EXHIBIT 4.21
CONFORMED COPY
DATED 27TH MARCH, 2003
MARCONI CORPORATION PLC
MARCONI PLC
REGENT ESCROW LIMITED
THE BANK OF NEW YORK
(IN ITS CAPACITIES AS DISTRIBUTION AGENT AND TRUSTEE AND BOOK-ENTRY DEPOSITARY
IN RESPECT OF THE YANKEE BONDS )
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
ANCRANE
BONDHOLDER COMMUNICATIONS GROUP
AND
THE SCHEME SUPERVISORS
----------------------------------------------------
ESCROW AND DISTRIBUTION AGREEMENT
----------------------------------------------------
▇▇▇▇▇ & ▇▇▇▇▇
London
CONTENTS
PAGE
CLAUSE
1. Interpretation................................................................... 2
2. Conditions Precedent, Commencement and Accession................................. 6
3. Agreement to Act................................................................. 7
4. Corp Declaration of Trust........................................................ 7
5. Establishment of Escrow Accounts................................................. 8
6. Undertakings..................................................................... 10
7. Distributions under the Corp Scheme.............................................. 12
8. Distributions under the plc Scheme............................................... 18
9. Rights, Powers and Duties of the Escrow Trustee and the Distribution Agent....... 23
10. Covenants of the Escrow Trustee.................................................. 27
11. Investments...................................................................... 28
12. Conduct of Taxation Matters...................................................... 28
13. Termination...................................................................... 32
14. Representations and Warranties................................................... 33
15. Exclusion of Personal Liability.................................................. 33
16. Exclusion of Liability........................................................... 33
17. Fees and Expenses................................................................ 34
18. Further Assurance................................................................ 34
19. Further Terms and Conditions..................................................... 34
20. Counterparts..................................................................... 35
21. Notices.......................................................................... 35
22. Third Party Rights............................................................... 36
23. Governing Law and Jurisdiction................................................... 36
SCHEDULE
1. Form of Accession Letter......................................................... 38
2. Form of Ancrane Direction Letter................................................. 40
3. Form of Instruction Letter to the Registrars..................................... 43
SIGNATORIES............................................................................... 45
THIS AGREEMENT is made by way of deed on 27th March, 2003 BETWEEN:
(1) MARCONI CORPORATION PLC, a public limited company incorporated in
England and Wales with registered number 00067307 ("CORP");
(2) MARCONI PLC, a public limited company incorporated in England and Wales
with registered number 03846429 ("PLC");
(3) REGENT ESCROW LIMITED, a limited liability company incorporated in
England and Wales with registered number 4659445 ("ESCROW TRUSTEE");
(4) THE BANK OF NEW YORK, a New York banking corporation acting through its
London branch (in its capacity as distribution agent, the "DISTRIBUTION
AGENT" and in its capacity as Trustee and Book-Entry Depositary of the
Yankee Bonds (as defined in the Schemes which expression is, in turn,
defined below), "BoNY");
(5) THE LAW DEBENTURE TRUST CORPORATION p.l.c., a public limited company
incorporated in England and Wales with registered number 01675231 (in
its capacity as trustee of the Eurobonds, the "EUROBOND TRUSTEE");
(6) ANCRANE, an unlimited liability company incorporated in England and
Wales with registered number 4308188 ("ANCRANE");
(7) BONDHOLDER COMMUNICATIONS GROUP, a New York corporation ("BONDHOLDER
COMMUNICATIONS"); and
(8) subject to their accession as provided in clause 2(4), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇ of KPMG, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the
"SUPERVISORS", which expression shall include any other persons holding
office as Supervisor of the Schemes from time to time).
WHEREAS:
(A) Corp proposes to enter into a scheme of arrangement (the "CORP SCHEME")
under section 425 of the Companies ▇▇▇ ▇▇▇▇ (the "ACT") with its Scheme
Creditors (as defined in the Corp Scheme).
(B) Plc also proposes to enter into a scheme of arrangement (the "PLC
SCHEME", together with the Corp Scheme, the "SCHEMES" and each a
"SCHEME") under section 425 of the Act with its Scheme Creditors (as
defined in the plc Scheme).
(C) The Corp Scheme and the plc Scheme are set out in sections II and III
respectively of the circular (the "SCHEME DOCUMENT") relating to the
Schemes prepared by Corp and plc incorporating an explanatory statement
in accordance with section 426 of the Act and filed with the court on
20th March, 2003 as the same may be approved or modified by the court.
(D) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ are expected to be appointed as
Supervisors by the Court on the Effective Date and to undertake to the
court to be bound to carry out their designated functions under each
Scheme. Upon their appointment as Supervisors, it is anticipated that
the Supervisors will accede to this Agreement.
(E) Each Scheme provides for the appointment of an escrow trustee and a
distribution agent who will be responsible for, amongst other things,
holding the Scheme Consideration (as
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separately defined in each Scheme) on trust for and distributing the
Scheme Consideration to the relevant Scheme Creditors and Designated
Recipients (as both of these terms are defined in the Schemes) who
become entitled thereto pursuant to the operation of the relevant
Scheme.
(F) The Escrow Trustee has been incorporated for the sole purpose of acting
as trustee in respect of the Scheme Consideration under the Schemes.
The Distribution Agent will agree on the terms of this Agreement to act
as custodian of the Trust Funds for the Escrow Trustee and to
distribute the Scheme Consideration to Admitted Scheme Creditors and
Designated Recipients in accordance with the terms of the Schemes and
this Agreement.
(G) Each of the Escrow Trustee, the Distribution Agent, the Supervisors,
the Eurobond Trustee, BoNY and Bondholder Communications will undertake
to the court to act in accordance with the terms of this Agreement.
(H) This Agreement is entered into in contemplation of, and certain
provisions of this Agreement are conditional upon, either or both of
the Schemes becoming effective.
(I) It is the intention of the parties that this Agreement be executed as a
deed.
IT IS AGREED AND THIS DEED WITNESSES as follows:
1. INTERPRETATION
(1) Capitalised terms used in this Agreement have the meanings given to
them in each Scheme unless otherwise expressly provided.
(2) In this Agreement:
"ACCESSION LETTER" means the letter to be executed as a deed by the
Supervisors on the Effective Date in or substantially in the form set
out in Schedule 1 to this Agreement, pursuant to its undertaking to the
court;
"ADMITTED KNOWN CORP SCHEME CREDITORS ESCROW ACCOUNTS" means each of
the following accounts:
(i) the interest bearing cash account to be established under the
designation Marconi Admitted Known Corp Scheme Creditors Trust
Account with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇; and
(ii) the securities account to be established under the designation
Marconi Admitted Known Corp Scheme Creditors Trust Account
with The Bank of New York, account number 490320
and a reference to one or more Admitted Known Corp Scheme Creditors
Escrow Accounts is a reference to any one or more of those accounts;
"ADMITTED KNOWN CORP SCHEME CREDITORS FUND" means the assets paid into
or allocated to the Admitted Known Corp Scheme Creditors Escrow
Accounts in accordance with clause 5 as the same may be increased or
reduced in accordance with clauses 6, 7 and 11;
"ADMITTED KNOWN PLC SCHEME CREDITORS ESCROW ACCOUNTS" means each of the
following accounts:
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(i) the interest bearing cash account to be established under the
designation Marconi Admitted Known plc Scheme Creditors Trust
Account with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇; and
(ii) the securities account to be established under the designation
Marconi Admitted Known plc Scheme Creditors Trust Account with
The Bank of New York, account number 490327
and a reference to one or more Admitted Known plc Scheme Creditors
Escrow Accounts is a reference to any one or more of those accounts;
"ADMITTED KNOWN PLC SCHEME CREDITORS FUND" means the assets paid into
or allocated to the Admitted Known plc Scheme Creditors Escrow Accounts
in accordance with clause 5 as the same may be increased or reduced in
accordance with clauses 6, 8 and 11;
"ANCRANE DIRECTION LETTER" means the letter to be executed as a deed by
Ancrane in or substantially in the form set out in Schedule 2 to this
Agreement;
"CLEARSTREAM, LUXEMBOURG" means Clearstream Banking, societe anonyme;
"CORPORATE EXPENSES ACCOUNT" means the current account at The Bank of
New York established by the Escrow Trustee for the sole purpose of
depositing the fees it will receive for acting as Escrow Trustee in
accordance with clause 17 of this Agreement, for depositing any sum it
receives under the indemnity given by Corp set out in clause 9(4) of
this Agreement and for making Permitted Withdrawals;
"CORPORATE NOMINEE" means the corporate nominee service to be operated
by Computershare Investor Services PLC on behalf of Corp in respect of
part of the plc Shareholder Stock and the Warrants referred to in the
Letter of Instruction (as defined below);
"CUSTODY INSTRUCTIONS" means instructions given by an Account Holder to
Euroclear, Clearstream, Luxembourg or DTC, as the case may be, to block
from trading the Bonds identified in an Account Holder Letter and which
must be given no later than 5.00 p.m. (local time) on the Business Day
immediately prior to the date on which that Account Holder Letter is
delivered to Bondholder Communications;
"DISTRIBUTION AGENT FEE LETTER" means a letter dated 14th March, 2003
from the Distribution Agent to the Supervisors, Corp and plc setting
out the fees and expenses of the Distribution Agent;
"DTC" means The Depository Trust Company of New York;
"ESCROW ACCOUNTS" means each of the Admitted Known Corp Scheme
Creditors Escrow Accounts, the Unadmitted Known Corp Scheme Creditors
Escrow Accounts, the Reserve Corp Scheme Creditors Escrow Accounts and
the plc Shareholders Account (such accounts, together, the "CORP ESCROW
ACCOUNTS") and each of the Admitted Known plc Scheme Creditors Escrow
Accounts, the Unadmitted Known plc Scheme Creditors Accounts and the
Reserve plc Scheme Creditors Accounts (such accounts, together, the
"PLC ESCROW ACCOUNTS");
"ESCROW TAX FUND" means a fund of not more than L 4,500,000 set aside
by Corp comprising any input value added tax recovered by Corp (whether
by means of a payment from HM
4
Customs & Excise or by way of reduction of the output value added tax
for which Corp would otherwise be required to account to HM Customs &
Excise) incurred in relation to the issue of New Shares or New Notes
under the Corp Scheme;
"ESCROW TRUSTEE FEE LETTER" means a letter dated the date of this
Agreement from the Escrow Trustee to the Supervisors, Corp and plc
setting out of the fees and expenses of the Escrow Trustee;
"EUROBOND MEETING" means a meeting of holders of a series of the
Eurobonds, duly convened and held in accordance with the terms of the
relevant Trust Deed;
"EUROCLEAR" means Euroclear Bank S.A./N.V. as operator of the Euroclear
System;
"LETTER OF INSTRUCTION" means the letter of instruction from Corp, the
Escrow Trustee and the Distribution Agent to Computershare Investor
Services PLC in or substantially in the form set out as Schedule 3 to
this Agreement;
"PERMITTED WITHDRAWAL" means any withdrawal by the Escrow Trustee from
the Corporate Expenses Account for the sole purpose of paying for one
or more of the following expenses:
(i) any expense arising under, or contemplated by, the terms of
this Agreement; and
(ii) any expense incurred in order to comply with its obligations
under the Act (including, but without limitation to the
generality of the foregoing, any expenses incurred in making
any requisite annual or other filings at Companies House) or
any other law or regulation applicable to companies generally;
"PLC SHAREHOLDERS ACCOUNT" means the securities account to be
established under the designation Marconi plc Shareholders Trust
Account with The Bank of New York, account number 490328;
"PLC SHAREHOLDERS FUND" means the assets allocated to the plc
Shareholders Account in accordance with clause 5 as the same may be
reduced in accordance with clause 7(9);
"RESERVE CORP SCHEME CREDITORS ESCROW ACCOUNTS" means each of the
following accounts:
(i) the interest bearing cash account to be established under the
designation Marconi Reserve Corp Scheme Creditors Trust
Account with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇; and
(ii) the securities account to be established under the designation
Marconi Reserve Corp Scheme Creditors Trust Account with The
Bank of New York, account number 490322
and a reference to one or more Reserve Corp Scheme Creditors Escrow
Accounts is a reference to any one or more of those Accounts;
"RESERVE CORP SCHEME CREDITORS FUND" means the assets paid into or
allocated to the Reserve Corp Scheme Creditors Escrow Accounts in
accordance with clause 5 as the same may be increased or reduced in
accordance with clauses 6, 7 and 11;
"RESERVE PLC SCHEME CREDITORS ESCROW ACCOUNTS" means each of the
following accounts:
5
(i) the interest bearing cash account to be established under the
designation Marconi Reserve plc Scheme Creditors Trust Account
with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
and
(ii) the securities account to be established under the designation
Marconi Reserve plc Scheme Creditors Trust Account with The
Bank of New York, account number 490326
and a reference to one or more Reserve plc Scheme Creditors Accounts is
a reference to any one or more of those accounts;
"RESERVE PLC SCHEME CREDITORS FUND" means the assets paid into or
allocated to the Reserve plc Scheme Creditors Escrow Accounts in
accordance with clause 5 as the same may be increased or reduced in
accordance with clauses 6, 8 and 11;
"SECURITY INTEREST" means any mortgage or sub-mortgage, standard
security, sub-standard security, charge or sub-charge (whether legal or
equitable), encumbrance, pledge, lien, hypothecation, assignment by way
of security, assignation in security or other security interest or
title retention arrangement any agreement, trust or arrangement having
substantially the same economic or financial effect as any of the
foregoing;
"TRANSFER NOTICE" means an irrevocable notice served by the Supervisors
on the Escrow Trustee (with a copy to the Distribution Agent)
instructing the Escrow Trustee to cause the Distribution Agent to
credit or transfer any Scheme Consideration to or between any Escrow
Accounts;
"TRUSTEES" means the Eurobond Trustee and BoNY (in its capacity as
trustee of the Yankee Bonds);
"TRUST FUNDS" means the Admitted Known Corp Scheme Creditors Fund, the
Admitted Known plc Scheme Creditors Fund, the plc Shareholders Fund,
the Reserve Corp Scheme Creditors Fund, the Reserve plc Scheme
Creditors Fund, the Unadmitted Known Corp Scheme Creditors Fund and the
Unadmitted Known plc Scheme Creditors Fund;
"UNADMITTED KNOWN CORP SCHEME CREDITORS ESCROW ACCOUNTS" means each of
the following accounts:
(i) the interest bearing cash account to be established under the
designation Marconi Unadmitted Known Corp Scheme Creditors
Trust Account with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇; and
(ii) the securities account to be established under the designation
Marconi Unadmitted Known Corp Scheme Creditors Trust Account
with The Bank of New York, account number 490321,
and a reference to one or more Unadmitted Known Corp Scheme Creditors
Escrow Accounts is a reference to any one or more of those Accounts;
"UNADMITTED KNOWN CORP SCHEME CREDITORS FUND" means the assets paid
into or allocated to the Unadmitted Known Corp Scheme Creditors Escrow
Accounts in accordance with clause 5 as the same may be increased or
reduced in accordance with clauses 6, 7 and 11;
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"UNADMITTED KNOWN PLC SCHEME CREDITORS ESCROW ACCOUNTS" means each of
the following accounts:
(i) the interest bearing cash account to be established under the
designation Marconi Unadmitted Known plc Scheme Creditors
Trust Account with The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇; and
(ii) the securities account to be established under the designation
Marconi Unadmitted Known plc Scheme Creditors Trust Account
with The Bank of New York, account number 490325
and a reference to one or more Unadmitted Known plc Scheme Creditors
Escrow Accounts is a reference to any one or more of those Accounts;
and
"UNADMITTED KNOWN PLC SCHEME CREDITORS FUND" means the assets paid into
or allocated to the Unadmitted Known plc Scheme Creditors Escrow
Accounts in accordance with clause 5 as the same may be increased or
reduced in accordance with clauses 6, 8 and 11.
