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DEPOSIT AGREEMENT
BETWEEN
BANKERS TRUST COMPANY
and
SOUTHERN INVESTMENTS UK plc
Dated as of ______ __, 1996
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TABLE OF CONTENTS
Page
ARTICLE I Definitions and Other General Provisions.................................................... 1
SECTION 1.01. Definitions........................................................................ 1
SECTION 1.02 Rules of Construction.............................................................. 2
ARTICLE II Interests.................................................................................. 3
SECTION 2.01. Deposit of the Global Note......................................................... 3
SECTION 2.02. Book-Entry System.................................................................. 3
SECTION 2.03. Registration of Transfer of the Book-Entry Interest................................ 3
SECTION 2.04. Transfer of Global Note............................................................ 4
SECTION 2.05. Cancellation....................................................................... 4
SECTION 2.06. Payments in Respect of the Book-Entry Interest and Global
Note............................................................................... 4
SECTION 2.07. Change in Principal Amount of Global Note.......................................... 5
SECTION 2.08. Record Date........................................................................ 5
SECTION 2.09. Action in Respect of the Book-Entry Interest or the Global Note.................... 5
SECTION 2.10. Surrender of the Global Note....................................................... 6
SECTION 2.11. Reports............................................................................ 6
SECTION 2.12. Additional Amounts................................................................. 6
ARTICLE III The Book-Entry Depositary................................................................. 7
SECTION 3.01. Certain Duties and Responsibilities................................................ 7
SECTION 3.02. Notice of Default.................................................................. 8
SECTION 3.03. Certain Rights of Book-Entry Depositary............................................ 8
SECTION 3.04. Not Responsible for Recitals or Issuance of Senior Notes........................... 9
SECTION 3.05. Money Held in Trust................................................................ 9
SECTION 3.06. Compensation and Reimbursement..................................................... 9
SECTION 3.07 Book-EntryDepositary Required; Eligibility 10
SECTION 3.08. Resignation and Removal; Appointment of Successor.................................. 10
SECTION 3.09. Acceptance of Appointment by Successor............................................. 12
SECTION 3.10. Merger, Conversion, Consolidation or Succession to Business........................ 12
ARTICLE IV Miscellaneous Provisions................................................................... 13
SECTION 4.01. Notices to Book-Entry Depositary or Company........................................ 13
SECTION 4.02. Notice to Depositarys; Waiver...................................................... 13
SECTION 4.03. Effect of Headings and Table of Contents........................................... 13
SECTION 4.04. Successors and Assigns............................................................. 14
SECTION 4.05. Separability Clause................................................................ 14
SECTION 4.06. Benefits of Agreement.............................................................. 14
SECTION 4.07. Governing Law...................................................................... 14
SECTION 4.08. Jurisdiction....................................................................... 14
SECTION 4.09. Counterparts....................................................................... 14
SECTION 4.10. Inspection of Agreement............................................................ 15
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SECTION 4.11. Satisfaction and Discharge......................................................... 15
SECTION 4.12. Amendments......................................................................... 15
SECTION 4.13. Book-Entry Depositary To Sign Amendments........................................... 15
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DEPOSIT AGREEMENT
This Deposit Agreement (as the same may be amended from time to time
in accordance with the provisions hereof, the "Deposit Agreement"), dated as of
______________, 1996, is between Bankers Trust Company, a New York banking
corporation, as book-entry depositary hereunder (the "Book-Entry Depositary")
and Southern Investments UK plc, a public limited company organized under the
laws of England and Wales (the "Company").
ARTICLE I
Definitions and Other General Provisions
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SECTION 1.01. Definitions. Terms not defined herein have the meanings
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ascribed to them in the Indenture. The following terms, as used herein, have the
following meanings:
"Book-Entry Depositary" means the party named as such in this Agreement or
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its nominee or the custodian of either until a successor shall have become such
pursuant to Section 3.08 hereof, and thereafter "Book-Entry Depositary" shall
mean such successor or its nominee or the custodian of either.
"Book-Entry Interest" means the certificateless depositary interests that
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shall at all times, prior to the issuance of Definitive Registered Notes in
respect thereof, represent the right to receive 100% of the principal, premium
(if any), interest and Additional Amounts (if any) of the underlying Global Note
and that are issued to DTC or its nominee by the Book-Entry Depositary.
"Book-Entry Register" has the meaning ascribed thereto in Section 2.03
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hereof.
"Company" means the party named as such in this Agreement until a successor
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replaces it pursuant to the applicable provisions of the Indenture and,
thereafter, means the successor.
