Exhibit 10(g)-1
CONFORMED COPY
DATED 17th July, 1998
SUPPLEMENTAL AGREEMENT
supplemental to a
(pound)l,057,395,552
STANDBY CREDIT FACILITY
dated 28th October, 1996
FOR
EASTERN MERCHANT PROPERTIES LIMITED
EASTERN MERCHANT GENERATION LIMITED
as Borrowers
EASTERN GROUP PLC
EASTERN GENERATION LIMITED
as Guarantors
ARRANGED BY
BARCLAYS CAPITAL
and
THE ROYAL BANK OF SCOTLAND pic
ALLEN & OVERY
London
INDEX
Clause Page
1. Interpretation......................................................2
2. Conditions Precedent................................................2
3. Fees................................................................2
4. Amendments..........................................................3
5. Representations and Warranties......................................3
6. Expenses............................................................5
7. Miscellaneous.......................................................5
8. Counterparts........................................................5
9. Governing Law.......................................................5
Schedules
1. Condition Precedent Documents.......................................6
2. Form of Amended and Restated Credit Agreement.......................7
Signatories.................................................................85
THIS AGREEMENT is dated 17th July, 1998 between:
(1) EASTERN MERCHANT PROPERTIES LIMITED (Registered No. 3181383) ("EMPL") and
EASTERN MERCHANT GENERATION LIMITED (Registered No. 3113665) ("EMGL") as
borrowers (in this capacity the "BORROWERS");
(2) EASTERN GROUP plc (Registered No. 3247622) ("EG") and EASTERN GENERATION
LIMITED (Registered No. 2353756) ("EGL") as guarantors;
(3) EASTERN ELECTRICITY plc (formerly Eastern Group plc) (Registered No
2366906) ("EE");
(4) BARCLAYS CAPITAL and THE ROYAL BANK OF SCOTLAND plc as arrangers (in this
capacity the "ARRANGERS");
(5) THE BANK OF NOVA SCOTIA, BAYERISCHE LANDESBANK GIROZENTRALE, THE DAI-ICHI
KANGYO BANK, LIMITED, DEN DANSKE BANK AKTIESELSKAB, NATIONSBANK, N.A.,
ROYAL BANK OF CANADA EUROPE LIMITED, THE TORONTO-DOMINION BANK and
WESTDEUTSCHE LANDESBANK GIROZENTRALE as co-arrangers (in this capacity
the "CO-ARRANGERS");
(6) THE FINANCIAL INSTITUTIONS listed in schedule 1 to Schedule 2 as banks
(the "BANKS"):
(7) THE INDUSTRIAL BANK OF JAPAN, LIMITED, BANCA COMMERCIALE ITALIANA S.p.A,
LONDON BRANCH, BANKGESELLSCHAFT BERLIN AG, LONDON BRANCH, THE FUJI BANK,
LIMITED, THE SAKURA BANK, LIMITED, THE BANK OF YOKOHAMA, LTD., THE NIKKO
BANK (UK) PLC and THE YASUDA TRUST & BANKING COMPANY LIMITED as exiting
banks (the "EXITING BANKS"); and
(8) THE ROYAL BANK OF SCOTLAND plc as agent (in this capacity the "AGENT").
BACKGROUND
(A) This Agreement is supplemental to and amends a standby credit agreement
(the "CREDIT AGREEMENT") dated 28th October, 1996 between (amongst
others) the Borrowers, the Guarantors, the Banks and The Industrial Bank
of Japan, Limited as the Agent.
(B) By a letter dated 29th June, 1998, The Industrial Bank of Japan, Limited
resigned as Agent and has been replaced by The Royal Bank of Scotland
plc.
(C) The Credit Agreement is amended and restated in accordance with Clause 26
(Amendments and Waivers) of the Credit Agreement.
(D) The Exiting Banks are party to this Agreement to confirm that they agree
to the amendment and restatement of the Credit Agreement and that, from
the Effective Date, they have no Commitment under the Credit Agreement
(as amended and restated).
2
- ------------------------------------------------------------------------------
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
(a) Capitalised terms defined in the Credit Agreement (as amended and
restated) have, unless expressly defined in this Agreement, the same
meaning in this Agreement.
(b) "EFFECTIVE DATE" means the date on which the Agent gives the confirmation
referred to in Clause 2.1 (Conditions precedent).
(c) "INFORMATION MEMORANDUM" means the information memorandum dated June,
1998.
(d) "NEW FEE LETTER" means a fee letter between the Arrangers and the
Obligors or a fee letter between the Agent and the Obligors, each dated
the date of this Agreement setting out the amount of the various fees
referred to in Clause 3 (Fees).
1.2 CONSTRUCTION
The provisions of Clause 1.2 (Construction) of the Credit Agreement apply
to this Agreement as though they were set out in full in this Agreement
except that references therein to the Credit Agreement are to be
construed as references to this Agreement.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS PRECEDENT
The amendments to the Credit Agreement set out in Clause 4 (Amendments)
are subject to the condition precedent that the Agent has notified the
Borrowers and the Banks that it has received all of the documents, or is
satisfied as to the matters, set out in Schedule 1 to this Agreement in
form and substance satisfactory to the Agent.
2.2 TIMING OF EFFECTIVE DATE
If the Effective Date has not occurred by 1st August, 1998; this
Agreement (other than Clause 6 (Expenses)) will (unless the parties to
this Agreement otherwise agree in writing) cease to have effect.
3. FEES
3.1 ARRANGEMENT FEE
EG shall pay to each Arranger for its own account an arrangement fee
hereunder in the amount and at the times set out in the relevant New Fee
Letter.
3.2 AGENT'S FEE
EG shall pay to the Agent for its own account an agency fee hereunder in
the amount and at the times set out in the relevant New Fee Letter.
- ------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------
3.3 VAT
Any fee referred to in this Clause 3 (Fees) is exclusive of any value
added tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it shall
(subject to the receipt of a valid value added tax invoice in respect of
the relevant supply) be paid by EG at the same time as it pays the
relevant fee.
4. AMENDMENTS AND WAIVER
With effect from the Effective Date, the Credit Agreement shall be
amended and restated in the form set out in Schedule 2 to this Agreement.
The outstanding Event of Default arising under the Credit Agreement
(before any amendment or restatement under this Agreement) as a result of
the acquisition of The Energy Group PLC by T.U. Acquisitions PLC is
permanently waived.
5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES
Each Obligor makes the following representations and warranties to each
Finance Party on the date of this Agreement and on the Effective Date:
5.2 STATUS
It is duly incorporated under the laws of England and Wales and has power
and is able lawfully to own its respective property and assets and carry
on its respective business, to execute and deliver this Agreement and to
exercise its respective rights and perform its respective obligations
hereunder and the transactions contemplated hereby and all corporate or
other action required to be taken by it in order to authorise the
execution and delivery by it of this Agreement and the performance by it
of its respective obligation hereunder has been duly taken.
5.3 LEGAL VALIDITY
This Agreement constitutes its legal, valid and binding obligations.
5.4 NON-CONTRAVENTION
The execution and delivery by it of this Agreement and the performance by
it of its obligations under this Agreement will not:
(a) contravene any provision of any law, statute (including, without
limitation, the Act), decree, rule, regulation or code of practice to
which it or any of its assets or revenues is subject, or of any order,
judgment, injunction, decree, resolution, determination or award of any
court or any judicial, administrative or governmental authority or
organisation having applicability to it or any of its assets or revenues;
or
(b) result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, bond, agreement or other instrument or obligation to which
it is a party or by which it or any of its assets or revenues may be
bound or affected; or
- ------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------
(c) violate any provision of its constitutive documents.
5.5 NO DEFAULT
(a) No Default has occurred which is continuing; and
(b) no Event of Default or Potential Event of Default has occurred under the
Guarantee and Indemnity which is continuing (as such terms are defined
therein),
other than, for the avoidance of doubt, any Default or (as such terms are
defined in the Guarantee and Indemnity) any Event of Default or Potential
Event of Default arising as a result of the acquisition of The Energy
Group PLC by T.U. Acquisitions PLC which has been waived.
5.6 CONSENTS
All consents, approvals, authorisations, exemptions, registrations and
filings and all acts, conditions and things required to be obtained,
done, fulfilled and performed in order to:
(a) enable it to enter into and exercise its respective rights and perform
its respective obligations under this Agreement; and
(b) make this Agreement legal, valid and binding and admissible in evidence
in England and Wales.
have been obtained and are in full force and effect or have been done, fulfilled
or performed (as the case may be).
5.7 INFORMATION MEMORANDUM
EG represents and warrants as of the date of this Agreement:
(a) All material factual information contained in the Information Memorandum
provided by it is true in all material respects;
(b) all forecasts contained in the Information Memorandum provided by it have
been arrived at after careful consideration;
(c) the Information Memorandum is not misleading in any material respect and
does not omit to disclose any matter, the failure to disclose of which
would result in any information contained in the Information Memorandum
being misleading in any material respect; and
(d) nothing has occurred since the date of the Information Memorandum which
renders the information contained in it and provided by EG untrue or
misleading in any material respect in the context of this Agreement;
provided that nothing in this Clause 4.7 is a representation or warranty
that the Information Memorandum is, or should be relied upon as, a
promise or forecast of the future.
- ------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------
5.8 REPRESENTATIONS AND WARRANTIES IN THE CREDIT AGREEMENT
The representations and warranties set out in Clause 17 (Representations
and Warranties) of the Credit Agreement (as amended and restated) are
true as if made on the date of this Agreement and will be true on the
Effective Date with reference to the facts and circumstances then
existing.
6. EXPENSES
(a) EG shall pay and forthwith on demand indemnify each Finance Party against
any liability it incurs in respect of, any stamp, registration or similar
tax which is or becomes payable in connection with the entry into,
performance or enforcement of this Agreement.
(b) EG shall on demand reimburse the Agent promptly on demand for the
out-of-pocket charges and expenses (including the fees and expenses of
legal advisers) reasonably incurred by it in connection with the
negotiation, preparation, printing and execution of this Agreement and
all associated documentation.
7. MISCELLANEOUS
(a) This Agreement is designated a Finance Document.
(b) Subject to the terms and conditions of this Agreement, the Credit
Agreement will remain in full force and effect and this Agreement and the
Credit Agreement will be read and construed as one document.
(c) The provisions of Clauses 10 (Payments), 26 (Amendments and Waivers), 28
(Confidentiality), 31 (Severability),33 (Notices) and 35 (Jurisdiction)
of the Credit Agreement shall apply to this Agreement as though they were
set out in this Agreement, but as if references to those clauses to the
Credit Agreement were references to this Agreement.
8. COUNTERPARTS
This Agreement may be executed in counterpart and each such counterpart
taken together shall be deemed to constitute one and the same instrument.
9. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning
of this Agreement.
- ------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------
SCHEDULE I
CONDITIONS PRECEDENT DOCUMENTS
(a) Memoranda and Articles of Association of each Guarantor and each of EMPL
and EMGL in each case certified by the company secretary of such party to
be a true copy of the original;
(b) a legal opinion from Allen & Overy addressed to the Agent and the Banks;
(c) a certified copy of an appropriate resolution of the board of directors
of each Guarantor and each of EMPL and EMGL;
(d) payment of all fees in connection with this Agreement which are required
to be paid by EMPL or its affiliates on or before the Effective Date;
(e) a copy of the waiver letter relating to the rent factoring transaction of
the Obligors;
(f) a certificate of a director of Eastern Group plc confirming:
(i) that no Event of Default is outstanding as at the Effective Date
(except as waived in writing);
(ii) as at 31st March, 1998 (together with calculations in reasonable
detail):
(A) that Adjusted Consolidated Tangible Net Worth is not less
than (pound)800,000,000;
(B) the ratio of Total Consolidated Net Borrowings to Adjusted
Consolidated Tangible Net Worth; and
(C) the ratio of Consolidated Profits Before Interest and Tax
to Consolidated Interest for the period from 1st April,
1996 to 30th September, 1997,
(iii) that since 30th September, 1997 there has been no change in the
business, assets or condition of itself or any other member of the
Group having a Material Adverse Effect; and
(g) certified copies of specimen signatures of duly authorized signatories
for each Guarantor and each of EMPL and EMGL.
- ------------------------------------------------------------------------------
7
- ------------------------------------------------------------------------------
SCHEDULE 2
FORM OF AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT
DATED 28th October, 1996 (as amended and restated on 17th July, 1998)
EASTERN MERCHANT PROPERTIES LIMITED
EASTERN MERCHANT GENERATION LIMITED
as Borrowers
EASTERN GROUP plc
EASTERN GENERATION LIMITED
as Guarantors
EASTERN ELECTRICITY plc (formerly Eastern Group plc)
BARCLAYS CAPITAL
and
THE ROYAL BANK OF SCOTLAND plc
as Arrangers
THE ROYAL BANK OF SCOTLAND) plc
as Agent
THE BANKS
(pound) l,057,395,552
STANDBY CREDIT FACILITY
ALLEN & OVERY
London
- ------------------------------------------------------------------------------
8
- ------------------------------------------------------------------------------
INDEX
CLAUSE PAGE
1. Interpretation.......................................................10
2. The Facility.........................................................28
3. Purpose..............................................................29
4. Conditions Precedent.................................................29
5. Drawdown.............................................................30
6. Repayment............................................................30
7. Prepayment and Cancellation..........................................31
8. Interest Periods.....................................................32
9. Interest.............................................................34
10. Payments.............................................................35
11. Withholdings.........................................................37
12. Market Disruption....................................................38
13. Increased Costs......................................................38
14. Illegality...........................................................40
15. Mitigation...........................................................40
16. Guarantee............................................................41
17. Representations and Warranties.......................................43
18. Undertakings.........................................................47
19. Default..............................................................54
20. The Agent and the Arrangers..........................................57
21. VAT on Fees..........................................................61
22. Expenses.............................................................62
23. Stamp Duties.........................................................62
24. Indemnities..........................................................62
25. Evidence and Calculations............................................64
26. Amendments and Waivers...............................................64
27. Changes to the Parties...............................................65
28. Disclosure of Information............................................67
29. Set-off..............................................................68
30. Pro Rata Sharing.....................................................68
31. Severability.........................................................69
32. Counterparts.........................................................69
33. Notices..............................................................70
34. Language.............................................................70
35. Jurisdiction.........................................................71
36. Governing Law........................................................72
- ------------------------------------------------------------------------------
9
- ------------------------------------------------------------------------------
Schedules
1. Banks and Commitments................................................73
2. Conditions Precedent Documents.......................................74
3. Calculation of the Mandatory Cost....................................75
4. Form of Request......................................................77
5. Novation Certificate.................................................78
6. Notional Repayments..................................................79
Signatories................................................................80
- ------------------------------------------------------------------------------
10
- ------------------------------------------------------------------------------
THIS AGREEMENT is dated 28th October, 1996 (as amended and restated on 17th
July, 1998) between:
(1) EASTERN MERCHANT PROPERTIES LIMITED (Registered No. 3181383) ("EMPL") and
EASTERN MERCHANT GENERATION LIMITED (Registered No. 3113665) ("EMGL") as
borrowers (in this capacity the "BORROWERS");
(2) EASTERN GROUP plc (Registered No. 3247622) ("EG") and EASTERN GENERATION
LIMITED (Registered No. 2353756) ("EGL") as guarantors;
(3) EASTERN ELECTRIC plc (formerly Eastern Group pic) (Registered No.
2366906) ("EE");
(4) BARCLAYS CAPITAL and THE ROYAL BANK OF SCOTLAND plc as arrangers (in this
capacity the "ARRANGERS");
(5) THE BANK OF NOVA SCOTIA, BAYERISCHE LANDESBANK GIROZENTRALE, THE DAI-ICHI
KANGYO BANK, LIMITED, DEN DANSKE BANK AKTIESELSKAB, NATIONSBANK N.A.,
ROYAL BANK OF CANADA EUROPE LIMITED, THE TORONTO-DOMINION BANK and
WESTDEUTSCHE LANDESBANK GIROZENTRALE as co-arrangers (in this capacity
the "CO-ARRANGERS")
(6) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks (the "BANKS");
and
(7) THE ROYAL BANK OF SCOTLAND plc as agent (in this capacity the "AGENT").
IT IS AGREED as follows:
1. INTERPRETATION
DEFINITIONS
In this Agreement:
"ACT"
means the Electricity Act 1989.
"ADJUSTED CONSOLIDATED TANGIBLE NET WORTH"
means at any time Consolidated Tangible Net Worth less the aggregate of:
(a) any indebtedness owed by:
(i) The Energy Group PLC;
(ii) a T.U. Company; or
(iii) Texas Utilities Company or any company, partnership or
person of which a T.U. Company is a direct or indirect
Subsidiary Undertaking or any other direct or indirect
- ------------------------------------------------------------------------------
11
- ------------------------------------------------------------------------------
Subsidiary Undertaking of any such company, partnership or
person,
in each case. to any member of the Group; and
(b) the amount of any revaluation or reserve arising from any upward
revaluation occurring after 31st March, 1998,
(and so that no amount shall be included or excluded more than once) all
as determined from the most recently published audited consolidated or
interim unaudited consolidated financial statements of EG.
"ADVANCE"
means, subject to Clause 8 (Interest Periods), the principal amount of a
borrowing by a Borrower under this Agreement or the principal amount
outstanding of that borrowing.
"AFFILIATE"
means a Subsidiary or a Holding Company of a Bank or any other Subsidiary
of that Holding Company.
"AGGREGATE OUTSTANDING RENTS"
has the same meaning as in the Assignment.
"ASSIGNMENT"
means the Deed of Assignment of Rents dated 28th October, 1996 between
EMPL, Eastern Group Finance Limited as trustee and certain financial
institutions identified as "Banks" therein.
"AUTHORISED SIGNATORY"
means, in relation to any communication to be made, or any document to be
executed or certified, by any Obligor or other person, any person who is
at such time duly authorised, by or pursuant to the board resolution or
other authorisation or in such other manner as may be reasonably
acceptable to the Agent, to make such communication, or to execute or
certify such document, on behalf of such Obligor or other person.
"BORROWER"
means EMPL or EMGL.
"BORROWING" and "BORROWINGS"
means any present or future Indebtedness (whether by way of principal or
premium) for or in respect of:
(a) money borrowed or raised;
- ------------------------------------------------------------------------------
12
- ------------------------------------------------------------------------------
(b) any recourse arising from the discounting of receivables owned by
a member of the Group;
(c) liabilities under or in respect of any acceptance or acceptance
credit or documentary credit facility, other than any documentary
credit facility relating to the acquisition cost of assets or
services to the extent that the same involves deferral of payment
of any sum for one year or less;
(d) any notes, bonds, debentures, debenture stock, loan stock or other
debt security offered, issued or distributed whether by way of
public offer, private placing, acquisition consideration or
otherwise and whether issued for cash or in whole or in part for a
consideration other than cash.
