CONFORMED COPY
DATED 16th October, 1995
------------------------
NORTHERN ELECTRIC FINANCE plc (1)
NORTHERN ELECTRIC plc (2)
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c. (3)
----------------------------------------
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
Norton Rose
London
CONTENTS
Clause Heading Page
1 Interpretation.....................................................2
1.1 Definitions.................................................2
1.2 Construction of certain references..........................9
1.3 Definitions in Conditions..................................11
1.4 Headings...................................................11
1.5 Schedules..................................................11
1.6 Enforceability.............................................11
2 Amounts of Original Bonds and covenant to pay.....................12
2.1 Amounts of Original Bonds..................................12
2.2 Original Bonds separate series.............................12
2.3 Covenant to pay............................................12
2.4 Discharge..................................................14
2.5 Payment after default......................................14
2.6 Ranking of obligations.....................................15
3 Guarantee
3.1 Guarantor's liability......................................16
3.2 No payments by Company.....................................16
3.3 Consents and authorisations................................18
3.4 Application of moneys received.............................19
3.5 Nature of obligations......................................19
4 Forms of Original Bonds and Original Coupons
4.1 Original Global Bond.......................................19
4.2 Original Bonds and Original Coupons........................19
4.3 Signature..................................................20
4.4 Issue......................................................21
4.5 Bondholder deemed to be absolute owner.....................21
5 Stamp duties and taxes............................................21
5.1 Stamp duties...............................................21
5.2 Change of taxing jurisdiction..............................22
6 Further Bonds.....................................................22
6.1 Liberty to create..........................................22
6.2 Means of constitution......................................23
6.3 Noting of supplemental deeds...............................23
6.4 Notice of further issues...................................23
6.5 Separate series............................................24
7 Application of moneys received by Trustee.........................24
7.1 Declaration of trust.......................................24
7.2 Accumulation...............................................25
7.3 Investment.................................................25
8 Covenants to comply with provisions...............................26
9 Covenants.........................................................27
10 Remuneration and indemnification of Trustee.......................33
11 Provisions supplemental to Trustee Act 1925.......................36
12 Trustee liable for breach of trust................................42
13 Waiver, proof of default, consents and Trustee's power to apply to
Court...........................................................43
14 Trustee not precluded from entering into contracts................44
15 Modification and substitution.....................................45
16 Appointment, retirement and removal of Trustee....................50
17 Couponholders.....................................................52
18 Communications....................................................53
19 Powers in addition................................................54
20 Severability......................................................54
21 Execution.........................................................55
22 Counterparts......................................................55
23 Governing law.....................................................55
Schedule
1 Part I Form of individual Certificate for Original Bonds 2005..56
1 Part II Form of Original Global Bond 2005.......................58
1 Part III Form of Original Coupon 2005............................66
2 Terms and Conditions of Original Bonds 2005.......................68
3 Part I Form of individual Certificate for Original Bonds 2020..69
3 Part II Form of Original Global Bond 2020.......................71
3 Part III Form of Original Coupon 2020............................79
3 Part IV Form of Original Talon 2020.............................81
4 Terms and Conditions of Original Bonds 2020.......................83
5 Provisions for meetings of Bondholders............................84
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 (the "Guarantor"); and
(2) THE LAW DEBENTURE TRUST CORPORATION p.l.c. whose registered office is
at Princes House, 95 Gresham Street, London EC2V 7LY (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 2020 to be constituted by these presents.
(B) The Guarantor, incorporated in England and Wales with registered
number 2366942, has 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) 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
1 Interpretation
--------------
1.1 Definitions: In these presents, unless the context otherwise requires,
the following expressions shall have the following meanings:
"AGENCY AGREEMENT" means, in relation to the Original Bonds 2005, the
Paying Agency Agreement dated 16th October, 1995 between the Company,
the Guarantor, 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,
the Guarantor, 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 the
Guarantor (as the case may require) or, if there shall be joint
auditors, any one
2
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 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 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;
"Cedel" means Cedel Bank, societe anonyme;
"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;
"Conditions" means, in relation to the Original Bonds 2005, the terms
and conditions set out in Schedule 2 and, in relation to the Original
Bonds 2020, the terms and conditions set out in Schedule 4 or, in
either case, other 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,
3
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;
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, 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),(e),(f),(g) and (h) 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;
4
"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 International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited;
"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;
5
"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 representing the Original Bonds 2005;
"Original Global Bond 2020" means the single temporary global Bond
Certificate in definitive form representing 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 for payment against presentation and
surrender of Bonds and/or Coupons, as the case may be;
6
(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,
7
those Bonds (if any) which are beneficially held by, or are held
on behalf of, the Company or the 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 fulfilment 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 respect of the
relevant Bonds by or on behalf of the Company with the prior
written approval of the Trustee;
8
"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 the 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 ~o 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;
9
(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;
10
(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;
(1) taking proceedings against the Company and/or the Guarantor shall
be deemed to include references to proving in the winding-up of
the Company and/or the Guarantor; and
(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.
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.
11
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 bec9me due to be redeemed
or, if the due 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);
12
(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: Subject to Clause 2.5, any payment to be made in respect of
the Bonds or the Coupons by the Company, the Guarantor or the Trustee
may be
13
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 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 Guarantor 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 Guarantor require
each of them to make all subsequent payments in respect of the
Bonds and the
14
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 Guarantor 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
(iii) the Bonds shall not have been declared immediately due and
repayable,
the Trustee shall by notice in writing to the Company, the Guarantor
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 pan 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.
15
3 Guarantee
3.1 Guarantor's liability: The Guarantor hereby irrevocably and
unconditionally guarantees 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 Guarantor 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 the 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 Guarantor 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
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
16
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 Guarantor from its
obligations hereunder. It is further agreed as a separate and
independent stipulation that any sums of money which may not be
recoverable from the 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 the
Guarantor as sole or principal debtor in respect thereof and
shall be paid by the 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 the Guarantor in relation to this guarantee which
the Trustee may think fit;
(e) prior to the liquidation of the Company, the Guarantor 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 the Guarantor in respect of such defaulted moneys remain
unpaid, exercise in respect of any amounts paid under this
guarantee any right of subrogation,
17
indemnity or reimbursement or any other right or remedy which the
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 the Guarantor under this guarantee, the
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
the 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;
(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 Guarantor, and this guarantee shall continue to
apply as if such payment had at all times remained owing by the
Company and the Guarantor 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 the
Guarantor under the guarantee, this 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
the Guarantor.