"Corporate Trust Office" means the office of the Book-Entry Depositary in
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the City of New York, at which any particular time its corporate trust business
shall be principally administered, which at the date hereof is located at
Bankers Trust Company, Four Albany Street, New York, NY 10006, Attn: Corporate
Trust Public Utilities Group and Agency Group.
"Definitive Registered Notes" means the Senior Notes issued pursuant to the
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Indenture and the Supplemental Indenture in substantially the form of Exhibit B
to the Supplemental Indenture.
"Depositary" means DTC or any successor, as the Depositary of the Book-
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Entry Interest as recorded on the Book-Entry Register.
"DTC" means The Depository Trust Company or its nominee.
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"Global Note" means the Global Note in bearer form issued pursuant to the
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Indenture and the Supplemental Indenture in substantially the same form as of
Exhibit A to the Supplemental Indenture.
"Indenture" means the Indenture dated as of____________, 1996, between the
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Company and Bankers Trust Company, as Trustee, and Bankers Trust Luxembourg
S.A., as paying and transfer agent relating to the Senior Notes as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental thereto entered into pursuant to the applicable
provisions thereof, including for all purposes to the extent applicable, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
such instrument.
"Interests" means beneficial interests in the Book-Entry Interest that will
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be shown on records maintained in book-entry form by DTC.
"Letter of Representations" means the Letter of Representations to DTC
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dated , 1996, from the Book-Entry Depositary and the Company.
"Opinion of Counsel" means a written opinion from legal counsel, who may be
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an employee of or regular counsel for the Company or may be other counsel
reasonably acceptable to the Book-Entry Depositary.
"Responsible Officer", when used with respect to the Book-Entry Depositary,
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means any authorized officer of the Book-Entry Depositary including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, or any other officer of the Book-Entry Depositary who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any depositary matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Senior Note" means and ___ Senior Note due 2006 of the Company issued
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under the Indenture and the Supplemental Indenture.
"Supplemental Indenture" means the First Supplemental Indenture dated as of
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_______, 1996, between the Company and Bankers Trust Company, as Trustee, and
Bankers Trust Luxembourg S.A., as paying and transfer agent, relating to the
Senior Notes.
"Trustee" means Bankers Trust Company and its successors and assigns, as
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trustee under the Indenture and the Supplemental Indenture.
SECTION 1.02. Rules of Construction. Unless the context otherwise
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requires:
(a) a term has the meaning assigned to it;
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(b) "or" is not exclusive;
(c) "including" means including without limitation; and
(d) words in the singular include the plural and words in the plural
include the singular.
ARTICLE II
Interests
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SECTION 2.01. Deposit of the Global Note. The Book-Entry Depositary hereby
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accepts custody of the Global Note from the Trustee and shall act as Book-Entry
Depositary in accordance with the terms of this Agreement. The Book-Entry
Depositary shall hold such Global Note at its Corporate Trust Office in the City
of New York or at such place as it shall determine with the consent of the
Company and shall issue the Book-Entry Interest in accordance with the Letter of
Representations.
SECTION 2.02. Book-Entry System. (a) Upon acceptance by DTC of the Book-
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Entry Interest for entry into its book-entry settlement system in accordance
with the terms of the Letter of Representations, Interests in the Book-Entry
Interest will be recorded on and traded through DTC's book-entry system, and
ownership of such Interests shall be shown in, and the transfer of such
ownership shall be effected only through, records maintained by (i) DTC or its
successors or (ii) institutions that have accounts with DTC or its successors
("DTC Participants"). Interests shall be transferable only as units representing
authorized denominations of the Senior Notes.
(b) The Book-Entry Interest shall be issuable only to DTC, or successors of
DTC or their respective nominees. Except as provided in Section 2.07, no owner
of Interests shall be entitled to receive a Senior Note on account of such
ownership, and such owner's Interests shall be shown only in accordance with the
procedures of DTC as set forth in the Letter of Representations.
SECTION 2.03. Registration of Transfer of the Book-Entry Interest.
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The Book-Entry Depositary agrees to maintain at the Book-Entry Depositary's
Corporate Trust Office the Book-Entry Register in which the Book-Entry
Depositary shall (i) record DTC as the initial registered owner of the Book-
Entry Interest and (ii) record the registration and transfer of the Book-Entry
Interest. The Book-Entry Interest cannot be transferred unless such transfer is
recorded on the Book-Entry Register. The Book-Entry Depositary shall not
constitute the agent of the Company for any other purpose and, in particular, it
shall not constitute the agent of the Company in relation to any payments it may
make to the owner of the Book-Entry Interest or be authorized to undertake any
obligations on behalf of the Company.
