FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For May 30, 2003
Commission File Number: 333-13096
AES DRAX HOLDINGS LIMITED
18 Parkshot
Richmond
Surrey TW9 2RG
England
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ________
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):82-_________
AES DRAX HOLDINGS LIMITED
INDEX
Item
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1. Recent Developments
2. Further Standstill Agreement Between the Registrant and AES Drax
Power Limited, AES Drax Limited, AES Drax Financing Limited, AES Drax
Electric Limited, AES Drax Acquisition Limited, as Guarantors, The
AES Corporation, Certain Senior Bondholders Named herein, JPMorgan
Chase Bank, as Eurobond Trustee, The Bank of New York, as Senior Bond
Trustee, Deutsche Bank AG London, as Senior Agent, Deutsche Trustee
Company Limited, as Intercreditor Agent, National Westminster Bank
PLC, as LC Facility Agent, JPMorgan Chase Bank, as Security Trustee.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AES DRAX HOLDINGS LIMITED
Date: May 30, 2003 By: /s/ John Turner
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Name: John Turner
Title: Director
ITEM 1.
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Recent Developments
On December 12, 2002 the AES Drax Companies, AES, the Eurobond Trustee and
the Senior Bond Trustee, amongst others, entered into an agreement (the
"Standstill Agreement") for the purpose of providing AES Drax Holdings and its
senior creditors with a period of stability during which discussions regarding
a consensual restructuring could take place. As previously disclosed in AES
Drax Holdings' Form 6-K dated March 17, 2003, in accordance with its
obligations under the Standstill Agreement, AES Drax Holdings presented to the
steering committee (the "Steering Committee") representing the syndicate of
banks (the "Senior Lenders") which financed the Eurobonds issued by AES Drax
Holdings to finance the acquisition of the Drax power plant and the ad hoc
committee (the "Ad Hoc Committee" and, together with the Steering Committee,
the "Senior Creditors Committee") formed by holders of AES Drax Holdings 9.07%
Senior Secured Bonds due 2025 and 10.41% Senior Secured Bonds due 2020
(collectively, the "Senior Bonds"), on March 14, 2003, proposals for a
restructuring plan and an updated business plan. On May 22, 2003, AES Drax
Holdings was informed by the Senior Creditors Committee of a counterproposal
for a restructuring plan (the "Senior Creditors' Counterproposal"). Since
receiving the Senior Creditors Counterproposal AES Drax Holdings has reviewed
and considered the terms of the Senior Creditors' Counterproposal and has
conducted detailed discussions with the Senior Creditors Committee about the
terms for a restructuring. Although the full terms of a consensual
restructuring remain to be agreed, based on negotiations to date, agreement on
Restructuring Principles has been reached with the Senior Creditors Committee
and will form the basis for further discussions during the extended standstill
period.
In order to maintain stability during a period in which further
discussions regarding the Restructuring Principles for a consensual
restructuring will take place, AES Drax Holdings will seek the requisite
consents of the holders of its Senior Bonds and its Senior Lenders to enter
into a new standstill agreement as the current Standstill Period will terminate
on May 31, 2003. Accordingly, AES Drax Holdings has reached an agreement in
principle with the Bank Steering Committee and the Ad Hoc Senior Bond Committee
regarding the terms of a further standstill agreement (the "Further Standstill
Agreement"). The Further Standstill Agreement will expire on June 30, 2003,
unless terminated earlier or extended in accordance with its terms. The terms
of the Further Standstill Agreement, which is attached as Exhibit A, are
substantially the same as the Standstill Agreement.
AES Drax Holdings has been informed by The AES Corporation that it will
continue to support the restructuring of the AES Drax project and that The AES
Corporation supports and will agree to the Further Standstill Agreement and the
extension of the standstill period through June 30, 2003.
1
Assuming that the Further Standstill Agreement is extended beyond June 30,
2003, it is expected that interest due and payable to the Senior Lenders and on
the Senior Bonds on June 30, 2003 will be paid on that date.
Close Brothers, financial advisor to the Ad Hoc Senior Bond Committee and
Milbank, Tweed, Hadley & McCloy, legal advisor to the Ad Hoc Senior Bond
Committee, will host a conference call on June 2, 2003 at 5:00 p.m. (London
time) to discuss with Senior Bondholders the contents of the Further Standstill
Agreement. The international dial-in telephone number is +44 1452-542-315. The
domestic dial-in telephone number is 0800-953-0220. The Chairperson of the call
is Martin Gudgeon. For further information Senior Bondholders should contact
David Riddell (Close Brothers): +44 (0)20-7655-3203, Martin Gudgeon (Close
Brothers): +44 (0)20-7655-3171, or Phillip Fletcher (Milbank Tweed): +44
(0)20-7448 3002.
2
ITEM 2.
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FURTHER STANDSTILL AGREEMENT
dated June 2003
between
AES DRAX HOLDINGS LIMITED
as the Issuer
and
AES DRAX POWER LIMITED
AES DRAX LIMITED
AES DRAX FINANCING LIMITED
AES DRAX ELECTRIC LIMITED
AES DRAX ACQUISITION LIMITED
as Guarantors
THE AES CORPORATION
Certain SENIOR BONDHOLDERS named herein
JPMORGAN CHASE BANK
as Eurobond Trustee
THE BANK OF NEW YORK
as Senior Bond Trustee
DEUTSCHE BANK AG LONDON
as Senior Agent
DEUTSCHE TRUSTEE COMPANY LIMITED
as Intercreditor Agent
NATIONAL WESTMINSTER BANK PLC
as LC Facility Agent
JPMORGAN CHASE BANK
as Security Trustee
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CONTENTS
Clause Page
1. Definitions and Principles of Construction; Conflict.....................2
2. Standstill Date..........................................................9
3. Standstill Termination...................................................0
4. Consenting Bondholders' Covenants........................................2
5. Senior Bond Trustee......................................................3
6. Waivers, Amendments and Consents.........................................3
7. Eurobond Trustee's Covenants.............................................5
8. AES Covenants............................................................5
9. Issuer's and Guarantors' Covenants.......................................6
10. Issuer's and Guarantors' Representations and Warranties.................17
11. Indemnity...............................................................18
12. Equalisation Fee........................................................20
13. Accounts................................................................20
14. Acknowledgements........................................................22
15. Amendments..............................................................23
16. Continuing Effect.......................................................23
17. Validity of Agreement...................................................24
18. Remedies................................................................24
19. Finance Document........................................................25
20. Counterparts; Delivery By Facsimile.....................................25
21. No Assignment...........................................................25
22. Notices.................................................................25
23. Contracts (Rights of Third Parties) Act 1999............................25
24. Governing Law...........................................................25
25. Jurisdiction............................................................25
Schedule 1 Conditions Precedent...........................................1
Schedule 2 Accession Deed.................................................2
Schedule 3 Termination Notice.............................................1
1
This FURTHER STANDSTILL AGREEMENT (this "Agreement"), dated June 2003 is made
between:
(1) AES Drax Holdings Limited ("Drax Holdings" or the "Issuer");
(2) The AES Corporation ("AES");
(3) AES Drax Power Limited ("Drax Power");
(4) AES Drax Limited ("Drax Limited");
(5) AES Drax Financing Limited ("Drax Financing");
(6) AES Drax Electric Limited ("Drax Electric");
(7) AES Drax Acquisition Limited ("Drax Acquisition" and, together with Drax
Power, Drax Limited, Drax Financing and Drax Electric, the "Guarantors");
(8) each of the beneficial holders of the Senior Bonds named on the signature
pages of this Agreement (the "Initial Consenting Bondholders" and,
together with any additional Senior Bondholder who accedes hereto pursuant
to Clause 4.2, the "Consenting Bondholders");
(9) JPMorgan Chase Bank, as Eurobond Trustee (the "Eurobond Trustee");
(10) The Bank of New York, as Senior Bond Trustee for and on behalf of the
beneficial holders of Senior Bonds (the "Senior Bond Trustee");
(11) Deutsche Bank AG London, as Senior Agent (the "Senior Agent");
(12) Deutsche Trustee Company Limited, as Intercreditor Agent (the
"Intercreditor Agent");
(13) National Westminster Bank Plc, as LC Facility Agent under an Approved LC
Facility (the "LC Facility Agent"); and
(14) JPMorgan Chase Bank, as Security Trustee (the "Security Trustee").
IT IS AGREED as follows:
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION; CONFLICT
1.1 Definitions
(a) Unless otherwise defined herein or otherwise provided in sub-clauses
(b), (c) and (d) below, terms defined in the AES Intercreditor and
Security Trust Deed dated 2 August 2000 (the "Intercreditor Deed")
between, inter alios, Drax Acquisition, Drax Financing, the Issuer,
the Guarantors, certain Senior Creditors named therein and their
Agents named therein shall have the same meanings when used herein.
(b) Unless otherwise defined herein, terms defined in Section 1.01 of the
Senior Bond Indenture as in effect immediately upon the occurrence of
the Standstill Date shall have the same meanings when used in the
definitions of "Permanently Waived Senior Bond Default" and
"Temporarily Waived Senior Bond Default" herein.
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(c) Unless otherwise defined herein, terms defined in the Bond Trust Deed
as in effect immediately upon the occurrence of the Standstill Date
shall have the same meanings when used in the definition of
"Temporarily Waived Eurobond Default" herein.
