CONFORMED COPY
FACILITIES AGREEMENT
(dated 2 March 1998 and as amended on 3 March 1998,
21 April 1998, 19 May 1998, 28 May 1998 and 16 July 1998)
for
(pound)3,625,000,000 Credit Facilities
TU Finance (No. 1) Limited (1)
TU Finance (No. 2) Limited (2)
TU Acquisitions PLC
Chase Manhattan plc (3)
▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Joint Lead Arrangers
The Chase Manhattan Bank (4)
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Underwriters
The Chase Manhattan Bank (5)
as Issuing Bank
Chase Manhattan International Limited (6)
as Facility Agent
Chase Manhattan International Limited (7)
as Security Agent
For the Primary Borrower For the Facility Agent
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
London London
CONTENTS
1. PURPOSE AND DEFINITIONS...............................................1
2. THE COMMITMENTS......................................................28
3. THE CONDITIONS.......................................................29
4. ADVANCES UNDER THE FACILITIES........................................30
5. INTEREST AND INTEREST PERIODS........................................37
6. REPAYMENT, PREPAYMENT, CANCELLATION AND REDUCTIONS...................40
7. FEES AND EXPENSES....................................................43
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS........................45
9. REPRESENTATIONS AND WARRANTIES.......................................50
10. POSITIVE UNDERTAKINGS................................................55
11. NEGATIVE UNDERTAKINGS................................................62
12. EVENTS OF DEFAULT....................................................71
13. INDEMNITIES..........................................................76
14. UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES............78
15. SET-OFF AND PRO-RATA PAYMENTS........................................81
16. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES.........................83
17. FACILITY AGENT AND SECURITY AGENT....................................87
18. POWERS ..............................................................90
19. DUTIES ..............................................................94
20. EXONERATION..........................................................96
21. ENFORCEMENT AND RECOVERIES..........................................102
22. DETERMINATION OF MATTERS............................................103
23. BASIS OF DECISIONS..................................................105
24. MATTERS CONCERNING THE BORROWERS....................................107
25. NOTICES AND OTHER MATTERS...........................................109
26. GOVERNING LAW AND JURISDICTION......................................112
Schedule 1
The Banks and their Commitments..............................................113
Schedule 2
Forms of Drawdown Notice.....................................................114
Schedule 3
Conditions Precedent.........................................................117
Schedule 4
Calculation of Additional Cost...............................................121
Schedule 5
Form of Substitution Certificate.............................................123
Schedule 6
Form of Accession Certificate................................................127
Schedule 7
Terms of Borrowers' Indemnity................................................129
Schedule 8
Terms of Interbank Guarantee and Indemnity...................................132
Schedule 9...................................................................134
Projects which may be financed under clause 11.1(g)(iii).....................134
THIS AGREEMENT is made the 2nd day of March 1998
BETWEEN:
(1) TU Finance (No. 1) Limited (a company registered in England and Wales with
company number 3505836) as Primary Borrower and the initial Permitted
Borrower;
(2) TU Finance (No. 2) Limited a company registered in England and Wales with
company number 3514100 ("▇▇▇▇▇ 2") and TU Acquisitions PLC, a company
registered in England and Wales with company number 3455523 ("Bidco");
(3) Chase Manhattan plc, ▇▇▇▇▇▇ Brothers International (Europe) and ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Corporation as joint lead arrangers (the "Arrangers");
(4) The Chase Manhattan Bank, ▇▇▇▇▇▇ Commercial Paper Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital Corporation as the original Banks (the "Underwriters");
(5) The Chase Manhattan Bank as the initial Issuing Bank;
(6) Chase Manhattan International Limited as the initial Facility Agent; and
(7) Chase Manhattan International Limited as the initial Security Agent.
IT IS AGREED as follows:
1. PURPOSE AND DEFINITIONS
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to which
the Banks agree, according to their several obligations, to make available:
(a) Acquisition Facility and Interim Facility
to the Primary Borrower, an Acquisition Facility in Sterling of up to
(pound)1,775,000,000 and an Interim Facility in Sterling of up to
(pound)1,150,000,000, each to be used for the purposes of on-lending to
▇▇▇▇▇ 2 by way of debt bearing interest at a rate at least equivalent to
the Facilities, to be, in turn, on-lent to Bidco in order to assist Bidco
in the financing or refinancing of the following (but only after the Offer
is declared or becomes unconditional in all respects as permitted by this
Agreement):
(i) any consideration payable by Bidco to shareholders of the Target in
respect of open market purchases of Target Shares;
(ii) the acquisition of Target Shares by Bidco pursuant to the Offer;
(iii) fees and expenses of the Primary Borrower and Bidco in relation to
the Offer, and/or out of pocket expenses of the Parent (up to an
amount reasonably satisfactory to the Arrangers), in relation to the
Offer;
(iv) the consideration payable pursuant to the operation by Bidco of the
procedures contained in sections 428 - 430 of the Companies ▇▇▇
▇▇▇▇;
(v) the consideration payable to share option holders in the Target
pursuant to any relevant offer to them by Bidco to purchase or
cancel such share options; and
(vi) in payment to the Parent of the Excess Equity Funding (if any);
(vii) paying amounts due to Loan Note Holders if the Loan Note Facility
comes into existence or in funding the Loan Note Collateral Account
with the principal amount of the Loan Note Obligation if the Loan
Note Facility does not come into existence;
(b) Revolving Credit Facility
to the Primary Borrower and (subject to accession to this Agreement under
clause 24) the Permitted Borrowers, a Revolving Credit Facility in Sterling
(and in the case of Letters of Credit, such other currencies as are
permitted by this Agreement) of up to (pound)700,000,000 to be used for the
purpose of refinancing certain of the Target Group's Borrowed Money, for
the Target Group's general corporate purposes, to the Primary Borrower for
payment of interest on the Advances drawn by the Primary Borrower falling
due not more than 6 months after the Unconditional Date, for the issue of
Letters of Credit by the Issuing Bank and, in part, for the REC's general
corporate purposes as provided in clause 24.5. For the avoidance of doubt,
the Revolving Credit Facility will not be available for the financing or
refinancing of the Acquisition.
No amounts borrowed under any of the Facilities may be used, directly or
indirectly, to repay or refinance the minimum equity contribution referred to in
paragraph (c) of Part B of Schedule 3 or otherwise make payments to the Parent
or any of its Affiliates (except the Primary Borrower and its Subsidiaries),
other than (i) to pay certain out of pocket expenses of the Parent in accordance
with clause 1.1(a)(iii) above and (ii) as contemplated in clause 1.1(a)(vi)
above.
1.2 Definitions
In this Agreement, unless the context otherwise requires:
"Accession Certificate" means an accession certificate (by way of deed) in
the form or substantially the form of schedule 6 and entered into or to be
entered into by a Permitted Borrower as an acceding Borrower and the
Facility Agent;
"Acquisition" means the acquisition by Bidco of the Target Shares whether
pursuant to the Offer or pursuant to the procedures contained in Part XIIIA
of the Act or by way of open market purchases (and includes where the
context admits payments by Bidco to the Target's share option holders to
purchase or cancel the benefit of such options);
"Acquisition Advance" means each borrowing under the Acquisition Facility
(and all advances made under the Loan Note Facility shall be deemed to be
Acquisition Advances) or (as the context requires) the principal amount of
that borrowing outstanding at any relevant time;
"Acquisition Facility" means the facility granted by the Banks under clause
2.1(a);
"Acquisition Facility Repayment Date" means each of the scheduled repayment
dates for the Acquisition Facility referred to in clause 6.1;
"Act" means the Companies ▇▇▇ ▇▇▇▇;
"acting in concert" has the meaning given to that term in the Code;
"Additional Cost" means, in relation to any period, a percentage calculated
for such period at an annual rate determined in accordance with schedule 4;
"Adjusted Share Capital and Reserves" means the aggregate of the following
items namely:
(a) the nominal amount of the share capital of ▇▇▇▇▇ 2 for the time being
issued and paid up or credited as paid up;
(b) the amounts standing to the credit of the consolidated reserves of the
Group (including any share premium account and capital redemption
reserve),
but adjusted, to the extent that the following items have not already been
added, deducted or excluded in arriving at the figures referred to in (a)
or (b) above:
(c) by deducting the amounts standing to the debit of the consolidated
reserves of the Group;
(d) by deducting any amounts attributable to interests of non-Group
members in Group Subsidiaries;
(e) by deducting any reserves set aside for deferred taxation;
(f) by deducting the amount by which the net book value of any fixed asset
has been written up after the date of this Agreement (or, in the case
of a person becoming a member of the Group after that date, the date
on which it becomes a member of the Group) by way of revaluation or on
its transfer from one member of the Group to another (but no such
deduction shall be made if the amount of this write up is supported by
and does not exceed the amount shown by an independent written
valuation);
(g) by deducting any amounts attributable to the consolidation of the
assets and liabilities of Project Finance Subsidiaries or, if the
value of such Project Finance Subsidiaries is represented by
`investment in subsidiaries' (or other investments) in the books of
their relevant holding companies, deducting the amount of such
investment;
(h) by deducting the amount of any outstanding loan or guarantee to
Project Finance Subsidiaries (to the extent not deducted under
paragraph (g) above);
(i) by adding back (aa) to capital reserves, goodwill written off by
reason of the Acquisition and (bb) to cumulative revenue reserves, any
goodwill arising on the Acquisition and subsequently amortised through
the profit and loss account;
but so that no amount to be added, deducted or excluded as a result of any
of the foregoing shall be added, deducted or excluded more than once in the
same calculation and, where the calculation is being made as at the end of
a Test Period, each such amount shall be determined
by reference to the most recent financial statements and compliance
certificates delivered hereunder as adjusted pursuant to the provisions of
clause 10.3(c);
"Advance" means any Acquisition Advance, Interim Advance or Revolving
Advance and, as the context requires, includes the making of any of the
same or the amount of the same which is outstanding at any relevant time;
"Affected Bank" has the meaning given to it in clause 14.4;
"Affiliate" means, in relation to any person, any Subsidiary or subsidiary
undertaking (as defined in section 258 of the Act) of that person, any
holding company of that person and any other Subsidiary or subsidiary
undertaking of that holding company;
"Agreed Projections" means the projections for the Group dated 2 March 1998
as amended by the supplemental projections of 3 March 1998, both in the
agreed form as further amended by projections dated 31 March 1998 and
revised projections issued on 8 April 1998;
"Applicable Fees Rate" means at any time in respect of:
(a) the Acquisition Facility and the Interim Facility, 0.5 per cent per
annum at all times and on the Loan Note Facility, 0.5 per cent per
annum at all times;
(b) the Revolving Credit Facility, 0.375 per cent. per annum;
(c) if the Stand-alone facility referred to in Clause 24.5 is executed,
the figures for the Applicable Fees Rate for the Revolving Credit
Facility shall be 0.5 per cent per annum.
"Applicable Margin" means, at any time, 1.25% per annum or if the most
recent determination of the Leverage Ratio under clause 10.3 shows that the
Leverage Ratio is less than 65%, the rate per annum determined as follows:
Leverage Ratio and not less than: Applicable Margin is:
is less than:
65% 60% 1%
60% - 0.75%
(a) any reduction in the Applicable Margin shall have effect 5 Banking
Days following the date of delivery of any set of audited or
management accounts for a Quarter under clause 10.1(b)(i) and (ii),
together with the financial covenant compliance certificate by the
Primary Borrower referred to in clause 10.1(b)(iii), until (but
excluding) the effective date for any subsequent change in the
Applicable Margin in accordance with this definition;
(b) during the continuance of any Default, any margin reduction under this
definition will not apply, and the Applicable Margin shall be 1.25%;
(c) until Target has become a wholly-owned Subsidiary of Bidco and no
amount is outstanding under the Interim Facility, there shall be no
reduction in the Applicable Margin below 1.25%;
"Appropriate Accounting Principles" means (i) the accounting principles,
policies, standards, practices and bases (being generally accepted in the
United Kingdom), as adopted in the last audited consolidated accounts of
Target published prior to 1 February 1998 or (ii) where any change has been
agreed under clause 10.3(c), such accounting principles, standards,
practices and bases as have been so agreed;
"Arrangers" means Chase Manhattan plc, ▇▇▇▇▇▇ Brothers International
(Europe) and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation;
"Auditors" means Deloitte & Touche L.L.P. or such other internationally
recognised firm of chartered accountants as may be auditors to the Group
for the time being;
"Available Commitment" means, in relation to a Bank and save as otherwise
provided herein:
(a) in respect of the Acquisition Facility at any time, its Commitment in
respect of such Facility at such time less its Contribution to all
outstanding Acquisition Advances at such time;
(b) in respect of the Interim Facility at any time, its Commitment in
respect of such Facility at such time less its Contribution to all
outstanding Interim Advances at such time;
(c) in respect of the Revolving Credit Facility at any time, its
Commitment in respect of such Facility at such time less:
(i) its Contribution to all outstanding Revolving Advances at such
time;
(ii) its Proportion of the Sterling Amount at that time of the
Outstanding Contingent Liabilities under all Letters of Credit
then outstanding; and
(iii) its proportion of any amount paid out by the Issuing Bank under
a Letter of Credit and not yet reimbursed;
"Available Commitment Termination Date" means save as otherwise provided
herein:
(a) in relation to the Revolving Credit Facility, the Final Repayment
Date;
(b) in relation to the Loan Note Facility, the Final Repayment Date; and
(c) in relation to the balance of the Acquisition Facility and the Interim
Facility, the date falling ten months after the date of this
Agreement;
"Available Facility Amount" means, at any time and in respect of any
Facility, the aggregate of the Available Commitments of all the Banks in
respect of such Facility at such time;
"Banking Day" means a day (other than Saturday or Sunday) on which banks
are open for business in London and in New York;
"Banks" means the original banks listed in schedule 1 and includes their
successors in title, assignees and Substitutes;
"Bidco" means TU Acquisitions PLC (company no. 3455523);
"Borrowed Money" includes any Indebtedness of a person in respect of
(without double counting):
(a) borrowed money of that person; or
(b) the principal amount outstanding in respect of any debentures (within
the meaning of Section 744 of the Act) of that person (notwithstanding
that the same are or were issued in whole or in part for a
consideration other than cash) which are not beneficially owned by
another member of the Group; or
(c) the principal amount raised by that person by acceptances (not being
an acceptance in relation to the purchase or sale of goods in the
ordinary course of trading) or under any acceptance credit opened by
any bank or accepting house on behalf of that person; or
(d) receivables sold or discounted to the extent of any potential or
contingent recourse save for recourse for disputed or ineligible debts
or similar rights of recourse typical in a securitisation transaction;
or
(e) the acquisition cost of any asset to the extent payable after the time
of acquisition or possession by the party liable where the deferred
payment is not normal trade credit, is deferred for a period of more
than 90 days or is arranged primarily as a method of raising finance
or financing the acquisition of that asset from or through a bank or
financial institution, except that, if the deferred payment is
amortising, only the amount which remains to be paid shall be taken
into account; or
(f) the nominal amount of any share capital and the principal amount of
any debentures or other indebtedness of any other person, the
redemption or repayment of which is guaranteed or secured by or is the
subject of an indemnity given by that person; or
(g) any fixed or minimum premium payable on final redemption or repayment
of any debenture, share capital or other borrowed moneys falling to be
taken into account under the other paragraphs of this definition; or
(h) any net liability under any Derivative Transactions; or
(i) the capital element of any Finance Leases; or
(j) any amount raised under any other transaction having the commercial
effect of a borrowing or entered into primarily as a means of raising
finance;
but does not include:
(i) items of the type described in paragraphs (a) to (j) (inclusive) above
which are owed by one wholly-owned member of the Group to another
wholly-owned member of the Group; or
(ii) Project Finance Borrowings of Project Finance Subsidiaries;
"Borrowers" means the Primary Borrower as the borrower of the Acquisition
Facility and the Interim Facility, and the Revolving Credit Facility
Borrowers, and "Borrower" means any one of them;
"Cancellation Date" means the earliest of:
(a) the date on which the Offer lapses or is withdrawn, or is referred as
provided for in paragraph c of Appendix 1 of the Press Release;
(b) the date falling six months after the Posting Date, if the Offer has
not become or been declared unconditional in all respects at that
date; and
(c) the seventh day after the date of this Agreement, if the Offer has not
by then been announced;
"Capitalisation" means at any time the aggregate of Adjusted Share Capital
and Reserves and Consolidated Net Borrowings:
"Certain Funds Period" means, in respect of the Acquisition Facility, the
period from the date of this Agreement and ending on the earliest of:
(a) the Cancellation Date;
(b) the date falling fifteen days after the Closing Date, or if prior to
such fifteenth day the procedures under sections 428-430 of the Act
have been implemented, the date which they are completed and all
payments thereunder have been made; and
(c) the date falling seven months after the date of this Agreement;
"Change in Control" shall be deemed to have occurred if:
(a) any person or group of related persons (other than the Parent, any
Subsidiary of the Parent, or any pension, savings or other employee
benefit plan for the benefit of employees of the Parent and/or any
Subsidiary of the Parent) shall have acquired beneficial ownership of
more than 30% of the outstanding Voting Shares of the Parent (within
the meaning of section 13(d) or 14(d) of the Securities Exchange Act
of 1934 of the United States of America, as amended, and the
applicable rules and regulations thereunder); provided that a Change
in Control shall not be deemed to have occurred if such acquisition
has been approved, prior to the Parent Acquisition Date and the date
on which any tender offer for Voting Shares of the Parent was
commenced, by a majority of the Disinterested Directors of the Parent;
or
(b) during any period of 12 consecutive months, commencing before or after
the date of this Agreement, individuals who on the first day of such
period were directors of the Parent (together with any replacement or
additional directors who were nominated or elected by a majority of
directors then in office) cease to constitute a majority of the board
of directors of the Parent;
"Charged Assets" means any property, assets and/or rights over which
security is granted and/or created under any of the Security Documents;
"Closing Date" means the effective date on which the Offer is finally
closed in accordance with the Code;
"Coalco" means, collectively, Citizens Power LLC, a limited liability
company organised in the State of Delaware, Gold Fields Mining Corporation,
a Delaware corporation, Peabody Holding Company Inc, a New York
corporation, Darex Capital Inc, a company incorporated in the Republic of
Panama and Peabody Australia Ltd, a private limited company incorporated in
England and Wales;
"Coalco Disposal Agreement" means the agreement for the sale of Coalco
dated 2 March 1998 entered into between the Target and P&L Coal Holdings
Corporation, a Delaware corporation, in the agreed form;
"Coal Proceeds" means (pound)1,313,950,000;
"Code" means the City Code on Takeovers and Mergers;
"Commitment" means, in relation to a Bank and in respect of any Facility at
any relevant time, the amount set opposite its name in relation to the
relevant Facility in schedule 1 and/or, in the case of a Substitute, the
amount novated in relation to the relevant Facility as specified in the
relevant Substitution Certificate, as reduced, in each case, by any
relevant term of this Agreement;
"Consolidated Net Borrowings" means, at any time, in respect of the Group,
the aggregate of the Borrowed Money of the Group, as shown in the then
latest audited or unaudited consolidated balance sheet of the Primary
Borrower then most recently delivered to the Facility Agent pursuant to
clause 10.1 (the "relevant balance sheet"), less the aggregate book value
(as included in the relevant balance sheet) of:
(a) all Liquid Assets which are freely transferable to the United Kingdom
and which are owned by wholly-owned members of the Group or (in the
case of the Liquid Assets of a member of the Group which is a
partly-owned Subsidiary) the proportion of the total amount for the
time being of Liquid Assets owned by such member which corresponds to
the proportion of the total nominal amount of the issued equity share
capital of such Subsidiary or subsidiary undertaking which is
beneficially owned directly or indirectly by the Primary Borrower
(exclusive of Liquid Assets constituting or representing obligations
of any member or members of the Group); and
(b) in the case of a member of the Group which is a partly-owned
Subsidiary, the proportion of total amounts for the time being
outstanding of Borrowed Money owing by such Subsidiary otherwise than
to the Primary Borrower or another member of the Group which
corresponds to the proportion of the total nominal amount of the
issued equity share capital of such Subsidiary not beneficially owned
directly or indirectly by the Primary Borrower (the "Minority
Proportion");
but adding the aggregate book value (as included in the relevant balance
sheet) of the Minority Proportion of the total amount, if any, for the time
being outstanding of Borrowed Money owing to a partly-owned Subsidiary by
any other member of the Group, and excluding Borrowed Money arising from
the Derivatives Transactions provided for in clause 11.1(b)(x);
"Contribution" means, in relation to a Bank, the principal amount of any or
all (as the context requires) of the Acquisition Advances, the Interim
Advances and/or the Revolving Advances owing to such Bank at any relevant
time;
"Debenture" means a composite guarantee and debenture in the agreed form
creating first fixed and floating charges over all its assets to be entered
into by the Primary Borrower, ▇▇▇▇▇ 2 and Bidco in favour of the Security
Agent;
"Default" means any Event of Default or any event or circumstance which in
the reasonable opinion of the Majority Banks would reasonably be expected,
upon the giving of a notice by the Facility Agent and/or the expiry of the
relevant period and/or the fulfilment of any other condition (in each case
as specified in clause 12.1), to constitute an Event of Default;
"Derivatives Transaction" means a contract, agreement or transaction which
is:
(a) a rate swap, basis swap, forward rate transaction, equity (or equity
or other index) swap or option, bond option, interest rate option,
foreign exchange transaction, cap, collar or floor, currency swap,
currency option or any other similar transaction; and/or
(b) any combination of such transactions,
in each case, whether on-exchange or otherwise;
"Director General" means the person appointed from time to time by the
Secretary of State to hold office as the Director General of Electricity
Supply for the purposes of the Electricity Act;
"Director General of Gas Supply" means the person appointed from time to
time by the Secretary of State to hold office as the Director General of
Gas Supply for the purposes of the Gas Acts 1986 and 1995;
"Disinterested Director" shall mean any member of the Board of Directors of
the Parent who:
(a) is not affiliated, directly or indirectly, with, or appointed by, a
person or group of related persons (other than the Parent, any
Subsidiary of the Parent, or any pension, savings or other employee
benefit plan for the benefit of employees of the Parent and/or any
Subsidiary of the Parent) acquiring the beneficial ownership of more
than 30% of the outstanding Voting Shares of the Parent (within the
meaning of section 13(d) or 14(d) of the Securities Exchange Act of
1934 of the United States of America, as amended, and the applicable
rules and regulations thereunder); and
(b) either was a member of the board of directors of the Parent prior to
the Parent Acquisition Date or was recommended for election by a
majority of the Disinterested Directors in office prior to the Parent
Acquisition Date;
"Distribution Business" means the business of REC, or any successor
undertaking to that business within the Group, in or ancillary to the
distribution (whether for its own account or that of any other party) of
electricity through the Group's distribution system and includes any
business of providing connections to the Group's distribution system;
"double taxation treaty" means any convention or agreement between the
government of the United Kingdom and any other government for the avoidance
of double taxation and the prevention of fiscal evasion with respect to
taxes on income and capital gains;
"Drawdown Date" means the date on which an Advance is, or is to be, made;
"Drawdown Notice" means, in respect of a Facility, a notice substantially
in the terms of the relevant Part of schedule 2;
"EBITDA" means, in respect of any Test Period, the total operating profit
of the Group for continuing operations, acquisitions (as a component of
continuing operations) and discontinued operations before taking into
account (a) interest payable and interest receivable, (b) all amounts
provided for depreciation, and amortisation of goodwill (c) all
extraordinary items, (d) all Taxes, (e) the deduction of any Offer costs in
each case, and (f) any share of consolidated profits or losses which is
attributable to Project Finance Subsidiaries, for that Test Period
(calculated on a consolidated basis disregarding any portion of any item
taken into account in that calculation which is attributable to any
minority interests in Subsidiaries, other than the minority interest in
▇▇▇▇▇ 2) all as determined by reference to the most recent financial
statements and compliance certificates delivered under clause 10.1(b), as
adjusted pursuant to clause 10.3(c);
"Electricity Act" means the Electricity ▇▇▇ ▇▇▇▇;
"Enforcement Date" means the date of the first declaration made by the
Facility Agent pursuant to clause 12.2;
"Environmental Claim" means any claim, prosecution, demand, action,
official warning, abatement, penalty or other order (conditional or
otherwise) arising as a result of or in connection with any Environmental
Matter against any member or former member of the Group or associated
company and including any formal written notification or order requiring
compliance with the terms of any Environmental Licence or Environmental
Law;
"Environmental Laws" means all or any laws, statutes, rules, regulations,
treaties, directives, by-laws, statutory codes of practices, circulars,
guidance notes, orders, notices and demands, decisions of the courts or
anything like any of the foregoing of any Government Entity or any other
body whatsoever in any jurisdiction or the European Union relating to
Environmental Matters and includes the Environmental Protection ▇▇▇ ▇▇▇▇
and the Environment ▇▇▇ ▇▇▇▇;
"Environmental Licence" means any permit, licence, authorisation, consent
or other approval required at any time by any Environmental Law;
"Environmental Matters" means:
(a) the generation, deposit, disposal, escape, keeping, treatment,
transportation, transmission, handling, importation, exportation,
processing, collection, sorting, presence or manufacture of any
"waste" (as defined in the Environmental Protection ▇▇▇ ▇▇▇▇ or in any
other Environmental Laws), or any Relevant Substance which gives rise
to a risk of causing harm to man or any other living organism
supported by the environment, or damaging the environment or public
health or welfare;
(b) nuisance, noise, health and safety at work or elsewhere; and
(c) the pollution, conservation or protection of the environment (both
natural and built) or of man or any living organisms supported by the
environment or any other matter whatsoever affecting the environment
or any part of it;
"Escrow Agreement" means the escrow agreement made between the parties to
the Coalco Disposal Agreement, in the agreed form;
"Euro" means the single currency of participating member states (so
described in any legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency);
"Event of Default" means any of the events or circumstances described in
clause 12.1;
"Excess Equity Funding" means an amount (which shall not exceed the amount
required to be subscribed in cash under paragraph (c) of Part B of Schedule
3), which shall be equal to the aggregate price (which would have been
payable by Bidco to persons accepting the Offer in cash) of Target Shares
acquired by Bidco pursuant to the Share Alternative and in accordance with
clause 6 of the Investment Agreement;
"Expiry Date" means the date stated in a Letter of Credit to be its expiry
date or (if later) the latest date on which demand may be made under it;
"Facilities" means all or any (as the context requires) of the Acquisition
Facility, Interim Facility, Loan Note Facility and the Revolving Credit
Facility and (as the context requires) "Facility" means any of them;
"Facility Agent" means Chase Manhattan International Limited of ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or such other person as may be appointed Facility
Agent for the Banks pursuant to clause 17;
"Facility Office" means, in relation to the Facility Agent, Security Agent
or any Bank, the office identified in Schedule 1 (or, in the case of a
Substitute, at the end of the Substitution Certificate to which it is a
party as a Substitute) or such other office as it may from time to time
select provided written notice thereof has been given by the Facility
Agent, Security Agent or such Bank to the Primary Borrower;
"Fee Letters" means the fee letters referred to in clause 7.1, in the
agreed form, and "Fee Letter" shall mean any one of them;
"Fee Payment Date" means each of the dates falling at three monthly
intervals after the date of this Agreement;
"Final Repayment Date" means the fifth anniversary of the date of this
Agreement;
"Finance Documents" means this Agreement, any L/C-Related Document, each
Drawdown Notice, each Accession Certificate, the Fee Letters, the
Syndication Letter and the Security Documents;
"Finance Lease" means any lease under which a member of the Group is the
lessee which is or should be treated as a finance or capital lease under
the Appropriate Accounting Principles (and includes any hire purchase
contract or other arrangement which is or should be similarly treated);
"Finance Parties" means the Facility Agent, the Issuing Bank, the
Arrangers, the Banks, and the Security Agent and (as the context requires)
"Finance Party" means any one of them;
"Finance Period" means the period from the date of this Agreement until the
date on which the Facility Agent confirms that none of the Finance Parties
and none of the Obligors has any actual or contingent liabilities or
obligations under any of the Finance Documents;
"Financial Covenants" means the financial undertakings in clauses 10.3(a)
and (b);
"Financial Definitions" means the definitions of Adjusted Share Capital and
Reserves, Capitalisation, Consolidated Net Borrowings, EBITDA, Leverage
Ratio, Net Interest Costs and Test Period;
"Gas Framework Agreement" means the agreement dated 1st March 1996 between
British Gas Transco and Eastern Natural Gas (Retail) Limited;
"Generation Business" means the business of the Group in or ancillary to
the generation of electricity (whether for its own account or that of any
other party);
"Government Entity" means and includes (whether having a distinct legal
personality or not) any supra-national, national or local government
authority, regulatory body, central bank, board, commission, department,
division, organ, instrumentality, court or agency and any association,
organisation or institution of which any of the foregoing is a member of or
whose jurisdiction any of the foregoing is subject or in whose activities
any of the foregoing is a participant and (if the context requires) which,
in relation to Environmental Matters, has regulatory or administrative
authority under Environmental Laws;
"Group" means the Primary Borrower and all its Subsidiaries for the time
being (except Project Finance Subsidiaries) save that where the reference
to "Group" is used in respect of the Financial Definitions used in
calculating the Leverage Ratio, "Group" shall mean ▇▇▇▇▇ 2 and all its
Subsidiaries for the time being (except Project Finance Subsidiaries);
"Guarantees" means any guarantees issued by members of the Target Group
under clause 10.6 or Part B of Schedule 3;
"Indebtedness" means any obligation of a person for the payment or
repayment of money, whether as principal or as surety and whether present
or future, actual or contingent;
"Interest Payment Date" means the last day of an Interest Period;
"Interest Period" means in relation to any Acquisition Advance, each period
for the calculation of interest in respect of such Advance ascertained in
accordance with clause 5.2 (or otherwise in this Agreement);
"Interim Advance" means each borrowing under the Interim Facility or (as
the context requires) the principal amount of that borrowing outstanding at
any relevant time;
"Interim Facility" means the facility granted by the Banks under 2.1(b);
"Investment Agreement" means the Investment Agreement in the agreed form
dated on or about the date of this Agreement between the Parent, the
Minority Shareholder, the Primary Borrower, ▇▇▇▇▇ 2 and Bidco as amended by
a Supplemental Agreement between the same parties dated 21 April 1998 and a
further supplemental agreement between the same parties dated on or about
18 May 1998;
"Issue" means with respect to any Letter of Credit, to issue or extend the
expiry of, or to renew or increase the amount of, such Letter of Credit;
and the terms "Issued", "Issuing" and "Issuance" have corresponding
meanings;
"Issue Date" means in relation to a Letter of Credit, the date on which
that Letter of Credit was Issued, or, as the context requires, is to be
Issued under clause 4.3 (Issue of Letters of Credit);
"Issuing Bank" means The Chase Manhattan Bank or any alternative Bank which
has been notified to the Primary Borrower by the Facility Agent as the
issuer of any Letter of Credit in accordance with the terms of this
Agreement;
"L/C-Related Documents" means each Letter of Credit, any Drawdown Notice or
other application for a Letter of Credit and any other document relating to
any Letter of Credit;
"Letter of Credit" means a letter of credit or a bank guarantee (as the
case may be) Issued or to be Issued by the Issuing Bank on the terms of
this Agreement;
"Leverage Ratio" means, at any relevant date, the percentage that
Consolidated Net Borrowings is of Capitalisation of the Group;
"LIBOR" means, in relation to any Advance or unpaid sum, the rate per annum
determined by the Facility Agent to be equal to:
(a) the offered rate (if any) appearing on page 3750 of the Telerate
screen, or such other pages as may replace such page of the Telerate
screen, which displays "BBA LIBOR" for deposits in Sterling and for
the specified period (where "specified period" means the Interest
Period or Maturity Period of such Advance or, as the case may be, the
period for which LIBOR falls to be determined in relation to such
unpaid sum); or
(b) if the Telerate screen is generally inaccessible or if the relevant
rate does not appear on page 3750 or such other page as may replace
such page of the Telerate screen, the arithmetic mean (rounded
upwards, if not already such a multiple, to four decimal places) of
the rates (as notified to the Facility Agent) at which each of the
Reference Banks was offering to leading banks in the London inter-bank
market deposits in Sterling and for the specified period,
in each case at or about 11.00 am on the Quotation Date for such period;
"Licence Undertaking" means any and each undertaking or assurance given in
connection with the Offer by any one or more of the Parent, the Primary
Borrower, ▇▇▇▇▇ 2, Bidco or the Target or any Affiliate of any of them to
the Director General, the Director General of Gas Supply or the Secretary
of State concerning the management and/or ownership of and/or other matters
concerning the Licensee once the Target has become a Subsidiary of the
Primary Borrower;
"Licences" means those licences granted by the Secretary of State:
(a) under section 6 of the Electricity Act authorising the relevant
Licensee to carry on the Distribution Business and supply of
electricity and the Generation Business and any activities ancillary
thereto;
(b) under section 7 of the Gas ▇▇▇ ▇▇▇▇; or
(c) being replacement Licence or Licences granted from time to time to REC
or any member of the Group (or, if more than one, the most recent such
replacement), as amended and/or extended from time to time;
"Licensee" means REC or such other member of the Group which, at any time,
is the licensee under a Licence;
"Liquid Assets" means as at any date, the aggregate (calculated on a
consolidated basis) of:
(a) cash at bank and in hand in a jurisdiction where such amounts are
transferable out of that jurisdiction and convertible into currencies
dealt in on the London foreign exchange market;
(b) short term deposits and money at call;
(c) certificates of deposit the term of which has twelve months or less
remaining to maturity;
(d) gilts the term of which has twelve months or less remaining to
maturity;
(e) deposits made with the Commissioners of Inland Revenue in respect of
which certificates of tax deposit have been issued by Her Majesty's
Treasury;
(f) Sterling bills of exchange eligible for rediscount at the Bank of
England;
(g) any other negotiable money market instrument with a maximum maturity
of 12 months or less excluding commercial paper issued by any person
other than a state entity;
provided that:
(i) where Liquid Assets are deposited subject to restrictions in order
that they are held as security for a liability or can be offset
against a liability, such Liquid Assets shall be taken into account
only to the extent that such liability is taken into account under
Consolidated Net Borrowings; and
(ii) when the aggregate amount of Liquid Assets required to be taken into
account for the purposes of this definition on any particular day is
being ascertained, any such Liquid Assets denominated or repayable or
in respect of which monies are payable in a currency other than
Sterling shall be converted for the purposes of calculating the
Sterling equivalent at the rate of exchange prevailing on that day in
London by taking the Facility Agent's spot rates as of 11.00 a.m. on
such date for the purchase of such currency with Sterling;
"Loan Note Alternative" means the option made available to holders of
Target Shares in the Offer Document to elect to receive Loan Notes in place
of the cash consideration otherwise payable;
"Loan Note Collateral Account" means an account with the Security Agent
into which amounts drawn down under the Loan Note Facility which, by reason
of the requirements for
Advances to be of a minimum amount, are greater than the amounts
immediately required to satisfy Loan Note Obligations, are to be paid;
"Loan Note Facility" means a sub-limit of the Acquisition Facility equal to
the nominal amount of Loan Notes issued pursuant to the Loan Note
Alternative;
"Loan Note Holders" means the holders from time to time of the Loan Notes;
"Loan Note Instrument" means the agreed form deed or instrument
constituting the Loan Notes dated on or about the date of this Agreement
and any certificates evidencing issued Loan Notes;
"Loan Note Obligations" means the obligations of Bidco (or any other person
who Bidco may substitute as principal debtor in respect of the Loan Notes
pursuant to clause 7 of the Loan Note Instrument) to make the payments
required to be made from time to time to the Loan Note Holders;
"Loan Notes" means the loan notes issued or to be issued to accepting
shareholders in the Target under the Loan Note Alternative;
"Majority Banks" means subject to clause 23.2 at any relevant time Banks:
(a) the aggregate of whose Contributions to all the Facilities exceeds
66 2/3 per cent. of the Total Contributions in respect of all the
Facilities; or
(b) (if no principal amounts are outstanding under this Agreement) the
aggregate of whose Commitments in respect of all the Facilities
exceeds 66 2/3 per cent. of the Total Commitments in respect of all
the Facilities but so that if at such time the Total Commitments in
respect of any Facility have been reduced to zero references to a
Bank's Commitment in relation to such Facility shall be construed as
amongst the Finance Parties (and not so as to give any rights to any
other person) as a reference to that Bank's Commitment in relation
to such Facility immediately prior to such reduction to zero;
"Major Default" means, any one or more of the events set out below (whether
or not caused by any reason outside the control of any Relevant Offeror
Company):
(a) any Relevant Offeror Company is deemed pursuant to applicable law
unable to pay its debts as they fall due or commences negotiations
with its creditors with a view to a general re-scheduling of
indebtedness;
(b) any administrative or other receiver or any manager is appointed over
any Relevant Offeror Company or any material part of the assets,
business and/or undertaking of any such company;
(c) a winding-up order or an administration order is made in relation to