The foregoing paragraph shall not (i) impose an obligation on the Book-
Entry Depositary to record the ownership interests in or transfers of Interests
held by DTC Participants or its successors or Persons that may hold Interests
through such institutions or
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(ii) restrict transfers of such Interests held by DTC Participants or such
Persons. The Book-Entry Depositary shall treat the Depositary or its nominee or
their respective successors as the absolute owner of the Book-Entry Interest for
all purposes whatsoever and shall not be bound or affected by any notice to the
contrary, other than an order of a court having jurisdiction over the Book-Entry
Depositary.
SECTION 2.04. Transfer of Global Note. The Book-Entry Depositary
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shall hold the Global Note in custody for the benefit of the Depositary. The
Book-Entry Depositary shall not transfer or lend the Global Note or any interest
therein, except that the Book-Entry Depositary may transfer the Global Note as a
whole to a successor Book-Entry Depositary with the consent of the Company.
Notwithstanding the foregoing, the Depositary may not under any circumstances
request the Book-Entry Depositary to surrender or deliver the Global Note to the
Depositary. If (i) the Depositary notifies the Company and the Book-Entry
Depositary that it is unwilling or unable to continue as Depositary with respect
to the Book-Entry Interest or if at any time it is unable to continue as, or
ceases to be, a "clearing agency" under the Exchange Act and a successor
Depositary registered as a "clearing agency" under the Exchange Act is not
appointed by the Company within 120 days; (ii) the Book-Entry Depositary
notifies the Company under Section 3.08 hereof that it is at any time unwilling
or unable to continue as Book-Entry Depositary and no successor Book-Entry
Depositary has been appointed by the Company within 120 days of such
notification; (iii) the Company shall request that Definitive Registered Notes
be issued; or (iv) an Event of Default (as defined in the Indenture) has
occurred and is continuing and the holder of a majority in outstanding principal
amount of interests in the Book-Entry Interest has requested that Definitive
Registered Notes be issued in accordance with Section 2.07 hereof and the
Indenture, then the Book-Entry Depositary will promptly notify the Trustee and
request the Trustee to issue Definitive Registered Notes in such names and
denominations as the Depositary shall specify in accordance with Section 209 of
the Supplemental Indenture, and the Book-Entry Depositary agrees that in such
event it will promptly surrender the Global Note held by it to the Trustee in
connection with such exchange and that such Global Note will be cancelled upon
issuance of such Definitive Registered Notes. All costs (taxes, governmental
charges or otherwise) related to the issuance of Definitive Registered Notes
will be borne by the Company subject to any exceptions set forth in the
Indenture.
SECTION 2.05. Cancellation. If the Global Note is surrendered for
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payment, or for redemption of Senior Notes evidenced thereby or for exchange for
Definitive Registered Notes to any Person other than the Trustee, such Global
Note shall, subject to Section 2.07, be delivered to the Trustee for
cancellation.
SECTION 2.06. Payments in Respect of the Book-Entry Interest and Global
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Note. (a) Whenever the Book-Entry Depositary shall receive from the
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Trustee (or other paying agent under the Indenture) any payment on the Global
Note, such payments shall be distributed promptly to the Depositary on the
payment date for the Global Note. So long as DTC is the Depositary, such
payments shall be made in accordance with the Letter of Representations.
(b) The Book-Entry Depositary will forward to the Company or its agents
such information from its records as the Company may reasonably request in
writing to enable the
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Company or its agents to file necessary reports with governmental agencies, and
the Book-Entry Depositary, the Company or their agents may (but shall not be
required to) file any such reports necessary to obtain benefits under any
applicable tax treaties for the Depositary of, or the beneficial owners of
Interests in the Book-Entry Interest.
(c) Notwithstanding any other provisions of this Agreement, the Book-Entry
Depositary shall be required to pay to the Depositary only amounts (including
Additional Amounts (as defined in the Indenture)) received by the Book-Entry
Depositary under the Global Note.
(d) Neither the Company nor any agent of the Company will have any
responsibility or liability for any aspect relating to payments made or to be
made by the Book-Entry Depositary to DTC in respect of the Global Note or the
Book-Entry Interests. None of the Company, the Trustee, the Book-Entry
Depositary or any agent of any of the foregoing will have any responsibility or
liability for any aspect relating to payments made or to be made by DTC on
account of a Participant's or Indirect Participant's ownership of an Interest in
the Book-Entry Interest or for maintaining, supervising or reviewing any records
relating to a Participant's interests in the Book-Entry Interest.