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3.3 Consents and authorisations: If at any time any authorisation or
approval becomes necessary to permit the 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 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 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: The Guarantor hereby covenants with the Trustee
that the obligations of the Guarantor under this guarantee constitute
direct, unconditional and, subject to Condition 3, unsecured
obligations of the Guarantor and, subject to Condition 3, rank and
will rank pan passu with all other outstanding unsecured and
unsubordinated obligations of the Guarantor, present and future but,
in the event of the insolvency of the 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: The Original Bonds 2005 will initially be
represented by the Original Global Bond 2005 and the Original Bonds
2020 will initially be represented by the Original Global Bond 2020,
each in the principal amount of (pound)100,000,000 and each of which
will be 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 shall issue each Original Global
Bond to a bank depositary
19
common to both Euroclear and Cedel 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 Cedel for the
time being. The Company shall issue the relevant Original Bonds in
exchange for the relevant Original Global Bond only in accordance with
the provisions thereof. Pending exchange of an Original Global Bond,
its holder will be 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 will be 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 will be in or
substantially in the respective forms set out in Parts I, II and III
of Schedule 1 and the Original Bonds 2005 will be 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 will be in or
substantially in the respective forms set out in Parts I, II, III and
IV of Schedule 3 and the Original Bonds 2020 will be 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 will be signed
manually or in facsimile by two Directors of the Company and two
Directors of the Guarantor and will be authenticated by or on behalf
of the Principal Paying Agent. The Company and the Guarantor may use
the facsimile signature of any person who is at the date of this
Master Trust Deed a Director of the Company or the Guarantor
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
20
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 the Guarantor.
4.4 Issue: Issue and delivery of the Original Bonds shall be 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 the Guarantor.
4.5 Bondholder deemed to be absolute owner: The Company, the 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, the 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 Guarantor) 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 Guarantor) will also
21
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 the
Guarantor under these presents.
5.2 Change of taxing jurisdiction: If the Company and/or the Guarantor
becomes subject generally to the taxing jurisdiction of any territory
or any political subdivision 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 the 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 jurisdiction of which the
Company and/or the 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
22
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 the
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
the 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 the 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: 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),
23
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 the Guarantor, the 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 the Guarantor, the
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
24
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 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 the Company and the
Guarantor 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
25
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 the 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. the Guarantor, as the case may be,
to the contrary) that the Company and the Guarantor 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.
9 Covenants
9.1 So long as any Bond is outstanding, the Company will and the
Guarantor will procure that the Company will:
26
(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
27
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
(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
28
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 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;
29
(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;
(1) 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;
30
(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;
(p) Cedel and Euroclear: use all reasonable endeavours to
provide assistance to Cedel 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 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
31
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 Guarantor: The Guarantor hereby covenants with
the Trustee in the terms of Clauses 9.1(a), (b), (c), (d), (e),
(f), (g), (h), (k), (1), (n), (o), (p), (q) and (r) as if
references to the Company therein were references to the
Guarantor. So long as any Bond is outstanding the Guarantor will
send to the Trustee a certificate of the Guarantor signed by two
of its Directors:
(a) specifying details of any modification to the terms and
conditions of the PES Licence, such certificate to be
provided promptly upon any such modification being made; and
(b) specifying any higher figure determined by the Director (as
defined in the PES Licence) as is mentioned in Condition 10,
such certificate to be provided within five days of the
Director determining such figure by notice in writing to the
Secretary of State (as defined in the PES Licence) and the
Guarantor.
32
10 Remuneration and indemnification of Trustee
10.1 Normal remuneration: So long as any Bond is outstanding the
Company (failing which the Guarantor) 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 the 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
Guarantor) 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 Guarantor, 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 Guarantor).
33
10.3 Expenses: The Company (failing which by the Guarantor) 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 the Guarantor
for enforcing any obligation under these presents.
10.4 Payment of Expenses: 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 Guarantor) 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 Guarantor) 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
34
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 wilful 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 Guarantor) 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.
10.8 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.
35
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, the
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 the Guarantor certifying to the effect that,
having made all reasonable enquiries, in the
36
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 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 Guarantor 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 the 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
37
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 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 Guarantor as the Trustee may
38
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 Guarantor 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 Guarantor 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 Guarantor
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, the
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.
39
(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
sensitive or other information made available to the Trustee by
the Company or the 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, the 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.
(l) 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
Guarantor, 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 the 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
40
prejudicial to the interests of the Bondholders or has a material
adverse effect on the Company's or the 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 Guarantor, 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 the Guarantor is observing and performing
all its obligations under these presents.
(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, the 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
41
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, the 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) Cedel and Euroclear: The Trustee may call for any certificate or
other document to be issued by Cedel 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 Cedel or
Euroclear and subsequently found to be forged or not authentic.
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
42
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 the 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 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 the 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
43
(if any) as the Trustee may think fit and may be given or exercised
with retrospective effect. The Company and the 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.
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 Guarantor 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, the
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, the 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, the
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.
44
15 Modification 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 Guarantor to the
substitution of the Guarantor or any Subsidiary or holding
company of the Guarantor or any subsidiary of such 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, where the
Substituted Obligor is not the Guarantor, the Guarantor to
the Trustee, in a form and manner satisfactory to the
Trustee, agreeing to be
45
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 Guarantor 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,
unless the Substituted Obligor is the Guarantor, the
guarantee of the Guarantor in these presents had been given
accordingly;
(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
46
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 Guarantor (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.
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: Upon 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
47
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 Guarantor to the
substitution of any Subsidiary or holding company of the
Guarantor or any subsidiary of such holding company (the
"Substituted Guarantor") in place of the Guarantor (or of any
previous substitute under this Clause 15.2, 15.3) as the
guarantor of the obligations of the Company (or any previous
substitute under Clause 15.2) under these presents guaranteed by
the Guarantor (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 PES 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
Guarantor with any consequential amendments which the
Trustee may deem appropriate as fully as if the Substituted
Guarantor had been named in these presents as the guarantor
of such obligations of the Company (or of any previous
substitute under Clause 15.2) in place of the Guarantor (or
of any previous substitute under this Clause 15.3);
48
(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) the
Guarantor (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 the Guarantor (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 Guarantor and the Substituted Guarantor (and any
previous substitute under this Clause 15.3) comply with such
other
49
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 the
Guarantor (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: Upon the execution of such
documents and compliance with such requirements, the
Substituted Guarantor will be deemed to be named in these
presents as the guarantor of the obligations aforesaid of
the Company (or of any previous substitute under Clause
15.2) in place of the Guarantor (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
50
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 Guarantor (but without
the need for the consent of the Company, the Guarantor, 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
(c) for the purpose of obtaining a judgment in any jurisdiction or the
enforcement in any jurisdiction of either a judgment already obtained
or
51
any of the provisions of these presents against the Company or the
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 Guarantor and such person
remove any person so appointed. At the request of the Trustee, the
Company and the Guarantor 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 the 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 Guarantor 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 the Guarantor
need give any notice to the Couponholders for any purpose under
these presents and the Couponholders 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.
52
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:
(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 the Guarantor, to it at:
Carliol House,
Market Street,
Newcastle-Upon-Tyne NEl 6NE
Fax no. 0191 210 2081
Attention: The Finance Director
53
(c) in the case of the Trustee, to it at:
Princes House,
95 Gresham Street,
London EC2V 7LY
Fax no. 0171 606 0643 or 0171 726 4063
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 despatch.
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.
54
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.
IN WITNESS whereof this Master Trust Deed has been executed as a deed
the day and year first above written.