(e) any outstanding Qualifying Preference Shares in issue;
(f) the acquisition cost of assets or services to the extent payable
on deferred payment terms after the time of acquisition or
possession thereof by the person liable (but only to the extent
the same (i) involves deferral of payment of any sum for more than
one year, (ii) is not a cost in respect of the expansion,
development or renewal of all or part of the "licensee's
distribution System" (as defined in the PES Licence) and (iii)
exceeds (pound)25,000,000 in respect of any transaction or series
of related transactions) whether or not any instalments for
payment are evidenced by a bond, note, debenture or other debt
security issued by the obligor;
(g) all instalments of Head Lease Premium but without adjustment under
paragraph 4.2 of the Eighth Schedule to the Head Lease entered
into with National Power PLC as Head Landlord;
(h) rental payments or elements thereof under all leases (whether in
respect of land, machinery, equipment or otherwise) which in the
event of the termination of the leasing thereunder at any time
prior to its expiry by effluxion of time, would become payable on
such termination by reference to the period from such termination
to the date of such expiry (and whether or not discounted for
early payment);
(i) any guarantee, indemnity or other legally binding assurance
against (or other legally binding arrangement intended to prevent
or limit) loss in respect of any Borrowing of any person who is
not a member of the Group;
(j) an amount equal to the Price up to and including the First Rent
Day and thereafter the Aggregate Outstanding Rents as at the Rent
Day on which the Rents were last paid in full, immediately
preceding the date of calculation; and
(k) any liability arising under any transaction by virtue of which (i)
a capital sum is received by a member of the Group as
consideration for the sale or disposal (whether by outright
alienation or the grant of lease or other interest or otherwise)
of any assets and (ii) the person making or funding the payment
receives a guarantee, indemnity or other legally binding assurance
from a member of the Group against (or other legally binding
arrangement intended to prevent or limit) loss as a result of the
assets not generating or being realised for a specific amount or
an amount calculated in an agreed manner,
- ------------------------------------------------------------------------------
13
- ------------------------------------------------------------------------------
Provided that:
(i) Subordinated Debt shall be excluded;
(ii) indebtedness of a member of the Group to another member of the
Group shall be excluded;
(iii) any interest, dividends. commissions, fees or other like financing
charges shall be included to the extent that they have been
capitalised;
(iv) in respect of paragraph (d) (where the item concerned is a bond,
note, debenture, debenture stock, loan stock or other debt
security issued at a discount) and in respect of paragraph (e),
only the issue price of any such debt security or Qualifying
Preference Share falling thereunder, together with any applicable
discount recognised at the time of calculation and required under
the accounting principles used by the Guarantors (which accounting
principles are consistently applied except as shown in the
relevant financial statements of the Guarantors) to be reflected
in the relevant person's most recently published financial
statements, shall be included;
(v) in respect of paragraph (h), only the capitalised value
established in accordance with the Statement of Standard
Accounting Practice 21 (as supplemented, varied or replaced from
time to time) as shown in the relevant person's most recently
published financial statements shall be included;
(vi) in respect of paragraph (i), any indemnity given to any person
which issues letters of credit at the request of EE in favour of
Energy Pool Funds Administration Limited in respect of its
obligations under the Pooling and Settlement Agreement shall be
excluded;
(vii) Project Finance Borrowing shall be excluded; and
(viii) adjustments shall be made to take account of the effect of any
relevant currency or interest rate swap or other similar hedging
arrangements,
(and so that no amount shall be included or excluded more than once).
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open
for business in London.
"CASH"
means cash at hand or cash at bank, in each case to the extent free of
Encumbrances (other than Encumbrances which secure only Borrowings) and
readily remittable to the United Kingdom, but excluding the proceeds of
any securitisation of the assets or revenues of any member of the Group
to the extent not included as Borrowings.
- ------------------------------------------------------------------------------
14
- ------------------------------------------------------------------------------
"CASH COLLATERALISATION DOCUMENTS"
means the charges on cash dated 28th October, 1996 made between EMPL and
The Industrial Bank of Japan. Limited, EMPL and The Bank of Nova Scotia
and EMPL and Societe Generale and the deferred premium settlement deed
entered into between EMPL, EMGL, EE, The Industrial Bank of Japan Limited
for itself and as arranger and agent and certain financial institutions
identified as "Banks" and "Participants" therein.
"CHANGE IN CONTROL"
shall be deemed to have occurred if:
(a) any person or group of related persons (other than Texas Utilities
Company, any Subsidiary of Texas Utilities Company, or any
pension, savings or other employee benefit plan for the benefit of
employees of Texas Utilities Company and/or any Subsidiary of
Texas Utilities Company) shall have acquired beneficial ownership
of more than 30% of the outstanding Voting Shares (within the
meaning of section 13(d) or 14(d) of the Securities Exchange Act
of 1934 of the United States of America, as amended, and the
applicable rules and regulations thereunder); provided that a
Change in Control shall not be deemed to have occurred if such
acquisition has been approved, prior to the Parent Acquisition
Date and the date on which any tender offer for Voting Shares of
Texas Utilities Company was commenced, by a majority of the
Disinterested Directors of Texas Utilities Company; or
(b) during any period of 12 consecutive months, commencing before or
after the date of the Supplemental Agreement, individuals who on
the first day of such period were directors of Texas Utilities
Company (together with any replacement or additional directors who
were nominated or elected by a majority of directors then in
office) cease to constitute a majority of the board of directors
of Texas Utilities Company.
"COMMITMENT"
means the amount in Sterling set opposite the name of a Bank in Schedule
1 to the extent not cancelled or reduced under this Agreement.
"COMMITMENT PERIOD"
means the period from the date of this Agreement to the Term Date (both
dates inclusive).
"CONSOLIDATED INTEREST"
means, in respect of any period, the aggregate amount of interest (which
shall be deemed to include the interest element of leasing and hire
purchase payments under finance leases plus an amount equal to the
difference between the amount by which the Aggregate Outstanding Rents
reduces and the amount of Rents (other than any amount of or in respect
of VAT) payable, in each case during that period and any amount
equivalent to interest accruing in respect of that period in relation to
any transaction contemplated by paragraph (k) of the definition of
Borrowings, but shall exclude interest, dividends, commissions, fees and
other like financing charges which have been capitalised) and all other
amounts payable under any agreement which are referable to interest,
acceptance commission, commitment commission and other finance payments
(including, without limitation, dividends on Qualifying Preference
Shares)
- ------------------------------------------------------------------------------
15
- ------------------------------------------------------------------------------
incurred by the Group in respect of Borrowings during such period
(exclusive of such interest, commission and other finance payments in
respect of Borrowings by any member of the Group from and for the time
being owed to another member of the Group) after deducting interest
received or receivable by or accrued to the Group on cash deposits and
investments (exclusive of such interest received or receivable or accrued
from another member of the Group), and after deducting net gains and
adding net losses on the disposal of investments with a maturity not
exceeding 365 days (other than any disposal by one member of the Group to
another), all as determined to the extent that such period comprises or
includes a financial year of EG, from the relevant audited consolidated
financial statements of EG, but otherwise from the relevant Consolidated
Management Accounts.
"CONSOLIDATED MANAGEMENT ACCOUNTS"
means consolidated accounts of the Group in the form approved by the
Agent (acting in accordance with the instructions of the Majority Banks)
comprising profit and loss, cashflow and balance sheet and certified by
the Finance Director or Deputy Finance Director of EG as being true and
fair.
"CONSOLIDATED PROFITS BEFORE INTEREST AND TAX"
means, in respect of any period the profits on ordinary activities before
taxation of the Group for such period, after adding back Consolidated
Interest for such period, all as determined, to the extent that such
period comprises or includes a financial year of EG, from the relevant
audited consolidated financial statements of EG, but otherwise from the
relevant Consolidated Management Accounts.
"CONSOLIDATED TANGIBLE NET WORTH"
means at any time the aggregate of:
(a) all amounts paid up or credited as paid up on the issued share
capital of EG (excluding Qualifying Preference Shares);
(b) any credit balance on profit and loss account; and
(c) any other capital and revenue reserves (including those resulting
from an upward revaluation included in the annual audited accounts
of EG dated 31st March, 1998),
less the aggregate of:
(d) any debit balance on profit and loss account;
(e) any amount shown in respect of goodwill (including goodwill
arising only on consolidation) or intangible assets or in respect
of minority interests; and
(f) any reserves set aside for taxation, deferred taxation or bad
debts,
(and so that no amount shall be included or excluded more than once) all
as determined from the most recently published audited or interim
unaudited consolidated financial statements of EG.
- ------------------------------------------------------------------------------
16
- ------------------------------------------------------------------------------
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would
constitute an Event of Default.
"DIRECTOR GENERAL"
means the person appointed from time to time by the Secretary of State to
hold office as the Director General of Electricity Supply for the
purposes of the Act.
"DISINTERESTED DIRECTOR"
means any member of the Board of Directors of Texas Utilities Company
who:
(a) is not affiliated, directly or indirectly, with, or appointed by,
a person or group of related persons (other than Texas Utilities
Company, any Subsidiary of Texas Utilities Company or any pension,
savings or other employee. benefit plan for the benefit of
employees of Texas Utilities Company and/or any Subsidiary of
Texas Utilities Company) acquiring the beneficial ownership of
more than 30% of the outstanding Voting Shares of Texas Utilities
Company (within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 of the United States of America,
as amended, and the applicable rules and regulations thereunder);
and
(b) either was a member of the board of directors of Texas Utilities
Company prior to the Parent Acquisition Date or was recommended
for election by a majority of the Disinterested Directors in
office prior to the Parent Acquisition Date.
"DISTRIBUTION BUSINESS"
means the business of EE or any successor undertaking to that business
within the Group, in or ancillary to the distribution (whether for its
own account or that of any other party) of electricity through the
Group's distribution system and includes any business of providing
connections to the Group's distribution system.
"DISTRIBUTION BUSINESS TANGIBLE NET WORTH"
means, at any time, the net assets as shown in the most recently
published audited balance sheet of the Distribution Business prepared
pursuant to the PES Licence less any amounts shown in such audited
balance sheet in respect of goodwill or intangible assets of the
Distribution Business.
"DRAWDOWN DATE"
means the date of the making of an Advance.
"ENCUMBRANCE"
means any mortgage, charge, assignment by way of security, lien, pledge,
hypothecation, right of set-off flawed asset or blocked deposit
arrangement or any other encumbrance or security
- ------------------------------------------------------------------------------
17
- ------------------------------------------------------------------------------
interest or security arrangement whatsoever created or arising under any
relevant law or any agreement or arrangement having that effect.
"EVENT OF DEFAULT"
means an event specified as such in Clause 19.1 (Events of Default).
"FACILITY OFFICE" means the office(s) notified by a Bank to the Agent:
(a) on or before the date it becomes a Bank; or
(b) by not less than 5 Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"FINANCE DOCUMENT"
means this Agreement, the Supplemental Agreement, the New Fee Letters (as
defined in the Supplemental Agreement), a Novation Certificate or any
other document designated as such by the Agent and EG.
"FINANCE PARTY"
means an Arranger, a Bank or the Agent.
"FIRST RENT DAY"
has the same meaning as in the Assignment.
"GENERATION BUSINESS"
means the business of EGL or EMGL in or ancillary to the generation
(whether for its own account or that of another parry) of electricity.
"GENERATION BUSINESS TANGIBLE NET WORTH"
means, at any time, the net assets as shown in the most recently
published audited balance sheet of the Generation Business prepared
pursuant to the PES Licence less any amounts shown in such audited
balance sheet in respect of goodwill or intangible assets of the
Generation Business.
"GENERATION LICENCE"
means those licences granted by the Secretary of State under section 6(l)
of the Act authorising the relevant licensee to carry on the Generation
Business and any activities ancillary thereto, or any replacement licence
or licences granted from time to time to any member of the Group (or. if
more than one, the most recent such replacement).
- ------------------------------------------------------------------------------
18
- ------------------------------------------------------------------------------
"GROUP"
means EG and all of its Subsidiaries from time to time and "MEMBER OF THE
GROUP" or "GROUP COMPANY" means any one of them.
"GUARANTEE AND INDEMNITY"
means the guarantee and indemnity dated 28th October, 1996 made between
EG, EGL, EE and certain financial institutions therein.
"GUARANTOR"
means a Borrower (as guarantor of the obligations of the other Borrower
which are guaranteed under Clause 16 (Guarantee)), EG and EGL.
"HEAD LEASE PREMIUM"
means the premium payable by EMPL in consideration of the grant of the
Leases by National Power PLC payable in accordance with Clause 3 and
paragraph 4 of the Eighth Schedule to the Head Lease entered into with
National Power PLC as Head Landlord.
"HEAD LEASES"
means the two leases between PowerGen plc and EMPL dated 2nd July, 1996
and the lease between National Power PLC, EMPL and Eastern Group plc (now
called Eastern Electricity plc) dated 27th June, 1996 in respect of the
Properties and "HEADLEASE" shall be construed accordingly.
"HEAD LANDLORD"
means National Power PLC and PowerGen plc or each of them as the context
may require and their respective successors in title under the Head
Leases.
"HOLDING COMPANY"
has the meaning given to it in section 736 of the Companies Act 1985, and
"HOLDING COMPANIES" shall be construed accordingly.
"INDEBTEDNESS"
means any obligation (whether incurred as principal or surety) for the
payment or repayment of money, whether present or future, actual or
contingent.
"INTEREST PERIOD"
means each period determined in accordance with Clause 8 (Interest
Periods).
"LEASES" OR "LEASE"
have the same meaning in the Assignment.
- ------------------------------------------------------------------------------
19
- ------------------------------------------------------------------------------
"LIBOR"
means, in relation to each Interest Period for any Advance, the rate
determined by the Agent to be either:
(a) the arithmetic mean (rounded, if necessary, to the nearest fifth
decimal place, and upwards if the sixth decimal place is a "5") of
the offered quotations in Sterling which appear on the display
designated as page "LIBP" of the Reuter Monitor Money Rates
Service (or such other page or service as may replace the LIBP
page or such service (as the case may be) for the purpose of
displaying London Interbank Offered Rates of leading banks) at or
about 11.00 a.m. on the first day of that Interest Period for the
offering of deposits in Sterling of an amount comparable to that
Advance and for a period comparable to that Interest Period; or
(b) if less than two quotations for the required period appear on such
display, or if no such display rate is available for Sterling, the
arithmetic mean (rounded, if necessary, to the nearest fifth
decimal place, and upwards if the sixth decimal place is a "5") of
the respective rates notified to the Agent by each of the
Reference Banks as the rate at which it is offered deposits in
Sterling for an amount comparable to that Advance and for a period
comparable to that Interest Period by prime banks in the London
Interbank Market at or about 11.00 a.m. on the first day of that
Interest Period.
"LICENSEE"
means Eastern Electricity plc (company number 2366906) or such other
member of the Group which, at any time, is the licensee under a PES
Licence or Generation Licence, any licence under section 7 of the Gas Act
1986 or any replacement of any such licence (or, if there is more than
one replacement licence, the most recent such replacement), in each case
as such licence is amended and/or extended from time to time.
"MAJORITY BANKS"
means, at any time, Banks:
(a) whose participations in an Advance then outstanding aggregate not
less than 66 2/3 per cent. of the aggregate principal amount then
outstanding; or
(b) if an Advance is not then outstanding, whose Commitments then
aggregate not less than 66 2/3 per cent. of the Total Commitments;
or
(c) if an Advance is not then outstanding and the Total Commitments
have been reduced to nil, whose Commitments aggregated not less
than 66 2/3 per cent. of the Total Commitments immediately before
the reduction.
"MANDATORY COST"
means the cost imputed to the Banks of compliance with the Mandatory
Liquid Assets requirements of the Bank of England and the Financial
Services Authority during an Interest Period, expressed as a rate per
annum and determined in accordance with Schedule 3.
- ------------------------------------------------------------------------------
20
- ------------------------------------------------------------------------------
"MARGIN"
means the percentage rate per annum determined under Clause 9.4 (Margin
adjustment).
"MATERIAL ADVERSE EFFECT"
means something which has or is reasonably likely to have a material
adverse effect on the ability of any Obligor or any member of the Group
to perform its respective obligations under the Finance Documents, the
Transaction Documents or the Relevant Lease Documents.
"NOVATION CERTIFICATE"
has the meaning given to it in Clause 27.3 (Procedure for novations).
"OBLIGOR"
means a Borrower or a Guarantor.
"PARENT ACQUISITION DATE"
shall mean the date as of which a person or group of related persons
first acquires more than 30% of the outstanding Voting Shares of Texas
Utilities Company (within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 of the United States of America, as
amended, and the applicable rules and regulations thereunder).
"PARTICIPANT"
means a person who is a party to a Participation Agreement or its
successors, permitted transferees or assigns and defined as a Participant
therein.
"PARTICIPATION AGREEMENTS"
means the participation agreements in respect of the participation by the
Banks in the rights and obligations of certain other banks identified as
"Banks" under the Assignment.
"PARTY"
means a party to this Agreement.
"PERMITTED ENCUMBRANCE"
means any Encumbrance:
(a) arising by virtue of the entry into by EMPL, EMGL or the
Guarantors of the Transaction Documents or the Cash
Collateralisation Documents or the performance of obligations in
accordance with the terms thereof;
(b) arising by operation of law in the ordinary course of business;
(c) over goods and/or documents of title thereto arising in the
ordinary course of letter of credit transactions;
- ------------------------------------------------------------------------------
21
- ------------------------------------------------------------------------------
(d) arising by way of retention of title to goods by the supplier of
those goods arising in the ordinary course of business;
(e) created after the date hereof provided that the Indebtedness
secured thereby, when aggregated with any other Indebtedness
secured by any subsisting Encumbrance permitted by (and only by)
this paragraph (e) and, for the avoidance of doubt, whether or not
such Indebtedness is in respect of any member of the Group, does
not at the time the latest such Indebtedness is incurred exceed an
amount equal to 15 per cent. of Consolidated Tangible Net Worth;
(f) created after the date hereof securing Borrowings which are not
repayable until a date falling in excess of fourteen years from
the date of creation of such encumbrance;
(g) existing on or created after the date hereof over an asset and/or
(where such asset comprises the whole or substantially the whole
of the assets of the owner thereof) shares or the like in the
owner of such asset, for the purpose of securing Indebtedness
incurred to acquire and/or develop such asset and/or shares or the
like, where such Indebtedness constitutes Project Finance
Borrowing;
(h) over or affecting any asset acquired by a member of the Group
after the date hereof and subject to which such asset is acquired,
provided that:
(i) such Encumbrance was not created at the request of any
member of the Group in contemplation of the acquisition of
such asset by a member of the Group; and
(ii) the amount thereby secured (or the amounts of the facility,
drawings under which are or would be thereby secured) has
not been increased at the request of any member of the
Group in contemplation of, or since the date of, the
acquisition of such asset by a member of the Group; or
(i) over or affecting any assets of any company which becomes a member
of the Group after the date hereof, where such Encumbrance is:
(i) created prior to the date on which such company becomes a
member of the Group provided that:
(A) such Encumbrance was not created at the request of
any member of the Group in contemplation of such
company becoming a member of the Group; and
(B) the amount thereby secured (or the amount of the
facility, drawings under which are or would be
thereby secured) has not been increased at the
request of any member of the Group in contemplation
of, or since the date of, such company becoming a
member of the Group; or
(ii) created after the date hereof with the prior written
consent of the Agent (acting in accordance with the
instructions of the Majority Banks) Provided that the
amount thereby secured (or the amount of the facility,
drawings under which
- ------------------------------------------------------------------------------
22
- ------------------------------------------------------------------------------
are or would be thereby secured) has not been increased
beyond the amount so consented to;
(i) any order of a court affecting any asset or assets of a member of
the Group to the extent that such order is discharged within 28
days after it is made and the consequences thereof would not
constitute an Event of Default; or
(k) any Encumbrance created by Peterborough Power Limited in favour of
a member of the Group in relation to the obtaining by Peterborough
Power Limited of financing of its assets; or
(l) any Encumbrance created or arising to secure any Indebtedness
incurred and applied in or towards the refinancing of any
Indebtedness secured by a Permitted Encumbrance but only to the
extent that:
(i) the amount of Indebtedness secured by such Encumbrance (or
the amount of the facility, drawings under which are or
would be thereby secured) does not exceed the amount
secured by such Permitted Encumbrance at the date of the
refinancing; and
(ii) the amount secured by such Permitted Encumbrance is thereby
reduced by an amount equal to the amount secured by such
Encumbrance; or
(m) any Encumbrance consisting of a contractual right (in personam and
not in rem) restricting the repayment of:
(i) cash deposits made by way of support of counter-indemnity
obligations of a member of the Group in respect of
guarantees given or analogous contingent liabilities
incurred by the holder of such cash deposits for the
account of a member of the Group; and/or
(ii) credit balances on bank accounts as part of general Group
banking arrangements having as their intention or effect
the netting of exposure of the bank to members of the
Group.
