EXHIBIT 10.7
MACQUARIE YORKSHIRE LIMITED
and
BALFOUR BEATTY PLC
and
YORKSHIRE LINK (HOLDINGS) LIMITED
and
YORKSHIRE LINK LIMITED
and
MACQUARIE EUROPEAN INFRASTRUCTURE PLC
_____________________________________
SHAREHOLDERS AGREEMENT
relating to
YORKSHIRE LINK (HOLDINGS) LIMITED
and
YORKSHIRE LINK LIMITED
_____________________________________
CONTENTS
CLAUSE PAGE
1. INTERPRETATION........................................................... 2
2. WARRANTIES............................................................... 5
3. OBJECTIVES OF THE SHAREHOLDERS, YHL AND YLL.............................. 5
4. NOT USED................................................................. 6
5. MANAGEMENT............................................................... 6
6. RESERVED MATTERS......................................................... 7
7. PERSONNEL................................................................ 8
8. CONTINUING OBLIGATIONS................................................... 9
9. DIVIDEND POLICY.......................................................... 10
10. RESTRICTIVE COVENANTS.................................................... 10
10A. MEANING OF TERMS IN CLAUSES 11, 11A AND 12............................... 11
11. TRANSFER OF SHARES....................................................... 12
11A PRE-EMPTIVE RIGHTS....................................................... 16
12. TRANSFER OF YLL LOAN STOCK AND COMMERCIAL SUBORDINATED LOAN AGREEMENT.... 20
13. DEFAULT.................................................................. 21
14. CONFIDENTIALITY.......................................................... 22
15. DURATION................................................................. 22
16. DISPUTES................................................................. 23
17. TAX AND THE SURRENDER OF LOSSES.......................................... 23
18. ANNOUNCEMENTS............................................................ 31
19. NOTICES AND RECEIPTS..................................................... 31
20. COSTS AND VAT............................................................ 31
21. SEVERABILITY............................................................. 32
22. WHOLE AGREEMENT.......................................................... 32
23. GENERAL.................................................................. 32
24. NOT USED................................................................. 33
25. COUNTER INDEMNITY........................................................ 33
26. GOVERNING LAW............................................................ 33
SCHEDULES
SCHEDULE 1 .......................................................................... 34
SCHEDULE 2 .......................................................................... 36
SCHEDULE 3 .......................................................................... 39
SCHEDULE 4 .......................................................................... 40
Signatories ......................................................................... 41
i
THIS AGREEMENT is made on 26th March, 1996 as amended and restated on 30 April
2003
BETWEEN:
(1) MACQUARIE YORKSHIRE LIMITED (registered number 4712996) whose
registered office is at Level 29 and 30, 1 Ropemaker Street, London
EC2Y 9HD ("MYL");
(2) BALFOUR BEATTY PLC (registered number 395826) whose registered office
is at 130 Wilton Road, London SW1V 1LQ ("BB");
(3) YORKSHIRE LINK (HOLDINGS) LIMITED (registered number 3059235) whose
registered office is at Level 29 and 30, 1 Ropemaker Street, London
EC2Y 9HD ("YHL");
(4) YORKSHIRE LINK LIMITED (registered number 2999303) whose registered
office is at Level 29 and 30, 1 Ropemaker Street, London EC2Y 9HD
("YLL"); and
(5) MACQUARIE EUROPEAN INFRASTRUCTURE PLC (registered number 867281) whose
registered office is at Level 29 and 30, 1 Ropemaker Street, London
EC2Y 9HD ("MEIP").
WHEREAS:
(A) YHL is a private company limited by shares short particulars of which
are set out in Part 1 of Schedule 1.
(B) YLL is a private company limited by shares short particulars of which
are set out in Part 2 of Schedule 1.
(C) YLL is the wholly owned subsidiary of YHL.
(D) The main business of YHL is the making and holding of its investment in
YLL.
(E) YLL has entered into the DBFO Contract, raised the finance for the
Project (under the terms and conditions of the Funding Agreements) and
is currently undertaking the Project.
(F) MYL and BB are shareholders in YHL.
(G) The parties have agreed to enter into this agreement for the purposes
of (i) regulating, as between the parties, their relationship with each
other as shareholders in YHL and (ii) regulating, as between all of the
parties, certain aspects of the affairs of YHL and YLL.
IT IS AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"AFFILIATE" means in relation to any member, any subsidiary undertaking
or parent undertaking or any other subsidiary undertaking of that
parent undertaking save that in relation to MYL, it means MEIP and any
subsidiary undertaking of MEIP;
"ARTICLES" means the articles of association of YHL or YLL (as the case
may be);
"BF LETTER OF CREDIT" has the meaning given to it in the EIB Facility
Agreement (as defined in the Intercreditor Agreement).
"BOARD" means the board of Directors for the time being of YHL or YLL
(as the case may be);
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open in London for normal business;
"COMMERCIAL BANK FACILITY AGREEMENT" means a facility agreement
between, amongst others, YLL, the financial institutions described as
lenders therein, the arrangers described therein and ABN AMRO Bank NV
as agent in relation to certain credit facilities in favour of YLL;
"COMMERCIAL SUBORDINATED LOAN AGREEMENT" means a subordinated loan
agreement between YLL (as borrower) and MYL and BB (as lenders);
"COMPANY" means YHL or YLL, as the case may be;
"COMPLETION DATE" means 26 March 1996;
"CONSTRUCTION CONTRACT" means the construction contract entered into on
26 March 1996 and made between YLL as employer and each of Balfour
Beatty Civil Engineering Limited and Skanska Construction UK Limited as
the contractor for the design and construction of the Project;
"DBFO CONTRACT" means the concession agreement dated 26 March 1996
between the Secretary of State for Transport and YLL requiring YLL to
design, build, finance and operate the M1-A1 Link Road (Lofthouse to
Bramham) in return for shadow tolls;
"DIRECTOR" means any director for the time being of YHL or YLL as the
case may be;
"EIB" means European Investment Bank of 100 Boulevard Konrad Adenauer,
L-2950 Luxembourg;
"EIB FACILITY AGREEMENT" means a facility agreement between YLL and EIB
in relation to certain credit facilities in favour of YLL;
2
"FINANCIAL YEAR" means a financial year for the purposes of the
Companies Act 1985;
"FUNDING AGREEMENT" means each of the Commercial Bank Facility
Agreement, the EIB Facility Agreement and (each as defined in the
Intercreditor Agreement) the EIF Senior Guarantee Facility Agreement,
the Commercial Subordinated Loan Agreement, the YLL Loan Stock
Instrument and any guarantees issued thereunder;
"GROUP" means in relation to any party, it and its Affiliates;
"GUARANTEE" means the deed of guarantee entered into on the Completion
Date and amended and restated on the date of amendment and restatement
of this agreement, under which MEIP agrees to guarantee the performance
of MYL of its obligations under this agreement and the performance by
MIUK of its obligations under the Technical Services Agreement and the
Secondment Agreement.
"INTERCREDITOR AGREEMENT" means an intercreditor agreement between,
amongst others, YLL and the lenders under each of the Funding
Agreements in relation to, amongst other things, the priority of
secured and unsecured claims between such persons;
"LC PROVIDER" means MEIP and BB.
"MIUK" means Macquarie Infrastructure (UK) Limited, (registered number
1540913) whose registered office is at Level 29 and 30, 1 Ropemaker
Street, London EC2Y 9HD;
"MYL OWNER" means (i) MEIP; (ii) an Affiliate of MEIP who, together or
by themselves own all of the shares in MYL then on issue;
"POST-TAX PROFITS" means in respect of any Financial Year the audited
post-tax profit of the relevant Company as shown in the audited profit
and loss account of that Company or, as the case may be, the audited
consolidated profit and loss accounts of YHL and its subsidiaries for
that year;
"PROJECT" means the designing, building, financing and operating of the
M1-A1 Link Road (Lofthouse to Bramham) and various related on and off
site facilities in accordance with the terms of the DBFO Contract;
"PROJECT BUDGET" means the project budget of YLL;
"RELEVANT DATE" means the date on which any party becomes a party to
this agreement whether as an original party or by subsequently adhering
to its terms in the manner described in this agreement;
"RESERVED MATTERS" means each of the matters in Schedule 2;
"SECONDMENT AGREEMENT" means the replacement secondment agreement
between MIUK, BB and YLL dated on or about the date of the amendment
and restatement of this agreement under which MIUK and BB each agree to
second personnel to YLL;
3
"SHAREHOLDERS" means MYL and BB and, where the context so admits, any
person holding shares in YHL who is party to this agreement;
"SHARE PLEDGE AGREEMENT" means a share pledge on 26 March 1996 granted
by YHL in favour of the Security Trustee (as defined in the
Intercreditor Agreement) as agent and trustee for the lenders under the
Funding Agreements in relation to the issued share capital of YLL;
"SUBSIDIARY" and "HOLDING COMPANY" shall have the meanings given in
section 736 of the Companies Act 1985;
"TECHNICAL SERVICES AGREEMENT" means the agreement between YLL, MIUK
and BB relating to the provision of technical services to YLL;
"ULTIMATE PARENT UNDERTAKING" means, in the case of MYL, MEIP, and, in
the case of BB, BB;
"YHL AGREEMENTS" means the agreement(s) to be entered into by YHL at
Completion as listed in Part 1 of Schedule 4;
"YHL ARTICLES" means the articles of association of YHL;
"YHL BOARD" means the board of directors of YHL;
"YHL MEMORANDUM" means the memorandum of association of YHL;
"YHL SHARES" means the ordinary shares in the share capital of YHL;
"YLL AGREEMENTS" means the agreements entered into by YLL as listed in
Part 2 of Schedule 4;
"YLL ARTICLES" means the articles of association of YLL;
"YLL BOARD" means the board of directors of YLL;
"YLL LOAN STOCK" means the (pound)12,000,000 15 per cent. secured
subordinated loan stock of YLL constituted by the YLL Loan Stock
Instrument or, as the case may be, the nominal amount thereof for the
time being outstanding;
"YLL LOAN STOCK INSTRUMENT" means a Loan Stock Instrument dated 26
March 1996 creating (pound)12,000,000 15 per cent. secured subordinated
loan stock;
"YLL MEMORANDUM" means the memorandum of association of YLL; and
"YLL SHARES" means the ordinary shares in the share capital of YLL.
