EXHIBIT 10.81
DATED 27TH SEPTEMBER; 2001
NORTHERN ELECTRIC FINANCE plc
- and -
NORTHERN ELECTRIC plc
- and -
NORTHERN ELECTRIC DISTRIBUTION LIMITED
- and -
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
FIRST SUPPLEMENTAL TRUST DEED
modifying and restating the provisions of the
Master Trust Deed dated 16th October, 1995
constituting the
(pound)100,000,000
8.625 per cent. Guaranteed Bonds due 2005
and the
(pound)100,000,000
8.875 per cent. Guaranteed Bonds due 2020
of Northern Electric Finance plc
ALLEN & OVERY
London
THIS FIRST SUPPLEMENTAL TRUST DEED is made on 27th September, 2001 BETWEEN:
(1) NORTHERN ELECTRIC FINANCE plc whose registered office is at Carliol
House, Market Street, Newcastle-Upon-Tyne NEl 6NE (the "Company" or the
"Issuer");
(2) NORTHERN ELECTRIC plc whose registered office is at Carliol House,
Market Street, Newcastle-Upon-Tyne NE1 6NE ("NE");
(3) NORTHERN ELECTRIC DISTRIBUTION LIMITED whose registered office is at
Carliol House, Market Street, Newcastle-Upon-Tyne NEl 6NE ("NEDL" and,
together with NE, the "Guarantors" and each a "Guarantor"); and
(4) THE LAW DEBENTURE TRUST CORPORATION p.l.c. whose registered office is
at Fifth Floor, 100 Wood Street, London EC2V 7EX (the "Trustee", which
expression shall, where the context so admits, include all persons for
the time being the trustee or trustees of these presents).
WHEREAS:
(A) This First Supplemental Trust Deed is supplemental to the Master Trust
Deed dated 16th October, 1995 (hereinafter called the "Master Trust
Deed") made between the Issuer, NE and the Trustee and constituting the
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 and the
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 of the
Issuer (together, the "Bonds").
(B) The Issuer wishes to make certain modifications to the terms and
conditions of the Bonds (the "Conditions") and to the Master Trust Deed
to reflect:
(i) the requirement of the Utilities Act 2000 that the supply of
electricity and distribution of electricity be performed by
separate corporate entities; and
(ii) the splitting of the PBS Licence into an electricity supply
licence (which will be held by Northern Electric & Gas 2
Limited ("NEAG2L")) and an electricity distribution licence
(which will be held by NEDL, a wholly-owned subsidiary of NE),
such licences to be issued to NEAG2L and NEDL on 1st October,
2001 or whatever alternative date is notified to the Guarantor
by the Secretary of State for Trade and Industry (the
"Effective Date");
together with certain other modifications in connection therewith.
(C) By virtue of Clause 15.1 of the Master Trust Deed the Trustee may agree
without the consent of the Bondholders or the Couponholders to any
modification to these presents (save as provided therein) which in its
opinion is not materially prejudicial to the interests of the
Bondholders.
(D) NE has requested the Trustee to concur in making the modifications to
the Conditions and the provisions of the Master Trust Deed referred to
in Recital (B) above.
(E) The Trustee being of the opinion that the modifications referred to in
recital (B) above will not be materially prejudicial to the interests
of the Bondholders, has concurred with the Issuer and NE that the
Conditions and the Master Trust Deed should be modified in the manner
hereinafter appearing.
NOW THIS FIRST SUPPLEMENTAL TRUST DEED WITNESSES AND IT IS HEREBY DECLARED AS
FOLLOWS:
1. DEFINITIONS
Subject as hereinafter provided and unless there is anything in the subject or
context inconsistent therewith all words and expressions defined in the Master
Trust Deed shall have the same meanings in this First Supplemental Trust Deed.
2. GUARANTEE
(A) With effect on and from the Effective Date, NEDL hereby irrevocably
and unconditionally guarantees to the Trustee, on a joint and several
basis with NE, the due and punctual payment by the Company of all
moneys payable from time to time in respect of the Original Bonds and
the Original Coupons (including, without prejudice to the generality
of the foregoing, all additional amounts payable pursuant to Condition
8) and all other moneys payable from time to time under or pursuant to
these presents on the terms of Clause 3 of the Master Trust Deed (as
modified as provided in Clause 3 below) and accordingly all the
provisions of Clause 3 of the Master Trust Deed (as so modified) shall
have effect as though such provisions were herein set forth.
(B) NEDL hereby covenants with the Trustee that, with effect on and from
the Effective Date, it will comply with and perform and observe all of
the provisions of the Master Trust Deed (as modified as provided in
Clause 3 below) and these presents which are expressed to be binding on
it (including those which may subsequently be determined to be illegal,
invalid or unenforceable for any reason).
(C) NE hereby confirms and acknowledges that with effect on and from the
Effective Date it is jointly and severally liable with NEDL in respect
of its obligations under Clause 3 of the Master Trust Deed.
3. MODIFICATIONS TO THE CONDITIONS AND THE MASTER TRUST DEED
Save for the purposes (where necessary) of construing the provisions of this
First Supplemental Trust Deed, with effect on and from the Effective Date:
(i) the Master Trust Deed (including the Conditions) is hereby modified in
such manner as would result in the Master Trust Deed being in the form
set out in the Schedule hereto; and
(ii) the provisions of the Master Trust Deed shall cease to have effect and
in lieu thereof the provisions of the Master Trust Deed (being in the
form set out in the Schedule hereto) shall have effect.
4. ORIGINAL BOND CERTIFICATES
With effect on and from the Effective Date, the Certificates and Coupons in
respect of the Original Bonds (which shall not be called in for replacement)
shall be deemed to be modified in such manner as would result in the
Certificates and Coupons in respect of the Original Bonds being in the form set
out in Parts I and III of Schedule I (in the case of the Original Bonds 2005)
and in Parts I and III of Schedule 3 (in the case of the Original Bonds 2020) to
the Master Trust Deed set out in the Schedule hereto.
5. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A Person who is not a party to this First Supplemental Trust Deed has no right
under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this First Supplemental Trust Deed, but this does not affect any right or remedy
of a third party which exists or is available apart from that Act.
6. NOTICE TO BONDHOLDERS
The Company covenants with the Trustee that not later than 14 days after the
Effective Date it will give notice to the Bondholders of the modifications
contained herein in a form previously approved by the Trustee.
7. GENERAL
(i) The Master Trust Deed and this First Supplemental Trust Deed shall
henceforth be read and construed as one Trust Deed.
(ii) A memorandum of this First Supplemental Trust Deed shall be endorsed by
the Trustee on the original of the Master Trust Deed and by the Company
and NE on their duplicates thereof.
(iii) This First Supplemental Trust Deed may be executed in counterparts,
each of which, taken together, shall constitute one and the same First
Supplemental Trust Deed and any party may enter into this First
Supplemental Trust Deed by executing a counterpart.
(iv) The Company shall procure that for so long as any of the Bonds remains
outstanding each of the Agents shall make available at its specified
office for inspection by Original Bondholders copies of this First
Supplemental Trust Deed.
IN WITNESS whereof this First Supplemental Trust Deed has been executed
as a deed by the Company, NE, NEDL and the Trustee and delivered on the
date first stated on page 1 above.
SCHEDULE
FORM OF MODIFIED AND RESTATED MASTER TRUST DEED
DATED 16th October, 1995
NORTHERN ELECTRIC FINANCE plc
NORTHERN ELECTRIC plc
NORTHERN ELECTRIC DISTRIBUTION LIMITED
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
MASTER TRUST DEED
constituting
(pound)100,000,000 8.625 per cent.
Guaranteed Bonds due 2005
and
(pound)100,000,000 8.875 per cent.
Guaranteed Bonds due 2020
with power to issue further securities
CONTENTS
Clause Page
1. Interpretation............................................................1
2. Amounts of Original Bonds and covenant to pay.............................7
3. Guarantee.................................................................9
4. Forms of Original Bonds and Original Coupons.............................11
5. Stamp duties and ........................................................12
6. Further Bonds............................................................13
7. Application of moneys received by Trustee................................14
8. Covenants to comply with provisions......................................15
9. Covenants................................................................16
10. Remuneration and indemnification of Trustee..............................19
11. Provisions supplemental to Trustee Act 1925..............................21
12. Trustee liable for breach of trust.......................................25
13. Waiver, proof of default, consents and Trustee's power to apply to Court.25
14. Trustee not precluded from entering into contracts.......................26
15. Modification and substitution............................................26
16. Appointment, retirement and removal of Trustee...........................29
17. Couponholders............................................................30
18. Communications...........................................................30
19. Powers in addition.......................................................31
20. Severability.............................................................31
21. Execution................................................................32
22. Counterparts.............................................................32
23. Governing law............................................................32
24. Contracts (Rights of Third Parties) Act 1999.............................32
Schedules
1. Part I - Form of individual Certificate for Original Bonds 2005...........33
Part II - Form of Original Global Bonds 2005..............................35
Part III - Form of Original Coupon 2005...................................42
2. Terms and Conditions of Original Bonds 2005...............................44
3. Part I - Form of individual Certificate for Original Bonds 2020...........62
Part II - Form of Original Global Bond 2020...............................64
Part III - Form of Original Coupon 2020...................................71
Part IV - Form of Original Talon 2020.....................................73
4. Terms and Conditions of Original Bonds 2020...............................75
5. Provisions for Meetings of Bondholders....................................93
THIS TRUST DEED is made on 16th October, 1995 BETWEEN:
(1) NORTHERN ELECTRIC FINANCE plc whose registered office is at Carliol
House, Market Street, Newcastle-Upon-Tyne NEl 6NE (the "Company" or the
"Issuer");
(2) NORTHERN ELECTRIC plc whose registered office is at Carliol House,
Market Street, Newcastle-Upon-Tyne NEl 6NE ("NE");
(3) NORTHERN ELECTRIC DISTRIBUTION LIMITED whose registered office is at
Carliol House, Market Street, Newcastle-Upon-Tyne NE 1 6NE ("NEDL" and,
together with NE, the "Guarantors" and each a "Guarantor"); and
(4) THE LAW DEBENTURE TRUST CORPORATION p.l.c. whose registered office is
at Fifth Floor, 100 Wood Street, London EC2V 7EX (the "Trustee", which
expression shall, where the context so admits, include all persons for
the time being the trustee or trustees of these presents).
WHEREAS:
(A) The Company, incorporated in England and Wales with registered number
3070482, has by resolution of its Board of Directors passed on 9th
October, 1995 authorised the issue of (pound)100,000,000 8.625 per
cent. Guaranteed Bonds due 2005 and (pound)100,000,000 8.875 per cent.
Guaranteed Bonds due 2020 to be constituted by these presents.
(B) NE, incorporated in England and Wales with registered number 2366942,
by resolution of a duly authorised committee of its Board of Directors
passed on 9th October, 1995 resolved to give its guarantee in relation
to the said Bonds upon and subject to the terms and conditions of these
presents.
(C) NEDL, incorporated in England and Wales with registered number 2906593,
by a resolution of its Board of Directors passed on 26th September,
2001 resolved to give its guarantee in relation to the said Bonds upon
and subject to the terms and conditions of these presents.
(D) The Trustee has agreed to act as trustee of these presents on and
subject to the terms and conditions set out in these presents.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:
1. INTERPRETATION
1.1 Definitions
In these presents, unless the context otherwise requires, the following
expressions shall have the following meanings:
1
"Agency Agreement" means, in relation to the Original Bonds 2005, the
Paying Agency Agreement dated 16th October, 1995 between the Company,
NE, the Trustee, the Principal Paying Agent and the other Paying Agents
whereby the Agents were appointed in respect of the Original Bonds
2005, in relation to the Original Bonds 2020, the Paying Agency
Agreement dated 16th October, 1995 between the Company, NE, the
Trustee, the Principal Paying Agent and the other Paying Agents whereby
the Agents were appointed in respect of the Original Bonds 2020 and, in
relation to any Further Bonds, the agreement appointing, on terms
previously approved in writing by the Trustee, the Principal Paying
Agent and the other Paying Agents and/or any other Agent in respect of
such Further Bonds and, in relation to the relevant Bonds, includes any
agreement (whether made pursuant to another agreement or otherwise)
appointing, on terms previously approved in writing by the Trustee, a
further or another Agent and any other agreement for the time being in
force, the terms of which shall have been previously approved in
writing by the Trustee, relating to the duties of any Agent or amending
or modifying any of such agreements;
"Agents" means, in relation to the Original Bonds, the Principal Paying
Agent and the other Paying Agents or, as the context requires, any of
them and, in relation to any Further Bonds, any Principal Paying Agent
and other Paying Agents and other agent approved by the Trustee
appointed under the Agency Agreement in respect of such Further Bonds
or, as the context requires, any of them;
"Auditors" means the auditors for the time being of the Company or
either Guarantor (as the case may require) or, if there shall be joint
auditors, any one or more of such auditors or, in the event of their
being unable or unwilling to carry out any action requested of them
pursuant to these presents, such other chartered accountant or firm of
chartered accountants as may be nominated by the Company or the
relevant Guarantor (as the case may require) with the prior written
approval of the Trustee or, in default of such nomination and approval,
nominated by the Trustee after consultation with the Company or the
relevant Guarantor (as the case may require) where such consultation is
not prejudicial to the interests of the Bondholders for the purpose;
"Bondholder" and, in relation to a Bond, "holder" means the bearer of
that Bond;
"Bonds" means the Original Bonds and/or, as the context may require,
any Further Bonds;
"Certificate" means a certificate in definitive form representing a
Bond including any Global Bond and includes any replacement certificate
in definitive form issued pursuant to the relevant Conditions;
"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;
"Conditions" means, in relation to the Original Bonds 2005, the terms
and conditions set out in Schedule 2 and, in relation to the Original
2
Bonds 2020, the terms and conditions set out in Schedule 4 or, in
either case, the terms and conditions for the time being endorsed on
the Original Bonds as the same may from time to time be modified in
accordance with these presents and references in these presents to a
particular numbered Condition shall, in relation to the Original Bonds,
be construed accordingly and, in relation to any Further Bonds, the
terms and conditions for the time being endorsed on such Further Bonds
and references in these presents to a particular numbered Condition
shall, in relation to any Further Bonds, unless either referring
specifically to a particular numbered Condition of such Further Bonds
or the context otherwise requires, be construed as a reference to the
provisions (if any) in the Conditions thereof which corresponds to the
provisions of the particular numbered Condition of the Original Bonds;
"Couponholder" and, in relation to a Coupon, "holder" means the bearer
of a Coupon;
"Coupons" means the Original Coupons and/or, as the context may
require, the bearer interest coupons for the time being relating to any
Further Bonds or, as the context may require, a specific number of them
and includes any replacement coupons issued pursuant to the relevant
Conditions and, where the context so permits, the Talons (if any);
"Couponholder" means, in relation to a Coupon, the bearer of a Coupon;
"Distribution Licence" has the meaning set out in Condition 3;
"Euroclear" means Euroclear Bank S.A./N.V. as operator of the Euroclear
System;
"Event of Default" means any of the events described in paragraphs (a)
to (i) (inclusive) of Condition 10 which, in the case of the events
described in paragraphs (b), (c), (d), (e), (f), (g), (h) and (i) of
such Condition, shall have been certified in writing by the Trustee to
be in its opinion materially prejudicial to the interests of the
Bondholders;
"Extraordinary Resolution" has the meaning set out in paragraph 21 of
Schedule 5;
"Further Bonds" means any further bonds or notes or similar securities
issued in accordance with the provisions of Clause 6 and constituted by
a deed supplemental to this Master Trust Deed or, as the context may
require, a specific number of them and includes the Certificates
representing the same including any relevant Global Bond;
"Global Bond" means the Original Global Bond 2005 and/or, as the
context may require, the Original Global Bond 2020 and/or, as the
context may require, any other global Bond Certificate in definitive
form representing Further Bonds or any of them;
"issue" includes allot and vice versa;
"London Stock Exchange" means the London Stock Exchange plc;
3
"Original Bonds" means the Original Bonds 2005 and/or, as the context
may require, the Original Bonds 2020;
"Original Bonds 2005" means the Bonds in bearer form comprising the
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
constituted by these presents and for the time being outstanding or, as
the context may require, a specific number of them and includes the
Certificates representing the same including the Original Global Bond
2005;
"Original Bonds 2020" means the Bonds in bearer form comprising the
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
constituted by these presents and for the time being outstanding or, as
the context may require, a specific number of them and includes the
Certificates representing the same including the Original Global Bond
2020;
"Original Bondholders" means the holders for the time being of the
Original Bonds;
"Original Coupons" means the Original Coupons 2005 and/or, as the
context may require, the Original Coupons 2020;
"Original Coupons 2005" means the Coupons relating to the Original
Bonds 2005;
"Original Coupons 2020" means the Coupons relating to the Original
Bonds 2020;
"Original Couponholders" means the holders for the time being of the
Original Coupons;
"Original Global Bond" means the Original Global Bond 2005 and/or, as
the context may require, the Original Global Bond 2020;
"Original Global Bond 2005" means the single temporary global Bond
Certificate in definitive form in respect of the Original Bonds 2005;
"Original Global Bond 2020" means the single temporary global Bond
Certificate in definitive form in respect of the Original Bonds 2020;
"Original Talons 2020" means the Talons relating to the Original Bonds
2020;
"outstanding" means, in relation to the Bonds, all the Bonds issued
other than:
(a) those which have been redeemed and cancelled in accordance
with the Conditions;
(b) those in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption
moneys (including all interest accrued on such Bonds to the
date for such redemption and any interest payable under
Condition 4 after such date) have been duly paid to the
relevant Bondholder (or to a person on behalf of such
Bondholder) or to the Trustee or to the Principal Paying Agent
as provided in the proviso to Clause 2.3 and remain available
4
for payment against presentation and surrender of Bonds and/or
Coupons, as the case may be;
(c) those which have become void or in respect of which claims
have become prescribed under Condition 9;
(d) those mutilated or defaced Bonds which have been surrendered
and cancelled in exchange for replacement Bonds pursuant to
Condition 13;
(e) (for the purpose only of determining how many Bonds are
outstanding and without prejudice to their status for any
other purpose) those Bonds which are alleged to have been
lost, stolen or destroyed and in respect of which replacement
Bonds have been issued pursuant to Condition 13;
(f) those which have been purchased and cancelled as provided in
Condition 6;
(g) the Global Bond to the extent that it shall have been
exchanged for individual Bonds,
provided that for the purposes of:
(i) ascertaining the right to attend and vote at any meeting of
the Bondholders;
(ii) the determination of how many Bonds are outstanding for the
purposes of Clause 8.2 and Conditions 7(D), 10, 11 and 15 and
Schedule 5;
(iii) the exercise of any discretion, power or authority which the
Trustee is required, expressly or impliedly, to exercise in or
by reference to the interests of the Bondholders or, as the
case may be, any of them; and
(iv) the determination by the Trustee whether any event,
circumstance, matter or thing is, in the opinion of the
Trustee, materially prejudicial to the interests of the
Bondholders,
those Bonds (if any) which are beneficially held by, or are held on
behalf of, the Company or either Guarantor or any of the Subsidiaries
and not yet cancelled shall (unless and until cancelled or, as the case
may be, ceasing to be so held) be deemed not to remain outstanding;
"Paying Agents" means, in relation to the Original Bonds, the several
institutions (including the Principal Paying Agent) at their respective
specified offices referred to in the Conditions and, in relation to any
Further Bonds, such institutions at their respective specified offices
as shall be appointed under the Agency Agreement as Paying Agents in
respect of such Further Bonds by or on behalf of the Company with the
prior written approval of the Trustee or, in any case, such other
institutions at their respective specified offices as may from time to
time be appointed under the Agency Agreement as Paying Agents in
respect of the relevant Bonds by or on behalf of the Company with the
prior written approval of the Trustee;
"Potential Event of Default" means an event or circumstance which would
with the giving of notice and/or lapse of time and/or the issuing of a
certificate and/or the fulfillment of any other requirement provided
for in Condition 10 become an Event of Default;
"Principal Paying Agent" means, in relation to the Original Bonds,
Barclays Bank PLC at its specified office in its capacity as Principal
Paying Agent in respect of the Original Bonds and, in relation to any
Further Bonds, such institution at its specified office as shall be
appointed under the Agency Agreement as the Principal Paying Agent in
respect of such Further Bonds by or on behalf of the Company with the
prior written approval of the Trustee or, in any case, such other
institution at its specified office as may from time to time be
appointed under the Agency Agreement as Principal Paying Agent in
5
respect of the relevant Bonds by or on behalf of the Company with the
prior written approval of the Trustee;
"specified office" means, in relation to any Agent, either the office
identified with its name at the end of the Conditions or any other
office approved by the Trustee and notified to the Bondholders pursuant
to Clause 9.1(k); "Subsidiary" means a subsidiary for the time being of
the Company or either Guarantor;
"Talons" means the Original Talons 2020 and/or, as the context may
require, the talons relating to, and exchangeable in accordance with
the provisions therein contained for further Coupons relating to, any
relevant Further Bonds or, as the context may require, a specific
number of them and includes any replacement talons issued pursuant to
the relevant Conditions;
"these presents" means this Master Trust Deed, including its Schedules,
as altered from time to time, and any other document executed in
accordance with or pursuant to this Master Trust Deed, as so altered,
and expressed to be supplemental to this Master Trust Deed and includes
the Bonds, the Coupons and the Conditions; and
"trust corporation" means a corporation entitled by rules made under
the Public Trustee Act 1906 or entitled pursuant to any other
legislation applicable to a trustee in any jurisdiction other than
England to carry out the functions of a custodian trustee.
1.2 Construction of certain references
Unless otherwise provided in these presents, references in these
presents to:
(a) costs, charges, remuneration or expenses shall include any
value added tax, turnover tax or similar tax charged in
respect thereof and legal fees and expenses on a full
indemnity basis;
6
(b) "sterling" and "(pound)" shall be construed as references to
the lawful currency for the time being of the United Kingdom;
(c) the expressions "subsidiary" and "holding company" have the
respective meanings ascribed thereto by the Companies Act
1985;
(d) any action, remedy or method of judicial proceedings for the
enforcement of rights of creditors shall include, in respect
of any jurisdiction other than England, references to such
action, remedy or method of judicial proceedings for the
enforcement of rights of creditors available or appropriate in
such jurisdiction as shall most nearly approximate thereto;
(e) words denoting the singular number only shall include the
plural number and vice versa;
(f) words denoting one gender only shall include the other
genders;
(g) words denoting persons only shall include firms and
corporations and vice versa;
(h) any provision of any statute shall be deemed also to refer to
any statutory modification or re-enactment thereof or any
statutory instrument, order or regulation made thereunder or
under such modification or re-enactment;
(i) any document shall be deemed also to refer to any amendment
thereto;
(j) Schedules and Clauses shall be construed as references to
Schedules to, and to Clauses of, this Trust Deed respectively;
(k) the carrying out of the trusts of these presents includes the
exercise of the functions of the Trustee under these presents
and the exercise of the powers, authorities and discretions
vested in the Trustee (or any agent or delegate or
sub-delegate) by, under or pursuant to these presents;
(l) taking proceedings against the Company and/or a Guarantor
shall be deemed to include references to proving in the
winding-up of the Company and/or a Guarantor;
(m) principal or principal amount of and/or interest in respect of
the Bonds shall include any premium and other additional
amounts which may be payable under Condition 6(B) or 8 or (in
the case of Condition 8) under any obligations undertaken in
addition thereto or in substitution therefor pursuant to these
presents; and
(n) Bonds 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
7
Exchange's market for listed securities and all references in
these presents to "listing" or "listed" shall include
references to "quotation" and "quoted", respectively.