55
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 by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
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 (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 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)[1,000/10,000/100,000][(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 Guarantor 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.
Dated ______________________
56
In witness whereof the Issuer and the Guarantor 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 GUARANTOR HAS 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
-----------------
57
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").
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
58
Bond by the submission of this temporary Global Bond Certificate to the
Principal Paying Agent together with a certificate from Cedel Bank, soci6t~
anonyme ("Cedel") or Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System ("Euroclear") substantially to the following
effect:
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 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.
59
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 parry in such proceedings.
Dated: _______________*
Yours faithfully,
[Cedel Bank, societe anonyme]
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 8.625 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]
60
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.
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: __________________*
61
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
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.
62
Northern Electric Finance plc Director 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: __________________________
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.]
63
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
------------------
in principal amount
-------------------
of Bonds Principal amount of Notation made by
-------- ------------------- ----------------
represented by Bonds represented by or on behalf of
-------------- -------------------- ---------------
Date of Global Bond Global Bond Certificate Principal Paying
- ------- ----------- ----------------------- ----------------
exchange Certificate following such decrease Agent
- -------- ----------- ----------------------- -----
64
Schedule of interest paid
-------------------------
Date of payment Amount of interest Notation made
- --------------- ------------------ -------------
65
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 by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
Coupon for _____________ due on - 199[6/7/8/9/2000/1/2/3/4/5].
This Coupon relates to interest payable on (pound)[1,OO0/10,000/100,000]
[(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 (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).
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 Guarantor.
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:_____________________
66
In witness whereof the Company and the Guarantor 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 GUARANTOR HAS 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
------------------------
67
Schedule 2
----------
Terms and Conditions of Original Bonds 2005
-------------------------------------------
68
TERMS AND CONDiTIONS OF THE BONDS
The following is the text of the terms and conditions of the Bonds which
will be endorsed on each Bond in definitive form:
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 (the "Trust Deed", which expression shall wherever the context so
admits include any deed supplemental thereto) made between the Issuer, Northern
Electric plc (the "Guarantor") 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 trustee for the holders of the
Bonds (the "Bondholders") 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 the Guarantor was authorised by a written resolution of the
board of directors of the Guarantor 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 the
Guarantor passed on 9th October, 1995. The Bonds are, on issue, listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited (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, the Guarantor, 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 the date of
issue of the Bonds at Princes House, 95 Gresham Street, London EC2V 7LY 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, the Guarantor, any Paying Agent and the Trustee may (to the
fullest extent permitted by applicable laws) deem and treat the holder of any
Bond and the holder of any Coupon as the absolute owner thereof for all 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 Guarantor has, in the Trust Deed, unconditionally and irrevocably guaranteed
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 the Guarantor under the terms of such guarantee
constitute direct, unconditional and, subject to the provisions of Condition 3,
unsecured obligations of the Guarantor and such obligations rank and will rank
pari passu with all other outstanding unsecured and unsubordinated obligations
of the Guarantor, present and future, but, in the event of insolvency of the
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 the Guarantor will ensure that no Relevant
Indebtedness of the Issuer, the Guarantor or any PES Subsidiary or of any other
person and no guarantee by the Issuer, the Guarantor or any PES Subsidiary of
any Relevant Indebtedness of any other person will be secured by a mortgage,
charge, lien, pledge or other security interest (each a "Security Interest")
upon, or with respect to, any of the present or future business, undertaking,
assets or revenues (including any uncalled capital) of the Issuer, the Guarantor
or any PES Subsidiary unless the Issuer or the 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 Guarantor
under the 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 Guarantor under the guarantee
referred to in Condition 2 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, the Guarantor or any PES Subsidiary may create or have
outstanding a Security Interest in respect of any of its Relevant Indebtedness
and/or any guarantees given by the Issuer, the Guarantor or any PES Subsidiary
in respect of any Relevant Indebtedness of any other person (without the
obligation to provide a Security Interest or guarantee or other arrangement in
respect of the Bonds, the Coupons and the Trust Deed or, as the case may be, the
obligations of the 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" means at any particular time the
aggregate of the amount paid up on the Guarantor'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) "Excluded Subsidiary" means any Subsidiary of the Issuer or the
Guarantor (other than a Subsidiary which holds a public electricity
supply licence granted under the Electricity Act 1989):
(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 the Guarantor
by written notice to the Trustee, provided that the Issuer or the
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;
(c) "Group" means the Guarantor, the Issuer and the Subsidiary
Undertakings;
(d) "PES Subsidiary" means any Subsidiary of the Guarantor which holds a
public electricity supply licence granted under the Electricity Act
1989;
(e) "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 PES
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);
(f) "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;
(g) "Subsidiary" means a subsidiary within the meaning of Section 736
of the Companies Act 1985;
(h) "Subsidiary Undertaking" shall have the meaning given to it by
Section 258 of the Companies Act 1985 (but shall exclude any
undertakings (as defined in the Companies Act 1985) whose
accounts are not included in the then latest published audited
consolidated accounts of the Guarantor, nor (in the case of an
undertaking which has first become a subsidiary undertaking of a
member of the Group since the date as at which any such audited
accounts were prepared) would its accounts have been so included
or consolidated if it had become so on or before that date); and
(i) 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"), the first such payment to be made on
16th October, 1996 and to amount to a full year's interest.
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 town clearing 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 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 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 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 de Zoete Wedd Limited (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.