(d) Each of the terms: "Account Bank", "Collateral Financing Account",
"Debt Service Reserve Account", "Holding Account", "Insurance Reserve
Account", "Payment Certificate" and "Proceeds Account" shall have the
meaning given to such term in the Group Account Agreement as in
effect immediately upon the occurrence of the Standstill Date. The
term "Collateral Holding Account" shall have the meaning given to
that term in the Collateral Holding Account Agreement.
1.2 Definitions
In addition, for the purposes of this Agreement:
"Ad Hoc Senior Bond Committee" means the committee constituted by a group
whose members are Senior Bondholders (or any agents of any such Senior
Bondholders) who, in each case, have entered into a confidentiality
agreement with the Issuer, provided that any reference in this Agreement
to the Ad Hoc Senior Bond Committee means each member of such group acting
individually.
"AES Drax Companies" means the Issuer, the Guarantors, AES Drax
Acquisition Holdings Limited, AES Drax Power Finance Holding Limited and
AES Drax Energy Limited and an "AES Drax Company" shall be construed
accordingly.
"Bank Steering Committee" means the steering committee of the Banks
referred to in the letter dated 1 November 2002 from the members of said
committee to InPower Limited, and agreed to by, inter alios, the Banks.
"Collateral Holding Account Agreement" means the Collateral Holding
Account Agreement substantially in the form attached as Exhibit 8 to the
First Standstill Agreement.
"Equalisation Fee" has the meaning given to that term in Clause 12(a).
"Eurobond Default" means any Default, as defined in the Conditions of the
Eurobonds.
"Excess Margin" has the meaning given to that term in Clause 12(a).
"Facility Agent" means the Agent, as defined in the Facility Agreement.
"First Standstill Agreement" means the Standstill Agreement dated 12
December 2002 between the Issuer and, amongst others, the Guarantors, AES,
the Eurobond Trustee and the Senior Bond Trustee.
"Indemnified Party" has the meaning given to that term in Clause 11.1.
"Indemnifying Party" has the meaning given to that term in Clause 11.1.
"InPower Standstill Agreement" means the Further Standstill Agreement
between, inter alios, InPower Limited, BondPower Limited and Deutsche Bank
AG London Branch, as Agent under the Facility Agreement.
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"Insolvency Event" means (a) with respect to the Issuer or any Guarantor,
any action, proceedings, or other steps taken with a view to the
winding-up, bankruptcy, liquidation, dissolution, administration,
receivership, administrative receivership, re-organisation of a company,
any moratorium, composition or arrangement in respect of a company, any
assignment for the benefit of creditors of a company or any analogous
proceeding affecting such company in any jurisdiction outside England or
Wales and (b) with respect to AES, the commencement of any proceeding or
the filing of any petition seeking liquidation, reorganization or other
relief in respect of its debts under any applicable bankruptcy,
insolvency, receivership or similar law, the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
company or for a substantial part of its assets, the making of a general
assignment for the benefit of creditors or the taking of any action for
the purpose of effecting any of the foregoing, or that such company shall
become unable, admit in writing its inability, or fail generally, to pay
its debts as they become due.
"Majority Bondholders" means Senior Bondholders, voting as a single class,
holding at least a majority of the Sterling Equivalent of the principal
amount of the Senior Bonds outstanding.
"Original Standstill Date" has the meaning given to the term "Standstill
Date" in the First Standstill Agreement.
"Permanently Waived Senior Bond Defaults" means any Default, Potential
Event of Default or Event of Default arising in connection with:
(a) the termination of the Primary Hedge Agreement, under Sections
6.01(c) (by reason of any breach of Section 4.18), 6.01(o) and
6.01(q) of the Indenture;
(b) the negotiation of, entering into by the Issuer and each Guarantor
of, and the performance of its obligations under, and compliance with
the terms of, the Standstill Documents, under Sections 6.01(f),
6.01(g) and 6.01(j) of the Indenture (insofar as such action
corresponds to the events described in said Sections 6.01(f) and
6.01(g));
(c) the deposit, or failure to deposit, into the Liquidity Account, or
failure to withdraw from, the Holding Account, the amount standing to
the credit of the Holding Account on the Transfer Date relating to
the Scheduled Calculation Date on 30 June 2002;
(d) failures during the Standstill Period by the Issuer or a Guarantor to
provide information to the Senior Bond Trustee as required under the
first sentence of Section 4.03(d)(ii) of the Indenture, if such
information has not otherwise been made public;
(e) transfers of funds in breach of Section 4.07(c) of the Indenture, if
made in accordance with the Group Account Agreement and as
contemplated by any Standstill Document;
(f) encumbrances or restrictions referred to in Section 4.09(a) of the
Indenture, to the extent that any term or provision of any Standstill
Document could be considered a breach of Section 4.09(a) of the
Indenture;
(g) a Lien created in early 2002 in breach of Section 4.11 of the
Indenture, in respect of(pound)300,000 of cash as collateral with
contractual counterparties;
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(h) any failure by the Issuer, during the Standstill Period, to give any
notice pursuant to Section 4.17 of the Indenture;
(i) any material amendment or material modification entered into during,
or any waiver for the period of, the Standstill Period or any
termination of the Electricity Contracting Policy or the Hedging
Policy, for which no Rating Affirmation is obtained, under Section
4.18 of the Indenture, or any material amendment, material
modification, termination or waiver of any Market Hedge Agreement
under Section 4.20 of the Indenture, provided that such amendment,
modification, termination or waiver is consented to by the Bank
Steering Committee, in consultation with the members of the Ad Hoc
Senior Bond Committee;
(j) any amendment, modification, termination or waiver of any material
right during the Standstill Period under the RJB Coal Sale Agreement
which under Section 4.18 of the Indenture may not be made if it could
reasonably be expected to have a Material Adverse Effect, if such
amendment, modification, termination or waiver is consented to by the
Bank Steering Committee, in consultation with the members of the Ad
Hoc Senior Bond Committee;
(k) agreements entered into during or prior to the Standstill Period
relating to sales of electricity or capacity which, under Section
4.21(a)(iii) of the Indenture, are not permitted by the Electricity
Contracting Policy as in effect immediately prior to the date of this
Agreement;
(l) breaches of Section 4.24 of the Indenture, to the extent such
breaches are required or permitted under any Standstill Document;
(m) breaches of Section 4.27 of the Indenture, to the extent such
breaches relate to fees provided for or contemplated by any
Standstill Document;
(n) to the extent not otherwise identified above, the entry into and the
performance of any obligation and the implementation of any
arrangement under any Standstill Document; or
(o) Section 6.01(f)(ii), 6.01(g)(i) or 6.01(g)(v) of the Indenture, by
virtue of any Relevant Company, Drax Power Finance Limited, Drax
Energy, Drax Energy II or Drax Power Finance Holdings Limited
entering into good faith negotiations relating to a Restructuring.
"Plot" has the meaning given to that term in Clause 6.3(a).
"Postponed Termination Date" has the meaning given to that term in Clause
3.2.
"Power Station" has the meaning given to that term in the Bond Trust Deed.
"Proceedings" has the meaning given to that term in Clause 25.1.
"Restructuring" means the restructuring of the Combined Senior Debt.
"Sale" has the meaning given to that term in Clause 6.3(a).
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"Senior Bond Default" means any Default, Potential Event of Default or
Event of Default, each as defined in the Senior Bond Indenture.
"Senior Creditor Committees" means the Bank Steering Committee and the Ad
Hoc Senior Bond Committee.
"Senior Bondholders" means the beneficial holders of interests in the
Senior Bonds.
"Standstill Date" has the meaning given to it in Clause 2.
"Standstill Documents" means this Agreement, the First Standstill
Agreement, each of the agreements set forth in paragraph (a) of Schedule
1, each of the agreements set forth in paragraph (a) of Schedule 1 to the
First Standstill Agreement and any other document so designated by the
Senior Creditor Committees and the Issuer.
"Standstill Period" means the period from and including the Standstill
Date to, but excluding, the Standstill Termination Date.
"Standstill Termination Date" has the meaning given to it in Clause 3.1.
"Temporarily Waived Senior Bond Default" shall mean any Default or Event
of Default arising:
(a) in connection with the Primary Hedge Counterparty, the Primary Hedge
Counterparty Guarantor or AES, under Sections 6.01(f), 6.01(g),
6.01(h), 6.01(i), 6.01(j) or 6.01(p) of the Indenture;
(b) in connection with any Relevant Company (other than Drax Power), Drax
Power Finance Limited, Drax Energy, Drax Energy II or Drax Power
Finance Holdings Limited, under Section 6.01(f)(i)(A) of the
Indenture to the extent any of them may be deemed balance sheet
insolvent under the Insolvency Act 1986 (as amended);
(c) except as otherwise provided in clause (p) of the definition of
"Permanently Waived Senior Bond Defaults", in connection with any
Relevant Company, Drax Power Finance Limited, Drax Energy, Drax
Energy II or Drax Power Finance Holdings Limited, under Section
6.01(f)(ii) of the Indenture to the extent any of them begins
negotiations with one or more of its creditors or takes any steps
with a view to readjustment, rescheduling or deferral of any of its
Indebtedness or proposes to take any of these steps;
(d) in connection with the Designated Agreement Counterparty to the RJB
Coal Sale Agreement, under Section 6.01(f), 6.01(g), 6.01(h),
6.01(i), 6.01(j), 6.01(p) or 6.01(q) of the Indenture;
(e) in connection with the failure to effect and maintain, pursuant to
Section 4.32(a) of the Indenture, Business Interruption Insurance (as
set out in Exhibit A, Part I of the Fourth Schedule to the Eurobond
Trust Deed (Property and Business Interruption Insurances)) in
conformity with the Minimum Insurance Requirements, under Section
6.01(c) of the Indenture; or
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(f) under Section 6.01(d) of the Indenture.