any Relevant Offeror Company;
(d) any Relevant Offeror Company threatens to pass or passes a resolution
for (or petitions for) its winding-up or administration;
(e) any event occurs in any jurisdiction which corresponds with, or has an
effect equivalent to, any of (a) to (d) above in any country or
territory in relation to a Relevant Offeror Company;
(f) an event falling within clause 12.1(w) occurs;
(g) a breach of any of clauses 10.4(a)(iii), (iv), (v) or (vi), 10.4(b),
10.4(c) or 10.4(d) occurs;
(h) any of the representations and warranties in clauses 9.1 or 9.2(a)
being incorrect in any material respect in relation to a Relevant
Offeror Company; or
(i) any other Default occurs which is within the power of a Relevant
Offeror Company to remedy within 7 days of receiving notice of the
Default, but which it chooses not to remedy having been given at least
7 days' prior written notice by the Facility Agent requesting it to do
so;
(j) so far only as concerns an Offer Advance falling within paragraph (ii)
of that definition, any of the matters referred to in paragraphs (a),
(b), (c), or (d) of this definition occurs in relation to the Target,
one of its Principal Subsidiaries or any Licensee;
"Material Adverse Effect" is a reference to:
(a) something having a material adverse effect on the ability of any
Borrower to perform its payment or Financial Covenant obligations
under any of the Finance Documents; or
(b) something (other than the Reservations) which results in any of the
Finance Documents not being legal, valid and binding on, or
enforceable in accordance with their terms against, any of the
Obligors in a manner and to an extent reasonably considered by the
Majority Banks to be materially adverse to the interests of the Banks;
"Maturity Date" means, in relation to any Revolving Advance, the last day
of the period for which that Revolving Advance is drawn down;
"Maturity Period" means, in relation to any Revolving Advance, the period
beginning on its Drawdown Date and ending on its Maturity Date;
"Minority Shareholder" means TU Finance (No. 2) Holdings, Inc.;
"month" or "months" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that (a) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it
shall end on the last Banking Day in such later calendar month and (b) if
such numerically corresponding day is not a Banking Day, the period shall
end on the next following Banking Day in such later calendar month but if
there is no such Banking Day it shall end on the preceding Banking Day and
"monthly" shall be construed accordingly;
"Net Interest Costs" means, in respect of any period, the aggregate
accruing during such period (whether or not paid or payable within such
period) of:
(a) interest, guarantee and other ancillary facility fees, letter of
credit commission and fronting fees and commitment fees incurred by
the Group (disregarding any portion attributable to any minority
interests in Subsidiaries, other than the minority interest in ▇▇▇▇▇
2) (including any agency fees or arrangement fees or other costs
associated with the Acquisition or the financing thereof charged and
amortised under FRS4, and including the interest element of Finance
Leases); and
(b) net amounts payable (or reduced by net amounts receivable) in respect
of interest rate hedging for the Facilities;
and:
(i) deducting credit interest receivable (on an accruals basis) in cash
during such period which would be shown as interest receivable in the
relevant accounts delivered under clause 10.1(b)(i) and (ii), as
adjusted pursuant to clause 10.3(c); and
(ii) excluding any nominal imputed interest charge that arises only as a
result of an accounting procedure;
"Non Cash Shares" means Target Shares acquired pursuant to the Share
Alternative or the Loan Note Alternative;
"Obligor" means a member of the Group party to a Finance Document;
"Offer" means the offer proposed to be made by and on behalf of Bidco, in
the agreed form and on terms and conditions set out in the Press Release,
to acquire the whole of the ordinary share capital (whether in issue or
falling to be allotted) of the Target not already owned by Bidco, as such
offer may from time to time be amended, added to, revised, renewed or
waived in accordance with clause 10.4;
"Offer Advance" means an Advance made or to be made under the Acquisition
Facility or the Interim Facility (i) for the purpose of meeting the
obligations of Bidco in respect of the Offer or (ii) for financing payments
by Bidco required under the procedures in sections 428- 430 of the Act;
"Offer Documents" means each of the documents issued, or to be issued, by
Bidco to the shareholders of the Target in respect of the Offer (including
the forms of acceptance), in the agreed form;
"Outstanding Contingent Liabilities" at any time under a Letter of Credit
means the face value of that Letter of Credit at that time in accordance
with its express provisions less:
(a) the aggregate amount of any cash cover (not including any cash cover
lodged by any Bank) held in relation to that Letter of Credit at that
time; and
(b) (save to the extent that this is taken into account in the express
provisions of that Letter of Credit or unless the context otherwise
requires) the aggregate of all payments made by the Issuing Bank,
pursuant to demands made under that Letter of Credit on or prior to
such time, for which it has been reimbursed by the relevant Borrower;
or such lesser amount as the Facility Agent and the Issuing Bank may agree
in good faith represents the maximum liability of the Issuing Bank in
respect thereof;
"Parent" means Texas Utilities Company whose principal place of business is
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇;
"Parent Acquisition Date" shall mean the date as of which a person or group
of related persons first acquires more than 30% of the outstanding Voting
Shares of the Parent (within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 of the United States of America, as
amended, and the applicable rules and regulations thereunder);
"Permitted Borrower" means any of the Target and the other members of the
Target Group, except the REC and any other member of the REC Group which is
a Borrower under the stand-alone facility referred to in clause 24.5;
"Permitted Capital Market Instrument" means a capital market instrument
which is for a term expiring after the Final Repayment Date and has no
option on the part of the holders of such instrument to request earlier
repayment other than on the occurrence of events of default which are
reasonably standard for capital market instruments;
"Permitted Security Interest" means a Security Interest created by any
member of the Target Group being any of the following, namely:
(a) any lien arising solely by operation of law in the ordinary course of
business and securing amounts not more than 90 days overdue or which
are being contested with due diligence and in good faith, and other
liens agreed to in writing by the Majority Banks;
(b) any Security Interest existing on or over the assets of any member of
the Target Group as at the Unconditional Date (or which any such
member is obliged to create under a contract existing at such date),
but only if:
(i) the Security Interest was not created in contemplation of such
member becoming a member of the Group;
(ii) the maximum principal amount of the indebtedness secured by the
Security Interest is not increased after the Unconditional
Date; and
(iii) any such Security Interest which is created between the date of
this Agreement and the Unconditional Date is discharged within
180 days after the Unconditional Date (unless the Security
Interest was created pursuant to an obligation existing as at
the date of this Agreement);
(c) any Security Interest existing on or over the assets of such member at
the time it becomes a member of the Target Group after the date the
Target becomes a member of the Group, but only if:
(i) the Security Interest was not created in contemplation of the
company becoming a member of the Target Group; and
(ii) the maximum principal amount of the indebtedness secured by the
Security Interest is not subsequently increased;
(iii) such Security Interest is discharged within 180 days after the
date such member became a member of the Group;
(d) any Security Interest existing on or over an asset acquired by a
member of the Target Group after the date of this Agreement, but only
if:
(i) the Security Interest was not created in contemplation of the
acquisition; and
(ii) the maximum principal amount of the indebtedness secured by the
Security Interest is not subsequently increased;
(iii) such Security Interest is discharged within 180 days after the
date such member became a member of the Group;
(e) any Security Interest over any asset acquired by a member of the
Target Group after the date of this Agreement as security for
Indebtedness incurred to finance or refinance (within 6 months of the
acquisition) all or part of the consideration for the acquisition of
that asset, provided that the Indebtedness secured by Security
Interests under this subclause (e) shall not exceed (pound)1,000,000
in aggregate at any time;
(f) any Security Interest arising over
(i) accounts with any bank or financial institution as a result of
netting and set-off arrangements existing with such person to
the extent that such arrangements are in support of net
overdraft facilities extended by such person or
(ii) documents of title to goods and insurances under trade finance
facilities provided to any member of the Target Group as part
of the Target Group's normal day to day banking business;
(g) any Security Interest over goods purchased in the ordinary course of
business arising by virtue of the supplier's retention of title clause
in its standard conditions of supply to secure only the purchase price
of the goods;
(h) any Security Interest created by a Project Finance Subsidiary to
secure Project Finance Borrowings, or over the shares or other
investment in a Project Finance Subsidiary provided that it is
entirely without recourse to any member of the Group beyond
enforcement of such Security Interest;
(i) so far as they relate to netting, settlement or pooling arrangements
or as required by the regulatory framework or arrangements in which
the relevant business operates, any Security Interest arising under
the Relevant Arrangements;
(j) any Security Interest arising under the terms of Derivatives
Transactions or as a result of trading of shares or other securities
where such Security Interest arises under the rules of the relevant
exchange or clearing system;
(k) (i) any Security Interest constituted by a Finance Lease if the
capital value of such Finance Lease would be permitted under this
Agreement as Borrowed Money under clause 11.1(b)
(ii) any Security Interest constituted by the grant to any person or
persons of any lease or leases with respect to the ▇▇▇▇'▇ ▇▇▇▇
generating facility owned by a member of the Group Provided that
none of the parties to any such lease or related transaction is
the Parent or an Affiliate of the Parent (other than a member of
the Group); and
(l) any Security Interests (other than any Security Interest permitted by
sub-paragraphs (a) to (k) above) securing indebtedness not exceeding
in aggregate (pound)100,000,000, or in respect of indebtedness
incurred at a time when the Leverage Ratio is less than 60%,
(pound)150,000,000, or its equivalent in other currencies at any time;
"Pooling and Settlement Agreement" means the pooling and settlement
agreement dated 30 March 1990 made between REC and the National Grid
Company Plc and others setting out the rules and procedures for the
operation of an electricity trading pool and of a settlement system in
England and Wales;
"Posting Date" means the date on which the Offer is posted;
"Press Release" means the press announcement in the agreed form proposed to
be released in connection with the Offer;
"Principal Subsidiary" means:
(a) any member of the Group whose unconsolidated net assets or pre-tax
profit, at any time after the date of this Agreement, equals or
exceeds 10 per cent of the net assets or pre-tax profit of the Group
at that time, and for the purpose of the above:
(i) the net assets or pre-tax profit of the Group shall be
ascertained by reference to the latest audited consolidated
accounts of the Group or the latest management accounts delivered
to the Facility Agent in accordance with clause 10.1(b)(ii); and
(ii) the net assets or pre-tax profit of any such member shall be
ascertained by reference to the latest audited accounts of that
Subsidiary or the latest management accounts delivered to the
Facility Agent in accordance with clause 10.1(b)(ii),
for the purposes of the above, "net assets" in respect of the Group or
any such member means the fixed assets and current assets of the Group
or that member (as the case may be) but excluding investments in any
Subsidiary and any loan to another member of the Group; or
(b) a member of the Group to which has been transferred (whether by one
transaction or a series of transactions, related or not) the whole or
a material part of the business, undertaking or assets of a Subsidiary
which immediately prior to those transactions was a Principal
Subsidiary;
(c) any member of the Group which is a holding company, directly or
indirectly, of a Principal Subsidiary;
Provided that if at any time members of the Group which are not Principal
Subsidiaries have in aggregate unconsolidated net assets or pre-tax profits
at any time equal to or exceeding 20% of the net assets or pre-tax profits
of the Group at that time, one or more of such other members of the Group
(beginning with the companies with the greatest net assets or pre-tax
profits as the case may be) shall also be treated as Principal Subsidiaries
until the 20% threshold for members of the Group which are not Principal
Subsidiaries is no longer exceeded;
"Project Finance Borrowings" means any Indebtedness of a type referred to
in any of paragraphs (a) to (j) of the definition of "Borrowed Money" which
is owed otherwise than to a member of the Group and finances the
acquisition, construction, development, ownership and/or operation of an
asset:
(a) which is incurred by a Project Finance Subsidiary; and
(b) in respect of which the person or persons to whom such Borrowed Money
is or may be owed by the relevant Project Finance Subsidiary has or
have no recourse whatsoever to any member of the Group for the
repayment thereof (save for enforcement of a Permitted Security
Interest under (h) of the definition thereof);
"Project Finance Subsidiary" means any Subsidiary of the Target:
(a) which is a company that is either (i) not an existing Subsidiary of
the Target as at the date of this Agreement or (ii) has no
Subsidiaries of its own (other than Subsidiaries which are Project
Finance Subsidiaries), and whose principal assets and business are
constituted by the ownership, acquisition, development and/or
operation of an asset or assets whether directly or indirectly;
(b) none of whose Borrowed Money or Indebtedness in respect of the
financing of the ownership, acquisition, development and/or operation
of such assets, or other arrangements, benefits from any recourse
whatsoever to any other member of the Group (including as shareholder
in an unlimited company) in respect of the repayment thereof (save as
permitted by clause 11.1(g)), and none of whose activities, business
or undertaking will under any applicable law or regulation result in
any member of the Group having any material risk of a liability which
might reasonably be expected to have a Material Adverse Effect; and
(c) which has been designated as such by the Facility Agent after the
Primary Borrower has given written notice to the Facility Agent
requiring such designation to be made;
or any Subsidiary of a company falling within (a), (b) and (c) above;
"Proportion" means, in relation to a Bank, the proportion borne by its
Commitment to the Total Commitments (or, if the Total Commitments are then
zero, by its Commitment to the Total Commitments immediately prior to their
reduction to zero);
"Qualifying Bank" means:
(a) a person which:
(i) is a bank within the meaning of Section 840A of the Income and
Corporation Taxes ▇▇▇ ▇▇▇▇;
(ii) will be beneficially entitled to any interest to be paid to it
(as a Bank) under this Agreement; and
(iii) is within the charge to United Kingdom corporation tax as
respects such interest,
except that, if Section 349 or Section 840A of the Income and
Corporation Taxes Act 1988 is repealed, modified, extended or
re-enacted, the Facility Agent may at any time and from time to time
(after consultation with the Primary Borrower and the Banks) amend
this paragraph (a) in such manner as it may determine acting
reasonably to be appropriate by giving notice of the amended paragraph
(a) to the Primary Borrower and the Banks and, so far as practicable
to put the Banks in the same position as they would otherwise have
been in; or
(b) a Treaty Lender;
"Quarter" means each three-month period ending on the last Banking Day in
March, June, September and December in each year;
"Quarter Date" means 31 March, 30 June, 30 September and 31 December;
"Quotation Date" means, in relation to an Interest Period, Maturity Period
or other period for which LIBOR is to be determined, the date on which
quotations would customarily be provided by leading banks in the London
Interbank Market for deposits in Sterling for delivery on the first day of
that Interest Period, Maturity Period or other period;
"REC" means Eastern Electricity plc (company no. 2366906);
"REC Group" means REC and its Subsidiaries (except for any Project Finance
Subsidiaries);
"Receiver" has the meaning given to that term in the Debenture;
"Recovering Bank" has the meaning given to that term in clause 15.2;
"Reference Banks" means The Chase Manhattan Bank and any two other banks
selected by the Facility Agent with the consent of the Primary Borrower
(which is not to be unreasonably withheld), or if any of them cease to so
act, such other bank or banks selected by the Facility Agent in accordance
with clause 23.7;
"Related Persons" each of the Facility Agent, the Security Agent, the
Issuing Bank, any successor Facility Agent, Security Agent or Issuing Bank
arising under clause 17, the Arrangers and the Underwriters, together with
their respective Affiliates and the officers, directors, employees, agents,
trustees and attorneys-in-fact of such persons and Affiliates;
"Relevant Arrangements" means any arrangements under or in connection with
any pooling and settlement or onshore transportation arrangements or
agreements of the electricity distribution, supply or generation, or gas
transportation, distribution and/or supply industry or energy trading
(including (but without limitation) the Pooling and Settlement Agreement or
the Gas Framework Agreement) or telecommunications or water industry or
energy or energy-
related business or in connection with any transactions or arrangements
entered into in the ordinary course of its business in a form usual in any
such industry or business;
"Relevant Company" means any of the Primary Borrower, the other Revolving
Credit Borrowers, ▇▇▇▇▇ 2, Bidco, the Target and the Principal
Subsidiaries;
"Relevant Offeror Company" means any of the Primary Borrower, ▇▇▇▇▇ 2 and
Bidco;
"Relevant Substance" means any radioactive emissions, radiation, noise, any
natural or artificial substance whatsoever (whether in a solid or liquid
form or in the form of a gas or vapour and whether alone or in combination
with any other substance) and includes, without limitation, "waste" (as
defined in the Environmental Protection ▇▇▇ ▇▇▇▇ or in any equivalent
legislation or regulation in force in any jurisdiction in which any member
of the Group is incorporated, owns property or assets or carries on any
business or operations);
"Reservations" means (a) the principle that equitable remedies may be
granted or refused at the discretion of the court, (b) the limitation on
enforcement by laws of general application relating to insolvency,
liquidation, reorganisation, court schemes or administration, (c) the time
barring of claims under the Limitation Act 1980 and (d) the possibility
that an undertaking to assume liability for or to indemnify against
non-payment of UK stamp duty may be void;
"Revolving Advance" means each borrowing made or to be made by way of an
advance under the Revolving Credit Facility or (as the context requires)
the principal amount of that borrowing outstanding at any relevant time;
"Revolving Credit Facility" means the facility granted by the Banks to the
Borrowers in accordance with clause 2.1(b);
"Revolving Credit Facility Borrowers" means the Primary Borrower and any
Permitted Borrower which accedes to this Agreement as a Revolving Credit
Facility Borrower pursuant to clause 24;
"Secretary of State" means the Secretary of State for Trade and Industry
from time to time or such other person as may for the time being be
fulfilling the functions of the Secretary of State under the Electricity
Act or the Gas Acts;
"Security Agent" means Chase Manhattan International Limited or such other
person as may be appointed security agent and trustee pursuant to clause 17
of this Agreement;
"Security Documents" means the Debenture, the Guarantees, the Share Charge
and any further guarantees or security provided to the Security Agent from
time to time under or in connection with this Agreement;
"Security Interest" means any mortgage, pledge, lien, charge, assignment,
right of set-off, arrangement for retention of title, hypothecation or
security interest, or any other agreement or arrangement having the effect
of conferring security or a security interest, or any agreement to sell or
otherwise dispose of any asset on terms whereby such asset is acquired or
reacquired by any member of the Group;
"Share Alternative" means the limited option made available to holders of
Target Shares in the Offer Documents to elect to receive common stock of
the Parent in place of the cash consideration otherwise payable;
"Share Charge" means the share charge, in the agreed form, dated on or
about the date hereof granted by the Minority Shareholder in favour of the
Security Agent over its shares in ▇▇▇▇▇ 2;
"Share Value" means, at any time until Bidco has acquired shares carrying
the right to vote 75% of the votes of each class of shares at a general
meeting, the value of the Target Shares acquired pursuant to the Offer and
effectively charged in favour of the Security Agent, which shall at all
times be deemed to be calculated by reference to the price per share
contained in the Offer;
"Spot Rate" means, in respect of any sum denominated in any currency other
than Sterling at any date, the Facility Agent's spot rate of exchange for
purchase of that sum in that currency in the London foreign exchange market
with Sterling at or about 11.00 am on that date for delivery of such sum
two Banking Days thereafter;
"Sterling" and "(pound)" mean the lawful currency for the time being of the
United Kingdom and in respect of all payments to be made under this
Agreement in Sterling mean immediately available, freely transferable
cleared funds;
"Sterling Amount" means in respect of Outstanding Contingent Liabilities,
the sum of the amount in Sterling of the Outstanding Contingent Liabilities
under Letters of Credit denominated in Sterling and the amount of Sterling
required to purchase the currency amount of the Outstanding Contingent
Liabilities under Letters of Credit denominated in each other currency at
the Spot Rate at that time and so that such Sterling Amount shall be
recalculated by the Facility Agent:
(a) in any event, on every Quarter Date; and
(b) on each date on which the Majority Banks request the Facility Agent to
do so in accordance with the provisions of clause 4.11 (Currency
Fluctuations),
and the recalculated amount shall thereupon and until the next
recalculation required by this Agreement constitute the Sterling Amount of
Outstanding Contingent Liabilities under any Letters of Credit for all
purposes of this Agreement;
"Subsidiary" means:
(a) a subsidiary within the meaning of section 736 of the Act; and
(b) for the purposes of the definition of "Affiliate" and "Group" and
clauses 10.1(a), 10.3, 20.7 and schedule 6 only, a subsidiary
undertaking within the meaning of section 258 of the Act;
"Substitute" has the meaning given to that term in clause 16.3;
"Substitution Certificate" means a certificate substantially in the terms
of schedule 5;
"Syndication Date" means the date as determined by the Arrangers and
notified by them to the Primary Borrower on which syndication of the
Facilities has been fully completed;
"Syndication Letter" means the syndication letter from the Arrangers and
the Underwriters to the Primary Borrower dated on or about the date of this
Agreement, in the agreed form;
"Takeover Operative Date" means the date falling 120 days after the
Unconditional Date;
"Target" means The Energy Group PLC (company no. 3257256);
"Target Group" means the Target and its Subsidiaries from time to time
(except any Project Finance Subsidiary);
"Target PES Subsidiaries" means any Subsidiary of the Target which holds a
Licence;
"Target Shares" means the issued and to be issued shares in the capital of
the Target (including the Target's American Depositary Shares) which are
the subject of the Offer;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature including without limitation any
interest or penalties payable in connection with any failure or delay in
paying any of the same and "Taxation" shall be construed accordingly;
"Test Period" means:
(a) each twelve-month period ending on the last day of each Quarter
beginning with the last day of the second complete Quarter following
the Unconditional Date; and
(b) each Accounting Reference Period of the Primary Borrower ending on 31
December in each year;
"Third Amendment Agreement" means the agreement between the parties to this
Agreement dated on or about 18 May 1998 amending and restating this
Agreement;
"Total Commitments" means, in respect of a Facility or (as the context
requires) the Facilities at any relevant time, and save as otherwise
provided herein, the total of the Commitments of all the Banks in respect
of such Facility or Facilities (as appropriate) at such time;
"Total Contributions" means, in respect of any Facility or (as the context
requires) the Facilities at any relevant time, the total of the
Contributions of all the Banks in respect of such Facility or Facilities
(as appropriate) at such time;
"Treaty Lender" means a person which is resident (as such term is defined
in the appropriate double taxation treaty) in a country with which the
United Kingdom has a double taxation treaty giving residents of that
country complete exemption from the imposition of any withholding or
deduction for or on account of United Kingdom Taxes on interest (and which
does not carry on business in the United Kingdom through a permanent
establishment with which the Indebtedness under this Agreement in respect
of which the interest is paid is effectively connected);
"Trust Period" means the period ending on the last day of the period of 80
years from the date of this Agreement, which period (and no other) shall be
the applicable perpetuity period;
"Trust Property" means all or any part of the rights, titles, interests,
assets and income that may now or hereafter be mortgaged, charged, assigned
or granted or the subject of a Security Interest in favour of the Security
Agent or the Finance Parties by or pursuant to the Finance Documents and
the proceeds of any such security;
"Unconditional Date" means the date the Offer becomes or is declared
unconditional in all respects;
"Utilisation" means the making of an Advance or the Issue of a Letter of
Credit; and
"Voting Shares" means outstanding shares of capital stock of any class of
the Parent entitled to vote in the election of directors, excluding shares
entitled so to vote only upon the happening of some contingency.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as references
to the clauses of, and schedules to, this Agreement and references to
this Agreement include its schedules;
(b) references to (or to any specified provision of) this Agreement or any
other document shall be construed as references to this Agreement
(including any Accession Certificate and Substitution Certificate),
that provision or that document as in force for the time being and as
from time to time amended, novated or supplemented in accordance with
its terms, or, as the case may be, with the agreement of the relevant
parties and (where such consent is, by the terms of this Agreement or
the relevant document, required to be obtained as a condition to such
amendment being permitted) the prior written consent of the Facility
Agent;
(c) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any Government Entity;
(d) references to an "authorisation" mean and include any consent,
authorisation, licence, approval and permit;
(e) words importing the plural shall include the singular and vice versa;
(f) references to a time of day are to London time;
(g) references to a "person" shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any State or any of its agencies;
(h) references to "assets" include all or part of any business,
undertaking, real property, personal property, shareholdings, assets,
revenues, uncalled capital and any rights (whether actual or
contingent, present or future) to receive, or require delivery of, any
of the foregoing;
(i) references to the "equivalent" of an amount specified in a particular
currency (the "specified currency amount") shall be construed as a
reference to the amount of the other relevant currency which can be
purchased with the specified currency amount in the London foreign
exchange market at or about 11 a.m. on the day on which the
calculation falls to be made for spot delivery, as conclusively
determined by the Facility Agent (with the relevant exchange rate of
any such purchase being the "spot rate");
(j) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended;
(k) references to documents being in the "agreed form" mean documents
initialled by both ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (on behalf of the Facility
Agent and the Arrangers) and ▇▇▇▇▇▇ ▇▇▇▇ (on behalf of the Borrowers),
or otherwise in the form required by the Facility Agent;
(l) references to "VAT" are to be construed as including references to any
similar Tax;
(m) "including" and "in particular" shall not be construed restrictively
but shall mean "including, without prejudice to the generality of the
foregoing" and "in particular, but without prejudice to the generality
of the foregoing" respectively;
(n) obligations of more than one Obligor under this Agreement are joint
and several;
(o) references to documents being "certified copies" mean copies certified
as being true, complete and up-to-date copies as of a date no earlier
than the date of this Agreement by an officer of the Primary Borrower
who is at such time duly authorised to execute or certify such
documents on behalf of the Primary Borrower;
(p) "arms length terms" means on terms which are fair and reasonable to
the relevant member of the Group and no more or less favourable to the
other party to the relevant transaction than could reasonably be
expected to be obtained in a comparable transaction with a person
unconnected with the Group;
(q) references to "holding company", save as otherwise defined, shall bear
the same meaning as in section 736 of the Act, as if extended to
bodies corporate wherever incorporated;
(r) a Letter of Credit being "repaid" or "prepaid" is effected by:
(i) providing the Issuing Bank with cash cover in the currency in
which that Letter of Credit is denominated;
(ii) reducing (in accordance with the terms of this Agreement and
the relevant Letter of Credit) the amount that may be demanded
under that Letter of Credit (or by such amount automatically
reducing in accordance with the terms of the relevant Letter of
Credit); or
(iii) cancelling that Letter of Credit by returning the original to
the Issuing Bank together with written confirmation (in form
and substance satisfactory to the Issuing Bank) from the
beneficiary that the Issuing Bank has no further liability
under that Letter of Credit.
2. THE COMMITMENTS
2.1 The Facilities
The Banks, relying upon each of the representations and warranties in
clause 9 and upon and subject to the conditions hereof, agree to make
available:
(a) to the Primary Borrower, the Acquisition Facility in the principal sum
of (pound)1,775,000,000;
(b) to the Primary Borrower, the Interim Facility in the principal sum of
(pound)1,150,000,000;
(c) to the Revolving Credit Facility Borrowers, the Revolving Credit
Facility in the principal sum of (pound)700,000,000 (including the
stand-alone facility for REC provided for in clause 24.5).
The obligations of each Bank under this Agreement shall be to participate
in each Advance in the proportion which its Commitment in respect of the
relevant Facility bears to the Total Commitments in respect of the relevant
Facility but so that no Bank shall be under any obligation to participate
in an Advance if and to the extent its Commitment in respect of the
relevant Facility would thereby be exceeded.
2.2 Finance Parties' obligations several
The obligations of each Finance Party under this Agreement are several; the
failure of any Finance Party to perform such obligations shall not relieve
any other Finance Party or any Borrower of any of their respective
obligations or liabilities under this Agreement nor shall any Finance Party
be responsible for the obligations of any other Finance Party under this
Agreement.
2.3 Finance Parties' interests several
Notwithstanding any other term of this Agreement (but without prejudice to
the provisions of this Agreement relating to or requiring action by the
Majority Banks) the interests of the Finance Parties are several and the
amount due to each of the Finance Parties (for its own account) is a
separate and independent debt. Without prejudice to any other provision of
this Agreement (including any requirement for action to be approved or
instigated by, or with the consent or approval of, the Majority Banks) each
of the Finance Parties shall have the right to protect and enforce its
rights to amounts which have become due and payable to it under this
Agreement and it shall not be necessary for any other Finance Party to be
joined as an additional party in any proceedings for this purpose.
3. THE CONDITIONS
3.1 Documents and evidence
Subject to clause 4.2(d), no Utilisation may be made until the
Unconditional Date and until the Facility Agent, or its duly authorised
representative, shall have received the documents and evidence specified in
Parts A and B of Schedule 3, in each case in form and substance
satisfactory to the Facility Agent which the Facility Agent shall, once it
is so satisfied, confirm in writing to the Primary Borrower.
3.2 General conditions precedent
Subject to clause 3.3, in respect of each Facility, the obligation of each
Bank to contribute to a Utilisation is subject to the further conditions
that at the date of each Drawdown Notice and on each Drawdown Date:
(a) the applicable representations and warranties set out in clause 9 are
true and correct on and as of each such date as if each were made with
respect to the facts and circumstances existing at such date; and
(b) no Default shall have occurred and be continuing or would result from
the making of such Utilisation,
but this clause 3.2(b) shall not prevent the rollover of an existing
Revolving Credit Advance (without increasing the amount thereof) for a
Maturity Period of no more than one month at any time when no Event of
Default has occurred and is continuing.
3.3 Conditions relating to Offer Advances during Certain Funds Period
To ensure that the Primary Borrower has resources available to advance to
▇▇▇▇▇ 2 funds to on-lend to Bidco funds to enable Bidco to fulfil its
obligations in respect of the Offer, the Banks agree that, in relation to
each Offer Advance requested and to be advanced during the Certain Funds
Period, clause 3.2 shall not be applicable and subject to satisfying the
requirements of clause 3.1 and to providing the appropriate Drawdown Notice
at the appropriate time in accordance with this Agreement, the only further
condition to the obligations of the Banks to make such Offer Advance is
that at the date of each Drawdown Notice and on each Drawdown Date no Major
Default shall have occurred and be continuing or would result from the
making of such Offer Advance.
It is further confirmed, for the avoidance of doubt, that the commitment in
this clause 3.3 operates notwithstanding any contrary provisions of the
Finance Documents and that no Bank shall be entitled to rescind this
Agreement or to fail to contribute to an Offer Advance where the conditions
in clause 3.3 are fulfilled.
3.4 Waiver of conditions precedent
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in part
and with or without conditions by the Facility Agent acting on the
instructions of the Majority Banks in respect of any Advance.
4. ADVANCES UNDER THE FACILITIES
4.1 The Acquisition Facility, Interim Facility and Loan Note Facility
(a) Drawdown
Subject to the terms and conditions of this Agreement, Acquisition
Advances and Interim Advances shall be made to the Primary Borrower
following receipt by the Facility Agent from the Primary Borrower of
an appropriately completed Drawdown Notice relating to the respective
Facility not later than 11 a.m. two Banking Days before the proposed
Drawdown Date or in the case of the first Drawdown Date of the
Acquisition Facility only, not later than 9.30 a.m. on such Drawdown
Date.
(b) Amount
Each Drawdown Notice delivered pursuant to clause 4.1(a) shall be
irrevocable and specify:
(i) the proposed Drawdown Date, which shall be a Banking Day prior
to the relevant Available Commitment Termination Date;
(ii) the amount of the proposed Advance, which shall be of
(pound)10,000,000 (or any larger sum which is an integral
multiple of (pound)5,000,000) or, if less, the Available
Facility Amount in respect of the Acquisition Facility or the
Interim Facility (as the case may be) on the relevant Drawdown
Date;
(iii) subject to clause 4.1(c), the first Interest Period relating to
the Advance in question (in the case of the Acquisition
Facility, (being a period of 1, 2, 3 or 6 months or such other
duration as the Primary Borrower and the Banks may agree, and
in the case of the Interim Facility being one month) will begin
on the proposed Drawdown Date and end on a Banking Day which is
or precedes the Final Repayment Date (and in the case of
Interim Advances, the relevant Available Commitment Termination
Date); and
(iv) the account to which the proceeds of the proposed Advance are
to be paid.
There shall be no more than 10 Acquisition Advances and 10 Interim
Advances outstanding at any time and not more than one Acquisition
Advance and/or Interim Advance may be made in any period of 5
consecutive Banking Days.
(c) Interest Periods at time of syndication
The Primary Borrower shall until the Syndication Date select one month
Interest Periods or such other periods as the Facility Agent and the
Primary Borrower agree as being necessary to effect the transfer of
participations following syndication.
(d) Acquisition Facility
No Interim Advances shall be made unless and until the Acquisition
Facility has been drawn down in full, save that in order to ensure
that the Loan Note Facility (which will increase with the receipt of
further acceptances of the Offer which specify the Loan
Note Alternative) remains as a sub-facility of the Acquisition
Facility, prior to the date of each Advance, the Facility Agent shall
deduct from the Available Facility Amount of the Acquisition Facility,
the amount of Loan Note Facility already required to cover Loan Note
Obligations created by acceptances of the Offer prior to that date,
and a reserve for the maximum amount of Loan Note Facility which may
be required to meet further Loan Note Obligations which may arise from
subsequent acceptances of the Offer, and shall notify the Banks
accordingly, with the result that Interim Advances may be drawn down
prior to the Acquisition Facility being fully drawn, Provided that the
Facility Agent shall in the light of further acceptances of the Offer
periodically adjust the Available Facility Amount in respect of the
Acquisition Facility in such a manner as will ensure that as early as
possible and in any event not later than the date of the making of the
final Offer Advance under this Agreement the aggregate of:
(i) the Acquisition Advances drawn down (other than under the Loan
Note Facility); and
(ii) the amount of the Loan Note Facility,
shall be equal to the Total Commitments under the Acquisition
Facility. The Banks shall participate in each Offer Advance on the
basis of the notifications made by the Facility Agent under this
clause and if necessary to achieve the above, the Facility Agent shall
require the making of Acquisition Advances (and matching mandatory
prepayments of the Interim Facility), which may (to the extent that
the amounts to be paid and received by any Bank are the same) be by
way of book entries, to ensure that the Facilities are drawn in the
manner described in the proviso to this clause.
(e) Loan Note Obligations
The Loan Note Facility shall be available until the Final Repayment
Date and Advances may be drawn down by the Primary Borrower from time
to time under the Loan Note Facility to be on-lent to ▇▇▇▇▇ 2 to be
used by it to on-lend to Bidco to be used to fund Loan Note
Obligations. To the extent that, by reason of the minimum drawdown
requirements set out above, an Advance drawn down under the Loan Note
Facility exceeds the then outstanding Loan Note Obligations, any
excess shall be retained by the Primary Borrower and paid into the
Loan Note Collateral Account which shall be a blocked account
maintained by the Security Agent. The Security Agent shall permit the
Primary Borrower to draw amounts from the Loan Note Collateral Account
from time to time:
(i) to the extent of Loan Note Obligations then due, to be on-lent to
▇▇▇▇▇ 2 to be used by it to on-lend to Bidco to be used by Bidco
to fund such Loan Note Obligations; provided that
(ii) at the relevant time, no Event of Default shall have occurred
which has not been remedied or waived to the reasonable
satisfaction of the Security Agent.
The Loan Note Collateral Account shall not be a trust account and sums
standing to its credit from time to time shall be charged by way of
fixed charge under the Debenture and available to the Security Agent
by way of security.
(f) Cancellation on Available Commitment Termination Date
If there is any Available Facility Amount outstanding in relation to
the Acquisition Facility or the Interim Facility on the Available
Commitment Termination Date in respect of such Facility, such
Available Facility Amount (other than the Loan Note Facility as at
such date) shall thereupon be automatically cancelled and no further
Advance may be made under the Acquisition Facility (other than the
Loan Note Facility) or the Interim Facility.
4.2 The Revolving Credit Facility
(a) Drawdown
Subject to the terms and conditions of this Agreement, and to the
prior delivery of a notice of cancellation of the agreement dated 5th
August 1996 between the Target and Citibank International plc as
agent, Barclays Bank PLC and Midland Bank plc so that it is no longer
available for drawing, Revolving Advances shall be made to the
relevant Revolving Credit Facility Borrower following receipt by the
Facility Agent from such Borrower of an appropriately completed
Drawdown Notice relating to the Revolving Credit Facility not later
than 11 a.m. two Banking Days before the proposed Drawdown Date
(which, in respect of the first Revolving Advance to be made for the
purpose of refinancing certain Target Group Borrowed Money will be the
Unconditional Date).
