banks in the London interbank market at or about
11.00 a.m. on the first day of an Interest Period for the
offering of deposits in Sterling for a period comparable
to the Interest Period.
"Licence"
means a public electricity supply licence held by a
member of the Group and issued pursuant to Section 6(1)
of the Act, as modified or supplemented from time to
time.
"Licenceholder"
means at any time the member of the Group which then
holds a Licence.
"Licence Undertaking"
means any undertaking or assurance given in connection
with the Acquisition by any one or more of the Company,
London Electricity or any Affiliate of any of them to the
Director General or the Secretary of State concerning the
management and/or ownership of and/or other matters
concerning London Electricity.
"Loan"
means a Facility A Loan or a Facility C Loan.
"London Electricity Group"
means at any time London Electricity and its Subsidiaries
at that time.
"Majority Banks"
means, at any time, Banks:-
(a) whose participations in all Loans then outstanding
aggregate more than 662/3 per cent. of all Loans
then outstanding; or
(b) if there are no Loans then outstanding, whose
Commitments then aggregate more than 662/3 per cent.
of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced to zero, whose
Commitments aggregated more than 662/3 per cent. of
the Total Commitments immediately before the
reduction.
"Margin"
means:
(a) in respect of a Facility A Loan, 1.00 per cent per
annum or, as the case may be, subject to
Clause 9.1(b) (Interest rate) and with effect from
each applicable Margin Adjustment Date, at any time
when the Capitalisation Ratio is:
(i) greater than 70 per cent., 1.00 per cent. per
annum;
(ii) equal to or less than 70 per cent., but greater
than 65 per cent., 0.75 per cent. per annum;
(iii) equal to or less than 65 per cent., but
greater than 60 per cent., 0.60 per cent. per
annum;
(iv) equal to or less than 60 per cent., but greater
than 55 per cent., 0.45 per cent. per annum;
and
(v) equal to or less than 55 per cent., 0.30 per
cent. per annum;
or
(b) in respect of a Facility C Loan, 0.25 per cent. per
annum.
"Margin Adjustment Date"
means, in respect of a Facility A Loan, the first day of
the first Interest Period for that Facility A Loan
commencing after each determination of the Capitalisation
Ratio following delivery by the Company of a certificate
under Clause 17.2(b)(i) or (ii) (Financial information).
"Material Subsidiary"
means:
(a) London Electricity;
(b) any member of the Group (other than the Company and
any Project Finance Subsidiary):
(i) which is the Licenceholder; or
(ii) whose pre-tax operating profits represent at
least ten per cent. of the consolidated pre-tax
operating profits of the Group; or
(iii) the book value of whose gross assets
represents at least ten per cent. of the
consolidated gross assets of the Group,
and for this purpose:
(A) in the case of a company which itself has
Subsidiaries, the calculation shall be made by
using the consolidated pre-tax operating
profits or gross assets, as the case may be, of
it and its Subsidiaries;
(B) all calculations of consolidated pre-tax
operating profits or gross assets shall be made
by reference to:
(1) the latest accounts of the relevant
company (or, as the case may be, a
consolidation of the accounts of it and
its Subsidiaries) used for the purpose of
the then latest unaudited quarterly or
audited annual consolidated accounts of
the Group delivered to the Agent under
Clause 17.2 (Financial information); and
(2) those unaudited quarterly or, as the case
may be, audited annual consolidated
accounts of the Group;
and shall be made in accordance with the
Applicable Accounting Principles; or
(c) any member of the Group (other than the Company and
any Project Finance Subsidiary) which is not
otherwise a Material Subsidiary under this
definition but to which any Material Subsidiary
transfers in any annual Accounting Period all or
substantially all of its assets; the Material
Subsidiary from which the assets were transferred
shall cease to be a Material Subsidiary unless and
until it is shown to be a Material Subsidiary under
any other paragraph of this definition.
In the event of any dispute as to whether a Subsidiary is
or is not at any time a Material Subsidiary the question
shall be referred to the Auditors for determination
according to the provisions of this definition (acting as
experts at the cost of the Company) and their decision
shall be conclusive and binding on the Parties in the
absence of manifest error.
"MLA Cost"
means the cost imputed to the Banks of compliance with
the Mandatory Liquid Assets requirements of the Bank of
England during each Interest Period, determined in
accordance with Schedule 2.
"Novation Certificate"
has the meaning given to it in Clause 26.3 (Procedure for
novations).
"Obligor"
means a Borrower or a Guarantor.
"Party"
means a party to this Agreement.
"Permitted Transaction"
means:
(a) a reconstruction, amalgamation, reorganisation,
merger or consolidation of an Obligor or a Material
Subsidiary on terms approved by the Majority Banks;
(b) a disposal of assets permitted by the terms of this
Agreement; or
(c) a solvent liquidation, dissolution or winding-up of
a Material Subsidiary (other than London Electricity
or the Licenceholder) which does not have a Material
Adverse Effect.
"Pooling and Settlement Agreement"
means the agreement dated 30th March, 1990 made by London
Electricity (or any other Licenceholders) with the
National Grid Company plc and others setting out the
rules and procedures for the operation of an electricity
trading pool and of a settlement system.
"Project Finance Indebtedness"
means any Borrowing which finances the acquisition,
development, ownership and/or operation of an asset:
(a) which is incurred by a Project Finance Subsidiary;
or
(b) in respect of which the person or persons to whom
the Borrowing is or may be owed by the relevant
debtor (whether or not a member of the Group) has or
have no recourse whatsoever to any member of the
Group (other than to a Project Finance Subsidiary)
for its repayment other than:
(i) recourse to the debtor for amounts limited to
the cash flow or net cash flow (other than
historic cash flow or historic net cash flow)
from the asset; and/or
(ii) recourse to the debtor for the purpose only of
enabling amounts to be claimed in respect of
that Borrowing in an enforcement of any
Security Interest given by the debtor over the
asset or the income, cash flow or other
proceeds deriving from the asset (or given by
any shareholder or the like in the debtor over
its shares or like interest in the capital of
the debtor) to secure the Borrowing but only
if:
(A) the extent of the recourse to the
debtor is limited solely to the amount of
any recoveries made on any such
enforcement; and
(B) that person or persons are not
entitled, by virtue of any right or claim
arising out of or in connection with that
Borrowing, to commence proceedings for the
winding up or dissolution of the debtor or
to appoint or procure the appointment of
any receiver, trustee or similar person or
officer in respect of the debtor or any of
its assets (other than the assets the
subject of that Security Interest); and/or
(iii) recourse to the debtor generally, or
directly or indirectly to a member of the
Group, under any form of assurance, undertaking
or support, which recourse is limited to a
claim for damages (other than liquidated
damages and damages required to be calculated
in a specified way) for breach of an obligation
(other than a payment obligation or an
obligation to procure payment by another or an
indemnity in respect thereof or any obligation
to comply or to procure compliance by another
with any financial ratios or other tests of
financial condition) by the person against whom
such recourse is available.
"Project Finance Subsidiary"
means any Subsidiary of the Company (other than the
Licenceholder):
(a) which is a company whose principal assets and
business are constituted by the ownership,
acquisition, development and/or operation of an
asset whether directly or indirectly;
(b) none of whose Borrowings in respect of the financing
of the ownership, acquisition, development and/or
operation of an asset benefits from any recourse
whatsoever to any member of the Group (other than
the Subsidiary itself or another Project Finance
Subsidiary) in respect of its repayment, except as
expressly referred to in paragraph (b)(iii) of the
definition of Project Finance Indebtedness in this
Clause 1.1 (Definitions); and
(c) which has been designated as such by the Company by
notice to the Agent. However, the Company may give
notice to the Agent at any time that any Project
Finance Subsidiary is no longer a Project Finance
Subsidiary, whereupon it shall cease to be a Project
Finance Subsidiary.
"Qualifying Bank"
means:-
(a) a bank as defined in Section 840A of the Income and
Corporation Taxes Act 1988 which, for the purposes
of Section 349 of the Income and Corporation Taxes
Act 1988, is beneficially entitled to, and within
the charge to United Kingdom corporation tax as
regards, any interest received by it under this
Agreement, except that, if that Section is repealed,
modified, extended or re-enacted, the Agent may at
any time and from time to time (acting reasonably)
amend this definition to reflect such repeal,
modification, extension or enactment by giving
notice of the amended definition to the Company; or
(b) a person carrying on a bona fide banking business
who is resident (as such term is defined in the
appropriate Double Taxation Treaty) in a country
with which the United Kingdom has an appropriate
Double Taxation Treaty giving that person and other
residents of that country full exemption from United
Kingdom taxation on interest and does not carry on
business in the United Kingdom through a permanent
establishment with which the indebtedness under this
Agreement in respect of which the interest is paid
is effectively connected.
"Reference Banks"
means, subject to Clause 26.4 (Reference Banks), the
principal London offices of ABN AMRO Bank N.V., Barclays
Bank PLC and Union Bank of Switzerland.
"Repayment Date"
means the Facility A Final Repayment Date or the last day
of the Interest Period of a Facility C Loan.
"Request"
means a request made by a Borrower for a Loan,
substantially in the form of Schedule 3.
"Restatement Agreement"
means the agreement dated 17th November, 1997 between the
parties to this Agreement on the Effective Date and
several other banks which were party to this Agreement
immediately before the Effective Date pursuant to which
this Agreement has been restated and amended.
"Rollover Loan(s)"
means one or more Facility C Loan(s), the aggregate
principal amount of which is less than or equal to one or
more outstanding Facility C Loan(s), and whose Drawdown
Date coincides with the Repayment Date(s) of those
outstanding Facility C Loan(s).
"Secretary of State"
means the Secretary of State as referred to in the Act.
"Security Account"
has the meaning given to it in each Debenture.
"Security Interest"
means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security.
"Sterling"
means the lawful currency for the time being of the
United Kingdom.
"Subordinated Capital Securities"
means the limited partnership interests of ELC designated
as "85/8% Cumulative Quarterly Income Preferred
Securities, Series A", issued concurrently with the
issuance of the Subordinated Debentures and not exceeding
U.S.$300,000,000 in aggregate liquidation preference
where:
(a) the proceeds of the issuance of the Subordinated
Capital Securities and the Company's capital
contributions to ELC are utilised by ELC to purchase
Subordinated Debentures; and
(b) the payments from time to time of interest on the
Subordinated Debentures are to be utilised by ELC to
make distributions to the holders of the
Subordinated Capital Securities.
"Subordinated Capital Security Guarantee"
means the guarantee of the Company to be executed and
delivered to the trustee with respect to the Subordinated
Capital Securities concurrently with the issuance
thereof, providing for a guarantee by the Company, on a
subordinated basis, of ELC's obligations under the
Subordinated Capital Securities, but only to the extent
that ELC has funds sufficient to make such payments.
"Subordinated Debentures"
means the 85/8% Junior Subordinated Deferrable Interest
Debentures, Series A to be issued to ELC and created
pursuant to an Indenture, dated as of 1st November, 1997,
between the Company and The Bank of New York, as Trustee,
and an "Officer's Certificate" as provided therein:
(a) providing for the issuance of Subordinated
Debentures in an aggregate principal amount equal to
the sum of the Company's capital contribution, as
general partner to ELC, plus the aggregate stated
liquidation preference of the Subordinated Capital
Securities to be issued concurrently with the
issuance of the Subordinated Debentures;
(b) providing that the Company shall have the right to
defer the payment of interest on the Subordinated
Debentures at any time or from time to time so long
as no Event of Default (as defined therein) shall
have occurred and be continuing; and
(c) providing that the payment of principal, premium, if
any, and interest on the Subordinated Debentures
shall be subordinate in right of payment and
enforcement to the prior payment of certain senior
indebtedness of the Company, to the extent provided
in such Indenture, provided that such senior
indebtedness shall include, without limitation, all
amounts outstanding under this Agreement, and
provided further, that such Indenture shall provide
that no payments on account of principal, premium,
if any, or interest on the Subordinated Debentures
may be made if there shall have occurred and be
continuing either a default in any payment with
respect to such senior indebtedness, or an event of
default with respect to such senior indebtedness
resulting in the acceleration of the maturity
thereof remaining uncured.
"Subordinated Debt"
means a separate unsecured loan to the Company from a
shareholder, or an Affiliate of a shareholder, of the
Company and/or any other person which:
(a) has a maturity date falling after the Facility A
Final Repayment Date;
(b) is not capable of acceleration (other than in the
event of insolvency or an insolvency proceeding)
whilst any amount may be or become payable by any
Obligor under the Finance Documents or any of the
Commitments remain in effect; and
(c) is subordinated (as regards priority of payment,
ranking, rights of enforcement and all other rights)
as to principal, interest and all other amounts
payable on or in respect thereof and any and all
claims (including for damages) related thereto to
all amounts which may be or become payable by the
Obligors under the Finance Documents,
all in accordance with a Subordination Agreement.
"Subordination Agreement"
means a subordination agreement entered, or to be
entered, into by the Agent, the Company and any other
person in respect of Subordinated Debt, substantially in
the form of Schedule 6.
"Subsidiary"
means:-
(a) a subsidiary within the meaning of Section 736 of
the Companies Act 1985, as amended by Section 144 of
the Companies Act 1989; and
(b) for the purposes of Clauses 17.26 (Financial
covenants) and any financial information relating to
the Group, a subsidiary undertaking within the
meaning of Section 21 of the Companies Act 1989.
"Swap Document"
means an interest rate hedging agreement (substantially
in the form agreed by the Company and the Agent prior to
the date of this Agreement) entered into by the Company
with certain Banks party to this Agreement as at the date
of this Agreement and any confirmation entered into
pursuant to any such agreement.
"Total Commitments"
means the aggregate of the Total Facility A Commitments
and the Total Facility C Commitments, being
BPS1,010,000,000 at the Effective Date.
"Total Facility A Commitments"
means the aggregate for the time being of the Facility A
Commitments, being BPS810,000,000 at the Effective Date.
"Total Facility C Commitments"
means the aggregate for the time being of the Facility C
Commitments, being BPS200,000,000 at the Effective Date.
"UK GAAP"
means generally accepted accounting principles in the
United Kingdom as at the date of this Agreement,
consistently applied.
"US GAAP"
means generally accepted accounting principles in the
United States as at the date of this Agreement,
consistently applied.
1.2 Construction
(a) In this Agreement, unless the contrary intention appears,
a reference to:
(i) "assets" includes properties, revenues and rights of
every description;
an "authorisation" includes an authorisation,
consent, approval, resolution, licence, exemption,
filing, registration and notarisation;
something having a "Material Adverse Effect" is to
its having, or being reasonably likely to have, a
material adverse effect on the ability of an Obligor
to perform and comply with:
(A) its payment obligations under any Finance
Document;
(B) its obligations under Clause 17.26 (Financial
covenants); or
(C) any other of its material obligations under the
Finance Documents;
a "month" is a reference to a period starting on one
day in a calendar month and ending on the
numerically corresponding day in the next calendar
month, except that:
(1) if there is no numerically corresponding day in
the month in which that period ends, that
period shall end on the last Business Day in
that calendar month; or
(2) if an Interest Period commences on the last
Business Day of a calendar month, that Interest
Period shall end on the last Business Day in
the calendar month in which it is to end; and
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 the person
concerned is accustomed to comply) of any
governmental body, agency, department or regulatory,
self-regulatory or other authority or organisation;
(ii) a provision of a law is a reference to that
provision as amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a
clause of or a schedule to this Agreement;
(iv) a person includes its successors and permitted
assigns;
(v) a Finance Document or another document is a
reference to that Finance Document or that other
document as amended, novated, supplemented, replaced
or renewed; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any
other Finance Document or in any notice given under or in
connection with any Finance Document has the same meaning
in that Finance Document or notice as in this Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored in construing this
Agreement.
2. THE FACILITIES
2.1 Facilities
Subject to the terms of this Agreement, the Banks
irrevocably grant to the Borrowers the following
facilities:-
(a) Facility A - a committed term loan facility under
which the Banks shall, when requested by EUK, make
to EUK on the Effective Date a Loan in an amount
equal to the Total Facility A Commitments; and
(b) Facility C - a committed revolving credit facility
under which the Banks shall, when requested by
London Electricity, make to London Electricity Loans
up to an aggregate amount not exceeding, at any
time, the Total Facility C Commitments at that time.
No Bank is obliged to lend at any time more than its
Commitment(s).
2.2 Nature of a Finance Party's rights and obligations
(a) The obligations of a Finance Party under the Finance
Documents are several. Failure of a Finance Party to
carry out those obligations does not relieve any other
Party of its obligations under the Finance Documents. No
Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents
are divided rights. A Finance Party may, except as
otherwise stated in the Finance Documents, separately
enforce those rights.
2.3 Change of currency
(a) If more than one currency or currency unit are at the
same time recognised by the laws of any country as the
lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any
obligations arising under the Finance Documents in,
the currency of that country shall be translated
into, or paid in, the lawful currency or currency
unit of that country designated by the Agent; and
(ii) any translation from one currency or currency unit
to another shall be at the official rate of exchange
legally recognised by the central bank for the
conversion of that currency or currency unit into
the other, rounded up or down by the Agent acting
in accordance with any applicable law on rounding
or, if there is no such law, acting reasonably in
accordance with market practice.
(b) If a change in any currency of a country occurs, this
Agreement will be amended to the extent the Agent (acting
reasonably) specifies to be necessary to reflect the
change in currency and to put the Banks (and, if possible
and practicable, the Borrowers) in the same position, so
far as possible, that they would have been in if no
change in currency had occurred.
2.4 Release of London Electricity
If the Facility C Commitments have been fully cancelled
and no amount payable by London Electricity is
outstanding under this Agreement, then, without prejudice
to any accrued rights or obligations, London Electricity
will cease to have any rights or obligations under this
Agreement and will cease to be a Borrower.
3. PURPOSE AND AVAILABILITY
(a) Each Borrower shall apply each Loan made to it towards
its working capital or general corporate purposes.
(b) Subject to the terms of this Agreement, EUK shall borrow
the Facility A Loan(s) on the Effective Date.
(c) Facility C Loans may be borrowed, subject to the terms of
this Agreement, at any time prior to the Facility C Final
Repayment Date.
(d) Without affecting the obligations of any Obligor in any
way, no Finance Party is bound to monitor or verify the
application of any Loan.
4. CONDITIONS PRECEDENT
The obligations of each Bank to participate in a Loan are
subject to the conditions precedent that:-
(a) on both the date of the Request and the Drawdown
Date:-
(i) the representations and warranties in Clause 16
(Representations and warranties) to be repeated
on those dates are correct in all material
respects and will be correct in all material
respects immediately after the Loan is made;
and
(ii) no Event of Default or (in the case of a Loan
which is not a Rollover Loan) no Default is
outstanding or will result from the Loan;
(b) it would not cause the Facility A Loan(s) or the
Facility C Loans to exceed the Total Facility A
Commitments or the Total Facility C Commitments, as
the case may be; and
(c) it would not result in there being more than 15
Loans outstanding at any time.
5. UTILISATIONS
5.1 Receipt of Requests
A Borrower may utilise a Facility if the Agent receives,
not later than 9.00 a.m. on the Business Day before its
Drawdown Date, a duly completed Request.
5.2 Completion of Requests
A Request will not be regarded as having been duly
completed unless:-
(a) it specifies whether the Loan is the Facility A
Loan(s) or a Facility C Loan;
(b) the Drawdown Date is, in the case of the Facility A
Loan(s), the Effective Date and, in the case of a
Facility C Loan, a Business Day falling before the
Facility C Final Repayment Date;
(c) the principal amount of the Loan is, in the case of
the Facility A Loan(s), an amount equal to the Total
Facility A Commitments and, in the case of a
Facility C Loan, a minimum of BPS10,000,000 and an
integral multiple of BPS5,000,000 or the balance of
the undrawn Facility C Commitments or such other
amount as the Agent may agree;
(d) the Interest Period specified complies with Clause 8
(Interest Periods); and
(e) the payment instructions comply with Clause 10
(Payments).
Each Request is irrevocable.
5.3 Amount of each Bank's participation in the Loan
The amount of a Bank's participation in a Loan will be
the proportion of the Loan which its Facility A
Commitment or Facility C Commitment bears to the Total
Facility A Commitments or the Total Facility C
Commitments, as the case may be, on the proposed Drawdown
Date.
5.4 Notification of the Banks
The Agent shall promptly notify each Bank of the details
of the requested Loan and the amount of its participation
in the Loan.
5.5 Payment of Proceeds
Subject to the terms of this Agreement, each relevant
Bank shall make its participation in a Loan available to
the Agent for the relevant Borrower on the relevant
Drawdown Date.
6. REPAYMENT
(a) EUK shall repay the Facility A Loan(s) in full on the
Facility A Final Repayment Date to the Agent for the
Banks.
(b) Subject to paragraph (c) below, London Electricity shall
repay each Facility C Loan in full on its Repayment Date
to the Agent for the Banks.
(c) Subject to the terms of this Agreement, amounts repaid by
London Electricity under paragraph (b) above may
subsequently be re-borrowed by London Electricity.
7. PREPAYMENT AND CANCELLATION
7.1 Automatic cancellation of the Total Commitments
The Facility C Commitment of each Bank shall be
automatically cancelled at close of business on the
Facility C Final Repayment Date.
7.2 Voluntary cancellation
London Electricity may, by giving not less than 2
Business Days' prior notice to the Agent, cancel the
unutilised portion of the Total Facility C Commitments in
whole or in part (but, if in part, in a minimum amount of
BPS10,000,000 and an integral multiple of BPS5,000,000).
Any cancellation in part shall be applied against the
Facility C Commitment of each Bank pro rata.
7.3 Voluntary prepayment
A Borrower may at any time, by giving not less than 2
Business Days' prior notice to the Agent, prepay a Loan
made to it in whole or in part (but, if in part, in
minimum amounts of BPS10,000,000), subject to Clause 23
(Indemnities).
7.4 Additional right of prepayment and cancellation
If any Obligor is required to pay any amount to a Bank
under Clause 11 (Taxes) or Clause 13 (Increased costs),
the Obligor may, whilst the circumstances giving rise to
the requirement continue, serve a notice of prepayment
and cancellation on that Bank through the Agent. In this
event:-
(a) on the date falling 5 Business Days after the date
of service of the notice each Obligor shall prepay
that Bank's participation in any Loans made to it
together with all other amounts payable by it to
that Bank under this Agreement; and
(b) the Bank's Commitments shall be cancelled on the
date of service of the notice.
7.5 Mitigation
If circumstances arise which would, or would on the
giving of notice, result in:
(a) any additional amounts becoming payable under
Clause 11.1 (Gross-up); or
(b) any amount becoming payable under Clause 13.1
(Increased costs); or
(c) any prepayment or cancellation under Clause 14
(Illegality),
then, without limiting the obligations of the Obligors
under this Agreement and without prejudice to the terms
of Clauses 11.1 (Gross-up), 13.1 (Increased costs) and 14
(Illegality), each Bank shall, in consultation with the
Company, take such reasonable steps as may be open to it
to mitigate or remove the relevant circumstance,
including (without limitation) the transfer with the
Company's consent as specified in Clause 26.2 (Transfers
by Banks) of its rights and obligations under this
Agreement to another bank or financial institution,
unless to do so might (in the opinion of the Bank) have a
material adverse effect on its business, operations or
financial condition or be contrary to its banking
policies or be otherwise prejudicial to it.