"Temporarily Waived Eurobond Default" means any Default:
(a) in connection with the Primary Hedge Counterparty, Primary Hedge
Counterparty Guarantor or AES, under Conditions 11.2 by reason of any
breach of Condition 8.5.1, 11.4.1(b), 11.4.2(b), 11.4.3, 11.4.5, 11.5
to 11.10, 11.11.1, 11.11.2(a), 11.11.4, 11.11.9, 11.22 and 11.23;
(b) in connection with UK Coal plc (formerly RJB Mining (UK) Ltd.) or any
of its Subsidiaries, under Conditions 11.4 to 11.10 or in connection
with any Relevant Company (other than Drax Power) being balance sheet
insolvent under the Insolvency Act 1986 (as amended), under
Conditions 11.4 to 11.9;
(c) that may have arisen in connection with any disclosed rescheduling of
payment and delivery under the Coal Supply Agreement prior to the
Standstill Period, under Conditions 8.5.1, 8.5.2, 10.6(c) and 11.11,
and under Conditions 11.2 and 11.3 by reason of any such Default;
(d) under Conditions 11.1 (with respect to non-payment of Coupons on or
about 31 December 2002, referable solely to the scheduled repayment
of the principal amount of the Loan on or about 31 December 2002),
11.18 and that may have arisen under Condition 11.23 by reason of all
circumstances in existence and events that have occurred up to and
including the date of execution and delivery of this Agreement;
(e) arising before the commencement of the Standstill Period, under
Conditions 7.1 and 10.6(a), and under Condition 11.2 by reason of any
such Default;
(f) arising during the period from, and including, the Original
Standstill Date to, but excluding, the Standstill Termination Date in
respect of which the Issuer fails to notify the Eurobond Trustee in
writing (provided other prompt notification is given to the Eurobond
Trustee), under Condition 7.1 and 10.6(a), and under Condition 11.2
by reason of any such Default;
(g) arising in relation to the production of the Optimisation Base Cost,
Forecast, Operating Budget or Capex Budget during the Standstill
Period, under Conditions 7.2(j), 10.20, in relation to the Capex
Budget only, and 9.5.1(iv), in relation to the Operating Budget only,
and 8.3.4, and under Condition 11.2 or 11.3 by reason of any such
Default;
(h) arising in connection with the delivery of audited accounts of TXU
Group companies to the Eurobond Trustee, under Condition 6.1(a)(iii),
and under Condition 11.2 by reason of any such Default;
(i) arising in connection with the failure to produce the Annual
Operating Plan in respect of the Financial Year commencing 1 January
2003, under Conditions 7.2(m) and 8.3.1(f), and under Condition 11.2
by reason of any such Default;
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(j) arising in connection with operating the Project Facilities with a
view to producing sufficient revenue to meet the obligations of each
Relevant Company, under Condition 8.3.1, and under Condition 11.2 by
reason of any such Default;
(k) arising in connection with any request for amendment to the Coal
Supply Agreement, the Rail Carriage Contracts, the Sidings Agreement
and the Docks Agreement, under Condition 8.5.2(a), and under
Condition 11.2 by reason of any such Default;
(l) that may have arisen in connection with breaches of the Coal Supply
Agreement that occurred prior to the Standstill Period, under
Condition 8.5.1, and under Condition 11.2 by reason of any such
Default; or
(m) arising under Condition 11.18.2.
"Termination Event" means:
(a) the delivery, in accordance with the Intercreditor Deed, of a
Declaration of Intent by the Senior Bond Trustee in respect of any
Senior Bond Default or by the Senior Agent in respect of any Eurobond
Default which is not a Temporarily Waived Senior Bond Default or a
Temporarily Waived Eurobond Default or which is not otherwise waived
and in respect of which no Cessation Notice has been delivered;
(b) the breach by any Consenting Bondholder, the Eurobond Trustee, the
Senior Bond Trustee or the Senior Agent of any of its obligations
under this Agreement; or
(c) the breach by any of the Issuer, any Guarantor or AES of any of its
obligations under this Agreement and any such breach, if capable of
being remedied, is not remedied within 10 Business Days of the
occurrence of such breach, provided that such breach will not be a
Termination Event if it is caused by, or is due to:
(i) the occurrence of any Insolvency Event in respect of AES; or
(ii) the enforcement by the High Yield Security Trustee (as defined
in the Drax Energy Intercreditor Deed) of the High Yield
Mortgage Over Shares (as defined in the Drax Energy
Intercreditor Deed),
and the Issuer or any Guarantor can demonstrate, to the reasonable
satisfaction of the Senior Creditor Committees, within 30 days of the
occurrence of such event or circumstance, that (x) the then current
operation of the Power Station is not materially adversely affected
by such event or circumstance and (y) the obligation to provide key
personnel under Clause 8.1 has not, and shall not, be breached during
the Standstill Period, or that alternative personnel with comparable
capabilities have been or will be employed by Drax Power.
"Termination Notice" means a notice substantially in the form set out in
Schedule 3 hereto.
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1.3 Conflicts
In the case of any conflict or inconsistency between the terms of this
Agreement and the terms of any other Finance Document (as such conflict or
inconsistency relates to the subject matter of this Agreement), the terms
of this Agreement shall prevail.
1.4 Interpretation
Any reference in this Agreement to:
(a) a "Business Day" shall be construed as a reference to a day on which
banks are generally open for business in London, and, for the
purposes of the monthly payments referred to in Clause 12(a) and
giving notices under Clause 22, New York City.
(b) 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 succeeding calendar month or, if that day is not a Business Day,
the next succeeding Business Day in the same calendar month (or, if
none, the immediately preceding Business Day), provided that if a
period starts on the last Business Day in a calendar month or if
there is no numerically corresponding day in the later calendar
month, that period shall end on the last Business Day in that later
calendar month;
(c) a "person" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
(d) statutory provisions shall be construed as references to those
provisions as replaced, amended or re-enacted from time to time;
(e) Clauses are to be construed as references to the Clauses of this
Agreement and references to this Agreement shall include its
Schedules; and
(f) this Agreement (or any Clause) or any other document shall be
construed as references to this Agreement (that Clause) or that
document as in force for the time being and as from time to time
amended, supplemented, novated or restated otherwise than contrary to
the terms thereof.
1.5 Headings
Headings shall be ignored in construing this Agreement.
2. STANDSTILL DATE
This Agreement shall not take effect unless and until the date (the
"Standstill Date") on which:
(a) Majority Bondholders and each other party intended to be a party
hereto has executed and delivered this Agreement; and
(b) each of the Senior Creditor Committees has notified each party to
this Agreement (which notification shall be given promptly upon such
receipt or waiver) that it has either received or waived (in its
absolute discretion) the requirement to receive each of the documents
set forth in Schedule 1 hereto in form and substance satisfactory to
it.
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3. STANDSTILL TERMINATION
3.1 Termination
The Standstill Period shall terminate on the date (the "Standstill
Termination Date") which is the earlier of:
(a) 30 June 2003 (the "Initial Termination Date"), unless Clause 3.2
applies, in which case the Postponed Termination Date; and
(b) the date on which either the Senior Bond Trustee (acting on the
instruction of Consenting Bondholders provided that such Consenting
Bondholders constitute the Majority Bondholders) or the Eurobond
Trustee (acting upon the instruction of the Bank Security Trustee set
out in a letter substantially in the form set out in Schedule 2 to
the InPower Standstill Agreement) has delivered a Termination Notice
to each of the other parties to this Agreement, provided that (i) the
Standstill Termination Date will not occur unless and until a
Termination Event has occurred and is continuing and (ii) any
Termination Notice shall not be effective if given with respect to a
Termination Event under paragraph (b) of the definition thereof if
such Termination Notice:
(i) is given by the Senior Bond Trustee acting on the instruction of
the Consenting Bondholders where one or more of such Consenting
Bondholders is or are in breach of its or their obligations
under this Agreement, unless the Consenting Bondholders who have
given the instruction to the Senior Bond Trustee and are not in
breach of their obligations under this Agreement constitute the
Majority Bondholders;
(ii) is given by the Senior Bond Trustee where the Senior Bond
Trustee is in breach of its obligations under this Agreement; or
(iii) is given by the Eurobond Trustee where the Eurobond Trustee or
the Senior Agent is in breach of its obligations under this
Agreement.
3.2 Extension of Standstill Period
The Standstill Period may be extended beyond the Initial Termination Date
if:
(a) the Eurobond Trustee (acting upon an instruction of the Bank Security
Trustee set out in a letter substantially in the form set out in
Schedule 2 to the InPower Standstill Agreement) provides notice to
the Senior Bond Trustee, the Senior Agent, the Intercreditor Agent,
AES and the Issuer;
(b) the Senior Bond Trustee (acting on the instruction of the Majority
Bondholders) provides notice to the Eurobond Trustee, the Senior
Agent, the Intercreditor Agent, AES and the Issuer,
(c) the Issuer (for itself and on behalf of each Guarantor) provides
notice to the Eurobond Trustee, the Senior Bond Trustee, the Senior
Agent, the Intercreditor Agent and AES, and
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(d) AES provides notice to the Eurobond Trustee, the Senior Bond Trustee,
the Senior Agent, the Intercreditor Agent and the Issuer,
in each case on or before the date which, but for such notices, would be
the date of termination of the Standstill Period in accordance with Clause
3.1(a), in writing and consenting to such an extension on the same terms
and conditions as set out in this Agreement; provided that the Standstill
Period may only be extended, on each occasion on which such notices are
given, for a period of 30 days beyond the date which, but for such
notices, would have been the termination date of the Standstill Period in
accordance with Clause 3.1(a). The last date of the Standstill Period, as
extended beyond the Initial Termination Date pursuant to this Clause 3.2,
is referred to herein as the "Postponed Termination Date".