SECTION 2.07. Change in Principal Amount of Global Note. Whenever
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the principal amount at maturity of the Global Note held by the Book-Entry
Depositary is changed by the Trustee, the Book-Entry Depositary shall notify the
Depositary of the corresponding change in the principal amount of the related
Book-Entry Interest.
SECTION 2.08. Record Date. Whenever any payment is to be made in
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respect of the Global Note or the Book-Entry Depositary shall receive notice of
any action to be taken by the Depositary of the Global Note or Depositarys of
interests therein, or whenever the Book-Entry Depositary otherwise deems it
appropriate in respect of any other matter, the Book-Entry Depositary shall fix
a record date for the determination of the Depositary who shall be entitled to
receive payment in respect of the Book-Entry Interest or to take any such action
or to act in respect of any such matter. Subject to the provisions of this
Agreement, only the Depositary who is registered on the Book-Entry Register at
the close of business on such record date shall be entitled to receive any such
payment, to give instructions as to such action or to act in respect of any such
matter.
SECTION 2.09. Action in Respect of the Book-Entry Interest or the Global
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Note. (a) As soon as practicable after receipt by the Book-Entry Depositary of
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notice of any solicitation of consents or request for a waiver or other action
by the Depositary or owners of Interests under this Agreement or the Indenture,
the Book-Entry Depositary shall mail to the Depositary a notice containing (i)
such information as is contained in such notice, (ii) a statement that the
Depositary at the close of business on a specified date will be entitled,
subject to the provisions of or governing the Book-Entry Interest or Global
Note, as the case may be, to instruct the Book-Entry Depositary as to the
consent, waiver or other action, if any, pertaining to the Book-Entry Interest
or Global Note, as the case may be, and (iii) a statement as to the manner in
which such instructions may be given. Upon the written request of the Depositary
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received on or before the date established by the Book-Entry Depositary for such
purpose, the Book-Entry Depositary shall endeavor insofar as practicable and
permitted under the provisions of or governing the Book-Entry Interest or Global
Note, as the case may be, to take such action regarding the requested consent,
waiver or other action in respect of such Book-Entry Interest or Global Note, as
the case may be, in accordance with any instructions set forth in such request.
The Book-Entry Depositary shall not itself exercise any discretion in the
granting of consents or waivers or the taking of any other action in respect of
the Book-Entry Interest or Global Note.
(b) The Depositary may direct the time, method and place of conducting
any proceeding for any remedy available to the Book-Entry Depositary or of
exercising any trust or power conferred on the Book-Entry Depositary. However,
the Book-Entry Depositary may refuse to follow any direction that conflicts with
law or this Agreement or the Indenture or, subject to Section 3.01 hereof, that
the Book-Entry Depositary determines would involve it in Personal liability.
SECTION 2.10. Surrender of the Global Note Surrender of the Global Note. In
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the event of the redemption, payment or purchase in full of all the Senior Notes
represented by the Global Note, then the Global Note shall become void and the
Book-Entry Depositary shall surrender the Global Note to the Trustee for
cancellation.
SECTION 2.11. Reports. The Book-Entry Depositary shall immediately (and in
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no event later than 10 days from receipt) send to the Depositary a copy of any
notices, reports and other communications received by it relating to the
Company, the Senior Notes or the Book-Entry Interest.
SECTION 2.12. Additional Amounts. All payments made by the Book-Entry
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Depositary pursuant to this Agreement shall be made without deduction or
withholding for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature (collectively, "United
Kingdom Taxes") imposed or levied by or on behalf of the United Kingdom or any
political subdivision thereof or any authority therein or thereof having power
to tax therein (each a "U.K. Tax Authority"), unless the withholding or
deduction of such United Kingdom Taxes is then required by law.
