<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997
REGISTRATION NOS. 333-33331 AND 333-33331-01
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT
NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ENTERGY LONDON CAPITAL, L.P.
ENTERGY LONDON INVESTMENTS PLC (EXACT NAME OF REGISTRANT AS SPECIFIED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN PARTNERSHIP AGREEMENT)
IN ITS CHARTER)
DELAWARE
ENGLAND AND WALES (STATE OR OTHER JURISDICTION OF
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
INCORPORATION OR ORGANIZATION)
4911
4911 (PRIMARY STANDARD INDUSTRIAL
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
CLASSIFICATION CODE NUMBER)
TO BE APPLIED FOR
NOT APPLICABLE (I.R.S. EMPLOYER IDENTIFICATION
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
NUMBER)
639 LOYOLA AVENUE
TEMPLAR HOUSE NEW ORLEANS, LOUISIANA 70113
81-87 HIGH HOLBORN 504-576-4308
LONDON WC1V 6NU ENGLAND (ADDRESS, INCLUDING ZIP CODE, AND
011-44-171-242- 9050 TELEPHONE NUMBER, INCLUDING AREA CODE,
(ADDRESS, INCLUDING ZIP CODE, AND OF REGISTRANT'S PRINCIPAL EXECUTIVE
TELEPHONE NUMBER, INCLUDING AREA CODE, OFFICES)
OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
---------------
LAURENCE M. HAMRIC, ESQ. WILLIAM J. REGAN, JR.
DENISE C. REDMANN, ESQ. VICE PRESIDENT AND TREASURER
ENTERGY SERVICES, INC. ENTERGY SERVICES, INC.
639 LOYOLA AVENUE 639 LOYOLA AVENUE
NEW ORLEANS, LOUISIANA 70113 NEW ORLEANS, LOUISIANA 70113
504-576-2272 504-576-4308
RICHARD W. GODDEN, ESQ. KEVIN STACEY, ESQ.
LINKLATERS & PAINES REID & PRIEST LLP
40 WEST 57TH STREET
ONE SILK STREET
NEW YORK, NEW YORK 10019
LONDON EC2Y 8HQ ENGLAND
212-603-2144
011-44-171-456-2000
(NAMES, ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING AREA
CODES, OF AGENTS FOR SERVICE)
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of the Registration Statement.
---------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM AND CAPTION IN FORM S-1 CAPTION IN PROSPECTUS
---------------------------- ---------------------
<S> <C> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus..... Outside Front Cover Page
2. Inside Front and Outside Back
Cover Pages of Prospectus.... Inside Front Cover Page; Back Cover Page
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges............. Summary; Summary Financial Data; Risk
Factors
4. Use of Proceeds............... Use of Proceeds
5. Determination of Offering
Price........................ Not Applicable
6. Dilution...................... Not Applicable
7. Selling Security Holders...... Not Applicable
8. Plan of Distribution.......... Underwriting
9. Description of Securities to
be Registered................ Description of the Preferred Securities;
Description of the Guarantee; Description
of the Perpetual Junior Subordinated
Debentures; Relationship Among the
Preferred Securities, the Perpetual Junior
Subordinated Debentures and the Guarantee
10. Interests of Named Experts and
Counsel...................... Experts; Legal Opinions
11. Information With Respect to
the Registrant............... Risk Factors; The Company; Capitalization;
Selected Financial Data; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; The Electric Utility Industry in
Great Britain; Management; Certain
Relationships and Related Transactions;
Security Ownership; Consolidated Financial
Statements
12. Disclosure of Commission
Position on Indemnification
For Securities Act
Liabilities.................. Not Applicable
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PRELIMINARY PROSPECTUS SHALL NOT CONSTITUTE AN OFFER +
+TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF +
+THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD +
+BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS +
+OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 24, 1997
12,000,000 PREFERRED SECURITIES
ENTERGY LONDON CAPITAL
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A (QUIPSSM)*
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
ENTERGY LONDON INVESTMENTS PLC
-----------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Preferred Securities"), offered hereby are being issued by, and represent
limited partner interests in, Entergy London Capital, L.P., a special purpose
limited partnership formed under the laws of the State of Delaware ("Entergy
London Capital"). Entergy London Capital was formed for the sole purpose of
issuing its limited partner interests and investing the proceeds thereof and
the capital contribution of Entergy London Investments plc, a public limited
company incorporated under the laws of England and Wales (the "Company") and
the sole General Partner of Entergy London Capital, in % Junior Subordinated
Deferrable Interest Debentures, Series A (the "Perpetual Junior Subordinated
Debentures"), to be issued by the Company under the Indenture for Unsecured
Subordinated Debt Securities relating to Preferred Securities, which will be
qualified under and subject to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Perpetual Junior Subordinated Debentures will not
have a stated maturity date, but will be redeemable, at the option of the
Company, as described herein. The limited partner interests represented by the
Preferred Securities will have a preference with respect to cash distributions
and amounts payable on dissolution, redemption or otherwise over the General
Partner's interest in Entergy London Capital.
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 17 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
PROCEEDS TO
ENTERGY
INITIAL PUBLIC UNDERWRITING LONDON
OFFERING PRICE(1) COMMISSION(2) CAPITAL(3)(4)
----------------- ------------- -------------
<S> <C> <C> <C>
Per Preferred Security............ $ (3) $
Total............................. $ (3) $
</TABLE>
- -----
(1) Plus accumulated Distributions, if any, from the date of original issuance.
(2) Entergy London Capital and the Company have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting".
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Perpetual Junior Subordinated
Debentures, the Underwriting Agreement provides that the Company will pay
to the Underwriters, as compensation ("Underwriters' Compensation") for
arranging the investment therein of such proceeds, $ per Preferred
Security; provided, that such compensation will be $ per Preferred
Security sold to certain institutions. Accordingly, the maximum aggregate
amount of Underwriters' Compensation will be $ , but the
actual amount of Underwriters' Compensation will be less than such amount
to the extent that the Preferred Securities are sold to such institutions.
See "Underwriting".
(4) Expenses of the offering, which are payable by the Company, are estimated
to be $861,000.
-----------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Preferred Securities will be ready for delivery in book-entry
only form through the facilities of The Depository Trust Company ("DTC") in New
York, New York, on or about November , 1997, against payment therefor in
immediately available funds.
- -----
*QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
-----------
The date of this Prospectus is November , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH PREFERRED SECURITIES, AND THE IMPOSITION OF A PENALTY
BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING".
----------------
(Continued from previous page)
Holders of the Preferred Securities will be entitled to receive, to the
extent of funds held by Entergy London Capital and available therefor,
periodic cash distributions accumulating from the date of original issuance
and payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing December 31, 1997, at the rate of %
per annum of the liquidation preference of $25 per Preferred Security (the
"Distributions"). The Company has the right to defer indefinitely the payment
of interest on the Perpetual Junior Subordinated Debentures at any time or
from time to time. If interest payments on the Perpetual Junior Subordinated
Debentures are so deferred, Distributions on the Preferred Securities will
also be deferred. Until all deferred interest payments and interest thereon
have been paid in full, interest on the Perpetual Junior Subordinated
Debentures will continue to accrue (and the Preferred Securities will
accumulate additional Distributions thereon) at the rate of % per annum,
compounded quarterly, and the Company will not be permitted, subject to
certain exceptions set forth herein, to declare or pay any cash distributions
with respect to the Company's capital stock or debt securities that rank pari
passu with or junior to the Perpetual Junior Subordinated Debentures, make any
guarantee payments with respect to the foregoing, make any payments in respect
of any of its debt securities held by affiliates or make any loans or advances
to, or make payments on any guarantee of the debt of, any affiliate. See
"Description of the Perpetual Junior Subordinated Debentures--Option to Defer
Payment of Interest".
Under the terms of the Guarantee, the Partnership Agreement, the Indenture
(each as defined herein) and the Perpetual Junior Subordinated Debentures,
taken together, the Company has fully, irrevocably and unconditionally
guaranteed, on a subordinated basis, all of Entergy London Capital's
obligations under the Preferred Securities. The Guarantee guarantees the
payment of Distributions and payments on liquidation of Entergy London Capital
or redemption of the Preferred Securities, but only in each case to the extent
of funds held by Entergy London Capital and available therefor (the
"Guarantee"). If the Company does not make interest payments on the Perpetual
Junior Subordinated Debentures held by Entergy London Capital, Entergy London
Capital will have insufficient funds to pay Distributions on the Preferred
Securities. The Guarantee does not cover payment of Distributions when Entergy
London Capital does not have sufficient funds to pay such Distributions. See
"Description of the Guarantee". The obligations of the Company under the
Guarantee are subordinate and junior in right of payment to all Senior Debt
(as defined in "Description of the Perpetual Junior Subordinated Debentures--
Subordination") of the Company.
The Preferred Securities are subject to mandatory redemption, in whole or in
part, upon redemption of the Perpetual Junior Subordinated Debentures in an
amount equal to the amount of Perpetual Junior Subordinated Debentures being
redeemed at a redemption price equal to the aggregate liquidation preference
of such Preferred Securities plus accumulated and unpaid Distributions thereon
to the date of redemption (the "Redemption Price"). See "Description of the
Preferred Securities--Redemptions". The Perpetual Junior Subordinated
Debentures are redeemable at the option of the Company (i) on or after
November , 2002, in whole at any time or in part from time to time, at a
redemption price equal to the accrued and unpaid interest on the Perpetual
Junior Subordinated Debentures so redeemed to the date fixed for redemption
plus 100% of the principal amount thereof (the "Debentures Redemption Price"),
(ii) at any time, in whole (but not in part), upon
2
<PAGE>
the occurrence and continuation of a Special Event (as defined herein), at the
Debentures Redemption Price, or (iii) at any time, in whole (but not in part),
in the event that the Company has or will become obligated to pay Additional
Amounts (as defined herein), at the Debentures Redemption Price. See
"Description of the Perpetual Junior Subordinated Debentures--Redemption" and
"--Optional Tax Redemption".
At any time, whether or not a Special Event has occurred, the Company will
have the right to dissolve Entergy London Capital and, after satisfaction of
liabilities to creditors of Entergy London Capital, if any, as provided by
applicable law, cause the Perpetual Junior Subordinated Debentures to be
distributed to the holders of the Preferred Securities in liquidation of
Entergy London Capital. See "Description of the Preferred Securities--
Redemptions--Special Event Redemption or Distribution of Perpetual Junior
Subordinated Debentures".
The Perpetual Junior Subordinated Debentures are subordinate and junior in
right of payment to all Senior Debt of the Company. As of September 30, 1997,
the Company had approximately (Pounds)1.03 billion ($1.66 billion) of Senior
Debt outstanding. The terms of the Perpetual Junior Subordinated Debentures
place no limitation on the amount of Senior Debt that may be incurred by the
Company. In addition, the Company's obligations under the Guarantee and the
Perpetual Junior Subordinated Debentures will be effectively subordinated to
all existing and future liabilities of its subsidiaries, including London
Electricity plc ("London Electricity"). See "Risk Factors" and "Description of
the Perpetual Junior Subordinated Debentures--Subordination".
In the event of the dissolution and liquidation of Entergy London Capital,
after satisfaction of liabilities to creditors of Entergy London Capital, if
any, as provided by applicable law, the holders of the Preferred Securities
will be entitled to receive a liquidation preference of $25 per Preferred
Security plus accumulated and unpaid Distributions thereon to the date of
payment, which liquidation preference may be in the form of a distribution of
a Like Amount (as defined herein) of Perpetual Junior Subordinated Debentures
in certain circumstances. See "Description of the Preferred Securities--
Liquidation Distribution Upon Dissolution".
Application will be made to list the Preferred Securities on the New York
Stock Exchange (the "NYSE") and has been made to list the Perpetual Junior
Subordinated Debentures on the Luxembourg Stock Exchange. If the Perpetual
Junior Subordinated Debentures are distributed to the holders of the Preferred
Securities upon the liquidation of Entergy London Capital, the Company will
use its best efforts to also list the Perpetual Junior Subordinated Debentures
on the NYSE or such other stock exchanges or other organizations, if any, on
which the Preferred Securities are then listed.
The Preferred Securities will be represented by global certificates
registered in the name of a nominee of DTC. Beneficial interests in the
Preferred Securities will be shown on, and transfers thereof will be effected
only through, records maintained by Participants (as defined herein) in DTC.
Except as described under "Description of the Preferred Securities--Book-Entry
Issuance", Preferred Securities in registered certificated form will not be
issued in exchange for the global certificates.
3
<PAGE>
AVAILABLE INFORMATION
Following this offering, the Company will be subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith will file reports and other information
with the Securities and Exchange Commission (the "Commission"). Such reports
and other information may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material may also be obtained by mail from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the Commission
(http://www.sec.gov).
The Company and Entergy London Capital have filed with the Commission a
registration statement on Form S-1 (herein, together with all amendments and
exhibits thereto, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act'). This Prospectus
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby
made to the Registration Statement.
No separate financial statements of Entergy London Capital have been
included herein. The Company and Entergy London Capital do not consider that
such financial statements would be material to holders of the Preferred
Securities because Entergy London Capital is a newly formed special purpose
entity, has no operating history or independent operations and is not engaged
in and does not propose to engage in any activity other than holding as assets
the Perpetual Junior Subordinated Debentures, issuing the Preferred Securities
and engaging in other activities as are necessary, advisable or incidental
thereto. See "Entergy London Capital", "Description of the Preferred
Securities", "Description of the Perpetual Junior Subordinated Debentures",
and "Description of the Guarantee". In addition, the Company does not expect
that Entergy London Capital will file reports, proxy statements and other
information under the Exchange Act with the Commission.
ENFORCEABILITY OF CIVIL LIABILITIES
The Company is a public limited company incorporated under the laws of
England and Wales. Substantially all the assets of the Company are located
outside the United States of America (the "US"). As a result, it may not be
possible for investors to effect service of process within the US upon the
Company or to enforce against it judgments of US courts predicated upon civil
liabilities under US Federal securities laws. There is doubt as to the
enforceability in England and Wales, in original actions or in actions for
enforcement of judgments of US courts, of civil liabilities predicated upon US
Federal securities laws.
The Partnership Agreement and the Preferred Securities will be governed by,
and construed in accordance with, the laws of the State of Delaware. The
Guarantee, the Indenture and the Perpetual Junior Subordinated Debentures will
be governed by, and will be construed in accordance with, the laws of the
State of New York. The Company has submitted to the non-exclusive jurisdiction
of the Supreme Court of New York, New York County and the United States
District Court for the Southern District of New York and any appellate court
from either thereof for any suit, legal action or proceeding against the
Company or its properties, assets or revenues with respect to its obligations,
liabilities or any other matter arising out of or in connection with the
Guarantee, the Indenture and the
4
<PAGE>
Perpetual Junior Subordinated Debentures. See "Description of the Perpetual
Junior Subordinated Debentures--Governing Law; Submission to Jurisdiction".
The Company accepts responsibility for the information contained in this
document. To the best knowledge and belief of the Company (which has taken all
reasonable care to ensure that such is the case) the information contained in
this document is in accordance with the facts and does not omit anything
likely to affect the import of such information.
PRESENTATION OF CURRENCY AND FINANCIAL INFORMATION
The Company publishes its consolidated financial statements in pounds
sterling. In this Prospectus, references to "pounds sterling" or "(Pounds)"
are to currency of the United Kingdom ("UK") and references to "US dollars",
"US$" or "$" are to US currency. As used herein, "US GAAP" means US generally
accepted accounting principles, and "UK GAAP" means UK generally accepted
accounting principles. For the convenience of the reader, this Prospectus
contains translations of certain pounds sterling amounts into US dollars at
specified rates, or, if not so specified, the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes
by the Federal Reserve Bank of New York (the "Noon Buying Rate") on September
30, 1997 of $1.6117 = (Pounds)1.00. No representation is made that the pounds
sterling amounts have been, could have been or could be converted into US
dollars at the rates indicated or at any other rates. See "Exchange Rates" for
historical information regarding Noon Buying Rates.
UK SELLING RESTRICTIONS
There are restrictions on the offer and sale of the Preferred Securities in
the UK. All applicable provisions of the Financial Services Act 1986 and the
Public Offers of Securities Regulations 1995 with respect to anything done by
any person in relation to the Preferred Securities, in, from or otherwise
involving the UK must be complied with. See "Underwriting".
FORWARD LOOKING STATEMENTS
Certain statements in this Prospectus under the captions "Summary", "Risk
Factors", "Management's Discussion and Analysis of Financial Condition and
Results of Operations", "Business", "The Electric Utility Industry in Great
Britain" and elsewhere constitute forward looking statements. Such forward
looking statements involve known and unknown risks, uncertainties and other
important factors that could cause the actual results, performance or
achievements of the Company or any of its subsidiaries, including London
Electricity, or industry results, to differ materially from any future
results, performance or achievements expressed or implied by such forward
looking statements. Such risks, uncertainties and other important factors
include, among others: general economic and business conditions in the UK, the
London metropolitan area, London Electricity's franchise area and elsewhere;
currency fluctuations; governmental, statutory, regulatory or administrative
initiatives affecting the Company, London Electricity or the UK electric
utility industry; general industry trends; competition; power costs and
availability; changes in business strategy, development plans or vendor
relationships; availability, terms and deployment of capital; availability of
qualified personnel; changes in, or the failure or inability to comply with,
governmental regulation, including, without limitation, environmental
regulations; and other factors referenced in this Prospectus. These forward
looking statements speak only as of the date of this Prospectus. The Company
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward looking statement contained herein to reflect any
change in the Company's expectations with regard thereto after the date hereof
or any change in events, conditions or circumstances on which any such
statement is based.
5
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed financial and other information contained
elsewhere in this Prospectus.
THE COMPANY
The Company owns all of the outstanding shares of London Electricity, one of
the twelve regional electricity companies ("RECs") in England and Wales. London
Electricity is the Company's sole significant asset. All of the Company's
outstanding shares are owned indirectly by Entergy Corporation ("Entergy", and,
together with its subsidiaries, the "Entergy Company system"), a US holding
company engaged in regulated electric power activities in the US and
competitive electric power and energy activities internationally and throughout
the US. Entergy, through the Company, gained effective control of London
Electricity in February 1997.
LONDON ELECTRICITY
London Electricity's principal businesses are the distribution and supply of
electricity to approximately 2 million customers in the London metropolitan
area. London Electricity's franchise area has a resident population of
approximately 4 million and covers approximately 257 square miles (the
"Franchise Area"). The Franchise Area generally consists of the metropolitan
London area and includes commercial, domestic and industrial customers. The
operations of London Electricity are regulated under its Public Electricity
Supply ("PES") license.
London Electricity's primary business is its distribution business, which in
Pro Forma Fiscal Year 1997 (as defined herein) produced operating income of
(Pounds)92 million ($148 million). Substantially all of the distribution
business is a regulated monopoly. London Electricity's supply business in Pro
Forma Fiscal Year 1997 generated (Pounds)6 million ($10 million) in operating
income. Together these businesses produced substantially all of London
Electricity's operating income of (Pounds)112 million ($181 million) in Pro
Forma Fiscal Year 1997.
London Electricity owns, manages and operates the electricity distribution
network within its Franchise Area. The primary activity of the distribution
business is the receipt of electricity from the national grid transmission
system (the "Grid") and its distribution to end users connected to London
Electricity's power lines. Virtually all electricity supplied (whether by
London Electricity's supply business or by any other suppliers) to consumers
within London Electricity's Franchise Area is transported through London
Electricity's distribution network.