1.3 Definitions in Conditions
Words and expressions defined in the Conditions and not otherwise
defined in the main body of any other document comprised in these
presents shall when used in these presents have the meanings given to
them in the Conditions.
1.4 Headings
Headings shall be ignored in construing these presents.
1.5 Schedules
The Schedules to any document comprised in these presents form part of
these presents and shall have effect accordingly.
1.6 Enforceability
If at any time any provision of these presents is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of these presents nor the legality, validity or
enforceability of such provision under the law of any other
jurisdiction shall in any way be affected or impaired thereby.
2. AMOUNTS OF ORIGINAL BONDS AND COVENANT TO PAY
2.1 Amounts of Original Bonds
The aggregate principal amount of the Original Bonds 2005 is limited to
(pound)100,000,000. The aggregate principal amount of the Original
Bonds 2020 is limited to (pound)100,000,000.
2.2 Original Bonds separate series
The Original Bonds 2005 and the Original Bonds 2020 shall be separate
series and the provisions of Clauses 1.1 (to the extent applicable),
2.3, 2.4, 2.5, 2.6, 3, 4.3, 4.4, 4.5 and of Clauses 5 to 23 (inclusive)
and Schedule 5 shall apply mutatis mutandis separately and
independently to the Original Bonds 2005 and the Original Bonds 2020
and shall be construed accordingly.
2.3 Covenant to pay
The Company will by 11.00 a.m. (London time) on any date when the
Original Bonds or any of them become due to be redeemed or, if the due
8
date is not a Business Day in London, on the immediately following
Business Day in London unconditionally pay to or to the order of the
Trustee in sterling in immediately available funds in London (or such
other place as the Trustee and the Company may agree in writing) the
principal amount of the Original Bonds becoming due for redemption on
that date and will (subject to the Conditions) up to and including the
date of such payment (both before and after judgment) unconditionally
so pay to or to the order of the Trustee in sterling in immediately
available funds in London (or such other place as the Trustee and the
Company may agree in writing) interest on the principal amount of the
Original Bonds outstanding as set out in the Conditions, provided that:
(a) every payment of any such principal amount and/or interest
made to or to the order of the Principal Paying Agent as
provided in the Agency Agreement shall, to such extent,
satisfy the applicable such obligation except to the extent
that there is failure in the subsequent payment of such
principal amount and/or interest (as the case may be) to the
relevant Original Bondholders or Original Couponholders (as
the case may be);
(b) in the case of any payment of principal amount and/or
interest made after the due date therefor or following the
application of Condition 10, the principal amount in respect
of which the payment thereof or of the interest thereon
shall have been so made shall continue to bear interest
until the day the full amount due has been received by or to
the order of the Trustee or by the Principal Paying Agent as
provided in the Agency Agreement and notice to that effect
has been given to the Original Bondholders if required in
accordance with Clause 9.1(i), except to the extent that
there is failure in the subsequent payment of such principal
amount and/or interest (as the case may be) to the relevant
Original Bondholders or Original Couponholders (as the case
may be), and so that a full amount due shall be deemed to
have been received by or to the order of the Trustee on the
day when by 11.00 a.m. (London time) such amount shall have
been so received in sterling in immediately available funds
in London (or such other place as the Trustee and the
Company may agree in writing); and
(c) in the event that on the occasion for redemption or purchase
of any Original Bond falling to be redeemed or, as the case
may be, purchased payment of any principal amount and/or
interest due in respect of that Original Bond is improperly
withheld or refused, the principal amount in respect of which
the payment thereof or of the interest thereon shall have been
so improperly withheld or refused will continue to bear
interest as aforesaid up to and including the date on which
such payment is deemed to have been received by the Trustee as
provided in paragraph (b) of this proviso.
The Trustee will hold the benefit of this covenant on trust for the
Original Bondholders and Original Couponholders.
2.4 Discharge
9
Subject to Clause 2.5, any payment to be made in respect of the Bonds
or the Coupons by the Company, either Guarantor or the Trustee may be
made as provided in the Conditions and any payment so made will
(subject to Clause 2.5) to such extent be a good discharge to the
Company, the relevant Guarantor or the Trustee, as the case may be.
2.5 Payment after default
At any time after a Potential Event of Default has occurred and whilst
the same is subsisting or after an Event of Default has occurred and is
continuing the Trustee may:
(a) by notice in writing to the Company, the Guarantors and the
Agents require the Agents, until notified by the Trustee to
the contrary, so far as permitted by any applicable law:
(i) to act thereafter as Agents of the Trustee in relation
to payments to be made by or on behalf of the Trustee
under these presents on the terms of the Agency
Agreement (with consequential amendments as necessary
and save that the Trustee's liability for the
indemnification, remuneration and all other
out-of-pocket expenses of the Agents will be limited to
the amounts for the time being held by the Trustee in
respect of the Bonds on the terms of these presents)
and thereafter to hold all Bonds and Coupons and all
moneys, documents and records held by them in respect
of Bonds and Coupons to the order of the Trustee;
and/or
(ii) to deliver all Bonds and Coupons and all moneys,
documents and records held by them in respect of the
Bonds and Coupons to the Trustee or as the Trustee
directs in such notice, provided that such notice shall
be deemed not to apply to any documents or records
which the relevant Agent is obliged not to release by
any law or regulation; and
(b) by notice in writing to the Company and the Guarantors require
each of them to make all subsequent payments in respect of the
Bonds and the Coupons to or to the order of the Trustee and
not to the Principal Paying Agent.
If the Potential Event of Default in respect of which the Trustee has
given notice in writing to the Company, the Guarantors and the Agents
as aforesaid shall cease to subsist and provided that:
(i) no other Potential Event of Default shall have occurred and be
subsisting or be about to occur; or
(ii) no Event of Default shall have occurred and be continuing or
be about to occur; or
10
(iii) the Bonds shall not have been declared immediately due and
repayable,
the Trustee shall by notice in writing to the Company, the Guarantors
and the Agents require the Agents to cease acting forthwith as the
Agents of the Trustee.
The provisions of this Clause 2.5 may apply on any number of occasions.
2.6 Ranking of obligations
The Company hereby covenants with the Trustee that the obligations of
the Company in respect of the Bonds and the Coupons constitute direct,
unconditional and, subject to Condition 3, unsecured obligations of the
Company and that the Bonds and the Coupons rank and will rank pari
passu and rateably without any preference or priority among themselves
and, subject to Condition 3, rank and will rank pari passu with all
other outstanding unsecured and unsubordinated obligations of the
Company, present and future, but, in the event of the insolvency of the
Company, only to the extent permitted by applicable laws relating to
creditors' rights.
3. GUARANTEE
3.1 Guarantor's liability
The Guarantors hereby irrevocably and unconditionally guarantee on a
joint and several basis to the Trustee the due and punctual payment by
the Company of all moneys payable from time to time in respect of the
Original Bonds and the Original Coupons (including, without prejudice
to the generality of the foregoing, all additional amounts payable
pursuant to Condition 8) and all other moneys payable from time to time
under or pursuant to these presents as follows:
(a) if and whenever the Company shall make default in the payment of
any such moneys, the Guarantors shall forthwith upon written
demand therefor by the Trustee irrevocably and unconditionally
pay to or to the order of the Trustee in sterling the amount in
respect of which such default has been made and any payment so
made shall to such extent cure such default by the Company
subject as provided in Clauses 2.3, 2.4 and 2.5, the provisions
of which Clauses shall apply mutatis mutandis to such payment;
(b) as a separate and independent stipulation each Guarantor agrees
that any such moneys which may not be recoverable from the
Company by reason of any legal limitation, disability or
incapacity on or of the Company or any other fact or circumstance
shall nevertheless be recoverable from the Guarantor as though
the same had been incurred by the Guarantor and the Guarantor
were the sole and principal debtor in respect thereof and shall
be paid by the Guarantor forthwith upon written demand therefor
by the Trustee. The Guarantors shall not be exonerated or
discharged from liability by time being given, or any other
indulgence or concession being granted, to the Company by the
11
Trustee or by the Original Bondholders or the Original
Couponholders or any of them or by anything done by the Trustee
in exercise of any of the trusts, powers, authorities or
discretions vested in it by these presents or by anything which
the Original Bondholders or the Original Couponholders or the
Trustee or any of them may do or omit or neglect to do or by any
other dealing or thing which, but for this provision, might
operate to exonerate or discharge the Guarantors from their
obligations hereunder. It is further agreed as a separate and
independent stipulation that any sums of money which may not be
recoverable from a Guarantor on the footing of a guarantee
whether by reason of any legal limitation, disability or any
other fact or circumstances and whether or not known to the
Trustee or the Original Bondholders or the Original Couponholders
or any of them shall nevertheless be recoverable from such
Guarantor as sole or principal debtor in respect thereof and
shall be paid by such Guarantor to the Trustee forthwith upon
written demand therefor by the Trustee;
(c) this guarantee shall be a continuing guarantee and accordingly
shall remain in operation until all such moneys have been paid or
satisfied in full and shall be in addition to and not in
substitution for, and shall not be affected by, any other rights
which the Trustee or the Original Bondholders or the Original
Couponholders or any of them may have under or by virtue of these
presents and may be enforced without first having recourse to any
such rights and without taking any steps or proceedings against
the Company;
(d) the Trustee may from time to time make any arrangement or
compromise with either Guarantor in relation to this guarantee
which the Trustee may think fit;
(e) prior to the liquidation of the Company, the Guarantors shall
not, without the prior written consent of the Trustee, at any
time after default has been made by the Company in the payment of
any such moneys and so long as any moneys payable from time to
time by a Guarantor in respect of such defaulted moneys remain
unpaid, exercise in respect of any amounts paid under this
guarantee any right of subrogation, indemnity or reimbursement or
any other right or remedy which a Guarantor may have in respect
of or as a result of such payment;
(f) in the event of the liquidation of the Company, if any moneys
shall then be payable by a Guarantor under this guarantee, each
Guarantor will, until all such moneys payable from time to time
in respect of the Original Bonds and the Original Coupons and all
other moneys payable from time to time under or pursuant to these
presents have been paid in full hold the benefit of all its
claims against the Company upon Trust to pay the same to the
Trustee and shall prove for such claims against the Company and
each Guarantor hereby irrevocably authorises the Company to pay
to the Trustee, to the extent that all such moneys payable from
time to time in respect of the Original Bonds and the Original
Coupons and all other moneys payable under or pursuant to these
presents shall not have been paid in full, all moneys due in
respect of such claims;
12
(g) if any payment received by the Trustee or any Original Bondholder
or Original Couponholder pursuant to the provisions hereof shall
be avoided under any laws relating to bankruptcy, insolvency,
corporate reorganisation or other similar events, such payment
shall not be considered as having discharged or diminished the
liability of the Guarantors, and this guarantee shall continue to
apply as if such payment had at all times remained owing by the
Company and the Guarantors shall indemnify the Trustee and the
Original Bondholders and Original Couponholders in respect
thereof.
3.2 No payments by Company
If any moneys shall become payable by a Guarantor under the guarantee,
the Company shall not (save in the event of the liquidation of the
Company), so long as such moneys remain unpaid, pay any moneys for the
time being due by the Company to either Guarantor.
3.3 Consents and authorisations
If at any time any authorisation or approval becomes necessary to
permit either Guarantor to pay any moneys payable from time to time in
respect of the Original Bonds or the Original Coupons or under or
pursuant to these presents in accordance with the terms of these
presents as a result of any change in, any change in the official
application of, or any amendment to, the laws or regulations of the
United Kingdom, the relevant Guarantor shall forthwith apply for the
necessary authorisation and approval and shall provide copies of such
application as soon as reasonably practicable to the Trustee. The
relevant Guarantor shall provide copies of such authorisation and
approval to the Trustee as soon as they are obtained.
3.4 Application of moneys received by Trustee
Any amount from time to time received by the Trustee under this
guarantee shall be applied by the Trustee in accordance with the
provisions of Clause 7.
3.5 Nature of obligations
Each Guarantor hereby covenants with the Trustee that the obligations
of each Guarantor under this guarantee constitute direct, unconditional
and, subject to Condition 3, unsecured obligations of such Guarantor
and, subject to Condition 3, rank and will rank pari passu with all
other outstanding unsecured and unsubordinated obligations of such
Guarantor, present and future but, in the event of the insolvency of
the relevant Guarantor, only to the extent permitted by applicable laws
relating to creditors' rights.
4. FORMS OF ORIGINAL BONDS AND ORIGINAL COUPONS
4.1 Original Global Bond
13
The Original Bonds 2005 were initially represented by the Original
Global Bond 2005 and the Original Bonds 2020 were initially represented
by the Original Global Bond 2020, each in the principal amount of
(pound)100,000,000 and each of which was exchangeable for relevant
individual Original Bonds (serially numbered) in denominations of
(pound)1,000, (pound)10,000 and (pound)100,000 each with Coupons
attached as set out in the relevant Original Global Bond. The Company
issued each Original Global Bond to a bank depositary common to both
Euroclear and Clearstream, Luxembourg on terms that such depositary
shall hold the same for the account of the persons who would otherwise
be entitled to receive the Original Bonds (as notified to such
depositary by the Principal Paying Agent) and the successors in title
to such persons as appearing in the records of Euroclear and
Clearstream, Luxembourg for the time being. The Company issued the
relevant Original Bonds in exchange for the relevant Original Global
Bond in accordance with the provisions thereof. Pending exchange of an
Original Global Bond, its holder was deemed to be the holder of the
relevant individual Original Bonds and Original Coupons for all
purposes.
4.2 Original Bonds and Original Coupons
The Certificates representing the Original Bonds and the Original
Coupons are security printed in accordance with the applicable stock
exchange requirements. The individual Certificates representing
Original Bonds 2005, the Original Global Bond 2005 and the Original
Coupons 2005 are in or substantially in the respective forms set out in
Parts I, II and III of Schedule 1 and the Original Bonds 2005 are
endorsed with the Conditions set out in Schedule 2. The individual
Certificates representing Original Bonds 2020, the Original Global Bond
2020, the Original Coupons 2020 and the Original Talons 2020 are in or
substantially in the respective forms set out in Parts I, II, III and
IV of Schedule 3 and the Original Bonds 2020 are endorsed with the
Conditions set out in Schedule 4. Title to the Original Bonds and the
Original Coupons shall pass by delivery.
4.3 Signature
Each Original Global Bond and individual Certificate representing
Original Bonds and Original Coupon is or will be signed manually or in
facsimile by two Directors of the Company and two Directors of NE and
is or will be authenticated by or on behalf of the Principal Paying
Agent. The Company and NE may use the facsimile signature of any person
who was at the date of this Master Trust Deed a Director of the Company
or NE respectively even if at the time of issue of any Original Global
Bond, individual Certificate representing Original Bonds or Original
Coupon he no longer holds such office. An Original Global Bond, an
individual Certificate representing Original Bonds or an Original
Coupon which is not so executed and authenticated shall not be valid
for any purpose. Each Original Global Bond and individual Certificate
representing Original Bonds and Original Coupon which shall be so
executed and authenticated shall represent valid binding and
enforceable obligations of the Company and of each Guarantor.
4.4 Issue
14
Issue and delivery of the Original Bonds was complete on the issue and
delivery of the relevant Original Global Bond to the depositary
referred to in Clause 4.1 (or its representative) by, or at the order
of, the Company and NE.
4.5 Bondholder deemed to be absolute owner
The Company, each Guarantor, the Trustee and the Agents 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 of such
Bond or such Coupon, as the case may be, for all purposes (whether or
not such Bond or such Coupon shall be overdue and notwithstanding any
notice of ownership or writing thereon or any notice of previous loss
or theft thereof), and the Company, each Guarantor, the Trustee and the
Agents shall not be affected by any notice or other matter to the
contrary, and shall not be liable to anyone for so treating such
holder. All payments made to any such holder shall be valid and, to the
extent of the sums so paid, effective to satisfy and discharge the
liability for the moneys payable upon such Bond or Coupon, as the case
may be.
5. STAMP DUTIES AND TAXES
5.1 Stamp duties
The Company (failing which the Guarantors) will pay any capital, stamp,
issue, registration, documentary and other similar taxes and duties and
all costs and expenses, including interest and penalties, payable in
the United Kingdom, Belgium and Luxembourg in respect of the creation,
constitution, issue and original offering of the Bonds and the Coupons,
and the execution and delivery of these presents. The Company (failing
which the Guarantors) will also indemnify the Trustee, the Bondholders
and the Couponholders from and against all stamp, issue, registration,
documentary and other taxes and duties paid by any of them in any
jurisdiction in relation to which the liability to pay arises directly
as a result of any action taken by or on behalf of the Trustee or, as
the case may be (where entitled under Condition 11 to do so), the
Bondholders or the Couponholders to enforce the obligations of the
Company or either Guarantor under these presents.
5.2 Change of taxing jurisdiction
If the Company and/or either Guarantor becomes subject generally to the
taxing jurisdiction of any territory or any political sub-division or
authority of or in that territory having power to tax other than or in
addition to the United Kingdom or any political sub-division or
authority of or in the United Kingdom, the Company and each Guarantor
will (unless the Trustee otherwise agrees) give to the Trustee an
undertaking in form and manner satisfactory to the Trustee in terms
corresponding to the terms of Condition 8 with the substitution for,
or, where applicable, the addition to, the references in that Condition
to the United Kingdom of references to that other or additional
territory or political sub-division or authority to the taxing
15
jurisdiction of which the Company and/or the relevant Guarantor (as the
case may be) has become so subject and in such event these presents
will be read accordingly.
6. FURTHER BONDS
6.1 Liberty to create
The Company may from time to time without the consent of the
Bondholders or Couponholders create and issue further bonds or notes or
similar securities, in bearer or registered form, ranking pari passu
with the Original Bonds and either having the same terms and conditions
as the Original Bonds in all respects (or in all respects except for
the amount of the first payment of interest thereon) or upon such terms
and conditions as to interest, conversion, premium, redemption and
otherwise as the Directors of the Company may at the time of issue
thereof determine. Any such further bonds having the same terms and
conditions as the Original Bonds in all respects or which after the
first payment of interest will have the same such terms and conditions
shall (if applicable, after such first payment of interest) be
consolidated and form a single series with the Original Bonds and any
Further Bonds forming a single series with the Original Bonds.
6.2 Means of constitution
Any Further Bonds created and issued pursuant to Clause 6.1 so as to
form either immediately or after the first payment of interest a single
series with the Original Bonds or Further Bonds of any series shall be
constituted by a deed supplemental to these presents and any other
further bonds, notes or similar securities created and issued pursuant
to Clause 6.1 may, with the consent of the Trustee, be so constituted.
The Company and each Guarantor shall prior to the issue of Further
Bonds execute and deliver to the Trustee a deed supplemental to these
presents (if applicable duly stamped or denoted) and containing a
covenant by the Company in the form mutatis mutandis of Clause 2.3, and
a guarantee by each Guarantor in the form mutatis mutandis of Clause 3,
in relation to the principal amount of and interest in respect of such
Further Bonds and such other provisions (corresponding to any of the
provisions contained in these presents) as the Trustee shall require.
6.3 Noting of supplemental deeds
A memorandum of every such supplemental deed shall be endorsed by the
Trustee on this Master Trust Deed and by the Company and each Guarantor
on each duplicate of this Master Trust Deed.
6.4 Notice of further issues
Whenever it is proposed to create and issue any Further Bonds, the
Company shall give to the Trustee not less than seven days' notice in
writing of its intention to do so, stating the amount of Further Bonds
proposed to be created and issued.
6.5 Separate series
16
Any Further Bonds not forming a single series with the Original Bonds
or Further Bonds of any series shall form a separate series and
accordingly, unless for any purpose the Trustee in its absolute
discretion shall otherwise determine, the provisions of Clauses 1.1 (to
the extent applicable), 2.4, 2.5, 2.6, 4.3, 4.4, 4.5, 5 and 6.2 and of
Clauses 7 to 23 (inclusive) and Schedule 5 shall apply (if at all)
mutatis mutandis separately and independently to the Bonds of each
series and shall be construed accordingly.
7. APPLICATION OF MONEYS RECEIVED BY TRUSTEE
7.1 Declaration of trust
All moneys received by the Trustee under or pursuant to these presents
will, regardless of any appropriation of all or part of them by the
Company or, in respect of amounts received from a Guarantor, the
relevant Guarantor, be held by the Trustee upon trust to apply them
(subject to Clause 7.2):
(a) first, in payment or satisfaction of all costs, charges,
expenses and liabilities properly incurred in or about the
exercise of powers conferred on the Trustee by these presents
or otherwise in relation to these presents and payments made
by the Trustee under any of the provisions contained in these
presents and of all remuneration payable to the Trustee under
these presents with interest thereon (as provided in Clause
10.4) and in payment or satisfaction of all amounts payable
pursuant to these presents to any attorney, manager, agent,
delegate or other person appointed by or under these presents;
(b) secondly, in payment of any principal and interest and all
other sums owing in respect of the Bonds and the Coupons pari
passu and rateably; and
(c) thirdly, in payment of the balance (if any) to the Company for
itself or, in respect of amounts received from a Guarantor,
the relevant Guarantor for itself.
Without prejudice to this Clause 7.1, if the Trustee holds any moneys
which represent principal or interest or other sums in respect of Bonds
or Coupons which have become void or in respect of which claims have
become prescribed under Condition 9, the Trustee will hold such moneys
upon the above trusts.
7.2 Accumulation
If the amount of the moneys at any time available for payment in
respect of the Bonds under Clause 7.1 is less than 10 per cent. of the
principal amount of the Bonds then outstanding, the Trustee may, at its
discretion, invest such moneys in accordance with the provisions of
Clause 7.3. The Trustee may retain such investments and accumulate the
resulting income until the investments and the accumulations, together
with any other funds for the time being under the control of the
Trustee and available for such payment, amount to at least 10 per cent.
of the principal amount of the Bonds then outstanding and then such
investments, accumulations and funds (after deduction of any applicable
17
taxes or provisions made therefor) will be applied as specified in
Clause 7.1.
7.3 Investment
Any moneys which under the trusts herein contained ought to or may be
invested by the Trustee may be invested in the name or under the
control of the Trustee in any of the investments for the time being
authorised by English law for the investment by trustees of trust
moneys or in any other investments, whether similar to the aforesaid or
not, which may be selected by the Trustee or by placing the same on
deposit in the name or under the control of the Trustee with such bank
or other financial institution as the Trustee may, in its absolute
discretion, think fit and the Trustee may at any time vary or transpose
any of such investments for or into other such investments and shall
not be responsible for any loss occasioned thereby whether by
depreciation in value or otherwise.
8. COVENANTS TO COMPLY WITH PROVISIONS
8.1 Compliance with these presents
Each of them the Company and the Guarantors hereby covenants with the
Trustee that it will comply with and perform and observe all the
provisions of these presents which are expressed to be binding on it
(including those which may subsequently be determined to be illegal,
invalid or unenforceable for any reason). The Trustee shall be entitled
to enforce the obligations of the Company and each Guarantor under
these presents.