(3) In this Agreement:
(a) references to a person include an individual, firm,
partnership, company, corporation, unincorporated body of
persons and any state or state agency;
(b) references to a natural person include his estate and personal
representatives;
(c) references to a party to this Agreement include references to
the successors or assigns (immediate or otherwise) of that
party; and
(d) references to the singular include the plural and vice versa
and words importing one gender shall include all genders.
(4) In this Agreement any reference, express or implied, to an enactment
includes references to:
(a) that enactment as re-enacted, amended, extended or applied by
or under any other enactment (before or after the signature of
this Agreement);
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after the
signature of this Agreement) under that enactment, as
re-enacted, amended, extended or applied as described in
paragraph (a) above or under any enactment referred to in
paragraph (b) above,
and "ENACTMENT" includes any legislation in any jurisdiction.
(5) Sub-clauses (1) to (4) above apply unless the contrary intention
appears.
(6) The headings in this Agreement do not affect its interpretation.
2. CONDITIONS PRECEDENT, COMMENCEMENT AND ACCESSION
(1) Save as provided in clauses 3, 13, 18, 19 and 21 and in sub-clauses (2)
to (4) below, the obligations of the parties pursuant to this Agreement
shall have effect from the Effective Time of the Corp Scheme as regards
matters relevant to the Corp Scheme and the Effective Time of
7
the plc Scheme as regards matters relevant to the plc Scheme. For the
avoidance of doubt, if the Effective Time does not occur under the plc
Scheme, this circumstance will have no effect on the provisions in this
Agreement relating to the Corp Scheme if the Effective Time occurs
under the Corp Scheme.
(2) Corp shall notify promptly each of the other parties to this Agreement
upon the occurrence of the Effective Time of the Corp Scheme and plc
shall notify promptly each of the other parties to this Agreement upon
the occurrence of the Effective Time of the plc Scheme.
(3) The obligations of Corp set out in clause 4 of this Agreement and of
the Escrow Trustee set out in clause 5(1) of this Agreement,
respectively, shall have effect from the date of this Agreement.
(4) Prior to the Effective Time, this Agreement shall operate as a contract
between each of the parties to it other than the Supervisors.
Accordingly, each of the parties to this Agreement (other than the
Supervisors) acknowledges that following the appointment by the Court
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ as Supervisors, the Supervisors will
become parties to this Agreement by executing the Accession Letter on
the Effective Date. Prior to their execution of the Accession Letter,
no provision of this Agreement shall operate to confer any right or
impose any obligation on the Supervisors.
3. AGREEMENT TO ACT
(1) The Escrow Trustee hereby agrees to act as trustee in relation to each
Scheme on the terms of this Agreement.
(2) The Escrow Trustee shall apply the Scheme Consideration received by it
in accordance with the terms of the Scheme pursuant to which it was
received and agrees that its holding of Scheme Consideration on bare
trusts for Scheme Creditors shall not affect the principles under which
Scheme Consideration is distributed in accordance with the terms of
each Scheme.
(3) The Distribution Agent hereby agrees to act as custodian of the Trust
Funds and as distribution agent in relation to the Scheme Consideration
under each Scheme.
4. CORP DECLARATION OF TRUST
Corp hereby declares as follows:
(a) it holds 1,000 fully paid ordinary shares of L 1.00 each (the
"ESCROW TRUSTEE SHARES") in the Escrow Trustee (being the
Escrow Trustee's entire issued share capital) on an
irrevocable bare trust for the Scheme Creditors of each of the
Corp Scheme and plc Scheme and each Designated Recipient
absolutely;
(b) it will hold all dividends and other distributions of profits
or assets in respect of the Escrow Trustee Shares and all
other property and rights arising out of or derived from the
Escrow Trustee Shares on trust for the Scheme Creditors of
each of the Corp Scheme and plc Scheme and each Designated
Recipient absolutely in the same manner as the Escrow Trustee
Shares and references to the Escrow Trustee Shares will be
construed accordingly;
(c) it will only deal with and dispose of the Escrow Trustee
Shares and exercise all rights conferred by its holding of the
Escrow Trustee Shares as the Supervisors direct; and
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(d) the power of appointing a new trustee or new trustees is
vested in the Supervisors.
5. ESTABLISHMENT OF ESCROW ACCOUNTS
(1) As soon as reasonably practicable after the date of this Agreement the
Escrow Trustee shall establish the Escrow Accounts and each such
account shall be designated by the Escrow Trustee as a trust account.
The Escrow Trustee shall provide to the Prospective Supervisors, Corp
and plc prompt confirmation of the establishment of the Escrow
Accounts.
(2) On the Effective Date, Corp shall transfer, issue and allot the Basic
Scheme Consideration and the plc Shareholder Stock to the Escrow
Trustee or, in the case of any New Shares comprised therein, to its
nominee to be held by the Escrow Trustee on the trusts set out in
sub-clause (7) below and to be paid into or allocated to the following
Escrow Accounts:
(a) in the case of the portion of the Known Claims Segment which
is to be distributed in accordance with the First Initial
Distribution Notice, the relevant Admitted Known Corp Scheme
Creditors Escrow Account;
(b) in the case of the balance of the Known Claims Segment, the
relevant Unadmitted Known Corp Scheme Creditors Escrow
Account;
(c) in the case of the Reserve Claims Segment, the relevant
Reserve Corp Scheme Creditors Escrow Account; and
(d) in the case of the plc Shareholder Stock, the plc
Shareholders' Account.
Except where defined herein, capitalised terms used in sub-clauses (2)
and (3) of this clause 5 have the meanings given to them in the Corp
Scheme.
(3) Any Scheme Consideration, not being Basic Scheme Consideration, shall
be paid into or allocated to the relevant Escrow Accounts by Corp in
the manner directed by the Supervisors (acting in accordance with the
authority given to them in the Corp Scheme) by a Transfer Notice.
(4) On the Effective Date, plc shall, in accordance with clause 34 of the
plc Scheme, direct that the Basic Scheme Consideration shall be
transferred to the Escrow Trustee to be held by the Escrow Trustee on
the trusts set out in sub-clause (7) below and to be paid into or
allocated to the following Escrow Accounts:
(a) in the case of the portion of the Known Claims Segment which
is to be distributed in accordance with the First Initial
Distribution Notice, the relevant Admitted Known plc Scheme
Creditors Escrow Account;
(b) in the case of the balance of the Known Claims Segment, the
relevant Unadmitted Known plc Scheme Creditors Escrow Account;
and
(c) in the case of the Reserve Claims Segment, the relevant
Reserve plc Scheme Creditors Escrow Account.
Except where defined herein, capitalised terms used in sub-clauses (4)
and (5) of this clause 5 have the meanings given to them in the plc
Scheme.
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(5) Any Scheme Consideration, not being Basic Scheme Consideration, shall
be paid into or allocated to the relevant Escrow Accounts by plc in the
manner directed by the Supervisors (acting in accordance with the
authority given to them under the plc Scheme) by a Transfer Notice.
(6) The Escrow Trustee shall, promptly after receipt of any Scheme
Consideration pursuant to any of sub-clauses (2) to (5) above, provide:
(a) to Corp and the Supervisors an acknowledgement of the receipt
of each part of the Scheme Consideration (as defined in the
Corp Scheme) and plc Shareholder Stock transferred, issued and
allotted to it; and
(b) to plc and the Supervisors an acknowledgement of the receipt
of each part of the Scheme Consideration (as defined in the
plc Scheme) transferred to it.
The Escrow Trustee shall maintain records of all its dealings with the
Scheme Consideration and shall make such records (or copies thereof)
available to Corp, plc and the Supervisors at all reasonable times upon
request.
(7) The Escrow Trustee shall hold:
(a) the Admitted Known Corp Scheme Creditors Fund on bare trust
for the Admitted Known Creditors named in the First Initial
Distribution Notice absolutely in proportion to their
respective entitlements to the First Initial Distribution
under clause 23 of the Corp Scheme;
(b) the Unadmitted Known Corp Scheme Creditors Fund and the
Reserve Corp Scheme Creditors Fund on bare trust for the
Scheme Creditors absolutely for application by the Escrow
Trustee on their behalf in accordance with the Corp Scheme and
this Agreement;
(c) the plc Shareholder Fund on trust for the plc Shareholders
absolutely in proportion to their respective entitlements
under sub-clause 31(3) of the Corp Scheme;
(d) the Admitted Known plc Scheme Creditors Fund on bare trust for
the Admitted Known Creditors named in the First Initial
Distribution Notice absolutely in proportion to their
respective entitlements to the First Initial Distribution
under clause 23 of the plc Scheme; and
(e) the Unadmitted Known plc Scheme Creditors Fund and the Reserve
plc Scheme Creditors Fund on bare trust for the Scheme
Creditors absolutely for application by the Escrow Trustee on
their behalf in accordance with the plc Scheme and this
Agreement.
Except where defined herein, capitalised terms used in paragraphs (a)
to (c) of this sub-clause (7) have the meanings given to them in the
Corp Scheme and capitalised terms used in paragraphs (d) and (e) of
this sub-clause (7) have the meanings given to them in the plc Scheme.
(8) It shall be a term of each trust constituted by sub-clause (7) above
that:
(a) the Supervisors of each Scheme shall have authority to give
instructions to the Escrow Trustee and the Distribution Agent
in order to give effect to the terms of the relevant
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Scheme and that the Distribution Agent shall have authority to
act on the instructions of the Supervisors of the relevant
Scheme, the directions of the Trustees and Ancrane contained
in clauses 7(6) and 8(6) of this Agreement and in the Ancrane
Direction Letter, the directions of Corp (on behalf of the
persons absolutely entitled thereto) contained in clauses
7(11) and (12) of this Agreement and the directions of plc (on
behalf of the persons absolutely entitled thereto) contained
in clauses 8(8) and (9) of this Agreement with regard to the
distribution of the property the subject of such trust;
(b) the Escrow Trustee is authorised to take any action which the
Supervisors may instruct for the purposes of the relevant
Scheme, including by way of Distribution Notice and Transfer
Notice; and
(c) the duties of the Escrow Trustee in relation to each trust of
confidentiality and acting in the interests only of the
beneficiaries of such trust are disapplied to the extent
necessary to enable the Escrow Trustee to take action in
accordance with the terms of each Scheme.
(9) The entity with which any Escrow Account is held may only be changed if
the Escrow Trustee is directed to make such a change by the Supervisors
and, if the Supervisors do make such a direction, the Distribution
Agent shall use all reasonable efforts to assist in that change.
(10) Neither the Escrow Trustee nor the Distribution Agent shall have, and
each of them shall procure that none of their respective delegates
shall have, any right of indemnity, set off, combination of accounts or
any other right whatsoever to apply the assets comprised in the Trust
Funds or any of them in discharge or satisfaction of any cost, right of
reimbursement, expense, loss or other liability of the Escrow Trustee
or, as the case may be, the Distribution Agent, and all such rights are
hereby released by the Escrow Trustee and the Distribution Agent.
6. UNDERTAKINGS
(1) Subject as provided in clause 7 (in the case of paragraphs (a) to (c)
below) and clause 8 (in the case of paragraphs (d) to (f) below), the
Escrow Trustee hereby undertakes in favour of the Supervisors, each
Admitted Scheme Creditor (including, for the avoidance of doubt, the
Eurobond Trustee and BoNY upon their Scheme Claims being Admitted) and
each Designated Recipient as follows:
(a) against receipt of the First Initial Distribution Notice under
the Corp Scheme, to direct (and it hereby does direct) the
Distribution Agent to transfer on behalf of the Admitted Known
Creditors named in the First Initial Distribution Notice from
the Admitted Known Corp Scheme Creditors Escrow Fund such
amounts and securities as are equal to the Distribution
Entitlement in respect of the Admitted Known Claims the
subject of the First Initial Distribution Notice to the
Admitted Scheme Creditors named in the First Initial
Distribution Notice;
(b) against receipt of any Distribution Notice (other than the
First Initial Distribution Notice) under the Corp Scheme, to
direct (and it hereby does direct) the Distribution Agent to
transfer on behalf of the Scheme Creditors from the relevant
Corp Escrow Accounts such amounts and securities as are
specified in the Distribution Notice to the Admitted Scheme
Creditors named in the Distribution Notice;
11
(c) against receipt of a Transfer Notice relating to any Corp
Scheme Consideration, to direct (and it hereby does direct)
the Distribution Agent to take the action required by that
Transfer Notice;
(d) against receipt of the First Initial Distribution Notice under
the plc Scheme, to direct (and it hereby does direct) the
Distribution Agent to transfer on behalf of the Admitted Known
Creditors named in the First Initial Distribution Notice from
the Admitted Known plc Scheme Creditors Escrow Fund such
amounts and securities as are equal to the Distribution
Entitlement in respect of the Admitted Known Claims the
subject of the First Initial Distribution Notice to the
Admitted Scheme Creditors named in the First Initial
Distribution Notice;
(e) against receipt of any Distribution Notice (other than the
First Initial Distribution Notice) under the plc Scheme, to
direct (and it hereby does direct) the Distribution Agent to
transfer on behalf of the Scheme Creditors from the relevant
plc Escrow Accounts such amounts and securities as are
specified in the Distribution Notice to the Admitted Scheme
Creditors named in the Distribution Notice; and
(f) against receipt of a Transfer Notice relating to any plc
Scheme Consideration, to direct (and it hereby does direct)
the Distribution Agent to take the action required by that
Transfer Notice.