(b) Amount
Each Drawdown Notice delivered to the Facility Agent pursuant to
clause 4.2(a) shall be irrevocable and shall specify:
(i) the proposed Drawdown Date, which shall be a Banking Day
falling prior to the Available Commitment Termination Date;
(ii) the amount of the Revolving Advance, which shall be of
(pound)10,000,000 or any larger sum which is an integral
multiple of (pound)5,000,000 or, if less, the Available
Facility Amount in respect of the Revolving Credit Facility on
the relevant Drawdown Date;
(iii) the Maturity Period which shall be of 1, 2, 3 or 6 months (or
such other period as the Facility Agent, acting on the
instructions of the Majority Banks, shall agree) ending not
later than the Final Repayment Date;
(iv) the account to which the proceeds of the proposed Advance are
to be paid.
(c) Number of Advances
There shall be no more than 10 Revolving Advances outstanding at any
time, and not more than one Revolving Advance may be made in any
period of 5 consecutive Banking Days.
(d) First drawdown
No Revolving Advance may be made unless and until the first
Acquisition Advance could have been drawn down (but for the delayed
settlement of acceptances of the Offer) Provided that, notwithstanding
the conditions precedent in paragraphs (b), (c), (d), (f) and (g) of
Part B of Schedule 3 have not been satisfied and a notice of
cancellation has not been delivered as required under clause 4.2(a) of
this Agreement but subject otherwise to the terms and conditions of
this Agreement, the Revolving Facility may be utilised to issue
certain Letters of Credit agreed with the Facility Agent in advance
with an aggregate face value not exceeding US$100,000,000 and, subject
to the accession of The Energy Group PLC as an additional Borrower, a
further (pound)100,000,000 of Advances.
(e) Calculation of Available Commitment
For the purpose of calculating the Available Commitment, the
Outstanding Contingent Liabilities under a Letter of Credit will
initially be its Sterling Amount on the Issue Date, subject to
recalculation by the Facility Agent in accordance with the definition
of "Sterling Amount" and clause 4.11 (Currency Fluctuations).
(f) Cancellation on the Available Commitment Termination Date
Without prejudice to any other provision of this Agreement, the Total
Commitments under the Revolving Credit Facility shall in any event be
reduced to zero on the Available Commitment Termination Date in
respect of such Facility and no Advance may be drawn by the Revolving
Credit Facility Borrowers under the Revolving Credit Facility
thereafter.
4.3 Issue of Letters of Credit
Subject to the provisions of this Agreement, the Issuing Bank will Issue a
Letter of Credit specified in a Drawdown Notice at the request of a
Revolving Credit Facility Borrower, if the Agent has received the Drawdown
Notice for a Letter of Credit in the form set out in Part C of Schedule 2
(Letters of Credit) signed on behalf of that Borrower not later, save in
the case of the first Issue of Letters of Credit requested on 15 May 1998,
than 11.00 am five Banking Days prior to the proposed Issue Date: and
(a) the proposed Issue Date is a Banking Day on or before the Final
Repayment Date;
(b) the face value of each Letter of Credit is a minimum Sterling Amount
of (pound)1,000,000;
(c) the Expiry Date falls on or before the earlier of 12 months from the
Issue Date and the Final Repayment Date;
(d) the Issuing Bank and (if different) the Facility Agent has agreed its
terms;
(e) the Sterling Amount of the Letter of Credit requested does not exceed
the Available Facility Amount in respect of the Revolving Credit
Facility;
(f) after such Issue, there will be no more than ten Letters of Credit
outstanding;
(g) no order, judgment or decree of any Governmental Entity or arbitrator
shall be outstanding which by its terms purports to enjoin or restrain
the Issuing Bank from Issuing such Letter of Credit, nor shall any
requirement of law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
Governmental Entity with jurisdiction over the Issuing Bank prohibit,
or request that the Issuing Bank refrain from, the Issuance of Letters
of Credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated hereunder and which is not in effect
on the date of this Agreement), or shall impose upon the Issuing Bank
any unreimbursed loss, cost or expense which was not applicable on the
date of this Agreement and which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇
material to it;
(h) the currency in which the relevant Letter of Credit is to be
denominated is, in the opinion of the Issuing Bank, not likely to be
subject to undue fluctuation against Sterling and is likely to be
freely convertible and available in sufficient amounts to enable the
Issuing Bank to discharge its obligations as they fall due;
(i) the Issuing Bank has approved (and been approved by) the relevant
beneficiary; and
(j) the total Sterling Amount of all Outstanding Contingent Liabilities
under all Letters of Credit then outstanding would not exceed
(pound)400,000,000.
4.4 Advances generally
(a) A Drawdown Notice (or notice purporting to be such) shall only be
effective if it complies with this Agreement and only upon actual
receipt by the Facility Agent and, once given, shall be irrevocable.
(b) As soon as practicable after receipt of each Drawdown Notice complying
with this Agreement the Facility Agent shall notify each Bank of such
receipt and of the date on which the proposed Advance is to be made
and of the relevant Interest Period or, as the case may be, the
relevant Maturity Period and each Bank shall on such Drawdown Date or,
the case may be, on the first day of the relevant Interest Period
participate in such Advance by making available to the Facility Agent
its portion of such Advance in accordance with clause 8.2.
4.5 Application of proceeds
Without prejudice to the Borrowers' obligations under clause 10.2(a), none
of the Finance Parties shall have any responsibility for the application of
the proceeds of any Advance by any Borrower.
4.6 Letters of Credit
(a) Issuing Bank as principal: the Issuing Bank will act as principal of
each Letter of Credit Issued by it and each Bank will
counter-indemnify the Issuing Bank in respect of the Outstanding
Contingent Liabilities thereunder in the relevant Proportion;
(b) Borrowers' Authorisation and Indemnity: each Borrower unconditionally
and irrevocably:
(i) authorises the Issuing Bank to comply with any demand which
appears to be duly made by a third party in respect of a Letter
of Credit without any further reference to the relevant
Borrower on the terms set out in Schedule 7 (Terms of
Borrowers' Indemnity);
(ii) agrees that its authorisation under clause 4.6(b)(i) and its
indemnity under clause 4.6(b)(iv) shall remain in full force
and effect and shall not be discharged until such date as the
Facility Agent (acting on the instructions of the Issuing Bank)
shall notify the relevant Borrower that it is satisfied (acting
reasonably) that the Issuing Bank remains under no liability
(actual or contingent) in respect of any Letter of Credit;
(iii) agrees that each Letter of Credit is Issued subject to and with
the benefit of the provisions of Schedule 7 (Terms of
Borrowers' Indemnity); and
(iv) if a Finance Party suffers any liabilities, damages, costs,
expenses, losses and charges whatsoever in relation to or
arising out of any Letter of Credit Issued or clause 4.7
(Banks' Guarantee and Indemnity), the benefit of Schedule 7
(Terms of Borrowers' Indemnity) shall extend to such Finance
Party. A Borrower may finance a payment under such indemnity by
drawing down a Revolving Advance if it is then entitled to do
so in accordance with the terms of this Agreement.
4.7 Banks' Guarantee and Indemnity
Each Bank hereby irrevocably and unconditionally:
(a) subject to clause 4.7(b), guarantees to and indemnifies on the terms
set out in Schedule 8 (Terms of Interbank Guarantee and Indemnity) the
Issuing Bank severally in its Proportion and on demand by the Issuing
Bank, the due and punctual performance by any relevant Borrower of all
its obligations in respect of each Letter of Credit Issued by the
Issuing Bank;
(b) if it is not permitted by its constitutional documents or any
applicable law to grant guarantees, agrees that, upon any failure of a
relevant Borrower to make timely payment of any amount due in respect
of a Letter of Credit, such Bank shall take (and upon the occurrence
of an Event of Default specified in clauses 12.1(e) to (n) (Events of
Default) (or any event occurs which under the applicable law of any
relevant jurisdiction has an analogous, similar or equivalent effect
to any such events) shall be deemed to have taken without any further
action, as of the Issue Date of each outstanding Letter of Credit), an
undivided participating interest from the Issuing Bank in each Letter
of Credit outstanding at such time in a proportion equal to such
Bank's Proportion. Each Bank shall hold the Issuing Bank harmless and
indemnify the Issuing Bank for such Bank's proportionate share of any
drawing under any Letter of Credit in which it has taken an undivided
participating interest under this clause 4.7;
(c) as a separate and independent stipulation agrees that any sum of money
intended to be the subject of the guarantee in clause 4.7(a), and
subject to clause 4.7(b) and Schedule 8 (Terms of Interbank Guarantee
and Indemnity), shall be recoverable from it (in its Proportion) as
sole principal debtor even if such sum would not be recoverable from
any relevant Borrower by reason of any legal limitation, disability or
incapacity or liquidation of any of them or any other fact or
circumstance (whether known to the Issuing Bank or not) but which
would have been recoverable from such Bank if it were the sole or
principal debtor in respect of such liability in place of any such
Borrower;
4.8 Calculation of Interest if Bank makes a Guarantee or Indemnity Payment
Any payment made or to be made by a Bank pursuant to clause 4.7 (Banks'
Guarantee and Indemnity) and any unreimbursed amount on the part of the
Issuing Bank shall (for the purpose of calculating interest thereon which
is due from the relevant Borrower) be deemed to have been made available to
that Borrower by way of a Revolving Advance on the date such payment is
made or is to be made (or reimbursed) and accordingly is subject to the
terms and conditions hereof and, after the earliest date on which a
Revolving Advance could have been drawn down to fund such liability, such
amount shall be treated as if it were an overdue sum with an initial term
of one month but (for all other purposes) shall be immediately due and
payable by the relevant Borrower.
4.9 Defaulting Banks
If a Bank (a "Defaulting Bank") fails to make payment on its due date of
any amount (an "overdue amount") due from it for the account of the Issuing
Bank pursuant to clause 4.7 (Banks' Guarantee and Indemnity) then until the
Issuing Bank (or the Agent on its behalf) has received payment of such
overdue amount in full (and without prejudice to any other rights or
remedies of the Issuing Bank in respect of such failure):
(a) the Issuing Bank shall be entitled to receive any remuneration which
such Defaulting Bank would otherwise have been entitled to receive in
respect of the Revolving Credit Facility; and
(b) the overdue amount shall bear interest at the rate of one per cent per
annum over LIBOR plus the Additional Cost for the time being from the
due date until the date of payment and any such interest which accrues
shall be compounded monthly.
4.10 Subrogation of Banks making guarantee payments
(a) Each Obligor agrees that if any Bank makes any payment under clause
4.7 (Banks' Guarantee and Indemnity) it will immediately be subrogated
to any rights that the Issuing Bank may then have against the relevant
Borrower in respect of the amount paid and such subrogation will be
subject to the terms set out in Schedule 7 (Terms of Borrowers'
Indemnity).
(b) Each Obligor agrees to indemnify the Bank making such a payment in
respect of such payment and all costs and expenses properly incurred
by the Bank in recovering or attempting to recover any amount pursuant
to such rights of subrogation.
4.11 Currency Fluctuations
In addition and without prejudice to the Banks' other rights hereunder, the
Facility Agent shall on every Quarter Date (and at any other time at which
it is requested to do so by the Majority Banks) calculate the aggregate of
the Sterling Amounts of all Outstanding Contingent Liabilities under all
Letters of Credit then outstanding.
4.12 Clawback
If the Facility Agent at any time issues a certificate addressed to the
Primary Borrower that in its opinion the aggregate of the Sterling Amounts
of Outstanding Contingent Liabilities under all Letters of Credit then
outstanding is equal to or exceeds 105% of the aggregate amount of the
Banks' Commitments under the Revolving Credit Facility less the amount of
all outstanding Revolving Advances at that time, the Agent may give notice
to the Primary Borrower requiring it within five Banking Days either to:
(a) make arrangements to repay Revolving Advances and/or reduce the amount
of the Letters of Credit outstanding so as to bring the Sterling
Amount of all such Outstanding Contingent Liabilities to an amount
equal to or below 100% of that aggregate amount; or
(b) provide the Issuing Bank with cash cover in the currency in which any
Letter of Credit is denominated of such amount as would cause the
requirements of this clause 4.12 to be satisfied.
4.13 Cash Cover
Where cash cover is provided by an Obligor under clause 4.12 (Clawback) or
otherwise under this Agreement, the Issuing Bank or other recipient Bank
undertakes to place the relevant cash deposit in an account with it
(subject to such security arrangements as the Facility Agent may specify)
bearing interest at a rate and on the standard terms (other than as to the
security arrangements) applicable to corporate customers of such Bank
making deposits of an equivalent size and for an equivalent duration (or on
such other terms as such Bank and the relevant Obligor may agree). Interest
accruing on cash deposited as cash cover shall be for the account of and
paid to such Obligor but shall not be paid to any Obligor during the
continuance of an Event of Default.
5. INTEREST AND INTEREST PERIODS
5.1 Interest on the Acquisition Advances and Interim Advances
The Primary Borrower shall pay interest on each Acquisition Advance and
Interim Advance in respect of each Interest Period on the relevant Interest
Payment Date (or, in the case of Interest Periods of more than six months,
by instalments, every six months from the commencement of the relevant
Interest Period and on the relevant Interest Payment Date) at the rate per
annum determined by the Facility Agent to be the aggregate of (a) the
Applicable Margin, (b) the Additional Cost and (c) LIBOR.
5.2 Interest Periods for the Acquisition Advances and Interim Advances
(a) The Primary Borrower may by notice received by the Facility Agent not
later than 11 a.m. on the second Banking Day before the beginning of
each Interest Period in respect of each Acquisition Advance specify
whether such Interest Period shall have a duration of 1, 2, 3 or 6
months (or such other period as the Facility Agent, acting on the
instructions of the Majority Banks, may agree). All Interest Periods
for the Interim Facility shall have a duration of one month, save as
provided in (b) below.
(b) Every Interest Period in respect of each Acquisition Advance and
Interim Advance shall be of the duration specified by the Primary
Borrower pursuant to clause 5.2(a) but so that:
(i) the initial Interest Period in respect of each such Advance will
commence on the relevant Drawdown Date and each subsequent
Interest Period in respect of each such Advance shall commence on
the date of the expiry of the previous Interest Period, and until
the Syndication Date the provisions of clause 4.1(c) shall apply
to the selection of Interest Periods;
(ii) if otherwise there would be more than 10 Acquisition Advances or
10 Interim Advances outstanding with different Interest Payment
Dates, the Primary Borrower shall select Interest Periods for
such Advances ending on the same day as the then current Interest
Period for another such Advance and on the last day of such
Interest Period, such Advances shall be consolidated into and
shall thereafter constitute a single Advance;
(iii)if any Interest Period in respect of an Acquisition Advance
would otherwise overrun the Final Repayment Date or the date the
First Repayment is due, such Interest Period shall end on such
date;
(iv) if any Interest Period in respect of an Interim Advance would
otherwise overrun the Available Commitment Termination Date for
the Interim Facility, it shall end on such Available Commitment
Termination Date; and
(v) if the Primary Borrower fails to select the duration of an
Interest Period in respect of an Advance in accordance with the
provisions of clause 5.2(a) and this clause 5.2(b) such Interest
Period shall have a duration of 3 months or such other period as
shall comply with this clause 5.2(b) selected at the Facility
Agent's sole discretion.
5.3 Interest under the Revolving Credit Facility
The relevant Revolving Credit Facility Borrower shall pay interest on each
Revolving Advance on its Maturity Date (or, in the case of a Revolving
Advance having a Maturity Period of more than six months, by instalments,
every six months from the relevant Drawdown Date and on the relevant
Maturity Date) at the rate per annum determined by the Facility Agent to be
the aggregate of (i) the Applicable Margin, (ii) the Additional Cost and
(iii) LIBOR.
5.4 Interest on unpaid sums
(a) If any Borrower fails to pay any sum (including, without limitation,
any sum payable pursuant to this clause 5.4) on its due date for
payment under this Agreement such Borrower shall pay interest on such
sum from the due date up to the date of actual payment (as well after
as before judgment) at a rate determined by the Facility Agent
pursuant to this clause 5.4.
(b) The period beginning on the due date for payment and ending on the
date of actual payment shall be divided into successive periods of not
more than three months as selected by the Facility Agent (after
consultation with the Banks so far as reasonably
practicable in the circumstances) each of which (other than the first,
which shall commence on such due date) shall commence on the last day
of the preceding such period but so that if the unpaid sum is an
amount of principal which shall have become due and payable prior to
the next succeeding Interest Payment Date relating thereto or, as the
case may be, prior to the relevant Maturity Date, then the first such
period selected by the Facility Agent shall end on such Interest
Payment Date or, as the case may be, such Maturity Date.
(c) The rate of interest applicable to each period referred to in clause
5.4(b) shall (subject to clause 5.6) be the aggregate (as determined
by the Facility Agent) of (i) one per cent per annum, (ii) the
Applicable Margin (iii) the Additional Cost and (iv) LIBOR but so that
if the unpaid sum is an amount of principal (as referred to in clause
5.4(b)) interest shall be payable on such unpaid sum during the first
period determined pursuant to clause 5.4(b) at a rate one per cent
above the rate applicable thereto immediately before it fell due.
(d) Interest under this clause 5.4 shall be due and payable on the last
day of each period determined by the Facility Agent pursuant to this
clause 5.4 or, if earlier, on the date on which the sum in respect of
which such interest is accruing shall actually be paid or on such date
or other dates which the Facility Agent may specify by written notice
to the Primary Borrower (but not more frequently than once a month).
Any interest payable under this clause 5.4 which is not paid when due
shall be deemed an unpaid sum and shall itself bear interest
accordingly.
5.5 Notification of Interest Periods and interest rate
The Facility Agent shall notify the Primary Borrower (who shall notify any
other relevant Borrower) and the Banks promptly of the duration of each
Interest Period, Maturity Period or other period for the calculation of
interest (or, as the case may be, default interest) and of each rate of
interest determined by it under this clause 5.
5.6 Alternative interest rates
If:
(a) in attempting to calculate LIBOR under paragraph (b) of the definition
of LIBOR for a specified period the Facility Agent determines at 11.00
a.m. (London time) on the Quotation Date that it is unable to obtain
quotations for LIBOR from any of the Reference Banks in respect of the
relevant Advance or unpaid sum for the specified period; or
(b) before its close of business on such day, the Facility Agent has been
notified in writing by a Bank or group of Banks to which 35% or more
of the relevant Advance or unpaid sum is (or, if the relevant Advance
were made, would then be) owed that LIBOR calculated in accordance
with its definition in this Agreement does not accurately reflect the
cost to them of funding their participation; or
(c) the Facility Agent, acting reasonably, determines that, by reason of
circumstances affecting the London inter-bank market, adequate and
fair means do not or will not exist for determining the rate of
interest applicable to the specified period,
then:
(i) the Facility Agent shall promptly notify in writing the Primary
Borrower and the Banks of such event or circumstance;
(ii) the Facility Agent (on behalf of and after consultation with
the Banks) shall, within three Banking Days of such notice,
negotiate with the Primary Borrower with a view to agreeing a
substitute basis on which the relevant part of the Facility may
be maintained;
(iii) any substitute basis agreed in writing by the Facility Agent
(on behalf of and with the consent of all the Banks) and the
Primary Borrower within 30 days of such notice shall take
effect in accordance with its terms and interest shall be
calculated as if the substitute basis had come into effect from
the beginning of the relevant specific period;
(iv) in default of agreement within 30 days, each Bank's
participation in the Advance or unpaid sum (if any) shall
during that specific period bear interest at the annual rate
equal to the cost to that Bank (as certified by it to the
Primary Borrower within ten days of the end of that 30 day
period and expressed as a percentage rate per annum) of funding
its participation during that specific period by whatever means
that Bank determines to be most appropriate plus the Applicable
Margin and the Additional Cost and if clause 5.4 (Interest on
unpaid sums) applies, a further one per cent.
6. REPAYMENT, PREPAYMENT, CANCELLATION AND REDUCTIONS
6.1 Repayment of the Acquisition and Interim Advances
The Primary Borrower shall repay in full:
(a) Acquisition Advances
all outstanding Acquisition Advances on the following dates and in the
following amounts:
Date Amount ((pound))
Second anniversary of the date 600,000,000 (less voluntary
of this Agreement prepayments previously made) (the
"First Repayment")
Final Repayment Date All remaining Acquisition Advances
outstanding (the "Final Repayment")
(b) Interim Advances
all outstanding Interim Advances on the Available Commitment
Termination Date of the Interim Facility.
6.2 Mandatory Repayment equal to Coal Proceeds
(a) On the Available Commitment Termination Date of the Interim Facility
the Primary Borrower shall prepay outstanding Acquisition Advances in
an amount equal to the product of the Coal Proceeds and the fraction
of the share capital of the Target acquired by Bidco at such date less
the amount of the Interim Advances repaid under clause 6.1(b).
(b) Amounts repaid and/or prepaid in accordance with this clause 6.2 shall
be applied in accordance with clause 6.6(c).
6.3 Repayment of Revolving Advances
The relevant Revolving Credit Facility Borrower shall repay each Revolving
Advance in full on its Maturity Date but, subject to the terms of this
Agreement, amounts repaid may be reborrowed.
On the Final Repayment Date the balance of all outstanding Revolving
Advances shall in any event be repaid in full and may not be reborrowed.
6.4 Optional prepayment of all the Banks
The relevant Borrower may, subject to clause 6.6, prepay:
(a) an Acquisition Advance or an Interim Advance in whole or part (if in
part, being (pound)10,000,000 or any larger sum which is an integral
multiple of (pound)5,000,000) on the next succeeding Interest Payment
Date in respect of such Advance or, together with any relevant amounts
payable pursuant to clause 13.1, any other Banking Day, Provided that
in prepaying such Advance, the Banks to whom such Advance is owing are
prepaid on a pro rata basis;
(b) Revolving Advances in whole (but not in part) together with any
relevant amounts payable pursuant to clause 13.1.
6.5 Affected Banks
(a) The relevant Borrower may and, where required under this Agreement
shall prepay (in whole but not in part only), without premium or
penalty, subject to clause 6.6, the whole of the Contributions to all
the Facilities of any Affected Bank. Upon any such notice of such
prepayment being given, or as provided for in clause 14.1, the
Commitments of the relevant Bank to all the relevant Facilities shall
be reduced to zero and the undrawn amount of the Total Commitments in
respect of all the Facilities shall be reduced accordingly.
(b) Instead of or, in addition to, its rights under clause 6.5(a) the
relevant Borrower may on payment of the fee under clause 16.5, without
prejudice to clause 14.4, require the Affected Bank to transfer
pursuant to clause 16.5 at par all of its Commitments and
Contributions to a Qualifying Bank nominated by the Borrower provided
that the relevant Qualifying Bank agrees (in its absolute discretion)
to accept the transfer to it and, in the case of clause 14.1, that
Bank is lawfully able to do so and the transfer is to take effect
prior to the prepayment date specified by the Facility Agent
thereunder.
6.6 Prepayments generally
(a) No prepayment may be made pursuant to clauses 6.2, 6.4 or 6.5 unless
the Primary Borrower shall have given the Facility Agent 5 Banking
Days prior notice (or in the case of a prepayment pursuant to clause
14.1 such notice as is required under clause 14.1) specifying the
proposed date of the prepayment and the amount to be prepaid. Every
such notice shall be effective only on actual receipt by the Facility
Agent, shall be irrevocable and shall oblige the relevant Borrower to
make the relevant prepayment on the date specified.
(b) No amount of the Acquisition Facility or the Interim Facility which is
repaid or prepaid may be reborrowed.
(c) Prepayments (other than under clause 6.5) shall be applied in the
following order:
(i) against outstanding Interim Advances;
(ii) against outstanding Acquisition Advances, in inverse order of
maturity save that:
(aa) prepayments of Coal Proceeds under Clause 6.2(a) shall be
applied against the First Repayment and thereafter against
the Final Repayment; and
(bb) voluntary prepayments shall be applied first against the
First Repayment and thereafter against the Final Repayment;
(iii) in repayment of outstanding Revolving Advances and in permanent
reduction of the Revolving Credit Facility;
(iv) to provide cash cover for the Outstanding Contingent
Liabilities under the Revolving Credit Facility.
(d) All prepayments shall be made together with (to the extent these
relate to the amounts prepaid) (i) accrued interest to the date of
prepayment; (ii) any additional amount payable under clauses 8.5 or
14.2; and (iii) all other sums payable by the Borrower to the relevant
Banks under this Agreement including, without limitation, any accrued
commitment commission payable under clause 7.2, any Letter of Credit
commission and fees under clause 7.3, expenses under clause 7.4 and
any amounts payable under clause 13.1.
(e) No Borrower shall prepay all or any part of an Advance outstanding
hereunder except at the times and in the manner expressly provided
herein.
6.7 Cancellation of the Facilities
The Primary Borrower may at any time prior to the Available Commitment
Termination Date in respect of the relevant Facility by notice to the
Facility Agent (effective only on actual receipt) cancel with effect from a
date not less than 10 Banking Days after the receipt by the Facility Agent
of such notice the whole or any part (if in part, being (pound)10,000,000
or any larger
sum which is an integral multiple of (pound)5,000,000) of the Available
Facility Amount of the relevant Facility, in each case which is not the
subject of a Drawdown Notice at such time. Such notice shall specify the
Facility to which it refers, the date upon which such cancellation is to be
made and the amount of such cancellation. Any such notice of cancellation,
once given, shall be irrevocable and upon such cancellation taking effect
the Commitments of the Banks in respect of the relevant Facility shall be
reduced accordingly (pro-rata their respective Commitments in respect of
the relevant Facility).
6.8 Termination
The Commitment of each Bank shall be automatically cancelled and reduced to
zero at the close of business in London on the relevant Available
Commitment Termination Date or, if it occurs, the Cancellation Date.
7. FEES AND EXPENSES
7.1 Arrangement, underwriting, participation and agency fees
The Primary Borrower shall pay to the Facility Agent or shall procure that
there is paid, whether or not any part of the Commitments is ever advanced:
(a) on the date of this Agreement, for the account of the Arrangers, fees
of an amount agreed between the Primary Borrower and the Arrangers in
a letter dated on or about the date of this Agreement;
(b) on the date of this Agreement and on each anniversary thereof until
the end of the Finance Period, for the account of the Facility Agent,
an agency fee and for the account of the Security Agent, a security
agency fee, in each case of an amount agreed between the Primary
Borrower and the Facility Agent in a letter dated on or about the date
of this Agreement.
7.2 Commitment fees
The Primary Borrower shall pay to the Facility Agent, whether or not any
part of the Commitments is ever advanced, from the date of this Agreement
on each Fee Payment Date after the date of this Agreement and on the
Available Commitment Termination Date in respect of each Facility (or the
Cancellation Date if earlier), for the account of each of the Banks
(pro-rata their respective Commitments for the relevant Facility),
commitment commission computed in arrears at the Applicable Fees Rate on
the daily amount by which the Total Commitments in respect of the relevant
Facility exceeds the aggregate of the Contributions in respect of the
relevant Facility. Accrued commitment commission will also be payable on
the amount of any Commitment when cancelled on the date of its
cancellation.
7.3 Letter of Credit Fees
(a) Each relevant Borrower shall (on the dates set out in clause 7.3(c))
pay commission in Sterling to the Facility Agent for the account of
the Banks (in their respective Proportions) on the Issue of any Letter
of Credit requested by such Borrower in Sterling at a percentage rate
per annum equal to the Applicable Margin on the Sterling Amount of the
Outstanding Contingent Liabilities under such Letter of Credit
calculated
in each case on the date of Issue and recalculated on each Quarter
Date from the Issue Date of such Letter of Credit until the earlier of
its Expiry Date or such date as the Issuing Bank and the Banks have
ceased to be under any liability (actual or contingent) in respect
thereof, and on the basis of a 365 day year. If the relevant Borrower
has provided cash cover for any Letter of Credit, the percentage rate
per annum payable on cash covered amounts shall instead be 0.25%.
(b) Each relevant Borrower shall pay a fronting fee to the Facility Agent
for the account of the Issuing Bank on the Issue of any Letter of
Credit at a rate of 0.2% per annum on the Sterling Amount of the face
amount of the relevant Letter of Credit payable in advance on the date
of Issue and on each Quarter Date thereafter.
(c) The commission and fronting fee payable under clauses 7.3(a) and
7.3(b) in respect of each Letter of Credit shall be paid in advance on
the relevant Issue Date and on each Quarter Date in each year during
the continuance of such Letter of Credit (or if such day is not a
Banking Day, on the preceding Banking Day) commencing on the first
Quarter Date falling on or after the Issue of the relevant Letter of
Credit. If a Letter of Credit is terminated leaving no Outstanding
Contingent Liabilities before a Quarter Date, any commission paid in
advance for the period from the date of cancellation until the next
Quarter Date shall be repaid to the Borrower which made the advance
commission payment by set-off against any amounts then due from the
Borrower to any Finance Party or, if no such amounts are due, by
payment in cash.
(d) For the avoidance of doubt, the Issuing Bank's Proportion of the
commission at the rate and calculated in the manner specified in
clause 7.3(a) shall be payable to the Issuing Bank in respect of its
residual liability in its capacity as a Bank, notwithstanding that it
does not purport to guarantee itself in its capacity as Issuing Bank.
(e) The Borrowers shall pay interest on the amount demanded and
outstanding under the indemnity given by them in respect of Letters of
Credit in accordance with clause 4.8 (Calculation of Interest if Bank
makes a Guarantee or Indemnity Payment) in addition to the commission
and other fees payable under this Agreement in respect of the
Revolving Credit Facility.
7.4 Expenses
The Primary Borrower shall reimburse the Arrangers, the Banks, the Security
Agent and the Facility Agent from time to time within three Banking Days of
demand:
(a) all reasonable costs and expenses (including without limitation legal,
printing and out-of-pocket expenses) together with any VAT thereon
incurred by the Facility Agent and the Arrangers in connection with
the negotiation, preparation and execution of the Finance Documents
and the completion and syndication of the transactions therein
contemplated, and the negotiation, preparation and execution of any
amendment or extension of, or the granting of any waiver or consent
under, any of the Finance Documents; and
(b) without prejudice to the generality of (c) below, all expenses and
costs (including without limitation the fees and expenses of lawyers,
accountants, surveyors, valuers, environmental consultants and other
professional advisers and out-of-pocket expenses) incurred by the
Facility Agent in connection with the obtaining of reports and/or
advice
and/or the undertaking of investigations by or on behalf of the
Facility Agent into or concerning the Primary Borrower or the Group
following the occurrence of a Default and whilst it is continuing (or
where the Majority Banks' reasonable opinion is that a Default may
have occurred) and the Primary Borrower undertakes to give, and to
procure that its Subsidiaries give, all such reasonable assistance
(including, without limitation, access to its and/or their properties
and financial and other records) at all times as the Facility Agent
shall reasonably require for the purpose of enabling such reports or
advice to be prepared or such investigations to be undertaken; and
(c) after a Default has occurred, all costs and expenses (including
without limitation legal and out-of-pocket expenses) incurred by any
of the Finance Parties in contemplation of, or otherwise in connection
with, the enforcement or attempted enforcement of, or preservation or
attempted preservation of any rights under, any of the Finance
Documents, or otherwise in respect of the recovery, or attempted
recovery, of moneys owing under the same, together with interest at
the rate referred to in clause 5.4 from the date on which such
expenses were incurred to the date of payment (as well after as before
judgment).
7.5 Value Added Tax
All fees, costs and expenses payable pursuant to this clause 7 shall be
paid together with an amount equal to any VAT thereon payable by any of the
Finance Parties in respect of such fees and expenses.
7.6 Stamp and other duties
The Primary Borrower shall pay all stamp, documentary, registration,
notarisation or other duties or Taxes (including any duties or Taxes
payable by, or assessed on, the Finance Parties) imposed on or in
connection with the negotiation, preparation, implementation and execution
of any of the Finance Documents and the syndication of the Facilities and
shall indemnify the Finance Parties against any liability arising by reason
of any delay or omission by the Primary Borrower to pay such duties or
Taxes.
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 No set-off or counterclaim; distribution to the Banks
All payments to be made by any Borrower under this Agreement shall be made
in full, without any set-off or counterclaim whatsoever and, subject as
provided in clause 8.5, free and clear of any deductions or withholdings,
in Sterling (except for costs, charges or expenses which shall be payable
in the currency in which they are incurred) on the due date to the account
of the Facility Agent at such bank as the Facility Agent may from time to
time specify for this purpose. Save where this Agreement provides for a
payment to be made for the account of a particular Finance Party or Finance
Parties, in which case the Facility Agent shall distribute the relevant
payment to the relevant Finance Party or Finance Parties concerned,
payments to be made by any Borrower under this Agreement shall be for the
account of all the Banks and the Facility Agent shall forthwith distribute
such payments in like funds as are received by the Facility Agent to the
Banks rateably for the account of such Banks' respective Facility Offices
in accordance with their Commitments or Contributions, as the case may be.
8.2 Payments by the Banks
All sums to be advanced by the Banks to any Borrower under this Agreement
shall be remitted in Sterling in immediately available funds not later than
11 a.m. on the relevant Drawdown Date or, as the case may be, the first day
of the relevant Interest Period to the account of the Facility Agent at
such bank as the Facility Agent may have notified to the Banks and shall be
paid by the Facility Agent on such date to the account of the relevant
Borrower in England specified in the relevant Drawdown Notice.
8.3 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be postponed to the
next following Banking Day unless such Banking Day falls in the next
calendar month, in which case payment shall be made on the immediately
preceding Banking Day.
8.4 Facility Agent may assume receipt
Where any sum is to be paid under this Agreement to the Facility Agent for
the account of another person, the Facility Agent may assume that the
payment will be made when due and may (but shall not be obliged to) make
such sum available to the person so entitled. If it proves to be the case
that such payment was not made to the Facility Agent, then the person to
whom such sum was so made available shall on request refund such sum to the
Facility Agent together with interest thereon sufficient to compensate the
Facility Agent for the cost of making available such sum up to (and/or, as
the case may be, the cost to the relevant other person of not receiving
such sum until) the date of such repayment and the person by whom such sum
was payable shall indemnify the Facility Agent (or the relevant other
person) for any and all loss or expense which the Facility Agent (or the
relevant other person) may sustain or incur as a consequence of such sum
not having been paid on its due date together with any interest, expenses
and penalties payable or incurred in connection therewith.
8.5 Grossing-up for Taxes
If at any time any Borrower is required to make any deduction or
withholding in respect of Taxes from any payment due under any Finance
Document for the account of any Finance Party (or if the Facility Agent, or
as the case may be, the Security Agent is required to make any such
deduction or withholding from a payment to a Finance Party), the sum due
from the relevant Borrower in respect of such payment shall, subject to
clause 8.6, be increased to the extent necessary to ensure that, after the
making of such deduction or withholding (and any further deduction and
withholding which may be levied on the additional amounts paid by reason of
this clause), each Finance Party receives on the due date for such payment
(and retains, free from any liability in respect of such deduction or
withholding) a net sum equal to the sum which it would have received and so
retained had no such deduction or withholding been made or required to be
made and (without prejudice to the foregoing provisions of this clause 8.5)
each Borrower shall indemnify each Finance Party on demand by the Facility
Agent against any losses or costs incurred by any of them together with any
interest, expenses and penalties payable or incurred in connection
therewith by reason of any failure of such Borrower to make any such
deduction or withholding.
Each Borrower shall promptly deliver to the Facility Agent any receipts,
certificates or other proof evidencing the amounts (if any) paid or payable
in respect of any such deduction or withholding.
8.6 Qualifying Bank
(a) If:
(i) any Bank is not or ceases to be a Qualifying Bank; and
(ii) as a result an Obligor is required to deduct or withhold United
Kingdom income tax in respect of payments of interest to be made
by such Obligor to that Bank under any Finance Document or would
otherwise have been required to make an indemnity payment or a
greater indemnity payment under clause 8.5 or 14.2,
then such Obligor shall (as the case may be) not be liable to pay
under clause 8.5 in respect of any such payment of interest any amount
in excess of the amount it would have been obliged to pay if such Bank
were a Qualifying Bank, nor shall it be liable to make an indemnity
payment or a greater indemnity payment under clause 8.5 or, as the
case may be, Clause 14.2 than would have been required if the
aforesaid Bank had been or had not ceased to be a Qualifying Bank
Provided that this Clause 8.6 shall not apply, and such Obligor shall
be obliged to comply with its obligations under clause 8.5, or as the
case may be 14.2, if on or after the date hereof:
(aa) there shall have been any change in, or in the official
interpretation or application of, any relevant law or the
practice of the United Kingdom Inland Revenue (or, in the case of
a Treaty Lender, any Government Entity in the country in which it
is resident for the purpose of the relevant double taxation
treaty) and as a result thereof the Bank is not or ceases to be a
Qualifying Bank, or
(bb) the Bank referred to in clause 8.6(a) has transferred its
Facility Office in respect of any Facility outside the United
Kingdom or has become a Bank hereunder with a Facility Office
outside the United Kingdom in respect of any Facility, in each
case, with the consent of the Primary Borrower if and insofar as
required under this Agreement.