8.2 When Trustee required to act
The Trustee is hereby authorised and it is declared that the Trustee
shall be entitled to assume without enquiry (in the absence of express
written notice to the Trustee from the Company or a Guarantor, as the
case may be, to the contrary) that the Company and the Guarantors are
duly performing and observing all covenants and provisions contained in
these presents and on their respective parts to be performed and
observed. Notwithstanding knowledge by or notice to the Trustee of any
breach of any such covenant or provision it shall be in the discretion
of the Trustee whether or not to take any action or proceedings to
enforce the performance thereof and the Trustee shall not be bound to
enforce the same or any of the covenants or provisions of these
presents unless and until in any of such cases (but subject to
Condition 10) the Trustee is required to do so by an Extraordinary
Resolution or in writing by the holders of not less than one-quarter
part in principal amount of the Bonds for the time being outstanding,
and then only if the Trustee shall be indemnified to its satisfaction
against all actions, proceedings, costs, claims and demands to which it
may render itself liable and all costs, charges, damages and expenses
which it may incur by so doing. Only the Trustee may enforce the
provisions of these presents. No Bondholder or Couponholder shall be
entitled to proceed directly against the Company unless the Trustee
having become bound as aforesaid to take proceedings fails so to do
within a reasonable period and such failure shall be continuing.
18
9. COVENANTS
9.1 So long as any Bond is outstanding, the Company will and each
Guarantor will procure that the Company will:
(a) Carry on and conduct its affairs in an efficient manner and keep
books of account; at all times carry on and conduct its affairs,
and procure that each of the Subsidiaries carries on and conducts
its affairs, in a proper and efficient manner and keep, and
procure that each of the Subsidiaries keeps, proper books of
account and, at any time after the occurrence of an Event of
Default or a Potential Event of Default or if the Trustee has
reasonable grounds to believe that any such event has occurred,
so far as permitted by applicable law, allow, and procure that
each of the Subsidiaries will allow, the Trustee and anyone
appointed by it to whom the Company and/or the relevant
Subsidiary has no reasonable objection access to the books of
account of the Company and/or the relevant Subsidiary
respectively at all reasonable times during normal business
hours;
(b) Notice of security interests: notify the Trustee in writing
immediately upon becoming aware that the provisions of Condition
3 shall have become applicable by reason of any encumbrance or
security interest referred to therein being created or being
permitted to subsist or arising;
(c) Notice of Event of Default: notify the Trustee in writing
immediately upon becoming aware of the occurrence of any Event of
Default or Potential Event of Default;
(d) Information: so far as permitted by applicable law, give to the
Trustee such information and assistance as it requires to carry
out the trusts of these presents;
(e) Financial statements etc.: send to the Trustee two copies or
translations, in each case in the English language, of:
(i) all accounts, financial statements and reports for or
in respect of any annual, half-yearly or other period
in respect of which any account, financial statement or
report is prepared by the Company for issue to its
shareholders, together with any report of the Auditors
thereon, as soon as practicable, and in any event
within six months, after the last day of such period;
(ii) all notices, statements, circulars and other documents
issued, sent or given to holders of the shares or of
any other securities of the Company (other than the
Bonds) or of any of the Subsidiaries, and which, in the
opinion of the Trustee, have a material bearing on the
interests of the Bondholders, when such documents are
issued, sent or given to such holders; and
19
(iii) all notices, statements, circulars and other documents
issued, sent or given to Bondholders when such
documents are issued, sent or given to Bondholders and
prior thereto, in the case of any such document
addressed to Bondholders, send to the Trustee two
copies of the form of such document at least 48 hours
prior to publication,
and so that:
(a) if and to the extent that any account, financial
statement or report referred to in paragraph (i) of
this Clause 9.1(e) shall not be prepared or adjusted on
a basis consistent with that used for the relevant
preceding period, that fact shall be stated in such
account, financial statement or report (as the case may
be);
(b) any document referred to in paragraph (iii) in this
Clause 9.1(e) addressed to Bondholders shall be issued,
sent or given in a form previously approved in writing
by the Trustee (such approval, unless so expressed, not
to constitute approval for the purposes of section 57
of the Financial Services Act 1986 of any such notice
which is an investment advertisement (as therein
defined)); and
(c) any notice, statement, circular and other document
issued, sent or given to Bondholders shall be so
issued, sent or given in accordance with Condition 14;
(f) Certificates of Directors: send to the Trustee, within ten
days after a request by the Trustee therefor and also
(without the necessity for any such demand) promptly or in
any event within 14 days of its annual audited financial
statements being issued to its shareholders, a certificate
signed by two of its Directors certifying to the effect
that, having made all reasonable enquiries, in the opinion
of the persons so certifying as at a date (the
"Certification Date"), being not more than five days before
the date of the certificate, no Event of Default or
Potential Event of Default had occurred since the date of
this Master Trust Deed or, if later, the Certification Date
of the last such certificate (if any) and, if such an event
had occurred, giving details of it;
(g) Reports of Auditors: procure that the Auditors furnish to the
Trustee such reports and information as the Trustee may
request in connection with any calculation or matter arising
under these presents;
(h) Further acts: so far as permitted by applicable law, do all
such further things as may be necessary in the opinion of the
Trustee to give effect to these presents and to enable the
Trustee to carry out the trusts of these presents;
(i) Notice of late payment: forthwith after a request by the
Trustee give notice to the Bondholders of any unconditional
20
payment to the Trustee or the Principal Paying Agent of any
sum due in respect of the Bonds or Coupons made after the due
date for such payment;
(j) Listing of Bonds: use all reasonable endeavours to maintain
at its expense a listing or quotation for the Bonds on the
London Stock Exchange and/or on any other stock exchange or
securities market on which the Bonds shall for the time
being be listed or quoted, provided that if, notwithstanding
such endeavours, it is unable to do so or if the terms and
conditions subject to which such listing or quotation is
maintained are agreed by the Trustee in writing to be unduly
onerous (whether by reason of expense or otherwise) and the
Trustee is satisfied that the interests of the Bondholders
would not be thereby materially prejudiced, the Company will
instead use all reasonable endeavours to obtain and maintain
at its expense a listing or quotation for the Bonds on such
other stock exchange or securities market as it may (with
the prior written approval of the Trustee) decide and will
promptly give notice (in a form previously approved in
writing by the Trustee) to the Bondholders of any delisting
or listing or grant or loss of quotation for the Bonds
occurring hereafter (other than the initial listing on the
London Stock Exchange);
(k) Change in Agents: give not less than 14 days' prior notice to
the Bondholders of any appointment or resignation or removal
of any Agent or of any change by any Agent of its specified
office, in each case occurring after the date of this Master
Trust Deed, and not make any such appointment or removal
without the prior written approval of the Trustee;
(l) Bonds held by the Company etc.: send to the Trustee as soon as
practicable after being so requested by the Trustee a
certificate signed by two Directors of the Company setting out
the total number of Bonds which, at the date of such
certificate, were held by or on behalf of the Company and each
of its Subsidiaries respectively and which had not been
cancelled;
(m) Early redemption: give prior written notice to the Trustee of
any proposed redemption pursuant to Condition 6(B) or (C) and,
if it gives notice to Bondholders of its intention to redeem
any Bonds pursuant to Condition 6(B), make selections by lot
(if appropriate) and redeem Bonds accordingly;
(n) Agency Agreement: comply with and perform all its obligations
under the Agency Agreement, use all reasonable endeavours to
procure that each of the Agents complies with and performs its
obligations thereunder, not take any steps to prevent
compliance by the Agent in accordance with the terms of the
Agency Agreement and not amend or modify the Agency Agreement
without the prior written consent of the Trustee;
(o) Availability of information: make available for inspection at
the specified offices of the Agents copies of the accounts,
financial statements and reports referred to in Clause 9.1(d)
as from the date of issue thereof to the Company's
shareholders;
21
(p) Clearstream, Luxembourg and Euroclear: use all reasonable
endeavours to provide assistance to Clearstream, Luxembourg
and/or Euroclear (as the case may be) in the issuance of any
certificate or other document requested by the Trustee under
Clause 11(q) as soon as practicable after such request;
(q) Filings: duly and punctually comply with or procure that there
is complied with all filing, reporting and similar
requirements required in accordance with applicable English
law and regulations from time to time relating in any manner
whatsoever to the Bonds, and deliver to the Trustee two copies
of all orders, directions and notices given or made to the
Company by the London Stock Exchange and any other stock
exchange or securities market on which the Bonds shall for the
time being be listed or quoted (other than of a purely
procedural, routine or technical nature) together, if
applicable, with English language translations thereof;
(r) Principal Subsidiaries: give to the Trustee within 14 days of
its annual audited financial statements being issued to its
shareholders and also within 14 days of a request by the
Trustee, either a certificate by the Auditors listing the
Principal Subsidiaries which, as at the last day of the latest
completed financial year of the Company or as at the date
specified in such request, were the consolidated Principal
Subsidiaries or, if the Company has no such Principal
Subsidiaries, a certificate to that effect signed by two
Directors of the Company.
9.2 Covenants by the Guarantors
Each Guarantor hereby covenants with the Trustee in the terms of
Clauses 9.1(a), (b), (c), (d), (e), (f), (g), (h), (k), (l), (n), (o),
(p), (q) and (r) as if references to the Company therein were
references to such Guarantor. So long as any Bond is outstanding NEDL
will send to the Trustee a certificate of NEDL signed by two of its
Directors:
(a) specifying details of any modification to the terms and
conditions of the Distribution Licence, such certificate to be
provided promptly upon any such modification being made; and
(b) specifying any higher figure determined by the Gas and
Electricity Markets Authority as is mentioned in Condition 10,
such certificate to be provided within five days of the Gas
and Electricity Markets Authority determining such figure by
notice in writing to the Secretary of State for Trade and
Industry (or any successor) and NEDL.
10. REMUMERATION AND INDEMNIFICATION OF TRUSTEE
10.1 Normal remuneration
22
So long as any Bond is outstanding the Company (failing which the
Guarantors) will pay to the Trustee by way of remuneration for its
services as Trustee such sum as may from time to time be agreed between
them. Such remuneration will accrue from day to day from the date of
this Trust Deed until the trusts of these presents shall be finally
wound up and shall be payable on such dates as shall be agreed between
the Company and the Trustee. Upon the issue of any Further Bonds, the
rate of remuneration in force immediately prior thereto shall be
increased by such amount, and as from such date, as shall be agreed
between the Company and the Trustee.
10.2 Extra remuneration
At any time after the occurrence of an Event of Default or a Potential
Event of Default or if the Trustee finds it expedient in the interests
of Bondholders or necessary, or if the Trustee is requested by the
Company or either Guarantor to undertake duties which the Trustee and
the Company or the Guarantor (as the case may be) agree to be of an
exceptional nature or otherwise outside the scope of the normal duties
of the Trustee under these presents, the Company (failing which the
Guarantors) will pay such additional remuneration as may be agreed
between the Company and the Trustee or, failing agreement as to any of
the matters in this Clause 10.2 (or as to such sums referred to in
Clause 10.1), as determined by a merchant or investment bank in London
of international repute selected by the Trustee and approved by the
Company or, failing such approval, nominated on the application by the
Trustee by the President for the time being of The Law Society of
England and Wales. In making its determination such merchant or
investment bank shall act as an expert and not as an arbitrator and its
determination of such matter shall, in the absence of manifest error,
be conclusive and binding on the Company, the Guarantors, the Trustee,
the Bondholders and the Couponholders. The expenses involved in
appointing such merchant or investment bank and the fees and expenses
of the merchant or investment bank shall be paid by the Company
(failing which by the Guarantors).
10.3 Expenses
The Company (failing which by the Guarantors) will also pay or
discharge on a full indemnity basis (in priority to any payment to the
Bondholders and the Couponholders) all costs, charges, liabilities and
expenses properly incurred by the Trustee in relation to the
preparation and execution of these presents and the carrying out of the
trusts of these presents and the exercise of the powers, authorities
and discretions vested in the Trustee by or pursuant to these presents,
including, but not limited to, legal and travelling expenses and any
stamp, issue, registration, documentary or other taxes or duties paid
by the Trustee in connection with any legal proceedings brought or
contemplated by the Trustee against the Company or either Guarantor for
enforcing any obligation under these presents.
10.4 Payment of expenses
23
All such costs, charges, liabilities and expenses incurred by the
Trustee and payments made referred to in Clause 10 will be payable or
reimbursable by the Company (failing which the Guarantors) on a full
indemnity basis within 14 days of demand by the Trustee and:
(i) in the case of payments made by the Trustee prior to such
demand will carry interest from the date on which the demand
is made at the rate of 2 per cent. per annum over the base
rate for the time being of Barclays Bank PLC; and
(ii) in all other cases will carry interest at such rate from 30
days after the date on which the demand is made or where the
demand properly specifies that payment is to be made on an
earlier date from such earlier date.
10.5 Indemnity
The Company (failing which the Guarantors) will indemnify the Trustee
(in priority to any payment to the Bondholders and the Couponholders)
in respect of all liabilities and expenses properly incurred by the
Trustee in the carrying out of the trusts of these presents or by
anyone appointed by the Trustee or to whom any of the functions of the
Trustee may be delegated by the Trustee in such carrying out of the
trusts of these presents and against any loss, liability, cost, claim,
action, demand or expense (including, but not limited to, all costs,
charges and expenses paid or incurred in disputing or defending any of
the foregoing) which the Trustee or any such person may properly incur
or which may be made against the Trustee or any such person, arising
out of or in relation to or in connection with the appointment of the
Trustee or any such person and any thing done or omitted by the Trustee
in such carrying out of the trusts of these presents or by any such
person under or pursuant to such delegation, provided that such
indemnity shall not extend to any such loss, liability, cost, claim,
action, demand or expense incurred or suffered by any agent or delegate
appointed by the Trustee in the event of negligence or willful default
of such agent or delegate. The Trustee may retain and pay out of any
moneys in its hands arising from the carrying out of the trusts of, or
otherwise trusts under, these presents all sums necessary to effect
such indemnity and also the remuneration of the Trustee as herein
before provided.
10.6 Value added tax
The Company (failing which the Guarantors) shall pay to the Trustee (in
priority to any payment to the Bondholders and the Couponholders) an
amount equal to any value added tax or similar tax chargeable in
respect of any payment to be made to the Trustee under these presents.
10.7 Provisions continuing
The provisions of Clauses 10.3 to 10.6 (inclusive) will continue in
full force and effect in relation to the Trustee even if it may have
ceased to be Trustee.
24
10.8 Apportionment
The Trustee shall be entitled in its absolute discretion to determine
in respect of which series of Bonds any costs, charges, liabilities and
expenses incurred under or pursuant to these presents have been
incurred or to allocate any such costs, charges, liabilities and
expenses between the Original Bonds and any Further Bonds of any
series.
11. PROVISIONS SUPPLEMENTAL TO TRUSTEE ACT 1925
By way of supplement to the Trustee Act 1925 it is expressly declared
in the terms of the following provisions of this Clause 11:
(a) Advice
The Trustee may in carrying out the trusts of these presents
act on the opinion or advice of, or information obtained from,
any accountant, lawyer, valuer, surveyor, broker, auctioneer
or other expert, whether obtained by the Company, either
Guarantor or the Trustee, and will not be responsible to
anyone for any loss occasioned by so acting. Any such opinion,
advice or information may be sent or obtained by letter,
telephone, telex or facsimile or cable transmission and the
Trustee will not be liable to anyone for acting in good faith
on any opinion, advice or information purporting to be
conveyed by such means even if it contains some error or is
not authentic.
(b) Notification of execution
The Trustee need not notify anyone of the execution of these
presents.
(c) Resolutions of Bondholders
The Trustee will not be responsible for having acted in good
faith upon a resolution purporting to have been passed at a
meeting of Bondholders (in respect of which minutes have been
made and signed) even though it may later be found that there
was a defect in the constitution of such meeting or in the
procedures thereat or in the signing of such resolution or
that such resolution was not valid or binding upon the
Bondholders or Couponholders for any reason whatsoever.
(d) Certificate signed by Directors
The Trustee may call for and may accept as sufficient evidence
of any fact or matter or the expediency of any act a
certificate signed by two Directors of the Company or of
either Guarantor certifying to the effect that, having made
all reasonable enquiries, in the opinion of the persons so
certifying such fact or matter is as stated in the certificate
or such act is expedient and in any such case and in the case
of any certificate given under Clause 9.1(f) or 15.2(a)(iv)
the Trustee may rely absolutely on such certificate and need
25
not call for any further evidence and will not be responsible
for any loss that may be occasioned by it not calling for
further evidence or by it acting on any such certificate.
(e) Deposit of documents
The Trustee may deposit these presents and any other documents
in any part of the world with any banker or banking company or
entity the business of which includes undertaking the safe
custody of documents or with any lawyer or firm of lawyers
believed by it to be of good repute, may at its discretion
make any such arrangements as it thinks fit for allowing the
Company or the Guarantors access to, or its solicitors or
auditors access to or possession of, such documents and the
Trustee shall not be responsible for or required to insure
against loss, liability, claim, action, demand or expense
incurred in connection with any such deposit, access or
provision and may pay all sums to be paid on account of or in
respect of any such deposit, provided that, unless in the
opinion of the Trustee it is required in connection with the
enforcement of any obligation of the Company or a Guarantor
under these presents or otherwise in connection with the
carrying out of the trusts of these presents or unless it
comprises the holding or placing of such documents in the
United Kingdom, the Trustee may not take any such action if a
liability to stamp duty or other duties or taxes would thereby
arise.
(f) Discretion of Trustee
Save as otherwise expressly provided in these presents, the
Trustee will have absolute and uncontrolled discretion as to
the exercise of the powers, authorities and discretions
conferred on, and the functions of, the Trustee under these
presents, will not be responsible to anyone for any loss,
liability, cost, claim, action, demand, expenses or
inconvenience which may result from their exercise or
non-exercise and any such exercise or non-exercise shall, as
between the Trustee and the Bondholders and the Couponholders,
be conclusive and binding on the Bondholders and the
Couponholders.
(g) Agents
The Trustee may, in the carrying out of the trusts of these
presents, instead of acting personally, employ and pay an
agent believed by it to be of good repute, whether or not a
lawyer or other professional person, to transact or conduct,
or concur in transacting or conducting, any business and to do
or concur in doing any acts required to be done by the Trustee
in carrying out of the trusts of these presents (including the
receipt and payment of money) and any Trustee being a lawyer,
accountant, broker or other person engaged in any profession
or business shall be entitled to charge and be paid all usual
professional and other charges for business transacted and
acts done by him or his firm in connection with the trusts of
these presents (including matters which ought to or should
have been attended to in person by a trustee not being engaged
in any trade or profession) and also his reasonable charges in
addition to disbursements for all other work and business done
and all time spent by him or his firm in connection with
26
matters arising in connection with these presents. The Trustee
shall not be responsible to anyone for any misconduct or
omission or default on the part of any such agent so employed
by it or be bound to supervise the proceedings or acts of any
such agent.
(h) Delegation
The Trustee may, in the execution and exercise of all or any
of the trusts, powers, authorities and discretions vested in
it by these presents and the Conditions, act by responsible
officers or a responsible officer for the time being of the
Trustee, and the Trustee may also whenever it thinks it
expedient in the interests of the Bondholders, whether by
power of attorney or otherwise, and after such consultation
(if any) with the Company and the Guarantors as the Trustee
may consider to be practicable, delegate to any person or
fluctuating body of persons all or any of the trusts, powers,
authorities and discretions vested in it by these presents and
the Conditions and any such delegation may be made upon such
terms and conditions and subject to such regulations
(including power to sub-delegate) as the Trustee may think fit
and provided that the Trustee shall have exercised reasonable
care in the selection of such delegate, it shall not be bound
to supervise the proceedings and shall not in any way or to
any extent be responsible for any loss incurred by any
misconduct or default on the part of such delegate or
sub-delegate. The Trustee shall give prompt notice to the
Company and the Guarantors of the appointment (and termination
thereof) of any delegate as aforesaid and shall procure that
any delegate shall also give prompt notice to the Company and
the Guarantors of any sub-delegate. Notwithstanding the above,
the Trustee may not delegate the right to give written notice
to the Company that the Bonds are immediately due and
repayable unless prior to such delegation the Trustee provides
to the Company and the Guarantors confirmation in writing that
the Trustee has been advised by its legal advisers that it
should delegate the right (with or without any other rights,
trusts, powers, authorities and discretions) to another person
or fluctuating body of persons because of a conflict of
interest or possible conflict of interest and/or other similar
circumstances which the Trustee might face, or be subjected
to, as the trustee of these presents if it were not to
delegate that right.
(i) Forged Bonds
The Trustee will not be liable to the Company, either
Guarantor or any Bondholder or Couponholder by reason of
having accepted as valid or not having rejected any
Certificate, Coupon or other document relating to any Bond
purporting to be such and later found to be forged or not
authentic.
(j) Confidentiality
Unless ordered to do so by a court of competent jurisdiction,
the Trustee shall not be required to disclose to any
Bondholder or Couponholder any confidential, financial, price
27
sensitive or other information made available to the Trustee
by the Company or either Guarantor or any of the Subsidiaries
and no Bondholder or Couponholder shall be entitled to take
any action to obtain from the Trustee any such information
(and for this purpose any unpublished accounts and other
unpublished financial information of or concerning the
Company, either Guarantor or any of the Subsidiaries shall be
considered to be confidential).
(k) Determinations conclusive
As between itself and the Bondholders and Couponholders, the
Trustee shall have power to determine all questions and doubts
arising in relation to any of the provisions of these
presents. Every such determination, whether made upon such a
question actually raised or implied in the acts or proceedings
of the Trustee, shall be conclusive in the absence of manifest
error and shall bind the Trustee, the Bondholders, the
Couponholders and all other persons interested under these
presents.
(1) Currency conversion
Where it is necessary or desirable to convert any sum from one
currency to another, it shall (unless otherwise provided under
these presents or required by law) be converted at such rate
or rates, in accordance with such method and as at such date
as may be specified by the Trustee but having regard to
current rates of exchange, if available. Any rate, method and
date so specified will be binding on the Company, the
Guarantors, the Bondholders and the Couponholders.
(m) Events of Default and other events
The Trustee may determine whether or not a default in the
performance or observance by the Company or either Guarantor
of any of their respective obligations is in its opinion
capable of remedy and/or whether or not any event is in its
opinion materially prejudicial to the interests of the
Bondholders or has a material adverse effect on the Company's
or either Guarantor's ability to perform or to comply with any
of its obligations under these presents. Any such
determination will be conclusive and binding upon the Company,
the Guarantors, the Bondholders and the Couponholders.
Notwithstanding the foregoing provisions of this Clause
11.1(m) or any other provisions of these presents, the Trustee
shall not be bound to take any steps to ascertain whether or
not any Event of Default or Potential Event of Default,
Negative Rating Event, Restructuring 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 these presents
to the contrary, the Trustee shall be entitled to assume that
no Event of Default, Potential Event of Default, Negative
Rating Event, Restructuring Event or any other such event has
occurred and that each of the Company and each Guarantor is
observing and performing all its obligations under these
presents.
28
(n) Payment for and delivery of Bonds
The Trustee will not be responsible for the receipt or
application by the Company of the proceeds of the issue of the
Bonds, the exchange of interests in the Global Bond for
individual Bonds or the delivery of individual Bonds to the
persons entitled to them.
(o) Bonds held by the Company etc.
In the absence of knowledge or express notice to the contrary,
the Trustee may assume without enquiry that no Bonds or
Coupons are for the time being held by or on behalf of the
Company, either Guarantor or any of the Subsidiaries and that
none of such companies has any beneficial interest therein.
