EXHIBIT 10.75
C L I F F O R D LIMITED LIABILITY PARTNERSHIP
C H A N C E
CONFORMED COPY
DATED 1 OCTOBER 2001
YORKSHIRE POWER FINANCE LIMITED
as Issuer
- and -
YORKSHIRE POWER GROUP LIMITED
as Guarantor
- and -
BANKERS TRUSTEE COMPANY LIMITED
as Trustee
FIRST SUPPLEMENTAL TRUST DEED
relating to (pound)200,000,000 7.25 per cent.
Guaranteed Bonds due 2028
CONTENTS
Clause Page
1. Definitions And Interpretation 1
2. Representations And Warranties 2
3. Amendments To The Principal Trust Deed 2
4. Trust Deed 4
5. Conditions Precedent 4
6. Costs, Expenses And Indemnification 5
7. Further Assurance 5
8 Counterparts 5
9. Governing Law And Jurisdiction 5
10. Third Party Rights 6
Schedule 1 CONDITIONS OF THE ORIGINAL BONDS 7
Schedule 2 FORM OF NOTICE TO BONDHOLDERS 25
THIS FIRST SUPPLEMENTAL TRUST DEED is made on 1 October 2000
BETWEEN:
(1) YORKSHIRE POWER FINANCE LIMITED as Issuer ("YPFL" or the "Issuer");
(2) YORKSHIRE POWER GROUP LIMITED as Guarantor (the "Guarantor"); and
(3) BANKERS TRUSTEE COMPANY LIMITED (the "Trustee" which expression where
the context so admits, includes all persons for the time being the
trustee or trustees of this First Supplemental Trust Deed).
WHEREAS:
(A) YPFL has issued the Original Bonds constituted by a trust deed (the
"Principal Trust Deed") dated 4 February 1998 made between the Issuer,
the Guarantor and the Trustee.
(B) The parties hereto agree to enter into this First Supplemental Trust
Deed to make certain amendments to the Conditions as a consequence of
changes in the UK regulatory regime for the electricity sector under
the Utilities Act 2000 (the "Regulatory Changes"), to make certain
amendments to the Principal Trust Deed as a result of the coming into
force of the Trustee Act 2000 and to make various miscellaneous
amendments to the Conditions, pursuant to Condition 16(b) and Clause
19(B)(i) of the Principal Trust Deed.
NOW THIS DEED WITNESSETH and it is hereby agreed and declared as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this First Supplemental Trust Deed:
"Completion Date" means 1 October 2001 or such other date as the
Trustee may agree by notice to the other parties hereto; and
"IFA" means an independent financial adviser, appointed pursuant to an
engagement letter dated 28 September 2001; and
"Trust Deed" means the Principal Trust Deed as supplemented by this
First Supplemental Trust Deed.
1.2 Principles of interpretation
In this First Supplemental Trust Deed:
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1.2.1 Clauses and Schedules: any reference to a Schedule or a Clause
or sub-clause is, unless otherwise stated, to a schedule
hereto or a clause or sub-clause hereof respectively; and
1.2.2 Principal Trust Deed: save as herein otherwise provided, all
words and expressions defined in the Principal Trust Deed
shall where the context so requires and admits have the same
meaning in this First Supplemental Trust Deed and the
principles of interpretation specified in Clause 1(B) of the
Principal Trust Deed shall where the context so requires and
admits also apply to this First Supplemental Trust Deed.
2. REPRESENTATIONS AND WARRANTIES
The Issuer and the Guarantor represent and warrant to the Trustee as
follows:
2.1 The Issuer is duly incorporated under the laws of the Cayman Islands
and the Guarantor is duly incorporated under the laws of England and
each of the Issuer and the Guarantor has full power and capacity to
execute and deliver this First Supplemental Trust Deed and to undertake
and perform the obligations expressed to be assumed by it herein and
has taken all necessary action to approve and authorise the same;
2.2 All authorisations, consents and approvals required by each of the
Issuer and the Guarantor, for or in connection with the execution of
this First Supplemental Trust Deed and the performance by the Issuer
and the Guarantor of the respective obligations expressed to be
undertaken by them herein have been obtained and are in full force and
effect;
2.3 No Event of Default, and no condition, event, or act which, with the
lapse of time and/or the giving of a notice and/or the issuing of any
certificate, would be an Event of Default, has occurred or will occur
on the Completion Date.
3. AMENDMENTS TO THE PRINCIPAL TRUST DEED
The Principal Trust Deed, with effect from the Completion Date, shall
be amended as follows:
3.1 Part II of the Second Schedule shall be deleted and replaced by
Schedule 1 hereto;
3.2 The definition of "Cedel" in Clause 1(A) shall be deleted and replaced
with the following text:
"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme,
Luxembourg;";
3.3 The following text shall be inserted after the definition of "Coupons"
in Clause 1(A):
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"Distribution Licence" has the meaning set out in Condition 3;
"Distribution Subsidiary" has the meaning set out in Condition 3;
3.4 The definition of "Euroclear" in Clause 1(A) shall be deleted and
replaced with the following text:
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System;
3.5 The following text shall be inserted after the definition of
"Liability" in Clause 1(A):
"London Stock Exchange" means the London Stock Exchange plc or any
successor thereto;
3.6 The following text shall be inserted after the definition of "Trust
Corporation" in Clause 1(A):
"UK Listing Authority" means the Financial Services Authority in its
capacity as competent authority under the Financial Services Act 1986;
3.7 The definitions of "PES Licence" and "PES Subsidiary" in Clause 1(A)
shall be deleted in their entirety;
3.8 In Clause 1(B), the following text shall be inserted after sub-clause
(xi):
"(xii) All references in these presents to Securities being "listed" or
"having a listing" shall, in relation to the London Stock Exchange, be
construed to mean that such Securities have been admitted to the
Official List by the UK Listing Authority and to trading on the London
Stock Exchange's market for listed securities and all references in
these presents to "listing" or "listed" shall include references to
"quotation" and "quoted" respectively.
(xiii) All references in these presents to Euroclear and/or
Clearstream, Luxembourg shall be deemed to include references to any
other clearing system as is approved by the Trustee.
3.9 All references to "PES Licence" shall be deleted and replaced by
"Distribution Licence" and all references to "PES Subsidiary" shall be
deleted and replaced by "Distribution Subsidiary";
3.10 All references to "Trustee Act 1925" shall be deleted and replaced by
"Trustee Act 1925 and Trustee Act 2000 (together the "Trustee Acts")";
and
3.11 All references to "Cedel Bank" shall be deleted and replaced by
"Clearstream, Luxembourg".
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3.12 Clause 16(D) shall be deleted and replaced with the following text:
"The Trustee may appoint and pay any person to act as a custodian or
nominee on any terms in relation to such assets of the trust as the
Trustee may determine, including for the purpose of depositing with a
custodian these presents or any document relating thereto and the
Trustee shall not be responsible for any loss, liability, expense,
demand, cost, claim or proceedings incurred by reason of the
misconduct, omission or default on the part of any person appointed by
it hereunder or be bound to supervise the proceedings or acts of any
such person; the Trustee is not obliged to appoint a custodian if the
Trustee invests in securities payable to bearer."
3.13 The following shall be inserted in the second line of Clause 16(S),
after the words "employ and pay an agent":
"on any terms"
3.14 The following shall be inserted as a new clause 16(U):
"Section 1 of the Trustee Act 2000 shall not apply to the duties of the
Trustee in relation to the trusts constituted by these presents. Where
there are any inconsistencies between the Trustee Acts and the
provisions of these presents, the provisions of this Trust Deed shall,
to the extent allowed by law, prevail and, in the case of any such
inconsistency with the Trustee Act 2000, the provisions of these
presents shall constitute a restriction or exclusion for the purposes
of that Act."
3.15 The following shall be inserted as a new Clause 30:
"RIGHTS OF THIRD PARTIES
NO person shall have any right under the Contracts (Rights of Third
Parties Act 1999) to enforce any term of these presents, but this does
not affect any right or remedy of any third party which exists or is
available apart from that Act."
4. TRUST DEED
4.1 With effect from the date of this First Supplemental Trust Deed, the
Principal Trust Deed shall be amended to conform with the amendments
contained herein. Thereafter, without prejudice to any existing rights
and obligations, the Principal Trust Deed as so amended shall continue
in full force and effect. Save as provided herein, the Principal Trust
Deed shall be read and construed in conjunction as one document with
this First Supplemental Trust Deed.