(b) A person intending to make a claim pursuant to clause 8.5 shall,
promptly after such person becomes aware of the circumstances giving
rise to such claim and the amount of such claim, deliver to the
Primary Borrower through the Facility Agent a certificate to that
effect specifying the amount of such claim and setting out in
reasonable detail the basis of such claim, provided that nothing shall
require such person to disclose any confidential information relating
to the organisation of its affairs.
(c) If at any time after the date of this Agreement any Bank is aware that
it is not or will cease to be a Qualifying Bank (for whatever reason),
it shall promptly notify the Primary Borrower.
(d) A Treaty Lender will submit such claim to the appropriate authorities
(together with such forms, papers, other documents and/or evidence as
necessary) as may be required
for the Obligors to make payment of interest to such Treaty Lender on
its Advances free of withholding or deduction on account of United
Kingdom Tax. No Obligor will be liable to pay any additional amount
under clause 8.5 in respect of the withholding or deduction on account
of United Kingdom income tax from any such interest unless such claim
has been submitted to those authorities promptly after that Treaty
Leader became a party to this Agreement as a Treaty Lender or the
proviso to clause 8.6(a) applies.
8.7 Claw-back of Tax benefit
If following any such deduction or withholding as is referred to in clause
8.5 any Finance Party determines in its sole discretion that it has
received or been granted a credit against or remission for any Taxes
payable by it, such Finance Party shall, subject to the relevant Borrower
having made any increased payment in accordance with clause 8.5 and subject
to there not being any Default which is continuing, and to the extent that
such Finance Party can do so without prejudicing the retention of the
amount of such credit or remission and without prejudice to the right of
such Finance Party to obtain any other relief or allowance which may be
available to it, reimburse the relevant Borrower with such amount as such
Finance Party shall in its absolute discretion certify to be the proportion
of such credit or remission as will leave such Finance Party (after such
reimbursement) in no worse position than it would have been in had there
been no such deduction or withholding from the payment by the relevant
Borrower as aforesaid. Such reimbursement shall be made forthwith upon such
Finance Party certifying that the amount of such credit or remission has
been received by it, provided that the Finance Party shall be the sole
judge of the amount of any such benefit and of the date on which it was
received. Nothing contained in this Agreement shall interfere with the
right of any Finance Party to arrange its tax affairs in whatever manner it
thinks fit nor oblige any Finance Party to disclose any information
regarding its tax affairs and computations. Without prejudice to the
generality of the foregoing, no Borrower shall, by virtue of this clause
8.7, be entitled to enquire about any Finance Party's tax affairs or
computations. The Finance Parties are under no obligation to investigate
whether any tax credit is available or to claim any tax credit. Any amount
paid by any Finance Party to a Borrower under this clause shall be
conclusive evidence of the amount payable and will be accepted by the
Borrower in full and final settlement of its claim.
8.8 Bank accounts
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by, owing
to and paid to it under this Agreement. The Facility Agent shall maintain a
control account showing the utilisation of the Facilities and other sums
owing by each Borrower under this Agreement and all payments in respect
thereof made by each Borrower from time to time. In any legal action
arising out of or in connection with the Finance Documents the entries made
in the accounts maintained pursuant to this clause 8.8 shall, in the
absence of manifest error, be conclusive as to the amount from time to time
owing by each Borrower under this Agreement.
8.9 Partial payments
If:
(a) on any date on which a payment is due to be made by any Borrower under
this Agreement, the amount received by the Facility Agent from such
Borrower falls short of the total amount of the payment due to be made
by such Borrower on such date; or
(b) on any date on which the Facility Agent receives any payment from the
Security Agent or otherwise receives any amount representing proceeds
of realisations or other recoveries under any of the Security
Documents, the amount of such payment or other receipt falls short of
the total amount owing to the Finance Parties under this Agreement on
such date
then (in any such case), without prejudice to any rights or remedies
available to the Finance Parties under any of the Finance Documents, the
Facility Agent shall apply the amount actually received by it in or towards
discharge of the obligations of such Borrower under this Agreement in the
following order, notwithstanding any appropriation made, or purported to be
made, by such Borrower:
(i) first, in or towards payment, on a pro-rata basis, of any
unpaid costs and expenses of the Facility Agent, Security Agent
or the Arrangers under this Agreement;
(ii) secondly, in or towards payment to the Banks, on a pro-rata
basis, of any amount owing to the Banks under clause 20.2;
(iii) thirdly, in or towards payment to the Arrangers, on a pro-rata
basis, of any portion of the fees payable under clause 7.1(a)
which remains unpaid;
(iv) fourthly, in or towards payment to the Facility Agent and the
Security Agent, on a pro-rata basis, of any portion of the fees
payable under clause 7.1(b) which remains unpaid;
(v) fifthly, in or towards payment to the Banks, on a pro-rata
basis, of any accrued commitment commission payable under
clause 7.2 which shall have become due but remains unpaid;
(vi) sixthly, in or towards payment to the Banks, on a pro-rata
basis, of any accrued interest, Letter of Credit commission and
(in the case of the Issuing Bank) Letter of Credit fronting
fees or commission which shall have become due but remain
unpaid, but so that any amount payable by virtue of clause 8.5
shall be excluded;
(vii) seventhly, in or towards payment to the Banks, on a pro-rata
basis, of any principal which shall have become due but remains
unpaid;
(viii) eighthly, in or towards payment to any such Banks, on a
pro-rata basis, of any amount payable to any Banks by virtue of
clause 8.5 which remains unpaid; and
(ix) ninthly, in or towards payment of any other sum which shall
have become due but remains unpaid (and, if more than one such
sum so remains unpaid, on a pro-rata basis).
Each reference in clause 8.9(i) to (ix) (inclusive) to a category of unpaid
sums shall include interest thereon payable in accordance with this
Agreement (including, without limitation,
default interest under clause 5.4). Accordingly, clause 8.9(vi) shall be
construed as referring to interest on principal and accrued interest
thereon which remain unpaid to the extent due.
The order of application set out in this clause 8.9(v) to 8.9(ix) shall be
varied by the Facility Agent if the Majority Banks so direct, without any
reference to, or consent or approval from, the Borrowers.
8.10 Calculations
All interest and other payments of an annual nature under this Agreement or
any of the Security Documents shall accrue from day to day and be
calculated on the basis of the actual number of days elapsed, and in the
case of Sterling a 365 day year and in the case of other currencies a 360
day year. In calculating the actual number of days elapsed in a period
which is one of a series of consecutive periods with no interval between
them or a period on the last day of which any payment falls to be made in
respect of such period, the first day of such period shall be included but
the last day excluded.
Where the Applicable Margin or Additional Cost changes during any period,
interest and commitment fees shall be calculated on the rate prevailing
from day to day.
8.11 Certificates conclusive
Any certificate of, or determination by, a Finance Party as to any rate of
interest or any other amount payable under this Agreement or any of the
Security Documents shall, in the absence of manifest error, be conclusive
and binding evidence of such rate or amount on each Borrower and (in the
case of a certificate of or determination by the Facility Agent) on the
Banks.
8.12 Effect of monetary union
If the country of any national currency in which any amount is expressed to
be payable under this Agreement participates in economic and monetary union
in accordance with Article 109J of the Treaty on European Union, then:
(a) any amount expressed to be payable under this Agreement in that
national currency shall (until the end of the transitional period) be
made in that national currency or in Euros as the Facility Agent may,
by not less than two Banking Days' notice to the Primary Borrower and
the Banks to that effect, require;
(b) any amount so required under clause 8.12(a) to be paid in Euros shall
be converted from that national currency at the rate stipulated
pursuant to Article 109L(4) of the Treaty on European Union and
payment of the amount in Euro derived from such conversion shall
discharge the obligation of the relevant party to pay such national
currency amount; and
(c) after consultation with the Primary Borrower and the Banks and
notwithstanding clause 22, the Facility Agent shall be entitled to
make from time to time such amendments to this Agreement as it may
determine to be necessary to take account of monetary union and any
consequent changes in market practices (whether as to the settlement
or rounding of obligations, the calculation of interest or otherwise
howsoever).
Any amendment so made to this Agreement by the Facility Agent shall be
promptly notified to the other Finance Parties and the Primary
Borrower by the Facility Agent and shall be binding on all the other
Finance Parties and any Borrower and any other party to this
Agreement.
9. REPRESENTATIONS AND WARRANTIES
9.1 Repeated representations and warranties
Each Obligor party hereto represents and warrants to each Finance Party
that (subject to clause 9.5):
(a) Due incorporation: it and the other members of the Group from time to
time are duly incorporated and validly existing under the laws of
England as limited liability companies and have power to carry on
their respective businesses as they are now being conducted and to own
their respective property and other assets;
(b) Corporate Power: it and the other Obligors have power to execute,
deliver and perform their respective obligations under each of the
Finance Documents to which they are parties and to borrow the
Commitments; all necessary corporate, shareholder and other action has
been taken to authorise the making of the Offer and the issue of the
Press Release and the Offer Documents, and the execution, delivery and
performance of the same and no limitation on the powers of any Obligor
to borrow will be exceeded as a result of any Advance under any of the
Finance Documents and no limitation on any of their respective powers
to give guarantees and/or to create security will be exceeded as a
result of the execution and delivery of any of the Security Documents;
(c) Binding obligations: (subject, in the case of the Security Documents,
to registration under section 395 Companies Act 1985) (i) each of the
Finance Documents when executed and delivered by any Obligor will
(subject to the Reservations) constitute, valid, legally binding and
enforceable obligations of it in accordance with their respective
terms and (ii) it is not necessary, to ensure the legality, validity,
enforceability or admissibility in evidence of any Finance Document
that they or any other instrument be notarised, filed, recorded,
registered or enrolled in any court, public office or elsewhere in the
United Kingdom or elsewhere or that any stamp, registration or similar
tax or charge be paid in the United Kingdom or elsewhere on or in
relation to any Finance Documents;
(d) No conflict with other obligations: the execution and delivery of, the
exercise of its rights and the performance of its obligations under,
and compliance with the provisions of, the Finance Documents by it and
all other Obligors will not (i) contravene any existing applicable
law, statute, rule or regulation or any judgment, decree or permit to
which any of them are subject, (ii) conflict with, or result in any
breach of any of the terms of, or constitute a default under any of
the Licences or the Pooling and Settlement Agreement, or under any
other agreement or other instrument to which any of them are a party
or are subject or by which any of their property is bound to an extent
which is reasonably likely in the reasonable opinion of the Majority
Banks to have a Material Adverse Effect, (iii) contravene or conflict
with any provision of their respective Memorandum or Articles of
Association or (iv) result, other than pursuant to the provisions of
any of the Finance Documents, in the creation or imposition of, or
oblige any member of the Group to create, any Security Interest (save
in favour of the Finance Parties) on any member of the Group's,
assets, rights or revenues; and
(e) Pari passu: in the case of each Borrower, its obligations under this
Agreement are its direct, general and unconditional obligations and
rank at least pari passu with all its other present and future
unsecured and unsubordinated Indebtedness with the exception of any
obligations which are mandatorily preferred by law and not by
contract.
9.2 Non-repeating representations and warranties
Each Obligor party hereto further represents and warrants to each of the
Finance Parties that (subject to clause 9.5):
(a) Clean company: (other than as may result from entry into the Finance
Documents, the Offer Documents and the documents ancillary thereto,
copies of which have been provided to the Arrangers) prior to the date
of this Agreement neither the Primary Borrower nor ▇▇▇▇▇ 2 nor Bidco
has undertaken any trading or incurred any material liabilities of any
nature whatsoever whether actual or contingent other than liabilities
for professional fees and any liability which would arise if the
relevant company were wound up;
(b) Winding Up: no meeting has been convened for the winding up or
administration of the Primary Borrower, ▇▇▇▇▇ 2, Bidco or (so far as
the Primary Borrower is aware) any other member of the Group and so
far as the Primary Borrower is aware, no such step is intended by any
of them and no petition, application or the like is outstanding for
the winding up or administration of any of them;
(c) Full Disclosure: so far as the Primary Borrower, ▇▇▇▇▇ 2 and Bidco are
aware, the written factual information supplied by or on behalf of the
Primary Borrower, ▇▇▇▇▇ 2, Bidco or the Parent, to any of the Finance
Parties in connection with this Agreement, the Parent and its
Subsidiaries, the Offer and/or the Target Group (including but not
limited to the Press Release and the Offer Document and any other
information concerning the Borrowed Monies, cash balances and Security
Interests of the Target Group) was and remains (except insofar as
superseded by later material supplied to the Finance Parties by the
Primary Borrower prior to the date of this Agreement) true and
accurate in all material respects and it is not aware of any material
facts or circumstances that have not been disclosed to the Finance
Parties and which might reasonably be expected to have a Material
Adverse Effect, or which might reasonably be expected to be material
to a bidder in the context of whether to make an offer or whether the
offer is correctly priced;
(d) Agreed Projections: the Agreed Projections delivered to the Arrangers
prior to the date of this Agreement in the agreed form were arrived at
after careful consideration, were fair and were based on assumptions
which were reasonable having regard to the state of knowledge of the
officers of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco;
(e) No Default: no Default has occurred and is continuing;
(f) Existing Security: no Security Interest exists on or over any member
of the Group's assets except as permitted by clause 11.1(a); and
(g) Litigation:
(i) no litigation, alternative dispute resolution, arbitration or
administration proceeding is taking place, pending or, to the
knowledge of the officers of the Primary Borrower, ▇▇▇▇▇ 2 or
Bidco, threatened against the Primary Borrower, ▇▇▇▇▇ 2 or Bidco;
and
(ii) so far as it is aware, no litigation, alternative dispute
resolution, arbitration or administration proceeding is taking
place, pending or threatened against any other member of the
Group which is reasonably likely (in the reasonable opinion of
the Majority Banks) in either case to have a Material Adverse
Effect.
9.3 Representations on and from the Takeover Operative Date
Each Obligor party hereto represents and warrants to each Finance Party
that on the Takeover Operative Date:
(a) Compliance with Environmental Laws: each member of the Group:
(i) as at the Takeover Operative Date complies; and
(ii) has (to the extent that non-compliance would be reasonably likely
to give rise to a material liability as at the Takeover Operative
Date) at all times complied,
in all material respects with all Environmental Laws, where
non-compliance, in each case, would be reasonably likely to have a
Material Adverse Effect;
(b) No Environmental Claims:
(i) no Environmental Claim is pending or has been made or threatened
against any member of the Group or any of their respective
officers in their capacity as such; and
(ii) no member of the Group is aware of any circumstances or situation
which would be reasonably likely to result in it having any
liability in relation to Environmental Matters,
which, in either case, would be reasonably likely to have a Material
Adverse Effect;
(c) The Licensees:
(i) each relevant Licensee has been duly authorised by the Secretary
of State under Section 6 of the Electricity Act to generate,
and/or distribute and/or supply electricity and/or, as the case
may be, section 7 of the Gas ▇▇▇ ▇▇▇▇ to supply and transport
gas; and
(ii) no Licensee is in contravention of:
(A) any term or condition of any Licence; or
(B) any requirement of the Electricity Act or Gas Acts or any
regulations made thereunder; or
(C) any other statutory requirement or any final order or
confirmed provisional order made under the Electricity Act
or Gas Acts; or
(D) any undertaking given by it to the Director General,
Director General of Gas Supply or the Secretary of State in
relation to the conduct of its business as a generator of
electricity or, as the case may be, as a public electricity
supplier or (as the case may be) public gas supplier or
transporter;
the contravention or consequence of which is reasonably likely to
have a Material Adverse Effect;
(d) The Licences:
(i) each Licence is in full force and effect and neither the
Director General nor the Director General of Gas Supply nor the
Secretary of State has given notice to revoke a Licence;
(ii) no amendment of any of the terms of a Licence has been made or
proposed;
(iii) no other material licence, consent, undertaking or
authorisation necessary for the carrying on by any member of
the Group of its business substantially as it is currently
carried on has been terminated or breached or not obtained or
is otherwise not in full force and effect;
which in either case is reasonably likely to have a Material Adverse
Effect.
9.4 Repetition
The representations and warranties in clauses 9.1 and 9.3 shall be deemed
to be repeated on and as of the first Drawdown Date (or in the case of
clause 9.3, the Takeover Operative Date), each subsequent Drawdown Date and
each Interest Payment Date, as if made with reference to the facts and
circumstances existing on each such date, and shall, after the first set of
financial statements have been delivered under clauses 10.1(b)(i) and (ii),
be deemed to include a representation that the then latest financial
statements delivered to the Banks under clauses 10.1(b)(i) and (ii) have
been prepared in accordance with the Appropriate Accounting Principles
which have been consistently applied and give a true and fair view of (or
in the case of unaudited accounts, present with reasonable accuracy) the
financial position of the Primary Borrower and the consolidated financial
position of the Group respectively as at the date to which such financial
statements were made up and the results of the operations of the Primary
Borrower and the results of the operations of the Group respectively for
the relevant period, and in the case of audited accounts are not subject to
any qualifications save of a technical and non-adverse nature.
9.5 Application to Target Group
Each representation or warranty given in respect of Target or any member of
the Target Group on any date up to (but not including) the Takeover
Operative Date shall be given only by the
Primary Borrower, ▇▇▇▇▇ 2 and Bidco and only on a qualified basis, namely
that the representation and warranty is true and accurate with regard to
the Target and the Target Group so far as the Primary Borrower, ▇▇▇▇▇ 2 and
Bidco are aware as at the date of this Agreement.
9.6 Obligors' Acknowledgement
Each Obligor party hereto acknowledges that the Finance Parties are relying
on the representations and warranties but not on any other information
contradictory to them or varying them of which the Finance Parties or any
of them or their respective agents or advisers may have actual or
constructive knowledge.
9.7 Representation at time of Third Amendment Agreement
Each Obligor party hereto represents and warrants to each Finance Party
that so far as it is aware (subject to clause 9.5) all written factual
information (including all supplements and updates to the Agreed
Projections) supplied on or prior to the date of the Third Amendment
Agreement by or on behalf of the Primary Borrower, ▇▇▇▇▇ 2, Bidco or the
Parent to any Finance Party or prospective Finance Party for the purposes
of the information memorandum referred to in clause 16.16(f) and the
Syndication Letter was and remains (except insofar as superseded by later
material supplied to the Finance Parties by the Primary Borrower, ▇▇▇▇▇ 2,
Bidco or the Parent prior to the date of the Second Supplemental Agreement)
true and accurate in all material respects and does not omit to state a
material fact necessary in order to make the statements contained therein
not materially misleading in the light of the circumstances under which the
statements were made.
10. POSITIVE UNDERTAKINGS
10.1 Information Undertakings
Each Obligor party hereto undertakes with each of the Finance Parties that,
throughout the Finance Period (but subject to clause 11.2):
(a) Preparation of financial statements: it will:
(i) Annual audited financial statements: beginning with the financial
year ending 31 December 1998, prepare financial statements in
respect of itself and consolidated financial statements in
respect of the Group and consolidated financial statements of
▇▇▇▇▇ 2 in accordance with the Appropriate Accounting Principles
(consistently applied) in respect of each financial year and
cause the same to be reported on by the Auditors; and
(ii) Quarterly financial statements: after the Unconditional Date,
prepare unaudited consolidated financial statements of the Group
and the consolidated financial statements of ▇▇▇▇▇ 2 in respect
of each Quarter in each financial year in accordance with the
Appropriate Accounting Principles (consistently applied);
(b) Delivery of financial statements: it will deliver to the Facility
Agent, for distribution to the Banks, sufficient copies for all the
Banks of each of the following documents:
(i) Annual audited financial statements: at the time of issue
thereof to the shareholders of the Primary Borrower and ▇▇▇▇▇
2, but in any event not later than 120 days after the end of
the financial year to which they relate, the audited financial
statements referred to in clause 10.1(a)(i) for each financial
year together, in each case, with the report of the Auditors
thereon, the notes thereto, the directors' report thereon and
the certificate referred to in clause 10.1(b)(iii);
(ii) Unaudited management accounts: within 45 days after the end of
each Quarter in each financial year, consolidated management
accounts for the Group and for ▇▇▇▇▇ 2 in respect of such
Quarter prepared in accordance with the requirements of clause
10.1(a)(ii) together with the certificate referred to in clause
10.1(b)(iii);
(iii) Compliance with Financial Undertakings: with each set of
accounts delivered by it under clauses 10.1(b)(i) and (ii)
above (except the first Quarter's accounts under clause
10.1(b)(ii)), the Primary Borrower will deliver to the Facility
Agent a certificate signed by a director of the Primary
Borrower:
(aa) confirming compliance with the financial undertakings in
clause 10.3(a) as at the end of the relevant Test Period;
and
(bb) setting out in reasonable detail and in a form satisfactory
to the Facility Agent the computations necessary to
demonstrate such compliance;
(iv) Regulatory Accounts: at the time of their issue to the relevant
Government Entity or regulator, all accounts and other
financial statements or information required under any law or
regulation to be provided to any Government Entity, industry
regulator or similar body or person;
(v) Reports and notices to shareholders and creditors: at the time
of issue thereof every report, circular, notice or like
document issued by the Primary Borrower, ▇▇▇▇▇ 2 and/or Bidco
to its shareholders or creditors generally and every notice
convening a meeting of its shareholders or any class of its
shareholders; and
(vi) Further information: promptly upon request, such further
information concerning the financial position of the Group (or
any member of it) as the Facility Agent shall reasonably
require;
(c) Notice of Default: it will promptly upon becoming aware of the same
inform the Facility Agent of any Default;
(d) Notice of litigation: it will, upon becoming aware that the same is
threatened or pending and in any case promptly after the commencement
thereof, give to the Facility Agent notice in writing of any
litigation, alternative dispute resolution, arbitration or
administrative proceedings or any dispute affecting any member of the
Group or any of their respective assets, rights or revenues which if
determined against it could reasonably be expected to result in a
liability (including costs) of more than (pound)10,000,000 or
otherwise have a Material Adverse Effect; and
(e) Environmental Claims: promptly upon receipt of formal written notice
of the same inform the Facility Agent of any material Environmental
Claim.
10.2 General Undertakings
Each Obligor party hereto undertakes with each of the Finance Parties that,
throughout the Finance Period but subject to clause 11.2:
(a) Use of proceeds: it will procure that the proceeds of Advances under
the Facilities are used exclusively for their respective purposes
specified in clause 1.1;
(b) Consents etc relating to the Finance Documents: it will obtain or
cause to be obtained, maintain in full force and effect and comply in
all material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every consent, authorisation,
licence or approval of any Government Entity or consents required by
it in connection with the execution, delivery, validity,
enforceability or admissibility in evidence of the Finance Documents
and do, or cause to be done, all other acts and things, which may from
time to time be necessary under applicable law for the continued due
performance of all its (or its Subsidiaries) obligations under the
Finance Documents;
(c) Pari passu: it will ensure that its obligations, and those of each
other Obligor, under each of the Finance Documents shall, at all times
be direct, general and unconditional obligations and rank at least
pari passu with all its other present and future unsecured and
unsubordinated Indebtedness with the exception of any obligations
which are mandatorily preferred by law and not by contract;
(d) Licences and Environmental Laws:
(i) it will obtain and maintain and procure that each member of the
Group obtains and maintains in full force and effect each Licence
required for the carrying on of their respective businesses; and
(ii) it will obtain and maintain and procure that each member of the
Group obtains and maintains in full force and effect all other
material Environmental Licences and ensures that its business and
the business of each of its Subsidiaries complies in all respects
with all material Environmental Laws and all other material
Environmental Licences;
(e) Clear Market: from the date of this Agreement until the Syndication
Date it will not and will procure that no member of the Group will,
except with the prior written consent of the Arrangers or in relation
to the refinancing in full of the Facilities, mandate or place in the
syndicated or bilateral loan markets any Borrowed Money, or issue any
floating rate notes, other than the Facilities;
(f) Hedging Transactions: within 150 days of the date of this Agreement
the Primary Borrower shall enter into one or more hedging agreements
so as to swap the floating element of interest on the Facilities to a
fixed rate in respect of at least 50% of the Acquisition Facilities,
such hedging agreements to be:
(i) with a counterparty having a credit rating with Standard & Poors
of at least A; and
(ii) for a period or periods such that the average maturity of the
hedging agreements is at least 2 years after the date on which
the hedging agreements are entered into;
any such hedging agreement to which it is at any time party governing
the terms of a hedging transaction required by this Agreement must be
entered into with one of the Banks and should be in the form of the
ISDA 1992 Master Agreement (Multicurrency Cross-Border) and will
provide for "two way payments" in the event of a termination of that
hedging transaction entered into under such hedging agreement whether
upon a Termination Event or an Event of Default (as defined therein)
meaning that the "Defaulting Party" under that hedging agreement will
be entitled to receive payment under the relevant termination
provisions if the net replacement value of all terminated transactions
effected under that hedging agreement is in its favour;
(g) Upstreaming:
(i) it will take all steps available to it to ensure that sufficient
funds are lawfully (and subject to compliance with applicable
regulations including the Licences) upstreamed (directly or
indirectly) to it by the Target Group, ▇▇▇▇▇ 2 and Bidco (by way
of dividend or otherwise) to ensure that it is able to meet its
obligations under this Agreement;
(ii) in particular, it will take all steps available to it to ensure
that an amount equal to the proceeds of the Coalco Disposal
Agreement (or as much of such proceeds as it is or can be made
lawful and in compliance with regulations as are referred to in
(i) above to upstream) are lawfully upstreamed (directly or
indirectly) from the Target to the Primary Borrower (and not to
any minority shareholder in ▇▇▇▇▇ 2, unless such minority
shareholder makes a simultaneous equity investment of an equal
amount into the Primary Borrower, the proceeds of which are
applied in immediate prepayment of the Facilities in accordance
with clause 6) as soon as is practicable following the
Unconditional Date, provided that the Primary Borrower may
refrain from requiring the upstreaming of such proceeds for so
long as:
(aa) it does not own 100% of the issued share capital of Target;
and
(bb) the Offer is still open for acceptance, and/or Bidco is
still entitled to implement or is in the course of
implementing the procedures in Section 428-30 of the
Companies Act;
(h) Insurance: it will procure that each member of the Group maintains
insurances on and in relation to its business and assets with
reputable underwriters or insurance companies against such risks and
to such extent that is usual for companies carrying on a business such
as that carried on by such member of the Group;
(i) Investment Agreement: the Primary Borrower, ▇▇▇▇▇ 2 and Bidco will
comply with their obligations under the Investment Agreement save if
and insofar as they conflict with clause 11.1(f).
10.3 Financial Undertakings
(a) Each Obligor party hereto undertakes with each of the Finance Parties
that, from the Unconditional Date and thereafter throughout the
Finance Period, it will procure that:
(i) for each Test Period, the ratio of EBITDA to Net Interest Costs
is not less than 2:1;
(ii) as at the last day of each Test Period, the Leverage Ratio is not
more than 70% until and including 30 September 2000, and
thereafter 65%;
where a Test Period commences prior to the Unconditional Date the
calculation of the Financial Definitions shall be amended so that:
(aa) for the purposes of calculating Net Interest Costs the whole
amount of the Advances drawn down and other Utilisations as
at the end of the relevant Test Period shall be deemed to
have been made on the first day of such Test Period and no
amount in respect of Net Interest Costs attributable to
Indebtedness which is refinanced in connection with the
Acquisition shall be brought into account; and
(bb) for all purposes Coalco will be deemed not to have been part
of the Group;
(b) Each Obligor party hereto shall procure that:
(i) as from the Unconditional Date until such time as Bidco shall
have acquired shares carrying the right to vote 75% of each class
of shares of the Target, the Share Value of all the Target Shares
acquired and effectively charged to the Security Agent shall not
at any time be less than twice the aggregate of the outstanding
Advances (excluding Revolving Credit Advances) at that time;
(ii) on each Drawdown Date, the sum of:
(aa) 50% of the Share Value of all the Target Shares consisting
of American Depositary Receipts acquired and effectively
charged to the Security Agent, plus;
(bb) the Share Value of all other Target Shares acquired and
effectively charged to the Security Agent,
shall not be less than the aggregate of the outstanding Advances;
(c) Each of the Primary Borrower and ▇▇▇▇▇ 2 undertakes with each of the
Finance Parties that it will not adopt any accounting policy or change
the consistency of application of its accounting principles from the
Appropriate Accounting Principles unless:
(i) the revised policy and practice adopted from time to time is in
accordance with generally accepted accounting practice in the
United Kingdom, and
(ii) prior to any revised policy and practice being adopted the
Primary Borrower has notified the Facility Agent thereof and, if
required by the Facility Agent, will negotiate in good faith with
the Facility Agent in order that the Financial Covenants may be
amended as required by the Facility Agent in order for it to be
able to make the same judgments as to the financial performance
of the Group as it is able to under the present accounting
policy.
If such negotiations are not concluded to the satisfaction of the
Facility Agent within a period of 30 days from the commencement of
such negotiations each of the Primary Borrower and ▇▇▇▇▇ 2 agrees that
it will procure that the Auditors provide financial statements
reflecting the Appropriate Accounting Policies, and any reference in
this Agreement to financial statements under this Agreement shall be
construed as a reference to such financial statements as adjusted to
reflect the Appropriate Accounting Policies;
(d) For the purposes of calculating Net Interests Costs, any incremental
impact of interest rate hedging transactions or refinancings entered
into by the Primary Borrower from time to time shall be treated as
varying the Net Interest Costs payable by ▇▇▇▇▇ 2, whether or not they
actually do so;
(e) Each of the Primary Borrower and ▇▇▇▇▇ 2 undertakes with each of the
Finance Parties that it will not vary or waive the terms of the
Investment Agreement, and undertakes to procure that the principal
amount of the intercompany loan from the Primary Borrower to ▇▇▇▇▇ 2
is not reduced save by way of amounts which are repaid by ▇▇▇▇▇ 2 to
the Primary Borrower and promptly applied by the Principal Borrower in
repayment and permanent reduction of sums outstanding under the
Facilities.
10.4 The Offer
(a) The Primary Borrower, ▇▇▇▇▇ 2 and Bidco each undertake with each of
the Finance Parties that it shall (or shall procure that Bidco shall,
as applicable):
(i) until the earlier of the date the Offer lapses or is finally
closed, comply in all material respects with the Code, the
Financial Services ▇▇▇ ▇▇▇▇ and the Act and all other
applicable laws and regulations relevant in the context of the
Offer;
(ii) provide the Facility Agent with such information regarding the
progress of the Offer as it may reasonably request and,
provided no breach of the Code would result, all material
written advice given to it in respect of the Offer;
(iii) not declare the Offer unconditional at a level of acceptances
below that required by Rule 10 of the Code;
(iv) ensure that at no time shall circumstances arise whereby a
mandatory offer is required to be made by the terms of Rule 9
of the Code in respect of the Target Shares;
(v) not, without the prior consent of the Arrangers (acting on the
instructions of the Majority Banks), waive, amend or agree or
decide not to enforce, in whole or in part, the conditions of the
Offer set out in paragraphs (c) (Referral) or (b) (Coalco
Disposal Agreement) of Appendix 1 to the Press Release;
(vi) not, without the prior consent of the Arrangers (acting on the
instructions of the Majority Banks), such consent not to be
unreasonably withheld or delayed, waive, amend (but not including
extending the Offer period, which shall be at the Primary
Borrower's discretion provided that the Offer is closed within
the period required by clause 10.4(f) below) or agree or decide
not to invoke, in whole or in part, in any material respect, any
of the other material conditions of the Offer (and the Primary
Borrower, ▇▇▇▇▇ 2 and Bidco acknowledge that the total
Indebtedness of the Target Group requiring to be refinanced, and
the amount of any contingent liabilities of the Target Group
which would or might crystallise upon the Offer becoming
unconditional, are material), provided that the Primary Borrower,
▇▇▇▇▇ 2 and Bidco shall not be in breach of this clause (vi) if
they fail to invoke a condition of the Offer because the Takeover
Panel has directed that they may not do so.
(b) Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco acknowledges and
confirms to the Finance Parties that if any event or circumstance
occurs which under the conditions of the Offer may entitle Bidco to
lapse the Offer, Bidco will promptly notify the Facility Agent and if
in the reasonable opinion of the Majority Banks such event or
circumstance would have a material and adverse affect on the ability
of the Borrowers to comply with their material obligations under this
Agreement (or the adequacy of the facilities available for refinancing
indebtedness or other liabilities of the Target Group) and the
Facility Agent acting on the instructions of the Majority Banks so
requests, Bidco will promptly seek the consent of the Takeover Panel
to lapse the Offer. If the Takeover Panel consents to Bidco's lapsing
the Offer in the light of such event or circumstance, Bidco shall then
lapse the Offer promptly.
(c) Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco shall keep the
Arrangers informed and consult with them as to:
(i) the terms of any undertaking or assurance proposed to be given
by it, any of its Affiliates or any member of the Target Group
to the Director General, the Director General of Gas Supply or
the Secretary of State for Trade and Industry in connection
with the Offer;
(ii) the terms of any modification to any of the Licences proposed
in connection with the Offer;
(iii) any terms proposed in connection with any authorisation or
determination necessary or appropriate in connection with the
Offer;
If the Majority Banks (acting reasonably) state that in their opinion
such proposed undertakings(s), assurance(s), modification(s) and/or
term(s), or compliance therewith, would materially and adversely
affect the ability of the Group to comply with its material
obligations under the Finance Documents, Bidco shall promptly request
the Takeover Panel to confirm (and shall use its reasonable endeavours
to ensure that the Takeover Panel does confirm) that the Takeover
Panel will not object to the lapsing of
the Offer as a result of the non-satisfaction of whichever of the
conditions in Appendix 1 to the Press Release is relevant, provided
that Bidco will not be obliged to lapse the Offer as a result of any
proposed modifications of any Licence or any proposed undertakings or
assurances from the Primary Borrower, ▇▇▇▇▇ 2, Bidco or any member of
the Target Group to be given to the Director General to the extent
that such modifications, undertakings or assurances (as the case may
be) are no more onerous than those set out and required by the
Director General from Pacificorp and/or the Target Group in accordance
with the terms of the Monopolies and Mergers Commission Report dated
19 December 1997 into the original Pacificorp offer for the Target. If
the Takeover Panel gives a confirmation substantially in those terms,
Bidco shall at the earliest opportunity declare the Offer lapsed by
reason of the non- fulfilment of such condition(s).
(d) Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco acknowledges and
confirms to the Finance Parties that the Offer, or an accompanying
circular to shareholders of the Target, should also contain a super
class one resolution to be passed by the shareholders of the Target,
seeking approval of the completion of the Coalco Disposal Agreement
with effect on and from the Unconditional Date. Where the context
permits, all references in this Agreement (and in the Offer) to the
Offer being accepted and/or becoming unconditional shall be construed
to include such approval being granted.
(e) Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco undertakes to the
Finance Parties that within 15 days of the date on which acceptances
of the Offer are received from holders of not less than 90% of the
Target Shares to which the Offer relates, Bidco shall procure that a
director of Bidco issues a statutory declaration pursuant to section
429(4) of the Companies ▇▇▇ ▇▇▇▇, gives notice to all remaining
holders of the Target Shares that it intends to acquire their shares
pursuant to section 429 of the Companies ▇▇▇ ▇▇▇▇, and Bidco shall
subsequently purchase all such shares.
(f) Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco undertakes to the
Finance Parties that Bidco shall in any event give notice to close the
Offer no later than 120 days after the date of this Agreement, unless
the Arrangers agree in their absolute discretion to extend such
period.
10.5 Delisting
Each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco undertakes to the Finance
Parties to procure that, as soon as legally and practically possible after
the Unconditional Date, the American Depositary Shares represented by the
American Depositary Receipts tendered to Bidco shall be converted into
ordinary shares of the Target or otherwise held in form satisfactory to the
Security Agent, the Target shall be removed from the Official List of the
London Stock Exchange Limited and reregistered as a private company and its
American Depositary Shares shall be delisted from the New York Stock
Exchange.
