CONFORMED COPY
FACILITY AGREEMENT
for
(pound)250,000,000 Revolving Credit Facility
Eastern Electricity plc (1)
Chase Manhattan plc (2)
▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Joint Lead Arrangers
The Chase Manhattan Bank (3)
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Underwriters
The Chase Manhattan Bank (4)
as Issuing Bank
Chase Manhattan International Limited (5)
as Facility Agent
For the Primary Borrower For the Facility Agent
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
London London
CONTENTS
1. PURPOSE AND DEFINITIONS................................................. 1
2. THE COMMITMENTS......................................................... 16
3. THE CONDITIONS.......................................................... 17
4. ADVANCES UNDER THE FACILITY............................................. 17
5. INTEREST AND MATURITY PERIODS........................................... 23
6. REPAYMENT, CANCELLATION AND REDUCTIONS.................................. 25
7. FEES AND EXPENSES....................................................... 27
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS........................... 29
9. REPRESENTATIONS AND WARRANTIES.......................................... 35
10. POSITIVE UNDERTAKINGS................................................... 37
11. NEGATIVE UNDERTAKINGS................................................... 41
12. EVENTS OF DEFAULT....................................................... 45
13. INDEMNITIES............................................................. 49
14. UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES............... 50
15. SET-OFF AND PRO-RATA PAYMENTS........................................... 54
16. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES............................ 55
17. FACILITY AGENT.......................................................... 60
18. POWERS ................................................................. 62
19. DUTIES ................................................................. 65
20. EXONERATION............................................................. 66
21. ENFORCEMENT AND RECOVERIES.............................................. 70
22. DETERMINATION OF MATTERS................................................ 71
23. BASIS OF DECISIONS...................................................... 73
24. MATTERS CONCERNING THE OBLIGORS......................................... 74
25. NOTICES AND OTHER MATTERS............................................... 76
26. GOVERNING LAW AND JURISDICTION.......................................... 79
Schedule 1
The Banks and their Commitments.............................................. 80
Schedule 2
Forms of Drawdown Notice..................................................... 81
Schedule 3
Conditions Precedent......................................................... 83
Schedule 4
Calculation of Additional Cost............................................... 84
Schedule 5
Form of Substitution Certificate............................................. 86
Schedule 6
Form of Deed of Accession.................................................... 89
Schedule 7
Terms of Borrowers' Indemnity................................................ 91
Schedule 8
Terms of Interbank Guarantee and Indemnity................................... 94
Schedule 9
Terms of Guarantee........................................................... 96
THIS AGREEMENT is made the 21st day of May 1998
BETWEEN:
(1) Eastern Electricity plc a company registered in England and Wales with
company number 2366906 as the initial Borrower and initial Guarantor (the
"Primary Borrower");
(2) Chase Manhattan plc, ▇▇▇▇▇▇ Brothers International (Europe) and ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Corporation as joint lead arrangers;
(3) The Chase Manhattan Bank, ▇▇▇▇▇▇ Commercial Paper Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital Corporation as the original Banks (the "Underwriters");
(4) The Chase Manhattan Bank as the initial Issuing Bank;
(5) Chase Manhattan International Limited as the initial Facility Agent.
IT IS AGREED as follows:
1. PURPOSE AND DEFINITIONS
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to
which the Banks agree, according to their several obligations, to make
available to the Primary Borrower and (subject to accession to this
Agreement under clause 24) the Additional Borrowers, a multi-currency
facility of up to (pound)250,000,000 to be used for such Borrower's
general corporate purposes.
No amounts borrowed under the Facility may be used, directly or
indirectly, to give financial assistance for the acquisition of the
shares of any Borrower or any holding company of any Borrower.
1.2 Definitions
In this Agreement, unless the context otherwise requires:
"Act" means the Companies ▇▇▇ ▇▇▇▇;
"Additional Borrower" means any member of the Group which becomes a
Borrower pursuant to clause 24.1 (Additional Obligors);
"Additional Cost" means, in relation to any period, a percentage
calculated for such period at an annual rate determined in accordance
with schedule 4;
"Additional Guarantor" means any member of the Group which becomes a
Guarantor pursuant to clause 24.1 (Additional Obligors) and/or clause
24.2 (Guarantees from REC Companies);
"Additional Obligor" means any Additional Borrower or Additional
Guarantor;
"Advance" means each borrowing made or to be made by way of an advance
under the Facility or (as the context requires) the principal amount of
that borrowing outstanding at any relevant time;
"Affected Bank" has the meaning given to it in clause 14.4;
"Affiliate" means, in relation to any person, any Subsidiary or
subsidiary undertaking (as defined in section 258 of the Act) of that
person, any holding company of that person and any other Subsidiary or
subsidiary undertaking of that holding company;
"Applicable Fees Rate" means 0.25 per cent. per annum;
"Applicable Margin" means 0.5 per cent. per annum;
"Appropriate Accounting Principles" means (i) the accounting principles,
policies, standards, practices and bases (being generally accepted in the
United Kingdom), as adopted in the last audited accounts of the Primary
Borrower published prior to 1 February 1998 and varied so that
investments in subsidiaries which are not REC Companies are accounted for
on an equity basis or (ii) where any change has been agreed under clause
10.3(c), such accounting principles, standards, practices and bases as
have been so agreed;
"Arrangers" means Chase Manhattan plc, ▇▇▇▇▇▇ Brothers International
(Europe) and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation;
"Auditors" means Price Waterhouse or such other internationally
recognised firm of chartered accountants as may be auditors to the REC
Group for the time being;
"Available Commitment" means, in relation to a Bank and save as otherwise
provided herein its Commitment at such time less:
(a) its Contribution to all Advances at such time;
(b) its Proportion of the Sterling Amount at that time of the
Outstanding Contingent Liabilities under all Letters of Credit
then outstanding; and
(c) its proportion of the Sterling Amount of any amount paid out by
the Issuing Bank under a Letter of Credit and not yet reimbursed;
"Available Facility Amount" means, at any time, the aggregate of the
Available Commitments of all the Banks in respect of the Facility at such
time;
"Banking Day" means a day (other than Saturday or Sunday) on which banks
are open for business in London and in New York;
"Banks" means the original banks listed in schedule 1 and includes their
successors in title, assignees and Substitutes;
"Borrowed Money" includes any Indebtedness of any REC Company in respect
of (without double counting):
(a) borrowed money; or
(b) the principal amount outstanding in respect of any debentures
(within the meaning of Section 744 of the Act) of that person
(notwithstanding that the same are or were issued in whole or in
part for a consideration other than cash) which are not
beneficially owned by another REC Company; or
(c) the principal amount raised by that person by acceptances (not
being an acceptance in relation to the purchase or sale of goods
in the ordinary course of trading) or under any acceptance credit
opened by any bank or accepting house on behalf of that person; or
(d) receivables sold or discounted to the extent of any potential or
contingent recourse save for recourse for disputed or ineligible
debts or similar rights of recourse typical in a securitisation
transaction; or
(e) the acquisition cost of any asset to the extent payable after the
time of acquisition or possession by the party liable where the
deferred payment is not normal trade credit, is deferred for a
period of more than 90 days or is arranged primarily as a method
of raising finance or financing the acquisition of that asset from
or through a bank or financial institution, except that, if the
deferred payment is amortising, only the amount which remains to
be paid shall be taken into account; or
(f) the nominal amount of any share capital and the principal amount
of any debentures or other indebtedness of any other person, the
redemption or repayment of which is guaranteed or secured by or is
the subject of an indemnity given by that person; or
(g) any fixed or minimum premium payable on final redemption or
repayment of any debenture, share capital or other borrowed moneys
falling to be taken into account under the other paragraphs of
this definition; or
(h) any net liability under any Derivative Transactions; or
(i) the capital element of any Finance Leases; or
(j) any amount raised under any other transaction having the
commercial effect of a borrowing or entered into primarily as a
means of raising finance;
but does not include items of the type described in (a) to (j)
(inclusive) which are owed to a member of the Wider Group or to another
REC Company;
"Borrowers" means the Primary Borrower and each other member of the Group
which has become an Additional Borrower and "Borrower" means any one of
them;
"Change in Control" shall be deemed to have occurred if:
(a) any person or group of related persons (other than the Parent, any
Subsidiary of the Parent, or any pension, savings or other
employee benefit plan for the benefit of employees of the Parent
and/or any Subsidiary of the Parent) shall have acquired
beneficial ownership of more than 30% of the outstanding Voting
Shares of the Parent (within the meaning of section 13(d) or 14(d)
of the Securities Exchange Act of 1934 of the United States of
America, as amended, and the applicable rules and regulations
thereunder); provided that a Change in Control shall not be deemed
to have occurred
if such acquisition has been approved, prior to the Parent
Acquisition Date and the date on which any tender offer for Voting
Shares of the Parent was commenced, by a majority of the
Disinterested Directors of the Parent; or
(b) during any period of 12 consecutive months, commencing before or
after the date of this Agreement, individuals who on the first day
of such period were directors of the Parent (together with any
replacement or additional directors who were nominated or elected
by a majority of directors then in office) cease to constitute a
majority of the board of directors of the Parent;
"Commitment" means, in relation to a Bank at any relevant time, the
amount set opposite its name in schedule 1 and/or, in the case of a
Substitute, the amount novated in relation to the Facility as specified
in the relevant Substitution Certificate, as reduced, in each case, by
any relevant term of this Agreement;
"Contribution" means, in relation to a Bank, the principal amount of any
or all (as the context requires) of the Sterling Amount of Advances owing
to such Bank at any relevant time;
"Deed of Accession" means an accession certificate (by way of deed) in
the form or substantially the form of schedule 6 and entered into or to
be entered into by the Facility Agent and an Additional Guarantor as an
acceding Guarantor and, in certain cases, an Additional Borrower as an
acceding Borrower;
"Default" means any Event of Default or any event or circumstance which
in the reasonable opinion of the Majority Banks would reasonably be
expected, upon the giving of a notice by the Facility Agent and/or the
expiry of the relevant period and/or the fulfilment of any other
condition (in each case as specified in clause 12.1), to constitute an
Event of Default;
"Derivatives Transaction" means a contract, agreement or transaction
which is:
(a) a rate swap, basis swap, forward rate transaction, equity (or
equity or other index) swap or option, bond option, interest rate
option, foreign exchange transaction, cap, collar or floor,
currency swap, currency option or any other similar transaction;
and/or
(b) any combination of such transactions,
in each case, whether on-exchange or otherwise;
"Director General" means the person appointed from time to time by the
Secretary of State to hold office as the Director General of Electricity
Supply for the purposes of the Electricity Act;
"Disinterested Director" shall mean any member of the board of directors
of the Parent who:
(a) is not affiliated, directly or indirectly, with, or appointed by,
a person or group of related persons (other than the Parent, any
Subsidiary of the Parent, or any pension, savings or other
employee benefit plan for the benefit of employees of the Parent
and/or any Subsidiary of the Parent) acquiring the beneficial
ownership of more than 30% of the outstanding Voting Shares of the
Parent (within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 of the United States of America,
as amended, and the applicable rules and regulations thereunder);
and
(b) either was a member of the board of directors of the Parent prior
to the Parent Acquisition Date or was recommended for election by
a majority of the Disinterested Directors in office prior to the
Parent Acquisition Date;
"Distribution Business" means the business conducted as at the date of
this Agreement by the Primary Borrower (and as that business may
subsequently be conducted by the REC Group), in or ancillary to the
distribution (whether for a REC Company's own account or that of any
other party) of electricity through any REC Company's distribution system
and includes any business of providing connections to any REC Company's
distribution system;
"double taxation treaty" means any convention or agreement between the
government of the United Kingdom and any other government for the
avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income and capital gains;
"Drawdown Date" means the date on which an Advance is, or is to be, made;
"Drawdown Notice" means, in respect of a Facility, a notice substantially
in the terms of the relevant Part of schedule 2;
"Effective Date" means the date on which the requirements of Part A of
Schedule 3 are satisfied in accordance with clause 3;
"Electricity Act" means the Electricity ▇▇▇ ▇▇▇▇;
"Environmental Claim" means any claim, prosecution, demand, action,
official warning, abatement, penalty or other order (conditional or
otherwise) arising as a result of or in connection with any Environmental
Matter against any member or former member of the Group and including any
formal written notification or order requiring compliance with the terms
of any Environmental Licence or Environmental Law;
"Environmental Laws" means all or any laws, statutes, rules, regulations,
treaties, directives, by-laws, statutory codes of practices, circulars,
guidance notes, orders, notices and demands, decisions of the courts or
anything like any of the foregoing of any Government Entity or any other
body whatsoever in any jurisdiction or the European Union relating to
Environmental Matters and includes the Environmental Protection ▇▇▇ ▇▇▇▇
and the Environment ▇▇▇ ▇▇▇▇;
"Environmental Licence" means any permit, licence, authorisation, consent
or other approval required at any time by any Environmental Law;
"Environmental Matters" means:
(a) the generation, deposit, disposal, escape, keeping, treatment,
transportation, transmission, handling, importation, exportation,
processing, collection, sorting, presence or manufacture of any
"waste" (as defined in the Environmental Protection ▇▇▇ ▇▇▇▇ or in
any other Environmental Laws), or any Relevant Substance which
gives rise to a risk of causing harm to man or any other living
organism supported by the environment, or damaging the environment
or public health or, for so long as any member of the Group shall
be engaged in the Generation Business, welfare;
(b) nuisance, noise, health and safety at work or elsewhere; and
(c) the pollution, conservation or protection of the environment (both
natural and built) or of man or any living organisms supported by
the environment or any other matter whatsoever affecting the
environment or any part of it;
"Euro" means the single currency of participating member states (so
described in any legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified
European currency);
"Event of Default" means any of the events or circumstances described in
clause 12.1;
"Excluded Business" means any business (other than the Distribution
Business or Supply Business) which the Director General or other
competent authority may determine (by modification to the Licence or
otherwise) should not be operated within the REC Group;
"Expiry Date" means the date stated in a Letter of Credit to be its
expiry date or (if later) the latest date on which demand may be made
under it;
"Facility" means the facility granted by the Banks to the Borrower in
accordance with clause 2.1;
"Facility Agent" means Chase Manhattan International Limited of ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or such other person as may be appointed
Facility Agent for the Banks pursuant to clause 17;
"Facility Office" means, in relation to the Facility Agent or any Bank,
the office identified in Schedule 1 (or, in the case of a Substitute, at
the end of the Substitution Certificate to which it is a party as a
Substitute) or such other office as it may from time to time select
provided written notice thereof has been given by the Facility Agent or
such Bank to the Primary Borrower;
"Fee Letter" means the fee letter referred to in clause 7.1, in the
agreed form;
"Fee Payment Date" means each of the dates falling at three monthly
intervals after the date of this Agreement;
"Final Repayment Date" means 2 March 2003;
"Finance Documents" means this Agreement, any Deed of Accession, any
L/C-Related Documents, any Guarantee, each Drawdown Notice and the Fee
Letter;
"Finance Lease" means any lease under which a REC Company is the lessee
which is or should be treated as a finance or capital lease under the
Appropriate Accounting Principles (and includes any hire purchase
contract or other arrangement which is or should be similarly treated);
"Finance Parties" means the Facility Agent, the Issuing Bank, the
Arrangers, the Banks and (as the context requires) "Finance Party" means
any one of them;
"Finance Period" means the period from the date of this Agreement until
the date on which the Facility Agent confirms that neither the Finance
Parties nor any Obligor has any actual or contingent liabilities or
obligations under any of the Finance Documents;
"Financial Covenants" means the financial undertakings in clauses
10.3(a);
"Financial Definitions" means the definitions of Operating Profit and Net
Interest Expense;
"Generation Business" means the business of the Group (if any) in or
ancillary to the generation of electricity (whether for its own account
or that of any other party);
"Government Entity" means and includes (whether having a distinct legal
personality or not) any supra-national, national or local government
authority, regulatory body, central bank, board, commission, department,
division, organ, instrumentality, court or agency and any association,
organisation or institution of which any of the foregoing is a member of
or whose jurisdiction any of the foregoing is subject or in whose
activities any of the foregoing is a participant and (if the context
requires) which, in relation to Environmental Matters, has regulatory or
administrative authority under Environmental Laws;
"Group" means the Primary Borrower and all its Subsidiaries from time to
time;
"Guarantee" means the guarantee set out in schedule 9 to be given by each
Guarantor and "Guarantees" shall be construed accordingly;
"Guarantors" means the Primary Borrower and each Additional Guarantor,
which in each case has not been released from such Guarantee and
"Guarantor" means any one of them;
"Half-year Periods" means the financial periods of the REC Group ending
on 31 March and 30 September in each year;
"Indebtedness" means any obligation of a person for the payment or
repayment of money, whether as principal or as surety and whether present
or future, actual or contingent;
"Issue" means with respect to any Letter of Credit, to issue or extend
the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued", "Issuing" and "Issuance" have
corresponding meanings;
"Issue Date" means in relation to a Letter of Credit, the date on which
that Letter of Credit was Issued, or, as the context requires, is to be
Issued under clause 4.2 (Issue of Letters of Credit);
"Issuing Bank" means The Chase Manhattan Bank or any alternative Bank
which has been notified to the Primary Borrower by the Facility Agent as
the issuer of any Letter of Credit in accordance with the terms of this
Agreement;
"L/C-Related Documents" means each Letter of Credit, any Drawdown Notice
or other application for a Letter of Credit and any other document
relating to any Letter of Credit;
"Letter of Credit" means a letter of credit or a bank guarantee (as the
case may be) Issued or to be Issued by the Issuing Bank on the terms of
this Agreement;
"LIBOR" means, in relation to any Advance or unpaid sum, the rate per
annum determined by the Facility Agent to be equal to:
(a) the offered rate (if any) appearing on page 3740 or page 3750 of
the Telerate screen, or such other pages as may replace such page
of the Telerate screen, which displays
British Bankers Association Interest Settlement Rates for deposits
in the currency in which such Advance or unpaid sum is denominated
and for the specified period (where "specified period" means the
Interest Period or Maturity Period of such Advance or, as the case
may be, the period for which LIBOR falls to be determined in
relation to such unpaid sum); or
(b) if the Telerate screen is generally inaccessible or if the
relevant rate does not appear on page 3740 or page 3750 or such
other page as may replace such page of the Telerate screen, the
arithmetic mean (rounded upwards, if not already such a multiple,
to four decimal places) of the rates (as notified to the Facility
Agent) at which each of the Reference Banks was offering to
leading banks in the London inter-bank market deposits in which
such Advance or unpaid sum is denominated and for the specified
period,
in each case at or about 11.00 am on the Quotation Date for such period;
"Licences" means those licences granted by the Secretary of State:
(a) under section 6 of the Electricity Act authorising the Primary
Borrower to carry on the Distribution Business and supply of
electricity and any activities ancillary thereto;
(b) being replacement Licence or Licences granted from time to time to
any REC Company (or, if more than one, the most recent such
replacement), as amended and/or extended from time to time;
"Licence Undertaking" means any and each undertaking or assurance given
to the Director General or the Secretary of State concerning the
management and/or ownership of and/or other matters concerning the REC
Group;
"Majority Banks" means subject to clause 23 at any relevant time Banks:
(a) the aggregate of whose Contributions to the Facility exceeds 662/3
per cent. of the Total Contributions in respect of the Facility;
or
(b) (if no principal amounts are outstanding under this Agreement) the
aggregate of whose Commitments in respect of the Facility exceeds
662/3 per cent. of the Total Commitments in respect of the
Facility but so that if at such time the Total Commitments in
respect of the Facility have been reduced to zero references to a
Bank's Commitment in relation to the Facility shall be construed
as amongst the Finance Parties (and not so as to give any rights
to any other person) as a reference to that Bank's Commitment in
relation to the Facility immediately prior to such reduction to
zero;
"Material Adverse Effect" is a reference to:
(a) something having a material adverse effect on the ability of any
Obligor to perform its payment or Financial Covenant obligations
under any of the Finance Documents; or
(b) something (other than the Reservations) which results in any of
the Finance Documents not being legal, valid and binding on, or
enforceable in accordance with their terms
against, any Obligor in a manner and to an extent reasonably
considered by the Majority Banks to be materially adverse to the
interests of the Banks;
"Maturity Date" means, in relation to any Advance, the last day of the
period for which that Advance is drawn down;
"Maturity Period" means, in relation to any Advance, the period beginning
on its Drawdown Date and ending on its Maturity Date;
"month" or "months" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that (a) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it
shall end on the last Banking Day in such later calendar month and (b) if
such numerically corresponding day is not a Banking Day, the period shall
end on the next following Banking Day in such later calendar month but if
there is no such Banking Day it shall end on the preceding Banking Day
and "monthly" shall be construed accordingly;
"Net Interest Expense" means, in respect of the preceding two Half-year
Periods, the aggregate interest paid or payable less interest received or
receivable by the REC Group during that period of the type which would
appear as "Net Interest" in the audited accounts of the REC Group
applying the Appropriate Accounting Principles applied in preparation of
the audited accounts of the REC Group;
"Obligors" means the Primary Borrower and each Additional Obligor and
"Obligor" means any one of them;
"Operating Profit" means, in respect of the preceding two Half-year
Periods, the pre-tax profit of the REC Group of the type which appears as
"Profit on ordinary activities before taxation" in the accounts of the
REC Group (after adding back any Net Interest Expense during that year)
for that period, all as calculated in accordance with the Appropriate
Accounting Principles applied in preparation of the audited accounts of
the REC Group;
"Optional Currency" means any currency (other than Sterling) which is
freely transferable and freely convertible into Sterling;
"Outstanding Contingent Liabilities" at any time under a Letter of Credit
means the face value of that Letter of Credit at that time in accordance
with its express provisions less:
(a) the aggregate amount of any cash cover (not including any cash
cover lodged by any Bank) held in relation to that Letter of
Credit at that time; and
(b) (save to the extent that this is taken into account in the express
provisions of that Letter of Credit or unless the context
otherwise requires) the aggregate of all payments made by the
Issuing Bank, pursuant to demands made under that Letter of Credit
on or prior to such time, for which it has been reimbursed by the
relevant Borrower;
or such lesser amount as the Facility Agent and the Issuing Bank may
agree in good faith represents the maximum liability of the Issuing Bank
in respect thereof;
"Parent" means Texas Utilities Company whose principal place of business
is at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇;
"Parent Acquisition Date" shall mean the date as of which a person or
group of related persons first acquires more than 30% of the outstanding
Voting Shares of the Parent (within the meaning of section 13(d) or 14(d)
of the Securities Exchange Act of 1934 of the United States of America,
as amended, and the applicable rules and regulations thereunder);
"Permitted Security Interest" means a Security Interest created by any
REC Company being any of the following, namely:
(a) any lien arising solely by operation of law in the ordinary course
of business and securing amounts not more than 90 days overdue or
which are being contested with due diligence and in good faith,
and other liens agreed to in writing by the Majority Banks;
(b) any Security Interest existing on or over the assets of any REC
Company as at the Effective Date (or which any REC Company is
obliged to create under a contract existing at such date), but
only if:
(i) the maximum principal amount of the indebtedness secured by
the Security Interest is not increased after the Effective
Date; and
(ii) any such Security Interest which is created between 2 March
1998 and the Effective Date is discharged within 180 days
after the Effective Date (unless the Security Interest was
created pursuant to an obligation existing as at 2 March
1998);
(c) any Security Interest existing on or over an asset acquired by any
REC Company after the date of this Agreement, but only if:
(i) the Security Interest was not created in contemplation of
the acquisition; and
(ii) the maximum principal amount of the indebtedness secured by
the Security Interest is not subsequently increased;
(d) any Security Interest over any asset acquired by any REC Company
after the date of this Agreement as security for Indebtedness
incurred to finance or refinance (within 6 months of the
acquisition) all or part of the consideration for the acquisition
of that asset, provided that the Indebtedness secured by Security
Interests under this subclause (d) shall not exceed (pound)250,000
in aggregate at any time;
(e) any Security Interest arising over
(i) accounts with any bank or financial institution as a result
of netting and set-off arrangements existing with such
person to the extent that such arrangements are in support
of net overdraft facilities extended by such person; or
(ii) documents of title to goods and insurances under trade
finance facilities provided to any REC Company as part of
the REC Group's normal day to day banking business;
(f) any Security Interest over goods purchased in the ordinary course
of business arising by virtue of the supplier's retention of title
clause in its standard conditions of supply to secure only the
purchase price of the goods;
(g) so far as they relate to netting, settlement or pooling
arrangements or as required by the regulatory framework or
arrangements in which the relevant business operates, any Security
Interest arising under the Relevant Arrangements;
(h) any Security Interest arising under the terms of Derivatives
Transactions or as a result of trading of shares or other
securities where such Security Interest arises under the rules of
the relevant exchange or clearing system;
(i) any Security Interest constituted by a Finance Lease if the
capital value of such Finance Lease would be permitted under this
Agreement as Borrowed Money under clause 11.1(b); and
(j) any Security Interests (other than any Security Interest permitted
by sub-paragraphs (a) to (i) above) securing indebtedness not
exceeding in aggregate (pound)10,000,000 or its equivalent in
other currencies at any time;
"Pooling and Settlement Agreement" means the pooling and settlement
agreement dated 30 March 1990 made between REC and 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 in
England and Wales;
"Proportion" means, in relation to a Bank, the proportion borne by its
Commitment to the Total Commitments (or, if the Total Commitments are
then zero, by its Commitment to the Total Commitments immediately prior
to their reduction to zero);
"Qualifying Bank" means:
(a) a person which:
(i) is a bank within the meaning of Section 840A of the Income
and Corporation Taxes ▇▇▇ ▇▇▇▇;
(ii) will be beneficially entitled to any interest to be paid to
it (as a Bank) under this Agreement; and
(iii) is within the charge to United Kingdom corporation tax as
respects such interest,
except that, if Section 349 or Section 840A of the Income and
Corporation Taxes Act 1988 is repealed, modified, extended or
re-enacted, the Facility Agent may at any time and from time to
time (after consultation with the Primary Borrower and the Banks)
amend this paragraph (a) in such manner as it may determine acting
reasonably to be appropriate by giving notice of the amended
paragraph (a) to the Primary Borrower and the Banks and, so far as
practicable to put the Banks in the same position as they would
otherwise have been in; or
(b) a Treaty Lender;
"Quotation Date" means, in relation to an Interest Period, Maturity
Period or other period for which LIBOR is to be determined, the date on
which quotations would customarily be provided by leading banks in the
London Interbank Market for deposits in the currency in relation to which
such rate is to be determined for delivery on the first day of that
Interest Period, Maturity Period or other period;
"REC Companies" means the Primary Borrower initially, together with any
other members of the Group carrying on the whole, or part of, the
Distribution Business or Supply Business and/or holding any assets used
to carry on the whole, or part of, the Distribution Business or Supply
Business and/or licensed under the Act to carry on the whole, or part of,
the Distribution Business or Supply Business, each being a "REC Company";
"REC Group" means the REC Companies from time to time;
"Recovering Bank" has the meaning given to that term in clause 15.2;
"Reference Banks" means The Chase Manhattan Bank and any two other banks
selected by the Facility Agent with the consent of the Primary Borrower
(which is not to be unreasonably withheld), or if any of them cease to so
act, such other bank or banks selected by the Facility Agent in
accordance with clause 23.7;
"Related Persons" each of the Facility Agent, the Issuing Bank, any
successor Facility Agent, or Issuing Bank arising under clause 17, the
Arrangers and the Underwriters, together with their respective Affiliates
and the officers, directors, employees, agents, trustees and
attorneys-in-fact of such persons and Affiliates;
"Relevant Arrangements" means any arrangements under or in connection
with pooling and settlement agreements or agreements of the electricity
distribution and/or supply industry or energy trading business (including
the Pooling and Settlement Agreement) or in connection with any
transactions or arrangements entered into in the ordinary course of its
business in a form usual in any such industry or business;
"Relevant Substance" means any radioactive emissions, radiation, noise,
any natural or artificial substance whatsoever (whether in a solid or
liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) and includes, without limitation,
"waste" (as defined in the Environmental Protection ▇▇▇ ▇▇▇▇ or in any
equivalent legislation or regulation in force in any jurisdiction in
which any REC Company owns property or assets or carries on any business
or operations);
"Reservations" means (a) the principle that equitable remedies may be
granted or refused at the discretion of the court, (b) the limitation on
enforcement by laws of general application relating to insolvency,
liquidation, reorganisation, court schemes or administration, (c) the
time barring of claims under the Limitation Act 1980 and (d) the
possibility that an undertaking to assume liability for or to indemnify
against non-payment of UK stamp duty may be void;
"Secretary of State" means the Secretary of State for Trade and Industry
from time to time or such other person as may for the time being be
fulfilling the functions of the Secretary of State under the Electricity
Act;
"Security Interest" means any mortgage, pledge, lien, charge, assignment,
right of set-off, arrangement for retention of title, hypothecation or
security interest, or any other agreement or arrangement having the
effect of conferring security or a security interest, or any agreement to
sell or otherwise dispose of any asset on terms whereby such asset is
acquired or reacquired by any REC Company;
"Spot Rate" means, in respect of any sum denominated in any currency
other than Sterling at any date, the Facility Agent's spot rate of
exchange for purchase of that sum in that currency in the London foreign
exchange market with Sterling at or about 11.00 am on that date for
delivery of such sum two Banking Days thereafter;
"Sterling" and "(pound)" mean the lawful currency for the time being of
the United Kingdom and in respect of all payments to be made under this
Agreement in Sterling mean immediately available, freely transferable
cleared funds;
"Sterling Amount" means:
(a) in respect of Outstanding Contingent Liabilities, the sum of the
amount in Sterling of the Outstanding Contingent Liabilities under
Letters of Credit denominated in Sterling and the amount of
Sterling required to purchase the currency amount of the
Outstanding Contingent Liabilities under Letters of Credit
denominated in each other currency at the Spot Rate at that time
and so that such Sterling Amount shall be recalculated by the
Facility Agent:
(i) in any event, on every Quarter Date; and
(ii) on each date on which the Majority Banks request the
Facility Agent to do so in accordance with the provisions
of clause 4.10 (Currency Fluctuations);
and any recalculated amount under paragraph (a) and (b) above
shall thereupon and until the next recalculation required by this
Agreement constitute the relevant Sterling Amount for all purposes
of this Agreement;
(b) in respect of each Advance, if such Advance is denominated in
Sterling, the amount of the Advance requested in the Drawdown
Notice relating to the Advance, or, in the case of an amount of an
Advance denominated in an Optional Currency the amount of Sterling
required to purchase such amount calculated at the Spot Rate on
the Quotation Date in each case as reduced by the amount (if any)
of such Advance which has been repaid;
"Subsidiary" means:
(a) a subsidiary within the meaning of section 736 of the Act; and
(b) for the purposes of the definition of "Affiliate" and "Group" and
clauses 10.1(a), 10.3, 20.6 and schedule 6 only, a subsidiary
undertaking within the meaning of section 258 of the Act;
"Substitute" has the meaning given to that term in clause 16.3;
"Substitution Certificate" means a certificate substantially in the terms
of schedule 5;
"Supply Business" means, in the case of each REC Company, its authorised
business as a public electricity supplier in the authorised area as such
terms are used in its Public Electricity Supply licence from time to
time;
"Syndication Date" means the date as determined by the Arrangers and
notified by them to the Primary Borrower on which syndication of the
Facilities has been fully completed;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature including without limitation any
interest or penalties payable in connection with any failure or delay in
paying any of the same and "Taxation" shall be construed accordingly;
"Total Commitments" means, at any relevant time, and save as otherwise
provided herein, the total of the Commitments of all the Banks in respect
of the Facility at such time;
"Total Contributions" means, in respect of the Facility, the total of the
Contributions of all the Banks in respect of the Facility at such time;
"Treaty Lender" means a person which is resident (as such term is defined
in the appropriate double taxation treaty) in a country with which the
United Kingdom has a double taxation treaty giving residents of that
country complete exemption from the imposition of any withholding or
deduction for or on account of United Kingdom Taxes on interest (and
which does not carry on business in the United Kingdom through a
permanent establishment with which the Indebtedness under this Agreement
in respect of which the interest is paid is effectively connected);
"Utilisation" means the making of an Advance or the Issue of a Letter of
Credit;
"Voting Shares" means outstanding shares of capital stock of any class of
the Parent entitled to vote in the election of directors, excluding
shares entitled so to vote only upon the happening of some contingency;
and
"Wider Group" means TU Finance (No.1) Limited and all its Subsidiaries
from time to time (other than any REC Company).