4.2 The Trustee agrees, pursuant to Clause 19(B)(i) of the Principal Trust
Deed and based, in respect of the amendments consequent on the
Regulatory Changes, on expert advice received from the IFA, that the
amendments made by this First Supplemental Trust Deed are not
materially prejudicial to the Holders and Couponholders and concurs
with the amendments.
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5. CONDITIONS PRECEDENT
5.1 Conditions Precedent
5.1.1 This First Supplemental Trust Deed shall only take effect on
the Completion Date upon the delivery to the Trustee of the
following documents in a form satisfactory to the Trustee:
(a) Supplemental Agency Agreement: a duly executed
supplemental agency agreement where each of the
Issuer and the Guarantor agrees to be bound by the
Agency Agreement insofar as it relates to the
Original Bonds;
(b) IFA's Certificate: a certificate dated on or before
the Completion Date from the IFA; and
(c) Notice to Bondholders: the notice to Bondholders
substantially in the form set out in Schedule 2 (the
"Notice to Bondholders").
5.1.2 The Issuer shall procure the publication of the Notice to
Bondholders in accordance with the Trust Deed as soon as
practicable after the Completion Date.
5.2 The Trustee may in its discretion waive the delivery, or the form, of
any of the documents referred to in Clause 5.1.1 of this First Supple-
mental Trust Deed or any part of them.
6. COSTS, EXPENSES AND INDEMNIFICATION
6.1 The Issuer and the Guarantor shall, from time to time on demand of the
Trustee, reimburse the Trustee for all proper costs and expenses
(including legal fees) incurred by it in connection with the
negotiation, preparation and execution or purported execution of this
First Supplemental Trust Deed and the completion of the matters herein
contemplated.
6.2 The Issuer and the Guarantor shall jointly and severally indemnify the
Trustee and every attorney, manager, agent, delegate or other person
properly appointed by it hereunder against any and all losses,
liabilities, costs, claims, actions or demands incurred by it or him or
which may be made against it or him as a result of or in connection
with the execution or purported execution of this First Supplemental
Trust Deed and the amendments hereby effected.
7. FURTHER ASSURANCE
The Issuer and the Guarantor jointly and severally undertake to the
Trustee to execute all such other documents and comply with all such
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other requirements to effect the amendments contemplated hereby and any
other matter incidental thereto as the Trustee may direct in the
interests of the Holders.
8. COUNTERPARTS
This First Supplemental Trust Deed may be executed in counterparts (and
in engrossment, photocopy or facsimile form) and the executed documents
shall, from the date on which all parties hereto have executed a
counterpart hereof, be construed and have effect as though all such
counterparts were one document executed by the parties hereto.
9. GOVERNING LAW AND JURISDICTION
9.1 This First Supplemental Trust Deed is governed by, and shall be
construed in accordance with, the laws of England.
9.2 Clause 28 of the Principal Trust Deed shall apply, mutatis mutandis,
to this First Supplemental Trust Deed as if set out herein in full.
10. THIRD PARTY RIGHTS
A person who is not party to this First Supplemental Trust Deed may not
enforce any terms of this First Supplemental Trust Deed under the
Contracts (Rights of Third Parties) Act 1999, but this does not affect
any right or remedy of any third party which exists or is available
apart from that Act.
IN WITNESS WHEREOF this First Supplemental Trust Deed has been executed as a
deed by the parties hereto and is intended to be and is hereby delivered on the
day first before written.
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SCHEDULE 1
CONDITIONS OF THE ORIGINAL BONDS
The following is the text of the terms and conditions of the Bonds which
(subject to amendment) will be endorsed on each Bond in definitive form:
The (pound)200,000,000 7.25 per cent. Guaranteed Bonds due 2028 (the "Bonds",
which expression shall in these Terms and Conditions, unless the context
otherwise requires, include any further bonds issued pursuant to Condition 18
and forming a single series with the Bonds) of Yorkshire Power Finance Limited
(the "Issuer") are constituted by the trust deed dated 4th February, 1998 (the
"Principal Trust Deed"), between the Issuer, Yorkshire Power Group Limited (the
"Guarantor") and Bankers Trustee Company Limited (the "Trustee", which
expression shall include any successor) as trustee for the Holders of the Bonds
("Bondholders") as supplemented by a first supplemental trust deed dated 1st
October, 2001 (the "First Supplemental Trust Deed") made between the Issuer, the
Guarantor and the Trustee. The Principal Trust Deed and the First Supplemental
Trust Deed are together referred to as the "Trust Deed". The issue of the Bonds
was authorised by resolutions of the board of directors of the Issuer passed on
5th January, 1998 and of a committee of the board of directors of the Issuer
passed on 22nd January, 1998 and of the board of directors of the Issuer passed
on 28th September, 2001 and, inter alia, the giving of the guarantee in respect
of the Bonds (which is contained in the Trust Deed) was authorised by
resolutions of the board of directors of the Guarantor passed on 2nd December,
1997 and on 28th September, 2001. The statements in these Terms and Conditions
include summaries of, and are subject to, the detailed provisions of and
definitions in the Trust Deed. The Bonds are also issued with the benefit of an
agency agreement dated 4th February, 1998 (the "Principal Agency Agreement")
made between the Issuer, the Guarantor, Union Bank of Switzerland as principal
paying agent (the "Principal Paying Agent", which expression shall include any
successor) and the other paying agent named therein (together with the Principal
Paying Agent, the "Paying Agents", which expression shall include any additional
or successor paying agents) and the Trustee, as supplemented by a first
supplemental agency agreement dated 1st October, 2001 (the "Supplemental Agency
Agreement") made between the Issuer, the Guarantor and the Paying Agents
(including HSBC Bank plc as principal paying agent, being the successor to
Morgan Guaranty Trust Company of New York, London office in that capacity). The
Principal Agency Agreement and the Supplemental Agency Agreement are together
referred to as the "Agency Agreement". Copies of the Trust Deed and the Agency
Agreement are available for inspection during normal business hours by the
Bondholders and the holders of the interest coupons appertaining to the Bonds
(respectively, the "Couponholders" and the "Coupons") at the registered office
for the time being of the Trustee, being at 1st October, 2001 at Winchester
House, 1 Great Winchester Street, London EC2N 2DB, and at the specified office
of each of the Paying Agents. The Bondholders and the Couponholders are entitled
to the benefit of, are bound by, and are deemed to have notice of, all the
provisions of the Trust Deed and the Agency Agreement. The Bonds will have
talons for further Coupons ("Talons") attached on issue. Any reference herein to
Coupons or coupons shall, unless the context otherwise requires, be deemed to
include a reference to Talons or talons and the expression "Couponholders"
shall, unless the context otherwise requires, include the holders of the Talons.
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1. Form, Denominations and Title
The Bonds are in bearer form, serially numbered, in the denominations
of (pound)1,000, (pound)10,000 and (pound)100,000 each with Coupons and
Talons attached on issue. Title to the Bonds and to the Coupons and
Talons will pass by delivery. Bonds of one denomination cannot be
exchanged for Bonds of another denomination.
The Issuer, the Guarantor, any Paying Agent and the Trustee may (to the
fullest extent permitted by applicable laws) deem and treat the holder
of any Bond and the holder of any Coupon as the absolute owner for all
purposes (whether or not the Bond or Coupon shall be overdue and
notwithstanding any ownership or writing on the Bond or Coupon or any
notice of previous loss or theft of the Bond or Coupon).
2. Status of the Bonds
The Bonds and the Coupons are direct, unconditional and, subject to the
provisions of Condition 3, unsecured obligations of the Issuer and,
subject as aforesaid, rank and will rank pari passu, without any
preference among themselves, with all other outstanding unsecured and
unsubordinated obligations of the Issuer, present and future, but, in
the event of insolvency, only to the extent permitted by the applicable
laws relating to creditors' rights.