(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, the 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, the 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, the 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
the Guarantor and previously approved in writing by the Trustee (such
approval not to be unreasonably withheld or delayed) or, if the
Guarantor 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 the
Guarantor;
(ii) "Investment Grade Rating" means a rating of at least investment grade
BBB- in the case of Standard & Poor's Corporation and Baa3 in the case
of Moody's Investors Services Inc. or their respective equivalents for
the time being; ~ "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) the
Guarantor does not, either prior to or not later than 14 days after
the date of a Negative Certification in respect of the relevant
Restructuring Event, seek, and thereupon use all reasonable endeavours
to obtain, a rating of the Bonds or any other unsecured and
unsubordinated debt of the Guarantor (or of any Subsidiary of the
Guarantor (including, without limitation, the Issuer) and which is
guaranteed on an unsecured and unsubordinated basis by the Guarantor)
having an initial maturity of five years or more from a Rating Agency
or (Y) if the Guarantor 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) "Pooling and Settlement Agreement" means the agreement dated 30th
March, 1990 (as amended and restated up to 22nd April, 1994) made by
the Guarantor with The National Grid Company plc and others setting
out the rules and procedures for the operation of an electricity
trading pool and of a settlement system as in force on 10th October,
1995 and, while the same has effect, the Initial Settlement Agreement
also dated 30th March, 1990 and made between the same parties, as in
force on 10th October, 1995;
(vi) A "Put Event" occurs on either (X) 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 or (Y) the date on which the Guarantor
receives a notice from the Secretary of State as referred to in
Article I l(4)(a) of the Guarantor's Articles of Association as in
effect on 10th October, 1995;
(vii)" Rating Agency" means Standard & Poor's Corporation or any of its
subsidiaries and their successors or Moody's Investors Service Inc. or
any of its subsidiaries and their successors or any rating agency
substituted for either of them (or any permitted substitute of them)
by the Guarantor from time to time with the prior written approval of
the Trustee (such approval not to be unreasonably withheld or
delayed);
(viii) 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 the
Guarantor 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;
(ix) "Rated Securities" means the Bonds, if at any time and for so long as
they shall have a rating from a Rating Agency, and otherwise any other
unsecured and unsubordinated debt of the Guarantor (or of any
Subsidiary of the Guarantor (including, without limitation, the
Issuer) and which is guaranteed on an unsecured and unsubordinated
basis by the Guarantor) having an initial maturity of five years or
more which is rated by a Rating Agency;
(x) "Restructuring Event" means the occurrence of any one or more of the
following events:
(A)(aa) the Secretary of State for Trade and Industry (or any successor)
giving the Guarantor written notice of revocation of the public
electricity supply licence (the "PES Licence") granted by the
Secretary of State for Energy to the Guarantor under the Electricity
Act 1989 in relation to its authorised area and excluding any second
tier supply licence provided that the giving of notice pursuant to
paragraph 3 of Part 1 of the PES Licence shall not be deemed to
constitute the revocation of the PES Licence or (bb) the Guarantor
agreeing in writing with the Secretary of State for Trade and Industry
(or any successor) to any revocation or surrender of the PES Licence
or (cc) any legislation (whether primary or subordinate) being enacted
terminating or revoking the PES Licence, except in any such case in
circumstances where a licence or licences on substantially no less
favourable terms is or are granted to the Guarantor or a wholly-owned
Subsidiary of the Guarantor (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 PES Licence on or after 10th October, 1995 unless the modified
terms and conditions are certified by two directors of the Guarantor
to be not materially less favourable to the business of the Guarantor;
or
(C) (aa) the Pooling and Settlement Agreement being terminated under
Clause 67.4 thereof and not being replaced by an agreement, commercial
arrangement or open market mechanism or framework having substantially
the same effect as the Pooling and Settlement Agreement, in each case
on terms which two directors of the Guarantor certify to be not
materially less favourable to the business of the Guarantor; or
(bb) the Guarantor being given notice pursuant to Clause 67.3.2 of the
Pooling and Settlement Agreement requiring it to cease to be a
party thereto; or
(cc) any notice declaring an event of default (as defined in the
Pooling and Settlement Agreement) being given to the Guarantor
under Clause 66.1.1 or 66.2 thereof and such default remaining
unremedied or unwaived; or
(dd) any modification (other than a modification which is of a formal,
minor or technical nature) being made to the Pooling and
Settlement Agreement on or after 10th October, 1995, unless two
directors of the Guarantor certify that any such modification has
not had and will not have a materially adverse effect on the
amount or nature of any payment made or to be made by or to the
Guarantor pursuant to the Pooling and Settlement Agreement or a
materially adverse effect on the financial rights or obligations
of the Guarantor under the Pooling and Settlement Agreement,
provided that any such modification shall, to the extent it
grants or confers powers or discretions on the Director General
of Electricity Supply (or any successor) under or in respect of
the Pooling and Settlement Agreement, be deemed not to have a
materially adverse effect as aforesaid, but for the avoidance of
doubt any modification to the Pooling and Settlement Agreement
made by the Director General of Electricity Supply (or any
successor) by virtue of or pursuant to any such powers or
discretions and which otherwise would have a materially adverse
effect as provided above shall not by virtue of this subparagraph
be deemed not to have such an effect; or
(ee) the Guarantor ceasing to be a party to the Pooling and Settlement
Agreement for any reason (other than pursuant to (bb) and (cc)
above), except where a licence is granted to a Relevant
Subsidiary as contemplated by sub-paragraph (A)(X)(A) above and
at or about the same time all rights and obligations of the
Guarantor pursuant to the Pooling and Settlement Agreement are
assigned and transferred to such Relevant Subsidiary in such
manner as the Trustee may previously approve in writing (such
approval not to be unreasonably withheld or delayed); or
(D) 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 Director
General of Electricity Supply (or any successor) under Section 3 of
the Electricity Act 1989 as in force on 10th October, 1995, unless two
directors of the Guarantor certify that such removal, qualification or
amendment does not have a materially adverse effect on the financial
condition of the Guarantor.
(xi) "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 (an) the date on which the Guarantor
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 the Guarantor in respect
of that Restructuring Event; and
(xii) A Rating Downgrade or a Negative Rating Event or a non-Investment
Grade Rating shall be deemed not to have occurred as a result or in
respect of a Restructuring Event if the Rating Agency making the
relevant reduction in rating or, where applicable, declining to assign
a rating of at least investment grade as provided in this Condition 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 circumstance comprised in or arising as a
result of the applicable Restructuring Event.
The Trust Deed provides that the Trustee is under no obligation to
ascertain whether a Restructuring Event, a Negative Rating Event or any event
which could lead to the occurrence of or could constitute a Restructuring Event
has occurred and until it shall have actual knowledge or express notice 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, either
(i) 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; or
(ii) the Guarantor receives a notice from the Secretary of State as
referred to in Article 11 (4)(a) of the Guarantor's Articles of
Association as in effect on 10th October, 1995,
then, unless, in the case of (ii) only, an independent financial adviser shall
have certified in writing to the Trustee within 12 days of issue of such notice
that neither the notice of the revocation of the Licence by the Secretary of
State nor the redemption by the Guarantor of all of its preference shares will
be or is, in its opinion, materially prejudicial to the interests of the
Bondholders and unless, in the case of both (i) and (ii), 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, the Guarantor, to redeem or, at the option of the Issuer
or the 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
Guarantor, the Bondholders and the Couponholders.