4
(2) Any reference, express or implied, to an enactment includes references
to:
(a) that enactment as amended, extended or applied by or under any
other enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after this
agreement) under any enactment, as amended, extended or
applied as described in paragraph (a) above or under any
enactment referred to in paragraph (b) above.
(3) The singular shall include the plural and vice versa and words denoting
a person shall include a body corporate and an unincorporated
association of persons and, unless otherwise stated, include that
person's successors or assigns.
(4) Any reference in this agreement to this agreement, another agreement,
deed, instrument or other document shall be construed as a reference to
this agreement or that other agreement, deed, instrument or other
document as the same may have been, or may from time to time be,
amended, varied, supplemented or novated.
(5) Subclauses (1) to (4) above apply unless the contrary intention
appears.
(6) The headings in this agreement do not affect its interpretation.
(7) Any annex, appendix or schedule to this agreement shall take effect as
if set out in this agreement and references to this agreement shall
include its annexes, appendices and schedules.
2. WARRANTIES
Each of the Shareholders represents and warrants to the other(s) at the
Completion Date that the matters contained in Schedule 3 are true and
accurate.
3. OBJECTIVES OF THE SHAREHOLDERS, YHL AND YLL
(1) The primary object of YHL is to maximise the value of its investment in
YLL in a manner consistent with the YHL Agreements and YHL shall not
carry on any other business without the agreement in writing of all the
Shareholders who are the parties to this agreement.
(2) The primary object of YLL is to undertake and profitably operate the
Project in accordance with the YLL Agreements and YLL shall not carry
on any other business without the agreement in writing of all the
Shareholders who are the parties to this agreement.
(3) Subject as otherwise required by law or by the provisions of this
agreement, proceedings of YHL shall be conducted in such a way as to
maximise profit available for distribution to its shareholders to the
extent consistent with good business practice.
5
(4) Subject as otherwise required by law or by the provisions of this
agreement, proceedings of YLL shall be conducted in such a way as to
maximise profit available for distribution to YHL to the extent
consistent with good business practice.
(5) Each of YHL and YLL shall deal with the Shareholders and their
Affiliates on an arm's length basis and the Shareholders shall
endeavour to ensure that any existing or potential conflicts of
interest are brought to the attention of YHL or YLL (as the case may
be) at the earliest opportunity so that they can be dealt with in
accordance with the provisions of this agreement and the relevant
Articles.
4. NOT USED
5. MANAGEMENT
(1) The composition of the YLL Board shall be identical to that of the YHL
Board together with the same voting rights.
(2) Other than in relation to matters which legally require the
participation of the YHL Board, all business relating to the Project
shall be undertaken by the YLL Board.
(3) The maximum number of Directors shall be six and the minimum shall be
two.
(4) Each Shareholder shall be entitled to appoint one Director for every
16.67% of the YHL Shares which that Shareholder holds (together with
its Affiliates). Each Shareholder shall be entitled to remove any
Director appointed by it and appoint another person as a Director in
his place. If a Shareholder's holding of YHL Shares falls below the
minimum percentage required to appoint the number of Directors which
have been appointed by it, that Shareholder shall reduce its number of
Directors accordingly, provided that if such reduction is not
performed, the Shareholders shall procure that such removal takes place
as soon as practicable and in any event prior to or at the beginning of
the next meeting of the relevant Board.
(5) The managing director of YHL and YLL from time to time shall be
appointed by the relevant Board and shall be a Director of the relevant
Company, but shall not be entitled to vote at Board meetings. The
managing director shall only be removed or replaced with the unanimous
consent of the Shareholders.
(6) [Not used]
(7) Unless otherwise agreed by all of the Directors, meetings of the YLL
Board shall be held at intervals of not more than one month and not
less than seven days' written notice shall be given to each of the
Directors (and any alternate directors) of all meetings of the Board at
the address notified from time to time by each Director to the
secretary of the relevant Company. Each such notice shall contain,
inter alia, an agenda specifying in reasonable detail the matters to be
discussed at the relevant meeting and any relevant papers for
discussion at such meeting.
6
(8) Subject to clauses 6(6) and 13(2), the quorum for any meeting of the
Board shall be one appointee from each of the Shareholders entitled to
appoint a Director under subclause (4). If any meeting is adjourned for
want of a quorum, not less than seven days' (or such other period as
shall be agreed by all the Directors) written notice of the adjourned
meeting shall be given to all the Directors and at the adjourned
meeting the quorum shall be one appointee from each of two
Shareholders.
(9) All or any of the Directors may attend a meeting of the Board by means
of a conference telephone or other communication equipment provided
that all persons participating in the meeting are able to hear and
address each other. Any Director attending a Board Meeting in this way
shall be deemed to be present in person at the meeting and shall be
entitled to vote and be counted in a quorum accordingly.
(10) The current chairman of the Board and of general meetings has been
nominated by BB; thereafter the appointment of the chairman shall
rotate between the shareholders on every second anniversary of the
Completion Date.
(11) The chairman shall not be entitled to a second or casting vote either
in general meeting or at any meeting of directors of the relevant
Company.
(12) Fees shall be paid by YHL and YLL to the Directors in the amounts
agreed by the relevant Board.
(13) Any non-executive Director appointed to the Board shall not be entitled
to vote on a resolution of Directors.
(14) Other regulations relating to the quorum and proceedings of directors
are contained in the Articles.
6. RESERVED MATTERS
(1) Each Director or, if a Shareholder has appointed more than one director
in accordance with clause 5(4), the Director specified from time to
time by that Shareholder by written notice to the Board as being
entitled to vote, shall at any meeting of the Board be entitled to cast
the number of votes equal to the number of YHL Ordinary Shares
registered in the name of the Shareholder (or any of its Affiliates)
who appointed that Director (or, as the case may be, those Directors).
(2) [Not used].
(3) All matters of the Board (other than those referred to in subclause
(5)) shall be decided by majority vote on the basis of the number of
votes to which each Director is entitled under subclause (1) above.
(4) The Shareholders agree as between themselves that they shall use all
reasonable endeavours to procure that, save as specifically contained
in the Project Budget, the Board of each of YHL and YLL shall not do
any of the things in Part 2 of Schedule 2 (Reserved Matters) without
the prior approval (either in writing or at the relevant Board
7
meeting) of all of those Directors appointed by any Shareholder which
(together with their Affiliates) hold not less than 49% in nominal
value of the YHL Shares for the time being entitled to attend and vote
at general meetings.
(5) The Shareholders agree, as between themselves, that they shall procure
that, save as specifically contained in the Project Budget, neither YHL
nor YLL shall do any of the things in Part 1 of Schedule 2 (Reserved
Matters) without the prior approval (either in writing or at the
relevant general meeting) of Shareholders which (together with their
Affiliates) hold not less than 90 per cent. in nominal value of the YHL
Shares for the time being entitled to attend and vote at general
meetings.
(6) Notwithstanding anything to the contrary in the relevant Articles:
(a) no Shareholder or Director appointed or nominated by that
Shareholder shall be entitled or required to vote on any
decision of the relevant Company or the Board relating to the
enforcement of rights, disputes, legal proceedings or
amendments to any of the YHL Agreements or the YLL Agreements
to which it or its Affiliate is a party ("SHAREHOLDER
LITIGATION"), provided that where the counterparty or
counterparties is an Affiliate of both BB and MYL, each of BB
and MYL (as shareholders) and the Directors appointed by them
shall be entitled to vote in respect of any such matters; and
(b) any meeting of YHL, YLL or the Board of either of them which
would be quorate but for the absence of such Shareholder or
Director shall be deemed quorate to the extent that the
business of such meeting is to discuss, consider or resolve
any matter relating to such Shareholder Litigation and any
resolution or vote taken at such a meeting which would be
valid and carried but for the absence of the vote of such
Shareholder or Director shall be deemed to be valid and
carried.
For the avoidance of doubt, neither MYL, BB nor any Director appointed
by them shall be restricted from voting on any decision relating to the
enforcement of rights under the Construction Contract and the Technical
Services Agreement.
7. PERSONNEL
(1) YLL may, in addition to employing personnel, obtain secondees from the
Shareholders or their Affiliates and has entered into the Secondment
Agreement in relation to such personnel. Such secondees shall be
subject to the direction and control of YLL during any such period of
secondment.
(2) The parties recognise that the Directors of YLL and its employees and
secondees owe a primary duty to act in the best interests of YLL which
shall take priority over their duties to the Shareholders or their
Affiliates to the extent that there is any conflict during any such
period of appointment, employment or secondment.
8
8. CONTINUING OBLIGATIONS
The Shareholders shall procure that for so long as they are
shareholders in YHL and, for so long as YHL is the sole shareholder in
YLL, the following obligations are complied with:
(a) (i) YHL, its officers and the Shareholders shall observe
all the provisions of the YHL Memorandum and the YHL
Articles (as amended or replaced from time to time).
(ii) YLL, its officers and YHL shall observe all the
provisions of the YLL Memorandum and the YLL Articles
(as amended or replaced from time to time).
(b) Each Shareholder and YHL shall use all reasonable endeavours
to procure that YLL complies with the Project Budget and any
operating budget set by YHL. If YHL or YLL becomes aware of
any material variation during any Financial Year in the
Project Budget it shall immediately notify each of the
Shareholders.
(c) YHL shall provide each Shareholder, being a holder of 16.67
per cent. or more of the YHL Shares, with:
(i) monthly accounts and progress reports within three
weeks of the end of each month or as otherwise agreed
by the Shareholders;
(ii) audited accounts of YHL and YLL and audited
consolidated accounts of YHL and YLL within six
months of the end of each Financial Year and shall
lay them before a general meeting of the relevant
Company within such period; and
(iii) such further information as each Shareholder may from
time to time reasonably require as to all matters
relating to the businesses or affairs of YHL and YLL
or to the financial position of YHL and YLL.
(d) YHL and YLL shall keep proper accounting records and in them
make true and complete entries of all of its dealings and
transactions in relation to its business and procure that its
accounting records shall at all reasonable times during normal
business hours be available for inspection by each of the
Shareholders or the respective Shareholders' duly authorised
representatives or agents.
(e) YHL and YLL shall provide each of the Shareholders with such
certificates (including certificates of auditors) of
borrowings, Post-tax Profits and such other matters as each of
the Shareholders may reasonably require in the form and
furnished at such time as each of the Shareholders shall
reasonably require.