3. Negative Pledge
So long as any of the Bonds remains outstanding (as defined in the
Trust Deed) the Issuer and the Guarantor will procure that no Relevant
Indebtedness (as defined below) of the Issuer, the Guarantor, Yorkshire
Electricity Group plc ("YEG") or any Distribution Subsidiary (as
defined below) or of any other person and no guarantee by the Issuer,
the Guarantor, YEG or any Distribution Subsidiary of any Relevant
Indebtedness of any other person will be secured by a mortgage, charge,
lien, pledge or other security interest (each a "Security Interest")
upon, or with respect to, any of the present or future business,
undertaking, assets or revenues (including any uncalled capital) of the
Issuer, the Guarantor, YEG or any Distribution Subsidiary unless the
Issuer and the Guarantor shall, before or at the same time as the
creation of the Security Interest, take any and all action necessary to
ensure that:
(i) all amounts payable by the Issuer under the Bonds, the Coupons
and the Trust Deed, or by the Guarantor under the Guarantee
(as defined below), are secured equally and rateably with the
Relevant Indebtedness or guarantee, as the case may be, by the
Security Interest to the satisfaction of the Trustee; or
(ii) such other Security Interest or guarantee or other arrangement
(whether or not including the giving of a Security Interest)
is provided in respect of all amounts payable by the Issuer
under the Bonds, the Coupons and the Trust Deed, or by the
Guarantor under the Guarantee, either (i) as the Trustee shall
in its absolute discretion deem not materially less beneficial
to the interests of the Bondholders or (ii) as shall be
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approved by an Extraordinary Resolution (as defined in the
Trust Deed) of the Bondholders,
save that the Issuer, the Guarantor, YEG or any Distribution Subsidiary
may create or have outstanding a Security Interest in respect of any of
its Relevant Indebtedness and/or any guarantees given by the Issuer,
the Guarantor, YEG or any Distribution Subsidiary in respect of any
Relevant Indebtedness of any other person (without the obligation to
provide a Security Interest or guarantee or other arrangement in
respect of the Bonds, the Coupons and the Trust Deed as aforesaid)
where such Relevant Indebtedness has an initial maturity falling not
earlier than 4th August, 2028 and is of a maximum aggregate amount
outstanding at any time not exceeding the greater of (pound)200,000,000
and 20 per cent. of the Capital and Reserves (as defined below).
For the purposes of these Terms and Conditions:
(a) "Capital and Reserves" means the aggregate of:
(i) the amount paid up or credited as paid up on the
share capital of the Guarantor; and
(ii) the total of the capital, revaluation and revenue
reserves of the Group, including any share premium
account, capital redemption reserve and credit
balance on the profit and loss account, but excluding
sums set aside for taxation and amounts attributable
to outside shareholders in Subsidiary Undertakings
(as defined below) and deducting any debit balance on
the profit and loss account,
all as shown in the then latest audited consolidated balance
sheet of the Group prepared in accordance with the historical
cost convention (as modified by the revaluation of certain
fixed assets) for the purposes of the Companies Act 1985, but
adjusted as may be necessary in respect of any variation in
the paid up share capital or share premium account of the
Guarantor since the date of that balance sheet and further
adjusted as may be necessary to reflect any change since the
date of that balance sheet in the Subsidiary Undertakings
comprising the Group and/or as the Auditors (as defined in the
Trust Deed) may consider appropriate.
A report by the Auditors as to the amount of the Capital and
Reserves at any given time shall, in the absence of manifest
error, be conclusive and binding on all parties;
(b) "Distribution Licence means the electricity distribution
licence granted under section 6(1)(c) of the Electricity Act
1989, as amended by the Utilities Act 2000, to the
Distribution Subsidiary (as defined below);
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(c) "Distribution Subsidiary" means Yorkshire Electricity
Distribution plc, as holder of the Distribution Licence, or
any other Subsidiary of the Guarantor that holds the
Distribution Licence from time to time;
(d) "Excluded Subsidiary" means any Subsidiary of the Guarantor
(other than a Distribution Subsidiary):
(i) which is a single purpose company whose principal
assets and business are constituted by the ownership,
acquisition, development and/or operation of an
asset;
(ii) none of whose indebtedness for borrowed money in
respect of the financing of such ownership,
acquisition, development and/or operation of an asset
is subject to any recourse whatsoever to any member
of the Group (other than another Excluded Subsidiary)
in respect of the repayment thereof, except as
expressly referred to in paragraph (g)(ii)(3); and
(iii) which has been designated as such by the Guarantor by
written notice to the Trustee, provided that the
Guarantor may give written notice to the Trustee at
any time that any Excluded Subsidiary is no longer an
Excluded Subsidiary, whereupon it shall cease to be
an Excluded Subsidiary;
(e) "Group" means the Guarantor and the Subsidiary Undertakings;
(f) "indebtedness for borrowed money" means any present or future
indebtedness (whether being principal, premium, interest or
other amounts) for or in respect of (i) money borrowed, (ii)
liabilities under or in respect of any acceptance or
acceptance credit, or (iii) any notes, bonds, debentures,
debenture stock, loan stock or other securities offered,
issued or distributed whether by way of public offer, private
placing, acquisition consideration or otherwise and whether
issued for cash or in whole or in part for a consideration
other than cash;
(g) "Project Finance Indebtedness" means any indebtedness for
borrowed money to finance the ownership, acquisition,
development and/or operation of an asset:
(i) which is incurred by an Excluded Subsidiary; or
(ii) in respect of which the person or persons to whom any
such indebtedness for borrowed money is or may be
owed by the relevant borrower (whether or not a
member of the Group) has or have no recourse
whatsoever to any member of the Group (other than an
Excluded Subsidiary) for the repayment thereof other
than:
(1) recourse to such borrower for amounts
limited to the cash flow or net cash flow
(other than historic cash flow or historic
net cash flow) from such asset; and/or
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(2) recourse to such borrower for the purpose
only of enabling amounts to be claimed in
respect of such indebtedness for borrowed
money in an enforcement of any encumbrance
given by such borrower over such asset or
the income, cash flow or other proceeds
deriving therefrom (or given by any
shareholder or the like in the borrower over
its shares or the like in the capital of the
borrower) to secure such indebtedness for
borrowed money, provided that (aa) the
extent of such recourse to such borrower is
limited solely to the amount of any
recoveries made on any such enforcement, and
(bb) such person or persons are not
entitled, by virtue of any right or claim
arising out of or in connection with such
indebtedness for borrowed money, to commence
proceedings for the winding up or
dissolution of the borrower or to appoint or
procure the appointment of any receiver,
trustee or similar person or officer in
respect of the borrower or any of its assets
(save for the assets the subject of such
encumbrance); and/or
(3) recourse to such borrower generally, or
directly or indirectly to a member of the
Group, under any form of assurance,
undertaking or support, which recourse is
limited to a claim for damages (other than
liquidated damages and damages required to
be calculated in a specified way) for breach
of an obligation (not being a payment
obligation or an obligation to procure
payment by another or an indemnity in
respect thereof or any obligation to comply
or to procure compliance by another with any
financial ratios or other tests of financial
condition) by the person against whom such
recourse is available;
(h) "Relevant Indebtedness" means any present or future
indebtedness (whether being principal, premium, interest or
other amounts) in the form of or represented by notes, bonds,
debentures, debenture stock, loan stock or other securities,
whether issued for cash or in whole or in part for a
consideration other than cash, and which, with the agreement
of the person issuing the same are quoted, listed or
ordinarily dealt in on any stock exchange or recognised
over-the-counter or other securities market, but shall in any
event not include Project Finance Indebtedness;
(i) "Subsidiary" means a subsidiary within the meaning of Section
736 of the Companies Act 1985;
(j) "Subsidiary Undertaking" shall have the meaning given to it by
Section 258 of the Companies Act 1985 (but shall exclude any
undertakings (as defined in the Companies Act 1985) whose
accounts are not included in the then latest published audited
consolidated accounts of the Guarantor, nor (in the case of an
undertaking which has first become a subsidiary undertaking of
a member of the Group since the date as at which any such
audited accounts were prepared) would its accounts have been
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so included or consolidated if it had become so on or before
that date); and
(k) any reference to an obligation being guaranteed shall include
a reference to an indemnity being given in respect of the
obligation.
4. Guarantee
The Guarantor has in the Trust Deed unconditionally and irrevocably
guaranteed the due payment of the principal and interest on the Bonds
and all other moneys payable under the Trust Deed. Its obligations in
that respect (the "Guarantee") constitute direct and, subject to
Condition 3, unsecured and unsubordinated obligations of the Guarantor
ranking, subject as aforesaid, pari passu and rateably with all its
other unsecured and unsubordinated obligations present and future, but,
in the event of insolvency, only to the extent permitted by applicable
laws relating to creditors' rights.