7.6 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable. The Agent shall notify the
Banks promptly of receipt of any such notice.
(b) All prepayments under this Agreement shall be made
together with accrued interest on the amount prepaid.
(c) No prepayment or cancellation is permitted except in
accordance with the express terms of this Agreement.
(d) (i) Subject to the terms of this Agreement, amounts
prepaid under Facility C pursuant to Clause 7.3
(Voluntary prepayment) may subsequently be re-
borrowed.
(ii) No other amount prepaid may subsequently be re-
borrowed.
(iii) No amount of the Total Commitments cancelled
under this Agreement may subsequently be reinstated.
8. INTEREST PERIODS
8.1 Interest Periods
(a) Each Facility A Loan will have successive Interest
Periods. The first Interest Period will commence on the
Effective Date and subsequent Interest Periods will
commence on the expiry of the preceding Interest Period.
(b) Each Facility C Loan will have one Interest Period only.
(c) Interest Periods may, subject to the other provisions of
this Clause 8, be, for an approved duration or an
optional duration, and, for this purpose:
(i) "approved duration" means a period of 1, 2, 3 or 6
months; and
(ii) "optional duration" means any other period (other
than an approved duration) of up to 12 months.
8.2 Selection of Interest Periods
(a) EUK may select an Interest Period for a Facility A Loan
in its Request or in a notice to be received by the Agent
not later than 9.00 a.m. on the Business Day before the
commencement of that Interest Period (in the case of
subsequent Interest Periods).
(b) If it would not result in more than 15 Loans being
outstanding, EUK may select different Interest Periods
for a Facility A Loan in accordance with this Clause but
each part of a Loan to which an Interest Period applies
must be a minimum of BPS10,000,000 and an integral multiple
of BPS5,000,000 or such other amount as the Agent may
agree. Each part of a Facility A Loan which has a
different Interest Period shall be treated as a separate
Loan.
(c) London Electricity may select an Interest Period for a
Facility C Loan in its Request.
(d) If the relevant Borrower fails to specify the duration of
an Interest Period, it shall be of 3 months' duration.
8.3 Selection of an optional duration
(a) If a Borrower selects an Interest Period of an optional
duration, it may also select in the relevant Request or
notice an Interest Period of an approved duration to
apply if the selection of an Interest Period of an
optional duration becomes ineffective in accordance with
paragraph (b) below.
(b) If:-
(i) a Borrower requests an Interest Period of an
optional duration; and
(ii) the Agent receives notice from a Bank not later than
3.00 p.m. on the Business Day before the beginning
of that Interest Period that it does not agree to
the request,
the Interest Period for the proposed Loan shall be the
alternative period of an approved duration specified in
the relevant Request or notice or, in the absence of any
alternative selection, 3 months.
(c) If the Agent receives a notice from a Bank under
paragraph (b) above, it shall notify the relevant
Borrower and the Banks promptly of the new Interest
Period for the proposed Loan.
8.4 Overrunning of Final Repayment Date
Notwithstanding any other provision of this Clause 8, if
an Interest Period for a Loan would otherwise overrun the
relevant Final Repayment Date it shall be shortened so
that it ends on that Final Repayment Date.
8.5 Notification
The Agent shall notify the relevant Borrower and the
Banks of the duration of each Interest Period promptly
after ascertaining its duration.
9. INTEREST
9.1 Interest rate
(a) The rate of interest on each Loan for each of its
Interest Periods is the rate per annum determined by the
Agent to be the aggregate of the applicable:-
(i) Margin;
(ii) LIBOR; and
(iii) MLA Cost.
(b) If, in respect of any Accounting Period, the Company does
not comply with its obligations under Clause 17.2 (a) or
(b) (Financial information), the applicable Margin in
respect of each Facility A Loan from the date of the
Company's non-compliance until the date on which that non-
compliance is remedied, shall be adjusted so that the
Margin applicable to that Facility A Loan shall be the
next Increment up from the applicable Margin for that
Facility A Loan in the previous quarterly Accounting
Period.
(c) For the purposes of paragraph (b) above, an "Increment"
is the difference between each level of the Margin in sub-
paragraphs (i) to (v) of paragraph (a) of the definition
of "Margin" in Clause 1.1 (Definitions).
9.2 Due dates
Except as otherwise provided in this Agreement, accrued
interest on each Loan is payable by the relevant Borrower
on the last day of each Interest Period and also, in the
case of a Loan with an Interest Period longer than six
months, on the date falling six months after the
commencement of the Interest Period.
9.3 Default interest
(a) (i) If an Obligor fails to pay any amount payable
by it under the Finance Documents, it shall
forthwith on demand by the Agent pay interest on the
overdue amount from the due date up to the date of
actual payment, as well after as before judgement,
at a rate (the "default rate") determined by the
Agent to be 1 per cent per annum above, subject to
sub-paragraph (ii) below, the rate which would have
been payable if the overdue amount had, during the
period of non-payment, constituted a Sterling Loan
for such successive Interest Periods of such
duration as the Agent may reasonably determine
having regard to the likely duration of the default
(each a "Designated Interest Period").
(ii) If the overdue amount is a principal amount of a
Loan and it becomes due and payable prior to the
last day of an Interest Period for that Loan, then:-
(1) the first Designated Interest Period for that
overdue sum will be the unexpired portion of
that Interest Period; and
(2) the rate of interest on the overdue amount for
that first Designated Interest Period will be 1
per cent per annum above the rate on the
overdue amount under Clause 9.1 (Interest rate)
immediately before the due date.
After the expiry of the first Designated Interest
Period for that overdue amount, the rate on the
overdue amount will be calculated in accordance with
sub-paragraph (i) above.
(b) The default rate will be determined on each Business Day
or the first day of the relevant Designated Interest
Period, as appropriate.
(c) If the Agent determines that Sterling deposits are not at
the relevant time being made available by the Reference
Banks to leading banks in the London interbank market,
the default rate will be determined by reference to the
cost of funds to the Banks from whatever sources the
Banks may reasonably select, having due regard to the
likely duration of the default.
(d) Default interest will be compounded at the end of each
Designated Interest Period.
9.4 Notification of rates of interest
The Agent shall promptly notify each relevant Party of
the determination of a rate of interest under this
Agreement.
10. PAYMENTS
10.1 Place
All payments by an Obligor or a Bank under the Finance
Documents shall be made to the Agent to its account at
such office or bank in the U.K. as it may notify to that
Obligor or Bank for this purpose.
10.2 Currency and funds
Payments under the Finance Documents to the Agent shall
be made in Sterling for value on the due date at such
times as the Agent may specify to the Party concerned as
being customary at the time for the settlement of
transactions in Sterling.
10.3 Distribution
(a) Each payment received by the Agent under this Agreement
for another Party shall, subject to the paragraphs below,
be made available by the Agent to that Party by payment
to its account with such bank in the U.K. as it may
notify to the Agent for this purpose by not less than 5
Business Days' prior notice.
(b) Where the Repayment Date for an outstanding Facility C
Loan coincides with the Drawdown Date for a new
Facility C Loan the Agent shall apply the relevant new
Loan in or towards repayment of the relevant outstanding
Loan so that:-
(i) where the amount of the outstanding Loan exceeds the
amount of the new Loan, London Electricity shall
only be required to repay the excess; and
(ii) where the amount of the outstanding Loan is exactly
the same as the amount of the new Loan, London
Electricity shall not be required to make any
payment.
(c) The Agent may apply any amount received by it for a
Borrower in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from
that Borrower under this Agreement or in or towards the
purchase of any amount of any currency to be so applied.
(d) Where a sum is to be paid under this Agreement to the
Agent for the account of another Party, the Agent is not
obliged to pay that sum to that Party until it has
established that it has actually received that sum. The
Agent may, however, assume that the sum has been paid to
it in accordance with this Agreement and, in reliance on
that assumption, make available to that Party a
corresponding amount. If the sum has not been made
available but the Agent has paid a corresponding amount
to another Party, that Party shall forthwith on demand
refund the corresponding amount to the Agent together
with interest on that amount from the date of payment to
the date of receipt, calculated at a rate determined by
the Agent to reflect its cost of funds.
10.4 Set-off and counterclaim
All payments made by an Obligor under the Finance
Documents shall be made without set-off or counterclaim.
10.5 Non-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 shall instead be the next Business Day in the
same calendar month (if there is one) or the preceding
Business Day (if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement interest is payable on the
principal at the rate payable on the original due date.
10.6 Partial payments
(a) If the Agent receives a payment insufficient to discharge
all the amounts then due and payable by London
Electricity or the other Obligors under the Finance
Documents, the Agent shall apply that payment towards the
obligations of London Electricity or those other
Obligors, as the case may be, 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 Agent under this
Agreement;
(ii) secondly, in or towards payment pro rata of any
accrued fees due but unpaid under Clause 20.2
(Commitment fee);
(iii) thirdly, in or towards payment pro rata of any
accrued interest due but unpaid under this
Agreement;
(iv) fourthly, in or towards payment pro rata of any
principal due but unpaid under this Agreement and
any amount payable under the Swap Documents; and
(v) fifthly, in or towards payment pro rata of any other
sum due but unpaid under the Finance Documents.
(b) The Agent shall, if so directed by all the Banks, vary
the order set out in sub-paragraphs (a)(ii) to (v) above.
(c) Paragraphs (a) and (b) above shall override any
appropriation made by an Obligor.
11. TAXES
11.1 Gross-up
All payments by an Obligor under the Finance Documents
shall be made without any deduction and free and clear of
and without deduction for or on account of any taxes,
except to the extent that the Obligor is required by law
to make payment subject to any taxes. If any tax or
amounts in respect of tax must be deducted, or any other
deductions must be made, from any amounts payable or paid
by an Obligor, or paid or payable by the Agent to a Bank,
under the Finance Documents, the Obligor shall pay such
additional amounts as may be necessary to ensure that the
relevant Bank receives a net amount equal to the full
amount which it would have received had payment not been
made subject to tax or other deduction.
11.2 Tax receipts
All taxes required by law to be deducted or withheld by
an Obligor from any amounts paid or payable under the
Finance Documents shall be paid by the relevant Obligor
when due and the Obligor shall, within 15 days of the
payment being made to the appropriate taxation authority,
deliver to the Agent for the relevant Bank evidence
satisfactory to that Bank (including all relevant tax
receipts) that the payment has been duly remitted to the
appropriate authority.
11.3 Refund of Tax Credits
If:-
(a) an Obligor makes a payment under Clause 11.1 (Gross-
up) (a "Tax Payment") in respect of a payment to a
Bank under the Finance Documents; and
(b) that Bank determines in good faith that it has
obtained a refund of tax or obtained and used a
credit against tax on its overall net income (a "Tax
Credit") which that Bank is able to identify in good
faith as attributable to that Tax Payment,
then, if it determines, acting in good faith, that it can
do so without any adverse consequences for the Bank, that
Bank shall forthwith reimburse that Obligor, such amount
as that Bank in its absolute discretion determines to be
such proportion of that Tax Credit as will leave that
Bank (after that reimbursement) in no better or worse
position in respect of its worldwide tax liabilities than
it would have been in if no Tax Payment had been
required. A Bank shall have an absolute discretion as to
whether to claim any Tax Credit (and, if it does claim,
the extent, order and manner in which it does so) and
whether any amount is due from it under this Clause 11.3)
(and, if so, what amount and when). No Bank shall be
obliged to disclose any information regarding its tax
affairs and computations.
11.4 Qualifying Bank
(a) Each Bank party to this Agreement on the Effective Date
represents that it is a Qualifying Bank on the Effective
Date. Any bank or financial institution which becomes a
Bank after the Effective Date represents to each Obligor
on the date it becomes a Party that, as at that date, it
is a Qualifying Bank.
(b) If, otherwise than as a result of the introduction of,
change in, or any change in the interpretation,
administration or application of, any law or regulation,
any Double Taxation Treaty or any practice or concession
of the United Kingdom Inland Revenue occurring after the
date a Bank becomes a Party, the Bank is not or ceases to
be a Qualifying Bank, no Obligor will be liable to pay to
that Bank under Clause 11.1 (Gross-up) any amount in
respect of taxes levied or imposed by the United Kingdom
or any taxing authority of or in the United Kingdom in
excess of the amount it would have been obliged to pay if
that Bank had been or had not ceased to be a Qualifying
Bank.
(c) Any Bank which falls within paragraph (b) of the
definition of Qualifying Bank shall deliver to the
Company, on the date it becomes a Bank, a duly completed
form from the tax authorities in the country in which it
is resident such that each Borrower may receive from the
Inland Revenue a direction to that Borrower under the
Double Taxation Relief (Taxes on Income) (General)
Regulations 1970 that the Borrower should not, on account
of the relevant Double Taxation Treaty, pay any interest
due to the Bank under the Finance Documents under
deduction of United Kingdom tax. The Bank concerned
shall, upon the request of the relevant Borrower,
promptly and duly (if it is able to do so) execute and
deliver any and all such further instruments and
documents which are required for the purpose of obtaining
such a direction.
(d) Each Bank shall notify the Company through the Agent as
soon as it is aware that it ceases to be a Qualifying
Bank.
12. MARKET DISRUPTION
(a) If a Reference Bank does not supply an offered rate by
11.30 a.m. on the first day of any Interest Period, the
applicable LIBOR shall, subject to paragraph (b) below,
be determined on the basis of the quotations of the
remaining Reference Banks.
(b) If, in relation to any proposed Loan:-
(i) no, or only one, Reference Bank supplies a rate for
the purposes of determining the applicable LIBOR or
the Agent otherwise determines that adequate and
fair means do not exist for ascertaining the
applicable LIBOR; or
(ii) the Agent receives notification from Banks whose
participations in a Loan exceed 50 per cent. of that
Loan that, in their opinion:-
(A) matching deposits may not be available to them
in the London interbank market in the ordinary
course of business to fund their participations
in that Loan for the relevant Interest Period;
or
(B) the cost to them of matching deposits in the
London interbank market would be in excess of
the relevant LIBOR,
the Agent shall promptly notify the Company and the
relevant Banks of the fact and that this Clause 12 is in
operation.
(c) After any notification under paragraph (b) above:-
(i) in the case of the Facility A Loan, it shall be made
or continue but it shall have an Interest Period of
one month and the interest payable on that Loan
shall be determined in accordance with sub-
paragraphs (iii)-(vii) below;
(ii) in the case of a Facility C Loan, unless London
Electricity notifies the Agent to the contrary
before close of business on the day it received the
notification under paragraph (b) above, the Loan
shall still be made but it shall have an Interest
Period of one month and the interest payable on that
Loan shall be determined in accordance with sub-
paragraphs (iii) to (vii) below;
(iii) promptly after receipt of the notification, the
relevant Borrower and the Agent shall enter into
negotiations in good faith for a period of not more
than one month with a view to agreeing a substitute
basis for determining the rate of interest and/or
funding applicable to the Loan affected by the
notification;
(iv) any substitute basis agreed under sub-paragraph
(iii) above shall be, with the prior consent of all
the Banks, binding on all the Parties;
(v) if no substitute basis is agreed under sub-
paragraph (iii) above, each Bank (through the Agent)
shall certify on or before the last day of the
Interest Period to which the notification relates an
alternative basis for maintaining its participation
in that Loan;
(vi) any alternative basis referred to in sub-paragraph
(v) above may include an alternative method of
fixing the interest rate, alternative Interest
Periods or alternative currencies but it must
reflect the cost to the Banks of funding their
participations in that Loan from whatever sources
each relevant Bank may reasonably select (each
Bank's cost of funding being certified by that Bank
with a copy to the Agent) plus the Margin and (if
applicable) any MLA Cost; and
(vii) each alternative basis so certified shall be
binding on the Borrowers and the certifying Bank and
treated as part of this Agreement.
13. INCREASED COSTS
13.1 Increased costs
(a) Subject to Clause 13.2 (Exceptions), the relevant
Borrower shall forthwith on demand by a Finance Party pay
that Finance Party the amount of any increased cost
incurred by it as a result of:
(i) the introduction of, or any change in, or any change
in the interpretation or application of, any law or
regulation after the date of this Agreement; or
(ii) compliance with any regulation made after the date
of this Agreement,
including any law or regulation relating to taxation,
change in currency of a country or reserve asset, special
deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary
control.
(b) In this Agreement "increased cost" means:-
(i) an additional cost incurred by a Finance Party or
its Holding Company as a result of the Finance Party
having entered into, or performing, maintaining or
funding its obligations under, this Agreement; or
(ii) that portion of an additional cost incurred by a
Finance Party or its Holding Company in the Finance
Party making, funding or maintaining all or any
advances comprised in a class of advances formed by
or including the participations in the Loans made or
to be made under this Agreement as is attributable
to the Finance Party making, funding or maintaining
those participations; or
(iii) a reduction in any amount payable to a Finance
Party or its Holding Company or the effective return
to a Finance Party under this Agreement or on its
capital or that of its Holding Company; or
(iv) the amount of any payment made by a Finance Party or
its Holding Company, or the amount of interest or
other return foregone by a Finance Party or its
Holding Company, calculated by reference to any
amount received or receivable by a Finance Party
from any other Party under this Agreement.
(c) A Finance Party intending to make a claim under this
Clause shall promptly notify the relevant Borrower in
reasonable detail of the circumstances giving rise to the
claim and the basis of computation of that claim.
However, no Finance Party is obliged to provide any
confidential information.
13.2 Exceptions
Clause 13.1 (Increased costs) does not apply to any
increased cost:-
(a) compensated for by the payment of the MLA Cost;
(b) compensated for by the operation of Clause 11
(Taxes) or which would have been compensated for but
for the operation of Clause 11.4(b) (Qualifying
Bank);
(c) attributable to any tax on the overall net income of
a Bank or its Holding Company (or the overall net
income of a division or branch of the Bank or its
Holding Company) imposed in the jurisdiction in
which its principal office or Facility Office is
situate;
(d) attributable to the relevant Bank (or its Holding
Company) having entered into a commitment to lend to
a third party which is, at the time of that
commitment, in breach of the relevant law or
regulation; or
(e) incurred in consequence of the implementation, as
contemplated at the date of this Agreement, of the
matters set out in:
(i) the report of the Basle Committee on Bank
Regulation and Supervisory Practices dated July
1988 and entitled "International Convergence of
Capital Measurement and Capital Standards"
(including in particular but without limitation
any directive of the Bank of England
implementing that report in the United
Kingdom);
(ii) the Directive of the Council of the European
Communities on a Solvency Ratio for Credit
Institutions (89/647/EEC of 18 December 1989);
and/or
(iii) the Directive of the Council of the
European Communities on Own Funds of Credit
Institutions (89/299/EEC of 17 April 1989),
unless it results from any change after the date of
this Agreement in, or in the interpretation or
application of, those matters as contemplated on the
date of this Agreement.
14. ILLEGALITY
If it is or becomes unlawful or contrary to any
regulation in any jurisdiction for a Bank to give effect
to any of its obligations as contemplated by this
Agreement or to fund or maintain its participation in any
Loan, then:-
(a) the Bank shall promptly notify the Company through
the Agent accordingly; and
(b) (i) each Borrower shall, on the latest day
permitted by the relevant law or regulation,
prepay that Bank's participation in all Loans
made to it together with all other amounts
payable by it to that Bank under this
Agreement; and
(ii) the Bank's Commitments shall be cancelled.
15. GUARANTEE
15.1 Guarantee
Each Guarantor jointly and severally and irrevocably and
unconditionally:-
(a) as principal obligor guarantees to each Finance
Party prompt performance by EUK of all its
obligations under the Finance Documents;
(b) undertakes with each Finance Party that whenever EUK
does not pay any amount when due under or in
connection with any Finance Document, that Guarantor
shall within two Business Days of demand by the
Agent pay that amount as if that Guarantor instead
of EUK were expressed to be the principal obligor;
and
(c) indemnifies each Finance Party within two Business
Days of demand against any loss or liability
suffered by it if any obligation so guaranteed by
that Guarantor is or becomes unenforceable, invalid
or illegal.
15.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend
to the ultimate balance of all sums payable by EUK under
the Finance Documents, regardless of any intermediate
payment or discharge in whole or in part.
15.3 Reinstatement
(a) Where any discharge (whether in respect of the
obligations of any Obligor, or any security for those
obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment,
security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without
limitation, the liability of a Guarantor under this
Clause 15 (Guarantee) shall 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.
15.4 Waiver of defences
The obligations of a Guarantor under this Clause 15
(Guarantee) will not be affected by an act, omission,
matter or thing which, but for this provision, would
reduce, release or prejudice any of its obligations under
this Clause 15 (Guarantee) or prejudice or diminish those
obligations in whole or in part, including (whether or
not known to it or any Finance Party):-
(a) any time or waiver granted to, or composition with,
any Obligor or other person;
(b) the taking, variation, compromise, exchange, renewal
or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security
over assets of, any Obligor or other person or any
non-presentation or non-observance of any formality
or other requirement in respect of any instrument or
any failure to realise the full value of any
security;
(c) any incapacity or lack of powers, authority or legal
personality of or dissolution or change in the
members or status of any Obligor or any other
person;
(d) any variation (however fundamental) or replacement
of a Finance Document or any other document or
security so that references to that Finance Document
in this Clause 15 (Guarantee) shall include each
variation or replacement;
(e) any unenforceability, illegality or invalidity of
any obligation of any person under any Finance
Document or any other document or security, to the
intent that the obligations of the Guarantor under
this Clause 15 (Guarantee) shall remain in full
force and its guarantee be construed accordingly, as
if there were no unenforceability, illegality or
invalidity; or
(f) any postponement, discharge, reduction, non-
provability or other similar circumstance affecting
any obligation of any Obligor under a Finance
Document resulting from any insolvency, liquidation
or dissolution proceedings or from any law,
regulation or order so that each such obligation
shall for the purposes of the obligations of the
Guarantor under this Clause 15 (Guarantee) be
construed as if there were no such circumstance.
15.5 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
rights or security or claim payment from any Obligor
before claiming from that Guarantor under this Clause 15
(Guarantee).
15.6 Appropriations
Until all amounts which may be or become payable by any
Obligor under or in connection with the Finance Documents
have been irrevocably paid in full, each Finance Party
(or any trustee or agent on its behalf) may:-
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance
Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the
same in such manner and order as it sees fit
(whether against those amounts or otherwise) and no
Guarantor shall be entitled to the benefit of the
same; and
(b) hold in an interest bearing suspense account any
moneys received from EUK or on account of the
liability of a Guarantor under this Clause 15
(Guarantee).