3.3 Release of Parties
On the Standstill Termination Date:
(a) the Consenting Bondholders shall, from that time, be released from
their obligations under Clauses 4.1, 4.2 and 6.1(a);
(b) the Senior Bond Trustee shall, from that time, be released from its
obligations under Clauses 5 and 6.1(a);
(c) the Eurobond Trustee shall, from that time, be released from its
obligations under Clauses 7.1 and 6.1(b);
(d) AES shall, from that time, be released from its obligations under all
of Clause 8; and
(e) the Issuer and each Guarantor shall, from that time, be released from
all of their respective obligations under Clause 9;
in each case without prejudice to any rights and liabilities of each party
hereto prior to the Standstill Termination Date.
3.4 Deemed Declaration of Intent
If, following the expiration of the Standstill Period, any class of Senior
Creditors delivers a Declaration of Intent to the Intercreditor Agent and
each Senior Representative, then that Declaration of Intent shall be
deemed to have been delivered on the later of the Original Standstill Date
and the first day upon which it could have been given following the
applicable Senior Bond Default or Eurobond Default (which day shall be
specified in the Declaration of Intent delivered to the Intercreditor
Agent and each Senior Representative) and the Remedies Initiation Notice
shall be deemed to have been delivered two Business Days after the deemed
date of delivery of such Declaration of Intent, provided that the
provisions of this Clause 3.4 shall not apply to any Permanently Waived
Senior Bond Defaults or any Eurobond Defaults permanently waived by
operation of the Bond Trust Deed (as amended pursuant hereto and the other
Standstill Documents). Each of the Senior Agent, the Senior Bond Trustee
and the LC Facility Agent, as Senior Representative, hereby waives its
right to receive such Declaration of Intent and Remedies Initiation Notice
from the Intercreditor Agent.
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4. CONSENTING BONDHOLDERS' COVENANTS
4.1 Not to Take Action
Each Consenting Bondholder hereby agrees, in connection with any
Temporarily Waived Senior Bond Default, during the Standstill Period:
(a) not to seek to enforce its rights under the Senior Bond Indenture
(whether, directly or indirectly, by instructing the Senior Bond
Trustee or otherwise) to Accelerate and not to make any Statutory
Demand for any of the Senior Bonds which it holds;
(b) not to take or cause (or seek to cause, directly or indirectly) the
Senior Bond Trustee to deliver any notice to the Intercreditor Agent
or the Security Trustee instructing the Intercreditor Agent to
instruct the Security Trustee or instructing the Security Trustee to
take, any Other Enforcement Action;
(c) if any other Senior Bondholders have given any instruction to the
Senior Bond Trustee (whether, directly or indirectly, by instructing
the Senior Bond Trustee or otherwise) to take or cause the
Intercreditor Agent to instruct the Security Trustee to take or
otherwise cause the Security Trustee to take, any Security
Enforcement Action or Other Enforcement Action, to give contrary
directions to the Senior Bond Trustee directing the Senior Bond
Trustee not to act in accordance with such instructions;
(d) not to take or cause (or seek to cause, directly or indirectly) the
Senior Bond Trustee to take, and to procure that the Senior Bond
Trustee does not take, any action under Section 7.02(j) of the Senior
Bond Indenture;
(e) not to cause (or seek to cause, directly or indirectly) the Senior
Bond Trustee to deliver any notice referred to in Clauses 8.3(b),
(c), (d) and (f)(ii) of the Group Account Agreement that could
otherwise be given to the Security Trustee;
(f) not to provide the Account Bank with a Payment Certificate; and
(g) not to cause (or seek to cause, directly or indirectly) the Senior
Bond Trustee to deliver, and to procure that the Senior Bond Trustee
does not deliver, a Declaration of Intent to the Intercreditor Agent.
4.2 Restrictions on Transfer of Senior Bonds
Each Consenting Bondholder hereby agrees, with effect from the date on
which such Consenting Bondholder executes any counterpart of this
Agreement (or, if not an Initial Consenting Bondholder, with effect from
the date on which it accedes hereto) until the Standstill Termination
Date, that if a sale, transfer or other disposal of an interest in Senior
Bonds by such Consenting Bondholder would result in the interest in the
principal amount of Senior Bonds held by such Consenting Bondholder being
less than the principal amount of Senior Bonds held at the time of its
execution of or accession to this Agreement, it will procure that any
purchaser or transferee of an interest in Senior Bonds owned by such
Consenting Bondholder agrees to be bound by the terms of this Agreement by
executing an accession deed substantially in the form attached hereto as
Schedule 2. If any Consenting Bondholder has sold, transferred or
otherwise disposed of all of its interests in the Senior
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Bonds to one or more purchasers or transferees, each of which has executed
an accession deed, such Consenting Bondholder shall be released from its
obligations under Clause 4.1.
4.3 Notice to Senior Bond Trustee
Each Consenting Bondholder hereby agrees to provide notice to the Senior
Bond Trustee confirming that such Consenting Bondholder has executed and
delivered this Agreement, such notice to include the principal amount of
Senior Bonds held by such Consenting Bondholder, and to provide any other
information or instructions required by the Senior Bond Trustee in order
to give effect to this Agreement (including to procure that its nominee or
the participant through which it holds such Senior Bonds in any clearing
system provides the necessary information and consent to the Senior Bond
Trustee to give effect to this Agreement as soon as practicable following
the execution hereof).
4.4 Deed Poll
The undertaking given by each Consenting Bondholder in Clauses 4.2 and 4.3
is given by way of Deed Poll for the benefit of all other parties
expressed to be a party to this Agreement (and notwithstanding that they
may not have executed this Agreement) and shall accordingly become
effective immediately upon execution and delivery by such Consenting
Bondholder of a counterpart of this Agreement.
5. SENIOR BOND TRUSTEE
The Consenting Bondholders hereby instruct the Senior Bond Trustee to
agree, and the Senior Bond Trustee hereby agrees, not to exercise any of
its discretion under the Senior Bond Indenture, in connection with any
Temporarily Waived Senior Bond Default:
(a) to Accelerate or to make any Statutory Demand for any of the Senior
Bonds;
(b) to deliver notice to the Intercreditor Agent or the Security Trustee
instructing the Intercreditor Agent to instruct the Security Trustee
or instructing the Security Trustee to take, any Other Enforcement
Action;
(c) to take any action under Section 7.02(j) of the Senior Bond
Indenture;
(d) to deliver any notice, referred to in Clauses 8.3(b), (c), (d) and
(f)(ii) of the Group Account Agreement that could otherwise be given
to the Security Trustee;
(e) to provide to the Account Bank a Payment Certificate; and/or
(f) to deliver a Declaration of Intent to the Intercreditor Agent.
6. WAIVERS, AMENDMENTS AND CONSENTS
6.1 Waivers for Cash Release
(a) The Consenting Bondholders hereby waive and authorise the Senior Bond
Trustee to waive, and the Senior Bond Trustee hereby waives, all
Senior Bond Defaults; and
(b) the Eurobond Trustee hereby waives all Eurobond Defaults,
solely for the purposes of Clause 8.3(a) of the Group Account Agreement
and paragraph (c) of Schedule 14 to the Group Account Agreement to the
extent and for so long as required:
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(i) to make withdrawals approved by the Senior Creditor Committees from
the Debt Service Reserve Account for transfer to the Proceeds Account
pursuant to Clause 13.2(a)(iii);
(ii) to withdraw amounts from the Collateral Financing Account pursuant to
Schedule 15 of the Group Account Agreement; and
(iii) to transfer funds between Accounts for any other purpose
contemplated by this Agreement or the First Standstill Agreement.
6.2 Permanent Waiver
The Consenting Bondholders hereby confirm the waiver of the Permanently
Waived Senior Bond Defaults.
6.3 Consent to Sale of Land
(a) The Senior Bond Trustee, the Senior Agent (in its capacity as the
Senior Representative of the Eurobond Finance Parties and of the Swap
Creditor) and the LC Facility Agent hereby request that the
Intercreditor Agent direct the Security Trustee and the Intercreditor
Agent hereby directs the Security Trustee to consent to the sale (the
"Sale") by Drax Power of one non-operational plot of land (the
"Plot") which forms part of the Site (as defined in the Eurobonds)
for an aggregate purchase price of approximately (pound)150,000
(which shall be paid into the Proceeds Account) and which is
mortgaged in favour of the Security Trustee pursuant to the Security
Documents and release the Plot from the security interests created
under the Security Documents.
(b) The Eurobond Trustee hereby consents to the sale of the Plot and
permanently waives all Eurobond Defaults in connection with the sale
of the Plot free from security interests created under the Security
Documents.
(c) The Consenting Bondholders hereby consent to the sale of the Plot and
permanently waive all Senior Bond Defaults in connection with the
sale of the Plot free from security interests created under the
Security Documents and hereby authorise the Senior Bond Trustee to
(i) consent to such sale and permanently waive all Defaults arising
from such sale arising under the Senior Bond Documents; and (ii) make
the request set out in sub-clause (a) above, and the Senior Bond
Trustee hereby so consents to such Sale and waives such Senior Bond
Defaults.