London Electricity's supply business consists of selling electricity to end
users, purchasing such electricity and arranging for its distribution to those
end users. London Electricity has an exclusive right to supply electricity to
customers in its Franchise Area who have demand of not more than 100 kW. This
exclusive right will continue until April 1, 1998, when the supply market for
these customers will become competitive over a six month phase-in period. The
supply business to consumers with demand of 100 kW and above, both inside and
outside of London Electricity's Franchise Area, is already open to competition.
London Electricity, through subsidiaries, also conducts ancillary business
activities, including the ownership and operation of private distribution
networks, power generation and retail gas supply.
6
<PAGE>
ENTERGY LONDON CAPITAL
Entergy London Capital is a newly formed special purpose limited partnership
formed under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act"). The Company is the sole general partner (the "General
Partner") in Entergy London Capital. Upon issuance of the Preferred Securities,
which securities represent limited partner interests in Entergy London Capital,
the registered holders thereof will become limited partners in Entergy London
Capital. The General Partner has agreed to contribute capital to the extent
required to maintain its capital at 1% of all capital of Entergy London
Capital. All of Entergy London Capital's business and affairs will be conducted
by the General Partner. Entergy London Capital was formed for the sole purpose
of issuing limited partner interests in the form of the Preferred Securities
and investing the proceeds thereof and the capital contributed by the General
Partner in the Perpetual Junior Subordinated Debentures.
THE OFFERING
As used herein, (i) the term "Indenture" means the Indenture for Unsecured
Subordinated Debt Securities relating to Preferred Securities, as the same may
be amended and supplemented from time to time, between the Company and The Bank
of New York, as Debenture Trustee (the "Debenture Trustee"), pursuant to which
the Perpetual Junior Subordinated Debentures will be issued, and (ii) the term
"Partnership Agreement" means the Amended and Restated Limited Partnership
Agreement, among the Company, as General Partner, and the holders, from time to
time, of the Preferred Securities. Each of the other capitalized terms used in
this Prospectus and not otherwise defined has the meaning set forth in the
Indenture or the Partnership Agreement, as the case may be.
Securities Offered.................. % Cumulative Quarterly Income
Preferred Securities, Series A
(QUIPSSM)* (liquidation preference $25
per preferred security).
Offering Price...................... $25 per Preferred Security.
Distribution Dates..................
March 31, June 30, September 30 and
December 31 of each year, commencing
December 31, 1997.
Deferral of Interest Payments....... The Company has the right to defer
indefinitely the payment of interest on
the Perpetual Junior Subordinated
Debentures at any time or from time to
time. If interest payments on the
Perpetual Junior Subordinated
Debentures are so deferred,
Distributions on the Preferred
Securities will also be deferred. See
"Description of the Perpetual Junior
Subordinated Debentures--Option to
Defer Payment of Interest".
No Stated Maturity.................. The Perpetual Junior Subordinated
Debentures will not have a stated
maturity.
- --------
* QUIPS is a servicemark of Goldman, Sachs & Co.
7
<PAGE>
Ranking............................. The limited partner interests
represented by the Preferred Securities
will have a preference with respect to
cash distributions and amounts payable
on dissolution, redemption or otherwise
over the General Partner's interest in
Entergy London Capital. The Company's
obligations under the Perpetual Junior
Subordinated Debentures and the
Guarantee will constitute unsecured
obligations of the Company and will be
subordinate and junior in right of
payment to all Senior Debt of the
Company to the extent and in the manner
set forth in the Indenture. See
"Description of the Perpetual Junior
Subordinated Debentures--Subordination"
and "Description of the Guarantee".
Redemption..........................
The Preferred Securities will be
subject to mandatory redemption, in
whole or in part, upon redemption of
the Perpetual Junior Subordinated
Debentures in an amount equal to the
amount of Perpetual Junior Subordinated
Debentures being redeemed at the
Redemption Price. The Perpetual Junior
Subordinated Debentures are redeemable
at the option of the Company (i) on or
after November , 2002, in whole at
any time or in part from time to time,
(ii) at any time, in whole (but not in
part), upon the occurrence and
continuation of a Special Event, or
(iii) at any time, in whole (but not in
part), in the event that the Company
has or will become obligated to pay
Additional Amounts, in each case at the
Debentures Redemption Price. See
"Description of the Preferred
Securities--Redemptions--Mandatory
Redemption", "--Optional Redemption of
Perpetual Junior Subordinated
Debentures" and "--Special Event
Redemption or Distribution of Perpetual
Junior Subordinated Debentures".
Distribution of Perpetual Junior
Subordinated Debentures............ The Company will have the right at any
time, whether or not a Special Event
has occurred, to dissolve Entergy
London Capital and, after satisfaction
of liabilities to creditors, if any, of
Entergy London Capital, cause the
Perpetual Junior Subordinated
Debentures to be distributed to the
holders of the Preferred Securities in
liquidation of Entergy London Capital.
See "Description of the Preferred
Securities--Redemptions--Special Event
Redemption or Distribution of Perpetual
Junior Subordinated Debentures".
8
<PAGE>
Withholding Tax..................... Payments in respect of the Perpetual
Junior Subordinated Debentures and,
therefore, the Preferred Securities
will be made free and clear of any
present or future UK withholding and
other deductions existing in the UK,
except as set forth under "Description
of the Perpetual Junior Subordinated
Debentures--Additional Amounts".
Subject to certain exceptions, the
Company will pay such additional
amounts (the "Additional Amounts") as
will result in receipt by the holder of
the Perpetual Junior Subordinated
Debentures and, therefore, the holders
of the Preferred Securities of such
amounts as would have been received by
it had no such withholding or deduction
been required. See "Description of the
Perpetual Junior Subordinated
Debentures--Additional Amounts".
Listing.............................
Application will be made to list the
Preferred Securities on the NYSE and
has been made to list the Perpetual
Junior Subordinated Debentures on the
Luxembourg Stock Exchange. If the
Perpetual Junior Subordinated
Debentures are distributed to the
holders of the Preferred Securities
upon the liquidation of Entergy London
Capital, the Company will use its best
efforts to also list the Perpetual
Junior Subordinated Debentures on the
NYSE, or such other stock exchanges or
other organizations, if any, on which
the Preferred Securities are then
listed.
Use of Proceeds..................... The proceeds to Entergy London Capital
from the sale of the Preferred
Securities will be invested by Entergy
London Capital in the Perpetual Junior
Subordinated Debentures to be issued by
the Company to Entergy London Capital.
The Company intends to use the net
proceeds from such investment to repay
a portion of indebtedness incurred in
connection with the acquisition of
London Electricity. See "Use of
Proceeds" and "Capitalization".
Governing Law....................... The Partnership Agreement and the
Preferred Securities will be governed
by, and construed in accordance with,
the laws of the State of Delaware. The
Guarantee, the Indenture and the
Perpetual Junior Subordinated
Debentures will be governed by, and
construed in accordance with, the laws
of the State of New York.
9
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following tables set forth summary consolidated financial data for
Entergy London Investments plc (the "Successor Company" or the "Company") and
London Electricity (the "Predecessor Company"). For a description of the
financial statements and records from which the following financial data have
been derived, see "Selected Financial Data". This information should be read in
conjunction with "Capitalization", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and notes thereto of the Successor Company and the Predecessor
Company included elsewhere in this Prospectus. All references to a fiscal year
mean a year ended March 31.
The unaudited pro forma condensed consolidated income statement and other
data presented below for fiscal year 1997 reflect the acquisition by the
Company of London Electricity as if it had occurred as of April 1, 1996 ("Pro
Forma Fiscal Year 1997"). Such unaudited pro forma condensed consolidated
income statement and other data have been prepared by the Successor Company
based upon assumptions deemed proper by it and reflect a preliminary allocation
of the purchase price paid for the Predecessor Company. The unaudited pro forma
condensed consolidated income statement and other data presented herein are
shown for illustrative purposes only and are not necessarily indicative of the
future results of operations of the Successor Company or of the results of
operations of the Successor Company that would have actually occurred had the
transaction occurred as of April 1, 1996. This information should be read in
conjunction with the unaudited pro forma condensed consolidated statement of
income and notes thereto of the Successor Company included elsewhere in this
Prospectus.
10
<PAGE>
PREDECESSOR COMPANY
UK GAAP (1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Turnover.............. (Pounds)1,367 (Pounds)1,309 (Pounds) 1,209 (Pounds)1,188
Operating costs....... ( 1,215) (1,137) (1,046) (1,115)
------------- ------------- -------------- -------------
Operating profit...... 152 172 163 73
Exceptional item(2)... (20) -- (10) 66
Other income(3)....... 18 20 21 142
Interest, net......... (4) (5) (1) (5)
Tax on profit......... (38) (45) (23) (89)
------------- ------------- -------------- -------------
Profit for financial
period............... (Pounds)108 (Pounds)142 (Pounds)150 (Pounds)187
============= ============= ============== =============
<CAPTION>
MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds)709 (Pounds)769 (Pounds)823 (Pounds)794
Current assets........ 291 453 338 455
Creditors: Amounts
falling due within
one year............. (263) (265) (343) (485)
------------- ------------- -------------- -------------
Total assets less
current liabilities.. 737 957 818 764
Creditors: Amounts
falling due in more
than
one year............. (73) (190) (115) (211)
Provisions for
liabilities and
charges.............. (42) (50) (45) (53)
------------- ------------- -------------- -------------
Total shareholders'
funds................ (Pounds)622 (Pounds)717 (Pounds)658 (Pounds)500
============= ============= ============== =============
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds)157 (Pounds)205 (Pounds)187 (Pounds)293
EBITDA(5)............. 189 240 225 334
Cash flow from
operations(6)........ 251 299 155 103
Ratio of earnings to
fixed charges(7)..... 11 10 12 15
</TABLE>
11
<PAGE>
PREDECESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 31, APRIL 1, 1996 TO
-------------------- JANUARY 31,
1995 1996 1997(8)
------------- --------------------- ----------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds)1,209 (Pounds)1,188 (Pounds)1,116
Operating income...... 166 102 107
National Grid
transaction.......... -- 450 --
Interest expense, net. (1) (5) (17)
Other, net............ 22 22 4
Provision for income
taxes................ (57) (110) (32)
------------- ------------- -------------
Income before
extraordinary item... 130 459 62
Extraordinary item.... (9) -- --
------------- ------------- -------------
Net income............ (Pounds) 121 (Pounds) 459 (Pounds) 62
============= ============= =============
<CAPTION>
MARCH 31, 1996
---------------------
(AMOUNTS IN MILLIONS)
<S> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds) 784
Total assets.......... 1,349
Total stockholder's
equity............... 448
Long-term debt........ 198
Short-term debt....... 96
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 31, APRIL 1, 1996 TO
-------------------- JANUARY 31,
1995 1996 1997(8)
------------- --------------------- ----------------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 201 (Pounds) 586 (Pounds) 120
EBITDA(5)............. 241 628 159
Cash flow from
operations........... 123 191 102
Ratio of earnings to
fixed charges(7)..... 12.1 30.0 4.3
</TABLE>
12
<PAGE>
BUSINESS SEGMENTS
PREDECESSOR COMPANY
UK GAAP(1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- ------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
TURNOVER:
Electricity
distribution......... (Pounds) 361 (Pounds) 367 (Pounds) 379 (Pounds) 357
Electricity supply.... 1,266 1,228 1,114 1,189
National Grid
transaction.......... -- -- -- (91)
Other................. 86 51 44 59
Intra-business(9)..... (346) (337) (328) (326)
------------- ------------- ------------- -------------
Total............... (Pounds)1,367 (Pounds)1,309 (Pounds)1,209 (Pounds)1,188
============= ============= ============= =============
OPERATING PROFIT (LOSS):
Electricity
distribution......... (Pounds) 152 (Pounds) 154 (Pounds) 136 (Pounds) 148
Electricity supply.... 7 6 14 9
National Grid
transaction.......... -- -- -- (97)
Other................. (7) 12 13 15
Intra-business(9)..... -- -- -- (2)
------------- ------------- ------------- -------------
Total............... (Pounds) 152 (Pounds) 172 (Pounds) 163 (Pounds) 73
============= ============= ============= =============
</TABLE>
13
<PAGE>
BUSINESS SEGMENTS
PREDECESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996
YEAR ENDED MARCH 31, TO
---------------------------- JANUARY 31,
1995 1996 1997
------------- ------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C>
OPERATING REVENUE:
Electricity distribution......... (Pounds) 379 (Pounds) 357 (Pounds) 275
Electricity supply............... 1,114 1,098 1,051
Other............................ 44 59 68
Intra-business(9)................ (328) (326) (278)
------------- ------------- -------------
Total.......................... (Pounds)1,209 (Pounds)1,188 (Pounds)1,116
============= ============= =============
OPERATING INCOME:
Electricity distribution......... (Pounds) 141 (Pounds) 158 (Pounds) 101
Electricity supply............... 11 (70) (1)
Other............................ 14 16 7
Intra-business(9)................ -- (2) --
------------- ------------- -------------
Total.......................... (Pounds) 166 (Pounds) 102 (Pounds) 107
============= ============= =============
</TABLE>
14
<PAGE>
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
PRO FORMA -----------------------------------
PERIOD FROM INCEPTION FISCAL YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
(OCTOBER 9, 1996) TO MARCH 31, 1997 1996 1997(12)
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
---------------------- --------------------- -----------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
------------- ------- ------------- ------ ------------- ------------ ------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds) 234 $ 377 (Pounds)1,350 $2,176 (Pounds) 617 (Pounds) 548 $ 883
Operating income...... 32 52 112 181 76 61 98
Other income
(expense):
Interest expense,
net................ (13) (21) (93) (150) (8) (55) (88)
Other, net.......... (6) (10) 5 8 3 2 3
Windfall profits
tax................ -- -- -- -- -- (140) (226)
(Provision) benefit
for income taxes..... (5) (8) (8) (13) (19) 36 58
------------- ------- ------------- ------ ------------- ------------ ------
Net income (loss)..... (Pounds) 8 $ 13 (Pounds) 16 $ 26 (Pounds) 52 (Pounds) (96) $ (155)
============= ======= ============= ====== ============= ============ ======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)(12)
---------------------- ---------------------------
(Pounds) $(11) (Pounds) $(11)
------------- ------- ------------- ------------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds)1,347 $ 2,171 (Pounds)1,358 $ 2,189
Total assets.......... 2,669 4,301 2,646 4,264
Total stockholder's
equity............... 248 400 152 245
Long-term debt........ 1,143 1,842 1,228 1,979
Short-term debt....... 162 261 72 116
<CAPTION>
SIX MONTHS ENDED
PRO FORMA -----------------------------------
PERIOD FROM INCEPTION FISCAL YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
(OCTOBER 9, 1996) TO MARCH 31, 1997 1996 1997(12)
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
---------------------- --------------------- -----------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
------------- ------- ------------- ------ ------------- ------------ ------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 34 $ 55 (Pounds) 135 $ 218 (Pounds) 87 (Pounds) (77) $ (124)
EBITDA(5)............. 42 68 215 347 110 (38) (61)
Ratio of earnings to
fixed charges(7)(14). 1.6 1.6 1.2 1.2 5.2 -- --
Cash flow from
operations........... 64 103 122 40 64
Cash provided by (used
in) investing
activities........... (1,203) (1,939) (48) (12) (20)
Cash provided by (used
in) financing
activities........... 1,165 1,877 (38) (5) (8)
</TABLE>
15
<PAGE>
BUSINESS SEGMENTS
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------------
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR SEPTEMBER 30, SEPTEMBER 30,
OCTOBER 9, 1996 ENDED MARCH 31, 1997 1996 1997
TO MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
----------------------------------------------------------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
-------------- ----------------------- ---------------------- ----------- -----
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Electricity
distribution......... (Pounds) 61 $ 98 (Pounds) 336 $ 541 (Pounds)155 (Pounds)151 $ 243
Electricity supply.... 213 343 1,265 2,039 574 501 807
Other................. 11 18 78 126 48 34 55
Intra-business(9)..... (51) (82) (329) (530) (160) (138) (222)
-------------- ------- -------------- ------- ----------- ----------- -----
Total............... (Pounds) 234 $ 377 (Pounds) 1,350 $ 2,176 (Pounds)617 (Pounds)548 $ 883
============== ======= ============== ======= =========== =========== =====
OPERATING INCOME:
Electricity
distribution......... (Pounds) 18 $ 30 (Pounds) 92 $ 148 (Pounds) 65 (Pounds) 44 $ 71
Electricity supply.... 7 11 6 10 3 5 8
Other................. 7 11 14 23 8 12 19
-------------- ------- -------------- ------- ----------- ----------- -----
Total............... (Pounds) 32 $ 52 (Pounds) 112 $ 181 (Pounds) 76 (Pounds) 61 $ 98
============== ======= ============== ======= =========== =========== =====
<CAPTION>
MARCH 31, 1997
-------------------------
(Pounds) $(11)
-------------- ---------
(AMOUNTS IN MILLIONS)
<S> <C> <C>
ASSETS(15):
Electricity
distribution......... (Pounds) 1,766 $ 2,846
Electricity supply.... 544 877
Other................. 359 578
-------------- -------
Total............... (Pounds)2,669 $ 4,301
============== =======
</TABLE>
- -------
(1) The financial data for the Predecessor Company were derived from financial
statements for the Predecessor Company prepared in accordance with UK GAAP
and US GAAP. The principal differences between the Predecessor Company's
US GAAP and UK GAAP financial statements relate to the treatment of
goodwill, pension costs and deferred taxes and the timing of recognition
of restructuring charges and dividend accruals.
(2) Exceptional items recorded in 1993, 1995 and 1996 were caused primarily by
the following:
1993--Withdrawal from the electrical products retailing business (write-down
of fixed asset and stock values, and provisions for losses and further
costs expected until completely closed)
1995--Restructuring charges recorded for the regulated electricity business
1996--London Electricity's distribution of its ownership interest in The
National Grid Group plc ("NGG") to its shareholders and related
transactions
(3) Other income in 1996 includes (Pounds)144 million of income from London
Electricity's investment in NGG.
(4) EBIT equals income from continuing operations before the sum of interest
expense and income taxes. This information is provided for informational
purposes only and such measure should not be construed as an alternative
to operating income (as determined in accordance with US GAAP) as an
indicator of operating performance, or as an alternative to cash flows
from operating activities (as determined in accordance with US GAAP) as a
measure of liquidity. EBIT is a widely accepted financial indicator of a
company's ability to incur and service debt. However, this measure of EBIT
may not be comparable to similar measures presented by other companies.
(5) EBITDA equals income from continuing operations before the sum of interest
expense, income taxes, depreciation and amortization. This information is
provided for informational purposes only and such measure should not be
construed as an alternative to operating income (as determined in
accordance with US GAAP) as an indicator of operating performance, or as
an alternative to cash flows from operating activities (as determined in
accordance with US GAAP) as a measure of liquidity. EBITDA is a widely
accepted financial indicator of a company's ability to incur and service
debt. However, this measure of EBITDA may not be comparable to similar
measures presented by other companies.
(6) Cash flow from operations increased in fiscal year 1994 primarily as a
result of customers who paid bills in advance in order to avoid paying
value added taxes which were introduced by the British government.