"PES LICENCE"
means the licence granted to EE by the Secretary of State under section 6
of the Act authorising EE to supply electricity within an authorised area
to the public, or any replacement granted from time to time to EG or any
one or more of its Subsidiaries (or, if more than one replacement, the
most recent such replacement), each as amended or modified from time to
time.
"POOLING AND SETTLEMENT AGREEMENT"
means the agreement originally dated 30th March, 1990, as amended and
restated from time to time and as may be further amended from time to
time, made by EE and EGL with The National Grid Company plc and others
setting out the rules and procedures for the operation of an electricity
trading pool and of a settlement system, as further amended from time to
time.
- ------------------------------------------------------------------------------
23
- ------------------------------------------------------------------------------
"PRICE"
has the same meaning as in the Assignment.
"PRINCIPAL SUBSIDIARY"
means, at any time, EGL, EE and any other member of the Group (other than
a member of the Group whose only Borrowing(s) is or are Project Finance
Borrowing):
(i) whose (a) profits before tax or (b) gross assets represent 15 per
cent. or more of the consolidated net profits before tax of the
Group or, as the case may be, consolidated gross assets of the
Group in each case as calculated by reference to the most recently
published audited financial statements of such Subsidiary
(consolidated in the case of a company which itself has Subsidiary
Undertakings and which is required by the Companies Act 1985 to
prepare consolidated accounts) and the then most recently
published audited consolidated financial statements of EG; or
(ii) to which is transferred all or substantially all of the business,
undertaking or assets of a Subsidiary of EG which imme6ately prior
to such transfer is a Principal Subsidiary, whereupon the
transferor Subsidiary shall immediately cease to be a Principal
Subsidiary and the transferee Subsidiary shall become. a Principal
Subsidiary but shall cease to be a Principal Subsidiary by virtue
only of this paragraph (ii) upon publication of its next audited
financial statements.
"PROJECT FINANCE BORROWING"
means, at any date, any Indebtedness to finance or refinance, or in
respect of the financing or refinancing of, a project:
(a) which is or has been incurred by a single purpose company (whether
or not a member of the Group) whose principal assets and business
are, at such date, constituted by such project and whose
liabilities in respect of such Indebtedness are, at such date, not
directly or indirectly the subject of a guarantee, indemnity or
other form of assurance, undertaking or support (having
substantially similar effect to a guarantee or indemnity) from any
member of the Group except as expressly referred to in paragraph
(c)(iii) below; or
(b) which is or has been incurred by a member of the Group in its
capacity as a partner in, and whose only asset is its interest in,
a single purpose partnership where the partnership's principal
assets and business are, at that date, constituted by such project
and where the liabilities of such Group member in respect of such
Indebtedness are not, at that date, directly or indirectly the
subject of a guarantee, indemnity or other form of assurance,
undertaking or support (having substantially similar effect to a
guarantee or indemnity) from any other member of the Group except
as expressly referred to in paragraph (c)(iii) below; or
(c) in respect of which the person or persons to whom such
Indebtedness is or may be owed by the obligor in respect of such
Indebtedness (whether or not a member of the Group) have no
recourse whatsoever to any member of the Group for the repayment
of or payment of any sum relating to such Indebtedness other than:
- ------------------------------------------------------------------------------
24
- ------------------------------------------------------------------------------
(i) recourse to such obligor for amounts limited to the
aggregate cash flow or net cash flow (other than historic
cash flow or historic net cash flow) from such project;
and/or
(ii) recourse to such obligor for the purpose only of enabling
amounts to be claimed in respect of such Indebtedness in an
enforcement of any Encumbrance given by such obligor over
the assets comprised in such project (or, where such an
obligor is a single purpose company or a member of the
Group as described in sub-clause (b) given by any
shareholder or the like in the obligor over its shares or
the like in the capital of the obligor) to secure such
Indebtedness or any recourse referred to in (iii) below,
provided that (A) the extent of such recourse to such
obligor is limited solely to the amount of any recoveries
made on such enforcement, and (B) such person or persons
are not entitled, by virtue of any right or claim arising
out of or in connection with such Indebtedness, to commence
proceedings for the winding up or dissolution of the
obligor or to appoint or procure the appointment of any
administrator, receiver, administrative receiver, trustee
or similar person or official in respect of the obligor or
any of its assets (save for the assets the subject of such
Encumbrance); and/or
(iii) recourse to such obligor generally, or directly or
indirectly to a member of the Group, under any form of
assurance, undertaking or support, which recourse is
limited to a claim for damages (other than liquidated
damages and damages required to be calculated in a specific
way) for breach of an obligation (not being a payment
obligation or an obligation to procure payment by another
or an obligation to comply or to procure compliance by
another with any financial ratios or other tests of
financial condition) by the person against whom such
recourse is available.
"PROPERTIES"
means each of the properties known as West Burton, Ironbridge and Rugeley
B. Power Stations, High Marnham Power Station and Drakelow Power Station
and as such properties are referred to in the Head Leases and "PROPERTY"
shall be construed accordingly.
"QUALIFYING LENDER"
means a person which is a bank as defined in section 840A of the Income
and Corporation Taxes Act 1988 and which is within the charge to U.K.
corporation tax as regards any interest received by it under this
Agreement.
"QUALIFYING PREFERENCE SHARES"
means on any date preference shares of EG or any member of the Group
expressed (whether by law, agreement or otherwise) to be redeemable at
the option of the issuer, any other person or otherwise on or before the
date three years after that date.
"QUOTA RIGHTS"
has the same meaning as in the Head Lease entered into with National
Power PLC as Head Landlord.
- ------------------------------------------------------------------------------
25
- ------------------------------------------------------------------------------
"REFERENCE BANKS"
means, subject to Clause 27.4 (Reference Banks), the principal London
offices of The Royal Bank of Scotland plc, Barclays Bank PLC and The
Toronto-Dominion Bank.
"RELEVANT LEASE DOCUMENTS"
has the same meaning as in the Guarantee and Indemnity.
"RELEVANT PERSON"
means EG's ultimate Holding Company and any Subsidiary of that Holding
Company other than EG and any Subsidiary of EG
"REMAINING RENT DAY"
has the same meaning as in the Assignment.
"RENT DAY"
has the same meaning as in the Assignment.
"RENTS"
has the same meaning as in the Assignment.
"REPAYMENT DATE"
means each date shown under the heading "Repayment Date" in Schedule 6.
"REPAYMENT INSTALMENT"
means each instalment for repayment in accordance with Clause 6
(Repayment).
"REQUEST"
means a request made by a Borrower for an Advance, substantially in the
form of Schedule 4.
"SECOND-TIER SUPPLY BUSINESS"
has the same meaning as in the PES Licence.
"SECRETARY OF STATE"
means the President of the Board of Trade (Secretary of State for Trade
and Industry) from time to time or such other person as may for the time
being be fulfilling the functions of the Secretary of State under the
Act.
- ------------------------------------------------------------------------------
26
- ------------------------------------------------------------------------------
"STERLING" OR "(Pound)"
means the lawful currency for the time being of the United Kingdom.
"SUBORDINATED DEBT"
means Indebtedness incurred expressly on terms which to the reasonable
satisfaction of the Agent (acting on the instructions of the Majority
Banks):
(a) prohibit repayment or prepayment of any principal amounts
thereof (including capitalised interest) prior to 1st
April, 2006; and
(b) prohibit the holder of that Indebtedness from exercising
any rights or remedies which it might otherwise have to
recover such Indebtedness prior to 1st April, 2006; and
(c) provide that in the event of the insolvency, liquidations
dissolution or other insolvency proceeding the Indebtedness
shall be subordinate in right of payment to all liabilities
of the Obligors to the agent, the banks, the participation
agent and the Participants under the Transaction Documents.
"SUBSIDIARY"
shall have the meaning given to it in Section 736 of the Companies Act
1985 and
"SUBSIDIARIES" shall be construed accordingly.
"SUBSIDIARY UNDERTAKING"
shall have the meaning given to it in Section 258 of the Companies Act
1985.
"SUPPLEMENTAL AGREEMENT"
means the agreement dated 17th July, 1998 between the Obligors and the
Finance Parties.
"SUPPLY BUSINESS"
has the same meaning as in the PES Licence.
"TERM DATE"
means 28th July, 2001 or, if this date is not a Business Day, the
immediately preceding Business Day.
"TOTAL COMMITMENTS"
means the aggregate for the time being of the Commitments, being
(pound)725,125,475 (as reduced, whether actually or notionally in
accordance with the Notional Repayment Amounts set out in Schedule 6) at
the date of the Supplemental Agreement.
"TOTAL CONSOLIDATED NET BORROWINGS"
means, at any time, the aggregate principal amount of all Borrowings of
the Group less Cash.
- ------------------------------------------------------------------------------
27
- ------------------------------------------------------------------------------
"TRANSACTION DOCUMENTS"
has the same meaning as in the Assignment.
"T.U. COMPANY"
means each of T.U. Finance (No. 1) Limited (company number 3505836), T.U.
Finance (No. 2) Limited (company number 3514100) and T.U. Acquisitions
PLC (company number 3455523),
"VOTING SHARES"
means outstanding shares of capital stock of any class of Texas Utilities
Company entitled to vote in the election of directors, excluding shares
entitled so to vote only upon the happening of some contingency.
"WHOLLY-OWNED SUBSIDIARY"
shall have the meaning given to it in Section 736 of the Companies Act
1985.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a
reference to:
(i) "ASSETS" includes properties, revenues and rights of every
description;
an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing and
registration;
a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month, except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last day in that calendar month;
a "PERSON" includes any individual, firm, company,
corporation, government, state or agency of a state or any
undertaking (within the meaning of Section 259(l) of the
Companies Act 1985) or other joint venture organisation or
association (whether or not having separate legal
personality) or any two or more of the foregoing;
a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental body, agency, department
or regulatory, self-regulatory or other authority or
organisation;
"TAX" includes any present or future tax, charge, levy,
impost, duty, deduction or withholding of any kind
whatsoever, or any amount payable on account of or as
security for any of the foregoing, payable at the instance
of or imposed by any statutory, governmental,
international, supranational, state, federal, provincial,
local or municipal authority, agency, body or department
whatsoever, together with any
- ------------------------------------------------------------------------------
28
- ------------------------------------------------------------------------------
penalties, additions. lien, surcharges or interest relating
thereto (and "TAXES", "TAXATION" and cognate expressions
shall be construed accordingly); and
"WINDING-UP" of any person includes its dissolution and/or
liquidation and/or any equivalent or analogous proceedings
under the law of any jurisdiction in which the person
concerned is incorporated, registered, resident,
established, carries on business or has assets or to which
that person is subject;
(ii) a provision of law is a reference to that provision as
amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a
schedule to this Agreement;
(iv) a person includes its successors and permitted assigns;
(v) a Finance Document or another document is a reference to
that Finance Document or other document as amended, novated
or supplemented; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any other
Finance Document or in any notice given under or in connection
with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored in construing this
Agreement.
(d) Barclays Capital is the investment banking division of Barclays
Bank PLC and all references to Barclays Capital include Barclays
Bank PLC. This paragraph does not affect the rights and
obligations of Barclays Bank PLC under the Finance Documents.
2. THE FACILITY
2.1 FACILITY
(a) Subject to the terms of this Agreement, the Banks agree to advance
to the Borrowers during the Commitment Period an aggregate
principal amount up to but not exceeding the Total Commitments. No
Bank is obliged to participate in a Advance if, as a result, the
aggregate amount of (i) its participation in all Advances and (ii)
the outstanding principal amount of all advances made by it under
the Participation Agreements would exceed its Commitment.
(b) The Total Commitments will reduce on each Repayment Date by the
amount shown opposite that date under the heading "Notional
Repayment Amount" in Schedule 6. Such reduction in the Total
Commitments shall, on each Repayment Date, be applied against the
Commitment of each Bank pro rata.
2.2 NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS
(a) The obligations of a Finance Party under the Finance Documents are
several. Failure of a Finance Party to carry out those obligations
does not relieve any other Party of its obligations
- ------------------------------------------------------------------------------
29
- ------------------------------------------------------------------------------
under the Finance Documents. No Finance Party is responsible for
the obligations of any other Finance Party under the Finance
Documents.
(b) The rights of a Finance Party under the Finance Documents are
divided rights. A Finance Party may, except as otherwise stated in
the Finance Documents, separately enforce those rights.
3. PURPOSE
Each Advance shall be applied for the general corporate purposes
of the relevant Borrower. Without affecting the obligations of any
Obligor in any way, no Finance Party is bound to monitor or verify
the application of any Advance.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of each Finance Party to any Obligor under this
Agreement are subject to the condition precedent that the Agent
has notified the Borrowers and the Banks that it has received all
of the documents, or is satisfied as to the matters, set out in
Part I of Schedule 2, in form and substance satisfactory to the
Agent.
4.2 FURTHER CONDITIONS PRECEDENT
The obligation of each Bank to make any amount available under
Clause 5.3 (Advance) is subject to the further conditions
precedent that:
(a) on both the date of the Request and the Drawdown Date:
(i) the representations and warranties in Clause 17
(Representations and warranties) to be repeated on
those dates are correct and will be correct
immediately after the Advance is made; and
(ii) no Default is outstanding or might result from the
making of the Advance; and
(iii) no Event of Default or Potential Event of Default
has occurred under the Guarantee and Indemnity (as
such terms are defined therein);
and
(b) no later than the time the Advance is made available, each
Bank shall have received a repayment of the principal
amount of one or more advances made by it under
Participation Agreements, in an aggregate amount equal to
the aggregate amount of that Bank's participation in that
Advance and all previous Advances, together with all
accrued interest, fees, costs and expenses owing to that
Bank under the Participation Agreements in connection with
such advances.
- ------------------------------------------------------------------------------
30
- ------------------------------------------------------------------------------
5. DRAWDOWN
5.1 COMMITMENT PERIOD
A Borrower may request an Advance during the Commitment Period if
the Agent receives, not later than 10:30 a.m., 2 Business Days
before the proposed Drawdown Date, a duly completed Request. The
undrawn amount (if any) of the Total Commitments shall
automatically be cancelled at close of business on the Term Date.
5.2 COMPLETION OF REQUESTS
A Request will not be regarded as having been duly completed
unless:
(a) the Drawdown Date is a Business Day falling on or before
the Term Date;
(b) the principal amount of the Advance is a minimum of
(pound)10,000,000 and an integral multiple of
(pound)l.000,000 or the balance of the undrawn Total
Commitments;
(c) the first Interest Period selected complies with Clause 8
(Interest Periods); and
(d) the payment instructions comply with Clause 10 (Payments).
Each Request must specify one Advance only, but the Borrowers may,
subject to the other terms of this Agreement, deliver more than
one Request on any one day.
5.3 ADVANCE
The Agent shall promptly notify each Bank of the details of the
requested Advance. Subject to the terms of this Agreement, each
Bank shall make its participation in the Advance available to the
Agent for the Borrower on the relevant Drawdown Date. The amount
of a Bank's participation in an Advance will be the proportion of
the Advance which its Commitment bears to the Total Commitments on
the proposed Drawdown Date.
6. REPAYMENT
6.1 REPAYMENT INSTALMENTS
(a) On each Repayment Date falling after the Drawdown Date of
the first Advance the Borrower shall make a Repayment
Instalment calculated, subject to paragraph (b) below, as
follows:
RI= A x NRA
-
O
Where:
"RI " is the amount of the Repayment Instalment;
"A" is the aggregate amount of Advances drawn down
hereunder;
- ------------------------------------------------------------------------------
31
- ------------------------------------------------------------------------------
"NRA" is the amount shown opposite the relevant Repayment
Date under the heading "Notional Repayment Amount" in
Schedule 6;
"O" is (pound)1,057,395,522 less the aggregate of all
----
amounts under the heading "Notional Repayment Amount" in
Schedule 6 for each Repayment Date before the relevant
Repayment Date on which that Repayment Instalment is to be
made.
Any outstanding Advance shall be repaid in full on 28th
October, 2001.
(b) If there is any cancellation or prepayment under this
Agreement which affects the calculation of the Repayment
Instalments under paragraph (a) above, the Borrowers and
the Agent shall agree in good faith a revised schedule of
"Notional Repayment Amounts" to replace Schedule 6, so as
to leave the Parties in no better or worse position under
this Agreement
6.2 DESIGNATION
The Agent shall designate which of the Advances (or which part of
the Advances) shall be repaid in order to satisfy each Repayment
Instalment.
7. PREPAYMENT AND CANCELLATION
7.1 VOLUNTARY PREPAYMENT
A Borrower may, by giving not less than 14 days' prior written
notice to the Agent, prepay any Advance on the last day of an
Interest Period for that Advance in whole or in part (but, if in
part, being a minimum of (pound)10,000,000 and an integral
multiple of (pound)l,000.000). Any such prepayment shall be
applied against the Repayment Instalments in inverse order of
maturity.
7.2 CANCELLATION
(a) Either Borrower may, by giving not less than 14 days' prior
written notice to the Agent, cancel the undrawn amount of
the Total Commitments in whole or in part (but, if in part,
being a minimum of (pound)10,000,000 and an integral
multiple of (pound)1,000,000).
(b) Notwithstanding paragraph (a) above, if a Borrower has made
a repayment or prepayment (in whole or in part) to a Bank
of the principal amount of one or more advances made by
that Bank in its capacity as a Participant under the
Participation Agreements or in its capacity as a "Bank"
under (and as defined in) the Assignment and that repayment
or prepayment has not been funded in whole by an Advance
that Borrower shall, within 5 Business Days, notify the
Agent of the amount of that repayment or prepayment which
has not been funded by an Advance (the "Relevant Amount").
On the date falling 5 Business Days from that notice, the
Total Commitments shall be cancelled in an amount equal to
the Relevant Amount.
(c) Any cancellation in part shall be applied against the
Commitment of each Bank pro rata.
- ------------------------------------------------------------------------------
32
- ------------------------------------------------------------------------------
7.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
if:
(a) an Obligor is required to pay to a Bank any additional
amounts under Clause 11 (Withholdings); or
(b) an Obligor is required to pay to a Bank any amount under
Clause 13 (Increased costs); or
(c) interest on a Bank's participation in an Advance made to a
Borrower is being calculated in accordance with Clause 12.3
(Failure to agree alternative basis),
then, without prejudice to the obligations of any Obligor under
those Clauses, EG may, whilst the circumstances continue, serve a
notice of prepayment and cancellation on that Bank through the
Agent. On the date falling 2 Business Days after the date of
service of the notice:
(i) each Borrower shall prepay that Bank's participation in all
the Advances made to it; and
(ii) that Bank's undrawn Commitment shall be cancelled.
7.4 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement
is irrevocable. The Agent shall notify the Banks promptly of
receipt of any such notice.
(b) All prepayments under this Agreement shall be made together with
accrued interest on the amount prepaid.
(c) No prepayment or cancellation is permitted except in accordance
with the express terms of this Agreement.
(d) No amount repaid or prepaid under this Agreement may subsequently
be re-borrowed. No amount of the Total Commitments cancelled or
reduced under this Agreement may subsequently be reinstated.
8. INTEREST PERIODS
8.1 SELECTION
(a) The Borrower may select an Interest Period for an Advance in
either the relevant Request or, if the Advance has been drawn, a
notice received by the Agent not later than 10:30 a.m. 2 Business
Days before the commencement of that Interest Period. Each
Interest Period for an Advance will commence on its Drawdown Date
or the expiry of its preceding Interest Period.
(b) Subject to the following provisions of this Clause 8 (Interest
Periods), each Interest Period will be either an approved duration
or an optional duration as so selected under paragraph (a) above.
- ------------------------------------------------------------------------------
33
- ------------------------------------------------------------------------------
In this Clause 8 (Interest Periods):
"APPROVED DURATION" means 3 months; and
"OPTIONAL DURATION" means any other period agreed by the Banks.