Each of the Escrow Trustee and the Distribution Agent agrees that it
shall have no discretion in the making or withholding of any
Distribution or credit or transfer required by a Transfer Notice, or
portion thereof, and undertakes at all times to comply with the terms
of Distribution Notices and Transfer Notices and any other directions
given to it by the Supervisors and, in the case of the Distribution
Agent, the Escrow Trustee.
Except where defined herein, capitalised terms used in paragraphs (a)
to (c) of this sub-clause (1) have the meanings given to them in the
Corp Scheme and capitalised terms used in paragraphs (d) to (f) of this
sub-clause (1) have the meanings given to them in the plc Scheme.
(2) Each of the Escrow Trustee and the Distribution Agent undertakes that
it will take any and all action required by the Supervisors of the
relevant Scheme in order to give effect to the provisions of that
Scheme.
(3) Subject as provided in sub-clause (2) above, each of the Escrow Trustee
and the Distribution Agent undertakes that, save with the prior written
consent of the Supervisors of the relevant Scheme, it will not take any
action affecting the trust property or any part of it except where
necessary to give effect to either Scheme or as required by clause 7
and 8 of this Agreement.
(4) Any Distribution or transfer made in accordance with sub-clause (1)
above shall only be made following receipt by the Escrow Trustee and
the Distribution Agent of a duly signed Distribution Notice or Transfer
Notice from the Supervisors and then only in accordance with the terms
of that Distribution Notice or Transfer Notice. Each Distribution
Notice and Transfer Notice shall constitute deemed directions from the
Escrow Trustee to the Distribution Agent to make the relevant
Distribution or transfer.
(5) The Escrow Trustee hereby undertakes in favour of the Supervisors and
the other parties to this Agreement that it will act honestly and in
good faith and will exercise the diligence expected of a reasonably
prudent trustee and custodian in the fulfilment and/or exercise of its
duties and obligations under this Agreement.
12
(6) The Distribution Agent hereby undertakes in favour of the Supervisors
and the other parties to this Agreement that it will act honestly and
in good faith and will exercise the diligence expected of a reasonably
prudent custodian and agent in comparable circumstances in the
fulfilment and/or exercise of its duties and obligations under this
Agreement.
(7) Bondholder Communications hereby undertakes in favour of the
Supervisors, the Eurobond Trustee, BoNY and the other parties to this
Agreement that it will act honestly and in good faith and will exercise
the diligence of a reasonably prudent expert in comparable
circumstances in the fulfilment and/or exercise of its duties and
obligations under this Agreement.
(8) Conditional upon the proposed reduction in its share capital and
repayment of capital in specie being effected as contemplated by the
Scheme Implementation Deed, Ancrane hereby undertakes in favour of each
of the other parties to this Agreement that it shall execute the
Ancrane Direction Letter on or before 17th April, 2003. Subject to
Ancrane executing the Ancrane Direction Letter, in accordance with the
proposed direction set out in paragraph 4(b) of that letter, each of
the Eurobond Trustee, BoNY, the Escrow Trustee and the Supervisors
hereby direct the Distribution Agent to pay all Corp and plc Scheme
Consideration to which Ancrane would otherwise have been entitled
through its Scheme Claim and as a Bondholder to plc.
7. DISTRIBUTIONS UNDER THE CORP SCHEME
(1) Capitalised terms used in this clause 7 and not otherwise defined in
this Agreement have the meanings given to them in the Corp Scheme. This
clause 7 applies only to Distributions made under the Corp Scheme.
(2) As set out in the Corp Scheme, the Supervisors shall determine the
Scheme Claims and shall decide whether or not they shall be Admitted.
(3) In respect of each Distribution, the Supervisors will deliver to the
Escrow Trustee (with a copy to the Distribution Agent) a duly completed
Distribution Notice (in the form agreed between the Supervisors, the
Escrow Trustee and the Distribution Agent) identifying each Admitted
Scheme Creditor (which expression, in this sub-clause (3), includes the
Eurobond Trustee and BoNY but does not include Account Holders or
Designated Recipients who are dealt with as provided in sub-clause (6)
below) to which the Distribution is to be made, the amount of each
Element of Scheme Consideration (and the relevant Trust Funds and
Escrow Accounts from which it should be taken) to be received by that
Admitted Scheme Creditor, the cash or securities accounts of that
Admitted Scheme Creditor to which the relevant portion of the Scheme
Consideration is to be credited and, if applicable, whether that
Admitted Scheme Creditor has elected to receive ADRs instead of New
Creditor Shares. In respect of each Distribution Notice that contains a
reference to BoNY or the Eurobond Trustee, the words "to be distributed
to Designated Recipients in accordance with the directions contained in
clauses 7 and 8 of the Escrow and Distribution Agreement dated 27th
March, 2003 given by such Scheme Creditor" shall be inserted in
parentheses following each such reference.
(4) Except in the case of the First Initial Distribution, the Distribution
Agent will make the relevant Distribution on behalf of the Escrow
Trustee within 5 Business Days after having received a duly completed
Distribution Notice from the Supervisors. Subject as provided in
sub-clause (6)(f), the Distribution Agent will make the First Initial
Distribution on the Effective Date.
13
(5) Each of the Eurobond Trustee and BoNY has submitted or will submit a
Claim Form and is expected to become an Admitted Scheme Creditor
entitled to participate in the First Initial Distribution. Account
Holders have been invited in the Scheme Document to complete and return
to Bondholder Communications Account Holder Letters giving details of
the manner in which the Scheme Consideration attributable to the
Trustees but the subject of the direction set out in sub-clause (6)
below should be delivered to Designated Recipients. Bondholder
Communications undertakes in favour of each Trustee, the Escrow
Trustee, the Distribution Agent, Corp, plc, the Supervisors, each
Designated Recipient and each Definitive Holder:
(a) to collate all Account Holder Letters received;
(b) to liaise with the relevant Account Holders with a view to
completing any missing information and correcting any manifest
errors in each Account Holder Letter received by it;
(c) to liaise with each of DTC, Euroclear and Clearstream,
Luxembourg with a view to ensuring that all Bonds the subject
of an Account Holder Letter have been blocked and that
appropriate Custody Instruction References or VOI numbers, as
the case may be, have been granted;
(d) to complete and distribute copies of Account Holder Letters
and forms of proxy to Definitive Holders wishing to attend a
Scheme Meeting in person or by proxy and to compile and
distribute one or more omnibus proxies in respect of each
Definitive Holder wishing to appoint the chairman of a Scheme
Meeting as his proxy, all in accordance with the instructions
given in duly completed Account Holder Letters;
(e) to prepare definitive Yankee Bonds and an initial register of
Yankee Bond holders in accordance with the instructions given
in duly completed Account Holder Letters and to distribute
such Yankee Bonds and register in the manner agreed between
Bondholder Communications, BoNY and Corp;
(f) to prepare individual global Eurobonds in accordance with the
instructions given in duly completed Account Holder Letters
and to distribute such Eurobonds in the manner agreed between
Bondholder Communications, the Eurobond Trustee and Corp;
(g) in the case of all duly completed Account Holders Letters
received by it on or before 5.00p.m. (New York City time) on
17th April, 2003, to provide by no later than 10th May, 2003
all information necessary to the Distribution Agent to enable
the Distribution Agent to make the Distributions directed in
sub-clause (6) below as soon as may be practicable but subject
always as provided in sub-clause (6)(f); and
(h) to maintain records of all Account Holder Letters received and
the Designated Recipients and Definitive Holders named therein
and to make such records (or copies thereof) available to
Corp, plc and the Supervisors at all reasonable times upon
request.
(6) Subject to the Scheme Claims of the Eurobond Trustee and BoNY being the
subject of a Distribution Notice, each of the Eurobond Trustee or BoNY,
as the case may be, with the authority and approval hereby given of the
Supervisors, the Escrow Trustee and Ancrane, hereby directs the
Distribution Agent, acting on behalf of the Escrow Trustee, to:
14
(a) in the case of the Eurobond Trustee, pay, at the same time as
the relevant Distribution is made, the Cash Element of each
Distribution which would otherwise have been made to it to (i)
all Account Holders (other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") to the extent that ▇▇▇▇▇▇
▇▇▇▇▇▇▇ is the Account Holder for Ancrane) which had Eurobonds
credited to their accounts on the Effective Date by a pro rata
distribution through Euroclear and Clearstream, Luxembourg or
(ii) if (for any reason), such a pro rata distribution through
Euroclear and Clearstream, Luxembourg is not possible, in the
manner contemplated in paragraph (b) below;
(b) in the case of BoNY (or the Eurobond Trustee pursuant to
sub-clause (6)(a)(ii) above), subject as provided in paragraph
(f) below, pay to each Designated Recipient, at the Specified
Time (as defined below), such Designated Recipient's
proportion of the Cash Element (together with any entitlement
to interest thereon) which would otherwise have been made to
BoNY in respect of the Yankee Bonds or the Eurobond Trustee in
respect of the Eurobonds, as the case may be, in accordance
with the cash payment directions contained in the relevant
Account Holder Letter; and
(c) subject to sub-clauses (11) and (12) and as provided in
paragraph (f) below, distribute to each Designated Recipient,
at the Specified Time, such Designated Recipient's proportion
of the New Notes Element and the New Creditor Shares Element
of the relevant Distribution (and any entitlement to interest
and dividends) which would otherwise have been distributed to
the relevant Trustee in accordance with the security delivery
directions (including, for the avoidance of doubt, directions
as to the currency of the Senior Notes to be delivered and in
relation to any ADRs to be delivered in lieu of New Creditor
Shares) contained in the relevant Account Holder Letters;
(d) other than any payments of Cash made in accordance with
sub-paragraph (a)(i) above, if the Relevant Conditions (as
defined below) have not been satisfied in relation to a
Designated Recipient of Scheme Consideration initially
attributable to the Eurobond Trustee or BoNY, as the case may
be, (whether in the Initial Distribution or any Further
Distribution) before the termination of the Scheme, to (i) (in
the case of the Eurobond Trustee) hold that Scheme
Consideration to the order of the Eurobond Trustee pending any
directions from it, which directions will be given by the
Eurobond Trustee if and to the extent that it is authorised or
directed by an extraordinary resolution passed at a Eurobond
Meeting or by court order and (ii) (in the case of BoNY)
transfer all such Scheme Consideration to BoNY or to its order
(including, but without limitation, by way of a payment into
court);
(e) in this sub-clause (6), "RELEVANT CONDITIONS" in relation to a
Designated Recipient means that (i) a duly completed Account
Holder Letter naming that Designated Recipient and (ii)
confirmation satisfactory to Bondholder Communications that
corresponding Custody Instructions have been given have been
received by Bondholder Communications and confirmed by it to
the Distribution Agent and all information necessary to make
the relevant Distribution has been provided by Bondholder
Communications to the Distribution Agent and "SPECIFIED TIME"
means the same time as the relevant Distribution is made where
the Relevant Conditions have been satisfied in relation to a
Designated Recipient or, where this is not the case, as soon
as practicable after the Relevant Conditions have been
satisfied in relation to that Designated Recipient. For the
avoidance of doubt, once the Relevant Conditions are met in
respect of a Designated Recipient, the Distribution Agent will
pay or transfer to that Designated Recipient all Scheme
Consideration (and any income accrued in respect of it) to
which that Designated Recipient would have been entitled
15
had the Relevant Conditions in relation to it been met prior
to 17th April, 2003 without further direction from any of the
parties to this Agreement; and
(f) in recognition of the fact that the Distribution Agent is
limited in its ability to prepare and process payment and
transfer instructions ("INSTRUCTIONS"), the Distribution Agent
shall act in the following manner in preparing and giving
effect to the First Initial Distribution:
(i) prepare preliminary Instructions as soon as
practicable after it has received the necessary
information from the Supervisors in accordance with
sub-clause (3) above or Bondholder Communications in
accordance with sub-clause (5)(g) above and complete
such Instructions in the Order of Priority (as
defined below) as swiftly as possible following the
determination of both the Scheme Rate and the
Effective Date;
(ii) on the Effective Date process as many Instructions
which have been completed as it is able to do in the
Order of Priority; and
(iii) on each Business Day after the Effective Date until
completion of the First Initial Distribution, process
as many Instructions which have been completed as it
is able to in the Order of Priority.
For the purpose of this sub-clause (f), "ORDER OF PRIORITY"
means, first, to each of the Scheme Creditors named in the
First Initial Distribution Notice (which, for the avoidance of
doubt, shall include the Trustees but not Designated
Recipients) and, secondly, to each Designated Recipient by
reference to the principal amount of Bonds represented by the
Account Holder Letter in which it is named as the Designated
Recipient starting with the Designated Recipient which has the
highest principal amount so represented.
It is currently envisaged that the Distribution Agent will be
able to complete a maximum of 1,000 Instructions per Business
Day and to process a maximum of 5,000 Instructions per
Business Day.
(7) Reflecting the directions and undertakings set out in the Ancrane
Direction Letter and its undertaking not to vote at either Scheme
Meeting, Ancrane undertakes in favour of each of the other parties to
this Agreement that it will procure that its Account Holder does not
deliver an Account Holder Letter in respect of its holdings of Bonds.
Ancrane further irrevocably authorises and directs the Distribution
Agent to instruct Euroclear and/or Clearstream, Luxembourg, as the case
may be, not to credit any cash to which Ancrane would otherwise be
entitled in respect of its holdings of Eurobonds to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇
account with such clearing system and undertakes in favour of each of
the other parties to this Agreement that it will procure that ▇▇▇▇▇▇
▇▇▇▇▇▇▇ will give corresponding instructions to the relevant clearing
system. Ancrane undertakes to each of the other parties to this
Agreement that it will irrevocably confirm to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that it
will not direct ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to process any transfer transactions
unless and until the Corp Scheme is not approved or does not become
effective in relation to any of its Bonds and hereby confirms that it
will not give any such direction. Ancrane hereby confirms in favour of
each of the other parties to this Agreement that it is incorporated in
the United Kingdom.