(7) The ratio of earnings to fixed charges is computed as the sum of pretax
income from continuing operations plus fixed charges divided by fixed
charges. Fixed charges consist of interest expense and the estimated
interest portion of rent expense.
(8) In February 1997, the Successor Company obtained effective control of the
Predecessor Company pursuant to the Successor Company's offer to acquire
the Predecessor Company.
(9) Intra-business eliminations consist primarily of intra-business
transactions between the distribution business and the supply business and
intercompany transactions between ancillary support businesses. Pursuant
to the UK regulatory framework, London Electricity's distribution of
electricity to its supply customers within its own Franchise Area is
billed to London Electricity's supply business, which in turn incorporates
the distribution charge into the bill sent to the final end user.
(10) Pro Forma Fiscal Year 1997 financial information gives effect to the
acquisition of the Predecessor Company by the Successor Company as if it
had occurred on April 1, 1996. See Unaudited Condensed Consolidated
Statement of Operations included elsewhere in this Prospectus.
(11) Solely for the convenience of the reader, pounds sterling amounts have
been translated into US dollars at the Noon Buying Rate on September 30,
1997 of $1.6117=(Pounds)1.00.
(12) Includes effect of windfall profits tax provision of (Pounds)140 million
and the effect of the reduction in the UK statutory income tax rate from
33% to 31%.
(13) The results of operations for the six months ended September 30, 1996
represent the historical amounts of the Predecessor Company. Such results
do not include the effects of acquisition adjustments.
(14) Earnings for the six months ended September 30, 1997 were insufficient to
cover fixed charges by (Pounds)132 million ($213 million).
(15) Includes distribution license, net of amortization, and prepaid pension
costs of (Pounds)830 million and (Pounds)145 million, respectively, at
March 31, 1997 and (Pounds)812 million and (Pounds)146 million,
respectively, at September 30, 1997.
16
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
Preferred Securities.
FACTORS RELATING TO THE COMPANY'S BUSINESS
Substantial Leverage
Upon completion of this offering, the Company will continue to have
substantial indebtedness. At September 30, 1997, on a pro forma basis after
giving effect to this offering and the application of the proceeds thereof,
the ratio of the Company's consolidated debt to total capitalization was
approximately 71%. The "windfall profits tax" recently enacted by Parliament
((Pounds)140 million for London Electricity) will result in additional
borrowings by London Electricity or the Company. The degree to which the
Company is leveraged could affect its ability to service its indebtedness, to
make capital investments, to take advantage of certain business opportunities,
to respond to competitive pressures or to obtain additional financing. The
Company believes that following this offering and the restructuring of the
Credit Facilities Agreement (as defined herein), it will be able to make its
principal and interest payments, as and when required, on such indebtedness
and on the Perpetual Junior Subordinated Debentures from funds derived from
the operations of London Electricity and its subsidiaries. See "The Company--
Acquisition Debt Facility".
However, unexpected declines in the Company's and London Electricity's
future business, especially in light of the increasingly competitive
environment in the UK electric utility industry, increases in operating or
capital costs, or the inability to borrow additional funds could impair the
Company's ability to meet its debt service obligations, including with respect
to the Perpetual Junior Subordinated Debentures, and, therefore, could
adversely affect the Company. No assurance can be given that additional
financing will be available when needed, or, if available, will be obtainable
on terms that are favorable to the Company.
The ability of Entergy London Capital to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments on the
Perpetual Junior Subordinated Debentures as and when required.
Price Regulation of Distribution
The distribution business of London Electricity is regulated under its PES
license, pursuant to which charges by the distribution business to customers
are controlled by the Distribution Price Control Formula (as defined herein).
The Distribution Price Control Formula determines the maximum allowable
average price per unit of electricity (expressed in kilowatt hours, a "unit")
that a PES license holder may charge in any year. The elements used in the
Distribution Price Control Formula are established for a five-year period and
are subject to review by the Director General of Electricity Supply for the
United Kingdom (the "Regulator") at the end of each five-year period and at
other times at the discretion of the Regulator. At each review, the Regulator
can adjust the value of certain elements in the Distribution Price Control
Formula.
Following a review by the Regulator in August 1994, a 14% reduction was set
for London Electricity's allowed distribution revenues, effective April 1,
1995. In July 1995, a further review of allowed distribution revenues was
concluded by the Regulator for fiscal years 1997 to 2000. As a result of this
further review, London Electricity's allowed distribution revenues were
reduced by an additional 11%, effective April 1, 1996, and by a further 3%,
effective April 1 of each of the three following years. In an attempt to
partially offset these, and potentially future, reductions in allowed
distribution revenues, London Electricity plans to pursue a number of cost
efficiency initiatives that are intended to result in operating and capital
cost savings. However, there can be no assurance that any future reviews by
the Regulator will not result in additional price reductions or that London
17
<PAGE>
Electricity's cost efficiency initiatives will yield sufficient savings to
offset any such distribution price reductions. See "The Electric Utility
Industry in Great Britain--Industry Structure--Distribution of Electricity".
Competition in Supply; Supply Price Restraint Proposals
Each PES license holder currently has an exclusive right, subject to
modified price cap regulation, to supply customers in its franchise area with
a maximum demand of not more than 100 kW ("Franchise Supply Customers").
However, the supply market is being progressively opened to full competition.
The market for customers with a maximum demand above 1 MW has been open to
competition for suppliers of electricity since privatization in 1990 while,
for customers with a maximum demand above 100 kW ("Non-Franchise Supply
Customers"), the market became competitive in April 1994. The final stage of
this process is scheduled to take place over a period of six months commencing
April 1, 1998, when competition in supply to Franchise Supply Customers will
be phased in, and the exclusive right of London Electricity to supply
Franchise Supply Customers will cease. London Electricity is in the process of
developing its strategy to meet expanded competition in its supply business,
which will focus on active marketing and customer service to defend its
residential customer base and expanding product offerings to larger business
customers. There can be no assurance that this strategy will be successful in
avoiding significant loss of customers of London Electricity's supply
business. See "Business--Supply Business--Competition in the Supply Business"
and "The Electric Utility Industry in Great Britain--Industry Structure--
Supply of Electricity".
On October 16, 1997, the Regulator published proposals for new supply price
restraints to apply from April 1, 1998. Each PES license holder has one month
in which to decide whether to accept the proposals, failing which the
Regulator has stated he would refer the matter for investigation by the UK
Monopolies and Mergers Commission ("MMC"). The proposals would, among other
things, implement a price reduction effective April 1, 1998 for London
Electricity's domestic and small business supply customers of 11.8% compared
to the supply price tariff in effect in August 1997. A further 3% reduction is
proposed to be effective on April 1, 1999. The 11.8% price reduction to be
effective on April 1, 1998 would be decreased by the supply tariff reductions
announced by London Electricity on September 29, 1997 and effective from
October 1, 1997, which will return over-recoveries experienced under the
current Supply Price Control Formula. The license modifications that will be
implemented if the Regulator's proposals are accepted would also discontinue
the automatic pass-through of all costs currently passed through to domestic
and small business customers, including purchased power costs from the Pool
(as defined herein). This change will increase the importance to London
Electricity of effective power purchasing and hedging activities. See "--Pool
Purchase Price Volatility", "The Electric Utility Industry in Great Britain--
Industry Structure--Supply Price Restraint Proposals" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
Regulatory Policies Affecting the Company's Capital Structure
Certain modifications to London Electricity's PES license following the
Company's acquisition of London Electricity set forth several conditions
designed to assure the continued financial soundness of London Electricity,
including undertakings from Entergy that it will refrain, and cause its
subsidiaries to refrain, from taking any action that would likely result in
London Electricity breaching its obligations under its PES license and the
Electricity Act 1989 (the "Electricity Act") and an undertaking by London
Electricity to use reasonable endeavors to maintain an investment grade rating
of its debt securities. Although such conditions do not constitute explicit
oversight by the Regulator of dividend payments by London Electricity to the
Company, such conditions could have an effect on London Electricity's dividend
policy, which will constitute the principal source of funds for payment of
interest on the Perpetual Junior Subordinated Debentures.
The ability of Entergy to contribute additional equity capital to the
Company is currently subject to regulations of the Commission under the Public
Utility Holding Company Act of 1935, as amended.
18
<PAGE>
Absent specific Commission approval, these regulations limit the aggregate
amount that Entergy may invest in foreign utility companies and exempt
wholesale generators to 50% of consolidated retained earnings at the time an
investment is made. These regulations could delay or limit the making of loans
or the contributions of equity by Entergy to the Company to enable the Company
to meet its obligations, including on the Perpetual Junior Subordinated
Debentures, or to contribute additional equity capital to London Electricity.
Governmental Review of Utility Regulation
On June 30, 1997, the new Labour government announced a comprehensive review
of the regulation of the electric, gas, water and telecommunications
industries to be directed by the Department of Trade and Industry. Generally,
the review will focus on whether the current system of regulation in the
utility industries is designed to facilitate open and predictable regulation,
fairness to consumers and shareholders and the promotion of a competitive
environment. Particularly, the review will examine whether the current system
of price regulation delivers, over time, the greatest benefits to consumers
while maintaining proper incentives for innovation and investment and an
adequate return to shareholders. The review is expected initially to conclude
with a consultation paper to be issued at the end of 1997 as a basis for
possible legislation. In addition, on August 1, 1997, the President of the
Board of Trade referred the proposed acquisition by PacifiCorp of The Energy
Group plc to the MMC. The Company cannot predict the results of the Department
of Trade and Industry's review of regulated industries or its ultimate effects
on the Company.
Pool Purchase Price Volatility
London Electricity's supply business to Non-Franchise Supply Customers
generally involves entering into fixed price contracts to supply electricity.
London Electricity obtains the electricity to satisfy its obligations under
such contracts primarily by purchases from the wholesale trading market for
electricity in England and Wales (the "Pool"). See "The Electric Utility
Industry in Great Britain--The Pool". Because the price of electricity
purchased from the Pool can be volatile, to the extent that London Electricity
purchases electricity from the Pool, London Electricity is exposed to risk
arising from differences between the fixed price at which it sells and the
fluctuating prices at which it purchases electricity unless it can effectively
hedge such exposure. London Electricity's ability to manage such risk at
acceptable levels will depend, in part, on the specifics of the supply
contracts that London Electricity enters into, London Electricity's ability to
implement and manage an appropriate hedging strategy and the development of an
adequate market for hedging instruments. No assurance can be given that this
risk will be effectively mitigated. In addition, under the supply price
restraint proposals published by the Regulator on October 16, 1997, costs of
power purchases from the Pool and related hedging activities which are
currently passed through to domestic and small business customers will no
longer automatically be passed through to such customers. See "Business--
Supply Business".
Currency Risks; Absence of Hedging Transactions
The Company's revenues will be generated primarily in pounds sterling while
the Company's interest and principal payment obligations with respect to the
Perpetual Junior Subordinated Debentures will be payable in US dollars. As a
result, any change in the currency exchange rate that reduces the amount in
pounds sterling obtained upon conversion of the US dollar-based net proceeds
of the Perpetual Junior Subordinated Debentures or that increases the
effective principal and interest payment obligations represented by the
Perpetual Junior Subordinated Debentures upon conversion of pounds sterling-
based revenues into US dollars may, if not appropriately hedged, have a
material adverse effect on the Company or on its ability to make payments on
the Perpetual Junior Subordinated Debentures. See "Exchange Rates" for certain
information concerning the Noon Buying Rate for pounds sterling expressed in
US dollars. Although the Company expects to enter into certain transactions to
hedge risks associated with exchange rate fluctuations, there can be no
assurance that the Company will engage in such transactions or that any such
transaction will be successful in reducing any or all such risks.
19
<PAGE>
Litigation Regarding Electricity Supply Pension Scheme
The Pension Ombudsman (a UK arbitrator appointed by statute) has issued a
"final determination" in favor of complaints made by members of the
Electricity Supply Pension Scheme ("ESPS") relating to another employer's use
of the ESPS surplus to offset such employer's additional costs of early
payment of pensions as a result of reorganization or redundancy, together with
additional contributions required after a valuation. Under that determination
the Pension Ombudsman directed the employer to pay into ESPS the amount of
that use of the surplus plus interest. The Pension Ombudsman's final
determination has been successfully challenged in the courts. At the same time
the courts also considered other areas of uncertainty relating to the uses
made of actuarial surpluses arising in the ESPS including the ability to
reduce or suspend standard employer contributions to reduce such surpluses.
The courts ruled that such reductions were permissible. The final decisions of
the courts are subject to appeal. If any of the decisions are reversed on
appeal they may have an adverse effect on London Electricity, which has made
similar use of its actuarial surplus, but no assurance can be given as to the
extent of that effect.
FACTORS RELATING TO THE PREFERRED SECURITIES AND THE PERPETUAL JUNIOR
SUBORDINATED DEBENTURES
Perpetual Junior Subordinated Debentures and the Guarantee are Unsecured and
Subordinated
The Company's obligations under the Guarantee and the Perpetual Junior
Subordinated Debentures are unsecured and rank subordinate and junior in right
of payment to all Senior Debt of the Company. At September 30, 1997, Senior
Debt of the Company aggregated approximately (Pounds)1.03 billion ($1.66
billion). See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources". None of the
Indenture, the Guarantee or the Partnership Agreement places any limitation on
the amount of secured or unsecured debt, including Senior Debt, that may be
incurred by the Company.
The Company is a non-operating holding company, conducting substantially all
of its business through London Electricity and its subsidiaries. Except to the
extent that the Company may receive funds in the future from Entergy, the
Company will rely on dividends from London Electricity to meet its obligations
for payment of principal of and interest on its outstanding debt obligations
and corporate expenses. Accordingly, the Company's obligations under the
Guarantee and the Perpetual Junior Subordinated Debentures will be effectively
subordinated to all existing and future indebtedness and liabilities of the
subsidiaries of the Company, including London Electricity. Consequently, the
rights of the Company to receive assets of any such subsidiary (and thus the
ability of the beneficiaries of the Guarantee and the holders of the Perpetual
Junior Subordinated Debentures to benefit indirectly from such assets) are
subject to the prior claims of creditors of that subsidiary. At September 30,
1997, such subsidiaries had (Pounds)247 million ($398 million) of
indebtedness, and such subsidiaries may incur additional indebtedness in the
future. See "Description of the Guarantee--Status of the Guarantee" and
"Description of the Perpetual Junior Subordinated Debentures--Subordination".
Option to Defer Payment of Interest; Potential Market Volatility During
Interest Deferral
So long as no Debenture Event of Default under the Indenture has occurred
and is continuing, the Company has the right under the Indenture to defer
indefinitely the payment of interest on the Perpetual Junior Subordinated
Debentures at any time or from time to time. As a consequence of any such
deferral, quarterly Distributions on the Preferred Securities would also be
deferred (but would continue to accumulate additional Distributions thereon)
at the rate of % per annum, compounded quarterly, by Entergy London Capital
until all deferred interest payments, together with interest thereon, have
been paid in full. If interest payments on the Perpetual Junior Subordinated
Debentures are so deferred, the Company will not be permitted, subject to
certain exceptions, to declare or pay any cash distributions with respect to
the Company's capital stock or debt securities that rank pari
20
<PAGE>
passu with or junior to the Perpetual Junior Subordinated Debentures, make any
guarantee with respect to the foregoing, make any payments in respect of any
of its debt securities held by affiliates or make any loans or advances to, or
make payments on any guarantee of the debt of, any affiliate. See "Description
of the Preferred Securities--Distributions" and "Description of the Perpetual
Junior Subordinated Debentures--Option to Defer Payment of Interest".
In the event the Company exercises its right to defer payments of interest
on the Perpetual Junior Subordinated Debentures, the market price of the
Preferred Securities is likely to be affected. A holder that disposes of its
Preferred Securities during such a deferral, therefore, might not receive the
same return on its investment as a holder that continues to hold its Preferred
Securities. In addition, the market price of the Preferred Securities may be
more volatile than the market prices of other securities that are not subject
to such deferrals.
Special Event Redemption; Distribution of Perpetual Junior Subordinated
Debentures
Upon the occurrence and continuation of a Special Event, as described in
"Description of the Preferred Securities--Redemptions--Special Event
Redemption or Distribution of Perpetual Junior Subordinated Debentures", the
Company has the right to redeem the Perpetual Junior Subordinated Debentures
in whole (but not in part), and thereby cause a mandatory redemption of the
Preferred Securities, at the Debentures Redemption Price, within 90 days
following the occurrence of such Special Event. See "Description of the
Preferred Securities--Redemptions--Special Event Redemption or Distribution of
Perpetual Junior Subordinated Debentures".
In addition, at any time, whether or not a Special Event has occurred, the
Company has the right to dissolve Entergy London Capital and, after
satisfaction of liabilities to creditors, if any, of Entergy London Capital as
provided by applicable law, cause the Perpetual Junior Subordinated Debentures
to be distributed to the holders of the Preferred Securities in liquidation of
Entergy London Capital.
There can be no assurance as to the market prices for the Perpetual Junior
Subordinated Debentures that may be distributed in exchange for the Preferred
Securities if a liquidation of Entergy London Capital were to occur.
Accordingly, the Perpetual Junior Subordinated Debentures that a holder of the
Preferred Securities may receive on liquidation of Entergy London Capital,
could trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby. Because holders of the Preferred
Securities may receive the Perpetual Junior Subordinated Debentures if the
Company exercises its right to dissolve Entergy London Capital, prospective
purchasers of the Preferred Securities are also making an investment decision
with regard to the Perpetual Junior Subordinated Debentures and should
carefully review all the information regarding the Perpetual Junior
Subordinated Debentures contained herein. See "Description of the Preferred
Securities--Redemptions--Special Event Redemption or Distribution of Perpetual
Junior Subordinated Debentures" and "Description of the Perpetual Junior
Subordinated Debentures--Distribution of the Perpetual Junior Subordinated
Debentures".
Rights under the Guarantee; Limitation as to Funds Available to Entergy
London Capital
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The Bank of New York will act as Guarantee Trustee for the purposes of
compliance with the Trust Indenture Act and will hold the Guarantee for the
benefit of the holders of the Preferred Securities. The Bank of New York will
also act as Debenture Trustee for the Perpetual Junior Subordinated
Debentures. The Guarantee guarantees to the holders of the Preferred
Securities the following payments, to the extent not paid by Entergy London
Capital: (i) any accumulated and unpaid Distributions required to be paid on
the Preferred Securities, to the extent that Entergy London Capital has funds
on hand available therefor, (ii) the Redemption Price with respect to any
Preferred Securities called for redemption to the extent that Entergy London
Capital has funds on hand available therefor, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of Entergy London Capital
(unless the Perpetual Junior Subordinated Debentures are distributed to
holders of the Preferred Securities), the lesser of
21
<PAGE>
(a) the aggregate of the Liquidation Preference Amount (as defined in
"Description of the Preferred Securities--Redemptions") and all accumulated
and unpaid Distributions to the date of payment and (b) the amount of assets
of Entergy London Capital remaining available for distribution to holders of
the Preferred Securities. The holders of a majority in aggregate Liquidation
Preference Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of the Guarantee or to direct the exercise
of any trust power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against Entergy London Capital, the
Guarantee Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable
under the Perpetual Junior Subordinated Debentures, Entergy London Capital
would lack funds for the payment of Distributions or amounts payable on
redemption of the Preferred Securities or otherwise, and, in such event,
holders of the Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. If the General Partner fails to enforce
Entergy London Capital's rights under the Perpetual Junior Subordinated
Debentures or the Indenture, a holder of the Preferred Securities may
institute a legal proceeding directly against the Company to enforce Entergy
London Capital's rights under the Perpetual Junior Subordinated Debentures or
the Indenture, to the fullest extent permitted by law, without first
instituting any legal proceeding against the General Partner or any other
person or entity. Notwithstanding the foregoing, a holder of the Preferred
Securities may institute a legal proceeding directly against the Company for
enforcement of payment to such holder of principal of or interest on the
Perpetual Junior Subordinated Debentures having a principal amount equal to
the aggregate Liquidation Preference Amount of the Preferred Securities of
such holder on or after the due dates thereof. See "Description of the
Preferred Securities", "Description of the Perpetual Junior Subordinated
Debentures" and "Description of the Guarantee". The Partnership Agreement
provides that each holder of the Preferred Securities, by acceptance thereof,
agrees to the provisions of the Guarantee and the Indenture.