5. Interest
The Bonds bear interest from (and including) 4th February, 1998 (the
"Closing Date") at the rate of 7.25 per cent. per annum, payable
annually in arrear on 4th August in each year (each an "Interest
Payment Date"), the first such payment being made on 4th August, 1998
in respect of the period from (and including) the Closing Date to (but
excluding) 4th August 1998. All amounts of interest will be rounded
upwards, if necessary, to the nearest penny. Accordingly, interest
payable on 4th August, 1998 will amount to (pound)36.25 per
(pound)1,000, (pound)362.50 per (pound)10,000 and (pound)3,625.00 per
(pound)100,000 respectively in principal amount of the Bonds.
Each Bond will cease to bear interest from its due date for redemption
unless, upon presentation, payment of the principal in respect of the
Bond is improperly withheld or refused or unless default is otherwise
made in respect of such payment, in which event interest shall continue
to accrue as provided in the Trust Deed.
When interest is required to be calculated in respect of a period of
less than a full year, it shall be calculated on the basis of a 360 day
year consisting of 12 months of 30 days each.
6. Payments
Payments of principal and interest in respect of each Bond will be made
against presentation and surrender (or, in the case of part payment
only, endorsement) of the Bond, except that payments of interest due on
an Interest Payment Date will be made against presentation and
surrender (or, in the case of part payment only, endorsement) of the
relevant Coupons, in each case at the specified office of any of the
Paying Agents.
Payments in respect of each Bond will be made at the specified office
of any Paying Agent, at the option of the holder, by sterling cheque
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drawn on, or by transfer to a sterling account maintained by the payee
with, a bank in London, subject in all cases to any applicable fiscal
or other laws and regulations, but without prejudice to the provisions
of Condition 9.
Each Bond should be presented for payment together with all relative
unmatured Coupons, failing which the full amount of any relative
missing unmatured Coupon (or, in the case of payment not being made in
full, that proportion of the full amount of the missing unmatured
Coupon which the amount so paid bears to the total amount due) will be
deducted from the amount due for payment. Each amount so deducted will
be paid in the manner mentioned above against presentation and
surrender (or, in the case of part payment only, endorsement) of the
relative missing Coupon at any time before the expiry of 10 years after
the Relevant Date (as defined in Condition 9) in respect of the
relevant Bond (whether or not the Coupon would otherwise have become
void pursuant to Condition 10), or, if later, five years after the date
on which the Coupon would have become due, but not thereafter.
A holder shall be entitled to present a Bond or Coupon for payment only
on a Presentation Date and shall not be entitled to any further
interest or other payment if a Presentation Date is after the due date.
"Presentation Date" means a day which (subject to Condition 10):
(i) is or falls after the relevant due date but, if the due date
is not or was not a Business Day in London, is or falls after
the next following such Business Day; and
(ii) is a Business Day in the place of the specified office of the
Paying Agent at which the Bond or Coupon is presented for
payment and, in the case of payment by transfer to a sterling
account in London as referred to above, in London.
"Business Day" means, in relation to any place, a day on which
commercial banks and foreign exchange markets settle payments in that
place.
The names of the Paying Agents and their specified offices are set out
at the end of these Terms and Conditions. The Issuer reserves the
right, subject to the prior written approval of the Trustee, at any
time to vary or terminate the appointment of any Paying Agent and to
appoint additional or other Paying Agents provided that it will at all
times maintain at least two Paying Agents having specified offices in
separate European cities approved by the Trustee, one of which, so long
as the Bonds are listed on the Luxembourg Stock Exchange and the rules
of the Luxembourg Stock Exchange so require, shall be Luxembourg.
Notice of any termination or appointment and of any changes in
specified offices will be given to the bondholders promptly by the
Issuer in accordance with Condition 15.
7. Redemption and Purchase
13
(a) Unless previously redeemed or purchased and cancelled as
provided below, the Issuer will redeem the Bonds at their
principal amount on 4th August, 2028.
(b) The Issuer may, at any time, having given notice to the
Bondholders in accordance with this Condition 7(b) (which
notice shall be irrevocable), redeem the Bonds in whole or in
part (but if in part, in integral multiples of
(pound)1,000,000 in principal amount thereof), at the price
which shall be the higher of the following, together with
interest accrued up to the date of redemption:
(i) par; and
(ii) that price (the "Redemption Price"), expressed as a
percentage rounded to three decimal places (0.0005
being rounded down), at which the Gross Redemption
Yield on the Bonds, if they were to be purchased at
such price on the third dealing day prior to the
publication of the notice of redemption or, in the
case of a partial redemption, the first notice of
redemption referred to below, would be equal to the
Gross Redemption Yield on such dealing day of the 7
1/4 per cent. Treasury Stock 2007 or of such other
United Kingdom Government Stock as the Trustee, with
the advice of three leading brokers operating in the
gilt-edged market and/or gilt-edged market makers,
shall determine to be appropriate (the "Reference
Stock") on the basis of the middle market price of
the Reference Stock prevailing on such dealing day,
as determined by UBS Limited or its successors (or
such other person(s) as the Trustee may approve).
The Gross Redemption Yield on the Bonds and the Reference
Stock will be expressed as a percentage and will be calculated
on the basis indicated by the Joint Index and Classification
Committee of the Institute and Faculty of Actuaries as
reported in the journal of the Institute of Actuaries, Vol.
105, Part I, 1978, page 18 or on such other basis as the
Trustee may approve.
In the case of a partial redemption of Bonds, Bonds to be
redeemed will be selected individually by lot in such place as
the Trustee may approve and in such manner as the Trustee
shall deem to be appropriate and fair without involving any
part only of a Bond, not more than 65 days before the date
fixed for redemption. In the case of a redemption of all of
the Bonds pursuant to this Condition 7(b), notice will be
given to the Bondholders by the Issuer in accordance with
Condition 15 once not less than 30 nor more than 60 days
before the date fixed for redemption. In the case of a partial
redemption, notice will be so given twice, first not less than
80 nor more than 95 days, and secondly not less than 30 nor
more than 60 days, before the date fixed for redemption. Each
notice will specify the date fixed for redemption and the
redemption price and, in the case of a partial redemption, the
aggregate principal amount of the Bonds to be redeemed, the
serial numbers of Bonds previously called (in whole or in
14
part) for redemption and not presented for payment and the
aggregate principal amount of the Bonds which will be
outstanding after the partial redemption. In addition, in the
case of a partial redemption, the second notice will specify
the serial numbers of the Bonds called for redemption.
Upon the expiry of any such notice as is referred to above,
the Issuer shall be bound to redeem the Bonds to which the
notice refers at the relative redemption price applicable at
the date of such redemption together with interest accrued to
but excluding such date.
(c) If as a result of any change in, or amendment to, the laws or
regulations of the Relevant Jurisdiction (as defined below),
or any change in the application or official interpretation
of such laws or regulations, which change or amendment
becomes effective after 13th January, 1998, either (I) the
Issuer has or will become obliged to pay additional amounts
as provided or referred to in Condition 9 (and such
amendment or change has been evidenced by the delivery by
the Issuer to the Trustee (who shall accept such certificate
and opinion as sufficient evidence thereof) of (i) a
certificate signed by two directors of the Issuer on behalf
of the Issuer stating that such amendment or change has
occurred (irrespective of whether such amendment or change
is then effective), describing the facts leading thereto and
stating that such obligation cannot be avoided by the Issuer
or, as the case may be, the Guarantor taking reasonable
measures available to it and (ii) an opinion in a form
satisfactory to the Trustee of independent legal advisers of
recognised standing to whom the Trustee shall have no
reasonable objection to the effect that such amendment or
change has occurred (irrespective of whether such amendment
or change is then effective)), or (2) the Guarantor would be
unable for reasons outside its control to procure payment by
the Issuer and in making payment itself would be required to
pay additional amounts, the Issuer may at its option, having
given not less than 30 nor more than 60 days' notice to the
Bondholders in accordance with Condition 15 (which notice
shall be irrevocable), redeem all the Bonds (other than
Bonds in respect of which the Issuer shall have given a
notice of redemption pursuant to Condition 7(b) prior to any
notice being given under this Condition 7(c)) but not some
only, at their principal amount together with interest (if
any) accrued to the date of redemption, provided that no
notice of redemption shall be given earlier than 90 days
before the earliest date on which the Issuer or, as the case
may be, the Guarantor would be required to pay such
additional amounts were a payment in respect of the Bonds
then due.