9
9. DIVIDEND POLICY
Subject always to the terms of the Intercreditor Agreement and the
Funding Agreements:
(1) YHL shall procure that YLL shall, to the extent permitted by
law and subject to making prudent reserves, distribute by way
of dividend in respect of each Financial Year 100 per cent. of
the Post-tax Profits of YLL for that Financial Year;
(2) the Shareholders shall procure that YHL shall, to the extent
permitted by law, distribute by way of dividend in respect of
each Financial Year 100 per cent. of the Post-tax Profits of
YHL for that Financial Year;
(3) to the extent that YHL is restricted from paying a dividend
under paragraph (2) above, but YLL or any other subsidiary has
available distributable reserves, YHL shall take all
reasonable steps to maximise profits available for
distribution by YHL including, without limitation, procuring
the payment of such dividends by YLL or any subsidiary to
enable YHL to pay the dividend referred to in paragraph (2)
above;
(4) YHL, YLL and any of their subsidiaries may declare interim
dividends; and
(5) the relevant Company shall, to the extent permitted by law,
pay any such dividends within 30 days after the date of the
holding of the annual general meeting before which the audited
accounts of the relevant Company for the Financial Year are
laid.
10. RESTRICTIVE COVENANTS
(1) Each Shareholder, being a holder of five per cent. or more of the YHL
Shares, undertakes with the other Shareholders, that, for so long as
it, or any Affiliate of it, remains a member of YHL and for two years
after the date on which it or any Affiliate ceases to be a member (the
"TERMINATION DATE"), without the prior consent of the other
Shareholder(s) (such consent not to be unreasonably withheld) it will
not and will procure that any such Affiliate will not (either
personally or through an agent):
(a) be concerned in any business which is competitive or
calculated or likely to be competitive with YHL, YLL or any
other subsidiary in their pursuit or performance of the
Project; or
(b) induce or attempt to induce any supplier of any of YHL, YLL or
any other subsidiary to cease to supply, or to restrict or
vary the terms of supply to them; or
(c) induce, or attempt to induce, any officer or employee of any
of YHL, YLL or any other subsidiary to leave his employment
with them; or
(d) use or (insofar as it can reasonably do so) allow to be used
(except by YHL, YLL or any of their subsidiaries) any trade
name used by YHL, YLL or any of their
10
subsidiaries at the Termination Date or any other name
calculated or likely to be confused with such a trade name.
(2) For the purposes of subclause (1):
(a) a Shareholder or its Affiliate is concerned in a business if
it carries it on as principal or agent or if:
(i) it is a partner, director, employee, secondee,
consultant or agent in, of or to any person who
carries on the business; or
(ii) it has any direct or indirect financial interest (as
shareholder or otherwise) in any person who carries
on the business, disregarding any financial interest
of a person in securities which are listed on The
London Stock Exchange or traded on the Alternative
Investment Market if that person, the Shareholder or
its Affiliate and any person connected with it are
interested in securities which amount to less than
ten per cent. of the issued securities of that class
and which, in all circumstances, carry less than ten
per cent. of the voting rights (if any) attaching to
the issued securities of that class; and
(b) references to any of YHL, YLL and their subsidiaries include
their respective successors in business.
(3) Each covenant contained in each paragraph or subclause above shall be,
and is, a separate covenant by each relevant Shareholder, and shall be
enforceable by the other Shareholder(s) separately and independently of
each of the other covenants and its validity shall not be affected if
any of the others is invalid; if any of the covenants is void but would
be valid if some part of the covenant were deleted the covenant in
question shall apply with such modification as may be necessary to make
it valid.
(4) Each Shareholder, having obtained professional advice, acknowledges and
agrees that the covenants contained in this clause are no more
extensive than is reasonable to protect the other(s) as a subscriber of
shares in YHL.
(5) If any provision of this agreement or of any other agreement or
arrangement of which it forms part is subject to registration under the
Restrictive Trade Practices Act 1976, that provision shall not take
effect until the day after particulars of the agreement or arrangement
have been given to the Director General of Fair Trading under section
24 of that Act.
10A. MEANING OF TERMS IN CLAUSES 11, 11A AND 12
In Clauses 11, 11A and 12, the following terms have the following
meanings unless the context otherwise requires:
11
"APPROVALS" means:
(a) any necessary approvals required by any competent
supranational, governmental or regulatory agencies or
authorities;
(b) any necessary approval of the shareholders of a Shareholder or
Affiliate in general meeting; and
(c) the prior approval of the Secretary of State for Transport if
required by the terms of the DBFO Contract.
"COMPETING PROPORTION" means the proportion derived from dividing the
number of YHL Shares, the number of YLL Loan Stock or the principal
amount of the Commercial Subordinated Loan Agreement held by a
Shareholder by the sum of the number of YHL Shares, the number of YLL
Loan Stock and the principal outstandings of the Commercial
Subordinated Loan Agreement (as the case may be) held by the Continuing
Shareholders or Losing Shareholders to whom an allotment is made
pursuant to Clause 11A(4).
"OTHER SHARES" means the YHL Shares held by Shareholders other than the
Shareholder proposing to Transfer any interest in any YHL Share or any
right attaching to them.
"OWNERSHIP PROPORTION" means the proportion derived from dividing the
number of YHL Shares, the number of YLL Loan Stock or the principal
amount of the Commercial Subordinated Loan Agreement held by a
Shareholder by the total number of YHL Shares then on issue, the total
number of YLL Loan Stock then on issue and the total principal
outstandings of the Commercial Subordinated Loan Agreement (as the case
may be).
"RELEVANT PROPORTION" means the proportion derived from dividing the
number of YHL Shares, the number of YLL Loan Stock or the principal
amount of the Commercial Subordinated Loan Agreement the subject of a
Transfer Notice by the total number of YHL Shares then on issue, the
total number of YLL Loan Stock then on issue and the total principal
outstandings of the Commercial Subordinated Loan Agreement (as the case
may be).
"TRANSFER" means any sale, transfer, assignment, pledge, charge or
other disposal.
11. TRANSFER OF SHARES
Subject always to the terms of the Intercreditor Agreement, the Funding
Agreements and the DBFO Contract:
(1) No Shareholder may Transfer any interest in any YHL Share or
any right attaching to it except:
(a) with the prior written consent of all other
Shareholders which (together with their Affiliates)
hold not less than 90% of the Other Shares; or
(b) pursuant to a Transfer to an Affiliate in accordance
with subclause (5); or
12
(c) pursuant to a Transfer under subclause (2).
Where a Shareholder is entitled to Transfer any interest in
any YHL Share in accordance with Clause 11(1), such Transfer
may be in respect of all or any part of the YHL Shares held by
that Shareholder.
(2) Other than in accordance with subclause (1)(a) and (b), no
Shareholder may Transfer its YHL Shares:
(a) [Not used]
(b) without the prior approval of the Secretary of State
for Transport and subject to the terms of the DBFO
Contract;
(c) without first offering the right to acquire the
shares to each other Shareholder or the right to sell
shares to a bona fide arms length third party in each
case in accordance with Clause 11A of this Agreement.
(2A) If a Continuing Shareholder is entitled to, and does, give
notice that it wishes that this Clause 11(2A) apply ("VENDOR
SHAREHOLDER"), the following shall occur:
(a) the Vendor Shareholder shall have the right to sell
to the Proposing Transferee an amount of YHL Shares,
YLL Loan Stock and a principal amount of the
Commercial Subordinated Loan Agreement equal to its
Ownership Proportion of the Offered Interests
("VENDOR INTERESTS") and the Proposing Transferor
shall only have the right to Transfer to the
Proposing Transferee YHL Shares, YLL Loan Stock and a
principal amount of the Commercial Subordinated Loan
Agreement comprising the Offered Interests other than
the Vendor Interests;
(b) The sale referred to in clause 11(2A)(a) shall be at
the same price per share and on the same terms
offered by the third party;
(c) A party making an election to exercise rights under
this clause 11.2A shall have no right to make an
offer to acquire any Offered Interests under clause
11A (except as permitted by Clause 11A(8));
(d) Any notification of the right to sell must be made
within 10 Business Days of receiving the notice
referred to in clause 11A(2);
(e) For the avoidance of doubt, the YHL Shares, YLL Loan
Stock and the principal amount of the Commercial
Subordinated Loan Agreement that shall be Transferred
to those Continuing Shareholders that exercise their
right to acquire Offered Interests under Clause 11A,
shall be that initially offered for Transfer by the
Proposing Transferor.
(3) The Shareholders agree, as between themselves, that no
Shareholder shall attempt to Transfer or agree to Transfer any
of its YHL Shares (or any interest therein),
13
any YLL Loan Stock (or any interest therein) or any interest
in the Commercial Subordinated Loan Agreement except in
accordance with the provisions of the YHL Articles and this
agreement but, subject to compliance with all of such terms, a
Proposing Transferor may transfer its YHL Shares without
limitation, except that it shall be a condition of any
transfer that:
(i) the transferee undertakes in a form satisfactory to
the other Shareholders to be bound by the obligations
under this agreement by which the transferor is
bound; and
(ii) the transferee and the other Shareholders agree what
procedures should be followed in the event that,
following the date of such transfer, the Board or a
general meeting of Shareholders become deadlocked.
(4) If a Shareholder at any time attempts to Transfer any YHL
Share, any YLL Loan Stock or any interest in the Commercial
Subordinated Loan Agreement otherwise than in accordance with
this Agreement, that Shareholder shall be deemed immediately
before the attempt to have served YHL and the Continuing
Shareholders with a Transfer Notice in respect of the YHL
Shares. YHL shall notify the Continuing Shareholders promptly
after receiving actual notice of such of the attempt. The
Specified Terms shall incorporate the Fair Price ascertained
in accordance with Clause 11(7) as at the date on which YHL
receives actual notice of such attempt by reference to the
information available at that time. YHL shall give notice to
the Continuing Shareholders as soon as the Fair Price is
ascertained. The Transfer Notice shall be deemed to be
received by the Continuing Shareholders on receipt of the
notice of the Fair Price and the provisions of Clause 11A
shall apply.
(4A) Each Shareholder agrees that it will not without the prior
written consent of the other Shareholders, transfer, permit
the issue of or otherwise dispose of or agree to transfer,
sell or otherwise dispose of any beneficial interest in or
enter into any arrangements relating to any YHL Shares or any
interest therein, if as a result of such transfer, sale or
other disposal or arrangements, YHL would cease to be a
company owned by a consortium as defined in sections 247(9)(c)
and 413(6) of the Income and Corporation Taxes Act 1988 (the
"Act"). The Shareholders intend that YHL should be a company
"owned by a consortium" and a "consortium company" as so
defined.