(p) Interests of Bondholders
In connection with the carrying out of the trusts of these
presents (including, but not limited to, those in relation to
any proposed modification, waiver or authorisation of any
breach or proposed breach of any of the Conditions or any of
the provisions of these presents or any proposed substitution
in accordance with Clause 15), the Trustee shall have regard
to the interests of the Bondholders as a class and in
particular, but without prejudice to the generality of the
foregoing, shall not have regard to the consequences of such
exercise for individual Bondholders resulting from their being
for any purpose domiciled or resident in, or otherwise
connected with, or subject to the jurisdiction of, any
particular territory or any political sub- division thereof or
otherwise to the tax consequences thereof and the Trustee
shall not be entitled to require, nor shall any Bondholder or
Couponholder be entitled to claim, from the Company, either
Guarantor, the Trustee or any other person any indemnification
or payment of or in respect of any tax arising in consequence
of any such exercise upon individual Bondholders or
Couponholders except to the extent provided for in Condition 8
and/or in any undertaking given in addition thereto or in
substitution therefor pursuant to these presents.
(q) Clearstream, Luxembourg and Euroclear
The Trustee may call for any certificate or other document to
be issued by Clearstream, Luxembourg or Euroclear as to the
principal amount of Bonds represented by a Global Bond
standing to the account of any person. Any such certificate or
other document shall be conclusive and binding for all
purposes. The Trustee shall not be liable to any person by
reason of having accepted as valid or not having rejected any
certificate or other document to such effect purporting to be
issued by Clearstream, Luxembourg or Euroclear and
subsequently found to be forged or not authentic.
29
12. TRUSTEE LIABLE FOR BREACH OF TRUST
Nothing in these presents shall, in any case in which the Trustee has
failed to show the degree of care and diligence required of it as
Trustee having regard to the provisions of these presents conferring on
the Trustee any powers, authorities or discretions, exempt the Trustee
from, or indemnify it against, any liability which by virtue of any
rule of law would otherwise attach to it in respect of any breach of
trust of which it may be guilty.
13. WAIVER, PROOF OF DEFAULT, CONSENTS AND TRUSTEE'S POWER TO APPLY TO
COURT
13.1 Waiver
The Trustee may, without the consent of the Bondholders or
Couponholders and without prejudice to its rights in respect of any
subsequent breach, Potential Event of Default or Event of Default, from
time to time and at any time, if in its opinion the interests of the
Bondholders will not be materially prejudiced thereby, waive or
authorise, on such terms and conditions as seem expedient to it
(including with retrospective effect) any breach or proposed breach by
the Company or either Guarantor of any of the provisions of these
presents or determine that any Event of Default or Potential Event of
Default will not be treated as such, provided that the Trustee will not
exercise any of the powers conferred on it by this Clause 13.1 in
contravention of any express direction given by an Extraordinary
Resolution or by a request made pursuant to Condition 11, but no such
direction or request will affect any previous waiver, authorisation or
determination. Any such waiver, authorisation or determination will be
binding on the Bondholders and the Couponholders and, if, but only if,
the Trustee so requires, will be notified to the Bondholders in
accordance with Condition 14 by the Company or the relevant Guarantor
as soon as practicable.
13.2 Proof of default
If it is proved that as regards any specified Bond or Coupon the
Company or a Guarantor has made default in paying any sum due to the
relevant Bondholder or Couponholder, such proof will (unless the
contrary be proved) be sufficient evidence that the same default has
been made as regards all other Bonds or (as the case may be) Coupons
which are then payable.
13.3 Consents
Where under these presents provision is made for the giving of any
consent or the exercise of any discretion by the Trustee, any such
consent may be given and any such discretion may be exercised on such
terms and conditions (if any) as the Trustee may think fit and may be
given or exercised with retrospective effect. The Company and each
Guarantor, as applicable, shall observe and perform any such terms and
conditions and the Trustee may at any time waive or agree a variation
in such terms and conditions.
30
13.4 Trustees' power to apply to Court
The Trustee may at any time apply to the Court for an order that the
powers and the carrying out of the trusts of these presents be
exercised or carried into execution under the direction of the Court
and for any other order in relation to the execution and administration
of the powers and the carrying out of the trusts of these presents as
the Trustee shall deem expedient and it may assent to or approve any
application to the Court made at the instance of any of the Bondholders
and shall be indemnified by the Company or, failing which, the
Guarantors against all the costs, charges and expenses incurred by and
in relation to any such application or proceedings.
14. TRUSTEE NOT PRECLUDED FROM ENTERING INTO CONTRACTS
Neither the Trustee nor any director, officer or employee of a
corporation acting as a Trustee, whether acting for itself or in any
other capacity, will be precluded in any way from becoming the owner
of, or acquiring any interest in, or holding, or disposing of, any Bond
or Coupon or any shares or securities of the Company, either Guarantor,
any Subsidiary or any associated companies thereof with the same rights
as it would have had if the Trustee or such person were not the Trustee
or connected with the Trustee or from entering into or being interested
in any contracts or transactions or arrangements with the Company,
either Guarantor, any Subsidiary or any associated companies thereof or
from acting on, or as depositary or agent for, any committee or body of
holders of any securities of the Company, either Guarantor, any
Subsidiary or any associated companies thereof and the Trustee will be
entitled to retain, and will not be liable to anyone to account for,
any profit, share of brokerage, commission, remuneration or other
benefit made or received in connection therewith.
15. MODIIFICATION AND SUBSTITUTION
15.1 Modification
The Trustee may agree, without the consent of the Bondholders or the
Couponholders, to any modification to these presents which in its
opinion is of a formal, minor or technical nature or which is made to
correct a manifest error. The Trustee may also so agree to any
modification to these presents which in its opinion is not materially
prejudicial to the interests of the Bondholders, but so that such power
shall not extend to any such modification as is mentioned in the
proviso to paragraph 19 of Schedule 5. Any such modification as is
permitted by this Clause 15.1 shall be binding upon the Bondholders and
the Couponholders and, unless the Trustee otherwise agrees, will be
notified by the Company to the Bondholders in accordance with Condition
14 as soon as practicable.
15.2 Substitution
(a) The Trustee may, without the consent of the Bondholders or the
Couponholders, but so as to bind the Bondholders and the Couponholders,
agree with the Company and the Guarantors to the substitution of NEDL
or any Subsidiary or holding company of NEDL or any subsidiary of such
31
holding company (the "Substituted Obligor") in place of the Company (or
of any previous substitute under this Clause 15.2, 15.3) as the
principal debtor under these presents, provided that:
(i) the Trustee is satisfied that such substitution is not
materially prejudicial to the interests of the Bondholders;
(ii) a trust deed is executed or some other form of undertaking
is given by the Substituted Obligor and each Guarantor
(other than a Guarantor which is the Substituted Obligor) to
the Trustee, in a form and manner satisfactory to the
Trustee, agreeing to be bound or, as the case may be, to
continue to be bound by the provisions of these presents
binding on the Company or, as the case may be, the
Guarantors with any consequential amendments which the
Trustee may deem appropriate as fully as if the Substituted
Obligor had been named in these presents as the principal
debtor in place of the Company (or of any previous
substitute under this Clause 15.2) and the guarantee of the
Guarantors in these presents had been given accordingly
(other than by a Guarantor which is the Substituted Obligor
or by NEDL if NEDL has transferred the Distribution Licence
to the Substituted Obligor);
(iii) where the Substituted Obligor is subject generally to the
taxing jurisdiction of any territory or any political
sub-division or any authority of or in that territory having
power to tax (for the purpose of this Clause 15.2, the
"Substituted Territory") other than or in addition to any
territory to the taxing jurisdiction of which (or to any
such political sub-division or authority of or in which) the
Company (or any previous substitute under this Clause 15.2)
is subject generally (for the purpose of this Clause 15.2,
the "Existing Territory"), the Substituted Obligor will
(unless the Trustee otherwise agrees) give to the Trustee an
undertaking in form and manner satisfactory to the Trustee
in terms corresponding to the terms of Condition 8 with the
substitution for or, where applicable, the addition to, the
references in that Condition to the Existing Territory of
references to the Substituted Territory and in such event
these presents will be read accordingly;
(iv) if any two of the directors or other officers acceptable to
the Trustee of the Substituted Obligor certify to the Trustee
to the effect that, having made all reasonable enquiries, in
the opinion of the persons so certifying the Substituted
Obligor will be solvent immediately after such substitution,
the Trustee may rely absolutely on such certificate and need
not have regard to the financial condition, profits or
prospects of the Substituted Obligor or compare them with
those of the Company (or any previous substitute under this
Clause 15.2) or call for any further evidence and the
provisions of Clause 11(d) shall apply; and
(v) the Company, the Guarantors (and any previous substitute under
Clause 15.3) and the Substituted Obligor (and any previous
substitute under this Clause 15.2) comply with such other
requirements as the Trustee may direct in the interests of the
Bondholders.
32
In the case of such substitution, the Trustee may agree, without the
consent of the Bondholders or the Couponholders, to a change of law
governing these presents provided that such change would not, in the
opinion of the Trustee, be materially prejudicial to the interests of
the Bondholders. Any such substitution as is permitted by this Clause
15.2 shall be binding upon the Bondholders and the Couponholders.
(b) Release of existing obligor
Any such agreement by the Trustee pursuant to this Clause 15.2 will, if
so expressed but subject to Clause 15.2(a)(v), operate to release the
Company (or any such previous substitute) from any or all of its
obligations under these presents. Not later than 14 days after the
execution of any such documents and after compliance with such
requirements, notice of the substitution will be given by the
Substituted Obligor to the Bondholders in accordance with Condition 14
as soon as practicable.
(c) Completion of substitution
Up on the execution of such documents and compliance with such
requirements, the Substituted Obligor will be deemed to be named in
these presents as the principal debtor in place of the Company (or of
any previous substitute under this Clause 15.2) and these presents will
be deemed to be modified in such manner as shall be necessary to give
effect to the substitution.
15.3 Substitution:
(a) The Trustee may, without the consent of the Bondholders or the
Couponholders, but so as to bind the Bondholders and the Couponholders,
agree with the Company and the Guarantors to the substitution of any
Subsidiary or holding company of NEDL or any subsidiary of such holding
company (the "Substituted Guarantor") in place of NEDL (or of any
previous substitute under this Clause 15.2, 15.3) as guarantor of the
obligations of the Company (or any previous substitute under Clause
15.2) under these presents guaranteed by the Guarantors (or if any
previous substitute under this Clause 15.3) under these presents,
provided that:
(i) the Trustee is satisfied that such substitution is not
materially prejudicial to the interests of the Bondholders;
(ii) the Distribution Licence is transferred to the Substituted
Guarantor;
(iii) a trust deed is executed or some other form of undertaking is
given by the Substituted Guarantor to the Trustee, in a form
and manner satisfactory to the Trustee, agreeing to be bound
by the provisions of these presents binding on the Guarantors
with any consequential amendments which the Trustee may deem
appropriate as fully as if the Substituted Guarantor had been
named in these presents as guarantor of such obligations of
33
the Company (or of any previous substitute under Clause 15.2)
in place of NEDL (or of any previous substitute under this
Clause 15.3);
(iv) where the Substituted Guarantor is subject generally to the
taxing jurisdiction of any territory or any political
sub-division or any authority of or in that territory having
power to tax (for the purpose of this Clause 15.3, the
"Substituted Territory") other than or in addition to any
territory to the taxing jurisdiction of which (or to any
such political sub-division or authority of or in which)
NEDL (or any previous substitute under this Clause 15.3) is
subject generally (for the purpose of this Clause 15.3, the
"Existing Territory"), the Substituted Guarantor will
(unless the Trustee otherwise agrees) give to the Trustee an
undertaking in form and manner satisfactory to the Trustee
in terms corresponding to the terms of Condition 8 with the
substitution for or, where applicable, the addition to, the
references in that Condition to the Existing Territory of
references to the Substituted Territory and in such event
these presents will be read accordingly;
(v) if any two of the directors or other officers acceptable to
the Trustee of the Substituted Guarantor certify to the
Trustee to the effect that, having made all reasonable
enquiries, in the opinion of the persons so certifying the
Substituted Guarantor will be solvent immediately after such
substitution, the Trustee may rely absolutely on such
certificate and need not have regard to the financial
condition, profits or prospects of the Substituted Guarantor
or compare them with those of NEDL (or of any previous
substitute under this Clause 15.3) or call for any further
evidence and the provisions of Clause 11.1(d) shall apply; and
(vi) the Company (and any previous substitute under Clause 15.2),
the Guarantors and the Substituted Guarantor (and any previous
substitute under this Clause 15.3) comply with such other
requirements as the Trustee may direct in the interests of the
Bondholders.
In the case of such substitution, the Trustee may agree, without the
consent of the Bondholders or the Couponholders, to a change of law
governing these presents provided that such change would not, in the
opinion of the Trustee, be materially prejudicial to the interests of
the Bondholders. Any such substitution as is permitted by this Clause
15.3 shall be binding upon the Bondholders and the Couponholders.
(b) Release of existing obligor
Any such agreement by the Trustee pursuant to this Clause 15.3 will, if
so expressed but subject to Clause 15.3(a)(vi), operate to release NEDL
(or any such previous substitute) from any or all of its obligations
under these presents. Not later than 14 days after the execution of any
such documents and after compliance with such requirements, notice of
the substitution will be given by the Substituted Guarantor to the
Bondholders in accordance with Condition 14 as soon as practicable.
(c) Completion of substitution
34
Upon the execution of such documents and compliance with such
requirements, the Substituted Guarantor will be deemed to be named in
these presents as a guarantor of the obligations aforesaid of the
Company (or of any previous substitute under Clause 15.2) in place of
NEDL (or of any previous substitute under this Clause 15.3) and these
presents will be deemed to be modified in such manner as shall be
necessary to give effect to the substitution.
16. APPOINTMENT, RETIREMENT AND REMOVAL OF TRUSTEE
16.1 Appointment
The Company will have the power of appointing a new Trustee but no
person will be so appointed unless previously approved by an
Extraordinary Resolution. A trust corporation will at all times be a
Trustee and may be the sole Trustee. Any appointment of a new Trustee
will be notified by the Company to the Bondholders and to the Agents as
soon as practicable.
16.2 Retirement and removal
Any Trustee may retire at any time on giving not less than three
months' notice in writing to the Company without giving any reason and
without being responsible for any costs occasioned by such retirement
and the Bondholders may by Extraordinary Resolution remove any Trustee
provided that the retirement or removal of any sole Trustee or sole
trust corporation will not become effective until a trust corporation
is appointed as successor Trustee. If a sole Trustee or sole trust
corporation gives notice of retirement or an Extraordinary Resolution
is passed for its removal under this Clause 16.2, it will use all
reasonable endeavours to procure that another trust corporation be
appointed as Trustee. Any replacement or retirement of a Trustee will
be notified by the Company to the Bondholders and to the Agents as soon
as practicable.
16.3 Co-Trustees
The Trustee may, notwithstanding the provisions of Clause 16.1, by
notice in writing to the Company and the Guarantors (but without the
need for the consent of the Company, the Guarantors, the Bondholders or
the Couponholders) appoint any person to act as an additional Trustee
jointly with the Trustee:
(a) if the Trustee considers such appointment to be in the
interests of the Bondholders;
(b) for the purpose of conforming with any legal requirement,
restriction or condition in any jurisdiction in which any
particular act is to be performed; or
37
(c) for the purpose of obtaining a judgment in any jurisdiction or
the enforcement in any jurisdiction of either a judgment
already obtained or any of the provisions of these presents
against the Company or either Guarantor.
Subject to the provisions of these presents the Trustee may confer on
any person so appointed such functions as it thinks fit. The Trustee
may by notice in writing to the Company, the Guarantors and such person
remove any person so appointed. At the request of the Trustee, the
Company and the Guarantors will forthwith execute and do all such
documents, acts and things as may be required to perfect such
appointment or removal and the Company and each Guarantor hereby
irrevocably appoints the Trustee to be its attorney in its name and on
its behalf to do so. Any appointment or removal of any such additional
Trustee shall be notified by the Company or the Guarantors to the
Bondholders and to the Agents as soon as practicable.
16.4 Competence of a majority of Trustees
If there are more than two Trustees, the majority of such Trustees will
(provided such majority includes a trust corporation) be competent to
carry out all or any of the Trustee's functions.
17. COUPONHOLDERS
17.1 Notices
Neither the Trustee, the Company nor either Guarantor need give any
notice to the Couponholders for any purpose under these presents and
the Couponbolders will be deemed to have notice of the contents of any
notice given to the Bondholders.
17.2 Bondholders assumed to hold Coupons
Even if it has express notice to the contrary, whenever the Trustee is
required to exercise any of its functions, powers, authorities or
discretions by reference to the interests of the Bondholders, the
Trustee shall assume that each Bondholder is the holder of all Coupons
relating to each Bond of which he is the bearer.
18. COMMUNICATIONS
Any notice, confirmation, demand, certificate or other document given,
made or served, or required to be given, made or served, under these
presents shall be in the English language and shall be given, made or
served by letter delivered personally or by facsimile transmission:
36
(a) in the case of the Company, to it at:
Carliol House
Market Street
Newcastle-Upon-Tyne NEl 6NE
Fax no: 0191 210 2081
Attention: The Finance Director
(b) in the case of NE, to it at:
Carliol House
Market Street
Newcastle-Upon-Tyne NEl 6NE
Fax no: 0191 210 2081
Attention: The Finance Director
(c) in the case of NEDL, to it at:
Carliol House
Market Street
Newcastle-Upon-Tyne NEl 6NE
Fax no: 0191 210 2081
Attention: The Finance Director
(d) in the case of the Trustee, to it at:
Fifth Floor
100 Wood Street
London EC2V 7EX
Fax no: 020 7606 0643
Attention: The Secretary
or, in each case, to such other address or facsimile number as shall
have been notified (in accordance with this Clause 18) to the other
parties.
Any such communication will take effect, in the case of delivery, at
the time of delivery or, in the case of facsimile transmission, at the
time of dispatch.
37
Any communication not by letter shall be confirmed by letter but
failure to send or receive the letter of confirmation shall not
invalidate the original communication.
19. POWERS IN ADDITION
The powers conferred upon the Trustee by these presents shall be in
addition to any powers which may from time to time be vested in the
Trustee by the general law or as a holder of any of the Bonds or
Coupons.
20. SEVERABILITY
Notwithstanding that any provision of these presents may prove to be
illegal or unenforceable, the remaining provisions of these presents
shall continue in full force and effect.
21. EXECUTION
Each of the parties to this Master Trust Deed intends it to be a deed,
and agrees to execute and deliver it as a deed. The signature or
sealing of this Master Trust Deed by or on behalf of a party shall
constitute an authority to the solicitors, or an agent or employee of
the solicitors, acting for that party in connection with this Master
Trust Deed to deliver it as a deed on behalf of that party.
22. COUNTERPARTS
These presents may be executed in counterparts, and the counterparts
together shall constitute one deed.
23. GOVERNING LAW
These presents shall be governed by and construed in accordance with
English law.
24. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to these presents has no 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 a third
party which exists or is available apart from that Act.
IN WITNESS whereof this Master Trust Deed has been executed as a deed the day
and year first above written.
38
SCHEDULE 1
PART I
FORM OF INDIVIDUAL CERTIFICATE FOR ORIGINAL BONDS 2005
On the front:
ISIN: Serial No: Cert No:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
guaranteed as to principal and interest on a joint and several basis by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
and
NORTHERN ELECTRIC DISTRIBUTION LIMITED
(Incorporated with limited liability in England and Wales - No. 2906593)
The Bonds in respect of which this Certificate is issued are in bearer form and
form part of the series designated as specified in the title (the "Bonds") of
Northern Electric Finance plc (the "Issuer") constituted by a Master Trust Deed
dated 16th October, 1995 between the Issuer, Northern Electric plc ("NE" and,
together with Northern Electric Distribution Limited, the "Guarantors") and The
Law Debenture Trust Corporation p.l.c. as the Trustee (the "Trust Deed", which
expression includes all deeds supplemental to such Trust Deed). The Bonds are
subject to, and have the benefit of, the Trust Deed and the Terms and Conditions
(the "Conditions") set out on the reverse hereof.
The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)[l,000/10,000/100,000] [(One/Ten/One
Hundred)] Thousand pounds sterling on 16th October, 2005 or on such earlier date
as such principal amount may become payable in accordance with the Conditions
and the Trust Deed together with interest thereon and any other moneys payable
in respect of the Bonds in accordance with the Conditions and the Trust Deed.
The Bonds are guaranteed as to principal and interest by the Guarantors on the
terms of the Trust Deed.
39
This Certificate shall not be valid or become obligatory for any purpose until
signed on behalf of the Issuer and the Guarantor and authenticated by or on
behalf of the Principal Paying Agent.
Dated
In witness whereof the Issuer and NE have caused this Certificate to be signed
in facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This Certificate is authenticated by or on behalf of the Principal Paying Agent.
By:
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940.]
On the back:
Terms and Conditions
Details of Agents
40
SCHEDULE 1
PART II
FORM OF ORIGINAL GLOBAL BOND 2005
ISIN:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
guaranteed as to principal and interest by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
TEMPORARY GLOBAL BOND CERTIFICATE
The Bonds in respect of which this temporary Global Bond Certificate is issued
are in bearer form and comprise the series of Bonds designated as specified in
the title (the "Bonds") of Northern Electric Finance plc (the "Issuer")
constituted by a Master Trust Deed dated 16th October, 1995 between the Issuer,
Northern Electric plc (the "Guarantor") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed). The Bonds are subject to, and have the benefit
of, the Trust Deed including the Terms and Conditions set out on the reverse
hereof.
The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)100,000,000 (or such lesser or
greater amount as is duly endorsed in the third column of Schedule A to this
Certificate) on 16th October, 2005 or on such earlier date as such principal
amount may become payable in accordance with the Trust Deed together with
interest thereon and any other moneys payable in respect of the Bonds in
accordance with the Trust Deed.
The Bonds are guaranteed as to principal and interest by the Guarantor on the
terms of the Trust Deed.
This temporary Global Bond Certificate is exchangeable for individual
Certificates representing Bonds in bearer form with Coupons attached. The Issuer
hereby irrevocably undertakes to deliver individual Certificates representing
Bonds in exchange for this temporary Global Bond Certificate on and after 26th
November, 1995 (the "Exchange Date").
41
On or after the Exchange Date this temporary Global Bond Certificate may be
exchanged in whole or in part for individual Certificates representing Bonds in
an aggregate principal amount not exceeding the principal amount of this
temporary Global Bond by the submission of this temporary Global Bond
Certificate to the Principal Paying Agent together with a certificate from Cedel
Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("Euroclear") substantially
to the following effect:
42
CERTIFICATE OF CLEARING SYSTEM
NORTHERN ELECTRIC FINANCE plc
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the "Bonds")
Common Code: ISIN:
This is to certify that, based solely on certificates we have received in
writing, by tested telex or by electronic transmission, from member
organisations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organisations") substantially
in the form set out in the temporary Global Bond Certificate representing Bonds
(the form of which is set out in Part II of Schedule 1 to the Master Trust Deed
constituting the Bonds) as of the date hereof [ ] principal amount of the Bonds
(i) is owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States persons"), (ii) is owned by United States persons that
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Bonds through foreign branches of United States financial
institutions and who hold the Bonds through such United States financial
institutions on the date hereof (and, in either case (a) or (b), each such
United States financial institution has agreed, on its own behalf or through its
agent, that we may advise the Issuer or the Issuer's agent that it will comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by United States or foreign financial institutions for purposes of resale
during the restricted period (as defined in U.S. Treasury Regulations Section
l.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign
financial institutions described in (iii) above (whether or not also described
in (i) or (ii) above) have certified that they have not acquired the Bonds for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Bonds represented by the temporary Global Bond Certificate
excepted in such certificates and (ii) that as of the date hereof we have not
received any notification from any of our Member Organisations to the effect
that the statements made by such Member Organisation with respect to any portion
of the part submitted herewith for exchange (or, if relevant, exercise of any
rights or collection of any interest) are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with certain tax
laws of the United States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceedings.