(D) Promptly upon the Issuer or the 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 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, in
the case of a Put Event referred to in sub-clause (X) of the definition of Put
Event, the fifteenth day after the date of expiry of the Put Period and, in the
case of a Put Event referred to in sub-clause (Y) of the definition of Put
Event, the day upon which such Bond is delivered at the specified office of any
Paying Agent by the relevant Bondholder 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, the Guarantor shall be made without withholding or deduction
for, or on account of, any present or future taxes, duties, assessments or
governmental charges of whatever nature ("Taxes") imposed or levied by or on
behalf of the 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 Guarantor will pay such additional amounts as may be necessary
in order that the net amounts received by the Bondholders and Couponholders
after the withholding or deduction shall equal the respective amounts which
would have been 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 full amount of the money payable has not been received
in London by the Principal Paying Agent or the Trustee on or before the due
date, it means the date on which, the full amount of the money having been so
received, notice to that effect shall have been duly given to the Bondholders by
the Issuer in accordance with Condition 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) and (h) below, only if the Trustee
shall have certified in writing to the Issuer that such event is, in its
opinion, materially prejudicial to the interests of the Bondholders and subject
in each case to the Trustee being indemnified by, or on behalf of. Bondholders
to its satisfaction), give notice to the Issuer and the Guarantor 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 the Guarantor fails to perform or observe any of its
other obligations, covenants, conditions or provisions under the Bonds
or the Trust Deed and (except where the Trustee shall have certified
to the Issuer 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 the Guarantor, 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, the
Guarantor or any Principal Subsidiary becomes due and repayable prior
to its stated maturity by reason of an event of default (howsoever
described) or (ii) any such indebtedness for borrowed money is not
paid when due or, as the case may be, within any applicable grace
period (as originally provided) or (iii) the Issuer, the Guarantor or
any Principal Subsidiary fails to pay when due (or, as the case may
be, within any originally applicable grace period) any amount payable
by it under any present or future guarantee for, or indemnity in
respect of, any indebtedness for borrowed money of any person or (iv)
any security given by the Issuer, the Guarantor or any Principal
Subsidiary for any indebtedness for borrowed money of any person or
any
guarantee or indemnity of indebtedness for borrowed money of any
person becomes enforceable by reason of default in relation thereto
and steps are taken to enforce such security save in any such case
where there is a bona fide dispute as to whether the relevant
indebtedness for borrowed money or any such guarantee or indemnity as
aforesaid shall be due and payable, provided that the aggregate amount
of the relevant indebtedness for borrowed money in respect of 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 the
Guarantor, 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 the Guarantor or any of its
other Subsidiaries or (ii) the terms of which have previously been
approved in writing by the Trustee or by an Extraordinary Resolution
of the Bondholders; or
(f) if the Issuer, the Guarantor or any Principal Subsidiary shall cease
to carry on 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, the
Guarantor or such Principal Subsidiary and under which all or
substantially all of its assets are transferred to another member of
the Group or (ii) under which all or substantially all of its assets
are transferred to a third party or parties (whether associates or
not) for full consideration by the Issuer, the Guarantor or a
Principal Subsidiary on an arm's length basis or (iii) where the
transferee is or immediately upon such transfer becomes a Principal
Subsidiary or (iv) the terms of which have previously been approved in
writing by the Trustee or by an Extraordinary Resolution of the
Bondholders, provided that if the Guarantor shall transfer the PES -
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 the Guarantor 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, the Guarantor or any Principal Subsidiary shall suspend
or shall threaten to suspend payment of its debts generally or shall
be declared or adjudicated by a competent court to be unable or shall
admit in writing its inability, to pay its debts (within the meaning
of Section 123(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, the
Guarantor or any Principal Subsidiary or in relation to the whole or a
substantial part of the undertaking or assets of any of them or a
distress, execution or other process shall be levied or enforced upon
or sued out against, or an encumbrancer shall take possession of, the
whole or a substantial part of the assets of any of them and in any of
the foregoing cases it or he shall not be paid out or discharged
within 60 days (or such longer period as the Trustee may in its
absolute discretion permit).
For the purposes of sub-paragraph (g) above, Section 123(1)(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 Director (as defined
in the PES Licence) may from time to time determine by notice in writing to the
Secretary of State (as defined in the PES Licence) and the Guarantor.
Neither the Issuer, the Guarantor 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, the Guarantor 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 the Guarantor (not being any Subsidiary of the Issuer or the
Guarantor 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 the Group or consolidated gross assets of the Group
respectively in each case as calculated by reference to the then
latest audited financial statements of such Subsidiary
(consolidated in the case of a company which itself has
Subsidiaries and which, in the normal course, prepares
consolidated accounts) and the then latest audited consolidated
financial statements of the Group; or
(B) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Issuer or the
Guarantor 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 the Guarantor is or is not or was or was not at any
particular time or throughout any specified period a Principal
Subsidiary shall, in the absence of manifest error, be conclusive
and binding on the Guarantor, 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 the Guarantor as it may think fit to
enforce the provisions of the Trust Deed, the Bonds and the Coupons but it shall
not be bound to take any proceedings or any other action in relation to the
Trust Deed, the Bonds or the Coupons unless (a) it shall have been so directed
by an Extraordinary Resolution of the Bondholders or so requested in writing by
the holders of at least one-quarter in principal amount of the Bonds then
outstanding, and (b) it shall have been indemnified to its satisfaction. No
Bondholder or Couponholder shall be entitled to proceed directly against the
Issuer or the Guarantor unless the Trustee, having become bound so to proceed,
fails so to do within a reasonable period and such failure shall be continuing.
12. Substitution
The Trustee may, without the consent of the Bondholders or Couponholders,
agree with the Issuer and the Guarantor to the substitution in place of the
Issuer (or of any previous substitute under this Condition) as the principal
debtor under the Bonds, the Coupons and the Trust Deed of the Guarantor or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of the Guarantor or any Subsidiary of such holding company, subject to (a)
the Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantor (save where the Guarantor itself has been substituted for the Issuer
(or any previous substitute) or where the Guarantor has transferred the PES
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 Guarantor to the substitution in place of the
Guarantor (or of any previous substitute under
this Condition) as the guarantor of the obligations of the Issuer (or of any
previous substitute under this Condition) guaranteed by the Guarantor 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 the Guarantor or any
subsidiary of such holding company, subject to (a) the PES Licence having been
previously transferred to the substituted party; (b) the Trustee being satisfied
that the interest 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 ~Eur6pe 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
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, the
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
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.
PRINCIPAL PAYING AGENT
Barclays Bank PLC
BGSS Depositary Services
8 Angel Court
Throgmorton Street
London EC2R 7HT
OTHER PAYING AGENT
Banque Lnternationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
Schedule 3
----------
Part I
------
Form of individual Certificate for Original Bonds 2020
------------------------------------------------------
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 8.875 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)
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 (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 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)[1,000/10,000/100,000] [(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 Guarantor 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.
Dated ____________________
69
In witness whereof the Issuer and the Guarantor 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 1650) AND 1287(a) OF THE INTERNAL REVENUE CODE.
[NEITHER THE ISSUER NOR THE GUARANTOR HAS 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
-----------------
70
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").
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
71
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:
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)(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 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
72
(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 authorise you to produce
this certificate to any interested party in such proceedings.
Dated: ____________________*
Yours faithfully,
[Cedel Bank, societe anonyme]
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]
73
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.
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: _____________________ *
74
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
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
75
Certificate of Authentication
- -----------------------------
This temporary Global Bond 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 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.]
76
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
------------------
in principal amount
-------------------
of Bonds Principal amount of Notation made by
-------- ------------------- ----------------
represented by Bonds represented by or on behalf of
-------------- -------------------- ---------------
Date of Global Bond Global Bond Certificate Principal Paying
- ------- ----------- ----------------------- ----------------
exchange Certificate following such decrease Agent
- -------- ----------- ----------------------- -----
77
Schedule of interest paid
-------------------------
Date of payment Amount of interest Notation made
- --------------- ------------------ -------------
78
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 by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
Coupon for................... due on 199[6/7/8/9/2000/1/2/3/4/5/6/7/8/9/10/11/
12/13/14/15/16/17/18/19/20].