At least 10 days prior to the first interest payment date, and at least 10
days prior to each succeeding interest payment date if there has been any change
with respect to the matters set forth in the below-mentioned Directors'
Certificate, the Company will furnish the Book-Entry Depositary with a
Directors' Certificate instructing the Book-Entry Depositary whether such
payment of principal of or interest on such Book-Entry Interest shall be made to
the Depositary without deduction or withholding for or on account of any United
Kingdom Taxes. If any such deduction or withholding shall be required, prior to
such interest payment date the Company will furnish the Book-Entry Depositary
with a Directors' Certificate which specifies the amount required to be deducted
or withheld on such payment. Neither the Company nor any agent of the Company
will have any responsibility or liability for any aspect relating to payments
made or to be made by the Book-Entry Depositary to DTC in respect of the Senior
Notes or the Book-Entry Interests. None of the Company, the Trustee, the Book-
Entry
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Depositary or any agent of any of the foregoing will have any responsibility or
liability for any aspect relating to payments made or to be made by DTC on
account of a Participant's or Indirect Participant's ownership of an interest in
the Book-Entry Interest or for maintaining, supervising or reviewing any records
relating to a Participant's or Indirect Participant's interests in the Book-
Entry Interest. The Company shall indemnify the Book-Entry Depositary, its
officers, directors and employees for, and hold it harmless against, any loss,
liability or expense reasonably incurred without negligence, willful misconduct
or bad faith on its part arising out of or in connection with actions taken or
omitted by it in reliance on any Directors' Certificate furnished to it pursuant
to this Section 2.12.
ARTICLE III
The Book-Entry Depositary
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SECTION 3.01. Certain Duties and Responsibilities. (a) The Book-Entry
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Depositary undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Book-Entry Depositary.
(b) In the absence of bad faith on its part, the Book-Entry Depositary
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Book-Entry Depositary and conforming to the requirements of this Agreement, but
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Book-Entry Depositary, the
Book-Entry Depositary shall examine the same to determine whether or not they
conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Book-Entry Depositary from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) the Book-Entry Depositary shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Book-Entry
Depositary, unless the Book-Entry Depositary was negligent in ascertaining
the pertinent facts; and
(ii) no provision of this Agreement shall require the Book-Entry
Depositary to spend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if repayment of such funds or
adequate indemnity against such risk or liability satisfactory to the Book-
Entry Depositary has not been assured to it.
(d) The Book-Entry Depositary shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Depositary relating to the time, method and place of conducting
any proceeding for any remedy available to the Book-Entry Depositary, or
exercising any power conferred upon the Book-Entry depositary, under this
Agreement or the Indenture.
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(e) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Book-Entry Depositary shall be subject to the
provisions of this Section 3.01.
SECTION 3.02. Notice of Default. Within 90 days after the occurrence of any
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Event of Default with respect to the Global Note (a "Note Default") of which a
Responsible Officer of the Book-Entry Depositary assigned to its corporate trust
department has actual knowledge, the Book-Entry Depositary shall transmit by
mail to the Depositary in the manner provided in Section 4.02 hereof, notice of
such Note Default, unless such Note Default shall have been cured or waived.
SECTION 3.03. Certain Rights of Book-Entry Depositary. Subject to the
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provisions of Section 3.01 hereof:
(a) the Book-Entry Depositary may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Directors' Certificate or Company Order or as
otherwise expressly provided herein and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(c) the Book-Entry Depositary may consult with counsel, and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(d) the Book-Entry Depositary shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Book-Entry Depositary, in its discretion, may make further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Book-Entry Depositary shall determine to make such further inquiry or
investigation, it shall be entitled upon reasonable prior request and during
normal business hours to examine the books, records and premises of the Company,
Personally or by agent or attorney;
(e) the Book-Entry Depositary may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, but the Book-Entry Depositary shall be responsible for any
misconduct or negligence on the part of any such agent or attorney appointed by
it hereunder;
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(f) the Book-Entry Depositary shall be under no obligation to expend
or risk its own funds or to exercise, at the request or direction of any
Depositary, any of the rights or powers vested in it by this Agreement or
the Indenture unless the Depositary shall have offered to the Book-Entry
Depositary security or indemnity satisfactory to the Book-Entry Depositary
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(g) whenever in the administration of its duties under this Agreement
the Book-Entry Depositary shall deem it desirable that a matter be proved
or established prior to taking or suffering or omitting any action
hereunder, the Book-Entry Depositary (unless other evidence be herein
specifically prescribed) may, in the absence of negligence or bad faith on
its part, rely upon a Directors' Certificate.
SECTION 3.04. Not Responsible for Recitals or Issuance of Senior Notes. The
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recitals contained in the Indenture and in the Senior Notes, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Book-Entry Depositary assumes no responsibility for their
correctness. The Book-Entry Depositary makes no representations as to the
validity or sufficiency of this Agreement or of the Senior Notes. The Book-Entry
Depositary shall not be accountable for the use or application by the Company of
the proceeds with respect to the Senior Notes.