(c) If a Borrower fails to select an Interest Period for an
outstanding Advance in accordance with paragraph (a) above, that
Interest Period will, subject to the other provisions of this
Clause 8 (Interest Periods), be 3 months.
8.2 SELECTION OF AN OPTIONAL DURATION
(a) If a Borrower selects an Interest Period of an optional duration,
it may also select an Interest Period of an approved duration to
apply if the selection of an optional duration becomes ineffective
in accordance with paragraph (b) below.
(b) If:
(i) a Borrower requests an Interest Period of an optional
duration; and
(ii) the Agent receives notice from a Bank not later than 11:00
a.m. on the first day of the Interest Period that matching
deposits may not, in its opinion, be available to it in the
London interbank market to fund its participation in the
Advance for that Interest Period,
the Interest Period for that Advance shall be 3 months or such
other period agreed by all the Banks. In this event, the Agent
shall promptly notify the Borrower and the Banks of the new
Interest Period for the Advance.
8.3 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next
Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).
8.4 CONSOLIDATION
Notwithstanding Clause 8.1 (Selection), the first Interest Period
for an Advance shall end on the same day as the current Interest
Period for any other Advance. On the last day of those Interest
Periods, those Advance shall be consolidated and treated as one
Advance.
8.5 COINCIDENCE WITH REPAYMENT DATES
If an Interest Period would otherwise overrun the final Repayment
Date, it shall be shortened so that it ends on that Repayment
Date. The Agent may also shorten any Interest Period for any
Advance (and may redesignate any Advance as two Advances) to
ensure that the aggregate principal amount of Advances with an
Interest Period ending on a Repayment Date is not less than the
Repayment Instalment due on that Repayment Date.
- ------------------------------------------------------------------------------
34
- ------------------------------------------------------------------------------
8.6 OTHER ADJUSTMENTS
The Agent and EG may enter into such other arrangements as they
may agree for adjustment of Interest Periods and the consolidation
and/or splitting of Advances.
8.7 NOTIFICATION
The Agent shall notify the relevant Borrower and the Banks of the
duration of each Interest Period promptly after ascertaining its
duration.
9. INTEREST
9.1 INTEREST RATE
The rate of interest on an Advance for each of its Interest
Periods is the rate per annum determined by the Agent to be the
aggregate of the applicable:
(a) Margin;
(b) LIBOR; and
(c) Mandatory Cost,
Provided that, in the event of a change in the Margin occurring during an
Interest Period, the rate of interest applying to an Advance outstanding
during such Interest Period shall be adjusted accordingly on the date of
such change.
9.2 DUE DATES
Except as otherwise provided in this Agreement, accrued interest
on an Advance is payable by the relevant Borrower on the last day
of each Interest Period for that Advance and also, if the Interest
Period is longer than 3 months, at 3 monthly intervals during that
Interest Period.
9.3 DEFAULT INTEREST
(a) If an Obligor falls to pay any amount payable by it under this
Agreement, it shall forthwith on demand by the Agent pay interest
on the overdue amount from the due date up to the date of actual
payment, as well after as before judgment, on the basis that the
overdue amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Interest Periods of such duration as the Agent may
determine (each a "DESIGNATED INTEREST PERIOD") and at a rate (the
"DEFAULT rate") determined by the Agent to be the aggregate of
LIBOR for such Designated Interest Period and 2 per cent. per
annum (plus Mandatory Cost for such Designated Interest Period, if
the overdue amount is denominated in Sterling).
(b) The default rate will be determined by the Agent on each Business
Day or the first day of, or 2 Business Days before the first day
of, the relevant Designated Interest Period, as appropriate.
(c) If the Agent determines that deposits in the currency of the
overdue amount are not at the relevant time being made available
by the Reference Banks to leading banks in the London
- ------------------------------------------------------------------------------
35
- ------------------------------------------------------------------------------
interbank market, the default rate will be determined by reference
to the cost of funds to the Agent from whatever sources it may
select.
(d) Default interest will be compounded at the end of each Designated
Interest Period.
9.4 MARGIN ADJUSTMENT
(a) Subject to paragraph (b) below, for an Interest Period of an
Advance, if the ratio of Total Consolidated Net Borrowings to
Adjusted Consolidated Tangible Net Worth (each as calculated by
the Agent by reference to the accounts or half yearly accounts
most recently delivered to the Agent under Clause 18.1(a) and (b)
(Undertakings) on or prior to the first day of that Interest
Period) is within a range set out in Column I below, the Margin
for that Interest Period shall be the rate per annum set out in
Column II below opposite that range:
COLUMN I COLUMN II
Greater than 125% 0.75% per annum
Greater than 100% but less than 0.625% per annum
or equal to 125%
100% or less 0.5% per annum
(b) For the purposes of calculating the Margin, the ratio of Total
Consolidated Net Borrowings to Adjusted Consolidated Tangible Net
Worth shall be deemed to be greater than 100% at all times from
the Effective Date (as defined in the Supplemental Agreement) to
the date falling 6 months from that Effective Date.
9.5 NOTIFICATION
The Agent shall promptly notify each relevant Party of the
determination of a rate of interest under this Agreement.
10. PAYMENTS
10.1 PLACE
All payments by an Obligor or a Bank under this Agreement shall be
made to the Agent to its account at such office or bank in London
as it may notify to that Obligor or Bank for this purpose.
10.2 FUNDS
Payments under this Agreement to the Agent shall be made for value
on the due date at such times and in such funds as the Agent may
specify to the Party concerned as being customary at the time for
the settlement of transactions in Sterling.
10.3 DISTRIBUTION
(a) Each payment received by the Agent under this Agreement for
another Party shall, subject to paragraphs (b) and (c) below, be
made available by the Agent to that Party by payment (on the date
and in the currency and funds of receipt) to its account with such
office or bank in the
- ------------------------------------------------------------------------------
36
- ------------------------------------------------------------------------------
principal financial centre of the country of the relevant currency
as it may notify to the Agent for this purpose by prior written
notice.
(b) The Agent may apply any amount received by it for an Obligor in or
towards payment (on the date and in the currency and funds of
receipt) of any amount due from an Obligor under this Agreement or
in or towards the purchase of any amount of any currency to be so
applied.
(c) Where a sum is to be paid to the Agent under this Agreement for
another Party, the Agent is not obliged to pay that sum to that
Party until it has established that it has actually received that
sum. The Agent may, however, assume that the sum has been paid to
it in accordance with this Agreement, and, in reliance on that
assumption, make available to that Party a corresponding amount.
If the sum has not been made available but the Agent has paid a
corresponding amount to another Party, that Party shall forthwith
on demand by the Agent refund the corresponding amount together
with interest on that amount from the date of payment to the date
of receipt, calculated at a rate determined by the Agent to
reflect its cost of funds.
10.4 CURRENCY
(a) Amounts payable in respect of costs, expenses and taxes and the
like are payable in the currency in which they are incurred.
(b) Any other amount payable under this Agreement is, except as
otherwise provided in this Agreement, payable in Sterling.
10.5 SET-OFF AND COUNTERCLAIM
All payments made by an Obligor under this Agreement shall be made
without set-off or counterclaim.
10.6 NON-BUSINESS DAYS
(a) If a payment under this Agreement is due on a day which is not a
Business Day, the due date for that payment shall instead be the
next Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal
under this Agreement interest is payable on that principal at the
rate payable on the original due date.
10.7 PARTIAL PAYMENTS
(a) If the Agent receives a payment insufficient to discharge all the
amounts then due and payable by the Obligors under this Agreement,
the Agent shall apply that payment towards the obligations of the
Obligors under this Agreement in the following order:
(i) FIRST, in or towards payment pro rata of any unpaid costs
and expenses of the Agent properly incurred under this
Agreement;
(ii) SECONDLY, in or towards payment pro rata of any accrued
interest due but unpaid under this Agreement;
- ------------------------------------------------------------------------------
37
- ------------------------------------------------------------------------------
(iii) THIRDLY, in or towards payment pro rata of any principal
due but unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum
due but unpaid under this Agreement.
(b) The Agent shall, if so directed by all the Banks, vary the order
set out in sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above shall override any appropriation made
by an Obligor.
11. WITHHOLDINGS
11.1 GROSS-UP
(a) Save as may be required by law, all payments to be made by any of
the Obligors and by the Agent to the Banks under the Finance
Documents shall be made without set-off or counterclaim and free
from any present or future taxes, levies, imposts, duties,
charges, fees, deductions or withholdings whatsoever (each a
"WITHHOLDING"). Subject to Clause 11.2 below, EG hereby covenants
with the Finance Parties that if any person is required by law to
make any Withholding from any such payment EG will pay to the
relevant Finance Party such additional amounts as may be necessary
to ensure that the Finance Party receives and retains an amount
equal to the full amount it would have received had such payment
not been made subject to any Withholding provided that EG shall
not be required to pay any additional amount under this Clause
11.1 in respect of any Withholding imposed by law in relation to
any payment of interest under Clause 9 (Interest) where such
Withholding would not have been so imposed if the person
beneficially entitled to such interest had been a Qualifying
Lender (unless such person was not a Qualifying Lender as a result
of the introduction of or any change in, or in the interpretation
or application of, any relevant law or any relevant practice of
the Inland Revenue after this Agreement is entered into).
(b) Each of the Banks and the Agent agrees to co-operate to the extent
that it is reasonably able to do so, in seeking in enable any
payment to be made without any such withholding, by supplying any
necessary documents and information to the Inland Revenue or other
appropriate authority on receipt of a request in writing from the
payer specifically identifying the document or the nature of the
information to be so supplied.
11.2 TAX CREDIT
If and to the extent that EG pays any additional amount under
clause 11.1 and any Finance Party receives and retains the benefit
of a refund of tax or credit against tax which is identified by
the Finance Party (acting in good faith) as attributable to the
payment made or the amount that was withheld or deducted, then
that Finance Party shall, to the extent it is able to do so
without prejudicing its ability to retain such refund or credit,
reimburse to EG such amount as it shall determine in good faith so
as to leave the Finance Party, after the reimbursement, in no
better or worse position than it would have been in if the
Withholding had not been required. No Finance Party shall be
obliged to disclose any information regarding its tax affairs or
computations to EG or restrict its ability to organise its tax
affairs as it sees fit and its certificate as to the amount to be
reimbursed shall, in the absence of manifest error, be prima facie
evidence thereof.
- ------------------------------------------------------------------------------
38
- ------------------------------------------------------------------------------
12. MARKET DISRUPTION
12.1 MARKET DISRUPTION
If, in relation to an Advance, adequate and fair means do not (as
a result of circumstances affecting the London interbank market
generally) exist for ascertaining LIBOR, then:
(a) the Agent shall promptly notify the Borrowers of such
event; and
(b) notwithstanding, such Advance shall be made and the amount
of interest payable in respect of such Advance shall be
determined in accordance with the following provisions of
this Clause 12 (Market Disruption).
12.2 ALTERNATIVE BASIS FOR AN OUTSTANDING ADVANCE
The Agent shall, promptly after giving the notice referred to in
Clause 12.1 (Market disruption), negotiate in good faith with the
relevant Borrower with a view to agreeing an alternative basis for
calculating the interest payable on the relevant Advance and any
such alternative basis that is so agreed within 7 Business Days
shall take effect in accordance with its terms and be binding on
each Party.
12.3 FAILURE TO AGREE ALTERNATIVE BASIS
If no such alternative basis is agreed pursuant to Clause 12.2
(Alternative basis for an outstanding Advance), the relevant
Borrower shall pay interest to the Agent for the account of each
of the Banks on the amount of such Bank's participation in any
such Advance at the rate per annum determined by the Agent to be
the sum of the Margin, the Mandatory Cost in respect thereof at
such time and the amount certified by such Bank as being the cost
to such Bank (expressed as a rate per annum) of funding its
participation in such Advance from whatever source it may
reasonably select.
12.4 DISRUPTION CEASES
The Agent and the Banks agree that, once the circumstances
referred to in Clause 12.1 (Market disruption) no longer exist,
they will as soon as is practicable thereafter revert to the
normal procedure under this Agreement for the determination of the
rate of interest applicable to future Interest Periods.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.2 (Exceptions), EG shall forthwith on
demand by a Finance Party pay to that Finance Party the
amount of any increased cost incurred by it as a result of
the introduction of, or any change in, any law or
regulation (including any law or regulation relating to
taxation, or reserve asset, special deposit, cash ratio,
liquidity or capital adequacy requirements or any other
form of banking or monetary control whether or not having
the force of law but, if not having the force of law, with
which persons to whom such requirement or control are
intended to apply are accustomed to comply) provided that:
- ------------------------------------------------------------------------------
39
- ------------------------------------------------------------------------------
(i) if such Finance Party makes such demand more than 90
days after such Finance Party becomes aware of the
circumstances giving rise to such claim, no payment
shall be made under this Clause 13.1 (Increased
costs) in respect of any period before such demand
was made; and
(ii) no payment shall be made under this Clause 13.1
(Increased costs) in respect of any such increased
cost incurred by a Holding Company of any Finance
Party to the extent that such increased cost would
not have been incurred by that Finance Party had it
not been a Subsidiary of that Holding Company.
(b) In this Agreement "INCREASED COST" means:
(i) an additional cost incurred by a Finance Party or a
Holding Company of such Finance Party as a result of
the Finance Party having entered into, or
performing, maintaining or funding its obligations
under, this Agreement; or
(ii) that portion of an additional cost incurred by a
Finance Party or a Holding Company of such Finance
Part in making, funding or maintaining all or any
advances comprised in a class of advances formed by
or including its participations in an Advance made
or to be made under this Agreement as is
attributable to it making, funding or maintaining
those participations; or
(iii) a reduction in any amount payable to a Finance Party
or a Holding Company of such Finance Party or the
effective return to a Finance Party or a Holding
Company of such Finance Party under this Agreement
or on its capital; or
(iv) the amount of any payment made by a Finance Party or
a Holding Company of such Finance Party, or the
amount of any interest or other return foregone by a
Finance Party or a Holding Company of such Finance
Party, calculated by reference to any amount
received or receivable by that Finance Party or a
Holding Company of such Finance Party from any other
Party under this Agreement.
13.2 EXCEPTIONS
Clause 13.1 (Increased costs) does not apply to any increased
cost:
(a) compensated for by the payment of the Mandatory Cost;
(b) compensated for by the operation of Clause 11
(Withholdings); or
(c) attributable to any change in the rate of tax on the
overall net income of a Bank (or the overall net income of
a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or Facility
Office for the time being is situate.
13.3 CERTIFICATE
If any Finance Party intends to require EG to make any payment
pursuant to Clause 13.1 (Increased costs), it shall deliver to the
Agent a certificate specifying in reasonable detail the event by
reason of which it is entitled to make such a claim, the amount of
such claim and bases and computation of the claim whereupon the
Agent shall notify EG thereof; provided that
- ------------------------------------------------------------------------------
40
- ------------------------------------------------------------------------------
nothing herein shall require any Finance Party to disclose any
confidential information relating to the organization of its
affairs.
14. ILLEGALITY
14.1 ILLEGALITY
If at any time it becomes unlawful, or contrary to any request
from or requirement of any fiscal, monetary or other authority to
or in relation to banks generally (whether or not having the force
of law but, if not having the force of law, with which the persons
to whom such request or requirement is intended to apply are
accustomed to comply) for any Bank to make, fund or allow to
remain outstanding all or any of the Advances made or to be made
by it hereunder, then such Bank shall, promptly after becoming
aware of the same, deliver to EG through the Agent a certificate
to that effect and, unless such illegality is avoided in
accordance with Clause 15 (Mitigation):
(a) such Bank shall not thereafter be obliged to participate in
any Advance and the amount of its Commitment shall be
immediately reduced to zero; and/or
(b) if the Agent on behalf of such Bank so requires, each
Borrower shall on such date as the Agent shall have
specified (being the latest date by which the relevant law
requires the same be repaid), repay such Bank's
participation in each outstanding Advance together with
accrued interest thereon and pay all other amounts owing to
such Bank in respect of its participation in the facility
provided under this Agreement.
14.2 APPLICATION
Any repayment under Class14.1(b) (Illegality) shall be applied
rateably against the Repayment Installments which remain due at
the time of such repayment.
15. MITIGATION
If, in respect of any Bank, circumstances arise which would or
would upon the giving of notice result in:
(a) the cancellation of its undrawn Commitment pursuant to
Clause 14(b) (Illegality);
(b) an increase in the amount of any payment to be made to such
Bank or for its account pursuant to Clause 11.1 (Gross-up);
or
(c) a claim for payment pursuant to Clause 13.1 (Increased
costs),
then, without in any way limiting, reducing or otherwise
qualifying the rights of such Bank or the obligation or any
Obligor under any of the Clauses referred to in (a), (b) or
(c) above, such Bank shall promptly upon becoming aware of
the same notify the Agent thereof and, in consultation with
the Agent and EG and to the extent that it can do so
without prejudice to its own position, take such steps as
shall be reasonable to mitigate the effects of such
circumstances including the transfer of its Facility Office
or the transfer of its rights and obligations hereunder to
another financial institution acceptable to EG and willing
to participate in the Facility provided under this
Agreement, provided that such Bank shall be
- ------------------------------------------------------------------------------
41
- ------------------------------------------------------------------------------
under no obligation to take any such action if, in the
reasonable opinion of such Bank, to do so would or might
have any adverse effect upon its business, operations or
financial condition.
16. GUARANTEE
16.1 GUARANTEE
Each Guarantor irrevocably, unconditionally, joint and severally:
(a) as principal obligor guarantees to each Finance Party
prompt performance by each Borrower of all its obligations
under the Finance Documents;
(b) In this Agreement "INCREASED COST" means:
(i) an additional cost incurred by a Finance Party or a
Holding Company of such Finance Party as a result of
the Finance Party having entered into, or
performing, maintaining or funding its obligations
under, this Agreement; or
(ii) that portion of an additional cost incurred by a
Finance Party or a Holding Company of such Finance
Part in making, funding or maintaining all or any
advances comprised in a class of advances formed by
or including its participations in an Advance made
or to be made under this Agreement as is
attributable to it making, funding or maintaining
those participations; or
(iii) a reduction in any amount payable to a Finance Party
or a Holding Company of such Finance Party or the
effective return to a Finance Party or a Holding
Company of such Finance Party under this Agreement
or on its capital; or
(iv) the amount of any payment made by a Finance Party or
a Holding Company of such Finance Party, or the
amount of any interest or other return foregone by a
Finance Party or a Holding Company of such Finance
Party, calculated by reference to any amount
received or receivable by that Finance Party or a
Holding Company of such Finance Party from any other
Party under this Agreement.
(c) indemnifies each Finance Party on demand against any loss
or liability suffered by it if any obligation guaranteed by
that Guarantor is or becomes unenforceable, invalid or
illegal.
16.2 CONTINUING GUARANTEE
(a) This guarantee is a continuing guarantee and will extend to
the ultimate balance of all sums payable by the Borrowers
under the Finance Documents, regardless of any intermediate
payment or discharge in whole or in part.
16.3 REINSTATEMENT
(a) Where any discharge (whether in respect of the obligations
of any Obligor or any security for those obligations or
otherwise) is made in whole or in part or any arrangement
is made on the faith of any payment, security or other
disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation,
the liability of each Guarantor under this Clause 16
(Guarantee) shall continue as if the discharge or
arrangement had not occurred.
(b) Each Finance Party may concede or compromise any claim that
any payment, security or other disposition is liable to
avoidance or restoration.