11. NEGATIVE UNDERTAKINGS
11.1 Negative undertakings
Each Obligor party hereto undertakes with each of the Finance Parties that
throughout the Finance Period (but subject to clause 11.2), without the
prior written consent of the Facility Agent acting on the instructions of
the Majority Banks:
(a) Negative pledge: it will not permit, and will procure that no other
member of the Group will permit, any Security Interest by it or any
other member of the Group to subsist, arise or be created or extended
over all or any part of their respective present or future
undertakings, assets, rights or revenues, save for any Permitted
Security Interest;
(b) No other Borrowed Money: it will not, and will procure that no member
of the Group will, incur or permit to exist on its behalf any
obligations in respect of Borrowed Money (excluding any guarantees,
indemnities or other forms of assurance against financial loss in
respect of Borrowed Money, which are referred to in clause 11.1(d)
below) to any person except:
(i) the Facilities;
(ii) the Loan Notes;
(iii) Borrowed Money owed by any member of the Group to another
member of the Group;
(iv) Borrowed Money incurred under the hedge transactions entered
into pursuant to clause 10.2(f) and/or clause (l) of Schedule
3, Part A or any other transaction entered into to hedge the
transactions referred to in such clause (l);
(v) Borrowed Money to the extent secured by a Security Interest
permitted by paragraphs (c) (d) (e) (f) and (l) of the
definition of Permitted Security Interest, but only for so long
as such Security Interest remains a Permitted Security Interest
and, with respect to paragraph (l) only, secures Borrowed Money
which is intended to be a temporary bridging loan to be
refinanced by a Project Finance Borrowing;
(vi) Borrowed Money incurred to repay and discharge the Facilities
in full;
(vii) Borrowed Money of the Target Group as at the Unconditional Date
(and refinancings thereof) provided that:
(aa) each refinancing extends the tenor of the refinanced
amount to beyond the Final Repayment Date; and
(bb) all refinancings shall be of a like nature to the
Indebtedness or facility being refinanced or shall be by
way of capital markets instruments which are of a similar
nature to the Target Group's existing instruments having
regard to market conditions and the issuer's credit
status, or are structurally or contractually subordinated
to the Facilities and the Guarantees in a manner
satisfactory to the Majority Banks (acting reasonably);
and
(cc) any new facilities for Borrowed Money entered into by the
Target Group between the date of this Agreement and the
Unconditional Date
(except the REC's facility referred to in clause 24.5)
shall be cancelled and repaid in full within 180 days of
the Unconditional Date;
(viii) provided that as a result of Borrowed Money incurred under this
paragraph (viii) the outstanding Advances under the Acquisition
Facility would be not more than(pound)1,011,000,000 and the
total Borrowed Money in the Primary Borrower (excluding
Borrowed Money which is subordinated to the Facilities as
referred to in (ix) below) would not
exceed(pound)1,611,000,000, Borrowed Money may be incurred by
way of a Permitted Capital Markets Instrument issued by the
Primary Borrower provided that the proceeds are applied solely
to repay or prepay all or any part of the Facilities.
If the Primary Borrower shall exercise its rights to incur
Borrowed Money and repay or prepay all or part of the
Facilities under and in compliance with this sub-paragraph
(viii) and no Default has occurred and is continuing, the
Facility Agent and the Security Agent shall permit the lenders
under the relevant Permitted Capital Markets Instrument (in
this clause, the "New Capital Markets Lenders") to take
security over the shares in ▇▇▇▇▇ 2 held by the Primary
Borrower and by the Minority Shareholder (in terms satisfactory
to the Majority Banks) and shall execute a pari passu agreement
with the New Capital Markets Lenders (in terms satisfactory to
the Majority Banks) agreeing that the Finance Parties' and the
New Capital Markets Lenders' security over the ▇▇▇▇▇ 2 shares
shall rank pari passu, and in addition the Facility Agent
acting on the instructions of the Majority Banks shall elect in
its discretion which of the following alternatives it wishes to
occur so as to put the New Capital Markets Lenders in a pari
passu position with the Finance Parties:
(aa) the Security Agent to release all of the remaining
guarantees and security constituted by the Debenture and
the Guarantees, save for the Finance Parties' security
over the ▇▇▇▇▇ 2 shares referred to above; or
(bb) the Security Agent to retain all or part of the security
and guarantees referred to in (aa) above, but permit the
New Capital Markets Lenders to take identical security
and/or guarantees to that retained and to execute a pari
passu agreement with the Finance Parties (on terms
satisfactory to the Majority Banks) agreeing that the
guarantees and/or security held by the Finance Parties and
the New Capital Markets Lenders shall rank pari passu;
(ix) to the extent that it is necessary to repay the outstanding
Interim Advances under clause 6.1(b), or prepay Acquisition
Advances under clause 6.2 but the Primary Borrower is either
unable or elects not to meet such payments by upstreaming Coal
Proceeds, Borrowed Money incurred which is contractually and/or
structurally subordinated to the Facilities and Guarantees in a
manner satisfactory to the Majority Banks;
(x) contracts for differences and contracts to hedge commodity and
energy related exposures and positions in the ordinary course
of trading;
(xi) in respect of the Target, Borrowed Money in addition to that
permitted by sub-clauses (i) to (x) above, provided that:
(aa) the Target has provided a guarantee to the Security Agent
in respect of all of the obligations of the Borrowers
hereunder; and
(bb) such Borrowed Money would not result in a breach of the
Leverage Ratio if it were added to Consolidated Net
Borrowings as at the end of the last Test Period (and
calculating the Leverage Ratio taking into account any
assets acquired with such Borrowed Money), and the
Leverage Ratio was recalculated;
(xii) Borrowed Money arising under the Standby Credit Facility dated
28 October, 1996 to the extent that it is used to fund the
consideration payable by any third party to acquire rent
participations under and in accordance with the documentation
(as amended in July 1998) relating to the Deed of Assignment of
Rents dated 28th October, 1996;
(c) Disposals: it shall procure that neither it nor any member of the
Group will, either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, factor, discount, transfer, licence, lend, grant
or lease or otherwise dispose of:
(i) any shares in ▇▇▇▇▇ 2, Bidco, any Target Shares and any shares in
REC or in any holding company thereof; or
(ii) all or any part of the assets or undertaking of the Target Group
(except the assets referred to in paragraph (i) above), other
than:
(aa) to another member of the Group;
(bb) pursuant to the Coalco Disposal Agreement;
(cc) disposals in the ordinary course of trading;
(dd) disposals of obsolete or redundant plant and equipment;
(ee) other disposals to third parties on arm's length terms,
provided that the consideration for such disposals does not
exceed (pound)50,000,000 in aggregate for the Group in any
financial year;
(ff) in any financial year, disposals of assets by any member of
the Target Group, (1) the gross value of which (based, in
relation to a disposal occurring before the first delivery
of any annual audited accounts in accordance with clause
10.1(b), on the annual audited accounts in respect of the
financial year to 31 December 1997 and, in relation to
disposals occurring thereafter, on the audited consolidated
accounts of the Target Group most recently delivered to the
Facility Agent) when aggregated with all other disposals by
each member of the Target Group during such financial year
not permitted by any other paragraph of this clause 11.1(c),
does not exceed an amount equal to 10% of the consolidated
gross assets of the Target Group as shown in such annual
audited consolidated accounts (excluding Coalco and its
Subsidiaries)
and (2) in respect of which the net proceeds of such
disposal will be applied (A) within one year of their
receipt in or towards acquiring for any member of the Target
Group assets of a type ordinarily employed in the operation
of any business permitted by clause 11.1(i) or (B) in
prepayment of any Acquisition Advance or Interim Advance in
accordance with clause 6.6;
(gg) disposals constituting the creation of Permitted Security
Interests;
(hh) securitisations of receivables of the REC in accordance with
the REC's securitisation programme in existence at the date
of this Agreement (or comparable programme(s)) Provided that
the amount advanced against the billed, unbilled and future
flow receivables in such programmes at any one time does not
exceed (pound)400,000,000 in aggregate in all such
programmes; or
(ii) other disposals where the proceeds are upstreamed promptly
to the Primary Borrower and used in repayment or prepayment
of the Advances in accordance with clause 6.6;
(d) Restriction on Guarantees: it shall not and shall procure that no
other member of the Group shall give any guarantee (which
includes an indemnity or other form of assurance against
financial loss), except:
(i) where the guarantee is given by a member of the Group in
connection with cash management and netting facilities
extended to the Group by a bank or financial institution
in the normal course of business; or
(ii) any guarantee, indemnity, letter of credit or similar
assurance against financial loss under any Relevant
Arrangements;
(iii) guarantees in favour of the Finance Parties;
(iv) guarantees of Borrowed Money or other obligations of other
members of the Group, where such guarantees are already in
existence as at the Unconditional Date (including
guarantees given by the same guarantor companies as had
previously guaranteed the relevant obligation in respect
of a new obligation which refinances or replaces the
existing obligation) provided that any such guarantees of
Borrowed Money entered into between the date of this
Agreement and the Unconditional Date shall be discharged
and released within 180 days of the Unconditional Date
(unless the guarantee was created pursuant to an
obligation existing as at the date of this Agreement);
(v) any guarantee permitted under clause 11.1(b)(xi)(aa) or
clause 11.1(b)(viii)(bb);
(vi) any other guarantees given with the prior written consent
of the Majority Banks;
(vii) any guarantees given in respect of Borrowed Money falling
within clause 11,1(b)(v) by virtue of the reference to
paragraph (l) of the Permitted Security
Interest definition (or prospective liabilities which on
being drawn down, would fall under that heading) of a
member of the Group (which is intended to become a Project
Finance Subsidiary) for so long as it is not a Project
Finance Subsidiary and the potential liabilities which are
secured by such guarantees, when aggregated with any
amount of Borrowed Money which is permitted under clause
11.1(b)(v) by virtue of the reference in clause 11.1(b)(v)
to paragraph (l) of the Permitted Security Interest
definition (but without double counting) would not exceed
the limit set out in that paragraph (l);
(viii) any guarantee permitted from time to time in accordance
with clause 11.1(g)(iii) or (iv);
(ix) guarantees not exceeding $147,000,000 in aggregate in
favour of the Pension Benefit Guaranty Corporation;
(x) any guarantee given in connection with cross-border
leasing arrangements in relation to the ▇▇▇▇'▇ ▇▇▇▇
generating facility owned by a member of the Group and
which is constituted by or relates to:
(aa) the payment of rental amounts or termination amounts
by any person pursuant to such arrangements to the
extent that the obligations of the person(s)
primarily liable for such amounts are collateralised
in full by means of investments in US Treasury zero
coupon bonds and/or cash deposited with a financial
institution rated AA or higher by Standard & Poor's
Rating Group and/or Aa2 or higher by ▇▇▇▇▇'▇ Investor
Services Group;
(bb) the payment of termination amounts (other than those
permitted to be guaranteed by virtue of (aa) above or
(cc) below) by any person pursuant to such
arrangements or any obligation of any person to
reimburse or counterindemnify an issuer of a letter
of credit to the extent that the letter of credit
secures such termination amounts Provided that the
maximum aggregate amount of such termination amounts
does not exceed US$125 million;
(cc) the payment of any other termination amount not
otherwise permitted to be guaranteed under (aa) or
(bb) above to the extent such amount arises from a
reduction in the value of the US Treasury zero coupon
bonds referred to in (aa) above on account of a
fluctuation in US interest rates; and/or
(dd) the guaranteeing of indemnity obligations customary
in finance lease transactions and/or which relate to
the continued possession and operation by any member
of the Group of the ▇▇▇▇'▇ ▇▇▇▇ generating facility.
(xi) guarantees in respect of the payment of fees and
indemnities in respect of liabilities, losses or claims
and any costs and expenses arising, suffered or incurred
in connection with the amendment and waiver in July 1998,
as a result of the Acquisition, of certain terms of the
rent factoring transaction governed
by the Deed of Assignment of Rents dated 28 October 1996
and the documentation relating thereto; and
(xii) guarantees given with respect to Borrowed Money permitted
under Clause 11.1(b)(xii).
(e) The Licences: it shall procure that each Licensee will:
(i) take all appropriate steps efficiently to perform and
discharge the duties and functions of a generator of
electricity or, as the case may be, public electricity
supplier in accordance with the provisions of the
Electricity Act and, in particular, to comply with:
(aa) the terms and conditions of the Licence;
(bb) the provisions of any final order or confirmed
provisional order made under the Electricity Act; and
(cc) all Licence Undertakings given by it to the Director
General and/or the Secretary of State in respect of
the matters referred to in Section 25(5) of the
Electricity Act;
(ii) not consent to any amendment to the terms and conditions
of the Licence if that amendment is reasonably likely to
have a Material Adverse Effect;
(iii) not consent to any revocation of the Licence except where
a replacement Licence is to be granted to a member of the
Group in its place;
(iv) promptly inform the Facility Agent of any material Licence
Undertakings given by it or any Affiliate to the Director
General, and/or the Secretary of State and subsequently
comply with its terms;
(v) promptly supply to the Facility Agent:
(aa) certified copies of all notices or orders served on
it by the Director General or the Secretary of State
in exercise of the powers conferred on him by the
Electricity Act;
(bb) details of any references to the Monopolies and
Mergers Commission; and
(cc) details of the exercise or purported exercise by the
Secretary of State or the Director General of the
powers conferred on him by the Fair Trading ▇▇▇ ▇▇▇▇,
the Competition ▇▇▇ ▇▇▇▇ and/or Section 12 of the
Electricity Act;
(vi) ensure that all times the Licensee has sufficient working
capital to finance the performance and discharge of its
duties as a generator of electricity or, as the case may
be, public electricity supplier, in accordance with the
provisions of the Electricity Act and the terms and
conditions of any Licence; and
(vii) not permit any person other than a member of the Group to
perform or manage on its behalf any of its functions as a
public electricity supplier, as set out in any Licence and
the Electricity Act;
(f) Dividend payments: neither the Primary Borrower nor ▇▇▇▇▇ 2 will:
(i) redeem or purchase any of its shares or otherwise reduce
its share capital, or declare or pay (including, without
limitation, by way of set-off, combination of accounts or
otherwise) any dividend or make any other distribution or
payment (whether in cash or in specie), including any
interest and/or unpaid dividends, to its shareholders or
their Affiliates for the time being; or
(ii) make any payment (including, without limitation, by way of
set-off, combination of accounts or otherwise) of interest
or principal, or make any other payment, in respect of any
loan stock or similar instrument issued by the Primary
Borrower or ▇▇▇▇▇ 2 (other than payments in respect of the
intercompany loan from the Primary Borrower to ▇▇▇▇▇ 2
referred to in the Investment Agreement),
unless:
(aa) the Primary Borrower or, as the case may be, ▇▇▇▇▇ 2
has notified the Facility Agent in writing of the
proposed payment or distribution at least 15 days in
advance of the proposed payment date; and
(bb) to the extent that the most recent financial
statements provided to the Facility Agent under
clause 10.1(b)(ii) and the accompanying financial
covenant compliance certificates confirm in a manner
satisfactory to the Facility Agent (acting
reasonably) that there is no breach of the Leverage
Ratio covenant, and there would still be no breach of
the Leverage Ratio covenant as at the end of the
financial Quarter if the proposed payment or
distribution (and any related advance corporation tax
or similar tax) was deducted from Adjusted Share
Capital and Reserves at the end of such preceding
Quarter and if Consolidated Net Borrowings was
increased to reflect any increase in Consolidated Net
Borrowings since the end of the preceding Quarter,
and the relevant financial covenant recalculated; and
(cc) no Default has occurred and is continuing; and
(dd) Bidco holds at least 90% of the Target Shares;
(g) Contracts and arrangements between the Group and the Parent: it
will not, and will procure that no other member of the Group
will, enter into any arrangement or contract with the Parent or
any of its Subsidiaries or Affiliates (not being a member of the
Group), or any Project Finance Subsidiaries, save for contracts
entered into on an arm's length basis in the ordinary course of
trade (and in any event neither it nor any member of the Group
will make any loan to or give any guarantee in respect of the
Parent or any of its Subsidiaries or Affiliates (not being a
member of the Group) or Project Finance Subsidiaries) except
that:
(i) the Primary Borrower may provide loans to Bidco to enable
Bidco to at any time after the Unconditional Date repay to
the Parent the Excess Equity Funding; or
(ii) any member of the Group may make equity investments in or
loans to Project Finance Subsidiaries if and to the extent
such loans or equity investments are financed directly or
indirectly by further equity subscribed by the Parent and/or
the Minority Shareholder or subordinated loans permitted in
accordance with clause 11.1(b)(ix) made by the Parent and/or
the Minority Shareholder to the Primary Borrower or ▇▇▇▇▇ 2;
or
(iii) to the extent that:
(aa) the conditions in clause 11.1(f)(aa) to (dd) are
satisfied, and
(bb) neither the Primary Borrower nor ▇▇▇▇▇ 2 is able to
make any payment or distribution under clause
11.1(f)(i) or (ii) in a sufficient amount,
any member of the Group may give any guarantee in respect of
the obligations of or make any loan to or equity investment
in a Project Finance Subsidiary to finance any particular
project identified in Schedule 9 up to a maximum amount
equal to 20% of the identified total investment required as
set out in Schedule 9 alongside the name of the particular
project provided that any such guarantee, loan or equity
investment is to be used only for that project (and no other
project);
(iv) any member of the Group may give any guarantee or make any
loan to or equity investment in a Project Finance Subsidiary
to the extent that at the time the conditions in clause
11.1(f)(aa) to (dd) are satisfied and such guarantee, loan
or equity investment does not exceed the maximum amount
available to the Primary Borrower and ▇▇▇▇▇ 2 to make any
payment or distribution under clause 11.1(f)(i) or (ii),
Provided that any payment or distribution otherwise capable of
being made under and for the purposes of clause 11.1(f)(i) or
(ii) or capable of being utilised for the purposes of clause
11.1(g)(iii) or (iv) shall be reduced (a) by the amount of any
outstanding guarantee, loan or equity investment made or given
and permitted under clauses 11.1(g)(iii) or (iv) and (b) the
amount (if any) of the Coal Proceeds which have been distributed
to the Borrower by way of dividend.
(h) Amalgamation and merger: it will not, and will procure that no
other member of the Group will, amalgamate or merge with any
other company or person (other than intra- Group or if a member
of the Group is the surviving corporation, and such merger or
amalgamation would not result in an Event of Default);
(i) Change in business: it will not, and will ensure that no other
member of the Group will, carry on any business other than those
which are usual for electricity companies in the United Kingdom
including, without limitation, electricity distribution, supply
and generation and energy trading and business activities related
to the gas, telecommunications and water industries. Provided
that the limitation of business activities contained in this
clause 11.1(i) will not apply to any other business activities
carried on by members of the Group as long as such other business
activities do not in aggregate account for more than 10% of the
consolidated gross assets or gross revenues of the Group;
(j) Primary Borrower, ▇▇▇▇▇ 2 and Bidco business and Subsidiaries:
the Primary Borrower, ▇▇▇▇▇ 2 and Bidco will not (save as
permitted under clause 11.1(g)) (i) carry on any business or own
any material assets other than their shareholdings in ▇▇▇▇▇ 2,
Bidco and the Target respectively, intra-group credit balances
and credit balances in bank accounts (which shall be held with
the Security Agent or as it directs), (ii) establish or acquire
any company or other entity or (iii) incur any liabilities other
than in connection with this Agreement and the Acquisition;
(k) Target Group Acquisitions: the Primary Borrower, ▇▇▇▇▇ 2 and
Bidco shall procure that the Target and its Subsidiaries shall
not acquire any business, assets or shares without the prior
written consent of the Majority Banks, save for:
(i) where the business, assets or shares acquired fall
within the Group's general business as described in
subclause 11.1(i) above (disregarding the business
activities referred to in the proviso to that clause)
and are subject to regulation by a Government Entity as
to pricing and operations, or constitute any other
business within the limits permitted by the proviso to
subclause 11.1(i) above;
(ii) acquisitions by Project Finance Subsidiaries where no
funds or assets of, or other financial support by, the
Primary Borrower, Bidco or any member of the Group are
invested in, lent to or otherwise provided to such
Project Finance Subsidiary in connection with or at any
time after the acquisition, save as provided by clause
11.1(g); and
(iii) acquisitions by Project Finance Subsidiaries where any
equity investment or subordinated debt required to be
invested in the Project Finance Subsidiary is obtained
by the Project Finance Subsidiary from third parties (or
the Parent) and not from resources of the Group, save as
provided by clause 11.1(g);
(iv) acquisitions by members of the Group which are intended
to become Project Finance Subsidiaries, provided that
the financing for any such acquisition complies with
sub-paragraphs 11.1(b)(v) and 11.1(d)(vii).
(l) Treasury Transactions: it will not, and will procure that no
other member of the Group will, enter into any Derivatives
Transactions, save for hedging financial exposures of the Group
arising in the ordinary course of business and the hedging
agreements contemplated by clause 10.2(f) and clause (l) of
Schedule 3, Part A or any other transaction entered into to hedge
the transactions referred to in such clause (l); and
(m) Regulations G, T, U and X: it will not use the Facilities or the
proceeds of the Facilities in contravention of Regulations G, T,
U or X of the Board of Governors of the Federal Reserve System of
the United States of America.
11.2 Application to Target Group
No covenant or undertaking (except the financial covenants in clause
10.3(a)) shall apply to the Target Group until the Takeover Operative Date,
but the Primary Borrower, ▇▇▇▇▇ 2 and Bidco
shall use all commercially reasonable endeavours to procure that the Target
Group is run as if the covenants and undertakings in this Agreement applied
to it as from the Unconditional Date.
12. EVENTS OF DEFAULT
12.1 Events of Default
Each of the events set out below is an Event of Default (whether or not
caused by any reason whatsoever outside the control of any Relevant Company
(or any other person)) namely if:
(a) Non-payment: any Borrower or Obligor fails to pay any sum due from it
under any of the Finance Documents on its due date in the manner
stipulated in the relevant Finance Document (or within three Banking
Days of the due date if the delay is caused by technical difficulties
or administrative error in the transfer of funds); or
(b) Breach of certain obligations: any Borrower or other Obligor commits
any breach or omits to observe any of the obligations or undertakings
expressed to be assumed by it under clause 10.3, 10.4, 11.1(a),
11.1(f) or 11.1(i); or
(c) Breach of other obligations: any Borrower or other Obligor commits any
breach of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under any of the Finance Documents
(other than any such obligations referred to in clause 12.1(a) and
(b)) and in respect of any such breach or omission which, in the
reasonable opinion of the Majority Banks, is capable of remedy, such
action as shall remedy the same to the reasonable satisfaction of the
Majority Banks shall not have been taken within 21 days of the
relevant Obligor becoming aware of such default; or
(d) Misrepresentation: any representation, warranty or statement made or
deemed to be made or repeated by or on behalf of any Borrower or other
Obligor in, or in connection with, any of the Finance Documents or in
any notice, accounts, certificate or statement referred to in or
delivered under any of the Finance Documents is or proves to have been
incorrect or misleading and if capable of being remedied, in the
reasonable opinion of the Majority Banks, is not remedied to the
reasonable satisfaction of the Majority Banks 21 days after the date
on which the relevant Group Company becomes aware of such
misrepresentation; or
(e) Cross-default:
(i) any Borrowed Money of a member of the Group is not paid when due
or within any originally stated applicable grace period; or
(ii) any Borrowed Money of a member of the Group is declared or
becomes capable of being declared (by reason of an event of
default or default howsoever described) to be or otherwise
becomes due and payable prior to its specified maturity; or
(iii) any Borrowed Money of a member of the Group which is repayable
on demand is not repaid on demand being made,
in circumstances where, in all or any of the above paragraphs,
the Borrowed Money amounts in aggregate at any one time to more
than (pound)20,000,000 or its equivalent in other currencies,
unless the Borrowed Money concerned is being disputed in good
faith and the Primary Borrower has shown to the Facility Agent's
satisfaction (acting reasonably) that it has adequate cash
reserves to pay that Borrowed Money and its other outstanding
debts; or
(f) Legal process: (without prejudice to any other provision of this
Agreement) any final judgment or order in an amount exceeding
(pound)2,000,000 (or its equivalent in other currencies) made against
any Relevant Company is not stayed or complied with or paid within 28
days (or in the case of payments, when due (if later)) or a creditor
attaches or takes possession of, or a distress, execution,
sequestration or other process is levied or enforced upon or sued out
against, any part of the undertakings, assets, rights or revenues of
any Relevant Company with a book value or market value in excess of
(pound)2,000,000 and is not discharged or stayed within 14 days; or
(g) Insolvency: any Relevant Company (i) is deemed unable to pay its debts
in accordance with Section 123(1)(a), (b) or (e) or (2) of the
Insolvency ▇▇▇ ▇▇▇▇ unless, in the case of Section 123(1)(a) only, a
statutory notice has been withdrawn, stayed or dismissed within 14
days or (ii) is unable generally to pay its debts as they fall due; or
(h) Administration: (i) any meeting of any Relevant Company is convened
for the purpose of considering any resolution to present an
application for an administration order or (ii) a petition on
administration order is presented to the Court in relation to any
Relevant Offeror Company or (iii) a petition for an administration
order in relation to any other Relevant Company is presented to the
court or an administration order is sought of the court on the basis
of an undertaking to subsequently present a petition which is being
contested by the Relevant Company in good faith with appropriate
proceedings diligently pursued, and is not discharged within 21 days
or (iv) any Relevant Company passes a resolution to present an
application for an administration order or (v) an administration order
is made in relation to any Relevant Company; or
(i) Compositions etc: any steps are taken, or negotiations commenced, by
any Relevant Company or by any of its creditors with a view to
proposing any kind of composition, scheme of arrangement, compromise
or arrangement, in each case involving such company and any of its
creditors; or
(j) Appointment of receivers and managers: (i) any administrative or other
receiver or any manager is appointed of any Relevant Company or any
material part of its assets and/or undertaking or (ii) the directors
of any Relevant Company request any person to appoint such a receiver
or manager or (iii) any other steps are taken to enforce any Security
Interest over all or any material part of the assets and/or
undertakings of any Relevant Company; or
(k) Winding up: (i) any meeting of any Relevant Company is convened for
the purpose of considering any resolution for (or to petition for) its
winding up or (ii) any Relevant Company passes such a resolution; or
(iii) any person presents any petition for the winding up of any
Relevant Company (not being a petition which the Primary Borrower can
demonstrate to the satisfaction of the Facility Agent is frivolous
vexatious or an abuse of the process of the court) which is not
discharged within 14 days or (iv) an order for the winding up of any
Relevant Company is made, not (in any case) being a
winding-up of a Subsidiary of the Primary Borrower involving an
amalgamation or reorganisation on a solvent basis which has been
approved in advance by the Facility Agent (acting reasonably); or
(l) Dissolution: any corporate, legal or administrative proceedings are
commenced by any person (including, without limitation, the Registrar
of Companies) with a view to the dissolution of any Relevant Company,
not being a dissolution involving an amalgamation or reorganisation on
a solvent basis which has been approved in advance by the Facility
Agent (acting reasonably); or
(m) Analogous proceedings: there occurs, in relation to any Relevant
Company, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their
assets is subject, any event which, in the reasonable opinion of the
Majority Banks, appears in that country or territory to correspond
with, or have an effect equivalent to, any of those mentioned in
clauses 12.1(f) to (l) (inclusive) or any Relevant Company otherwise
becomes subject, in any such country or territory, to the operation of
any law relating to insolvency, bankruptcy or liquidation; or
(n) Cessation of business: other than in relation to a disposal permitted
under this Agreement, any Relevant Company suspends or ceases or
threatens to suspend or cease to carry on its business; or
(o) Change of Control:
(i) Bidco ceases to be a wholly owned subsidiary (as that term is
used in section 736 of the Act) of ▇▇▇▇▇ 2; or
(ii) ▇▇▇▇▇ 2 ceases to be a wholly owned Subsidiary of the Parent
(other than as permitted by paragraph (iii) below) and at least
a 90% owned direct subsidiary of the Primary Borrower; or
(iii) less than 100% (until the first anniversary of the Unconditional
Date) or 75% (until the second anniversary of the Unconditional
Date) or 60% (thereafter) of the equity share capital of the
Primary Borrower is held by the Parent (directly or indirectly)
at any time; or
(iv) Bidco at any time reduces its shareholding in the Target; or
(v) REC, any other Licensee ceases to be a wholly-owned Subsidiary
of the Target; or
(vi) there is a Change in Control of the Parent; or
(p) Distribution Business/Generation Business:
(i) the Group ceases, or threatens to cease, to carry on the
Distribution Business;
(ii) all or a majority of the issued shares of the Licensee or any
other Relevant Company or the whole or any material part of the
assets or revenues of the Distribution Business or Generation
Business are seized, nationalised,
expropriated or compulsorily acquired by or under the authority
of a Government Entity;
(iii) any change is made in the statutory or regulatory requirements
applicable to the Distribution Business or Generation Business
or any new statutory or regulatory requirements are imposed on
it which would be reasonably likely to have a Material Adverse
Effect; or
(q) Licences:
(i) the Secretary of State gives notice in writing of the revocation
of a Licence for any reason or a Licence ceases to be in full
force and effect in any material respect except where a similar
licence is or licences are granted to a member of the Group in
its place;
(ii) without prejudice to paragraph (i) above, any legislation
(whether primary or subordinate) with regard to the creditors of
Licensees or the ability of Licensees to raise finance under a
Licence or with regard to generators or electricity or public
electricity suppliers generally is enacted and that enactment
would be reasonably likely to have a Material Adverse Effect;
(iii) any amendment is made to the terms and conditions of a Licence
and the amendment would be reasonably likely to have a Material
Adverse Effect;
(r) Electricity Act:
(i) any of the provisions of the Electricity Act (or any subordinate
legislation) detailing the rights, powers, authorities,
obligations and duties of the Secretary of State or the Director
General, or the manner in or time at which they are to be
exercised, are repealed or amended in a manner which would be
reasonably likely (in the opinion of the Majority Banks) to have
a Material Adverse Effect; or
(ii) the Licensee fails to comply with a final order (within the
meaning of section 25 of the Electricity Act) or with a
provisional order (within the meaning of that section) which has
been confirmed under that section and in either case which has
not been revoked under that section or the validity of which has
not been questioned under section 27 of the Electricity Act, if
such failure to comply would be reasonably likely to have a
Material Adverse Effect; or
(s) Pooling and Settlement Agreement: REC or any other member of the Group
ceases to be a party to the Pooling and Settlement Agreement, or any
notice requiring REC or any other member of the Group to cease to be a
party to the Pooling and Settlement Agreement is given to such company
under the relevant clauses of the Pooling and Settlement Agreement,
except where another member of the Group becomes a party to that
agreement in its place;
(t) Gas Framework Agreement: REC or any other member of the Group ceases
to be a party to the Gas Framework Agreement where this would be
reasonably likely to lead to a Material Adverse Effect, except where
another member of the Group becomes a party to that agreement in its
place;
(u) Finance Documents: any Finance Document is not or ceases to be legal,
valid and binding on or enforceable against any Obligor or is alleged
by any Borrower or other Obligor to be ineffective for any reason; or
(v) Unlawfulness: it becomes unlawful at any time for any Borrower or
other Obligor to perform all or any of its material obligations under
any of the Finance Documents;
(w) Coalco Disposal Agreement: the Target varies, waives or amends any
material provision of the Coalco Disposal Agreement or the Escrow
Agreement (save with the prior written consent of the Majority Banks).
12.2 Acceleration
The Facility Agent may, and, if so requested by the Majority Banks, shall,
without prejudice to any other rights of the Finance Parties:
(a) Certain Funds Period: during the Certain Funds Period, at any time
after the happening of a Major Default; or
(b) Other times: at any other time, after the happening of an Event of
Default,
and so long as the same is continuing, by notice to the Primary Borrower:
(i) declare that the obligation of each Bank to make its Commitments
available shall be terminated, whereupon the Total Commitments
in respect of all Facilities shall be reduced to zero forthwith;
and/or
(ii) declare that the Advances and all interest, fees and commitment
commission accrued and all other sums payable under the Finance
Documents have become due and payable or have become due and
payable on demand, whereupon the same shall, immediately or in
accordance with the terms of such notice, become due and
payable; and/or
(iii) demand full cash cover for the Outstanding Contingent
Liabilities under all Letters of Credit then outstanding in the
currency in which those Letters of Credit are denominated;
and/or
(iv) declare that the Security Documents (or any of them) have become
enforceable (in whole or in part).
On or at any time after the making of any such declaration, the
Facility Agent shall be entitled, to the exclusion of the Borrowers,
to select the duration of Interest Periods.
12.3 Limited rights of rescission during the Certain Funds Period
Priorto the end of the Certain Funds Period, except as expressly permitted
by clause 12.2(a), none of the Finance Parties shall have or seek to
exercise any right of rescission or other remedy in consequence of any of
the representations or warranties in the Finance Documents being or being
proved to have been incorrect in any respect or any Borrower having failed
to perform, observe or comply with any of its obligations, undertakings or
agreements under the
Finance Documents or otherwise (except for the Security Agent's rights
under the Debenture to take control of and vote the Target Shares).
12.4 Application to Target Group
Without limitation to clauses 9.5, 11.2 and 12.3, the occurrence of any
event falling within clause 12.1 in respect of the Target or any member of
the Target Group at any time prior to the Takeover Operative Date shall not
(unless it constitutes a breach of clause 11.2) constitute an Event of
Default or a Default if:
(a) the same arises under clauses 12.1(e), (f), (i) or (u); and
(b) the event is remedied to the satisfaction of the Majority Banks by the
Takeover Operative Date.
13. INDEMNITIES
13.1 Miscellaneous indemnities
The Primary Borrower shall within three Banking Days of demand indemnify
each Finance Party, without prejudice to any of their other rights under
any of the Finance Documents, against any cost, loss, claim, expense
(including loss of Applicable Margin and legal fees) or liability together
with any Tax thereon which such Finance Party shall certify as sustained or
incurred by it as a consequence of:
(a) any default in payment by any Borrower of any sum under any of the
Finance Documents when due,
(b) the occurrence of any other Default,
(c) any prepayment of the Facilities or part thereof being made otherwise
than on an Interest Payment Date or, as the case may be, Maturity Date
relative thereto,
(d) any Advance not being made for any reason (excluding, but only to the
extent of the indemnification of a particular Finance Party, any gross
negligence or wilful default by such Finance Party) after a Drawdown
Notice has been given, or
(e) any notice sent by telefax failing to be received,
including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding its Contributions or any
part thereof or in liquidating or re-employing deposits from third parties
acquired or contracted for to fund all or any part of its Contributions or
any other amount owing to such Finance Party.
13.2 Currency of account; currency indemnity
(a) No payment by any Borrower under any of the Finance Documents which is
made in a currency other than the currency ("Contractual Currency") in
which such payment is required to be made pursuant to the relevant
Finance Documents shall discharge the obligation in respect of which
it is made except to the extent of the net proceeds in the
Contractual Currency received by the Facility Agent upon the sale of
the currency so received, after taking into account any premium and
costs of exchange in connection with such sale.
(b) The Finance Parties shall not be obliged to accept any such payment in
a currency other than the Contractual Currency nor shall the Finance
Parties be liable to any Borrower for any loss or alleged loss arising
from fluctuations in exchange rates between the date on which such
payment is so received by the Facility Agent and the date on which the
Facility Agent effects such sale, as to which the Facility Agent shall
(as against each Borrower) have an absolute discretion.
(c) If any sum due from any Borrower under any Finance Documents or any
order or judgment given or made in relation hereto is required to be
converted from the Contractual Currency or the currency in which the
same is payable under such order or judgment (the "first currency")
into another currency (the "second currency") for the purpose of (i)
making or filing a claim or proof against any Borrower, (ii) obtaining
an order or judgment in any court or other tribunal or (iii) enforcing
any order or judgment given or made in relation to any of the Finance
Documents, each Borrower shall indemnify and hold harmless each
Finance Party from and against any loss suffered as a result of any
difference between (A) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (B) the rate or rates of exchange at which each such
Finance Party may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to
it in satisfaction, in whole or in part, of any such order, judgment,
claim or proof.
(d) Any amount due from any Borrower under the indemnity contained in this
clause 13.2 shall be due as a separate debt and shall not be affected
by judgment being obtained for any other sums due under or in respect
of any of the Finance Documents and the term "rate of exchange"
includes any premium and costs of exchange payable in connection with
the purchase of the first currency with the second currency.
13.3 Acquisition finance indemnity
The Primary Borrower shall forthwith on demand indemnify each Finance Party
and each of their respective Affiliates and Subsidiaries and its respective
directors officers and employees (each being an "Indemnified Person") from
and against any cost, claim, loss, expense (including without limitation,
the fees, costs and expenses of legal advisors arising from any legal
procedures (including, without limitation, any administrative regulatory or
judicial actions or investigations) to which that Indemnified Person
becomes subject or joined as a party or which may be threatened or pending
against it) or liability together with any Tax thereon which may be
incurred or asserted against such Indemnified Person arising out of or in
connection with the Offer (whether or not made) or it agreeing to finance
or refinance any acquisition by Bidco or any person acting in concert with
Bidco of any shares or share options of any class in Target or the use of
the proceeds of any Advance (save to the extent any such loss or liability
arises as a result of the gross negligence or wilful default of the
relevant Finance Party).
13.4 No settlement without consent
The Primary Borrower agrees on its own behalf and on behalf of each other
member of the Group that, without the prior written consent of each
relevant Agent and the Majority Banks,
no member of the Group will settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification could be sought under the
indemnification provisions of clauses 8.4, 8.5, 8.6, 7.6, 13, 16.14, 20.2
or 20.3 (whether or not any indemnitee thereunder (the "Indemnitee") is an
actual or potential party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent does not include any
statement as to an admission of fault, culpability or failure to act by or
on behalf of any Indemnitee and does not involve any payment of money or
other value by any Indemnitee or any injunctive relief or factual findings
or stipulations binding on any Indemnitee.
14. UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES
14.1 Unlawfulness
(a) If it is or becomes contrary to any law or regulation or contrary to
any request from or requirement of any fiscal monetary or other
authority (with which such Finance Party would normally comply) for a
Finance Party to contribute to any Utilisation or to maintain its
Commitments in respect of a Facility or fund its Contribution to a
Facility, such Finance Party shall promptly after becoming aware of
the same, through the Facility Agent, notify the Primary Borrower
whereupon (a) such Finance Party's Commitments shall be reduced to
zero (and, if it is the Issuing Bank, it shall have no further
obligation to Issue Letters of Credit if to do so would in the opinion
of the Issuing Bank be or become contrary to any law or regulation or
contrary to any request from or requirement of any fiscal monetary or
other authority (with which such Finance Party would normally comply))
and (b) if the Facility Agent on behalf of the Finance Party so
requires each relevant Borrower shall be obliged to prepay the
Contribution of such Finance Party to such Facility and provide full
cash cover for any Outstanding Contingent Liabilities of the relevant
Finance Party on a future date specified by the Facility Agent not
being earlier than the latest date permitted by the relevant law or
regulation or not contrary to such request or requirement. Any
prepayment pursuant to this clause 14.1 shall be made together with
all amounts referred to in clause 6.6.
(b) When any relevant Borrower makes any prepayment under this clause 14.1
the Facility Agent shall not release the amount of such prepayment
which is cash cover for any Outstanding Contingent Liabilities of the
relevant Finance Party to such Finance Parties but shall place such
monies on suspense account and such money may be used as collateral
for the actual and the contingent liabilities of that Finance Party to
the Issuing Bank, which liabilities shall remain in full force and
effect notwithstanding such prepayment; and such Finance Party shall
remain liable under all the relevant provisions of this Agreement to
the Issuing Bank to pay in cash any shortfall between the amount held
by the Facility Agent and its liabilities under this Agreement.
14.2 Increased costs
If the result of any change in, or in the interpretation or application of,
or the introduction of, (after the date of this Agreement):
(a) any law (including, the introduction of the proposed Bank of England
Act following the publication of the Bank of ▇▇▇▇▇▇▇ ▇▇▇▇ 1997) or
(b) any regulation, request or requirement (which if not having the force
of law is one of a kind with which the relevant Finance Party or, as
the case may be, its holding company habitually complies), including
those relating to Taxation, capital adequacy, European monetary union,
liquidity, reserve assets, cash ratio deposits and special deposits or
requested or required by any central bank (including without
limitation any European Central Bank) or other fiscal monetary or
other authority,
is to:
(i) subject any Finance Party or its holding company to Taxes or
change the basis of Taxation of any Finance Party with respect
to any payment under this Agreement (other than Taxes or
Taxation on the overall net income, profits or gains of such
Finance Party imposed in the jurisdiction in which its
principal office or Facility Office is located); and/or
(ii) increase the cost to, or impose an additional cost on, any
Finance Party or its holding company in entering into or
performing its obligations under the Finance Documents and/or
in making or keeping available all or part of such Finance
Party's Commitments and/or maintaining or funding all or part
of such Finance Party's Contributions (and/or providing any
guarantee or indemnity of any other Finance Party's
obligations); and/or
(iii) reduce the amount payable or the effective return to any
Finance Party under this Agreement; and/or
(iv) reduce any Finance Party's or its holding company's rate of
return on its overall capital by reason of a change in the
manner in which it is required to allocate capital resources in
respect of all or any of the advances or obligations comprised
in a class of advances or obligations formed by or including
such Finance Party's share in Utilisations made or to be made
under this Agreement; and/or
(v) require any Finance Party or its holding company to make a
payment or forgo a return calculated by reference to or on any
amount received or receivable by such Finance Party under this
Agreement; and/or
(vi) require any Finance Party or its holding company to incur or
sustain a loss (including a loss of future potential profits)
by reason of being obliged to deduct all or part of such
Finance Party's Commitments or Contributions from its capital
for regulatory purposes,
then and in each such case (but subject to clause 8.6 and 14.3):
(aa) such Finance Party shall notify the Primary Borrower
through the Facility Agent in writing of such event
promptly upon its becoming aware of the same; and
(bb) following such notification the Primary Borrower shall,
whether or not such Finance Party's Contribution to any
Facility has been repaid, pay to the Facility Agent on
demand for the account of such Finance Party the amount
which such Finance Party specifies (in a certificate
setting
forth the basis of the computation of such amount but not
including any matters which such Finance Party or its
holding company regards as confidential) is required to
compensate such Finance Party and/or its holding company
in its sole discretion for such liability to Taxes,
increased or additional cost, reduction, payment, forgone
return or loss.
For the purposes of this clause 14.2 each Finance Party may in good faith
allocate or spread costs and/or losses among its assets and liabilities (or
any class thereof) on such basis as it considers appropriate.
Each Finance Party shall use all reasonable endeavours to notify the
Primary Borrower as soon as reasonably practicable of any such increased
cost, reduction, payment or forgone return which is to result in a demand
under clause 14.2(bb).
For the purposes of this clause 14.2 and clause 14.4 "holding company"
means, in relation to a Finance Party, the company or entity (if any)
within the consolidated supervision of which such Finance Party is
included.
For the purposes of this clause 14.2, the Borrowers acknowledge that any
requirement that the Finance Parties treat interest hereunder as anything
other than interest shall be a change in law or the interpretation thereof.
14.3 Exceptions
Nothing in clause 14.2 shall entitle any Finance Party to receive any
amount in respect of compensation for any such liability to Taxes,
increased or additional cost, reduction, payment, forgone return or loss to
the extent that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is the subject of an additional payment under clause 8.5; or
(c) arises as a consequence of (or of any law or regulation implementing)
(i) the proposals for international convergence of capital measurement
and capital standards published by the Basle Committee on Banking
Regulations and Supervisory Practices in July 1988 and/or (ii) any
applicable directive of the European Union (in each case) unless it
results from any change in, or in the interpretation or application
of, such proposals or any such applicable directive (or any law or
regulation implementing the same) occurring after the date hereof; or
(d) is attributable to Taxation save where it is recovered under clause
14.2(i); or
(e) is attributable to the wilful default or gross negligence of a Finance
Party.
For the purposes of clause 14.3(c) the term "applicable directive" means
(exclusively) each of the Own Funds Directive (89/299/EEC of 17th April
1989) and the Solvency Ratio Directive (89/647/EEC of 18th December 1989).
14.4 Mitigation
If, in respect of any Finance Party (an "Affected Bank"), circumstances
arise or exist which would result in:
(a) any Borrower being required to make an increased payment to that
Finance Party pursuant to clause 8.5;
(b) the reduction of that Finance Party's Commitment in respect of any
Facility to zero or any Borrower being required to prepay that Finance
Party's Contribution to any Facility pursuant to clause 14.1;
(c) any Borrower being required to make a payment to any Finance Party to
compensate such Finance Party or its holding company for a liability
to Taxes, increased or additional cost, reduction, payment, forgone
return or loss pursuant to clause 14.2(bb); or
(d) any Borrower not being entitled to a deduction for UK corporation tax
purposes in respect of interest payable under this Agreement to that
Finance Party;
then, without in any way limiting, reducing or otherwise qualifying the
obligations of any Borrower under clause 8 and this clause 14 (and subject
to the Borrower's rights under clause 6.5), such Finance Party shall, in
consultation with the Facility Agent, endeavour to take such reasonable
steps (and/or, in the case of clause 14.2(bb) and where the increased or
additional cost, reduction, payment, forgone return or loss is that of its
holding company, endeavour to procure that its holding company takes such
reasonable steps) as are open to it (or, as the case may be, its holding
company) to mitigate or remove such circumstances unless the taking of such
steps might (in the opinion of such Finance Party) be prejudicial to such
Finance Party (or, as the case may be, its holding company) and provided
that such Finance Party shall be under no obligation to take any such
action if in the opinion of such Finance Party to do so might have any
adverse effect upon its business, operations or financial condition.
15. SET-OFF AND PRO-RATA PAYMENTS
15.1 Set-off
Each Borrower hereby agrees that each Finance Party may at any time, whilst
any Default shall be continuing notwithstanding any settlement of account
or other matter whatsoever, combine or consolidate all or any of its then
existing accounts wheresoever situate (including accounts in the name of
such Finance Party or of such Borrower jointly with others), whether such
accounts are current, deposit, loan or of any other nature whatsoever,
whether they are subject to notice or not and whether they are denominated
in Sterling or in any other currency, and set-off or transfer any sum
standing to the credit of any one or more such accounts in or towards
satisfaction of any moneys, obligations or liabilities which are due and
payable by such Borrower to such Finance Party under the Finance Documents
but are unpaid. For this purpose each Finance Party is authorised to
purchase with the moneys standing to the credit of such account such other
currencies as may be necessary to effect such application. No Finance Party
shall be obliged to exercise any right given to it by this clause 15.1.
Each Finance Party shall notify the Facility Agent promptly upon the
exercise or purported exercise of any right of
set-off in relation to any member of the Group giving full details in
relation thereto and the Facility Agent shall inform the other Finance
Parties.
15.2 Pro-rata payments
(a) If at any time any Bank (the "Recovering Bank") receives or recovers
any amount owing to it by any Borrower under this Agreement by direct
payment, set-off or in any manner other than by payment through the
Facility Agent (not being a payment received from a Substitute or a
sub-participant in such Bank's Contribution to any Facility or any
other payment of an amount due to the Recovering Bank for its sole
account), the Recovering Bank shall, within two Banking Days of such
receipt or recovery (a "Relevant Receipt") notify the Facility Agent
of the amount of the Relevant Receipt. If the Relevant Receipt exceeds
the amount which the Recovering Bank would have received if the
Relevant Receipt had been received by the Facility Agent then:
(i) within two Banking Days of demand by the Facility Agent, the
Recovering Bank shall pay to the Facility Agent an amount equal
to the excess;
(ii) the Facility Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the relevant
Borrower and shall distribute the same to the Banks (other than
the Recovering Bank); and
(iii) as between the relevant Borrower and the Recovering Bank, the
excess amount so re-distributed shall be treated as not having
been paid but the obligations of the relevant Borrower to the
other Banks shall, to the extent of the amount so re-distributed
to them, be treated as discharged.
(b) If any part of a Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank's pro-rata share of the amount which has to
be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Facility Agent such
information as the Facility Agent may from time to time request for
the purpose of this clause 15.2.
(d) Notwithstanding the foregoing provisions of this clause 15.2, no
Recovering Bank shall be obliged to share any Relevant Receipt which
it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other party
which has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Bank are instituted by it in
breach of clause 18.2).
(e) The amounts due from each relevant Borrower to each of the Banks shall
reflect any payments and receipts among the Banks prescribed by this
clause.
(f) Nothing in this clause 15.2 shall prevent the Issuing Bank from
recovering from the relevant Borrowers any amounts due under a Letter
of Credit issued by the Issuing Bank.
15.3 No release
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 15.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 15.2.
15.4 No charge
The provisions of this clause 15 are not intended to, shall not, and shall
not be construed so as to, constitute a charge by a Bank. In particular it
is not intended to create a charge over all or any part of a sum received
or recovered by any Bank in the circumstances mentioned in clause 15.2.
16. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
16.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the
Finance Parties and the Borrowers and their respective successors,
transferees and assigns.
16.2 No assignment by the Borrowers
The Borrowers may not assign or otherwise transfer any of their respective
rights or obligations under any of the Finance Documents.
16.3 Substitution
Each Bank (an "Existing Bank") may at any time assign all or any of its
rights and benefits under the Finance Documents or novate in accordance
with clause 16.5 all or any part of its rights, benefits and/or obligations
under the Finance Documents to another Qualifying Bank (a "Substitute")
with the consent of the Issuing Bank, and with the consent of the Primary
Borrower (not to be unreasonably withheld or delayed), save that such
consent of the Primary Borrower will not be required to assignments or
novations which take place prior to the Syndication Date.
16.4 Assignment
If any Bank assigns all or any of its rights and benefits under the Finance
Documents in accordance with clause 16.3, then, unless and until the
assignee has agreed with the other Finance Parties that it shall be under
the same obligations towards each of them as it would have been if it had
been an original party thereto as a Bank, the other Finance Parties shall
not be obliged to recognise that assignee as having the rights against each
of them which it would have had if it had been such a party thereto.
16.5 Substitution Certificate
Subject to clause 16.5 (b), if a duly completed Substitution Certificate
duly executed by the Existing Bank and the Substitute is five Banking Days
before the proposed Effective Date (unless the Facility Agent otherwise
agrees) delivered to and counter-signed by the Facility
Agent (for itself and the other parties to this Agreement other than the
Existing Bank), then on the Effective Date (as specified in that
Substitution Certificate) to the extent that the Existing Bank's rights,
benefits and obligations under the Finance Documents are expressed in such
Substitution Certificate to be the subject of a novation in favour of the
Substitute effected pursuant to this clause 16.5:
(i) the existing parties to the Finance Documents and the Existing
Bank shall be released from their respective obligations towards
one another under the Finance Documents ("discharged
obligations") except for any obligation which the Existing Bank
has to the Issuing Bank under clause 4.7 (Bank's Guarantee and
Indemnity) before the date on which the novation takes place
unless otherwise agreed in writing by the Issuing Bank and their
respective rights against one another under the Finance
Documents ("discharged rights") shall be cancelled;
(ii) the Substitute party to such Substitution Certificate and the
existing parties to the Finance Documents shall assume
obligations towards each other which differ from the discharged
obligations only insofar as they are owed to or assumed by such
Substitute instead of to or by such Existing Bank;
(iii) the Substitute party to such Substitution Certificate and the
existing parties to the Finance Documents shall acquire rights
against each other which differ from the discharged rights only
insofar as they are exercisable by or against such Substitute
instead of by or against such Existing Bank; and
(iv) the Finance Parties shall acquire the same rights and benefits
and assume the same obligations between themselves as they would
have acquired and assumed had such Substitute been an original
party hereto as a Bank with the rights, benefits and/or
obligations acquired or assumed by it as a result of such
transfer;
and, on such Effective Date, the Substitute shall (unless such
novation is part of the syndication process carried out by the
Arrangers) pay to the Facility Agent for its own account a fee of
(pound)750. The Facility Agent shall promptly notify the other Banks
of the receipt by it of any Substitution Certificate and shall
promptly deliver a copy of such Substitution Certificate to the
Primary Borrower.
16.6 Reliance on Substitution Certificate
The Facility Agent (on behalf of itself and the Security Agent) and the
Borrowers shall be fully entitled to rely on any Substitution Certificate
delivered to the Facility Agent in accordance with the foregoing provisions
of this clause 16 which is complete and regular on its face as regards its
contents and purportedly signed on behalf of the relevant Existing Bank(s)
and the Substitute(s) and none of the Facility Agent, the Security Agent
and the Borrowers shall have any liability or responsibility to any party
as a consequence of placing reliance on and acting in accordance with any
such Substitution Certificate if it proves to be the case that the same was
not authentic or duly authorised.
16.7 Authorisation of Facility Agent
Each party to this Agreement irrevocably authorises the Facility Agent to
counter-sign each Substitution Certificate on its behalf for the purposes
of clause 16.5 without any further consent of, or consultation with, such
party except, in the case of the Primary Borrower, any consent required
pursuant to clause 16.3.
16.8 Accession Deeds
The Obligors shall from time to time at the request of the Facility Agent
promptly execute any accession deed to any of the Security Documents and do
any other act or thing or execute such further documents as directed by the
Facility Agent in connection with the transfer of rights or benefits under
clause 16.3.
16.9 Costs and Expenses
The Primary Borrower shall, promptly after demand by the Facility Agent,
pay to the Facility Agent and the Security Agent the reasonable costs and
expenses incurred by them or any other Finance Party in connection with the
creation of valid security in respect of any Substitute taking an
assignment of rights and/or an assumption of obligations pursuant to clause
16 in those jurisdictions requiring further steps to be taken following
such assignment or assumption.
16.10 Construction of certain references
If any Bank novates all or any part of its rights, benefits and obligations
as provided in clause 16.3 all relevant references in this Agreement to
such Bank shall thereafter be construed as a reference to such Bank and/or
its Substitute to the extent of their respective interests.
16.11 Lending offices
Each Bank shall lend through its office at the address specified in
schedule 1 or, as the case may be, in or pursuant to any relevant
Substitution Certificate or through any other office of such Bank selected
from time to time by such Bank through which such Bank wishes to lend for
the purposes of this Agreement. If the office through which a Bank is
lending is changed pursuant to this clause 16.11, such Bank shall notify
the Facility Agent promptly of such change. No Bank shall exercise its
rights under this clause in any manner which might reasonably be expected
to result in it not being a Qualifying Bank.
16.12 Disclosure of information
The Obligors party to this Agreement agree that the Finance Parties may at
any time disclose such information relating to the Obligors, their
Affiliates and associated companies as shall come into their possession,
whether or not in relation to the Facilities:
(a) to any prospective assignee, Substitute or sub-participant;
(b) to their respective advisers, professional or otherwise;
(c) to any Affiliate of such Finance Party;
(d) to the other Finance Parties;
(e) if required to do so by an order of a court in any jurisdiction;
(f) under any law or regulation or to any applicable regulatory authority
(including the Bank of England) in any jurisdiction; and
(g) where such information shall have already entered the public domain,
and in the case of (a) and (b) above, subject to requiring and receiving a
written confirmation from the recipient of the information that it will
treat in confidence any confidential information so disclosed to it and not
use it for any unauthorised purpose and, upon receipt of such confirmation,
such Finance Party shall in no way be liable or responsible for such
information not being kept confidential by such proposed assignee,
Substitute or other person.
16.13 Restrictions on novations
Any novation by an Existing Bank which is transferring part (but not all)
of its Commitment may only be made under this clause 16 if (i) it is made
in respect of a Commitment of (pound)5,000,000 or any larger integral
multiple of (pound)5,000,000 and (ii) as a consequence of such novation (or
as a consequence of that and any other novation between the same or related
parties taking effect at or about the same time) the Commitment of the
Existing Bank would be not less than (pound)5,000,000. If part (but not
all) of a Bank's Contribution is being transferred, the previous sentence
shall be read as if it referred to "Contribution", "Contributions" and
assignment instead of "Commitment" and "Commitments" and "novation"
respectively.
16.14 No obligation
The Existing Bank shall not be obliged by any Finance Document to:
(a) accept a re-transfer from the Substitute of any of the rights and/or
obligations assigned or transferred under this clause 16; or
(b) indemnify the Substitute for any losses arising by reason of any
Obligor's failure to perform its obligations under any Finance
Documents or otherwise.
16.15 Syndication
It is acknowledged that at the date of this Agreement the Facilities are
being made available by the Underwriters with the intention that each
Underwriter may transfer any part of its participation in accordance with
clause 16.5 (Substitution) and, accordingly, references to the Banks shall,
before the first date on which such transfer shall be made of the
Underwriter's rights, benefits and obligations under this Agreement in
accordance with clause 16.5 (Substitution), be construed as a reference
solely to the Underwriters.
16.16 Obligors' undertakings in connection with syndication
The Obligors acknowledge that syndication of the Facilities in accordance
with this clause 16.16 and the Syndication Letter will take place and
undertake to take reasonable steps to assist and co-operate with the
Arrangers, the Facility Agent and the Underwriters in syndication by, among
other things:
(a) co-operating with site visits by the Banks and persons invited by the
Arrangers to participate (in this clause 16.16 only, together the
"Banks");
(b) participating at an appropriate senior management level in
presentations to the Banks concerning the Parent, the members of the
Group and their activities;
(c) using reasonable endeavours to obtain appropriate authorisations from
the Auditors, other accountants, consultants and professional advisers
to release for the benefit of the Banks any information addressed to
any Obligor and/or the Facility Agent;
(d) refraining from making any statement, announcement or publication or
doing any act or thing which may obstruct syndication in any way;
(e) providing the Banks with such information relating to the Parent and
members of the Group, and their associated companies and their
activities as the Banks reasonably request;
(f) assisting the Facility Agent and the Arrangers in the preparation and
review of any information which such Facility Agent and/or the
Arrangers reasonably require for the purposes of syndication,
including assisting in the preparation of any information memorandum
and the giving of such additional warranties as the Facility Agent may
reasonably request of the contents of the information and/or the
warranties in clause 9, provided that any such warranties are
expressed to be to the best of the relevant Obligor's knowledge,
information and belief and that the Obligors may disclose against such
warranties such matters as they deem appropriate;
(g) passing on to the Facility Agent any enquiries received by them from
potential Banks; and
(h) agreeing to amendments to the Finance Documents of an administrative
or technical nature or to correct typographical or other clerical
errors.
17. FACILITY AGENT AND SECURITY AGENT
17.1 Appointment of Facility Agent and Security Agent
Each Finance Party (except the relevant agent) appoints the Facility Agent
to act as its agent in connection with the Finance Documents to which the
Facility Agent is a party and the Security Agent to act as its agent and
trustee in relation to the Security Documents, and authorises each of the
Facility Agent and the Security Agent to exercise such rights, remedies,
powers and discretions as are specifically delegated to them by the terms
of this Agreement and the Security Documents together with all reasonably
incidental rights, powers and discretions. The Obligors shall be entitled
to assume that the Facility Agent and the Security Agent represent the
Finance Parties (except the relevant agent), the Reference Banks or the
Majority Banks (as the case may be), and that all consents and notices
given by the Facility Agent or the Security Agent on their behalf are
validly given.
17.2 Separate treatment of syndication division
In acting as Facility Agent or Security Agent, the Facility Agent's or, as
the case may be, the Security Agent's syndication division (or such other
division as may undertake such task) shall be treated as a separate entity
from any other of its divisions or departments and, despite the
provisions of clauses 17 to 21, if the Facility Agent or Security Agent or
any Related Person acts for or transacts business with any member of a
group comprising the Parent and its Affiliates or associated companies (the
"Parent Group") or any other person which may be a trade competitor of the
Parent Group or Target Group or any member of either such group or may
otherwise have commercial interests similar to those of any member of such
groups in any capacity in relation to any other matter (including as a Bank
under this Agreement), any information acquired by the Facility Agent or
Security Agent or any Related Person in such other capacity may be treated
as confidential by the Facility Agent or Security Agent. The Borrowers and
Bidco hereby expressly acknowledge that the Finance Parties and Related
Persons may be providing debt financing, equity capital or other services
(including financial advisory services) to other persons with whom the
Parent or the Group may have conflicting interests in respect of the
Facilities or otherwise.
17.3 Actions of Facility Agent and Security Agent
Each action taken or decision made by the Facility Agent or the Security
Agent under or in relation to any Finance Document with requisite authority
under this Agreement, including on the basis of the requisite instructions,
shall be binding on all the Finance Parties.
17.4 Notification of retirement of Facility Agent, Security Agent or Issuing
Bank
Each of the Facility Agent, the Security Agent and/or the Issuing Bank may
resign its appointment under this Agreement at any time without assigning
any reason therefor by giving not less than 30 days' prior written notice
to that effect to each of the other parties to this Agreement Provided that
no such resignation shall be effective until a successor for such Facility
Agent, Security Agent or Issuing Bank (as the case may be) is appointed in
accordance with the succeeding provisions of this clause.
17.5 Successor Facility Agent, Security Agent or Issuing Bank
If the Facility Agent, Security Agent or Issuing Bank gives notice of its
resignation pursuant to clause 17.4, then any reputable and experienced
bank or other financial institution with an office in London may after
consultation with the Primary Borrower be appointed as a successor to such
Facility Agent, Security Agent or Issuing Bank (as the case may be) by the
Majority Banks but, if no such successor is so appointed, the Facility
Agent, Security Agent or Issuing Bank (as the case may be) may appoint such
a successor itself.
17.6 Provisions relating to successor Facility Agent, Security Agent or Issuing
Bank
With effect from the date that a successor is appointed and accepts the
office of Facility Agent, Security Agent or, as the case may be, Issuing
Bank and executes such necessary documentation under this clause 17:
(a) as regards the other Finance Parties and the Obligors, such successor
shall become bound by all the obligations of the Facility Agent,
Security Agent or, as the case may be, the Issuing Bank and become
entitled to all the rights, privileges, powers, authorities and
discretions of the Facility Agent, Security Agent or, as the case may
be, the Issuing Bank under the Finance Documents;
(b) the agency of the retiring Facility Agent, the trusteeship of the
retiring Security Agent or, as the case may be, the duties of the
Issuing Bank shall terminate and the retiring
Facility Agent, Security Agent or, as the case may be, the retiring
Issuing Bank shall be discharged from any further liability or
obligation under the Finance Documents, but without prejudice to any
liabilities which the retiring Facility Agent, Security Agent or, as
the case may be, the retiring Issuing Bank may have incurred
(including with respect to the retiring Issuing Bank any then
outstanding Issued Letter of Credit) before the termination of its
agency, trusteeship and/or duties;
(c) the costs, charges and expenses of the retiring Facility Agent,
Security Agent or, as the case may be, the retiring Issuing Bank shall
be discharged if recoverable under the provisions of this Agreement;
(d) the provisions of the Finance Documents shall continue in effect for
the benefit of any retiring Facility Agent, Security Agent or, as the
case may be, the retiring Issuing Bank in respect of any actions taken
or omitted to be taken by it or any event occurring before the
termination of its agency, trusteeship and/or duties (including with
respect to the retiring Issuing Bank any then outstanding Issued
Letter of Credit);
(e) it is intended that (except only as may be agreed in writing between
any retiring Security Agent and its successor with the prior approval
of the Majority Banks), in the case of the appointment of successor to
the Security Agent, the property, assets and rights vested in the
retiring Security Agent pursuant to the Security Documents should,
with immediate effect, be vested in such successor Security Agent
under the provisions of the Trustee ▇▇▇ ▇▇▇▇, either by operation of
law or, failing that, by assignment or other form of transfer or
conveyance;
(f) at any time and from time to time following such appointment of a
successor to the Security Agent, the retiring Security Agent shall do
and execute all acts, deeds and documents reasonably required by such
successor in order to transfer to such successor Security Agent (or
its nominee, as such successor may direct) any such property, assets
and rights which shall not have vested in such successor by operation
of law and all such acts, deeds and documents under clauses 17.6(e)
and (f) shall be done or, as the case may be, executed at the cost of
the retiring Security Agent; and
(g) the retiring Facility Agent, Security Agent or Issuing Bank shall (at
the expense of the Primary Borrower) provide its successor with copies
of such of its records as its successor reasonably requires to carry
out its functions as such.
17.7 Merger of Facility Agent, Security Agent or Issuing Bank
Any corporation into which the Facility Agent, the Security Agent or the
Issuing Bank may be merged or converted or any corporation with which the
Facility Agent, the Security Agent or the Issuing Bank may be consolidated
or any corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Facility Agent, the
Security Agent or the Issuing Bank shall be a party shall, to the extent
permitted by applicable law, be the successor Facility Agent, Security
Agent or, as the case may be, Issuing Bank under this Agreement and the
other Finance Documents (as appropriate) without the execution or filing of
any document or any further act on the part of any of the parties to this
Agreement or, as the case may be, the other Finance Documents save that
notice of merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to the Primary Borrower and the
Banks.
17.8 Role of Issuing Bank
The Issuing Bank shall act on behalf of the Banks with respect to any
Letters of Credit Issued by it and the documents associated therewith until
such time and except for so long as the Facility Agent may agree at the
request of the Majority Banks to act for such Issuing Bank with respect
thereto.
18. POWERS
18.1 General powers
Each of the Facility Agent, the Security Agent, the Arrangers and the
Underwriters may:
(a) assume that the Facility Office of each Bank is that identified with
its signature below (or, in the case of a Substitute, that identified
in the Substitution Certificate under which it became a party to this
Agreement) until it has received from such Bank a notice designating
some other office of such Bank as its Facility Office, and may act
upon any such notice until the same is superseded by a further such
notice;
(b) engage and pay for the advice or services of any lawyers, accountants
or other advisers whose advice or services may seem necessary,
expedient or desirable to it and may rely upon any advice so obtained;
(c) rely as to matters of fact which might reasonably be expected to be
within the knowledge of an Obligor upon a certificate or statement
signed by or on behalf of that Obligor;
(d) rely upon any communication or document believed by it to be genuine
and correct and to have been communicated or signed by the person by
whom it purports to be communicated or signed;
(e) refrain from exercising any right, power or discretion vested in it
under any Finance Document unless and until instructed by the Majority
Banks or, where required, all of the Banks as to whether or not such
right, power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised, and it
shall not be liable for acting or refraining from acting in accordance
with or in the absence of such instructions;
(f) refrain from taking any step to protect or enforce the rights of any
Finance Party under any Finance Document and from beginning any legal
action or proceeding arising out of or in connection with any Finance
Document until it has been indemnified and/or secured as it may
require (whether by way of payment in advance or otherwise) against
all costs, claims, expenses (including legal fees) and liabilities
which it will or may expend or incur in complying with such
instructions;
(g) refrain from doing anything which would or might in its opinion be
contrary to any applicable law or any requirements (whether or not
having the force of law) of any governmental, judicial or regulatory
body or otherwise render it liable to any person, and do anything
which is in its opinion necessary to comply with any such applicable
law or requirement;
(h) do any act or thing in the exercise of any of its powers and duties
under the Finance Documents which may lawfully be done and which in
its absolute discretion it deems advisable for the protection and
benefit of the Finance Parties collectively;
(i) perform any of its duties, obligations and responsibilities under the
Finance Documents by or through its personnel or agents; and
(j) accept deposits from, lend money (secured or unsecured) to and
generally engage in any kind of banking or other business with, be the
owner or holder of any shares or other securities of, and provide
advisory or other services to the Parent and its Affiliates, and/or
the Group or any of the Finance Parties, without any liability to
account.
18.2 Specific powers of Facility Agent and Security Agent
Each of the Facility Agent and the Security Agent:
(a) may assume that:
(i) any representation made by the Obligors in or in connection with
the Finance Documents is true;
(ii) no Default has occurred;
(iii) no Obligor is in breach of or default under its obligations
under any Finance Document; and
(iv) any right, power, authority or discretion vested in any of the
Finance Documents upon the Majority Banks, all Banks, or any
other person or group of persons has not been exercised,
unless the Facility Agent or, as the case may be, the Security Agent
has in its capacity as agent (or where relevant, as agent and trustee)
for the relevant Finance Parties received actual notice to the
contrary from any other party to any Finance Document;
(b) shall be at liberty to place any Finance Document and any other
instruments, documents or deeds delivered to it pursuant thereto or in
connection therewith for the time being in its possession in any safe
deposit, safe or receptacle selected by the Security Agent or Facility
Agent, as the case may be, or with any bank, any company whose
business includes undertaking the safe custody of documents or any
firm of lawyers of good repute and may make any such arrangements as
it thinks fit for allowing the Primary Borrower access to, or its
solicitors or auditors possession of, such documents when necessary or
convenient and, in the absence of gross negligence or wilful default
on its part, shall not be responsible for any loss thereby incurred;
(c) may, whenever it thinks fit, delegate by power of attorney or
otherwise to any person or persons all or any of the rights, trusts,
powers, authorities and discretion vested in it by any Finance
Document and such delegation may be made upon such terms and subject
to such conditions and subject to such regulations as the Security
Agent or Facility Agent, as the case may be, may think fit and shall
not be bound to supervise
the proceedings or (in the absence of gross negligence or wilful
default on its part) be in any way responsible for any loss incurred
by reason of any misconduct or default on the part of any such
delegate;
(d) notwithstanding anything else herein contained, may refrain from doing
anything which would or might in its opinion be contrary to any
relevant law of any jurisdiction or any relevant directive or
regulation of any agency of any state or which would or might
otherwise render it liable to any persons and may do anything which
is, in its opinion, necessary or desirable to comply with any such
law, directive or regulations;
(e) may indemnify itself and/or every attorney, agent or other person
appointed by it under any Finance Document out of the Trust Property
against all Liabilities (as defined in clause 20.3) and/or in respect
of any other matter or thing done or omitted to be done in any way
relating to any Finance Document or by law and/or acting as Facility
Agent or Security Agent (as the case may be);
(f) shall have the power to institute, prosecute and defend any suits or
actions or other proceedings affecting the Facility Agent or Security
Agent respectively or the Trust Property and to compromise any matter
or difference or submit any such matter to arbitration and to
compromise or compound any debts owing to the Facility Agent or
Security Agent respectively or any other claims against it or any such
terms as it shall deem sufficient and to make petition upon such terms
as it shall deem desirable;
(g) save as otherwise expressly provided herein, shall have absolute
discretion as to the exercise or non exercise (and as to the manner
and time of any such exercise) of all rights, trust, powers,
authorities and discretions vested in it by any of the Finance
Documents but shall be entitled to refrain from exercising any right,
power or discretion vested in it as agent or trustee under any Finance
Document unless and until instructed by the Majority Banks or, where
required under this Agreement, all Banks as to whether or not such
right, power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised; and
(h) shall have absolute discretion as to the exercise or non-exercise (and
as to the manner and time of any such exercise) of all rights, trust,
powers, authorities and discretions in relation to any matter, or in
any context, not expressly provided for by this Agreement to act or,
as the case may be, refrain from acting in accordance with the
instructions of the Majority Banks;
(i) shall have the power to give or enter into any indemnity, warranty,
guarantee, undertaking or covenant or to enter into any type of
agreement as it shall, with the approval of the Majority Banks (or,
where required under this Agreement, all Banks) and subject to all
other provisions of the Finance Documents, think fit in relation to
the Trust Property;
(j) shall (subject to clause 19) be entitled (in its own name or in the
names of nominees) to invest moneys from time to time including in the
case of the Security Agent moneys forming part of the Trust Property
or otherwise held by it as a consequence of any enforcement of the
security constituted by the Security Documents which, in the opinion
of the Facility Agent or (as the case may be) the Security Agent, it
would not be practicable to distribute immediately by placing the same
on deposit in the name or under the control of itself as it may think
fit without being under any duty to diversify
the same and it shall not be responsible for any loss due to interest
rate or exchange rate fluctuations;
(k) with respect to its own Commitments and Contributions (if any), shall
have the same rights and powers under this Agreement and the other
Finance Documents as any other Bank and may exercise the same as
though it were not performing the duties and functions delegated to it
under this Agreement and/or the other Finance Documents and the term
"Banks" shall, unless the context clearly otherwise indicates, include
the Security Agent and the Facility Agent in their individual
capacities as Banks.
18.3 Specific powers of Security Agent
The Security Agent:
(a) shall have all the powers and discretions conferred upon trustees by
the Trustee ▇▇▇ ▇▇▇▇ (to the extent not inconsistent herewith) and
upon the Security Agent by this Agreement and the other Finance
Documents and upon a receiver appointed under any Finance Documents
(as though the Security Agent were a receiver thereunder);
(b) shall, without prejudice to any of the powers, discretions and
immunities conferred upon trustees by law (and to the extent not
inconsistent with the provisions of this Agreement or any of the
Security Documents), have all the same powers and discretions as a
natural person acting as the beneficial owner of such property and/or
as are conferred upon the Security Agent by this Agreement and/or any
Security Document but so that the Security Agent may only exercise
such powers and discretions to the extent that it is authorised to do
so by the provisions of this Agreement;
(c) shall have full power to determine all questions and doubts arising in
relation to the interpretation or application of any of the provisions
of this Agreement or any of the Security Documents as it affects the
Security Agent and every such determination (whether made upon a
question actually raised or implied in the acts or proceedings of the
Security Agent) shall be conclusive and shall bind all the other
parties to this Agreement and the Security Documents;
(d) may at any time appoint any person (whether or not a trust
corporation) to act either as a separate trustee or as a co-trustee
jointly with it (i) if it considers such appointment to be in the
interests of the Finance Parties or (ii) for the purposes of
conforming to any legal requirements, restrictions or conditions which
the Security Agent deems relevant for the purposes hereof, and shall
give prior notice to the Primary Borrower and the Facility Agent of
any such appointment; and any person so appointed shall have such
powers, authorities and discretions (including the receipt and payment
of money) and such duties and obligations as shall be conferred or
imposed on such person by the instrument of appointment and shall have
the same benefits under clauses 17 to 23 as the Security Agent; and
the Security Agent shall have power in like manner to remove any
person so appointed; and may pay to any person so appointed, and any
costs, charges and expenses incurred by such person in performing its
functions pursuant to such appointment, shall for the purposes hereof
be treated as costs, charges and expenses incurred by the Security
Agent in performing its function as trustee hereunder;
(e) has at its absolute discretion the right to make or retain or register
in the names of nominees any investment of any part or all of the
Trust Property;
(f) without prejudice to the provisions of any of the Finance Documents,
shall have the right to, but shall not be under any obligation to,
insure any of the Trust Property or to require any other person to
maintain any such insurance and (in the absence of gross negligence or
wilful default on the part of the Security Agent) shall not be
responsible for any loss which may be suffered by any person as a
result of the lack of or inadequacy or insufficiency of any such
insurance;
(g) may at its sole discretion, and without reference to the Finance
Parties, release any asset or assets from the Security Documents to
the extent that their disposal or release is permitted or required by
the terms of this Agreement or any of the Security Documents;
(h) shall be entitled to make the deductions and withholdings (on account
of Taxes or otherwise) from payments to the Facility Agent hereunder
which it is required by any applicable law to make, and to pay all
Taxes which may be assessed against it in respect of any of the Trust
Property, in respect of anything done by it in its capacity as trustee
or otherwise by virtue of its capacity as trustee;
(i) shall be entitled to carry out all dealings with the other Finance
Parties through the Facility Agent and shall be entitled to rely on
the Facility Agent's certificate as to the entitlement of all or any
of the Finance Parties; and
(j) shall be authorised to execute each of the Security Documents on
behalf of the Finance Parties.