(5) For the purposes of this subclause (5):
"TRANSFEROR" means a Shareholder which has transferred or
proposes to transfer its YHL Shares to an Affiliate.
"TRANSFEREE" means a company holding Shares in consequence of
a transfer or a series of transfers between Affiliates.
"RELEVANT SHARES" means YHL Shares acquired by a Transferee
pursuant to a transfer or series of transfers to Affiliates
and any additional YHL Shares issued
14
to that Transferee in exercise of capitalisation or acquired
by the Transferee by way of any right or option granted or
arising by virtue of any holding of such shares or the
membership of YHL thereby conferred.
If, while it holds YHL Shares, a Transferee ceases (or is
about to cease) to be an Affiliate of the Transferor from
which the Relevant Shares were derived, then the Transferee
shall give a Transfer Notice in respect of those shares and,
if the Transferee fails to give a Transfer Notice, it shall be
deemed immediately following such event to have served YHL
with a Transfer Notice in respect of those shares. The parties
agree that MYL (for so long as it is wholly owned the MYL
Owners) shall not be a Transferee for the purposes of this
clause and the provisions of this Clause 11(5) shall not
require MYL to issue a Transfer Notice if MYL ceases to be an
Affiliate of MIUK.
If the MYL Owners receive a bona fide offer to Transfer all or
any part of its shares in MYL, from any bona fide arms length
third party purchaser, then MEIP shall within 5 Business Days
give notice to all other Shareholders including in such
notice:
(a) the percentage of shares in MYL which the MYL Owners
are proposing to Transfer;
(b) the purchase price; and
(c) the material terms of the offer (including whether
any sale is subject to any Approvals), and
Clauses 11A(3), 11A(4), 11A(5), 11A(6), 11A(7) and 11A(8)
shall apply except that:
(d) references to "Transfer Notice" shall be construed as
a reference to the notice containing the items in
paragraphs (a), (b) and (c) and references to
"Specified Terms" shall be construed as a reference
to the terms of such Transfer Notice;
(e) references to YHL Shares shall be construed as a
reference to shares in MYL;
(f) references to "YLL Loan Stock" and "interests in the
Commercial Subordinated Loan Agreement" shall be
disregarded;
(g) references to the "Proposing Transferor" shall be
construed as references to the MYL Owners;
(h) references to the "Proposing Transferee" shall be
construed as references to the bona fide arms length
third party purchaser offering to acquire shares in
MYL; and
15
(i) notices shall be given to MEIP, MEIP shall give
notices and MEIP shall make determinations as to the
terms of the offers (in each case, in lieu of YHL).
For the avoidance of doubt, Clauses 11A(3A) and 11(2A) shall
not apply to any Transfer or prospective Transfer of shares in
MYL.
(6) Except as provided under the Share Pledge Agreement, YHL shall
not sell, transfer, assign, pledge, charge or otherwise
dispose of any interest in any YLL Share.
(7) The auditors of YHL shall be appointed to ascertain the Fair
Price at the cost of the Transferee. The Fair Price shall mean
the price which the auditors of YHL state in writing to be in
their opinion the fair market value of the shares on a sale as
between a willing seller and a willing purchaser (taking no
account of whether the shares do or do not carry control of
YHL). In stating the Fair Price, the auditors shall act as
experts and not as arbitrators and their decision shall be
final and binding on the parties.
11A PRE-EMPTIVE RIGHTS
(1) A Shareholder who is entitled to Transfer any interest in any
YHL Share in accordance with Clause 11(2) shall only be
entitled to so in accordance with this Clause 11A.
(1A) A Shareholder shall only be entitled to Transfer an interest
in a YHL Share if the Proposing Transferor also proposes to
Transfer to the Proposing Transferee:
(a) an amount of YLL Loan Stock equal to the Relevant
Proportion of the total amount of YLL Loan Stock; and
(b) an interest in the Commercial Subordinated Loan
Agreement equal to the Relevant Proportion of the
outstanding principal amount of the Commercial
Subordinated Loan Agreement (which Transfer shall
take place under and in accordance with the terms of
the Commercial Subordinated Loan Agreement).
(2) Upon receipt of a bona fide offer to Transfer all or any part
of a Shareholder's YHL Shares by a Shareholder ("PROPOSING
TRANSFEROR") from any bona fide arms length third party
purchaser ("PROPOSING TRANSFEREE"), such Shareholder shall
within 5 Business Days give notice to YHL copied to all other
Shareholders ("CONTINUING SHAREHOLDERS") of such offer
including in such notice:
(a) the percentage of the total number of shares in YHL,
YLL Loan Stock and the principal amount of the
Commercial Subordinated Loan Agreement which the
Proposing Transferee is offering to Transfer
("OFFERED INTERESTS");
16
(b) the purchase price; and
(c) the material terms of the offer (including whether
any sale is subject to any Approvals),
(such notice hereafter being referred to as the "TRANSFER
NOTICE" and the terms of such notice hereafter being referred
to as the "SPECIFIED TERMS"). The Transfer Notice shall
constitute YHL the agent of the Proposing Transferor.
(3) If a Continuing Shareholder wishes to acquire the Offered
Interests, it must within 20 Business Days of receipt of the
notice referred to in Clause 11A(2) make a written offer to
YHL to acquire the Offered Interests, which offer shall comply
with the following conditions:
(a) the Continuing Shareholder must offer to purchase all
of the YHL shares, the YLL Loan Stock and the
interest in the Commercial Subordinated Loan
Agreement comprising the Offered Interests;
(b) the offer must be on terms that are no worse than the
Specified Terms (which, for the avoidance of doubt
shall be determined taking into account whether any
additional or more onerous Approvals are required in
respect of the Transfer to the Continuing Shareholder
that has offered to acquire the Offered Interests, as
compared to those required in respect of the Transfer
to the Proposing Transferee); and
(c) the price offered by the Continuing Shareholders must
be greater than or equal to the price offered by the
Proposing Transferee; and
(d) the offer must remain open until allotment of the
Offered Interests in accordance with Clause 11A.4(c)
(provided such offer shall not be required to remain
open for a period longer than 40 Business Days after
the expiry of the 20 Business Day period referred to
above).
(3A) If a Continuing Shareholder does not wish to acquire any of
the Offered Interests, and that Continuing Shareholder is a
holder of 5 per cent. or more of the YHL Shares, that
Continuing Shareholder may give notice to YHL requesting that
Clause 11(2A) apply within 10 Business Days of receipt of the
notice referred to in Clause 11A(2).
(4) On the expiry of the first 20 Business Day period referred to
in Clause 11A(3), the following principles shall apply:
(a) If no offer has been received, the Proposing
Transferor may proceed with the Transfer to the
Proposing Transferee and the Continuing Shareholders
shall have no further rights to acquire the Offered
Interests;
(b) If only one offer has been received, the Offered
Interests shall be allotted to that Continuing
Shareholder;
17
(c) If more than one offer has been received, the
following principles shall apply:
(i) YHL shall determine which offer is the best
offer (such determination to take into
account the price and terms offered by the
Continuing Shareholder, but otherwise be
made in the sole and absolute discretion of
YHL) and YHL shall notify the Continuing
Shareholder or Continuing Shareholders who
did not make the best offer ("LOSING
SHAREHOLDERS") of the terms of the offer
which YHL determines to be the best offer
within 15 Business Days of the expiry of the
first 20 Business Day period referred to in
Clause 11A(3); and
(ii) a Losing Shareholder may, within 5 Business
Days of notification of the best offer under
clause 11A.4(c)(i), notify YHL that that
Losing Shareholder intends to match the
terms of the best offer (the determination
of whether an offer made by a Losing
Shareholder matches the best offer shall
take into account the price and terms
offered, but otherwise be made in the sole
and absolute discretion of YHL);
(iii) if:
(A) the offers made by the Continuing
Shareholders under clause
11A.4(c)(i) are substantially the
same; or
(B) one or more Losing Shareholders
matches the terms of the best offer
under clause 11A.4(c)(ii),
YHL shall notify the Continuing Shareholders
or the Losing Shareholders referred to in
this paragraph (iii) and such persons shall
have the right to make a better offer within
5 Business Days of being notified by YHL
(the determination of whether an offer made
by a Continuing Shareholder or a Losing
Shareholder matches the best offer shall
take into account the price and terms
offered, but otherwise be made in the sole
and absolute discretion of YHL);
(iv) If one of the offers made by the Continuing
Shareholders or the Losing Shareholders
referred to in paragraph (iii) is better
than any other (the determination of whether
an offer made by a Continuing Shareholder or
a Losing Shareholder matches the best offer
shall take into account the price and terms
offered, but otherwise be made in the sole
and absolute discretion of YHL), YHL shall
notify the Continuing Shareholders or the
Losing Shareholders of the terms of that
better offer and the Continuing Shareholders
or the Losing Shareholders shall have a
further right to match the
18
terms of that better offer within 5 Business
Days of being notified by YHL and
sub-paragraph (iii) shall apply again;
(v) If in any round of offers, the best offer
made in the preceding round is not matched
or is matched and not bettered and the
Continuing Shareholder or Losing Shareholder
who made the best offer in the preceding
round does not wish to make a further offer,
(the determination of whether an offer made
by a Continuing Shareholder or a Losing
Shareholder matches the best offer shall
take into account the price and terms
offered, but otherwise be made in the sole
and absolute discretion of YHL), the Offered
Interests shall be allotted to the
Continuing Shareholder or Continuing
Shareholders or Losing Shareholder or Losing
Shareholders who have made or matched the
best offer in their Competing Proportions,
(any Offered Interests allotted pursuant to this Clause 11A(4)
shall be referred to as "ALLOTTED INTERESTS").
(5) On any allocation under Clause 11A(4) being made, YHL shall
notify the Proposing Transferor and the Continuing Shareholder
to whom any Allotted Interests have been allotted
("ALLOTTEE").
(6) If no Approvals are required in respect of the Transfer of the
Allotted Interests, the Allottee shall be bound to pay the
purchase price for, and accept a transfer of the Allotted
Interests within 10 Business Days of the date of the
allotment. Upon receipt of the purchase price, the Proposing
Transferee shall be bound to complete the sale of the Allotted
Interests to each Allottee.