16.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 16 (Guarantee)
will not be affected by an act, omission, matter or thing which,
but for this provision, would reduce, release or prejudice any of
its obligations under this Clause 17 (Guarantee) or prejudice or
diminish those obligations in whole or in part, including (whether
or not known to it or any Finance Party):
(a) any time or waiver granted to, or composition with, any
Borrower or other person;
(b) the taking, variation, compromise, exchange, renewal
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of,
any Borrower or other person or any non-presentation or
non-observance of any formality
- ------------------------------------------------------------------------------
42
- ------------------------------------------------------------------------------
or other requirement in respect of any instrument or any
failure to realise the full value of any security;
(c) any incapacity or lack of powers, authority or legal
personality of or dissolution or change in the members or
status of a Borrower or any other person;
(d) any variation (however fundamental) or replacement of a
Finance Document or any other document or security so that
reference to that Finance Document in this Clause 16
(Guarantee) shall include each variation or replacement;
(e) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security, to the intent that each
Guarantor's obligations under this Clause 16 (Guarantee)
shall remain in full force and its guarantee be construed
accordingly, as if there were no unenforceability,
illegality or invalidity; or
(f) any postponement, discharge, reduction, non-provability or
other similar circumstance affecting any obligation of any
Borrower under a Finance Document resulting from any
insolvency, liquidation or dissolution proceedings or from
any law, regulation or order so that each such obligation
shall be for the purposes of the Guarantor's obligations
under this Class 16 (Guarantee) be construed as if there
were no such circumstance.
16.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment
from any person before claiming from that Guarantor under this
Clause 16 (Guarantee).
16.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors
under or in connection with the Finance Documents have been
irrevocably paid in full, each Finance Party (or any trustee or
agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance Party
(or any trustee or agent on its behalf) in respect of those
amounts, r apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or
otherwise) and no Guarantor shall be entitled to the
benefit of the same; and
(b) hold in a suspense account any moneys received from any
Guarantor or on account of any Guarantor's liability under
this Clause 16 (Guarantee), without liability to pay
interest on those moneys.
16.7 NON-COMPETITION
Until all amounts which may be or become payable by the Obligors
under or in connection with the Finance Documents have been
irrevocably paid in full, no Guarantor shall, after a claim has
been made or by virtue of any payment or performance by it under
this Clause 16 (Guarantee):
- ------------------------------------------------------------------------------
43
- ------------------------------------------------------------------------------
(a) be subrogated to any rights, security r moneys held,
received or receivable by any Finance Party (or any trustee
or agent on its behalf) or be entitled to any right of
contribution or indemnity in respect of any payment made or
moneys received on account of that Guarantor's liability
under this Clause 16 (Guarantee);
(b) claim, rank, prove or vote as a creditor of any Obligor or
its estate in competition with any Finance Party (or any
trustee or agent on its behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any Obligor,
or exercise any right of set-off as against any Obligor.
Each Guarantor shall hold in trust for and forthwith pay or
transfer to the Agent for the Finance Parties any payment or
distribution or benefit or security received by it contrary to
this Clause 16.7.
16.8 NON-COMPETITION
17 REPRESENTATIONS AND WARRANTIES
17.1 REPRESENTATIONS AND WARRANTIES
Each Obligor makes the representations and warranties set out in
this Clause 17 (Representations and warranties) to each Finance
Party.
17.2 STATUS
It and EE are duly incorporated under the laws of England and
Wales and have power and are able lawfully to own their respective
property and assets and carry on their respective businesses, to
execute and deliver this Agreement and to exercise their
respective rights and perform their respective obligations
hereunder and the transactions contemplated hereby and all
corporate or other action required to be taken by each of them in
order to authorise the execution and delivery by each of them of
this Agreement and the performance by each of them of their
respective obligations hereunder has been duly taken.
17.3 LEGAL VALIDITY
17.4 NON-CONTRAVENTION
The execution and delivery by it of the Finance Documents and the
Relevant Lease Documents to which it, EE, or any of them is a
party and the performance by each of them of their respective
obligations thereunder will not:
(a) contravene any provision of any law, statute (including,
without limitation, the Act), decree, rule, regulation or
code of practice to which it or any of them or any of its
or their assets or revenues is subject, or of any order,
judgment, injunction, decree,
- ------------------------------------------------------------------------------
44
- ------------------------------------------------------------------------------
resolution, determination or award of any court or any
judicial, administrative or governmental authority or
organisation having applicability to it or any of them
or any of its or their assets or revenues; or
(b) result in an breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, bond, agreement or
other instrument or obligation to which it or any of them
is a party or by which it or any of them or any of its or
their assets or revenues may be bound or affected; or
(c) violate any provision of its or their constitutive
documents.
17.5 NO DEFAULT
(a) No Default has occurred which is continuing; and
(b) no Event of Default or Potential Event of Default has
occurred under the Guarantee and Indemnity which is
continuing (as such terms are defined therein).
17.6 CONSENT
All consents, approvals, authorisations, exemptions, registrations
and filings and all acts, conditions and things required to be
obtained, done, fulfilled and performed in order to:
(a) enable it and EE to enter into and exercise their
respective rights and perform their respective obligations
under each Finance Document and each Relevant Lease
Document to which it or EE is party; and
(b) make the Finance Documents and the Relevant Lease Documents
legal, valid and binding and admissible in evidence in
England and Wales
have been obtained and are in full force and effect or have been
done, fulfilled or performed (as the case may be).
17.7 ACCOUNTS
The last audited financial statements and the last consolidated
audited financial statements prior to the date hereof for EE, and
thereafter each of its most recently published audited financial
statements and those of EG which, in the case of EG, will include
consolidated financial statements of the Group, were each prepared
under the historical cost convention as modified by and in
accordance with accounting principles used by EE and EG and
consistently applied from one period to the next (except as shown
in those financial statements) which accounting principles shall,
save as shown in those financial statements, be those generally
accepted in the United Kingdom and give a true and fair view of
its financial condition (or, as the case may be, the financial
condition of the Group) as at the date as of which the same were
prepared.
17.8 NO MATERIAL ADVERSE EFFECT
Save for the effect of the acquisition of The Energy Group PLC by
T.U. Acquisitions PLC (notwithstanding that this acquisition may
not have constituted a Material Adverse Effect),
- ------------------------------------------------------------------------------
45
- ------------------------------------------------------------------------------
since 30th September, 1997 there has been no change in the
business, assets or condition of itself, or any member of
the Group having a Material Adverse Effect.
17.9 LITIGATION
No action or proceeding of or before any court, administrative
tribunal, government body or regulatory authority (including,
without limitation, the Monopolies and Mergers Commission or the
Office of Electricity Regulation) has been commenced, or (to the
best of its knowledge) is threatened against any member of the
Group which, in each case, has a Material Adverse Effect.
17.10 INDEBTEDNESS
Its Indebtedness under the Finance Documents to which it is a
party will rank at least pari passu with all its other
unsubordinated and unsecured Indebtedness with the exception of
that which is preferred by operation of law.
17.11 NO BREACH
It is not in breach of or default under any agreement to which it
is party or which is binding on it or any of its assets to an
extent or in a manner which has a Material Adverse Effect.
17.12 NO ENCUMBRANCE
No Encumbrance exists over all or any of the present or future
revenues or assets of any member of the Group, save for Permitted
Encumbrances.
17.13 OBLIGATION TO CREATE ENCUMBRANCE
The execution of the Finance Documents, and the Relevant Lease
Documents to which it or a Borrower is party and the exercise of
their respective rights and performance of their respective
obligations thereunder will not result in the existence or nor
oblige it or any of them to create any Encumbrance over all or any
of its or their present and future revenues or assets other than
in favour of the Finance Parties, the banks party to the
Transaction Documents as"Banks" and/or the Participants.
17.14 LICENCES
EMGL has been duly licensed to generate electricity and each of
EGL and each Borrower has been duly licensed to conduct its
business as presently conducted, no notice has been given to
revoke the Generation Licence and no modification of or amendment
to any of the terms or any Generation Licences has been made or
proposed by the Secretary of State or any other person having a
right to do so which has a Material Adverse Effect.
17.15 NO CONTRAVENTION OF LICENCES
EMGL is not in contravention of any term or condition of the
Generation Licences or any requirement of the Act or any
regulations made thereunder or any other statutory requirement or
any final order or confirmed provisional order made under the Act
or any undertaking given by it to the Director General or the
Secretary of State in relation to the conduct of its business
- ------------------------------------------------------------------------------
46
- ------------------------------------------------------------------------------
as a generator, which contravention and/or any consequence
thereof has a Material Adverse Effect.
17.16 ELECTRICITY SUPPLY
EE has been duly licensed by the Secretary of State as the Public
Electricity Supplier (as defined in the Act) to supply electricity
to any premises in the area designated in the PES Licence and is
duly licensed to conduct its business as presently conducted and
the PES license is in full force and effect and neither the
Director General nor the Secretary of State has given notice to it
to revoke the PES Licence.
17.17 NO MODIFICATION OF PES LICENCE
No modification or amendment of any of the terms of the PES
Licence has been made or proposed by way of consultation with
interested parties by the Director General or the Secretary of
State pursuant to Section 11, 14 or 15 of the Act or in accordance
with the conditions set out in the PES Licence which has a
Material Adverse Effect.
17.18 NO VARIATION OF AUTHORISED AREA
No variation of the authorised area in respect of which the PES
Licence has been granted has been made pursuant to Section 6(1)(c)
of the Act which has a Material Adverse Effect.
17.19 NO CONTRAVENTION OF PES LICENCE
EE is not in contravention of any terms or condition of the PES
Licence or any other licence or any requirement of the Act or any
regulations made thereunder or any other statutory requirement or
any final order or confirmed provisional order made under the Act
or any undertaking given by it to the Director General or the
Secretary of State in relation to the conduct of its business as a
Public Electricity Supplier, which contravention and/or any
consequence thereof has a Material Adverse Effect.
17.20 ENVIRONMENTAL LAW
There has been no non-compliance by any member of the Group with
any applicable environmental or safety law applicable to it which
has a Material Adverse Effect.
17.21 MATERIAL LIABILITIES
As at the end of the financial half-year ended 30th September,
1997 neither it nor EE had any material liabilities (contingent or
other wise) which were not disclosed in the financial statements
for the financial period then ended (or in the notes thereto) or
reserved against therein nor were there at that date any material
unrealised or anticipated losses arising from commitments entered
into by it which were not so disclosed or reserved against.
17.22 CONTINGENT LIABILITY
The maximum aggregate contingent liability of EE in respect of all
its indemnity obligations of the type referred to in sub-paragraph
(vi) of the definition of "Borrowing" and "Borrowings" in Clause
1.1 (Definitions) does not exceed (pound)1,000,000 and is unlikely
to increase substantially in the foreseeable future.
- ------------------------------------------------------------------------------
47
- ------------------------------------------------------------------------------
17.23 WHOLLY-OWNED SUBSIDIARY
Each Borrower is a Wholly-owned Subsidiary of (a) EE. (b) a Holding
Company of EE or (c) a company of which EE is a Wholly-owned Subsidiary.
17.24 BREACH OF DOCUMENTS
No Obligor is in breach of. and is not aware that any other party is in
breach of, any of the terms of any of the Finance Documents or any of the
Relevant Lease Documents.
17.25 NO DISPUTE
There is no dispute subsisting between any Obligor and any other party to
any of the Finance Documents or any of the Relevant Lease Documents and
no material amendments have been made to any thereof.
17.26 REPRESENTATIONS AND WARRANTIES IN THE GUARANTEE AND INDEMNITY
The representations and warranties in the Guarantee and Indemnity are
true and correct in all material respects.
17.27 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this Clause 17
(Representations and warranties):
(a) (i) in the case of an Obligor which is a Party on the date of
this Agreement, are made by that Obligor on the date; and
(ii) in the case of an Obligor which becomes a Party after the
date of this Agreement, will be deemed to be made by that
Obligor on the date it becomes a Party; and
(b) are deemed to be repeated by each Obligor on the date of each
Request and the first day of each Interest Period with reference
to the facts and circumstances then existing other than in the
case of any representation and warranty as to each Obligor's or
the Group's audited financial statements where such representation
and warranty shall be read and construed as referring to its and
the Group's then most resent audited financial statements,
including notes thereto.
18. UNDERTAKINGS
18.1 UNDERTAKINGS
Each of the Obligors undertakes to each Finance Party (such undertakings
to commence on the date of this Agreement and to remain in force for so
long as any amount may be outstanding under this Agreement or any
Commitment is in force) that it will:
(a) as soon as the same become available, but in any event within 180
days after the end of each of its financial years, deliver to the
Agent in sufficient copies for the Banks, its audited financial
statements (and in the case of EG its audited consolidated
financial
- ------------------------------------------------------------------------------
48
- ------------------------------------------------------------------------------
statements and the audited financial statements and the
audited financial statements of EE) which shall in all cases
include a balance sheet, profit and loss account, cash flow
statement and the notes to such statements;
(b) in the case of the Guarantors, as soon as the same become
available, but in any event within 90 days after the end of the
first six-month period of each financial year, deliver to the
Agent in sufficient copies for the Banks, any interim financial
statements which may be required to be published by for such
six-month period and, together with such accounts and the accounts
in paragraph (a) above, a certificate signed by two directors of
EG setting out in reasonable detail computations establishing
compliance with paragraphs (y) and (bb) below;
(c) as soon as the same become available, but in any event within 60
days after the end of the relevant six-month period, deliver to
the Agent in sufficient copies for the Banks, Consolidated
Management Accounts for the accounting period ending on 30th
September, 1998 and each successive six-month period thereafter
and in the form previously approved by the Agent (acting in
accordance with the instructions of the Majority Banks) or such
other form as may be approved by the Agent (acting in accordance
with the instructions of the Majority Banks) (in each case, such
approval not to be unreasonably withheld or delayed) and shall
promptly provide the Agent in sufficient numbers to distribute as
aforesaid with such explanatory notes and commentary in relation
to such Consolidated Management Accounts as the Agent (acting in
accordance with the instructions of the Majority Banks), may
reasonably request;
(d) ensure or procure that each set of financial statements delivered
by it in respect of itself, or EE pursuant to paragraphs (a), (b)
and (c) above:
(i) is prepared under the historical cost convention, as
modified (and, to the extent that the basis of such
modification is not set out in such financial statements,
is accompanied by notes and explanation of such basis) by
and in accordance with accounting principles used by the
relevant reporting entity and consistently applied from one
period to the next (except as shown in those financial
statements) and which accounting principles shall, save as
shown in those financial statements, be those generally
accepted in the United Kingdom and, in the case of
paragraph (a) above, audited by auditors reasonably
acceptable to the Agent (acting in accordance with the
instructions of the Majority Banks); and
(ii) is certified by a duly authorized officer of the relevant
member of the Group or the relevant Obligor, as the case
may be, as giving a true and fair view of its financial
condition (and, in the case of EG, the financial condition
of the Group) as at the end of the period to which those
financial statements relate and of the results of its (or,
as the case may be, the Group's) operations during such
period;
(e) supply to the Agent, in sufficient copies for the Banks, in the
case of each of the Guarantors, all information and circulars from
time to time distributed by it to its shareholders at the same
time as they are supplied to such shareholders and, in the case of
each Borrower, such information and circulars which might
reasonably be expected
- ------------------------------------------------------------------------------
49
- ------------------------------------------------------------------------------
to be material to the interests of the Agent or the Banks,
and will supply to the Agent, in sufficient copies for the
Banks, such information concerning its business,
operations and financial condition and that of its Subsidiary
Undertakings (if any) as the Agent may from time to time
reasonably request (acting on the reasonable instructions of any
Bank);
(f) inform the Agent within 2 Business Days of the occurrence of any
Default (as defined herein) or any Event of Default or Potential
Event of Default (as defined in the Guarantee and Indemnity) and,
upon receipt of a request to that effect from the Agent, confirm
to the Agent and the Banks that, save as previously notified to
the Agent or as notified in such confirmation, no Default (as
defined herein) or any Event of Default or Potential Event of
Default (as defined in the Guarantee and Indemnity) has occurred
which is continuing;
(g) obtain and comply with and do all that is necessary to maintain in
full force and effect all consents, authorizations, approvals and
licenses required by law or regulation to enable it to enter into
and perform its obligations under the Finance Documents, the
Transaction Documents and the Relevant Lease Documents to which it
is a party or to ensure their legality, validity or admissibility
in evidence;
(h) not, and will procure that no other member of the Group will,
(either in a single transaction or in a series of transactions,
whether related or not) sell, convey, transfer or otherwise
dispose of:
(a) any shares in EE or in any Principal Subsidiary;
(b) any loans to or other claims on EE; or
(c) the whole or a substantial part of the undertaking or
assets of the Distribution Business or the Generation
Business, other than on commercial terms.
This restriction will not apply (x) with respect to sub-paragraph
(c) to (i) the expenditure or application of cash, or (ii) any
disposal where the net book value of the assets disposed of, when
aggregated with the net book value of any other assets forming
part of the Distribution Business or the Generation Business
disposed of otherwise than on commercial terms in the same
financial year of each of the Guarantors, in the case of EE, does
not exceed 10 percent. of the Distribution Business Tangible Net
Worth or, in the case of EGL or EMGL, does not exceed 10 percent.