SECTION 3.05. Money Held in Trust. Money held by the Book-Entry Depositary
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in trust hereunder need not be segregated from other funds held by the Book-
Entry Depositary, except to the extent required by law. The Book-Entry
Depositary shall be under no obligation to invest or pay interest on any money
received by it hereunder, except as otherwise agreed in writing with the
Company. Any interest accrued on funds deposited with the Book-Entry Depositary
under this Agreement shall be paid to the Company from time to time and the
Depositary shall have no claim to any such interest.
SECTION 3.06. Compensation and Reimbursement. The Company agrees:
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(a) to pay to the Book-Entry Depositary from time to time such
compensation as is agreed upon in writing;
(b) except as otherwise expressly provided herein, to reimburse the
Book-Entry Depositary upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Book-Entry Depositary in
accordance with any provision of this Agreement (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and
counsel, which compensation, expenses and disbursements shall be set forth in
sufficient written detail to the satisfaction of the Company), except any such
expense, disbursement or advance as may be attributable to its or their
negligence or bad faith; and
(c) to indemnify the Book-Entry Depositary for, and to hold it
harmless against, any loss, liability or expense incurred without negligence,
bad faith or willful misconduct on its part arising out of or in connection with
the acceptance or
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administration of this Agreement and its duties hereunder, including the
costs and expenses of defending itself against any claim of liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Indemnity provided by this Section 3.06(c) shall survive the
satisfaction and discharge of this Agreement pursuant to Section 4.11
hereof.
SECTION 3.07. Book-Entry Depositary Required; Eligibility. At all times
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when there is a Book-Entry Depositary hereunder, such Book-Entry Depositary
shall be a corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, having,
together with its parents, a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal, state or District
of Columbia authority and willing to act on reasonable terms. Such corporation
shall have its principal place of business in the Borough of Manhattan, The City
of New York, if there be such a corporation in such location willing to act upon
reasonable and customary terms and conditions. If such corporation, or its
parent, publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 3.07, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Book-Entry Depositary
hereunder shall at all times be the Trustee under the Indenture, subject to
receipt of an Opinion of Counsel that the same Person is precluded by law from
acting in such capacities. If at any time the Book-Entry Depositary shall cease
to be eligible in accordance with the provisions of this Section 3.07, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 3.08. Resignation and Removal; Appointment of Successor. (a) No
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resignation or removal of the Book-Entry Depositary and no appointment of a
successor Book-Entry Depositary pursuant to this Article shall become effective
until (i) the acceptance of appointment by the successor Book-Entry Depositary
in accordance with the applicable requirements of Section 3.09 hereof or (ii)
the issuance of Definitive Registered Notes in accordance with Section 2.04 or
Section 2.07 hereof and the Indenture.
(b) The Book-Entry Depositary may resign with respect to the Global Note by
giving written notice thereof to the Company and the Depositary, in accordance
with Section 4.01 and Section 4.02 hereof, 60 days prior to the effective date
of such resignation. The Book-Entry Depositary may be removed at any time upon
90 days' notice by the filing with it of an instrument in writing signed on
behalf of the Company and specifying such removal and the date when it is
intended to become effective. If the instrument of acceptance by a successor
Book-Entry Depositary required by Section 3.09 hereof shall not have been
delivered to the Book-Entry Depositary within 30 days after the giving of such
notice of resignation or removal, the resigning Book-Entry Depositary may
petition any court of competent jurisdiction for the appointment of a successor
Book-Entry Depositary.
(c) If at any time:
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(i) the Book-Entry Depositary shall cease to be eligible under Section 3.07
hereof, or shall cease to be eligible as Trustee under the Indenture, and
shall fail to resign after written request therefor by the Company or by
the Depositary, or
(ii) the Book-Entry Depositary shall become incapable of acting with
respect to the Book-Entry Interest or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Book-Entry Depositary or of
its property shall be appointed or any public officer shall take charge or
control of the Book-Entry Depositary or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation.
then, in any such case, (i) the Company, by Board Resolution, may remove the
Book-Entry Depositary and appoint a successor Book-Entry Depositary, and (ii) if
the Company shall fail to remove such Book-Entry Depositary and appoint a
successor Book-Entry Depositary, the Depositary may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Book-Entry Depositary or Book-Entry Depositaries and the
appointment of a successor Book-Entry Depositary, unless Definitive Registered
Notes have been issued in accordance with the Indenture.