(8) In respect of each Distribution Notice that directs the Escrow Trustee
and the Distribution Agent to distribute ADRs instead of New Creditor
Shares in accordance with sub-clause (3) above and any elections in
Account Holder Letters to receive ADRs instead of New Creditor
16
Shares communicated to the Distribution Agent in accordance with
sub-clause (5) above, the Escrow Trustee shall procure that the
Distribution Agent, acting on behalf of the Escrow Trustee, shall:
(a) subject to paragraph (c) below, transfer the New Creditor
Shares relating to the relevant Eligible Recipient to the ADR
Depositary;
(b) arrange for the distribution of ADRs relating to those New
Creditor Shares to entitled Eligible Recipients; and
(c) where there are any New Creditor Shares which are not
sufficient in number to equate to one ADR and which therefore
cannot be transferred to the ADR Depositary in accordance with
paragraph (a) above, sell those New Creditor Shares and deal
with the proceeds as instructed by the Supervisors by Transfer
Notice.
(9) Corp hereby directs the Escrow Trustee and the Escrow Trustee shall
procure that the Distribution Agent:
(a) transfers the plc Shareholder Stock to the CREST account of
the Registrars by means of a matched transaction in CREST
bearing a "no change in beneficial ownership" denotation as
soon as practicable following the Effective Date; and
(b) instructs the Registrars to hold part of the plc Shareholders
Stock through the Corporate Nominee and otherwise to deal with
the plc Shareholder Stock and Warrants as set out in the
Letter of Instruction.
(10) In respect of each Distribution Notice that directs the Escrow Trustee
and the Distribution Agent to distribute New Creditor Shares, the
Escrow Trustee shall procure that the Distribution Agent transfers on
its behalf the requisite number of New Creditor Shares to the
Registrars and instruct the Registrars to transfer the same to the
relevant Eligible Recipient in accordance with the relevant
Distribution Notice and sub-clause (6) above. For this purpose the
Escrow Trustee shall give the Registrars standing instructions in the
Letter of Instruction to effect the transfers contemplated by this
sub-clause (10) and hereby irrevocably agrees not to withdraw or alter
such instructions without the prior approval of the Supervisors.
(11) Where an Account Holder Letter is submitted to Bondholder
Communications in which the confirmations set out in section 5,
paragraphs (D), (E) and (F) of that Account Holder Letter are not made
or a Claim Form is submitted to the Supervisors by a Scheme Creditor
(other than the Eurobond Trustee or BoNY) whose Scheme Claim is
subsequently Admitted in which the confirmations set out in paragraphs
(3) and (4) of Box 3 of that Claim Form are not made, Bondholder
Communications or, as the case may be, the Supervisors shall inform the
Distribution Agent accordingly and Corp may direct that (i) if the New
Creditor Shares or New Notes or any of them are listed on a securities
exchange, the Distribution Agent shall, on behalf of the Escrow
Trustee, sell or procure the sale of the New Notes and the New Creditor
Shares which would otherwise have been Distributed and shall instead
pay the cash proceeds of such sale to the relevant Eligible Recipient
(after deducting all applicable expenses including foreign currency
conversion costs incurred) to the cash account set out in the relevant
Account Holder Letter or Claim Form; or (ii) if the New Creditor Shares
or New Notes or any of them are not listed on a securities exchange,
the Distribution Agent shall, on behalf of the Escrow Trustee, pay a
sum of cash which is substantially equivalent in value to such New
Creditor Shares or New Notes determined in accordance with clause
30(7)(e)(ii) of the Corp Scheme to the cash account set out in the
relevant Account Holder Letter or Claim
17
Form. Any sale made pursuant to sub-paragraph (i) of this sub-clause
(11) shall be made for the best terms reasonably available at the time
of the sale.
(12) Where an Account Holder Letter or Claim Form is submitted in which the
confirmations set out in section 5, paragraphs (D), (E) and (F) of that
Account Holder Letter or paragraphs (3) and (4) of Box 3 of that Claim
Form are made but, on the face of the Account Holder Letter or Claim
Form, as the case may be, it is apparent that the confirmations may be
inaccurate or Corp has reason to believe that a Distribution made in
accordance with the Account Holder Letter or Claim Form, as the case
may be, might be in breach of any of the securities laws described in
part 1, Section 2 of Parts D.16 and D.17 of the Scheme Document:
(a) in the case of the Account Holder Letter, Bondholder
Communications shall draw that Account Holder Letter to the
attention of Corp and the Supervisors; and
(b) in the case of the Claim Form, the Supervisors shall draw that
Claim Form to the attention of Corp; and
Corp may, after such investigation as it may deem appropriate in the
circumstances, direct the Distribution Agent (acting on behalf of the
Escrow Trustee) (i) if the New Creditor Shares or New Notes or any of
them are listed on a securities exchange, to sell or procure the sale
of the New Notes and the New Creditor Shares which would otherwise have
been Distributed and instead and pay the cash proceeds of such sale to
the relevant Eligible Recipient (after deducting all applicable
expenses including foreign currency conversion costs incurred) to the
cash account set out in the relevant Account Holder Letter or Claim
Form or (ii) if the New Creditor Shares or New Notes or any of them are
not listed on a securities exchange, to pay a sum of cash in sterling
which is substantially equivalent in value to such New Creditor Shares
or New Notes and determined in accordance with clause 30(7)(e)(ii) of
the Corp Scheme to the cash account set out in the relevant Account
Holder Letter or Claim Form. Any sale made pursuant to sub-paragraph
(i) of this sub-clause (12) shall be made for the best terms reasonably
available at the time of the sale.
(13) In relation to each Distribution made by it, in any case where it would
otherwise be required to distribute a fraction of a New Note or a
fraction of a New Creditor Share to an Eligible Recipient, the
Distribution Agent (acting on behalf of the Escrow Trustee) shall, in
accordance with sub-clause 30(6) of the Corp Scheme, (a) if the New
Creditor Shares or New Notes or any of them are Listed, aggregate all
such fractions and sell the relevant number of New Notes and New
Creditor Shares in the market and pay the net proceeds of such sale
(after deducting all costs of the sale and paying all fractional
entitlements) to the Escrow Account specified for this purpose in a
Transfer Notice and (b) if the New Creditor Shares or New Notes are not
Listed, round down to zero all fractional entitlements of Eligible
Recipients to such unlisted New Creditor Shares and New Notes and
transfer (if required) to the Escrow Account specified for this purpose
in a Transfer Notice all fractional entitlements to those New Shares or
New Notes (as the case may be) which, but for this sub-paragraph (b),
Eligible Recipients would have received. No fraction of a unit of
currency shall be Distributed by the Distribution Agent and any cash
remaining after the relevant Distribution as a result of any such
fractional entitlements shall be paid by the Distribution Agent to
Corp. In this paragraph, the "RELEVANT NUMBER OF NEW NOTES OR NEW
CREDITOR SHARES" means the number of New Notes and New Creditor Shares
that would have resulted from the aggregation of all fractional
entitlements and the rounding down of the result to the nearest whole
New Note and New Creditor Share, respectively.
(14) In each case where Undistributed Scheme Consideration is to be applied
in reimbursing Corp for any SDRT Expense it has incurred in excess of
L 500,000 in accordance with clause 25(2)
18
of the Corp Scheme, the Supervisors shall give the Distribution Agent
the directions necessary to make that reimbursement including, but not
limited to, the following:
(a) the amount of the SDRT Expense that is to be reimbursed;
(b) if any Element of Undistributed Scheme Consideration other
than cash is required, the number of New Creditor Shares
and/or New Notes to be sold; and
(c) Corp's bank account details to which the reimbursement should
be made.
8. DISTRIBUTIONS UNDER THE PLC SCHEME
(1) Capitalised terms used in this clause 8 and not otherwise defined in
this Agreement have the meanings given to them in the plc Scheme. This
clause 8 applies only to Distributions made under the plc Scheme.
(2) As set out in the plc Scheme, the Supervisors shall determine the
Scheme Claims and shall decide whether or not they shall be Admitted.
(3) In respect of each Distribution, the Supervisors will deliver to the
Escrow Trustee (with a copy to the Distribution Agent) a duly completed
Distribution Notice (in the form agreed between the Supervisors, the
Escrow Trustee and the Distribution Agent) identifying each Admitted
Scheme Creditor (which expression, in this sub-clause (3), includes the
Eurobond Trustee and BoNY but does not include Account Holders or
Designated Recipients who are dealt with as provided in sub-clause (6)
below) to which the Distribution is to be made, the amount of each
Element of Scheme Consideration (and the relevant Trust Funds and
Escrow Accounts from which it should be taken) to be received by that
Admitted Scheme Creditor, the cash or securities accounts of that
Admitted Scheme Creditor to which the relevant portion of the Scheme
Consideration is to be credited and, if applicable, whether that
Admitted Scheme Creditor has elected to receive ADRs instead of New
Creditor Shares. In respect of each Distribution Notice that contains a
reference to BoNY or the Eurobond Trustee, the words "to be distributed
to Designated Recipients in accordance with the directions contained in
clauses 7 and 8 of the Escrow and Distribution Agreement dated 27th
March, 2003 given by such Scheme Creditor" shall be inserted in
parentheses following each such reference.
(4) Except in the case of the First Initial Distribution, the Distribution
Agent will make the relevant Distribution on behalf of the Escrow
Trustee within 5 Business Days after having received a duly completed
Distribution Notice from the Supervisors. Subject as provided in
sub-clause (6)(f), the Distribution Agent will make the First Initial
Distribution on the Effective Date.
(5) Each of the Eurobond Trustee and BoNY has submitted or will submit a
Claim Form and is expected to become an Admitted Scheme Creditor
entitled to participate in the First Initial Distribution. Account
Holders have been invited in the Scheme Document to complete and return
to Bondholder Communications Account Holder Letters giving details of
the manner in which the Scheme Consideration attributable to the
Trustees but the subject of the direction set out in sub-clause (6)
below should be delivered to Designated Recipients. Bondholder
Communications undertakes in favour of each Trustee, the Escrow
Trustee, the Distribution Agent, Corp, plc, the Supervisors, each
Designated Recipient and each Definitive Holder:
(a) to collate all Account Holder Letters received;
19
(b) to liaise with the relevant Account Holders with a view to
completing any missing information and correcting any manifest
errors in each Account Holder Letter received by it;
(c) to liaise with each of DTC, Euroclear and Clearstream,
Luxembourg with a view to ensuring that all Bonds the subject
of an Account Holder Letter have been blocked and that
appropriate Custody Instruction References or VOI numbers, as
the case may be, have been granted;
(d) to complete and distribute copies of Account Holder Letters
and forms of proxy to Definitive Holders wishing to attend a
Scheme Meeting in person or by proxy and to compile and
distribute one or more omnibus proxies in respect of each
Definitive Holder wishing to appoint the chairman of a Scheme
Meeting as his proxy, all in accordance with the instructions
given in duly completed Account Holder Letters;
(e) to prepare definitive Yankee Bonds and an initial register of
Yankee Bond holders in accordance with the instructions given
in duly completed Account Holder Letters and to distribute
such Yankee Bonds and register in the manner agreed between
Bondholder Communications, BoNY and Corp;
(f) to prepare individual global Eurobonds in accordance with the
instructions given in duly completed Account Holder Letters
and to distribute such Eurobonds in the manner agreed between
Bondholder Communications, the Eurobond Trustee and Corp;
(g) in the case of all duly completed Account Holders Letters
received by it on or before 5.00p.m. (New York City time) on
17th April, 2003, to provide by no later than 10th May, 2003
all information necessary to the Distribution Agent to enable
the Distribution Agent to make the Distributions directed in
sub-clause (6) below as soon as may be practicable but subject
always as provided in sub-clause (6)(f); and
(h) to maintain records of all Account Holder Letters received and
the Designated Recipients and Definitive Holders named therein
and to make such records (or copies thereof) available to
Corp, plc and the Supervisors at all reasonable times upon
request.