15.7 Non-competition
Until all amounts which may be or become payable by any
Obligor under or in connection with the Finance Documents
have been irrevocably paid in full, no Guarantor shall
after a claim has been made or by virtue of any payment
or performance by it under this Clause 15 (Guarantee):-
(a) be subrogated to any rights, security or moneys
held, received or receivable by any Finance Party
(or any trustee or agent on its behalf) or be
entitled to any right of contribution or indemnity
in respect of any payment made or moneys received on
account of that Guarantor's liability under this
Clause 15 (Guarantee);
(b) claim, rank, prove or vote as a creditor of any
Obligor or its estate in competition with any
Finance Party (or any trustee or agent on its
behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any
Obligor , or exercise any right of set-off as
against any Obligor .
Each Guarantor shall hold in trust for and forthwith pay
or transfer to the Agent for the Finance Parties any
payment or distribution or benefit of security received
by it contrary to this Clause 15.7.
15.8 Additional security
This guarantee is in addition to and is not in any way
prejudiced by any other security now or subsequently held
by any Finance Party.
16. REPRESENTATIONS AND WARRANTIES
16.1 Representations and warranties
Each Obligor makes the representations and warranties set
out in this Clause 16 (Representations and warranties) to
each Finance Party in respect of itself and its
Subsidiaries.
16.2 Status
(a) (i) In the case of an Obligor incorporated in
England, it is a limited liability company, duly
incorporated and validly existing under the
Companies Act 1985; and
(ii) in the case of an Obligor formed in the State
of Delaware, it is a limited liability company, duly
formed, validly existing and in good standing under
the laws of the State of Delaware; and
(b) it has the power to own its assets and carry on its
business as it is being conducted.
16.3 Powers and authority
It 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.
16.4 Legal validity
Each Finance Document to which it is or will be a party
constitutes, or when executed in accordance with its
terms will constitute, its legal, valid, binding and
enforceable obligation.
16.5 Non-conflict
The entry into and performance by it of, and the
transactions contemplated by, the Finance Documents do
not and will not:-
(a) conflict with any law or regulation, judicial or
official order or any Licence or Licence
Undertaking; or
(b) conflict with its constitutional documents; or
(c) conflict with any document which is binding upon any
Obligor or any other member of the Group or any
asset of any Obligor or any other member of the
Group to an extent or in a manner which has a
Material Adverse Effect.
16.6 No default
(a) No Event of Default or (unless this representation is
being repeated or deemed to be repeated on the date of a
Request or a Drawdown Date in respect of a Rollover Loan
or the first day of an Interest Period for a Facility A
Loan commencing after the Effective Date) other Default
is outstanding or will result from any Loan; and
(b) no other event is outstanding which constitutes a default
under any document which is binding on any Obligor or any
other member of the Group or any asset of any Obligor or
any other member of the Group to an extent or in a manner
which has a Material Adverse Effect.
16.7 Authorisations
Subject to due registration of any Debenture at Companies
House under section 395 of the Companies Act 1985, all
authorisations required by any UK or US law or the terms
of any Licence or Licence Undertaking in connection with
the entry into, performance, validity and enforceability
of, and the transactions contemplated by, the Finance
Documents have been obtained or effected (as appropriate)
and are in full force and effect.
16.8 Accounts
(a) In the case of the Company, the audited consolidated
accounts of the Group most recently delivered to the
Agent under this Agreement:-
(i) have been prepared in accordance with Applicable
Accounting Principles; and
(ii) fairly represent the consolidated financial
condition of the Group as at the date to which they
were drawn up.
(b) In the case of EUK and London Electricity, its audited
consolidated accounts most recently delivered to the
Agent:-
(i) have been prepared in accordance with Applicable
Accounting Principles; and
(ii) fairly represent its consolidated financial
condition as at the date to which they were drawn
up.
16.9 Litigation
No litigation, arbitration or administrative proceedings
are, to its knowledge, current, pending or threatened:
(a) to restrain the entry into, exercise of any of its
rights, and/or performance or enforcement of or
compliance with any of its obligations, under the
Finance Documents; or
(b) which have a Material Adverse Effect.
16.10 Information Memorandum
(a) All material factual information contained in the
Information Memorandum was true (or, in the case of
information provided by any person other than an Obligor
or its advisers, was true to the best of its knowledge
and belief) in all material respects at the date (if any)
ascribed to it in the Information Memorandum or (if none)
at the date of the relevant component of the Information
Memorandum;
(b) any expressions of opinion or intention and any forecasts
and projections contained in the Information Memorandum
were arrived at in good faith and were based on
reasonable assumptions which that Obligor believes to be
true; and
(c) as at the Effective Date, the Information Memorandum,
taken as a whole, was not misleading in any material
respect and did not omit to disclose any matter failure
to disclose which would result in any material
information contained in the Information Memorandum being
misleading in any material respect in the context of the
Finance Documents.
16.11 Environmental Matters
(a) Each Obligor and each other member of the Group has
obtained all material Environmental Licences required for
the carrying on of its business as then conducted and is
in compliance in all material respects with:
(i) the terms and conditions of those Environmental
Licences; and
(ii) all other applicable Environmental Law,
which, in each case, if not obtained or complied with,
has a Material Adverse Effect and there are, to its
knowledge, no circumstances which may materially prevent
or interfere with such compliance in the future which, if
not complied with, have a Material Adverse Effect;
(b) so far as it is aware, no Dangerous Substance has been
used, disposed of, generated, stored, transported,
dumped, released, deposited, buried or emitted at, on
from or under any site or premises (whether or not owned,
leased, occupied or controlled by any Obligor or any
other member of the Group and including any offsite waste
management or disposal location utilised by any Obligor
or any other member of the Group) in circumstances where
this has a Material Adverse Effect; and
(c) so far as it is aware, there is no Environmental Claim
(whether in respect of any site previously or currently
owned or occupied by any Obligor or any other member of
the Group or otherwise) pending or threatened, and there
are no past or present acts, omissions, events or
circumstances that would be likely to form the basis of
any Environmental Claim (whether in respect of any site
previously or currently owned or occupied by any Obligor
or any other member of the Group or otherwise), against
it which, in each case, is reasonably likely to be
determined against it and which, if so determined, has a
Material Adverse Effect.
16.12 Assets
Each Obligor is the legal and/or beneficial owner of all
its material assets free from any Security Interests
(other than any Security Interests permitted under
Clause 17.9(b) (Negative pledge)).
16.13 Ownership
Each Obligor confirms that the corporate structure chart
set out in Schedule 7 is accurate as at the Effective
Date and, as at the Effective Date, neither EUK nor any
Additional Guarantor has any material commitments or
Financial Indebtedness other than as contemplated by the
Finance Documents.
16.14 Licence
In the case of London Electricity and as at the Effective
Date:-
(a) the Licence is in full force and effect;
(b) there exist no material breaches of the terms of the
Licence or Licence Undertakings; and
(c) there are no circumstances in existence which would
entitle the Director General or the Secretary of
State to seek to revoke the Licence.
16.15 No insolvency
As at the Effective Date no insolvency, bankruptcy or
similar proceedings have been instituted by (and in
relation to) or against or threatened against any Obligor
or Material Subsidiary.
16.16 Times for making representations and warranties
The representations and warranties set out in this
Clause 16 (Representations and warranties):-
(a) are made by each Obligor on the Effective
Date; and
(b) (with the exception of Clauses 16.10 (Information
Memorandum), 16.13 (Ownership), 16.14 (Licence) and
16.15 (No insolvency)) are deemed to be made by each
Obligor on the date of each Request and the first
day of each Interest Period with reference to the
facts and circumstances then existing.
16.17 Qualifications to representations
The representations and warranties contained in Clauses
16.4 (Legal validity) and 16.7 (Authorisations) shall
(where applicable) be subject, as to matters of law only,
to the qualifications in the legal opinions referred to
in Part I of Schedule 2 to the Restatement Agreement.
17. UNDERTAKINGS
17.1 Duration
The undertakings in this Clause 17 (Undertakings) remain
in force from the date of this Agreement for so long as
any amount is or may be outstanding under this Agreement
or any Commitment is in force and are made (where
applicable) by itself in respect of it and its
Subsidiaries.
17.2 Financial information
(a) The Company shall supply to the Agent in sufficient
copies for all the Banks:-
(i) as soon as the same are available (and in any event
within 120 days of the end of each of their
financial years) the audited or (in the case of
London Electricity) unaudited consolidated accounts
of EUK, the Company and London Electricity for that
financial year;
(ii) as soon as the same are available (and in any event
within 60 days of the end of the first half-year of
each of their financial years and within 45 days (in
the case of the Company) or 60 days (in the case of
EUK) of the end of each quarter of each of their
financial years) the unaudited consolidated accounts
for that half-year or that quarter, as the case may
be, of EUK and the Company;
(iii) as soon as the same are available (and in any
event within 60 days of the end of the first half-
year of each of its financial years), the unaudited
consolidated accounts for that half-year of London
Electricity; and
(iv) as soon as the same are available (and in any event
within 210 days of the end of each of its financial
years) the audited unconsolidated accounts of London
Electricity for that year.
(b) The Company shall supply to the Agent in
sufficient copies for all the Banks:-
(i) together with its accounts specified in
paragraph (a)(i) above, a certificate signed by its
auditors setting out in reasonable detail
computations establishing compliance or non-
compliance with Clause 17.26 (Financial covenants)
as at the date to which those accounts were drawn-
up;
(ii) together with its accounts specified in paragraph
(a)(ii) above, a certificate signed by two of its
senior authorised officers on its behalf setting out
in reasonable detail computations establishing
compliance or non-compliance with Clause 17.26
(Financial covenants) as at the date to which those
accounts were drawn-up; and
(iii) within 5 Business Days of them being delivered
to the Director General under Condition 2 of Part II
of the Licence, the accounting statements delivered
to the Director General by London Electricity.
17.3 Information - miscellaneous
Each Obligor shall supply to the Agent:-
(a) all documents despatched by it to its creditors (or
any class of them), other than any creditors in
respect of Subordinated Debt or the Subordinated
Debentures, at the same time as they are despatched;
(b) promptly upon becoming aware of them, details of any
litigation, arbitration or administrative
proceedings which are current, threatened or
pending, and which:
(i) if adversely determined, have a Material
Adverse Effect; or
(ii) would involve liability or potential liability
of BPS10,000,000 or more (or its equivalent in
other currencies); or
(iii) involves the Director-General, the
Secretary of State, the Licence or any Licence
Undertaking;
(c) promptly upon becoming aware that any material
modifications to the Licence are being proposed by
the Director General or London Electricity and/or
that any Licence Undertaking is being requested by
the Director General or the Secretary of State,
reasonable details of those modifications and/or
that Licence Undertaking, to be updated from time to
time to reflect any changes;
(d) unless the Agent has already received them, copies
of any Licence Undertakings in force at the date of
the Acquisition and thereafter, promptly after the
giving of any Licence Undertaking; and
(e) promptly, such further information in the possession
or control of any member of the Group regarding its
financial condition and operations as any Finance
Party may reasonably request and which the Obligor
is able to provide without breaching any legal
obligation or regulation,
in sufficient copies for all of the Banks, if the Agent
so requests.
17.4 Notification of Default
(a) Each Obligor shall notify the Agent of any Default (and
the steps, if any, being taken to remedy it) promptly
upon becoming aware of its occurrence.
(b) Each Obligor shall notify the Agent of any event of
default or potential event of default under the EIL
Facility Agreement (and the steps, if any being taken to
remedy it) promptly upon becoming aware of its
occurrence.
17.5 Compliance certificates/accounting matters
(a) The Company shall supply to the Agent:-
(i) together with its accounts specified in
Clause 17.2(a) (Financial information); and
(ii) promptly at any other time, if the Agent so
requests,
a certificate signed by two of its 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.
(b) If, at any time after the date of this Agreement, any
material change is made to the Applicable Accounting
Principles, the Company shall notify the Agent of the
change and, in the absence of any agreement between the
Company and the Agent (acting on the instructions of the
Majority Banks) to the contrary, the Company shall ensure
that the Auditors provide a description of the change and
the adjustments which would be required to be made to the
latest accounts or financial statements so that those
accounts or financial statements reflect the Applicable
Accounting Principles, and any reference to any financial
statements or accounts delivered under this Agreement
shall be construed as a reference to those accounts or
financial statements as adjusted to reflect the
Applicable Accounting Principles.
(c) The Company shall ensure that each set of accounts to be
delivered by it under this Agreement are prepared and
audited (in the case of its annual accounts) by the
Auditors in accordance with the Applicable Accounting
Principles, subject to any variations which are not
material or, if material, have been agreed in writing by
the Majority Banks.
17.6 Authorisations
Each Obligor shall promptly:-
(a) obtain, maintain and comply with the terms of; and
(b) supply certified copies to the Agent of,
any authorisation required by it under any law or
regulation to enable it to perform its obligations under,
or for the validity or enforceability of, any Finance
Document.
17.7 Environmental matters
Each Guarantor shall, and the Company shall procure that
each member of the Group will:
(a) obtain all requisite Environmental Licences and
comply in all material respects with:
(i) the terms and conditions of all Environmental
Licences applicable to it; and
(ii) all other applicable Environmental Laws,
in each case where failure to do so has a Material
Adverse Effect; and
(b) promptly upon receipt of the same, notify the Agent
of any claim, notice or other communication served
on it in respect of any alleged breach of or
corrective or remedial obligation or liability under
any Environmental Law which, if substantiated, has a
Material Adverse Effect.
17.8 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 payment obligations, except for obligations
which are mandatorily preferred by law applying to
companies generally.
17.9 Negative pledge
(a) No Obligor shall, and the Company shall procure that no
other member of the Group will, create or permit to
subsist any Security Interest on any of its assets.
(b) Paragraph (a) does not apply to:
(i) any lien or right of set-off arising by operation of
law (or by an agreement having similar effect) in
the ordinary course of business; or
(ii) pledges of goods, the related documents of title
and/or other related documents arising or created in
the ordinary course of business of any member of the
London Electricity Group as security only for
indebtedness owed to a bank or financial institution
directly relating to the goods or documents on or
over which that pledge exists; or
(iii) any Security Interest arising out of title
retention or conditional sale provisions in a
supplier's standard conditions of supply of goods
acquired by any member of the London Electricity
Group in the ordinary course of its business; or
(iv) any Security Interest created under the Pooling and
Settlement Agreement; or
(v) any Security Interest existing on an asset at the
time of the acquisition of the asset by any member
of the London Electricity Group after the date of
this Agreement, but only if:
(A) the Security Interest was not created in
contemplation of the acquisition;
(B) the principal amount secured by the Security
Interest is not increased after the
acquisition; and
(C) the Security Interest is discharged within
180 days of the acquisition; or
(vi) any Security Interest existing on the assets of a
company at the time it becomes a member of the
London Electricity Group after the date of this
Agreement, but only if:
(A) the Security Interest was not created in
contemplation of the relevant company becoming
a member of the London Electricity Group;
(B) the principal amount secured by the Security
Interest is not increased after the relevant
company becomes a member of the London
Electricity Group; and
(C) the Security Interest is discharged within
180 days of the relevant company becoming a
member of the London Electricity Group; or
(vii) any Security Interest which:-
(A) constitutes a contractual right of any bank or
financial institution to apply any credit
balance maintained by any member of the London
Electricity Group with that bank or financial
institution against any amount due and payable
to such bank or financial institution by that
or any other member of the London Electricity
Group; and
(B) arises in connection with the relevant London
Electricity Group member's ordinary banking
arrangements (including a cash management
scheme); or
(viii) any Security Interest created:
(A) by the Debentures; or over any Excluded Asset
(as defined in a Debenture executed by an
Obligor in corporated in the U.S.A.); or
(B) with the approval of the Majority Banks; or
(ix) any Security Interest created or existing over the
assets of a Project Finance Subsidiary, or over the
shares (or like interest in the capital) of a
Project Finance Subsidiary, securing Project Finance
Indebtedness; or
(x) any other Security Interest created or existing over
the assets of any member of the London Electricity
Group not falling within any of paragraphs (i) to
(ix) above so long as the aggregate principal amount
of outstanding indebtedness of the London
Electricity Group secured by all the Security
Interests permitted under this sub-paragraph (x) at
any time, together with the aggregate principal
amount of all outstanding indebtedness permitted
under Clause 17.10(b) (Transactions similar to
security) at that time, does not exceed BPS50,000,000
(or its equivalent in other currencies).
(c) Notwithstanding the above, the Company shall not create
or permit to subsist any Security Interest on any of the
share capital of London Electricity other than pursuant
to a Debenture.
17.10 Transactions similar to security
(a) Subject to paragraph (b) below, no Obligor shall, and the
Company shall procure that no other member of the Group
will:-
(i) sell, transfer or otherwise dispose of any of its
assets on terms whereby it is or may be leased to or
re-acquired or acquired by a member of the Group or
any of its related entities; or
(ii) sell, transfer or otherwise dispose of any of its
receivables on terms that recourse may be had to the
vendor in the event of non-payment of those
receivables when due, except for the discounting of
bills or notes in the ordinary course of trading,
in circumstances where the transaction is entered into
primarily as a method of raising finance or of financing
the acquisition of an asset.
(b) Any member of the London Electricity Group may enter into
transactions otherwise prohibited by paragraph (a) above
so long as the aggregate principal amount of outstanding
indebtedness of the London Electricity Group in respect
of all such transactions at any time, together with the
aggregate principal amount of all outstanding secured
indebtedness permitted under Clause 17.9(b)(x) (Negative
pledge) at that time, does not exceed BPS50,000,000 (or its
equivalent in other currencies).
17.11 Disposals
(a) The Company shall not sell, transfer or otherwise dispose
of or cease to exercise control over any of the share
capital of London Electricity except under or pursuant to
the Debenture executed by it.
(b) No Obligor shall, and the Company shall procure that no
other member of the Group will, 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 any part of its assets (all such transactions
being "disposals" for the purpose of this Clause).
(c) Paragraph (b) does not apply to the following disposals
(if made on arm's length terms or permitted by
Clause 17.20 (Arm's length terms)):-
(i) disposals made in the ordinary course of business of
the disposing entity; or
(ii) disposals made by a member of the London Electricity
Group of assets in exchange for other assets
comparable or superior as to type, value and
quality; or
(iii) disposals made by a member of the London
Electricity Group of obsolete or surplus assets no
longer required for the purpose of the relevant
person's business; or
(iv) the payment of cash not otherwise prohibited by the
terms of any Finance Document; or
(v) disposals by one member of the London Electricity
Group to another member of the London Electricity
Group (other than a Project Finance Subsidiary), but
only if, in the case of a Subsidiary of London
Electricity to whom the assets are transferred,
London Electricity owns directly or indirectly at
least a corresponding percentage of the ownership
interest in the transferee Subsidiary as in the
transferor Subsidiary or disposals from one Obligor
to another Obligor; or
(vi) other disposals of assets which are integral to the
distribution and supply of electricity activities of
the London Electricity Group to the extent that the
value of those assets disposed of during any
financial year of London Electricity is less than
BPS20,000,000 (as determined by reference to the
audited consolidated balance sheet of London
Electricity as at the end of the relevant financial
year or, in the case of any such asset which was not
taken into account for the purposes of that balance
sheet, its book value at the date of disposal); or
(vii) other disposals of assets not referred to in
paragraph (vi) above to the extent that the value of
those assets disposed of during any financial year
of London Electricity is less than BPS50,000,000 (as
determined by reference to the audited consolidated
balance sheet of London Electricity as at the end of
the relevant financial year or, in the case of any
such asset which was not taken into account for the
purposes of that balance sheet, its book value at
the date of disposal); or
(viii) disposals made by a member of the London
Electricity Group of receivables on arm's length
terms up to a maximum value:
(1) of BPS20,000,000, at any time when the
Capitalisation Ratio is in excess of 65 per
cent.; or
(2) of BPS50,000,000 at any time when the
Capitalisation Ratio is less than or equal to
65 per cent.; or
(3) in excess of the relevant limit of BPS20,000,000
or BPS50,000,000, as appropriate, but only if the
net proceeds of any such excess disposals are
applied in accordance with this Agreement in or
towards prepayment of, first, Facility C Loans
and then Facility A Loans. The Total Facility
A Commitments and the Total Facility C
Commitments shall be reduced by an amount equal
to the relevant prepayment; or
(ix) any other disposal approved by the Majority Banks.
17.12 Change of business
The Company shall procure that no substantial change is
made to the general nature or scope of the business of
the Company or the Group from that carried on at the date
of this Agreement or those which are usual for
electricity companies in the United Kingdom as at the
date of this Agreement, including, without limitation,
electricity distribution, supply and generation,
electrical contracting and business activities relating
to the gas, telecommunication and water industries.
17.13 Holding Company
(a) The Company shall not carry on any business (other than
(i) the holding of shares in, the making of loans to and
the provision of administrative services to, members of
the Group and (ii) the holding of general partnership
interests in ELC, the execution, delivery and performance
of Subordinated Debentures and the execution, delivery
and performance of the Subordinated Capital Security
Guarantee) or acquire any assets other than cash, cash
equivalents or shares in (or loans to) members of the
Group or general partnership interests in ELC.
(b) No Additional Guarantor shall carry on any business
(other than the holding of shares in, the making of loans
to and the provision of administrative services to,
members of the Group or Obligors) or acquire any assets
other than cash, cash equivalents or shares in (or loans
to) members of the Group or Obligors.
(c) No Guarantor shall create or acquire any new Subsidiaries
(other than a member of the London Electricity Group).
17.14 Mergers and acquisitions
(a) No Obligor shall, and the Company shall procure that no
other member of the Group will, enter into any
amalgamation, demerger, merger or reconstruction, except
for any amalgamation, merger or reconstruction between a
member of the Group (other than a Borrower or the
Licenceholder) and any other member of the Group (other
than a Borrower or the Licenceholder).
(b) No Obligor shall, and the Company shall procure that no
other member of the Group will, acquire any assets or
business or make any investment if the assets, business
or investment is substantial in relation to the Group ,
except for:
(i) acquisitions or investments made in the ordinary
course of business;
(ii) capital expenditure and any other expenditure, in
either case in connection with compliance with the
Licence, any Licence Undertaking or any other
applicable law or regulation;
(iii) investments contemplated by the implementation
of the capital structure referred to in paragraph 5
of Part I of Schedule 2 to the Restatement Agreement
or any other investment by an Obligor or other
member of the Group in another Obligor or other
member of the Group; and
(iv) other acquisitions or investments, the consideration
for which does not exceed (on a cumulative basis) 20
per cent. of the Adjusted Capital and Reserves at
such time (or its equivalent in other currencies),
and no Default is then outstanding or will result
from the acquisition or investment.
17.15 Distributions
(a) No Guarantor shall declare, recommend, make or pay any
dividend, distribution or payment (including by way of
redemption, repurchase, defeasance, retirement, return or
repayment) to any of its shareholders (other than any
payment due to its shareholders for goods and/or services
received or provided in the ordinary course of business)
or make any payment (including by way of redemption,
repurchase, defeasance, retirement, return or repayment
and including the payment of interest) in respect of any
Subordinated Debt, if a Default is outstanding or will
result from the relevant dividend, payment or
distribution.