of the Generation Business Tangible Net Worth (as the case may be)
at the end of the previous financial year or (y) with respect to
sub-paragraphs (a), insofar as it refers to Principal Subsidiaries
other than EE and (c) to a disposal made by any member of the
Group to another member of the Group;
(i) not, and will procure that none of its Subsidiaries shall, create
or permit to subsist any Encumbrance (other than Permitted
Encumbrances) upon the whole or any part of its present or future
revenues or assets;
(j) ensure that its Indebtedness under the Finance Documents to which
it is a party will rank at least pari passu with all its other
unsubordinated and unsecured Indebtedness with the exception of
that preferred by operation) of law;
- ------------------------------------------------------------------------------
50
- ------------------------------------------------------------------------------
(k) not, and will procure that none of its Subsidiaries shall, give
any guarantee, indemnity or other legally binding assurance
against loss to any person in respect of the obligations of any of
EG's shareholders direct or indirect;
(1) duly perform its obligations under the Finance Documents, the
Transaction Documents and the Relevant Lease Documents at the time
and in the manner specified therein and not take any action or
omit to do so which might reasonably be expected to result in the
forfeiture of the Head Leases or which has a Material Adverse
Effect;
(m) promptly notify the Agent if it becomes aware that a Head Landlord
or any other party is in breach of any of its obligations under
any of the Relevant Lease Documents;
(n) promptly notify the Agent if it becomes aware that any of the
Relevant Lease Documents is not, or ceases to be, binding on or
enforceable against any party thereto;
(o) duly exercise and take all steps available to it to enforce all of
its rights under each of the Relevant Lease Documents to the
extent that any failure so to do would have a Material Adverse
Effect;
(p) save as may be permitted hereunder, not, without the prior consent
of the Agent vary, amend, modify, terminate, cancel (or purport to
give notice to do any of the same) any of the Finance Documents or
the Relevant Lease Documents to which it is a party (or any
provision of any of the same), provided that the Agent shall not
unreasonably withhold its consent where such variation, amendment,
modification, termination or cancellation could not reasonably be
expected to be material to the interests of the Agent or the
Banks;
(q) promptly notify the Agent of its receipt of any notice or
communication under or in respect of the Head Leases which might
reasonably be expected to be material to the interests of the
Agent or the Banks and provide the Agent with a copy thereof;
(r) supply to the Agent, promptly following the request of the Agent
from time to time, such documentary and other information as the
Agent may reasonably request for the purposes of syndicating the
facilities provided under this Agreement;
(s) in so far as is necessary to prevent a Material Adverse Effect,
take and, in the case of EG, procure that EE takes, all
appropriate steps efficiently to perform and discharge its duties
and functions in accordance with the provisions of the Act, the
terms and conditions of the PES Licence, the provisions of any
final order or confirmed provisional order made under the Act and
all undertakings (if any) given to the Director General and/or the
Secretary of State, in respect of the matters referred to in
Section 25(5) of the Act;
(t) promptly inform the Agent of any material undertaking given by any
member of the Group to the Director General and/or the Secretary
of State;
(u) forthwith upon receipt of the same, deliver to the Agent in
sufficient copies for the Banks, copies of all notices or orders
served on any member of the Group by the Director General or the
Secretary of State in exercise of the powers conferred on him by
- ------------------------------------------------------------------------------
51
- ------------------------------------------------------------------------------
the Act and keep the Agent informed of any references to the
Monopolies and Mergers Commission or the exercise or purported
exercise by the Secretary of State or the Director General of the
powers conferred on him by the Fair Trading Act 1973, the
Competition Act 1980 and/or Section 12 of the Act;
(v) not, without the prior written consent of the Agent (acting on the
instructions of the Majority Banks), dispose of, deal with,
sublease, licence, let, assign or agree to the assignment of or
part with or share possession of or create any Encumbrance over
the assets comprised in the Properties necessary for the
generation of electricity or the Quota Rights other than pursuant
to the Relevant Lease Documents in a manner consistent with the
covenants on the part of EMPL contained in the Assignment;
(w) not relinquish or forfeit any of its rights under any of the
Relevant Lease Documents;
(x) in the case of EG, procure that EE will not consent to any
revocation of the PES Licence (except where a public electricity
supply licence is granted to a member of the Group in its place)
or to any material modification or amendment to or restriction in
the terms and conditions of the PES Licence if such revocation,
modification, amendment or restriction ought to have a Material
Adverse Effect;
(y) in the case of EG, subject to Clause 18.3 (Windfall Tax), ensure
that the ratio of Consolidated Profits Before Interest and Tax to
Consolidated Interest for each period set out below is not less
than 2:1:
-----------------------------------
PERIOD
1.4.96 to 31.3.97
1.4.96 to 30.9.97
1.4.96 to 31.3.98
1.4.96 to 30.9.98
1.4.96 to 31.3.99
And the three-year period ending
on each 31 March and 30
September thereafter;
-------------------------------------
(z) in the case of EG, procure that EE will not enter into or engage
in any business or activity other than the Supply Business, the
Second-Tier Supply Business or the Distribution Business, other
than any business or activity the aggregate turnover of which does
not in any financial year exceed 5 per cent. of the aggregate
turnover of the Supply Business. the Second-Tier Supply Business
and the Distribution Business (excluding the turnover on
transactions which the Supply Business, the Second-Tier Supply
Business and the Distribution Business make with each other) in
the immediately preceding financial year;
(aa) in the case of EG, procure that EE will not have outstanding at
any one time any loans to (other than short-term deposits or any
deposits with any institution authorised under the Banking Act
1987, the Building Societies Act 1986 or any European Authorised
- -------------------------------------------------------------------------------
52
- -------------------------------------------------------------------------------
Institution as defined in the Banking Act 1987) or investments in
any person other than a member of the Group in excess of an
aggregate of (pound)5 million;
(bb) in the case of EG, to procure that:
(i) the Adjusted Consolidated Tangible Net Worth is not, at any
time, less than (pound)800,000,000; and
(ii) Total Consolidated Net Borrowings do not, at any time,
exceed 150% of Adjusted Consolidated Tangible Net Worth;
(cc) in the case of EG, ensure at all times that EE has sufficient
working capital to finance the performance and discharge of its
duties as a Public Electricity Supplier in accordance with the
provisions of the Act and the terms and conditions of the PES
Licence,
(dd) comply and procure that each other member of the Group will,
comply with any environmental or safety laws applicable to it
where failure to do so has a Material Adverse Effect;
(ee) in the case of each Guarantor, not, and shall procure that none of
its Subsidiaries shall:
(i) give any guarantee, indemnity or other legally binding
assurance against loss to any person in respect of the
obligations of any Relevant Person, or
(ii) enter into any transaction under which (or do anything as a
result of or by which) cash or other assets are transferred
by or from it to any Relevant Person provided that this
sub-paragraph (ii) shall not prohibit:
(A) the declaration or payment of any lawful dividends
or other distributions or the provision of loans,
deposits or other credit but excluding guarantees or
indemnities entered into in favour of or in respect
of the indebtedness of any Relevant Person; or
(B) anything done pursuant to a transaction entered into
on terms no more onerous to EG (or the relevant
Subsidiary) than a transaction entered in to on an
arm's length basis on normal commercial terms;
(ff) in the case of EG, procure that EMGL or any member of the Group
from time to time licensed to carry on the Generation Business
will not consent to any revocation of the Generation Licence
(except where a Generation Licence is granted to a member of the
Group in its place) or to any material modification or amendment
to or restriction in the terms and conditions of the Generation
Licence if such revocation, modification, amendment or restriction
ought to have a Material Adverse Effect;
(gg) in the case of EG, procure that EMGL shall pay the Rents on the
First Rent Day and each succeeding Remaining Rent Day provided
that if any such day shall not be a Business Day, EMGL shall make
such payment on the preceding Business Day; and
- -------------------------------------------------------------------------------
53
- -------------------------------------------------------------------------------
(hh) procure that EE will insure and maintain insurance to the
reasonable satisfaction of the Agent (acting in accordance with
the instructions of the Majority Banks) in respect of property
damage, third party liability and such other risks in respect of
its business and assets in accordance with good industry practice.
18.2 CHANGE IN ACCOUNTING
Each Obligor and the Agent hereby undertake that, in the event that:
(a) there is a change in the manner in which any Obligor's financial
statements (and, in the case of EG, its consolidated financial
statements) are prepared or in the accounting principles or
standards applied in the preparation of those accounts; and
(b) such change affects the amounts utilised for the purposes of
determining whether or not an Obligor has complied with the
covenants contained in this Clause 18,
they will agree to renegotiate each of the covenants affected by such
change with a view to putting in place covenants that fairly reflect that
change. In the event that the Obligors and the Agent (acting in
accordance with the instructions of the Majority Banks) fail to agree on
the revised terms of the covenants within 5 Business Days, the matter may
be referred by either party to an independent firm of chartered
accountants agreed by the Obligors and the Agent (acting in accordance
with the instructions of the Majority Banks) or, in default of agreement
within ten Business Days after the expiry of the previous 5 Business Day
period, to an independent firm of chartered accountants nominated by the
President for the time being of the Institute of Chartered Accountants in
England and Wales, on the application of the relevant Obligor or the
Agent (acting in accordance with the instructions of the Majority Banks)
and in either case at the expense of the Obligors. The firm so agreed or
nominated shall act as expert and not as an arbitrator, shall provide its
decision within 30 days of its appointment and its decision concerning
the revised terms of the covenants will, in the absence of fraud or
manifest error, be final and binding.
18.3 WINDFALL TAX
If the ratio of Consolidated Profits Before Interest and Tax to
Consolidated Interest for any period set out in Clause 18.1 (y) is less
than 2:1 due to the payment or proper accrual of any exceptional, special
or windfall tax or levy, then. notwithstanding the provisions of Clause
19.1(b), no Event of Default shall occur as a result thereof except as
provided in this clause. The Obligors and the Agent (acting in accordance
with the instructions of the Majority Banks) shall consult for a period
not exceeding 30 days with a view to agreeing a revised basis for
calculation of the ratio or a revised ratio. The failure to agree a basis
for such calculation or a revised ratio by the end of that 30-day period
shall constitute an Event of Default under Clause 19.1(b) which, for the
purposes of that clause shall not be capable of remedy.
18.4 SHARE CAPITAL OF EMPL AND EMGL
EG undertakes that it will remain either the direct or the indirect legal
and beneficial owner of the entire issued share capital of EE, EMPL and
EMGL free of all Encumbrances.
- -------------------------------------------------------------------------------
54
- -------------------------------------------------------------------------------
18.5 UNDERTAKINGS OF EASTERN ELECTRICITY PLC
Eastern Electricity plc undertakes to each Finance Party (such
undertaking to commence on the date of this Agreement and to remain in
force for so long as any amount may be outstanding under this Agreement
or any Commitment is in force) that it will:
(a) insure and maintain insurance to the reasonable satisfaction of
the Agent (acting in accordance with the instructions of the
Majority Banks) in respect of property damage, third party
liability and such other risks in respect of its business and
assets in accordance with good industry practice;
(b) not enter into or engage in any business or activity other than
the Supply Business, the Second-Tier Supply Business or the
Distribution Business, other than any business or activity the
aggregate turnover of which does not in any financial year exceed
5% of the aggregate turnover of the Supply Business, the
Second-Tier Supply Business and the Distribution Business
(excluding turnover on transactions which the Supply Business, the
Second-Tier Supply Business aid the Distribution Business make
with each other) in the immediately preceding financial year; and
(c) not have outstanding at any one time any loans to (other than
short-term deposits or any deposits with any institution
authorised under the Banking Act 1987, the Building Societies Act
1986 or any European Authorised Institution as defined in the
Banking Act 1987) or investments in any person other than a member
of the Group in excess of an aggregate of (pound)5 million.
19. DEFAULT
19.1 EVENTS OF DEFAULT
Each of the events set out below is an Event of Default (whether or not
caused by any reason whatsoever outside the control of any Obligor or of
any other person):
(a) any of the Obligors fails to pay any sum due from it under any
Finance Document to which it is a party, in the currency and in
the manner specified therein, within 5 Business Days after the
date on which such sum falls due or;
(b) or any of the Obligors or EE fails to perform or observe any other
obligation binding on it under any of the Finance Documents to
which it is a party and such default is (if capable of remedy) not
remedied within 28 days after the Agent (acting in accordance with
the instructions of the Majority Banks) has given written notice
to the Obligors or EE. as the case may be, of such default or
(c) any representation or warranty when made or repeated by any of the
Obligors herein or in any Request delivered hereunder is or proves
to be incorrect or misleading in any material respect when made or
deemed to be made and as if made or deemed to be made by reference
to the then prevailing facts and circumstances; or;
(d) any corporate action or other steps are taken or (save for
frivolous or vexatious or other proceedings which the Guarantors
demonstrate and continue to demonstrate to the satisfaction of the
Agent (acting in accordance with the instructions of the Majority
Banks) are being contested in good faith and by appropriate action
in a manner
- -------------------------------------------------------------------------------
55
- -------------------------------------------------------------------------------
consistent with legal advice until they are stayed or
withdrawn) legal proceedings are started for the liquidation,
winding-up, dissolution, administration, re-organisation or
amalgamation of any of the Obligors, any Principal Subsidiary or
for the appointment of a receiver, trustee or similar officer of
any of the Obligors or any Principal Subsidiary or of any or all
of a material part of its assets and revenues (except, in the case
of a Principal Subsidiary of EE (other than a Borrower) for (i)
the purpose of and followed by an amalgamation or re-organisation,
the terms of which have first been approved by the Agent in
writing (acting in accordance with the instructions of the
Majority Banks) or (ii) a voluntary solvent winding-up in
connection with the transfer of the business, undertaking and
assets of such Principal Subsidiary to another member of the
Group); or
(e) any of the Obligors or any Principal Subsidiary is unable or
admits in writing its inability to pay its debts as they fall due
or commences negotiations with a view to, or takes any proceedings
under any law for, a readjustment, rescheduling or deferment of
all or any of its obligations or proposes, makes or enters into a
general assignment, arrangement or composition with or for the
benefit of its creditors; or
(f) any Borrowings of any of the Obligors, any T.U. Company or any
Principal Subsidiary in an aggregate amount exceeding whichever is
the greater of (pound)20,000,000 and 2 per cent. of Consolidated
Tangible Net Worth (or its equivalent in any other currency) (i)
are not paid when due or within any applicable grace period in any
agreement or instrument relating to such Borrowings or (ii) become
due and payable, or capable of being declared due and payable,
before their normal or agreed maturity; or
(g) any execution or distress is levied against, or an encumbrancer
takes possession of, the whole or any material part of the
property, undertaking or assets of any Obligor or any Principal
Subsidiary and is not discharged within 28 days; or
(h) EE or EGL or, if appropriate, any other relevant member of the
Group ceases, or threatens to cease, to carry on the Distribution
Business or, as the case may be, the Generation Business; or
(i) The Secretary of State or any person with the ability to do so
gives notice in writing of the revocation of the PES Licence or
the Generation Licence for any reason or the PES Licence or the
Generation Licence ceases to be in full force and effect in any
material respect except where, in respect of the PES Licence, a
public electricity supply licence, or in respect of the Generation
Licence, an electricity generating licence, is granted to a member
of the Group in its place, which member shall, in respect of any
such electricity generating licence, have the right to operate the
generating assets comprised in the Properties; or
(j) any of the provisions of the Act detailing the rights. powers,
authorities, obligations and duties of the Secretary of State or
the Director General, or the manner in or time at which the same
are to be exercised, are repealed or amended or any change is made
in the statutory or regulatory requirements applicable to the
Distribution Business or the Generation Business or any new
statutory or regulatory requirements are imposed on it which in
any case has a Material Adverse Effect; or
- -------------------------------------------------------------------------------
56
- -------------------------------------------------------------------------------
(k) any modification (including, without limitation, a modification of
the authorised area designated in Schedule 1 to the PES License as
originally granted or Condition 27 of the PES Licence) is made to
the terms and condition of the PES Licence, the Generation Licence
or any other licence and such modification has a Material Adverse
Effect; or
(l) EE or the holder for the time being of the Generation Licence
ceases to be a party to the Pooling and Settlement Agreement save
where another member of the Group which is for the time being a
licensee the PES Licence or the Generation Licence, as the case
may be, becomes a party in its place; or
(m) at any time after the date hereof, all or a majority of the issued
shares of any Obligor or the whole or any material part of the
assets or revenues of the Distribution Business or the Generation
Business are seized, nationalised. expropriated or compulsorily
acquired by or under the authority of the United Kingdom
government or any other person having the ability so to do
(including, without limitation, any supra-national organisation);
or
(n) at any time it becomes unlawful for any Obligor to perform or
comply with any or all of its material obligations under any
Finance Document to which it is a party or any Finance Document
shall at any time be invalid or unenforceable or for any reason
cease to be in full force and effect; or
(o) at any time after the date hereof there is a change in the
financial condition of a Borrower, or either Guarantor which has a
Material Adverse Effect; or
(p) at any time a Borrower, EMPL or EMGL ceases to be a Subsidiary of
EG; or
(q) at any time the Head Landlord serves a demand on EMPL under Clause
3.2 of the National Power PLC Head Lease save where EMPL
demonstrates to the reasonable satisfaction of the Agent (acting
in accordance with the instructions of the Majority Banks) within
five Business Days following the service of that demand that that
demand is frivolous or vexatious or has otherwise been wrongfully
made; or
(r) at any time:
(i) T. U. Acquisitions PLC ceases to be a Wholly-owned
Subsidiary of T. U. Finance (No, 2) Limited; or
(ii) T. U. Finance (No. 2) Limited ceases to be a Wholly-owned
Subsidiary of Texas Utilities Company (other than as
permitted by paragraph (iii) below) and at least a 90%
owned direct Subsidiary of T. U. Finance (No. 1) Limited;
or
(iii) less than 100% (until 19th May, 1991) or 75% (until 19th
May, 2000) or 60% (thereafter) of the equity share capital
of T. U. Finance (No. 1) Limited is held by Texas Utilities
Company (directly or indirectly) at any time; or
(iv) EE or any other Licensee ceases to be a Wholly-owned
Subsidiary of EG; or
- -------------------------------------------------------------------------------
57
- -------------------------------------------------------------------------------
(v) EG ceases to be a direct or indirect Wholly-owned
Subsidiary of T.U. Acquisitions PLC or Texas Utilities
Company; or
(vi) there is a Change in Control of Texas Utilities Company; or
(s) the occurrence of an Event of Default or Potential Event of
Default under the Guarantee and Indemnity (as such terms are
defined therein).
19.2 ACCELERATION
On and at any time after the occurrence of an Event of Default the Agent
may, and shall if so directed by the Majority Banks, by notice to EG:
(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Advances, together with accrued
interest and all other amounts accrued under this Agreement be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
(c) demand that all or part of the Advances be payable on demand,
whereupon they shall immediately become payable on demand.
20. THE AGENT AND THE ARRANGERS
20.1 APPOINTMENT AND DUTIES OF THE AGENT
Each Finance Party (other than the Agent) irrevocably appoints the Agent
to act as its agent under and in connection with the Finance Documents,
and irrevocably authorises the Agent on its behalf to perform the duties
and to exercise the rights, powers and discretions that are specifically
delegated to it under or in connection with the Finance Documents.
together with any other incidental rights, powers and discretions. The
Agent has only those duties which are expressly specified in this
Agreement, and those duties are solely of a mechanical and administrative
nature.
20.2 ROLE OF THE ARRANGERS
Except as specifically provided in this Agreement. the Arrangers and the
Co-Arrangers have no obligations of any kind to any other Party under or
in connection with any Finance Document.
20.3 RELATIONSHIP
The relationship between the Agent and the other Finance Parties is that
of agent and principal only. Nothing in this Agreement constitutes the
Agent as trustee or fiduciary for any other Party or any other person and
the Agent need not hold in trust any moneys paid to it for a Party or be
liable to account for interest on those moneys.
20.4 MAJORITY BANKS' DIRECTIONS
The Agent will be fully protected if it acts in accordance with the
instructions of the Majority Banks in connection with the exercise of any
right, power or discretion or any matter not expressly provided for in
this Agreement. Any such instructions given by the Majority Banks will be
- -------------------------------------------------------------------------------
58
- -------------------------------------------------------------------------------
binding on all the Banks. In the absence of such instructions, the Agent
may act as it considers to be in the best interests of all the Banks.
20.5 DELEGATION
The Agent may act under the Finance Documents through its personnel and
agents.
20.6 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor any Arranger is responsible to any other Party for:
(a) the execution, genuineness, validity, enforceability or
sufficiency of any Finance Document or any other document;
(b) the collectability of amounts payable under any Finance Document;
or
(c) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document.
20.7 DEFAULT
(a) The Agent is not obliged to monitor or enquire as to whether or not a
Default has occurred. The Agent will not be deemed to have knowledge of
the occurrence of a Default. However, if the Agent receives notice from a
Party referring to this Agreement, describing the Default and stating
that the event is a Default, it shall promptly notify the Banks.
(b) The Agent may require the receipt of security satisfactory to it, whether
by way of payment in advance or otherwise, against any liability or loss
which it will or may incur in taking any proceedings or action arising
out of or in connection with any Finance Document before it commences
those proceedings or takes that action.
20.8 EXONERATION
(a) Without limiting paragraph (b) below, the Agent will not be liable to any
other Party for any action taken or not taken by it under or in
connection with any Finance Document, unless directly caused by its gross
negligence or wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or agent
of the Agent in respect of any claim it might have against the Agent or
in respect of any act or omission of any kind (including gross negligence
or wilful misconduct) by that officer, employee or agent in relation to
any Finance Document.
20.9 RELIANCE
The Agent may:
(a) rely on any notice or document believed by it to be genuine and
correct and to have been signed by, or with the authority of, the
proper person;
- -------------------------------------------------------------------------------
59
- -------------------------------------------------------------------------------
(b) rely on any statement made by a director or employee of any person
regarding any matters which may reasonably be assumed to be within
his knowledge or within his power to verify; and
(c) engage, pay for and rely on legal or other professional advisers
selected by it (including those in the Agent's employment and
those representing a Party other than the Agent).
20.10 CREDIT APPROVAL AND APPRAISAL
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Bank confirms that it:
(a) has made its own independent investigation and assessment of the
financial condition and affairs of each Obligor and its related
entities in connection with its participation in this Agreement
and has not relied exclusively on any information provided to it
by the Agent or the Arrangers or the Co-Arrangers in connection
with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities while
any amount is or may be outstanding under the Finance Documents or
any Commitment is in force.
20.11 INFORMATION
(a) The Agent shall promptly forward to the person concerned the original or
a copy of any document which is delivered to the Agent by a Party for
that person.
(b) The Agent shall promptly supply a Bank with a copy of each document
received by the Agent under Clause 4 (Conditions Precedent) upon the
request and at the expense of that Bank.