Upon the expiry of any such notice as is referred to above
(and subject as provided above), the Issuer shall be bound to
redeem the Bonds at their principal amount together with
interest accrued to but excluding the redemption date.
In these Terms and Conditions "Relevant Jurisdiction" in
relation to the Issuer or, as the case may be, the Guarantor
means the jurisdiction in which the Issuer or, as the case may
be, the Guarantor is generally resident for tax purposes
(being, at the date of issue of the Bonds, the United Kingdom
15
in relation to both the Issuer and the Guarantor) and any
political sub-division of, or authority in, or of, such
jurisdiction having power to tax.
(d) The Issuer, the Guarantor or any of the Guarantor's other
Subsidiaries may at any time purchase the Bonds in any manner
and at any price. If purchases are made by tender, tenders
must be available to all Bondholders alike.
(e) All Bonds which are redeemed by the Issuer will forthwith be
cancelled (together with all relative unmatured Coupons
attached to the Bonds or surrendered with the Bonds) and may
not be reissued or resold. Bonds purchased by the Issuer, the
Guarantor or any of the Guarantor's other Subsidiaries may be
held or reissued or resold or surrendered for cancellation.
8. Redemption at the Option of Bondholders
(a) (i) If, at any time while any of the Bonds remains
outstanding, a Restructuring Event (as defined below)
occurs and prior to the commencement of or during the
Restructuring Period (as defined below) an
independent financial adviser (as defined below)
shall have certified in writing to the Trustee that
such Restructuring Event will not be or is not, in
its opinion, materially prejudicial to the interests
of the Bondholders, the following provisions of this
Condition 8 shall cease to have any further effect in
relation to such Restructuring Event.
(ii) If, at any time while any of the Bonds remains
outstanding, a Restructuring Event occurs and
(subject to Condition 8(a)(i)):
(A) within the Restructuring Period, either:
(1) if at the time such Restructuring
Event occurs there are Rated
Securities (as defined below), a
Rating Downgrade (as defined below)
in respect of such Restructuring
Event also occurs; or
(2) if at such time there are no Rated
Securities, a Negative Rating Event
(as defined below) also occurs; and
(B) an independent financial adviser shall have
certified in writing to the Trustee that
such Restructuring Event will be or is, in
its opinion, materially prejudicial to the
interests of the Bondholders (a "Negative
Certification"),
then, unless at any time the Issuer shall have given a notice under
Condition 7(b) in respect of the Bonds in whole or in part or Condition
7(c) in respect of all of the Bonds, in each case expiring prior to the
Put Date (as defined below), the holder of each Bond will, upon the
giving of a Put Event Notice (as defined below), have the option (the
"Put Option") to require the Issuer to redeem or, at the option of the
Issuer, purchase (or procure the purchase of) that Bond on the Put Date
16
at its principal amount together with (or, where purchased, together
with an amount equal to) interest (if any) accrued to (but excluding)
the Put Date.
A Restructuring Event shall be deemed not to be materially prejudicial
to the interests of the Bondholders if, notwithstanding the occurrence
of a Rating Downgrade, the rating assigned to the Rated Securities by
any Rating Agency (as defined below) is subsequently increased to an
investment grade rating (BBB-/Baa3 or their respective equivalents for
the time being, or better) prior to any Negative Certification being
issued.
Any certification by an independent financial adviser as aforesaid as
to whether or not, in its opinion, any Restructuring Event will be or
is materially prejudicial to the interests of the Bondholders shall be
conclusive and binding on the Trustee, the Issuer, the Guarantor and
the Bondholders. For the purposes of this Condition 8, an "independent
financial adviser" means a financial adviser appointed by the Issuer
and the Guarantor and approved by the Trustee (such approval not to be
unreasonably withheld or delayed) or, if the Issuer and the Guarantor
shall not have appointed such an adviser within 21 days after becoming
aware of the occurrence of such Restructuring Event and the Trustee is
indemnified to its satisfaction against the costs of such adviser,
appointed by the Trustee following consultation with the Issuer and the
Guarantor.
(b) Promptly upon the Issuer becoming aware that a Put Event (as
defined below) has occurred, and in any event not later than
14 days after the occurrence of a Put Event, the Issuer shall,
and at any time upon the Trustee becoming similarly so aware
the Trustee may, and if so requested by the holders of at
least one-quarter in principal amount of the Bonds then
outstanding shall, give notice (a "Put Event Notice") to the
Bondholders in accordance with Condition 15 specifying the
nature of the Put Event and the procedure for exercising the
Put Option.
(c) To exercise the Put Option, the holder of a Bond must deliver
such Bond to the specified office of any Paying Agent, on a
day which is a Business Day (as defined in Condition 6) in
London and in the place of such specified office falling
within the period (the "Put Period") of 45 days after that
on which a Put Event Notice is given, accompanied by a duly
completed and signed notice of exercise in the form (for the
time being current) obtainable from any specified office of
Paying Agent (a "Put Notice") and in which the holder may
specify a bank account complying with the requirements of
Condition 6 to which payment is to be made under this
Condition 8. Each Bond should be delivered together with all
Coupons appertaining thereto maturing after the day (the
"Put Date") being the fifteenth day after the date of expiry
of the Put Period, failing which an amount equal to the face
value of any such missing Coupon will be deducted from the
amount due for payment. Each amount so deducted will be paid
in the manner provided in Condition 6 against presentation
and surrender (or, in the case of part payment only,
endorsement) of the relevant missing Coupon at any time
before the expiry of 10 years after the Relevant Date in
17
respect of the relevant Bond (whether or not the Coupon
would otherwise have become void pursuant to Condition 10)
or, if later, five years after the date on which such Coupon
would have become due, but not thereafter. The Paying Agent
to which such Bond and Put Notice are delivered shall issue
to the bondholder concerned a non-transferable receipt in
respect of the Bond so delivered. Payment in respect of any
Bond so delivered shall be made, if the holder duly
specifies a bank account in the Put Notice to which payment
is to be made on the Put Date, by transfer to that bank
account and, in every other case, on or after the Put Date
in each case against presentation and surrender or (as the
case may be) endorsement of such receipt at any specified
office of any Paying Agent, subject in any such case as
provided in Condition 6. A Put Notice, once given, shall be
irrevocable. For the purposes of Conditions 1, 10, 11, 12,
14 and 16 and for certain other purposes specified in the
Trust Deed, receipts issued pursuant to this Condition 8
shall be treated as if they were Bonds. The Issuer shall
redeem or, at the option of the Issuer, purchase (or procure
the purchase of) the relevant Bond on the applicable Put
Date unless previously redeemed or purchased.
(d) For the purposes of these Terms and Conditions:
(i) A "Negative Rating Event" shall be declared to have
occurred if (A) the Issuer does not either prior to
or not later than 14 days after the date of a
Negative Certification in respect of the relevant
Restructuring Event seek, and thereupon use all
reasonable endeavours to obtain, a rating of the
Bonds or any other unsecured and unsubordinated debt
of the Issuer (or of any other Subsidiary of the
Guarantor and which is guaranteed on an unsecured and
unsubordinated basis by the Guarantor) having an
initial maturity of five years or more from a Rating
Agency or (B) it does so seek and use such
endeavours, but is unable, as a result of such
Restructuring Event, to obtain such a rating at least
investment grade (BBB-/Baa3, or their respective
equivalents for the time being).
(ii) A "Put Event" occurs on the date of the last to occur
of (aa) a Restructuring Event, (bb) either a Rating
Downgrade or, as the case may be, a Negative Rating
Event and (cc) the relevant Negative Certification.
(iii) "Rating Agency" means Standard & Poor's Ratings Group
or any of its successors or Moody's Investors Service
or any of its successors or any rating agency
substituted for either of them (or any permitted
substitute of them) by the Issuer from time to time
with the prior written approval of the Trustee (such
approval not to be withheld or delayed).