19. DUTIES
19.1 Specific duties of the Facility Agent and the Security Agent
Each of the Facility Agent and the Security Agent (for the benefit of the
other Finance Parties only) shall:
(a) promptly upon receipt inform each Bank of the contents of any notice
or document or other information received by it on or after the date
of this Agreement in its capacity as Facility Agent under this
Agreement from any Obligor or as Security Agent under the Security
Documents from any Obligor;
(b) promptly notify each Bank of the occurrence of any Default or any
material breach by any Obligor in the due performance of its
obligations under this Agreement or any Security Document of which the
Facility Agent or, as the case may be, the Security Agent (in its
capacity as such) has received written notice from any other party to
any Finance Document;
(c) save as otherwise provided herein, act in accordance with any
instructions given to it by the Majority Banks (which instructions
shall be binding on all of the Finance Parties);
(d) if so instructed by the Majority Banks (or, where so required under
this Agreement, all Banks), refrain from exercising any right, remedy
power or discretion vested in it under the Finance Documents;
(e) except as regards purely administrative acts, consult whenever
reasonably practicable with the Banks before doing or refraining from
doing any act or thing in the exercise of its powers as agent and/or
trustee;
(f) to the extent that it receives or recovers monies following the
service of a notice in accordance with Clause 12.2 pursuant to or as a
result of any breach of any Finance Document to be applied in
discharging any obligation (whether actual or contingent, present or
future) of any Obligor under any Finance Document, apply such monies
(without prejudice to the respective rights of the Facility Agent or
the Security Agent pursuant to any Finance Document to credit any
monies received by it to any suspense account) as between the Finance
Parties in accordance with clause 8.9 as if they were a partial
payment; and
(g) shall make each such application and/or distribution as soon as is
practicable after the relevant moneys are received by, or otherwise
become available to, it save that (without prejudice to any other
provision contained in any of the Security Documents) the Security
Agent (acting on the instructions of the Facility Agent), the Facility
Agent or any Receiver may credit any moneys received by it to a
suspense account for so long and in such manner as the Security Agent,
Facility Agent or such Receiver may from time to time determine with a
view to preserving the rights of the Finance Parties or any of them to
prove for the whole of their respective claims against any Borrower or
any other person liable.
19.2 Specific duties of Security Agent
The Security Agent (for the benefit of the other Finance Parties only)
shall:
(a) during the Trust Period hold the Trust Property as trustee upon trust
for the Finance Parties from time to time and (as well after as before
enforcement) perform and exercise (as the case may be) the
obligations, rights and benefits vested or to be vested in the
Security Agent by the Finance Documents or any document entered into
pursuant thereto in accordance with the provisions of Clauses 17 to
23.
(b) (subject to the provisions contained in clause 3.3 (Certain Funds
Period)) only make demand under the Security Documents and to the
extent practicable enforce the security constituted by the Security
Documents:
(i) before the Final Repayment Date at the direction of the Majority
Banks, if any of the Facilities has been declared to be
immediately due and payable by the Facility Agent under clause
12.2; or
(ii) on or after the Final Repayment Date at the direction of any
Bank, if any Borrower defaults in repaying the Facilities in
full on the Final Repayment Date or in paying any other amount
due by any Borrower to any Finance Party, under the Finance
Documents; or
(iii) at any time, if requested to do so by a member of the Group
which has granted security to the Security Agent;
(c) hold any recoveries which it receives under the security constituted
by the Security Documents on trust for distribution to the Finance
Parties, in accordance with the provisions of this clause 19 and shall
hold the security constituted by the Security Documents on trust for
the Finance Parties, to give effect to this Agreement and shall
exercise its rights, powers and duties under the Security Documents
(and particularly those concerned with the protection and enforcement
of the security afforded by such documents) and/or under this
Agreement for the benefit of all Finance Parties; and
(d) carry out all dealings with the other Finance Parties through the
Facility Agent.
20. EXONERATION
20.1 Absence of obligation on initial Finance Parties
Despite anything to the contrary expressed or implied in any Finance
Document, each of the Facility Agent, the Security Agent, the Issuing Bank,
the Arrangers and the Underwriters shall:
(a) not be bound to enquire as to and will have no liability in respect
of:
(i) whether or not any representation or warranty made by any
Obligor under or in connection with any Finance Document is true
complete or adequate;
(ii) the occurrence or otherwise of any Default;
(iii) the performance by any Obligor of its obligations under any
Finance Document; or
(iv) any breach or default by any Obligor of or under its obligations
under any Finance Document;
(b) not be bound to account to any Finance Party for any fee or other sum
or the profit element of any sum received by it for its own account;
(c) not be bound to disclose to any other person any information relating
to any member of the Group if such disclosure would or might in its
opinion constitute a breach of any law or regulation or duty of
confidentiality or be otherwise actionable at the suit of any person;
(d) not be under any fiduciary or other duty towards any Finance Party or
under any obligations other than those expressly provided for in any
Finance Documents;
(e) not be liable (in the absence of its own gross negligence or wilful
default):
(i) for any failure, omission, or defect in the due execution,
delivery, validity, legality, adequacy, performance,
enforceability, or admissibility in evidence of any Finance
Document or any communication, report or other document delivered
under any Finance Document; or
(ii) in respect of its exercise or failure to exercise any of its
powers and duties under any Finance Document; or
(f) not have any duties, obligations or liabilities other than those
expressly provided for in this Agreement and (in the case of the
Security Agent) the Security Documents and have no liability or
responsibility (in the absence of its own gross negligence or wilful
default) of any kind to:
(i) any member of the Group arising out of or in relation to any
failure or delay in the performance or breach by any Finance
Party (other than itself) of any of its obligations under or in
connection with any Finance Document; or
(ii) any Finance Party arising out of or in relation to:
(aa) the financial condition of any member of the Group; or
(bb) any failure or delay in the performance or breach by any
Obligor of any of its obligations under or in connection
with any Finance Document or the Facilities;
(g) not be bound to check or enquire on behalf of any other Finance Party
into or liable for the adequacy, accuracy, execution, genuineness,
enforceability, admissibility in evidence or completeness of any
communication delivered to it under any of the Finance Documents, any
legal or other opinions, reports, valuations, certificates, appraisals
or other documents delivered or made or required to be delivered or
made at any time in connection with any of the Finance Documents, any
security to be constituted thereby or any other report or other
document, statement or information circulated, delivered or made,
whether orally or otherwise and whether before, on or after the date
of this Agreement;
(h) be entitled to accept without enquiry, requisition or objection such
right and title as any Obligor may have to that part of the property
belonging to it (or any part thereof) which is the subject matter of
any Finance Document and not be bound or concerned to investigate or
make any enquiry into the right or title of such person to such
property (or any part thereof) or, without prejudice to the foregoing,
to require such person to remedy any defect in such person's right or
title as aforesaid;
(i) in enforcing the security constituted by the Finance Documents and in
determining the respective entitlements of the Finance Parties, be
entitled to rely on its own account;
(j) be entitled to invest monies which in the opinion of the Facility
Agent or Security Agent (as the case may be) may not be paid out
promptly following receipt in the name or under the control of such
Facility Agent or Security Agent (as the case may be) in any of the
investments for the time being authorised by law for the investment by
trustees of trust monies or in any other investments whether similar
to the aforesaid or not which may be requested by the Majority Banks
or by placing the same on deposit in the name or under the control of
the Facility Agent or the Security Agent as the Facility Agent or
Security Agent (as the case may be) may think fit and the Facility
Agent and Security Agent (as the case may be) may at any time vary or
transpose any such investments for or into any others of a like nature
and (in the absence of gross
negligence or wilful default on the part of such Facility Agent or
Security Agent) shall not be responsible for any loss thereby incurred
whether due to depreciation in value of such investments or any other
reason whatever;
(k) not be bound to take any steps or perform any obligation or exercise
any right or fulfil any request if to do so might in its sole opinion
breach or conflict with or contradict or be contrary to any rule,
regulation, law, regulatory requirement, court order or judgment in
any jurisdiction or expose the Facility Agent, the Security Agent, the
Arrangers or the Underwriters to liabilities in any jurisdiction or be
otherwise actionable at the suit of any person;
(l) not be liable for any failure:
(i) to require the deposit with it of any deed or document
certifying, representing or constituting the title of any of
the Obligors to any of the property mortgaged, charged,
assigned or otherwise encumbered by or pursuant to any of the
Security Documents;
(ii) to obtain any licence, consent or other authority for the
execution, delivery, validity, legality, adequacy, performance,
enforceability or admissibility in evidence of any of the
Finance Documents;
(iii) to register or notify any of the foregoing in accordance with
the provisions of any of the documents of title of any of the
Obligors;
(iv) to effect or procure registration of or otherwise protect any
of the security created by the Security Documents by
registering the same under any applicable registration laws in
any territory;
(v) to take, or to require any of the Obligors to take, any steps
to render the security created by the Security Documents
effective or to secure the creation of any ancillary charge
under the laws of any other jurisdiction; or
(vi) to require any further assurances in relation to any of the
Security Documents;
(vii) to become or remain a mortgagee or heritable creditor in
possession (or equivalent in any foreign jurisdiction);
(viii) to take or omit to take any other action under or in connection
with the Security Documents or any aspect thereof (save as
otherwise expressly provided in clause 19); or
(ix) in the case of each of the Facility Agent, Arrangers and
Underwriters, by the Security Agent to perform or discharge any
of its duties or obligations under the Security Documents;
(m) in the case of the Security Agent, not be bound to supervise, or be
responsible for any loss incurred by reason of any act or omission of,
any trustee or co-trustee of the Security Agent if the Security Agent
shall have exercised reasonable care in the selection of such trustee
or co-trustee; and
(n) have no liability (save as otherwise provided in clauses 17 to 23)
otherwise in connection with the Facilities or their negotiations or
for acting (or as the case may be refraining from acting) in
connection with the instructions of the Majority Banks.
20.2 Indemnity from Banks
Each Bank and the Issuing Bank shall, in its Proportion, on demand by the
Facility Agent, the Security Agent or any Arranger from time to time,
indemnify the Facility Agent or, as the case may be, the Security Agent or
the Arranger, against any and all fees (to the extent properly chargeable
by the Facility Agent or, as the case may be, the Security Agent or the
Arranger under any Finance Document but not promptly recovered from the
Obligors), costs, claims and expenses and liabilities including any VAT
thereon:
(a) to which the Facility Agent or, as the case may be, the Security Agent
becomes subject by reason of it acting as agent or security trustee;
or
(ii) incurred by the Facility Agent or, as the case may be, the
Security Agent or any attorney, agent, delegate or other person
appointed by the Facility Agent or the Security Agent under any
Finance Document in relation to or arising out of the taking or
holding of any of the security given or created by or pursuant
to any of the Finance Documents or in the execution or purported
or attempted execution of the rights, trusts, powers,
authorities, discretions and obligations vested in it; or
(iii) which it is otherwise entitled to recover from any Obligor,
in each case under any of the Finance Documents or by law, including
those relating to all actions, proceedings, claims and demands in
respect of any matter or thing done or omitted in any way relating to
the Finance Documents any exercise or non exercise of any right, power
or discretion, and all amounts due to the Facility Agent or the
Security Agent by way of remuneration for acting as agent or trustee
(as the case may be) under any of the Finance Documents (collectively
the "Liabilities"). Each Borrower shall counter-indemnify the Banks
and the Issuing Bank against all payments by them under this clause
20.2. If a Bank or the Issuing Bank (referred to in this clause 20.2
as a "defaulting Bank") fails to pay its due contribution under this
indemnity, then the Facility Agent or, as the case may be, the
Security Agent may (without prejudice to its other rights and
remedies) deduct the amount due from the defaulting Bank from any sums
which are then or afterwards in its possession which would otherwise
be payable to the defaulting Bank.
20.3 Indemnity from Trust Property
The Security Agent and every employee, officer, trustee or co-trustee or
other person appointed by it in connection with its appointment under the
Security Documents (each a "Protected Party") shall be entitled to be
indemnified out of the Trust Property in respect of all liabilities,
damages, costs, claims, charges or expenses whatsoever properly incurred or
suffered by any Protected Party:
(a) in the execution or exercise or bona fide purported execution or
exercise of the trusts, rights, powers, authorities, discretions and
duties created or conferred by or pursuant to the Security Documents;
(b) as a result of any breach by a member of the Group of any of its
obligations under any Security Document;
(c) in respect of any Environmental Claim made or asserted against a
Protected Party which would not have arisen if the Security Documents
had not been executed; and
(d) in respect of any matter or thing done or omitted in any way relating
to the Trust Property or the provisions of any of the Security
Documents.
The rights conferred by this clause 20.3 are without prejudice to any right
to indemnity by law given to trustees generally and to any provision of the
Security Documents entitling the Security Agent or any other person to an
indemnity in respect of, and/or reimbursement of, any liabilities, damages,
costs, claims, charges or expenses incurred or suffered by it in connection
with any of the Security Documents or the performance of any duties under
any of the Security Documents. Nothing contained in this clause 20.3 shall
entitle any Protected Party to be indemnified in respect of any
liabilities, damages, costs, claims, charges or expenses to the extent that
the same arise from such person's own gross negligence or wilful
misconduct.
20.4 Disclaimer
Neither the Facility Agent, the Security Agent, nor any Arranger or
Underwriter accepts responsibility to any other Finance Party for the
accuracy and/or completeness of any information supplied in connection with
any Finance Document or for the legality, validity, effectiveness, adequacy
or enforceability of any Finance Document and neither the Facility Agent,
the Security Agent, nor any Arranger or Underwriter shall be under any
liability to any other Finance Party as a result of taking or omitting to
take any action in relation to any Finance Document (except in the case of
its gross negligence or wilful misconduct).
20.5 No actions against individuals
Each of the Banks agrees that it will not assert or seek to assert against
any director, officer or employee of the Facility Agent, the Security
Agent, any Arranger or Underwriter any claim it may have against any of
them in respect of the matters referred to in clause 20.4.
20.6 Credit appraisals
It is agreed by each Bank, by virtue of its execution of this Agreement or
its accession to this Agreement, that it has itself been, and will continue
to be, solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of each member of the Group, and, accordingly,
each Bank confirms to the Facility Agent, the Security Agent, and each
Arranger and Underwriter that it:
(a) does not enter into this Agreement nor accede to it on the basis of
and has not relied on and will not rely on any statement, opinion,
forecast or other representation (whether negligent or innocent) or
warranty or other provision (in any case whether oral, written,
express or implied) made by, or agreed to, the Facility Agent, the
Security Agent, any Arranger, any Underwriter or any other Bank to
induce it to enter into this Agreement or any other Finance Document
except as expressly set out therein and the remedies available in
respect of any such misrepresentation or untrue statement made to such
Bank shall be limited to a claim for breach of contract under this
Agreement; and
(b) has not relied on and will not rely on the Facility Agent, the
Security Agent, any Arranger, any Underwriter or any other Bank:
(i) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by or on behalf of any
member of the Group in connection with any Finance Document
and/or the transactions contemplated in the Finance Documents
(whether or not such information has been or is after the date of
this Agreement circulated to such Bank by the Facility Agent, the
Security Agent, any Arranger or Underwriter or as the case may be
any other Bank); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature
of any member of the Group.
Provided that clause 20.6(a) shall not apply to any statement or
representation made fraudulently, or to any provision of this Agreement
which was induced by fraud for which the remedies available shall be all
those available under English law.
20.7 Exoneration of Related Persons
All the provisions of this clause 20 and of any other provision of any
Finance Document protecting (including indemnifying) or limiting the
liability of any Finance Party, or exonerating it from liability or
responsibility, which may enure to the benefit of the such Finance Party
shall also be deemed to be given for the benefit of the Security Agent and
all Related Persons to whom they are capable of relating or in respect of
whom they are capable of taking effect.
20.8 Pre-contractual effect of exoneration
For the avoidance of doubt, the guarantee, indemnity, exonerations and
other protections in favour of the Facility Agent, the Security Agent, the
Arrangers, the Underwriters and the Related Persons contained in the
Finance Documents shall take effect in respect of all events, action and
omissions occurring before the execution and completion of this Agreement
as well as events, actions and omissions occurring on or after its
execution and completion and to the extent that any liability should be
adjudged to have arisen prior to the date of this Agreement, such liability
is hereby completely released.
20.9 Common Parties
Notwithstanding that the Facility Agent and the Security Agent may from
time to time be the same entity, the Facility Agent and the Security Agent
have entered into this Agreement in their separate capacities as agent or
(as appropriate) security agent and trustee for the Finance Parties
provided that, where this Agreement provides for the Facility Agent or
Security Agent to communicate with or provide instructions to another
Facility Agent or Security Agent while the two parties in question are the
same entity, it will not be necessary for there to be any such formal
communication or instructions.
21. ENFORCEMENT AND RECOVERIES
21.1 Obligations owed by Obligors to Finance Parties
Each Obligor agrees that:
(a) the security comprised in the Security Documents may be enforced,
realised and distributed by the Security Agent and Facility Agent in
accordance with their respective powers and obligations to the Finance
Parties set out in clauses 18 and 19;
(b) the obligations and liabilities the subject of the Security Documents
shall only be discharged by virtue of receipt or recovery by the
Security Agent of monies, or of payments made by the Security Agent
hereunder, to the extent that the ultimate recipient actually receives
monies from the Security Agent hereunder;
(c) if it receives any sum from any person which, pursuant to the Finance
Documents, should have been paid to the Security Agent, such sum shall
be held on trust for the Finance Parties and shall forthwith be paid
over to the Security Agent;
(d) it hereby waives, to the extent permitted under applicable law, all
rights it may otherwise have to require that the security created
pursuant to the Facility Documents be enforced in any particular order
or manner or that any sum received or recovered from any person or by
virtue of the enforcement of any of the security or any other
Encumbrance of any nature over any assets or revenues, which is
capable of being applied in or towards discharge of any of the Secured
Obligations is so applied, whether on receipt or recovery or at any
time thereafter.
21.2 Obligations owed by Finance Parties to Facility Agent and Security Agent
The Finance Parties agree between themselves:
(a) to furnish to the Facility Agent, for transmission to the Security
Agent, such information as the Security Agent may reasonably specify
(through the Facility Agent) as being necessary or desirable for the
purpose of enabling the Security Agent to perform its functions as
trustee or administrator;
(b) to co-operate with each other and with the Security Agent and any
Receiver under the Security Documents in realising the property and
assets subject to the Security Documents and in ensuring that the net
proceeds realised under the Security Documents after deduction of the
expenses of realisation are applied in accordance with clause 19.1;
and
(c) not to take any action separately to enforce or attempt to enforce any
of the Security Documents or to exercise any rights, discretions or
powers or to grant any consents or releases under or pursuant to any
of the Security Documents or otherwise have direct recourse to the
security and/or guarantees constituted by any of the Security
Documents.
21.3 Perpetuity period
The trusts constituted or evidenced in or by the Security Documents shall
remain in full force and effect during the Trust Period.
22. DETERMINATION OF MATTERS
22.1 Majority Bank matters: amendments and waivers
Except as provided in clause 22.4 and 22.5 (Unanimous consent), with the
prior written consent of the Majority Banks, the Facility Agent (or as the
case may be, the Security Agent) and the Primary Borrower may from time to
time:
(a) enter into written amendments, supplements or modifications to the
Finance Documents (however fundamental) for the purpose of adding any
provisions to the Finance Documents or changing in any manner the
rights and/or obligations of any of the Borrowers, the Facility Agent,
the Security Agent and the Banks; and
(b) execute and deliver to any Borrower a written instrument waiving
prospectively or retrospectively, on such terms and conditions as the
Facility Agent (or, as the case may be, Security Agent) may specify in
such instrument, any of the requirements of any of the Finance
Documents, or giving any consents or approvals thereunder.
22.2 Documentation of Majority Bank changes
Any action so authorised and effected by the Facility Agent or the Security
Trustee under clause 22.1 shall be documented in such manner as the
Facility Agent shall (with the approval of the Majority Banks) determine,
shall be promptly notified to the Banks by the Facility Agent and (without
prejudice to the generality of clause 17.3) shall be binding on all the
Banks.
22.3 Majority bank matters: enforcement
If the Facility Agent makes a declaration under clause 12.2 the Facility
Agent shall, in the names of all the Banks, take such action on behalf of
the Banks and conduct such negotiations with any Borrower and any other
members of the Group and generally administer the Advances in accordance
with the wishes of the Majority Banks. All the Banks shall be bound by the
provisions of this clause 22.3 and no Bank shall be entitled to take action
independently against any Borrower or any other member of the Group without
the prior consent of the Majority Banks.
22.4 All Bank matters: amendments and waivers
Except with the prior written consent of all the Banks, the Facility Agent
shall not have authority on behalf of the Banks to agree with any Borrower
any amendment or modification to this Agreement or to vary or waive
breaches of or defaults under or otherwise excuse performance of any
provision of this Agreement by any Obligor, if the effect of such would be
to:
(a) reduce the Applicable Margin;
(b) postpone the due date or reduce the amount of any payment of
principal, interest, commitment commission or other amount payable by
any Borrower under this Agreement;
(c) change the currency in which any amount is payable by any Borrower
under this Agreement;
(d) have the effect of changing the amount of any Facility, any Bank's
Commitment or the principal or face amount or currency of any Advance;
(e) extend any period during which a Drawdown Notice may be delivered;
(f) change any provision of this Agreement which expressly requires the
approval or consent of all the Banks such that the relevant approval
or consent may be given otherwise than with the sanction of all the
Banks;
(g) change the definitions of Borrowed Moneys, Security Interests, Event
of Default, Major Default, Majority Banks, Default, Cancellation Date,
Certain Funds Period, Available Commitment Termination Date or
Substitution Certificate;
(h) change clause 15.2 (Pro-rata Payments) or clause 3.3; or
(i) change this clause 22 or clause 23.
22.5 All Bank matters: security
Except with the prior written consent of all the Banks, the Facility Agent
shall not have authority on behalf of the Banks to authorise the Security
Agent to agree amendments or modifications to the Security Documents with
the members of the Group (or the Parent on their behalf) and/or vary or
waive breaches of, or defaults under, or otherwise excuse performance of,
any provision of any of the Security Documents by any member of the Group
if the effect of such would be to:
(a) release any member of the Group from the security constituted by any
Security Document;
(b) release any of the Charged Assets from the security constituted by any
Security Document other than any such release (pursuant to (a) or (b))
as part of a disposal made pursuant to the terms of this Agreement or
once the Facilities have been repaid and/or discharged in full and the
Finance Period has terminated;
(c) agree with the Parent or any other member of the Group any amendment
of, or action in relation to, any of the Security Documents which
would have the effect of:
(i) extending the due date or reducing the amount of any payment
under any Security Document or
(ii) changing the currency in which any amount is payable under any
Security Document.
22.6 Execution of new security
For the purposes of this clause 22 it is expressly agreed and acknowledged
that the execution of a guarantee and/or deed of adherence by a new
Subsidiary or other Obligor or proposed Obligor or any deed or instrument
pursuant to a further assurance provision in this Agreement or the other
Finance Documents shall not constitute an amendment or modification to, or
variation of, any of the Finance Documents.
22.7 Veto of Security Agent and Facility Agent
Regardless of any other provision in this Agreement, the Facility Agent, or
as the case may be, the Security Agent, shall not be obliged to agree to
any such waiver, amendment, supplement or modification if it would:
(a) amend, modify or waive any provision of clause 22; or
(b) otherwise amend, modify or waive any of the Facility Agent's, the
Arrangers' or the Security Agent's rights under any of the Finance
Documents or subject the Facility Agent or the Security Agent to any
additional obligations under such documents.
22.8 Administrative determinations
The Facility Agent may determine purely administrative matters without
reference to the Banks.
23. BASIS OF DECISIONS
23.1 Meaning of Majority Banks
Where this Agreement or any of the Security Documents provides for any
matter to be determined by reference to the opinion of, or to be subject to
the consent or request of, the Majority Banks or for any action to be taken
on the instructions of the Majority Banks, such opinion, consent, request
or instructions shall (as between the Banks) only be regarded as having
been validly given or issued by the Majority Banks if all the Banks shall
have received prior notice of the matter on which such opinion, consent,
request or instructions are required to be obtained and the relevant
majority of Banks shall have given or issued such opinion, consent, request
or instructions, but so that (as between the Obligors and the Finance
Parties) the Obligors shall each be entitled (and bound) to assume that
such notice shall have been duly received by each Bank and that the
relevant majority shall have been obtained to constitute Majority Banks
when notified to this effect by the Facility Agent whether or not this is
the case.
23.2 Notice to Majority Banks
If, within 10 Banking Days (or in the case of any approval sought under
clause 10.4, 2 Banking Days) of the Facility Agent despatching to each Bank
a notice requesting instructions (or confirmation of instructions) from the
Banks or the agreement of the Banks to any amendment, modification, waiver,
variation or excuse of performance for the purposes of, or in relation to,
any of the Finance Documents, the Facility Agent has not received a reply
specifically giving or confirming or refusing to give or confirm the
relevant instructions or, as the case may be, approving or refusing to
approve the proposed amendment, modification, waiver, variation or excuse
of performance, then (subject to clause 23.4) the Facility Agent shall
treat any Bank
which has not so responded as having indicated a desire to be bound by the
wishes of 662/3 per cent. of those Banks (measured in terms of the relevant
Contributions or, if none, the relevant Commitments of those Banks) which
have so responded. Any Bank which notifies the Facility Agent of a wish or
intention to abstain on any particular issue shall be treated as if it had
not responded.
23.3 Meaning of all Banks
Where this Agreement or any other Finance Document, provides for any matter
to be determined by reference to the opinion of, or to be subject to the
consent of or request of all of the Banks or the Banks acting unanimously
or for any action to be taken on the instruction of all the Banks such
opinion, consent, request or instructions shall (as between the Banks) only
be regarded as having been validly given or issued by all the Banks (or the
Banks acting unanimously) if all the Banks shall have received prior notice
(the "Agent's Notice") of such matter containing a request for written
instructions from such Bank to be received by the Facility Agent or, as the
case may be, the Security Agent within ten Banking Days of the receipt (or
the deemed receipt pursuant to clause 25.1(b)) of the Agent's Notice. If,
in respect of a Bank, the Facility Agent or the Security Agent, as
appropriate:
(a) shall not have received written instructions in respect of such matter
from such Bank; and
(b) the Facility Agent or Security Agent shall have received written
instructions in respect of such matter from at least five other Banks,
in each case within such time period (and subject to clause 23.4), such
Bank shall be deemed to have irrevocably renounced and waived its right to
make any such determination, approval, consent or provide instructions to
the Facility Agent or the Security Agent in respect of such matter; shall
not have any rights, recourse or remedy against the Facility Agent or the
Security Agent in respect of such matter; and shall be bound (as shall each
of the Obligors) by the determination, approval, consent or instructions of
the other Banks in respect of such matter. Clauses 23.1 and 23.2 shall not
apply in relation to those matters which are to be decided by all the
Banks.
23.4 Late responses
In any case where a Bank fails to respond within the time limit set down
under clauses 23.2 or 23.3, such Bank's response, if it responds before any
determination or instruction is acted upon or communicated to any Obligor,
will be taken into account as if it had been received within the time limit
Provided that the Facility Agent has received actual notice of such
response before any such action or communication.
23.5 Costs
If any Borrower requests, or if the Facility Agent requires in accordance
with clause 10.3(c) or any other provision of this Agreement, any
amendment, supplement, modification or waiver under clause 22.1 (Majority
Bank matters) or clauses 22.4 or 22.5 (All Bank matters), then the
Borrowers shall, on demand by the Facility Agent, reimburse the Facility
Agent for all costs and expenses (including legal fees), together with any
VAT on them, incurred by the Facility Agent in the negotiation, preparation
and execution of any written instrument contemplated by clause 22.1
(Majority Bank matters) or clauses 22.4 or 22.5 (All Bank matters).
23.6 No partnership
This Agreement shall not and shall not be construed so as to constitute a
partnership between the parties or any of them.
23.7 Change of Reference Banks
If:
(a) the whole of the Contributions (if any) of any Reference Bank are
prepaid;
(b) the Commitments (if any) of any Reference Bank are reduced to zero
prior to the end of the Finance Period;
(c) a Reference Bank novates the whole of its rights and obligations (if
any) as a Bank under this Agreement; or
(d) a Reference Bank ceases to provide quotations to the Facility Agent
upon request for the purposes of determining LIBOR (where such
quotations are required having regard to the definition of "LIBOR" in
clause 1.2)
the Facility Agent may, acting on the instructions of the Majority Banks,
terminate the appointment of such Reference Bank and after consultation
with the Primary Borrower appoint another Bank to replace such Reference
Bank.
24. MATTERS CONCERNING THE BORROWERS
24.1 Additional Borrower
The Primary Borrower may, at any time during the term of this Agreement
(unless a Default shall have occurred and be continuing), notify the
Facility Agent that a Permitted Borrower is to be designated as an
additional Borrower under the Revolving Credit Facility. Such notice shall
be in writing and signed by the Primary Borrower and the relevant Permitted
Borrower and shall take effect in accordance with its terms on the
condition that:
(a) such Permitted Borrower shall have entered into an Accession
Certificate with the Facility Agent which, subject to (b) below, the
Facility Agent shall execute on behalf of all the parties to this
Agreement (and all such parties so authorise the Facility Agent
without any further consent of, or consultation with, such party); and
(b) such Permitted Borrower, before entering into such an Accession
Certificate, shall have fulfilled all appropriate conditions
precedent, as notified to the Primary Borrower by the Facility Agent,
to the satisfaction of the Facility Agent including the delivery to
the Facility Agent of the documents and evidence referred to in Part C
of Schedule 3 in form and substance satisfactory to the Facility
Agent.
Upon satisfaction of such conditions such Permitted Borrower shall become a
party to this Agreement in the capacity of a Borrower in respect of the
Revolving Credit Facility and shall assume all the obligations and rights
of such a Borrower under this Agreement.
24.2 Primary Borrower as Obligors' agent
Each Obligor by its execution of this Agreement or an Accession
Certificate, as the case may be, irrevocably appoints and authorises the
Primary Borrower:
(a) as agent for each Borrower and Bidco to receive all notices, requests,
demands or other communications under this Agreement which shall,
without prejudice to any other effective mode of serving the same, be
properly served on the Obligor concerned if served on the Primary
Borrower in accordance with clause 25.1; and
(b) to give all notices (including any Drawdown Notices) and instructions
and make such agreements expressed to be capable of being given or
made by such Obligor or Obligors in this Agreement (including an
agreement for the continuance of any guarantee or security)
notwithstanding that they may affect such Obligor without further
reference to, or the consent of, such Obligor and such Obligor shall,
as regards the Finance Parties, be bound thereby as though such
Obligor itself had given such notice or instructions or made such
agreement.
24.3 Obligations unconditional
The obligations of each Obligor under this Agreement and the Security
Documents are unconditional and irrevocable (subject to the express
provisions of this Agreement or any Security Document) and shall not be in
any way affected or discharged by reason of any matter affecting the Offer
or the Acquisition (or the Offer Documents). Each Obligor acknowledges that
any approval or authorisation given under this Agreement or a Security
Document by a Finance Party in relation to the Offer or the Acquisition (or
the Offer Documents) shall not constitute any representation or warranty by
such (or any) Finance Party as to the adequacy or effectiveness of such
Offer or the Acquisition (or the Offer Documents), the purchase
consideration payable by Bidco, the commercial advisability of any Obligor
or Bidco entering into the arrangements contemplated thereby or otherwise.
24.4 Obligations Several
The obligations of each Obligor under this Agreement and the Security
Documents are several and the failure of any Obligor to perform such
obligations shall not release any other Obligor of its obligations under
this Agreement.
24.5 Stand-alone Revolving Credit Facility to REC
The Finance Parties and the Obligors agree that they shall as soon as
reasonably practicable after the date of the Press Release agree the form
of an agreement for a stand-alone revolving credit facility to be made
available by the Banks to REC (the "REC Facility Agreement"). The REC
Facility Agreement shall be entered into between the Finance Parties and
REC upon the Unconditional Date and, upon such date, the Commitment of each
Bank in respect of the Revolving Credit Facility shall reduce by an amount
equal to the commitment assumed by such Bank under the REC Facility
Agreement. The REC Facility Agreement shall be on terms and subject to
conditions identical, mutatis mutandis, to the terms and conditions of the
Revolving Credit Facility as set out herein save that it shall:
(a) create a commitment on the part of each of the Banks (pro rata to
their respective Proportions) of an aggregate amount of
(pound)250,000,000;
(b) be available for the general corporate purposes of REC;
(c) have an Applicable Fees Rate of 0.25% and an Applicable Margin of
0.50%;
(d) contain no covenants, representations and warranties or events of
default referencing any person other than REC and that all such
covenants, representations and warranties and events of default shall
be confined to, and to events occurring in respect of, the REC (but
otherwise corresponding where applicable, to the covenants,
representations and warranties and events of default in this Agreement
which by their terms herein operate to include the REC Group) and
without limitation to the above the following clauses shall not appear
in the REC Facility Agreement: 9.2, 10.2(e), (f), (g), 10.4, 10.5,
10.6, 11.1(f), 12.1(o)(i), (ii) or (iii), 12.1(w), and any covenant
contained in clause 10.3 shall be replaced by the covenant in clause
20.14(b) of the agreement between the Target, Citibank International
plc (as agent), Barclays Bank PLC and Midland Bank plc dated 5 August
1996.
Following such stand-alone REC facility being executed:
(i) the Revolving Credit Facility shall reduce by the principal
amount of the commitment created under such stand-alone REC
facility; and
(ii) amounts committed or outstanding thereunder shall not be deemed
to be committed or outstanding under this Agreement.
25. NOTICES AND OTHER MATTERS
25.1 Address for Notice
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in this
Agreement, in the case of a letter, when delivered personally or 2
days after it has been put into the post and, in the case of a
telefax, when a complete and legible copy is received by the addressee
(unless the time of despatch of any telefax is after close of business
in which case it shall be deemed to have been received at the opening
of business on the next business day); and
(c) be sent:
(i) to the Primary Borrower (for itself, Bidco, ▇▇▇▇▇ 2 and the
other Borrowers) at:
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(ii) to the Facility Agent at:
Chase Manhattan International Ltd
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(iii) to the Security Agent at:
Chase Manhattan International Ltd
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(iv) to the Issuing Bank at:
The Chase Manhattan Bank
Trinity Tower
9 ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(v) to each Bank at its address or telefax number specified in
schedule 1 or in, or pursuant to, any relevant Substitution
Certificate
(vi) to the Arrangers:
Chase Manhattan plc
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telefax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Brothers International (Europe)
3 World Financial Center
10th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇
Telefax: 001 212 528 0819
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
C/o Merrill ▇▇▇▇▇ & Co
World Financial Center
North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇
Telefax: 001 212 447 9461
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
or to such other address or telefax number as is notified by the
Primary Borrower, or a Finance Party, as the case may be, to the other
parties to this Agreement.
25.2 Notice to Facility Agent
Every notice, request, demand or other communication under this Agreement
to be given by a Borrower shall be given by the Primary Borrower and by the
Primary Borrower to any other party shall be given to the Facility Agent
for onward transmission as appropriate and to be given to a Borrower shall
(except as otherwise provided in this Agreement) be given by the Facility
Agent to the Primary Borrower.
25.3 No implied waiver, remedies cumulative
No failure or delay on the part of the Finance Parties or any of them to
exercise any power, right or remedy under this Agreement or any Security
Document shall operate as a waiver thereof, nor shall any single or partial
exercise by the Finance Parties or any of them of any power, right or
remedy preclude any other or further exercise thereof or the exercise of
any other power, right or remedy. The remedies provided in this Agreement
and each of the Security Documents are cumulative and are not exclusive of
any remedies provided by law.