Dated: *
43
Yours faithfully,
[Cedel Bank, societe anonyme]
or
44
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels office,
as operator of the Euroclear System]
By:
*To be dated no earlier than the Exchange Date.
Any person appearing in the records maintained by Cedel or Euroclear as entitled
to any interest in Bonds represented by this temporary Global Bond Certificate
shall be entitled to require the exchange of this temporary Global Bond
Certificate for (an) individual Certificate(s) representing such Bonds in bearer
form by delivering or causing to be delivered to Cedel or Euroclear a
certificate in substantially the following form (copies of which certificate
will be available at the office of Cedel in Luxembourg and Euroclear in Brussels
and at the specified office of each of the Paying Agents):
"CERTIFICATE OF CLEARING SYSTEM PARTICIPANT
NORTHERN ELECTRIC FINANCE plc
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the "Bonds")
Common Code: ISIN:
To: [Cedel Bank, societe anonyme] [Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System]
This is to certify that, as of the date hereof, and except as set forth below,
the Bonds held by you for our account (i) are owned by persons that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source ("United States
persons"), (ii) are owned by United States persons that are (a) foreign branches
of United States financial institutions (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own
account or for resale, or (b) United States persons who acquired the Bonds
through foreign branches of United States financial institutions and who hold
the Bonds through such United States financial institutions on the date hereof
(and, in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise the
Issuer or the Issuer's agent that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign financial institutions for purposes of resale during the restricted
period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and in addition, if an owner of Bonds is a United States or foreign financial
institution described in (iii) above (whether or not also described in (i) or
(ii) above), this is to certify further that such financial institution has not
acquired the Bonds for purposes of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
45
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to that date on
which you intend to submit your certificate relating to the Bonds held by you
for our account in accordance with your documented procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certificate applies as of such date.
This certificate excepts and does not relate to [ ] principal amount of the
Bonds in respect of which we are not able to certify and as to which we
understand exchange and delivery of individual Certificates representing Bonds
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certificate is required in connection with certain tax
laws of the United States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceeding.
Dated: *
By:
[Name of person giving certificate] as, or as
agent for, the beneficial owner(s) of the
Bonds in respect of which this certificate is issued.
* To be dated no earlier than the fifteenth day prior to the Exchange
Date."
Until the exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds pursuant to the foregoing provisions, no person
as aforesaid shall (except as stated herein) be entitled to receive any payment
by way of principal or interest in respect of the Bonds represented by this
temporary Global Bond Certificate (unless, upon due presentation of this
temporary Global Bond Certificate for exchange, delivery of any individual
Certificate representing Bonds shall be improperly withheld or refused) or to
receive (an) individual Certificate(s) representing Bonds which he would
otherwise be entitled to receive.
Upon any exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds the portion of the principal amount represented
by this temporary Global Bond Certificate in respect of which such exchange
shall be effected shall be endorsed by the Principal Paying Agent on the
Schedule of exchanges for individual Certificates hereon, whereupon the
46
principal amount represented by this temporary Global Bond Certificate shall be
reduced for all purposes by the amount of such portion.
Subject to the second preceding paragraph, no provisions of this temporary
Global Bond Certificate shall alter or impair the obligation of the Issuer to
pay the principal and interest in respect of the Bonds when due in accordance
with the Trust Deed or the obligations of the Guarantor under the Trust Deed.
This temporary Global Bond Certificate is governed by and shall be construed in
accordance with English law.
This temporary Global Bond Certificate shall not be valid or become obligatory
for any purpose until signed on behalf of the Issuer and the Guarantor and
authenticated by or on behalf of the Principal Paying Agent.
Dated:
In witness whereof the Issuer and the Guarantor have caused this temporary
Global Bond Certificate to be signed in facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This temporary Global Bond Certificate is authenticated by or on behalf of the
Principal Paying Agent.
By:
Authorized Signatory
47
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
[NEITHER THE ISSUER NOR THE GUARANTOR HAS BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]
48
Schedule of exchanges for individual Certificates
The principal amount of the Bonds represented by this temporary Global Bond
Certificate has been reduced as a result of the issue of individual Certificates
representing Bonds in respect of a portion of such principal amount in exchange
as follows:
Amount of decrease Principal amount of
in principal amount Bonds represented by
of Bonds represented Global Bond Notation made by or
by Global Bond Certificate following on behalf of Principal
Date of exchange Certificate such decrease Paying Agent
49
Schedule of interest paid
Date of payment Amount of interest Notation made
50
SCHEDULE 1
PART III
FORM OF ORIGINAL COUPON 2005
On the front:
ISIN: Serial No: Coupon No:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
guaranteed as to principal and interest on a joint and several basis by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
and
NORTHERN ELECTRIC DISTRIBUTION LIMITED
(Incorporated with limited liability in England and Wales - No. 2906593)
Coupon for [ ] due on 199[6/7/8/9/2000/1/2/3/4/5].
This Coupon relates to interest payable on (pound)[l,000/l0,000/l00,000]
[(One/Ten/One Hundred Thousand)] principal amount of the Bonds designated as
specified in the title (the "Bonds") of Northern Electric Finance plc (the
"Issuer") constituted by a Master Trust Deed dated 16th October, 1995 between
the Issuer, Northern Electric plc ("NE" and, together with Northern Electric
Distribution Limited, the "Guarantors") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed).
This Coupon is payable to bearer (subject to the Trust Deed, including the
Conditions endorsed on the Certificate representing the Bonds to which this
Coupon relates, which shall be binding upon the holder of this Coupon whether or
not it is for the time being attached to such Certificate) at the specified
offices of the Paying Agents set out on the reverse hereof (or any further or
other Paying Agents or specified offices duly appointed or nominated from time
to time and notified to the Bondholders).
Such interest is guaranteed by the Guarantors.
This Coupon is negotiable separately from the Bonds to which this Coupon
relates.
51
This Coupon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and authenticated by or on behalf of the Principal
Paying Agent.
Dated:
In witness whereof the Company and NE have caused this Coupon to be signed in
facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This Coupon is authenticated by or on behalf of the Principal Paying Agent
By:
Authorized Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]
On the back:
Details of Paying Agents
52
SCHEDULE 2
TERMS AND CONDITIONS OF THE BONDS
The (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the
"Bonds", which expression shall in these Terms and Conditions, unless the
context otherwise requires, include any further bonds issued pursuant to
Condition 17 and forming a single series with the Bonds) of Northern Electric
Finance plc (the "Issuer") are constituted by a master trust deed dated 16th
October, 1995 made between the Issuer, Northern Electric plc ("NE") and The Law
Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall
include all persons for the time being the trustee or trustees under the Trust
Deed (as defined below)) as trustee for the holders of the Bonds (the
"Bondholders") as modified and restated by a first supplemental trust deed dated
27th September, 2001 made between the Issuer, NE, Northern Electric Distribution
Limited ("NEDL" and, together with NE, the "Guarantors" and each a "Guarantor")
and the Trustee (together, the "Trust Deed", which expression shall wherever the
context so admits include any other deed supplemental thereto). The issue of the
Bonds was authorised by a resolution of the board of directors of the Issuer
passed on 9th October, 1995. The giving of the guarantee by NE was authorised by
a written resolution of the board of directors of NE passed on 14th September,
1995 appointing a committee of the board for the purposes of the giving of the
guarantee and by a resolution of such duly appointed committee of the board of
directors of NE passed on 9th October, 1995. The giving of the guarantee by NEDL
was authorised by a resolution of the board of directors of NEDL passed on 26th
September, 2001. The Bonds are listed on the London Stock Exchange plc (the
"London Stock Exchange"). The statements in these Terms and Conditions include
summaries of, and are subject to, the detailed provisions of and definitions in
the Trust Deed. Copies of the Trust Deed and of an agency agreement dated 16th
October, 1995 (the "Agency Agreement") made between the Issuer, NE, Barclays
Bank PLC, as principal paying agent (the "Principal Paying Agent", which
expression shall include any successor), the other paying agents named therein
(together with the Principal Paying Agent, the "Paying Agents", which expression
shall include any additional or successor paying agents) and the Trustee 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 Fifth Floor, 100 Wood Street, London EC2V 7EX and at
the specified office of each of the Paying Agents. The Bondholders and the
Couponholders are entitled to the benefit of, and are bound by, and are deemed
to have notice of, all the provisions of the Trust Deed and the Agency
Agreement.
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 attached on
issue. Title to the Bonds and to the Coupons will pass by delivery. Bonds of one
denomination may not be exchanged for Bonds of another denomination.
The Issuer, each 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 thereof for all
53
purposes (whether or not the Bond or Coupon shall be overdue and notwithstanding
any notice of ownership or writing on the Bond or Coupon or any notice of
previous loss or theft of the Bond or Coupon).
2. Status and Guarantee
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 of the
Issuer, only to the extent permitted by applicable laws relating to creditors'
rights.
The Guarantors have, in the Trust Deed, unconditionally and irrevocably
guaranteed on a joint and several basis the due and punctual payment of the
principal of and interest on the Bonds as and when the same shall become due and
payable together with any additional amounts payable pursuant to Condition 8 and
all other moneys payable under the Trust Deed. The obligations of each Guarantor
under the terms of its guarantee constitute direct, unconditional and, subject
to the provisions of Condition 3, unsecured obligations of such Guarantor and
such obligations rank and will rank pari passu with all other outstanding
unsecured and unsubordinated obligations of the relevant Guarantor, present and
future, but, in the event of insolvency of the relevant Guarantor, only to the
extent permitted by applicable laws relating to creditors' rights.
3. Negative Pledge
So long as any of the Bonds remains outstanding (as defined in the
Trust Deed) each of the Issuer and each Guarantor will ensure that no Relevant
Indebtedness of the Issuer, either Guarantor or any Distribution Subsidiary (as
defined below) or of any other person and no guarantee by the Issuer, either
Guarantor 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, either Guarantor or any Distribution Subsidiary
unless the Issuer or the relevant Guarantor, as the case may be, shall, before
or at the same time as the creation of the Security Interest, take any and all
action necessary to ensure that:
(a) all amounts payable by the Issuer under the Bonds, the Coupons
and the Trust Deed or, as the case may be, the obligations of
the relevant Guarantor under its guarantee referred to in
Condition 2 are secured to the satisfaction of the Trustee
equally and rateably with the Relevant Indebtedness or
guarantee of Relevant Indebtedness, as the case may be, by
such Security Interest; or
(b) 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, as the
case may be, in respect of the obligations of the relevant
Guarantor under its guarantee referred to in Condition 2
54
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 approved by an Extraordinary
Resolution (as defined in the Trust Deed) of the Bondholders,
save that the Issuer, either Guarantor 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, either Guarantor 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 in respect of the Bonds, the Coupons and the Trust
Deed or, as the case may be, the obligations of the relevant Guarantor under the
said guarantee as aforesaid) where such Relevant Indebtedness has an initial
maturity falling not earlier than 31st December, 2005 and is of a maximum
aggregate amount outstanding at any time not exceeding the greater of
(pound)20,000,000 and 20 per cent. of the Consolidated Tangible Net Worth (as
defined below).
For the purposes of these Terms and Conditions:
(a) "Consolidated Tangible Net Worth" at any particular time the
aggregate of the amount paid up on NE's issued share capital
and the consolidated distributable and non-distributable
reserves of the Group (as shown in the most recently published
audited consolidated financial statements of the Group),
after:
(i) deducting the total of any debit balance on the
profit and loss account and the book value of any
intangible assets including but not limited to
goodwill; and
(ii) excluding any minority interests in Subsidiary
Undertakings;
but adjusted as may be necessary in respect of any variation
in the paid-up share capital or share premium account of the
Group 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.
A report by the Auditors (as defined in the Trust Deed) as to
the amount of the Consolidated Tangible Net Worth at any given
time shall, in the absence of manifest error, be conclusive
and binding on all parties.
(b) "Distribution License" means either the distribution licence
granted to NEDL under section 6(l)(c) of the Electricity Act
1989 as amended by section 30 of the Utilities Act 2000 or the
public electricity supply licence of NE having effect as if it
were a distribution licence granted to NEDL under section
6(l)(c) of the Electricity Act 1989 as amended by section 30
of the Utilities Act 2000, as appropriate.
(c) "Distribution Subsidiary" means any Subsidiary of NE which
holds a Distribution License granted under Section 6(l)(c) of
the Electricity Act 1989 as amended by the Utilities Act 2000;
55
(d) "Excluded Subsidiary" means any Subsidiary of the Issuer or
either 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 and
(iii) which has been designated as such by the Issuer or
either Guarantor by written notice to the Trustee,
provided that the Issuer or either Guarantor, as the
case may be, 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 NE, NEDL, the Issuer and the Subsidiary
Undertakings of NE;
(f) "Project Finance Indebtedness" means any present or future
indebtedness (whether being principal, premium, interest or
other amounts) to finance a project:
(i) which is incurred by an Excluded Subsidiary; or
(ii) in respect of which recourse to any member of the
Group for the repayment or payment of any sum
relating to such indebtedness is limited to:
(1) the assets of a single purpose company
(other than a Distribution Subsidiary) the
principal assets and business of which are
constituted by such project and which was
established for the purpose of incurring
such indebtedness; or
(2) the assets of the project and the rights,
revenues and insurance proceeds derived
therefrom or related thereto,
with no recourse to any other assets of the Group (other than
those of an Excluded Subsidiary);
(g) "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
56
of the person issuing the same are quoted, listed or
ordinarily dealt in on any stock exchange or recognized
over-the-counter or other securities market, but shall not in
any event include Project Finance Indebtedness;
(h) "Subsidiary" means a subsidiary within the meaning of Section
736 of the Companies Act 1985;
(i) "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 NE, 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
so included or consolidated if it had become so on or before
that date); and
(j) any reference to an obligation being guaranteed shall include
a reference to an indemnity being given in respect of the
obligation.
4. Interest
The Bonds bear interest from (and including) 16th October, 1995 at the
rate of 8.625 per cent. per annum, payable annually in arrear on 16th October in
each year (each an "Interest Payment Date").
Each Bond will cease to bear interest from its due date for redemption
unless, upon due 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 and, in the case of an incomplete month,
the number of days elapsed.
5. Payments
Payments of principal in respect of each Bond will only be made against
presentation and surrender (or, in the case of part payment only, endorsement)
of the relevant Bond at the specified office of any of the Paying Agents.
Payments of interest due on the Bonds 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 at the specified office of any of the
Paying Agents. Each such payment will be made at the specified office of any
Paying Agent, at the option of the holder, by sterling cheque drawn on a branch
of, or by transfer to a sterling account maintained by the payee with, a bank in
the City of London, subject in all cases to any applicable fiscal or other laws
and regulations, but without prejudice to the provisions of Condition 8.
Each Bond must be presented for payment together with all unmatured
Coupons appertaining thereto failing which the full amount of any missing
57
unmatured Coupon (or, in the case of payment not being made in full, that
proportion of the full amount of the missing unmatured Coupons which the amount
so paid bears to the total amount due) appertaining thereto 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 such missing Coupon at any time before the
expiry of 10 years after the Relevant Date (as defined in Condition 8) in
respect of the relevant Bond (whether or not such Coupon would otherwise have
become void pursuant to Condition 9), or, if later, five years after the date on
which such 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 9):
(a) is or falls after the relevant due date but, if the due date is
not or was not a Business Day in the City of London, is or falls
after the next following such Business Day; and
(b) 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
the City of London as referred to above, in the City of London.
"Business Day" means, in relation to any place, a day (other than a
Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in that place.
When making payments to Bondholders or Couponholders, fractions of one
penny will be rounded down to the nearest whole penny.
The names of the initial Paying Agents and their initial 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
previously approved in writing by the Trustee, one of which, so long as the
Bonds are listed on the London Stock Exchange, shall be London or such other
place as the London Stock Exchange may approve and one of which shall be outside
the United Kingdom. Notice of any such termination or appointment and of any
changes in the specified offices of the Paying Agents will be given to the
Bondholders promptly by the Issuer in accordance with Condition 14.
6. Redemption and Purchase
(A) Unless previously redeemed or purchased and cancelled as provided
below, the Issuer will redeem the Bonds at their principal amount on 16th
October, 2005.
(B) The Issuer may, at any time, having given notice to the
Bondholders in accordance with this Condition 6(B) (which
notice shall be irrevocable), redeem the Bonds in whole or in
58
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) their principal amount; 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 8 1/2 per cent. Treasury Stock 2005 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 Barclays Bank PLC (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 1, 1978, page 18 or on such other basis as the Trustee may previously
approve in writing.
In the case of a redemption of all of the Bonds pursuant to this
Condition 6(B), notice will be given to the Bondholders by the Issuer in
accordance with Condition 14 once not less than 30 nor more than 60 days before
the date fixed for redemption and will specify the date fixed for redemption and
the redemption price.
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 previously
approve in writing and in such manner as the Trustee shall deem to be
appropriate and fair without involving any part of a Bond, not more than 65 days
before the date fixed for redemption. In the case of a partial redemption of the
Bonds pursuant to this Condition 6(B), notice will be so given to the
Bondholders by the Issuer in accordance with Condition 14 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, the aggregate principal amount of
the Bonds to be redeemed, the serial numbers of Bonds previously called (in
whole or in part) for redemption and not presented for payment and the aggregate
principal amount of Bonds which will be outstanding after the partial
redemption. In addition the second such notice will specify the serial numbers
of the Bonds called for redemption.
Upon the expiry of any such notice as is referred to in this Condition
6(B), the Issuer shall be bound to redeem the Bonds to which the notice refers
at the relevant redemption price at the date of such redemption together with
interest accrued to but excluding such date.
59
(C) If as a result of any change in, or amendment to, the laws or
regulations of the United Kingdom or any political sub-division of, or any
authority in, or of, the United Kingdom having power to tax, or any change in
the application or official interpretation of such laws or regulations, which
change or amendment becomes effective after 10th October, 1995, the Issuer has
or will become obliged to pay additional amounts as provided or referred to in
Condition 8 (and such amendment or change has been evidenced by the delivery by
the Issuer to the Trustee (who shall, in the absence of manifest error, 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 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)), 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 14
(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 6(B) prior to any notice being given under this Condition 6(C)) but
not some only, at their principal amount together with interest (if any) accrued
to (but excluding) 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
would be required to pay such additional amounts were a payment in respect of
the Bonds then due.
Upon expiry of any such notice as is referred to in this Condition 6(C)
(and subject as provided above), the Issuer shall be bound to redeem all the
Bonds at their principal amount together with interest accrued to (but
excluding) the redemption date.
(D) The Issuer, either Guarantor or any of their respective
Subsidiaries may at any time purchase Bonds together with unmatured Coupons in
any manner and at any price in the open market or by private treaty. If
purchases are made by tender, tenders must be available to all Bondholders
alike. Bonds purchased by the Issuer, either Guarantor or any of their
respective Subsidiaries may be held or reissued or resold or surrendered for
cancellation.
(E) All Bonds which are redeemed will forthwith be cancelled (together
with all relative unmatured Coupons attached to or surrendered with the Bonds)
and may not be reissued or resold.
(F) While any Bonds are held by the Issuer, either Guarantor or any of
their respective Subsidiaries, such Bonds shall not entitle the holder to vote
at, or to be counted in the quorum for, any meeting of Bondholders and, for the
purposes of the provisions of the Trust Deed concerning meetings of Bondholders,
will not be regarded as being in issue.
7. Redemption at the Option of Bondholders
(A) For the purposes of these Terms and Conditions:
60
(i) "independent financial adviser" means a financial
adviser appointed by NEDL and previously approved in
writing by the Trustee (such approval not to be
unreasonably withheld or delayed) or, if NEDL shall
not have appointed such an adviser within 21 days of
becoming aware of the occurrence of a Restructuring
Event and the Trustee is indemnified to its
satisfaction against the costs of such adviser,
appointed by the Trustee following consultation with
NEDL;
(ii) "Investment Grade Rating" means a rating of at least
investment grade BBB- in the case of Standard &
Poor's Rating Services, a division of the McGraw-Hill
Companies Inc. and Baa3 in the case of Moody's
Investors Services Limited or their respective
equivalents for the time being;
(iii) "Negative Certification" means a certificate given in
writing to the Trustee by an independent financial
adviser that a Restructuring Event will be or is, in
its opinion, materially prejudicial to the interests
of the Bondholders;
(iv) A "Negative Rating Event" shall be deemed to
have occurred if (X) NEDL 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 NEDL (or of any Subsidiary of
NEDL (including, without limitation, the Issuer) and
which is guaranteed on an unsecured and
unsubordinated basis by NEDL) having an
initial maturity of five years or more from a Rating
Agency or (Y) if NEDL does so seek and use such
endeavours but it is unable, as a result of such
Restructuring Event, to obtain the Investment
Grade Rating (and, in this definition, "seek"
shall include procuring the relevant Subsidiary to
seek);
(v) A "Put Event" occurs on the date of the last to occur
of all of the following (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;
(vi) "Rating Agency" means Standard & Poor's Rating
Services, a Division of the McGraw-Hill Companies
Inc. or any of its subsidiaries and their successors
or Moody's Investors Service Limited or any of its
subsidiaries and their successors or any rating
agency substituted for either of them (or any
permitted substitute of them) by NEDL from time to
time with the prior written approval of the Trustee
(such approval not to be unreasonably withheld or
delayed);
(vii) Following a Restructuring Event, a "Rating Downgrade"
shall be deemed to have occurred in respect of that
Restructuring Event if the then current rating
61
assigned to the Rated Securities by any Rating Agency
(whether provided by a Rating Agency at the
invitation of NEDL or by its own volition) is
withdrawn or reduced from the Investment Grade Rating
or, if the Rating Agency shall then have already
rated the Rated Securities below the Investment Grade
Rating, the rating is lowered one full rating
category;
(viii) "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 NEDL (or of any Subsidiary of
NEDL (including, without limitation, the Issuer) and
which is guaranteed on an unsecured and
unsubordinated basis by NEDL) having an initial
maturity of five years or more which is rated by a
Rating Agency;
(ix) "Restructuring Event" means the occurrence of any one
or more of the following events:
(A) (aa) The Gas and Electricity Markets
Authority (which expression shall in these
Terms and Conditions include any other
competent authority) (or any successor)
giving the Issuer written notice of
revocation of the Distribution Licence (bb)
NEDL 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 circumstances where a
licence or licences on substantially no
less favourable terms is or are
granted to NEDL or a wholly-owned
Subsidiary of NEDL (the "Relevant
Subsidiary") and in the case of such
Relevant Subsidiary at the time of such
grant it either executes in favour of the
Trustee an unconditional and irrevocable
guarantee in respect of the Bonds in such
form as the Trustee may previously approve
in writing (such approval not to be
unreasonably withheld or delayed) or
becomes the principal debtor under the
Bonds in accordance with Condition 12; 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 the Effective Date (as defined in the
First Supplemental Trust Deed) unless the
modified terms and conditions are certified
by two directors of NEDL to be not
materially less favourable to the business
of NEDL; or
(C) any legislation (whether primary or
subordinate) is enacted which removes,
qualifies or amends (other than an amendment
which is of a formal, minor or technical
nature) the duties of the Secretary of
62
State for Trade and Industry (or any
successor) and/or the Gas and Electricity
Markets Authority (or any successor) under
Section 3A of the Electricity Act 1989 (as
amended) as in force on the Effective Date,
unless two directors of NEDL certify that
such removal, qualification or amendment
does not have a materially adverse effect
on the financial condition of NEDL.