1.3 Headings
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement and
references to this Agreement include its schedules;
(b) references to (or to any specified provision of) this Agreement or
any other document shall be construed as references to this
Agreement (including any Substitution Certificate), that provision
or that document as in force for the time being and as from time
to time amended, novated or supplemented in accordance with its
terms, or, as the
case may be, with the agreement of the relevant parties and (where
such consent is, by the terms of this Agreement or the relevant
document, required to be obtained as a condition to such amendment
being permitted) the prior written consent of the Facility Agent;
(c) references to a "regulation" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any Government Entity;
(d) references to an "authorisation" mean and include any consent,
authorisation, licence, approval and permit;
(e) words importing the plural shall include the singular and vice
versa;
(f) references to a time of day are to London time;
(g) references to a "person" shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any of its
agencies;
(h) references to "assets" include all or part of any business,
undertaking, real property, personal property, shareholdings,
assets, revenues, uncalled capital and any rights (whether actual
or contingent, present or future) to receive, or require delivery
of, any of the foregoing;
(i) references to the "equivalent" of an amount specified in a
particular currency (the "specified currency amount") shall be
construed as a reference to the amount of the other relevant
currency which can be purchased with the specified currency amount
in the London foreign exchange market at or about 11 a.m. on the
day on which the calculation falls to be made for spot delivery,
as conclusively determined by the Facility Agent (with the
relevant exchange rate of any such purchase being the "spot
rate");
(j) references to any enactment shall be deemed to include references
to such enactment as re-enacted, amended or extended;
(k) references to documents being in the "agreed form" mean documents
initialled by both ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (on behalf of the Facility
Agent and the Arrangers) and ▇▇▇▇▇▇ ▇▇▇▇ (on behalf of the
Obligors), or otherwise in the form required by the Facility
Agent;
(l) references to "VAT" are to be construed as including references to
any similar Tax;
(m) "including" and "in particular" shall not be construed
restrictively but shall mean "including, without prejudice to the
generality of the foregoing" and "in particular, but without
prejudice to the generality of the foregoing" respectively;
(n) references to documents being "certified copies" mean copies
certified as being true, complete and up-to-date copies as of a
date no earlier than the date of this Agreement by an officer of
the Primary Borrower who is at such time duly authorised to
execute or certify such documents on behalf of the Primary
Borrower;
(o) "arms-length terms" means on terms which are fair and reasonable
to the relevant REC Company and no more or less favourable to the
other party to the relevant transaction than could reasonably be
expected to be obtained in a comparable transaction with a person
unconnected with the REC Group;
(p) references to "holding company" and "wholly-owned subsidiary",
save as otherwise defined, shall bear the same meaning as in
section 736 of the Act, as if extended to bodies corporate
wherever incorporated;
(q) a Letter of Credit being "repaid" or "prepaid" is effected by:
(i) providing the Issuing Bank with cash cover in the currency
in which that Letter of Credit is denominated;
(ii) reducing (in accordance with the terms of this Agreement
and the relevant Letter of Credit) the amount that may be
demanded under that Letter of Credit (or by such amount
automatically reducing in accordance with the terms of the
relevant Letter of Credit); or
(iii) cancelling that Letter of Credit by returning the original
to the Issuing Bank together with written confirmation (in
form and substance satisfactory to the Issuing Bank) from
the beneficiary that the Issuing Bank has no further
liability under that Letter of Credit.
2. THE COMMITMENTS
2.1 The Facilities
The Banks, relying upon each of the representations and warranties in
clause 9 and upon and subject to the conditions hereof, agree to make
available to the Primary Borrower and (subject to accession to this
Agreement under clause 24) the Additional Borrowers, a revolving advance
and letter of credit facility in an aggregate principal amount of
(pound)250,000,000.
The obligations of each Bank under this Agreement shall be to participate
in each Utilisation in the proportion which its Commitment in respect of
the Facility bears to the Total Commitments in respect of the Facility
but so that no Bank shall be under any obligation to participate in a
Utilisation if and to the extent its Commitment in respect of the
Facility would thereby be exceeded.
2.2 Finance Parties' obligations several
The obligations of each Finance Party under this Agreement are several;
the failure of any Finance Party to perform such obligations shall not
relieve any other Finance Party or any Obligor of any of their respective
obligations or liabilities under this Agreement nor shall any Finance
Party be responsible for the obligations of any other Finance Party under
this Agreement.
2.3 Finance Parties' interests several
Notwithstanding any other term of this Agreement (but without prejudice
to the provisions of this Agreement relating to or requiring action by
the Majority Banks) the interests of the Finance Parties are several and
the amount due to each of the Finance Parties (for its own account) is a
separate and independent debt. Without prejudice to any other provision
of this Agreement (including any requirement for action to be approved or
instigated by, or with the consent or approval of, the Majority Banks)
each of the Finance Parties shall have the right to protect and enforce
its rights to amounts which have become due and payable to it under this
Agreement and it shall not be necessary for any other Finance Party to be
joined as an additional party in any proceedings for this purpose.
3. THE CONDITIONS
3.1 Documents and evidence
No Drawdown Notice may be delivered until the Facility Agent, or its duly
authorised representative, shall have received the documents and evidence
specified in Schedule 3, in each case in form and substance satisfactory
to the Facility Agent which the Facility Agent shall, once it is so
satisfied, confirm in writing to the Primary Borrower.
3.2 General conditions precedent
Each Utilisation is subject to the further conditions that at the date of
each Drawdown Notice and on each Drawdown Date and Issue Date:
(a) the applicable representations and warranties set out in clause 9
are true and correct on and as of each such date as if each were
made with respect to the facts and circumstances existing at such
date; and
(b) no Default shall have occurred and be continuing or would result
from the making of such Utilisation,
but this clause 3.2 shall not prevent the rollover of an existing Advance
(without increasing the amount thereof) or the refinancing of an amount
payable under a maturing Letter of Credit by an Advance in each case for
a Maturity Period of no more than one month at any time when no Event of
Default has occurred and is continuing.
3.3 Waiver of conditions precedent
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in
part and with or without conditions by the Facility Agent acting on the
instructions of the Majority Banks in respect of any Utilisation.
4. ADVANCES UNDER THE FACILITY
4.1 The Facility
(a) Drawdown
Subject to the terms and conditions of this Agreement, Advances
shall be made to the relevant Borrower following receipt by the
Facility Agent from the relevant Borrower of an appropriately
completed Drawdown Notice in the form set out in Part A of
Schedule 2 relating to the Facility not later than 11 a.m. one
Banking Day, in the case of a Sterling Advance, and three Banking
Days otherwise, before the proposed Drawdown Date.
(b) Amount
Each Drawdown Notice delivered to the Facility Agent pursuant to
clause 4.2(a) shall be irrevocable and shall specify:
(i) the proposed Drawdown Date, which shall be a Banking Day
falling prior to the Final Repayment Date;
(ii) the currency of denomination of the Advance (being Sterling
or an Optional Currency);
(iii) the amount of the Advance, which shall be of
(pound)10,000,000 or any larger sum which is an integral
multiple of (pound)5,000,000 (or if such Advance is to be
denominated in an Optional Currency, an integral multiple
of 1,000,000 of the largest currency unit of that Optional
Currency but in an amount at least the equivalent of
(pound)5,000,000) or, if less, the Available Facility
Amount in respect of the Facility on the relevant Drawdown
Date;
(iv) the Maturity Period which shall be of 1, 2, 3 or 6 months
(or such other period as the Facility Agent, acting on the
instructions of the Majority Banks, shall agree) ending not
later than the Final Repayment Date;
(v) the account to which the proceeds of the proposed Advance
are to be paid.
(c) Number of Advances
There shall be no more than 20 Advances outstanding at any time,
and not more than one Advance may be made in any period of 5
consecutive Banking Days.
(d) Calculation of Available Commitment
For the purpose of calculating the Available Commitment, the
Outstanding Contingent Liabilities under a Letter of Credit will
initially be its Sterling Amount on the Issue Date, subject to
recalculation by the Facility Agent in accordance with the
definition of "Sterling Amount" and clause 4.10 (Currency
Fluctuations).
(e) Cancellation on the Final Repayment Date
Without prejudice to any other provision of this Agreement, the
Total Commitments under the Facility shall in any event be reduced
to zero on the Final Repayment Date in respect of such Facility
and no Advance may be drawn by the Borrowers under the Facility
thereafter.
(f) Unavailability of Optional Currency
If a Borrower requests that an Advance be denominated in an
Optional Currency during its Maturity Period as provided in Clause
4.1(b)(ii), and:
(i) no later than 10.00 a.m. on the Quotation Date for such
Advance, any Bank or Banks (an "Affected Bank") notifies
the Facility Agent (providing detailed reasons and
justification therefor) that it is not able to comply with
such request; or
(ii) no later than 11.00 a.m. on the Quotation Date for such
Advance, the Agent notifies the relevant Borrower and the
Banks that by reason of circumstances affecting the London
Interbank Market generally it is not feasible for such
Advance to be made in such Optional Currency or, as the
case may be, denominated in such Optional Currency for the
relevant Maturity Period;
(iii) to give effect to such request would cause the Advances
under the Facility to be denominated in more than four
Optional Currencies,
then:
(aa) if the circumstances in paragraph (i) above only
apply, the relevant Borrower and the Facility Agent
shall agree to adjust the amount of such Advance to
exclude the participation therein of the Affected
Bank or Banks and the Affected Bank or Banks shall
make a separate Advance in Sterling in the amount of
their scheduled participation in such Advance
Provided always that the Maturity Period thereof
ends on the same day as the Maturity Period of such
Advance; and/or
(bb) if the circumstances in (ii) and/or (iii) apply,
such Advance shall not be made unless the relevant
Borrower and the Banks otherwise agree, or the
relevant Borrower specified in the Drawdown Notice
in respect of such Advance that such Revolving
Advance should be denominated in Sterling in such
circumstances in which case such Advance shall be
made in Sterling in the Sterling Amount relating to
such Advance.
4.2 Issue of Letters of Credit
Subject to the provisions of this Agreement and to the prior delivery of
the notice referred to in clause 4.1(a), the Issuing Bank will Issue a
Letter of Credit specified in a Drawdown Notice at the request of a
Borrower, if the Agent has received the Drawdown Notice for a Letter of
Credit in the form set out in Part B of schedule 2 (Letters of Credit)
signed on behalf of such Borrower not later than 11.00 am five Banking
Days prior to the proposed Issue Date; and
(a) the proposed Issue Date is a Banking Day on or before the Final
Repayment Date;
(b) the face value of each Letter of Credit is a minimum Sterling
Amount of (pound)250,000;
(c) the Expiry Date falls on or before the earlier of 12 months from
the Issue Date and the Final Repayment Date;
(d) the Issuing Bank and (if different) the Facility Agent has agreed
its terms;
(e) the Sterling Amount of the Letter of Credit requested does not
exceed the Available Facility Amount in respect of the Facility;
(f) after such Issue, there will be no more than twenty Letters of
Credit outstanding;
(g) no order, judgment or decree of any Governmental Entity or
arbitrator shall be outstanding which by its terms purports to
enjoin or restrain the Issuing Bank from Issuing such Letter of
Credit, nor shall any requirement of law applicable to the Issuing
Bank or any request or directive (whether or not having the force
of law) from any Governmental Entity with jurisdiction over the
Issuing Bank prohibit, or request that the Issuing Bank refrain
from, the Issuance of Letters of Credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Bank with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise
compensated hereunder and which is not in effect on the date of
this Agreement), or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
date of this Agreement and which the Issuing Bank in good ▇▇▇▇▇
▇▇▇▇▇ material to it;
(h) the currency in which the relevant Letter of Credit is to be
denominated is, in the opinion of the Issuing Bank, not likely to
be subject to undue fluctuation against Sterling and is likely to
be freely convertible and available in sufficient amounts to
enable the Issuing Bank to discharge its obligations as they fall
due;
(i) the Issuing Bank has approved (and been approved by) the relevant
beneficiary; and
(j) the total Sterling Amount of all Outstanding Contingent
Liabilities under all Letters of Credit then outstanding would not
exceed (pound)100,000,000.
4.3 Advances generally
(a) A Drawdown Notice (or notice purporting to be such) shall only be
effective if it complies with this Agreement and only upon actual
receipt by the Facility Agent and, once given, shall be
irrevocable.
(b) As soon as practicable after receipt of each Drawdown Notice
complying with this Agreement the Facility Agent shall notify each
Bank of such receipt and of the date on which the proposed Advance
is to be made and of the relevant Interest Period or, as the case
may be, the relevant Maturity Period and each Bank shall on such
Drawdown Date or, the case may be, on the first day of the
relevant Interest Period participate in such Advance by making
available to the Facility Agent its portion of such Advance in
accordance with clause 8.2 (Payments by the Banks).
4.4 Application of proceeds
Without prejudice to the Borrowers' obligations under clause 1.1(a), none
of the Finance Parties shall have any responsibility for the application
of the proceeds of any Utilisation by the relevant Borrower.
4.5 Letters of Credit
(a) Issuing Bank as principal: the Issuing Bank will act as principal
of each Letter of Credit Issued by it and each Bank will
counter-indemnify the Issuing Bank in respect of the Outstanding
Contingent Liabilities thereunder in the relevant Proportion;
(b) Borrower's Authorisation and Indemnity: the relevant Borrower
unconditionally and irrevocably:
(i) authorises the Issuing Bank to comply with any demand which
appears to be duly made by a third party in respect of a
Letter of Credit without any further reference to the
relevant Borrower on the terms set out in Schedule 7 (Terms
of Borrower's Indemnity);
(ii) agrees that its authorisation under clause 4.5(b)(i) and
its indemnity under clause 4.5(b)(iv) shall remain in full
force and effect and shall not be discharged until such
date as the Facility Agent (acting on the instructions of
the Issuing Bank) shall notify the relevant Borrower that
it is satisfied (acting reasonably) that the Issuing Bank
remains under no liability (actual or contingent) in
respect of any Letter of Credit;
(iii) agrees that each Letter of Credit is Issued subject to and
with the benefit of the provisions of Schedule 7 (Terms of
Borrower's Indemnity); and
(iv) if a Finance Party suffers any liabilities, damages, costs,
expenses, losses and charges whatsoever in relation to or
arising out of any Letter of Credit Issued or clause 4.6
(Banks' Guarantee and Indemnity), the benefit of Schedule 7
(Terms of Borrower's Indemnity) shall extend to such
Finance Party. The relevant Borrower may finance a payment
under such indemnity by drawing down an Advance if it is
then entitled to do so in accordance with the terms of this
Agreement.
4.6 Banks' Guarantee and Indemnity
Each Bank hereby irrevocably and unconditionally:
(a) subject to clause 4.6(b), guarantees to and indemnifies on the
terms set out in Schedule 8 (Terms of Interbank Guarantee and
Indemnity) the Issuing Bank severally in its Proportion and on
demand by the Issuing Bank, the due and punctual performance by
the relevant Borrower of all its obligations in respect of each
Letter of Credit Issued by the Issuing Bank;
(b) if it is not permitted by its constitutional documents or any
applicable law to grant guarantees, agrees that, upon any failure
of the relevant Borrower to make timely payment of any amount due
in respect of a Letter of Credit, such Bank shall take (and upon
the occurrence of an Event of Default specified in clauses 12.1(e)
to (n) (Events of Default) shall be deemed to have taken without
any further action, as of the Issue Date of each outstanding
Letter of Credit), an undivided participating interest from the
Issuing Bank in each Letter of Credit outstanding at such time in
a proportion equal to such Bank's Proportion. Each Bank shall hold
the Issuing Bank harmless and indemnify
the Issuing Bank for such Bank's proportionate share of any
drawing under any Letter of Credit in which it has taken an
undivided participating interest under this clause 4.7;
(c) as a separate and independent stipulation agrees that any sum of
money intended to be the subject of the guarantee in clause
4.6(a), and subject to clause 4.6(b) and Schedule 8 (Terms of
Interbank Guarantee and Indemnity), shall be recoverable from it
(in its Proportion) as sole principal debtor even if such sum
would not be recoverable from the relevant Borrower by reason of
any legal limitation or disability or incapacity or liquidation of
the relevant Borrower or any other fact or circumstance (whether
known to the Issuing Bank or not) but which would have been
recoverable from such Bank if it were the sole or principal debtor
in respect of such liability in place of the relevant Borrower;
(d) if it ceases to have the Minimum Rating as defined in clause 16.5,
to lodge forthwith with the Issuing Bank cash cover as security
for its indemnity obligations in the same amount as if it had
been, on that date, a Substitute.
4.7 Calculation of Interest if Bank makes a Guarantee or Indemnity Payment
Any payment made or to be made by a Bank pursuant to clause 4.6 (Banks'
Guarantee and Indemnity) and any unreimbursed amount on the part of the
Issuing Bank shall (for the purpose of calculating interest thereon which
is due from the relevant Borrower) be deemed to have been made available
to the relevant Borrower by way of an Advance on the date such payment is
made or is to be made (or reimbursed) and accordingly is subject to the
terms and conditions hereof and, after the earliest date on which an
Advance could have been drawn down to fund such liability, such amount
shall be treated as if it were an overdue sum with an initial term of one
month but (for all other purposes) shall be immediately due and payable
by the relevant Borrower.
4.8 Defaulting Banks
If a Bank (a "Defaulting Bank") fails to make payment on its due date of
any amount (an "overdue amount") due from it for the account of the
Issuing Bank pursuant to clause 4.6 (Banks' Guarantee and Indemnity) then
until the Issuing Bank (or the Agent on its behalf) has received payment
of such overdue amount in full (and without prejudice to any other rights
or remedies of the Issuing Bank in respect of such failure):
(a) the Issuing Bank shall be entitled to receive any remuneration
which such Defaulting Bank would otherwise have been entitled to
receive in respect of the Facility; and
(b) the overdue amount shall bear interest at the rate of one per cent
per annum over LIBOR plus the Additional Cost for the time being
from the due date until the date of payment and any such interest
which accrues shall be compounded monthly.
4.9 Subrogation of Banks making guarantee payments
(a) The relevant Borrower agrees that if any Bank makes any payment
under clause 4.6 (Banks' Guarantee and Indemnity) it will
immediately be subrogated to any rights that the Issuing Bank may
then have against the relevant Borrower in respect of the amount
paid and such subrogation will be subject to the terms set out in
Schedule 7 (Terms of Borrower's Indemnity).
(b) The relevant Borrower agrees to indemnify the Bank making such a
payment in respect of such payment and all costs and expenses
properly incurred by the Bank in recovering or attempting to
recover any amount pursuant to such rights of subrogation.
4.10 Currency Fluctuations
In addition and without prejudice to the Banks' other rights hereunder,
the Facility Agent shall on every Quarter Date (and at any other time at
which it is requested to do so by the Majority Banks) calculate the
aggregate of the Sterling Amounts of all Outstanding Contingent
Liabilities under all Letters of Credit then outstanding.
4.11 Clawback
If the Facility Agent at any time issues a certificate addressed to the
Primary Borrower that in its opinion the aggregate of the Sterling
Amounts of Outstanding Contingent Liabilities under all Letters of Credit
then outstanding is equal to or exceeds 105% of the aggregate amount of
the Banks' Commitments under the Facility less the amount of all
outstanding Advances at that time, the Agent may give notice to the
Borrowers requiring them within five Banking Days either to:
(a) make arrangements to repay Advances and/or reduce the amount of
the Letters of Credit outstanding so as to bring the Sterling
Amount of all such Outstanding Contingent Liabilities to an amount
equal to or below 100% of that aggregate amount; or
(b) provide the Issuing Bank with cash cover in the currency in which
any Letter of Credit is denominated of such amount as would cause
the requirements of this clause 4.11 to be satisfied.