(c) Except where this Agreement specifically provides otherwise, the Agent is
not obliged to review or check the accuracy or completeness of any
document it forwards to another Party.
(d) Except as provided above, the Agent has no duty:
(i) either initially or on a continuing basis to provide any Bank with
any credit or other information concerning the financial condition
or affairs of any Obligor or any related entity of any Obligor
whether coming into its possession before, on or after the date of
this Agreement; or
(ii) unless specifically requested to do so by a Bank in accordance
with this Agreement, to request any certificates or other
documents from any Obligor.
20.12 THE AGENT AND THE ARRANGERS INDIVIDUALLY
(a) If it is also a Bank, each of the Agent and each Arranger has the same
rights and powers under this Agreement as any other Bank and may exercise
those rights and powers as though it were not the Agent or an Arranger.
(b) Each of the Agent and each Arranger may:
- -------------------------------------------------------------------------------
60
- -------------------------------------------------------------------------------
(i) carry on any business with an Obligor or its related entities;
(ii) act as agent or trustee for, or in relation to any financing
involving, an Obligor or its related entities; and
(iii) retain any profits or remuneration in connection with its
activities under this Agreement or in relation to any of the
foregoing.
20.13 INDEMNITIES
(a) Without limiting the liability of any Obligor under the Finance
Documents, each Bank shall forthwith on demand indemnify the Agent for
its proportion of any liability or loss incurred by the Agent in any way
relating to or arising out of its acting as the Agent, except to the
extent that the liability or loss arises directly from the Agent's gross
negligence or wilful misconduct.
(b) A Bank's proportion of the liability set out in paragraph (a) above will
be the proportion which its participation in the Advances (if any) bears
to all the Advances on the date of the demand. If, however, there are no
Advances outstanding on the date of demand, then the proportion will be
the proportion which its Commitment bears to the Total Commitments at the
date of demand or, if the Total Commitments have then been cancelled,
bore to the Total Commitments immediately before being cancelled.
(c) EG shall forthwith on demand reimburse each Bank for any payment made by
it under paragraph (a) above.
20.14 COMPLIANCE
(a) The Agent may refrain from doing anything which might, in its opinion,
constitute a breach of any law or regulation or be otherwise actionable
at the suit of any person, and may do anything which, in its opinion, is
necessary or desirable to comply with any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not disclose any
information relating to any Obligor or any of its related entities if the
disclosure might, in the opinion of the Agent, constitute a breach of any
law or regulation or any duty of secrecy or confidentiality or be
otherwise actionable at the suit of any person.
20.15 RESIGNATION OF THE AGENT
(a) Notwithstanding its irrevocable appointment, the Agent may resign by
giving notice to the Banks and EG. in which case the Agent may forthwith
appoint one of its Affiliates as successor Agent or, failing that, the
Majority Banks may appoint a successor Agent
(b) If the appointment of a successor Agent is to be made by the Majority
Banks but they have not, within 30 days after notice of resignation,
appointed a successor Agent which accepts the appointment, the Agent may
appoint a successor Agent.
(c) The resignation of the Agent and the appointment of any successor Agent
will both become effective only upon the successor Agent notifying all
the Parties that it accepts its appointment.
- -------------------------------------------------------------------------------
61
- -------------------------------------------------------------------------------
On giving the notification, the successor Agent will succeed to the
position of the Agent and the term "AGENT" will mean the successor Agent.
(d) The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance as
the successor Agent may reasonably request for the purposes of performing
its functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 20 (The Agent and
the Arrangers) shall continue to benefit the retiring Agent in respect of
any action taken or not taken by it under or in connection with the
Finance Documents while it was the Agent, and, subject to paragraph (d)
above, it shall have no further obligations under any Finance Document.
(f) if required to do so by the Majority Banks, the Agent shall resign in
accordance with paragraph (a) above. However, in this event the Agent is
not entitled to appoint one of its Affiliates as successor.
20.16 BANKS
(a) The Agent may treat each Bank as a Bank, entitled to payments under this
Agreement and as acting through its Facility Office(s) until it has
received not less than 5 Business Days' prior notice from that Bank to
the contrary.
(b) Each Bank, on the date on which it becomes a party to this Agreement,
represents to the Agent and the Borrowers that it is:
(i) a Qualifying Lender and either:
(A) not resident in the United Kingdom for United Kingdom tax
purposes; or
(B) a "bank" as defined in section 840A of the Income and
Corporation Taxes Act 1988 and resident in the United
Kingdom; and
(ii) beneficially entitled to the principal and interest payable by the
Agent to it under this Agreement,
and shall forthwith notify the Agent and the Borrowers if either
representation ceases to be correct.
(c) The Agent may at any time, and shall if requested to do so by the
Majority Banks, convene a meeting of the Banks.
21. VAT ON FEES
Any fee referred to in the Supplemental Agreement is exclusive of any
value added tax or any other tax which might be chargeable in connection
with that fee. If any value added tax or other tax is so chargeable, it
shall (subject to the receipt of a valid value added tax invoice in
respect of the relevant supply) be paid by EG at the same time as it pays
the relevant fee.
- -------------------------------------------------------------------------------
62
- -------------------------------------------------------------------------------
22. EXPENSES
22.1 INITIAL AND SPECIAL COSTS
EG shall forthwith on demand pay the Agent and the Arrangers the amount
of all costs and expenses (including reasonable legal fees) incurred by
any of them in connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in this
Agreement; and
(ii) any other Finance Document (other than a Novation
Certificate) executed after the date of this Agreement;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of an
Obligor and relating to a Finance Document or a document referred
to in any Finance Document; and
(c) any other matter, not of an ordinary administrative nature,
arising out of or in connection with a Finance Document.
22.2 ENFORCEMENT COSTS
EG shall forthwith on demand pay to each Finance Party the amount of all
costs and expenses (including legal fees) incurred by it:
(a) in connection with the enforcement of, or the preservation of any
rights under, any Finance Document; or
(b) in investigating any possible Default.
23. STAMP DUTIES
EG shall pay and forthwith on demand indemnify each Finance Party against
any liability it incurs in respect of, any stamp, registration and
similar tax which is or becomes payable in connection with the entry
into, performance or enforcement of any Finance Document.
24. INDEMNITIES
24.1 CURRENCY INDEMNITY
(a) If a Finance Party receives an amount in respect of an Obligor's
liability under the Finance Documents or if that liability is converted
into a claim, proof, judgment or order in a currency other than the
currency (the "CONTRACTUAL CURRENCY") in which the amount is expressed to
be payable under the relevant Finance Document:
(i) that Obligor shall indemnify that Finance Party as an independent
obligation against any loss or liability arising out of or as a
result of the conversion;
(ii) if the amount received by that Finance Party, when converted into
the contractual currency at a market rate in the usual course of
its business is less than the amount
- -------------------------------------------------------------------------------
63
- -------------------------------------------------------------------------------
owed in the contractual currency, the Obligor concerned shall
forthwith on demand pay to that Finance Party an amount in the
contractual currency equal to the deficit; and
(iii) the Obligor shall pay to the Finance Party concerned forthwith on
demand any exchange costs and taxes payable in connection with any
such conversion.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency other than that in which
it is expressed to be payable.
24.2 OTHER INDEMNITIES
EG shall forthwith on demand indemnify each Finance Party against any
loss or liability which that Finance Party incurs as a consequence of:
(a) the occurrence of any Default;
(b) the operation of Clause 19.2 (Acceleration) or Clause 30 (Pro rata
sharing);
(c) any payment of principal or an overdue amount being received from
any source otherwise than on the last day of a relevant Interest
Period or Designated Interest Period (as defined in Clause 9.3
(Default interest)) relative to the amount so received; or
(d) (other than by reason of negligence or default by a Finance Party)
an Advance not being made after the Borrower has delivered a
Drawdown Request or an Advance (or part of an Advance) not being
prepaid in accordance with a notice of prepayment.
EG's liability in each case includes any loss of margin or other loss or
expense on account of funds borrowed, contracted for or utilised to fund
any amount payable under any Finance Document, any amount repaid or
prepaid or any Advance.
24.3 ENVIRONMENTAL INDEMNITY
Each of the Guarantors as principal obligor hereby jointly and severally
agrees irrevocably and unconditionally to indemnify the Agent and each
Bank in full, (after deducting the proceeds of any insurance relating to
liabilities associated with the ownership or occupation of any Property,
received by that Bank) on receipt of a demand served upon each Guarantor
in writing, on an after tax basis, against all liabilities (including
without limitation any property liabilities), losses, claims and costs,
charges and expenses reasonably incurred to which it may be subject or
which it may incur, in each case, by reason or in respect of that Bank
being or becoming liable as, or to perform or observe any obligation of,
an occupier or owner of any Property or as a result of its participation
in the Finance Documents and against all liabilities, losses, claims and
costs, charges and expenses relating to or in connection with liabilities
for environmental damage or infringement of environmental laws in
relation to the Properties.
24.4 SURVIVAL
The indemnities given under this Clause 24 shall continue in full force
and effect notwithstanding any breach of the terms of this Agreement, the
repudiation of this Agreement by either Guarantor or the termination of
this Agreement under any other circumstance whatsoever.
- -------------------------------------------------------------------------------
64
- -------------------------------------------------------------------------------
24.5 RECOVERY
Without prejudice to the rights of the Agent and each of the Banks to
claim or prove for the full amount against each of the Guarantors, no
Bank shall be entitled to recover any amount from a Guarantor if that
amount has already been recovered from the other Guarantor or recover an
amount more than once under any provision of any of the Finance
Documents.
25. EVIDENCE AND CALCULATIONS
25.1 ACCOUNTS
Accounts maintained by a Finance Party in connection with this Agreement
are prima facie evidence of the matters to which they relate.
25.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount
under this Agreement is, in the absence of manifest error, prima facie
evidence of the matters to which it relates.
25.3 CALCULATIONS
Interest (including any applicable Mandatory Cost) accrues from day to
day and is calculated on the basis of the actual number of days elapsed
and a year of 365 days.
26. AMENDMENTS AND WAIVERS
26.1 PROCEDURE
(a) Subject to Clause 26.2 (Exceptions), any term of the Finance Documents
may be amended or waived with the agreement of the Borrowers, the
Majority Banks and the Agent. The Agent may effect, on behalf of the
Majority Banks, an amendment or waiver to which they have agreed.
(b) The Agent shall promptly notify the other Parties of any amendment or
waiver effected under paragraph (a) above, and any such amendment or
waiver shall be binding on all the Parties.
26.2 EXCEPTIONS
An amendment or waiver which relates to:
(a) the definition of "MAJORITY BANKS" in Clause 1.1;
(b) an extension of the date for, or a decrease in the amount or a
change in the currency of, any payment under the Finance
Documents;
(c) an increase in a Bank's Commitment,
(d) a term of a Finance Document which expressly requires the consent
of each Bank,
(e) Clause 30 (Pro rata sharing) or this Clause 26 (Amendments and
waivers); or
- -------------------------------------------------------------------------------
65
- -------------------------------------------------------------------------------
(f) the definition of "GUARANTORS" in Clause 1.1,
may not be effected without the consent of each Bank.
26.3 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Finance Party under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
27. CHANGES TO THE PARTIES
27.1 TRANSFERS BY OBLIGORS
(a) Subject to paragraph (b) below, no Obligor may assign, transfer, novate
or dispose of any of, or any interest in, its rights and/or obligations
under this Agreement.
(b) Each Party to this Agreement agrees that either Guarantor may at any time
assign, transfer or novate any of its rights and obligations under this
Agreement to such other Group company as is acceptable to the Agent and
all of the Banks at their absolute discretion.
27.2 TRANSFERS BY BANKS
(a) A Bank (the "EXISTING BANK") may at any time assign, transfer or novate
any of its rights and/or obligations under this Agreement to another bank
or financial institution which is a Qualifying Lender (the "NEW BANK").
The prior consent of EG is required for any such assignment, transfer or
novation, unless:
(i) the New Bank is another Bank or an Affiliate of a Bank; or
(ii) a Default is outstanding.
However, the prior consent of EG must not be unreasonably withheld or
delayed and will be deemed to have been given if, within 14 days of
receipt by EG of an application for consent, it has not been expressly
refused.
(b) A transfer of obligations will be effective only if either:
(i) the obligations are novated in accordance with Clause 27.3
(Procedure for novations); or
(ii) the New Bank confirms to the Agent and EG that it undertakes to be
bound by the terms of this Agreement as a Bank in form and
substance satisfactory to the Agent. On the transfer becoming
effective in this manner the Existing Bank shall be relieved of
- -------------------------------------------------------------------------------
66
- -------------------------------------------------------------------------------
its obligations under this Agreement to the extent that they are
transferred to the New Bank.
(c) Nothing in this Agreement restricts the ability of a Bank to sub-contract
an obligation if that Bank remains liable under this Agreement for that
obligation.
(d) On each occasion an Existing Bank assigns, transfers or novates any of
its rights and/or obligations under this Agreement, the New Bank shall,
on the date the assignment, transfer and/or novation takes effect, pay to
the Agent for its own account a fee of (pound)500.
(e) An Existing Bank is not responsible to a New Bank for:
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Finance Document or any other document;
(ii) the collectability of amounts payable under any Finance document;
or
(iii) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document.
(f) Each New Bank confirms to the Existing Bank and the other Finance Parties
that it:
(i) has made its own independent investigation and assessment of the
financial condition and affairs of each Obligor and its related
entities in connection with its participation in this Agreement
and has not relied exclusively on any information provided to it
by the Existing Bank in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities while
any amount is or may be outstanding under this Agreement or any
Commitment is in force.
(g) Nothing in any Finance Document obliges an Existing Bank to:
(i) accept a re-transfer from a New Bank of any of the rights and/or
obligations assigned, transferred or novated under this Clause; or
(ii) support any losses incurred by the New Bank by reason of the
non-performance by any Obligor of its obligations under this
Agreement or otherwise.
(h) Any reference in this Agreement to a Bank includes a New Bank but
excludes a Bank if no amount is or may be owed to or by it under this
Agreement and its Commitment has been cancelled or reduced to nil.
27.3 PROCEDURE FOR NOVATIONS
(a) A novation is effected if:
(i) the Existing Bank and the New Bank deliver to the Agent a duly
completed certificate, substantially in the form of Part I of
Schedule 5 (a "NOVATION CERTIFICATE"); and
- -------------------------------------------------------------------------------
67
- -------------------------------------------------------------------------------
(ii) the Agent executes it.
(b) Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Agent to execute any duly completed Novation Certificate
on its behalf.
(c) To the extent that they are expressed to be the subject of the novation
in the Novation Certificate:
(i) the Existing Bank and the other Parties (the "EXISTING PARTIES")
will be released from their obligations to each other (the
"DISCHARGED OBLIGATIONS");
(ii) the New Bank and the Existing Parties will assume obligations
towards each other which differ from the discharged obligations
only insofar as they are owed to or assumed by the New Bank
instead of the Existing Bank,
(iii) the rights of the Existing Bank against the existing Parties and
vice versa (the "DISCHARGED RIGHTS") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire rights against
each other which differ from the discharged rights only insofar as
they are exercisable by or against the New Bank instead of the
Existing Bank,
all on the date of execution of the Novation Certificate by the Agent or,
if later, the date specified in the Novation Certificate.
27.4 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank of
which it is an Affiliate) ceases to be a Bank, the Agent shall (in
consultation with EG) appoint another Bank or an Affiliate of a Bank to
replace that Reference Bank.
27.5 REGISTER
The Agent shall keep a register of all the Parties and shall supply any
other Party (at that Party's expense) with a copy of the register on
request.
27.6 UK BANKS
Each Bank shall ensure that it makes, and at all times continues to hold,
any Advance through a Qualifying Lender.
28. DISCLOSURE OF INFORMATION
28.1 CONFIDENTIALITY
Any Bank or the Agent may disclose to any Affiliate or (provided that EG
has consented to the relevant assignment or transfer in accordance with
the provisions of Clause 27.2 (Transfers by Banks) to any actual or
potential assignee or transferee such information about any member of the
Group as such Bank or the Agent shall consider appropriate Provided that
such information is public knowledge (otherwise than as a result of the
wrongful conduct of that Bank or the Agent) or was received by such Bank
or the Agent in connection with this Agreement and the
- -------------------------------------------------------------------------------
68
- -------------------------------------------------------------------------------
proposed recipient of any such information has undertaken to EG to keep
such information confidential on the terms (mutatis mutandis) set out in
this Clause 28 (Disclosure of Information).
28.2 DISCLOSURE
Save as provided in Clause 28.1 (Confidentiality), a Bank or the Agent
may not disclose any information about the Finance Documents or otherwise
about any member of the Group received by it in connection with this
Agreement to any person (other than its professional advisers and
auditors) without the prior written consent of EG unless:
(a) such information is or becomes public knowledge otherwise than as
a result of the wrongful conduct of that Bank or the Agent;
(b) that Bank or the Agent is required to disclose the same pursuant
to any law or order of any court or pursuant to any direction,
request or requirement (whether or not having the force of law) of
any central bank or governmental or other regulatory authority
(including, without limitation, any official bank examiners or
regulators); or
(c) that Bank or the Agent needs to disclose the same for its own
protection; or
(d) that Bank or the Agent is enforcing its rights under this
Agreement or any Finance Document.
29. SET-OFF
A Finance Party may set off any matured obligation owed by an Obligor
under this Agreement (to the extent beneficially owned by that Finance
Party) against any obligation (whether or not matured) owed by that
Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are
in different currencies, the Finance Party may convert either obligation
at a market rate of exchange in its usual course of business for the
purpose of the set-off. If either obligation is unliquidated or
unascertained, the Finance Party may set off in an amount estimated by it
in good faith to be the amount of that obligation. For the avoidance of
doubt, each of the parties hereto acknowledges that foregoing is not
intended to create a registrable security interest for the purposes of
the Companies Act 1985.
30. PRO RATA SHARING
30.1 REDISTRIBUTION
If any amount owing by an Obligor under this Agreement to a Finance Party
(the "RECOVERING FINANCE Party") is discharged by payment, set-off or any
other manner other than through the Agent in accordance with Clause 10
(Payments) (a "RECOVERY"), then:
(a) the recovering Finance Party shall, within 3 Business Days, notify
details of the recovery to the Agent;
(b) the Agent shall determine whether the recovery is in excess of the
amount which the recovering Finance Party would have received had
the recovery been received by the Agent and distributed in
accordance with Clause 10 (Payments);
- -------------------------------------------------------------------------------
69
- -------------------------------------------------------------------------------
(c) subject to Clause 30.3 (Exception), the recovering Finance Party
shall within 3 Business Days of demand by the Agent pay to the
Agent an amount (the "REDISTRIBUTION") equal to the excess;
(d) the Agent shall treat the redistribution as if it were a payment
by the Obligor concerned under Clause 10 (Payments) and shall pay
the redistribution to the Finance Parties (other than the
recovering Finance Party) in accordance with Clause 10.7 (Partial
Payments); and
(e) after payment of the full redistribution, the recovering Finance
Party will be subrogated to the portion of the claims paid under
paragraph (d) above and that Obligor will owe the recovering
Finance Party a debt which is equal to the redistribution,
immediately payable and of the type originally discharged.
30.2 REVERSAL OF REDISTRIBUTION
If under Clause 30.1 (Redistribution):
(a) a recovering Finance Party must subsequently return a recovery, or an
amount measured by reference to a recovery, to an Obligor; and
(b) the recovering Finance Party has paid a redistribution in relation to
that recovery,
each Finance Party shall, within 3 Business Days of demand by the
recovering Finance Party through the Agent, reimburse the recovering
Finance Party all or the appropriate portion of the redistribution paid
to that Finance Party. Thereupon, the subrogation in Clause 30.l(e)
(Redistribution) will operate in reverse to the extent of the
reimbursement.