(d) If the Book-Entry Depositary shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Book-Entry
Depositary for any cause, the Company, by Board Resolution, shall promptly
appoint a successor Book-Entry Depositary (other than the Company) and shall
comply with the applicable requirements of Section 3.09 hereof. If no successor
Book-Entry Depositary with respect to the Global Note shall have been so
appointed by the Company and accepted appointment in the manner required by
Section 3.09, the Depositary may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Book-Entry Depositary unless Definitive Registered Notes have been
issued in accordance with the Indenture.
(e) The Company shall give, or shall cause such successor Book-Entry
Depositary to give, notice of each resignation and each removal of a Book-Entry
Depositary and each appointment of a successor Book-Entry Depositary to the
Depositary in accordance with Section 4.02 hereof. Each notice shall include the
name of the successor Book-Entry Depositary and the address of its Corporate
Trust Office.
SECTION 3.09. Acceptance of Appointment by Successor. (a) In case of the
--------------------------------------
appointment hereunder of a successor Book-Entry Depositary, every such successor
Book-Entry Depositary so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Book-Entry Depositary an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Book-Entry
Depositary shall become effective and such successor Book-Entry Depositary,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, agencies and duties of the retiring Book-Entry Depositary, with
like effect as if originally named as Book-Entry Depositary hereunder; but, on
the request of the Company or the successor Book-Entry Depositary, such retiring
Book-Entry Depositary shall, upon payment of all amounts due and payable to it
pursuant to Section 3.06 hereof, execute and deliver an instrument transferring
to such successor Book-Entry Depositary all the rights and powers of the
retiring Book-Entry Depositary and shall duly
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assign, transfer and deliver to such successor Book-Entry Depositary all
property and money held by such retiring Book-Entry Depositary hereunder. Any
retiring Book-Entry Depositary shall, nonetheless, retain a prior claim upon all
property or funds held or collected by such Book-Entry Depositary to secure any
amounts then due it pursuant to Section 3.06 hereof.
(b) Upon request of any such successor Book-Entry Depositary, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Book-Entry Depositary all such rights, powers
and agencies referred to in paragraph (a) of this Section 3.09.
(c) No successor Book-Entry Depositary shall accept its appointment unless
at the time of such acceptance such successor Book-Entry Depositary shall be
eligible under this Article.
(d) Upon acceptance of appointment by any successor Book-Entry Depositary
as provided in this Section 3.09, the Company shall give notice thereof to the
Depositary in accordance with Section 4.02 hereof. If the acceptance of
appointment is substantially contemporaneous with the resignation of the Book-
Entry Depositary, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 3.08(b) hereof. If the Company
fails to give such notice within 10 days after acceptance of appointment by the
successor Book-Entry Depositary, the successor Book-Entry Depositary shall cause
such notice to be given at the expense of the Company.
SECTION 3.10. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Book-Entry Depositary may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Book-Entry Depositary shall be
a party, or any corporation succeeding to all or substantially all the corporate
trust business of the Book-Entry Depositary, shall be the successor of the Book-
Entry Depositary hereunder, without the execution of filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE IV
Miscellaneous Provisions
------------------------
SECTION 4.01. Notices to Book-Entry Depositary or Company. Any request,
-------------------------------------------
demand, authorization, direction, notice, consent, or waiver or other document
provided or permitted by this Agreement to be made upon, given or furnished to,
or filed with,
(a) the Book-Entry Depositary by the Depositary, by the Trustee or the
Company shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or filed in writing
and Personally delivered or mailed, first-class postage prepaid, to the
Book-Entry Depositary at is Corporate Trust Office, Attention: Corporate
Trust Trustee Administration Department, or at any other address previously
furnished in writing by the Book-Entry Depositary to the Depositary, the
Trustee and the Company, or
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(b) the Company, by the Book-Entry Depositary or by the Depositary shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and Personally
delivered or mailed, first-class postage prepaid to Southern Investments UK
plc, Attention: ____________________________, or at any other address
previously furnished in writing to the Book-Entry Depositary by the
Company.
SECTION 4.02. Notice to Depositarys; Waiver. Where this Agreement provides
-----------------------------
for notice to the Depositary of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided or as provided in the Letter
of Representations) if in writing and mailed, first-class postage prepaid, to
the Depositary at the address notified to the Book-Entry Depositary, in each
case not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. Where this Agreement provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by the
Depositary shall be filed with the Book-Entry Depositary, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Book-Entry Depositary
shall constitute a sufficient notification for every purpose hereunder.
SECTION 4.03. Effect of Headings and Table of Contents. The Article and
-----------------------------------------
Section headings herein are for convenience only and shall not affect the
construction hereof.