(b) Each Guarantor shall, and the Company shall procure that
London Electricity will:
(i) pay dividends to its shareholders; or
(ii) provide funds by way of the making of a loan or the
payment of interest on a loan or the repayment of a
loan to its shareholders,
in each case in the amount available to it and necessary
to enable EUK to perform its obligations under the
Finance Documents. However, a Guarantor's obligation
under this paragraph does not extend to making or
procuring a payment or providing or procuring funds if it
would be contrary to any law or regulation or (in the
case of London Electricity) would breach the Licence or
any Licence Undertaking. Without limiting the above, if
London Electricity could make a payment or provide funds
by complying with Section 155 of the Companies Act 1985
and London Electricity is able to do so, then the Company
shall procure that London Electricity shall take the
necessary steps under Section 155-158 of the Companies
Act 1985 to enable the payment to be made or the relevant
funds to be provided.
17.16 Lending and borrowing
(a) No Obligor (other than London Electricity) shall incur
any Financial Indebtedness other than:-
(i) under the Finance Documents;
(ii) under the Subordinated Capital Security Guarantee
and the Subordinated Debentures;
(iii) under the Intercompany Notes;
(iv) to another Obligor;
(v) Financial Indebtedness specified in paragraph (g) of
its definition in Clause 1.1 (Definitions) and
complying with Clause 17.17 (Hedging);
(vi) where the net proceeds of the Financial Indebtedness
are used to prepay the Facility A Loans in whole; or
(vii) where the net proceeds of the Financial
Indebtedness are used solely to prepay the Facility
A Loans in part and:
(A) the Financial Indebtedness is unsecured except
to the extent secured under the Debentures or
is subordinated to the Financial Indebtedness
under the Finance Documents;
(B) if the Financial Indebtedness is secured under
the Debentures, the creditors of that Financial
Indebtedness (or their agent or trustee) have
entered into an intercreditor agreement
providing that, for so long as any amount is
outstanding under Facility A, the Banks shall
maintain control of voting rights with respect
to the security created under the Debentures;
(C) the Financial Indebtedness:-
(1) does not have a maturity date;
(2) is not voluntarily prepayable (otherwise
than on a pro rata basis with Facility A);
and
(3) does not amortize,
prior to the Facility A Final Repayment Date;
and
(D) after the Financial Indebtedness is incurred
and the Facility A Loan(s) partially prepaid,
no Default will then be outstanding.
(b) The Company will procure that the aggregate Borrowings of
London Electricity and its Subsidiaries taken together on
a consolidated basis plus (to the extent not otherwise
included in Borrowings of London Electricity and/or its
Subsidiaries and without double counting) the amount of
any actual or contingent liabilities of London
Electricity and/or its Subsidiaries:
(i) for Borrowings at that time of any person in which
London Electricity or any of its Subsidiaries has an
ownership interest; or
(ii) to provide funds by loan, subscription for share
capital or otherwise to any person (other than a
member of the London Electricity Group) in which
London Electricity or any of its Subsidiaries has an
ownership interest,
will not exceed the aggregate of:
(A) the outstanding principal amount from time to time
of the Facility C Loans;
(B) the principal amount of all Borrowings of those
companies outstanding at the date London Electricity
became a member of the Group;
(C) the outstanding principal amount from time to time
of all Borrowings of those companies for which the
only creditor is the Company or Entergy UK Finance
Limited;
(D) any Borrowing of any member of the London
Electricity Group where there is recourse falling
within paragraph (b)(iii) of the definition of
"Project Finance Indebtedness" in Clause 1.1
(Definitions) outstanding from time to time; and
(E) the amount which, when aggregated with the amounts
referred to in sub-paragraphs (A), (B) and (D)
above, equals BPS600,000,000.
(c) No Obligor will, and each Obligor will procure that no
member of the Group will, be the creditor in respect of
any Borrowings, other than:
(i) any Borrowing entered into with the prior consent of
the Majority Banks;
(ii) any Borrowing under paragraph (b) of the definition
of "Borrowings" where trade credit is extended by
any member of the Group on normal commercial terms
and in the ordinary course of its business on
substantially the same terms (or terms more
favourable to it) and in similar circumstances as
for trade credit extended prior to the date of this
Agreement by London Electricity;
(iii) loans made by one member of the Group to
another member of the Group or Obligor or by one
Obligor to another Obligor or member of the Group;
(iv) cash deposits made by a member of the Group at a
bank or other financial institution or any
commercial paper rated A1 or higher by Standard &
Poor's Rating Group (or any of its successors) or P1
or higher by Moody's Investors Service, Inc. (or any
of its successors) held by any member of Group;
(v) the Intercompany Notes; or
(vi) Borrowings not otherwise permitted under to
paragraphs (i) to (v) above in an aggregate amount
for the Group as a whole at any time outstanding not
exceeding BPS40,000,000.
(d) Without prejudice to paragraph (a) above and unless the
Majority Banks otherwise consent (such consent not to be
unreasonably withheld), the Company shall procure that
London Electricity does not repay or redeem the Bonds
otherwise than as may be required by the relevant
bondholders in accordance with the terms of the Bonds.
17.17 Hedging
(a) Subject to paragraph (b) below, no Obligor shall, and the
Company shall ensure that none of its Subsidiaries will,
enter into any interest rate swap, cap, ceiling, collar
or floor or any currency swap, futures, foreign exchange
or commodity contract or option (whether over the counter
or exchange traded) or any similar treasury transaction,
other than spot foreign exchange contracts entered into
in the ordinary course of business, and transactions for
the hedging of actual or projected interest rate,
currency and/or commodity and/or energy price exposures
arising in the ordinary course of the business activities
of that member of the Group.
(b) (i) It is the policy of the Company and EUK to
ensure that the interest rate on at least 50 per
cent. of the aggregate of the outstanding Facility A
Loan(s) and the Facility C Loans is either fixed or
subject to a cap (the level of which must be
acceptable to the Arrangers (acting reasonably)),
based on current market rates at the time the
relevant hedging arrangement is put in place and for
an average period of not less than three years from
the date upon which London Electricity became a
member of the Group.
(ii) The Company and EUK confirms that it is party to
such Swap Documents as are necessary to implement
the above policy.
17.18 Insurance
Each Guarantor shall procure that there is:
(a) maintained with underwriters or insurance companies
of repute in respect of each member of the London
Electricity Group and each Obligor the policies of
insurance in relation to its business and assets
which a prudent person carrying on a similar
business might be expected to maintain (including
policies to cover public and third party liability
and insurance against business interruption) and any
such other insurance as may be required pursuant to
the terms of any Finance Document; and
(b) from time to time upon request by the Agent,
supplied to the Agent copies of all such insurance
policies or certificates of insurance or such other
evidence of the existence of such policies as may be
reasonably acceptable to the Agent.
17.19 Constitutional Documents
No Obligor will, and the Company will procure that no
other member of the Group will, without the prior consent
of the Majority Banks or as required by law, amend or
seek or agree to amend or replace the memorandum or
articles of association or other constitutional documents
or by-laws of any Obligor or any member of the Group in
any way which would be likely materially and adversely to
affect the interests of the Banks under the Finance
Documents.
17.20 Arm's length terms
No Obligor will, and the Company will procure that no
other member of the Group will, enter into any material
transaction with any other person otherwise than on arm's
length terms, other than:
(a) transactions previously approved by the Majority
Banks;
(b) loans from or to, or disposals by, one member of the
Group to another member of the Group or from one
Obligor to another Obligor, which, in each case, are
permitted under the Finance Documents;
(c) transactions entered into on terms more favourable
to a member of the Group than arm's length terms;
and
(d) other transactions (including the issue of
Subordinated Debt, the Subordinated Debentures and
the Subordinated Capital Security Guarantee)
expressly permitted under the Finance Documents.
17.21 Share capital and security
Each Guarantor shall ensure that no Obligor or member of
the Group whose shares are charged under a Debenture
shall issue any further shares or alter any rights
attaching to its issued shares in existence at the
Effective Date unless those further shares are
contemporaneously charged, by way of fixed charge, to the
Agent on the terms of a Debenture or, in the case of
further shares in London Electricity, are Excluded Shares
(as defined in the Debenture created by the Company).
17.22 Security perfection
Each Obligor shall take all action required to perfect
the Security Interests created by it under a Debenture
over the Security Assets (as defined in that Debenture)
as soon as reasonably practicable after the date of that
Debenture, including (without limitation) sending to the
Agent in form and substance satisfactory to it (acting
reasonably):
(a) unless already delivered to the Agent, all share
certificates and all other documents of title in
relation to shares, stocks or other securities
charged under that Debenture together with share
transfer forms executed in blank or other documents
required to enable the Agent or its nominees to
become registered as the owner of the same; and
(b) where required under the terms of the relevant
Debenture, duly executed notices of charge and
acknowledgements in the form of the relevant
schedules to that Debenture respectively in relation
to the relevant agreements or accounts charged under
that Debenture, but the relevant Obligor will only
be obliged to use reasonable endeavours to obtain
the acknowledgements referred to above.
17.23 Compliance with laws
Without prejudice to Clause 17.24 (Licences and
regulatory matters), each Obligor will, and the Company
will procure that each other member of the Group will,
comply in all material respects with all applicable laws
and regulations, whether domestic or foreign, having
jurisdiction over it or any of its assets, failure to
comply with which has a Material Adverse Effect.
17.24 Licences and regulatory matters
The Company shall:
(a) ensure that London Electricity and any Licenceholder
(or any other relevant member of the Group) complies
in all material respects with the terms of its
Licence where failure to comply has a Material
Adverse Effect; and
(b) notify the Agent promptly upon receipt by it or any
member of the Group of any notice from the
government, any court or any regulatory authority or
agency which is reasonably likely to give rise to
the revocation, termination, material adverse
amendment, suspension or withdrawal of any Licence
granted in its favour (unless, contemporaneously,
that Licence is to be replaced, substituted or
reissued on the same, substantially the same or
improved terms); and
(c) procure that each member of the Group will comply
with the requirements of all rules, regulations,
orders and other requirements of the Secretary of
State and the Director General under the Act or any
other law applicable to the conduct of the business
of the supply or distribution of electricity, where
failure to comply has a Material Adverse Effect.
17.25 Business Consents
Each Guarantor will, and the Company will procure that
each other member of the Group will, obtain, promptly
renew from time to time, and maintain in full force and
effect, and if so requested promptly furnish certified
copies to the Agent of, all such material authorisations
as may be required under any applicable law or regulation
or under the Licence or any Licence Undertaking to carry
on its business as it is being conducted from time to
time, where failure to obtain, renew or maintain any such
authorisation or non-compliance with the terms of the
same has a Material Adverse Effect.
17.26 Financial covenants
(a) In this Clause 17.26:-
"Adjusted Capital and Reserves"
means the amount (including any share premium) for the
time being paid up or credited as paid up on the issued
share capital of the Company, adjusted as follows:
(i) plus the outstanding amount of any Subordinated Debt
and Subordinated Capital Securities;
(ii) plus the amount standing to the credit (or, as the
case may be, minus the amount standing to the debit)
of the capital and revenue reserves of the Group;
(iii) plus any amount standing to the credit or minus
any amount standing to the debit of the consolidated
profit and loss account of the Group;
(iv) minus any distribution declared or made by the
Company or any of its Subsidiaries (other than to
another member of the Group) out of profits included
within reserves to the extent that those reserves
have not already been reduced on account of it;
(v) minus amounts attributable to the interests (if any)
of outside holders of issued share capital in any
member of the Group other than the Company itself;
(vi) plus any amount deducted from reserves or the profit
and loss account in respect of goodwill arising upon
and in respect of the Acquisition;
(vii) plus any amount deducted from reserves or the
profit and loss account as a provision for the
future payment of any exceptional, special or
windfall tax or levy applicable to, inter alia,
privatised regional electricity companies;
and, for the purposes of the foregoing:
(A) no item shall be effectively deducted or added more
than once, all items shall be calculated on a
consolidated basis and (subject only as may be
required in order to reflect the express inclusion
or exclusion of items as specified in this
definition) in accordance with the Applicable
Accounting Principles; and
(B) where the calculation is being made as at the end of
any Accounting Period it shall be determined from
the balance sheet forming part of the relevant
quarterly or annual accounts for that Accounting
Period.
"Capitalisation Ratio"
means, at any time, the ratio of Consolidated Net Total
Borrowings to the aggregate of Consolidated Net Total
Borrowings and Adjusted Capital and Reserves, expressed
as a percentage.
"Consolidated EBITDA"
for any period comprising an annual Accounting Period of
the Company or consecutive quarterly Accounting Periods
of the Company (taken together as one period) means the
profit of the Group for such period:
(i) before deducting all depreciation and other
amortisation;
(ii) before taking into account all Extraordinary Items
(whether positive or negative) but, in the case of
the first test of the covenant set out in
Clause 17.26(c)(i) only, after taking into account
all Exceptional Items (whether positive or
negative);
(iii) before deducting tax;
(iv) before taking into account Consolidated Net Interest
Payable for such period;
(v) before deducting the costs incurred in connection
with the Acquisition;
(vi) after deducting any gain, or adding any loss, to
book value arising in favour of the Group on the
sale, lease or other disposal of any asset (other
than on the sale of trading stock) during such
period and deducting any gain, or adding any loss,
arising on revaluation of any asset during such
period, in each case to the extent that it would
otherwise be taken into account,
and, for the purposes of the foregoing, no item shall be
effectively deducted or credited more than once in this
calculation, all items shall be determined on a
consolidated basis and (subject only as may be required
in order to reflect the express inclusion or exclusion of
items as specified in this definition) in accordance with
the Applicable Accounting Principles and as determined
from the consolidated accounts of the Group for that
annual Accounting Period or for the relevant Accounting
Periods falling within that period.
"Consolidated Net Interest Payable"
means Consolidated Total Interest Payable less any
interest or amounts in the nature of interest receivable
during the relevant annual Accounting Period of the
Company or consecutive quarterly Accounting Periods of
the Company (taken together as one period), determined on
the same basis and manner as for Consolidated Total
Interest Payable.
"Consolidated Net Total Borrowings"
at any time means the aggregate at that time of the
Borrowings of the members of the Group from sources
external to the Group,
(i) plus (to the extent not otherwise included) the
amount of any actual or contingent liability of any
member of the Group:
(A) for Borrowings at that time of any person in
which any member of the Group has an ownership
interest; or
(B) to provide funds by loan, subscription for
share capital or otherwise to any person in
which any member of the Group has an ownership
interest;
(ii) less the cash in hand and cash equivalents of the
members of the Group at that time, and
(iii) excluding, for the avoidance of doubt, the
amount of any liability of any member of the Group
in respect of the Subordinated Debentures, the
Subordinated Capital Security Guarantee and the
Subordinated Capital Securities,
calculated on a consolidated basis and (subject only as
may be required in order to reflect the express inclusion
or exclusion of items as specified herein and/or in the
definition of Borrowings in this Clause) in accordance
with the Applicable Accounting Principles and, where the
calculation is being made as at the end of any Accounting
Period for which a consolidated balance sheet of the
Group has been delivered to the Agent, as shown in that
balance sheet.
"Consolidated Total Interest Payable"
for any period comprising an annual Accounting Period of
the Company or consecutive quarterly Accounting Periods
of the Company (taken together as one period) means the
interest (and all amounts required by the Applicable
Accounting Principles to be accounted for as interest)
accrued on Borrowings of the Group during such period
(excluding any interest payable on the Subordinated
Debentures) as an obligation of any member or members of
the Group (whether or not paid or capitalised during or
deferred for payment after such period) adjusted to take
account of any amount constituting interest receivable by
any members of the Group under interest rate and/or
currency hedging agreements or instruments under which
all parties are in compliance with their payment and
other material obligations, all determined on a
consolidated basis and (subject only as may be required
in order to reflect the express inclusion or exclusion of
items as specified in this definition) in accordance with
the Applicable Accounting Principles and as shown in the
consolidated accounts of the Group for such annual
Accounting Period or for the Accounting Periods falling
within such period.
"Exceptional Items"
has the meaning given to it in Financial Reporting
Standard 3 issued by the Accounting Standards Board (as
in force at the date of this Agreement), but shall
exclude any items falling within the definition of
Extraordinary Items.
"Extraordinary Items"
in the case of the first test of the covenant set out in
Clause 17.26(c)(i) only, has the meaning given to it in
Financial Reporting Standard 3 issued by the Accounting
Standards Board (as in force at the date of this
Agreement) but in addition shall include those items
listed in paragraph 20 thereof and, thereafter, has the
meaning given to it under US GAAP.
(b) (i) All the terms used in paragraph (a) above are
to be calculated in accordance with the Applicable
Accounting Principles.
(ii) If there is a dispute as to any interpretation of or
computation for paragraph (a) above, the
interpretation or computation of the Auditors
prevails.
(c) The Company shall procure that:-
(i) as of each date on which it is tested under
paragraph (d) below, the ratio of Consolidated
EBITDA to Consolidated Net Interest Payable is no
less than:
(A) in the case of an Accounting Period ending on
or before 30th September 1998, 1.8:1; and
(B) in the case of any subsequent Accounting
Period, 2:1; and
(ii) the Capitalisation Ratio shall not, as of each date
on which it is tested under paragraph (d) below,
exceed:
(A) for the period from the Effective Date until
31st December, 1999, 75 per cent.; and
(B) thereafter, 70 per cent.
(d) (i) Each test of the covenant set out in
paragraph (c)(i) above shall be made on a quarterly
basis and in respect of the annual Accounting Period
ending on the expiry of the relevant quarterly
Accounting Period, except that the first test of the
covenant shall be made:
(A) as of 31st December, 1997 in respect of the
period beginning on 1st February, 1997 and
ending on that date; and
(B) by reference to UK GAAP and not US GAAP.
(ii) Each test of the covenant set out in
paragraph (c)(ii) above shall be made as of the last
day of each quarterly Accounting Period.
17.27 Payment of taxes
Each Guarantor shall, and the Company shall procure that
each member of the Group will, pay all taxes, assessments
and governmental charges or levies imposed upon it or
upon its income or profits or upon any of its assets,
before the same shall become in default, which, if not
paid, has a Material Adverse Effect.
17.28 Maintenance of existence
Each Guarantor shall, and the Company shall procure that
each member of the Group will, do all such things as
necessary to maintain its corporate existence except
pursuant to a Permitted Transaction.
17.29 Property rights
Each Guarantor shall, and the Company shall procure that
each member of the Group will, maintain and keep, or
cause to be maintained and kept, its properties in good
repair, working order and condition, and from time to
time make or cause to be made all needful and proper
repairs, renewals, replacements and improvements so that
the business carried on in connection therewith may be
properly conducted at all times, where failure to do so
has a Material Adverse Effect.
17.30 Books
Each Guarantor will, and the Company shall procure that
each member of the Group will, keep proper books of
record and account in which proper entries will be made
of its transactions in accordance with generally accepted
accounting principles in the U.K. or the U.S.
18. DEFAULT
18.1 Events of Default
Each of the events set out in Clauses 18.2 (Non-payment)
to 18.21 (Material adverse change) (inclusive) is an
Event of Default (whether or not caused by any reason
whatsoever outside the control of any Obligor or any
other person).
18.2 Non-payment
An Obligor does not pay on the due date any amount
payable by it under the Finance Documents at the place at
and in the currency in which it is expressed to be
payable and (if caused by technical or administrative
error) the non-payment continues unremedied for
3 Business Days from the receipt by it of notice of non-
payment from the Agent.
18.3 Breach of other obligations
(a) An Obligor fails to comply with any provision of Clauses
17.8 (Pari passu ranking) to 17.15 (Distributions)
inclusive, Clause 17.20 (Arm's length terms) and
Clause 17.26(c)(i) (Financial covenants);
(b) the Company fails to comply with Clause 17.26(c)(ii)
(Financial covenants) and, if that default is capable of
remedy, it is not remedied within 3 Business Days of it
becoming aware of the default; or
(c) an Obligor does not comply with any provision of the
Finance Documents (other than those referred to in
Clause 18.2 (Non-payment) or paragraph (a) or (b) above)
and, if that default is capable of remedy, it is not
remedied within 28 days of the earlier of the relevant
Obligor becoming aware of the default and receipt by it
of a notice of default from the Agent.
18.4 Misrepresentation
A representation, warranty or statement made or repeated
in or in connection with any Finance Document or in any
document delivered by or on behalf of any Obligor under
or in connection with any Finance Document is incorrect
in any material respect when made or deemed to be made or
repeated by reference to the facts and circumstances then
subsisting and, if the circumstances causing the
misrepresentation are capable of remedy within that
period, that misrepresentation is not remedied within 28
days of the earlier of the relevant Obligor becoming
aware of the misrepresentation and receipt by it of
notice from the Agent requiring remedy.
18.5 Cross-default
(a) Any Financial Indebtedness of any Obligor or other member
of the Group is not paid when due or within any
applicable grace period; or
(b) an event of default howsoever described exists in
relation to any Obligor or other member of the Group
under any document relating to Financial Indebtedness of
an Obligor or other member of the Group; or
(c) any Financial Indebtedness of any Obligor or other member
of the Group becomes prematurely due and payable or is
placed on demand as a result of an event of default
(howsoever described) under the document relating to that
Financial Indebtedness; or
(d) any commitment for, or underwriting of, any Financial
Indebtedness of any Obligor or other member of the Group
is cancelled or suspended as a result of an event of
default (howsoever described) under the document relating
to that Financial Indebtedness; or
(e) any Security Interest securing Financial Indebtedness
over any asset of any Obligor or other member of the
Group becomes enforceable; or
(f) any Financial Indebtedness under the EIL Facility
Agreement becomes prematurely due and payable as a result
of an event of default,
unless, in the case of any member(s) of the London
Electricity Group, the aggregate amount of Financial
Indebtedness is less than BPS20,000,000 (or its equivalent
in other currencies) and, for this purpose, the amount of
any Financial Indebtedness specified in paragraph (b)
above will be determined after making the adjustments
specified in paragraphs (b) and (c) of the definition of
"Borrowing" contained in Clause 1.1 (Definitions) and the
amount of any Financial Indebtedness specified in
paragraph (g) of its definition in Clause 1.1
(Definitions) will be determined on a mark-to-market
basis.
18.6 Insolvency
(a) an Obligor or any Material Subsidiary is, or is deemed
for the purposes of any law to be (except in the
circumstances of Section 123(1)(a) of the Insolvency Act
1986 where the Obligor or Material Subsidiary is
contesting payment of the relevant debt in good faith and
with due diligence), unable to pay its debts as they fall
due or to be insolvent, or admits inability to pay its
debts as they fall due; or
(b) an Obligor or any Material Subsidiary suspends making
payments on all or any class of its debts or announces an
intention to do so, or a moratorium is declared in
respect of all or any class of its indebtedness; or
(c) An Obligor or any Material Subsidiary by reason of
financial difficulties (in circumstances of actual or
imminent insolvency) begins negotiations with one or more
of its creditors with a view to the readjustment or
rescheduling of all or any class of its indebtedness.