4.12 Cash Cover
Wherecash cover is provided by any Borrower under clause 4.11 (Clawback)
or otherwise under this Agreement:
(a) the Issuing Bank or other recipient Bank undertakes to place the
relevant cash deposit in an account with it bearing interest at a
rate and on the standard terms (other than as to the security
arrangements) applicable to corporate customers of such Bank
making deposits of an equivalent size and for an equivalent
duration (or on such other terms as such Bank and such Borrower
may agree or are set out in this Agreement);
(b) interest accruing on cash deposited as cash cover shall be for the
account of and paid to such Borrower but shall not be paid to such
Borrower during the continuance of an Event of Default; and
(c) unless the Majority Banks decide otherwise, cash cover may not be
withdrawn by any Borrower until all outstanding liabilities of the
Issuing Bank in respect of all Letters of Credit have been repaid
or prepaid (ignoring for this purpose any cash cover provided to
the Issuing Bank) in full.
5. INTEREST AND MATURITY PERIODS
5.1 Interest under the Facility
The relevant Borrower shall pay interest on each Advance on its Maturity
Date (or, in the case of an Advance having a Maturity Period of more than
six months, by instalments, every six months from the relevant Drawdown
Date and on the relevant Maturity Date) at the rate per annum determined
by the Facility Agent to be the aggregate of (i) the Applicable Margin,
(ii) the Additional Cost and (iii) LIBOR.
5.2 Interest on unpaid sums
(a) If any Borrower fails to pay any sum (including, without
limitation, any sum payable pursuant to this clause 5.2) on its
due date for payment under this Agreement such Borrower shall pay
interest on such sum from the due date up to the date of actual
payment (as well after as before judgment) at a rate determined by
the Facility Agent pursuant to this clause 5.2.
(b) The period beginning on the due date for payment and ending on the
date of actual payment shall be divided into successive periods of
not more than three months as selected by the Facility Agent
(after consultation with the Banks so far as reasonably
practicable in the circumstances) each of which (other than the
first, which shall commence on such due date) shall commence on
the last day of the preceding such period but so that if the
unpaid sum is an amount of principal which shall have become due
and payable prior to the relevant Maturity Date, then the first
such period selected by the Facility Agent shall end on such
Maturity Date.
(c) The rate of interest applicable to each period referred to in
clause 5.2(b) shall (subject to clause 5.4) be the aggregate (as
determined by the Facility Agent) of (i) one per cent per annum,
(ii) the Applicable Margin (iii) the Additional Cost and (iv)
LIBOR but so that if the unpaid sum is an amount of principal (as
referred to in clause 5.2(b)) interest shall be payable on such
unpaid sum during the first period determined pursuant to clause
5.2(b) at a rate one per cent above the rate applicable thereto
immediately before it fell due.
(d) Interest under this clause 5.2 shall be due and payable on the
last day of each period determined by the Facility Agent pursuant
to this clause 5.2 or, if earlier, on the date on which the sum in
respect of which such interest is accruing shall actually be paid
or on such date or other dates which the Facility Agent may
specify by written notice to the relevant Borrower (but not more
frequently than once a month). Any interest payable under this
clause 5.2 which is not paid when due shall be deemed an unpaid
sum and shall itself bear interest accordingly.
5.3 Notification of Maturity Periods and interest rate
The Facility Agent shall notify the relevant Borrower and the Banks
promptly of the duration of each Maturity Period or other period for the
calculation of interest (or, as the case may be, default interest) and of
each rate of interest determined by it under this clause 5.
5.4 Alternative interest rates
If:
(a) in attempting to calculate LIBOR under paragraph (b) of the
definition of LIBOR for a specified period the Facility Agent
determines at 11.00 a.m. (London time) on the Quotation Date that
it is unable to obtain quotations for LIBOR from any of the
Reference Banks in respect of the relevant Advance or unpaid sum
for the specified period; or
(b) before its close of business on such day, the Facility Agent has
been notified in writing by a Bank or group of Banks to which 35%
or more of the relevant Advance or unpaid sum is (or, if the
relevant Advance were made, would then be) owed that LIBOR
calculated in accordance with its definition in this Agreement
does not accurately reflect the cost to them of funding their
participation; or
(c) the Facility Agent, acting reasonably, determines that, by reason
of circumstances affecting the London inter-bank market, adequate
and fair means do not or will not exist for determining the rate
of interest applicable to the specified period,
then:
(i) the Facility Agent shall promptly notify in writing the
Primary Borrower and the Banks of such event or
circumstance;
(ii) the Facility Agent (on behalf of and after consultation
with the Banks) shall, within three Banking Days of such
notice, negotiate with the Primary Borrower with a view to
agreeing a substitute basis on which the relevant part of
the Facility may be maintained;
(iii) any substitute basis agreed in writing by the Facility
Agent (on behalf of and with the consent of all the Banks)
and the Primary Borrower within 30 days of such notice
shall take effect in accordance with its terms and interest
shall be calculated as if the substitute basis had come
into effect from the beginning of the relevant specific
period;
(iv) in default of agreement within 30 days, each Bank's
participation in the Advance or unpaid sum (if any) shall
during that specific period bear interest at the annual
rate equal to the cost to that Bank (as certified by it to
the Primary Borrower within ten days of the end of that 30
day period and expressed as a percentage rate per annum) of
funding its participation during that specific period by
whatever means that Bank determines to be most appropriate
plus the Applicable Margin and the Additional Cost and if
clause 5.4 (Interest on unpaid sums) applies, a further one
per cent.
6. REPAYMENT, CANCELLATION AND REDUCTIONS
6.1 Repayment of Advances
(a) The relevant Borrower shall repay each Advance in full on its
Maturity Date but, subject to the terms of this Agreement, amounts
repaid may be reborrowed.
(b) On the Final Repayment Date the balance of all outstanding
Advances shall in any event be repaid in full (together with all
other amounts outstanding under the Facility) and may not be
reborrowed.
(c) In the event that
(i) there is a Change in Control of the Parent; or
(ii) any REC Company ceases to be a Subsidiary of the Parent or
the Parent reduces its shareholding (whether direct or
indirect) in any REC Company;
then, within thirty days of such event (unless the Majority Banks
decide otherwise) the balance of all outstanding Advances shall be
repaid in full (together with all other amounts outstanding under
the Facility) and may not be reborrowed and each Borrower shall
procure the provision of full cash cover for the Outstanding
Contingent Liabilities under all Letters of Credit then
outstanding in the currency in which those Letters of Credit are
denominated.
6.2 Optional prepayment of all the Banks
The relevant Borrower may prepay Advances other than on their relative
Maturity Date provided that it shall simultaneously pay any relevant
amounts payable pursuant to clause 13.1.
6.3 Affected Banks
(a) The relevant Borrower may and, where required under this Agreement
shall prepay (in whole but not in part only), without premium or
penalty, subject to clause 13.1, the whole of the Contributions to
the Facility of any Affected Bank. Upon any such notice of such
prepayment being given, or as provided for in clause 14.1, the
Commitments of the relevant Bank to the Facility shall be reduced
to zero and the undrawn amount of the Total Commitments in respect
of the Facility shall be reduced accordingly.
(b) Instead of or, in addition to, its rights under clause 6.5(a) the
relevant Borrower may on payment of the fee under clause 16.5,
without prejudice to clause 14.4, require the Affected Bank to
transfer pursuant to clause 16.5 at par all of its Commitments and
Contributions to a Qualifying Bank nominated by the relevant
Borrower provided that the relevant Qualifying Bank agrees (in its
absolute discretion) to accept the transfer to it and, in the case
of clause 14.1, that Bank is lawfully able to do so and the
transfer is to take effect prior to the prepayment date specified
by the Facility Agent thereunder.
6.4 Prepayments generally
(a) No prepayment may be made unless the relevant Borrower shall have
given the Facility Agent 5 Banking Days prior notice (or in the
case of a prepayment pursuant to clause 14.1 such notice as is
required under clause 14.1) specifying the proposed date of the
prepayment and the amount to be prepaid. Every such notice shall
be effective only on actual receipt by the Facility Agent, shall
be irrevocable and shall oblige the relevant Borrower to make the
relevant prepayment on the date specified.
(b) All prepayments shall be made together with (to the extent these
relate to the amounts prepaid) (i) accrued interest to the date of
prepayment; (ii) any additional amount payable under clauses 8.5
or 14.2; and (iii) all other sums payable by the relevant Borrower
to the relevant Banks under this Agreement including, without
limitation, any accrued commitment commission payable under clause
7.2, any Letter of Credit commission and fees under clause 7.3,
expenses under clause 7.4 and any amounts payable under clause
13.1.
(c) No Borrower shall prepay all or any part of an Advance outstanding
hereunder except at the times and in the manner expressly provided
herein.
6.5 Cancellation of the Facilities
The Primary Borrower may at any time prior to the Final Repayment Date in
respect of the Facility by notice to the Facility Agent (effective only
on actual receipt) cancel with effect from a date not less than 10
Banking Days after the receipt by the Facility Agent of such notice the
whole or any part (if in part, being (pound)10,000,000 or any larger sum
which is an integral multiple of (pound)5,000,000) of the Available
Facility Amount of the Facility, in each case which is not the subject of
a Drawdown Notice at such time. Such notice shall specify the date upon
which such cancellation is to be made and the amount of such
cancellation. Any such notice of cancellation, once given, shall be
irrevocable and upon such cancellation taking effect the Commitments of
the Banks in respect of the Facility shall be reduced pro rata
accordingly.
6.6 Termination
The Commitment of each Bank shall be automatically cancelled and reduced
to zero at the close of business in London on the Final Repayment Date.
7. FEES AND EXPENSES
7.1 Arrangement, underwriting, participation and agency fees
The Primary Borrower shall pay to the Facility Agent or shall procure
that there is paid, whether or not any part of the Commitments is ever
advanced on the date of this Agreement and on each anniversary thereof
until the end of the Finance Period, for the account of the Facility
Agent, an agency fee of an amount agreed between the Primary Borrower and
the Facility Agent in a letter dated on or about the date of this
Agreement.
7.2 Commitment fees
The Primary Borrower shall pay to the Facility Agent, whether or not any
part of the Commitments is ever advanced, from the date of this Agreement
on each Fee Payment Date after the date of this Agreement and on the
Final Repayment Date, for the account of each of the Banks (pro-rata
their respective Commitments for the Facility), commitment commission
computed in arrears at the Applicable Fees Rate on the daily amount by
which the Total Commitments in respect of the Facility exceeds the
aggregate of the Contributions in respect of the Facility. Accrued
commitment commission will also be payable on the amount of any
Commitment when cancelled on the date of its cancellation.
7.3 Letter of Credit Fees
(a) The relevant Borrower shall (on the dates set out in clause
7.3(c)) pay commission in Sterling to the Facility Agent for the
account of the Banks (in their respective Proportions) on the
Issue of any Letter of Credit requested by the relevant Borrower
in Sterling at a percentage rate per annum equal to the Applicable
Margin on the Sterling Amount of the Outstanding Contingent
Liabilities under such Letter of Credit calculated in each case on
the date of Issue and recalculated on each Quarter Date from the
Issue Date of such Letter of Credit until the earlier of its
Expiry Date or such date as the Issuing Bank and the Banks have
ceased to be under any liability (actual or contingent) in respect
thereof, and on the basis of a 365 day year. If the relevant
Borrower has provided cash cover for any Letter of Credit, the
percentage rate per annum payable on cash covered amounts shall
instead be 0.25%.
(b) The relevant Borrower shall pay a fronting fee to the Facility
Agent for the account of the Issuing Bank on the Issue of any
Letter of Credit at a rate of 0.2% per annum on the Sterling
Amount of the face amount of the relevant Letter of Credit payable
in advance on the date of Issue and on each Quarter Date
thereafter.
(c) The commission and fronting fee payable under clauses 7.3(a) and
7.3(b) in respect of each Letter of Credit shall be paid in
advance on the relevant Issue Date and on each Quarter Date in
each year during the continuance of such Letter of Credit (or if
such day is not a Banking Day, on the preceding Banking Day)
commencing on the first Quarter Date falling on or after the Issue
of the relevant Letter of Credit. If a Letter of Credit is
terminated leaving no Outstanding Contingent Liabilities before a
Quarter Date, any commission paid in advance for the period from
the date of cancellation until the next Quarter Date shall be
repaid to the relevant Borrower which made the advance commission
payment by set-off against any amounts then due from the relevant
Borrower to any Finance Party or, if no such amounts are due, by
payment in cash.
(d) For the avoidance of doubt, the Issuing Bank's Proportion of the
commission at the rate and calculated in the manner specified in
clause 7.3(a) shall be payable to the Issuing Bank in respect of
its residual liability in its capacity as a Bank, notwithstanding
that it does not purport to guarantee itself in its capacity as
Issuing Bank.
(e) The relevant Borrower shall pay interest on the amount demanded
and outstanding under the indemnity given by them in respect of
Letters of Credit in accordance with clause 4.7 (Calculation of
Interest if Bank makes a Guarantee or Indemnity Payment) in
addition to the commission and other fees payable under this
Agreement in respect of the Facility.
7.4 Expenses
The Primary Borrower shall reimburse the Arrangers, the Banks, the
Issuing Bank and the Facility Agent from time to time within three
Banking Days of demand:
(a) all reasonable costs and expenses (including without limitation
legal, printing and out-of-pocket expenses) together with any VAT
thereon incurred by the Facility Agent and the Arrangers in
connection with the negotiation, preparation and execution of the
Finance Documents and the completion and syndication of the
transactions therein contemplated, and the negotiation,
preparation and execution of any amendment or
extension of, or the granting of any waiver or consent under, any
of the Finance Documents; and
(b) without prejudice to the generality of (c) below, all expenses and
costs (including without limitation the fees and expenses of
lawyers, accountants, surveyors, valuers, environmental
consultants and other professional advisers and out-of-pocket
expenses) incurred by the Facility Agent in connection with the
obtaining of reports and/or advice and/or the undertaking of
investigations by or on behalf of the Facility Agent into or
concerning any Borrower or the REC Group following the occurrence
of a Default and whilst it is continuing (or where the Majority
Banks' reasonable opinion is that a Default may have occurred) and
each Borrower undertakes to give, and to procure that its
Subsidiaries give, all such reasonable assistance (including,
without limitation, access to its and/or their properties and
financial and other records) at all times as the Facility Agent
shall reasonably require for the purpose of enabling such reports
or advice to be prepared or such investigations to be undertaken;
and
(c) after a Default has occurred, all costs and expenses (including
without limitation legal and out-of-pocket expenses) incurred by
any of the Finance Parties in contemplation of, or otherwise in
connection with, the enforcement or attempted enforcement of, or
preservation or attempted preservation of any rights under, any of
the Finance Documents, or otherwise in respect of the recovery, or
attempted recovery, of moneys owing under the same, together with
interest at the rate referred to in clause 5.4 from the date on
which such expenses were incurred to the date of payment (as well
after as before judgment).
7.5 Value Added Tax
All fees, costs and expenses payable pursuant to this clause 7 shall be
paid together with an amount equal to any VAT thereon payable by any of
the Finance Parties in respect of such fees and expenses.
7.6 Stamp and other duties
The Primary Borrower shall pay all stamp, documentary, registration,
notarisation or other duties or Taxes (including any duties or Taxes
payable by, or assessed on, the Finance Parties) imposed on or in
connection with the negotiation, preparation, execution or implementation
of any of the Finance Documents and the syndication of the Facilities and
shall indemnify the Finance Parties against any liability arising by
reason of any delay or omission by the Primary Borrower to pay such
duties or Taxes.
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 No set-off or counterclaim; distribution to the Banks
All payments to be made by the relevant Obligor under this Agreement
shall be made in full, without any set-off or counterclaim whatsoever
and, subject as provided in clause 8.5, free and clear of any deductions
or withholdings, in Sterling (except for (a) the repayment or prepayment
of an Advance which shall be payable in the currency in which the Advance
is denominated on the due date, (b) interest which shall be payable in
the currency in which the relevant amount in respect of which it is
payable is denominated, (c) costs, charges or expenses which shall be
payable in the currency in which they are incurred and (d) provisions in
the Finance Documents providing otherwise) on the due date to the account
of the Facility Agent at such bank as the Facility Agent may from time to
time specify for this purpose. Save where this Agreement provides for a
payment to be made for the account of a particular Finance Party or
Finance Parties, in which case the Facility Agent shall distribute the
relevant payment to the relevant Finance Party or Finance Parties
concerned, payments to be made by the relevant Obligor under this
Agreement shall be for the account of all the Banks and the Facility
Agent shall forthwith distribute such payments in like funds as are
received by the Facility Agent to the Banks rateably for the account of
such Banks' respective Facility Offices in accordance with their
Commitments or Contributions, as the case may be.
8.2 Payments by the Banks
All sums to be advanced by the Banks to the relevant Borrower under this
Agreement shall be remitted in the currency specified in the Drawdown
Notice (subject to clause 4.1(f)) in immediately available funds not
later than such time as the Facility Agent may specify as being customary
for settlement of transactions in the relevant currency on the relevant
Drawdown Date or, as the case may be, the first day of the relevant
Interest Period to the account of the Facility Agent at such bank as the
Facility Agent may have notified to the Banks and shall be paid by the
Facility Agent on such date to the account of the relevant Borrower in
England specified in the relevant Drawdown Notice.
8.3 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be postponed
to the next following Banking Day unless such Banking Day falls in the
next calendar month, in which case payment shall be made on the
immediately preceding Banking Day.
8.4 Facility Agent may assume receipt
Where any sum is to be paid under this Agreement to the Facility Agent
for the account of another person, the Facility Agent may assume that the
payment will be made when due and may (but shall not be obliged to) make
such sum available to the person so entitled. If it proves to be the case
that such payment was not made to the Facility Agent, then the person to
whom such sum was so made available shall on request refund such sum to
the Facility Agent together with interest thereon sufficient to
compensate the Facility Agent for the cost of making available such sum
up to (and/or, as the case may be, the cost to the relevant other person
of not receiving such sum until) the date of such repayment and the
person by whom such sum was payable shall indemnify the Facility Agent
(or the relevant other person) for any and all loss or expense which the
Facility Agent (or the relevant other person) may sustain or incur as a
consequence of such sum not having been paid on its due date together
with any interest, expenses and penalties payable or incurred in
connection therewith.
8.5 Grossing-up for Taxes
If at any time the relevant Obligor is required to make any deduction or
withholding in respect of Taxes from any payment due under any Finance
Document for the account of any Finance Party (or if the Facility Agent,
is required to make any such deduction or withholding from a payment to a
Finance Party), the sum due from the relevant Obligor in respect of such
payment shall, subject to clause 8.6, be increased to the extent
necessary to ensure that, after the making
of such deduction or withholding (and any further deduction and
withholding which may be levied on the additional amounts paid by reason
of this clause), each Finance Party receives on the due date for such
payment (and retains, free from any liability in respect of such
deduction or withholding) a net sum equal to the sum which it would have
received and so retained had no such deduction or withholding been made
or required to be made and (without prejudice to the foregoing provisions
of this clause 8.5) the relevant Obligor shall indemnify each Finance
Party on demand by the Facility Agent against any losses or costs
incurred by it together with any interest, expenses and penalties payable
or incurred in connection therewith by reason of any failure of the
relevant Obligor to make any such deduction or withholding.
The relevant Obligor shall promptly deliver to the Facility Agent any
receipts, certificates or other proof evidencing the amounts (if any)
paid or payable in respect of any such deduction or withholding.
8.6 Qualifying Bank
(a) If:
(i) any Bank is not or ceases to be a Qualifying Bank; and
(ii) as a result any Borrower is required to deduct or withhold
United Kingdom income tax in respect of payments of
interest to be made by such Borrower to that Bank under any
Finance Document or would otherwise have been required to
make an indemnity payment or a greater indemnity payment
under clause 8.5 or 14.2,
then the relevant Borrower shall (as the case may be) not be
liable to pay under clause 8.5 in respect of any such payment of
interest any amount in excess of the amount it would have been
obliged to pay if such Bank were a Qualifying Bank, nor shall it
be liable to make an indemnity payment or a greater indemnity
payment under clause 8.5 or, as the case may be, Clause 14.2 than
would have been required if the aforesaid Bank had been or had not
ceased to be a Qualifying Bank Provided that this Clause 8.6 shall
not apply, and the relevant Borrower shall be obliged to comply
with its obligations under clause 8.5, or as the case may be 14.2,
if on or after the date hereof:
(aa) there shall have been any change in, or in the official
interpretation or application of, any relevant law or the
practice of the United Kingdom Inland Revenue (or, in the
case of a Treaty Lender, any Government Entity in the
country in which it is resident for the purpose of the
relevant double taxation treaty) and as a result thereof
the Bank is not or ceases to be a Qualifying Bank, or
(bb) the Bank referred to in clause 8.6(a) has transferred its
Facility Office in respect of any Facility outside the
United Kingdom or has become a Bank hereunder with a
Facility Office outside the United Kingdom in respect of
any Facility, in each case, with the consent of the Primary
Borrower if and insofar as required under this Agreement.
(b) A person intending to make a claim pursuant to clause 8.5 shall,
promptly after such person becomes aware of the circumstances
giving rise to such claim and the amount of such claim, deliver to
the Primary Borrower through the Facility Agent a certificate
to that effect specifying the amount of such claim and setting out
in reasonable detail the basis of such claim, provided that
nothing shall require such person to disclose any confidential
information relating to the organisation of its affairs.
(c) If at any time after the date of this Agreement any Bank is aware
that it is not or will cease to be a Qualifying Bank (for whatever
reason), it shall promptly notify the Primary Borrower.
(d) A Treaty Lender will submit such claim to the appropriate
authorities (together with such forms, papers, other documents
and/or evidence as necessary) as may be required for the relevant
Borrower to make payment of interest to such Treaty Lender on its
Advances free of withholding or deduction on account of United
Kingdom Tax. The relevant Borrower will not be liable to pay any
additional amount under clause 8.5 in respect of the withholding
or deduction on account of United Kingdom income tax from any such
interest unless such claim has been submitted to those authorities
promptly after that Treaty Leader became a party to this Agreement
as a Treaty Lender or the proviso to clause 8.6(a) applies.
8.7 Claw-back of Tax benefit
If following any such deduction or withholding as is referred to in
clause 8.5 any Finance Party determines in its sole discretion that it
has received or been granted a credit against or remission for any Taxes
payable by it, such Finance Party shall, subject to the relevant Borrower
having made any increased payment in accordance with clause 8.5 and
subject to there not being any Default which is continuing, and to the
extent that such Finance Party can do so without prejudicing the
retention of the amount of such credit or remission and without prejudice
to the right of such Finance Party to obtain any other relief or
allowance which may be available to it, reimburse the relevant Borrower
with such amount as such Finance Party shall in its absolute discretion
certify to be the proportion of such credit or remission as will leave
such Finance Party (after such reimbursement) in no worse position than
it would have been in had there been no such deduction or withholding
from the payment by the relevant Borrower as aforesaid. Such
reimbursement shall be made forthwith upon such Finance Party certifying
that the amount of such credit or remission has been received by it,
provided that the Finance Party shall be the sole judge of the amount of
any such benefit and of the date on which it was received. Nothing
contained in this Agreement shall interfere with the right of any Finance
Party to arrange its tax affairs in whatever manner it thinks fit nor
oblige any Finance Party to disclose any information regarding its tax
affairs and computations. Without prejudice to the generality of the
foregoing, no Borrower shall, by virtue of this clause 8.7, be entitled
to enquire about any Finance Party's tax affairs or computations. The
Finance Parties are under no obligation to investigate whether any tax
credit is available or to claim any tax credit. Any amount paid by any
Finance Party to any Borrower under this clause shall be conclusive
evidence of the amount payable and will be accepted by such Borrower in
full and final settlement of its claim.
8.8 Bank accounts
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. The Facility Agent shall
maintain a control account showing the utilisation of the Facilities and
other sums owing by the Borrowers under this Agreement and all payments
in respect thereof made by any Borrower from time to time. In any legal
action arising out of or in connection with the Finance Documents the
entries made in the accounts maintained pursuant to this
clause 8.8 shall, in the absence of manifest error, be conclusive as to
the amount from time to time owing by each Borrower under this Agreement.
8.9 Partial payments
If:
(a) on any date on which a payment is due to be made by a Obligor
under this Agreement, the amount received by the Facility Agent
from such Obligor falls short of the total amount of the payment
due to be made by such Obligor on such date; or
(b) on any date on which the Facility Agent receives or recovers any
payment from an Obligor or otherwise receives any amount
representing proceeds of realisations or other recoveries under
any of the Finance Documents, the amount of such payment or other
receipt falls short of the total amount owing to the Finance
Parties under this Agreement on such date,
then (in any such case), without prejudice to any rights or remedies
available to the Finance Parties under any of the Finance Documents, the
Facility Agent shall apply the amount actually received by it in or
towards discharge of the obligations of the relevant Obligor under this
Agreement in the following order, notwithstanding any appropriation made,
or purported to be made, by such Obligor:
(i) first, in or towards payment, on a pro-rata basis, of any
unpaid costs and expenses of the Facility Agent or the
Arrangers under this Agreement;
(ii) secondly, in or towards payment to the Banks, on a pro-rata
basis, of any amount owing to the Banks under clause 20.2;
(iii) thirdly, in or towards payment to the Facility Agent on a
pro-rata basis, of any portion of the fees payable under
clause 7.1(b) which remains unpaid;
(iv) fourthly, in or towards payment to the Banks, on a pro-rata
basis, of any accrued commitment commission payable under
clause 7.2 which shall have become due but remains unpaid;
(v) fifthly, in or towards payment to the Banks, on a pro-rata
basis, of any accrued interest, Letter of Credit commission
and (in the case of the Issuing Bank) Letter of Credit
fronting fees or commission which shall have become due but
remain unpaid, but so that any amount payable by virtue of
clause 8.5 shall be excluded;
(vi) sixthly, in or towards payment to the Banks, on a pro-rata
basis, of any principal which shall have become due but
remains unpaid;
(vii) seventhly, in or towards payment to any such Banks, on a
pro-rata basis, of any amount payable to any Banks by
virtue of clause 8.5 which remains unpaid; and
(viii) eighthly, in or towards payment of any other sum which
shall have become due but remains unpaid (and, if more than
one such sum so remains unpaid, on a pro-rata basis).
Each reference in clause 8.9(i) to (viii) (inclusive) to a category of
unpaid sums shall include interest thereon payable in accordance with
this Agreement (including, without limitation, default interest under
clause 5.4). Accordingly, clause 8.9(v) shall be construed as referring
to interest on principal and accrued interest thereon which remain unpaid
to the extent due.