30.3 EXCEPTION
A recovering Finance Party need not pay a redistribution to the extent
that it would not, after the payment, have a valid claim against the
Obligor concerned in the amount of the redistribution pursuant to Clause
30.1(e)(Redistribution).
31. SEVERABILITY
If a provision of any Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other
provision of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of the Finance Documents.
32. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
- -------------------------------------------------------------------------------
70
- -------------------------------------------------------------------------------
33. NOTICES
33.1 GIVING OF NOTICES
All notices or other communications under or in connection with this
Agreement shall be given in writing or by facsimile. Any such notice will
be deemed to be given as follows:
(a) if in writing, when delivered; and
(b) if by facsimile, when fully received in fully legible form.
However, a notice given in accordance with the above but received on a
non-working day or after business hours in the place of receipt will only
be deemed to be given on the next working day in that place.
33.2 ADDRESSES FOR NOTICES
(a) The address and facsimile number of each Party (other than the Agent) for
all notices under or in connection with this Agreement are:
(i) those notified by that Party for this purpose to the Agent on or
before the date it becomes a Party; or
(ii) any other notified by that Party for this purpose to the Agent by
not less than 5 Business Days' notice.
(b) The address and facsimile number of the Agent are:
Loans Administration
Corporate Banking Office
5-10 Great Tower Street
London EC3 3HX
Attention: John Shippey
Fax: 0171 220 7370
or such other as the Agent may notify to the other Parties by not less
than 5 Business Days' notice.
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) The Agent shall, promptly upon request from any Party, give to that Party
the address or fax number of any other Party applicable at the time for
the purposes of this Clause.
34. LANGUAGE
(a) Any notice given under or in connection with any Finance Document shall
be in English.
(b) All other documents provided under or in connection with any Finance
Document shall be:
- -------------------------------------------------------------------------------
71
- -------------------------------------------------------------------------------
(i) in English; or
(ii) if not in English, accompanied by a certified English translation
and, in this case, the English translation shall prevail unless
the document is a statutory or other official document.
35. JURISDICTION
35.1 SUBMISSION
For the benefit of each Finance Party, each Obligor agrees that the
courts of England have jurisdiction to settle any disputes in connection
with any Finance Document and accordingly submits to the jurisdiction of
the English courts.
35.2 SERVICE OF PROCESS
Without prejudice to any other mode of service each Obligor (other than
an Obligor incorporated in England and Wales):
(a) irrevocably appoints EG as its agent for service of process
relating to any proceedings before the English courts in
connection with any Finance Document;
(b) agrees that failure by a process agent to notify the Obligor of
the process will not invalidate the proceedings concerned; and
(c) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process to its
address for the time being applying under Clause 33.2 (Addresses
for notices).
35.3 FORUM CONVENIENCE AND ENFORCEMENT ABROAD
Each Obligor:
(a) waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with a
Finance Document; and
(b) agrees that a judgment or order of an English court in connection
with a Finance Document is conclusive and binding on it and may be
enforced against it in the courts of any other jurisdiction.
35.4 NON-EXCLUSIVITY
Nothing in this Clause 35 limits the right of a Finance Party to bring
proceedings against an Obligor in connection with any Finance Document:
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
- -------------------------------------------------------------------------------
72
- -------------------------------------------------------------------------------
36. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
- -------------------------------------------------------------------------------
73
- -------------------------------------------------------------------------------
SCHEDULE I
BANKS AND COMMITMENTS
BANK COMMITMENT
(pound)
The Bank of Nova Scotia 46,000,000
Bayerische Landesbank Girozentrale 46,000,000
London Branch
The Dai-Ichi Kangyo Bank, Limited 46,000,000
Den Danske Bank Aktieselskab 46,000,000
NationsBank, N.A. 46,000,000
Royal Bank of Canada Europe Limited 46,000,000
Barclays Bank PLC 40,915,245
The Royal Bank of Scotland plc 40,915,244
The Toronto-Dominion Bank 39,142,343
Westdeutsche Landesbank Girozentrale 39,142,343
Bank of Montreal 37,708,389
The Bank of Tokyo-Mitsubishi, Ltd. 37,708,389
Paribas 32,200,000
KBC Bank N.V., London Branch 30,166,711
The Sanwa Bank, Limited, London 30,166,711
Branch
Leonia Bank plc, London Branch 18,854,194
Nomura Bank International plc 18,854,194
The Norinchukin Bank 18,854,194
Norddeutsche Landesbank Girozentrale, 15,083,355
London Branch
Societe Generale 10,000,000
Banco Central Hispanoamericano, S.A, 9,247,455
London Branch
Banca Nazionale del Lavoro S.p.A., 7,541,677
London Branch
Banca Popolare di Novara S.C.aR.L., 7,541,677
London Branch
Creditanstalt AG 7.541,677
Credit Lyonnais 7,541,677
- -------------------------------------------------------------------------------
74
- -------------------------------------------------------------------------------
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
TO BE DELIVERED BEFORE DRAWDOWN
1. A copy, certified as being a true, complete and up-to-date copy as at a
date no earlier than the date of this Agreement by an Authorised
Signatory of each Obligor, of the Memorandum and Articles of Association
and the Certificate of Incorporation of such Obligor.
2. A copy, certified as being a true, complete and up-to-date copy by an
Authorised Signatory of each Obligor, of a resolution of the board of
directors of such Obligor duly approving the execution and delivery of
the Finance Documents, to which it is a party and the performance of its
obligations thereunder and authorising a person or persons (specified by
name or office) on behalf of such Obligor to sign or execute the Finance
Documents to which it is a party and any other documents to be delivered
by such Obligor pursuant thereto.
3. A certificate of the Secretary or another Authorised Signatory of each
Obligor setting out the names and specimen signatures of the persons
authorised to sign or execute, on behalf of such Obligor, the Finance
Documents, to which it is a party and any other documents to be delivered
by such Obligor pursuant thereto.
4. The form of the six-monthly Consolidated Management Accounts which shall
have been approved by the Agent.
5. A copy, certified as being a true, complete and up-to-date copy, of the
consolidated audited financial statements of the Group for the
twelve-month period ended on 31st March, 1996 and the Consolidated
Management Accounts for the periods 1st April, 1995 to 30th September,
1995 and 1st October, 1995 to 31st May, 1996 in such approved form.
6. A legal opinion of Allen & Overy, legal advisers to the Agent, addressed
to the Finance Parties.
7. The items referred to in Clause 2.1(c), (f), (g), (i) and (k) of the
Guarantee and Indemnity.
8. Originals of the Cash Collateralisation Documents duly executed by each
party expressed to be a party thereto.
- -------------------------------------------------------------------------------
75
- -------------------------------------------------------------------------------
SCHEDULE 3
CALCULATION OF THE MANDATORY COST
(a) The Mandatory Cost for an Advance for each of its Interest Periods is the
rate determined by the Agent to be equal to the arithmetic mean (rounded
upward, if necessary, to four decimal places) of the respective rates
notified by each of the Reference Banks to the Agent and calculated in
accordance with the following formulae:
in relation to a Loan denominated in sterling:
BY + S(Y-Z) + (F x 0.01)% per annum = Mandatory Cost
------------------------
100 (B + S)
where on the day of application of the formula:
B is the percentage of a Reference Bank's eligible liabilities (in
excess of any stated minimum) which the Bank of England requires
the Reference Bank to hold on a non-interest-bearing deposit
account in accordance with its cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the
Reference Bank to leading banks in the London interbank market at
or about 11.00 a.m. on that day for the relevant period;
S is the percentage of the Reference Bank's eligible liabilities
which the Bank of England requires the Reference Bank to place as
a special deposit;
Z is the interest rate per annum allowed by the Bank of England on
special deposits; and
F is the charge payable by the Reference Bank to the Financial
Services Authority under the relevant paragraphs of the Fees
Regulations (but where for this purpose any minimum limit will be
deemed to be zero) expressed in pounds per (pound)1 million of
the fee base of the Reference Bank.
(b) For the purposes of this Schedule 3:
(i) "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings
given to them at the time of application of the formula by the
Bank of England; and
(ii) "FEE BASE" has the meaning given to it in the Fees Regulations;
(iii) "FEES REGULATIONS" means:
(1) prior to 31st March, 1999, the Banking Supervision (Fees)
Regulations 1998; and
(2) on and after 31st March, 1999, any regulations governing
the payment of fees for banking supervision;
(iv) "RELEVANT PERIOD" in relation to each Interest period, means:
- -------------------------------------------------------------------------------
76
- -------------------------------------------------------------------------------
(A) if it is three months or less. that Interest Period; or
(B) if it is more than three months, each successive period of
three months and any necessary shorter period comprised in
that Interest Period.
(c) In the application of the formula, B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
BY is calculated as 0.5 x 15.
(d) If a Reference Bank does not supply a rate to the Agent, the applicable
Mandatory Cost will be determined on the basis of the rate(s) supplied by
the remaining Reference Banks.
(e) (i) The formula is applied on the first day of each relevant
period comprised in the relevant Interest Period.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
(f) If the Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Agent (after consultation
with the Banks and EG) shall notify the Borrowers of the manner in which
the Mandatory Cost will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the absence of manifest
error, be binding on all the Parties.
- -------------------------------------------------------------------------------
77
- -------------------------------------------------------------------------------
SCHEDULE 4
FORM OF REQUEST
To: The Royal Bank of Scotland plc as Agent
From: [BORROWER]
Date: [ ]
EASTERN MERCHANT PROPERTIES LIMITED AND
EASTERN MERCHANT GENERATION LIMITED
(POUND)1,057,395,552 STANDBY CREDIT FACILITY DATED 28TH OCTOBER, 1996 (AS
AMENDED AND RESTATED ON 17TH JULY, 1998)
1. We wish to borrow an Advance as follows:
(a) Drawdown Date: [ ]
(b) Amount: (pound)[ ]
(c) First Interest Period: [ ]/alternative Interest Period: [ ]*
(d) Payment Instructions: [ ].
2. We confirm that each condition specified in Clause 4.2. (Further
conditions precedent) is satisfied on the date of this Request.
By:
[BORROWER]
Authorised Signatory
- -----------------------------------
* Complete only if the requested Interest Period is of an optional duration
- -------------------------------------------------------------------------------
78
- -------------------------------------------------------------------------------
SCHEDULE 5
NOVATION CERTIFICATE
To: The Royal Bank of Scotland plc as Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date: [ ]
EASTERN MERCHANT PROPERTIES LIMITED AND
EASTERN MERCHANT GENERATION LIMITED
(POUND)1,057,395,552 STANDBY CREDIT FACILITY DATED 28TH OCTOBER, 1996 (AS
AMENDED AND RESTATED ON 17TH JULY, 1998)
We refer to Clause 27.3 (Procedure for novations).
1. We[ ] (the "EXISTING BANK") and
[ ] (the "NEW BANK") agree to the Existing Bank and the New Bank
novating all the Existing Bank's rights and obligations referred to in
the Schedule in accordance with Clause 27.3 (Procedure for novations).
2. The specified date for the purposes of Clause 27.3(c) is [date of
novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 33.2 (Addresses for notices) are set out in the
Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE NOVATED
[Details of the rights and obligations of the Existing Bank to be novated].
[Existing Bank] [New Bank]
By: By:
Date: Date:
[NEW BANK]
[Facility Office Address for notices]
THE ROYAL BANK OF SCOTLAND PLC
By:
Date:
- -------------------------------------------------------------------------------
79
- -------------------------------------------------------------------------------
SCHEDULE 6
NOTIONAL REPAYMENTS
REPAYMENT DATE NOTIONAL REPAYMENT AMOUNT
24th December, 1996 51,102,239.21
25th March, 1997 44,802,322.54
24th June, 1997 45,622,894.24
29th September, 1997 45,352,485.77
24th December, 1997 48,165,177.54
25th March, 1998 48,171,306.85
24th June, 1998 49,053,582.79
29th September, 1998 49,076,350.86
24th December, 1998 51,531,205.19
25th March, 1999 51,794,683.86
24th June, 1999 52,743,323.34
29th September, 1999 53,081,405.78
24th December, 1999 55,151,402.29
24th March, 2000 55,691,662.84
23rd June, 2000 56,711,676.98
29th September, 2000 57,328,634.93
22nd December, 2000 59,141,338.18
23rd March, 2001 59,883,565.22
22nd June, 2001 60,980,355.66
28th September, 2001 62,009,870.03
- -------------------------------------------------------------------------------
80
- -------------------------------------------------------------------------------
SIGNATORIES
BORROWERS
EASTERN MERCHANT PROPERTIES LIMITED
By:
EASTERN MERCHANT GENERATION LIMITED
By:
GUARANTORS
EASTERN GROUP plc
By:
EASTERN GENERATION LIMITED
By:
EE
EASTERN ELECTRICITY plc (formerly Eastern Group plc)
By:
ARRANGERS
BARCLAYS CAPITAL
By:
THE ROYAL BANK OF SCOTLAND plc
By:
- -------------------------------------------------------------------------------
81
- -------------------------------------------------------------------------------
CO-ARRANGERS
THE BANK OF NOVA SCOTIA
By:
BAYERISCHE LANDESBANK GIROZENTRALE
By:
THE DAI-ICHI KANGYO BANK, LIMITED
By:
DEN DANSKE BANK AKTIESELSKAB
By:
NATIONSBANK, N.A.
By:
ROYAL BANK OF CANADA EUROPE LIMITED
By:
THE TORONTO-DOMINION BANK
By:
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By:
- -------------------------------------------------------------------------------
82
- -------------------------------------------------------------------------------
BANKS
THE BANK OF NOVA SCOTIA
By:
BAYERISCHE LANDESBANK GIROZENTRALE LONDON BRANCH
By:
THE DAI-ICHI KANGYO BANK LIMITED
By:
DEN DANSKE BANK AKTIESELSKAB
By:
NATIONSBANK, N.A.
By:
ROYAL BANK OF CANADA EUROPE LIMITED
By:
BARCLAYS BANK PLC
By:
THE ROYAL BANK OF SCOTLAND PLC
By:
THE TORONTO-DOMINION BANK
By:
- -------------------------------------------------------------------------------
83
- -------------------------------------------------------------------------------
BANKS CONTINUED
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By:
BANK OF MONTREAL
By:
THE BANK OF TOKYO-MITSUBISHI, LTD
By:
PARIBAS
By:
KBC BANK N.V., LONDON BRANCH
By:
THE SANWA BANK, LIMITED, LONDON BRANCH
By:
LEONIA BANK PLC, LONDON BRANCH
By:
NOMURA BANK INTERNATIONAL PLC
By:
THE NORINCHUKIN BANK
By:
NORDDEUTSCHE LANDESBANK GIROZENTRALE, LONDON BRANCH
By:
- -------------------------------------------------------------------------------
84
- -------------------------------------------------------------------------------
BANKS CONTINUED
SOCIETE GENERALE
By:
BANCO CENTRAL HISPANOAMERICANO, S.A. LONDON BRANCH
By:
BANCA NAZIONALE DEL LAVORO S.P.A. LONDON BRANCH
By:
BANCA POPOLARE DI NOVARA S.C.aR.L., LONDON BRANCH
By:
CREDITANSTALT AG
By:
CREDIT LYONNAIS
By:
AGENT
THE ROYAL BANK OF SCOTLAND plc
By:
- -------------------------------------------------------------------------------
85
- -------------------------------------------------------------------------------
SIGNATORIES
BORROWERS
EASTERN MERCHANT PROPERTIES LIMITED
By: E.J. LEAN
EASTERN MERCHANT GENERATION LIMITED
By: E.J. LEAN
GUARANTORS
EASTERN GROUP plc
By: E.J. LEAN
EASTERN GENERATION LIMITED
By: E. J. LEAN
EE
EASTERN ELECTRICITY plc (formerly Eastern Group plc)
By: E.J. LEAN
ARRANGERS
BARCLAYS CAPITAL
By: N. LAWRENCE
THE ROYAL BANK OF SCOTLAND plc
By: C.L. SALTER
- -------------------------------------------------------------------------------
86
- -------------------------------------------------------------------------------
CO-ARRANGERS
THE BANK OF NOVA SCOTIA
By: R.C. HAMER
BAYERISCHE LANDESBANK GIROZENTRALE LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
THE DAI-ICHI KANGYO BANK, LIMITED
By: C.S. VITTERY
DEN DANSKE BANK AKTIESELSKAB
By: C.L. SALTER (Power of Attorney)
NATIONSBANK, N.A.
By: C.L. SALTER (Power of Attorney)
ROYAL BANK OF CANADA EUROPE LIMITED
By: C.L. SALTER (Power of Attorney)
THE TORONTO-DOMINION BANK
By: C.L. SALTER (Power of Attorney)
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: C.L. SALTER (Power of Attorney)
BANKS
THE BANK OF NOVA SCOTIA
By: R.C. HAMER
- -------------------------------------------------------------------------------
87
- -------------------------------------------------------------------------------
BANKS CONTINUED
BAYERISCHE LANDESBANK GIROZENTRALE LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
THE DAI-ICHI KANGYO BANK, LIMITED
By: C.S. VITTERY
DEN DANSKE BANK AKTIESELSKAB
By: C.L. SALTER (Power of Attorney)
NATIONSBANK, N.A.
By: C.L. SALTER (Power of Attorney)
ROYAL BANK OF CANADA EUROPE LIMITED
By: C.L. SALTER (Power of Attorney)
BARCLAYS BANK PLC
By: N. LAWRENCE
THE ROYAL BANK OF SCOTLAND PLC
By: B. McINNES
THE TORONTO-DOMINION BANK
By: C.L. SALTER (Power of Attorney)
WESTDEUTSCHE LANDESBANK GIRONZENTRALE
By: C.L. SALTER (Power of Attorney)
- -------------------------------------------------------------------------------
88
- -------------------------------------------------------------------------------
BANKS CONTINUED
BANK OF MONTREAL
By: C.L. SALTER (Power of Attorney)
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: C.L. SALTER (Power of Attorney)
PARIBAS
By: C.L. SALTER (Power of Attorney)
KBC BANK N.V., LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
THE SANWA BANK, LIMITED, LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
LEONIA BANK PLC, LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
NOMURA BANK INTERNATIONAL PLC
By: C.L. SALTER (Power of Attorney)
THE NORINCHUKIN BANK
By: C.L. SALTER (Power of Attorney)
NORDDEUTSCHE LANDESBANK GIROZENTRALE, LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
SOCIETE GENERALE
By: C.L. SALTER (Power of Attorney)
- -------------------------------------------------------------------------------
89
- -------------------------------------------------------------------------------
BANCO CENTRAL HISPANOAMERICANO, S.A. LONDON BRANCH
By: H. BRIGHT C. GRIGGS
BANCA NAZIONALE DEL LAVORO S.P.A., LONDON BRANCH
By: P. MITCHELL D. ROSSER
BANCA POPOLARE DI NOVARA S.C.aR.L., LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
CREDITANSTALT AG
By: C.L. SALTER (Power of Attorney)
CREDIT LYONNAIS
By: C.L. SALTER (Power of Attorney)
EXITING BANKS
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: C.L. SALTER (Power of Attorney)
BANCA COMMERCIALE ITALIANA S.p.A., LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
BANKGESELLSCHAFT BERLIN AG, LONDON BRANCH
By: C.L. SALTER (Power of Attorney)
THE FUJI BANK, LIMITED
By: P. RICHEY
- -------------------------------------------------------------------------------
90
- -------------------------------------------------------------------------------
EXITING BANKS CONTINUED
THE SAKURA BANK, LIMITED
By: C.L. SALTER (Power of Attorney)
THE BANK OF YOKOHAMA, LTD.
By: C.L. SALTER (Power of Attorney)
THE NIKKO BANK (UK) PLC
By: C.L. SALTER (Power of Attorney)
THE YASUDA TRUST & BANKING COMPANY LIMITED
By: C.L. SALTER (Power of Attorney)
AGENT
THE ROYAL BANK OF SCOTLAND plc
By: S. HUGHES
- -------------------------------------------------------------------------------