(x) "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 NEDL shall seek to
obtain a rating pursuant to Condition
7(A)(iv) 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 NEDL in respect of that Restructuring
Event; and
(xi) 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 made as provided in Condition 7 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 circumstances 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 in
accordance with the Trust Deed to the contrary the Trustee may assume that no
Restructuring Event, Negative Rating Event or other such event has occurred.
(B) If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and prior to the commencement of or during the
Restructuring Period an independent financial adviser 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 7 shall cease to have any further effect
in relation to such Restructuring Event.
63
(C) If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and (subject to Condition 7(B)):
(X) within the Restructuring Period, either:
(i) if at the time such Restructuring Event occurs there
are Rated Securities a Rating Downgrade in respect
of such Restructuring Event also occurs; or
(ii) if at such time there are no Rated Securities, a Negative
Rating Event also occurs; and
(Y) an independent financial adviser shall have given a Negative
Certification,
then, unless at any time the Issuer shall have given a notice in respect of his
Bond under Condition 6(B) or under Condition 6(C), in each case expiring prior
to the Put Date (as defined below) each Bondholder shall have the option (the
"Put Option") to require the Issuer or, failing the Issuer, either Guarantor, to
redeem or, at the option of the Issuer or the relevant Guarantor, as applicable,
purchase (or procure the purchase of) that Bond on the Put Date 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 the
Rating Downgrade, the rating assigned to the Rated Securities by any Rating
Agency (as defined below) is subsequently increased to the Investment Grade
Rating prior to any Negative Certification being given.
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, in the absence
of manifest error, be conclusive and binding on the Trustee, the Issuer, the
Guarantors, the Bondholders and the Couponholders.
(D) Promptly upon the Issuer or either Guarantor becoming aware that a
Put Event has occurred, and in any event not later than 14 days after the
occurrence of a Put Event, the Issuer or the relevant Guarantor 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 14 specifying the nature of the Put
Event, and the procedure for exercising the Put Option.
(E) To exercise the Put Option in respect of his Bond the Bondholder
must deliver such Bond to the specified office of any Paying Agent, on a day
which is a Business Day (as defined in Condition 5) in the City of London and in
the place of such specified office falling within the period (the "Put Period")
commencing on the date the Put Event Notice is given and expiring 45 days
thereafter accompanied by a duly completed and signed notice of exercise in the
form (for the time being current) obtainable from any specified office of any
64
Paying Agent (a "Put Notice") and in which the Bondholder may specify a bank
account complying with the requirements of Condition 5 to which payment is to be
made under this Condition 7. Each Bond must 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 the full
amount 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 5 against presentation and surrender (or, in the case of part payment
only, endorsement) of such missing Coupon at any time before the expiry of 10
years after the Relevant Date (as defined in Condition 8) in respect of the
relevant Bond (whether or not the Coupon would otherwise have become void
pursuant to Condition 9) 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, but 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 5. A Put Notice, once given,
shall be irrevocable. For the purposes of Conditions 1, 9, 10, 11, 13, and 15
and for certain other purposes specified in the Trust Deed, receipts issued
pursuant to this Condition 7 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 such Bond has been
previously redeemed or purchased in accordance with these Terms and Conditions.
8. Taxation
All payments in respect of the Bonds and the Coupons by the Issuer or,
as the case may be, either 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 United Kingdom, or any political sub-division of,
or any authority in, or of the United Kingdom having power to tax, unless the
withholding or deduction of the Taxes is required by law. In that event, the
Issuer or, as the case may be, the Guarantors 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 receivable in respect of the Bonds or, as the case
may be, the 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 United Kingdom other than the
mere holding of the Bond or Coupon; or
(b) presented for payment in the United Kingdom; or
65
(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 or deduction by making
a declaration of non-residence or other similar claim for
exemption to the relevant tax authority.
As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the 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 14.
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 8 or under any undertakings given in addition
to, or in substitution for, this Condition 8 pursuant to the Trust Deed.
9. Prescription
Bonds and Coupons will become void unless presented for payment within
periods of 10 years and five years respectively from the Relevant Date in
respect of the Bonds or, as the case may be, the Coupons, subject to the
provisions of Condition 5.
10. 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), (d), (e), (f), (g), (h) and (i) 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 the Trustee being indemnified by, or on behalf of, Bondholders
to its satisfaction), give notice to the Issuer and the Guarantors 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 7 days or more in the
payment of any principal or the purchase price due in respect
of any Bond pursuant to Condition 7 or 14 days or more in the
payment of any interest due in respect of the Bonds or any of
them; or
66
(b) if the Issuer or NEDL 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 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 30
days (or such longer period as the Trustee may in its absolute
discretion permit) next following the service by the Trustee
on the Issuer or NEDL, as the case may be, of notice requiring
the same to be remedied; or
(c) if (i) any other indebtedness for borrowed money of the
Issuer, NEDL 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, NEDL or any
Principal Subsidiary falls 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, NEDL 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
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 two per cent. of the Consolidated Tangible Net
Worth, 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 NEDL, save for the purposes of amalgamation,
merger, consolidation. reorganisation, 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, reorganisation,
reconstruction or other similar arrangement (i) not involving
or arising out of the insolvency of such Principal Subsidiary
and under which all the surplus assets of such Principal
Subsidiary are transferred to NEDL 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
67
(f) if the Issuer, NEDL or any Principal Subsidiary shall cease
to carry on the whole or substantially the whole of its
business, save in each case for the purposes of
amalgamation, merger, consolidation, reorganisation,
reconstruction or other similar arrangement (i) not
involving or arising out of the insolvency of the Issuer,
NEDL or such Principal Subsidiary and under which all or
substantially all of its assets are transferred to NEDL or
any of its other Subsidiaries 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, NEDL 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 NEDL 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 assumes all the Issuer's
obligations under the Bonds and the Trust Deed as primary
obligor or gives a guarantee in substitution for NEDL in
form and substance acceptable to the Trustee in respect of
the obligations of the Issuer under the Bonds and the Trust
Deed; or
(g) if the Issuer, NEDL 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(1) 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
(h) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Issuer,
NEDL 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 60 days (or such
longer period as the Trustee may in its absolute discretion
permit); or
(i) if the Issuer ceases to be a wholly-owned Subsidiary of NEDL
or if NEDL ceases to have the right to appoint or remove a
majority of the board of directors of the Issuer.
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 may from time to time determine by notice in writing to NEDL.
68
Neither the Issuer, NEDL nor 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 Issuer, NEDL or the relevant Principal
Subsidiary, as the case may be, 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 10.
For the purposes of these Terms and Conditions
(a) a "Principal Subsidiary" at any time shall mean a Subsidiary
of the Issuer or NEDL (not being any Subsidiary of the Issuer
or NEDL whose only indebtedness for borrowed money is Project
Finance Indebtedness):
(A) whose (i) net profits before tax or (ii) gross assets
represent 15 per cent. or more of the consolidated
net profits before tax of NEDL and its Subsidiaries
(the "NEDL Group") or consolidated gross assets of
the NEDL 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 NEDL
Group; or
(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary
of the Issuer or NEDL which immediately prior to such
transfer is a Principal Subsidiary, whereupon the
transferor Subsidiary shall immediately cease to be a
Principal Subsidiary and the transferee Subsidiary
shall immediately become a Principal Subsidiary under
the provisions of this sub-paragraph (B) (but without
prejudice to the provisions of sub-paragraph (A)
above);
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of
the Issuer or NEDL 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 the Guarantors, the Issuer, the
Trustee, the Bondholders and the Couponholders; and
(b) "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 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.
69
11. Enforcement
The Trustee may at any time, at its discretion and without notice, take
such proceedings against the Issuer or either 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 either Guarantor unless the Trustee, having become bound so to
proceed, fails so to do within a reasonable period and such failure shall be
continuing.
12. Substitution
The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of the Issuer (or of any previous substitute under this Condition) as the
principal debtor under the Bonds, the Coupons and the Trust Deed of NEDL or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of NEDL or any Subsidiary of such holding company, subject to (a) the
Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantors (save where NE or, as the case may be, NEDL itself has been
substituted for the Issuer (or any previous substitute) or where NEDL has
transferred the Distribution Licence to the substituted party), (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.
The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of NEDL (or of any previous substitute under this Condition) as guarantor
of the obligations of the Issuer (or of any previous substitute under this
Condition) guaranteed by NEDL under the Bonds, the Coupons and the Trust Deed of
any Subsidiary or holding company (as defined in section 736 of the Companies
Act 1985) of NEDL or any subsidiary of such holding company, subject to (a) the
Distribution Licence having been previously transferred to the substituted
party; (b) the Trustee bring 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.
13. Replacement of Bonds and Coupons
If any Bond or Coupon is lost, stolen, mutilated, defaced or destroyed it may be
replaced at the specified office of the Paying Agent in London, upon payment by
the claimant of the expenses incurred in connection with the replacement and on
such terms as to evidence, indemnity and security as the Issuer may reasonably
require. Mutilated or defaced Bonds or Coupons must be surrendered before
replacements will be issued.
14. Notices
70
Notices to the Bondholders will be valid if published in a leading
English language daily newspaper published in London or such other English
language daily newspaper with general circulation in Europe as the Trustee may
previously approving in writing. Any notice shall be deemed to have been given
on the date of publication or, if so published more than once, on the date of
the first publication. It is expected that publication will normally be made in
the Financial Times. 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 previously approve in writing.
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 14.
15. 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 or
voted thereat, 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 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, either
Guarantor, the Trustee or any other person any indemnification or payment in
respect of any tax consequences of any such exercise upon individual Bondholders
71
or Couponholders except to the extent already provided for in Condition 8 and/or
any undertaking given in addition to, or in substitution for, Condition 8
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 14.
16. 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.
17. 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 (whether
in bearer or registered form) 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 prior written 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.
18. Governing Law
The Trust Deed, the Bonds and the Coupons are governed by, and will be construed
in accordance with, English law.
72
PRINCIPAL PAYING AGENT
Barclays Bank PLC
BGSS Depositary Services
8 Angel Court
Throgmorton Street
London EC2R 7HT
OTHER PAYING AGENT
Banque Internationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
73
SCHEDULE 3
PART I
FORM OF INDIVIDUAL CERTIFICATE FOR ORIGINAL BONDS 2020
On the front: Serial No: Cert No:
ISIN:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
guaranteed as to principal and interest on a joint and several basis by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No.2366942)
and
NORTHERN ELECTRIC DISTRIBUTION LIMITED
(Incorporated with limited liability in England and Wales - No. 2906593)
The Bonds in respect of which this Certificate is issued are in bearer form and
form part of the series designated as specified in the title (the "Bonds") of
Northern Electric Finance plc (the "Issuer") constituted by a Master Trust Deed
dated 16th October, 1995 between the Issuer, Northern Electric plc ("NE" and,
together with Northern Electric Distribution Limited, the "Guarantors") and The
Law Debenture Trust Corporation p.l.c. as the Trustee (the "Trust Deed", which
expression includes all deeds supplemental to such Trust Deed). The Bonds are
subject to, and have the benefit of, the Trust Deed and the Terms and Conditions
(the "Conditions") set out on the reverse hereof.
The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)[l,000/10,000/l00,000] [(One/Ten/One
Hundred)] Thousand pounds sterling on 16th October, 2005 or on such earlier date
as such principal amount may become payable in accordance with the Conditions
and the Trust Deed together with interest thereon and any other moneys payable
in respect of the Bonds in accordance with the Conditions and the Trust Deed.
The Bonds are guaranteed as to principal and interest by the Guarantors on the
terms of the Trust Deed.
This Certificate shall not be valid or become obligatory for any purpose until
signed on behalf of the Issuer and the Guarantor and authenticated by or on
behalf of the Principal Paying Agent.
74
Dated:
In witness whereof the Issuer and NE have caused this Certificate to be signed
in facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
This Certificate is authenticated by or on behalf of the Principal Paying Agent.
By:
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940.]
On the back:
Terms and Conditions
Details of Agents
75
SCHEDULE 3
PART II
FORM OF ORIGINAL GLOBAL BOND 2020
ISIN:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
guaranteed as to principal and interest by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
TEMPORARY GLOBAL BOND CERTIFICATE
The Bonds in respect of which this temporary Global Bond Certificate is issued
are in bearer form and comprise the series of Bonds designated as specified in
the title (the "Bonds") of Northern Electric Finance plc (the "Issuer")
constituted by a Master Trust Deed dated 16th October, 1995 between the Issuer,
Northern Electric plc (the "Guarantor") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed). The Bonds are subject to, and have the benefit
of, the Trust Deed including the Terms and Conditions set out on the reverse
hereof.
The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)100,000,000 (or such lesser or
greater amount as is duly endorsed in the third column of Schedule A to this
Certificate) on 16th October, 2005 or on such earlier date as such principal
amount may become payable in accordance with the Trust Deed together with
interest thereon and any other moneys payable in respect of the Bonds in
accordance with the Trust Deed.
The Bonds are guaranteed as to principal and interest by the Guarantor on the
terms of the Trust Deed.
This temporary Global Bond Certificate is exchangeable for individual
Certificates representing Bonds in bearer form with Coupons attached. The Issuer
hereby irrevocably undertakes to deliver individual Certificates representing
Bonds in exchange for this temporary Global Bond Certificate on and after 26th
November, 1995 (the "Exchange Date").
76
On or after the Exchange Date this temporary Global Bond Certificate may be
exchanged in whole or in part for individual Certificates representing Bonds in
an aggregate principal amount not exceeding the principal amount of this
temporary Global Bond Certificate by the submission of this temporary Global
Bond Certificate to the Principal Paying Agent together with a Certificate from
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office as operator of the Euroclear System ("Euroclear")
substantially to the following effect:
77
CERTIFICATE OF CLEARING SYSTEM
NORTHERN ELECTRIC FINANCE plc
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 (the "Bonds")
Common Code: ISIN:
This is to certify that, based solely on certificates we have received in
writing, by tested telex or by electronic transmission, from member
organisations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organisations") substantially
in the form set out in the temporary Global Bond Certificate representing Bonds
(the form of which is set out in Part II of Schedule 3 to the Master Trust Deed
constituting the Bonds), as of the date hereof [ ] principal amount of the Bonds
(i) is owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States persons"), (ii) is owned by United States persons that
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(l)(v) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Bonds through foreign branches of United States financial
institutions and who hold the Bonds through such United States financial
institutions on the date hereof (and, in either case (a) or (b), each such
United States financial institution has agreed, on its own behalf or through its
agent, that we may advise the Issuer or the Issuer's agent that it will comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by United States or foreign financial institutions for purposes of resale
during the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign
financial institutions described in (iii) above (whether or not also described
in (i) or (ii) above) have certified that they have not acquired the Bonds for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Bonds represented by the temporary Global Bond Certificate
excepted in such certificates and (ii) that as of the date hereof we have not
received any notification from any of our Member Organisations to the effect
that the statements made by such Member Organisation with respect to any portion
of the part submitted herewith for exchange (or, if relevant, exercise of any
rights or collection of any interest) are no longer true and cannot be relied
upon as of the date hereof.
78
We understand that this certificate is required in connection with certain tax
laws of the United States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorise you to produce
this certificate to any interested party in such proceedings.
Dated: *
Yours faithfully,
[Cedel Bank, societe anonyme]
79
or
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels office,
as operator of the Euroclear System]
By:
* To be dated no earlier than the Exchange Date.
Any person appearing in the records maintained by Cedel or Euroclear as entitled
to any interest in Bonds represented by this temporary Global Bond Certificate
shall be entitled to require the exchange of this temporary Global Bond
Certificate for (an) individual Certificate(s) representing such Bonds in bearer
form by delivering or causing to be delivered to Cedel or Euroclear a
certificate in substantially the following form (copies of which certificate
will be available at the office of Cedel in Luxembourg and Euroclear in Brussels
and at the specified office of each of the Paying Agents):
"CERTIFICATE OF CLEARING SYSTEM PARTICIPANT
NORTHERN ELECTRIC FINANCE plc
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 (the "Bonds")
Common Code: ISIN:
To: [Cedel Bank, societe anonyme] [Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System]
This is to certify that, as of the date hereof, and except as set forth below,
the Bonds held by you for our account (i) are owned by persons that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source ("United States
persons"), (ii) are owned by United States persons that are (a) foreign branches
of United States financial institutions (as defined in U.S. Treasury Regulations
Section l.165-12(c)(l)(v)) ("financial institutions") purchasing for their own
account or for resale, or (b) United States persons who acquired the Bonds
through foreign branches of United States financial institutions and who hold
the Bonds through such United States financial institutions on the date hereof
(and, in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise the
Issuer or the Issuer's agent that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
80
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign financial institutions for purposes of resale during the restricted
period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and in addition, if an owner of Bonds is a United States or foreign financial
institution described in (iii) above (whether or not also described in (i) or
(ii) above), this is to certify further that such financial institution has not
acquired the Bonds for purposes of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to that date on
which you intend to submit your certificate relating to the Bonds held by you
for our account in accordance with your documented procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certificate applies as of such date.
This certificate excepts and does not relate to [ ] principal amount of the
Bonds in respect of which we are not able to certify and as to which we
understand exchange and delivery of individual Certificates representing Bonds
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certificate is required in connection with certain tax
laws of the United States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorise you to produce
this certificate to any interested party in such proceeding.
Dated: *
By:
[Name of person giving certificate] as, or as
agent for, the beneficial owner(s) of the
Bonds in respect of which this certificate is issued.
* To be dated no earlier than the fifteenth day prior to the Exchange
Date."
Until the exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds pursuant to the foregoing provisions, no person
as aforesaid shall (except as stated herein) be entitled to receive any payment
by way of principal or interest in respect of the Bonds represented by this
temporary Global Bond Certificate (unless, upon due presentation of this
temporary Global Bond Certificate for exchange, delivery of any individual
81
Certificate representing Bonds shall be improperly withheld or refused) or to
receive (an) individual Certificate(s) representing Bonds which he would
otherwise be entitled to receive.
Upon any exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds the portion of the principal amount represented
by this temporary Global Bond Certificate in respect of which such exchange
shall be effected shall be endorsed by the Principal Paying Agent on the
Schedule of exchanges for individual Certificates hereon, whereupon the
principal amount represented by this temporary Global Bond Certificate shall be
reduced for all purposes by the amount of such portion.
Subject to the second preceding paragraph, no provisions of this temporary
Global Bond Certificate shall alter or impair the obligation of the Issuer to
pay the principal and interest in respect of the Bonds when due in accordance
with the Trust Deed or the obligations of the Guarantor under the Trust Deed.
This temporary Global Bond Certificate is governed by and shall be construed in
accordance with English law.
This temporary Global Bond Certificate shall not be valid or become obligatory
for any purpose until signed on behalf of the Issuer and the Guarantor and
authenticated by or on behalf of the Principal Paying Agent.
Dated:
In witness whereof the Issuer and the Guarantor have caused this temporary
Global Bond Certificate to be signed in facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This temporary Global Bond Certificate is authenticated by or on behalf of the
Principal Paying Agent.
82
By:
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
[NEITHER THE ISSUER NOR THE GUARANTOR HAS BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]
83
Schedule of exchanges for individual Certificates
The principal amount of the Bonds represented by this temporary Global Bond
Certificate has been reduced as a result of the issue of individual Certificates
representing Bonds in respect of a portion of such principal amount in exchange
as follows:
Amount of decrease Principal amount of
in principal amount Bonds represented by
of Bond represented Global Bond Notation made by or
Date of by Global Bond Certificate following on behalf of Principal
exchange Certificate such decrease Paying Agent
84
Schedule of interest paid
Date of payment Amount of interest Notation made
85
SCHEDULE 3
PART III
FORM OF ORIGINAL COUPON 2020
On the front:
ISIN: Serial No: Coupon No:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
guaranteed as to principal and interest on a joint and several basis by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
and
NORTHERN ELECTRIC DISTRIBUTION LIMITED
(Incorporated with limited liability in England and Wales - No. 2906593)
Coupon for [ ]due on 199[6/7/8/9/2000/1/2/3/4/5/6/7/8/9/10/1l/
12/13/14/15/16/17/18/19/20].
This Coupon relates to interest payable on (pound)[1,000/l0,000/l00,000]
[(One/Ten/One Hundred Thousand)] principal amount of the Bonds designated as
specified in the title (the "Bonds") of Northern Electric Finance plc (the
"Issuer") constituted by a Master Trust Deed dated 16th October, 1995 between
the Issuer, Northern Electric plc ("NE" and, together with Northern Electric
Distribution Limited, the "Guarantors") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed).
This Coupon is payable to bearer (subject to the Trust Deed, including the
Conditions endorsed on the Certificate representing the Bonds to which this
Coupon relates, which shall be binding upon the holder of this Coupon whether or
not it is for the time being attached to such Certificate) at the specified
offices of the Paying Agents set out on the reverse hereof (or any further or
other Paying Agents or specified offices duly appointed or nominated from time
to time and notified to the Bondholders).
Such interest is guaranteed by the Guarantors.
86
This Coupon is negotiable separately from the Bonds to which this Coupon
relates.
This Coupon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and authenticated by or on behalf of the Principal
Paying Agent.
Dated:
In witness whereof the Company and NE have caused this Coupon to be signed in
facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This Coupon is authenticated by or on behalf of the Principal Paying Agent
By:
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]
On the back:
Details of Paying Agents
87
SCHEDULE 3
PART IV
FORM OF ORIGINAL TALON 2020
On the front:
NORTHERN ELECTRIC FINANCE plc
(Incorporated with limited liability in England and Wales - No. 3070482)
(pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
guaranteed as to principal and interest on a joint and several basis by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
and
NORTHERN ELECTRIC DISTRIBUTION LIMITED
(Incorporated with limited liability in England and Wales - No. 2906593)
Talon relating to(pound)[1,000/10,000/100,000] principal amount of Bonds
On and after ____________, 200_ further Coupons will be issued at the specified
office of any of the Paying Agents set out on the reverse hereof (and/or any
other or further Paying Agents and/or specified offices as may from time to time
be duly appointed and notified to the Bondholders) upon production and surrender
of this Talon.
If the Bond to which this Talon appertains shall become due and payable or shall
have been redeemed or cancelled before the date for presentation of this Talon,
this Talon shall be void and no further Coupons will be issued in respect
thereof.
This Talon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and the Guarantors and authenticated by or on behalf of
the Principal Paying Agent.
Dated:
In witness whereof the Company and NE have caused this Talon to be signed in
facsimile on their respective behalves.
88
Northern Electric Finance plc Northern Electric plc
By: By:
Director Director
By: By:
Director Director
Certificate of Authentication
This Talon is authenticated by or on behalf of the Principal Paying Agent
By:
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(A) OF THE UNITED STATES INTERNAL REVENUE
CODE.