The order of application set out in this clause 8.9(v) to 8.9(viii) shall
be varied by the Facility Agent if the Majority Banks so direct, without
any reference to, or consent or approval from, any Obligor.
8.10 Calculations
All interest and other payments of an annual nature under this Agreement
or any of the Finance Documents shall accrue from day to day and be
calculated on the basis of the actual number of days elapsed, and in the
case of Sterling a 365 day year and in the case of other currencies a 360
day year. In calculating the actual number of days elapsed in a period
which is one of a series of consecutive periods with no interval between
them or a period on the last day of which any payment falls to be made in
respect of such period, the first day of such period shall be included
but the last day excluded.
Where the Applicable Margin or Additional Cost changes during any period,
interest and commitment fees shall be calculated on the rate prevailing
from day to day.
8.11 Certificates conclusive
Any certificate of, or determination by, a Finance Party as to any rate
of interest or any other amount payable under this Agreement or any other
Finance Documents shall, in the absence of manifest error, be conclusive
and binding evidence of such rate or amount on the Obligors and (in the
case of a certificate of or determination by the Facility Agent) on the
Banks.
8.12 Effect of monetary union
If the country of any national currency in which any amount is expressed
to be payable under this Agreement participates in economic and monetary
union in accordance with Article 109J of the Treaty on European Union,
then:
(a) any amount expressed to be payable under this Agreement in that
national currency shall (until the end of the transitional period)
be made in that national currency or in Euros as the Facility
Agent may, by not less than two Banking Days' notice to the
Primary Borrower and the Banks to that effect, require;
(b) any amount so required under clause 8.12(a) to be paid in Euros
shall be converted from that national currency at the rate
stipulated pursuant to Article 109L(4) of the Treaty on European
Union and payment of the amount in Euro derived from such
conversion shall discharge the obligation of the relevant party to
pay such national currency amount; and
(c) after consultation with the Primary Borrower and the Banks and
notwithstanding clause 22, the Facility Agent shall be entitled to
make from time to time such amendments to this Agreement as it may
determine to be necessary to take account of monetary union
and any consequent changes in market practices (whether as to the
settlement or rounding of obligations, the calculation of interest
or otherwise howsoever).
Any amendment so made to this Agreement by the Facility Agent shall be
promptly notified to the other Finance Parties and the Primary Borrower
by the Facility Agent and shall be binding on all the other Finance
Parties and the Primary Borrower and any other party to this Agreement.
9. REPRESENTATIONS AND WARRANTIES
9.1 Repeated representations and warranties
Each Obligor represents and warrants to each Finance Party that:
(a) Due incorporation: it is duly incorporated and validly existing
under the laws of England as a limited liability company and has
power to carry on its businesses as they are now being conducted
and to own its property and other assets;
(b) Corporate Power: it has power to execute, deliver and perform its
obligations under each of the Finance Documents and to borrow the
Commitments; all necessary corporate, shareholder and other action
has been taken to authorise the execution, delivery and
performance of the same and no limitation on the powers of any
Borrower to borrow or Guarantor to guarantee will be exceeded as a
result of any Utilisation under or entry into any of the Finance
Documents;
(c) Binding obligations: (i) each of the Finance Documents when
executed and delivered by it will (subject to the Reservations)
constitute, valid, legally binding and enforceable obligations of
it in accordance with their respective terms and (ii) it is not
necessary, to ensure the legality, validity, enforceability or
admissibility in evidence of any Finance Document that they or any
other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in the United
Kingdom or elsewhere or that any stamp, registration or similar
tax or charge be paid in the United Kingdom or elsewhere on or in
relation to any Finance Documents;
(d) No conflict with other obligations: the execution and delivery of,
the exercise of its rights and the performance of its obligations
under, and compliance with the provisions of, the Finance
Documents by it will not (i) contravene any existing applicable
law, statute, rule or regulation or any judgment, decree or permit
to which any of them are subject, (ii) conflict with, or result in
any breach of any of the terms of, or constitute a default under
any of the Licences or the Pooling and Settlement Agreement, or
under any other agreement or other instrument to which any of them
are a party or are subject or by which any of their property is
bound to an extent which is reasonably likely in the reasonable
opinion of the Majority Banks to have a Material Adverse Effect,
(iii) contravene or conflict with any provision of its Memorandum
or Articles of Association or (iv) result, other than pursuant to
the provisions of any of the Finance Documents, in the creation or
imposition of, or oblige any Obligor to create, any Security
Interest (save in favour of the Finance Parties) on its assets,
rights or revenues; and
(e) Pari passu: its obligations under this Agreement are its direct,
general and unconditional obligations and rank at least pari passu
with all its other present and
future unsecured and unsubordinated Indebtedness with the
exception of any obligations which are mandatorily preferred by
law and not by contract.
(f) No Litigation: So far as it is aware, no litigation, alternative
dispute resolution, arbitration or administration proceeding is
taking place, pending or threatened against it or any other member
of the Group which is reasonably likely (in the reasonable opinion
of the Majority Banks) in either case to have a Material Adverse
Effect.
9.2 Continuing representations
Each Obligor represents and warrants to each Finance Party that:
(a) Compliance with Environmental Laws: it:
(i) as at the Effective Date, or in the case of an Additional
Obligor, the date it accedes to this Agreement complies;
and
(ii) has (to the extent that non-compliance would be reasonably
likely to give rise to a material liability as at the
Effective Date or such date) at all times complied,
in all material respects with all Environmental Laws, where
non-compliance, in each case, would be reasonably likely to have a
Material Adverse Effect;
(b) No Environmental Claims:
(i) no Environmental Claim is pending or has been made or
threatened against the Primary Borrower or any other member
of the Group for which any REC Company could be held liable
or any of their respective officers in their capacity as
such; and
(ii) no member of the Group is aware of any circumstances or
situation which would be reasonably likely to result in it
having any liability in relation to Environmental Matters,
which, in either case, would be reasonably likely to have a
Material Adverse Effect;
(c) Electricity Act:
(i) each REC Company (to the extent necessary for it to be able
to carry on such part of the Distribution Business and/or
Supply Business carried on by it) has been duly authorised
by the Secretary of State under Section 6 of the
Electricity Act to distribute and/or supply electricity;
and
(ii) no REC Company is in contravention of:
(A) any term or condition of any Licence; or
(B) any requirement of the Electricity Act or any
regulations made thereunder; or
(C) any other statutory requirement or any final order
or confirmed provisional order made under the
Electricity Act; or
(D) any undertaking given by it to the Director General
or the Secretary of State in relation to the conduct
of its business as a public electricity supplier;
the contravention or consequence of which is reasonably
likely to have a Material Adverse Effect;
(d) The Licences:
(i) each Licence is in full force and effect and neither the
Director General nor the Secretary of State has given
notice to revoke a Licence;
(ii) no amendment of any of the terms of a Licence has been made
or proposed;
(iii) no other material licence, consent, undertaking or
authorisation necessary for the carrying on by any REC
Company of its business substantially as it is currently
carried on has been terminated or breached or not obtained
or is otherwise not in full force and effect;
which in either case is reasonably likely to have a Material
Adverse Effect.
9.3 Repetition
The representations and warranties in clauses 9.1 and 9.2 shall be deemed
to be repeated as of each Drawdown Date, the date of each Drawdown Notice
and the date of accession of each Additional Obligor and, as if made with
reference to the facts and circumstances existing on each such date, and
shall, after the first set of financial statements have been delivered
under clauses 10.1(b)(i) and (ii), be deemed to include a representation
that the then latest financial statements delivered to the Banks under
clauses 10.1(b)(i) and (ii) have been prepared in accordance with the
Appropriate Accounting Principles which have been consistently applied
and give a true and fair view of (or in the case of unaudited accounts,
present with reasonable accuracy) the financial position of each REC
Company and the consolidated financial position of the REC Group
respectively as at the date to which such financial statements were made
up and the results of the operations of each REC Company and the results
of the operations of the REC Group respectively for the relevant period,
and in the case of audited accounts are not subject to any qualifications
save of a technical and non-adverse nature.
9.4 Borrowers' acknowledgement
Each Borrower acknowledges that the Finance Parties are relying on the
representations and warranties but not on any other information
contradictory to them or varying them of which the Finance Parties or any
of them or their respective agents or advisers may have actual or
constructive knowledge.
10. POSITIVE UNDERTAKINGS
10.1 Information Undertakings
Each Borrower undertakes with each of the Finance Parties that,
throughout the Finance Period:
(a) Preparation of financial statements: it will:
(i) Annual audited financial statements: beginning with the
financial year ending 31 March 1998, prepare financial
statements in respect of itself and consolidated financial
statements in respect of the REC Group in accordance with
the Appropriate Accounting Principles (consistently
applied) in respect of each financial year and cause the
same to be reported on by the Auditors; and
(ii) Semi-annual financial statements: prepare unaudited
consolidated financial statements of the REC Group and
financial statements in respect of each REC Company in
respect of each Half-Year Period in each financial year in
accordance with the Appropriate Accounting Principles
(consistently applied);
(b) Delivery of financial statements: it will deliver to the Facility
Agent, for distribution to the Banks, sufficient copies for all
the Banks of each of the following documents:
(i) Annual audited financial statements: at the time of issue
thereof to the shareholders of the Primary Borrower, but in
any event not later than 120 days after the end of the
financial year to which they relate, the audited financial
statements referred to in clause 10.1(a)(i) for each
financial year together, in each case, with the report of
the Auditors thereon, the notes thereto, the directors'
report thereon and the certificate referred to in clause
10.1(b)(iii);
(ii) Unaudited management accounts: within 45 days after the end
of each Half- year Period in each financial year,
consolidated management accounts for the REC Group in
respect of such Half-year Period prepared in accordance
with the requirements of clause 10.1(a)(ii) together with
the certificate referred to in clause 10.1(b)(iii);
(iii) Compliance with Financial Undertakings: with each set of
accounts delivered by it under clauses 10.1(b)(i) and (ii)
above by reference to which the financial covenants are
tested, the Primary Borrower will deliver to the Facility
Agent a certificate signed by a director of the Primary
Borrower:
(aa) confirming compliance with the financial
undertakings in clause 10.3 as at the end of the
relevant Test Period; and
(bb) setting out in reasonable detail and in a form
satisfactory to the Facility Agent the computations
necessary to demonstrate such compliance;
(iv) Regulatory Accounts: at the time of their issue to the
relevant Government Entity or regulator, all accounts and
other financial statements or information required under
any law or regulation to be provided to any Government
Entity, industry regulator or similar body or person;
(v) Reports and notices to shareholders and creditors: at the
time of issue thereof every report, circular, notice or
like document issued by each REC Company to its
shareholders or creditors generally and every notice
convening a meeting of its shareholders or any class of its
shareholders; and
(vi) Further information: promptly upon request, such further
information concerning the financial position of the REC
Group (or any member of it) as the Facility Agent shall
reasonably require;
(c) Notice of Default: it will promptly upon becoming aware of the
same inform the Facility Agent of any Default;
(d) Notice of litigation: it will, upon becoming aware that the same
is threatened or pending and in any case promptly after the
commencement thereof, give to the Facility Agent notice in writing
of any litigation, alternative dispute resolution, arbitration or
administrative proceedings or any dispute affecting any member of
the Group to the extent that any REC Company could be held liable
or any of its respective assets, rights or revenues affected and
which if determined against it could reasonably be expected to
result in a liability (including costs) of more
than(pound)10,000,000 or otherwise have a Material Adverse Effect;
and
(e) Environmental Claims: promptly upon receipt of formal written
notice of the same inform the Facility Agent of any material
Environmental Claim to the extent that any REC Company would have
responsibility for or be materially affected by it.
10.2 General Undertakings
Each Obligor undertakes with each of the Finance Parties that, throughout
the Finance Period:
(a) Consents etc relating to the Finance Documents: it will obtain or
cause to be obtained, maintain in full force and effect and comply
in all material respects with the conditions and restrictions (if
any) imposed in, or in connection with, every consent,
authorisation, licence or approval of any Government Entity or
consents required by it in connection with the execution,
delivery, validity, enforceability or admissibility in evidence of
the Finance Documents and do, or cause to be done, all other acts
and things, which may from time to time be necessary under
applicable law for the continued due performance of all its
obligations under the Finance Documents;
(b) Pari passu: it will ensure that its obligations, under each of the
Finance Documents shall, at all times be direct, general and
unconditional obligations and rank at least pari passu with all
its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract and save for
Indebtedness secured by Permitted Security Interests;
(c) Licences and Environmental Laws:
(i) it will obtain and maintain in full force and effect each
Licence and use all reasonable endeavours to procure that
each other REC Company obtains and maintains in full force
and effect each Licence required by such person for the
carrying on of their respective businesses and, as
appropriate for so long as any REC Company is involved in
the Generation Business, any licence under the
Electricity Act to carry on Generation Business required by
such person for the carrying on of their respective
businesses; and
(ii) it will obtain and maintain, and use all reasonable
endeavours to procure that each REC Company obtains and
maintains, in full force and effect all other material
Environmental Licences and ensures that its business and
the business of each of its Subsidiaries complies in all
respects with all material Environmental Laws and all other
material Environmental Licences;
(d) Insurance: it will maintain and will use all reasonable endeavours
to procure that each member of the REC Group maintains insurances
on and in relation to its business and assets with reputable
underwriters or insurance companies against such risks and to such
extent as is usual for companies carrying on a business such as
that carried on by such member of the REC Group.
10.3 Financial Condition
(a) Each Obligor shall procure that, at the end of any Half-year
Period (the first such Half-year Period being the one beginning on
1 April 1998), the ratio of Operating Profit to Net Interest
Expense in respect of the preceding two Half-year Periods is not
less than 2.25:1.
(b) Each Obligor undertakes with each of the Finance Parties that it
will not adopt any accounting policy or change the consistency of
application of its accounting principles from the Appropriate
Accounting Principles unless:
(i) the revised policy and practice adopted from time to time
is in accordance with generally accepted accounting
practice in the United Kingdom, and
(ii) prior to any revised policy and practice being adopted such
Obligor has notified the Facility Agent thereof and, if
required by the Facility Agent, will negotiate in good
faith with the Facility Agent in order that the Financial
Covenants may be amended as required by the Facility Agent
in order for it to be able to make the same judgments as to
the financial performance of the REC Group as it is able to
under the present accounting policy.
If such negotiations are not concluded to the satisfaction of the
Facility Agent within a period of 30 days from the commencement of
such negotiations the relevant Obligor agrees that it will procure
that the Auditors provide financial statements reflecting the
Appropriate Accounting Policies, and any reference in this
Agreement to financial statements under this Agreement shall be
construed as a reference to such financial statements as adjusted
to reflect the Appropriate Accounting Policies.
(c) If, at the end of any Half-year Period, the financial covenant
under clause 10.3(a) is breached due to any exceptional, special
or windfall tax or levy applying to the electricity industry as a
whole, then:
(i) the breach of that clause will not constitute an Event of
Default under clause 12.1(b) (Breach of certain
obligations) and the Primary Borrower and the Facility
Agent (on behalf of the Banks) shall enter into
negotiations for a period of not more than 30 days with a
view to agreeing new terms for this Agreement
to reflect that tax or levy and such terms may include
improved pricing and/or security and if any new terms are
agreed under this paragraph (i), they shall be, with the
prior consent of the Majority Banks, binding upon all the
parties to this Agreement; but
(ii) if no new terms are agreed within 30 days of such breach,
the breach will become an immediate Event of Default under
clause 12.1(b) (Breach of certain obligations) on the 31st
day after the date of such breach.
11. NEGATIVE UNDERTAKINGS
Negative undertakings
Each Obligor undertakes with each of the Finance Parties that throughout
the Finance Period, without the prior written consent of the Facility
Agent acting on the instructions of the Majority Banks:
(a) Negative pledge: it shall not permit, and shall procure that no
other REC Company shall permit, any Security Interest by it or any
other member of the REC Group to subsist, arise or be created or
extended over all or any part of their respective present or
future undertakings, assets, rights or revenues, save for any
Permitted Security Interest;
(b) No other Borrowed Money: it shall not, and shall procure that no
REC Company shall, incur or permit to exist on its behalf any
obligations in respect of Borrowed Money (excluding any
guarantees, indemnities or other forms of assurance against
financial loss in respect of Borrowed Money, which are referred to
in clause 11.1(d) below) to any person except:
(i) the Facility;
(ii) Borrowed Money owed by any REC Company to a member of the
Wider Group;
(iii) Borrowed Money to the extent secured by a Security Interest
permitted by paragraphs (c), (d), (e) and (j) of the
definition of Permitted Security Interest, but only for so
long as such Security Interest remains a Permitted Security
Interest;
(iv) Borrowed Money incurred to repay and discharge the Facility
in full;
(v) Borrowed Money of the Primary Borrower as at the Effective
Date (and refinancings thereof) provided that:
(aa) each refinancing extends the tenor of the refinanced
amount to beyond the Final Repayment Date; and
(bb) all refinancings shall be of a like nature to the
Indebtedness or facility being refinanced or shall
be by way of capital markets instruments which are
of a similar nature to the REC Group's existing
instruments
having regard to market conditions and the issuer's
credit status, or are structurally or contractually
subordinated to the Facilities in a manner
satisfactory to the Majority Banks (acting
reasonably); and
(cc) any new facilities for Borrowed Money entered into
by the REC Group between 2 March 1998 and the
Effective Date (inclusive) shall be cancelled and
repaid in full within 180 days of the Effective
Date;
(vi) contracts for differences and contracts to hedge commodity
and energy related exposures and positions in the ordinary
course of trading;
(vii) individual letters of credit having a face value of a
Sterling Amount less than (pound)250,000 provided that in
aggregate the face value of such letters of credit at any
one time is no more than a Sterling Amount of
(pound)10,000,000;
(c) Disposals: it shall not and shall procure that no other REC
Company shall, either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, factor, discount, transfer, licence, lend,
grant or lease or otherwise dispose of all or any part of the
assets or undertaking of any REC Company other than:
(i) disposals in the ordinary course of trading;
(ii) disposals of obsolete or redundant assets;
(iii) other disposals to third parties, provided that the
consideration for such disposals does not exceed
(pound)5,000,000 in aggregate for the REC Group in any
financial year;
(iv) disposals constituting the creation of Permitted Security
Interests;
(v) securitisations of receivables of the Borrower in
accordance with the Borrower's securitisation programme in
existence at the date of this Agreement (or comparable
programme(s) of REC Companies) Provided that the value of
the billed, unbilled and future flow receivables in the
programme at any one time does not exceed
(pound)300,000,000 in aggregate in all such programmes; or
(vi) disposals of an interest in a Subsidiary of the Primary
Borrower which is not itself in the REC Group on
arms-length terms to a person outside the REC Group in
consideration for payment in freely transferrable funds on
the date of disposal.
(vii) disposals of assets by a REC Company to another REC Company
or to another member of the Group which becomes a REC
Company on or before acquiring the assets disposed of;
(viii) disposals by way of sales and operating leasebacks of
capital assets to other members of the Wider Group limited
to a net book value of (pound)75,000,000 in aggregate;
(ix) disposals of any interest in an Excluded Business of any
REC Company (including by way of disposal of any interest
in a member of the Group not being a REC Company carrying
on an Excluded Business) or disposals of assets to a member
of the Wider Group where such REC Company is engaged in an
Excluded Business irrespective of what consideration may be
payable provided that such a disposal is not of all or part
of the Distribution Business or Supply Business or any of
the assets primarily used in such Distribution Business or
Supply Business;
(d) Restriction on Guarantees: it shall not and shall procure that no
other REC Company shall give any guarantee (which includes an
indemnity or other form of assurance against financial loss),
except:
(i) where the guarantee is given by a member of the REC Group
in connection with cash management and netting facilities
extended to the REC Group by a bank or financial
institution in the normal course of business; or
(ii) any guarantee, indemnity, letter of credit or similar
assurance against financial loss under any Relevant
Arrangements;
(iii) guarantees of Borrowed Money or other obligations of other
members of the REC Group, for so long as they remain
members of the REC Group where such guarantees are already
in existence as at the Effective Date provided that any
such guarantees of Borrowed Money entered into between 2
March 1998 and the Effective Date (inclusive) shall be
discharged and released within 180 days of the Effective
Date (unless the guarantee was created pursuant to an
obligation existing as at 2 March 1998);
(iv) any guarantee permitted under clause 11.1(b)(vi);
(v) any other guarantees given with the prior written consent
of the Majority Banks;
(e) The Licences: it shall, and shall procure that each other REC
Company shall, (having regard to the Distribution Business and
Supply Business or that part of such businesses carried on by it):
(i) take all appropriate steps efficiently to perform and
discharge the duties and functions of a public electricity
supplier in accordance with the provisions of the
Electricity Act and, in particular, to comply with:
(aa) the terms and conditions of the Licence;
(bb) the provisions of any final order or confirmed
provisional order made under the Electricity Act;
and
(cc) all Licence Undertakings given by it to the Director
General and/or the Secretary of State in respect of
the matters referred to in Section 25(5) of the
Electricity Act;
(ii) not consent to any amendment to the terms and conditions of
the Licence if that amendment is reasonably likely to have
a Material Adverse Effect;
(iii) not consent to any revocation of the Licence except where a
replacement Licence is to be granted to it in its place;
(iv) promptly inform the Facility Agent of any material Licence
Undertaking given by it or any Affiliate to the Director
General, and/or the Secretary of State and subsequently
comply with its terms;
(v) promptly supply to the Facility Agent:
(aa) certified copies of all notices or orders served on
it by the Director General or the Secretary of State
in exercise of the powers conferred on him by the
Electricity Act;
(bb) details of any references to the Monopolies and
Mergers Commission relating to the business of the
REC Group; and
(cc) details of the exercise or purported exercise by the
Secretary of State or the Director General of the
powers conferred on him by the Fair Trading ▇▇▇
▇▇▇▇, the Competition ▇▇▇ ▇▇▇▇ and/or Section 12 of
the Electricity Act;
(vi) ensure that all times it has sufficient working capital to
finance the performance and discharge of its duties as a
public electricity supplier in accordance with the
provisions of the Electricity Act and the terms and
conditions of any Licence; and
(vii) not permit any other person (other than a REC Company) to
perform or manage on its behalf any of its functions as a
public electricity supplier, as set out in any Licence and
the Electricity Act;
(f) Dividend payments: the Primary Borrower shall not declare or pay
any dividend or make any other distribution or payment (whether in
cash or in specie), including any interest and/or unpaid
dividends, to its shareholders or their Affiliates for the time
being if and for so long as any Default has occurred and is
continuing;
(g) Contracts and arrangements between the REC Companies and the
Parent: it shall not enter into any material arrangement or
contract with or incur any material liability to the Parent or any
of its Subsidiaries or Affiliates or any member of the Wider Group
other than another REC Company or another member of the Group
which becomes a REC Company on or prior to such arrangement coming
into force or liability being incurred, save for contracts entered
into on an arm's length basis in the ordinary course of trade (and
in any event no REC Company will make any loan to or give any
guarantee in respect of the Parent or any of its Subsidiaries or
Affiliates other than another REC Company);
(h) Amalgamation and merger: it shall not and shall procure that no
other REC Company shall amalgamate or merge with any other company
or person (other than a REC Company);
(i) Change in business: it shall not and shall procure that no other
REC Company shall carry on any business other than those which are
usual for electricity companies in the United Kingdom including,
without limitation, electricity distribution and supply. Provided
that the limitation of business activities contained in this
clause 11.1(i) will not apply to any other business activities
carried on by the REC Group as long as such other business
activities do not in aggregate account for more than 10% of the
consolidated gross assets or gross revenues of the REC Group; and
(j) Treasury Transactions: it shall not, and shall procure that no
other REC Company shall, enter into any Derivatives Transactions,
save for hedging financial exposures of the REC Group arising in
the ordinary course of business.