ENTERGY LONDON CAPITAL
Entergy London Capital is a newly formed special purpose limited partnership
formed under the Delaware Act. The Company is the sole General Partner in
Entergy London Capital. Upon issuance of the Preferred Securities, which
securities represent limited partner interests in Entergy London Capital, the
registered holders thereof will become limited partners in Entergy London
Capital. The General Partner has agreed to contribute capital to the extent
required to maintain its capital at 1% of all capital of Entergy London
Capital. All of Entergy London Capital's business and affairs will be
conducted by the General Partner.
Entergy London Capital was formed for the sole purpose of issuing limited
partner interests in the form of the Preferred Securities and investing the
proceeds thereof and the capital contributed by the General Partner in the
Perpetual Junior Subordinated Debentures. The limited partner interests
represented by the Preferred Securities will have a preference with respect to
cash distributions and amounts payable on dissolution, redemption or otherwise
over the General Partner's interest in Entergy London Capital.
The rights and obligations of the Company as General Partner and the holders
of the Preferred Securities will be governed by the Delaware Act and the
Partnership Agreement, a form of which has been filed as an exhibit to the
Registration Statement. The principal executive office of Entergy London
Capital is 639 Loyola Avenue, New Orleans, Louisiana 70113 and its telephone
number is 504-529-5262.
22
<PAGE>
THE COMPANY
GENERAL
The Company, incorporated as a public limited company under the laws of
England and Wales in October 1996, owns all of the outstanding shares of
London Electricity, one of the twelve RECs in England and Wales. London
Electricity is the Company's sole significant asset. All of the Company's
outstanding shares are owned indirectly by Entergy, a US holding company
engaged in regulated electric power activities in Arkansas, Louisiana,
Mississippi, Texas, Australia, Argentina and the UK and competitive electric
power and energy activities internationally and throughout the US. The Entergy
Company system provides energy to approximately 4.8 million customers
worldwide. Entergy, through the Company, gained effective control of London
Electricity in February 1997.
London Electricity's principal businesses are the distribution and supply of
electricity to approximately 2 million customers in the London metropolitan
area. London Electricity's Franchise Area has a resident population of
approximately 4 million and covers approximately 257 square miles. The
Franchise Area generally consists of the metropolitan London area and includes
commercial, domestic and industrial customers.
The operations of London Electricity are regulated under its PES license
pursuant to which charges by the distribution business, and the supply
business to Franchise Supply Customers, are currently subject to a price cap
regulatory framework that provides economic incentives to London Electricity
to improve its efficiency. See "The Electric Utility Industry in Great
Britain".
London Electricity's primary business is its distribution business, which in
Pro Forma Fiscal Year 1997 produced operating income of (Pounds)92 million
($148 million). Substantially all of the distribution business is a regulated
monopoly. London Electricity's supply business in Pro Forma Fiscal Year 1997
generated (Pounds)6 million ($10 million) in operating income. Together these
businesses produced substantially all of London Electricity's operating income
of (Pounds)112 million ($181 million) in Pro Forma Fiscal Year 1997.
London Electricity owns, manages and operates the electricity distribution
network within its Franchise Area. The primary activity of the distribution
business is the receipt of electricity from the Grid and its distribution to
end users connected to London Electricity's power lines. Virtually all
electricity supplied (whether by London Electricity's supply business or by
any other suppliers) to consumers within London Electricity's Franchise Area
is transported through London Electricity's distribution network. See
"Business--Distribution Business".
London Electricity's supply business consists of selling electricity to end
users, purchasing such electricity and arranging for its distribution to those
end users. London Electricity has an exclusive right to supply electricity to
Franchise Supply Customers (those who have demand of less than 100 kW). This
exclusive right will continue until April 1, 1998, when the supply market for
these customers is currently scheduled to become competitive over a six month
phase-in period. The supply business to Non-Franchise Supply Customers (those
who have demand of 100 kW and above), both inside and outside of London
Electricity's Franchise Area, is already open to competition. See "Business--
Supply Business".
London Electricity, through subsidiaries, also conducts ancillary business
activities including the ownership and operation of private distribution
networks such as the Heathrow, Gatwick and Stansted airport networks,
investments in power generation companies, such as Barking Power Limited
("Barking Power") and Thames Valley Power Limited, and retail gas supply. See
"Business--Affiliate Businesses and Other Investments".
The registered office and principal executive offices of the Company and
London Electricity are located at Templar House, 81-87 High Holborn, London
WC1V 6NU, England, telephone number 011-44-171-242-9050.
23
<PAGE>
OWNERSHIP STRUCTURE
The following organizational chart illustrates the ownership structure of
the Company and London Electricity (all ownership interests are 100% unless
otherwise indicated).
LOGO
[CHART APPEARS HERE]
24
<PAGE>
ACQUISITION DEBT FACILITY
Entergy's acquisition of London Electricity was financed with (Pounds)240
million of equity provided by Entergy and debt funded by the Company through
approximately (Pounds)20 million in loan notes issued to certain of London
Electricity's former shareholders and through borrowings under the Company's
(Pounds)1.25 billion Credit Facilities Agreement dated December 17, 1996, as
amended (the "Credit Facilities Agreement"), arranged by ABN AMRO Bank N.V.,
Bank of America International Limited and Union Bank of Switzerland. The
Credit Facilities Agreement is comprised of three parts: Facility A in the
amount of (Pounds)810 million ("Facility A"), Facility B in the amount of
(Pounds)240 million ("Facility B") and Facility C in the amount of (Pounds)200
million ("Facility C"). As of September 30, 1997, the Company had borrowed
(Pounds)790 million under Facility A and (Pounds)240 million under Facility B
to finance the acquisition cost of London Electricity. Facility C currently is
undrawn and is available only to refinance London Electricity's outstanding
debt and for London Electricity's working capital and general corporate
purposes.
The Company plans to restructure the Credit Facilities Agreement in
connection with the issuance of the Preferred Securities. As part of the
restructuring, Facility B will be repaid and terminated. Entergy UK Limited
will become the primary obligor under Facility A of the restructured Credit
Facilities Agreement, and the Company will become a guarantor of all Facility
A borrowings under the restructured Credit Facilities Agreement. The terms of
the restructured facilities will extend the maturity of borrowings under
Facility A to October 31, 2002 and increase London Electricity's permitted
borrowing capacity. The restructured Credit Facilities Agreement will contain
financial covenants and events of default typical for UK acquisition debt
facilities, including the ability of the lenders to declare an event of
default if a material adverse change affecting the Company's ability to meet
its financial covenants and payment obligations under the Credit Facilities
Agreement occurs. Facility C will continue to be available to London
Electricity.
The Company's obligations under the Perpetual Junior Subordinated Debentures
and the Guarantee are subordinate and junior in right of payment to the
Company's obligations under the Credit Facilities Agreement, along with other
Senior Debt of the Company. At September 30, 1997, Senior Debt, including
borrowings outstanding under the Credit Facilities Agreement, of the Company
aggregated approximately (Pounds)1.03 billion ($1.66 billion). Following the
restructuring of the Credit Facilities Agreement, the Company's obligations
thereunder likewise will remain senior to the Company's obligations under the
Perpetual Junior Subordinated Debentures and the Guarantee.
ACCOUNTING TREATMENT
For financial reporting purposes, Entergy London Capital will be treated as
a subsidiary of the Company and, accordingly, the accounts of Entergy London
Capital will be included in the consolidated financial statements of the
Company. The Preferred Securities will be presented as a separate line item in
the consolidated balance sheet of the Company entitled "Company-Obligated
Redeemable Preferred Securities of Subsidiary Holding Solely Junior
Subordinated Deferrable Debentures" and appropriate disclosures about the
Preferred Securities, the Guarantee and the Perpetual Junior Subordinated
Debentures will be included in the notes to the consolidated financial
statements. For financial reporting purposes, the Company will record
Distributions payable on the Preferred Securities as an expense.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred Securities will be
invested by Entergy London Capital in the Perpetual Junior Subordinated
Debentures. The Company intends to use the net proceeds from the sale of such
Perpetual Junior Subordinated Debentures, together with other funds available
to the Company, to repay all of the borrowings under Facility B. Such
borrowings mature in installments through December 17, 1998 and currently bear
interest at an effective rate of 8.78%.
25
<PAGE>
CAPITALIZATION
The following table sets forth, at September 30, 1997 (i) the actual
consolidated capitalization of the Company, and (ii) the consolidated
capitalization of the Company adjusted to reflect the issuance of the
Preferred Securities and the application of the net proceeds thereof, as
described under "Use of Proceeds". This table should be read in conjunction
with "Selected Financial Data", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and notes thereto of the Company included elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
--------------------------------------------------
ACTUAL AS ADJUSTED
------------------------ ------------------------
(Pounds) $(1) % (Pounds) $(1) %
------------- ------ --- ------------- ------ ---
(AMOUNTS IN MILLIONS, EXCEPT %)
<S> <C> <C> <C> <C> <C> <C>
Capitalization:
Long-term debt:
Eurobonds................ (Pounds) 198 $ 319 14% (Pounds) 198 $ 319 14%
Facility A............... 790 1,273 57 790 1,273 57
Facility B............... 240 387 18 -- -- --
Company-obligated
redeemable preferred
securities of subsidiary
holding solely junior
subordinated deferrable
debentures offered
hereby................... -- -- -- 186 300 14
Shareholder's equity...... 152 245 11 206 332 15
------------- ------ --- ------------- ------ ---
Total Capitalization....... (Pounds)1,380 $2,224 100% (Pounds)1,380 $2,224 100%
============= ====== === ============= ====== ===
Short-term debt and current
portion of long-term debt. (Pounds) 72 $ 116
</TABLE>
- --------
(1) Solely for the convenience of the reader, UK pounds sterling amounts have
been translated into US dollars at the Noon Buying Rate on September 30,
1997 of $1.6117 = (Pounds)1.00
EXCHANGE RATES
The following table sets out, for the periods indicated, certain information
concerning the exchange rates between UK pounds sterling and US dollars based
on the Noon Buying Rate in New York City for cable transfers in pounds
sterling as certified for customs purposes by the Federal Reserve Bank of New
York.
<TABLE>
<CAPTION>
FISCAL YEAR PERIOD END AVERAGE(1) HIGH LOW
----------- ---------- ---------- ---- ----
($ PER (Pounds)1.00)
<S> <C> <C> <C> <C>
1993............................................ 1.51 1.68 1.99 1.42
1994............................................ 1.49 1.50 1.57 1.48
1995............................................ 1.62 1.57 1.64 1.51
1996............................................ 1.53 1.56 1.61 1.51
1997............................................ 1.64 1.60 1.71 1.51
1998 through September 30, 1997................. 1.61 1.63 1.69 1.58
</TABLE>
- --------
(1) The average of the Noon Buying Rates in effect on the last business day of
each month during the relevant period.
26
<PAGE>
SELECTED FINANCIAL DATA
The income statement data of the Predecessor Company for each of the fiscal
years ended 1993, 1994, 1995 and 1996, and for the period from April 1, 1996
to January 31, 1997, and the balance sheet data of the Predecessor Company as
of the end of fiscal years 1993, 1994, 1995 and 1996 have been derived from
the audited consolidated financial statements of the Predecessor Company. The
income statement data for the period from October 9, 1996 to March 31, 1997
and the balance sheet data as of March 31, 1997 for the Successor Company have
been derived from the audited consolidated financial statements of the
Successor Company. The unaudited consolidated income statement data for the
six month period ended September 30, 1997 and the balance sheet data as of
September 30, 1997 have been derived from the financial statements of the
Successor Company. In the opinion of the management of the Company, all
adjustments (consisting of only normal recurring adjustments) considered
necessary for a fair presentation of the condensed unaudited consolidated
financial statements present fairly the financial position and the results of
operations for the interim periods presented. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
consolidated financial statements and notes thereto of the Predecessor Company
and the Successor Company included elsewhere in this Prospectus.
The unaudited pro forma condensed consolidated income statement and other
data presented below for Pro Forma Fiscal Year 1997 reflect the acquisition by
the Company of London Electricity as if it had occurred as of April 1, 1996.
Such unaudited pro forma condensed consolidated income statement and other
data have been prepared by the Successor Company based upon assumptions deemed
proper by it and reflect a preliminary allocation of the purchase price paid
for the Predecessor Company. The unaudited pro forma condensed consolidated
income statement and other data presented herein are shown for illustrative
purposes only and are not necessarily indicative of the future results of
operations of the Successor Company or of the results of operations of the
Successor Company that would have actually occurred had the transaction
occurred as of April 1, 1996. This information should be read in conjunction
with the unaudited pro forma condensed consolidated statement of income and
notes thereto of the Successor Company included elsewhere in this Prospectus.
27
<PAGE>
PREDECESSOR COMPANY
UK GAAP (1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS,
EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Turnover.............. (Pounds)1,367 (Pounds)1,309 (Pounds) 1,209 (Pounds)1,188
Operating costs....... (1,215) (1,137) (1,046) (1,115)
------------- ------------- -------------- -------------
Operating profit...... 152 172 163 73
Exceptional item(2)... (20) -- (10) 66
Other income(3)....... 18 20 21 142
Interest, net......... (4) (5) (1) (5)
Tax on profit......... (38) (45) (23) (89)
------------- ------------- -------------- -------------
Profit for financial
period............... (Pounds)108 (Pounds)142 (Pounds)150 (Pounds)187
============= ============= ============== =============
<CAPTION>
MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds)709 (Pounds)769 (Pounds)823 (Pounds)794
Current assets........ 291 453 338 455
Creditors: Amounts
falling due within
one year............. (263) (265) (343) (485)
------------- ------------- -------------- -------------
Total assets less
current liabilities.. 737 957 818 764
Creditors: Amounts
falling due in more
than
one year............. (73) (190) (115) (211)
Provisions for
liabilities and
charges.............. (42) (50) (45) (53)
------------- ------------- -------------- -------------
Total shareholders'
funds................ (Pounds)622 (Pounds)717 (Pounds)658 (Pounds)500
============= ============= ============== =============
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- -------------- -------------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds)157 (Pounds)205 (Pounds)187 (Pounds)293
EBITDA(5)............. 189 240 225 334
Cash flow from
operations(6)........ 251 299 155 103
Ratio of earnings to
fixed charges(7)..... 11 10 12 15
</TABLE>
28
<PAGE>
PREDECESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 31, APRIL 1, 1996 TO
-------------------- JANUARY 31,
1995 1996 1997(8)
------------- --------------------- ----------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds)1,209 (Pounds)1,188 (Pounds)1,116
Operating income...... 166 102 107
National Grid
transaction.......... -- 450 --
Interest expense, net. (1) (5) (17)
Other, net............ 22 22 4
Provision for income
taxes................ (57) (110) (32)
------------- ------------- -------------
Income before
extraordinary item... 130 459 62
Extraordinary item.... (9) -- --
------------- ------------- -------------
Net income............ (Pounds) 121 (Pounds) 459 (Pounds) 62
============= ============= =============
<CAPTION>
MARCH 31, 1996
---------------------
(AMOUNTS IN MILLIONS)
<S> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds) 784
Total assets.......... 1,349
Total stockholder's
equity............... 448
Long-term debt........ 198
Short-term debt....... 96
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 31, APRIL 1, 1996 TO
-------------------- JANUARY 31,
1995 1996 1997(8)
------------- --------------------- ----------------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 201 (Pounds) 586 (Pounds) 120
EBITDA(5)............. 241 628 159
Cash flow from
operations........... 123 191 102
Ratio of earnings to
fixed charges(7)..... 12.1 30.0 4.3
</TABLE>
29
<PAGE>
BUSINESS SEGMENTS
PREDECESSOR COMPANY
UK GAAP(1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------
1993 1994 1995 1996
------------- ------------- ------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
TURNOVER:
Electricity
distribution......... (Pounds) 361 (Pounds) 367 (Pounds) 379 (Pounds) 357
Electricity supply.... 1,266 1,228 1,114 1,189
National Grid
transaction.......... -- -- -- (91)
Other................. 86 51 44 59
Intra-business(9)..... (346) (337) (328) (326)
------------- ------------- ------------- -------------
Total............... (Pounds)1,367 (Pounds)1,309 (Pounds)1,209 (Pounds)1,188
============= ============= ============= =============
OPERATING PROFIT (LOSS):
Electricity
distribution......... (Pounds) 152 (Pounds) 154 (Pounds) 136 (Pounds) 148
Electricity supply.... 7 6 14 9
National Grid
transaction.......... -- -- -- (97)
Other................. (7) 12 13 15
Intra-business(9)..... -- -- -- (2)
------------- ------------- ------------- -------------
Total............... (Pounds) 152 (Pounds) 172 (Pounds) 163 (Pounds) 73
============= ============= ============= =============
</TABLE>
30
<PAGE>
BUSINESS SEGMENTS
PREDECESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996
YEAR ENDED MARCH 31, TO
---------------------------- JANUARY 31,
1995 1996 1997
------------- ------------- -------------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C>
OPERATING REVENUE:
Electricity distribution......... (Pounds) 379 (Pounds) 357 (Pounds) 275
Electricity supply............... 1,114 1,098 1,051
Other............................ 44 59 68
Intra-business(9)................ (328) (326) (278)
------------- ------------- -------------
Total.......................... (Pounds)1,209 (Pounds)1,188 (Pounds)1,116
============= ============= =============
OPERATING INCOME:
Electricity distribution......... (Pounds) 141 (Pounds) 158 (Pounds) 101
Electricity supply............... 11 (70) (1)
Other............................ 14 16 7
Intra-business(9)................ -- (2) --
------------- ------------- -------------
Total.......................... (Pounds) 166 (Pounds) 102 (Pounds) 107
============= ============= =============
</TABLE>
31
<PAGE>
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
PRO FORMA -----------------------------------
PERIOD FROM INCEPTION FISCAL YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
(OCTOBER 9, 1996) TO MARCH 31, 1997 1996 1997(12)
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
---------------------- --------------------- -----------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
------------- ------- ------------- ------ ------------- ------------ ------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds) 234 $ 377 (Pounds)1,350 $2,176 (Pounds) 617 (Pounds) 548 $ 883
Operating income...... 32 52 112 181 76 61 98
Other income
(expense):
Interest expense,
net................ (13) (21) (93) (150) (8) (55) (88)
Other, net.......... (6) (10) 5 8 3 2 3
Windfall profits
tax................ -- -- -- -- -- (140) (226)
(Provision) benefit
for income taxes..... (5) (8) (8) (13) (19) 36 58
------------- ------- ------------- ------ ------------- ------------ ------
Net income (loss)..... (Pounds) 8 $ 13 (Pounds) 16 $ 26 (Pounds) 52 (Pounds) (96) $ (155)
============= ======= ============= ====== ============= ============ ======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)(12)
---------------------- ---------------------------
(Pounds) $(11) (Pounds) $(11)
------------- ------- ------------- ------------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Fixed assets, net..... (Pounds)1,347 $ 2,171 (Pounds)1,358 $ 2,189
Total assets.......... 2,669 4,301 2,646 4,264
Total stockholder's
equity............... 248 400 152 245
Long-term debt........ 1,143 1,842 1,228 1,979
Short-term debt....... 162 261 72 116
<CAPTION>
SIX MONTHS ENDED
PRO FORMA -----------------------------------
PERIOD FROM INCEPTION FISCAL YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
(OCTOBER 9, 1996) TO MARCH 31, 1997 1996 1997(12)
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
---------------------- --------------------- -----------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
------------- ------- ------------- ------ ------------- ------------ ------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 34 $ 55 (Pounds) 135 $ 218 (Pounds) 87 (Pounds) (77) $ (124)
EBITDA(5)............. 42 68 215 347 110 (38) (61)
Ratio of earnings to
fixed charges(7)(14). 1.6 1.6 1.2 1.2 5.2 -- --
Cash flow from
operations........... 64 103 122 40 64
Cash provided by (used
in) investing
activities........... (1,203) (1,939) (48) (12) (20)
Cash provided by (used
in) financing
activities........... 1,165 1,877 (38) (5) (8)
</TABLE>
32
<PAGE>
BUSINESS SEGMENTS
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------------
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR SEPTEMBER 30, SEPTEMBER 30,
OCTOBER 9, 1996 ENDED MARCH 31, 1997 1996 1997
TO MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
----------------------------------------------------------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds)(13) (Pounds) $(11)
-------------- ----------------------- ---------------------- ----------- -----
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Electricity
distribution......... (Pounds) 61 $ 98 (Pounds) 336 $ 541 (Pounds)155 (Pounds)151 $ 243
Electricity supply.... 213 343 1,265 2,039 574 501 807
Other................. 11 18 78 126 48 34 55
Intra-business(9)..... (51) (82) (329) (530) (160) (138) (222)
-------------- ------- -------------- ------- ----------- ----------- -----
Total............... (Pounds) 234 $ 377 (Pounds) 1,350 $ 2,176 (Pounds)617 (Pounds)548 $ 883
============== ======= ============== ======= =========== =========== =====
OPERATING INCOME:
Electricity
distribution......... (Pounds) 18 $ 30 (Pounds) 92 $ 148 (Pounds) 65 (Pounds) 44 $ 71
Electricity supply.... 7 11 6 10 3 5 8
Other................. 7 11 14 23 8 12 19
-------------- ------- -------------- ------- ----------- ----------- -----
Total............... (Pounds) 32 $ 52 (Pounds) 112 $ 181 (Pounds) 76 (Pounds) 61 $ 98
============== ======= ============== ======= =========== =========== =====
<CAPTION>
MARCH 31, 1997
-------------------------
(Pounds) $(11)
-------------- ---------
(AMOUNTS IN MILLIONS)
<S> <C> <C>
ASSETS(15):
Electricity
distribution......... (Pounds) 1,766 $ 2,846
Electricity supply.... 544 877
Other................. 359 578
-------------- -------
Total............... (Pounds)2,669 $ 4,301
============== =======
</TABLE>
- -------
(1) The financial data for the Predecessor Company were derived from
financial statements for the Predecessor Company prepared in accordance
with UK GAAP and US GAAP. The principal differences between the
Predecessor Company's US GAAP and UK GAAP financial statements relate to
the treatment of goodwill, pension costs and deferred taxes and the
timing of recognition of restructuring charges and dividend accruals.