[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]
On the back:
Details of Paying Agents
89
SCHEDULE 4
TERMS AND CONDITIONS OF THE BONDS
The (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 (the "Bonds",
which expression shall in these Terms and Conditions, unless the context
otherwise requires, include any further bonds issued pursuant to Condition 17
and forming a single series with the Bonds) of Northern Electric Finance plc
(the "Issuer") are constituted by a master trust deed dated 16th October, 1995
made between the Issuer, Northern Electric plc ("NE") and The Law Debenture
Trust Corporation plc (the "Trustee", which expression shall include all persons
for the time being the trustee or trustees under the Trust Deed (as defined
below)) as trustee for the holders of the Bonds (the "Bondholders") as modified
and restated by a first supplemental trust deed dated 27th September, 2001 made
between the Issuer, NE, Northern Electric Distribution Limited ("NEDL" and,
together with NE, the "Guarantors" and each a "Guarantor") and the Trustee
(together, the "Trust Deed", which expression shall wherever the context so
admits include any other deed supplemental thereto). The issue of the Bonds was
authorised by a resolution of the board of directors of the Issuer passed on 9th
October, 1995. The giving of the guarantee by NE was authorised by a written
resolution of the board of directors of NE passed on 14th September, 1995
appointing a committee of the board for the purposes of the giving of the
guarantee and by a resolution of such duly appointed committee of the board of
directors of NE passed on 9th October, 1995. The giving of the guarantee by NEDL
was authorised by a written resolution of the board of directors of NEDL passed
on 26th September, 2001. The Bonds are listed on the London Stock Exchange plc
(the "London Stock Exchange"). The statements in these Terms and Conditions
include summaries of, and are subject to, the detailed provisions of and
definitions in the Trust Deed. Copies of the Trust Deed and of an agency
agreement dated 16th October, 1995 (the "Agency Agreement") made between the
Issuer, NE, Barclays Bank PLC, as principal paying agent (the "Principal Paying
Agent", which expression shall include any successor), the other paying agents
named therein (together with the Principal Paying Agent, the "Paying Agents",
which expression shall include any additional or successor paying agents) and
the Trustee 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 Fifth Floor, 100 Wood Street, London
EC2V 7EX and at the specified office of each of the Paying Agents. The
Bondholders and the Couponholders are entitled to the benefit of, and are bound
by, and are deemed to have notice of, all the provisions of the Trust Deed and
the Agency Agreement.
1. Form, Denominations and Title
The Bonds are in bearer form, serially numbered, in the denominations
of (pound)1,000, (pound)10,000and (pound)100,000 each with Coupons and one Talon
for further Coupons (a "Talon") attached on issue. Title to the Bonds and to the
Coupons will pass by delivery. Bonds of one denomination may not be exchanged
for Bonds of another denomination.
The Issuer, each 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 thereof for all
purposes (whether or not the Bond or Coupon shall be overdue and notwithstanding
90
any notice of ownership or writing on the Bond or Coupon or any notice of
previous loss or theft of the Bond or Coupon).
2. Status and Guarantee
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 of the
Issuer, only to the extent permitted by applicable laws relating to creditors'
rights.
The Guarantors have, in the Trust Deed, unconditionally and irrevocably
guaranteed on a joint and several basis the due and punctual payment of the
principal of and interest on the Bonds as and when the same shall become due and
payable together with any additional amounts payable pursuant to Condition 8 and
all other moneys payable under the Trust Deed. The obligations of each Guarantor
under the terms of its guarantee constitute direct, unconditional and, subject
to the provisions of Condition 3, unsecured obligations of such Guarantor and
such obligations rank and will rank pari passu with all other outstanding
unsecured and unsubordinated obligations of the relevant Guarantor, present and
future, but, in the event of insolvency of the relevant Guarantor, only to the
extent permitted by applicable laws relating to creditors' rights.
3. Negative Pledge
So long as any of the Bonds remains outstanding (as defined in the
Trust Deed) each of the Issuer and each Guarantor will ensure that no Relevant
Indebtedness of the Issuer, either Guarantor or any Distribution Subsidiary (as
defined below) or of any other person and no guarantee by the Issuer, either
Guarantor 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, either Guarantor or any Distribution Subsidiary
unless the Issuer or the relevant Guarantor, as the case may be, shall, before
or at the same time as the creation of the Security Interest, take any and all
action necessary to ensure that:
(a) all amounts payable by the Issuer under the Bonds, the Coupons
and the Trust Deed or, as the case may be, the obligations of
the relevant Guarantor under its guarantee referred to in
Condition 2 are secured to the satisfaction of the Trustee
equally and rateably with the Relevant Indebtedness or
guarantee of Relevant Indebtedness, as the case may be, by
such Security Interest; or
(b) 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, as the
case may be, in respect of the obligations of the relevant
Guarantor under its guarantee referred to in Condition 2
either (i) as the Trustee shall in its absolute discretion
91
deem not materially less beneficial to the interests of the
Bondholders or (ii) as shall be approved by an Extraordinary
Resolution (as defined in the Trust Deed) of the Bondholders,
save that the Issuer, either Guarantor 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, either Guarantor 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 in respect of the Bonds, the Coupons and the Trust
Deed or, as the case may be, the obligations of the relevant Guarantor under the
said guarantee as aforesaid) where such Relevant Indebtedness has an initial
maturity falling not earlier than 31st December, 2005 and is of a maximum
aggregate amount outstanding at any time not exceeding the greater of
(pound)20,000,000 and 20 per cent. of the Consolidated Tangible Net Worth (as
defined below).
For the purposes of these Terms and Conditions:
(a) "Consolidated Tangible Net Worth" at any particular time the
aggregate of the amount paid up on NE's issued share capital
and the consolidated distributable and non-distributable
reserves of the Group (as shown in the most recently published
audited consolidated financial statements of the Group),
after:
(i) deducting the total of any debit balance on the
profit and loss account and the book value of any
intangible assets including but not limited to
goodwill; and
(ii) excluding any minority interests in Subsidiary
Undertakings;
but adjusted as may be necessary in respect of any variation
in the paid-up share capital or share premium account of the
Group 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.
A report by the Auditors (as defined in the Trust Deed) as to
the amount of the Consolidated Tangible Net Worth at any given
time shall, in the absence of manifest error, be conclusive
and binding on all parties.
(b) "Distribution Licence" means either the distribution licence
granted to NEDL under section 6(l)(c) of the Electricity Act
1989 as amended by section 30 of the Utilities Act 2000 or the
public electricity supply licence of NE having effect as if it
were a distribution licence granted to NEDL under section
6(1)(c) of the Electricity Act 1989 as amended by section 30
of the Utilities Act 2000, as appropriate.
92
(c) "Distribution Subsidiary" means any Subsidiary of NE which
holds a Distribution Licence granted under Section 6(1)(c) of
the Electricity Act 1989 as amended by the Utilities Act 2000;
(d) "Excluded Subsidiary" means any Subsidiary of the Issuer or
either 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; and
(iii) which has been designated as such by the Issuer or
either Guarantor by written notice to the Trustee,
provided that the Issuer or either Guarantor, as the
case may be, 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 NE, NEDL, the Issuer and the Subsidiary
Undertakings of NE;
(f) "Project Finance Indebtedness" means any present or future
indebtedness (whether being principal, premium, interest or
other amounts) to finance a project:
(i) which is incurred by an Excluded Subsidiary; or
(ii) in respect of which recourse to any member of the
Group for the repayment or payment of any sum
relating to such indebtedness is limited to:
(1) the assets of a single purpose company
(other than a Distribution Subsidiary) the
principal assets and business of which are
constituted by such project and which was
established for the purpose of incurring
such indebtedness; or
(2) the assets of the project and the rights,
revenues and insurance proceeds derived
therefrom or related thereto,
with no recourse to any other assets of the Group (other than
those of an Excluded Subsidiary);
93
(g) "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 not in
any event include Project Finance Indebtedness;
(h) "Subsidiary" means a subsidiary within the meaning of Section
736 of the Companies Act 1985;
(i) "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 NE, 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
so included or consolidated if it had become so on or before
that date); and
(j) any reference to an obligation being guaranteed shall include
a reference to an indemnity being given in respect of the
obligation.
4. Interest
The Bonds bear interest from (and including) 16th October, 1995 at the
rate of 8.875 per cent. per annum, payable annually in arrear on 16th October in
each year (each an "Interest Payment Date").
Each Bond will cease to bear interest from its due date for redemption
unless, upon due 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 and, in the case of an incomplete month,
the number of days elapsed.
5. Payments and exchange of Talons
Payments of principal in respect of each Bond will only be made against
presentation and surrender (or, in the case of part payment only, endorsement)
of the relevant Bond at the specified office of any of the Paying Agents.
Payments of interest due on the Bonds 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 at the specified office of any of the
Paying Agents. Each such payment will be made at the specified office of any
Paying Agent, at the option of the holder, by sterling cheque drawn on a branch
94
of, or by transfer to a sterling account maintained by the payee with, a bank in
the City of London, subject in all cases to any applicable fiscal or other laws
and regulations, but without prejudice to the provisions of Condition 8.
Each Bond must be presented for payment together with all unmatured
Coupons appertaining thereto failing which the full amount of any missing
unmatured Coupon (or, in the case of payment not being made in full, that
proportion of the full amount of the missing unmatured Coupons which the amount
so paid bears to the total amount due) appertaining thereto 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 such missing Coupon at any time before the
expiry of 10 years after the Relevant Date (as defined in Condition 8) in
respect of the relevant Bond (whether or not such Coupon would otherwise have
become void pursuant to Condition 9), or, if later, five years after the date on
which such 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 9):
(a) is or falls after the relevant due date but, if the due date
is not or was not a Business Day in the City of London, is or
falls after the next following such Business Day; and
(b) 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 the City of London as referred to above, in the
City of London.
"Business Day" means, in relation to any place, a day (other than a
Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in that place.
When making payments to Bondholders or Couponholders, fractions of one
penny will be rounded down to the nearest whole penny.
On and after the Interest Payment Date on which the final Coupon
comprised in any Coupon sheet relating to a Bond matures, the Talon comprised in
the Coupon Sheet relating to a Bond may be surrendered at the specified office
of any Paying Agent in exchange for a further Coupon sheet (including any
appropriate further Talon), subject to the provisions of Condition 9. Each Talon
shall, for the purposes of these Terms and Conditions, be deemed to mature on
the Interest Payment Date on which the final Coupon comprised in the relative
Coupon sheet relating to the relevant Bond matures.
The names of the initial Paying Agents and their initial 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
95
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
previously approved in writing by the Trustee, one of which, so long as the
Bonds are listed on the London Stock Exchange, shall be London or such other
place as the London Stock Exchange may approve and one of which shall be outside
the United Kingdom. Notice of any such termination or appointment and of any
changes in the specified offices of the Paying Agents will be given to the
Bondholders promptly by the Issuer in accordance with Condition 14.
6. Redemption and Purchase
(A) Unless previously redeemed or purchased and cancelled as
provided below, the Issuer will redeem the Bonds at their principal amount on
16th October, 2020.
(B) The Issuer may, at any time, having given notice to the
Bondholders in accordance with this Condition 6(B) (which notice shall be
irrevocable), redeem the Bonds in whole or in part (but if in part, in integral
multiples of (pound)l,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) their principal amount; 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 8 3/4
per cent. Treasury Stock 2017 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 Barclays Bank PLC (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 1, 1978, page 18 or on such other basis as the Trustee may previously
approve in writing.
In the case of a redemption of all of the Bonds pursuant to this
Condition 6(B), notice will be given to the Bondholders by the Issuer in
accordance with Condition 14 once not less than 30 nor more than 60 days before
the date fixed for redemption and will specify the date fixed for redemption and
the redemption price.
96
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 previously
approve in writing and in such manner as the Trustee shall deem to be
appropriate and fair without involving any part of a Bond, not more than 65 days
before the date fixed for redemption. In the case of a partial redemption of the
Bonds pursuant to this Condition 6(B), notice will be so given to the
Bondholders by the Issuer in accordance with Condition 14 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, the aggregate principal amount of
the Bonds to be redeemed, the serial numbers of Bonds previously called (in
whole or in part) for redemption and not presented for payment and the aggregate
principal amount of Bonds which will be outstanding after the partial
redemption. In addition the second such notice will specify the serial numbers
of the Bonds called for redemption.
Upon the expiry of any such notice as is referred to in this Condition
6(B), the Issuer shall be bound to redeem the Bonds to which the notice refers
at the relevant redemption price 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 United Kingdom or any political sub-division of, or any
authority in, or of, the United Kingdom having power to tax, or any change in
the application or official interpretation of such laws or regulations, which
change or amendment becomes effective after 10th October, 1995, the Issuer has
or will become obliged to pay additional amounts as provided or referred to in
Condition 8 (and such amendment or change has been evidenced by the delivery by
the Issuer to the Trustee (who shall, in the absence of manifest error, 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 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)), 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 14
(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 6(B) prior to any notice being given under this Condition 6(C)) but
not some only, at their principal amount together with interest (if any) accrued
to (but excluding) 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
would be required to pay such additional amounts were a payment in respect of
the Bonds then due.
Upon expiry of any such notice as is referred to in this Condition 6(C)
(and subject as provided above), the Issuer shall be bound to redeem all the
Bonds at their principal amount together with interest accrued to (but
excluding) the redemption date.
(D) The Issuer, either Guarantor or any of their respective
Subsidiaries may at any time purchase Bonds together with unmatured Coupons and
97
Talons in any manner and at any price in the open market or by private treaty.
If purchases are made by tender, tenders must be available to all Bondholders
alike. Bonds purchased by the Issuer, either Guarantor or any of their
respective Subsidiaries may be held or reissued or resold or surrendered for
cancellation.
(E) All Bonds which are redeemed will forthwith be cancelled (together
with all relative unmatured Coupons and Talons attached to or surrendered with
the Bonds) and may not be reissued or resold.
(F) While any Bonds are held by the Issuer, either Guarantor or any of
their respective Subsidiaries, such Bonds shall not entitle the holder to vote
at, or to be counted in the quorum for, any meeting of Bondholders and, for the
purposes of the provisions of the Trust Deed concerning meetings of Bondholders,
will not be regarded as being in issue.
7. Redemption at the Option of Bondholders
(A) For the purposes of these Terms and Conditions:
(i) "independent financial adviser" means a financial
adviser appointed by NEDL and previously approved in
writing by the Trustee (such approval not to be
unreasonably withheld or delayed) or, if NEDL shall
not have appointed such an adviser within 21 days of
becoming aware of the occurrence of a Restructuring
Event and the Trustee is indemnified to its
satisfaction against the costs of such adviser,
appointed by the Trustee following consultation with
NEDL;
(ii) "Investment Grade Rating" means a rating of at least
investment grade BBB- in the case of Standard &
Poor's Rating Services, a division of the McGraw-Hill
Companies Inc. and Baa3 in the case of Moody's
Investors Services Limited or their respective
equivalents for the time being;
(iii) "Negative Certification" means a certificate given in
writing to the Trustee by an independent financial
adviser that a Restructuring Event will be or is, in
its opinion, materially prejudicial to the interests
of the Bondholders;
(iv) A "Negative Rating Event" shall be deemed to
have occurred if (X) NEDL 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 NEDL (or of any Subsidiary of
NEDL (including, without limitation, the Issuer) and
which is guaranteed on an unsecured and
unsubordinated basis by NEDL) having an
initial maturity of five years or more from a Rating
Agency or (Y) if NEDL does so seek and use such
endeavours but it is unable, as a result of such
Restructuring Event, to obtain the Investment
Grade Rating (and, in this definition, "seek"
shall include procuring the relevant Subsidiary to
seek);
98
(v) A "Put Event" occurs on the date of the last to occur
of all of the following (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;
(vi) "Rating Agency" means Standard & Poor's Rating
Services, a Division of the McGraw-Hill Companies
Inc. or any of its subsidiaries and their successors
or Moody's Investors Service Limited or any of its
subsidiaries and their successors or any rating
agency substituted for either of them (or any
permitted substitute of them) by NEDL from time to
time with the prior written approval of the Trustee
(such approval not to be unreasonably withheld or
delayed);
(vii) Following a Restructuring Event, a "Rating Downgrade"
shall be deemed to have occurred in respect of that
Restructuring Event if the then current rating
assigned to the Rated Securities by any Rating Agency
(whether provided by a Rating Agency at the
invitation of NEDL or by its own volition) is
withdrawn or reduced from the Investment Grade Rating
or, if the Rating Agency shall then have already
rated the Rated Securities below the Investment Grade
Rating, the rating is lowered one full rating
category;
(viii) "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 NEDL (or of any Subsidiary of
NEDL (including, without limitation, the Issuer) and
which is guaranteed on an unsecured and
unsubordinated basis by NEDL) having an initial
maturity of five years or more which is rated by a
Rating Agency;
(ix) "Restructuring Event" means the occurrence of any one
or more of the following events:
(A) (aa) The Gas and Electricity Markets
Authority which expression shall in these
Terms and Conditions include any other
competent authority) (or any successor)
giving the Issuer written notice of
revocation of the Distribution Licence (bb)
NEDL 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 circumstances
where a licence or licences on
substantially no less favourable terms
is or are granted to NEDL or a
wholly-owned Subsidiary of NEDL (the
"Relevant Subsidiary") and in the case of
such Relevant Subsidiary at the time of such
grant it either executes in favour of the
99
Trustee an unconditional and irrevocable
guarantee in respect of the Bonds in such
form as the Trustee may previously approve
in writing (such approval not to be
unreasonably withheld or delayed)
or becomes the principal debtor under the
Bonds in accordance with Condition 12; 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 the Effective Date (as defined in the
First Supplemental Trust Deed) unless the
modified terms and conditions are certified
by two directors of NEDL to be not
materially less favourable to the business
of NEDL; or
(C) any legislation (whether primary or
subordinate) is enacted which removes,
qualifies or amends (other than an amendment
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 3Aof the Electricity Act 1989 (as
amended) as in force on the Effective Date,
unless two directors of NEDL certify that
such removal, qualification or amendment
does not have a materially adverse effect
on the financial condition of NEDL.
(x) "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 NEDL shall seek to
obtain a rating pursuant to Condition
7(A)(iv) 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 NEDL in respect of that Restructuring
Event; and
(xi) 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 made as provided in Condition 7 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 circumstances comprised in
100
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 in
accordance with the Trust Deed to the contrary the Trustee may assume that no
Restructuring Event, Negative Rating Event or other such event has occurred.
(B) If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and prior to the commencement of or during the
Restructuring Period an independent financial adviser 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 7 shall cease to have any further effect
in relation to such Restructuring Event.
(C) If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and (subject to Condition 7(B)):
(X) within the Restructuring Period, either:
(i) if at the time such Restructuring Event
occurs there are Rated Securities a Rating
Downgrade in respect of such Restructuring
Event also occurs; or
(ii) if at such time there are no Rated
Securities, a Negative Rating Event also
occurs; and
(Y) an independent financial adviser shall have given a
Negative Certification,
then, unless at any time the Issuer shall have given a notice in respect of his
Bond under Condition 6(B) or under Condition 6(C), in each case expiring prior
to the Put Date (as defined below) each Bondholder shall have the option (the
"Put Option") to require the Issuer or, failing the Issuer, either Guarantor, to
redeem or, at the option of the Issuer or the relevant Guarantor, as applicable,
purchase (or procure the purchase of) that Bond on the Put Date 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 the
Rating Downgrade, the rating assigned to the Rated Securities by any Rating
Agency (as defined below) is subsequently increased to the Investment Grade
Rating prior to any Negative Certification being given.
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, in the absence
101
of manifest error, be conclusive and binding on the Trustee, the Issuer, the
Guarantors, the Bondholders and the Couponholders.
(D) Promptly upon the Issuer or either Guarantor becoming aware that
a Put Event has occurred, and in any event not later than 14 days after the
occurrence of a Put Event, the Issuer or the relevant Guarantor 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 14 specifying the nature of the Put
Event, and the procedure for exercising the Put Option.
(E) To exercise the Put Option in respect of his Bond the Bondholder
must deliver such Bond to the specified office of any Paying Agent, on a day
which is a Business Day (as defined in Condition 5) in the City of London and in
the place of such specified office falling within the period (the "Put Period")
commencing on the date the Put Event Notice is given and expiring 45 days
thereafter accompanied by a duly completed and signed notice of exercise in the
form (for the time being current) obtainable from any specified office of any
Paying Agent (a "Put Notice") and in which the Bondholder may specify a bank
account complying with the requirements of Condition 5 to which payment is to be
made under this Condition 7. Each Bond must 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 the full
amount 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 5 against presentation and surrender (or, in the case of part payment
only, endorsement) of such missing Coupon at any time before the expiry of 10
years after the Relevant Date (as defined in Condition 8) in respect of the
relevant Bond (whether or not the Coupon would otherwise have become void
pursuant to Condition 9) 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, but 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 5. A Put Notice, once given,
shall be irrevocable. For the purposes of Conditions 1, 9, 10, 11, 13, and 15
and for certain other purposes specified in the Trust Deed, receipts issued
pursuant to this Condition 7 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 such Bond has been
previously redeemed or purchased in accordance with these Terms and Conditions.
8. Taxation
All payments in respect of the Bonds and the Coupons by the Issuer or,
as the case may be, either 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
102
levied by or on behalf of the United Kingdom, or any political sub-division of,
or any authority in, or of the United Kingdom having power to tax, unless the
withholding or deduction of the Taxes is required by law. In that event, the
Issuer or, as the case may be, the Guarantors 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 receivable in respect of the Bonds or, as the case
may be, the 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 United Kingdom other than the
mere holding of the Bond or Coupon; or
(b) presented for payment in the United Kingdom; 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 or deduction by making
a declaration of non-residence or other similar claim for
exemption to the relevant tax authority.
As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the 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 14.
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 8 or under any undertakings given in addition
to, or in substitution for, this Condition 8 pursuant to the Trust Deed.
9. Prescription
Bonds and Coupons (which for this purpose shall not include Talons)
will become void unless presented for payment within periods of 10 years and
five years respectively from the Relevant Date in respect of the Bonds or, as
the case may be, the Coupons, subject to the provisions of Condition 5. There
shall not be included in any Coupon sheet issued upon exchange of a Talon any
Coupon which would be void upon issue under this Condition or Condition 5.
10. Events of Default
103
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), (d), (e), (f), (g), (h) and (i) 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 the Trustee being indemnified by, or on behalf of, Bondholders
to its satisfaction), give notice to the Issuer and the Guarantors 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 7 days or more in the
payment of any principal or the purchase price due in respect
of any Bond pursuant to Condition 7 or 14 days or more in the
payment of any interest due in respect of the Bonds or any of
them; or
(b) if the Issuer or NEDL 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 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 30
days (or such longer period as the Trustee may in its absolute
discretion permit) next following the service by the Trustee
on the Issuer or NEDL, as the case may be, of notice requiring
the same to be remedied; or
(c) if (i) any other indebtedness for borrowed money of the
Issuer, NEDL 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, NEDL or any
Principal Subsidiary falls 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, NIEDL 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
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
104
Trustee) or two per cent. of the Consolidated Tangible Net
Worth, 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 NEDL, save for the purposes of amalgamation,
merger, consolidation. reorganisation, 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, reorganisation,
reconstruction or other similar arrangement (i) not involving
or arising out of the insolvency of such Principal Subsidiary
and under which all the surplus assets of such Principal
Subsidiary are transferred to NIEDL 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, NEDL or any Principal Subsidiary shall cease
to carry on the whole or substantially the whole of its
business, save in each case for the purposes of
amalgamation, merger, consolidation, reorganisation,
reconstruction or other similar arrangement (i) not
involving or arising out of the insolvency of the Issuer,
NEDL or such Principal Subsidiary and under which all or
substantially all of its assets are transferred to NEDL or
any of its other Subsidiaries 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, NEDL 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 NEDL 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 assumes all the Issuer's
obligations under the Bonds and the Trust Deed as primary
obligor or gives a guarantee in substitution for NEDE in
form and substance acceptable to the Trustee in respect of
the obligations of the Issuer under the Bonds and the Trust
Deed; or
(g) if the Issuer, NEDL 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(1) 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
105
(h) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Issuer,
NEDL 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 60 days (or such
longer period as the Trustee may in its absolute discretion
permit); or
(i) if the Issuer ceases to be a wholly-owned Subsidiary of NEDL
or if NEDL ceases to have the right to appoint or remove a
majority of the board of directors of the Issuer.