12. EVENTS OF DEFAULT
12.1 Events of Default
Each of the events set out below is an Event of Default (whether or not
caused by any reason whatsoever outside the control of any member of the
REC Group (or any other person)) namely if:
(a) Non-payment: any Borrower fails to pay any sum due from it under
any of the Finance Documents on its due date in the manner
stipulated in the relevant Finance Document (or within three
Banking Days of the due date if the delay is caused by technical
difficulties or administrative error in the transfer of funds); or
(b) Breach of certain obligations: any Obligor commits any breach or
omits to observe any of the obligations or undertakings expressed
to be assumed by it under clause 10.3, 11.1(a), 11.1(f), 11.1(i)
or 24.2(b); or
(c) Breach of other obligations: any Obligor commits any breach of or
omits to observe any of the obligations or undertakings expressed
to be assumed by it under any of the Finance Documents (other than
any such obligations referred to in clause 12.1(a) and (b)) and in
respect of any such breach or omission which, in the reasonable
opinion of the Majority Banks, is capable of remedy, such action
as shall remedy the same to the reasonable satisfaction of the
Majority Banks shall not have been taken within 21 days of such
Obligor becoming aware of such default; or
(d) Misrepresentation: any representation, warranty or statement made
or deemed to be made or repeated by or on behalf of any Obligor
in, or in connection with, any of the Finance Documents or in any
notice, accounts, certificate or statement referred to in or
delivered under any of the Finance Documents is or proves to have
been incorrect or misleading and if capable of being remedied, in
the reasonable opinion of the Majority Banks, is not remedied to
the reasonable satisfaction of the Majority Banks 21 days after
the date on which any Obligor becomes aware of such
misrepresentation; or
(e) Cross-default:
(i) any Borrowed Money of any Obligor is not paid when due or
within any originally stated applicable grace period; or
(ii) any Borrowed Money of any Obligor is declared or becomes
capable of being declared (by reason of an event of default
or default howsoever described) to be or otherwise becomes
due and payable prior to its specified maturity; or
(iii) any Borrowed Money of any Obligor which is repayable on
demand is not repaid on demand being made,
in circumstances where, in all or any of the above paragraphs, the
Borrowed Money amounts in aggregate at any one time to more than
(pound)20,000,000 or its equivalent in other currencies, unless
the Borrowed Money concerned is being disputed in good faith and
any Obligor has shown to the Facility Agent's satisfaction (acting
reasonably) that it has adequate cash reserves to pay that
Borrowed Money and its other outstanding debts; or
(f) Legal process: (without prejudice to any other provision of this
Agreement) any final judgment or order in an amount
exceeding(pound)2,000,000 (or its equivalent in other currencies)
made against any Obligor is not stayed or complied with or paid
within 28 days (or in the case of payments, when due (if later))
or a creditor attaches or takes possession of, or a distress,
execution, sequestration or other process is levied or enforced
upon or sued out against, any part of the undertakings, assets,
rights or revenues of any Obligor with a book value or market
value in excess of(pound)2,000,000 and is not discharged or stayed
within 14 days; or
(g) Insolvency: any Obligor (i) is deemed unable to pay its debts in
accordance with Section 123(1)(a), (b) or (e) or (2) of the
Insolvency ▇▇▇ ▇▇▇▇ unless, in the case of Section 123(1)(a) only,
a statutory notice has been withdrawn, stayed or dismissed within
14 days or (ii) is unable generally to pay its debts as they fall
due; or
(h) Administration: (i) any meeting of any Obligor is convened for the
purpose of considering any resolution to present an application
for an administration order or (ii) the Obligor passes a
resolution to present an application for an administration order
or (iii) an administration order is made in relation to any
Obligor; or
(i) Compositions etc: any steps are taken, or negotiations commenced,
by any Obligor or by any of its creditors with a view to proposing
any kind of composition, scheme of arrangement, compromise or
arrangement, in each case involving any Obligor and any of its
creditors; or
(j) Appointment of receivers and managers: (i) any administrative or
other receiver or any manager is appointed over any Obligor or any
material part of its assets and/or undertaking or (ii) the
directors of any Obligor request any person to appoint such a
receiver or manager or (iii) any other steps are taken to enforce
any Security Interest over all or any material part of the assets
and/or undertakings of any Obligor; or
(k) Winding up: (i) any meeting of any Obligor is convened for the
purpose of considering any resolution for (or to petition for) its
winding up or (ii) any Obligor passes such a resolution; or (iii)
any person presents any petition for the winding up of any Obligor
(not being a petition which such Obligor can demonstrate to the
satisfaction of the Facility Agent is frivolous vexatious or an
abuse of the process of the court) which is not discharged within
14 days or (iv) an order for the winding up of any Obligor is
made, not (in any case) being a winding-up of a Subsidiary of any
Obligor involving an amalgamation or reorganisation on a solvent
basis which has been approved in advance by the Facility Agent
(acting reasonably); or
(l) Dissolution: any corporate, legal or administrative proceedings
are commenced by any person (including, without limitation, the
Registrar of Companies) with a view to the dissolution of any
Obligor, not being a dissolution involving an amalgamation or
reorganisation on a solvent basis which has been approved in
advance by the Facility Agent (acting reasonably); or
(m) Analogous proceedings: there occurs, in relation to any Obligor,
in any country or territory in which it carries on business or to
the jurisdiction of whose courts any part of their assets is
subject, any event which, in the reasonable opinion of the
Majority Banks, appears in that country or territory to correspond
with, or have an effect equivalent to, any of those mentioned in
clauses 12.1(f) to (l) (inclusive) or any Obligor otherwise
becomes subject, in any such country or territory, to the
operation of any law relating to insolvency, bankruptcy or
liquidation; or
(n) Cessation of business: other than in relation to a disposal
permitted under this Agreement, any REC Company suspends or ceases
or threatens to suspend or cease to carry on its business unless
it is transferred to another REC Company; or
(o) Insolvency of members of REC Group: any of the events (e) to (n)
above happening in respect of another member of the REC Group,
where that could reasonably be expected to have a Material Adverse
Effect;
(p) Distribution Business and Supply Business:
(i) the REC Group ceases, or threatens to cease, to carry on
all or any material part of the Distribution Business or
Supply Business;
(ii) all or a majority of the issued shares of any REC Company
or the whole or any material part of the assets or revenues
of the Distribution Business or Supply Business are seized,
nationalised, expropriated or compulsorily acquired by or
under the authority of a Government Entity;
(iii) any change is made in the statutory or regulatory
requirements applicable to the Distribution Business or
Supply Business or any new statutory or regulatory
requirements are imposed on it which would be reasonably
likely to have a Material Adverse Effect; or
(iv) any REC Company is not or ceases to be a directly
wholly-owned Subsidiary of the Primary Borrower or is not
incorporated in England and Wales or fails to execute a
Deed of Accession in accordance with clause 24;
(q) Licences:
(i) the Secretary of State gives notice in writing of the
revocation of a Licence for any reason or a Licence ceases
to be in full force and effect in any material respect
except where a similar licence or licences are granted to a
REC Company in its place;
(ii) without prejudice to paragraph (i) above, any legislation
(whether primary or subordinate) with regard to the
creditors of any REC Company or the ability of any REC
Company to raise finance under a Licence or with regard to
public electricity suppliers generally is enacted and that
enactment would be reasonably likely to have a Material
Adverse Effect;
(iii) any amendment is made to the terms and conditions of a
Licence and the amendment would be reasonably likely to
have a Material Adverse Effect;
(iv) the REC Group ceases to hold the Licences required by it to
carry on the Distribution Business and Supply Business.
(r) Electricity Act:
(i) any of the provisions of the Electricity Act (or any
subordinate legislation) detailing the rights, powers,
authorities, obligations and duties of the Secretary of
State or the Director General, or the manner in or time at
which they are to be exercised, are repealed or amended in
a manner which would be reasonably likely (in the opinion
of the Majority Banks) to have a Material Adverse Effect;
or
(ii) any REC Company fails to comply with a final order (within
the meaning of section 25 of the Electricity Act) or with a
provisional order (within the meaning of that section)
which has been confirmed under that section and in either
case which has not been revoked under that section or the
validity of which has not been questioned under section 27
of the Electricity Act, if such failure to comply would be
reasonably likely to have a Material Adverse Effect; or
(s) Pooling and Settlement Agreement: any REC Company which is a party
to the Pooling and Settlement Agreement ceases to be such a party
(except where another REC Company is substituted in its place), or
any notice requiring REC Company to cease to be a party to the
Pooling and Settlement Agreement is given to such company under
the relevant clauses of the Pooling and Settlement Agreement;
(t) Finance Documents: any Finance Document is not or ceases to be
legal, valid and binding on or enforceable against any Obligor or
is alleged by any Obligor to be ineffective for any reason; or
(u) Unlawfulness: it becomes unlawful at any time for any Obligor to
perform all or any of its material obligations under any of the
Finance Documents.
12.2 Acceleration
The Facility Agent may, and, if so requested by the Majority Banks,
shall, without prejudice to any other rights of the Finance Parties at
any time, after the happening of an Event of Default, and so long as the
same is continuing, by notice to the Primary Borrower:
(i) declare that the obligation of each Bank to make its Commitments
available shall be terminated, whereupon the Total Commitments in
respect of all Facilities shall be reduced to zero forthwith;
and/or
(ii) declare that the Advances and all interest, fees and commitment
commission accrued and all other sums payable under the Finance
Documents have become due and payable or have become due and
payable on demand, whereupon the same shall, immediately or in
accordance with the terms of such notice, become due and payable;
and/or
(iii) demand full cash cover for the Outstanding Contingent Liabilities
under all Letters of Credit then outstanding in the currency in
which those Letters of Credit are denominated.
On or at any time after the making of any such declaration, the Facility
Agent shall be entitled, to the exclusion of the Primary Borrower, to
select the duration of Interest Periods.
13. INDEMNITIES
13.1 Miscellaneous indemnities
The Primary Borrower shall within three Banking Days of demand indemnify
each Finance Party, without prejudice to any of their other rights under
any of the Finance Documents, against any cost, loss, claim, expense
(including loss of Applicable Margin and legal fees) or liability
together with any Tax thereon which such Finance Party shall certify as
sustained or incurred by it as a consequence of:
(a) any default in payment by any Obligor of any sum under any of the
Finance Documents when due,
(b) the occurrence of any other Default,
(c) any Advance outstanding under the Facility or part thereof being
made otherwise than on Maturity Date relative thereto,
(d) any Advance not being made for any reason (excluding, but only to
the extent of the indemnification of a particular Finance Party,
any gross negligence or wilful default by such Finance Party)
after a Drawdown Notice has been given, or
(e) any notice sent by telefax failing to be received,
including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding its Contributions or any
part thereof or in liquidating or re-employing deposits from third
parties acquired or contracted for to fund all or any part of its
Contributions or any other amount owing to such Finance Party.
13.2 Currency of account; currency indemnity
(a) No payment by any Obligor under any of the Finance Documents which
is made in a currency other than the currency ("Contractual
Currency") in which such payment is required to be made pursuant
to the relevant Finance Documents shall discharge the
obligation in respect of which it is made except to the extent of
the net proceeds in the Contractual Currency received by the
Facility Agent upon the sale of the currency so received, after
taking into account any premium and costs of exchange in
connection with such sale.
(b) The Finance Parties shall not be obliged to accept any such
payment in a currency other than the Contractual Currency nor
shall the Finance Parties be liable to any Obligor for any loss or
alleged loss arising from fluctuations in exchange rates between
the date on which such payment is so received by the Facility
Agent and the date on which the Facility Agent effects such sale,
as to which the Facility Agent shall (as against any Obligor) have
an absolute discretion.
(c) If any sum due from any Obligor under any Finance Documents or any
order or judgment given or made in relation hereto is required to
be converted from the Contractual Currency or the currency in
which the same is payable under such order or judgment (the "first
currency") into another currency (the "second currency") for the
purpose of (i) making or filing a claim or proof against any
Obligor, (ii) obtaining an order or judgment in any court or other
tribunal or (iii) enforcing any order or judgment given or made in
relation to any of the Finance Documents, each Borrower shall
indemnify and hold harmless each Finance Party from and against
any loss suffered as a result of any difference between (A) the
rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (B)
the rate or rates of exchange at which each such Finance Party may
in the ordinary course of business purchase the first currency
with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment,
claim or proof.
(d) Any amount due from any Borrower under the indemnity contained in
this clause 13.2 shall be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due under
or in respect of any of the Finance Documents and the term "rate
of exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
13.3 No settlement without consent
The Primary Borrower agrees on its own behalf and on behalf of each other
member of the REC Group that, without the prior written consent of the
Agent and the Majority Banks, no member of the REC Group will settle,
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification could be sought under the indemnification provisions of
clauses 4.5(b)(iv), 8.4, 8.5, 8.6, 7.6, 13, 16.14, or 20.2 (whether or
not any indemnitee thereunder (the "Indemnitee") is an actual or
potential party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnitee and does not involve any payment of money or other value by
any Indemnitee or any injunctive relief or factual findings or
stipulations binding on any Indemnitee.
14. UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES
14.1 Unlawfulness
(a) If it is or becomes contrary to any law or regulation or contrary
to any request from or requirement of any fiscal monetary or other
authority (with which such Finance Party would normally comply)
for a Finance Party to contribute to any Utilisation or to
maintain its Commitments in respect of a Facility or fund its
Contribution to a Facility, such Finance Party shall promptly
after becoming aware of the same, through the Facility Agent,
notify the Primary Borrower whereupon (a) such Finance Party's
Commitments shall be reduced to zero (and, if it is the Issuing
Bank, it shall have no further obligation to Issue Letters of
Credit if to do so would in the opinion of the Issuing Bank be or
become contrary to any law or regulation or contrary to any
request from or requirement of any fiscal monetary or other
authority (with which such Finance Party would normally comply))
and (b) if the Facility Agent on behalf of the Finance Party so
requires the relevant Borrower shall be obliged to prepay the
Contribution of such Finance Party to such Facility and provide
full cash cover for any Outstanding Contingent Liabilities of the
relevant Finance Party on a future date specified by the Facility
Agent not being earlier than the latest date permitted by the
relevant law or regulation or not contrary to such request or
requirement. Any prepayment pursuant to this clause 14.1 shall be
made together with all amounts referred to in clause 6.6.
(b) When any Borrower makes any prepayment under this clause 14.1 the
Facility Agent shall not release the amount of such prepayment
which is cash cover for any Outstanding Contingent Liabilities of
the relevant Finance Party to such Finance Parties but shall place
such monies on suspense account and such money may be used as
collateral for the actual and the contingent liabilities of that
Finance Party to the Issuing Bank, which liabilities shall remain
in full force and effect notwithstanding such prepayment; and such
Finance Party shall remain liable under all the relevant
provisions of this Agreement to the Issuing Bank to pay in cash
any shortfall between the amount held by the Facility Agent and
its liabilities under this Agreement.
14.2 Increased costs
If the result of any change in, or in the interpretation or application
of, or the introduction of, (after the date of this Agreement):
(a) any law (including, the introduction of the proposed Bank of
England Act following the publication of the Bank of ▇▇▇▇▇▇▇ ▇▇▇▇
1997) or
(b) any regulation, request or requirement (which if not having the
force of law is one of a kind with which the relevant Finance
Party or, as the case may be, its holding company habitually
complies), including those relating to Taxation, capital adequacy,
European monetary union, liquidity, reserve assets, cash ratio
deposits and special deposits or requested or required by any
central bank (including without limitation any European Central
Bank) or other fiscal monetary or other authority,
is to:
(i) subject any Finance Party or its holding company to Taxes
or change the basis of Taxation of any Finance Party with
respect to any payment under this
Agreement (other than Taxes or Taxation on the overall net
income, profits or gains of such Finance Party imposed in
the jurisdiction in which its principal office or Facility
Office is located); and/or
(ii) increase the cost to, or impose an additional cost on, any
Finance Party or its holding company in entering into or
performing its obligations under the Finance Documents
and/or in making or keeping available all or part of such
Finance Party's Commitments and/or maintaining or funding
all or part of such Finance Party's Contributions (and/or
providing any guarantee or indemnity of any other Finance
Party's obligations); and/or
(iii) reduce the amount payable or the effective return to any
Finance Party under this Agreement; and/or
(iv) reduce any Finance Party's or its holding company's rate of
return on its overall capital by reason of a change in the
manner in which it is required to allocate capital
resources in respect of all or any of the advances or
obligations comprised in a class of advances or obligations
formed by or including such Finance Party's share in
Utilisations made or to be made under this Agreement;
and/or
(v) require any Finance Party or its holding company to make a
payment or forgo a return calculated by reference to or on
any amount received or receivable by such Finance Party
under this Agreement; and/or
(vi) require any Finance Party or its holding company to incur
or sustain a loss (including a loss of future potential
profits) by reason of being obliged to deduct all or part
of such Finance Party's Commitments or Contributions from
its capital for regulatory purposes,
then and in each such case (but subject to clause 8.6 and 14.3):
(aa) such Finance Party shall notify the Primary Borrower
through the Facility Agent in writing of such event
promptly upon its becoming aware of the same; and
(bb) following such notification the Primary Borrower
shall, whether or not such Finance Party's
Contribution to any Facility has been repaid, pay to
the Facility Agent on demand for the account of such
Finance Party the amount which such Finance Party
specifies (in a certificate setting forth the basis
of the computation of such amount but not including
any matters which such Finance Party or its holding
company regards as confidential) is required to
compensate such Finance Party and/or its holding
company in its sole discretion for such liability to
Taxes, increased or additional cost, reduction,
payment, forgone return or loss.
For the purposes of this clause 14.2 each Finance Party may in good faith
allocate or spread costs and/or losses among its assets and liabilities
(or any class thereof) on such basis as it considers appropriate.
Each Finance Party shall use all reasonable endeavours to notify the
Primary Borrower as soon as reasonably practicable of any such increased
cost, reduction, payment or forgone return which is to result in a demand
under clause 14.2(bb).
For the purposes of this clause 14.2 and clause 14.4 "holding company"
means, in relation to a Finance Party, the company or entity (if any)
within the consolidated supervision of which such Finance Party is
included.
For the purposes of this clause 14.2, each Borrower acknowledges that any
requirement that the Finance Parties treat interest hereunder as anything
other than interest shall be a change in law or the interpretation
thereof.
14.3 Exceptions
Nothing in clause 14.2 shall entitle any Finance Party to receive any
amount in respect of compensation for any such liability to Taxes,
increased or additional cost, reduction, payment, forgone return or loss
to the extent that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is the subject of an additional payment under clause 8.5; or
(c) arises as a consequence of (or of any law or regulation
implementing) (i) the proposals for international convergence of
capital measurement and capital standards published by the Basle
Committee on Banking Regulations and Supervisory Practices in July
1988 and/or (ii) any applicable directive of the European Union
(in each case) unless it results from any change in, or in the
interpretation or application of, such proposals or any such
applicable directive (or any law or regulation implementing the
same) occurring after the date hereof; or
(d) is attributable to Taxation save where it is recovered under
clause 14.2(i); or
(e) is attributable to the wilful default or gross negligence of a
Finance Party.
For the purposes of clause 14.3(c) the term "applicable directive" means
(exclusively) each of the Own Funds Directive (89/299/EEC of 17th April
1989) and the Solvency Ratio Directive (89/647/EEC of 18th December
1989).
14.4 Mitigation
If, in respect of any Finance Party (an "Affected Bank"), circumstances
arise or exist which would result in:
(a) any Borrower being required to make an increased payment to that
Finance Party pursuant to clause 8.5;
(b) the reduction of that Finance Party's Commitment in respect of any
Facility to zero or any Borrower being required to prepay that
Finance Party's Contribution to any Facility pursuant to clause
14.1;
(c) any Borrower being required to make a payment to any Finance Party
to compensate such Finance Party or its holding company for a
liability to Taxes, increased or additional cost, reduction,
payment, forgone return or loss pursuant to clause 14.2(bb); or
(d) any Borrower not being entitled to a deduction for UK corporation
tax purposes in respect of interest payable under this Agreement
to that Finance Party;
then, without in any way limiting, reducing or otherwise qualifying the
obligations of any Borrower under clause 8 and this clause 14 (and
subject to such Borrower's rights under clause 6.5), such Finance Party
shall, in consultation with the Facility Agent, endeavour to take such
reasonable steps (and/or, in the case of clause 14.2(bb) and where the
increased or additional cost, reduction, payment, forgone return or loss
is that of its holding company, endeavour to procure that its holding
company takes such reasonable steps) as are open to it (or, as the case
may be, its holding company) to mitigate or remove such circumstances
unless the taking of such steps might (in the opinion of such Finance
Party) be prejudicial to such Finance Party (or, as the case may be, its
holding company) and provided that such Finance Party shall be under no
obligation to take any such action if in the opinion of such Finance
Party to do so might have any adverse effect upon its business,
operations or financial condition.
15. SET-OFF AND PRO-RATA PAYMENTS
15.1 Set-off
Each Borrower hereby agrees that each Finance Party may at any time,
whilst any Default shall be continuing or, with respect to cash cover
referred to in clause 4.12, at any time, notwithstanding any settlement
of account or other matter whatsoever, combine or consolidate all or any
of its then existing accounts wheresoever situate (including accounts in
the name of such Finance Party or of any Borrower jointly with others),
whether such accounts are current, deposit, loan or of any other nature
whatsoever, whether they are subject to notice or not and whether they
are denominated in Sterling or in any other currency, and set-off or
transfer any sum standing to the credit of any one or more such accounts
in or towards satisfaction of any moneys, obligations or liabilities
which are due and payable by any Borrower to such Finance Party under the
Finance Documents but are unpaid. For this purpose each Finance Party is
authorised to purchase with the moneys standing to the credit of such
account such other currencies as may be necessary to effect such
application. No Finance Party shall be obliged to exercise any right
given to it by this clause 15.1. Each Finance Party shall notify the
Facility Agent promptly upon the exercise or purported exercise of any
right of set-off in relation to any Borrower giving full details in
relation thereto and the Facility Agent shall inform the other Finance
Parties.
15.2 Pro-rata payments
(a) If at any time any Bank (the "Recovering Bank") receives or
recovers any amount owing to it by a Borrower under this Agreement
by direct payment, set-off or in any manner other than by payment
through the Facility Agent (not being a payment received from a
Substitute or a sub-participant in such Bank's Contribution to any
Facility or any other payment of an amount due to the Recovering
Bank for its sole account), the Recovering Bank shall, within two
Banking Days of such receipt or recovery (a "Relevant Receipt")
notify the Facility Agent of the amount of the
Relevant Receipt. If the Relevant Receipt exceeds the amount which
the Recovering Bank would have received if the Relevant Receipt
had been received by the Facility Agent then:
(i) within two Banking Days of demand by the Facility Agent,
the Recovering Bank shall pay to the Facility Agent an
amount equal to the excess;
(ii) the Facility Agent shall treat the excess amount so paid by
the Recovering Bank as if it were a payment made by the
relevant Borrower and shall distribute the same to the
Banks (other than the Recovering Bank); and
(iii) as between the relevant Borrower and the Recovering Bank,
the excess amount so re-distributed shall be treated as not
having been paid but the obligations of the relevant
Borrower to the other Banks shall, to the extent of the
amount so re-distributed to them, be treated as discharged.
(b) If any part of a Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt
was so re-distributed shall on request from the Recovering Bank
repay to the Recovering Bank such Bank's pro-rata share of the
amount which has to be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Facility Agent such
information as the Facility Agent may from time to time request
for the purpose of this clause 15.2.
(d) Notwithstanding the foregoing provisions of this clause 15.2, no
Recovering Bank shall be obliged to share any Relevant Receipt
which it receives or recovers pursuant to legal proceedings taken
by it to recover any sums owing to it under this Agreement with
any other party which has a legal right to, but does not, either
join in such proceedings or commence and diligently pursue
separate proceedings to enforce its rights in the same or another
court (unless the proceedings instituted by the Recovering Bank
are instituted by it in breach of clause 18.2).
(e) The amounts due from the relevant Borrower to each of the Banks
shall reflect any payments and receipts among the Banks prescribed
by this clause.
(f) Nothing in this clause 15.2 shall prevent the Issuing Bank from
recovering from the relevant Borrower any amounts due under a
Letter of Credit issued by the Issuing Bank.
15.3 No release
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 15.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 15.2.
15.4 No charge
The provisions of this clause 15 are not intended to, shall not, and
shall not be construed so as to, constitute a charge by a Bank. In
particular it is not intended to create a charge over all or any part of
a sum received or recovered by any Bank in the circumstances mentioned in
clause 15.2.
16. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
16.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the
Finance Parties and each Borrower and their respective successors,
transferees and assigns.
16.2 No assignment by the Borrower
No Borrower may assign or otherwise transfer any of its respective rights
or obligations under any of the Finance Documents.
16.3 Substitution
Each Bank (an "Existing Bank") may at any time assign all or any of its
rights and benefits under the Finance Documents or novate in accordance
with clause 16.5 all or any part of its rights, benefits and/or
obligations under the Finance Documents to another Qualifying Bank (a
"Substitute") with the consent of the Issuing Bank, and with the consent
of the Primary Borrower (not to be unreasonably withheld or delayed),
save that such consent of the Primary Borrower will not be required to
assignments or novations which take place prior to the Syndication Date.
16.4 Assignment
If any Bank assigns all or any of its rights and benefits under the
Finance Documents in accordance with clause 16.3, then, unless and until
the assignee has agreed with the other Finance Parties that it shall be
under the same obligations towards each of them as it would have been if
it had been an original party thereto as a Bank, the other Finance
Parties shall not be obliged to recognise that assignee as having the
rights against each of them which it would have had if it had been such a
party thereto.
16.5 Substitution Certificate
(a) Subject to clause 16.5(b), if a duly completed Substitution
Certificate duly executed by the Existing Bank and the Substitute
is delivered five Banking Days before the proposed Effective Date
(unless the Facility Agent otherwise agrees) to and counter-
signed by the Facility Agent (for itself and the other parties to
this Agreement other than the Existing Bank), then on the
Effective Date (as defined in that Substitution Certificate) to
the extent that the Existing Bank's rights, benefits and
obligations under the Finance Documents are expressed in such
Substitution Certificate to be the subject of a novation in favour
of the Substitute effected pursuant to this clause 16.5:
(i) the existing parties to the Finance Documents and the
Existing Bank shall be released from their respective
obligations towards one another under the Finance Documents
("discharged obligations") except for any obligation which
the Existing Bank has to the Issuing Bank under clause 4.7
(Bank's Guarantee and Indemnity) before the date on which
the novation takes place unless otherwise agreed in writing
by the Issuing Bank and their respective rights against one
another under the Finance Documents ("discharged rights")
shall be cancelled;
(ii) the Substitute party to such Substitution Certificate and
the existing parties to the Finance Documents shall assume
obligations towards each other which differ from the
discharged obligations only insofar as they are owed to or
assumed by such Substitute instead of to or by such
Existing Bank;
(iii) the Substitute party to such Substitution Certificate and
the existing parties to the Finance Documents shall acquire
rights against each other which differ from the discharged
rights only insofar as they are exercisable by or against
such Substitute instead of by or against such Existing
Bank; and
(iv) the Finance Parties shall acquire the same rights and
benefits and assume the same obligations between themselves
as they would have acquired and assumed had such Substitute
been an original party hereto as a Bank with the rights,
benefits and/or obligations acquired or assumed by it as a
result of such transfer;
and, on such Effective Date, the Substitute shall (unless such
novation is part of the syndication process carried out by the
Arrangers) pay to the Facility Agent for its own account a fee of
(pound)750. The Facility Agent shall promptly notify the other
Banks of the receipt by it of any Substitution Certificate and
shall promptly deliver a copy of such Substitution Certificate to
the Primary Borrower.
(b) A Substitution Certificate executed under this clause 16.5 shall
be automatically effective only if and to the extent that the
Substitute shall have a credit rating issued by Standard & Poors
Corporation of at least A (the "Minimum Rating"). If any
Substitute does not have the Minimum Rating as at the time of the
transfer, then the Substitution Certificate shall not take effect
until such time as the Substitute has lodged with the Issuing Bank
such amount of cash by way of cash cover as would represent the
amount required to be paid by that Substitute to the Issuing Bank,
if the Issuing Bank were to call on the Bank's indemnity in
respect of Letters of Credit contained in clause 4.6. Should the
Issuing Bank issue any further Letters of Credit, such Substitute
shall lodge such further cash cover as shall equal the
contribution which it could be required to make to the Banks'
indemnity in respect of such additional Letters of Credit. Cash
cover lodged under this clause 16.5(b) or clause 4.6(d) shall be
placed by the Issuing Bank in a deposit account (subject to such
security arrangements as the Issuing Bank may specify) and
interest (at a rate determined by the Issuing Bank from time to
time) shall be for the account of and paid to such Substitute or
Bank required to lodge such cash cover.