(d) The Security Trustee hereby confirms that it shall act in accordance
with the direction of the Intercreditor Agent as set out in
sub-clause (a) above.
6.4 Execution of this Agreement
The Eurobond Trustee, the Senior Bond Trustee, the Senior Agent (in its
capacity as the Senior Representative of the Eurobond Finance Parties and
of the Swap Creditor) and the LC Facility Agent hereby request that the
Intercreditor Agent direct the Security Trustee and the Intercreditor
Agent hereby directs the Security Trustee to execute and perform this
Agreement.
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7. EUROBOND TRUSTEE'S COVENANTS
7.1 Not to Take Action
The Eurobond Trustee hereby agrees, in connection with any Temporarily
Waived Eurobond Default, during the Standstill Period:
(a) not to take any of the actions set forth in Condition 11(a), (b),
(c), (d) or (e) of the Eurobonds and not to Accelerate or to make any
Statutory Demand for any of the Eurobonds;
(b) not to take any action under Condition 5.3.3(c) of the Eurobonds;
(c) not to take, seek to take or instruct the Intercreditor Agent to
instruct the Security Trustee or to instruct the Security Trustee to
take, any Other Enforcement Action;
(d) not to provide to the Account Bank a Payment Certificate; and
(e) not to deliver a Declaration of Intent to the Intercreditor Agent.
7.2 No Security Enforcement Action The Eurobond Trustee hereby agrees that it
will not:
(a) take any of the actions set forth in Conditions 11(a), (b), (c), (d)
or (e) of the Eurobonds or to Accelerate or to make any Statutory
Demand for any of the Eurobonds;
(b) take any action under Condition 5.3.3 of the Eurobonds;
(c) take, seek to take or deliver any notice to the Intercreditor Agent
or the Security Trustee instructing the Intercreditor Agent to
instruct the Security Trustee or instructing the Security Trustee to
take, any Other Enforcement Action;
(d) provide the Account Bank with a Payment Certificate; or
(e) deliver a Declaration of Intent to the Intercreditor Agent;
in each case, by reason of any failure by the Issuer or any Guarantor to
make any prepayment of the Coupons pursuant to Condition 5.3.1 of the
Eurobonds, notwithstanding that any amount of the Loan (as defined in the
Facility Agreement) has become due pursuant to clause 7.9(c) of the
Facility Agreement; provided that any amounts paid by the Primary Hedge
Counterparty, the Primary Hedge Counterparty Guarantor (or any Affiliate
thereof) that would otherwise be applied in accordance with Clause 7.9(c)
of the Facility Agreement have been deposited into the Collateral Holding
Account in accordance with Clause 13.1(c).
8. AES COVENANTS
8.1 Support to Restructuring
AES hereby agrees to act in good faith in providing support to the
Restructuring process and any Restructuring plan, including the provision
of key personnel (including J Turner (or alternative personnel of
comparable capabilities), J Brandt, G Levesley and R
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Santoroski) for the Power Station and the Restructuring process, provided
that in no circumstances shall AES be required to make any further debt or
equity contributions. For the avoidance of doubt, for so long as AES is
not in breach of Clause 8.2 (and subject to Clause 8.5), no disposal
(directly or indirectly) of share capital of any Obligor by AES or any of
its Affiliates shall be deemed to be a failure to provide support.
8.2 No Sale
AES hereby agrees to retain a direct or indirect holding of a majority of
the share capital of each AES Drax Company.
8.3 Restructuring Plan
AES hereby agrees not to prevent any AES Drax Company from approving a
Restructuring plan acceptable to the requisite Combined Senior Creditors,
provided that no AES Drax Company shall be required to approve any
Restructuring plan solely on the basis that it is acceptable to any, some
or all of the Combined Senior Creditors.
8.4 Procuring Breach
AES hereby agrees not to give directions to the Issuer or any Guarantor to
breach any of the Issuer and Guarantors' obligations in Clause 9, provided
that any action taken by representatives of AES in their role as officers
or directors of any AES Drax Company shall not, under any circumstances,
be deemed to be an action of AES.
8.5 Limitation of Liability
For the avoidance of doubt, the Senior Creditors party to this Agreement
hereby agree that the only recourse for breach of any of the covenants set
out in Clauses 8.1 to 8.4 shall be the termination of this Agreement and
no other claim may be made and no other remedy may be sought against AES
by any person whatsoever in connection with any such breach, save that the
Senior Creditors may seek and/or obtain injunctive relief from any court
of competent jurisdiction to prevent a breach by AES of the covenant set
out in Clause 8.2; provided that injunctive relief may not be sought in
relation to AES's failure to retain (directly or indirectly) any holding
in any AES Drax Company if such failure is caused by or due to the
enforcement by the High Yield Security Trustee (as defined in the Drax
Energy Intercreditor Deed) of the High Yield Mortgage Over Shares (as
defined in the Drax Energy Intercreditor Deed) or any Security Enforcement
Action.
9. ISSUER'S AND GUARANTORS' COVENANTS
9.1 Notice of Insolvency Proceedings
The Issuer and each Guarantor hereby agrees to provide notice to each of
the Senior Creditor Committees at the earliest practicable time prior to
and, if reasonably practicable, not less than 30 days prior to, any
proposal in relation to any proposed Insolvency Event of the Issuer or any
Guarantor and consult in good faith with the Senior Creditor Committees in
relation to such proposal.
9.2 Restructuring Proposal
The Issuer and each Guarantor hereby agrees to enter into good faith
negotiations with the Senior Creditor Committees relating to a
Restructuring plan.
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9.3 Financial Model
The Issuer and each Guarantor hereby agrees to provide access to the draft
of any financial model prepared in relation to the Restructuring.
9.4 Access to Information
The Issuer and each Guarantor hereby agrees to procure that all written
material relating to the Restructuring that is provided by it to either of
the Senior Creditor Committees or their respective advisers will be
provided to the other Senior Creditor Committee and their respective
advisers, provided that this obligation shall not relate to any written
information prepared by either of the Senior Creditor Committees or their
respective advisers based on written materials which have been provided to
each Senior Creditor Committee as required hereby.
9.5 Fees
Other than as set out in the Finance Documents as in effect on the date
hereof, the Issuer and each Guarantor hereby agrees not to pay, prior to
the Standstill Termination Date, any fees to any Senior Bondholder,
Eurobondholder, Swap Creditor, Couponholder or Hedging Bank, including in
relation to the providing of any consent, waiver or amendment that may be
required under any Finance Document, other than the fees set forth in:
(a) the fee letters between the Issuer and each of the members of the Ad
Hoc Senior Bond Committee, dated on or about the date of this
Agreement; and
(b) the fee letter between Target and InPower Limited, dated on or about
the date of this Agreement.
9.6 Cash Flow Reports
The Issuer and each Guarantor hereby agrees to provide to the Senior
Creditor Committees weekly cash flow reports and accounts, such reports
and accounts to be prepared in consultation with PricewaterhouseCoopers.
9.7 Terms of Engagement
The Issuer and each Guarantor hereby agrees, to the extent that the scope
of the services required of PricewaterhouseCoopers is not covered by the
terms of its engagement letter as at the date of this Agreement, to
approve changes to the terms of engagement to extend the scope of the
services required of PricewaterhouseCoopers (including the payment by the
Issuer or any Guarantor of reasonable fees therefor) as reasonably
required by the Senior Creditors Committees in relation to the
Restructuring.
10. Issuer's and Guarantors' Representations and Warranties
The Issuer and each Guarantor represents and warrants to each of the other
parties hereto that, as of the Standstill Date:
(a) it is a limited liability company, duly incorporated and validly
existing under the laws of its jurisdiction of incorporation;
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(b) it has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of, this Agreement and the transactions contemplated hereby;
(c) this Agreement constitutes its legal, binding, valid and enforceable
obligations (it being understood that in this context "enforceable"
means that such an obligation is of a type which, and is contained in
a document which is in a form which, is customarily enforced by the
courts in the applicable jurisdiction); and
(d) other than the Temporarily Waived Senior Bond Defaults, the
Temporarily Waived Eurobond Defaults, the Permanently Waived Senior
Bond Defaults, those defaults contained in the Sixth Supplemental
Bond Trust Deed (as executed in the form attached as Exhibit 5 to the
First Standstill Agreement) and those defaults contained in a waiver
letter dated 26 November 2002 regarding, inter alia, the terms of the
insurance cover renewed by Drax Power, to its actual knowledge, after
due inquiry, no Senior Bond Default or Eurobond Default has occurred
and is continuing.
11. INDEMNITY
11.1 Indemnity
Subject to the conditions set forth in Clauses 11.2, 11.3 and 11.4, the
Issuer and each Guarantor (each an "Indemnifying Party") shall indemnify
each member of the Ad Hoc Senior Bond Committee and such member's
directors, officers, and agents (each an "Indemnified Party") for any
loss, claim, liability or judgement arising in connection with or as a
consequence of the Indemnified Parties:
(a) granting or not granting any consent, approval, instruction or waiver
under:
(i) the definition of "Standstill Document" in connection with
designating any other document to be a "Standstill Document",
(ii) paragraph (c) of the definition of "Termination Event",
(iii) Clause (iii) or (iv) of Schedule 15 to the Group Account
Agreement,
(iv) Clause 6.1(b)(i) or Clauses 13.2(a) or 13.2(e), or
(b) having a right to be consulted and/or being consulted or negotiating
under:
(i) paragraphs (i) and (j) of the definition of "Permanently Waived
Senior Bond Defaults", and/or
(ii) Clauses 9.1, 9.2 or 9.7;
provided that no Indemnifying Party shall be liable to any Indemnified
Party for any such loss, claim, liability or judgement if caused by the
gross negligence or wilful misconduct of any Indemnified Party.