(iv) A "Rating Downgrade" shall be deemed to have occurred
in respect of a Restructuring Event if the then
current client rating assigned to the Rated
Securities by any Rating Agency (whether provided by
a Rating Agency at the invitation of the Issuer or by
its own volition) is withdrawn or reduced from an
investment grade rating (BBB-/Baa3, or their
18
respective equivalents for the time being, or better)
to a non-investment grade rating (BB+/Ba1, or their
respective equivalents for the time being, or worse)
or, if the Rating Agency shall then have already
rated the Rated Securities below investment grade (as
described above), the rating is lowered one full
rating category.
(v) "Rated Securities" means the Bonds, if at any time
and for so long as they shall have a rating from a
Rating Agency, and otherwise any other unsecured and
unsubordinated debt of the Issuer (or of any other
Subsidiary of the Guarantor and which is guaranteed
on an unsecured and unsubordinated basis by the
Guarantor) having an initial maturity of five years
or more which is rated by a Rating Agency.
(vi) "Restructuring Event" means the occurrence of any one
or more of the following events:
(A) (aa) the Secretary of State for Trade and
Industry (or any successor) giving the
Distribution Subsidiary written notice of
revocation of the Distribution Licence or
(bb) the Distribution Subsidiary agreeing
in writing with the Secretary of State for
Trade and Industry (or any successor) to any
revocation or surrender of the Distribution
Licence or (cc) any legislation (whether
primary or subordinate) being enacted
terminating or revoking the Distribution
Licence, except in any such case in circum-
stances where a licence or licences on
substantially no less favourable terms is
or are granted to the Distribution
Subsidiary or another directly or indirectly
owned Subsidiary of the Guarantor; or
(B) any modification (other than a modification
which is of a formal, minor or technical
nature) being made to the terms and
conditions of the Distribution Licence on or
after 1st October, 2001 unless two directors
of the Guarantor or, with the consent of the
Trustee, of the Distribution Subsidiary have
certified in good faith to the Trustee that
the modified terms and conditions are not
materially less favourable to the business
of the Guarantor or the Distribution
Subsidiary, as the case may be; or
(C) any legislation (whether primary or sub-
ordinate) is enacted which removes,
qualifies or amends (other than an amend-
ment which is of a formal, minor or
technical nature) the duties of the
Secretary of State for Trade and Industry
(or any successor) and/or the Gas and
Electricity Markets Authority (or any
successor) under Section 3 of the Electri-
city Act 1989, as amended by the Utilities
Act 2000, unless two directors of the
Guarantor or, with the consent of the
Trustee, of the Distribution Subsidiary have
certified in good faith to the Trustee that
such removal, qualification or amendment
19
does not have a materially adverse effect on
the financial condition of the Guarantor or
the Distribution Subsidiary, as the case may
be.
(vii) "Restructuring Period" means:
(A) if at the time a Restructuring Event occurs
there are Rated Securities, the period of 90
days starting from and including the day on
which that Restructuring Event occurs; or
(B) if at the time a Restructuring Event occurs
there are no Rated Securities, the period
starting from and including the day on which
that Restructuring Event occurs and ending
on the day 90 days following the later of
(aa) the date on which the Issuer shall seek
to obtain a rating pursuant to Condition
8(d)(i) prior to the expiry of the 14 days
referred to in the definition of Negative
Rating Event and (bb) the date on which a
Negative Certification shall have been given
to the Issuer in respect of that
Restructuring Event.
(viii) A Rating Downgrade or a Negative Rating Event or a
non-investment grade rating shall be deemed not to
have occurred as a result or in respect of a
Restructuring Event if the Rating Agency making the
relevant reduction in rating or, where applicable,
declining to assign a rating of at least investment
grade as provided in this Condition 8 does not
announce or publicly confirm or inform the Trustee in
writing at its request that the reduction or, where
applicable, declining to assign a rating of at least
investment grade was the result, in whole or in part,
of any event or circumstance comprised in or arising
as a result of the applicable Restructuring Event.
The Trust Deed provides that the Trustee is under no
obligation to ascertain whether a Restructuring Event, a
Negative Rating Event or any event which could lead to the
occurrence of or could constitute a Restructuring Event has
occurred and until it shall have actual knowledge or express
notice pursuant to the Trust Deed to the contrary the Trustee
may assume that no Restructuring Event, Negative Rating Event
or other such event has occurred.
9. Taxation
All payments in respect of the Bonds or the Guarantee by the Issuer or,
as the case may be, the Guarantor shall be made without withholding or
deduction for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature ("Taxes")
imposed or levied by or on behalf of the Relevant Jurisdiction unless
the withholding or deduction of the Taxes is required by law. In that
event, the Issuer or, as the case may be, the Guarantor will pay such
additional amounts as may be necessary in order that the net amounts
received by the Bondholders and Couponholders after the withholding or
deduction shall equal the respective amounts which would have been
20
receivable in respect of the Bonds or, as the case may be, Coupons in
the absence of the withholding or deduction; except that no additional
amounts shall be payable in relation to any payment in respect of any
Bond or Coupon:
(a) to, or to a third party on behalf of, a holder who is liable
to the Taxes in respect of the Bond or Coupon by reason of his
having some connection with the Relevant Jurisdiction other
than the mere holding of the Bond or Coupon; or
(b) where the Coupon is presented for payment in the Relevant
Jurisdiction; or
(c) presented for payment more than 30 days after the Relevant
Date except to the extent that a holder would have been
entitled to additional amounts on presenting the same for
payment on the last day of such period of 30 days; or
(d) to, or to a third party on behalf of, a holder who would not
be liable or subject to the withholding deduction by making a
declaration of non-residence or other similar claim for
exemption to the relevant tax authority; or
(e) where the withholding or deduction is imposed on payment to an
individual and is required to be made pursuant to any European
Union Directive on the taxation of savings implementing the
conclusions of the ECOFIN Council meeting of 26-27 November
2000 or any law implementing or complying with, or introduced
in order to conform to, such Directive; or
(f) presented for payment by or on behalf of a holder who would
have been able to avoid the withholding or deduction by
presenting the relevant Bond or Coupon to another Paying Agent
in a Member State of the EU.
As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the full amount of the money payable has not
been received in London by the Principal Paying Agent or the Trustee on
or before the due date, it means the date on which, the full amount of
the money having been so received, notice to that effect shall have
been duly given to the Bondholders by the Issuer in accordance with
Condition 15.
Any reference in these Terms and Conditions to any amounts in respect
of the Bonds shall be deemed also to refer to any additional amounts
which may be payable under this Condition or under any undertakings
given in addition to, or in substitution for, this Condition pursuant
to the Trust Deed.
10. Prescription
Bonds and Coupons will become void unless presented for payment within
periods of 10 years (in the case of principal) and five years (in the
case of interest) from the Relevant Date in respect of the Bonds or, as
the case may be, the Coupons, subject to the provisions of Condition 6.