(7) If any Approvals are required in respect of the Transfer of
the Allotted Interests, the Allottee shall be bound to pay the
purchase price for, and accept a transfer of the Allotted
Interests within such time as is reasonable having regard to
the nature of the Approval required (which time period shall
not exceed a period of 180 days from the date of the
allotment).
(8) If, at the expiry of the period referred to in Clause 11A(6)
or Clause 11A(7) (as the case may be), any Transfer of the
Allotted Interests has not taken place ("UNTRANSFERRED
INTERESTS"), YHL shall notify all the Continuing Shareholders
(if any) other than the Allottee (including any Continuing
Shareholder that was prohibited from making an offer to
acquire Offered Interests under clause 11(2A)(c)). Such
Continuing Shareholders (including any Continuing Shareholders
that were prohibited from making an offer to acquire Offered
Interests under clause 11(2A)(c)) shall have the right to
acquire all (and with the agreement of the Proposing
Transferor, any part) of the Untransferred Interests at any
price being not less than the price specified in the Specified
Terms, provided that the sale and purchase is completed within
40 Business Days of receipt of notification under this clause
11A(8).
19
(9) At the end of the period referred to in clause 11A(8), the
Proposing Transferor may within 90 days of the expiry of such
period, Transfer and complete the sale and purchase of all or
any part of the Untransferred Interests to any person at any
price being not less than the price specified in the Specified
Terms.
12. TRANSFER OF YLL LOAN STOCK AND COMMERCIAL SUBORDINATED LOAN AGREEMENT
12.1 Subject always to the terms of the Intercreditor Agreement, the Funding
Agreements and the DBFO Contract:
(1) no Shareholder shall Transfer any interest in any of the YLL
Loan Stock or the Commercial Subordinated Loan Agreement,
except:
(a) with the prior written consent of all other
Shareholders which (together with their Affiliates)
hold not less than 90% of that portion of the Other
Shares; or
(b) pursuant to a transfer to an Affiliate in accordance
with subclause (4); or
(c) pursuant to a transfer under subclause (2).
(2) A Shareholder may only Transfer an interest in YLL Loan Stock
or the Commercial Subordinated Loan Agreement:
(a) to a person who is not an Affiliate; or
(b) without the prior written consent of all other
Shareholders which (together with their Affiliates)
hold not less than 90% of that portion of the Other
Shares,
in accordance with Clause 11A.
(3) [Not used]
(4) Any Shareholder shall be entitled to Transfer all or any part
of the YLL Loan Stock or any interest in the Commercial
Subordinated Loan Agreement at any time to any Affiliate
provided that if an Affiliate is not resident in the United
Kingdom or is outside the scope of United Kingdom corporation
tax, such Transfer shall only be to an Affiliate who is a
wholly-owned subsidiary of the Shareholder.
(5) Each Shareholder undertakes to ensure that any Affiliate which
holds any YLL Loan Stock or any interest in the Commercial
Subordinated Loan Agreement shall Transfer all of the YLL Loan
Stock or any interest in the Commercial Subordinated Loan
Agreement which it then holds to an Affiliate who is a
wholly-owned subsidiary of the Shareholder and who is resident
in the United Kingdom and not outside the scope of United
Kingdom corporation tax before it
20
ceases at any time to be a wholly-owned subsidiary of the
Shareholder. The parties agree that the provisions of this
clause 12.5 shall not require MYL to issue a Transfer Notice
in respect of the YLL Loan Stock or any interest in the
Commercial Subordinated Loan Agreement if MYL ceased to be an
Affiliate of MIUK provided the MYL Owners issue a Transfer
Notice in respect of its shares in MYL pursuant to Clause
11(5).
(6) Any transfer of YLL Loan Stock shall be conditional on the
transferee first entering into and becoming bound by the
Intercreditor Agreement as if it was an original party
thereto.
13. DEFAULT
(1) If:
(a) any Shareholder makes a serious or persistent default in
performing and observing any of its obligations under this
agreement and, where such default is capable of remedy, fails
to remedy it within 30 days after service of written notice
from any other Shareholder of such default; or
(b) any Shareholder or the Ultimate Parent Undertaking of any
Shareholder (a "DEFAULTING PARTY"):
(i) becomes insolvent or is unable or deemed unable
pursuant to Section 123(1)(e) and (2) of the
Insolvency Act 1986, to pay its debts or admits in
writing that it is unable to pay its debts;
(ii) commences negotiations with any one or more of its
creditors with a view to the general readjustment or
rescheduling of its indebtedness or makes a general
assignment for the benefit of or a composition with
its creditors;
(iii) takes any corporate action to appoint or suffers the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer
of it or all or a material part of its revenues and
assets;
(iv) has a winding-up or administration order made in
relation to it;
(v) compounds with or negotiates for any composition with
its creditors generally or permits any judgment
against it to remain unsatisfied for 7 days; or
(vi) is affected in any way in any jurisdiction other than
England or Wales by anything equivalent to any of the
things referred to in paragraphs (ii) to (v) above,
then any Shareholder who is not a Defaulting Party and whose
Ultimate Parent Undertaking is not a Defaulting Party, may,
subject to any prior written approval of the agent being
required under the Commercial Bank Facility Agreement and
21
any prior approval of the Secretary of State required under
the DBFO Contract, give notice in writing to the Defaulting
Party (or if the Defaulting Party is not a Shareholder, the
relevant Shareholder) and YHL whereupon the relevant
Shareholder (and each of its Affiliates) shall be deemed to
have served a Transfer Notice in respect of all of its YHL
Shares in accordance with Clause 11(4).
(2) If a Shareholder shall be deemed to have served a Transfer Notice under
subclause (1) and its YHL Shares have not been purchased by the other
Shareholders:
(a) each such Shareholder and any Director nominated by it shall
not be entitled or required to vote on any decision of YHL or
the YHL Board or any decision of YLL or the YLL Board; and
(b) any general meeting or board meeting of YHL or YLL which would
be quorate but for the absence of the relevant Shareholder or
Director (appointed by it), shall be deemed quorate,
provided that subclause (2)(a) shall not apply in relation to a default
under subclause (1)(b).
14. CONFIDENTIALITY
(1) Each Shareholder undertakes with the other that it shall use all
reasonable endeavours to ensure that all information received by it
relating to the other or any of the other's subsidiaries which is not
in the public domain shall be treated as confidential and shall not be
disclosed to any third party except with the consent of the other
Shareholder or except as may be required by law or by any regulatory
authority.
(2) A Shareholder shall not be in breach of the provisions of this
agreement by virtue of any Director appointed by a Shareholder passing
to that Shareholder any information he receives as a Director of YHL,
YLL or any other subsidiary of YHL, but nothing contained in this
agreement shall require such disclosure where the Director's fiduciary
duty to YHL, YLL or any such subsidiary, would be breached as a result.
(3) In the event that a Shareholder ceases to be a party to this agreement,
such Shareholder shall nevertheless remain bound by subclause (1) for a
period of two years from ceasing to be such a party.
15. DURATION
(1) This agreement shall commence on the date of this agreement and shall
continue to bind each Shareholder until such time as such Shareholder
ceases to hold any YHL Shares.
(2) This agreement, save for clauses 10 (Restrictive Covenants), 14
(Confidentiality) and 18 (Announcements) shall cease to bind any
Shareholder which ceases to hold any YHL Shares with effect from the
date on which the transferee of that Shareholder's Shares assumes all
of that Shareholder's obligations under this agreement. This clause is
without prejudice to any rights of the other parties to this agreement
which shall have
22
accrued prior to such date and nothing in this agreement shall affect
any liabilities and financial obligations owed to YHL by the
Shareholder which have accrued prior to the disposal of that
Shareholder's Shares.
16. DISPUTES
(1) Any dispute or difference between the parties (a "DISPUTE") may be
referred by any party to a meeting of affected parties (the "AFFECTED
PARTIES") convened by that party upon not less than 10 days notice to
the Affected Parties such meeting to be held in the absence of
agreement to the contrary at the registered office for the time being
of YHL (an "AFFECTED PARTIES' MEETING").
(2) An Affected Party who receives notice of an Affected Parties' Meeting
shall use all reasonable endeavours to make a director of its Ultimate
Parent Undertaking available to attend the meeting but in any event
shall send the most senior officer in its Group who is available to
attend the meeting.
(3) The Affected Parties shall endeavour to settle the Dispute but in the
absence of agreement at the Affected Parties' Meeting or within the
following 14 days the remaining provisions of this clause shall apply.
(4) If the Dispute has not been settled in the manner described above then
upon the application of an Affected Party the Dispute shall be
submitted to a court of law for resolution.
17. TAX AND THE SURRENDER OF LOSSES
(1) For the purposes of this clause 17, the following expressions shall
have the following meanings:
"ACCOUNTING PERIOD" shall have the same meaning as in Section 12 of the
Act;
"ACT" means the Income and Corporation Taxes Act 1988;
"RELIEFS" means any trading losses, charges on income, management
expenses and other amounts available for relief against any Tax
Liability, where such amounts arise to YHL or YLL and to the extent
that those amounts cannot be applied by YHL or YLL, as the case may be,
in reducing a Tax Liability for the Accounting Period in which such
amounts arise;
"TAX" includes all present and future income and other taxes, levies,
assessments, imposts, deductions, charges, duties and withholdings
whatsoever and any charges in the nature thereof together with interest
thereon and penalties and fines with respect thereto, if any, and any
payments made on or in respect thereof and "TAXES" and "TAXATION" shall
be construed accordingly; and
"TAX LIABILITY" means any liability of YHL or YLL, as the case may be,
in respect of Taxation.
23
(2) Unless the Shareholders and the Agent under the Commercial Bank
Facility Agreement otherwise expressly agree in writing and subject to
the rights of each Shareholder under subclauses (3) to (9), the
Shareholders shall procure that Reliefs will:
(a) to the greatest extent possible, be applied so as to reduce or
extinguish any Tax Liability of YHL or YLL, as the case may
be, for Accounting Periods which precede that in which the
relevant Reliefs arise; and
(b) to the extent that any such Reliefs cannot be applied in
accordance with (a), be carried forward by YHL or YLL, as the
case may be, so as to reduce or extinguish any Tax Liability
of YHL or YLL, as the case may be, for subsequent Accounting
Periods.