This Coupon relates to interest payable on (pound)[1,000/10,000/100,000]
[(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 (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).
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 Guarantor.
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: _________________________
79
In witness whereof the Company and the Guarantor 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 GUARANTOR HAS 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
------------------------
80
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 by
NORTHERN ELECTRIC plc
(Incorporated with limited liability in England and Wales - No. 2366942)
Talon relating to (pound)[1,OOO/1O,OOO/100,OOO] 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 Guarantor and authenticated by or on behalf of
the Principal Paying Agent.
Dated: ______________________
In witness whereof the Company and the Guarantor have caused this Talon to be
signed in facsimile on their respective behalves.
Northern Electric Finance plc Northern Electric plc
By: _________________________ By: ___________________
Director Director
_________________________ ___________________
Director Director
81
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 GUARANTOR HAS 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
------------------------
82
Schedule 4
Terms and Conditions of Original Bonds 2020
-------------------------------------------
83
TERMS AND CONDITIONS OF THE BONDS
The following is the text of the terms and conditions of the Bonds which
will be endorsed on each Bond in definitive form:
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 (the "Trust Deed", which expression shall wherever the context so
admits include any deed supplemental thereto) made between the Issuer, Northern
Electric plc (the "Guarantor") 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 trustee for the holders of the
Bonds (the "Bondholders"). 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 the Guarantor was authorised by a written resolution of the
board of directors of the Guarantor 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 the
Guarantor passed on 9th October, 1995. The Bonds are, on issue, listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited (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, the Guarantor, 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",
which latter expression shall, unless the context otherwise requires, include
the Talons referred to below) at the registered office for the time being of the
Trustee, being at the date of issue of the Bonds at Princes House, 95 Gresharn
Street, London EC2V 7LY 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 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, the Guarantor, any Paying Agent and the Trustee may (to the
fullest extent permitted by applicable laws) deem and treat the holder of any
Bond and the holder of any Coupon as the absolute owner thereof for all 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 Guarantor has, in the Trust Deed, unconditionally and irrevocably
guaranteed 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 the Guarantor under the terms of such
guarantee constitute direct, unconditional and, subject to the provisions of
Condition 3, unsecured obligations of the Guarantor and such obligations rank
and will rank pari passu with all other outstanding unsecured and unsubordinated
obligations of the Guarantor, present and future, but, in the event of
insolvency of the 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 the Guarantor will ensure that no Relevant Indebtedness
of the Issuer, the Guarantor or any PES Subsidiary or of any other person and no
guarantee by the Issuer, the Guarantor or any PES Subsidiary of any Relevant
Indebtedness of any other person will be secured by a mortgage, charge, lien,
pledge or other security interest (each a "Security Interest") upon, or with
respect to, any of the present or future business, undertaking, assets or
revenues (including any uncalled capital) of the Issuer, the Guarantor or any
PES Subsidiary unless the Issuer or the 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 Guarantor
under the 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 Guarantor under the guarantee
referred to in Condition 2 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, the Guarantor or any PES Subsidiary may create or have
outstanding a Security Interest in respect of any of its Relevant Indebtedness
and/or any guarantees given by the Issuer, the Guarantor or any PES Subsidiary
in respect of any Relevant Indebtedness of any other person (without the
obligation to provide a Security Interest or guarantee or other arrangement in
respect of the Bonds, the Coupons and the Trust Deed or, as the case may be, the
obligations of the Guarantor under the said guarantee as aforesaid) where such
Relevant Indebtedness h4s an initial maturity falling not earlier than 31st
December, 2020 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" means at any particular time the
aggregate of the amount paid up on the Guarantor'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) "Excluded Subsidiary" means any Subsidiary of the Issuer or the
Guarantor (other than a Subsidiary which holds a public
electricity supply licence granted under the Electricity Act
1989):
(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 the
Guarantor by written notice to the Trustee, provided that
the Issuer or the 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;
(c) "Group" means the Guarantor, the Issuer and the Subsidiary
Undertakings;
(d) "PES Subsidiary" means any Subsidiary of the Guarantor which
holds a public electricity supply licence granted under the
Electricity Act 1989;
(e) "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
PBS 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);
(f) "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;
(g) "Subsidiary" means a subsidiary within the meaning of Section 736
of the Companies Act 1985;
(h) "Subsidiary Undertaking" shall have the meaning given to it by
Section 258 of the Companies Act 1985 (but shall exclude any
undertakings (as defined in the Companies Act 1985) whose
accounts are not included in the then latest published audited
consolidated accounts of the Guarantor, nor (in the case of an
undertaking which has first become a subsidiary undertaking of a
member of the Group since the date as at which any such audited
accounts were prepared) would its accounts have been so included
or consolidated if it had become so on or before that date); and
(i) 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 percent. per annum, payable annually in arrear on 16th October in each
year (each an "Interest Payment Date"), the first such payment to be made on
16th October, 1996 and to amount to a full year's interest.
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 town clearing 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 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 purpose 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 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)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 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 de Zoete Wedd Limited (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.