(6) Subject to the Scheme Claims of the Eurobond Trustee and BoNY being the
subject of a Distribution Notice, each of the Eurobond Trustee or BoNY,
as the case may be, with the authority hereby given and approval of the
Supervisors, the Escrow Trustee and Ancrane, hereby directs the
Distribution Agent, acting on behalf of the Escrow Trustee, to:
(a) in the case of the Eurobond Trustee, pay, at the same time as
the relevant Distribution is made, the cash Element of each
Distribution which would otherwise have been made to it to (i)
all Account Holders (other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to the extent
that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is the Account Holder for Ancrane) which
had Eurobonds credited to their accounts on the Effective Date
by a pro rata distribution through Euroclear and Clearstream,
Luxembourg or (ii) if (for any reason), such a pro rata
distribution through Euroclear and Clearstream, Luxembourg is
not possible, in the manner contemplated in paragraph (b)
below;
(b) in the case of BoNY (or the Eurobond Trustee pursuant to
sub-clause (6)(a)(ii) above), subject as provided in paragraph
(f) below, pay to each Designated Recipient, at the Specified
Time (as defined below), such Designated Recipient's
proportion of
20
the cash Element (together with any entitlement to interest
thereon) which would otherwise have been made to BoNY in
respect of the Yankee Bonds or the Eurobond Trustee in respect
of the Eurobonds, as the case may be, in accordance with the
cash payment directions contained in the relevant Account
Holder Letter; and
(c) subject to sub-clauses (8) and (9) and subject as provided in
paragraph (f) below, distribute to each Designated Recipient,
at the Specified Time, such Designated Recipient's proportion
of the New Notes Element and the New Creditor Shares Element
of the relevant Distribution (and any entitlement to interest
and dividends) which would otherwise have been distributed to
the relevant Trustee in accordance with the security delivery
directions (including, for the avoidance of doubt, directions
as to the currency of the Senior Notes to be delivered and in
relation to any ADRs to be delivered in lieu of New Creditor
Shares) contained in the relevant Account Holder Letters;
(d) other than any payments of cash made in accordance with
sub-paragraph (a)(i) above, if the Relevant Conditions (as
defined below) have not been satisfied in relation to a
Designated Recipient of Scheme Consideration initially
attributable to the Eurobond Trustee or BoNY, as the case may
be, (whether in the Initial Distribution or any Further
Distribution) on or before the termination of the Scheme, to
(i) (in the case of the Eurobond Trustee) hold that Scheme
Consideration to the order of the Eurobond Trustee pending any
directions from it, which directions will be given by the
Eurobond Trustee if and to the extent that it is authorised or
directed by an extraordinary resolution passed at a Eurobond
Meeting or by court order and (ii) (in the case of BoNY)
transfer all such Scheme Consideration to BoNY or to its order
(including, but without limitation, by way of a payment into
court);
(e) in this sub-clause (6), "RELEVANT CONDITIONS" in relation to a
Designated Recipient means that (i) a duly completed Account
Holder Letter naming that Designated Recipient; and (ii)
confirmation satisfactory to Bondholder Communications that
corresponding Custody Instructions have been given have been
received by Bondholder Communications and confirmed by it to
the Distribution Agent and all information necessary to make
the relevant Distribution has been provided by Bondholder
Communications to the Distribution Agent and "SPECIFIED TIME"
means the same time as the relevant Distribution is made where
the Relevant Conditions have been satisfied in relation to a
Designated Recipient or, where this is not the case, as soon
as practicable after the Relevant Conditions have been
satisfied in relation to that Designated Recipient. For the
avoidance of doubt, once the Relevant Conditions are met in
respect of a Designated Recipient, the Distribution Agent will
pay or transfer to that Designated Recipient all Scheme
Consideration (and any income accrued in respect of it) to
which that Designated Recipient would have been entitled had
the Relevant Conditions in relation to it been met prior to
17th April, 2003 without further direction from any of the
parties to this Agreement; and
(f) in recognition of the fact that the Distribution Agent is
limited in its ability to prepare and process payment and
transfer instructions ("INSTRUCTIONS"), the Distribution Agent
shall act in the following manner in preparing and giving
effect to the First Initial Distribution:
(i) prepare preliminary Instructions as soon as
practicable after it has received the necessary
information from the Supervisors in accordance with
sub-clause (3) above or Bondholder Communications in
accordance with sub-clause (5)(g) above and complete
such Instructions in the Order of Priority (as
21
defined below) as swiftly as possible following the
determination of both the Scheme Rate and the Effective Date;
(ii) on the Effective Date process as many Instructions
which have been completed as it is able to do in the
Order of Priority; and
(iii) on each Business Day after the Effective Date until
completion of the First Initial Distribution, process
as many Instructions which have been completed as it
is able to in the Order of Priority.
For the purpose of this sub-clause (f), "ORDER OF PRIORITY"
means, first, to each of the Scheme Creditors named in the
First Initial Distribution Notice (which, for the avoidance of
doubt, shall include the Trustees but not Designated
Recipients) and, secondly, to each Designated Recipient by
reference to the principal amount of Bonds represented by the
Account Holder Letter in which it is named as the Designated
Recipient starting with the Designated Recipient which has the
highest principal amount so represented.
It is currently envisaged that the Distribution Agent will be
able to complete a maximum of 1,000 Instructions per Business
Day and to process a maximum of 5,000 Instructions per
Business Day.
(7) In respect of each Distribution Notice that directs the Escrow Trustee
and the Distribution Agent to distribute ADRs instead of New Creditor
Shares in accordance with sub-clause (3) above and any elections in
Account Holder Letters to receive ADRs instead of New Creditor Shares
communicated to the Distribution Agent in accordance with sub-clause
(5) above, the Escrow Trustee shall procure that the Distribution
Agent, acting on behalf of the Escrow Trustee, shall:
(a) subject to paragraph (c) below, transfer the New Creditor
Shares relating to the relevant Eligible Recipient to the ADR
Depositary;
(b) arrange for the distribution of ADRs relating to those New
Creditor Shares to entitled Eligible Recipients; and
(c) where there are any New Creditor Shares which are not
sufficient in number to equate to one ADR and which therefore
cannot be transferred to the ADR Depositary in accordance with
paragraph (a) above, sell those New Creditor Shares and deal
with the proceeds as instructed by the Supervisors by Transfer
Notice.
(8) Where an Account Holder Letter is submitted to Bondholder
Communications in which the confirmations set out in section 5,
paragraphs (D), (E) and (F) of that Account Holder Letter are not made
or a Claim Form is submitted to the Supervisors by a Scheme Creditor
(other than the Eurobond Trustee or BoNY) whose Scheme Claim is
subsequently Admitted in which the confirmations set out in paragraphs
(3) and (4) of Box 3 of that Claim Form are not made, Bondholder
Communications or, as the case may be, the Supervisors shall inform the
Distribution Agent accordingly and plc may direct that (i) if the New
Creditor Shares or New Notes or any of them are listed on a securities
exchange, the Distribution Agent shall, on behalf of the Escrow
Trustee, sell or procure the sale of the New Notes and the New Creditor
Shares which would otherwise have been Distributed and shall instead
pay the net cash proceeds of such sale to the relevant Eligible
Recipient (after deducting all applicable expenses including foreign
currency conversion costs incurred) to the cash account set out in the
relevant Account Holder Letter or Claim Form; or (ii) if the New
Creditor Shares or New
22
Notes or any of them are not listed on a securities exchange, the
Distribution Agent shall, on behalf of the Escrow Trustee, pay to the
relevant Eligible Recipient a sum of cash which is substantially
equivalent in value to such New Creditor Shares or New Notes and
determined in accordance with clause 32(7)(e)(ii) of the plc Scheme to
the cash account set out in the relevant Account Holder Letter or Claim
Form. Any sale made pursuant to sub-paragraph (i) of this sub-clause
(8) shall be made for the best terms reasonably available at the time
of the sale.
(9) Where an Account Holder Letter or Claim Form is submitted in which the
confirmations set out in section 5, paragraphs (D), (E) and (F) of that
Account Holder Letter or paragraphs (3) and (4) of Box 3 of that Claim
Form are made but, on the face of the Account Holder Letter or Claim
Form, as the case may be, it is apparent that the confirmations may be
inaccurate or plc has reason to believe that a Distribution made in
accordance with the Account Holder Letter or Claim Form, as the case
may be, might be in breach of any of the securities laws described in
part 1, and Section 2 of Parts D.16 and D.17 of the Scheme Document:
(a) in the case of the Account Holder Letter, Bondholder
Communications shall draw that Account Holder Letter to the
attention of plc and the Supervisors; and
(b) in the case of the Claim Form, the Supervisors shall draw that
Claim Form to the attention of plc; and
plc may, after such investigation as it may deem appropriate in the
circumstances, direct the Distribution Agent (i) if the New Creditor
Shares or New Notes or any of them are listed on a securities exchange,
to sell or procure the sale of the New Notes and the New Creditor
Shares which would otherwise have been Distributed and instead either
(i) pay the cash proceeds of such sale to the relevant Eligible
Recipient in sterling (after deducting all applicable expenses
including foreign currency conversion costs incurred) or (ii) if the
New Creditor Shares or New Notes or any of them are not listed on a
securities exchange, to pay a sum of cash in sterling which is
substantially equivalent in value to such New Creditor Shares or New
Notes and determined in accordance with clause 32(7)(e)(ii) of the plc
Scheme to the cash account set out in the relevant Account Holder
Letter or Claim Form. Any sale made pursuant to this sub-clause (9)
shall be made for the best terms reasonably available at the time of
the sale.
(10) In respect of each Distribution Notice that directs the Escrow Trustee
and the Distribution Agent to distribute New Creditor Shares, the
Escrow Trustee shall procure that the Distribution Agent transfers on
its behalf the requisite number of New Creditor Shares to the
Registrars and instruct the Registrars to transfer the same to the
relevant Scheme Creditor or Designated Recipient in accordance with the
relevant Distribution Notice and sub-clause (6) above. For this purpose
the Escrow Trustee shall give the Registrars standing instructions in
the Letter of Instruction to effect the transfers contemplated by this
sub-clause (10) and hereby irrevocably agrees not to withdraw or alter
such instructions without the prior approval of the Supervisors.
(11) In relation to each Distribution made by it, in any case where it would
otherwise be required to distribute a fraction of a New Note or a
fraction of a New Creditor Share to an Eligible Recipient, the
Distribution Agent (acting on behalf of the Escrow Trustee) shall, in
accordance with sub-clause 32(6) of the plc Scheme, (i) if the New
Creditor Shares or New Notes or any of them are Listed, aggregate all
such fractions and sell the relevant number of New Notes and New
Creditor Shares in the market and pay the net proceeds of such sale
(after deducting all costs of the sale and paying all fractional
entitlements) to the Escrow Account specified for this purpose in a
Transfer Notice; and (ii) if the New Creditor Shares or New Notes are
not Listed, round down to zero all fractional entitlements of Eligible
23
Recipients to such unlisted New Creditor Shares and New Notes and
transfer (if required) to the Escrow Account specified for this purpose
in a Transfer Notice all fractional entitlements to those New Shares or
New Notes (as the case may be) which, but for this sub-paragraph (b),
Eligible Recipients would have received. No fraction of a unit of
currency shall be Distributed by the Distribution Agent and any cash
remaining after the relevant Distribution as a result of any such
fractional entitlements shall be paid by the Distribution Agent to plc.
In this paragraph, the "RELEVANT NUMBER OF NEW NOTES OR NEW SHARES"
means the number of New Notes and New Creditor Shares that would have
resulted from the aggregation of all fractional entitlements and the
rounding down of the result to the nearest whole New Note and New
Creditor Share, respectively.
9. RIGHTS, POWERS AND DUTIES OF THE ESCROW TRUSTEE AND THE DISTRIBUTION
AGENT
(1) Neither the Escrow Trustee nor the Distribution Agent will exercise any
voting rights attaching to the New Notes or the New Shares whilst they
are held in any of the Trust Funds.
(2) The duties, responsibilities and obligations of the Escrow Trustee and
the Distribution Agent shall be limited to those expressly set forth
herein and no duties, responsibilities or obligations shall be inferred
or implied. Neither the Escrow Trustee nor the Distribution Agent shall
be required to, and nor shall either of them, expend or risk any of its
own funds or otherwise incur any financial liability in the performance
of any of its duties under this Agreement save where the same arises as
a result of its negligence, misfeasance, breach of duty or wilful
default.
(3) Each of the Escrow Trustee and the Distribution Agent shall not be
responsible for, or charged with knowledge of, the terms and conditions
of any other agreement, instrument or document executed between the
other parties and to which it is not a party, other than the Schemes
and except such agreements, instruments or documents as may be
specifically referred to in this Agreement.
(4) Corp agrees (subject as provided in sub-clause (5)) to reimburse each
of the Escrow Trustee and the Distribution Agent on demand for, and to
indemnify (on an after tax basis) and hold each of the Escrow Trustee
and the Distribution Agent harmless against and with respect to, any
and all loss, liability, damage or expense (including, but without
limitation, reasonable legal fees, costs and disbursements) that the
Escrow Trustee or, as the case may be, the Distribution Agent may
suffer or incur in connection with it acting in accordance with the
Corp Scheme, the plc Scheme or this Agreement, except to the extent
that such loss, liability, damage or expense arises from its own
negligence, misfeasance, breach of duty or wilful default.
(5) In case any action shall be brought against either the Escrow Trustee
or the Distribution Agent (the "INDEMNIFIED PERSON") in respect of
which recovery may be sought from Corp (the "INDEMNIFIER"), under
sub-clause (4), the indemnified person shall promptly notify the
indemnifier in writing but (subject as provided below) failure to do so
will not relieve the indemnifier from any liability under this
Agreement. Subject to sub-clause (6), the indemnifier may participate
at its own expense in the defence of any action.
(6) If it so elects within a reasonable time after receipt of the notice
referred to in sub-clause (5), the indemnifier may assume the defence
of the action with legal advisers chosen by it and approved by the
indemnified person. Notwithstanding such election the indemnified
person may employ separate legal advisers, and the indemnifier shall
bear the fees and expenses of such separate legal advisers if:
24
(a) the use of the legal advisers chosen by the indemnifier to
represent the indemnified person would present such legal
advisers with a conflict of interest;
(b) the actual or potential defendants in, or targets of, any such
action include both the indemnified person and the indemnifier
and the indemnified person concludes that there may be legal
defences available to it which are different from or
additional to those available to the indemnifier;
(c) the indemnifier has not employed legal advisers satisfactory
to the indemnified person (acting reasonably) to represent the
indemnified person within a reasonable time after notice of
the institution of such action; or
(d) the indemnifier authorises the indemnified person to employ
separate legal advisers at the expense of the indemnifier.
If the indemnifier assumes the defence of the action, the indemnifier
shall not be liable for any fees and expenses of legal advisers of the
indemnified person incurred thereafter in connection with the action,
except as stated above.
(7) Corp shall not be liable in respect of any settlement of any action
effected without its consent, such consent not to be unreasonably
withheld or delayed. Corp shall not, without the prior written consent
of the indemnified person, where the indemnified person is an actual or
is reasonably likely to be a potential party to such claim or action,
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim or action in respect of
which recovery may be sought hereunder unless such settlement,
compromise or consent includes an unconditional release of the
indemnified person from all liability arising out of such claim or
action and does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of the indemnified
person.
(8) Subject as provided in sub-clause (9), Corp agrees to reimburse each
Designated Recipient on demand for, and to indemnify and hold each of
them harmless against and with respect to, any Loss to the extent that
such Loss arises out of any negligence, fraud, breach of duty, wilful
misconduct or misfeasance of Bondholder Communications. For this
purpose "LOSS" means any loss suffered by a Designated Recipient:
(a) in the case of the First Initial Distribution under each
Scheme, through it failing to receive any part of its part of
that First Initial Distribution or it receiving any part of
its part of that First Initial Distribution after the
Effective Date of the relevant Scheme; and
(b) in the case of the Initial Distribution (other than the First
Initial Distribution) under each Scheme, through it failing to
receive any part of its part of that Initial Distribution,
in each case except where the failure to receive any part of the
Distribution is as a result of the operation of any of clause 7(11),
7(12), 7(13), 8(8), 8(9) and 8(11) of this Agreement.