SECTION 4.04. Successors and Assign. All covenants and agreements in this
---------------------
Agreement and the Senior Notes by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 4.05. Separability Clause. In case any provision in this Agreement
-------------------
or in the Senior Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof and thereof shall
not in any way be affected or impaired thereby.
SECTION 4.06. Benefits of Agreement. Nothing in this Agreement, the Senior
---------------------
Notes or the Indenture, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Depositarys and
owners from time to time of Interests in the Book-Entry Interest shall be
parties to this Agreement and shall be bound by all of the terms and conditions
hereof and of the Indenture and the Senior Notes, by their acceptance of
delivery of the Interests.
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SECTION 4.07. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 4.08. Jurisdiction. The Company agrees that any legal suit, action
------------
or proceeding against the Company brought by the Book-Entry Depositary arising
out of or based upon this Agreement may be instituted in any state or Federal
court in the Borough of Manhattan, The City of New York, and waives any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and irrevocably submits to the nonexclusive jurisdiction of such
courts in any suit, action or proceeding. The Company has appointed [CT
Corporation], 1633 Broadway, New York, New York 10019, as its authorized agent
(the "Authorized Agent") upon whom process may be served in any legal suit,
action or proceeding arising out of or based upon this Agreement which may be
instituted in the Supreme Court of New York, New York County of the United
States District Court for the Southern District of New York by the Depositary or
the Book-Entry Depositary, and expressly accepts the nonexclusive jurisdiction
of any such court in respect of any such action. Such appointment shall be
irrevocable. Service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the Company. Notwithstanding
the foregoing, any action based on this Agreement may be instituted by the Book-
Entry Depositary in any competent court in England.
SECTION 4.09. Counterparts. This Agreement may be executed in any number of
------------
counterparts by the parties hereto on separate counterparts, each of which, when
so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 4.10. Inspection of Agreement. A copy of this Agreement shall be
-----------------------
available at all reasonable times during normal business hours at the Corporate
Trust Office of the Book-Entry Depositary for inspection by any Depositary.
SECTION 4.11. Satisfaction and Discharge. This Agreement upon Company Order
--------------------------
shall cease to be of further effect, and the Book-Entry Depositary, at the
expense of the Company shall execute proper instruments acknowledging
satisfaction and discharge of this Agreement, when (i) the Indenture has been
satisfied and discharged pursuant to the provisions thereof or Definitive
Registered Notes have been issued and the Global Note has been cancelled in
accordance with the provisions of Section 2.05 hereof and the Indenture, (ii)
the Company has paid or caused to be paid all sums payable hereunder by the
Company and (iii) the Company has delivered to the Book-Entry Depositary a
Directors' Certificate and an Opinion of Counsel, stating that all conditions
precedent herein provided relating to the satisfaction and discharge of this
Agreement have been complied with.
SECTION 4.12. Amendments. The Company and the Book-entry Depositary may
----------
amend this Agreement without the consent of the Depositary:
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(a) to cure any formal defect, omission, inconsistency or ambiguity;
(b) to add to the covenants and agreements of the Company or the Book-
Entry Depositary ;
(c) to effect the assignment of the Book-Entry Depositary's rights and
duties to a qualified successor, as provided herein;
(d) to comply with any requirements of the Securities Act, the
Exchange Act or the U.S. Investment Company Act of 1940, as amended, and
the Trust Indenture Act;
(e) to modify this Agreement in connection with an amendment to the
Indenture that does not require the consent of the Depositarys of Senior
Notes; or
(f) to modify, alter, amend or supplement this Agreement in any other
respect not inconsistent with this Agreement which, in the opinion of
counsel acceptable to the Company, is not materially adverse to the
Depositary or the Depositarys of Interests.
Except as set forth in this Section 4.12, no amendment which materially
adversely affects any Depositary or beneficial owner of Interests may be made to
this Agreement without the consent of such Depositary or beneficial owner.
SECTION 4.13. Book-Entry Depositary To Sign Amendments. The Book-Entry
----------------------------------------
Depositary shall sign any amendment authorized pursuant to Section 4.12 if the
amendment does not materially adversely affect the rights, duties, liabilities
or immunities of the Book-Entry Depositary. If it does, the Book-Entry
Depositary may but need not sign it.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
SOUTHERN INVESTMENTS UK PLC
By:____________________
Name:
Title:
BANKERS TRUST COMPANY, as
Book-Entry Depositary,
By:____________________
Name:
Title:
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