(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, the Guarantor or any of their respective Subsidiaries may
at any time purchase Bonds together with unmatured Coupons and 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, the 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, the 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
the Guarantor and previously approved in writing by the Trustee (such
approval not to be unreasonably withheld or delayed) or, if the
Guarantor 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 the
Guarantor;
(ii) "Investment Grade Rating" means a rating of at least investment grade
BBB- in the case of Standard & Poor's Corporation and Baa3 in the case
of Moody's Investors Services Inc. 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) the
Guarantor does not, either prior to or not later than 14 days after
the date of a Negative Certification in respect of the relevant
Restructuring Event, seek, and thereupon use all reasonable endeavours
to obtain, a rating of the Bonds or any other unsecured and
unsubordinated debt of the Guarantor (or of any Subsidiary of the
Guarantor (including, without limitation, the Issuer) and which is
guaranteed on an unsecured and unsubordinated basis by the Guarantor)
having an initial maturity of five years or more from a Rating Agency
or (Y) if the Guarantor 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) "Pooling and Settlement Agreement" means the agreement dated 30th March,
1990 (as amended and restated up to 22nd April, 1994) made by the Guarantor with
The National Grid Company plc and others setting out the rules and procedures
for the operation of an electricity trading pool and of a settlement system as
in force on 10th October, 1995 and, while the same has effect, the Initial
Settlement Agreement also dated 30th March, 1990 and made between the same
parties, as in force on 10th October, 1995;
(vi) A "Put Event" occurs on either (X) the date of the last to occur of
all of the following (an) a Restructuring Event, (bb) either a Rating
Downgrade or, as the case may be, a Negative Rating Event and (cc) the
relevant Negative Certification or (Y) the date on which the Guarantor
receives a notice from the Secretary of State as referred to in
Article 1 1(4)(a) of the Guarantor's Articles of Association as in
effect on 10th October, 1995;
(vii) "Rating Agency" means Standard & Poor's Corporation or any of its
subsidiaries and their successors or Moody's Investors Service Inc. or
any of its subsidiaries and their successors or any rating agency
substituted for either of them (or any permitted substitute of them)
by the Guarantor from time to time with the prior written approval of
the Trustee (such approval not to be unreasonably withheld or
delayed);
(viii) 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 the
Guarantor 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;
(ix) "Rated Securities" means the Bonds, if at any time and for so long as
they shall have a rating from a Rating Agency, and otherwise any other
unsecured and unsubordinated debt of the Guarantor (or of any
Subsidiary of the Guarantor (including, without limitation, the
Issuer) and which is guaranteed on an unsecured and unsubordinated
basis by the Guarantor) having an initial maturity of five years or
more which is rated by a Rating Agency;
(x) "Restructuring Event" means the occurrence of any one or more of the
following events:
(A (aa) the Secretary of State for Trade and Industry (or any
successor) giving the Guarantor written notice of revocation of
the public electricity supply licence (the "PES Licence") granted
by the Secretary of State for Energy to the Guarantor under the
Electricity Act 1989 in relation to its authorised area and
excluding any second tier supply licence provided that the giving
of notice pursuant to paragraph 3 of Part 1 of the PES Licence
shall not be deemed to constitute the revocation of the PES
Licence or (bb) the Guarantor agreeing in writing with the
Secretary of State for Trade and Industry (or any successor) to
any revocation or surrender of the PES Licence or (cc) any
legislation (whether primary or subordinate) being enacted
terminating or revoking the PES Licence, except in any such case
in circumstances where a licence or licences on substantially no
less favourable terms is or are granted to the Guarantor or a
wholly-owned Subsidiary of the Guarantor (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 PES Licence on or after 10th October, 1995 unless the
modified terms and conditions are certified by two directors of
the Guarantor to be not materially less favourable to the
business of the Guarantor; or
(C) (aa) the Pooling and Settlement Agreement being terminated under
Clause 67.4 thereof and not being replaced by an agreement,
commercial arrangement or open market mechanism or framework
having substantially the same effect as the Pooling and
Settlement Agreement, in each case on terms which two directors
of the Guarantor certify to be not materially less favourable to
the business of the Guarantor; or
(bb) the Guarantor being given notice pursuant to Clause 67.3.2
of the Pooling and Settlement Agreement requiring it to
cease to be a party thereto; or
(cc) any notice declaring an event of default (as defined in the
Pooling and Settlement Agreement) being given to the
Guarantor under Clause 66.1.1 or 66.2 thereof and such
default remaining unremedied or unwaived; or
(dd) any modification (other than a modification which is of a
formal, minor or technical nature) being made to the Pooling
and Settlement Agreement on or after 10th October, 1995,
unless two directors of the Guarantor certify that any such
modification has not had and will not have a materially
adverse effect on the amount or nature of any payment made
or to be made by or to the Guarantor pursuant to the Pooling
and Settlement Agreement or a materially adverse effect on
the financial rights or obligations of the Guarantor under
the Pooling and Settlement Agreement, provided that any such
modification shall, to the extent it grants or confers
powers or discretions on the Director General of Electricity
Supply (or any successor) under or in respect of the Pooling
and Settlement Agreement, be deemed not to have a materially
adverse effect as aforesaid, but for the avoidance of doubt
any modification to the Pooling and Settlement Agreement
made by the Director General of Electricity Supply (or any
successor) by virtue of
or pursuant to any such powers or discretions and which
otherwise would have a materially adverse effect as provided
above shall not by virtue of this subparagraph be deemed not
to have such an effect; or
(ee) the Guarantor ceasing to be a party to the Pooling and
Settlement Agreement for any reason (other than pursuant to
(bb) and (cc) above), except where a licence is granted to a
Relevant Subsidiary as contemplated by sub-paragraph
(A)(X)(A) above and at or about the same time all rights and
obligations of the Guarantor pursuant to the Pooling and
Settlement Agreement are assigned and transferred to such
Relevant Subsidiary in such manner as the Trustee may
previously approve in writing (such approval not to be
unreasonably withheld or delayed); or
(D) 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
Director General of Electricity Supply (or any successor) under
Section 3 of the Electricity Act 1989 as in force on 10th
October, 1995, unless two directors of the Guarantor certify that
such removal, qualification or amendment does not have a
materially adverse effect on the financial condition of the
Guarantor.
(xi) "Restructuring Period" means:
(A) if at the time a Restructuring Event occurs there are Rated
Securities, the period of 90 days starting from and including the
day on which that Restructuring Event occurs; or
(B) if at the time a Restructuring Event occurs there are no Rated
Securities, the period starting from and including the day on
which that Restructuring Event occurs and ending on the day 90
days following the later of (aa) the date on which the Guarantor
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 the Guarantor in respect
of that Restructuring Event; and
(xii) A Rating Downgrade or a Negative Rating Event or a non-Investment
Grade Rating shall be deemed not to have occurred as a result or in
respect of a Restructuring Event if the Rating Agency making the
relevant reduction in rating or, where applicable, declining to assign
a rating of at least investment grade as provided in this Condition 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 circumstance comprised in or arising as a
result of the applicable Restructuring Event.
The Trust Deed provides that the Trustee is under no obligation to
ascertain whether a Restructuring Event, a Negative Rating Event or any event
which could lead to the occurrence of or could constitute a Restructuring Event
has occurred and until it shall have actual knowledge or express notice 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. either
(i) 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; or
(ii) the Guarantor receives a notice from the Secretary of State as
referred to in Article 11 (4)(a) of the Guarantor's Articles of
Association as in effect on 10th October, 1995,
then, unless, in the case of (ii) only, an independent financial adviser shall
have certified in writing to the Trustee within 12 days of issue of such notice
that neither the notice of the revocation of the Licence by the Secretary of
State nor the redemption by the Guarantor of all of its preference shares will
be or is, in its opinion, materially prejudicial to the interests of the
Bondholders and unless, in the case of both (i) and (ii), 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, the Guarantor, to redeem or, at the option of the
Issuer, or the 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
Guarantor, the Bondholders and the Couponholders.