16.6 Reliance on Substitution Certificate
The Facility Agent and the Primary Borrower shall be fully entitled to
rely on any Substitution Certificate delivered to the Facility Agent in
accordance with the foregoing provisions of this clause 16 which is
complete and regular on its face as regards its contents and purportedly
signed on behalf of the relevant Existing Bank(s) and the Substitute(s)
and none of the Facility Agent and the Primary Borrower shall have any
liability or responsibility to any party as a consequence of placing
reliance on and acting in accordance with any such Substitution
Certificate if it proves to be the case that the same was not authentic
or duly authorised.
16.7 Authorisation of Facility Agent
Each party to this Agreement irrevocably authorises the Facility Agent to
counter-sign each Substitution Certificate on its behalf for the purposes
of clause 16.5 without any further consent of, or consultation with, such
party.
16.8 Deed of Accession
Each Borrower shall from time to time at the request of the Facility
Agent promptly execute any accession deed to any of the Finance Documents
and do any other act or thing or execute such further documents as
directed by the Facility Agent in connection with the transfer of rights
or benefits under clause 16.3.
16.9 Costs and Expenses
Each Borrower will, promptly after demand by the Facility Agent, pay to
the Facility Agent the reasonable costs and expenses incurred by it or
any other Finance Party in connection with the creation of valid security
in respect of any Substitute taking an assignment of rights and/or an
assumption of obligations pursuant to clause 16 in those jurisdictions
requiring further steps to be taken following such assignment or
assumption.
16.10 Construction of certain references
If any Bank novates all or any part of its rights, benefits and
obligations as provided in clause 16.3 all relevant references in this
Agreement to such Bank shall thereafter be construed as a reference to
such Bank and/or its Substitute to the extent of their respective
interests.
16.11 Lending offices
Each Bank shall lend through its office at the address specified in
schedule 1 or, as the case may be, in or pursuant to any relevant
Substitution Certificate or through any other office of such Bank
selected from time to time by such Bank through which such Bank wishes to
lend for the purposes of this Agreement. If the office through which a
Bank is lending is changed pursuant to this clause 16.11, such Bank shall
notify the Facility Agent promptly of such change. No Bank shall exercise
its rights under this clause in any manner which might reasonably be
expected to result in it not being a Qualifying Bank.
16.12 Disclosure of information
Each Borrower agrees that the Finance Parties may at any time disclose
such information relating to itself, its Affiliates and associated
companies as shall come into their possession, whether or not in relation
to the Facility:
(a) to any prospective assignee, Substitute or sub-participant;
(b) to their respective advisers, professional or otherwise;
(c) to any Affiliate of such Finance Party;
(d) to the other Finance Parties;
(e) if required to do so by an order of a court in any jurisdiction;
(f) under any law or regulation or to any applicable regulatory
authority (including the Bank of England) in any jurisdiction; and
(g) where such information shall have already entered the public
domain,
and in the case of (a) and (b) above, subject to requiring and receiving
a written confirmation from the recipient of the information that it will
treat in confidence any confidential information so disclosed to it and
not use it for any unauthorised purpose and, upon receipt of such
confirmation, such Finance Party shall in no way be liable or responsible
for such information not being kept confidential by such proposed
assignee, Substitute or other person.
16.13 Restrictions on novations
Any novation by an Existing Bank which is transferring part (but not all)
of its Commitment may only be made under this clause 16 if (i) it is made
in respect of a Commitment of (pound)5,000,000 or any larger integral
multiple of (pound)5,000,000 and (ii) as a consequence of such novation
(or as a consequence of that and any other novation between the same or
related parties taking effect at or about the same time) the Commitment
of the Existing Bank would be not less than (pound)5,000,000. If part
(but not all) of a Bank's Contribution is being transferred, the previous
sentence shall be read as if it referred to "Contribution",
"Contributions" and assignment instead of "Commitment" and "Commitments"
and "novation" respectively.
16.14 No obligation
The Existing Bank shall not be obliged by any Finance Document to:
(a) accept a re-transfer from the Substitute of any of the rights
and/or obligations assigned or transferred under this clause 16;
or
(b) indemnify the Substitute for any losses arising by reason of any
Obligor's failure to perform its obligations under any Finance
Documents or otherwise.
16.15 Syndication
It is acknowledged that at the date of this Agreement the Facility is
being made available by the Underwriters with the intention that each
Underwriter may transfer any part of its participation in accordance with
clause 16.5 (Substitution) and, accordingly, references to the Banks
shall, before the first date on which such transfer shall be made of the
Underwriter's rights, benefits and obligations under this Agreement in
accordance with clause 16.5 (Substitution), be construed as a reference
solely to the Underwriters.
16.16 The Borrower's undertakings in connection with syndication
Each Borrower acknowledges that syndication of the Facility in accordance
with this clause 16.16 will take place and undertakes to take reasonable
steps to assist and co-operate with the Arrangers, the Facility Agent and
the Underwriters in syndication by, among other things:
(a) co-operating with site visits by the Banks and persons invited by
the Arrangers to participate (in this clause 16.16 only, together
the "Banks");
(b) participating at an appropriate senior management level in
presentations to the Banks concerning the Parent, the members of
the REC Group and their activities;
(c) using reasonable endeavours to obtain appropriate authorisations
from the Auditors, other accountants, consultants and professional
advisers to release for the benefit of the Banks any information
addressed to a Borrower and/or the Facility Agent;
(d) refraining from making any statement, announcement or publication
or doing any act or thing which may obstruct syndication in any
way;
(e) providing the Banks with such information relating to the Parent
and members of the REC Group, and their associated companies and
their activities as the Banks reasonably request;
(f) assisting the Facility Agent and the Arrangers in the preparation
and review of any information which such Facility Agent and/or the
Arrangers reasonably require for the purposes of syndication,
including assisting in the preparation of any information
memorandum and the giving of such additional warranties as the
Facility Agent may reasonably request of the contents of the
information and/or the warranties in clause 9, provided that any
such warranties are expressed to be to the best of such Borrower's
knowledge, information and belief and that it may disclose against
such warranties such matters as it deems appropriate;
(g) passing on to the Facility Agent any enquiries received by it from
potential Banks; and
(h) agreeing to amendments to the Finance Documents of an
administrative or technical nature or to correct typographical or
other clerical errors.
17. FACILITY AGENT
17.1 Appointment of Facility Agent
Each Finance Party appoints the Facility Agent to act as its agent in
connection with the Finance Documents to which the Facility Agent is a
party and authorises the Facility Agent to exercise such rights,
remedies, powers and discretions as are specifically delegated to it by
the terms of this Agreement together with all reasonably incidental
rights, powers and discretions. The Borrowers shall be entitled to assume
that the Facility Agent represents the Finance Parties, the Reference
Banks or the Majority Banks (as the case may be), and that all consents
and notices given by the Facility Agent on its behalf are validly given.
17.2 Separate treatment of syndication division
In acting as Facility Agent, the Facility Agent's syndication division
(or such other division as may undertake such task) shall be treated as a
separate entity from any other of its divisions or departments and,
despite the provisions of clauses 17 to 21, if the Facility Agent or any
Related Person acts for or transacts business with any member of a group
comprising the Parent and its Affiliates or associated companies (the
"Parent Group") or any other person which may be a trade competitor of
the Parent Group or the Wider Group or any member of either such group or
may otherwise have commercial interests similar to those of any member of
such groups in
any capacity in relation to any other matter (including as a Bank under
this Agreement), any information acquired by the Facility Agent or any
Related Person in such other capacity may be treated as confidential by
the Facility Agent. The Borrowers hereby expressly acknowledge that the
Finance Parties and Related Persons may be providing debt financing,
equity capital or other services (including financial advisory services)
to other persons with whom the Parent or the Wider Group may have
conflicting interests in respect of the Facilities or otherwise.
17.3 Actions of Facility Agent
Each action taken or decision made by the Facility Agent under or in
relation to any Finance Document with requisite authority under this
Agreement, including on the basis of the requisite instructions, shall be
binding on all the Finance Parties.
17.4 Notification of retirement of Facility Agent or Issuing Bank
Each of the Facility Agent and/or the Issuing Bank may resign its
appointment under this Agreement at any time without assigning any reason
therefor by giving not less than 30 days' prior written notice to that
effect to each of the other parties to this Agreement Provided that no
such resignation shall be effective until a successor for such Facility
Agent or Issuing Bank (as the case may be) is appointed in accordance
with the succeeding provisions of this clause.
17.5 Successor Facility Agent or Issuing Bank
If the Facility Agent or Issuing Bank gives notice of its resignation
pursuant to clause 17.4, then any reputable and experienced bank or other
financial institution with an office in London may after consultation
with the Borrowers be appointed as a successor to such Facility Agent or
Issuing Bank (as the case may be) by the Majority Banks but, if no such
successor is so appointed, the Facility Agent or Issuing Bank (as the
case may be) may appoint such a successor itself.
17.6 Provisions relating to successor Facility Agent or Issuing Bank
With effect from the date that a successor is appointed and accepts the
office of Facility Agent or, as the case may be, Issuing Bank and
executes such necessary documentation under this clause 17:
(a) as regards the other Finance Parties and the Borrowers, such
successor shall become bound by all the obligations of the
Facility Agent or, as the case may be, the Issuing Bank and become
entitled to all the rights, privileges, powers, authorities and
discretions of the Facility Agent or, as the case may be, the
Issuing Bank under the Finance Documents;
(b) the agency of the retiring Facility Agent or, as the case may be,
the duties of the Issuing Bank shall terminate and the retiring
Facility Agent or, as the case may be, the retiring Issuing Bank
shall be discharged from any further liability or obligation under
the Finance Documents, but without prejudice to any liabilities
which the retiring Facility Agent or, as the case may be, the
retiring Issuing Bank may have incurred (including with respect to
the retiring Issuing Bank any then outstanding Issued Letter of
Credit) before the termination of its agency, trusteeship and/or
duties;
(c) the costs, charges and expenses of the retiring Facility Agent,
or, as the case may be, the retiring Issuing Bank shall be
discharged if recoverable under the provisions of this Agreement;
(d) the provisions of the Finance Documents shall continue in effect
for the benefit of any retiring Facility Agent, or, as the case
may be, the retiring Issuing Bank in respect of any actions taken
or omitted to be taken by it or any event occurring before the
termination of its agency, trusteeship and/or duties (including
with respect to the retiring Issuing Bank any then outstanding
Issued Letter of Credit);
(e) the retiring Facility Agent or Issuing Bank shall (at the expense
of the Primary Borrower) provide its successor with copies of such
of its records as its successor reasonably requires to carry out
its functions as such.
17.7 Merger of Facility Agent or Issuing Bank
Any corporation into which the Facility Agent or the Issuing Bank may be
merged or converted or any corporation with which the Facility Agent or
the Issuing Bank may be consolidated or any corporation resulting from
any merger, conversion, amalgamation, consolidation or other
reorganisation to which the Facility Agent or the Issuing Bank shall be a
party shall, to the extent permitted by applicable law, be the successor
Facility Agent or, as the case may be, Issuing Bank under this Agreement
and the other Finance Documents (as appropriate) without the execution or
filing of any document or any further act on the part of any of the
parties to this Agreement or, as the case may be, the other Finance
Documents save that notice of merger, conversion, amalgamation,
consolidation or other reorganisation shall forthwith be given to the
Primary Borrower and the Banks.
17.8 Role of Issuing Bank
The Issuing Bank shall act on behalf of the Banks with respect to any
Letters of Credit Issued by it and the documents associated therewith
until such time and except for so long as the Facility Agent may agree at
the request of the Majority Banks to act for such Issuing Bank with
respect thereto.
18. POWERS
18.1 General powers
Each of the Facility Agent, the Issuing Bank, the Arrangers and the
Underwriters may:
(a) assume that the Facility Office of each Bank is that identified
with its signature below (or, in the case of a Substitute, that
identified in the Substitution Certificate under which it became a
party to this Agreement) until it has received from such Bank a
notice designating some other office of such Bank as its Facility
Office, and may act upon any such notice until the same is
superseded by a further such notice;
(b) engage and pay for the advice or services of any lawyers,
accountants or other advisers whose advice or services may seem
necessary, expedient or desirable to it and may rely upon any
advice so obtained;
(c) rely as to matters of fact which might reasonably be expected to
be within the knowledge of any Borrower upon a certificate or
statement signed by or on behalf of such Borrower;
(d) rely upon any communication or document believed by it to be
genuine and correct and to have been communicated or signed by the
person by whom it purports to be communicated or signed;
(e) refrain from exercising any right, power or discretion vested in
it under any Finance Document unless and until instructed by the
Majority Banks or, where required, all of the Banks as to whether
or not such right, power or discretion is to be exercised and, if
it is to be exercised, as to the manner in which it should be
exercised, and it shall not be liable for acting or refraining
from acting in accordance with or in the absence of such
instructions;
(f) refrain from taking any step to protect or enforce the rights of
any Finance Party under any Finance Document and from beginning
any legal action or proceeding arising out of or in connection
with any Finance Document until it has been indemnified and/or
secured as it may require (whether by way of payment in advance or
otherwise) against all costs, claims, expenses (including legal
fees) and liabilities which it will or may expend or incur in
complying with such instructions;
(g) refrain from doing anything which would or might in its opinion be
contrary to any applicable law or any requirements (whether or not
having the force of law) of any governmental, judicial or
regulatory body or otherwise render it liable to any person, and
do anything which is in its opinion necessary to comply with any
such applicable law or requirement;
(h) do any act or thing in the exercise of any of its powers and
duties under the Finance Documents which may lawfully be done and
which in its absolute discretion it deems advisable for the
protection and benefit of the Finance Parties collectively;
(i) perform any of its duties, obligations and responsibilities under
the Finance Documents by or through its personnel or agents; and
(j) accept deposits from, lend money (secured or unsecured) to and
generally engage in any kind of banking or other business with, be
the owner or holder of any shares or other securities of, and
provide advisory or other services to the Parent and its
Affiliates, and/or the REC Group or any of the Finance Parties,
without any liability to account.
18.2 Specific powers of Facility Agent and Issuing Bank
The Facility Agent and the Issuing Bank:
(a) may assume that:
(i) any representation made by a Obligor in or in connection
with the Finance Documents is true;
(ii) no Default has occurred;
(iii) no Obligor is in breach of or default under its obligations
under any Finance Document; and
(iv) any right, power, authority or discretion vested in any of
the Finance Documents upon the Majority Banks, all Banks,
or any other person or group of persons has not been
exercised,
unless the Facility Agent has in its capacity as agent for the
relevant Finance Parties received actual notice to the contrary
from any other party to any Finance Document;
(b) shall be at liberty to place any Finance Document and any other
instruments, documents or deeds delivered to it pursuant thereto
or in connection therewith for the time being in its possession in
any safe deposit, safe or receptacle selected by the Facility
Agent, as the case may be, or with any bank, any company whose
business includes undertaking the safe custody of documents or any
firm of lawyers of good repute and may make any such arrangements
as it thinks fit for allowing any of the Obligors access to, or
its solicitors or auditors possession of, such documents when
necessary or convenient and, in the absence of gross negligence or
wilful default on its part, shall not be responsible for any loss
thereby incurred;
(c) may, whenever it thinks fit, delegate by power of attorney or
otherwise to any person or persons all or any of the rights,
trusts, powers, authorities and discretion vested in it by any
Finance Document and such delegation may be made upon such terms
and subject to such conditions and subject to such regulations as
the Facility Agent, as the case may be, may think fit and shall
not be bound to supervise the proceedings or (in the absence of
gross negligence or wilful default on its part) be in any way
responsible for any loss incurred by reason of any misconduct or
default on the part of any such delegate;
(d) notwithstanding anything else herein contained, may refrain from
doing anything which would or might in its opinion be contrary to
any relevant law of any jurisdiction or any relevant directive or
regulation of any agency of any state or which would or might
otherwise render it liable to any persons and may do anything
which is, in its opinion, necessary or desirable to comply with
any such law, directive or regulations;
(e) may indemnify itself and/or every attorney, agent or other person
appointed by it under any Finance Document out of any security
against all liabilities arising in connection with the Facility
and/or in respect of any other matter or thing done or omitted to
be done in any way relating to any Finance Document or by law
and/or acting as Facility Agent or Issuing Bank;
(f) shall have the power to institute, prosecute and defend any suits
or actions or other proceedings affecting the Facility Agent or
Issuing Bank or any security and to compromise any matter or
difference or submit any such matter to arbitration and to
compromise or compound any debts owing to the Facility Agent or
Issuing Bank or any other claims against it or any such terms as
it shall deem sufficient and to make petition upon such terms as
it shall deem desirable;
(g) save as otherwise expressly provided herein, shall have absolute
discretion as to the exercise or non exercise (and as to the
manner and time of any such exercise) of all
rights, trust, powers, authorities and discretions vested in it by
any of the Finance Documents but shall be entitled to refrain from
exercising any right, power or discretion vested in it as agent or
trustee under any Finance Document unless and until instructed by
the Majority Banks or, where required under this Agreement, all
Banks as to whether or not such right, power or discretion is to
be exercised and, if it is to be exercised, as to the manner in
which it should be exercised; and
(h) shall have absolute discretion as to the exercise or non-exercise
(and as to the manner and time of any such exercise) of all
rights, trust, powers, authorities and discretions in relation to
any matter, or in any context, not expressly provided for by this
Agreement to act or, as the case may be, refrain from acting in
accordance with the instructions of the Majority Banks;
(i) shall have the power to give or enter into any indemnity,
warranty, guarantee, undertaking or covenant or to enter into any
type of agreement as it shall, with the approval of the Majority
Banks (or, where required under this Agreement, all Banks) and
subject to all other provisions of the Finance Documents, think
fit in relation to any security in respect of the Facility;
(j) shall (subject to clause 19) be entitled (in its own name or in
the names of nominees) to invest moneys from time to time which,
in the opinion of the Facility Agent or the Issuing Bank, it would
not be practicable to distribute immediately by placing the same
on deposit in the name or under the control of itself as it may
think fit without being under any duty to diversify the same and
it shall not be responsible for any loss due to interest rate or
exchange rate fluctuations;
(k) with respect to its own Commitments and Contributions (if any),
shall have the same rights and powers under this Agreement and the
other Finance Documents as any other Bank and may exercise the
same as though it were not performing the duties and functions
delegated to it under this Agreement and/or the other Finance
Documents and the term "Banks" shall, unless the context clearly
otherwise indicates, include the Facility Agent and Issuing Bank
in their individual capacities as Banks.
19. DUTIES
19.1 Specific duties of the Facility Agent
The Facility Agent (for the benefit of the other Finance Parties only)
shall:
(a) promptly upon receipt inform each Bank of the contents of any
notice or document or other information received by it on or after
the date of this Agreement in its capacity as Facility Agent under
this Agreement from any Borrower;
(b) promptly notify each Bank of the occurrence of any Default or any
material breach by any Obligor in the due performance of its
obligations under this Agreement or any guarantee or security in
respect of the Facility of which the Facility Agent has received
written notice from any other party to any Finance Document;
(c) save as otherwise provided herein, act in accordance with any
instructions given to it by the Majority Banks (which instructions
shall be binding on all of the Finance Parties);
(d) if so instructed by the Majority Banks (or, where so required
under this Agreement, all Banks), refrain from exercising any
right, remedy power or discretion vested in it under the Finance
Documents;
(e) except as regards purely administrative acts, consult whenever
reasonably practicable with the Banks before doing or refraining
from doing any act or thing in the exercise of its powers as agent
and/or trustee;
(f) to the extent that it receives or recovers monies following the
service of a notice in accordance with Clause 12.2 pursuant to or
as a result of any breach of any Finance Document to be applied in
discharging any obligation (whether actual or contingent, present
or future) of any Obligor under any Finance Document, apply such
monies (without prejudice to the respective rights of the Facility
Agent pursuant to any Finance Document to credit any monies
received by it to any suspense account) as between the Finance
Parties in accordance with clause 8.9 as if they were a partial
payment; and
(g) shall make each such application and/or distribution as soon as is
practicable after the relevant moneys are received by, or
otherwise become available to, it save that the Facility Agent may
credit any moneys received by it to a suspense account for so long
and in such manner as the Facility Agent may from time to time
determine with a view to preserving the rights of the Finance
Parties or any of them to prove for the whole of their respective
claims against any Obligor or any other person liable.
20. EXONERATION
20.1 Absence of obligation on initial Finance Parties
Despite anything to the contrary expressed or implied in any Finance
Document, each of the Facility Agent, the Issuing Bank, the Arrangers and
the Underwriters shall:
(a) not be bound to enquire as to and will have no liability in
respect of:
(i) whether or not any representation or warranty made by any
Obligor under or in connection with any Finance Document is
true, complete or adequate;
(ii) the occurrence or otherwise of any Default;
(iii) the performance by any Obligor of its obligations under any
Finance Document; or
(iv) any breach or default by any Obligor of or under its
obligations under any Finance Document;
(b) not be bound to account to any Finance Party for any fee or other
sum or the profit element of any sum received by it for its own
account;
(c) not be bound to disclose to any other person any information
relating to any member of the REC Group if such disclosure would
or might in its opinion constitute a breach of any law or
regulation or duty of confidentiality or be otherwise actionable
at the suit of any person;
(d) not be under any fiduciary or other duty towards any Finance Party
or under any obligations other than those expressly provided for
in any Finance Documents;
(e) not be liable (in the absence of its own gross negligence or
wilful default):
(i) for any failure, omission, or defect in the due execution,
delivery, validity, legality, adequacy, performance,
enforceability, or admissibility in evidence of any Finance
Document or any communication, report or other document
delivered under any Finance Document; or
(ii) in respect of its exercise or failure to exercise any of
its powers and duties under any Finance Document; or
(f) not have any duties, obligations or liabilities other than those
expressly provided for in this Agreement and have no liability or
responsibility (in the absence of its own gross negligence or
wilful default) of any kind to:
(i) any member of the Wider Group arising out of or in relation
to any failure or delay in the performance or breach by any
Finance Party (other than itself) of any of its obligations
under or in connection with any Finance Document; or
(ii) any Finance Party arising out of or in relation to:
(aa) the financial condition of any member of the Wider
Group; or
(bb) any failure or delay in the performance or breach by
any Obligor of any of its obligations under or in
connection with any Finance Document or the
Facility;
(g) not be bound to check or enquire on behalf of any other Finance
Party into or liable for the adequacy, accuracy, execution,
genuineness, enforceability, admissibility in evidence or
completeness of any communication delivered to it under any of the
Finance Documents, any legal or other opinions, reports,
valuations, certificates, appraisals or other documents delivered
or made or required to be delivered or made at any time in
connection with any of the Finance Documents, any security to be
constituted thereby or any other report or other document,
statement or information circulated, delivered or made, whether
orally or otherwise and whether before, on or after the date of
this Agreement;
(h) be entitled to accept without enquiry, requisition or objection
such right and title as any Obligor may have to that part of the
property belonging to it (or any part thereof) which is the
subject matter of any Finance Document and not be bound or
concerned to investigate or make any enquiry into the right or
title of such person to such property (or any part thereof) or,
without prejudice to the foregoing, to require such person to
remedy any defect in such person's right or title as aforesaid;
(i) be entitled to invest monies which in the opinion of the Facility
Agent may not be paid out promptly following receipt in the name
or under the control of the Facility Agent or Issuing Bank in any
of the investments for the time being authorised by law for the
investment by trustees of trust monies or in any other investments
whether similar to the aforesaid or not which may be requested by
the Majority Banks or by placing the same on deposit in the name
or under the control of the Facility Agent or Issuing Bank as the
Facility Agent may think fit and the Facility Agent or Issuing
Bank may at any time vary or transpose any such investments for or
into any others of a like nature and (in the absence of gross
negligence or wilful default on the part of such Facility Agent or
Issuing Bank) shall not be responsible for any loss thereby
incurred whether due to depreciation in value of such investments
or any other reason whatever;
(j) not be bound to take any steps or perform any obligation or
exercise any right or fulfil any request if to do so might in its
sole opinion breach or conflict with or contradict or be contrary
to any rule, regulation, law, regulatory requirement, court order
or judgment in any jurisdiction or expose the Facility Agent, the
Issuing Bank, the Arrangers or the Underwriters to liabilities in
any jurisdiction or be otherwise actionable at the suit of any
person;
(k) not be liable for any failure:
(i) to require the deposit with it of any deed or document
certifying, representing or constituting the title of any
Obligor to any of the property mortgaged, charged, assigned
or otherwise encumbered by or pursuant to any security;
(ii) to obtain any licence, consent or other authority for the
execution, delivery, validity, legality, adequacy,
performance, enforceability or admissibility in evidence of
any of the Finance Documents; or
(iii) to register or notify any of the foregoing in accordance
with the provisions of any of the documents of title of any
Obligor;
(l) have no liability (save as otherwise provided in clauses 17 to 23)
otherwise in connection with the Facility or their negotiations or
for acting (or as the case may be refraining from acting) in
connection with the instructions of the Majority Banks.
20.2 Indemnity from Banks
Each Bank shall, in its Proportion, on demand by the Facility Agent, the
Issuing Bank or any Arranger from time to time, indemnify the Facility
Agent, the Issuing Bank or the Arranger, against any and all fees (to the
extent properly chargeable by the Facility Agent, the Issuing Bank or the
Arranger under any Finance Document but not promptly recovered from any
Obligor), costs, claims and expenses and liabilities including any VAT
thereon:
(a) to which the Facility Agent or Issuing Bank becomes subject by
reason of it acting as agent or security trustee; or
(ii) incurred by the Facility Agent or any attorney, agent, delegate or
other person appointed by the Facility Agent under any Finance
Document in relation to or arising out of the taking or holding of
any of the security given or created by or pursuant to
any of the Finance Documents or in the execution or purported or
attempted execution of the rights, trusts, powers, authorities,
discretions and obligations vested in it; or
(iii) which it is otherwise entitled to recover from any Obligor,
in each case under any of the Finance Documents or by law, including
those relating to all actions, proceedings, claims and demands in respect
of any matter or thing done or omitted in any way relating to the Finance
Documents any exercise or non exercise of any right, power or discretion,
and all amounts due to the Facility Agent by way of remuneration for
acting as agent or trustee under any of the Finance Documents
(collectively the "Liabilities"). Each Borrower shall counter-indemnify
the Banks against all payments by them under this clause 20.2. If a Bank
(referred to in this clause 20.2 as a "defaulting Bank") fails to pay its
due contribution under this indemnity, then the Facility Agent may
(without prejudice to its other rights and remedies) deduct the amount
due from the defaulting Bank from any sums which are then or afterwards
in its possession which would otherwise be payable to the defaulting
Bank.