(2) Exceptional items recorded in 1993, 1995 and 1996 were caused primarily
by the following:
1993--Withdrawal from the electrical products retailing business (write-down
of fixed asset and stock values, and provisions for losses and further
costs expected until completely closed)
1995--Restructuring charges recorded for the regulated electricity business
1996--London Electricity's distribution of its ownership interest in NGG to
its shareholders and related transactions
(3) Other income in 1996 includes (Pounds)144 million of income from London
Electricity's investment in NGG.
(4) EBIT equals income from continuing operations before the sum of interest
expense and income taxes. This information is provided for informational
purposes only and such measure should not be construed as an alternative
to operating income (as determined in accordance with US GAAP) as an
indicator of operating performance, or as an alternative to cash flows
from operating activities (as determined in accordance with US GAAP) as a
measure of liquidity. EBIT is a widely accepted financial indicator of a
company's ability to incur and service debt. However, this measure of
EBIT may not be comparable to similar measures presented by other
companies.
(5) EBITDA equals income from continuing operations before the sum of
interest expense, income taxes, depreciation and amortization. This
information is provided for informational purposes only and such measure
should not be construed as an alternative to operating income (as
determined in accordance with US GAAP) as an indicator of operating
performance, or as an alternative to cash flows from operating activities
(as determined in accordance with US GAAP) as a measure of liquidity.
EBITDA is a widely accepted financial indicator of a company's ability to
incur and service debt. However, this measure of EBITDA may not be
comparable to similar measures presented by other companies.
(6) Cash flow from operations increased in fiscal year 1994 primarily as a
result of customers who paid bills in advance in order to avoid paying
value added taxes which were introduced by the British government.
(7) The ratio of earnings to fixed charges is computed as the sum of pretax
income from continuing operations plus fixed charges divided by fixed
charges. Fixed charges consist of interest expense and the estimated
interest portion of rent expense.
(8) In February 1997, the Successor Company obtained effective control of the
Predecessor Company pursuant to the Successor Company's offer to acquire
the Predecessor Company.
(9) Intra-business eliminations consist primarily of intra-business
transactions between the distribution business and the supply business
and intercompany transactions between ancillary support businesses.
Pursuant to the UK regulatory framework, London Electricity's
distribution of electricity to its supply customers within its own
Franchise Area is billed to London Electricity's supply business, which
in turn incorporates the distribution charge into the bill sent to the
final end user.
(10) Pro Forma Fiscal Year 1997 financial information gives effect to the
acquisition of the Predecessor Company by the Successor Company as if it
had occurred on April 1, 1996. See Unaudited Condensed Consolidated
Statement of Operations included elsewhere in this Prospectus.
(11) Solely for the convenience of the reader, pounds sterling amounts have
been translated into US dollars at the Noon Buying Rate on September 30,
1997 of $1.6117=(Pounds)1.00.
(12) Includes effect of windfall profits tax provision of (Pounds)140 million
and the effect of the reduction in the UK statutory income tax rate from
33% to 31%.
(13) The results of operations for the six months ended September 30, 1996
represent the historical amounts of the Predecessor Company. Such results
do not include the effects of acquisition adjustments.
(14) Earnings for the six months ended September 30, 1997 were insufficient to
cover fixed charges by (Pounds)132 million ($213 million).
(15) Includes distribution license, net of amortization, and prepaid pension
costs of (Pounds)830 million and (Pounds)145 million, respectively, at
March 31, 1997 and (Pounds)812 million and (Pounds)146 million,
respectively, at September 30, 1997.
33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with the consolidated
and condensed financial statements and the notes thereto of Entergy London
Investments plc and subsidiaries (the "Company" or "Successor Company") and
with the consolidated and condensed financial statements and the notes thereto
of London Electricity plc and its subsidiaries (the "Predecessor Company" or
"London Electricity") and "Selected Financial Data" included elsewhere in this
Prospectus. The consolidated and condensed financial statements of the
Successor Company and the Predecessor Company discussed in this section are
presented in accordance with US GAAP.
INTRODUCTION
Background
The Company was incorporated as a public limited company under the laws of
England and Wales in October 1996, as a vehicle for the acquisition of London
Electricity. In February 1997, the Company gained effective control of London
Electricity, having acquired over 90% of its shares. The Company subsequently
replaced a portion of London Electricity's board of directors and certain
senior managers with officers and employees of companies from within Entergy.
In May 1997, the Company acquired the remaining shares of London Electricity.
Total consideration for the acquisition was approximately (Pounds)1.3 billion.
The Company's sole significant asset is the stock of London Electricity. The
Company has no operations outside of its investment in London Electricity.
Accounting for the Acquisition
The Company's acquisition of London Electricity effective February 1, 1997
was accounted for as a purchase in accordance with US GAAP. Accordingly, the
results of operations of London Electricity have been consolidated into the
results of operations for the Company beginning on such date. In accordance
with the purchase method of accounting, the Company has allocated the price
paid for London Electricity to London Electricity's assets and liabilities
based on their estimated fair market values with the remainder allocated to
London Electricity's distribution license which represents an other
identifiable intangible asset. The assets and liabilities acquired as of
February 1, 1997 were as follows:
<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S> <C>
Current assets.............................................. (Pounds) 323.4
Network assets.............................................. 1,332.0
Other long term assets...................................... 999.3
Current liabilities......................................... (383.7)
Long term debt.............................................. (208.4)
Other long term liabilities................................. (802.5)
---------------
Total purchase price...................................... (Pounds)1,260.1
===============
</TABLE>
The principal adjustments to London Electricity's historical cost of its
assets and liabilities include: (a) increase in the value of network assets
((Pounds)488.6 million); (b) increase in pension asset for defined benefit
pension plan under US GAAP ((Pounds)67.8 million); (c) recordation of
distribution license ((Pounds)833.7 million); and (d) recordation of liability
for unfavorable long term contracts ((Pounds)99.5 million). Additionally, the
Company provided for the deferred income tax effect of these adjustments at a
rate of 33% which is included in other long term liabilities. The Company is
amortizing the adjustments for network assets and the distribution license
over estimated useful lives of 40 years and the adjustment for unfavorable
long term contracts over their remaining lives ranging from 14 to 18 years.
34
<PAGE>
The Company's asset recorded for the defined benefit pension plan will be
increased or decreased on a prospective basis based on future actuarial
studies of the plan's projected benefit obligation and fair value of pension
plan assets. The liability for unfavorable long term contracts is based on the
estimated fair market value of these contracts over the present value of the
future cash flows under the contracts at the applicable discount rates and
prices. Although amortization of the liability for unfavorable long-term
contracts will reduce the expense related to these contracts, it will not
impact the Company's actual payments or cash flow obligations.
London Electricity has utilized a portion of the pension plan surplus to
increase benefits to members and reduce employer and employee contributions. A
recent court ruling in the UK upheld such uses of pension surplus. However,
the decision is under appeal and should the decision be reversed on appeal,
the Company could be required to repay pension surplus utilized and recompute
the Company's prepaid pension asset which was (Pounds)146 million at September
30, 1997. The recomputation of the prepaid pension asset prior to February
1998 would result in a corresponding increase in the distribution license and
an increase in license amortization expense over its 40-year life. A
recomputation subsequent to February 1998 would be recognized as an expense in
the Company's results of operations in the period in which such recomputation
occurs. Additionally, as of September 30, 1997, a tax valuation of fixed
assets had not yet been prepared. Management expects that this tax valuation
will be completed by December 31, 1997. The outcome of the tax valuation could
result in a reallocation of amounts between the Company's distribution license
and fixed assets. Such reallocation would not have a significant effect on the
Company's liquidity, results of operations or financial condition. The
Company's allocation of purchase price is preliminary pending the outcome of
these matters.
The unaudited pro forma information presented for Pro Forma Fiscal Year 1997
consists of the historical results of operations of the Predecessor Company
prior to the acquisition and the results of operations of the Successor
Company subsequent to the acquisition, both of which have been adjusted for
the effects of the acquisition as though it had taken place on April 1, 1996.
The primary effects of the acquisition that are reflected in Pro Forma Fiscal
Year 1997 include: (a) an increase in depreciation and amortization expense
resulting from applying the purchase method of accounting to the Predecessor
Company's fixed assets and distribution license based on 40-year useful lives,
(b) reduction in other deductions to eliminate the Predecessor Company's
acquisition defense costs, (c) additional interest associated with debt
incurred to purchase the Predecessor Company at an assumed average rate of
7.3%, and (d) recognition of income tax expense based on a 33% UK statutory
income tax rate.
The information for Pro Forma Fiscal Year 1997 has been prepared for
illustrative purposes only and, because of its nature, cannot give a complete
picture of the Company's results of operations for the relevant period had the
transactions been consummated on the date assumed and does not project the
Company's financial position or results of operations for any future date or
period.
National Grid Group Transactions
During fiscal year 1996, London Electricity, as well as each of the other 11
REC businesses in the UK, reorganized their interests in NGG. London
Electricity distributed the majority of its shares in NGG to its shareholders.
As part of this distribution, London Electricity revalued these shares to fair
market value and recognized a gain of approximately (Pounds)266 million and
received special dividends of (Pounds)131 million and rights dividends of
(Pounds)3.0 million from NGG which were also recognized as income.
Additionally, London Electricity received approximately (Pounds)70.1 million
as a result of NGG's sale of its pumped storage business which was also
recognized as a gain in fiscal year 1996. London Electricity has retained
shares of NGG for the purpose of establishing an employee stock ownership plan
("ESOP") for its employees who were participants in London Electricity stock
option and sharesave plans to compensate them for any dimunition in value in
London Electricity shares as a result of NGG
35
<PAGE>
distributions. The cost of such ESOP shares has been reflected as expense of
(Pounds)17.3 million in the fiscal year 1996 results of operations. As a
result of all of the above, London Electricity recognized a total nonrecurring
gain of (Pounds)453 million ((Pounds)366 million after tax effect) in the
fiscal year 1996 results of operations. As part of the agreement among the
shareholders of NGG, each of the RECs agreed to provide a discount to each of
their respective Franchise Supply Customers which, together with the
associated reduction in the Fossil Fuel Levy (as defined in "The Electric
Utility Industry in Great Britain"), produced a credit on each Franchise
Supply Customer's bill of just over (Pounds)50. The cost to London Electricity
of providing this discount amounted to (Pounds)83 million (net of the
reduction in the Fossil Fuel Levy of (Pounds)8 million) which was credited to
customers in the last quarter of fiscal year 1996. The effect of the refund
was to reduce operating revenues, cost of sales, gross profit and net income
by (Pounds)91 million, (Pounds)8 million, (Pounds)83 million and (Pounds)56
million, respectively. The net dividends received from NGG and the net after
tax proceeds from the sale of NGG's pumped storage business were sufficient to
offset the after tax cash cost of providing the (Pounds)50 per customer
discount to its Franchise Supply Customers and taxation cost of distributing
its NGG investment to its shareholders.
SIGNIFICANT FACTORS AND KNOWN TRENDS
Competition and Industry Challenges
On April 1, 1995, 1996 and 1997 certain reductions in allowed distribution
revenues were made by the Regulator. London Electricity's allowed distribution
revenues were reduced by 14% and 11% on April 1, 1995 and April 1, 1996,
respectively, following reviews by the Regulator. On April 1, 1997, London
Electricity's allowed distribution revenues were decreased an additional 3%,
and there will be further annual reductions of 3% on April 1, 1998 and 1999.
London Electricity plans to pursue a number of cost efficiency initiatives
that are intended to result in operating and cost savings in an attempt to
partially offset the expected price decreases and potential future additional
price reductions. Such efficiencies will include voluntary early retirement
programs, work force reductions and labor cost realignment and are expected to
generate substantial costs savings, when fully implemented by fiscal year
2001. The one-time cost of such savings will be approximately (Pounds)35
million, which has been provided in the Company's March 31, 1997 balance
sheet.
The potential exists for additional distribution price reductions based upon
further review by the Regulator. The cost efficiency initiatives may not
result in sufficient savings to offset price reductions. Price reductions are
mitigated by the inclusion of the general index for inflation in the
determination of allowed revenues.
Until April 1, 1998, London Electricity has an exclusive right to supply
electricity to customers in its Franchise Area with demand of less than 100
kW. At that time this segment of the supply business will be open to
competition, subject to a six-month transition period. Although the advent of
competition for all customers in the supply business in 1998 will permit all
RECs to compete on a national level, London Electricity may be more sensitive
to competition from its neighboring RECs due to its high customer
concentration. London Electricity is in the process of developing its strategy
to meet expanded competition in its supply business, which will focus on
active marketing and customer service to defend its residential customer base
and expanding product offerings to larger business customers. Such strategy
may include the development of strategic alliances in the provision of energy
and related services and the increased use of hedging of electricity prices to
mitigate the increased risk from the expansion of competition. There can be no
assurance that this strategy will be successful in avoiding a significant loss
of customers of London Electricity's supply business.
The Company expects to incur approximately (Pounds)30 million (a portion of
which is expected to be capitalized) in fiscal year 1998 for re-engineering
and technology costs to prepare infrastructure services for full competition
in supply from April 1998. The Company, along with the other PES license
36
<PAGE>
holders, petitioned the Regulator to recover such costs from customers. In the
Regulator's supply price restraint proposals published on October 16, 1997,
the Regulator proposed, within the Supply Price Control Formula (as defined
herein), to provide for an annual allowance for each PES license holder over
the 5 years ending March 31, 2003 of (Pounds)4.6 million to cover data
management services set-up costs plus an annual allowance of (Pounds)1 million
plus (Pounds)1 per customer to cover operating costs for the period 1998
through 2000. London Electricity estimates that these proposals will result in
an aggregate allowance for London Electricity of approximately (Pounds)7.64
million per annum for the period 1998 through 2000. London Electricity is
currently in the process of evaluating these proposals and their likely effect
on London Electricity if they are accepted. In fiscal year 1998, London
Electricity will also incur (Pounds)5 million costs as its contribution to
Pool settlement software design to interface with REC's data managemet
software. These costs are expected to be recouped through Pool settlement
charges.
UK Tax Law Changes
On July 31, 1997, the UK Government enacted certain changes in tax law
including a one-time windfall profits tax on privatized industries and a
reduction in rates of corporation tax on income from 33% to 31%. London
Electricity has estimated the impact of the windfall profits tax at
approximately (Pounds)140 million, which will not be deductible for UK
corporation tax purposes. The tax will be payable in two equal installments on
December 1, 1997 and 1998. London Electricity has also estimated the impact of
the reduction in corporation tax rates which will result in a one-time
reduction in deferred income tax liabilities and a corresponding reduction in
income tax expense of approximately (Pounds)38 million. The liability for the
windfall profits tax (with a corresponding charge against income) and the
reduction in London Electricity's deferred corporation tax liability (with a
corresponding reduction in corporation tax expense) was recorded in the
Company's quarter ended September 30, 1997.
Affiliate Businesses and Other Investments
London Electricity plans to continue to expand its involvement in non-core
businesses. Included in these businesses are the ownership, operation, and
maintenance of private distribution networks at the major London area airports
and at a number of rail facilities and the eventual ownership and operation of
electric distribution assets of the Channel Tunnel Rail Link.