(D) Promptly upon the Issuer or the 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 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 We 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, in
the case of a Put Event referred to in sub-clause (X) of the definition of Put
Event, the fifteenth day after the date of expiry of the Put Period and, in the
case of a Put Event referred to in sub-clause (Y) of the definition of Put
Event, the day upon which such Bond is delivered at the specified office of any
Paying Agent by the relevant Bondholder 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, the Guarantor shall be made without withholding or deduction
for, or on account of, any present or future taxes, duties, assessments or
governmental charges of whatever nature ("Taxes") imposed or levied by or on
behalf of the 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 Guarantor will pay such additional amounts as may be necessary
in order that the net amounts received by the Bondholders and Couponholders
after the withholding or deduction shall equal the respective amounts which
would have been 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 full amount of the money payable has not been received
in London by the Principal Paying Agent or the Trustee on or before the due
date, it means the date on which, the full amount of the money having been so
received, notice to that effect shall have been duly given to the Bondholders by
the Issuer in accordance with Condition 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
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) and (h) below, only if the Trustee
shall have certified in writing to the Issuer that such event is, in its
opinion, materially prejudicial to the interests of the Bondholders and subject
in each case to the Trustee being indemnified by, or on behalf of, Bondholders
to its satisfaction), give notice to the Issuer and the Guarantor 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 the Guarantor fails to perform or observe any of its
other obligations, covenants, conditions or provisions under the Bonds
or the Trust Deed and (except where the Trustee shall have certified
to the Issuer 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 the Guarantor, 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, the
Guarantor or any Principal Subsidiary becomes due and repayable prior
to its stated maturity by reason of an event of default (howsoever
described) or (ii) any such indebtedness for borrowed money is not
paid when due or, as the case may be, within any applicable grace
period (as originally provided) or (iii) the Issuer, the Guarantor or
any Principal Subsidiary fails to pay when due (or, as the case may
be, within any originally applicable grace period) any amount payable
by it under any present or future guarantee for, or indemnity in
respect of, any indebtedness for borrowed money of any person or (iv)
any security given by the Issuer, the Guarantor or any Principal
Subsidiary for any indebtedness for borrowed money of any person or
any guarantee or indemnity of indebtedness for borrowed money of any
person becomes enforceable by reason of default in relation thereto
and steps are taken to enforce such security save in any such case
where there is a bona fide dispute as to whether the relevant
indebtedness for borrowed money or any such guarantee or indemnity as
aforesaid shall be due and payable, provided that the aggregate amount
of the relevant indebtedness for borrowed money in respect of 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 the
Guarantor, 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 the Guarantor or any of its
other Subsidiaries or (ii) the terms of which have previously been
approved in writing by the Trustee or by an Extraordinary Resolution
of the Bondholders; or
(f) if the Issuer, the Guarantor or any Principal Subsidiary shall cease
to carry on 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, the
Guarantor or such Principal Subsidiary and under which all or
substantially all of its assets are transferred to another member of
the Group or (ii) under which all or substantially all of its assets
are transferred to a third party or parties (whether associates or
not) for full consideration by the Issuer, the Guarantor or a
Principal Subsidiary on an arm's length basis or (iii) where the
transferee is or immediately upon such transfer becomes a Principal
Subsidiary or (iv) the terms of which have previously been approved in
writing by the Trustee or by an Extraordinary Resolution of the
Bondholders, provided that if the Guarantor shall transfer the PES
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 the Guarantor 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, the Guarantor or any Principal Subsidiary shall suspend
or shall threaten to suspend payment of its debts generally or shall
be declared or adjudicated by a competent court to be unable or shall
admit in writing its inability, to pay its debts (within the meaning
of Section 123(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, the Guarantor
or any Principal Subsidiary or in relation to the whole or a
substantial part of the undertaking or assets of any of them or a
distress, execution or other process shall be levied or enforced upon
or sued out against, or an encumbrancer shall take possession of, the
whole or a substantial part of the assets of any of them and in any of
the foregoing cases it or he shall not be paid out or discharged
within 60 days (or such longer period as the Trustee may in its
absolute discretion permit).
For the purposes of sub-paragraph (g) above, Section 123(1)(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 Director (as defined
in the PES Licence) may from time to time determine by notice in writing to the
Secretary of State (as defined in the PES Licence) and the Guarantor.
Neither the Issuer, the Guarantor 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, the Guarantor 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 the Guarantor (not being any Subsidiary of the Issuer or the
Guarantor 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 the Group or consolidated gross assets of the Group
respectively in each case as calculated by reference to the then
latest audited financial statements of such Subsidiary
(consolidated in the case of a company which itself has
Subsidiaries and which, in the normal course, prepares
consolidated accounts) and the then latest audited consolidated
financial statements of the Group; or
(B) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Issuer or the
Guarantor 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 the Guarantor is or is not or was or was not at any
particular time or throughout any specified period a Principal
Subsidiary shall, in the absence of manifest error, be conclusive and
binding on the Guarantor, 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 the Guarantor as it may think fit to
enforce the provisions of the Trust Deed, the Bonds and the Coupons but it shall
not be bound to take any proceedings or any other action in relation to the
Trust Deed, the Bonds or the Coupons unless (a) it shall have been so directed
by an Extraordinary Resolution of the Bondholders or so requested in writing by
the holders of at least one-quarter in principal amount of the Bonds then
outstanding, and (b) it shall have been indemnified to its satisfaction. No
Bondholder or Couponholder shall be entitled to proceed directly against the
Issuer or the Guarantor unless the Trustee, having become bound so to proceed,
fails so to do within a reasonable period and such failure shall be continuing.
12. Substitution
The Trustee may, without the consent of the Bondholders or Couponholders,
agree with the Issuer and the Guarantor to the substitution in place of the
Issuer (or of any previous substitute under this Condition) as the principal
debtor under the Bonds, the Coupons and the Trust Deed of the Guarantor or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of the Guarantor or any Subsidiary of such holding company, subject to (a)
the Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantor (save where the Guarantor itself has been substituted for the Issuer
(or any previous substitute) or where the Guarantor has transferred the PES
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 Guarantor to the substitution in place of the
Guarantor (or of any previous substitute under this Condition) as the guarantor
of the obligations of the Issuer (or of any previous substitute under this
Condition) guaranteed by the Guarantor 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 the Guarantor or any subsidiary of such holding
company, subject to (a) the PES Licence having been previously transferred to
the substituted party; (b) the Trustee being satisfied that the interest 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
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, the
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
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.
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
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 and that all such
instructions are, during the period of
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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
85
made or if at any meeting the person nominated shall not be present
within 15 minutes after the time fixed for the meeting the Bondholders
present shall choose one of their number to be chairman, failing which
the Company or, failing which, the 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 9ertificates 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.
86
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.
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, the
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, the 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.
87
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 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 the 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 the 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, the 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, the 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;
88
(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 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 the Guarantor (or any
previous substitute) as the 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
89
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.
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;
90
(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;
(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, the Guarantor, the Subsidiaries or any of their respective holding
and associated companies.
91
THE COMMON SEAL of )
NORTHERN ELECTRIC FINANCE plc )
was hereunto affixed )
in the presence of: )
/s/ John Edwards
- ----------------
JOHN EDWARDS
Director
- ----------------
VALERIE GILES
Secretary
THE COMMON SEAL of )
NORTHERN ELECTRIC plc )
was hereunto affixed )
in the presence of: )
/s/ Ron Dixon
- --------------------
RON DIXON
Director
/s/ Valerie Giles
- --------------------
VALERIE GILES
Secretary
THE COMMON SEAL of THE LAW )
DEBENTURE TRUST CORPORATION p.l.c. )
was hereunto affixed )
in the presence of: )
/s/ Julian Mason-Jebb
- ---------------------
JULIAN MASON-JEBB
Director
/s/ Clive Rakestrow
- ----------------------
CLIVE RAKESTROW
Assistant Trust Manager
92