25.4 English translations
All certificates, instruments and other documents to be delivered under or
supplied in connection with this Agreement shall be in the English language
or shall be accompanied by a certified English translation upon which the
Finance Parties shall be entitled to rely.
25.5 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed
and delivered shall be an original, but all counterparts shall together
constitute one and the same instrument.
25.6 Severance
If any provision of this Agreement is held to be illegal, invalid or
unforceable in whole or in part this Agreement shall continue to be valid
as to its other provisions and the remainder of the affected provision.
26. GOVERNING LAW AND JURISDICTION
26.1 Law
This Agreement shall be governed by English law.
26.2 Submission to jurisdiction
The parties to this Agreement agree for the benefit of the Finance Parties
that:
(a) if any party has any claim against any other arising out of or in
connection with this Agreement, such claim shall (subject to clause
26.2(c)) be referred to the High Court of Justice in England, to the
jurisdiction of which each of the parties irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any such
claim against any Finance Party shall be a non-exclusive jurisdiction
and no courts outside England shall have jurisdiction to hear or
determine any such claim; and
(c) nothing in this clause 26.2 shall limit the right of any Finance Party
to refer any such claim against any Borrower to any other court of
competent jurisdiction outside England, to the jurisdiction of which
any Borrower hereby irrevocably agrees to submit, nor shall the taking
of proceedings by any Finance Party before the courts in one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction whether concurrently or not.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
Schedule 1
The Banks and their Commitments
=================================================================================================================
Commitments
-----------------------------------------------------------------------------------------------------------------
Bank Acquisition Facility Interim Facility Revolving Credit
(pound) (pound) Facility
Address and telefax (pound)
number
-----------------------------------------------------------------------------------------------------------------
The Chase Manhattan Bank 591,666,667 383,333,334 233,333,334
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ Commercial Paper 591,666,666 383,333,333 233,333,333
Inc.
3 World Financial Center
10th Floor
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Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital 591,666,667 383,333,333 233,333,333
Corporation
4 World Financial Center
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇ - 1307
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Schedule 2
Forms of Drawdown Notice
Part A
The Acquisition and Interim Facility
To: [Name and address of Facility Agent] [DATE]
Attention: _____
(pound) Credit Facilities Agreement dated _____ 1998
1. We refer to the above Agreement and hereby give you notice that we wish to
draw down an [Acquisition/Interim] Advance [under the Loan Note Facility]:
(a) on |_| 19|_| ;
(b) in the sum of (pound)_____ ;
(c) [with a first Interest Period in respect thereof of
_____ months.] [with the first Interest Period in respect thereof
to expire on _____ 19]; and
(d) [the proceeds of such Advance to be credited to [name and number
of account] at [name of bank in London] [Loan Note Collateral
Account].
[2. We confirm that each condition specified in clause 3 is satisfied on the
date of this Drawdown Notice.] OR
[2. We confirm that:
(a) the Advance is an Offer Advance;
[(b) the date of this Drawdown Notice is within the Certain Funds Period;
and]
(c) each condition in clause 3.3 is satisfied on the date of this Drawdown
Notice.]
3. Words and expressions defined in the Agreement shall have the same meanings
where used herein.
For and on behalf of
TU Finance (No. 1) Ltd
______________________
Director
Part B
The Revolving Credit Facility
To: [Name and address of Facility Agent] [DATE]
Attention: _____
(pound) Credit Facilities Agreement dated _____ 1998
1. We refer to the above Agreement and hereby give you notice that [name of
Borrower] wishes to draw a Revolving Credit Advance:
(a) on _____ 19 _____ ;
(b) in the sum of (pound)_____;
(c) with a Maturity Period in respect thereof of o months; and
(d) the proceeds of such fund to be credited to [name and number of
account] with [details of bank in London].
2. We confirm that:
(a) no event or circumstance has occurred and is continuing which
constitutes a Default; and
(b) the applicable representations and warranties contained in clause 9 of
the Agreement are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such date.
3. Words and expressions defined in the Agreement shall have the same meanings
where used herein.
For and on behalf of
[Name of Borrower]
____________________
Director
Part C
Letters of Credit
To: [Name and address of Facility Agent]
Attention:_______________________
[DATE]
(pound) Credit Facilities Agreement dated o 1998
1. We refer to the above Agreement and hereby give you notice that [name of
Borrower] requests the Issue of a Letter of Credit as follows:
(a) Drawdown Date: [ _____ ]
(b) Expiry Date: [_____ ]
(c) Currency: [ _____ ]
(d) Beneficiary: [ _____ ]
(e) Amount: [_____ ]
(f) Purpose: [ _____ ]
(g) Issue instructions: [ _____ ]
(h) Documents required to be presented: [ _____ ].
2. We confirm that:
(a) no event or circumstance has occurred and is continuing which
constitutes a Default; and
(b) the applicable representations and warranties contained in clause 9 of
the Agreement are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such date.
3. Words and expressions defined in the Agreement shall have the same meanings
where used herein.
For and on behalf of
[Name of Borrower]
____________________
Director
Schedule 3
Conditions Precedent
Part A - Documents and Evidence required as Conditions Precedent
prior to the issue of the Press Release
(a) Certified copies of the memorandum and articles of association and the
certificate of incorporation and any change of name certificates of the
Primary Borrower, ▇▇▇▇▇ 2 and Bidco, in the agreed form.
(b) Certified copies of resolutions of the shareholders and the board of
directors of each of the Primary Borrower, ▇▇▇▇▇ 2 and Bidco in the agreed
form approving:
(i) the execution and delivery of and the performance of their
respective obligations under the Finance Documents to which they are
a party;
(ii) the acquisition of the Target on the terms and subject to the
conditions set out in the Offer Documents and the issuing of the
Offer Documents;
(iii) the execution and completion of the Investment Agreement; and
(iv) (in the case of the shareholders' resolutions) the adoption of their
respective articles of association,
and authorising a person or persons (specified by name or office) on behalf
of each of them to sign such documents and any other documents to be
delivered by them under such documents.
(c) A certificate of a duly authorised signatory of each of the Primary
Borrower, ▇▇▇▇▇ 2 and Bidco setting out the names and specimen signatures
of the persons authorised to sign on behalf of such companies the documents
referred to in clause (b) above and any other documents to be delivered by
such companies pursuant to them, and confirming that the resolutions
referred to in (b) above are still in effect and have not been varied or
rescinded.
(d) The opinions of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, English solicitors for the Facility
Agent and (in the agreed form) of the Parent's US counsel.
(e) Certified copies of the Press Release and the Offer Documents, each as
despatched by Bidco, and of the Loan Note Instrument (in the agreed form)
and the Investment Agreement (duly executed).
(f) The Agreed Projections.
(g) Certified copies of the Coalco Disposal Agreement and the Escrow Agreement.
(h) A side letter from the Parent to the Facility Agent in the agreed form
confirming that it is aware of the terms of this Agreement, that it and its
Subsidiaries will comply with clear market and syndication obligations in
the same terms as are in clause 10.2(e) and clause 16.16, and that it will:
(i) not permit the memorandum and articles of association of the Primary
Borrower to be amended without the prior written consent of the
Facility Agent;
(ii) not receive any dividends, distributions or other payments from the
Primary Borrower or any other member of the Group save as permitted
by clause 11.1(f), and in the event that it does receive any such
payments in breach of clause 11.1(f), it will hold them on trust for
the payer and forthwith return them to the payer; and
(iii) provide and maintain appropriate senior management for the Group
during the continuance of the Facilities.
(i) A report from Coopers & ▇▇▇▇▇▇▇ in the agreed form.
(j) The Fee Letters, duly executed and countersigned, and the fees and expenses
payable under the Fee Letters and under clause 7 on or before the date of
issue of the Press Release.
(k) The Syndication Letter, duly countersigned.
(l) Written confirmation that an option has been purchased to buy a fixed sum
of (pound) Sterling with the amount of the Coal Proceeds.
Part B - Documents and Evidence required as Conditions Precedent
to the First Drawdown
(a) Written confirmation from a duly authorised officer of the Primary Borrower
that the Office of Fair Trading has announced that it is not the intention
of the Secretary of State for Trade and Industry to refer the Acquisition,
or any matters arising from it, to the Monopolies and Mergers Commission.
(b) Evidence satisfactory to the Facility Agent, to the Arrangers and the Banks
dated as at the date of the first Drawdown Notice that completion of the
Coalco Disposal Agreement is unconditional in all respects save for any
condition or conditions relating to the Offer becoming unconditional in all
respects, and that the consideration required for the purchaser to complete
the Coalco Disposal Agreement has been received in full by the Escrow Agent
(as defined in the Escrow Agreement), subject to the Escrow Agreement, and
that such amount will be released unconditionally to the Target without the
need for any further confirmations, consents, permissions or actions from
or on the part of any person, save only for the confirmation (referred to
in (d) below) from the financial advisers to the Offer that the Offer has
become unconditional in all respects.
(c) Evidence satisfactory to the Facility Agent that
(i) the Parent (in respect of 90% of the required amount) and the Minority
Shareholder (in respect of 10%) have invested an amount
of(pound)1,678,082,000 in cash in subscription for equity share
capital in the Primary Borrower and ▇▇▇▇▇ 2 respectively or by way of
capitalisation of intercompany loans made to the Primary Borrower or
▇▇▇▇▇ 2 respectively being loans on-lent to Bidco to finance the
purchase of Target on the open market Provided that, the Parent, as
contemplated by the Investment Agreement, may transfer all its shares
in ▇▇▇▇▇ 1 to any other wholly-owned Subsidiary of the Parent if such
transfer is notified to the Agent in advance of such transfer, in
which case the
investment referred to above will be that of such wholly-owned
Subsidiary not the Parent; and
(ii) the Primary Borrower has in turn invested the entire sum subscribed
under paragraph (i) above by way of equity share capital into ▇▇▇▇▇
2, and ▇▇▇▇▇ 2 shall have invested the entire sum (including the
subscription monies provided by the Minority Shareholder) by way of
equity share capital into Bidco; and
(iii) the cash proceeds of such investments referred to in (ii) above have
been paid in full by Bidco to the receiving bankers for the
financing of the Acquisition; and
(iv) all shares acquired at such time pursuant to the Loan Note
Alternative and the Share Alternative have been transferred to and
are beneficially owned by Bidco.
(d) A certified copy of the announcement by the financial advisers to the Offer
that the Offer has become or has been declared unconditional in all
respects.
(e) All share certificates representing Target Shares which Bidco owns as at
the first Drawdown Date, together with stock transfer forms executed in
blank to enable the Security Agent or its nominee to become registered as
the owner of such shares, except to the extent that such share certificates
are lodged with the receiving bankers to the Offer or any brokers executing
market purchases on the Parent or Bidco's behalf and are covered by the
acknowledgement issued by such persons to the Security Agent referred to in
sub-clause (i)(ii) of Part B of this Schedule.
(f) Written confirmation from a duly authorised officer of the Primary Borrower
that the terms and conditions of the Offer have not been waived, amended,
varied or declared to be satisfied other than in compliance with the terms
of this Agreement.
(g) The fees and expenses payable under the Fees Letters and under clause 7 on
or before the Unconditional Date.
(h) The Loan Note Instrument, duly executed by the parties thereto; the
Debenture, duly executed by the Primary Borrower, ▇▇▇▇▇ 2 and Bidco; and
the Share Charge duly executed by the Minority Shareholder, together with:
(i) such directions by Bidco to, and/or undertakings from, the trustees of
the American Depositary Receipts and American Depositary Shares and/or
the person performing similar functions to the Receiving Bankers to
the offer in the United States as the Agent, acting reasonably and on
counsel's advice, considers to be normal and appropriate for
perfecting a valid security interest in the United States over such
depositary receipts and depositary shares; and
(ii) share certificates and stock transfer forms executed in blank in
respect of the whole of the issued share capital of ▇▇▇▇▇ 2 and Bidco;
(i) Certified copies of:
(i) the agreement appointing Royal Bank of Scotland plc as receiving
bankers to the Offer, in the agreed form; and
(ii) the notice to the receiving bankers and any brokers engaged to
purchase Target Shares in the market and their acknowledgement, each
in the form set out in the Third Schedule to the Debenture.
Part C - To be delivered by each Permitted Borrower
(a) A certified copy of the certificate of incorporation and the memorandum and
articles of association of the Permitted Borrower.
(b) A certified copy of the resolutions of the board of directors of the
Permitted Borrower evidencing approval of this Agreement and the Security
Documents (to which that company is a party) and authorising its
appropriate duly authorised officers to execute and deliver this Agreement
and those Security Documents and to give all notices and take all other
action required by the relevant company under this Agreement and those
Security Documents.
(c) Specimen signatures, authenticated by the company secretary or a director
of the Permitted Borrower, of the persons authorised in the resolutions of
the board of directors referred to in paragraph (b) above.
(d) The Accession Certificate duly executed by the Permitted Borrower.
(e) A certificate of a director of the Permitted Borrower certifying that the
borrowing and/or guaranteeing of the Total Commitments in respect of the
Revolving Credit Facility would not cause any borrowing limit binding on
the Permitted Borrower to be exceeded.
(f) A cross-guarantee executed by the Permitted Borrower and the other
Revolving Credit Facility Borrowers in favour of the Security Agent of each
other's liabilities under the Revolving Credit Facility (excluding any such
liabilities which the relevant Borrower is not permitted by law to
guarantee), in the form required by the Facility Agent.
Schedule 4
Calculation of Additional Cost
1. The Additional Cost for any period shall (subject to paragraph 5 below) be
calculated in accordance with the following formula:
BY + L(Y - X) + S(Y - Z) per cent per annum
------------------------
100 - (B + S)
where on the day of application of the formula:
B is the percentage of the Facility Agent's eligible liabilities which
the Bank of England then requires the Facility Agent to hold on a
non-interest-bearing deposit account in accordance with its cash ratio
requirements;
Y is the rate at which Sterling deposits are offered by the Facility
Agent to leading banks in the London Interbank Market at or about 11
a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result of the
requirements of the Bank of England) the Facility Agent maintains as
secured money with members of the London Discount Market Association
or in certain marketable or callable securities approved by the Bank
of England;
X is the rate at which secured Sterling investments may be placed by the
Facility Agent with members of the London Discount Market Association
at or about 11 a.m. on that day for the relevant period or, if
greater, the rate at which Sterling bills of exchange (of a tenor
equal to the duration of the relevant period) eligible for
rediscounting at the Bank of England can be discounted in the London
Discount Market at or about 11 a.m. on that day;
S is the percentage of the Facility Agent's eligible liabilities which
the Bank of England requires the Facility Agent to place as a special
deposit; and
Z is the interest rate expressed as a percentage per annum allowed by
the Bank of England on special deposits.
2. For the purpose of this schedule 4:
2.1 "eligible liabilities" and "special deposits" have the meanings given to
them at the time of application of the formula by the Bank of England; and
2.2 "relevant period" in relation to each period for which Additional Cost
falls to be calculated means:
(a) if it is 3 months or less, that period; or
(b) if it is more than 3 months, 3 months.
2.3 In the application of the formula, B, Y, L, X, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5 per cent and Y =
15 per cent BY is calculated as 0.5 x 15.
2.4 The formula shall be applied on the first day of each relevant period. Each
amount shall be rounded up to the nearest four decimal places.
2.5 If the Facility Agent determines that a change in circumstances has
rendered, or will render, the formula inappropriate, the Facility Agent
(after consultation with the Banks) shall notify the Primary Borrower of
the manner in which the Additional Cost will subsequently be calculated.
The manner of calculation so notified by the Facility Agent shall, in the
absence of manifest error, be binding on all the parties.
Schedule 5
Form of Substitution Certificate
(referred to in clause 16.5)
NB 1. Banks are advised not to employ Substitution Certificates or otherwise
to assign, novate or transfer interests in the Agreement without first
ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services ▇▇▇ ▇▇▇▇ and regulations
made thereunder.
2. It is expected that Banks will enter into separate arrangements
dealing with the monies to be paid to the Existing Bank by the
Substitute in consideration of the novation (e.g. principal, accrued
interest, fees and any mismatched funding adjustment). Unless the
Effective Date is a rollover date, mismatches of parties' funding may
arise. This Certificate does not deal with these issues, nor does it
deal with any interim risk participation the Existing Bank may grant
to the Substitute pending the Effective Date.
To: [Name of Facility Agent] on its own behalf, as Facility Agent and on behalf
of each other party to the Agreement mentioned below.
Attention:____________________ [DATE]
Substitution Certificate
This Substitution Certificate relates to a (pound)[o] Facilities Agreement (the
"Agreement") dated 2 March 1998 between TU Finance (No. 1) Ltd as the initial
Borrower (1) TU Finance Ltd and Bidco (2), Chase Manhattan plc, ▇▇▇▇▇▇ Brothers
International (Europe), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation as Arrangers (3),
various banks and financial institutions as Underwriters (4) The Chase Manhattan
Bank as Issuing Bank (5) Chase Manhattan International Limited as Facility Agent
(6) and Chase Manhattan International Limited as Security Agent (7). Terms
defined in the Agreement shall have the same meaning in this Substitution
Certificate.
1. [Existing Bank] (the "Existing Bank") (a) confirms the accuracy of the
summary of its participation in the Agreement set out in the schedule
below; and (b) requests [Substitute Bank] (the "Substitute") to accept by
way of novation the portion of such participation specified in the schedule
to this Substitution Certificate by counter-signing and delivering this
Substitution Certificate to the Facility Agent at its address for the
service of notices specified in the Agreement.
2. The Substitute hereby requests the Facility Agent (on behalf of itself, the
other Finance Parties, the Borrowers and all other parties to the
Agreement) to accept this Substitution Certificate as being delivered to
the Facility Agent pursuant to and for the purposes of clause 16.5 of the
Agreement so as to take effect in accordance with the terms of such clause
16.5 on [date of transfer] (the "Effective Date") or on such later date as
may be determined in accordance with the terms of the Agreement.
3. The Facility Agent (on behalf of itself, the other Finance Parties, the
Borrowers and all other parties to the Agreement) confirms the novation
effected by this Substitution Certificate
pursuant to and for the purposes of clause 16.5 of the Agreement so as to
take effect in accordance with the terms of such clause 16.5.
4. The Substitute confirms:
(a) that it has received a copy of the Agreement and each of the Security
Documents and all other documentation and information required by it
in connection with the transactions contemplated by this Substitution
Certificate;
(b) that it has not relied upon any statement, opinion, forecast or other
representation or warranty made by the Existing Bank or any other
party to induce it to enter into this Substitution Certificate;
(c) that it has made and will continue to make, without reliance on the
Existing Bank or any other Finance Party, and based on such documents
as it considers appropriate, its own appraisal of the creditworthiness
of any Borrower and the Group and its own independent investigation of
the financial condition, prospects and affairs of any Borrower and the
Group in connection with the making and continuation of the Facilities
under the Agreement and the other Finance Documents;
(d) that neither the Existing Bank nor any other Finance Party shall at
any time be deemed to have had or have a duty or responsibility,
either historically, initially or on a continuing basis, to provide
the Substitute with any credit or other information with respect to
any Borrower or any other member of the Group whether coming into its
possession before the making of any Advance or at any time or times
thereafter, other than (in the case of the Facility Agent) as provided
in clause 19.1 of the Agreement;
(e) that it has made and will continue to make its own assessment of the
legality, validity, enforceability and sufficiency of the Agreement,
the Security Documents, any other Finance Document and this
Substitution Certificate and has not relied and will not rely on the
Existing Bank or any other Finance Party or any statements made by any
of them in that respect;
(f) that, accordingly, none of the Existing Bank nor any other Finance
Party makes any representations or warranties in respect of, or shall
have any liability or responsibility to the Substitute in respect of,
any of the foregoing matters or any other matter referred to in clause
20 of the Agreement;
(g) that it is a Qualifying Bank; and
(h) that it has signed an appropriate confidentiality undertaking issued
by the Existing Bank.
5. The Substitute hereby undertakes to the Existing Bank, the Finance Parties,
the Borrowers and each of the other parties to the Agreement that it will
perform in accordance with its terms all those obligations which by the
terms of the Agreement will be assumed by it after counter-signature of
this Substitution Certificate by the Facility Agent.
6. The Substitute irrevocably and unconditionally guarantees to and
indemnifies the Issuing Bank as required under clause 4.7 (Banks' Guarantee
and Indemnity).
7. Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges the Existing Bank to:
(a) accept any re-transfer from the Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by the Substitute by reason of any
non-performance by the Borrowers or any other party to the Agreement
or any of the Security Documents or any document relating thereto of
any of its obligations under the same.
8. This Substitution Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
Note:This Substitution Certificate is not a security, bond, note, debenture,
investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties to this
Substitution Certificate on the date appearing below.
The Schedule
THE ACQUISITION FACILITY
Commitment (pound) Portion Transferred (pound)
[_____] [_____]
Contion (pound) Next Interest Payment Date Portion Transferred (pound)
[_____] [_____] [_____]
THE INTERIM FACILITY
Commitment (pound) Portion Transferred (pound)
[_____] [_____]
Contribution (pound) Next Interest Payment Date Portion Transferred (pound)
[_____] [_____] [_____]
THE REVOLVING CREDIT FACILITY
Commitment (pound) Portion Transferred ((pound))
[_____] [_____]
Contribution ((pound)) Next Maturity Date(s) Portion Transferred ((pound))
[_____] [_____] [_____]
Transferor's share of Portion of Letters of Credit
Outstanding Letters of Credit Transferred
[_____] [_____]
Administrative Details of Substitute
Lending Office:
Account for payments:
Telephone:
Telefax:
Attention:
[Existing Bank] [Substitute]
By: __________ By: ________
Date: Date:
The Facility Agent
By: __________
Date:
on its own behalf and on behalf of all other parties to the Agreement (other
than the Existing Bank)
Schedule 6
Form of Accession Certificate
To: [name of Facility Agent] on its own behalf as Facility Agent and on behalf
of each other party to the Agreement.
Attention: [Date]
Accession Certificate
This Accession Certificate relates to a (pound)o Facilities Agreement (the
"Agreement") dated 2 March 1998 between, among others, the Primary Borrower (1),
▇▇▇▇▇ 2 and Bidco (2), Chase Manhattan plc, ▇▇▇▇▇▇ Brothers International
(Europe), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation as Arrangers (3), various banks and
financial institutions as Underwriters (4) The Chase Manhattan Bank as Issuing
Bank (5) Chase Manhattan International Limited as Facility Agent (6) and Chase
Manhattan International Limited as Security Agent (7). Terms defined in the
Agreement shall have the same meaning in this Accession Certificate.
1. [_____] (the "Acceding Borrower") hereby requests the Facility Agent (on
behalf of itself and all other parties to the Agreement) to accept this
Accession Certificate as being delivered to the Facility Agent pursuant to
and for the purposes of clause 24.1 of the Agreement so as to take effect
in accordance with the respective terms thereof on the date hereof.
2. The Acceding Borrower is, pursuant to this Accession Certificate, acceding
to the Agreement as a Borrower in respect of the Revolving Credit Facility
(only) and accordingly shall, subject to the terms of this Accession
Certificate and the Agreement, become a Revolving Credit Facility Borrower
under the Agreement.
3. The Facility Agent (on behalf of itself, and all other parties to the
Agreement) confirms the novation effected by this Accession Certificate
pursuant to and for the purposes of clause 24.1 of the Agreement so as to
take effect in accordance with the terms thereof.
4. The Acceding Borrower hereby undertakes to the Facility Agent (on behalf of
itself and the other Finance Parties) that it will perform in accordance
with their terms all those obligations which by the terms of the Agreement
will be assumed by it as a Borrower after acceptance of this Accession
Certificate by the Facility Agent.
5. [This Accession Certificate is intended to take effect as a Deed
notwithstanding that the Facility Agent may execute it under hand only.]
6. This Accession Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
IN WITNESS whereof this Accession Certificate has been entered into as a Deed on
the date above.
Notice Details of Acceding Borrower
Address:
Telephone:
Telefax:
Attention:
The Acceding Borrower
[Execution particulars - Acceding Borrower to execute as a Deed]
The Facility Agent
By:
_____
on its own behalf and on behalf of
all the other parties to the Facility Agreement.
Schedule 7
Terms of Borrowers' Indemnity
1. Each Borrower unconditionally and irrevocably undertakes to the Issuing
Bank as follows:
(a) each Borrower will at all times on demand indemnify the Issuing Bank
against all actions, suits, proceedings, claims, demands, liabilities,
damages, costs, expenses, losses and charges whatsoever (except those
arising from the gross negligence or wilful misconduct of the Issuing
Bank) in relation to or arising out of the Issue of any Letter of
Credit and each Borrower will pay to the Facility Agent for the
account of the Issuing Bank in immediately available funds and in the
currency in which the relevant Letter of Credit is denominated the
amount of all payments made (whether directly or by way of set-off,
counterclaim or otherwise howsoever) and all losses, costs or expenses
suffered or incurred from time to time by the Issuing Bank, arising
under any liability which the Issuing Bank has incurred under the
Issue of any Letter of Credit and any of the indemnities relating
thereto;
(b) the liability of each Borrower under this indemnity shall not be
affected by any time being given or by anything being done by the
Issuing Bank unless the same constitutes the gross negligence or
wilful misconduct of the Issuing Bank.
2. Each of the Borrowers specifically releases and indemnifies the Issuing
Bank against the consequences of:
(a) the failure of the Issuing Bank or any other person to receive any
telex or telephone message in a form in which it was despatched; and
(b) any delay that may occur during the course of the transmission of any
such message
save in respect of any failure arising from the gross negligence or wilful
misconduct of the Issuing Bank.
3. (a) The obligations of any Borrower under this Agreement and any
L/C-Related Document to reimburse the Issuing Bank for a drawing under a
Letter of Credit and to repay any drawing under a Letter of Credit which is
converted into Advances, shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement and each
such other L/C-Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement or any
L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the relevant
Borrower in respect of any Letter of Credit or any other
amendment or waiver of or any consent to departure from all or
any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defence or other right that
the relevant Borrower may have at any time against any
beneficiary or any transferee of any
Letter of Credit (or any person for whom any such beneficiary or
any such transferee may be acting), the Issuing Bank or any
other person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C-Related Documents
or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, (save
where the Issuing Bank should decline to make payment under the
terms of the Uniform Customs and Practice for Documentary
Credits (1993) (ICC Publication No. 500 (the "UCPDC")) invalid
or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any
payment made by the Issuing Bank under any Letter of Credit to
any person purporting to be a trustee in bankruptcy, debtor-
in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to
any beneficiary or transferee of any Letter of Credit, including
any arising in connection with any voluntary or involuntary
proceeding, process or arrangement under any law, regulation or
procedure relating to insolvency in any jurisdiction including
in relation to winding up, bankruptcy, administration,
administrative receivership, receivership and management,
receivership, judicial custodianship, judicial trusteeship or
the appointment of a judicial conservator or other official or
the reconstruction, rescheduling, readjustment, moratorium or
suspension of payments of any Indebtedness;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of
the relevant Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defence available
to, or a discharge of, the relevant Borrower;
(b) The obligations of each of the Borrowers under the Senior Finance
Documents shall not be affected in any way by reason of any time or
other indulgence which may be granted:
(i) to the Issuing Bank by any beneficiary of any Letter of Credit;
or
(ii) by the Issuing Bank to any person from whom it may seek
reimbursement in respect of sums paid out by it under any Letter
of Credit or any other obligation pursuant thereto or pursuant
to this Agreement, as the case may be.
4. The Issuing Bank may, at any time, without affecting any security created
by, pursuant to or in relation to this Agreement or the rights, powers and
remedies conferred upon it by this Agreement, any such security or by law:
(a) offer or agree to or enter into agreement for the extension or
variation of the Issue of any Letter of Credit (provided it does so in
accordance with written instructions of the Borrower); or
(b) offer or agree to give any time or other indulgence for any sums paid
out by it under any Letter of Credit or any obligation pursuant to any
Letter of Credit.
5. Any rights conferred on the Issuing Bank by this Agreement and by each
document executed in relation to this Agreement shall be in addition to and
not in substitution for or derogation of any other rights which the Issuing
Bank may at any time have to seek from any person reimbursement of or
indemnification against payments made or liabilities incurred under any
Letter of Credit, any obligation pursuant thereto or to this Agreement.
6. Any satisfaction of obligations by any Borrower or any other person to the
Issuing Bank or any discharge given by the Issuing Bank to any Borrower or
any other person in respect of obligations under this Agreement or any
related agreement between the Issuing Bank and any Borrower or any other
person shall be, and be deemed always to have been, void if any act
satisfying any of such obligations or on the faith of which any such
discharge was given or any such agreement was entered into is subsequently
avoided by law (otherwise than as a result of any act or default by the
Issuing Bank).
7. Any Letter of Credit shall be considered to be outstanding until the later
of:
(a) its Expiry Date, or a reasonable time after its Expiry Date to allow
for the presentation of documents through an advising bank; and
(b) if, in the opinion of the Issuing Bank, its liability under the Letter
of Credit does not expire on its stated Expiry Date or there is any
doubt as to its Expiry Date, the date of return of the document
evidencing the Issuing Bank's liability to the relevant beneficiary
under any Letter of Credit.
8. Each Borrower confirms and agrees that:
(a) the Issuing Bank shall make any payment that appears to be duly
requested or demanded in writing by any beneficiary under any Letter
of Credit subject to its compliance (where applicable) with its
obligations as Issuing Bank under the UCPDC regardless of whether or
not the relevant Borrower shall be in any way in breach of any of its
obligations under or by virtue of the transaction in connection with
which the Letter of Credit was Issued and without making any further
reference to the relevant Borrower or any investigation as to the bona
fide nature, validity or genuineness of any such request or demand
(unless, under applicable law, the Issuing Bank is under no obligation
to make such payment), and
(b) the liability of such Borrower hereunder and the right and obligation
of the Issuing Bank to make such payment shall be in no way diminished
or prejudiced if it should appear that, as between the relevant
Borrower and that beneficiary, that beneficiary was not entitled for
whatever reason to demand payment under the Letter of Credit or that
such demand was not valid or genuine (subject as mentioned in
paragraph 8(a) above).
Schedule 8
Terms of Interbank Guarantee and Indemnity
1. Each Bank agrees to pay to the Facility Agent for the account of the
Issuing Bank on demand made through the Facility Agent under clause 4.7
(Banks' Guarantee and Indemnity) to such account as the Facility Agent may
have specified for the purpose in immediately available funds and in the
currency in which the relevant Letter of Credit is denominated, its
Proportion of:
(a) any and every sum of money which such Borrower shall from time to time
be liable to pay to the Issuing Bank in respect of that Letter of
Credit in full without set-off or counterclaim on the later of the
date that the Issuing Bank has itself to make payment under the Letter
of Credit (as notified by the Facility Agent to such Bank in the
demand) and two Banking Days after receipt by such Bank of such
demand; and
(b) full cash cover for the Outstanding Contingent Liabilities under that
Letter of Credit at any time after the Issuing Bank has become
entitled to demand an indemnity through the Facility Agent in respect
thereof from the relevant Borrower and which shall not have been paid
at the time such demand is made.
2. Where a Bank makes a payment pursuant to paragraph 1 after the date on
which the Issuing Bank makes the relevant payment under the Letter of
Credit in question, such Bank shall pay on demand to the Issuing Bank its
Proportion (as calculated in clause 4.7) of such amount as the Issuing Bank
certifies as necessary to compensate it for funding the amount demanded in
the interim.
3. No assurance, security or payment avoided under any law relating to
bankruptcy, liquidation, insolvency, reconstruction or reorganisation or
any similar laws and no release, settlement, arrangement or discharge which
may have been given or made on the basis of any such assurance, security or
payment shall prejudice or affect the right of the Issuing Bank to recover
from each of the Banks to the full extent of their obligations under clause
4.7.
4. The obligations of each Bank under clause 4.7 shall not be impaired,
affected or revoked by any act, omission, matter, thing or circumstance
whatsoever which but for this provision might operate to release or
exonerate such Bank from all or any part of its obligations under clause
4.7 or reduce, impair or affect such obligations or cause all or any part
of such obligations to be irrecoverable from or unenforceable against any
Obligor or to discharge, reduce, affect or impair any of such obligations,
including without limitation:
(a) any time, waiver or indulgence granted to any person or the
forbearance of the Issuing Bank in enforcing the obligations of any
person under any Finance Document or in respect of any other
guarantee, security, obligation, right or remedy;
(b) the recovery of any judgment against any person or any action to
enforce the same;
(c) the taking of any other security from any person or the failure,
refusal, or neglect to take, perfect or enforce, any rights, remedies
or securities from or against any person or all or any part of the
security constituted by any of the Finance Documents;
(d) any alteration in the constitution of any Obligor or any defect in or
irregular exercise of the borrowing or other powers of any person or
any legal limitation, disability, incapacity or other circumstance
relating to any person or any legal limitation, disability, incapacity
or other circumstance relating to any person whether arising in
relation to any Finance Document or otherwise howsoever;
(e) subject to clause 22.4 and 22.5 (Unanimous consents), any amendment or
supplement to or variation of any L/C - Related Document or any other
Finance Document;
(f) the insolvency, bankruptcy, liquidation, reconstruction or
reorganisation of, or analogous proceedings relating to any person or
any composition or arrangement made by any of them with the Issuing
Bank, any Bank or any other person or any transfer or extinction of
any liabilities of any Obligor by any law, order regulation, decree,
court order or similar instrument;
(g) any irregularity, unenforceability or invalidity of any obligations of
any person under any security or document (to the intent that such
Bank's obligations under clause 4.7 shall remain in full force as if
there were no such irregularity, unenforceability or invalidity);
(h) the occurrence of an Event of Default;
(i) the existence of any claim, set-off defence or other right which any
Obligor may have against any beneficiary of any Letter of Credit or
any other person; or
(j) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect.
5. The Issuing Bank shall be entitled to enforce the obligations of each Bank
under clause 4.7 without making any demand on or taking any proceedings
against or filing any proof of claim in any insolvency, winding up,
dissolution or liquidation of any person or exhausting any right or remedy
against any person or taking any action to enforce any part of the security
constituted or evidenced by any of the Finance Documents.
6. The obligations of each Bank under clause 4.7 shall be continuing
obligations and shall extend to the ultimate balance of the obligations
referred to therein. If, for any reason, such obligations cease to be
continuing obligations, the Issuing Bank may open a new account with or
continue any existing account with any person and the liability of each
Bank in respect of amounts guaranteed by it pursuant to clause 4.7 at the
date of such cessation shall remain regardless of any payments in or out of
any such account.
7. The Issuing Bank's rights under clause 4.7 shall be in addition to and
shall be in no way prejudiced by any other rights of or security held by
the Issuing Bank in relation to the obligations of any Obligor. The Issuing
Bank's rights under clause 4.7 are in addition to and are not exclusive of
those provided by law.
8. A certificate of the Issuing Bank as to any amount due to it from any Bank
pursuant to clause 4.7 shall be conclusive (in the absence of manifest
error).
Schedule 9
Projects which may be financed under clause 11.1(g)(iii)
Name of project Total investment required
Norway (pound)175,000,000
Finland (pound)75,000,000
Spain (pound)180,000,000
Sweden (pound)25,000,000
Poland (pound)150,000,000
UK (pound)170,000,000
PRIMARY BORROWER, ▇▇▇▇▇ 2 AND BIDCO
Signed for and on behalf of
TU Finance (No. 1) Ltd
(company number 3505836)
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇]
__________________________________
Signed for and on behalf of
TU Finance (No. 2) Ltd
(company number 3514100)
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇]
__________________________________
Signed for and on behalf of
TU Acquisitions PLC
(company number 3455523)
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇]
__________________________________
JOINT LEAD ARRANGERS
Signed for and on behalf of
Chase Manhattan plc
as Arranger
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇]
__________________________________
Signed for and on behalf of
▇▇▇▇▇▇ Brothers International (Europe)
as Arranger
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇]
__________________________________
Signed for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Arranger
[▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇]
__________________________________
ORIGINAL BANKS
Signed for and on behalf of
The Chase Manhattan Bank
as Underwriter
[▇▇▇▇ ▇▇▇▇▇▇▇]
__________________________________
Signed for and on behalf of
▇▇▇▇▇▇ Commercial Paper Inc
as Underwriter
[▇▇▇▇▇▇ ▇ ▇▇▇]
__________________________________
Signed for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as Underwriter
[▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇]
__________________________________
ISSUING BANK
Signed for and on behalf of
The Chase Manhattan Bank
as Issuing Bank
[▇▇▇▇ ▇▇▇▇▇▇▇]
__________________________________
FACILITY AGENT
Signed for and on behalf of
Chase Manhattan International Limited
as Facility Agent
[▇▇▇▇ ▇▇▇▇▇▇▇]
__________________________________
SECURITY AGENT
Signed for and on behalf of
Chase Manhattan International Limited
as Security Agent
[▇▇▇▇ ▇▇▇▇▇▇▇]
__________________________________