(3) Notwithstanding subclause (2), if at any time after the date hereof YHL
or YLL shall have available to it Reliefs, then to the extent permitted
by subclause (6) below, by law and by the published practice of the tax
authorities, each Shareholder or a member of that Shareholder's Group
("A CLAIMANT") shall be entitled to make a claim for the surrender by
YHL or, as the case may be, YLL of some or all of those Reliefs by way
of group relief in accordance with Chapter IV of Part X of the Act and
shall be entitled to do all such acts and things and execute all such
documents and deeds as are necessary to ensure that all such claims and
surrenders are valid and effective.
(4) Notwithstanding subclause (2), where subclause (3) applies, YHL or, as
the case may be, YLL shall surrender group relief in accordance with
Chapter IV of Part X of the Act and in accordance with subclause (3) in
a timely manner and to the extent permitted by law, at the request in
writing of a Claimant who makes a valid claim under subclause (3). The
Shareholders shall procure that all such surrenders are in a form and
manner sufficient to facilitate the relevant claim under subclause (3)
and that YHL or, as the case may be, YLL executes all such documents
and deeds and gives such consents in a timely manner so as to ensure
that all such claims and surrenders of group relief are effective.
(5) At the request in writing of a Claimant which makes a valid claim under
subclause (3), each other Shareholder shall execute all such documents
and deeds and give such consents in a timely manner so as to ensure
that any such claim, and the corresponding surrender, is valid and
effective.
(6) Where, in any of its Accounting Periods ("THE CLAIM PERIOD"), a
Claimant is or was chargeable to Tax in respect of any amount accrued
but unpaid in respect of the YLL Loan Stock ("THE ACCRUAL"), then that
Claimant shall, under subclause (3), be entitled to make one or more
claims for the surrender by YHL or, as the case may be, YLL of Reliefs
equal to the Accrual in respect of which that Claimant was chargeable
for one or more Claim Periods ending on or prior to the date of the
claim; provided that the aggregate amount of Reliefs which may be
claimed by virtue of this subclause (6) shall not exceed the lesser of
(a) the Accrual relating to the period from Completion until 30th June,
2000 and (b) (pound)3,000,000. Unless otherwise agreed in writing by
the Shareholders, the aggregate amount of Reliefs which may be claimed
by virtue of this subclause (b) by one or more Claimants which are
members of the same Shareholder's Group shall not
24
exceed the lesser of (a) (pound)1,500,000 and (b) the Accrual relating
to the period from Completion until 30th June, 2000 in respect of YLL
Loan Stock which is beneficially owned by members of that Shareholder's
Group throughout the period by reference to which that Accrual is
ascertained.
(7) Where a claim for the surrender of group relief is made under subclause
(3), then an amount (a "GROUP RELIEF PAYMENT") shall be payable in the
manner hereafter provided to whichever of YHL or YLL makes such a
surrender. If the claim was made by a Shareholder, then the Group
Relief Payment shall be made by the Shareholder. If the claim was made
by a member of a Shareholder's Group, then that Shareholder shall
procure that the relevant member of its Group enters into an agreement
with YHL or, as the case may be, YLL regarding the terms of the
aforesaid claim and providing for that member to make a Group Relief
Payment. The terms of such agreement shall not be inconsistent with the
terms of this Agreement. Where a member of a Shareholder's Group enters
into such an agreement, the Shareholder concerned shall procure that
that member performs its obligations under that agreement. YLL shall
credit to the Tax Reserve Account (as defined in the Intercreditor
Agreement) any amount which it receives in respect of or on account of
a Group Relief Payment and YLL shall be entitled to any interest
payable on the Tax Reserve Account which is attributable to such an
amount.
(8) The aggregate of the Group Relief Payments referred to in subclause (7)
shall be calculated in accordance with this subclause (8). The Reliefs
which are surrendered by YHL or YLL in accordance with subclause (3)
shall be aggregated. The resulting aggregate ("THE CUMULATIVE RELIEFS")
shall then be multiplied by the rate of Tax (ignoring any relief
available under Section 13 of the Act) to which the profits of YHL, or
as the case may be, YLL are or would be subject in the first Accounting
Period of YHL or, as the case may be, YLL in which it is chargeable to
Tax in respect of its profits or in which it would be so chargeable if
any relief available to it under Section 240 or Chapter IV of Part X of
the Act were ignored. The sum resulting from such multiplication is the
aggregate of the Group Relief Payments payable in accordance with
subclause (7). The portion of the aggregate of the Group Relief
Payments which is payable by each Claimant in accordance with subclause
(7) shall correspond to the fraction of the Cumulative Reliefs
represented by the Reliefs in respect of which that Claimant has made a
valid claim or claims in accordance with subclause (3). Subject to
subclauses (9), (10) and (11), the Shareholders shall procure that all
Group Relief Payments less any amounts paid under subclauses (9), (10)
and (11), are made to YHL or, as the case may be, YLL in immediately
available funds no later than the last day ("THE LAST DATE FOR
PAYMENT") of the first Accounting Period of YHL or, as the case may be,
YLL in which it is chargeable to tax in respect of its profits or in
which it would be so chargeable if any relief available to it under
Section 240 or Chapter IV of Part X of the Act were ignored.
25
(9) PAYMENTS ON ACCOUNT
(a) In the circumstances and in the manner set out in this
subclause (9), a Claimant shall be required to make one or
more payments on account of a Group Relief Payment prior to
the Last Date for Payment.
(b) The aggregate of the Group Relief Payments payable in
accordance with subclause (7) may be calculated by YHL and YLL
from time to time on a provisional basis. This provisional
amount ("THE PROVISIONAL SUM") shall be calculated by
multiplying
(i) the aggregate of the Reliefs which, at the date by
reference to which the Provisional Sum falls to be
determined, have been validly surrendered by YHL or
YLL in accordance with subclause (3) and
(ii) the rate of Tax to which YHL or, as the case may be,
YLL would be subject for its then current Accounting
Period if in that period it had profits chargeable to
Tax and if the rate of Tax for that Period were the
rate prevailing as at the date on which the
Provisional Sum is calculated but ignoring any relief
which would otherwise be available under Section 13
of the Act.
The Provisional Sum shall be allocated among the Claimants as
at the date by reference to which it is calculated in
accordance with the share of the Reliefs taken into account in
(i) above which have been the subject of a valid claim by each
Claimant in accordance with subclause (3).
(c) YHL and YLL shall calculate the Provisional Sum on and by
reference to the date falling two working days prior to each
date on which, but for the Intercreditor Agreement, interest
would be payable in respect of the YLL Loan Stock. The
Provisional Sum as so determined less any amounts already paid
under subclause (9), (10) or (11), shall be called amount "A".
The Shareholders, YHL and YLL shall at the same time ascertain
from the Financial Model (as defined in the DBFO Contract), by
reference to the same date, the interest which is forecast to
be payable, in accordance with the Intercreditor Agreement, in
respect of the YLL Loan Stock on or prior to the Last Date for
Payment. Such forecast interest shall be called amount "B". If
A is greater than B, then on the next date on which interest
is payable in respect of the YLL Loan Stock or would be so
payable but for the Intercreditor Agreement, the excess of A
over B shall be payable to YHL or, as the case may be, YLL by
the Claimants to whom the Provisional Sum has been allocated
in the manner described in paragraph (b) above. The amount
payable by each Claimant shall bear the same proportion to the
excess of A over B as that Claimant's share of the Provisional
Sum allocated in accordance with (b) above bears to the entire
Provisional Sum, as so determined.
(d) If the date on which interest is payable in respect of the YLL
Loan Stock is one on which such interest is in fact paid, then
an amount equal to the interest which
26
is in fact paid shall be payable on account of Group Relief
Payments to YHL or, as the case may be, YLL by the Claimants
to whom the Provisional Sum has been allocated in the manner
aforesaid. The amount payable by each Claimant in this way
shall bear the same proportion to the amount of interest which
is in fact paid on that date in respect of the YLL Loan Stock
as that Claimant's share of the Provisional Sum allocated in
accordance with (b) above bears to the entire Provisional Sum
determined in accordance with (b) and (c), by reference to the
date falling two working days prior to the relevant date on
which interest is in fact paid in respect of the YLL Loan
Stock. If YLL has reasonable grounds for considering that a
Claimant is unable or unwilling to make such a payment on
account of Group Relief Payments, YLL shall be entitled to
withhold from any interest otherwise falling to be paid by it
in respect of the YLL Loan Stock to YHL or to any member of
the Shareholder's Group of which the relevant Claimant is a
member, a sum equal to the amount payable on account by that
Claimant. The Shareholders and YHL hereby agree that YLL shall
be discharged from any obligation to pay any amount which it
withholds as aforesaid and that YLL shall be treated as if it
had actually paid that amount in respect of the YLL Loan
Stock. If YLL is entitled to withhold an amount in accordance
with this paragraph (d), then if the amount so withheld would
otherwise have been due and payable to YHL, YHL shall also be
entitled to withhold a sum in accordance with (e) from any
amount otherwise payable by it to any member of the
Shareholder's Group to which belongs the Claimant whose
unwillingness or inability to make a payment on account
entitled YLL to withhold the amount which would otherwise have
been due and payable to YHL.
(e) The sum which YHL is entitled to withhold as
aforesaid shall not exceed the amount which YLL is
entitled to withhold in accordance with paragraph (d)
and which would otherwise have been due and payable
to YHL.
(f) Each Shareholder shall procure that each member of
that particular Shareholder's Group shall respect the
provisions of paragraph (d).
(10) EARLY PAYMENT ARRANGEMENTS
This subclause applies where:
(a) a Shareholder or a member of its Group sells any
shares of YHL or any YLL Loan Stock or loan stock
issued by YHL, other than to YHL or to another member
of that same Group; or
(b) YHL sells any YLL Loan Stock other than to a
Shareholder or a member of a Shareholder's Group;
THEN:
(i) If (a) occurs, YHL and YLL shall determine and
allocate the Provisional Sum in accordance with
subclause (9) above by reference to the date of such
sale. The Shareholder which sells, or a member of
whose Group sells, such shares or loan
27
stock shall procure that an amount equal to the proceeds of
such sale is promptly applied in paying to YHL or, as the case
may be, YLL an amount equal to the lesser of
(1) such proceeds and
(2) the portion of the Provisional Sum, calculated as
aforesaid, which is allocated to any Claimant or
Claimants consisting of that Shareholder and/or
members of its Group.
YHL or, as the case may be, YLL shall treat any such payment
as a payment on account of the Group Relief Payments payable
by such Claimants in accordance with subclause (7) above. The
payment on account shall, where necessary, be allocated pro
rata between the Claimants concerned by reference to the
amounts owed by them under subclause (7) and shall be treated
accordingly as having been made by those Claimants.