21
11. Events of Default
The Trustee at its discretion may, and if so requested in writing by
the holders of at least one-quarter in principal amount of the Bonds
then outstanding or if so directed by an Extraordinary Resolution of
the Bondholders shall (but, in the case of the happening of any of the
events mentioned in sub-paragraphs (b), (c), (e), (f), (g) and (h)
below, only if the Trustee shall have certified in writing to the
Issuer that such event is, in its opinion, materially prejudicial to
the interests of the Bondholders and subject in each case to being
indemnified by, or on behalf of, Bondholders to its satisfaction), give
notice to the Issuer that the Bonds are, and they shall accordingly
thereby forthwith become, immediately due and repayable at their
principal amount together with accrued interest (as provided in the
Trust Deed) if any of the following events (each an "Event of Default")
shall have occurred (unless such Event of Default has been remedied to
the satisfaction of the Trustee):
(a) if default is made for a period of 14 days or more in the
payment of any principal or the purchase price due in respect
of any Bond pursuant to Condition 8 or 21 days or more in the
payment of any interest due in respect of the Bonds or any of
them; or
(b) if either the Issuer or the Guarantor fails to perform or
observe any of its other obligations, covenants, conditions or
provisions under the Bonds or the Trust Deed and (except where
the Trustee shall have certified to the Issuer and the
Guarantor in writing that it considers such failure to be
incapable of remedy in which case no such notice or
continuation as is hereinafter mentioned will be required)
such failure continues for the period of 60 days (or such
longer period as the Trustee may in its absolute discretion
permit) next following the service by the Trustee on the
Issuer and the Guarantor of notice requiring the same to be
remedied; or
(c) if (i) any other indebtedness for borrowed money of the
Issuer, the Guarantor or any Principal Subsidiary becomes
due and repayable prior to its stated maturity by reason of
an event of default (howsoever described) or (ii) any such
indebtedness for borrowed money is not paid when due or, as
the case may be, within any applicable grace period (as
originally provided) or (iii) the Issuer, the Guarantor or
any Principal Subsidiary fails to pay when due (or, as the
case may be, within any originally applicable grace period)
any amount payable by it under any present or future
guarantee for, or indemnity in respect of, any indebtedness
for borrowed money of any person or (iv) any security given
by the Issuer, the Guarantor or any Principal Subsidiary for
any indebtedness for borrowed money of any person or any
guarantee or indemnity of indebtedness for borrowed money of
any person becomes enforceable by reason of default in
relation thereto and steps are taken to enforce such
security save in any such case where there is a bona fide
dispute as to whether the relevant indebtedness for borrowed
money or any such guarantee or indemnity as aforesaid shall
be due and payable, provided that the aggregate amount of
the relevant indebtedness for borrowed money in respect of
22
which any one or more of the events mentioned above in this
sub-paragraph (c) has or have occurred equals or exceeds
whichever is the greater of(pound)20,000,000 or its
equivalent in other currencies (as determined by the
Trustee) or 2 per cent. of the Capital and Reserves, and for
the purposes of this sub-paragraph (c), "indebtedness for
borrowed money" shall exclude Project Finance Indebtedness;
or
(d) if any order shall be made by any competent court or any
resolution shall be passed for the winding up or dissolution
of the Issuer or the Guarantor save for the purposes of
amalgamation, merger, consolidation, reorganization,
reconstruction or other similar arrangement on terms
previously approved in writing by the Trustee or by an
Extraordinary Resolution of the Bondholders; or
(e) if any order shall be made by any competent court or any
resolution shall be passed for the winding up or dissolution
of a Principal Subsidiary, save for the purposes of
amalgamation, merger, consolidation, reorganization,
reconstruction or other similar arrangement (i) not involving
or arising out of the insolvency of such other Principal
Subsidiary and under which all the surplus assets of such
Principal Subsidiary are transferred to the Guarantor or any
of its other Subsidiaries or (ii) the terms of which have
previously been approved in writing by the Trustee or by an
Extraordinary Resolution of the Bondholders; or
(f) if the Issuer, the Guarantor or any Principal Subsidiary shall
cease to carry on substantially the whole of its business,
save in each case for the purposes of amalgamation, merger,
consolidation, reorganization, reconstruction or other
similar arrangement (i) not involving or arising out of the
insolvency of the Issuer, the Guarantor or such Principal
Subsidiary and under which all or substantially all of its
assets are transferred to another member of the Group or
(ii) under which all or substantially all of its assets are
transferred to a third party or parties (whether associates
or not) for full consideration by the Issuer, the Guarantor
or a Principal Subsidiary on an arm's length basis or (iii)
where the transferee is or immediately upon such transfer
becomes a Principal Subsidiary or (iv) the terms of which
have previously been approved in writing by the Trustee or
by an Extraordinary Resolution of the Bondholders, provided
that if a Distribution Subsidiary shall cease to hold or
shall transfer the Distribution Licence, it shall be deemed
to have ceased to carry on the whole or substantially the
whole of its business (and none of exceptions (i) to (iii)
shall apply) unless the transferee is a Subsidiary of the
Guarantor; or
(g) if the Issuer, the Guarantor or any Principal Subsidiary shall
suspend or shall threaten to suspend payment of its debts
generally or shall be declared or adjudicated by a competent
court to be unable, or shall admit in writing its inability,
to pay its debts (within the meaning of Section 123(l) or (2)
of the Insolvency Act 1986) as they fall due, or shall be
adjudicated or found insolvent by a competent court or shall
enter into any composition or other similar arrangement with
its creditors under Section 1 of the Insolvency Act 1986; or
23
(h) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Issuer,
the Guarantor or any Principal Subsidiary or in relation to
the whole or a substantial part of the undertaking or assets
of any of them or a distress, execution or other process shall
be levied or enforced upon or sued out against, or an
encumbrancer shall take possession of, the whole or a
substantial part of the assets of any of them and in any of
the foregoing cases it or he shall not be paid out or
discharged within 90 days (or such longer period as the
Trustee may in its absolute discretion permit); or
(i) if the Guarantor ceases to own directly or indirectly at least
51 per cent. of the ordinary share capital of YEG.
For the purposes of sub-paragraph (g) above, Section 123(l)(a) of the
Insolvency Act 1986 shall have effect as if for "(pound)750" there was
substituted "(pound)250,000" or such higher figure as the Gas and
Electricity Markets Authority (or any successor) may from time to time
determine by notice in writing to the Secretary of State for Trade and
Industry (or any successor).
None of the Issuer, the Guarantor or any Principal Subsidiary shall be
deemed to be unable to pay its debts for the purposes of sub-paragraph
(g) above if any such demand as is mentioned in Section 123(1)(a) of
the Insolvency Act 1986 is being contested in good faith by the
relevant company with recourse to all appropriate measures and
procedures or if any such demand is satisfied before the expiration of
such period as may be stated in any notice given by the Trustee under
the first paragraph of this Condition 11.
For the purposes of these Terms and Conditions, a "Principal
Subsidiary" at any time shall mean a Subsidiary of the Guarantor (other
than the Issuer and not being an Excluded Subsidiary or any other
Subsidiary of the Guarantor whose only indebtedness for borrowed money
is Project Finance Indebtedness):
(A) whose (i) net profits before tax or (ii) gross assets
represent 20 per cent. or more of the consolidated
net profits before tax of the Group or consolidated
gross assets of the Group respectively, in each case
as calculated by reference to the then latest audited
financial statements of such Subsidiary (consolidated
in the case of a company which itself has
Subsidiaries and which, in the normal course,
prepares consolidated accounts) and the then latest
audited consolidated financial statements of the
Group; or
(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary
of the Guarantor which immediately prior to such
transfer is a Principal Subsidiary, whereupon the
transfer Subsidiary shall immediately cease to be a
Principal Subsidiary and the transferee Subsidiary
shall cease to be a Principal Subsidiary under the
provisions of this sub-paragraph (B) (but without
24
prejudice to the provisions of sub-paragraph (A)
above), upon publication of its next audited
financial statements,
all as more fully defined in the Trust Deed.
A report by the Auditors that, in their opinion, a Subsidiary of the
Guarantor is or is not or was or was not at any particular time or
throughout any specified period a Principal Subsidiary shall, in the
absence of manifest error, be conclusive and binding on all parties.
12. Enforcement
The Trustee may at any time, at its discretion and without notice, take
such proceedings against the Issuer or the Guarantor as it may think
fit to enforce the provisions of the Trust Deed, the Bonds and the
Coupons but it shall not be bound to take any proceedings or any other
action in relation to the Trust Deed, the Bonds or the Coupons unless
(a) it shall have been so directed by an Extraordinary Resolution of
the Bondholders or so requested in writing by the holders of at least
one-quarter in principal amount of the Bonds then outstanding, and (b)
it shall have been indemnified to its satisfaction. No Bondholder or
Couponholder shall be entitled to proceed directly against the Issuer
or the Guarantor unless the Trustee, having become bound so to proceed,
fails so to do within a reasonable period and such failure shall be
continuing.
13. Substitution
The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantor to the
substitution in place of the Issuer or the Guarantor (or, in either
case, of any previous substitute under this Condition) as the principal
debtor under or, as the case may be, guarantor in respect of the Bonds,
the Coupons and the Trust Deed of any other Subsidiary of the
Guarantor, subject to (a) the Bonds being unconditionally and
irrevocably guaranteed by the Guarantor, (b) the Trustee being
satisfied that the interests of the Bondholders will not be materially
prejudiced by the substitution and (c) certain other conditions set out
in the Trust Deed being complied with.
14. Replacement of Bonds and Coupons
Should any Bond or Coupon be lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Principal
Paying Agent (or such other Paying Agent as may be approved by the
Trustee for such purpose) upon payment by the claimant of the expenses
incurred in connection with the replacement and on such terms as to
evidence and indemnity as the Issuer may reasonably require. Mutilated
or defaced Bonds or Coupons must be surrendered before replacements
will be issued.