18.7 Insolvency proceedings
(a) Any step (including petition, proposal or convening a
meeting) is taken with a view to a composition,
assignment or arrangement with any creditors of an
Obligor or a Material Subsidiary; or
(b) a meeting of an Obligor or a Material Subsidiary is
convened for the purpose of considering any resolution
for (or to petition for) its winding-up or its
administration or any such resolution is passed; or
(c) any person presents a petition for the winding-up or for
the administration of an Obligor or a Material
Subsidiary, and, in the case of a petition for winding-up
presented by a creditor, it is not withdrawn, discharged
or stayed within 21 days; or
(d) any order is made for the winding-up or administration of
an Obligor or a Material Subsidiary; or
(e) any other step (including petition, proposal or convening
a meeting) is taken with a view to the rehabilitation,
administration, custodianship, liquidation, winding-up or
dissolution of an Obligor or a Material Subsidiary or any
other insolvency proceedings involving an Obligor or a
Material Subsidiary, and, in the case of any such step
taken by a creditor, it is not withdrawn, discharged or
stayed within 21 days,
except for any which arises from a Permitted Transaction.
18.8 Appointment of receivers and managers
(a) Any liquidator, trustee in bankruptcy, judicial
custodian, compulsory manager, receiver, administrative
receiver, administrator or the like is appointed in
respect of an Obligor or a Material Subsidiary or any
part of its assets, otherwise than in connection with a
Permitted Transaction; or
(b) the directors of an Obligor or a Material Subsidiary
requests the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator or the
like, otherwise than in connection with a Permitted
Transaction; or
(c) any other step is taken to enforce any Security Interest
over any part of the assets of an Obligor or a Material
Subsidiary and is not withdrawn, discharged or stayed
within 21 days.
18.9 Creditors' process
Any attachment, sequestration, distress or execution
affects any assets of an Obligor or a Material Subsidiary
(having, in the case of any member(s) of the London
Electricity Group, an aggregate value of BPS20,000,000 (or
its equivalent in other currencies)) and is not
discharged within 14 days, unless:
(a) it is being contested in good faith with due
diligence; and
(b) in the case of London Electricity, in the reasonable
opinion of the Majority Banks, it does not have a
Material Adverse Effect.
18.10 Analogous proceedings
There occurs, in relation to an Obligor or a Material
Subsidiary, any event anywhere which, in the opinion of
the Majority Banks, appears to correspond with any of
those mentioned in Clauses 18.6 (Insolvency) to 18.9
(Creditors' process) (inclusive).
18.11 Cessation of business
An Obligor or a Material Subsidiary ceases, or threatens
to cease, to carry on all or a substantial part of its
business, other than in connection with a Permitted
Transaction.
18.12 Unlawfulness
It is or becomes unlawful for any Obligor to perform any
of its material obligations under the Finance Documents.
18.13 Ownership of London Electricity
London Electricity ceases to be beneficially wholly-owned
by the Company.
18.14 Ownership of the Group
(a) The issued share capital of any Obligor ceases to be 100%
directly or indirectly legally and beneficially owned by
Entergy Corporation and/or any of its wholly-owned
Subsidiaries free of any Security Interest (other than
any created by a Debenture), except as a result of a sale
of, or issuance of stock representing, up to 20 per cent.
of the common stock of Entergy International Holdings Ltd
or Entergy International Ltd LLC.
(b) There is any variation to the corporate and/or capital
structure set out in Schedule 7 that has a material
adverse effect on the position of the Banks under the
Finance Documents.
18.15 Licence
(a) The Licence is revoked or surrendered or ceases to be
held by London Electricity or a wholly-owned Subsidiary
of London Electricity or the Company, other than in
circumstances which permit London Electricity or one of
its wholly-owned Subsidiaries to carry on the
distribution business of London Electricity substantially
as envisaged at the date of this Agreement either without
the Licence as a result of any change in the Act or with
a new public electricity supply licence issued to such
person under the Act whose terms are not materially less
favourable than those of the Licence; or
(b) the Licence or any substitute licence contemplated by
paragraph (a) above is materially modified in any manner
which, in the reasonable opinion of the Majority Banks,
has (whether immediately or in the course of time) a
Material Adverse Effect.
18.16 Compliance with the Act
The Licenceholder fails to comply with:
(a) a final order (within the meaning of Section 25 of
the Act); or
(b) a provisional order (within the meaning of that
section) which has been confirmed under that
section,
and, in either case, the order has not been revoked under
that section or the validity of the order has not been
questioned under Section 27 of the Act.
18.17 Pooling and Settlement Agreement
(a) Any notice requiring a Licenceholder to cease to be a
party to the Pooling and Settlement Agreement is given to
a Licenceholder under the Pooling and Settlement
Agreement.
(b) London Electricity or any other Licenceholder which
subsequently becomes a party to the Pooling and
Settlement Agreement ceases to be a party to the Pooling
and Settlement Agreement, except as the result of the
transfer of the Licence to another member of the Group
which becomes a party to the Pooling and Settlement
Agreement.
18.18 Expropriation
The authority or ability of any Obligor or London
Electricity or the Licenceholder to conduct its business
is wholly or substantially curtailed by any expropriation
or renationalisation by or on behalf of any governmental
authority.
18.19 Security
A Debenture or the guarantee of a Guarantor or any
Subordination Agreement is ineffective or is alleged by
an Obligor or (in the case of a Subordination Agreement)
the relevant junior creditor to be ineffective for any
reason.
18.20 Extra security
If:
(a) on any date as of which a covenant in paragraph (c)
(i) of Clause 17.26 (Financial covenants) is tested
the ratio of Consolidated EBITDA to Consolidated Net
Interest Payable is less than :
(i) in the case of a date falling on or before 30th
September, 1998, 1.81:1;
(ii) in the case of 31st December, 1998, 2.01:1;
(iii) in the case of a date falling after
31st December, 1998 and on or before 31st
December, 2000, 2.1:1; or
(iv) in the case of any subsequent date, 2.15:1
or
(b) the public senior debt ratings of London Electricity
shall be rated BB+ or below by Standard & Poor's
Rating Group (or any of its successors) and Ba1 or
below by Moody's Investors Service, Inc. (or any of
its successors),
and, in each case, the Company fails to create within
7 days a first legal mortgage, in favour of the Agent
under the terms of the Debenture executed by the Company,
of all the shares in London Electricity.
18.21 Material adverse change
Any event or series of events occurs which, in the
reasonable opinion of the Majority Banks, has or is
reasonably likely to have a material adverse effect on
the ability of an Obligor to comply with:
(a) its payment obligations under any Finance Document;
or
(b) its obligations under Clause 17.26 (Financial
covenants).
18.22 Acceleration
At any time during the existence of an Event of Default
the Agent may, and shall if so directed by the Majority
Banks, by notice to the Company:-
(a) cancel the Total Commitments; and/or
(b) demand that all or part of 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 or part of the Loans be payable on
demand, whereupon they shall immediately become
payable on demand by the Agent (acting on the
instructions of the Majority Banks); and/or
(d) request that the Company, if it has not already done
so, executes a Debenture over the shares of London
Electricity which are not secured in favour of the
Agent.
19. THE AGENT AND THE ARRANGERS
19.1 Appointment and duties of the Agent
(a) Each Finance Party (other than the Agent) irrevocably
appoints the Agent to act as its agent under and in
connection with the Finance Documents, and irrevocably
authorises the Agent on its behalf to perform the duties
and to exercise the rights, powers and discretions that
are specifically delegated to it under or in connection
with the Finance Documents, together with any other
incidental rights, powers and discretions. The Agent
shall have only those duties which are expressly
specified in this Agreement. Those duties are solely of a
mechanical and administrative nature.
(b) The Agent agrees to execute a Subordination Agreement,
duly executed by the Company and the relevant junior
creditor, promptly on request by the Company.
19.2 Role of the Arrangers
Except as otherwise provided in this Agreement, no
Arranger has any obligations of any kind to any other
Party under or in connection with any Finance Document.
19.3 Relationship
The relationship between the Agent and the other Finance
Parties is that of agent and principal only. Nothing in
this Agreement constitutes the Agent as trustee or
fiduciary for any other Party or any other person and the
Agent need not hold in trust any moneys paid to it for a
Party or be liable to account for interest on those
moneys.
19.4 Majority Banks' directions
The Agent will be fully protected if it acts in
accordance with the instructions of the Majority Banks in
connection with the exercise of any right, power or
discretion or any matter not expressly provided for in
the Finance Documents. Any such instructions given by the
Majority Banks will be binding on all the Banks. In the
absence of such instructions the Agent may act as it
considers to be in the best interests of all the Banks.
19.5 Delegation
The Agent may act under the Finance Documents through its
personnel and agents.
19.6 Responsibility for documentation
None of the Agent and the Arrangers is responsible to any
other Party for:-
(a) the execution, genuineness, validity, enforceability
or sufficiency of any Finance Document or any other
document;
(b) the collectability of amounts payable under any
Finance Document; or
(c) the accuracy of any statements (whether written or
oral) made in or in connection with any Finance
Document (including the Information Memorandum).
19.7 Default
(a) The Agent is not obliged to monitor or enquire as to
whether or not a Default has occurred. The Agent will not
be deemed to have knowledge of the occurrence of a
Default. However, if the Agent receives notice from a
Party referring to this Agreement, describing the Default
and stating that the event is a Default, it shall
promptly notify the Banks.
(b) The Agent may require from the Banks the receipt of
security satisfactory to it whether by way of payment in
advance or otherwise, against any liability or loss which
it will or may incur in taking any proceedings or action
arising out of or in connection with any Finance Document
before it commences those proceedings or takes that
action.
19.8 Exoneration
(a) Without limiting paragraph (b) below, the Agent will not
be liable to any other Party for any action taken or not
taken by it under or in connection with any Finance
Document, unless directly caused by its gross negligence
or wilful misconduct.
(b) No Party may take any proceedings against any officer,
employee or agent of the Agent in respect of any claim it
might have against the Agent or in respect of any act or
omission of any kind (including negligence or wilful
misconduct) by that officer, employee or agent in
relation to any Finance Document.
19.9 Reliance
The 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 a director or employee
of any person regarding any matters which may
reasonably be assumed to be within his knowledge or
within his power to verify; and
(c) engage, pay for and rely on legal or other
professional advisers selected by it (including
those in the Agent's employment and those
representing a Party other than the Agent).
19.10 Credit approval and appraisal
Without affecting the responsibility of any Obligor for
information supplied by it or on its behalf in connection
with any Finance Document, each Bank confirms that it:-
(a) has made its own independent investigation and
assessment of the financial condition and affairs of
each Obligor and its related entities in connection
with its participation in this Agreement and has not
relied exclusively on any information provided to it
by the Agent or an Arranger in connection with any
Finance Document; and
(b) will continue to make its own independent appraisal
of the creditworthiness of each Obligor and its
related entities while any amount is or may be
outstanding under the Finance Documents or any
Commitment is in force.
19.11 Information
(a) The Agent shall promptly forward to the person concerned
the original or a copy of any document which is delivered
to the Agent by a Party for that person.
(b) The Agent shall promptly supply a Bank with a copy of
each document received by the Agent under Clause 4
(Conditions precedent) upon the request and at the
expense of that Bank.
(c) Except where this Agreement specifically provides
otherwise, the Agent is not obliged to review or check
the accuracy or completeness of any document it forwards
to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide
any Bank with any credit or other information
concerning the financial condition or affairs of any
Obligor or any related entity of any Obligor whether
coming into its possession or that of any of its
related entities before, on or after the date of
this Agreement; or
(ii) unless specifically requested to do so by a Bank in
accordance with this Agreement, to request any
certificates or other documents from any Obligor.
19.12 The Agent and the Arrangers individually
(a) If it is also a Bank, each of the Agent and the Arrangers
has the same rights and powers under the Finance
Documents as any other Bank and may exercise those rights
and powers as though it were not the Agent or an
Arranger.
(b) Each of the Agent and the Arrangers may:-
(i) carry on any business with an Obligor or its related
entities;
(ii) act as agent or trustee for, or in relation to any
financing involving, an Obligor or its related
entities; and
(iii) retain any profits or remuneration in
connection with its activities under this Agreement
or in relation to any of the foregoing.
(c) In acting as the Agent, the Agent's agency division shall
be treated as a separate entity from any other of its
divisions or departments and, notwithstanding the
foregoing provisions of this Clause 19, if the Agent
should act for any member of the Group in any capacity in
relation to any other matter, any information given by
that member of the Group to the Agent in such other
capacity may be treated as confidential by the Agent.
19.13 Indemnities
(a) Without limiting the liability of any Obligor under the
Finance Documents, each Bank shall forthwith on demand
indemnify the Agent for its proportion of any liability
or loss incurred by the Agent in any way relating to or
arising out of its acting as the Agent, except to the
extent that the liability or loss arises directly from
the Agent's gross negligence or wilful misconduct.
(b) A Bank's proportion of the liability or loss set out in
paragraph (a) above is the proportion which its
participation in the Loans (if any) bear to all the Loans
on the date of the demand. If, however, there is no Loan
outstanding on the date of demand, then the proportion
will be the proportion which its Commitments bears to the
Total Commitments at the date of demand or, if the Total
Commitments have been cancelled, bore to the Total
Commitments immediately before being cancelled.
19.14 Compliance
(a) The Agent may refrain from doing anything 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 of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not
disclose any information relating to any Obligor or any
of its related entities if the disclosure might, in the
opinion of the Agent, constitute a breach of any law or
regulation or any duty of secrecy or confidentiality or
be otherwise actionable at the suit of any person.
19.15 Resignation of Agent
(a) Notwithstanding its irrevocable appointment, the Agent
may resign by giving notice to the Banks and the Company,
in which case the Agent may forthwith appoint one of its
Affiliates as successor Agent or, failing that, the
Majority Banks may (after consultation with the Company)
appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by
the Majority Banks but they have not, within 30 days
after notice of resignation, appointed a successor Agent
which accepts the appointment, the retiring Agent may
(after consultation with the Company) appoint a successor
Agent.
(c) The resignation of the retiring Agent and the appointment
of any successor Agent will both become effective only
upon the successor Agent notifying all the Parties that
it accepts the appointment. On giving the notification,
the successor Agent will succeed to the position of the
retiring Agent and the term "Agent" will mean the
successor Agent.
(d) The retiring Agent shall, at its own cost, make available
to the successor Agent such documents and records and
provide such assistance as the successor Agent may
reasonably request for the purposes of performing its
functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 19
(The Agent and the Arrangers) shall continue to benefit
the retiring Agent in respect of any action taken or not
taken by it under or in connection with the Finance
Documents while it was the Agent, and, subject to
paragraph (d) above, it shall have no further obligation
under any Finance Document.
(f) If so instructed by the Majority Banks (after
consultation with the Company), the Agent shall resign in
accordance with paragraph (a) above. However, in this
event the Agent may not appoint a successor Agent.
19.16 Banks
The Agent may treat each Bank as a Bank, entitled to
payments under this Agreement and as acting through its
Facility Office(s) until it has received notice from the
Bank to the contrary not less than 5 Business Days prior
to the relevant payment.
19.17 Agent as Trustee
(a) The Agent in its capacity as trustee or otherwise under a
Debenture:-
(i) is not liable for any failure, omission or defect in
perfecting or registering the security constituted
or created by any Finance Document;
(ii) may accept without enquiry such title as the
relevant Obligor may have to any asset secured by a
Debenture; and
(iii) is not under any obligation to hold any Finance
Document or any other document in connection with
the Finance Documents or the assets secured by any
Finance Document (including title deeds) in its own
possession or to take any steps to protect or
preserve the same. The Agent may permit any member
of the Group to retain any Finance Document or other
document in its possession.
(b) Save as otherwise provided in the Finance Documents, all
moneys which under the trusts contained in the Finance
Documents are received by the Agent in its capacity as
trustee or otherwise may be invested in the name of or
under the control of the Agent in any investment
authorised by English law for the investment by trustees
of trust money or in any other investments which may be
selected by the Agent. Additionally, the same may be
placed on deposit in the name of or under the control of
the Agent at such bank or institution (including the
Agent) and upon such terms as the Agent may think fit.
20. FEES
20.1 Restatement fee
EUK shall pay (or procure the payment) to the Agent for
the Arrangers a restatement fee in the amount and on the
date agreed in the Fee Letter between EUK and the
Arrangers.
20.2 Commitment fee
(a) London Electricity shall pay to the Agent for each Bank a
commitment fee during the period from the date of this
Agreement up to (but excluding) the Facility C Final
Repayment Date computed at the rate of 0.125 per cent.
per annum on the undrawn, uncancelled amount of that
Bank's Facility C Commitment.
(b) Accrued commitment fee is payable quarterly in arrear.
Accrued commitment fee is also payable to the Agent for
the relevant Bank(s) on the cancelled amount of its
Facility C Commitment at the time the cancellation takes
effect.
20.3 Agent's fee
EUK shall pay (or procure the payment) to the Agent for
its own account an agency fee in the amount and on the
date agreed in the Fee Letter between EUK and the Agent.
20.4 VAT
Any fee referred to in this Clause 20 (Fees) is exclusive
of any value added tax or any other tax which might be
chargeable in connection with that fee. If any value
added tax or other tax is so chargeable, it shall be paid
by the relevant Borrower at the same time as it pays the
relevant fee.
21. EXPENSES
21.1 Initial and special costs
EUK shall forthwith on demand pay (or procure the
payment) to the Agent and the Arrangers the amount of all
reasonable costs and expenses (including legal fees)
reasonably incurred by them in connection with:-
(a) the negotiation, preparation, printing and execution
of this Agreement and any other documents referred
to in this Agreement and the syndication of the
Facilities, subject as provided in the letter dated
25th September, 1997 from the Arrangers to Entergy
Corporation;
(b) the negotiation, preparation, printing and execution
of any other Finance Document (other than a Novation
Certificate) executed after the date of this
Agreement; and
(c) any amendment, waiver, consent or suspension of
rights (or any proposal for any of the foregoing)
requested by or on behalf of an Obligor or, in the
case of Clause 2.3 (Change of currency), the Agent
and relating to a Finance Document or a document
referred to in any Finance Document.
21.2 Enforcement costs
EUK shall forthwith on demand pay (or procure the
payment) to each Finance Party the amount of all
reasonable costs and expenses (including, without
limitation, legal fees) incurred by it in connection with
the enforcement of, or the preservation of any rights
under, any Finance Document.
22. STAMP DUTIES
EUK shall pay (or procure the payment) and forthwith on
demand indemnify each Finance Party (or procure that each
Finance Party is indemnified) against any liability it
incurs in respect of any stamp, registration and similar
tax which is or becomes payable in connection with the
entry into, performance or enforcement of any Finance
Document.
23. INDEMNITIES
23.1 Currency indemnity
(a) If a Finance Party receives an amount in respect of an
Obligor's liability under the Finance Documents or if
that liability is converted into a claim, proof,
judgement or order in a currency other than the currency
(the "contractual currency") in which the amount is
expressed to be payable under the relevant Finance
Document:-
(i) that Obligor shall indemnify that Finance Party as
an independent obligation against any loss or
liability arising out of or as a result of the
conversion;
(ii) if the amount received by that Finance Party, when
converted into the contractual currency at a market
rate in the usual course of its business, is less
than the amount owed in the contractual currency,
the Obligor concerned shall forthwith on demand pay
to that Finance Party an amount in the contractual
currency equal to the deficit; and
(iii) the Obligor shall pay to the Finance Party
concerned on demand any exchange costs and taxes
payable in connection with any such conversion.
(b) Each Obligor waives any right it may have in any
jurisdiction to pay any amount under the Finance
Documents in a currency other than that in which it is
expressed to be payable.
23.2 Other indemnities
EUK shall forthwith on demand indemnify each Finance
Party (or procure that each Finance Party is indemnified)
against any loss or liability which that Finance Party
incurs as a consequence of:-
(a) the occurrence of any Default;
(b) a change in currency of a country or the operation
of Clause 2.3 (Change of currency), the operation of
Clause 18.22 (Acceleration) or Clause 29 (Pro rata
sharing);
(c) any payment of principal or an overdue amount being
received from any source otherwise than on the last
day of an Interest Period relative to the relevant
payment and, for the purposes of this paragraph (c),
the last day of an Interest Period for an overdue
amount is the last day of the relevant Designated
Interest Period (as defined in Clause 9.3 (Default
interest));
(d) (other than by reason of negligence or default by
any Finance Party) a Loan not being made after the
Borrower has delivered a Request for that Loan; or
(e) any failure by a member of the Group to comply with
the Environmental Laws applicable to it or any
Environmental Licence held by it.
EUK's liability in each case includes any loss of margin
or other 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.
24. EVIDENCE AND CALCULATIONS
24.1 Accounts
Accounts maintained by a Finance Party in connection with
this Agreement are prima facie evidence of the matters to
which they relate.
24.2 Certificates and determinations
Any certification or determination by a Finance Party of
a rate or amount under the Finance Documents is prima
facie evidence of the matters to which it relates. Any
determination by a Finance Party of an amount under a
Finance Document shall contain a calculation of the
amount in reasonable detail.
24.3 Calculations
Interest (including any applicable MLA Cost) and the fee
payable under Clause 20.2 (Commitment fee) accrue from
day to day and are calculated on the basis of the actual
number of days elapsed and a year of 365 days or (where
market practice so dictates) 360 days.
25. AMENDMENTS AND WAIVERS
25.1 Procedure
(a) Subject to Clause 25.2 (Exceptions), any term of the
Finance Documents may be amended or waived with the
agreement of the Company, the Majority Banks and the
Agent. The Agent may effect, on behalf of the Banks, an
amendment to which they or the Majority Banks have
agreed.
(b) The Agent shall promptly notify the other Parties of any
amendment or waiver effected under paragraph (a) above,
and any such amendment or waiver shall be binding on all
the Parties.
25.2 Exceptions
An amendment or waiver which relates to:-
(a) the definition of "Majority Banks" in Clause 1.1
(Definitions);
(b) an extension of the date for, or a decrease in an
amount or a change in the currency of, any payment
(including the Margin or any other amount of
interest or any fee) under the Finance Documents;
(c) an increase in a Bank's Commitment;
(d) the release of any Guarantor or any security the
subject of a Debenture;
(e) a term of a Finance Document which expressly
requires the consent of each Bank; or
(f) Clause 29 (Pro rata sharing) or this Clause 25
(Amendments and waivers),
may not be effected without the consent of each Bank.
25.3 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 such right is
not a waiver of that right.
26. CHANGES TO THE PARTIES
26.1 Transfers by Obligors
No Obligor may assign, transfer, novate or dispose of any
of, or any interest in, its rights and/or obligations
under this Agreement.
26.2 Transfers by Banks
(a) Subject to paragraph (b) below, a Bank (the "Existing
Bank") may at any time assign, transfer or novate any of
its Commitments and/or rights and/or obligations in whole
or in part under this Agreement to a Qualifying Bank (the
"New Bank"). A partial assignment, transfer or novation
is only permitted in minimum amounts of BPS10,000,000 and
if the Bank concerned assigns, transfers or novates a pro
rata portion of all its rights and obligations under
Facilities A and C.
(b) The prior consent of the Company is required for any such
assignment, transfer or novation referred to in paragraph
(a) above, unless:-
(i) the New Bank is another Bank or an Affiliate of a
Bank; or
(ii) a Default is outstanding.