11.2 No Consenting Bondholder Action
Each Consenting Bondholder agrees that it shall not (and that it shall
procure that its directors, officers and agents will not) make any claim
whatsoever against any Indemnified
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Party and shall not (and that it shall procure that its directors,
officers and agents will not) take, commence or acquiesce to any action or
proceedings against an Indemnified Party in respect of any action,
decision, consent, approval or waiver taken or granted by such Indemnified
Party as a member (or a director, officer or agent of such member) of the
Ad Hoc Senior Bond Committee.
11.3 No Settlement absent Consent
No Indemnified Party shall, without the consent of the Indemnifying
Parties (such consent not to be unreasonably withheld), effect any
settlement or compromise of, or consent to the entry of judgement with
respect to, any pending or threatened action in respect of which the
Indemnified Party is or could have been a party and an indemnity may be or
could have been sought under this Clause 11, unless:
(a) the Indemnifying Party either:
(i) has not assumed the defence of the action; or
(ii) having assumed the defence of the action, has failed to make
reasonable efforts to pursue the defence; and
(b) such settlement, compromise or consent:
(i) includes an unconditional release of the Indemnified Party and
the Indemnifying Party from all liability on claims that are or
could have been the subject of such action; and
(ii) does not include a statement as to or an admission of fault,
culpability or failure to act, by or on behalf of, the
Indemnified Party; and
(c) 45 days following delivery of a request from the Indemnified Party to
an Indemnifying Party for reimbursement for the fees and expenses of
counsel which have been incurred by the Indemnified Party as a result
of the occurrence of the circumstances in Clause 11.3(a)(i) or
11.3(a)(ii), the Indemnifying Party (or any Affiliate thereof) has
failed to make such payment.
11.4 Process Control
(a) If any action is commenced against any Indemnified Party in respect
of which indemnity may be sought pursuant to this Clause 11, the
Indemnified Party shall promptly give notice to the Issuer giving
reasonable details of the action.
(b) Any Indemnifying Party may, by delivering notice to the Indemnified
Party to that effect, assume the defence of such action, including
the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses of such counsel.
(c) If the Indemnifying Party assumes the defence of any action then, the
Indemnified Party shall cooperate with the Indemnifying Party,
provided that the Indemnified Party may employ separate counsel in
such action and participate in the defence thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified
Party
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unless the Indemnified Party has received consent in writing to the
employment of such counsel.
11.5 Survival
This Clause 11 will survive the termination of this Agreement for a period
of two years after the Standstill Termination Date.
12. Equalisation Fee
(a) The Issuer and the Guarantors hereby agree that a fee (the
"Equalisation Fee") of (pound)266,666.67 (inclusive of value added
tax, if any) shall accrue monthly starting from and including 1
January 2003 during each month falling within the Standstill Period
(and pro rata in respect of the month in which the Standstill
Termination Date falls), which shall be paid by the Issuer to all the
Senior Bondholders (for the account of such holders pro rata to the
Sterling Equivalent of the principal amount of Senior Bonds held by
them) on each date, if any, on which the Banks receive interest with
a Margin in excess of the Margin in effect on 13 October 2002
("Excess Margin").
(b) The Equalisation Fee shall be reduced pro rata to the extent that
during any period falling after 1 January 2003 and during the
Standstill Period, the interest due and payable on the Loan does not
accrue with an interest rate including the Excess Margin.
(c) The Senior Agent hereby instructs the Intercreditor Agent in
accordance with Clause 4.4 of the Intercreditor Deed to agree, and
the Intercreditor Agent hereby agrees, to the accrual and payment of
the Equalisation Fee by the Issuer to the Senior Bondholders in
accordance with this Clause 12.
13. ACCOUNTS
13.1 Collateral Holding Account Agreement
(a) The Consenting Bondholders hereby consent to and authorise the Senior
Bond Trustee to perform, and the Senior Bond Trustee agrees that it
shall perform the Collateral Holding Account Agreement.
(b) The Eurobond Trustee, the Senior Bond Trustee, the Senior Agent (in
its capacity as the Senior Representative of the Eurobond Finance
Parties and of the Swap Creditor) and the LC Facility Agent hereby
request that the Intercreditor Agent direct the Security Trustee and
the Intercreditor Agent hereby directs the Security Trustee to
perform the Collateral Holding Account Agreement.
(c) The parties hereto agree that any amount paid by the Primary Hedge
Counterparty, the Primary Hedge Counterparty Guarantor (or any
Affiliate thereof) that would otherwise be applied in accordance with
Clause 7.9(c) of the Facility Agreement shall be deposited into the
Collateral Holding Account and held or applied in accordance with the
Collateral Holding Account Agreement.
(d) The parties hereto agree that the bank designated in the Collateral
Holding Account Agreement to hold the Collateral Holding Account may
deduct fees and costs associated with the Collateral Holding Account
from the Proceeds Account.
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13.2 Debt Service Reserve Account
(a) The Senior Bond Trustee, the Senior Agent (in its capacity as the
Senior Representative of the Eurobond Finance Parties and of the Swap
Creditor) and the LC Facility Agent hereby direct the Intercreditor
Agent to direct the Security Trustee, and the Intercreditor Agent
hereby directs the Security Trustee (and Drax Power hereby consents
to such direction):
(i) at any time, to make a demand for (pound)15,386,658 under the
DSRA Letter of Credit issued by the Bank of America, if so
instructed in writing by the Senior Creditor Committees;
(ii) on any date (of which, for the avoidance of doubt, there may be
more than one), to make any further demand under the DSRA Letter
of Credit issued by Bank of America for the amount which it is
instructed in writing by the Senior Creditor Committees to
demand up to the maximum amount available thereunder (provided
that AES has consented in writing to such demand being made);
and
(iii) to withdraw, pursuant to clause 4.6(j) of the Group Account
Agreement, upon receipt of an instruction in writing from the
Senior Creditor Committees, the amount set forth in such notice
from the Debt Service Reserve Account as soon as reasonably
practicable and in any event within two Business Days of such
notice being received and transfer such amount to the Proceeds
Account.
(b) The Consenting Bondholders hereby authorise the Senior Bond Trustee
to make the request set out in sub-clause (a) above.
(c) The Security Trustee hereby confirms that it shall act in accordance
with the direction of the Intercreditor Agent as set out in
sub-clause (a) above.
(d) Nothing herein shall restrict the ability of the Security Trustee to
make demands under a DSRA Letter of Credit in accordance with the
terms of the Intercreditor Deed.
(e) Drax Power hereby agrees that it shall not withdraw any amounts from
the Debt Service Reserve Account during the Standstill Period without
the consent, in each case, of the Senior Creditor Committees, other
than in accordance with Clause 13.2(a).
13.3 Insurance Reserve Account
(a) The Eurobond Trustee and Drax Power hereby agree, for the purpose of
Section 4.17(b) of the Group Account Agreement, that no amount is
required to be transferred from the Proceeds Account to the Insurance
Reserve Account on any Transfer Date falling after 30 June 2002.
(b) The Eurobond Trustee and Drax Power hereby agree, for the purposes of
Section 4.17(d) of the Group Account Agreement, that no amount is
required to be transferred from the Holding Account to the Insurance
Reserve Account on any Transfer Date falling after 30 June 2002.
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13.4 Intercreditor Agent
(a) Each Consenting Bondholder hereby authorises the Senior Bond Trustee
to direct the Intercreditor Agent to consent to;
(b) each of the Senior Bond Trustee, the Senior Agent (in its capacity as
Senior Representative of the Eurobond Finance Parties and of the Swap
Creditor) and the LC Facility Agent hereby directs the Intercreditor
Agent to consent to; and
(c) the Intercreditor Agent hereby consents to:
the maintaining of the Collateral Financing Account and the Cash Cover
Account (as defined in the credit facility agreement between Drax Power
and National Westminster Bank Plc dated on or about the date of the First
Standstill Agreement).
14. ACKNOWLEDGEMENTS
(a) The Eurobond Trustee confirms that the principal amount of the Loan
(as defined in the Facility Agreement) outstanding on the date hereof
is (pound)842,555,000.
(b) The Senior Bond Trustee confirms that the principal amount of the
Senior Bonds outstanding on the date hereof is (pound)200,000,000 and
$302,400,000.
(c) The parties hereto acknowledge that:
(i) Clause 14.1(a) Third of the Intercreditor Deed provides that
proceeds of enforcement of security conferred by the Security
Documents are generally to be applied, subject to prior ranking
claims, pari passu among the Combined Senior Creditors in
respect of the Combined Senior Debt (other than (i) principal
amounts of the Eurobonds and any default interest thereon and
(ii) and any Senior Bonds which are defeased). The Combined
Senior Debt includes, without limitation (a) the Senior Bonds,
(b) the unmatured Coupons on the Eurobonds (which, if the
Eurobonds are accelerated, shall immediately become due and
payable at their NPV Coupon Amount) and (c) the Hedging Debt;
(ii) Clause 3.1(a) of the Calculation Agency Agreement provides that
it is the intent of the parties to that agreement that "in the
event of an Early Termination Date under the Swap Transactions,
the aggregate of (i) the aggregate NPV Coupon Amount in respect
of all unmatured Coupons on the Early Termination Date plus (ii)
any other amount due and payable to InPower under the Eurobond
Documents (which, for the avoidance of doubt, does not include
any Early Redemption Amount) plus (iii) the net amount due and
payable to InPower (if any) under the Terminated Transactions to
which InPower and Harich are party minus (iv) the net amount due
and payable by InPower and Harich (if any) under the Terminated
Transactions to which InPower and Harich are party will be
approximately equal to (but not less than) the amount due and
payable by InPower under the Facility Agreement on such date";
(iii) Clause 3.3 of the Calculation Agency Agreement provides that
"the Calculation Agent shall make all determinations and
calculations pursuant to the Swap Transaction Documents and this
Agreement in a manner which ensures that the
- 22 -
intention referred to in Clause 3.1 is carried out and, to that
end, the Calculation Agent shall on behalf of all parties to
this Agreement modify the provisions of the Swap Transaction
Documents and this Agreement so far (but only so far) as is
necessary to ensure the same".