15. Notices
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All notices to the Bondholders will be valid if published (i) in a
leading English language daily newspaper published in London (which is
expected to be the Financial Times) or such other English language
daily newspaper with general circulation in Europe as the Trustee may
approve and (ii) (so long as the Bonds are listed on the Luxembourg
Stock Exchange and the rules of the Luxembourg Stock Exchange so
require) in a leading newspaper having general circulation in
Luxembourg which is expected to be the Luxemburger Wort. Any notice
shall be deemed to have been given on the date of publication or, if so
published and more than once, on the date of the first publication in
both such newspapers. If publication as provided above is not
practicable, notice will be given in such other manner, and shall be
deemed to have been given on such date, as the Trustee may approve.
Couponholders will be deemed for all purposes to have notice of the
contents of any notice given to the Bondholders in accordance with this
Condition.
16. Meetings of Bondholders, Modification, Waiver and Authorisation
(a) The Trust Deed contains provisions for convening meetings of
the Bondholders to consider any matter affecting their
interests, including the modification by Extraordinary
Resolution of these Terms and Conditions or the provisions
of the Trust Deed. The quorum at any meeting for passing an
Extraordinary Resolution will be one or more persons present
holding or representing a clear majority in principal amount
of the Bonds for the time being outstanding, or at any
adjourned such meeting one or more persons present whatever
the principal amount of the Bonds held or represented by him
or them, except that at any meeting, the business of which
includes the modification of certain of the provisions of
these Terms and Conditions and certain of the provisions of
the Trust Deed, the necessary quorum for passing an
Extraordinary Resolution will be one or more persons present
holding or representing not less than two-thirds, or at any
adjourned such meeting not less than one-third, of the
principal amount of the Bonds for the time being
outstanding. An Extraordinary Resolution passed at any
meeting of the Bondholders will be binding on all
Bondholders, whether or not they are present at the meeting,
and on all Couponholders.
(b) The Trustee may agree, without the consent of the Bondholders
or Couponholders, to any modification (subject to certain
exceptions) of, or to the waiver or authorisation of any
breach or proposed breach of, any of these Terms and
Conditions or any of the provisions of the Trust Deed which is
not, in the opinion of the Trustee, materially prejudicial to
the interests of the Bondholders or to any modification which
is of a formal, minor or technical nature or to correct a
manifest error.
(c) In connection with the exercise by it of any of its trusts,
powers, authorities or discretions (including, without
limitation, any modification, waiver, authorisation or
substitution), the Trustee shall have regard to the
interests of the Bondholders as a class and, in particular
26
but without limitation, shall not have regard to the
consequences of the exercise of its trusts, powers,
authorities or discretions for individual Bondholders and
Couponholders resulting from their being for any purpose
domiciled or resident in, or otherwise connected with, or
subject to the jurisdiction of, any particular territory and
the Trustee shall not be entitled to require, nor shall any
Bondholder or Couponholder be entitled to claim, from the
Issuer, the Trustee or any other person any indemnification
or payment in respect of any tax consequences of any such
exercise upon individual Bondholders or Couponholders except
to the extent already provided for in Condition 9 and/or any
undertaking given in addition to, or in substitution for,
Condition 9 pursuant to the Trust Deed.
(d) Any modification, waiver or authorisation shall be binding on
the Bondholders and the Couponholders and, unless the Trustee
agrees otherwise, any modification shall be notified by the
Issuer to the Bondholders as soon as practicable thereafter in
accordance with Condition 15.
17. Indemnification of the Trustee
The Trust Deed contains provisions for the indemnification of the
Trustee and for its relief from responsibility, including provisions
relieving it from taking action unless indemnified to its satisfaction.
18. Further Issues
The Issuer is at liberty from time to time without the consent of the
Bondholders or Couponholders to create and issue further bonds or notes
either (a) ranking pari passu in all respects (or in all respects save
for the first payment of interest thereon) and so that the same shall
be consolidated and form a single series with the outstanding bonds or
notes of any series (including the Bonds) constituted by the Trust Deed
or any supplemental deed or (b) upon such terms as to ranking,
interest, conversion, redemption and otherwise as the Issuer may
determine at the time of the issue. Any further bonds or notes which
are to form a single series with the outstanding bonds or notes of any
series (including the Bonds) constituted by the Trust Deed or any
supplemental deed shall, and any other further bonds or notes, may
(with the consent of the Trustee), be constituted by a deed
supplemental to the Trust Deed. The Trust Deed contains provisions for
convening a single meeting of the Bondholders and the holders of bonds
or notes of other series in certain circumstances where the Trustee so
decides.
19. Contracts (Rights of Third Parties) Act 1999
No rights are conferred on any person under the Contracts (Rights of
Third Parties) Act 1999 to enforce any term of this Bond, but this does
not affect any right or remedy of a third party which exists or is
available apart from that Act.
20. Governing Law
27
The Trust Deed, the Bonds and the Coupons are governed by, and will be
construed in accordance with, English law.
28
SCHEDULE 2
FORM OF NOTICE TO BONDHOLDERS
NOTICE TO THE HOLDERS of the outstanding
(pound)200,000,000 7.25 per cent. Guaranteed Bonds due 2028
of
YORKSHIRE POWER FINANCE LIMITED
(Incorporated in the Cayman Islands with limited liability)
Unconditionally and irrevocably guaranteed by
YORKSHIRE POWER GROUP LIMITED
NOTICE IS HEREBY GIVEN to the holders (the "Bondholders") of the above-mentioned
Bonds (the "Bonds") issued by Yorkshire Power Finance Limited (the "Issuer") and
guaranteed by Yorkshire Power Group Limited (the "Guarantor") and notice is also
hereby given to the holders (the "Couponholders") of the coupons, if any (the
"Coupons"), relating to the Bonds that the terms and conditions and the trust
deed dated 4th February, 1998 (the "Trust Deed") relating thereto were amended
as from 1st October, 2001 (the "Effective Date") to (i) reflect certain changes
to the terms and conditions arising from changes in the U.K. regulatory regime
for the electricity sector under the Utilities Act 2000 (the "Regulatory
Changes") and (ii) to make various miscellaneous amendments to the terms and
conditions.
Bankers Trustee Company Limited (the "Trustee") is of the opinion, having
received expert advice in respect of amendments consequent on the Regulatory
Changes, that the amendments referred to above are not materially prejudicial to
the interests of the Bondholders and the Couponholders and therefore by virtue
of clause 19(B)(i) of the Trust Deed, the Trustee has approved the amendments
referred to above.
The Bonds were issued subject to an agency agreement dated 4th February, 1998
(the "Agency Agreement"). The parties have entered into a supplemental agency
agreement (the "Supplemental Agency Agreement ") dated the Effective Date.
The amendments referred to above were effected by a first supplemental trust
deed dated on or about the Effective Date (the "First Supplemental Trust Deed").
Copies of the First Supplemental Trust Deed, the Supplemental Agency Agreement
and a supplementary offering circular dated 28th September, 2001 are available
for inspection during business hours at the offices of the Trustee, being at the
date hereof at Winchester House, 1 Great Winchester Street, London, EC2N 2DB and
at the specified offices of the Paying Agents as set out below.
29
Dated: 1st October, 2001
PAYING AGENTS
HSBC Bank plc Banque Generale du Luxembourg S.A.
Mariner House, Pepys Street 50, Avenue J.F. Kennedy
London EC3N 4DA L-2951 Luxembourg
EXECUTION CLAUSES:
As Issuer:
Executed as a deed by YORKSHIRE POWER FINANCE LIMITED acting by:
/s/ Ken Linge
Acting under the authority of that company
in the presence of:
Name: /s/ Mark Whitehead
Address: 15 St Johns Terrace
East Boldon
Occupation: Assistant Treasurer, Northern Electric
As Guarantor:
Executed as a deed by
YORKSHIRE POWER GROUP LIMITED
acting by:
/s/ John France
Director
/s/ J. Elliott
Director/Secretary
30
As Trustee:
The Common Seal of
BANKERS TRUSTEE COMPANY LIMITED
was affixed to this deed in the presence of:
/s/ John Wallace
Director
/s/ Aileen McCormack
Associated Director
31