However, the prior consent of the Company must not be
unreasonably withheld or delayed and will be deemed to
have been given if, within 14 days of receipt by the
Company of an application for consent, it has not been
expressly refused.
(b) A transfer of obligations will be effective only if
either:-
(i) the obligations are novated in accordance with
Clause 26.3 (Procedure for novations); or
(ii) the New Bank confirms to the Agent and the Company
that it undertakes to be bound by the terms of this
Agreement as a Bank in form and substance
satisfactory to the Agent. On the transfer becoming
effective in this manner the Existing Bank shall be
relieved of its obligations under this Agreement to
the extent that they are transferred to the New
Bank.
(c) Nothing in this Agreement restricts the ability of a Bank
to sub-contract an obligation if that Bank remains liable
under this Agreement for that obligation.
(d) On each occasion an Existing Bank assigns, transfers or
novates any of its rights and/or obligations under this
Agreement, the New Bank shall, on the date the
assignment, transfer and/or novation takes effect, pay to
the Agent for its own account a fee of BPS750.
(e) An Existing Bank is not responsible to a New Bank for:-
(i) the execution, genuineness, validity, enforceability
or sufficiency of any Finance Document or any other
document;
(ii) the collectability of amounts payable under any
Finance Document; or
(iii) the accuracy of any statements (whether written
or oral) made in or in connection with any Finance
Document.
(f) Each New Bank confirms to the Existing Bank and the other
Finance Parties that it:-
(i) has made its own independent investigation and
assessment of the financial condition and affairs of
each Obligor and its related entities in connection
with its participation in this Agreement and has not
relied exclusively on any information provided to it
by the Existing Bank in connection with any Finance
Document; and
(ii) will continue to make its own independent appraisal
of the creditworthiness of each Obligor and its
related entities while any amount is or may be
outstanding under this Agreement or any Commitment
is in force.
(g) Nothing in any Finance Document obliges an Existing Bank
to:-
(i) accept a re-transfer from a New Bank of any of the
rights and/or obligations assigned, transferred or
novated under this Clause; or
(ii) support any losses incurred by the New Bank by
reason of the non-performance by any Obligor of its
obligations under this Agreement or otherwise.
(h) Any reference in this Agreement to a Bank includes a New
Bank, but excludes a Bank if no amount is or may be owed
to or by that Bank under this Agreement and its
Commitment has been cancelled or reduced to nil.
26.3 Procedure for novations
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the
Agent a duly completed certificate, substantially in
the form of Schedule 4 (a "Novation Certificate");
and
(ii) the Agent executes it.
(b) Each Party (other than the Existing Bank and the New
Bank) irrevocably authorises the Agent to execute any
duly completed Novation Certificate on its behalf.
(c) To the extent that they are expressed to be the subject
of the novation in the Novation Certificate:-
(i) the Existing Bank and the other Parties (the
"existing Parties") will be released from their
obligations to each other (the "discharged
obligations");
(ii) the New Bank and the existing Parties will assume
obligations towards each other which differ from the
discharged obligations only insofar as they are owed
to or assumed by the New Bank instead of the
Existing Bank;
(iii) the rights of the Existing Bank against the
existing Parties and vice versa (the "discharged
rights") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire
rights against each other which differ from the
discharged rights only insofar as they are
exercisable by or against the New Bank instead of
the Existing Bank,
all on the date of execution of the Novation Certificate
by the Agent or, if later, the date specified in the
Novation Certificate.
26.4 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a
Bank, the Bank of which it is an Affiliate) ceases to be
one of the Banks, the Agent shall (in consultation with
the Company) appoint another Bank or an Affiliate of a
Bank to replace that Reference Bank.
26.5 Increased costs etc.
If:-
(a) a Bank assigns, transfers or novates any of its
Commitments and/or rights and/or obligations under
the Finance Documents or changes its Facility
Office; and
(b) as a result of circumstances existing at the date
the assignment, transfer, novation or change occurs,
an Obligor would be obliged to make a payment to the
New Bank or Bank acting through its new Facility
Office under Clause 11 (Taxes) or Clause 13
(Increased costs),
then, notwithstanding the provisions of Clause 11 (Taxes)
or Clause 13 (Increased costs), the relevant New Bank or
Bank acting through its new Facility Office is only
entitled to receive payment under those Clauses from an
Obligor to the same extent as the relevant Existing Bank
or Bank acting through its previous Facility Office would
have been if the assignment, transfer, novation or change
had not occurred
26.6 Register
The Agent shall keep a register of all the Parties and
shall supply any other Party (at that Party's expense)
with a copy of the register on request.
27. DISCLOSURE OF INFORMATION
(a) A Finance Party may disclose to one of its Affiliates or
any person (a "participant") with whom it is proposing to
enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this
Agreement:-
(i) a copy of any Finance Document; and
(ii) any information which that Finance Party has
acquired under or in connection with any Finance
Document,
so long as disclosure of confidential information under
sub-paragraph (ii) above may only be disclosed to a
participant if the participant has agreed in writing with
the relevant Finance Party to keep the information
confidential on the same terms (with consequential
changes) as are set out in paragraph (b) below.
(b) Each Finance Party shall keep confidential and not,
without the prior consent of the Company, use any
information (other than information which is publicly
available other than as a result of a breach of this
paragraph (b)) supplied by or on behalf of any Obligor
under the Finance Documents otherwise than in connection
with the Finance Documents. However, each Finance Party
is entitled to disclose information:
(i) in connection with any legal or arbitration
proceedings arising out of or in connection with a
Finance Document; or
(ii) if required to do so by an order of a court of
competent jurisdiction whether under any procedure
for discovering documents or otherwise; or
(iii) pursuant to any law or regulation in accordance
with which that Bank is required or accustomed to
act; or
(iv) to a governmental, banking, taxation or other
regulatory authority of any competent jurisdiction;
or
(v) to its accountants or legal advisers or any other
professional advisers.
28. SET-OFF
A Finance Party may set off any matured obligation owed
by an Obligor under this Agreement (to the extent
beneficially owned by that Finance Party) against any
obligation (whether or not matured) owed by that Finance
Party to that Obligor, regardless of the place of
payment, booking branch or currency of either obligation.
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. If either obligation is
unliquidated or unascertained, the Finance Party may set
off in an amount estimated by it in good faith to be the
amount of that obligation. Nothing in this Clause 28
will be effective to create a charge.
29. PRO RATA SHARING
29.1 Redistribution
If any amount owing by an Obligor under this Agreement to
a Finance Party (the "recovering Finance Party") is
discharged by payment, set-off or any other manner other
than through the Agent in accordance with Clause 10
(Payments) (a "recovery"), then:-
(a) the recovering Finance Party shall, within 3
Business Days, notify details of the recovery to the
Agent;
(b) the Agent shall determine whether the recovery is in
excess of the amount which the recovering Finance
Party would have received had the recovery been
received by the Agent and distributed in accordance
with Clause 10 (Payments);
(c) subject to Clause 29.3 (Exceptions), the recovering
Finance Party shall, within 3 Business Days of
demand by the Agent, pay to the Agent an amount (the
"redistribution") equal to the excess;
(d) the Agent shall treat the redistribution as if it
were a payment by the Obligor concerned under
Clause 10 (Payments) and shall pay the
redistribution to the Finance Parties (other than
the recovering Finance Party) in accordance with
Clause 10.6 (Partial payments); and
(e) after payment of the full redistribution, the
recovering Finance Party will be subrogated to the
portion of the claims paid under paragraph (d)
above, and that Obligor will owe the recovering
Finance Party a debt which is equal to the
redistribution, immediately payable and of the type
originally discharged.
29.2 Reversal of redistribution
If under Clause 29.1 (Redistribution):-
(a) a recovering Finance Party must subsequently return
a recovery, or an amount measured by reference to a
recovery, to an Obligor; and
(b) the recovering Finance Party has paid a
redistribution in relation to that recovery,
each Finance Party shall, within 3 Business Days of
demand by the recovering Finance Party through the Agent,
reimburse the recovering Finance Party all or the
appropriate portion of the redistribution paid to that
Finance Party. Thereupon, the subrogation in
Clause 29.1(e) (Redistribution) will operate in reverse
to the extent of the reimbursement.
29.3 Exceptions
(a) A recovering Finance Party need not pay a redistribution
to the extent that it would not, after the payment, have
a valid claim against the Obligor concerned in the amount
of the redistribution pursuant to Clause 29.1(e)
(Redistribution).
(b) A recovering Finance Party is not obliged to share with
any other Finance Party any amount which the recovering
Finance Party has received or recovered as a result of
taking legal proceedings, if that other Finance Party had
an opportunity to participate in those legal proceedings,
but did not do so and did not take separate legal
proceedings.
30. SEVERABILITY
If a provision of any Finance Document is or becomes
illegal, invalid or unenforceable in any jurisdiction,
that shall not affect:-
(a) the legality, validity or enforceability in that
jurisdiction of any other provision of the Finance
Documents; or
(b) the legality, validity or enforceability in other
jurisdictions of that or any other provision of the
Finance Documents.
31. COUNTERPARTS
A Finance Document may be executed in any number of
counterparts, and this has the same effect as if the
signatures on the counterparts were on a single copy of
the Finance Document.
32. NOTICES
32.1 Giving of notices
All notices or other communications under or in
connection with the Finance Documents shall be given in
writing or by telex or facsimile. Any such notice will be
deemed to be given as follows:-
(a) if in writing, when delivered;
(b) if by telex, when despatched, but only if, at the
time of transmission, the correct answerback appears
at the start and at the end of the sender's copy of
the notice; and
(c) if by facsimile, when received.
However, a notice given in accordance with the above but
received on a non-working day or after business hours in
the place of receipt will only be deemed to be given on
the next working day in that place.
32.2 Addresses for notices
(a) The address, telex number and facsimile number of each
Party (other than the Agent) for all notices under or in
connection with the Finance Documents are:-
(i) that notified by that Party for this purpose to the
Agent on or before it becomes a Party; or
(ii) any other notified by that Party for this purpose to
the Agent by not less than five Business Days'
notice.
(b) The address, telex number and facsimile number of the
Agent is:-
101 Moorgate
London EC2M 6SB
Telex No: 887139 ABN ALG
Facsimile No: 0171 588 2975
Attention: Credit Administration
or such other as the Agent may notify to the other
Parties by not less than 5 Business Days' notice.
(c) The Agent shall, promptly upon request from any Party,
give to that Party the address, telex number or facsimile
number of any other Party applicable at the time for the
purposes of this Clause.
32.3 Facsimile notices
Each Obligor shall indemnify the Agent against any loss
or liability which the Agent incurs as a result of the
Agent accepting and/or acting upon any instructions under
the Finance Documents received by the Agent from that
Obligor by facsimile and which may not have been incurred
if, at the time of receipt, the Agent had been given the
instructions other than by facsimile.
33. JURISDICTION
33.1 Submission
(a) For the benefit of each Finance Party, each Obligor
agrees that the courts of England have jurisdiction to
settle any disputes in connection with any Finance
Document and accordingly submits to the jurisdiction of
the English courts.
(b) Without prejudice to paragraph (a) above, each Obligor
agrees that the State Courts or the Federal Courts
sitting in the State of New York have jurisdiction to
settle any disputes in connection with the Finance
Documents, and accordingly submits to the jurisdiction of
those Courts.
33.2 Service of process
Without prejudice to any other mode of service, each
Obligor:-
(a) if it is not incorporated in England,
irrevocably appoints the Company as its agent for
service of process relating to any proceedings
before the English courts in connection with any
Finance Document;
(b) irrevocably appoints CT Corporation of 1633
Broadway, New York, NY10033 as its agent for service
of process relating to any proceedings before the
New York courts in connection with any Finance
Document;
(c) agrees to maintain an agent for service of process
in New York for so long as any amount is outstanding
under this Agreement or any Commitment is in force;
(d) agrees that failure by a process agent to notify it
(where applicable) of the process will not
invalidate the proceedings concerned;
(e) consents, where there is not an agent for service of
process in the jurisdiction where proceedings have
been commenced, to the service of process relating
to any such proceedings by prepaid posting of a copy
of the process to its address for the time being
applying under Clause 32.2 (Addresses for notices);
and
(f) agrees that if the appointment of the person
mentioned in paragraph (b) above ceases to be
effective, it shall immediately appoint a further
person in New York to accept service of process on
its behalf in New York and, failing such appointment
within 15 days, the Agent is entitled to appoint
such person by notice to the relevant Obligor.
33.3 Forum convenience and enforcement abroad
Each Obligor:-
(a) waives objection to the English courts and the New
York courts on grounds of inconvenient forum or
otherwise as regards proceedings in connection with
a Finance Document; and
(b) agrees that a non-appealable judgment or order of an
English court or a New York court in connection with
a Finance Document is conclusive and binding on it
and may be enforced against it in the courts of any
other jurisdiction.
33.4 Non-exclusivity
Nothing in this Clause 33 (Jurisdiction) limits the right
of a Finance Party to bring proceedings against an
Obligor in connection with any Finance Document:-
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
34. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
SCHEDULE 1
PART I
ADDITIONAL GUARANTORS
ENTERGY INTERNATIONAL INVESTMENTS NO. 1 LTD LLC
ENTERGY INTERNATIONAL INVESTMENTS NO. 2 LTD LLC
ENTERGY LONDON HOLDINGS LIMITED
ENTERGY UK FINANCE LIMITED
ENTERGY LONDON LIMITED
PART II
BANKS AND COMMITMENTS
Banks Facility A Facility C
Commitments Commitments
ABN AMRO Bank N.V. BPS32,079,207.92 BPS7,920,792.08
Union Bank of Switzerland BPS32,079,207.92 BPS7,920,792.08
Bayerische Landesbank Girozentrale BPS36,389,851.49 BPS8,985,148.51
London Branch
The Sanwa Bank, Limited BPS36,389,851.49 BPS8,985,148.51
The Bank of Tokyo-Mitsubishi, Ltd BPS30,274,752.48 BPS7,475,247.52
Barclays Bank PLC BPS30,274,752.48 BPS7,475,247.52
CIBC Wood Gundy PLCplc BPS30,274,752.48 BPS7,475,247.52
The Dai-Ichi Kangyo Bank, Limited BPS30,274,752.48 BPS7,475,247.52
De Nationale Investeringsbank N.V., BPS30,274,752.48 BPS7,475,247.52
London Branch
Den Danske Bank Aktieselskab BPS30,274,752.48 BPS7,475,247.52
Deutsche Bank AG London BPS30,274,752.48 BPS7,475,247.52
Dresdner Bank AG London Branch BPS30,274,752.48 BPS7,475,247.52
Rabobank International, London Branch BPS30,274,752.48 BPS7,475,247.52
(Cooperatieve Centrale Raiffeisen
Boerenleenbank BA)
The Royal Bank of Scotland plc BPS30,274,752.48 BPS7,475,247.52
Scotiabank Europe PLC BPS30,274,752.48 BPS7,475,247.52
Societe Generale BPS30,274,752.48 BPS7,475,247.52
The Sumitomo Trust & Banking Co., Ltd BPS30,274,752.48 BPS7,475,247.52
The Toronto-Dominion Bank BPS30,274,752.48 BPS7,475,247.52
Westdeustche Landesbank Girozentrale BPS30,274,752.48 BPS7,475,247.52
Commonwealth Bank of Australia BPS22,455,445.54 BPS5,544,554.46
Credit Lyonnais BPS22,455,445.54 BPS5,544,554.46
The Fuji Bank, Limited BPS22,455,445.54 BPS5,544,554.46
National Westminster Bank plc BPS22,455,445.54 BPS5,544,554.46
The Sakura Bank, Limited BPS22,455,445.54 BPS5,544,554.46
The Bank of New York BPS15,237,623.76 BPS3,762,376.24
ING Bank N.V., London Branch BPS15,237,623.76 BPS3,762,376.24
Midland Bank PLC BPS15,237,623.76 BPS3,762,376.24
The Nikko Bank (UK) plc BPS15,237,623.76 BPS3,762,376.24
The Sumitomo Bank, Limited BPS15,237,623.76 BPS3,762,376.24
Banks Facility A Facility C
Commitments Commitments
The Tokai Bank, Limited BPS15,237,623.76 BPS3,762,376.24
The Toyo Trust and Banking Company, BPS15,237,623.76 BPS3,762,376.24
Limited
BPS810,000,000 BPS200,000,000
SCHEDULE 2
CALCULATION OF THE MLA COST
(a) The MLA Cost for a Loan for its Interest Period(s) is
calculated in accordance with the following formula:-
BY + L(Y-X) + S(Y-Z)% per annum = MLA Cost
____________________
100 - (B+S)
where on the day of application of the formula:-
B is the percentage of the Agent's eligible
liabilities which the Bank of England requires the
Agent to hold on a non-interest-bearing deposit
account in accordance with its cash ratio
requirements;
Y is the rate at which Sterling deposits are offered
by the Agent to leading banks in the London
interbank market at or about 11.00 a.m. on that day
for the relevant period;
L is the percentage of eligible liabilities which the
Bank of England requires the Agent to maintain as
secured money with members of the London Discount
Market Association and/or as secured call money with
certain money brokers and gilt-edged primary market
makers;
X is the rate at which secured Sterling deposits in
the relevant amount may be placed by the Agent with
members of the London Discount Market Association
and/or as secured call money with certain money
brokers and gilt-edged primary market makers at or
about 11.00 a.m. on that day for the relevant
period;
S is the percentage of the Agent's eligible
liabilities which the Bank of England requires the
Agent to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank
of England on special deposits.
(b) For the purposes of this Schedule 2:-
(i) "eligible liabilities" and "special deposits" have
the meanings given to them at the time of
application of the formula by the Bank of England;
(ii) "relevant period" in relation to a Loan, means:-
(A) if the relevant Interest Period is 3 months or
less, that Interest Period; or
(B) if the relevant Interest Period is more than 3
months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z
are included in the formula as figures and not as
percentages, e.g. if B = 0.5% and Y = 15%, BY is
calculated as 0.5 x 15.
(d) (i) The formula is applied on the first day of the
relevant Interest Period.
(ii) Each rate calculated in accordance with the formula
is, if necessary, rounded upward to the nearest four
decimal places.
(e) If the Agent determines that a change in circumstances
has rendered, or will render, the formula inappropriate,
the Agent (after consultation with the Company and the
Banks) shall notify the Company of the manner in which
the MLA Cost will subsequently be calculated. The manner
of calculation so notified by the Agent shall, in the
absence of manifest error, be binding on all the Parties.
SCHEDULE 3
FORM OF REQUEST
To: ABN AMRO BANK N.V. as Agent
From: [ENTERGY UK LIMITED/LONDON ELECTRICITY plc]*
Date: [ ]
ENTERGY UK LIMITED - BPS1,010,000,000 Revolving Credit Agreement
dated 17th December, 1996 (as amended including by way of a
restatement agreement
dated 17th November, 1997)
1. We wish to borrow a Facility A/a Facility C* Loan as
follows:-
(a) Drawdown Date:
[ ]
(b) Amount: [ ]
(c) Interest Period:
[ ]
/alternative Interest Period
[ ]**
(d) Payment instructions:
[ ].
2. We confirm that each condition specified in Clause 4
(Conditions precedent) is satisfied on the date of this
Request.
By:
[ENTERGY UK LIMITED/LONDON ELECTRICITY plc]*
Authorised Signatory
SCHEDULE 4
FORM OF NOVATION CERTIFICATE
To: ABN AMRO BANK N.V. as Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date:
[ ]
ENTERGY UK LIMITED - BPS1,010,000,000 Revolving Credit Agreement
dated 17th December, 1996 (as amended including by way of a
restatement agreement
dated 17th November, 1997)
We refer to Clause 26.3 (Procedure for novations).
1. We [ ] (the
"Existing Bank") and
[ ] (the "New Bank")
agree to the Existing Bank and the New Bank novating all
the Existing Bank's Commitment(s) and/or rights and
obligations referred to in the Schedule in accordance
with Clause 26.3 (Procedure for novations).
2. The specified date for the purposes of Clause 26.3(c) is
[date of novation].
3. The Facility Office and address for notices of the New
Bank for the purposes of Clause 32.2 (Addresses for
notices) are set out in the Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
Commitments/Rights and obligations to be novated
[Details of the Commitments/rights and obligations of the
Existing Bank to be novated].
[New Bank]
[Facility Office Address for notices]
[Existing Bank] [New Bank] ABN AMRO BANK
N.V.
By: By: By:
Date: Date: Date:
SCHEDULE 5
FORM OF DEBENTURE
DEBENTURE
DATED 17th November, 1997
BETWEEN
[RELEVANT OBLIGOR]
- and -
ABN AMRO BANK N.V.
London
TABLE OF CONTENTS
Clause Page
1. INTERPRETATION 96
2. FIXED SECURITY 99
3. FLOATING CHARGE 99
4. REPRESENTATIONS AND WARRANTIES 100
5. UNDERTAKINGS 100
7. WHEN SECURITY BECOMES ENFORCEABLE 102
8. ENFORCEMENT OF SECURITY 103
9. RECEIVER 104
10. POWERS OF RECEIVER 105
12. APPLICATION OF PROCEEDS 107
13. EXPENSES AND INDEMNITY 107
14. DELEGATION 107
15. FURTHER ASSURANCES 107
16. POWER OF ATTORNEY 108
17. MISCELLANEOUS 108
18. RELEASE 109
19. GOVERNING LAW 109
Schedules
1. FORM OF NOTICE TO THE ACCOUNT BANK 110
2. FORM OF ACKNOWLEDGEMENT OF THE ACCOUNT BANK 111
SIGNATORIES 112
THIS DEED is dated 17th November, 1997 between:
(1) [ ] (the
"Chargor"); and
(2) ABN AMRO BANK N.V. (the "Agent") as agent and trustee for
the Secured Parties (as defined below).
BACKGROUND:
(A) The Chargor enters into this Deed in connection with the
Credit Agreement (as defined below).
(B) It is intended that this document takes effect as a deed
notwithstanding the fact that a party may only execute
this document under hand.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Deed:
"Account Bank"
means a person with whom a Security Account is maintained
under Clause 6 (Security Accounts).
"Credit Agreement"
means the BPS1,010,000,000 credit agreement dated 17th
December, 1996 between (among others) the parties to this
Deed (as amended, including by way of a restatement
agreement dated 17th November, 1997).
"EIL"
means Entergy International Ltd LLC.
"EIL Facility Agreement"
means the U.S.$120,000,000 credit agreement dated 17th
November, 1997 between EIL, the Banks (as defined
therein) and ABN AMRO Bank N.V. as administrative agent.
["Excluded Assets"
means the Tax Letter Agreement, any payments made under
the Tax Letter Agreement or the Tax Sharing Agreement
referred to in it and any U.S. Dollar account into which
those payments may be made.]*
"Financing Agreement"
means:
(a) a Finance Document;
(b) the EIL Facility Agreement; or
(c) a Refinancing Agreement,
and includes all amendments and supplements.
"Group Shares"
means any shares in any Obligor from time to time held by
the Chargor or a nominee on its behalf.
"Receiver"
means a receiver and manager or (if the Agent so
specifies in the relevant appointment) a receiver, in
either case, appointed under this Deed.