London Electricity's PES license currently limits the extent of the
generation capacity in which London Electricity may hold an interest without
the prior consent of the Regulator to 700 MW. After taking into account London
Electricity's current ownership interest in Barking Power and other generation
assets, London Electricity could make additional generation investment of
approximately 565 MW in capacity. Under the terms of the PES license,
investments made in generating assets in the UK by affiliates of London
Electricity would count toward the own generation limit. London Electricity
has applied to the Regulator for an exception from this license condition for
certain planned investments by other Entergy subsidiaries that would exceed
London Electricity's own generation limit, but cannot predict whether the
application will be granted.
Additional investments by Entergy in the Company and London Electricity are
subject to regulation under the Public Utility Holding Company Act of 1935, as
amended.
Derivative Financial Instruments
Derivative financial instruments are used by the Company on a limited basis.
The Company utilizes such instruments only to mitigate business risks and not
for speculative purposes. See "Long-Term Debt" footnote to the Company's March
31, 1997 consolidated financial statements for additional information on such
instruments.
The Company maintains its cash balances in pounds sterling. However, the
Company's obligations related to the Perpetual Junior Subordinated Debentures
will be due in US Dollars. The Company is not currently engaged in any hedging
of currency risks; however it expects to utilize derivative financial
instruments to hedge a portion of the currency risks associated with this
exposure.
37
<PAGE>
Environmental Factors
The UK Environmental Protection Act 1990 addresses waste management issues
and imposes certain obligations on companies which handle and dispose of
waste. Some of London Electricity's distribution activities produce waste, but
London Electricity believes that it has taken and continues to take measures
to comply with the applicable laws and governmental regulations for the
protection of the environment. There are no material legal or administrative
proceedings pending against London Electricity or the Company with respect to
any environmental matter.
Inflation and Interest Rates
Inflation neither has had a significant impact on London Electricity in the
last three years, nor is expected to do so in the foreseeable future. London
Electricity's revenues from regulated activities are adjusted based on factors
which include an index for inflation in costs of operations.
Changes in interest rates have not had a significant impact on London
Electricity in the last three years. However, the Company has entered into
debt facilities which bear interest at variable rates. To mitigate the effects
of interest rate changes, the Company has entered into interest rate swap
agreements. See "Long-Term Debt" footnote to the Company's March 31, 1997
consolidated financial statements for additional information on such
agreements.
Year 2000 Issues
Like many companies, the Company is currently evaluating its computer
software and databases to determine the extent to which modifications are
required to prevent problems related to the year 2000, and the resources which
will be required to make such modifications. These problems could result in
malfunctions in certain software and databases with respect to dates on or
after January 1, 2000 unless corrected.
RESULTS OF OPERATIONS
Six Months Ended September 30, 1997 Compared with Six Months Ended September
30, 1996
The results of operations for the six months ended September 30, 1996
represent the historical amounts of the Predecessor Company. Such results do
not include the effects of acquisition adjustments described above under
"--Introduction--Accounting for the Acquisition".
Earnings
Income from operations was (Pounds)61 million for the six months ended
September 30, 1997, a decrease of (Pounds)15 million from the six months ended
September 30, 1996. This decrease was due principally to revenues being lower
by (Pounds)69 million during the six months ended September 30, 1997, compared
to the six months ended September 30, 1996. Partially offsetting this decrease
was a decrease of (Pounds)54 million in operating expenses, principally cost
of sales, in the six months ended September 30, 1997, compared to the six
months ended September 30, 1996.
Income from operations by segments for the six months ended September 30,
1997 was (Pounds)44 million, (Pounds)5 million, and (Pounds)12 million for the
distribution, supply, and other segments, respectively. Income from those
segments in the six months ended September 30, 1996 was (Pounds)65 million,
(Pounds)3 million, and (Pounds)8 million, respectively.
Net income decreased by (Pounds)148 million, from (Pounds)52 million in the
six months ended September 30, 1996, to a loss of (Pounds)96 million in the
six months ended September 30, 1997. The net loss for the period ended
September 30, 1997 includes a one-time charge of (Pounds)140 million for the
windfall profits tax enacted by the British government in July 1997. The
windfall profits tax is not deductible for UK corporation tax purposes. This
charge was partially offset by a reduction of (Pounds)38 million in the
Company's deferred income tax liability, in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," due to
the government also reducing the UK
38
<PAGE>
corporation tax rate from 33% to 31%, effective April 1, 1997. Acquisition
related adjustments including increased depreciation and amortization of
approximately (Pounds)17 million ((Pounds)12 million after tax effect) and
increased interest expense, principally on acquisition debt, of approximately
(Pounds)45 million ((Pounds)31 million after tax effect) also contributed to
the reduction in net income.
Revenues
Operating revenues decreased by (Pounds)69 million (11%) from (Pounds)617
million in the six months ended September 30, 1996 to (Pounds)548 million
during the six months ended September 30, 1997, as follows:
<TABLE>
<CAPTION>
OPERATING REVENUES
INCREASE (DECREASE)
FROM SIX MONTHS
ENDED SEPTEMBER 30,
1996 TO SIX MONTHS
ENDED SEPTEMBER 30,
1997
-------------------
((Pounds) MILLIONS)
<S> <C>
Electricity distribution................................. (4)
Electricity supply....................................... (73)
Other.................................................... (14)
Intra-business........................................... 22
---
Total operating revenues............................... (69)
===
</TABLE>
Two principal factors determine the amount of revenues produced by the main
electricity distribution business: the unit price of the electricity
distributed (which is controlled by the Distribution Price Control Formula)
and the number of electricity units distributed which depends on the demand of
London Electricity's customers for electricity within its Franchise Area.
Demand varies based upon weather conditions and economic activity. Following
London Electricity's regulatory distribution price review in 1994, London
Electricity's allowable expected distribution revenues were reduced by 14%,
beginning in fiscal year 1996. Subsequently, the Regulator announced a further
allowed distribution price reduction of 11% beginning at the start of fiscal
year 1997, and an additional 3%, beginning April 1, 1997. These price
reductions have reduced and will continue to reduce London Electricity's
distribution revenues. See "The Electric Utility Industry in Great Britain."
Revenues from the distribution business decreased by (Pounds)4 million (3%)
from (Pounds)155 million for the six months ended September 30, 1996 to
(Pounds)151 million for the six months ended September 30, 1997, principally
due to a decrease in the maximum allowable average price of units distributed
as a result of application of the revised Distribution Price Control Formula.
A 3% increase in sales volume partially offset the average price decrease.
Two principal factors determine the amount of revenues produced by the
supply business: the unit price of the electricity supplied (which, in the
case of the Franchise Supply Customers, is controlled by the Supply Price
Control Formula) and the number of electricity units supplied. London
Electricity is expected to have the exclusive right to supply all Franchise
Supply Customers in its Franchise Area until at least April 1, 1998.
Franchise Supply Customers, who are generally residential and small
commercial customers, comprised 54% of total sales volume for the six months
ended September 30, 1997. The volume of unit sales of electricity for
Franchise Supply Customers is influenced largely by the number of customers in
London Electricity's Franchise Area, weather conditions and prevailing
economic conditions. Unit sales to Non-Franchise Supply Customers, who are
typically large commercial and industrial businesses, constituted 46% of total
sales volume for the six months ended September 30, 1997. Sales to Non-
Franchise Supply Customers are determined primarily by the success of the
supply business in contracting to supply customers with electricity who are
located both inside and outside London Electricity's Franchise Area.
39
<PAGE>
During the six months ended September 30, 1997, the number of electricity
units supplied decreased by 2% and total revenues produced by the supply
business decreased by 13% ((Pounds)73 million) to (Pounds)501 million from
(Pounds)574 million for the six months ended September 30, 1996. Revenues
decreased principally due to lower average unit prices for both Franchise
Supply Customers and Non-Franchise Supply Customers. Reductions in revenue
from Franchise Supply Customers is due primarily to pass-through of reduced
costs of purchased power. Reductions in revenue from Non-Franchise Supply
Customers is due primarily to competitive pressures in this market as
purchased power costs decline.
Other revenues for the six months ended September 30, 1997 were (Pounds)34
million, a decrease of (Pounds)14 million compared to the same period in 1996.
This decrease was due principally to decreased provision of services to the
distribution segment, which are eliminated in the intra-business elimination.
The remaining change in the intra-business elimination was due primarily to a
reduction in distribution revenue charged to the London Electricity supply
business due to increased third party competition in the supply business and
reductions in distribution prices due to the application of the revised
Distribution Price Control Formula.
Operating Expenses
Operating expenses decreased by (Pounds)54 million (10%) from (Pounds)541
million in the six months ended September 30, 1996 to (Pounds)487 million in
the six months ended September 30, 1997. This decrease was due principally to
an approximate (Pounds)72 million reduction in cost of sales due to reductions
of 7% in units supplied to Non-Franchise Supply Customers partially offset by
an increase of 3% in units supplied to Franchise Supply Customers.
Additionally, average cost per unit supplied decreased by approximately 16%,
due primarily to reductions in the cost of the Fossil Fuel Levy. This decrease
was partially offset by an increase in depreciation and amortization expense
of (Pounds)17 million related to the acquisition adjustments for fixed assets
and distribution license based on 40-year useful lives.
Interest Expense, Net
Interest expense, net increased by (Pounds)47 million from (Pounds)8 million
during the six months ended September 30, 1996 to (Pounds)55 million in the
six months ended September 30, 1997, principally as a result of the financing
costs associated with the debt facilities entered into to finance the
acquisition of London Electricity.
Income from Operations
Income from operations decreased by (Pounds)15 million (20%), from
(Pounds)76 million for the six months ended September 30, 1996, to (Pounds)61
million for the same period in 1997. This decrease was comprised of a decrease
of (Pounds)21 million in the distribution segment and increases of (Pounds)2
million and (Pounds)4 million in the supply and other segments, respectively.
The decrease in distribution income for operations was principally due to a
reduction of (Pounds)4 million in distribution revenues and additional
depreciation and amortization expense of (Pounds)17 million attributable to
acquisition adjustments for fixed assets and the distribution license based on
40-year useful lives.
Windfall Profits Tax
The Company recorded a one-time charge of (Pounds)140 million during the six
months ended September 30, 1997 for the windfall profits tax enacted by the
British government in July 1997. This windfall profits tax is not deductible
for UK corporation tax purposes.
40
<PAGE>
Income Taxes
The Company's effective income tax rate was approximately 27% for both the
six months ended September 30, 1997, and 1996. The effective rate in the 1997
period was affected by the non-deductibility, for UK corporation tax purposes,
of the charge of (Pounds)140 million for windfall profits taxes. This impact
was partially offset by the (Pounds)38 million favorable impact of the
reduction in the UK corporation tax rate from 33% to 31%, as discussed above.
The Company's 27% effective income tax rate for the six months ended
September 30, 1996, compared to a statutory rate of 33%, was due principally
to reduced fiscal year March 1997 taxable income projections, based on a lower
statutory rate on dividends received.
Pro Forma Fiscal Year Ended March 31, 1997 Compared with Fiscal Year Ended
March 31, 1996
Earnings
Income from operations was (Pounds)112 million in Pro Forma Fiscal Year
1997, an increase of (Pounds)10 million from fiscal year 1996. The increase
was due principally to customer refunds of (Pounds)83 million in fiscal year
1996 in connection with the NGG demerger. Such customer refunds were partially
offset by (a) a decrease of (Pounds)18 million in gross profit from sales as a
result of increased revenues, offset by increased purchases of electricity
required to supply the increase in unit sales and by higher other costs of
sales, and (b) a (Pounds)54 million increase in operating expenses.
Income from operations by segments for Pro Forma Fiscal Year 1997 was
(Pounds)92 million, (Pounds)6 million, and (Pounds)14 million for the
distribution, supply, and other segments, respectively. Income (loss) from
those segments in fiscal year 1996 was (Pounds)158 million, (Pounds)(70)
million, and (Pounds)16 million, respectively.
Net income decreased by (Pounds)133 million, from (Pounds)149 million in
fiscal year 1996 (excluding the after tax effect of NGG transactions of
(Pounds)310 million) to (Pounds)16 million in Pro Forma Fiscal Year 1997. This
decrease was primarily due to the effects of the various acquisition
adjustments listed above in Pro Forma Fiscal Year 1997 and the reduction in
distribution operating revenues as discussed in "--Revenues" comparing the six
months ended September 30, 1997 with the six months ended September 30, 1996.
Revenues
Operating revenues, excluding the impact of the NGG refund, increased by
(Pounds)71 million (6%) from (Pounds)1,279 million in fiscal year 1996 to
(Pounds)1,350 million in Pro Forma Fiscal Year 1997 as follows:
<TABLE>
<CAPTION>
OPERATING REVENUES
INCREASE
(DECREASE) FROM
FISCAL YEAR 1996
TO PRO FORMA
FISCAL YEAR 1997
------------------
((Pounds)
MILLIONS)
<S> <C>
Electricity distribution.................................. (21)
Electricity supply........................................ 76
Other..................................................... 18
Intra-business............................................ (2)
---
Total operating revenues................................ 71
===
</TABLE>
The factors affecting distribution revenues are the same as those described
above in "--Revenues" comparing the six months ended September 30, 1997 with
the six months ended September 30, 1996. Revenues from the distribution
business decreased by (Pounds)21 million (6%) from (Pounds)357 million for
fiscal year 1996 to (Pounds)336 million for Pro Forma Fiscal Year 1997
principally due to a
41
<PAGE>
decrease in the maximum allowable average price of units distributed as a
result of the application of the revised Distribution Price Control Formula. A
3% increase in sales volume partially offset the average price decrease.
Two principal factors determine the amount of revenues produced by the
supply business: the unit price of electricity supplied (which, in the case of
Franchise Supply Customers, is controlled by the Supply Price Control Formula)
and the number of electricity units supplied. London Electricity is expected
to have the exclusive right to supply all Franchise Supply Customers in its
Franchise Area until at least April 1, 1998.
Franchise Supply Customers, who are generally residential and small
commercial customers, comprised 54% of total sales volume in Pro Forma Fiscal
Year 1997. The volume of unit sales of electricity for Franchise Supply
Customers is influenced largely by the number of customers in London
Electricity's Franchise Area, weather conditions and prevailing economic
conditions. Unit sales to Non-Franchise Supply Customers, who are typically
large commercial and industrial businesses, constituted 46% of total sales
volume in Pro Forma Fiscal Year 1997. Volume in this segment is determined
primarily by the success of the supply business in contracting to supply
customers with electricity who are located both inside and outside London
Electricity's Franchise Area.
During Pro Forma Fiscal Year 1997, the number of electricity units supplied
increased by 14% while total revenues produced by the supply business
increased by (Pounds)76 million (6%), to (Pounds)1,265 million from
(Pounds)1,189 million (excluding the impact of the NGG refund of (Pounds)91
million) for the fiscal year 1996. The relatively small revenue increase was
due to a majority of the increase in total units supplied to Non-Franchise
Supply Customers, who are larger energy users, charged at generally lower
average unit prices relative to those charged to Franchise Supply Customers.
This was partially offset by a 2% reduction in revenues from the franchise
supply market which was primarily due to lower average unit prices received as
units supplied increased slightly.
Other revenues in Pro Forma Fiscal Year 1997 totaled (Pounds)78 million, an
increase of (Pounds)19 million over fiscal year 1996. Such increase was
primarily a result of increased electrical contracting services to the
distribution segment by London Electricity Contracting Limited ("LEC"), the
revenues for which were eliminated in intra-business eliminations. Intra-
business eliminations decreased slightly from fiscal year 1996 to Pro Forma
Fiscal Year 1997 notwithstanding the LEC increase due principally to the
reductions in electricity distribution revenues (the majority of which are
charged to the supply segment) as discussed above.
Cost of Sales
Cost of sales increased by (Pounds)89 million (11%) from (Pounds)843 million
(excluding the NGG-related Fossil Fuel Levy reduction of (Pounds)8 million) in
fiscal year 1996 to (Pounds)932 million in Pro Forma Fiscal Year 1997. This
increase was principally the result of an increase in the supply business cost
of sales of (Pounds)77 million reflecting an increase in purchases of
electricity to supply the increase in unit sales as discussed above.
Operating Expenses
Operating expenses increased by (Pounds)54 million (21%) from (Pounds)252
million in fiscal year 1996 to (Pounds)306 million in Pro Forma Fiscal Year
1997. This increase was primarily due to depreciation and amortization expense
being higher by (Pounds)32 million due principally to the purchase method of
accounting to the Predecessor Company's fixed assets and distribution license
based on 40-year useful lives and to (Pounds)20 million in restructuring
charges, (Pounds)12 million of which were incurred by London Electricity prior
to the acquisition.
42
<PAGE>
Income from Operations
Income from operations increased by (Pounds)10 million (10%) from
(Pounds)102 million in fiscal year 1996 to (Pounds)112 million in Pro Forma
Fiscal Year 1997. This increase was comprised of increases (decreases) of
(Pounds)(66) million and (Pounds)76 million in the distribution and supply
segments, respectively. The decrease in distribution operating income of
(Pounds)66 million was principally due to: (i) reductions in distribution
revenue from an 11% allowed distribution revenues reduction announced by the
Regulator effective at the beginning of fiscal year 1997, (ii) an increase in
distribution operating expenses due to a pro forma increase in depreciation
and amortization expense from applying the purchase method of accounting, and
(iii) an increase in distribution operating expenses due to restructuring
charges in Pro Forma Fiscal Year 1997. An increase of 3% in distribution sales
volume partially offset the net decrease in distribution operating income.
The increase in supply operating income of (Pounds)76 million was
principally due to the (Pounds)83 million customer refund (net of the Fossil
Fuel Levy reduction) in 1996 from the NGG transactions and a 14% increase in
number of electricity units supplied. Such increases were partially offset by
a (Pounds)77 million increase in the cost of electricity purchases for the
supply business.
Other Income (Expense)
Other income (expense) decreased by (Pounds)467 million from (Pounds)473
million in fiscal year 1996 to (Pounds)6 million in Pro Forma Fiscal Year
1997. This decrease was primarily attributable to other income of (Pounds)450
million from the NGG transaction in fiscal year 1996. See "--Introduction--
National Grid Group Transactions."
Interest Expense, Net
Interest expense, net increased by (Pounds)88 million from (Pounds)5 million
in fiscal year 1996 to (Pounds)93 million in Pro Forma Fiscal Year 1997,
principally as a result of the financing costs associated with the debt issued
for the acquisition. Interest expense for Pro Forma Fiscal Year 1997 reflects
interest expense recorded in connection with the acquisition as if the
acquisition had occurred on April 1, 1996 and had been financed at an assumed
interest rate of 7.3% per year. Of the increase in interest expense,
(Pounds)64 million was attributable to this pro forma adjustment. The
remaining increase is attributable to the 8 5/8%, (Pounds)100 million Eurobond
issue in October 1995 which was outstanding for five months of fiscal year
1996 and the entire Pro Forma Fiscal Year 1997 and an increase of (Pounds)45
million in short-term borrowings from March 31, 1996 to March 31, 1997.
Income Taxes
The Company's effective income tax rate of 19% in fiscal year 1996 increased
to 33% for Pro Forma Fiscal Year 1997. This increase was due to book/tax
differences from the NGG transaction in fiscal year 1996 and use of an assumed
statutory 33% rate in Pro Forma Fiscal Year 1997.