20.3 Disclaimer
Neither the Facility Agent or the Issuing Bank, nor any Arranger or
Underwriter accepts responsibility to any other Finance Party for the
accuracy and/or completeness of any information supplied in connection
with any Finance Document or for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document and neither the
Facility Agent or the Issuing Bank, nor any Arranger or Underwriter shall
be under any liability to any other Finance Party as a result of taking
or omitting to take any action in relation to any Finance Document
(except in the case of its gross negligence or wilful misconduct).
20.4 No actions against individuals
Each of the Banks agrees that it will not assert or seek to assert
against any director, officer or employee of the Facility Agent, the
Issuing Bank, any Arranger or Underwriter any claim it may have against
any of them in respect of the matters referred to in clause 20.3.
20.5 Credit appraisals
It is agreed by each Bank, by virtue of its execution of this Agreement
or its accession to this Agreement, that it has itself been, and will
continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of each member of
the REC Group, and, accordingly, each Bank confirms to each of the
Facility Agent, the Issuing Bank, the Arrangers, the Underwriters and
other Banks that it:
(a) does not enter into this Agreement nor accede to it on the basis
of and has not relied on and will not rely on any statement,
opinion, forecast or other representation (whether negligent or
innocent) or warranty or other provision (in any case whether
oral, written, express or implied) made by, or agreed to, the
Facility Agent, the Issuing Bank, any Arranger, any Underwriter or
any other Bank to induce it to enter into this Agreement or any
other Finance Document except as expressly set out therein and the
remedies available in respect of any such misrepresentation or
untrue statement made to such Bank shall be limited to a claim for
breach of contract under this Agreement; and
(b) has not relied on and will not rely on the Facility Agent, the
Issuing Bank, any Arranger, any Underwriter or any other Bank:
(i) to check or enquire on its behalf into the adequacy,
accuracy or completeness of any information provided by or
on behalf of any Obligor or any of its Affiliates in
connection with any Finance Document and/or the
transactions contemplated in the Finance Documents (whether
or not such information has been or is after the date of
this Agreement circulated to such Bank by the Facility
Agent, the Issuing Bank, any Arranger or Underwriter or as
the case may be any other Bank); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of any Obligor or any of its Affiliates.
Provided that clause 20.5(a) shall not apply to any statement or
representation made fraudulently, or to any provision of this Agreement
which was induced by fraud for which the remedies available shall be all
those available under English law.
20.6 Exoneration of Related Persons
All the provisions of this clause 20 and of any other provision of any
Finance Document protecting (including indemnifying) or limiting the
liability of any Finance Party, or exonerating it from liability or
responsibility, which may enure to the benefit of the such Finance Party
shall also be deemed to be given for the benefit of all Related Persons
to whom they are capable of relating or in respect of whom they are
capable of taking effect.
20.7 Pre-contractual effect of exoneration
For the avoidance of doubt, the guarantee, indemnity, exonerations and
other protections in favour of the Facility Agent, the Issuing Bank, the
Arrangers, the Underwriters and the Related Persons contained in the
Finance Documents shall take effect in respect of all events, action and
omissions occurring before the execution and completion of this Agreement
as well as events, actions and omissions occurring on or after its
execution and completion and to the extent that any liability should be
adjudged to have arisen prior to the date of this Agreement, such
liability is hereby completely released.
21. ENFORCEMENT AND RECOVERIES
21.1 Obligations owed by each Borrower to Finance Parties
Each Borrower agrees that:
(a) all claims in the Finance Documents may be enforced, realised and
distributed by the Facility Agent and, where relevant, the Issuing
Bank in accordance with their respective powers and obligations of
the Finance Parties set out in clauses 18 and 19;
(b) if it receives any sum from any person which, pursuant to the
Finance Documents, should have been paid to the Facility Agent,
such sum shall be held on trust for the Finance Parties and shall
forthwith be paid over to the Facility Agent.
(c) the obligations and liabilities the subject of any Guarantee shall
only be discharged by virtue of receipt or recovery by the
Facility Agent of monies, or of payments made by the Facility
Agent hereunder, to the extent that the ultimate recipient
actually receives monies from the Facility Agent hereunder.
21.2 Obligations owed by Finance Parties to Facility Agent and Security Agent
The Finance Parties agree between themselves not to take any action
separately to enforce or attempt to enforce any Guarantee or to exercise
any rights, discretions or powers or to grant any consents or releases
under or pursuant to any Guarantee.
22. DETERMINATION OF MATTERS
22.1 Majority Bank matters: amendments and waivers
Except as provided in clauses 22.4 and 22.5, with the prior written
consent of the Majority Banks, the Facility Agent and the Primary
Borrower may from time to time:
(a) enter into written amendments, supplements or modifications to the
Finance Documents (however fundamental) for the purpose of adding
any provisions to the Finance Documents or changing in any manner
the rights and/or obligations of any of the Obligors, the Facility
Agent, the Issuing Bank and the Banks; and
(b) execute and deliver to the Primary Borrower a written instrument
waiving prospectively or retrospectively, on such terms and
conditions as the Facility Agent may specify in such instrument,
any of the requirements of any of the Finance Documents, or giving
any consents or approvals thereunder.
22.2 Documentation of Majority Bank changes
Any action so authorised and effected by the Facility Agent under clause
22.1 shall be documented in such manner as the Facility Agent shall (with
the approval of the Majority Banks) determine, shall be promptly notified
to the Banks by the Facility Agent and (without prejudice to the
generality of clause 17.3) shall be binding on all the Banks.
22.3 Majority bank matters: enforcement
If the Facility Agent makes a declaration under clause 12.2 the Facility
Agent shall, in the names of all the Banks, take such action on behalf of
the Banks and conduct such negotiations with any Obligor and generally
administer the Facility in accordance with the wishes of the Majority
Banks. All the Banks shall be bound by the provisions of this clause 22.3
and no Bank shall be entitled to take action independently against the
Primary Borrower without the prior consent of the Majority Banks.
22.4 All Bank matters: amendments and waivers
Except with the prior written consent of all the Banks, the Facility
Agent shall not have authority on behalf of the Banks to agree with any
Borrower any amendment or modification to this Agreement or to vary or
waive breaches of or defaults under or otherwise excuse
performance of any provision of this Agreement by any Borrower, if the
effect of such would be to:
(a) reduce the Applicable Margin;
(b) postpone the due date or reduce the amount of any payment of
principal, interest, commitment commission or other amount payable
by any Borrower under this Agreement;
(c) change the currency in which any amount is payable by any Borrower
under this Agreement;
(d) have the effect of changing the amount of any Facility, any Bank's
Commitment or the principal or face amount or currency of any
Advance;
(e) extend any period during which a Drawdown Notice may be delivered;
(f) change any provision of this Agreement which expressly requires
the approval or consent of all the Banks such that the relevant
approval or consent may be given otherwise than with the sanction
of all the Banks;
(g) change the definitions of Borrowed Money, Event of Default,
Majority Banks, Default, Final Repayment Date or Substitution
Certificate;
(h) agree with any Obligor any amendment of, or action in relation to,
any Guarantee which would have the effect of:
(i) extending the due date or reducing the amount of any
payment under any Guarantee; or
(ii) changing the currency in which any amount is payable under
any Guarantee;
(i) change clause 15.2 (Pro-rata Payments); or
(j) change this clause 22 or clause 23.
22.5 Execution of new security
For the purposes of this clause 22 it is expressly agreed and
acknowledged that the execution of a guarantee and/or deed of adherence
by a new REC Company or other Obligor or proposed Obligor or any deed or
instrument pursuant to a further assurance provision in this Agreement or
the other Finance Documents shall not constitute an amendment or
modification to, or variation of, any of the Finance Documents.
22.6 Veto of Facility Agent
Regardless of any other provision in this Agreement, the Facility Agent
and, to the extent affected, the Issuing Bank shall not be obliged to
agree to any such waiver, amendment, supplement or modification if it
would:
(a) amend, modify or waive any provision of clause 22; or
(b) otherwise amend, modify or waive any of the Facility Agent's, the
Issuing Bank's or the Arrangers' rights under any of the Finance
Documents to any additional obligations under such documents.
22.7 Administrative determinations
The Facility Agent may determine purely administrative matters without
reference to the Banks.
23. BASIS OF DECISIONS
23.1 Meaning of Majority Banks
Where this Agreement provides for any matter to be determined by
reference to the opinion of, or to be subject to the consent or request
of, the Majority Banks or for any action to be taken on the instructions
of the Majority Banks, such opinion, consent, request or instructions
shall (as between the Banks) only be regarded as having been validly
given or issued by the Majority Banks if all the Banks shall have
received prior notice of the matter on which such opinion, consent,
request or instructions are required to be obtained and the relevant
majority of Banks shall have given or issued such opinion, consent,
request or instructions, but so that (as between each Borrower and the
Finance Parties) each Borrower shall be entitled (and bound) to assume
that such notice shall have been duly received by each Bank and that the
relevant majority shall have been obtained to constitute Majority Banks
when notified to this effect by the Facility Agent whether or not this is
the case.
23.2 Notice to Majority Banks
If, within 10 Banking Days of the Facility Agent despatching to each Bank
a notice requesting instructions (or confirmation of instructions) from
the Banks or the agreement of the Banks to any amendment, modification,
waiver, variation or excuse of performance for the purposes of, or in
relation to, any of the Finance Documents, the Facility Agent has not
received a reply specifically giving or confirming or refusing to give or
confirm the relevant instructions or, as the case may be, approving or
refusing to approve the proposed amendment, modification, waiver,
variation or excuse of performance, then (subject to clause 23.4) the
Facility Agent shall treat any Bank which has not so responded as having
indicated a desire to be bound by the wishes of 662/3 per cent. of those
Banks (measured in terms of the relevant Contributions or, if none, the
relevant Commitments of those Banks) which have so responded. Any Bank
which notifies the Facility Agent of a wish or intention to abstain on
any particular issue shall be treated as if it had not responded.
23.3 Meaning of all Banks
Where this Agreement or any other Finance Document, provides for any
matter to be determined by reference to the opinion of, or to be subject
to the consent of or request of all of the Banks or the Banks acting
unanimously or for any action to be taken on the instruction of all the
Banks such opinion, consent, request or instructions shall (as between
the Banks) only be regarded as having been validly given or issued by all
the Banks (or the Banks acting unanimously) if all the Banks shall have
received prior notice (the "Agent's Notice") of such matter containing a
request for written instructions from such Bank to be received by the
Facility Agent within ten Banking Days of the receipt (or the deemed
receipt pursuant to clause 24.1(b)) of the Agent's Notice. If, in respect
of a Bank, the Facility Agent:
(a) shall not have received written instructions in respect of such
matter from such Bank; and
(b) the Facility Agent shall have received written instructions in
respect of such matter from at least five other Banks,
in each case within such time period (and subject to clause 23.4), such
Bank shall be deemed to have irrevocably renounced and waived its right
to make any such determination, approval, consent or provide instructions
to the Facility Agent in respect of such matter; shall not have any
rights, recourse or remedy against the Facility Agent in respect of such
matter; and shall be bound (as shall each Borrower) by the determination,
approval, consent or instructions of the other Banks in respect of such
matter. Clauses 23.1 and 23.2 shall not apply in relation to those
matters which are to be decided by all the Banks.
23.4 Late responses
In any case where a Bank fails to respond within the time limit set down
under clauses 23.2 or 23.3, such Bank's response, if it responds before
any determination or instruction is acted upon or communicated to any
Borrower, will be taken into account as if it had been received within
the time limit Provided that the Facility Agent has received actual
notice of such response before any such action or communication.
23.5 Costs
If the Primary Borrower requests, or if the Facility Agent requires in
accordance with clause 10.3(c) or any other provision of this Agreement,
any amendment, supplement, modification or waiver under clauses 22.1 or
22.3 (Majority Bank matters) or clauses 22.4 or 22.5 (All Bank matters),
then the Primary Borrower shall, on demand by the Facility Agent,
reimburse the Facility Agent for all costs and expenses (including legal
fees), together with any VAT on them, incurred by the Facility Agent in
the negotiation, preparation and execution of any written instrument
contemplated by clauses 22.1 or 22.3 (Majority Bank matters) or clauses
22.4 or 22.5 (All Bank matters).
23.6 No partnership
This Agreement shall not and shall not be construed so as to constitute a
partnership between the parties to this Agreement or any of them.
23.7 Change of Reference Banks
If:
(a) the whole of the Contributions (if any) of any Reference Bank are
prepaid;
(b) the Commitments (if any) of any Reference Bank are reduced to zero
prior to the end of the Finance Period;
(c) a Reference Bank novates the whole of its rights and obligations
(if any) as a Bank under this Agreement; or
(d) a Reference Bank ceases to provide quotations to the Facility
Agent upon request for the purposes of determining LIBOR (where
such quotations are required having regard to the definition of
"LIBOR" in clause 1.2)
the Facility Agent may, acting on the instructions of the Majority Banks,
terminate the appointment of such Reference Bank and after consultation
with the Primary Borrower appoint another Bank to replace such Reference
Bank.
24. MATTERS CONCERNING THE OBLIGORS
24.1 Additional Borrower
The Primary Borrower may with the prior written consent of the Facility
Agent at any time during the term of this Agreement designate another
directly wholly owned, English incorporated Subsidiary of the Primary
Borrower which is or, on or prior to it making a drawdown hereunder, will
become a REC Company as an Additional Borrower under the Facility, by
giving not less than 10 days' written notice to the Facility Agent. No
such accession shall be valid until the Primary Borrower has procured the
delivery to the Facility Agent of a Deed of Accession duly executed by
the proposed Additional Borrower. Any member of the Group wishing to
become an Additional Borrower shall also become an Additional Guarantor.
24.2 Guarantees from REC Companies
The Primary Borrower shall:
(a) notify the Facility Agent as soon as reasonably practicable after
it becomes aware that any member of the Group is to become a REC
Company; and
(b) procure that each such member of the Group becomes an Additional
Guarantor by the time it becomes a REC Company.
24.3 Deed of Accession
Any member of the Group which is to become either an Additional Guarantor
or both an Additional Borrower and an Additional Guarantor shall deliver
to the Facility Agent:
(a) a Deed of Accession (incorporating a Guarantee) executed by it;
(b) the documents specified in clause 3 of the Deed of Accession, in
form and substance satisfactory to the Facility Agent;
(c) such other information relating to that Subsidiary as the Facility
Agent may reasonably require; and
(d) a guarantee executed by the Guarantors (other than the Additional
Borrower) in a form satisfactory to the Facility Agent of the
Additional Borrower's obligations to the Banks
under the Finance Documents unless the Guarantees already executed
by such Guarantors would (to the satisfaction of the Facility
Agent) guarantee such Additional Borrower's obligations.
Such a member of the Group shall become an Additional Obligor when the
relevant Deed of Accession has been executed by the Facility Agent, such
Subsidiary and the Primary Borrower and the Facility Agent has notified
the Primary Borrower that it has received the other items referred to in
this clause 24.3.
24.4 Primary Borrower as Obligors' Agent
Each Obligor (other than the Primary Borrower), and each Additional
Obligor by its execution of a Deed of Accession, irrevocably appoints the
Primary Borrower as its agent for all purposes of or connected with the
Finance Documents (including, without limitation, the giving of any
Drawdown Notice under the Facility, the execution of future Deeds of
Accession on its behalf and any agreement to the continuance of its
Guarantee on its behalf). Each of the Finance Parties may rely upon any
document, notice, confirmation or agreement (whether given in writing or
orally) signed by or given by, or on behalf of the Primary Borrower as if
it had been signed by or given by each and every other Obligor. The
Primary Borrower may give a good receipt for any sum payable to each and
every other Borrower under this Agreement.
24.5 Obligations unconditional
The obligations of each Obligor under this Agreement and each other
Finance Document are unconditional and irrevocable (subject to the
express provisions of this Agreement) and shall not be in any way
affected or discharged by reason of any matter in connection with the
offer for shares in The Energy Group PLC made by TU Acquisitions PLC.
24.6 Obligations Several
The obligations of each Obligor under this Agreement and the other
Finance Documents are several and the failure of any Obligor to perform
such obligations shall not release any other Obligor from its obligations
under this Agreement.
25. NOTICES AND OTHER MATTERS
25.1 Address for Notice
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid
letter (airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter, when delivered personally
or 2 days after it has been put into the post and, in the case of
a telefax, when a complete and legible copy is received by the
addressee (unless the time of despatch of any telefax is after
close of business in which case it shall be deemed to have been
received at the opening of business on the next Banking Day); and
(c) be sent:
(i) to the Primary Borrower at:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ 2AQ
Telefax: ▇▇▇ (▇)▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
TU Acquisitions PLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇
Telefax: ▇▇▇ (▇) ▇▇▇▇ ▇▇▇▇▇▇
Attention: Finance Director
(ii) to the Facility Agent at:
Chase Manhattan International Ltd
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(iii) to the Issuing Bank at:
The Chase Manhattan Bank
Trinity Tower
9 ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(iv) to each Bank at its address or telefax number specified in
schedule 1 or in, or pursuant to, any relevant Substitution
Certificate
(v) to the Arrangers:
Chase Manhattan plc
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Brothers International (Europe)
3 World Financial Center
10th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇
Telefax: 001 212 528 0819
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
c/o Merrill ▇▇▇▇▇ & Co
World Financial Center
North Tower
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▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇
Telefax: 001 212 447 9461
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
or to such other address or telefax number as is notified by the
Primary Borrower, or a Finance Party, as the case may be, to the
other parties to this Agreement.
25.2 Notice to Facility Agent
Every notice, request, demand or other communication under this Agreement
to be given by a Borrower shall be given by the Primary Borrower and by
the Primary Borrower to any other party shall be given to the Facility
Agent for onward transmission as appropriate and to be given to a
Borrower shall (except as otherwise provided in this Agreement) be given
by the Facility Agent to the Primary Borrower.
25.3 No implied waiver, remedies cumulative
No failure or delay on the part of the Finance Parties or any of them to
exercise any power, right or remedy under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise by the Finance
Parties or any of them of any power, right or remedy preclude any other
or further exercise thereof or the exercise of any other power, right or
remedy. The remedies provided in this Agreement are cumulative and are
not exclusive of any remedies provided by law.
25.4 English translations
All certificates, instruments and other documents to be delivered under
or supplied in connection with this Agreement shall be in the English
language or shall be accompanied by a certified English translation upon
which the Finance Parties shall be entitled to rely.
25.5 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
25.6 Severance
If any provision of this Agreement is held to be illegal, invalid or
unforceable in whole or in part this Agreement shall continue to be valid
as to its other provisions and the remainder of the affected provision.
26. GOVERNING LAW AND JURISDICTION
26.1 Law
This Agreement shall be governed by English law.
26.2 Submission to jurisdiction
The parties to this Agreement agree for the benefit of the Finance
Parties that:
(a) if any party has any claim against any other arising out of or in
connection with this Agreement, such claim shall (subject to
clause 25.2(c)) be referred to the High Court of Justice in
England, to the jurisdiction of which each of the parties
irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any
such claim against any Finance Party shall be a non-exclusive
jurisdiction and no courts outside England shall have jurisdiction
to hear or determine any such claim; and
(c) nothing in this clause 25.2 shall limit the right of any Finance
Party to refer any such claim against any Borrower to any other
court of competent jurisdiction outside England, to the
jurisdiction of which such Borrower hereby irrevocably agrees to
submit, nor shall the taking of proceedings by any Finance Party
before the courts in one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction whether concurrently or
not.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
Schedule 1
The Banks and their Commitments
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Bank Commitments
Address and telefax number
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The Chase Manhattan Bank (pound)83,333,333.34
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▇▇▇▇▇▇
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Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ Commercial Paper Inc. (pound)83,333,333.33
3 World Financial Center
10th Floor
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Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation (pound)83,333,333.33
4 World Financial Center
c/o Merrill ▇▇▇▇▇ & Co
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇ - 1307
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Schedule 2
Forms of Drawdown Notice
Part A
Advances
To: [Name and address of Facility Agent]
[DATE]
Attention: o
(pound)250,000,000 Revolving Credit Facility Agreement dated o 1998
1. We refer to the above Agreement and hereby give you notice that Eastern
Electricity plc wishes to draw an Advance:
(a) on o 19 o ;
(b) in the sum of (pound)o;
(c) with a Maturity Period in respect thereof of o months; and
(d) the proceeds of such fund to be credited to [name and number of
account] with [details of bank in London].
2. We confirm that:
(a) no event or circumstance has occurred and is continuing which
constitutes a Default; and
(b) the applicable representations and warranties contained in clause
9 of the above Agreement are true and correct at the date hereof
as if made with respect to the facts and circumstances existing at
such date.
3. Words and expressions defined in the above Agreement shall have the same
meanings where used herein.
For and on behalf of
Eastern Electricity plc
..............................
Duly authorised officer
Part B
Letters of Credit
To: [Name and address of Facility Agent]
Attention:
--------------------------------------
[DATE]
(pound)250,000,000 Revolving Credit Facility Agreement dated o 1998
1. We refer to the above Agreement and hereby give you notice that Eastern
Electricity plc requests the Issue of a Letter of Credit as follows:
(a) Drawdown Date: [__________]
(b) Expiry Date: [__________]
(c) Currency: [__________]
(d) Beneficiary: [__________]
(e) Amount: [__________]
(f) Purpose: [__________]
(g) Issue instructions: [__________]
(h) Documents required to be presented: [__________].
2. We confirm that:
(a) no event or circumstance has occurred and is continuing which
constitutes a Default; and
(b) the applicable representations and warranties contained in clause
9 of the above Agreement are true and correct at the date hereof
as if made with respect to the facts and circumstances existing at
such date.
3. Words and expressions defined in the above Agreement shall have the same
meanings where used herein.
For and on behalf of
Eastern Electricity plc
..............................
Duly authorised officer
Schedule 3
Conditions Precedent
1. Evidence that the offer made by TU Acquisitions PLC for the entire issued
share capital of The Energy Group PLC has become or been declared
unconditional in all respects and that the obligations of the
Underwriters in favour of TU Finance (No.1) Limited under the acquisition
facility agreement dated 2 March 1998 (and amended and restated as of 3
March 1998 and 21 April 1998 and May 1998) have become unconditional.
2. Delivery of a notice of cancellation of the agreement dated 5 August 1996
between The Energy Group PLC, Citibank International plc as agent,
Barclays Bank PLC and Midland Bank plc so that it is no longer available
for drawing.
3. Delivery of the latest stand-alone audited accounts for the Primary
Borrower prepared on the basis of Appropriate Accounting Principles for
the year ending 31 March 1997 or, if available, 31 March 1998.
4. A certified copy of the certificate of incorporation and the memorandum
and articles of association of the Primary Borrower.
5. A certified copy of the resolutions of the board of directors of the
Primary Borrower evidencing approval of this Agreement (to which that
company is a party) and authorising its appropriate duly authorised
officers to execute and deliver this Agreement and to give all notices
and take all other action required by the Primary Borrower under this
Agreement.
6. Specimen signatures, authenticated by the company secretary or a director
of the Primary Borrower, of the persons authorised in the resolutions of
the board of directors referred to in paragraph 3 above.
7. A certificate of a director of the Primary Borrower certifying that the
borrowing of the Total Commitments in respect of the Facility would not
cause any borrowing limit binding on the Primary Borrower to be exceeded.
Schedule 4
Calculation of Additional Cost
1. The Additional Cost for any period shall (subject to paragraph 2(e)
below) be calculated in accordance with the following formula:
BY + L(Y - X) + S(Y - Z) per cent per annum
------------------------
100 - (B + S)
where on the day of application of the formula:
B is the percentage of the Facility Agent's eligible liabilities
which the Bank of England then requires the Facility Agent to hold
on a non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the Facility
Agent to leading banks in the London Interbank Market at or about
11 a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result of
the requirements of the Bank of England) the Facility Agent
maintains as secured money with members of the London Discount
Market Association or in certain marketable or callable securities
approved by the Bank of England;
X is the rate at which secured Sterling investments may be placed by
the Facility Agent with members of the London Discount Market
Association at or about 11 a.m. on that day for the relevant
period or, if greater, the rate at which Sterling bills of
exchange (of a tenor equal to the duration of the relevant period)
eligible for rediscounting at the Bank of England can be
discounted in the London Discount Market at or about 11 a.m. on
that day;
S is the percentage of the Facility Agent's eligible liabilities
which the Bank of England requires the Facility Agent to place as
a special deposit; and
Z is the interest rate expressed as a percentage per annum allowed
by the Bank of England on special deposits.
2. For the purpose of this schedule 4:
(a) "eligible liabilities" and "special deposits" have the meanings
given to them at the time of application of the formula by the
Bank of England; and
(b) "relevant period" in relation to each period for which Additional
Cost falls to be calculated means:
(i) if it is 3 months or less, that period; or
(ii) if it is more than 3 months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z are
included in the formula as figures and not as percentages, e.g. if
B = 0.5 per cent and Y = 15 per cent BY is calculated as 0.5 x 15.
(d) The formula shall be applied on the first day of each relevant
period. Each amount shall be rounded up to the nearest four
decimal places.
(e) If the Facility Agent determines that a change in circumstances
(including the introduction of charges by the FSA in June 1998)
has rendered, or will render, the formula inappropriate, the
Facility Agent (after consultation with the Banks) shall notify
the Primary Borrower of the manner in which the Additional Cost
will subsequently be calculated. The manner of calculation so
notified by the Facility Agent shall, in the absence of manifest
error, be binding on all the parties.
Schedule 5
Form of Substitution Certificate
(referred to in clause 16.5)
NB 1. Banks are advised not to employ Substitution Certificates or otherwise to
assign, novate or transfer interests in the Agreement without first
ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services ▇▇▇ ▇▇▇▇ and regulations
made thereunder.
2. It is expected that Banks will enter into separate arrangements dealing
with the monies to be paid to the Existing Bank by the Substitute in
consideration of the novation (e.g. principal, accrued interest, fees and
any mismatched funding adjustment). Unless the Effective Date is a
rollover date, mismatches of parties' funding may arise. This Certificate
does not deal with these issues, nor does it deal with any interim risk
participation the Existing Bank may grant to the Substitute pending the
Effective Date.