"Refinancing Agreement"
means a document providing for Financial Indebtedness
satisfying the requirements of Clause 17.16(a)(vi) or
(vii) (Lending and borrowing) of the Credit Agreement (as
in force at the date of this Deed).
"Related Rights"
means:
(a) any dividend or interest paid or payable in relation
to any Shares;
(b) any stocks, shares, securities, rights, moneys or
property accruing or offered at any time in relation
to any Shares by way of redemption, substitution,
exchange, bonus or preference, under option rights
or otherwise; and
(c) all dividends, interest or other income in respect
of any such asset as is referred to in paragraph (b)
above.
"Secured Liabilities"
means all present and future obligations and liabilities
(whether actual or contingent and whether owed jointly or
severally or in any other capacity whatsoever) of the
Chargor, EUK, EIL, Entergy International Investments
No. 1 Ltd LLC, Entergy International Investments No. 2
Ltd LLC or any Holding Company of any of the foregoing to
any Secured Party under the Financing Agreements.
"Secured Party"
means:
(a) a Finance Party (as defined in the Credit
Agreement);
(b) the Administrative Agent, an Arranger or a Lender
(each as defined in the EIL Facility Agreement); or
(c) any creditor (or any agent, trustee or arranger) in
respect of Financial Indebtedness incurred under a
Refinancing Agreement.
"Security Account"
means an account of the Chargor established under
Clause 6 (Security Accounts).
"Security Assets"
means all assets of the Chargor the subject of any
security created by this Deed.
"Security Period"
means the period beginning on the date of this Deed and
ending on the date on which the Agent is satisfied that
all the Secured Liabilities have been unconditionally and
irrevocably paid and discharged in full.
"Shares"
means the Group Shares and any other stocks, shares,
debentures, bonds or other securities and investments
held by the Chargor.
["Tax Letter Agreement"
means the tax letter agreement dated on or about 17th
November, 1997 between among EIL, Entergy Corporation,
the Chargor, Entergy International Investments No.1/2*
Ltd LLC and ABN AMRO Bank N.V. as agent for the lenders
under the EIL Facility Agreement.]**
1.2 Construction
(a) Capitalised terms defined in the Credit Agreement have,
unless expressly defined in this Deed, the same meaning
in this Deed.
(b) The provisions of Clause 1.2 of the Credit Agreement
apply to this Deed as though they were set out in full in
this Deed except that references to the Credit Agreement
are to be construed as references to this Deed.
(c) If the Agent (acting reasonably) considers that an amount
paid by any Obligor or EIL to a Secured Party under a
Financing Agreement is capable of being avoided or
otherwise set aside on the liquidation or administration
of that Obligor or EIL or otherwise, then that amount
shall not be considered to have been irrevocably paid for
the purposes of this Deed.
(d) A reference in this Deed to any assets includes, unless
the context otherwise requires, present and future
assets.
2. FIXED SECURITY
[Except for any Excluded Assets]* the Chargor, as
beneficial owner and as security for the payment of all
the Secured Liabilities, charges in favour of the Agent:-
(a) by way of a first legal mortgage all Group Shares
held by it and/or any nominee on its behalf and all
Related Rights accruing to the Group Shares; and
(b) by way of first fixed charge:-
(i) (to the extent not effectively mortgaged under
paragraph (a) above) its interest in all the
Shares and their Related Rights;
(ii) to the fullest extent permitted by law, all
moneys standing to the credit of any account
(including the Security Accounts) with any
person and the debts represented by them;
(iii) all of the Chargor's book and other debts,
the proceeds of the same and all other moneys
due and owing to the Chargor and the benefit of
all rights, securities and guarantees of any
nature enjoyed or held by it in relation to any
of the foregoing; and
(iv) to the extent that they are able to be the
subject of any Security Interest, the benefit
of all licences, consents and authorisations
(statutory or otherwise) held in connection
with its business or the use of any Security
Asset specified in any other sub-paragraph in
this Clause and the right to recover and
receive all compensation which may be payable
to it in respect of them.
The mortgages and charges created by this Clause 2 are
made with full title guarantee.
3. FLOATING CHARGE
3.1 Creation of floating charge
The Chargor, as beneficial owner and as security for the
payment of all of the Secured Liabilities, charges in
favour of the Agent by way of a first floating charge
[(other than any Excluded Assets)]* all its assets not
otherwise effectively mortgaged or charged by way of
fixed mortgage or charge by Clause 2 (Fixed Security).
3.2 Conversion
The Agent may by notice to the Chargor convert the
floating charge created by this Deed into a fixed charge
as regards all or any of the Chargor's assets specified
in the notice if:
(a) an Event of Default is outstanding; or
(b) the Agent considers those assets to be in danger of
being seized or sold under any form of distress,
attachment, execution or other legal process or to
be otherwise in jeopardy.
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and warranties
The Chargor makes the representations and warranties set
out in this Clause 4 to each Finance Party.
4.2 Security
This Deed creates those Security Interests it purports to
create (subject, as to matters of law only, to the
qualifications in the legal opinions referred to in
Part I of Schedule 2 to the Restatement Agreement) and is
not liable to be avoided or otherwise set aside on the
liquidation or administration of the Chargor or
otherwise.
4.3 Shares
The Group Shares are fully paid and the Chargor is the
sole beneficial owner of the Shares, free from any
Security Interest (other than this Deed) or option.
4.4 Times for making representations and warranties
The representations and warranties set out in this
Clause 4 are made on the date of this Deed and are deemed
to be repeated by the Chargor on each date during the
Security Period with reference to the facts and
circumstances then existing.
5. UNDERTAKINGS
5.1 Duration
The undertakings in this Clause 5 remain in force
throughout the Security Period.
5.2 Restrictions on dealing
The Chargor shall not (except as permitted under the
Credit Agreement):-
(a) create or permit to subsist any Security Interest on
any Security Asset other than any Security Interest
created by this Deed; or
(b) sell, transfer, grant, or lease or otherwise dispose
of any Security Asset, except for:
(i) the disposal in the ordinary course of trade of
any Security Asset subject to the floating
charge created under Clause 3.1 (Creation of
floating charge); or
(ii) the investment of any moneys in any commercial
paper rated A1 or higher by Standard & Poors
Rating Group (or any of its successors) or P1
or higher by Moody's Investors Service, Inc.
(or any of its successors) or the disposal of
any such investment.
5.3 Book debts and receipts
[Except in respect of any Excluded Asset, the* ]The
Chargor shall:-
(a) get in and realise the Chargor's:
(i) securities to the extent held by way of
temporary investment; and
(ii) book and other debts and other moneys,
in the ordinary course of its business and hold the
proceeds of the getting in and realisation (until
payment into a Security Account if required in
accordance with paragraph (b) below) upon trust for
the Agent; and
(b) save to the extent that the Agent otherwise agrees,
pay the proceeds of the getting in and realisation
into a Security Account.
5.4 Notice to bank operating an account
[Except for any US Dollar account into which proceeds
comprising an Excluded Asset may be paid, the]*The
Chargor will give notice to any bank (other than the
Agent) operating an account of the Chargor on the date of
this Deed or (if later) the date the account is opened,
substantially in the form of Schedule 1, and shall use
its reasonable endeavours to procure that the relevant
bank acknowledges the notice substantially in the form of
Schedule 2.
5.5 Deposit of Shares
The Chargor shall:-
(a) deposit with the Agent, or as the Agent may direct,
all certificates, bearer instruments, and other
documents of title or evidence of ownership in
relation to the Shares and their Related Rights but
only, in the case of Shares other than the Group
Shares, if the Agent so requests whilst the security
created by this Deed is enforceable; and
(b) execute and deliver to the Agent all share transfers
and other documents which may be requested by the
Agent in order to enable the Agent or its nominees
to be registered as the owner or otherwise obtain a
legal title to the Shares and their Related Rights
but only, in the case of the Shares other than the
Group Shares, if the Agent so requests whilst the
security created by this Deed is enforceable.
6. SECURITY ACCOUNTS
6.1 Accounts
All Security Accounts must be maintained at a branch of
the Account Bank approved by the Agent. The initial
Account Bank is the Agent.
6.2 Change of Account Bank
(a) The Account Bank may be changed to another bank or
financial institution if the Agent so agrees or requires.
(b) A change only becomes effective upon the proposed new
Account Bank agreeing with the Agent and the Chargor, in
a manner satisfactory to the Agent and the Chargor, to
fulfil the role of the Account Bank under this Deed.
(c) In the event of a change of Account Bank, the amount (if
any) standing to the credit of the Security Accounts
maintained with the old Account Bank shall be transferred
to the corresponding Security Accounts maintained with
the new Account Bank forthwith upon the appointment
taking effect. The Chargor shall take any action which
the Agent may reasonably require to facilitate a change
of Account Bank and any transfer of credit balances
(including the execution of bank mandate forms).
6.3 Interest
Amounts standing to the credit of each Security Account
shall bear interest at a rate considered by the Account
Bank to be a fair market rate.
6.4 Withdrawals
(a) Except with the prior consent of the Agent, the Chargor
shall not withdraw any moneys standing to the credit of a
Security Account except for a purpose not prohibited by
the Credit Agreement or a Refinancing Agreement at a time
when the security constituted by this Deed is not
enforceable or has not been enforced.
(b) The Agent (or a Receiver) may (subject to the payment of
any claims having priority to this security) withdraw
amounts standing to the credit of a Security Account to
meet an amount due and payable under the Financing
Agreements when it is due and payable.
7. WHEN SECURITY BECOMES ENFORCEABLE
The security constituted by this Deed shall become
immediately enforceable if an Event of Default is
outstanding and the power of sale shall be immediately
exerciseable whilst this Deed is enforceable. Whilst the
security constituted by this Deed is enforceable, the
Agent may in its absolute discretion enforce all or any
part of the security in any manner it sees fit or as the
Majority Banks direct. If an Event of Default is
remedied or waived, the security constituted by this Deed
shall remain enforceable if, prior to the Event of
Default being remedied, the Agent has taken any step to
enforce the security.
8. ENFORCEMENT OF SECURITY
8.1 General
For the purposes of all powers implied by statute, the
Secured Liabilities are deemed to have become due and
payable on the date of this Deed and section 103 and
section 93 of the Law of Property Act 1925 shall not
apply to the security constituted by this Deed.
8.2 Shares
Whilst the security constituted by this Deed is
enforceable, the Agent may exercise (in the name of the
Chargor and without any further consent or authority on
the part of the Chargor) any voting rights and any powers
or rights which may be exercised by the person or persons
in whose name any Share and its Related Rights are
registered or who is the holder of any of them or
otherwise (including all the powers given to trustees by
Section 10(3) and (4) of the Trustee Act, 1925 as amended
by Section 9 of the Trustee Investment Act, 1961 in
respect of securities or property subject to a trust).
Until that time, the voting rights, powers and other
rights in respect of the Shares shall (if exercisable by
the Agent) be exercised in any manner which the Chargor
may direct in writing.
8.3 Contingencies
If the Agent enforces the security constituted by this
Deed at a time when no amounts are due under the
Financing Agreements but at a time when amounts may or
will become so due, the Agent (or the Receiver) may pay
the proceeds of any recoveries effected by it into a
Security Account.
8.4 No liability as mortgagee in possession
Neither the Agent nor any Receiver will be liable, by
reason of entering into possession of a Security Asset,
to account as mortgagee in possession or for any loss on
realisation or for any default or omission for which a
mortgagee in possession might be liable.
8.5 Agent of the Chargor
Each Receiver is deemed to be the agent of the Chargor
for all purposes and accordingly is deemed to be in the
same position as a Receiver duly appointed by a mortgagee
under the Law of Property Act 1925. The Chargor alone
shall be responsible for his contracts, engagements,
acts, omissions, defaults and losses and for liabilities
incurred by him and no Secured Party shall incur any
liability (either to the Chargor or to any other person)
by reason of the Agent making his appointment as a
Receiver or for any other reason.
8.6 Protection of third parties
No person (including a purchaser) dealing with the Agent
or a Receiver or its or his agents will be concerned to
enquire:-
(a) whether the Secured Liabilities have become payable;
or
(b) whether any power which the Agent or the Receiver is
purporting to exercise has become exercisable; or
(c) whether any money remains due under the Financing
Agreements; or
(d) how any money paid to the Agent or to the Receiver
is to be applied.
8.7 Redemption of prior mortgages
At any time whilst the security constituted by this Deed
is enforceable, the Agent may:-
(a) redeem any prior Security Interest against any
Security Asset; and/or
(b) procure the transfer of that Security Interest to
itself; and/or
(c) settle and pass the accounts of the prior mortgagee,
chargee or encumbrancer; any accounts so settled and
passed shall be conclusive and binding on the
Chargor.
All principal moneys, interest, costs, charges and
expenses of and incidental to any such redemption and/or
transfer shall be paid by the Chargor to the Agent on
demand.
9. RECEIVER
9.1 Appointment of Receiver
At any time whilst the security constituted by this Deed
is enforceable or, if the Chargor so requests the Agent
in writing, at any time, the Agent may without further
notice appoint under seal or in writing under its hand
any one or more persons to be a Receiver of all or any
part of the Security Assets in like manner in every
respect as if the Agent had become entitled under the Law
of Property Act 1925 to exercise the power of sale
conferred under the Law of Property Act 1925.
9.2 Removal
The Agent may by writing under its hand (subject to any
requirement for an order of the court in the case of an
administrative receiver) remove any Receiver appointed by
it and may, whenever it deems it expedient, appoint a new
Receiver in the place of any Receiver whose appointment
may for any reason have terminated.
9.3 Remuneration
The Agent may fix the remuneration of any Receiver
appointed by it.
9.4 Relationship with Agent
To the fullest extent permitted by law, any right, power
or discretion conferred by this Deed (either expressly or
impliedly) upon a Receiver of the Security Assets may
after the security created by this Deed becomes
enforceable be exercised by the Agent in relation to any
Security Asset without first appointing a Receiver or
notwithstanding the appointment of a Receiver.
10. POWERS OF RECEIVER
10.1 General
(a) Each Receiver has, and is entitled to exercise, all of
the rights, powers and discretions set out below in this
Clause 10 in addition to those conferred by the Law of
Property Act 1925 on any receiver appointed under the Law
of Property Act 1925.
(b) If there is more than one Receiver holding office at the
same time, each Receiver may (unless the document
appointing him states otherwise) exercise all of the
powers conferred on a Receiver under this Deed
individually and to the exclusion of any other Receivers.
(c) A Receiver who is an administrative receiver of the
Chargor has all the rights, powers and discretions of an
administrative receiver under the Insolvency Act 1986.
10.2 Possession
A Receiver may take immediate possession of, get in and
collect any Security Assets.
10.3 Carry on business
A Receiver may carry on the business of the Chargor as he
thinks fit.
10.4 Protection of assets
A Receiver may do all acts as he may think fit which the
Chargor might do in the ordinary conduct of its business
as well for the protection as for the improvement of the
Security Assets.
10.5 Employees
A Receiver may appoint and discharge managers, officers,
agents, accountants, servants, workmen and others for the
purposes of this Deed upon such terms as to remuneration
or otherwise as he may think proper and discharge any
such persons appointed by the Chargor.
10.6 Borrow money
A Receiver may raise and borrow money either unsecured or
on the security of any Security Asset either in priority
to the security constituted by this Deed or otherwise and
generally on any terms and for whatever purpose which he
thinks fit. No person lending that money is concerned to
enquire as to the propriety or purpose of the exercise of
that power or to check the application of any money so
raised or borrowed.
10.7 Sale of assets
A Receiver may sell, exchange, convert into money and
realise any Security Asset by public auction or private
contract and generally in any manner and on any terms
which he thinks proper. The consideration for any such
transaction may consist of cash, debentures or other
obligations, shares, stock or other valuable
consideration and any such consideration may be payable
in a lump sum or by instalments spread over such period
as he thinks fit.
10.8 Compromise
A Receiver may settle, adjust, refer to arbitration,
compromise and arrange any claims, accounts, disputes,
questions and demands with or by any person who is or
claims to be a creditor of the Chargor or relating in any
way to any Security Asset.
10.9 Legal Actions
A Receiver may bring, prosecute, enforce, defend and
abandon all actions, suits and proceedings in relation to
any Security Asset which may seem to him to be expedient.
10.10 Receipts
A Receiver may give valid receipts for all moneys and
execute all assurances and things which may be proper or
desirable for realising any Security Asset.
10.11 Subsidiaries
A Receiver may form a Subsidiary of the Chargor and
transfer to that Subsidiary any Security Asset.
10.12 Delegation
A Receiver may delegate his powers in accordance with
Clause 14 (Delegation).
10.13 Other powers
A Receiver may:-
(a) do all other acts and things which he may consider
desirable or necessary for realising any Security
Asset or incidental or conducive to any of the
rights, powers or discretions conferred on a
Receiver under or by virtue of this Deed; and
(b) exercise in relation to any Security Asset all the
powers, authorities and things which he would be
capable of exercising if he were the absolute
beneficial owner of the same,
and may use the name of the Chargor for any of the above
purposes.
11. SET OFF
The Agent may, at any time whilst the security
constituted by this Deed is enforceable, without notice
to or making demand on the Chargor and whether or not all
or any of the Secured Liabilities have matured:
(a) set off any of the Secured Liabilities against any
liability (whether or not matured) owed by the Agent
to the Chargor in respect of any moneys in the
Security Accounts regardless of the place of
payment, booking branch or currency of either
obligation; and/or
(b) debit any account of the Chargor (whether sole or
joint) with the Agent at any of its offices anywhere
(including an account opened specially for that
purpose) with all or any part of the Secured
Liabilities; and/or
(c) apply any moneys in a Security Account in or towards
the payment or discharge of the Secured Liabilities.
12. APPLICATION OF PROCEEDS
Any moneys received by the Agent or any Receiver whilst
the security constituted by this Deed is enforceable
shall be applied in the following order of priority (but
without prejudice to the right of any Secured Party to
recover any shortfall from the Chargor):
(a) in satisfaction of or provision for all costs and
expenses incurred by the Agent or any Receiver and
of all remuneration due to the Receiver under this
Deed;
(b) in or towards payment of the Secured Liabilities
under the Finance Documents and the Refinancing
Agreements pari passu (unless the relevant
refinancing is undertaken on a basis subordinate to
the Secured Liabilities under the Finance
Documents);
(c) in or towards payment of the Secured Liabilities
under the Refinancing Agreements pari passu (if the
relevant refinancing is undertaken on a basis
subordinate to the Secured Liabilities under the
Finance Documents);
(d) in or towards payment of the Secured Liabilities
under the EIL Facility Agreement; and
(e) in payment of the surplus (if any) to the Chargor or
other person entitled to it.
13. EXPENSES AND INDEMNITY
The Chargor shall forthwith on demand pay all costs and
expenses (including legal fees) incurred in connection
with this Deed by any Secured Party, Receiver, attorney,
manager, agent or other person appointed by the Agent
under this Deed, and keep each of them indemnified
against any failure or delay in paying the same.
14. DELEGATION
The Agent and any Receiver may delegate by power of
attorney or in any other manner to any person any right,
power or discretion exercisable by them under this Deed.
Any such delegation may be made upon the terms (including
power to sub-delegate) and subject to any regulations
which the Agent or that Receiver (as the case may be) may
think fit. Neither the Agent nor any Receiver will be in
any way liable or responsible to the Chargor for any loss
or liability arising from any act, default, omission or
misconduct on the part of any such delegate or sub-
delegate.
15. FURTHER ASSURANCES
The Chargor shall, at its own expense, take whatever
action the Agent or a Receiver may reasonably require
for:-
(a) perfecting or protecting the security intended to be
created by this Deed over any Security Asset;
(b) facilitating the realisation of any Security Asset,
or the exercise of any right, power or discretion
exercisable, by the Agent or any Receiver or any of
its or their delegates or sub-delegates in respect
of any Security Asset,
including the execution of any transfer, conveyance,
assignment or assurance of any property whether to the
Agent or to its nominees, and the giving of any notice,
order or direction and the making of any registration,
which, in any such case, the Agent may think expedient.
16. POWER OF ATTORNEY
The Chargor, by way of security, irrevocably and
severally appoints the Agent, each Receiver and any of
their delegates or sub-delegates to be its attorney to
take any action which the Chargor is obliged to take
under this Deed, including under Clause 15 (Further
assurances). The Chargor ratifies and confirms whatever
any attorney does or purports to do pursuant to its
appointment under this Clause.
17. MISCELLANEOUS
17.1 Covenant to pay
The Chargor shall pay or discharge the Secured
Liabilities in the manner provided for in the Finance
Documents and the Refinancing Agreements.
17.2 Continuing security
The security constituted by this Deed is continuing and
will extend to the ultimate balance of all the Secured
Liabilities, regardless of any intermediate payment or
discharge in whole or in part.
17.3 Additional security
The security constituted by this Deed is in addition to
and is not in any way prejudiced by any other security
now or subsequently held by any Secured Party for any
Secured Liability.
17.4 Tacking
Each Bank shall perform its obligations under the Credit
Agreement (including any obligation to make available
further advances).
17.5 New Accounts
If a Secured Party receives, or is deemed to be affected
by, notice, whether actual or constructive, of any
subsequent charge or other interest affecting any
Security Asset and/or the proceeds of sale of any
Security Asset, the Secured Party may open a new account
with the Chargor. If the Secured Party does not open a
new account, it shall nevertheless be treated as if it
had done so at the time when it received or was deemed to
have received notice. As from that time all payments made
to the Secured Party will be credited or be treated as
having been credited to the new account and will not
operate to reduce any amount for which this Deed is
security.
17.6 Time deposits
Without prejudice to any right of set-off any Secured
Party may have under any other Finance Document or
otherwise, if any time deposit matures on any account the
Chargor has with any Secured Party at a time within the
Security Period when:
(a) this security has become enforceable; and
(b) no amount of the Secured Liabilities is due and
payable,
that time deposit shall automatically be renewed for any
further maturity which that Secured Party considers
appropriate.
18. RELEASE
Upon the expiry of the Security Period (but not
otherwise), the Secured Parties shall, at the request and
cost of the Chargor, take whatever action is necessary to
release the Security Assets from the security constituted
by this Deed.
19. GOVERNING LAW
This Deed is governed by English law.
This Deed has been entered into as a deed on the date stated
at the beginning of this Deed.
SCHEDULE 1
Form of notice to the Account Bank
To: [ ]
[
], [ ]
Dear Sirs,
We give you notice that, by a Debenture dated 17th November,
1997, [ ] charged (by way of a first
fixed and floating charge) to ABN AMRO Bank N.V. (as agent and
trustee) (the "Agent") all moneys (including interest) from
time to time standing to the credit of certain bank accounts
(the "Accounts") and the debt or debts represented thereby.
We irrevocably instruct and authorise you to disclose to the
Agent without any reference to or further authority from us
and without any inquiry by you as to the justification for the
disclosure, any information relating to any of the Accounts
maintained with you from time to time as the Agent may, at any
time and from time to time, request you to disclose to it.