(d) The parties hereto acknowledge that the provisions of Clause
30.11 of the Intercreditor Deed apply in relation to any action
taken by the Intercreditor Agent in entering into and pursuant
to or in connection with this Agreement.
(e) The parties hereto acknowledge that the provisions of and Clause
6 of Schedule 6 to the Intercreditor Deed apply in relation to
any action taken by the Security Trustee pursuant to or in
connection with this Agreement.
(f) Drax Power and the Security Trustee acknowledge that the charge
over cash referred to in paragraph (a)(vii) of Schedule 1 to the
First Standstill Agreement constitutes a first ranking security
interest over the Cash Cover Account (as defined therein).
15. AMENDMENTS
Except as expressly provided herein, the terms of this Agreement may be
modified, amended or waived only by an instrument in writing executed by
each party to this Agreement.
16. CONTINUING EFFECT
(a) Except as expressly provided herein and in any of the other
Standstill Documents, the Intercreditor Deed and the other Finance
Documents shall remain unchanged and shall continue in full force and
effect and are in all respects ratified and confirmed, and no Senior
Creditor has waived, or shall be deemed to have waived, by virtue of
the passage of time or any other circumstance whatsoever, any of its
rights, powers, privileges or remedies under any Finance Document or
any applicable law, all of which are expressly reserved (including,
on and after the Standstill Termination Date, with respect to any
Temporarily Waived Senior Bond Default or Temporarily Waived Eurobond
Default that is continuing at such time).
(b) Subject to Clauses 8 and 9 hereof, each party hereto (other than the
Security Trustee, the Senior Bond Trustee and the Intercreditor
Agent) hereby agrees and covenants that it shall, during the
Standstill Period, negotiate in good faith with the other parties
hereto in an effort to arrive at an agreement for a Restructuring;
provided that nothing set forth in this Agreement shall be construed
so as to require any party hereto to agree to the terms of any
modification proposed by any other party hereto to the Finance
Documents or any other document or agreement to which it is a party.
(c) Nothing in this Agreement shall limit the accrual of interest, fees
or other amounts under any Finance Document in accordance with the
terms thereof during the Standstill Period.
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17. VALIDITY OF AGREEMENT
If any of the provisions of this Agreement becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
18. REMEDIES
(a) Except as expressly provided herein, no failure on the part of any
party to this Agreement to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy
hereunder or under any Finance Document shall operate as a waiver
thereof; nor shall any single or partial exercise by any or all of
such parties of any right, power or remedy hereunder or under any
Finance Document preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
(b) Each party hereto acknowledges and hereby agrees that, from and after
the Standstill Termination Date, the obligations set forth in Clauses
4.1 and 7.1 shall terminate and be of no further force or effect, and
each Senior Creditor shall be entitled, in accordance with the
Finance Documents, to exercise and enforce, or to take steps to
exercise and enforce, any and all other rights, powers, privileges
and remedies available to it under the Finance Documents or
applicable law as a consequence of any Senior Bond Default or
Eurobond Default that exists at such time.
(c) Notwithstanding anything else in this Agreement, but save for those
things that each of the Security Trustee, the Senior Bond Trustee or
the Eurobond Trustee is expressly directed to do in this Agreement
and the other Standstill Documents, none of the Security Trustee, the
Senior Bond Trustee or the Eurobond Trustee shall be obliged to take
any action in relation to this Agreement or any other Standstill
Document unless directed or requested to do so by the Intercreditor
Agent (in the case of the Security Trustee), the Majority Bondholders
(in the case of the Senior Bond Trustee) or the Bank Security Trustee
(in the case of the Eurobond Trustee) and in each case only if it
shall be indemnified to its satisfaction against all liabilities to
which it may thereby render itself liable or which it may incur by so
doing.
(d) The parties to this Agreement hereby agree that in acting under this
Agreement and the other Standstill Documents, the Security Trustee,
the Senior Bond Trustee, the Eurobond Trustee and the Intercreditor
Agent shall be entitled to, and to rely upon, all the protections
afforded to them under the Intercreditor Deed, the Senior Bond
Indenture and the Bond Trust Deed as if the same were set out herein
mutatis mutandis.
(e) The Security Trustee shall not be liable for any liabilities suffered
by any party to this Agreement or any other Senior Creditor by reason
of the entry into this Agreement or the performance or otherwise of
the terms hereof save for any such liabilities arising by virtue of a
breach of trust by the Security Trustee or the wilful default, fraud
or gross negligence of the Security Trustee.
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19. FINANCE DOCUMENT
Without limiting any other provisions of this Agreement, Clauses 11 and 12
(but no other clauses of this Agreement) and the fee letters referred to
in Clause 9.5 shall be deemed to be Finance Documents for purposes of
Clause 14 of the Intercreditor Deed.
20. COUNTERPARTS; DELIVERY BY FACSIMILE
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be effective for purposes of binding the
parties hereto, but all of which shall together constitute one and the
same instrument. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of an
original executed counterpart of this Agreement.
21. NO ASSIGNMENT
None of the parties to this Agreement may assign any of their rights or
transfer any of their obligations under this Agreement, provided that any
of the Eurobond Trustee, the Senior Bond Trustee, the Senior Agent, the
Intercreditor Agent or the Security Trustee may assign their rights and
transfer their obligations to any successor Eurobond Trustee, Senior Bond
Trustee, Senior Agent, Intercreditor Agent or Security Trustee
respectively.
22. NOTICES
Any communication or document to be sent or delivered by one person to
another pursuant to this Agreement shall be sent or delivered to it:
(a) by leaving it at (or mailing it by first class prepaid post to) the
address identified with its signature below marked for the attention
of the person so identified (or such other address or person as it
may have specified at least two Business Days previously); or
(b) by fax to the fax number identified with its signature below marked
for the attention of the person so identified (or such other fax
number as it may have specified at least two Business Days
previously),
anything sent by post being deemed to have been delivered on the third day
following the date of posting and anything sent by fax being deemed to
have been delivered when transmission has been completed.
23. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to this Agreement has no rights under The
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Agreement.
24. GOVERNING LAW
This Agreement is governed by and shall be construed in accordance with
English law.
25. JURISDICTION
25.1 English Courts
The courts of England are to have jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and
accordingly any legal action or proceedings
- 25 -
arising out of or in connection with this Deed ("Proceedings") may be
brought in such courts.
25.2 Submission to Jurisdiction
Each of the parties hereto hereby irrevocably submits to the jurisdiction
of such courts and waives any objections to Proceedings in such courts
whether on the ground of venue or on the ground that the Proceedings have
been brought in an inconvenient forum. the taking of Proceedings in any
other jurisdiction (whether concurrently or not).
- 26 -
Schedule 1
CONDITIONS PRECEDENT
Each of the Senior Creditor Committees shall have received:
(a) a fully executed and unconditional (or conditional only upon this
Agreement being unconditional) copy of the Further InPower Standstill
Agreement in the form attached hereto as Exhibit 6;
(b) certificates signed by an officer of Drax Power and Drax Holdings
confirming that (i) the Exposure of each Hedging Bank as of the date
hereof is nil and (ii) no Additional Bonds have been issued;
(c) confirmation to the Intercreditor Agent from each of the (i) the Senior
Bond Trustee, (ii) the Eurobond Trustee, (iii) the Senior Agent and (iv)
the LC Facility Agent, in the forms attached hereto as Exhibits 1, 2, 3
and 4, respectively;
(d) confirmation from Milbank, Tweed, Hadley & McCloy addressed to the
Eurobond Trustee, the Senior Bond Trustee, the Intercreditor Agent and
the Issuer in the form attached hereto as Exhibit 5;
1
Schedule 2
ACCESSION DEED
THIS DEED is made on 200o
BY o the (the "Acceding Senior Bondholder"); and
WHEREAS:
(A) This deed is supplemental to a Further Standstill Agreement dated June
2003 (the "Further Standstill Agreement") between, inter alios, Drax
Holdings Limited, certain of its affiliates, certain of its senior
creditors and their respective agents.
(B) This deed has been entered into to record the accession of the Acceding
Senior Bondholder as a Consenting Bondholder pursuant to the provisions of
Clause 4.2 of the Further Standstill Agreement.
NOW THIS DEED WITNESSES as follows:
DEFINITIONS
Terms defined in the Further Standstill Agreement shall have the same
meaning when used in this deed.
ACCESSION OF ACCEDING SENIOR BONDHOLDER
1.1 The Acceding Senior Bondholder hereby agrees to become, with immediate
effect, a Consenting Bondholder and agrees to be bound by all of the terms
of the Further Standstill Agreement as if it had originally been party
thereto as a Consenting Bondholder thereunder.