Fiscal Year 1996 Compared with Fiscal Year 1995
Earnings
Income from operations was (Pounds)102 million in fiscal year 1996, a
decrease of (Pounds)64 million from fiscal year 1995. This decrease was due
principally to the refund (Pounds)(83) million ordered in connection with the
NGG demerger in fiscal year 1996 and a decrease of (Pounds)34 million in gross
profit from sales, principally due to the increase in electricity purchase
costs exceeding the increase in supply revenues. This was partially offset by
a (Pounds)52 million decrease in operating expenses.
Income (loss) from operations by segments for fiscal year 1996 was
(Pounds)158 million, (Pounds)(70) million and (Pounds)16 million for the
distribution, supply and other segments, respectively. Income from those
segments in fiscal year 1995 was (Pounds)141 million, (Pounds)11 million and
(Pounds)14 million, respectively.
43
<PAGE>
Net income increased by (Pounds)28 million, from (Pounds)121 million in
fiscal year 1995 to (Pounds)149 million in fiscal year 1996 (excluding the
effect of NGG transactions of (Pounds)310 million). This increase was
primarily due to a reduction in operating expenses due to a fiscal year 1995
(Pounds)41 million restructuring charge.
Revenues
Operating revenues, excluding the impact of the NGG refund, increased by
(Pounds)70 million (6%) from (Pounds)1,209 million in fiscal year 1995 to
(Pounds)1,279 million in fiscal year 1996 as follows:
<TABLE>
<CAPTION>
OPERATING REVENUES
INCREASE (DECREASE)
FROM FISCAL YEAR 1995
TO FISCAL YEAR 1996
---------------------
((Pounds) MILLIONS)
<S> <C>
Electricity distribution............................... (22)
Electrical supply...................................... 75
Other.................................................. 15
Intra-business......................................... 2
---
Total operating revenues............................. 70
===
</TABLE>
The factors affecting distribution revenues are the same as those described
above in "--Revenues" comparing the six months ended September 30, 1997 with
the six months ended September 30, 1996. Revenues from the distribution
business decreased by (Pounds)22 million (6%) from (Pounds)379 million for
fiscal year 1995 to (Pounds)357 million for fiscal year 1996 principally due
to a decrease in the maximum allowable average price of units distributed as a
result of the application of the revised Distribution Price Control Formula. A
5% increase in sales volume partially offset the average price decrease.
Revenues from the supply business increased by (Pounds)75 million from
(Pounds)1,114 million in fiscal year 1995 to (Pounds)1,189 million (excluding
the impact of the NGG refund) in fiscal year 1996. This increase reflects an
increase of (Pounds)83 million in revenues from the non-franchise supply
market as the result of a 45% increase in unit sales to those customers. Sales
to these customers comprised 39% of the total sales from the supply business.
This was partially offset by a (Pounds)8 million reduction in revenues from
the franchise supply market which was primarily due to lower average unit
prices received as units supplied increased slightly.
Other revenues in fiscal year 1996 totaled (Pounds)59 million, an increase
of (Pounds)15 million over fiscal year 1995. Such increase was principally a
result of increased services to the distribution segment by LEC, the revenues
for which were eliminated in intra-business eliminations. The increase in
intra-business eliminations was offset principally by the reductions in
electricity distribution revenues (the majority of which are charged to the
supply segment) as discussed above.
Cost of Sales
Cost of sales increased by (Pounds)103 million (14%) from (Pounds)740
million in fiscal year 1995 to (Pounds)843 million (excluding NGG-related
Fossil Fuel Levy reduction of (Pounds)8 million) in fiscal year 1996. This
increase is principally the result of an increase in the supply business
electricity purchase costs of (Pounds)100 million reflecting an increase in
purchases of electricity to correspond with the increase in unit sales as
discussed above.
Operating Expenses
Operating expenses decreased by (Pounds)52 million (17%) from (Pounds)304
million in fiscal year 1995 to (Pounds)252 million in fiscal year 1996. The
principal reasons for the decrease were (Pounds)41 million in restructuring
44
<PAGE>
charges incurred in fiscal year 1995 and a (Pounds)10 million decrease in
other operation and maintenance costs as a result of reduced payroll and
benefit expense due to a lower number of employees as a result of
restructuring and reduced pension cost due to use of a portion of defined
benefit plan overfunding.
Income from Operations
Income from operations decreased by (Pounds)64 million (39%) from
(Pounds)166 million in fiscal year 1995 to (Pounds)102 million in fiscal year
1996. This decrease was comprised of increases (decreases) of (Pounds)17
million and (Pounds)(81) million in the distribution and supply segments,
respectively. The increase in distribution operating income of (Pounds)17
million was principally due to: (i) an increase of 5% in distribution sales
volume, (ii) a decrease in distribution operating expenses in 1996 due to
(Pounds)41 million of restructuring charges in fiscal year 1995, (iii)
reductions in payroll and related benefits in fiscal year 1996 due to
reductions in number of employees, and (iv) use of a portion of pension plan
overfunding in fiscal year 1996 to reduce pension cost. Such increases were
partially offset by reductions in distribution revenue from an 11%
distribution price reduction, before an allowed increase for inflation,
announced by the Regulator effective at the beginning of fiscal year 1996.
The decrease in supply operating income of (Pounds)81 million was
principally due to the (Pounds)83 million customer refund (net of the Fossil
Fuel Levy reduction) in 1996 from the NGG transactions, a (Pounds)100 million
increase in the cost of electricity purchases for the supply business and an
(Pounds)8 million reduction in franchise supply customer revenue due to lower
unit prices. Such decreases were partially offset by a 45% increase in unit
sales to Non-Franchise Supply Customers.
Other Income (Expense)
Other income (expense) increased by (Pounds)450 million for fiscal year
1996, to (Pounds)473 million. This increase was due to the gain and dividends
on the NGG transaction, partially offset by a related contribution to the
Employee Stock Ownership Plan. See "--National Grid Group Transactions."
Interest Expense - Net
Interest expense - net increased by (Pounds)4 million from (Pounds)1 million
in fiscal year 1995 to (Pounds)5 million in fiscal year 1996 principally as a
result of substantially more long-term debt outstanding during fiscal year
1996 than during fiscal year 1995. Also contributing to this increase was a
reduction in interest income.
Income Taxes
The Predecessor Company's effective income tax rate decreased from 32% to
19% from fiscal year 1995 to fiscal year 1996. The reduction in the effective
income tax rate was due principally to book/tax differences generated from the
NGG transactions in fiscal year 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's sole investment and only significant asset is the entire share
capital of London Electricity. The Company is therefore dependent upon
dividends from London Electricity for its cash flow. The Company's primary
need for liquidity is to pay interest on its debt, and management believes
that, following this offering and the restructuring of the Credit Facilities
Agreement, it will receive sufficient amounts of dividends from London
Electricity to make such payments. The Company believes that London
Electricity will distribute all cash flow generated which is in excess of the
amounts necessary for London Electricity to conduct its business.
45
<PAGE>
Demand for electricity in the UK and in London Electricity's Franchise Area
is seasonal, with demand being higher in the winter months and lower in the
summer months. London Electricity bills its Franchise Supply Customers on a
staggered quarterly basis while it is generally required to pay related
expenses (principally the cost of purchased electricity) on 28-day terms.
However, approximately 45% of the Franchise Supply Customers settle their
accounts using regular payment plans based on prepayment or spreading of the
cost of their annual bill evenly throughout the year. A majority of London
Electricity's supply revenues are based on a fixed price per unit. The cost of
supply to London Electricity from the Pool, if not covered by hedging
mechanisms, varies throughout the year, generally being higher in winter
months and lower in summer months. London Electricity balances the effect of
these influences on its working capital needs with drawings under its
available credit facilities.
The principal sources of funds of the Successor Company during the six
months ended September 30, 1997 were (Pounds)39.5 million from operations,
(Pounds)85.2 million from the Credit Facilities Agreement and (Pounds)28.2
million from sales of current investments. During this period, the Company
utilized (Pounds)90.3 million of cash for repayment of notes payable,
(Pounds)40.5 million for capital expenditures and increased its cash and cash
equivalents by (Pounds)22.1 million.
The principal sources of funds of the Successor Company during Pro Forma
Fiscal Year 1997 were (Pounds)166 million from operations, (Pounds)945 million
from the Credit Facilities Agreement and (Pounds)240 million of equity
contributions from Entergy. During this period, the Company invested cash of
(Pounds)1,174 million in its acquisition of London Electricity, and
(Pounds)152 million was invested in capital expenditures.
The principal sources of funds of the Predecessor Company during fiscal year
1996 were (Pounds)191 million from operations and (Pounds)99 million from the
proceeds of a Eurobond issuance. During fiscal year 1996, the Predecessor
Company invested (Pounds)111 million in capital expenditures and paid
dividends of (Pounds)260 million which included a special dividend of
(Pounds)199 million.
The principal sources of funds of the Predecessor Company during fiscal year
1995 were (Pounds)123 million from operations, (Pounds)114 million from the
sale of marketable securities, and (Pounds)56 million of net additional short
term borrowings. During fiscal year 1995, the Predecessor Company invested
(Pounds)110 million in capital expenditures and paid dividends of (Pounds)53
million. The Predecessor Company also repaid (Pounds)70 million of government
debt and repurchased common stock totaling (Pounds)149 million.
At September 30, 1997 and March 31, 1997, the Successor Company had negative
working capital of (Pounds)37 million and (Pounds)47 million, respectively,
compared to negative working capital of the Predecessor Company of (Pounds)7
million at March 31, 1996. The increased working capital deficit at September
30, 1997 and March 31, 1997 is primarily the result of the initial financing
structure of the acquisition of London Electricity and increased borrowings
under London Electricity's credit facilities.
To meet short-term cash needs and contingencies, the Successor Company had
approximately (Pounds)47 million and (Pounds)25 million of cash and cash
equivalents at September 30, 1997 and March 31, 1997, respectively.
The Company had several primary sources of liquidity available at March 31,
1997 including: (i) London Electricity's cash from operations which totaled
(Pounds)166 million in Pro Forma Fiscal Year 1997, (ii) the Company's
availability under its Credit Facilities Agreement of approximately
(Pounds)305 million at March 31, 1997 ((Pounds)220 million at September 30,
1997), (iii) London Electricity's several uncommitted loan facilities totaling
(Pounds)200 million provided by banking institutions, and (iv) London
Electricity's (Pounds)150 million commercial paper program. At the end of
fiscal year 1997, a total of (Pounds)141 million ((Pounds)45 million at
September 30, 1997) was borrowed under the London Electricity commercial paper
facility. The Company intends to use availability under existing facilities,
or replacements thereof, to finance its payments of windfall profits taxes in
December 1997 and 1998 which total (Pounds)140 million.
46
<PAGE>
The Credit Facilities Agreement was executed on December 17, 1996. Proceeds
of this facility, which is in three tranches (Facility A for (Pounds)810
million, Facility B for (Pounds)240 million, and Facility C for (Pounds)200
million), have been used to fund the majority of the acquisition of London
Electricity and are available to provide working capital for London
Electricity. As of March 31, 1997, (Pounds)945 million of variable rate
borrowings were outstanding under this credit facility ((Pounds)1.03 billion
at September 30, 1997).
The Company plans to restructure the Credit Facilities Agreement in
connection with the issuance of the Preferred Securities. As part of the
restructuring, Facility B will be repaid and terminated. Entergy UK Limited
will become the primary obligor under Facility A of the restructured Credit
Facilities Agreement, and the Company will become a guarantor of all Facility
A borrowings under the restructured Credit Facilities Agreement. The terms of
the restructured facilities will extend the maturity of borrowings under
Facility A to October 31, 2002, and increase London Electricity's permitted
borrowing capacity. The restructured Credit Facilities Agreement will contain
financial covenants and events of default typical for UK acquisition debt
facilities, including the ability of the lenders to declare an event of
default if a material adverse change affecting the Company's ability to meet
its financial covenants and payment obligations under the Credit Facilities
Agreement occurs. Facility C will continue to be available to London
Electricity. Facility A of the restructured Credit Facilities Agreement will
be collateralized by 65% of the shares of London Electricity.
At the end of fiscal year 1997, London Electricity also had outstanding
(Pounds)200 million of Eurobonds. These bonds mature in two tranches of
(Pounds)100 million each in 2003 and 2005.
London Electricity's capital expenditures are primarily related to the
distribution business and include expenditures for load-related, non-load-
related and non-operational capital assets. Load-related capital expenditures
are largely required by new business growth. Customer contributions are
normally received where capital expenditures are made to extend or upgrade
service to customers (except to the extent that such capital expenditures are
made to enhance London Electricity's distribution network generally). Non-
load-related capital expenditures include asset replacement which is expected
to continue until at least the next decade. Other non-load-related
expenditures include system upgrade work that provides for load growth and has
the additional benefit of improving network security and reliability. Non-
operational capital expenditures are for assets such as fixtures and
equipment. For fiscal years 1995 and 1996, and for Pro Forma Fiscal Year 1997,
capital expenditures were (Pounds)110 million, (Pounds)111 million, and
(Pounds)152 million, respectively. London Electricity is required to file
five-year projections with the Regulator for capital expenditures related to
its regulated distribution network and updates of such projections annually.
The most recent projection was for the five-year period ended March 31, 2000
and was filed in July 1997. This filing indicated London Electricity's current
projection of approximately (Pounds)482 million for the five year period.
Approximately (Pounds)186 million has already been spent in fiscal year 1996
and Pro Forma Fiscal Year 1997 related to this five-year projection.
London Electricity is a member of the London and Continental consortium that
has won the contract to build the Channel Tunnel Rail Link. Assuming
construction of this project proceeds, it will require future additional
capital expenditures of approximately (Pounds)60 - (Pounds)80 million to be
made by London Electricity over the next six years. London Electricity is also
a member of the City of Greenwich Lewisham Rail Link plc which will require
expenditures of approximately (Pounds)6 million in the next two years. London
Electricity maintains the distribution network for the British Airport
Authority of Heathrow, Gatwick, and Stansted airports and expects to spend
approximately (Pounds)36 million on this network over the next six years.
To reduce the impact of interest rate changes, the Company has entered into
several interest rate swaps with total notional amount of (Pounds)600 million
currently outstanding and with maturity dates ranging from March 1999 to
September 2001. The interest rate swaps are from a LIBOR variable rate to an
average fixed rate of approximately 7.5%. See "Long-Term Debt" note to the
Company's consolidated financial statements for further information.
47
<PAGE>
The Company does not have any foreign currency hedging contracts in place;
however, it does intend to swap some or all of the US dollar liabilities
associated with the Perpetual Junior Subordinated Debentures back to pounds
sterling to hedge the currency risk associated therewith.
London Electricity's supply business to Non-Franchise Supply Customers
generally involves entering into fixed price contracts to supply electricity
to its customers. The electricity is obtained primarily by purchases from the
Pool. Because the price of electricity purchased from the Pool can be
volatile, London Electricity is exposed to risk arising from differences
between the fixed price at which it sells electricity and the fluctuating
prices at which it purchases electricity unless it can effectively hedge such
exposure. This risk will be extended to the Franchise Supply market beginning
on April 1, 1998. To mitigate its exposure to volatility, London Electricity
utilizes contracts for differences ("CFDs") and power purchase contracts with
certain UK generators to fix the price of electricity for a contracted
quantity over a specific period of time. At September 30, 1997, the Company
has outstanding CFDs and power purchase contracts for approximately 39,000 GWh
of electricity. These include a long term power purchase contract with an
affiliate which is based on 27.5% of the affiliate's capacity from its 1,000
MW facility through the year 2010. London Electricity's electricity sales
volumes were approximately 15,771 GWh; 18,117 GWh and 20,758 GWh for fiscal
years 1995 and 1996 and Pro Forma Fiscal Year 1997, respectively.
Management believes that cash flow from operations, together with its
existing sources of credit and the proceeds from this offering and the
restructuring of the Credit Facilities Agreement, will provide sufficient
financial resources to meet the Company's projected capital needs and other
expenditure requirements for the foreseeable future. London Electricity has
made a representation to the Regulator, in connection with the acquisition and
its PES license, that it will use all reasonable endeavors to ensure that it
maintains an investment grade rating on its long-term debt.
48
<PAGE>
BUSINESS
INTRODUCTION
London Electricity's principal businesses are the distribution of
electricity and the supply of electricity to approximately 2 million customers
in the London metropolitan area. London Electricity also conducts ancillary
business activities apart from the distribution and supply business that are
not subject to regulation, such as owning and operating private electricity
distribution networks and holding interests in power generation.
DISTRIBUTION BUSINESS
London Electricity's distribution business consists of the ownership,
management and operation of the electricity distribution network within the
Franchise Area. The primary activity of the distribution business is the
receipt of electricity from the national grid transmission system and the
distribution of electricity to end users connected to London Electricity's
power lines. Virtually all electricity supplied (whether by London
Electricity's supply business or by other suppliers) to consumers in the
Franchise Area is transported through its distribution network, thus providing
London Electricity with a stable distribution volume unaffected by customer
choice of supplier. As a holder of a PES license, London Electricity is
subject to a price cap regulatory framework providing economic incentives to
increase the volume of electricity distributed and to operate in a more cost-
effective manner. See "The Electric Utility Industry in Great Britain".
Distribution Business Customers, Units Distributed, Revenues and Operating
Profit
London Electricity combines a substantial commercial sector with a domestic
sector to form a unique customer base among RECs. Approximately 60% of London
Electricity's distribution sales are to the commercial sector. London
Electricity serves the office and retail center of the capital of the UK. The
growth of London as a major financial center has been a significant factor in
increased consumption as the standards of lighting, air conditioning and
computing have improved. London Electricity's domestic (residential) customers
live in a mix of urban and suburban parts of metropolitan London, including
both inner city and more affluent suburban areas.
The following table sets out details of London Electricity's distribution
customers, units distributed, distribution revenues and operating profit.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------
1995 1996 1997
--------- --------- ---------
NUMBER OF CUSTOMERS CONNECTED AT YEAR END
- -----------------------------------------
<S> <C> <C> <C>
Domestic.......................................... 1,705,898 1,721,123 1,737,547
Commercial........................................ 231,621 231,330 230,904
Industrial........................................ 10,283 9,667 9,155
--------- --------- ---------
Total........................................... 1,947,802 1,962,120 1,977,606
========= ========= =========
<CAPTION>
ELECTRICITY DISTRIBUTED (GWH)
- -----------------------------
<S> <C> <C> <C>
Domestic.......................................... 6,230 6,472 6,696
Commercial........................................ 11,621 12,383 12,816
Industrial........................................ 1,815 1,837 1,882
--------- --------- ---------
Total........................................... 19,666 20,692 21,394
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED MARCH 31, ENDED
----------------------------------- SEPTEMBER 30,
1995 1996 1997 1997
----------- ----------- ----------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Distribution Revenues....... (Pounds)379 (Pounds)357 (Pounds)336* (Pounds)151
Distribution Operating Prof-
it......................... (Pounds)141 (Pounds)158 (Pounds) 92* (Pounds) 44
</TABLE>
- --------
* Represents amounts for the Pro Forma Fiscal Year ended March 31, 1997. See
the Unaudited Pro Forma Condensed Consolidated Statement of Operations for
explanation of pro forma adjustments.
49
<PAGE>
London Electricity's distribution business has grown in both its customer
base and the number of units distributed, primarily reflecting economic growth
in London. At March 31, 1997, London Electricity had experienced a five year
compound annual growth rate of 0.5% in customers and a five year compound
annual growth rate of 2.6% in units of electricity distributed.