Until the Agent notifies you in writing that it has taken any
step to enforce the security constituted by the Debenture, we
are entitled to operate the Accounts in accordance with our
usual practice.
This letter is governed by English law.
Would you please confirm your agreement to the above by
sending the enclosed acknowledgement to the Agent with a copy
to ourselves.
Yours faithfully,
................................
(Authorised signatory)
[ ]
SCHEDULE 2
Form of acknowledgement of the Account Bank
To: ABN AMRO Bank N.V.
For the attention of: [ ]
[relevant address applying under
Clause 32 (Notices) of the Credit Agreement]
[ ], [ ]
Dear Sirs,
We confirm receipt from [ ]
(the "Company") of a notice dated
[ ] of a charge upon the
terms of a Debenture dated 17th November, 1997 of all moneys
(including interest) from time to time standing to the credit
of certain bank accounts of the Company (the "Accounts") and
the debt or debts represented thereby.
We confirm that we have not received notice of the interest of
any third party in any of the Accounts maintained with us.
We confirm that, until you give us notice in writing that the
assets charged to you under the Debenture have been released,
we do not have, and will not make or exercise, any claims or
demands, any rights of counterclaim, rights of set-off or any
other equities against the Company in respect of the Accounts
maintained with us.
This letter is governed by English law.
Yours faithfully,
.................................
[ ]
SIGNATORIES TO THE DEBENTURE
The Chargor
EXECUTED as a deed )
by [THE CHARGOR] )
acting by [name of Director] )
and [name of Director/Secretary] )
....................................................
director
.....................................................
director/secretary
The Agent
ABN AMRO BANK N.V.
By:
SCHEDULE 6
FORM OF SUBORDINATION AGREEMENT
DATED [ ], [ ]
BETWEEN
ENTERGY LONDON INVESTMENTS PLC
-and-
THE JUNIOR CREDITOR
(as defined in this Deed)
-and-
ABN AMRO BANK N.V.
as Security Agent
_________________________________
SUBORDINATION AGREEMENT
relating to a BPS1,010,000,000
credit agreement dated 17th December, 1996
between ENTERGY LONDON INVESTMENTS PLC and others
(as amended including by way of a restatement agreement
dated 17th November, 1997)
__________________________________
London
TABLE OF CONTENTS
Clause Page
1. INTERPRETATION 115
2. THE COMPANY'S UNDERTAKINGS 117
3. JUNIOR CREDITOR'S UNDERTAKINGS 117
4. TURNOVER OF NON-PERMITTED RECOVERIES 118
5. SUBORDINATION ON INSOLVENCY 118
6. CONSENTS 119
7. REPRESENTATIONS AND WARRANTIES 119
8. SUBROGATION BY THE JUNIOR CREDITOR 119
9. PROTECTION OF SUBORDINATION 120
10. PRESERVATION OF JUNIOR DEBT 121
11. CHANGES TO THE PARTIES 121
12. MISCELLANEOUS 121
13. INDEMNITY 122
14. WAIVERS; REMEDIES CUMULATIVE 122
15. SEVERABILITY 122
16. GOVERNING LAW 122
SIGNATORIES 123
THIS SUBORDINATION AGREEMENT is dated [ ]
between:
(1) [ ] (the
"Junior Creditor");
(2) ENTERGY LONDON INVESTMENTS PLC (Registered
No. 3261188)(the "Company"); and
(3) ABN AMRO BANK N.V. (the "Agent") as agent and trustee for
the Finance Parties.
BACKGROUND:
(A) By the Credit Agreement the Banks have agreed to make
available a credit facility of up to BPS1,010,000,000 to
the Borrowers.
(B) The Junior Creditor has agreed to subordinate all amounts
payable under the Junior Finance Documents on the terms
of this Deed.
(C) It is intended that this document takes effect as a deed
notwithstanding the fact that a party may only execute
this document under hand.
1. INTERPRETATION
1.1 Definitions
In this Deed:
"Credit Agreement"
means the agreement dated 17th December, 1996 (as
amended, including by way of a restatement agreement
dated 17th November, 1997) between (among others) the
Borrowers and the Agent for a credit facility of up to
BPS1,010,000,000.
"Junior Debt"
means all present and future liabilities (actual or
contingent) payable or owing to the Junior Creditor by
the Company under or in connection with the Junior
Finance Documents relating thereto together with:
(a) any permitted novation, deferral or extension of any
of those liabilities;
(b) any further advances which may be made by the Junior
Creditor to the Company under any agreement
expressed to be supplemental to any Junior Finance
Document plus all interest, fees and costs in
connection therewith;
(c) any claim for damages or restitution in the event of
rescission of any of those liabilities or otherwise
in connection with the Junior Finance Documents;
(d) any claim against the Company flowing from any
recovery by the Company of a payment or discharge in
respect of those liabilities on grounds of
preference or otherwise; and
(e) any amounts (such as post-insolvency interest) which
would be included in any of the above for any
discharge, non-provability, unenforceability or non-
allowability of the same in any insolvency or other
proceedings.
"Junior Finance Documents"
means [specify debt document] and all variations,
replacements, novations of and supplements thereto.
"Majority Banks"
has the meaning given to it in the Credit Agreement.
"Senior Debt"
means all present and future liabilities (actual or
contingent) payable or owing by any Obligor to the
Finance Parties under or in connection with the Finance
Documents together with:
(a) any refinancing, novation, refunding, deferral or
extension of any of those liabilities;
(b) any further advances which may be made by the
Finance Parties to any Obligor under any agreement
expressed to be supplemental to any Finance Document
plus all interest, fees and costs in connection
therewith;
(c) any claim for damages or restitution in the event of
rescission of any of those liabilities or otherwise
in connection with the Finance Documents;
(d) any claim against any Obligor flowing from any
recovery by such Obligor of a payment or discharge
in respect of those liabilities on grounds of
preference or otherwise; and
(e) any amounts (such as post-insolvency interest) which
would be included in any of the above for any
discharge, non-provability, unenforceability or
non-allowability of the same in any insolvency or
other proceedings.
"Senior Liabilities"
means all present and future obligations and liabilities
(whether actual or contingent and whether owned jointly
or severally or in any capacity whatsoever) of each
Obligor to any Finance Party under each Finance Document
to which such Obligor is a party.
1.2 Construction
(a) Capitalised terms defined in the Credit Agreement have,
unless expressly defined in this Deed, the same meaning
in this Deed.
(b) The provisions of Clause 1.2 of the Credit Agreement
apply to this Deed as though they were set out in full in
this Deed except that references to the Credit Agreement
are to be construed as references to this Deed.
(c) References to any document, instrument or agreement shall
be construed as to include such document, instrument or
agreement as varied, amended, supplemented or novated
from time to time.
2. THE COMPANY'S UNDERTAKINGS
So long as any Senior Debt is outstanding and until the
Senior Liabilities have been irrevocably paid in full,
the Company will not except as permitted under the
Finance Documents (including, without limitation, Clause
17.15 (Distributions)) or except as the Agent (acting on
the instructions of the Majority Banks) has previously
consented:
(a) subject to Clause 5 (Subordination on insolvency),
pay or repay or purchase or acquire any of the
Junior Debt; or
(b) discharge any of the Junior Debt by set-off; or
(c) create or permit to subsist security over any of its
assets for any of the Junior Debt; or
(d) amend, vary, waive or release any term of the Junior
Finance Documents (other than any procedural or
administrative change or any other change which can
reasonably be expected not to prejudice any Senior
Debt or any Finance Party); or
(e) take or omit to take any action whereby the
subordination achieved by this Deed will be
impaired.
3. JUNIOR CREDITOR'S UNDERTAKINGS
So long as any Senior Debt is outstanding and until the
Senior Liabilities have been irrevocably paid in full,
except, as permitted under the Finance Documents or
except as the Agent (acting on the instructions of the
Majority Banks) has previously consented, the Junior
Creditor will:
(a) subject to Clause 5 (Subordination on insolvency),
not demand or receive payment of any of the Junior
Debt from the Company or any other source or apply
any money or assets in discharge of any Junior Debt;
(b) not discharge any of the Junior Debt by set-off;
(c) not permit to subsist or receive any security for
any of the Junior Debt;
(d) not permit to subsist or receive any guarantee or
other assurance against loss in respect of any of
the Junior Debt;
(e) not amend, vary, waive or release any term of the
Junior Finance Documents (other than any procedural
or administrative change or any other change which
can reasonably be expected not to prejudice any
Senior Debt or any Finance Party);
(f) promptly notify the Agent of any default or event of
default in respect of the Junior Debt;
(g) unless Clause 5 (Subordination on insolvency)
applies, not:
(i) declare any of the Junior Debt prematurely due
and payable;
(ii) enforce the Junior Debt by execution or
otherwise; or
(iii) initiate or take any steps with a view to
any insolvency, reorganisation or dissolution
proceedings in respect of the Company; and
(h) not take or omit to take any action whereby the
subordination achieved by this Deed may be impaired.
4. TURNOVER OF NON-PERMITTED RECOVERIES
4.1 Non-permitted payment
If, other than as permitted under the Finance Documents:
(a) the Junior Creditor receives a payment or
distribution in respect of any of the Junior Debt
from the Company or any other source; or
(b) the Junior Creditor receives the proceeds of any
enforcement of any security or any guarantee for any
Junior Debt; or
(c) the Company makes any payment or distribution to the
Junior Creditor on account of the purchase or other
acquisition of any of the Junior Debt,
the Junior Creditor will hold the same in trust for the
Finance Parties and pay and distribute it to the Agent
for application towards the Senior Debt until the Senior
Debt is irrevocably paid in full.
4.2 Non-permitted set-offs
If, other than as permitted under the Finance Documents,
for any reason, any of the Junior Debt is discharged by
set-off, the Junior Creditor will promptly pay an amount
equal to the discharge to the Agent for application
towards the Senior Debt until the Senior Debt is
irrevocably paid in full.
4.3 Failure of trust
If, for any reason, a trust in favour of, or a holding of
property for, the Finance Parties under this Deed is
invalid or unenforceable, the Junior Creditor will pay
and deliver to the Agent an amount equal to the payment,
receipt or recovery which the Junior Creditor would
otherwise have been bound to hold on trust for or as
property of the Finance Parties.
5. SUBORDINATION ON INSOLVENCY
If any of the events set out in Clauses 18.6 (Insolvency)
to 18.10 (Analogous proceedings) (inclusive) of the
Credit Agreement exists THEN
(a) the Junior Debt will be subordinate in right of
payment to the Senior Debt;
(b) the Agent may, and is irrevocably authorised on
behalf of the Junior Creditor to, (i) claim, enforce
and prove for the Junior Debt, (ii) file claims and
proofs, give receipts and take all such proceedings
and do all such things as the Agent reasonably sees
fit to recover the Junior Debt and (iii) receive all
distributions on the Junior Debt for application
towards the Senior Debt;
(c) if and to the extent that the Agent is not entitled
to do any of the foregoing, the Junior Creditor will
do so in good time as reasonably directed by the
Agent;
(d) the Junior Creditor will hold all distributions in
cash or in kind received or receivable by it in
respect of the Junior Debt from the Company or from
any other source in trust for the Finance Parties
and will (at the Junior Creditor's expense) pay and
transfer the same to the Agent for application
towards the Senior Debt until the Senior Debt is
irrevocably paid in full; and
(e) the trustee in bankruptcy, liquidator, assignee or
other person distributing the assets of the Company
or their proceeds is directed to pay distributions
on the Junior Debt direct to the Agent for
application towards the Senior Debt until the Senior
Debt is irrevocably paid in full. The Junior
Creditor will give all such notices and do all such
things as the Agent may reasonably direct to give
effect to this provision.
6. CONSENTS
The Junior Creditor will not have any remedy against the
Company or any other Obligor, the Agent or the Finance
Parties by reason of any transaction entered into between
the Agent and/or the Finance Parties and an Obligor which
violates any Junior Finance Document and the Junior
Creditor may not object to any such transaction by reason
of any provisions of the Junior Finance Documents.
7. REPRESENTATIONS AND WARRANTIES
The Junior Creditor represents and warrants to the Agent
and each Finance Party that this Deed:
(a) is within its powers and has been duly authorised by
it;
(b) constitutes its legal, valid and binding
obligations; and
(c) does not conflict in any material respect with any
law or regulation or its constitutional documents or
any document binding on it and that it has obtained
all necessary consents for its performance of this
Deed.
8. SUBROGATION BY THE JUNIOR CREDITOR
If any of the Senior Debt is wholly or partially paid out
of any proceeds received in respect of or on account of
the Junior Debt, the Junior Creditor will to that extent
be subrogated to the Senior Debt so paid but not before
all the Senior Debt is paid in full.
9. PROTECTION OF SUBORDINATION
9.1 Continuing subordination
The subordination provisions in this Deed constitute a
continuing subordination and benefit the ultimate balance
of the Senior Debt regardless of any intermediate payment
or discharge of the Senior Debt in whole or in part.
9.2 Waiver of defences
The subordination in this Deed and the obligations of the
Junior Creditor under this Deed will not be affected by
any act, omission, matter or thing which, but for this
provision, would reduce, release or prejudice the
subordination or any of those obligations in whole or in
part, including without limitation:
(a) any waiver granted to, or composition with, any
Obligor or other person;
(b) the taking, variation, compromise, exchange, renewal
or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security
over assets of, any Obligor or other person in
respect of the Senior Debt or otherwise or any
failure to realise the full value of any security;
or
(c) any unenforceability, illegality or invalidity of
any obligation of any Obligor or security in respect
of the Senior Debt or any other document or
security.
9.3 Immediate recourse
The Junior Creditor waives any right it may have of first
requiring any Finance Party (or the Agent or any trustee
or other agent on its behalf) to proceed against or
enforce any other rights or security or claim payment
from any person before claiming the benefit of this Deed.
The Agent may refrain from applying or enforcing any
money, rights or security unless and until instructed by
the Majority Banks. The Majority Banks may give or
refrain from giving instructions to the Agent to enforce
or refrain from enforcing any security as long as they
see fit.
9.4 Appropriations
Until the Senior Liabilities have been irrevocably paid
in full, the Agent may:
(a) apply any moneys or property received under this
Deed or from any Obligor or from any other person
against the Senior Debt in accordance with the terms
of the Credit Agreement;
(b) hold in an interest-bearing suspense account any
moneys or distributions received from the Junior
Creditors under Clause 4 (Turnover of non-permitted
recoveries) or Clause 5 (Subordination on
insolvency) or on account of the liability of the
Junior Creditor under this Deed.
9.5 Non-competition
Until the Senior Liabilities have been irrevocably paid
in full, the Junior Creditor will not by virtue of any
payment or performance by them under this Deed or by
virtue of the operation of Clauses 4 (Turnover of non-
permitted recoveries) or 5 (Subordination on insolvency):-
(a) be subrogated to any rights, security or moneys
held, received or receivable by any Finance Party
(or the Agent or any trustee or other agent on its
behalf) or be entitled to any right of contribution
or indemnity in respect of any payment made or
moneys received on account of the Junior Creditor's
liability under this Deed; or
(b) claim, rank, prove or vote as a creditor of any
Obligor or other person or their respective estates
in competition with any Finance Party (or the Agent
or any trustee or other agent on its behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any
Obligor or other person.
10. PRESERVATION OF JUNIOR DEBT
Notwithstanding any term of this Deed postponing,
subordinating or preventing the payment of any of the
Junior Debt, the Junior Debt concerned shall, solely as
between the Company and the Junior Creditor, remain owing
or due and payable in accordance with the terms of the
Junior Finance Documents, and interest and default
interest will accrue on missed payments accordingly.
11. CHANGES TO THE PARTIES
11.1 Successors and assigns
This Deed is binding on the successors and assigns of the
parties hereto.
11.2 The Company and the Junior Creditor
Neither the Company nor the Junior Creditor may assign or
transfer any of their rights or obligations under this
Deed without the consent of the Majority Banks.
11.3 The Agent and the Finance Parties
The Agent and the Finance Parties may assign or otherwise
dispose of all or any of their rights under this Deed in
accordance with the Senior Finance Documents to which
they are respectively a party.
12. MISCELLANEOUS
12.1 Perpetuity
The perpetuity period for the trusts in this Deed is 80
years.
12.2 Power of attorney
By way of security for the obligations of the Junior
Creditor under this Deed, the Junior Creditor irrevocably
appoints the Agent as its attorney to do anything which
the Junior Creditor is required to do by this Deed but
has failed to do, having been given 10 Business Day's
notice to rectify such non-compliance. The Agent may
delegate this power subject to the approval of the
Majority Banks.
13. INDEMNITY
(a) The Company will indemnify the Agent and every attorney
appointed by it in respect of all liabilities and
expenses reasonably incurred by it or him in good faith
in connection with the enforcement or preservation of any
rights in accordance with this Deed.
(b) The Agent shall not be liable for any losses arising in
connection with the exercise or purported exercise of any
of its rights, powers and discretions in good faith under
this Deed, unless that liability arises as a result of
the Agent's negligence or wilful default and in
particular (but without limitation) the Agent in
possession shall not be liable to account as mortgagee in
possession or for anything except actual receipts.
14. WAIVERS; REMEDIES CUMULATIVE
The rights of the Agent and the Finance Parties under
this Deed:
(a) may be exercised as often as necessary;
(b) are cumulative and are not exclusive of their rights
under the general law; and
(c) may be waived only in writing and specifically and
may be on such terms as the Agent or the Finance
Parties see fit.
15. SEVERABILITY
(a) If a provision of this Deed is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall
not affect:
(i) the validity or enforceability in that jurisdiction
of any other provision of this Deed; or
(ii) the validity or enforceability in other
jurisdictions of that or any other provision of this
Deed.
(b) This Deed may be executed in any number of counterparts,
all of which, taken together, shall constitute one and
the same instrument and any party may enter into this
Deed by executing a counterpart.
16. GOVERNING LAW
This Deed is governed by and shall be construed in
accordance with English law.
This Deed has been entered into on the date stated at the
beginning of this Deed.
SIGNATORIES TO THE SUBORDINATION AGREEMENT
Junior Creditor
[ ]
By:
Company
ENTERGY LONDON INVESTMENTS PLC
By:
Agent
ABN AMRO BANK N.V.
By:
SCHEDULE 7
CORPORATE STRUCTURE
[RIDER Y MISSING]
SIGNATORIES TO THE RESTATEMENT AGREEMENT
EUK
ENTERGY UK LIMITED
By: WILLIAM J. REGAN JR.
Company
ENTERGY LONDON INVESTMENTS PLC
By: WILLIAM J. REGAN JR.
London Electricity
LONDON ELECTRICITY PLC
By: ALAN TOWERS
Additional Guarantors
ENTERGY UK FINANCE LIMITED
By: WILLIAM J. REGAN JR.
ENTERGY LONDON HOLDINGS LIMITED
By: WILLIAM J. REGAN JR.
ENTERGY LONDON LIMITED
By: GERALD D. McINVALE
Additional Guarantors (continued)
ENTERGY INTERNATIONAL INVESTMENTS NO. 1 LTD LLC
By: Entergy International Ltd LLC, as member
By: Entergy International Holdings Ltd LLC, as member
By: Entergy Corporation, as member
By:
Name: WILLIAM J. REGAN JR.
Title: V.P. AND TREASURER
Additional Guarantors (continued)
ENTERGY INTERNATIONAL INVESTMENTS NO. 2 LTD LLC
By: Entergy International Ltd LLC, as member
By: Entergy International Holdings Ltd LLC, as member
By: Entergy Corporation, as member
By:
Name: WILLIAM J. REGAN JR.
Title: V.P. AND TREASURER
Arrangers
ABN AMRO BANK N.V.
By: Justin Cliffe
UNION BANK OF SWITZERLAND
By: Barbara Taylor
Continuing Banks
ABN AMRO BANK N.V.
By: Justin Cliffe
BAYERISCHE LANDESBANK GIROZENTRALE
LONDON BRANCH
By: Barbara Taylor
THE SANWA BANK, LIMITED
By: Peter Ellemann (Power of Attorney)
THE BANK OF TOKYO-MITSUBISHI, LTD
By: Peter Ellemann (Power of Attorney)
BARCLAYS BANK PLC
By: Paul Sims
CIBC WOOD GUNDY PLC
By: Suzy Webb
THE DAI-ICHI KANGYO BANK, LIMITED
By: Colin Vittery
DEN DANSKE BANK AKTIESELSKAB
By: Peter Ellemann (Power of Attorney)
DEUTSCHE BANK AG LONDON
By: Andrew Carter David Bugge
Continuing Banks (continued)
DRESDNER BANK AG LONDON BRANCH
By: Peter Ellemann (Power of Attorney)
RABOBANK INTERNATIONAL, LONDON BRANCH
(COOPERATIEVE CENTRALE RAIFFEISEN
BOERENLEENBANK BA)
By: Peter Ellemann (Power of Attorney)
THE ROYAL BANK OF SCOTLAND PLC
By: Peter Ellemann (Power of Attorney)
SOCIETE GENERALE
By: Peter Ellemann (Power of Attorney)
THE SUMITOMO TRUST & BANKING CO., LTD
By: David McDonnell
THE TORONTO-DOMINION BANK
By: Peter Ellemann (Power of Attorney)
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: Peter Ellemann (Power of Attorney)
COMMONWEALTH BANK OF AUSTRALIA
By: Peter Ellemann (Power of Attorney)
CREDIT LYONNAIS
By: Peter Ellemann (Power of Attorney)
Continuing Banks (continued)
THE FUJI BANK, LIMITED
By: Peter Richey
NATIONAL WESTMINSTER BANK PLC
By: John P. Kasperek
THE SAKURA BANK, LIMITED
By: C. Murchison
THE BANK OF NEW YORK
By: Ian K. Stewart
MIDLAND BANK PLC
By: Martin S. Peplow
THE NIKKO BANK (UK) PLC
By: E.G. Waite-Roberts
THE SUMITOMO BANK, LIMITED
By: Barry Henry
THE TOKAI BANK, LIMITED
By: Carl Roberts
THE TOYO TRUST AND BANKING COMPANY, LIMITED
By: John C. Sidhom
New Banks
DE NATIONALE INVESTERINGSBANK N.V.,
LONDON BRANCH
By: Peter Ellemann (Power of Attorney)
ING BANK N.V., LONDON BRANCH
By: James W. Rowe
SCOTIABANK EUROPE PLC
By: J.M. Copley
Retiring Banks
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: John R. Lavery
THE BANK OF NOVA SCOTIA
By: W. Currie
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AG
By: J.C. Barton Trevor Pritchard
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: Peter Ellemann (Power of Attorney)
KREDIETBANK N.V.
By: Peter Ellemann (Power of Attorney)
Retiring Banks (continued)
UNION BANK OF CALIFORNIA, N.A.
By: Peter Ellemann (Power of Attorney)
Bank of America
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: John R. Lavery
Agent
ABN AMRO BANK N.V.
By: Robert Skews
_______________________________
* Delete as appropriate.
** Only if Interest Period is of an optional duration.
* Include only in Debenture of US Chargors.
* Delete as applicable
** Include only in Debentures of US Chargors.
* Include only in Debentures of US Obligor.