(ii) If (b) occurs, YHL and YLL shall determine and allocate the
Provisional Sum in accordance with subclause (9) above by
reference to the date of such sale. Each Shareholder shall
procure that a sum equal to that portion of the sale proceeds
which corresponds to the percentage of the ordinary share
capital of YHL owned by it or by members of its Group shall be
promptly applied in paying to YHL or, as the case may be, YLL
an amount equal to the lesser of
(1) that portion of such sale proceeds and
(2) the portion of the Provisional Sum, calculated as
aforesaid, which is allocated to any Claimant or
Claimants consisting of that Shareholder and/or
members of its Group.
YHL or, as the case may be, YLL shall treat any such payment
as a payment on account of the Group Relief Payments payable
by such Claimants in accordance with subclause (7) above. The
payment on account shall, where necessary, be allocated pro
rata between the Claimants concerned by reference to the
amounts owed by them under subclause (7) and shall be treated
accordingly as having been made by those Claimants.
(iii) If, when a payment on account is made to YHL or, as the case
may be, YLL following the events described in paragraph (a) or
(b) above, no prior payment has been made or treated as made
under subclause (9) above by any Claimant who is treated in
accordance with this subclause (10) as having made such a
payment on account, then that payment shall be regarded as a
full and final discharge pro tanto of that Claimant's
obligation to make a Group Relief Payment under subclause (7)
in respect of any Reliefs for which it has made a valid claim
under subclause (3) prior to the events described in paragraph
(a) or (b) above.
28
(11) CALAMITOUS EVENT PREPAYMENT
This subclause applies where, prior to the Last Date for Payment, any
of the following (a "RELEVANT EVENT") occurs:
(a) there is an Event of Default under Clause 25 of the Commercial
Banks Facility Agreement which leads to the Agent serving a
written notice on the Borrower in accordance with Clause 25.31
of that Agreement prior to the Final Repayment Date; or
(b) a Step-in Notice is given under the Direct Agreement for the
DBFO Contract referred to in Schedule 4 hereof and is accepted
by the Secretary of State for Transport; or
(c) the DBFO Contract is terminated under Clause 37 or 38 thereof;
then:
(i) The Shareholders shall request the Agent under the Commercial
Banks Facility Agreement to provide, at the Shareholders'
expense, within 21 working days of the Relevant Event, a
written reasoned opinion from a reputable firm of accountants
or lawyers with recognised corporate tax expertise, to be
selected by the Agent at its sole discretion, that if YHL or,
as the case may be, YLL had not surrendered Reliefs in
accordance with subclause (3), then notwithstanding the
Relevant Event, it was reasonably probable that YHL or YLL, as
the case may be, would have been able to utilise those Reliefs
or otherwise to turn them to account;
(ii) If no such opinion is provided as aforesaid, then any
obligation under subclause (7) to make a Group Relief Payment
shall, to the extent not already satisfied by one or more
payments on account under subclauses (9) and (10), be
discharged;
(iii) If such an opinion is provided as aforesaid, then any Group
Relief Payment otherwise payable under subclause (7) above in
accordance with subclause (8) shall be adjusted by
substituting for the amount determined under subclause (8) the
aggregate found by adding together each amount of Reliefs
claimed in accordance with subclause (3) multiplied by the
rate of Tax (ignoring any relief available under Section 13 of
the Act) to which YHL or, as the case may be, YLL would have
been subject in respect of its profits for the Accounting
Period in which each such amount of Reliefs was claimed if YHL
or, as the case may be, YLL had been chargeable to Tax in
respect of its profits for that Accounting Period;
(iv) The amount substituted in accordance with paragraph (iii)
above shall be reduced by any amount payable to YHL or, as the
case may be, YLL in respect of such Reliefs under subclause
(9) or (10) above and shall be further reduced so that it
equals the amount which, in the reasonable opinion of the
Shareholders, would have been the value to YHL or, as the case
may be, YLL if the Reliefs had been available to it following
the Relevant Event. Any such amount, as so reduced
29
where appropriate, shall be paid by the Shareholders to YHL
or, as the case may be, YLL in full and final settlement of
any Group Relief Payments otherwise owed hereunder by any
Claimant and YHL and YLL shall accept such amounts in full and
final discharge of any Group Relief Payments otherwise due.
The amount payable hereunder shall be borne by the
Shareholders pro rata to the Reliefs claimed under subclause
(3) above by each Shareholder and/or a member of its Group.
(12) If any amount surrendered or purportedly surrendered by YHL or, as the
case may be, YLL in accordance with subclause (3) is subsequently
disallowed or otherwise determined to be unavailable for surrender,
then YHL or, as the case may be, YLL shall, as soon as reasonably
practicable, notify each Shareholder, on behalf of the relevant
Claimant or Claimants, of such disallowance or unavailability and any
obligation to make a Group Relief Payment in accordance with subclause
(7) shall to the extent of such disallowance or unavailability be
extinguished. If in such circumstances a Group Relief Payment has been
made, then YHL or, as the case may be, YLL shall, to the extent
permitted by the Intercreditor Agreement, repay an amount of such Group
Relief Payment corresponding to the proportion of the amount
surrendered or purportedly surrendered which has been disallowed or
determined to be unavailable. The amount of the Group Relief Payment
which is repayable hereunder shall be repaid to the Shareholder by
which or by a member of whose Group the relevant Group Relief Payment
was made.
(13) If the tax authorities do not for any reason accept any claim in
respect of group relief which is permitted under subclause (3), then
the Shareholders and YHL or, as the case may be, YLL shall take all
reasonable action with a view to proving or otherwise establishing to
the satisfaction of the tax authorities that the claim has been validly
and effectively made in a timely manner. On request by notice in
writing to it from either Shareholder, YHL or, as the case may be, YLL
shall as soon as reasonably practicable, provide that Shareholder with
an estimate of any Reliefs which may be available for surrender. YHL
and YLL agree not to revoke or disclaim any surrender made pursuant to
this Clause 17 without the consent in writing of the Shareholder which,
or a member of whose Group which, made the claim under subclause (3) to
which such surrender relates.
(14) This Clause 17 shall be without prejudice to Clause 3(l), (2), (3) and
(4) hereof. For the avoidance of doubt but subject to Clause 11(4), the
Shareholders and the Board shall not, in taking decisions regarding the
management and development of the business of YHL or YLL or any other
action which could be of benefit to YHL or YLL, be required to have
regard to whether as a result of such a decision or such action, a
Claimant would or would not be able to make a claim under subclause
(3).
(15) The Shareholders, YHL and YLL shall jointly elect in a timely manner
that Section 247 of the Act shall, to the extent permitted by law and
the published practice of the tax authorities, apply to:
(a) any dividend paid by YLL to YHL or by YHL to any of the
Shareholders; and
30
(b) any payment by YLL to YHL or by YHL to YLL or by YHL to any of
the Shareholders, which payment is referred to in Section
247(4) of the Act.
The aforesaid election is referred to hereafter as the "GROUP INCOME
ELECTION".
YHL, YLL and the Shareholders shall execute and deliver all such
documents and deeds in a timely manner as are necessary to ensure that
the Group Income Election is valid and effective. Unless the
Shareholders otherwise consent in writing, neither YHL nor YLL shall
give a notice of the kind specified in Section 247(3) of the Act in
respect of any dividend paid by it.
(16) Without prejudice to the generality of Clause 1(2), references to
Reliefs available under any Section, Chapter or Part of the Act shall
include any statutory provision which subsequently provide an
equivalent relief to that provided by the relevant Section, Chapter or
Part of the Act.
(17) This Clause 17 is without prejudice to any obligations of YLL under
Clause 40.3.5 of the DBFO Contract.
18. ANNOUNCEMENTS
No announcement concerning this agreement or its subject matter or any
ancillary matter shall be made by any Shareholder except as required by
law or any recognised stock exchange or by any other regulatory body
without the prior written approval of the other (such approval not to
be unreasonably withheld or delayed).
19. NOTICES AND RECEIPTS
(1) Any notice or other document to be served under this agreement may be
delivered or sent by prepaid first class recorded delivery post or
facsimile process to the party to be served at its address appearing in
this agreement or at such other address as it may have notified to the
other parties in accordance with this clause.
(2) In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted as a prepaid first class
recorded delivery letter or that the facsimile message was properly
addressed and despatched as the case may be.
(3) The receipt of any party's solicitor for any sum or document to be paid
or delivered to that party will discharge the obligor's obligation to
pay or deliver it to that party.
20. COSTS AND VAT
(1) Each of the Shareholders shall bear its own costs and expenses
incidental to the negotiation, preparation and completion of this
agreement. The Shareholders shall procure that YHL shall pay all costs
and expenses properly and reasonably attributable to it in negotiating,
preparing and completing this agreement. Subject to the above each of
31
the Shareholders shall bear its own costs and expenses incidental to
the negotiation, preparation and completion of this agreement.
(2) All figures stated in this agreement are exclusive of value added tax
(if any).
21. SEVERABILITY
The provisions contained in each clause and/or subclause of this
agreement shall be enforceable independently of each of the others and
its validity shall not be affected if any of the others is invalid; if
any of those provisions is void but would be valid if some part of the
provision were deleted, the provision in question shall apply with such
modification as may be necessary to make it valid.
22. WHOLE AGREEMENT
(1) This agreement and the documents referred to in it contain the whole
agreement between the Shareholders relating to the transactions
contemplated by this agreement and supersede all previous agreements
between the Shareholders relating to these transactions.
(2) In entering into this agreement (and any document referred to herein),
no Shareholder may rely on any representation, warranty, collateral
contract or other assurance (except those expressly set out in this
agreement or any document referred to in it (made by or on behalf of
any other party before the signature of this agreement)) and each
Shareholder waives all rights and remedies which, but for this
subclause, might otherwise be available to it in respect of any such
representation, warranty, collateral contract or other assurance;
provided that nothing in this subclause shall limit or exclude any
liability for fraud.
(3) Each obligation, representation and warranty on the part of each of the
Shareholders under this agreement (excluding any obligation fully
performed at the Completion Date) shall continue in force after the
Completion Date.
23. GENERAL
(1) In the event that there is any inconsistency between this agreement and
the Articles, this agreement shall prevail as between the Shareholders
in respect of their rights in relation to YHL.