(9) The right of reimbursement and indemnity set out in sub-clause (8) will
not apply:
(a) in the case of the First Initial Distribution under either
Scheme, where an Account Holder Letter was submitted after
5.00 p.m. (New York City time) on 17th April, 2003 or was
submitted before that time and date but was incomplete or
contained any
25
error or inconsistency which had not been rectified by that
time and date to Bondholder Communications' satisfaction
(acting as a reasonably prudent expert); or
(b) to the extent that the loss arose as a result of any action
taken or omitted by the relevant Designated Recipient or its
connected Bondholder, Account Holder or Intermediary or any
clearing system or agent of a clearing system or any other
party to this Agreement (other than Corp or plc); or
(c) where all necessary information in respect of a Designated
Recipient has been given by Bondholder Communications to the
Distribution Agent by the date specified in, and as required
by, but subject as provided in, clause 7(5)(g) or 8(5)(g), as
the case may be, Scheme Consideration under either Scheme is
not received by that Designated Recipient or, in the case of
the First Initial Distribution, is not received by him on the
Effective Date of the relevant Scheme.
(10) Each of the Escrow Trustee and the Distribution Agent may obtain and
pay for such legal or other expert advice or services as it may
reasonably consider necessary in relation to this Agreement, may rely
on the opinion of or advice obtained from any accountant, lawyer or
other expert of good repute and shall incur no liability and shall be
fully protected in acting in good faith in accordance with such opinion
or advice.
(11) Each of the Escrow Trustee and the Distribution Agent may call for and
shall be at liberty to accept as sufficient evidence of any fact or
matter or the expediency of any transaction or thing a certificate
signed by the Supervisors or (but only where specifically provided in
this Agreement that Corp or plc may give directions to the Escrow
Trustee or, as the case may be, the Distribution Agent) by any two
directors of Corp or plc, as the case may be, and neither the Escrow
Trustee nor the Distribution Agent shall be bound in any such case to
call for further evidence or be responsible for any liability that may
be occasioned by it or any other person acting on such certificate.
(12) Each of the Escrow Trustee and the Distribution Agent shall be at
liberty to hold this Agreement and any other documents relating to it
or to deposit them in any part of the world with any banker or banking
company or company whose business includes undertaking the safe custody
of documents or lawyer or firm of lawyers considered by the Escrow
Trustee or, as the case may be, the Distribution Agent to be of good
repute and neither the Escrow Trustee nor the Distribution Agent shall
be responsible for or required to insure against any liability incurred
in connection with any such holding or deposit and may pay all sums
required to be paid on account of or in respect of any such deposit.
(13) Neither the Escrow Trustee nor the Distribution Agent shall (unless and
to the extent ordered so to do by a court of competent jurisdiction) be
required to disclose to any Scheme Creditor any information (including,
without limitation, information of a confidential, financial or price
sensitive nature) made available to it by any other party to this
Agreement or any other person in connection with this Agreement.
(14) Neither the Escrow Trustee nor the Distribution Agent shall be required
to take any legal action or proceedings unless it has been indemnified
and/or provided with security to its satisfaction against all actions,
proceedings, claims and demands to which it may render itself liable
and all costs, charges, damages, expenses and liabilities which it may
incur by so doing.
(15) Each of the parties to this Agreement agrees (a) that it will not take
any proceedings, or assert or seek to assert any claim, against any
officer or employee of any of the Escrow Trustee, the Distribution
Agent, Bondholder Communications, the Eurobond Trustee or BoNY in
respect
26
of any claim it might have against the Escrow Trustee, the Distribution
Agent, Bondholder Communications, the Eurobond Trustee or BoNY (as the
case may be) or in respect of this Agreement and (b) that any officer
or employee of the Escrow Trustee, the Distribution Agent, Bondholder
Communications, the Eurobond Trustee or BoNY may enforce this
provision. Each of the parties to this Agreement agrees (a) that it
will not take any proceedings, or assert or seek to assert any claim,
against any partner (not being a Supervisor) in the same firm as the
Supervisors, or any individual or natural person (provided that such
person is not a Supervisor) employed, whether under a contract of
service or a contract for services, by that firm or any company owned
by that firm in respect of any claim it might have against the
Supervisors or in respect of this Agreement and (b) that any such
partner in the same firm as the Supervisors, or any such person
employed, whether under a contract of service or a contract for
services, by that firm or any company owned by that firm may enforce
this provision.
(16) Each of the Escrow Trustee and the Distribution Agent may (without any
responsibility for any resulting loss) rely on:
(a) any written communication, certificate, legal opinion or other
document received or obtained by it in the course of
performing its obligations under this Agreement and believed
by it to be genuine and correct and to have been signed by, or
with the authority of, the proper person; and
(b) any written statement made to it in the course of, and as part
of, performing its obligations under this Agreement by a
director, officer, partner or employee of any person regarding
any matters which may reasonably be assumed to be within the
maker's knowledge or within the maker's power to verify.
(17) Any opinion, advice or information described in sub-clause (16) on
which the Escrow Trustee or, as the case may be, the Distribution Agent
relies or intends to rely may be sent or communicated by letter or
facsimile transmission. Neither the Escrow Trustee nor the Distribution
Agent shall be liable for acting properly and in accordance with this
Agreement on any opinion, advice or information which is so conveyed,
even if the opinion, advice or information contains some error of which
the Escrow Trustee or, as the case may be, the Distribution Agent is
not aware or which is not manifest.
(18) Each of the Escrow Trustee and the Distribution Agent may retain for
its own benefit, without liability to account to any other person, any
fee or other sum received by it for its own account.
(19) The Distribution Agent may provide advisory or other services to or
engage in any kind of business with any person party to, or affected
by, the arrangements the subject of this Agreement and may do so
without any obligation to account to or disclose any such arrangements
to any person but not in respect of the Schemes unless permitted by a
Scheme or this Agreement.
(20) Each of the Escrow Trustee and the Distribution Agent may exercise any
of its rights and perform any of its duties, obligations and
responsibilities under this Agreement through its paid or unpaid
agents, which may be corporations, partnerships or individuals (whether
or not lawyers or other professional persons) and, provided that it has
exercised reasonable care in the selection of any such agent, shall not
be responsible for any misconduct or omission on the part of, or be
bound to supervise the proceedings or acts of, any such agent save
where the same arises as a result of the negligence, misfeasance,
breach of duty or wilful default on the
27
part of the agent. Any such agent which is engaged in any profession or
business shall be entitled to charge and be paid all usual fees,
expenses and other charges for its services.
(21) Each of the Escrow Trustee and the Distribution Agent may refrain from
doing anything which would or might in its opinion be contrary to any
law or any directive or regulation of or having the force of law to
which it is subject or which would or might otherwise render it liable
to any person and may do anything which is, in its reasonable opinion,
necessary to comply with such law, directive or regulation.
(22) If so instructed by the Supervisors, each of the Escrow Trustee and the
Distribution Agent shall concur with the other parties to this
Agreement in the making of any modification to this Agreement which is
certified by the Supervisors in writing as (a) relating to
administrative matters or being a technical amendment arising out of a
manifest or proven error and (b) not in the Supervisor's reasonable
opinion materially prejudicial the Scheme Creditors or Designated
Recipients affected by such modification.
10. COVENANTS OF THE ESCROW TRUSTEE
The Escrow Trustee shall not:
(1) create or permit to subsist any mortgage, standard security, pledge,
lien, charge or other Security Interest whatsoever (unless arising by
operation of law), upon the whole or any part of its assets or its
undertakings, present or future;
(2) sell, assign, transfer, convey, lease or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire all or
any of its properties, assets, or undertakings or any interest, estate,
right, title or benefit therein or thereto or agree or attempt to
purport to do any of the foregoing except, in all cases, to the extent
necessary to perform its obligations under this Agreement;
(3) save in respect of the trusts created by this Agreement, permit any
person other than itself to have any equitable interest in any of its
assets or undertakings or any interest, estate, right, title or benefit
therein;
(4) have an interest in any bank account, other than the bank accounts
comprised in the Escrow Accounts and the Corporate Expenses Account or
to withdraw any sum from the Corporate Expenses Account other than a
Permitted Withdrawal;
(5) carry on any business other than as Escrow Trustee for the Schemes and
the related activities described in the Schemes or as contemplated in
this Agreement;
(6) incur any indebtedness whatsoever or give any guarantee or indemnity in
respect of any indebtedness or obligation of any person;
(7) consolidate or merge with any other person or convey or transfer
substantially all of its properties or assets to any other person;
(8) have any employees or premises or subsidiaries; and
(9) pay any dividend or make any other distribution to its shareholders or
issue any further shares or alter any rights attaching to its shares as
at the date of this Agreement.
28
11. INVESTMENTS
(1) The Escrow Trustee hereby directs the Distribution Agent to credit all
interest earned (including any interest in the form of debt securities)
and dividends (or any other rights or benefits) or other cash or
property received in respect of any assets in any Escrow Account to the
relevant account forming part of that Escrow Account until payment or
transfer to Admitted Scheme Creditors in accordance with the provisions
of this Agreement. The Supervisors shall have the power to direct (but
shall not be obliged to direct) that any such property that cannot be
conveniently held by the Escrow Trustee shall be sold and the cash
proceeds of such sale dealt with in accordance with this clause.
(2) Any payment of interest earned (including any interest in the form of
debt securities) or dividends received in respect of any assets in an
Escrow Account ("PROFITS") to Eligible Recipients shall only be made by
the Distribution Agent (acting on behalf of the Escrow Trustee) if the
Supervisors have so instructed the Distribution Agent, having first
instructed the Distribution Agent (as agent for the Escrow Trustee) to
retain a reserve in respect of any and all taxes payable by the Escrow
Trustee, or required to be deducted by the Escrow Trustee (whether by
law or by agreement with the Inland Revenue), in respect of such
Profits being distributed.
12. CONDUCT OF TAXATION MATTERS
(1) For the purposes of this clause 12, a "BARE TRUST" is a trust which is
not a settlement for the purposes of section 43 Inheritance Tax ▇▇▇
▇▇▇▇, whereby the trust property is held by the Escrow Trustee for
another person absolutely entitled as against the Escrow Trustee within
the meaning of section 60(2) Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇ and
which is a bare trust for all income tax purposes.
(2) As soon as reasonably practicable after the Effective Date, the Escrow
Trustee shall seek confirmation from the Inland Revenue that the
arrangements constituted by the Corp Scheme, the plc Scheme and this
Agreement result in the Trust Funds being held on bare trust (such
confirmation being a "FAVOURABLE CONFIRMATION"). The Escrow Trustee
shall notify Corp and the Supervisors within 21 days of receipt of a
Favourable Confirmation.
(3) If the Inland Revenue at any time confirms to the Escrow Trustee that
the Trust Funds are not held on bare trust or commences an enquiry into
any tax return submitted on the basis that the Trust Funds are held on
bare trust (an "ADVERSE CONFIRMATION"), the provisions of sub-clauses
(6) and (8) shall apply. If the Inland Revenue declines to give a
Favourable Confirmation, or has not given a Favourable Confirmation
within 3 months of the date on which confirmation was sought under
sub-clause (2) above, but does not give an Adverse Confirmation (a
"NON-CONFIRMATION"), the provisions of sub-clauses (7) and (8) shall
apply.
(4) Unless and until the Escrow Trustee receives or becomes aware of an
Adverse Confirmation or Non-Confirmation, it shall direct the
Distribution Agent to make distributions to Eligible Recipients without
retaining or deducting any amounts on account of tax, save as provided
in sub-clause 11(2). For the avoidance of doubt, nothing in this clause
12 affects the obligations of the Distribution Agent in clause 11(2).
(5) Corp agrees that, if and when it recovers any input value added tax
incurred by it in relation to the issue of New Shares or New Notes
under the Corp Scheme, it shall establish the Escrow Tax Fund as a
separate fund to be applied only in accordance with the following
provisions.
(a) Subject to paragraph (b) below, the Escrow Tax Fund shall only
be used:
29
(i) to make any repayment of the input value added tax
comprising the Escrow Tax Fund for which Corp is
determined or agreed to be liable to HM Customs &
Excise (together with any applicable interest or
penalties) (a "VAT REPAYMENT");
(ii) to meet any Tax Liability (as defined in sub-clause
(8)(d) below) of the Escrow Trustee; or
(iii) to pay any Costs as provided in sub-clause (9).
(b) The Escrow Tax Fund shall be used to meet a VAT Repayment in
priority to a Tax Liability or any Costs (as defined in
sub-clause (9)). If any or all of the Escrow Tax Fund has been
used to meet a Tax Liability or any Costs (as defined in
sub-clause (9)) and is later required to meet a VAT Repayment,
such that there are insufficient sums in the Escrow Tax Fund
to meet Corp's liability to make the VAT Repayment, the
Supervisors hereby direct the Escrow Trustee (which hereby
directs the Distribution Agent) to pay to Corp an amount equal
to the deficiency from the Reserve Corp Scheme Creditors Fund
or the Combined Corp Funds, or the Reserve plc Scheme
Creditors Fund or the Combined plc Funds, as the case may be.
(c) Corp may cease to hold the Escrow Tax Fund as a separate fund,
and its use shall cease to be subject to the restrictions
referred to in paragraph (a) above on the occurrence of any of
the following:
(i) the Escrow Trustee's receipt of a Favourable
Confirmation (including a Favourable Confirmation as
set out in sub-clause (7)(c));
(ii) the determination by a court of competent
jurisdiction from which neither party appeals that
the Scheme Consideration is held on bare trust; or
(iii) after the closure of all the Escrow Accounts as set
out in clause 13, the confirmation by the Escrow
Trustee that it has no further Tax Liability (as
defined in sub-clause (8)(d)) in connection with its
activities as escrow trustee under the Schemes.
(d) For the avoidance of doubt, nothing in this sub-clause (5)
shall require Corp to conduct its tax affairs in a particular
manner, to disclose any information relating to its tax
affairs, or to contest any assessment to value added tax made
by HM Customs & Excise.
(6) This sub-clause applies if the Escrow Trustee receives an Adverse
Confirmation.
(a) The Escrow Trustee shall, within 21 days of receiving the
Adverse Confirmation, inform the Supervisors. Unless and until
the Escrow Trustee receives a subsequent Favourable
Confirmation, it shall retain a reserve for any tax liability
it may have on the basis that the Trust Funds are not held on
bare trust, in accordance with sub-clause (8).
(b) The Escrow Trustee shall take reasonable steps to pursue
correspondence with the Inland Revenue to obtain a Favourable
Confirmation.