1.2 The Acceding Senior Bondholder confirms that its address details for
notices in relation to Clause 22 of the Further Standstill Agreement are
as follows:
Address:
Facsimile:
Attention:
LAW
This deed shall be governed by and construed in all respects in accordance
with English law.
- 2 -
OTHER PARTIES ENTITLED TO ENFORCE
It is intended that each party to the Further Standstill Agreement from
time to time shall have the benefit of this deed and shall be entitled to
enforce the terms of this deed under the Contracts (Rights of Third
Parties Act) 1999.
IN WITNESS whereof this deed has been duly executed the day and year first
before written.
The Acceding Bondholder
Executed as a deed by )
o )
)
)
acting by
and
Authorised Signatory
Authorised Signatory
- 3 -
Schedule 3
TERMINATION NOTICE
[Date]
Each of the parties to the Further Standstill Agreement referred to below
Ladies and Gentlemen
Further Standstill Agreement dated June 2003: Termination Notice
We refer to the Further Standstill Agreement dated June 2003 (the "Further
Standstill Agreement") between AES Drax Power Limited, certain of its
affiliates, certain of its senior creditors and their agents named therein.
Terms defined in the Further Standstill Agreement shall have the same meanings
herein.
We hereby notify that this letter constitutes a Termination Notice pursuant to
Clause 3.1 of the Further Standstill Agreement.
We hereby confirm that we are acting on the instruction [of Consenting
Bondholders who constitute the Majority Bondholders] [the Bank Security Trustee
set out in a letter dated [_________] delivered under the Further InPower
Standstill Agreement].
Very truly yours,
[Senior Bond Trustee] [Eurobond Trustee]
1
Exhibit 1
[ON THE LETTERHEAD OF BANK OF NEW YORK]
TO: Deutsche Trustee Company Limited as Intercreditor Agent
under the Intercreditor Deed as defined below
Winchester House
1 Great Winchester Street
London EC2N 2DB
Facsimile: 020 7547 1089
Attention: The Managing Director
___ June 2003
Ladies and Gentlemen,
Further Standstill Agreement to be entered into between AES Drax Holdings
Limited, AES Drax Power Limited, AES Corporation, certain Senior Bondholders,
JPMorgan Chase Bank as Eurobond Trustee, The Bank of New York as Senior Bond
Trustee, Deutsche Bank AG London as Senior Agent, Deutsche Trustee Company
Limited as Intercreditor Agent, National Westminster Bank Plc as LC Facility
Agent, JPMorgan Chase Bank as Security Trustee and others in the agreed form
(the "Further Standstill Agreement")
We refer to the Further Standstill Agreement. Terms defined in the Further
Standstill Agreement have the same meaning when used herein.
This confirmation is being given under item (c) of Schedule 1 to the Further
Standstill Agreement and Clause 30.8 of the Intercreditor Deed.
As Senior Bond Trustee, we confirm that we are authorised, in accordance with
the Senior Bond Indenture, to execute and perform our obligations under the
Further Standstill Agreement and the matters and transactions contemplated by
it.
We agree to advise you if this ceases to be the case at any time prior to
execution of the Further Standstill Agreement by you. This confirmation shall
continue to be effective and may be relied on by you until you receive notice
from us to the contrary.
Yours faithfully
.................................................
For and on behalf of
The Bank of New York, as Senior Bond Trustee
Exhibit 2
[ON THE LETTERHEAD OF JPMORGAN CHASE BANK]
TO: Deutsche Trustee Company Limited as Intercreditor Agent
under the Intercreditor Deed as defined below
Winchester House
1 Great Winchester Street
London EC2N 2DB
Facsimile: 020 7547 1089
Attention: The Managing Director
[ ] June 2003
Dear Sirs,
Further Standstill Agreement to be entered into between AES Drax Holdings
Limited, AES Drax Power Limited, AES Corporation, certain Senior Bondholders,
JPMorgan Chase Bank as Eurobond Trustee, The Bank of New York as Senior Bond
Trustee, Deutsche Bank AG London as Senior Agent, Deutsche Trustee Company
Limited as Intercreditor Agent, National Westminster Bank Plc as LC Facility
Agent, JPMorgan Chase Bank as Security Trustee and others in the agreed form
(the "Further Standstill Agreement")
We refer to the Further Standstill Agreement. Terms defined in the Further
Standstill Agreement have the same meaning when used herein.
This confirmation is being given under clause 30.8 of the Intercreditor Deed.
As Eurobond Trustee, we confirm that we are authorised, in accordance with the
Bond Trust Deed (as defined in the Intercreditor Deed), to execute and perform
our obligations under the Further Standstill Agreement and the matters and
transactions contemplated by it.
We agree to advise you if this ceases to be the case at any time prior to
execution of the Further Standstill Agreement by you. This confirmation shall
continue to be effective and may be relied on by you until you receive notice
from us to the contrary.
Yours faithfully
..........................................
For and on behalf of
JPMorgan Chase Bank as Eurobond Trustee
Exhibit 3
[ON THE LETTERHEAD OF DEUTSCHE BANK]
TO: Deutsche Trustee Company Limited as Intercreditor Agent
under the Intercreditor Deed as defined below
Winchester House
1 Great Winchester Street
London EC2N 2DB
Facsimile: 020 7547 1089
Attention: The Managing Director
[ ] June 2003
Dear Sirs,
Further Standstill Agreement to be entered into between AES Drax Holdings
Limited, AES Drax Power Limited, AES Corporation, certain Senior Bondholders,
JPMorgan Chase Bank as Eurobond Trustee, The Bank of New York as Senior Bond
Trustee, Deutsche Bank AG London as Senior Agent, Deutsche Trustee Company
Limited as Intercreditor Agent, National Westminster Bank Plc as LC Facility
Agent, JPMorgan Chase Bank as Security Trustee and others in the agreed form
(the "Further Standstill Agreement")
We refer to the Further Standstill Agreement. Terms defined in the Further
Standstill Agreement have the same meaning when used herein.
This confirmation is being given under clause 30.8 of the Intercreditor Deed.
As Senior Representative for the Eurobond Finance Parties and the Swap
Creditor, we confirm that we are authorised, in accordance with the Eurobond
Documents and the Target Swap Documents (as defined in the Intercreditor Deed),
to execute and perform our obligations under the Further Standstill Agreement
and the matters and transactions contemplated by it.
We agree to advise you if this ceases to be the case at any time prior to
execution of the Further Standstill Agreement by you. This confirmation shall
continue to be effective and may be relied on by you until you receive notice
from us to the contrary.
Yours faithfully
.............................
For and on behalf of
Deutsche Bank AG London
Exhibit 4
[ON THE LETTERHEAD OF NATWEST]
TO: Deutsche Trustee Company Limited as Intercreditor Agent
under the Intercreditor Deed as defined below
Winchester House
1 Great Winchester Street
London EC2N 2DB
Facsimile: 020 7547 1089
Attention: The Managing Director
[ ] June 2003
Dear Sirs,
Further Standstill Agreement to be entered into between AES Drax Holdings
Limited, AES Drax Power Limited, AES Corporation, certain Senior Bondholders,
JPMorgan Chase Bank as Eurobond Trustee, The Bank of New York as Senior Bond
Trustee, Deutsche Bank AG London as Senior Agent, Deutsche Trustee Company
Limited as Intercreditor Agent, National Westminster Bank Plc as LC Facility
Agent, JPMorgan Chase Bank as Security Trustee and others in the agreed form
(the "Further Standstill Agreement")
We refer to the Further Standstill Agreement. Terms defined in the Further
Standstill Agreement have the same meaning when used herein.
This confirmation is being given under clause 30.8 of the Intercreditor Deed.
As LC Facility Agent, we confirm that we are authorised, in accordance with the
LC Finance Documents (as defined in the Intercreditor Deed), to execute and
perform our obligations under the Further Standstill Agreement and the matters
and transactions contemplated by it.
We agree to advise you if this ceases to be the case at any time prior to
execution of the Further Standstill Agreement by you. This confirmation shall
continue to be effective and may be relied on by you until you receive notice
from us to the contrary.
Yours faithfully
...................................
For and on behalf of
National Westminster Bank plc
Exhibit 5
[LETTERHEAD OF MILBANK, TWEED, HADLEY & McCLOY]
[__] June 2003
AES Drax Holdings Limited,
as Issuer
JP Morgan Chase Bank,
as Eurobond Trustee
The Bank of New York,
as Senior Bond Trustee
Deutsche Trustee Company Limited,
as Intercreditor Agent
Ladies and Gentlemen:
Reference is made to the Further Standstill Agreement dated [___] June 2003
among the AES Drax companies parties thereto, the Consenting Bondholders named
therein, and the other parties named therein (the "Standstill Agreement").
Terms used in this letter and defined in the Standstill Agreement are used as
defined therein.
This letter is being delivered to you pursuant to Item (d) of Schedule 1 to the
Standstill Agreement.
We confirm that:
(a) we have received representations from the Consenting Bondholders party to
the Standstill Agreement as of the date hereof, or their agents, as to the
Sterling Equivalent (as defined in the Senior Bond Indenture) of Senior
Bonds they own;
(b) on the basis of such representations, we have calculated that the
aggregate Sterling Equivalent of Senior Bonds held by such Consenting
Bondholders is (pound)[ ].
Based on the representations included in the Standstill Agreement and in
accordance with the terms of the Senior Bond Indenture, Holders of Senior Bonds
of the Sterling Equivalent of more than (pound)200,000,000 would represent the
Majority Holders (as defined in the Senior Bond Indenture).
Exhibit 6
FORM OF FURTHER INPOWER STANDSTILL AGREEMENT