(2) The Shareholders agree, as between themselves, that they shall procure
the convening of all meetings and the giving of all waivers and
consents and the passing of all resolutions and shall otherwise
exercise all powers and rights available to them in order to give
effect to the provisions of this agreement.
(3) YHL and YLL are excluded from any obligations contained in this
agreement to the extent that such obligations would constitute an
unlawful fetter on their statutory powers.
32
(4) None of the rights or obligations under this agreement may be assigned
or transferred without the written consent of the other parties (such
consent not to be unreasonably withheld), provided that if a
Shareholder proposes to transfer its rights or obligations to an
Affiliate, it shall enter into a guarantee (or procure that its
Ultimate Parent Undertaking enters into a guarantee) substantially in
the form of the Guarantee.
(5) This agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one and the same agreement, and
any party may enter into this agreement by executing a counterpart.
24. NOT USED
25. COUNTER INDEMNITY
Subject to the Intercreditor Agreement, YLL agrees to keep each LC
Provider indemnified against all actions, proceedings, liabilities,
claims, demands, damages, costs and expenses in relation to or arising
out of or in connection with the BF Letter of Credit procured by that
LC Provider and to pay to that LC Provider on demand all payments,
losses, costs, charges, damages and expenses suffered or incurred by
that LC Provider in consequence of the BF Letter of Credit or arising
directly or indirectly therefrom.
26. GOVERNING LAW
This agreement is governed by and shall be construed in accordance with
English law.
AS WITNESS the hands of the parties (or their duly authorised representatives)
on the date which first appears on page 1.
33
SCHEDULE 1
DETAILS OF YHL AND YLL
PART 1 (YHL)
SHARE CAPITAL:
CLASS AUTHORISED ISSUED
Ordinary Shares (pound) 10,000,000 (pound) 3,000,000
SHAREHOLDERS:
NUMBER OF CLASS OF
NAME SHARES SHARES HELD
Macquarie Yorkshire Limited 1,500,000 Ordinary
Balfour Beatty plc 1,500,000 Ordinary
DIRECTORS: Ian Rylatt
John Fox
Colin Chanter
Sean MacDonald
Peter Dyer
SECRETARY: Annabelle Helps
REGISTERED OFFICE: Level 29 and 30, CityPoint
1 Ropemaker Street
London EC2Y 9HD
COMPANY NUMBER: 3059235
DATE OF INCORPORATION: 22nd May, 1995
34
PART 2 (YLL)
SHARE CAPITAL:
CLASS AUTHORISED ISSUED
Ordinary Shares (pound) 10,000,000 (pound) 3,000,000
SHAREHOLDERS:
NUMBER OF CLASS OF
NAME SHARES SHARES HELD
Yorkshire Link (Holdings) 3,000,000 Ordinary
Limited
DIRECTORS: Ian Rylatt
John Fox
Colin Chanter
Sean MacDonald
Peter Dyer
SECRETARY: Annabelle Helps
REGISTERED OFFICE: Level 29 and 30, CityPoint
1 Ropemaker Street
London EC2Y 9HD
COMPANY NUMBER: 2999303
DATE OF INCORPORATION: 7th December, 1994
35
SCHEDULE 2
RESERVED MATTERS
PART 1
THOSE MATTERS IN RELATION TO YHL AND YLL REQUIRING APPROVAL OF
SHAREHOLDERS HOLDING NOT LESS THAN 90 PER CENT. IN NOMINAL VALUE OF THE
YHL SHARES FOR THE TIME BEING ENTITLED TO ATTEND AND VOTE AT GENERAL
MEETINGS
(i) any amendment or addition to this agreement
(ii) depart from the ordinary course of trading in any way
(iii) alter the provisions in the Memorandum or Articles
(iv) pass any resolution for winding up
(v) tender for or undertake any new project
(vi) [not used]
(vii) make any acquisitions or disposals of any companies or businesses.
PART 2
THOSE MATTERS IN RELATION TO YHL AND YLL REQUIRING THE APPROVAL OF ALL
OF THOSE DIRECTORS APPOINTED BY ANY SHAREHOLDER HOLDING NOT LESS THAN
49% IN NOMINAL VALUE OF THE YHL SHARES FOR THE TIME BEING ENTITLED TO
ATTEND AND VOTE AT GENERAL MEETINGS
GENERAL
(i) declare, make or pay any dividends (interim or final)
(ii) give any guarantee or indemnity
(iii) create, issue, purchase or redeem or reorganise any share or loan
capital
(iv) apply for the appointment of a receiver or an administrator
(v) begin or settle any legal or arbitration proceedings other than routine
debt collection
ACCOUNTS AND GENERAL
(i) incur expenditure exceeding (pound)10,000 on its capital account
(ii) borrow any money
36
(iii) make any loans
(iv) prepay any loans
(v) change the financial year
(vi) change the basis of accounting
(vii) pay remuneration or expenses to anyone other than as proper
remuneration for work done or services provided
(viii) make any gift or political or charitable donation
COMMERCIAL
(i) create or redeem any mortgage, charge, debenture or other security
(ii) dispose of or grant any option or right of pre-emption in respect of
its assets except in the ordinary course of trading
(iii) allow any insurances to lapse or do anything which would make any
policy void or voidable
(iv) enter into any agreement which cannot be terminated by YHL or YLL (as
applicable) without penalty within 12 months of its commencement
(v) enter into any abnormal or unusual contract or commitment including any
which:
(a) is outside the ordinary course of business
(b) is unlikely to be profitable
(c) is of a long-term nature
(d) would have extended payment terms
(e) would involve a total outlay over the term of the contract in
excess of (pound)10,000
(vi) reorganise or change the nature or scope of its business
(vii) enter into any agreement restricting its freedom to do business as it
thinks fit
PROPERTIES (I.E. REAL ESTATE)
(i) grant any lease or third party rights in respect of any property
(ii) transfer or dispose of any property
(iii) create any interest over any property (including a security interest)
37
INTELLECTUAL PROPERTY
(i) assign, licence, transfer, dispose of, create any security interest
over, or otherwise deal with any intellectual property
(ii) apply for registration of any intellectual property
(iii) allow any registration of intellectual property to lapse or be
cancelled
(iv) prosecute any infringement action against parties other than partners,
or defend any action for revocation or cancellation or any other
challenge to the validity of any intellectual property
(v) accept any restrictions on use of its own intellectual property
EMPLOYEES
(i) change the terms and conditions of employment of any director/partner
or senior employee; for this purpose a "senior employee" is an employee
with a gross annual salary of (pound)50,000 or above
(ii) employ, or terminate without good cause the employment of any person
(iii) dismiss any senior employees (as defined above)
38
SCHEDULE 3
REPRESENTATIONS AND WARRANTIES
1. STATUS
It is a limited liability company duly organised and validly existing
under the laws of its country of incorporation.
2. POWERS
It has the power to enter into and perform its obligations under this
agreement and each of the other documents referred to in this agreement
to which it is a party.
3. CONSENTS
It has all necessary consents, licences and approvals in connection
with the entry into and performance of its obligations under this
agreement and (if applicable) as a shareholder in YHL.
4. NON-VIOLATION OF LAW ETC.
Its entry into this agreement and performance of its obligations under
this agreement will not violate or conflict with, or exceed any limit
imposed by (i) any law or regulation to which it is subject, (ii) its
memorandum or Articles of Association or other applicable
constitutional documents or (iii) any other agreement, instrument or
undertaking binding upon it.
5. RECITALS
The Recitals to this agreement are true and accurate insofar as they
relate to it.
39
SCHEDULE 4
PART 1
YHL AGREEMENTS
Intercreditor Agreement
Share Pledge Agreement
PART 2
YLL AGREEMENTS
Commercial Bank Facility Agreement
EIB Facility Agreement
EIF Senior Guarantee Facility Agreement
Commercial Subordinated Facility Agreement
Intercreditor Agreement
YLL Loan Stock Instrument
Debenture
ISDA Master Agreements
Security Trust Deed
DBFO Contract
Direct Agreement for the DBFO Contract
Construction Contract
Direct Agreement for Construction Contract
Technical Services Agreement
Secondment Agreement
Maintenance Depot Lease
BB Parent Company Guarantee
MEIP Parent Company Guarantee
Model Custody Agreement
Assignment of Intellectual Property Rights
Appointment of Independent Engineer Agreement
Motorway Communications Side Letter
Insurance Policies
40
Signed by )
for MACQUARIE YORKSHIRE ) *
LIMITED ) ___________
Signed by ) *
for BALFOUR BEATTY PLC ) ___________
Signed by )
for YORKSHIRE LINK ) *
(HOLDINGS) LIMITED ) ___________
Signed by ) *
for YORKSHIRE LINK LIMITED ) ___________
Signed by )
for MACQUARIE EUROPEAN INFRASTRUCTURE ) *
PLC ) ___________
41
* This agreement was restated and amended by an Omnibus Deed dated as of
April 30, 2003 between Macquarie Infrastructure (UK) Limited, Macquarie
Yorkshire Limited, Balfour Beatty plc, Yorkshire Link (Holdings) Limited,
Yorkshire Link Limited, Kvaerner plc and Macquarie European Infrastructure
plc, which was executed by the parties thereto as follows:
MACQUARIE INFRASTRUCTURE (UK) LIMITED
/s/ Colin Chanter
Attorney
Witness /s/ Andrew Deszcz
Name: Andrew Deszcz
Address: 65 Fleet Street, London
MACQUARIE YORKSHIRE LIMITED
/s/ Sean MacDonald
Director
/s/ Colin Chanter
Director
BALFOUR BEATTY PLC
/s/ John Fox
Attorney
Witness /s/ Andrew Deszcz
Name: Andrew Deszcz
Address: 65 Fleet Street, London
YORKSHIRE LINK (HOLDINGS) LIMITED
/s/ John Fox
Director
/s/ Peter Dyer
Director
YORKSHIRE LINK LIMITED
/s/ John Fox
Director
/s/ Peter Dyer
Director
KVAERNER PLC
/s/ Nigel Williams
Attorney
Witness /s/ Peter Dyer
Name: Peter Dyer
Address: 14 Crofton Avenue, Chiswick
London W4 3EW
MACQUARIE EUROPEAN INFRASTRUCTURE PLC
/s/ Peter Dyer
Attorney
Witness /s/ Andrew Deszcz
Name: Andrew Deszcz
Address: 65 Fleet Street, London