(c) If, after taking the steps referred to in paragraph (b) above,
the Escrow Trustee is unable to obtain a Favourable
Confirmation, the Escrow Trustee shall take reasonable
30
steps to pursue any available appeal. The Escrow Trustee shall
not be required to take any steps where, in the opinion of the
Supervisors, the cost of undertaking those steps outweighs any
likely benefit or where leading tax counsel has advised either
that an appeal is not likely to succeed or that it would not
be reasonable to pursue an appeal in the light of any
settlement offered.
(d) Until (i) the Adverse Confirmation is upheld by a court of
competent jurisdiction from whose decision the Escrow Trustee
does not appeal, (ii) the Escrow Trustee is not required to
take any further steps in respect of the Adverse Confirmation
in accordance with paragraph (c) above, or (iii) leading tax
counsel advises the Escrow Trustee otherwise, and in so far as
it is able to do so without incurring any penalty, the Escrow
Trustee shall file any tax returns on the basis that the Trust
Funds are held on bare trust. This paragraph is without
prejudice to sub-clause (8) below.
(7) This sub-clause applies if the Escrow Trustee receives or becomes aware
of a Non-Confirmation.
(a) The Escrow Trustee shall, within 21 days of receiving or
becoming aware of the Non-Confirmation, inform the
Supervisors. Unless and until the Escrow Trustee receives a
subsequent Favourable Confirmation, it shall retain a reserve
for any tax liability it may have on the basis that the Trust
Funds are not held on bare trust, in accordance with
sub-clause (8).
(b) The Escrow Trustee shall file any tax returns on the basis
that the Trust Funds are held on bare trust, unless leading
tax counsel advises the Escrow Trustee to file on a different
basis. This paragraph is without prejudice to sub-clause (8)
below.
(c) The agreement by the Inland Revenue of any tax return filed by
the Escrow Trustee on the basis that the Trust Funds are held
on bare trust shall be taken as a Favourable Confirmation.
Where the Escrow Trustee has filed such a tax return and no
notice of enquiry has been issued pursuant to Schedule 18
Finance Act 1998 within the prescribed time period, there
shall be deemed to have been a Favourable Confirmation unless
leading tax counsel advises otherwise.
(d) If at any point the Escrow Trustee receives an Adverse
Confirmation, the provisions of sub-clause (6) will apply.
(8) If the Escrow Trustee receives an Adverse Confirmation or
Non-Confirmation, the Supervisors hereby direct the Escrow Trustee
(which hereby directs the Distribution Agent) to pay or set aside
amounts (taking into account any amounts already paid or set aside
under sub-clause 11(2) and the balance of the Escrow Tax Fund) on
account of any tax payable by the Escrow Trustee (on the assumption
that the Trust Funds are not held on bare trust) in respect of (i)
assets or income comprising distributions to Scheme Creditors which
have already been made ("PAST TAX LIABILITY"), and (ii) distributions
of assets or income comprising distributions to Scheme Creditors which
have not yet been made ("FUTURE TAX LIABILITY") in the following
manner:
(a) If the Supervisors have not terminated the Waiting Period in
accordance with clause 24 of the Corp Scheme, or clause 24 of
the plc Scheme as the case may be, the Distribution Agent
shall set aside amounts from the Reserve Corp Scheme Creditors
Fund or the combined Unadmitted Known Corp Scheme Creditors
Fund and Reserve Corp Scheme Creditors Fund (the "COMBINED
CORP FUNDS") or from the Reserve plc Scheme Creditors Fund or
the combined Unadmitted Known plc Scheme Creditors
31
Fund and Reserve plc Scheme Creditors Fund (the "COMBINED PLC
FUNDS"), as the case may be:
(i) in the case of amounts in respect of the Past Tax
Liability, forthwith after the receipt by the Escrow
Trustee of the Adverse Confirmation or
Non-Confirmation; and
(ii) in the case of amounts in respect of a Future Tax
Liability, at the time at which the distribution to
which that liability relates is made. If, however, at
that time the Supervisors have terminated the Waiting
Period as set out above, amounts in respect of a
Future Tax Liability shall be retained as provided
for in paragraph (b)(ii) below.
(b) If the Supervisors have terminated the Waiting Period as set
out in paragraph (a) above or decide to do so as a result of
the operation of this sub-clause (8),
(i) amounts shall be set aside in respect of the Past Tax
Liability from the Combined Corp Funds or the
Combined plc Funds, as the case may be, forthwith
after the receipt by the Escrow Trustee of the
Adverse Confirmation or Non-Confirmation; and
(ii) amounts in respect of any Future Tax Liability shall
be retained by the Distribution Agent out of the
distribution to which that liability relates.
(c) The quantum of any amounts set aside or retained pursuant to
this sub-clause (8) shall be directed by the Supervisors.
(d) Any amounts which are determined or agreed to be payable on
account of any tax liability of the Escrow Trustee (a "TAX
LIABILITY") shall be met out of the following amounts and in
the following priority:
(i) in the first instance, out of amounts already paid or
set aside under sub-clause 11(2);
(ii) secondly, out of the Escrow Tax Fund; and
(iii) thirdly, out of any amounts set aside in accordance
with this sub-clause (8),
Corp hereby agrees to make any payments necessary pursuant to
the operation of this paragraph from the Escrow Tax Fund to
the Escrow Trustee. The Supervisors hereby direct the Escrow
Trustee (which hereby directs the Distribution Agent) to pay
any amounts to be paid in accordance with paragraphs (i) and
(iii) above in satisfaction of its Tax Liability.
(e) To the extent that any amounts set aside pursuant to this
sub-clause (8) are not, in the event, required to meet a Tax
Liability, or, in the case of any amounts paid in satisfaction
of a Tax Liability, are subsequently repaid by the Inland
Revenue, then such amounts shall be dealt with as follows and
in the following order of priority:
(i) where an amount has been retained and/or paid out of a
distribution made to an Eligible Recipient pursuant to
paragraph (b)(ii) above, an equivalent sum shall be
paid to that Eligible Recipient;
32
(ii) where an amount has been set aside and/or paid from
the Reserve Corp Scheme Creditors Fund or the Combined
Corp Funds, or the Reserve plc Scheme Creditors Fund
or the Combined plc Funds, an equivalent sum shall be
returned to that fund (or any fund into which the
contents of that fund have been transferred pursuant
to this Agreement); and
(iii) where an amount has been paid from the Escrow Tax
Fund, an equivalent sum shall be returned to that
fund,
unless Corp has made a payment to the Escrow Trustee pursuant
to sub-clause (10) (an "INDEMNITY PAYMENT"), in which case the
amounts shall first be paid over to Corp to the extent of such
Indemnity Payment.
(9) The cost of any steps taken pursuant to this clause 12 ("COSTS") shall
be met first out of the Escrow Tax Fund and subsequently:
(a) before the end of the Waiting Period, out of the Reserve Corp
Scheme Creditors Fund, or from the Reserve plc Scheme
Creditors Fund as the case may be; and
(b) after the end of the Waiting Period, out of the Combined Corp
Funds or the Combined plc Funds, as the case may be.
(10) Clause 9(4) of this Agreement shall not apply to any Tax Liability or
any Costs of the Escrow Trustee and instead the following provisions
shall apply:
(a) Corp shall indemnify (on an after tax basis) the Escrow
Trustee against any Tax Liability or any Costs (whether
arising in relation to the Corp or plc Scheme) insofar as such
Tax Liability or Costs cannot be met out of amounts retained
for the purpose pursuant to sub-clause 11(2) or this clause
12. For the purposes of this sub-clause, a Tax Liability
includes any interest or penalties thereon.
(b) The Escrow Trustee shall promptly give notice to Corp if it
appears to it that it may incur or suffer a potential Tax
Liability. It shall demonstrate to Corp's reasonable
satisfaction the extent to which (if at all) such Tax
Liability or any Costs cannot be met out of the amounts
referred to in paragraph (a) above.
(c) If it appears that Corp may be obliged to make payment to the
Escrow Trustee in accordance with this sub-clause, Corp shall
be entitled to resist the Tax Liability in the name of the
Escrow Trustee and have the conduct of any proceedings
relating to that Tax Liability, having indemnified the Escrow
Trustee against all charges, costs and expenses which it might
incur in resisting the Tax Liability.
13. TERMINATION
(1) Promptly after each Escrow Account ceases to have any cash or
securities credited to it, the Escrow Trustee shall, subject to
obtaining the prior consent of the Supervisors, arrange for that Escrow
Account to be closed.
(2) Once all of the Escrow Accounts have been closed and the Distribution
Agent's obligations fulfilled, the trusts set out in this Agreement
shall be wound up.
(3) Upon closure of all of the Escrow Accounts in accordance with the terms
of this Agreement, each of the Escrow Trustee, the Distribution Agent
and Bondholder Communications shall
33
have no further duties, responsibilities or obligations hereunder save
for such obligations as may have arisen prior to such closure, which
obligations have not as at the time of such closure been fulfilled or
discharged.
14. REPRESENTATIONS AND WARRANTIES
(1) Each of the parties to this Agreement represents and warrants to each
of the others that it has the capacity, power and authority to enter
into this Agreement and that the obligations assumed by it (if any) are
legal, valid and binding obligations on it.
(2) Each of the parties to this Agreement represents and warrants to each
of the others that neither the execution by it of, nor the performance
by it of its respective obligations (if any) in accordance with the
terms of, this Agreement will:
(a) so far as that party is aware, violate or conflict with, or
constitute a default under, any agreement or other obligation
to which that party is subject or by which it is bound; or
(b) so far as that party is aware, contravene or conflict with or
constitute a violation of any provision of any law, rule,
regulation, judgement, order or decree which is binding on it.
(3) Each of the parties to this Agreement represents and warrants to each
of the other parties that it has obtained the power, capacity and
authority to execute, and perform its respective obligations (if any)
in accordance with the terms of, this Agreement.
(4) Corp represents and warrants to each of the other parties to this
Agreement that the Escrow Trustee has not carried on any business since
the date of its incorporation to the date of this Agreement.
15. EXCLUSION OF PERSONAL LIABILITY
Nothing in this Agreement shall impose any personal liability on the
Supervisors or either of them but without prejudice to the Supervisors
obligations under the Schemes. This clause is without prejudice to the
provisions of clause 16.
16. EXCLUSION OF LIABILITY
(1) None of the Supervisors, the Escrow Trustee, the Distribution Agent and
Bondholder Communications (and their related parties (if any),
delegates and agents appointed pursuant to the provisions of the
Schemes) shall have any liability in respect of or arising from making
the determinations or exercising any of the powers or performing any of
the duties provided for in the Scheme or this Agreement or any matter
relating to such determinations, powers or duties (including, without
limitation, any payment made or not made to any person), other than as
a direct consequence of its own wilful default, misfeasance, breach of
duty or negligence (or that of its related parties (if any), delegates
or agents). For the purpose of this clause 16, "RELATED PARTIES" means
any partner in the same firm as the Supervisors, or any person
employed, whether under a contract of service or a contract for
services, by that firm or any company owned by that firm.
(2) Neither the Eurobond Trustee nor BoNY (except where it is acting as
Distribution Agent) shall have any liability or any obligations
whatsoever to any person under or pursuant to this Agreement.
34
17. FEES AND EXPENSES
(1) The Escrow Trustee shall be paid fees and expenses for its services
under this Agreement in accordance with the Escrow Trustee Fee Letter.
(2) The Distribution Agent shall be paid fees and expenses for its services
under this Agreement in accordance with the Distribution Agent Fee
Letter.
(3) The fees and expenses referred to in sub-clauses (1) and (2) above
shall be paid by Corp and plc in the proportion agreed between them
without recourse to any of the Trust Funds.
18. FURTHER ASSURANCE
The parties shall do and execute, or procure to be done and executed,
all necessary acts, deeds and documents, including but not limited to
giving the necessary instructions to their solicitors, to effect the
release of the contents of any of the Escrow Accounts in accordance
with any termination of any of them pursuant to clause 13, and shall
provide each other with all necessary mutual support for the purposes
of doing so and giving effect to the terms of this Agreement.
19. FURTHER TERMS AND CONDITIONS
(1) If at any time either the Escrow Trustee or the Distribution Agent is
served with any judicial or administrative order, judgment, decree,
writ or other form of judicial or administrative process which in any
way affects the Escrow Accounts (each a "JUDICIAL NOTICE"), the Escrow
Trustee or, as the case may be, the Distribution Agent may comply
therewith in any manner as it or legal counsel of its choosing deems
appropriate; provided that, if reasonably practicable, it shall notify
Corp and/or plc (as the case may be) of such Judicial Notice received
and shall use its best efforts to discuss the manner in which it
proposes to comply with that Judicial Notice with Corp and/or plc prior
to doing so. If the Escrow Trustee or, as the case may be, the
Distribution Agent complies with any Judicial Notice, it shall not be
liable to any other person or entity even though such Judicial Notice
may be subsequently modified or vacated or otherwise determined to have
been without legal force or effect.
(2) The Distribution Agent shall provide the Escrow Trustee and the
Supervisors with monthly statements identifying the transactions,
charges (if any) and Profits earned on the Escrow Accounts and
undistributed balances of the Escrow Accounts.
(3) Subject to the provisions of sub-clause (4), the Distribution Agent may
resign at any time by giving to the other parties not less than 90
days' prior written notice.
(4) If the Distribution Agent has given notice of resignation as provided
in sub-clause (5), the Escrow Trustee shall promptly appoint a
successor Distribution Agent. A successor Distribution Agent shall
deliver a written acceptance of its appointment to the retiring
Distribution Agent and the Escrow Trustee. A resignation of the
Distribution Agent shall not become effective until a successor
Distribution Agent is appointed. The retiring Distribution Agent shall
ensure that the successor Distribution Agent becomes the custodian of
the Escrow Accounts and the successor Distribution Agent shall have all
the rights, powers and duties of the Distribution Agent under this
Agreement.
(5) No variation or amendment may be made to any provision in this
Agreement that would have the effect of altering or extinguishing the
entitlement of any Admitted Scheme Creditor or
35
Designated Recipient unless consented to by that Admitted Scheme
Creditor or Designated Recipient.
(6) None of the parties to this Agreement shall be in breach of its
obligations (if any) under this Agreement as a result of any delay or
non-performance of its obligations (if any) under this Agreement
arising from any Force Majeure.
20. COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
21. NOTICES
(1) Any notice or other document to be served under this Agreement may be
delivered or sent by post or facsimile process to the party to be
served as follows:
(a) to Corp at: (b) to plc at:
Marconi Corporation plc Marconi plc
New Century Park New Century Park
▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇
Coventry Coventry
Warwickshire Warwickshire
CV3 1HT ▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
Marked for the attention of The Marked for the attention
Company Secretary, of The Company Secretary,
(c) to the Distribution Agent and (d) to the Eurobond Trustee
BoNY at: at:
The Bank of New York The Law Debenture Trust
One Canada Square Corporation p.l.c.
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
Marked for the attention of Marked for the attention
Corporate Trust Administration, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
(e) to Ancrane at: (f) to Bondholder
Ancrane Communications at:
New Century Park Bondholder Communications
▇▇ ▇▇▇ ▇▇ Group
Coventry ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: + ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇ Marked for the attention
Marked for the attention of The of ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Company Secretary,
36
(g) to the Supervisors at: (h) to the Escrow Trustee at:
KPMG Regent Escrow Limited
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ Fax: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Marked for the attention of Marked for the attention
▇▇▇▇▇▇▇ ▇▇▇▇, of the Company Secretary,
or at such other address or facsimile number as it may have notified to
the other parties in accordance with this clause. Any notice or other
document sent by post shall be sent by prepaid first class post (if
within the United Kingdom) or by prepaid airmail (if elsewhere).
(2) In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted (either by prepaid first
class post or by prepaid airmail, as the case may be) or that the
facsimile message was properly addressed and despatched, as the case
may be.
22. THIRD PARTY RIGHTS
(1) The parties to this Agreement agree that wherever in this Agreement a
right is specifically expressed to be given to (or an undertaking is
expressed to be in favour of) a person (being a Scheme Creditor
(including a Definitive Holder) or a Designated Recipient) who is not a
party to this Agreement, such language is intended to confer benefits
on that person thereby granting to him rights capable of being enforced
by him separately under the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇. Subject as stated in the previous sentence, a person who is not a
party to this Agreement may not enforce any of its terms under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
(2) Nothing in sub-clause (1) above shall confer a right on any Designated
Recipient to disturb a prior Distribution under either Scheme, whether
on the grounds that there remains insufficient Scheme Consideration to
satisfy that Designated Recipient's entitlement to any part of a
Distribution pursuant to the direction given in clause 7 or, as the
case may be, clause 8 or otherwise.
23. GOVERNING LAW AND JURISDICTION
This Agreement is governed by, and shall be construed in accordance
with, the laws of England. Each party irrevocably agrees that the
courts of England are to have exclusive jurisdiction to settle any
dispute which may arise out of or in connection with this Agreement and
that accordingly any suit, action or proceedings arising out of or in
connection with this Agreement (together referred to as "PROCEEDINGS")
may be brought in such courts. Each party irrevocably waives any
objection which it may have now or hereafter to the laying of the venue
of any Proceedings in the courts of England and any claim that any
Proceedings have been brought in an inconvenient forum. Each of the
Bank of New York (in its capacity as both the Distribution Agent and
the Yankee Bond Trustee) and Bondholder Communications appoint the
General Manager at the London branch of The Bank of New York and the
Manager at the London branch of Bondholder Communications,
respectively, as its agent for service of process in England in respect
of any Proceedings and each undertakes that in the event of such agent
ceasing so to act it will appoint another person as its agent for
37
that purpose. Nothing in this Agreement shall affect the right to serve
process in any other manner permitted by law.
IN WITNESS of which this Agreement has been executed as a deed and has been
delivered on the date which appears first on page 1.
38
SCHEDULE 1
FORM OF ACCESSION LETTER
[to be amended as appropriate if the plc Scheme does not become effective]
[Effective Date] 2003
BY FACSIMILE AND BY POST
To: Marconi Corporation plc
Marconi plc
Regent Escrow Limited
Ancrane
The Bank of New York
The Law Debenture Trust Corporation p.l.c.
Bondholder Communications Group
c/o Marconi Corporation plc
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax No.: ▇▇▇ ▇▇▇▇ ▇▇▇▇
Dear Sirs,
MARCONI CORPORATION PLC:
SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 (THE "CORP
SCHEME") MARCONI PLC:
SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 (THE "PLC
SCHEME" AND, TOGETHER WITH THE CORP SCHEME, THE "SCHEMES")
We refer to the Escrow and Distribution Agreement (the "AGREEMENT") dated 27th
March, 2003 between yourselves and confirm that we have been appointed today by
the High Court of England and Wales as the Supervisors of each of the Schemes.
Accordingly, we both jointly and severally agree to become a party to, and be
bound by the terms of, the Agreement from the date of this Accession Letter and
hereby accede to the Agreement in accordance with clause 2(4) thereof. We both
intend that this Accession Letter shall take effect as a deed poll for the joint
and several benefit of each of the addressees of this Accession Letter.
We may each sign a counterpart of this Accession Letter, both of which taken
together shall constitute one and the same instrument. If one of us does not
sign this Accession Letter, this shall not affect the validity of this Accession
Letter with respect to the Supervisor who has signed it.
Capitalised terms used in this Accession Letter shall have the same meaning
given to them in the Agreement.
39
IN WITNESS whereof this Accession Letter has been entered into as a deed poll by
both of us on the date first set out above.
SIGNED as a deed by )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, without )
personal liability in his )
capacity as a Supervisor )
of the Schemes, in the presence of: )
Witness's signature: ___________________________________
Name: ___________________________________
Address: ___________________________________
___________________________________
SIGNED as a deed by )
▇▇▇▇▇▇▇ ▇▇▇▇, without )
personal liability in his )
capacity as a Supervisor )
of the Schemes, in the presence of: )
Witness's signature: ___________________________________
Name: ___________________________________
Address: ___________________________________
___________________________________
40
SCHEDULE 2
FORM OF ANCRANE DIRECTION LETTER
[LETTERHEAD OF ANCRANE]
To: Marconi plc
New Century Park
▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
("PLC")
Marconi Corporation plc
New Century Park
▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
("CORP")
[date], 2003
Dear Sirs,
ESCROW AND DISTRIBUTION AGREEMENT - DIRECTIONS OF ANCRANE
1. We refer to the escrow and distribution agreement (the "ESCROW
AGREEMENT") entered into on 27th March, 2003 between, inter alios, plc,
Corp and Ancrane (the "COMPANY"). Except as otherwise provided in this
letter, capitalised terms in this letter shall have the meaning
ascribed to them in the Escrow Agreement and where there is a conflict,
the definition in this letter shall prevail.
2. It is proposed that Corp and plc will each enter into a scheme of
arrangement whereby, under the plc Scheme, the Scheme Claims of plc
Scheme Creditors against plc will be compromised in exchange for a
distribution of plc's assets pursuant to the plc Scheme and, under the
Corp Scheme, the Scheme Claims of Corp Scheme Creditors against Corp
will be compromised for a distribution of cash, new equity and new debt
securities of Corp pursuant to the Corp Scheme.
3. The Company has repaid capital in specie, being all of its assets other
than L 100, to plc as contemplated in the scheme implementation deed
(the "SCHEME IMPLEMENTATION DEED") entered into on 27th March, 2003
between, inter alios, plc, Corp and the Company. The Company is a
Scheme Creditor of Corp for the purpose of the Corp Scheme and is also
entitled to Corp Scheme Consideration and plc Scheme Consideration by
virtue of its holding of Bonds.
41
4. (a) The Company hereby irrevocably directs Corp to deliver to plc
any Scheme Consideration (as defined in the Corp Scheme) to
which the Company is entitled pursuant to the Claim Form
filed by it in the Corp Scheme. This delivery is being
directed in connection with the repayment of capital in specie
to plc contemplated by the Scheme Implementation Deed.
(b) The Company hereby irrevocably authorises and directs each of
the Eurobond Trustee, BoNY, the Escrow Trustee and the
Supervisors to direct the Distribution Agent to pay all Corp
and plc Scheme Consideration to which it is entitled by virtue
of its holding of Bonds to plc. This delivery is being
directed in connection with the repayment of capital in specie
to plc contemplated by the Scheme Implementation Deed.
5. This letter may be executed in one or more counterparts, each of which
will be deemed an original and all of which will constitute one and the
same letter.
6. In the event that any provision of this letter is void and
unenforceable by reason of any applicable law, it shall be deleted and
the remaining provisions of this letter shall continue in full force
and effect, and if necessary be so amended as necessary to give effect
to the spirit of this letter so far as possible.
7. This letter will be governed by, and construed in accordance with,
English law. Each party irrevocably submits to the jurisdiction of the
English courts for all purposes relating to this letter.
If you agree with the above, please sign where indicated below.
Yours faithfully
______________________________________ Date:
For
ANCRANE
Authorised Signatory
Copy: Regent Escrow Limited ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇
New Century Park ▇/▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Coventry ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇
The Law Debenture Trust The Bank of New York
Corporation p.l.c. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
42
FORM OF ACKNOWLEDGEMENT
We hereby agree with the above letter and will carry out the directions of
Ancrane as set out in the above letter.
______________________________________ Date:
For
MARCONI PLC
Authorised Signatory
______________________________________ Date:
For
MARCONI CORPORATION PLC
Authorised Signatory
43
SCHEDULE 3
FORM OF INSTRUCTION LETTER TO THE REGISTRARS
To: Computershare Investor Services PLC
▇.▇. ▇▇▇ ▇▇
The Pavilions
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Dear Sirs,
MARCONI CORPORATION PLC:
SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 (THE "CORP
SCHEME") MARCONI PLC:
SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 (THE "PLC
SCHEME" AND, TOGETHER WITH THE CORP SCHEME, THE "SCHEMES")
Pursuant to the terms of the Schemes and the Escrow and Distribution Agreement
(the "AGREEMENT") dated 27th March, 2003 between, among others, Marconi
Corporation plc, Marconi plc, Regent Escrow Limited, Bondholder Communications
Group, The Bank of New York, The Law Debenture Trust Corporation p.l.c. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ (in their capacity as Supervisors of the
Schemes), we are giving this Letter of Instruction to you as Corp's share and
warrant registrars. Capitalised terms used in this Letter of Instruction shall
have the same meaning given to them in the relevant Scheme and the Agreement.
We hereby direct you as follows:
1. Each plc Shareholder on the register of members shall receive one New
Share and such additional New Shares and Warrants as provided below.
2. The allocation of New Shares and Warrants to plc Shareholders shall be
calculated as provided in clause 31(3) of the Corp Scheme.
3. Except as provided in paragraph 4, final allocations of New Shares and
Warrants shall be distributed by you to the plc Shareholders as
follows:
3.1 You shall transfer to your CREST securities account or that of your
subsidiary which will operate the Corporate Nominee, such number of New
Shares and Warrants as are allocated to plc Shareholders who hold share
certificates in respect of plc Shares, are aged 18 or more and have a
registered address in the United Kingdom, Channel Islands, Isle of Man
or Ireland.
3.2 You shall transfer to the relevant plc Shareholders' CREST securities
accounts by means of a USE message in CREST, such number of New Shares
and Warrants as are allocated to plc Shareholders who hold their
interests in plc Shares in CREST.
3.3 You shall issue new certificates to the relevant holders of the
remainder of the New Shares and Warrants within five business days of
the date of this Letter of Instruction.
3.4 All such transfers and issues shall be effected in such a way as not to
incur stamp duty or stamp duty reserve tax.
44
4. Clauses 31(6) and (7) of the Corp Scheme shall apply in respect of plc
Shareholders in certain jurisdictions and you will perform the
responsibilities of the Registrars as referred to therein.
5. Following the issuance by the Supervisors of a Distribution Notice
under one or both of the Schemes, the Escrow Trustee will procure that
the Distribution Agent (on its behalf) transfers sufficient New
Creditor Shares to you. Based on specific instructions given to you by
the Escrow Trustee in relation to each such Distribution Notice, we
hereby direct you as follows:
5.1 You shall transfer any New Creditor Shares to the CREST accounts
designated in Claim Forms and in those Account Holder Letters which
specify that New Creditor Shares are to be delivered in this manner by
issuing USE instructions.
5.2 You shall issue and post any share certificates to the persons
identified as receiving such in Claim Forms and the Account Holder
Letters.
6. This letter shall be governed by English law.
Yours faithfully,
By:___________________________________ By:________________________________
For and on behalf of For and on behalf of
Regent Escrow Limited Marconi Corporation plc
(as Escrow Trustee)
By:___________________________________
For and on behalf of
The Bank of New York
(as Distribution Agent)
45
SIGNATORIES
EXECUTED as a deed )
by MARCONI CORPORATION PLC, ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
acting by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ) director
and ▇▇▇▇ ▇▇▇▇▇▇ )
) ▇▇▇▇ ▇▇▇▇▇▇
secretary
EXECUTED as a deed )
by MARCONI PLC, ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
acting by ▇▇▇▇▇▇▇ ) director
▇▇▇▇▇▇ and )
▇▇▇▇ ▇▇▇▇▇▇ ) ▇▇▇▇ ▇▇▇▇▇▇
secretary
EXECUTED as a deed )
by REGENT ESCROW LIMITED, ) ▇▇▇▇ ▇▇▇▇▇▇
acting by ▇▇▇▇ ▇▇▇▇▇▇ and ) director
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
director
EXECUTED as a deed )
by THE BANK OF NEW YORK, )
acting by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
acting on the authority of that )
company in the presence of: )
Witness's signature: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
46
The COMMON SEAL of )
THE LAW DEBENTURE ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
TRUST CORPORATION p.l.c. ) authorised signatory
was affixed to this ) [SEAL AFFIXED]
deed in the presence of: )
)
▇▇▇▇▇▇ ▇▇▇▇
authorised signatory
EXECUTED as a deed )
by BONDHOLDER )
COMMUNICATIONS GROUP, ) ▇▇▇▇▇▇ ▇▇▇▇▇
acting by ▇▇▇▇▇▇ ▇▇▇▇▇ ) President
acting on the authority of that )
company in the presence of: )
Witness's Signature: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
EXECUTED as a deed )
by ANCRANE, ) ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
acting by ▇▇▇▇▇▇▇▇▇▇▇ ) director
HOLDEN and ▇▇▇▇ )
▇▇▇▇▇▇ )
▇▇▇▇ ▇▇▇▇▇▇
secretary