To: [Name of Facility Agent] on its own behalf, as Facility Agent and on
behalf of each other party to the Agreement mentioned below.
Attention: o [DATE]
Substitution Certificate
This Substitution Certificate relates to a (pound)250,000,000 Revolving Credit
Facility Agreement (the "Agreement") dated [ ] [March] 1998 between Eastern
Electricity plc as the Primary Borrower (1) Chase Manhattan plc, ▇▇▇▇▇▇ Brothers
International (Europe), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation as Arrangers (2),
various banks and financial institutions as Underwriters (3) The Chase Manhattan
Bank as Issuing Bank (4) Chase Manhattan International Limited as Facility Agent
(5). Terms defined in the Agreement shall have the same meaning in this
Substitution Certificate unless otherwise defined herein.
1. [Existing Bank] (the "Existing Bank") (a) confirms the accuracy of the
summary of its participation in the Agreement set out in the schedule
below; and (b) requests [Substitute Bank] (the "Substitute") to accept by
way of novation the portion of such participation specified in the
schedule to this Substitution Certificate by counter-signing and
delivering this Substitution Certificate to the Facility Agent at its
address for the service of notices specified in the Agreement.
2. The Substitute hereby requests the Facility Agent (on behalf of itself,
the other Finance Parties, the Primary Borrower and all other parties to
the Agreement) to accept this Substitution Certificate as being delivered
to the Facility Agent pursuant to and for the purposes of clause 16.5 of
the Agreement so as to take effect in accordance with the terms of such
clause 16.5 on [date of transfer] (the "Effective Date") or on such later
date as may be determined in accordance with the terms of the Agreement.
3. The Facility Agent (on behalf of itself, the other Finance Parties, the
Primary Borrower and all other parties to the Agreement) confirms the
novation effected by this Substitution Certificate
pursuant to and for the purposes of clause 16.5 of the Agreement so as to
take effect in accordance with the terms of such clause 16.5.
4. The Substitute confirms:
(a) that it has received a copy of the Agreement and all other
documentation and information required by it in connection with
the transactions contemplated by this Substitution Certificate;
(b) that it has not relied upon any statement, opinion, forecast or
other representation or warranty made by the Existing Bank or any
other party to induce it to enter into this Substitution
Certificate;
(c) that it has made and will continue to make, without reliance on
the Existing Bank or any other Finance Party, and based on such
documents as it considers appropriate, its own appraisal of the
creditworthiness of each Borrower and its Affiliates and its own
independent investigation of the financial condition, prospects
and affairs of each Borrower and its Affiliates in connection with
the making and continuation of the Facility under the Agreement
and the other Finance Documents;
(d) that neither the Existing Bank nor any other Finance Party shall
at any time be deemed to have had or have a duty or
responsibility, either historically, initially or on a continuing
basis, to provide the Substitute with any credit or other
information with respect to any Borrower or any of its Affiliates
whether coming into its possession before any Utilisation or at
any time or times thereafter, other than (in the case of the
Facility Agent) as provided in clause 19.1 of the Agreement;
(e) that it has made and will continue to make its own assessment of
the legality, validity, enforceability and sufficiency of the
Agreement, any other Finance Document and this Substitution
Certificate and has not relied and will not rely on the Existing
Bank or any other Finance Party or any statements made by any of
them in that respect;
(f) that, accordingly, none of the Existing Bank nor any other Finance
Party makes any representations or warranties in respect of, or
shall have any liability or responsibility to the Substitute in
respect of, any of the foregoing matters or any other matter
referred to in clause 20 of the Agreement;
(g) that it is a Qualifying Bank; and
(h) that it has signed an appropriate confidentiality undertaking
issued by the Existing Bank.
5. The Substitute hereby undertakes to the Existing Bank, the Finance
Parties, the Primary Borrower and each of the other parties to the
Agreement that it will perform in accordance with its terms all those
obligations which by the terms of the Agreement will be assumed by it
after counter-signature of this Substitution Certificate by the Facility
Agent.
6. The Substitute irrevocably and unconditionally guarantees to and
indemnifies the Issuing Bank as required under clause 4.6 (Banks'
Guarantee and Indemnity).
7. Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges the Existing Bank to:
(a) accept any re-transfer from the Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by the Substitute by reason of any
non-performance by the Primary Borrower or any other party to the
Agreement or any of the Finance Documents or any document relating
thereto of any of its obligations under the same.
8. This Substitution Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with
English law.
Note: This Substitution Certificate is not a security, bond, note, debenture,
investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties to this
Substitution Certificate on the date appearing below.
The Schedule
THE FACILITY
Commitment ((pound)) Portion Transferred ((pound))
[____] [____]
Contribution ((pound)) Next Maturity Date(s) Portion Transferred ((pound))
[____] [____] [____]
Transferor's share of Portion of Letters of Credit
outstanding Letters of Credit Transferred
[____] [____]
Administrative Details of Substitute
Lending Office:
Account for payments:
Telephone:
Telefax:
Attention:
[Existing Bank] [Substitute]
By: ........... By: .........
Date: Date:
The Facility Agent
By:.........
Date:
on its own behalf and on behalf of all other parties to the Agreement (other
than the Existing Bank)
Schedule 6
Form of Deed of Accession
THIS DEED is made on 199
BETWEEN
(1) [ ] (the "Additional Obligor");
(2) Eastern Electricity plc (the "Primary Borrower") on behalf of itself, and
each other Borrower (as defined in the Facilities Agreement referred to
below); and
(3) [Chase Manhattan International Ltd] as agent (the "Facility Agent") (as
defined in the Facilities Agreement referred to below).
WHEREAS
(A) This Deed is supplemental to the facilities agreement dated [ ] May 1998
made between among others Eastern Electricity plc as Primary Borrower and
Chase Manhattan International Ltd as Facility Agent (the "Facilities
Agreement", which expression shall include any amendments to it in force
from time to time).
(B) The parties intend that [ ] shall accede to the Facilities Agreement as
an Additional Guarantor [and Additional Borrower].
NOW THIS DEED WITNESSES:
1. Accession of Additional Obligor
[In consideration of the Banks through the Facility Agent agreeing to the
Additional Borrower becoming an additional Borrower pursuant to clause
24.1 (Additional Obligors) of the Facilities Agreement and] by the
execution of this Deed the Additional Obligor agrees to observe and be
bound by all of the terms and provisions of the Facilities Agreement to
the extent that they apply to the Obligors as if it were an original
party to the Facilities Agreement and, without limitation to the
generality of the foregoing, to become a Guarantor and give the Guarantee
in the form contained in schedule 9 (Terms of Guarantee).
2. Interpretation
This Deed shall be read as one with the Facilities Agreement so that any
reference in it to "this Agreement" and similar expressions shall include
and be deemed to include this Deed.
3. Conditions precedent
The obligations of the Facility Agent and each Bank in this Deed are
subject to the condition that the Facility Agent has received all
appropriate conditions precedent, as notified by the Facility Agent to
the Primary Borrower in form and substance satisfactory to it including
the following:
(a) a certified copy of the Certificate of Incorporation and
Memorandum and Articles of Association of the Additional Obligor
in the form required by the Facility Agent together with certified
copies of the minutes of the meetings of the members of the
Additional Obligor adopting such changes to the memorandum and
articles of the Additional Obligor as the Facility Agent shall
have required, and a certificate of a director of the Additional
Obligor confirming that such resolutions were duly and properly
passed;
(b) a certificate of a director of the Additional Obligor to the
effect that the requisite resolutions of its board of directors in
a form agreed with the Facility Agent have been duly and properly
passed (1) authorising the execution, delivery and performance on
behalf of the Additional Obligor of this Deed and (2) authorising
a named person or persons specified in the board resolution and
whose specimen signatures appear there to give any notices or
certificates required in connection with it and confirming that
such resolutions are still in effect and have not been varied or
rescinded;
(c) a copy, certified by a director of the Additional Obligor as being
a true copy, of the resolutions of the board of directors of the
Additional Obligor referred to in (b) above;
(d) a certificate of a director of the Additional Obligor confirming
that the aggregate of the Borrowings of the Additional Obligor
(including the Facilities) do not or, as the case may be, would
not if fully drawn, exceed any borrowing limit contained in the
Additional Obligor's constitutional documents or in any trust deed
or other agreement or instrument to which the Additional Obligor
is a party.
4. Notices
The Additional Obligor's address for notices and demands under the
Facilities Agreement is:
Address:
Telephone:
Telefax:
Attention:
6. Governing Law
This Agreement shall be governed by and construed in accordance with
English law.
IN WITNESS whereof this Deed of Accession has been entered into as a Deed on the
date above.
The Additional Guarantor [and Additional Borrower]
[Execution particulars - Additional Obligor to execute as a deed]
The Facility Agent
By:
on its own behalf and on behalf of
all the other parties to the Facility Agreement.
Schedule 7
Terms of Borrowers' Indemnity
1. Each Borrower unconditionally and irrevocably undertakes to the Issuing
Bank as follows:
(a) each Borrower will at all times on demand indemnify the Issuing
Bank against all actions, suits, proceedings, claims, demands,
liabilities, damages, costs, expenses, losses and charges
whatsoever (except those arising from the gross negligence or
wilful misconduct of the Issuing Bank) in relation to or arising
out of the Issue of any Letter of Credit and each Borrower will
pay to the Facility Agent for the account of the Issuing Bank in
immediately available funds and in the currency in which the
relevant Letter of Credit is denominated the amount of all
payments made (whether directly or by way of set-off, counterclaim
or otherwise howsoever) and all losses, costs or expenses suffered
or incurred from time to time by the Issuing Bank, arising under
any liability which the Issuing Bank has incurred under the Issue
of any Letter of Credit and any of the indemnities relating
thereto;
(b) the liability of each Borrower under this indemnity shall not be
affected by any time being given or by anything being done by the
Issuing Bank unless the same constitutes the gross negligence or
wilful misconduct of the Issuing Bank.
2. Each of the Borrowers specifically releases and indemnifies the Issuing
Bank against the consequences of:
(a) the failure of the Issuing Bank or any other person to receive any
telex or telephone message in a form in which it was despatched;
and
(b) any delay that may occur during the course of the transmission of
any such message save in respect of any failure arising from the
gross negligence or wilful misconduct of the Issuing Bank.
3. (a) The obligations of any Borrower under this Agreement and any
L/C-Related Document to reimburse the Issuing Bank for a drawing
under a Letter of Credit and to repay any drawing under a Letter
of Credit which is converted into Advances, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and each such other L/C-Related Document
under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the
relevant Borrower in respect of any Letter of Credit or any
other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defence or other right
that the relevant Borrower may have at any time against any
beneficiary or any transferee of any
Letter of Credit (or any person for whom any such
beneficiary or any such transferee may be acting), the
Issuing Bank or any other person, whether in connection
with this Agreement, the transactions contemplated hereby
or by the L/C-Related Documents or any unrelated
transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged,
fraudulent, (save where the Issuing Bank should decline to
make payment under the terms of the Uniform Customs and
Practice for Documentary Credits (1993) (ICC Publication
No. 500 (the "UCPDC")) invalid or insufficient in any
respect or any statement therein being untrue or inaccurate
in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does
not strictly comply with the terms of any Letter of Credit;
or any payment made by the Issuing Bank under any Letter of
Credit to any person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or transferee of any
Letter of Credit, including any arising in connection with
any voluntary or involuntary proceeding, process or
arrangement under any law, regulation or procedure relating
to insolvency in any jurisdiction including in relation to
winding up, bankruptcy, administration, administrative
receivership, receivership and management, receivership,
judicial custodianship, judicial trusteeship or the
appointment of a judicial conservator or other official or
the reconstruction, rescheduling, readjustment, moratorium
or suspension of payments of any Indebtedness;
(vi) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the
obligations of the relevant Borrower in respect of any
Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defence
available to, or a discharge of, the relevant Borrower;
(b) The obligations of each of the Borrowers under the Finance
Documents shall not be affected in any way by reason of any time
or other indulgence which may be granted:
(i) to the Issuing Bank by any beneficiary of any Letter of
Credit; or
(ii) by the Issuing Bank to any person from whom it may seek
reimbursement in respect of sums paid out by it under any
Letter of Credit or any other obligation pursuant thereto
or pursuant to this Agreement, as the case may be.
4. The Issuing Bank may, at any time, without affecting any security created
by, pursuant to or in relation to this Agreement or the rights, powers
and remedies conferred upon it by this Agreement, any such security or by
law:
(a) offer or agree to or enter into agreement for the extension or
variation of the Issue of any Letter of Credit (provided it does
so in accordance with written instructions of the relevant
Borrower); or
(b) offer or agree to give any time or other indulgence for any sums
paid out by it under any Letter of Credit or any obligation
pursuant to any Letter of Credit.
5. Any rights conferred on the Issuing Bank by this Agreement and by each
document executed in relation to this Agreement shall be in addition to
and not in substitution for or derogation of any other rights which the
Issuing Bank may at any time have to seek from any person reimbursement
of or indemnification against payments made or liabilities incurred under
any Letter of Credit, any obligation pursuant thereto or to this
Agreement.
6. Any satisfaction of obligations by any Obligor or any other person to the
Issuing Bank or any discharge given by the Issuing Bank to any Obligor or
any other person in respect of obligations under this Agreement or any
related agreement between the Issuing Bank and any Obligor or any other
person shall be, and be deemed always to have been, void if any act
satisfying any of such obligations or on the faith of which any such
discharge was given or any such agreement was entered into is
subsequently avoided by law (otherwise than as a result of any act or
default by the Issuing Bank).
7. Any Letter of Credit shall be considered to be outstanding until the
later of:
(a) its Expiry Date, or a reasonable time after its Expiry Date to
allow for the presentation of documents through an advising bank;
and
(b) if, in the opinion of the Issuing Bank, its liability under the
Letter of Credit does not expire on its stated Expiry Date or
there is any doubt as to its Expiry Date, the date of return of
the document evidencing the Issuing Bank's liability to the
relevant beneficiary under any Letter of Credit.
8. Each Borrower confirms and agrees that:
(a) the Issuing Bank shall make any payment that appears to be duly
requested or demanded in writing by any beneficiary under any
Letter of Credit subject to its compliance (where applicable) with
its obligations as Issuing Bank under the UCPDC regardless of
whether or not the relevant Borrower shall be in any way in breach
of any of its obligations under or by virtue of the transaction in
connection with which the Letter of Credit was Issued and without
making any further reference to the relevant Borrower or any
investigation as to the bona fide nature, validity or genuineness
of any such request or demand (unless, under applicable law, the
Issuing Bank is under no obligation to make such payment), and
(b) the liability of such Borrower hereunder and the right and
obligation of the Issuing Bank to make such payment shall be in no
way diminished or prejudiced if it should appear that, as between
the relevant Borrower and that beneficiary, that beneficiary was
not entitled for whatever reason to demand payment under the
Letter of Credit or that such demand was not valid or genuine
(subject as mentioned in paragraph 8(a) above).
Schedule 8
Terms of Interbank Guarantee and Indemnity
1. Each Bank agrees to pay to the Facility Agent for the account of the
Issuing Bank on demand made through the Facility Agent under clause 4.7
(Banks' Guarantee and Indemnity) to such account as the Facility Agent
may have specified for the purpose in immediately available funds and in
the currency in which the relevant Letter of Credit is denominated, its
Proportion of:
(a) any and every sum of money which the relevant Borrower shall from
time to time be liable to pay to the Issuing Bank in respect of
that Letter of Credit in full without set-off or counterclaim on
the later of the date that the Issuing Bank has itself to make
payment under the Letter of Credit (as notified by the Facility
Agent to such Bank in the demand) and two Banking Days after
receipt by such Bank of such demand; and
(b) full cash cover for the Outstanding Contingent Liabilities under
that Letter of Credit at any time after the Issuing Bank has
become entitled to demand an indemnity through the Facility Agent
in respect thereof from the relevant Borrower and which shall not
have been paid at the time such demand is made.
2. Where a Bank makes a payment pursuant to paragraph 1 after the date on
which the Issuing Bank makes the relevant payment under the Letter of
Credit in question, such Bank shall pay on demand to the Issuing Bank its
Proportion (as calculated in clause 4.7) of such amount as the Issuing
Bank certifies as necessary to compensate it for funding the amount
demanded in the interim.
3. No assurance, security or payment avoided under any law relating to
bankruptcy, liquidation, insolvency, reconstruction or reorganisation or
any similar laws and no release, settlement, arrangement or discharge
which may have been given or made on the basis of any such assurance,
security or payment shall prejudice or affect the right of the Issuing
Bank to recover from each of the Banks to the full extent of their
obligations under clause 4.7.
4. The obligations of each Bank under clause 4.7 shall not be impaired,
affected or revoked by any act, omission, matter, thing or circumstance
whatsoever which but for this provision might operate to release or
exonerate such Bank from all or any part of its obligations under clause
4.7 or reduce, impair or affect such obligations or cause all or any part
of such obligations to be irrecoverable from or unenforceable against any
Obligor or to discharge, reduce, affect or impair any of such
obligations, including without limitation:
(a) any time, waiver or indulgence granted to any person or the
forbearance of the Issuing Bank in enforcing the obligations of
any person under any Finance Document or in respect of any other
guarantee, security, obligation, right or remedy;
(b) the recovery of any judgment against any person or any action to
enforce the same;
(c) the taking of any other security from any person or the failure,
refusal, or neglect to take, perfect or enforce, any rights,
remedies or securities from or against any person or all or any
part of the security constituted by any of the Finance Documents;
(d) any alteration in the constitution of any Obligor or any defect in
or irregular exercise of the borrowing or other powers of any
person or any legal limitation, disability, incapacity or other
circumstance relating to any person or any legal limitation,
disability, incapacity or other circumstance relating to any
person whether arising in relation to any Finance Document or
otherwise howsoever;
(e) subject to clause 22.4 and 22.5 (Unanimous consents), any
amendment or supplement to or variation of any L/C - Related
Document or any other Finance Document;
(f) the insolvency, bankruptcy, liquidation, reconstruction or
reorganisation of, or analogous proceedings relating to any person
or any composition or arrangement made by any of them with the
Issuing Bank, any Bank or any other person or any transfer or
extinction of any liabilities of any Obligor by any law, order
regulation, decree, court order or similar instrument;
(g) any irregularity, unenforceability or invalidity of any
obligations of any person under any security or document (to the
intent that such Bank's obligations under clause 4.7 shall remain
in full force as if there were no such irregularity,
unenforceability or invalidity);
(h) the occurrence of an Event of Default;
(i) the existence of any claim, set-off defence or other right which
any Obligor may have against any beneficiary of any Letter of
Credit or any other person; or
(j) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect.
5. The Issuing Bank shall be entitled to enforce the obligations of each
Bank under clause 4.7 without making any demand on or taking any
proceedings against or filing any proof of claim in any insolvency,
winding up, dissolution or liquidation of any person or exhausting any
right or remedy against any person or taking any action to enforce any
part of the security constituted or evidenced by any of the Finance
Documents.
6. The obligations of each Bank under clause 4.7 shall be continuing
obligations and shall extend to the ultimate balance of the obligations
referred to therein. If, for any reason, such obligations cease to be
continuing obligations, the Issuing Bank may open a new account with or
continue any existing account with any person and the liability of each
Bank in respect of amounts guaranteed by it pursuant to clause 4.7 at the
date of such cessation shall remain regardless of any payments in or out
of any such account.
7. The Issuing Bank's rights under clause 4.7 shall be in addition to and
shall be in no way prejudiced by any other rights of or security held by
the Issuing Bank in relation to the obligations of any Obligor. The
Issuing Bank's rights under clause 4.7 are in addition to and are not
exclusive of those provided by law.
8. A certificate of the Issuing Bank as to any amount due to it from any
Bank pursuant to clause 4.7 shall be conclusive (in the absence of
manifest error).
Schedule 9
Terms of Guarantee
1. Each Guarantor irrevocably, unconditionally, jointly and severally:
(a) as principal obligor, and not merely as surety, guarantees to each
Finance Party prompt performance by each other Obligor of all its
obligations under the Finance Documents and the payment when due
of all sums from time to time payable to each Finance Party by
each other Obligor;
(b) undertakes with each Finance Party that whenever a Borrower does
not pay any amount when due under or in connection with any
Finance Document, that Guarantor shall forthwith on demand by the
Facility Agent pay that amount as if that Guarantor instead of the
relevant Borrower were expressed to be the principal obligor; and
(c) indemnifies each Finance Party on demand against any loss or
liability suffered by such Finance Party if any obligation
guaranteed by that Guarantor is or becomes unenforceable, invalid
or illegal.
2. Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate
balance of all sums payable by the Obligors or any of them under the
Finance Documents, regardless of any intermediate payment or discharge in
whole or in part.
3. Reinstatement
(a) Where any discharge (whether in respect of the obligations of any
Obligor or any security for those obligations or otherwise) is
made in whole or in part of any arrangement is made on the faith
of any payment, security or other disposition which is avoided or
must be restored on insolvency, liquidation or otherwise without
limitation, the liability of each Guarantor under this schedule 9
shall continue as if the discharge or arrangement had not
occurred.
(b) Each Finance Party may concede or compromise any claim that any
payment, security or other disposition is liable to avoidance or
restoration.
4. Waiver of defences
The obligations of each Guarantor under this schedule 9 will not be
affected by any act, circumstance, omission, matter or thing which, but
for this provision, would reduce, release or prejudice any of its
obligations under this schedule 9 or prejudice or diminish those
obligations in whole or in part, including without limitation (whether or
not known to it or any other party):
(a) any time, indulgence or waiver granted to, or composition with,
any Obligor or other person;
(b) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights or remedies against, or security over assets of, any
Obligor or other person or any non-presentation or non-observance
of the full value of any security;
(c) any legal limitation, disability, incapacity or lack of powers,
authority or legal personality of or dissolution or change in the
members or status of any Obligor or any other person;
(d) any variation (however fundamental and whether or not involving an
increase in liability of any Obligor) or replacement of a Finance
Document or any other document or security so that references to
that Finance Document in this schedule 9 (Guarantee) shall include
each variation or replacement;
(e) any unenforceability, illegality, invalidity or frustration of any
obligation of any person under any Finance Document or any other
document or security or any failure of any Obligor or proposed
Obligor to become bound by the terms of any Finance Document;
(f) any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any obligation of any Obligor under
a Finance Document resulting from any insolvency, liquidation or
dissolution proceedings or from any law, regulation or order,
so that each such obligation shall, for the purposes of the Guarantor's
obligations under this schedule 9 remain in full force and be construed
as if there were no such act, circumstance, variation, omission, matter
or thing.
5. Immediate recourse
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed against
or enforce any other rights or security or claim payment from or file any
proof or claim in any insolvency proceedings of any person before
claiming from the Guarantor under this schedule 9.
6. Appropriations
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in
full, each Finance Party (or any trustee or agent on its behalf) may:
(a) refrain from applying or enforcing any other monies, security or
rights held or received by that Finance Party (or any trustee or
agent on its behalf) in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether
against those amounts or otherwise) and no Guarantor shall be
entitled to the benefit of the same; and
(b) hold in an interest bearing suspense account any monies received
from any Guarantor or on account of any Guarantor's liability
under this schedule 9.
7. Non-competition
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in
full, no Guarantor shall, after a claim has been made or by virtue of any
payment or performance by it under this schedule 9:
(a) be subrogated to any rights, security or monies held, received or
receivable by any Finance Party (or any trustee or agent on its
behalf) or be entitled to any right of contribution or indemnity
in respect of any payment made or monies received on account of
that Guarantor's liability under this schedule 9 and, to the
extent that any Guarantor is so subrogated or entitled by law,
that Guarantor (to the fullest extent permitted by law) waives and
agrees not to exercise or claim those rights, security or money or
that right of contribution or indemnity;
(b) claim, rank, prove or vote as a creditor of any Obligor or its
estate in competition with any Finance Party (or any trustee or
agent on its behalf) unless otherwise required by the Facility
Agent or by law (in which case any proceeds of any claim in
respect of any rights, security or monies of any Finance Party to
which such Guarantor was subrogated will be paid by such Guarantor
to the Facility Agent to be applied in accordance with the
provisions of the Finance Documents); or
(c) receive, claim or have the benefit of any payment, distribution or
security from or on account of any Obligor, or exercise any right
of set-off as against any Obligor (and without prejudice to the
foregoing, each Guarantor shall forthwith pay to the Facility
Agent for the benefit of the Finance Parties an amount equal to
any amount so set-off by it).
Each Guarantor shall hold in trust for and forthwith pay or transfer to
the Facility Agent for the Finance Parties any payment or distribution or
benefit of security received by it contrary to this schedule 9.
8. Additional security
This guarantee is in addition to and is not in any way prejudiced by any
other security now or hereafter held by any Finance Party.
PRIMARY BORROWER
Signed for and on behalf of
Eastern Electricity plc
[▇▇▇▇ ▇▇▇▇▇ - Group Finance Director]
...................................
GUARANTOR
Signed for and on behalf of
Eastern Electricity plc
[▇▇▇▇ ▇▇▇▇▇]
...................................
JOINT LEAD ARRANGERS
Signed for and on behalf of
Chase Manhattan plc
as Arranger
[▇▇▇▇ ▇▇▇▇▇▇▇]
...................................
Signed for and on behalf of
▇▇▇▇▇▇ Brothers International (Europe)
as Arranger
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇]
...................................
Signed for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Arranger
[▇▇▇▇▇ ▇▇▇▇▇]
...................................
ORIGINAL BANKS
Signed for and on behalf of
The Chase Manhattan Bank
as Underwriter
[▇▇▇▇ ▇▇▇▇▇▇▇]
...................................
Signed for and on behalf of
▇▇▇▇▇▇ Commercial Paper Inc
as Underwriter
[▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇]
...................................
Signed for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Underwriter
[▇▇▇▇▇ ▇▇▇▇▇]
...................................
ISSUING BANK
Signed for and on behalf of
The Chase Manhattan Bank
as Issuing Bank
[▇▇▇▇ ▇▇▇▇▇▇▇]
...................................
FACILITY AGENT
Signed for and on behalf of
Chase Manhattan International Limited
as Facility Agent
[▇▇▇▇ ▇▇▇▇▇▇▇]
...................................