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 may from time to time determine by notice in writing to NEDL.
Neither the Issuer, NEDL nor 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 Issuer, NEDL or the relevant Principal
Subsidiary, as the case may be, 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 10.
For the purposes of these Terms and Conditions:
(a) a "Principal Subsidiary" at any time shall mean a Subsidiary
of the Issuer or NEDL (not being any Subsidiary of the Issuer
or NEDL whose only indebtedness for borrowed money is Project
Finance Indebtedness):
(A) whose (i) net profits before tax or (ii) gross assets
represent 15 per cent. or more of the consolidated
net profits before tax of NEDL and its Subsidiaries
(the "NEDL Group") or consolidated gross assets of
the NEDL 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 NEDL
Group; or
(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary
of the Issuer or NEDL which immediately prior to such
transfer is a Principal Subsidiary, whereupon the
transferor Subsidiary shall immediately cease to be a
Principal Subsidiary and the transferee Subsidiary
shall immediately become a Principal Subsidiary under
106
the provisions of this sub-paragraph (B) (but without
prejudice to the provisions of sub-paragraph (A)
above);
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of
the Issuer or NEDL 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 the Guarantors, the Issuer, the
Trustee, the Bondholders and the Couponholders; and
(b) "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 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.
11. Enforcement
The Trustee may at any time, at its discretion and without notice, take
such proceedings against the Issuer or either 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 either Guarantor unless the Trustee, having become bound so to
proceed, fails so to do within a reasonable period and such failure shall be
continuing.
12. Substitution
The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of the Issuer (or of any previous substitute under this Condition) as the
principal debtor under the Bonds, the Coupons and the Trust Deed of NEDL or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of NEDL or any Subsidiary of such holding company, subject to (a) the
Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantors (save where NE or, as the case may be, NEDL itself has been
substituted for the Issuer (or any previous substitute) or where NEDL has
transferred the Distribution Licence to the substituted party), (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.
107
The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of NEDL (or of any previous substitute under this Condition) as guarantor
of the obligations of the Issuer (or of any previous substitute under this
Condition) guaranteed by NEDL under the Bonds, the Coupons and the Trust Deed of
any Subsidiary or holding company (as defined in section 736 of the Companies
Act 1985) of NEDL or any subsidiary of such holding company, subject to (a) the
Distribution Licence having been previously transferred to the substituted
party; (b) the Trustee bring 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.
13. Replacement of Bonds and Coupons
If any Bond or Coupon is lost, stolen, mutilated, defaced or destroyed
it may be replaced at the specified office of the Paying Agent in London, upon
payment by the claimant of the expenses incurred in connection with the
replacement and on such terms as to evidence, indemnity and security as the
Issuer may reasonably require. Mutilated or defaced Bonds or Coupons must be
surrendered before replacements will be issued.
14. Notices
Notices to the Bondholders will be valid if published in a leading
English language daily newspaper published in London or such other English
language daily newspaper with general circulation in Europe as the Trustee may
previously approve in writing. Any notice shall be deemed to have been given on
the date of publication or, if so published more than once, on the date of the
first publication. It is expected that publication will normally be made in the
Financial Times. 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 previously approve in writing.
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 14.
15. 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
108
binding on all Bondholders, whether or not they are present at the meeting or
voted thereat, 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 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, either
Guarantor, 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 8 and/or
any undertaking given in addition to, or in substitution for, Condition 8
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 14.
16. 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.
17. 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 (whether
in bearer or registered form) 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 prior written consent of the Trustee), be constituted by a
109
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.
18. Governing Law
The Trust Deed, the Bonds and the Coupons are governed by, and will be
construed in accordance with, English law.
110
PRINCIPAL PAYING AGENT
Barclays Bank PLC
BGSS Depositary Services
8 Angel Court
Throgmorton Street
London EC2R 7HT
OTHER PAYING AGENT
Banque Internationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
111
SCHEDULE 5
PROVISIONS FOR MEETINGS OF BONDHOLDERS
1. The following expressions shall have the following meanings:
"voting certificate" means a certificate in the English language issued
by a Paying Agent and dated in which it is stated:
(a) that on that date Bonds (not being Bonds in respect of which a
block voting instruction has been issued and is outstanding in
respect of the meeting specified in such voting certificate or
any adjournment of such meeting) bearing specified serial
numbers were deposited with such Paying Agent (or to its order
at a bank or other depositary) and that such Bonds will not be
released until the earlier of:
(i) the conclusion of the meeting specified in such
certificate or any adjournment of it whichever is the
later; and
(ii) the surrender of the certificate to the Paying Agent
which issued it; and
(b) that its bearer is entitled to attend and vote at such meeting
or any adjournment of it in respect of the Bonds represented
by such certificate;
"block voting instruction" means a document in the English language
issued by a Paying Agent and dated in which:
(a) it is certified that Bonds (not being Bonds in respect of
which a voting certificate has been issued and is outstanding
in respect of the meeting specified in such block voting
instruction or any adjournment of it) have been deposited with
such Paying Agent (or to its order at a bank or other
depositary) and that such Bonds will not be released until the
earlier of:
(i) the conclusion of the meeting specified in such
document or any adjournment of it whichever is the
later; and
(ii) the surrender, not less than 48 hours before the time
fixed for such meeting or adjournment, of the receipt
for each such deposited Bond which is to be released
to the Paying Agent which issued it and the
notification of such surrender by such Paying Agent
to the Company;
(b) it is certified that each depositor of such Bonds or a duly
authorised agent on his behalf has instructed such Paying
Agent that the votes attributable to his Bonds so deposited
should be cast in a particular way in relation to each
resolution to be put to such meeting or any adjournment of it
112
and that all such instructions are, during the period of 48
hours before the time fixed for such meeting or adjourned
meeting, neither revocable nor subject to amendment;
(c) the total number and the serial numbers of the Bonds so
deposited are listed, distinguishing with regard to each such
resolution between those in respect of which instructions have
been so given (i) to vote for, and (ii) to vote against, the
resolution; and
(d) any person named in such document (a "proxy") is authorised
and instructed by such Paying Agent to vote in respect of the
Bonds so listed in accordance with the instructions referred
to in sub-paragraph (c) above as set out in such document.
2. A holder of a Bond may obtain a voting certificate from a Paying
Agent or require a Paying Agent to issue a block voting instruction
by depositing his Bond with such Paying Agent not later than 48
hours before the time fixed for any meeting. Voting certificates and
block voting instructions shall be valid until the relevant Bonds are
released pursuant to paragraph 1 of this Schedule and until then the
holder of any such voting certificate or (as the case may be) the
proxy named in any such block voting instruction shall, for all
purposes in connection with any meeting or proposed meeting of
Bondholders, be deemed to be the holder of the Bonds to which such
voting certificate or block voting instruction relates and the Paying
Agent with which (or to the order of which) such Bonds have been
deposited shall be deemed for such purposes not to be the holder of
those Bonds.
3. Each of the Company and the Trustee at any time may, and the Trustee
(subject to its being indemnified to its satisfaction against all costs
and expenses thereby occasioned) upon a request in writing of
Bondholders holding not less than one-tenth in principal amount of the
Bonds for the time being outstanding shall, convene a meeting of
Bondholders. Whenever any such party is about to convene any such
meeting it shall forthwith give notice in writing to the other parties
of the day, time and place of the meeting and of the nature of the
business to be transacted at it. Every such meeting shall be held at
such time and place as the Trustee may previously approve in writing.
4. At least 21 days' notice (exclusive of the day on which the notice is
given and of the day on which the meeting is held) specifying the day,
time and place of meeting shall be given to the Bondholders. A copy of
the notice shall in all cases be given by the party convening the
meeting to the other parties. Such notice shall also specify, unless in
any particular case the Trustee otherwise agrees, the nature of the
resolutions to be proposed and shall include a statement to the effect
that Bonds may be deposited with (or to the order of) any Paying Agent
for the purpose of obtaining voting certificates or appointing proxies
not later than 48 hours before the time fixed for the meeting.
5. A person (who may, but need not, be a Bondholder) nominated in writing
by the Trustee may take the chair at every such meeting but if no such
nomination is made or if at any meeting the person nominated shall not
be present within 15 minutes after the time fixed for the meeting the
113
Bondholders present shall choose one of their number to be chairman,
failing which the Company or, failing which, a Guarantor may appoint a
chairman. The chairman of an adjourned meeting need not be the same
person as was chairman of the original meeting.
6. At any such meeting any one or more persons present in person holding
Bonds or voting certificates or being proxies and holding or
representing in the aggregate not less than one- tenth in principal
amount of the Bonds for the time being outstanding shall (except for
the purpose of passing an Extraordinary Resolution) form a quorum for
the transaction of business and no business (other than the choosing
of a chairman) shall be transacted at any meeting unless the requisite
quorum be present at the commencement of business. The quorum at any
such meeting for passing an Extraordinary Resolution shall (subject as
provided below) be one or more persons present in person holding Bonds
or voting certificates or being proxies and holding or representing in
the aggregate a clear majority in principal amount of the Bonds for
the time being outstanding, provided that at any meeting the business
of which includes the consideration of an Extraordinary Resolution to
effect any of the matters specified in the proviso to paragraph 19 of
this Schedule the quorum shall be one or more persons present in
person holding Bonds or voting certificates or being proxies and
holding or representing in the aggregate not less than two-thirds in
principal amount of the Bonds for the time being outstanding.
7. If within 15 minutes from the time fixed for any such meeting a quorum
is not present the meeting shall, if convened upon the requisition of
Bondholders, be dissolved. In any other case it shall stand adjourned
(unless the Company and the Trustee agree that it be dissolved) for
such period, not being less than 14 days nor more than 42 days, and to
such place, as may be decided by the chairman. At such adjourned
meeting one or more persons present in person holding Bonds or voting
certificates or being proxies (whatever the principal amount of the
Bonds so held or represented) shall form a quorum and may pass any
resolution and decide upon all matters which could properly have been
dealt with at the meeting from which the adjournment took place had a
quorum been present at such meeting, provided that at any adjourned
meeting the business of which includes the consideration of an
Extraordinary Resolution to effect any of the modifications specified
in the proviso to paragraph 19 the quorum shall be one or more persons
present in person holding Bonds or voting certificates or being
proxies and holding or representing in the aggregate not less than
one-third in principal amount of the Bonds for the time being
outstanding.
8. The chairman may with the consent of (and shall if directed by) any
meeting adjourn such meeting from time to time and from place to place
but no business shall be transacted at any adjourned meeting except
business which might lawfully have been transacted at the meeting from
which the adjournment took place.
9. At least 10 days' notice of any meeting adjourned through want of a
quorum shall be given in the same manner as for an original meeting and
such notice shall state the quorum required at such adjourned meeting.
It shall not, however, otherwise be necessary to give any notice of an
adjourned meeting.
114
10. Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in case of equality of votes the
chairman shall both on a show of hands and on a poll have a casting
vote in addition to the vote or votes (if any) which he may have as a
Bondholder or as a holder of a voting certificate or as a proxy.
11. At any meeting, unless a poll is (before or on the declaration of the
result of the show of hands) demanded by the chairman, the Company, a
Guarantor, the Trustee or by one or more persons holding one or more
Bonds or voting certificates or being proxies and holding or
representing in the aggregate not less than one-fiftieth in principal
amount of the Bonds for the time being outstanding, a declaration by
the chairman that a resolution has been carried or carried by a
particular majority or lost or not carried by any particular majority
shall be conclusive evidence of the fact without proof of the number or
proportion of the votes recorded in favour of or against such
resolution.
12. If at any meeting a poll is so demanded, it shall be taken in such
manner and (subject as provided below) either at once or after such an
adjournment as the chairman directs and the result of such poll shall
be deemed to be the resolution of the meeting at which the poll was
demanded as at the date of the taking of the poll. The demand for a
poll shall not prevent the continuation of the meeting for the
transaction of any business other than the question on which the poll
has been demanded.
13. Any poll demanded at any meeting on the election of a chairman or on
any question of adjournment shall be taken at the meeting without
adjournment.
14. The Company, each Guarantor and the Trustee (through their respective
representatives) and their respective financial and legal advisers may
attend and speak at any meeting of Bondholders. No one else may attend
at any meeting of Bondholders or join with others in requesting the
convening of such a meeting unless he is the holder of a Bond or a
voting certificate or is a proxy.
15. At any meeting on a show of hands every person who is present in person
and who produces a Certificate in respect of a Bond or a voting
certificate shall have one vote and on a poll every such person and
every person present in person who is a proxy shall have one vote in
respect of each such principal amount as is equal to the lowest common
denomination of the Bonds forming a particular series. Without
prejudice to the obligations of proxies named in any block voting
instruction, any person entitled to more than one vote need not use all
his votes or cast all the votes to which he is entitled in the same
way.
16. The proxy named in any block voting instruction need not be a
Bondholder.
17. Each block voting instruction shall be deposited at the registered
office of the Company, or at such other place as the Trustee shall
designate or approve, not less than 24 hours before the time appointed
for holding the meeting or adjourned meeting at which the proxy named
in the block voting instruction proposes to vote and in default the
115
block voting instructions shall not be treated as valid unless the
chairman of the meeting decides otherwise before such meeting or
adjourned meeting proceeds to business. A notarially certified copy of
each such block voting instruction and, if required by the Trustee,
proof satisfactory to the Trustee of its due execution on behalf of
the relevant Paying Agent shall be produced by the proxy at the
meeting or adjourned meeting but the Trustee shall not thereby be
obliged to investigate or be concerned with the validity of, or the
authority of, the proxy named in any such block voting instruction.
18. Any vote given in accordance with the terms of a block voting
instruction shall be valid even if the block voting instruction or any
of the Bondholders instructions pursuant to which it was executed has
been previously revoked or amended, provided that no intimation in
writing of such revocation or amendment shall have been received from
the relevant Paying Agent by the Company or the Trustee at its
registered office or by the chairman of the meeting in each case not
less than 24 hours before the time fixed for the meeting or adjourned
meeting at which the block voting instruction is used.
19. A meeting of Bondholders shall, subject to the Conditions, in addition
to the powers given above, but without prejudice to any powers
conferred on other persons by these presents, have power exercisable by
Extraordinary Resolution:
(a) to sanction any proposal by the Company or either Guarantor
for any modification, abrogation, variation or compromise of,
or arrangement in respect of, the rights of the Bondholders
and/or the Couponholders against the Company or either
Guarantor or against any of its property whether such rights
shall arise under these presents or otherwise;
(b) to sanction any scheme or proposal for the exchange,
substitution or sale of the Bonds for, or the conversion of
the Bonds into, or the cancellation of the Bonds in
consideration of, shares, stock, notes, bonds, debentures,
debenture stock and/or other obligations and/or securities of
the Company, either Guarantor or any other body corporate
formed or to be formed, or for or into or in consideration of
cash, or partly for or into or in consideration of such
shares, stock, notes, bonds, debentures, debenture stock
and/or other obligations and/or securities as aforesaid and
partly for or into or in consideration of cash;
(c) to assent to any modification of these presents which shall be
proposed by the Company, either Guarantor or the Trustee;
(d) to authorise anyone to concur in and do all such things as may
be necessary to carry out and give effect to any Extraordinary
Resolution;
(e) to give any authority, direction or sanction which under these
presents is required to be given by Extraordinary Resolution;
(f) to appoint any persons (whether Bondholders or not) as a
committee or committees to represent the interests of the
116
Bondholders and to confer upon such committee or committees
any powers or discretions which the Bondholders could
themselves exercise by Extraordinary Resolution;
(g) to approve a person proposed to be appointed as a new Trustee
and to remove any Trustee;
(h) to approve the substitution of any entity for the Company (or
any previous substitute) as principal debtor under these
presents;
(i) to approve the substitution of any entity for either Guarantor
(or any previous substitute) as guarantor under these
presents; and
(j) to discharge or exonerate the Trustee from any liability in
respect of any act or omission for which it may become
responsible under these presents,
provided that the special quorum provisions contained in the proviso to
paragraph 6 of this Schedule and, in the case of an adjourned meeting,
in the proviso to paragraph 7 of this Schedule shall apply in relation
to any Extraordinary Resolution for the purpose of paragraph 19(b) or
(h) of this Schedule or for the purpose of making any modification to
the provisions contained in these presents which would have the effect
of:
(i) postponing the maturity of the Bonds or the dates on which
interest is payable in respect of the Bonds; or
(ii) modifying the status of the Bonds; or
(iii) reducing or cancelling the principal amount of, or interest
on, or other amounts in respect of or reducing the rate of
interest on, the Bonds; or
(iv) changing the currency of payment of the Bonds; or
(v) modifying the provisions contained in this Schedule concerning
the quorum required at any meeting of Bondholders or the
majority required to pass an Extraordinary Resolution; or
(vi) amending this proviso.
20. An Extraordinary Resolution passed at a meeting of Bondholders duly
convened and held in accordance with these presents shall be binding
upon all the Bondholders, whether or not present at such meeting and
whether or not they vote in favour, and upon all the Couponholders and
each of the Bondholders and Couponholders shall be bound to give effect
to it accordingly. The passing of any such resolution shall be
conclusive evidence that the circumstances of such resolution justify
the passing of it. The Company shall give notice of the passing of an
Extraordinary Resolution to Bondholders within 14 days but failure to
do so shall not invalidate the resolution.
117
21. The expression "Extraordinary Resolution" means a resolution passed at
a meeting of Bondholders duly convened and held in accordance with
these presents by a majority consisting of not less than three-quarters
of the votes cast.
22. Minutes of all resolutions and proceedings at every such meeting shall
be made and entered in the books to be from time to time provided at
the expense of the Company for that purpose by the Company or the
Trustee and any such minutes, if purporting to be signed by the
chairman of the meeting at which such resolutions were passed or
proceedings transacted or by the chairman of the next succeeding
meeting of Bondholders, shall be conclusive evidence of the matters
contained in them and until the contrary is proved every such meeting
in respect of the proceedings of which minutes have been so made and
signed shall be deemed to have been duly convened and held and all
resolutions passed or proceedings transacted at it to have been duly
passed and transacted.
23. Subject to all other provisions contained in these presents the Trustee
may without the consent of the Bondholders prescribe such further
regulations regarding the holding of meetings of Bondholders and
attendance and voting at them as the Trustee may in its sole discretion
determine, including in particular (but without prejudice to the
generality of the foregoing) such regulations and requirements as the
Trustee thinks reasonable:
(a) so as to satisfy itself that persons who purport to
requisition a meeting in accordance with paragraph 3 of this
Schedule or who purport to make any requisition to the Trustee
in accordance with these presents are in fact Bondholders; and
(b) as to the form of voting certificates or block voting
instructions to be issued pursuant to paragraph 1 of this
Schedule so as to satisfy itself that persons who purport to
attend or vote at any meeting of Bondholders are entitled to
do so in accordance with these presents.
24. (a) If and whenever the Company shall have issued and have
outstanding any Bonds which are not identical and do not
form one single series then those Bonds which are in all
respects identical shall be deemed to constitute a
separate series of the Bonds and the foregoing provisions
of this Schedule shall have effect subject to the following
modifications:
(i) a resolution which in the opinion of the Trustee
affects one series only of the Bonds shall be deemed
to have been duly passed if passed at a separate
meeting of the holders of the Bonds of that series;
(ii) a resolution which in the opinion of the Trustee
affects more than one series of the Bonds but does
not give rise to a conflict of interest between the
holders of Bonds of any of the series so affected
shall be deemed to have been duly passed if passed at
a single meeting of the holders of the Bonds of all
the series so affected;
118
(iii) a resolution which in the opinion of the Trustee
affects more than one series of the Bonds and gives
or may give rise to a conflict of interest between
the holders of the Bonds of any of the series so
affected shall be deemed to have been duly passed
only if it shall be duly passed at separate meetings
of the holders of the Bonds of each series so
affected; and
(iv) to all such meetings as aforesaid all the preceding
provisions of this Schedule shall mutatis mutandis
apply as though references therein to Bonds and
holders were references to the Bonds of the series or
group of series in question and to the holders of
such Bonds respectively.
(b) If the Company shall have issued and have outstanding (a)
Bonds which are not denominated in sterling or (b) more than
one series of Bonds denominated in sterling but in differing
denominations, the following provisions shall apply. In the
case of any meeting of holders of Bonds of more than one
currency the principal amount of such Bonds not denominated
in sterling shall (i) for the purposes of paragraph 3 of
this Schedule be the equivalent in sterling at the spot rate
of a bank nominated by the Trustee for the conversion of the
relevant currency or currencies into sterling on the seventh
dealing day (being a day (other than a Saturday or a Sunday)
on which banks in London are open for normal banking
business) prior to the day on which the request in writing
is received by the Trustee and (ii) for the purposes of
paragraphs 6, 7, 11 and 15 of this Schedule (whether in
respect of the meeting, or any adjourned such meeting or any
poll resulting therefrom) be the equivalent in pounds
sterling at such spot rate on the seventh dealing day (as
defined above) prior to the day of such meeting or, if
applicable, the taking of such poll. In such circumstances,
and where separate series of Bonds denominated in sterling
but of different denominations are to be treated together
for the purposes of this Schedule, on any poll each person
present shall have one vote for every complete one pound of
Bonds (converted as above) which he holds.
25. Nothing in these presents shall prevent any of the proxies named in any
block voting instruction or form of proxy from being a director,
managing director, officer or representative of, or otherwise connected
with, the Company, either Guarantor, the Subsidiaries or any of their
respective holding and associated companies.
119
THE COMMON SEAL of )
NORTHERN ELECTRIC FINANCE plc )
was hereunto affixed )
in the presence of: )
_________________
Director
_________________
Secretary
THE COMMON SEAL of )
NORTHERN ELECTRIC plc )
was hereunto affixed )
in the presence of: )
_________________
Director
_________________
Secretary
THE COMMON SEAL of )
NORTHERN ELECTRIC DISTRIBUTION )
LIMITED was hereto affixed )
in the presence of: )
_________________
Director
_________________
Secretary
THE COMMON SEAL of THE LAW )
DEBENTURE TRUST CORPORATION p.l.c. )
was hereunto affixed )
in the presence of: )
_________________
Director
_________________
Assistant Trust Manager
120
EXECUTED as a deed by )
NORTHERN ELECTRIC FINANCE plc ) /s/ director
acting by )
and ) /s/ director/secretary
EXECUTED as a deed by )
NORTHERN ELECTRIC plc ) /s/ director
acting by )
and ) /s/ director/secretary
EXECUTED as a deed by )
NORTHERN ELECTRIC DISTRIBUTION LIMITED ) /s/ director
acting by )
and ) /s/ director/secretary
THE COMMON SEAL of )
THE LAW DEBENTURE TRUST )
CORPORATION p.l.c. ) [seal]
was affixed to this deed )
in the presence of )
/s/ Director
/s/ Authorised Signature
121