Competition in the Distribution Business
London Electricity has not experienced significant competition in its
distribution business. The Company believes that the cost of providing a
duplicate underground network connected to the Grid would be prohibitive. To
the extent a customer may invest in its own on-site electric generating
plants, such customer would no longer require distribution and related
services from London Electricity except for standby connection to the Grid.
London Electricity has the smallest industrial customer base of all of the
RECs which the Company believes results in a reduced downside risk of loss of
load from cogeneration. The distribution business is subject to marginal loss
of income from related services, such as metering, that will become subject to
competition in the year 2000.
Strategy for the Distribution Business
The principal pressures on the distribution business are the regulatory
price control formula and standards of performance, each established by the
Regulator. Since being acquired by the Company, London Electricity has
reviewed and refined its distribution strategy and established goals of cost
savings and improved customer service.
The distribution business will pursue several cost efficiency initiatives
expected to yield savings in both operating and capital costs. These
initiatives include major process redesign projects within the engineering,
metering, and customer operations activities of the business. In addition, the
Company's asset management philosophy will focus on optimizing the life-cycle
economics of the London Electricity network asset base by controlling the
annual capital spending with respect to such network without prejudicing its
performance.
Improvements in customer service in the distribution business are also part
of London Electricity's strategy to retain Franchise Supply Customers in the
Franchise Area after the introduction of competition on April 1, 1998 and are
expected to enable London Electricity to meet the network performance
standards agreed with the Regulator. London Electricity believes that these
improvements are important both for building customer loyalty to benefit the
supply business by maintaining and improving customer satisfaction and for
maintaining good relations with the Regulator. Improvements in customer
service are being pursued, in part through improvements in system performance,
measured primarily in terms of customer minutes lost and speed of supply
restoration. To that end, London Electricity is pursuing several initiatives,
including (i) installation of remote control facilities at secondary
substations; (ii) implementation of formal control over all activities on the
low voltage network; (iii) implementation of new business processes generally
in the distribution business, and particularly in the emergency services
activity; and (iv) application of asset management techniques to refocus
London Electricity's capital program on improvements in system reliability.
London Electricity is also developing expanded product offerings for its
customers, including services from providers of insurance and
telecommunication products, and is exploring the provision of internet access
and energy management systems to customers.
Distribution Facilities
Electricity is transported across the Grid at 400kV or 275kV to twelve grid
supply points within London Electricity's distribution network, where it is
then transformed by London Electricity to 132kV and transported through London
Electricity's distribution system. Electricity is also transported to six
national grid supply points located in the franchise areas of neighboring
RECs, which are connected to London Electricity's distribution system by
overhead lines and underground cables. Substantially
50
<PAGE>
all electricity which enters London Electricity's distribution system is
received at these eighteen grid supply points.
At March 31, 1997, London Electricity's electricity distribution network
(excluding service connections to consumers) included overhead lines and
underground cables at the operating voltage levels indicated in the table
below:
<TABLE>
<CAPTION>
OVERHEAD LINES UNDERGROUND
(CIRCUIT CABLES
OPERATING VOLTAGE MILES) (CIRCUIT MILES)
----------------- -------------- ---------------
<S> <C> <C>
132kV...................................... 24 301
66kV....................................... 8 354
33kV....................................... 0 387
22kV....................................... 0 173
11kV....................................... 1 4,134
6.6kV...................................... 0 1,062
480 or 415/240V............................ 0 12,175
--- ------
Total...................................... 33 18,586
</TABLE>
In addition to the circuits referred to above, London Electricity's
distribution facilities also include:
<TABLE>
<CAPTION>
AGGREGATE CAPACITY
TRANSFORMERS NUMBER (MEGA VOLT AMPERES)
------------ ------ -------------------
<S> <C> <C>
132kV/lower voltages.......................... 141 6,741
66kV or 33kV/11kV or 6.6kV.................... 252 4,259
11kV or 6.6kV/lower voltages.................. 12,826 7,785
Other......................................... 64 1,170
------ ------
Total......................................... 13,283 19,955
<CAPTION>
AGGREGATE CAPACITY
SUBSTATIONS NUMBER (MEGA VOLT AMPERES)
----------- ------ -------------------
<S> <C> <C>
132kV/33kV.................................... 52 6,741
66kV or 33kV/11kV or 6.6kV.................... 78 4,259
11kV or 6.6kV/415V or 240V.................... 12,725 10,585
Other......................................... 22 1,170
------ ------
Total......................................... 12,877 22,755
</TABLE>
In providing service connections to customers and to street lighting,
traffic lights and other installations from its network, London Electricity
uses underground cables in addition to those referred to above. Electricity is
received by customers at various voltages depending upon their requirements.
At March 31, 1997, London Electricity's distribution system was connected to
approximately 2 million customers.
Operation and control of London Electricity's distribution system are
continuously monitored and coordinated from one central control center located
in Brixton, south London. This control center is responsible for all HV and
EHV networks. A reserve control center is located in Islington, north London.
A system control data acquisition system monitors and controls all 132kV,
66kV, 33kV and 22kV switchgear and selected 11kV and 6.6kV switchgear.
SUPPLY BUSINESS
London Electricity's supply business consists of selling electricity to end
users, purchasing such electricity and arranging for its distribution to those
end users. Under its PES license, London Electricity has an exclusive right to
supply electricity to Franchise Supply Customers (those who have a demand of
not more than 100 kW). This exclusive right is scheduled to continue until at
least
51
<PAGE>
April 1, 1998. The supply business to Non-Franchise Supply Customers (those
who have demand of 100kW and above), both inside and outside London
Electricity's Franchise Area is open to competition.
Supply sales volumes, supply revenues and operating profit are shown in the
table below.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------
1995 1996 1997
------ ------ ------
SALES VOLUME (GWH)
- ------------------
<S> <C> <C> <C>
100 kW and above......................................... 4,858 7,043 9,428
Under 100 kW............................................. 10,917 11,077 11,332
------ ------ ------
15,775 18,120 20,760
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED MARCH 31, ENDED
------------------------------------------ SEPTEMBER 30,
1995 1996 1997 1997
------------- ------------- ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Supply Revenues......... (Pounds)1,114 (Pounds)1,189* (Pounds)1,265** (Pounds)501
Supply Operating Profit. (Pounds)11 (Pounds)13* (Pounds)6** (Pounds) 5
</TABLE>
- --------
* Excludes the effect of NGG discount to customers and reduction in Fossil
Fuel Levy which reduced supply revenues and supply operating profit by
(Pounds)91 million and (Pounds)83 million, respectively.
** Represents amounts for the Pro Forma Fiscal Year ended March 31, 1997. See
the Unaudited Pro Forma Condensed Consolidated Statement of Operations for
explanation of pro forma adjustments.
Competition in the Supply Business
The supply business is currently divided between Franchise Supply Customers,
customers with under 100 kW demand within the Franchise Area, and Non-
Franchise Supply Customers, customers with 100 kW and above demand inside or
outside the Franchise Area. The non-franchise threshold was lowered to 100 kW
in April 1994 allowing competition in supply for these customers while
Franchise Supply Customers remained subject to regulation. Competition in
supply to Franchise Supply Customers will be phased in over a six month period
commencing April 1, 1998, and the exclusive right of London Electricity to
supply the Franchise Market will then cease. London Electricity's present
intention is to open its Franchise Market to competition by July 1, 1998. The
Regulator has indicated in his supply price restraint proposals published on
October 16, 1997, that price regulation will continue for smaller consumption
customers for an initial period of two years until an adequate level of
competition is established. Implementation of the proposals will result in
price reductions for London Electricity of 11.8% effective April 1, 1998 and
3% effective April 1, 1999, although the Regulator has stated that price
reductions implemented by London Electricity in October 1997 will reduce the
11.8% reduction and that the 3% reduction is also subject to review. The 11.8%
price reduction to be effective on April 1, 1998 would be decreased by the
supply tariff reductions announced by London Electricity on September 29, 1997
and effective from October 1, 1997, which will return over-recoveries
experienced under the current Supply Price Control Formula. See "The Electric
Utility Industry in Great Britain--Industry Structure--Supply of Electricity".
In 1994, London Electricity initially had difficulty competing in the 100 kW
and above market which became competitive and lost approximately 40% of its
supply sales in the Franchise Market due to aggressive marketing by its
competitors eager to penetrate the London market. Since implementing a new
strategy focused on sales to Non-Franchise Markets, London Electricity has
more than recovered the sales lost in the Franchise Market by competing on
price and tailoring
52
<PAGE>
contracts to the needs of customers. The profitability in the 100 kW and above
market on a per unit basis is significantly less than in the under 100 kW
market. Accordingly, the loss of any individual major customer would not
threaten overall profitability of London Electricity.
Significant steps have been taken both to reduce the cost base of the supply
business and to invest in marketing, systems and management resources to
compete in the market for the supply of electricity. In 1995 London
Electricity transferred the work of 600 London based staff to a new customer
service facility located in northeastern England in order to reduce
operational costs. As a result, the Company was able to upgrade customer
operations facilities, reduce manpower and recruit high caliber staff in a
lower cost labor market. The benefits of this relocation are now being
realized in terms of high quality customer service combined with lower costs.
In 1997, London Electricity also introduced a new customer database system to
replace its previous billing system.
Strategy for the Supply Business
Since Entergy's acquisition of London Electricity, London Electricity has
commenced a review of the supply market to establish new goals for its supply
business and to update its strategy for achieving those goals. The strategy
reflects the need to differentiate segments of the market. For the largest
business customers, the approach will be to focus on limited volume growth
while improving margin by refining customer mix, offering higher margin
products, and optimizing the contribution from purchasing. For smaller
business customers, the aim will be to retain these profitable accounts with
flexible customer proposals, telesales and direct selling. This strategy will
include proactive defense of London Electricity's residential customer base
within the Franchise Area because management believes that the London market
will be an attractive target for competing RECs.
This strategy includes further steps to reduce the cost base of the supply
business. Consideration is being given to the role which alliances might play
in cost reduction and matching the cost bases of aggressive larger
competitors. Studies are also being undertaken to establish the future role of
dual fuel offerings of electricity and gas.
AFFILIATE BUSINESSES AND OTHER INVESTMENTS
London Electricity's ancillary business activities primarily include, among
other things, owning and operating private electricity distribution networks,
holding interests in power generation, operating an electrical contracting
business and gas retailing.
Private Distribution Networks
London Electricity's wholly-owned subsidiary London Electricity Services
Limited ("LES") owns, operates and maintains electricity distribution networks
other than London Electricity's regulated distribution network. In 1993, a
substantial portion of the electricity distribution networks of Heathrow,
Gatwick and Stansted airports was acquired for (Pounds)90 million from BAA
plc. Under its agreement with BAA plc, LES receives an annual fee for the use
of the networks in the amount of (Pounds)13.5 million for the first year with
increases linked to the UK Retail Price Index and unit growth. Further
investment of (Pounds)20 million with corresponding increased fee income has
occurred in the last three years. At Heathrow this included a (Pounds)10
million project to expand the distribution network and improve reliability and
security of the system as well as to accommodate further developments at the
airport and the construction of the Paddington-Heathrow rail-link. Additional
expansion investment is planned.
In 1996 London & Continental Railways Limited ("LCR") agreed to develop
proposals to design, build and operate a new high speed rail link from London
to the Channel Tunnel at a total expected cost of (Pounds)4 billion with
completion scheduled in the year 2003. Assuming the project is financed,
during construction LCR will be essentially a train-operating company using
existing railtrack
53
<PAGE>
capacity. After completion, LCR will own all the new track and infrastructure
assets. In 1997, London Electricity's wholly-owned subsidiary, London
Electricity Enterprises Limited ("LEE"), provided (Pounds)5 million of equity
to LCR and is committed to providing an additional (Pounds)5 million of equity
in 1998 to fund the development phase of the project.
Furthermore, LES has provided (Pounds)5.6 million to acquire existing
electrical assets at stations and depots and assuming construction proceeds,
will be providing approximately (Pounds)60-80 million in direct electrical
asset investment over the period 1996-2004. LCR will pay to LES an annual
index-linked fee for the availability of the electricity network and any
capital extensions or modifications.
London Electricity is also a member of the City Greenwich Lewisham Rail Link
plc ("CGLR") consortium, responsible for the delivery of the Docklands Light
Railway--Lewisham Extension in London, designed to connect the Docklands area
to south London and beyond. Completion of this project is expected in 2000 at
a projected total construction cost of (Pounds)203 million. Project funding of
(Pounds)268 million has been raised, comprised of (Pounds)195 million in bond
and senior debt, (Pounds)17 million in shareholder funds and (Pounds)56
million in UK Government grants. The London Electricity direct investment will
be approximately (Pounds)6 million to be paid on completion of the system in
1999. London Electricity will receive an annual fee for the availability of
the private network which is linked to both the Retail Price Index and growth
in passenger traffic.
London Electricity from time to time joins consortia bidding for
infrastructure development projects through LEE. Subsequent investments in
such electrical infrastructure assets will be made by LES.
Power Generation
London Electricity's PES license currently enables it and its affiliates to
make investments in up to 700 MW in electricity generation. London Electricity
has, through its wholly-owned subsidiary, The London Power Company Limited
("LPCL"), invested in generation in order to secure longer term energy prices
and at the same time achieve a profitable return on its investment. LPCL's
primary generation investments are Barking Power and Thames Valley Power
Limited ("TVP"). London Electricity has applied to the Regulator for an
exception from this license condition for certain planned investments by other
Entergy subsidiaries that would exceed London Electricity's own generation
limit, but cannot predict whether the application will be granted. Additional
investments by Entergy in the Company and London Electricity are subject to
regulation under the Public Utility Holding Company Act of 1935, as amended.
Barking Power
LPCL has a 13.475% interest in Barking Power, a joint venture company with
two other RECs and Thames Power Limited, a joint venture between CU Power
Generation Limited, one of the ATCO Limited group of companies, and BICC plc,
an international cables and construction group. Barking Power initially
obtained a non-recourse project finance facility of (Pounds)661 million from a
group of commercial banks and the European Investment Bank to finance the
project. The 1,000 MW combined cycle gas fired power station was commissioned
at Barking Reach in East London and commenced operation in 1995. The project
was refinanced in July 1997 to take advantage of lower interest rates. The new
credit facility will total (Pounds)600 million and includes a (Pounds)35
million facility for expansion. Barking Power has negotiated a long term gas
supply contract with Centrica plc. London Electricity has a contract for
differences with Barking Power for 27.5% of the output of the station which
expires in 2010.
TVP
TVP is a 50-50 joint venture formed in March 1995 between LPCL and CU Power
Generation Limited. TVP owns and operates a (Pounds)10 million, 12 MWE
combined heat and power plant at Heathrow Airport. TVP has a gas supply
contract with Total Gas Marketing Limited. To date the plant has operated at
98% efficiency with output rated at 12.8-13 MW.
54
<PAGE>
Electrical Contracting
Through LEC, London Electricity is involved in the electrical contracting
business, which includes a range of installation and maintenance work of
varying complexity and size from work performed for London Electricity's
distribution business or private domestic installations to high voltage
industrial and commercial systems.
Gas Retailing
London Electricity intends to take advantage of the liberalization of
natural gas retailing in the UK. Gas is to be supplied by competing retailers
using the existing pipelines of Transco (formerly British Gas plc). Currently
gas may be sold to customers in the selected regional markets that have been
opened to competition. London Electricity plans to use its energy retailing
and customer service skills and expects to concentrate on the residential and
small commercial sectors complementing its electricity retailing in these
sectors. Experience in the gas market in selected pilot regions has already
been gained by participating in London Total Energy Limited, a joint venture
with Total Gas Marketing Limited.
Metering and Meter Reading
It is expected that metering and meter reading will become open to
competition in the year 2000. In anticipation, London Electricity's
organization structure reflects the need to develop these activities as
separate businesses.
RISK MANAGEMENT
Because London Electricity's distribution business does not involve the
purchase and sale of electricity, London Electricity's risk management efforts
are focused on the supply business which is exposed to Pool price volatility.
Virtually all electricity generated in England and Wales is sold by generators
and bought by suppliers through the Pool.
Regulations governing the franchise supply market at present permit the
pass-through to customers of prudent costs which include the cost of
arrangements such as contracts for differences ("CFDs") to hedge against Pool
price volatility. CFDs are contracts predominantly between generators and
suppliers which fix the price of electricity for a contracted quantity of
electricity over a specific time period. Differences between the actual price
set by the Pool and the agreed prices give rise to difference payments between
the parties to the particular CFD. At the present time, London Electricity's
forecast franchise supply market demand for calendar year 1997 is
substantially hedged through various types of agreements including CFDs.
The most common contracts for supply to Non-Franchise Supply Customers are
for a twelve-month term and contain fixed rates. London Electricity is exposed
to two principal risks associated with such contracts: load shape risk (the
risk associated with a shift in the customer's usage pattern, including
absolute amounts demanded and timing of amounts demanded) and purchase price
risk (the risk associated with fluctuations in the cost of purchased
electricity relative to the price received from the supply customer). London
Electricity employs risk management methods to maximize its return consistent
with an acceptable level of risk. Generally, load shape risk decreases as
London Electricity's portfolio of supply customers in the non-franchise supply
market increases. London Electricity hedges purchasing price risk by employing
a variety of risk management tools, including management of its supply
contract portfolio, hedging contracts and other means which mitigate risk of
future Pool price volatility.
London Electricity's ability to manage its purchase price risk depends, in
part, on the continuing availability of properly priced risk management
mechanisms such as CFDs. No assurance can be given that an adequate,
transparent market for such products will in fact be available.
55
<PAGE>
London Electricity is also investigating whether owning one or more sources
of generation or contracting for such sources would be an appropriate
alternative for partially managing purchase price risk, but no assurance can
be given that this alternative would be available to or economically
appropriate for London Electricity and any further acquisition could be
subject to the own generation limitation in London Electricity's PES license.
UK ENVIRONMENTAL REGULATION
London Electricity's businesses are subject to numerous regulatory
requirements with respect to the protection of the environment. The
Electricity Act obligates the UK Secretary of State for Trade and Industry
(the "Secretary of State") to take into account the effect of electricity
generation, transmission and supply activities upon the physical environment
in approving applications for the construction of generating facilities and
the location of overhead power lines. The Electricity Act requires London
Electricity to have regard to the desirability of preserving natural beauty
and the conservation of natural and man-made features of particular interest,
when it formulates proposals for development in connection with certain of its
activities. The Company mitigates the effects its proposals have on natural
and man-made features and is required to carry out an environmental assessment
when it intends to lay cables, construct overhead lines or carry out any other
development in connection with its licensed activities. London Electricity
also has produced an Environmental Policy Statement which sets out the manner
in which it intends to comply with its obligations under the Electricity Act.
The Environmental Protection Act 1990 addresses waste management issues and
imposes certain obligations and duties on companies which handle and dispose
of waste. Some of London Electricity's distribution activities produce waste,
but London Electricity believes that it is in compliance with the applicable
standards in such regard.
Possible adverse health effects of electromagnetic fields ("EMFs") from
various sources, including transmission and distribution lines, have been the
subject of a number of studies and increasing public discussion. The
scientific research currently is inconclusive as to whether EMFs may cause
adverse health effects. The only UK standards for exposure to power frequency
EMFs are those promulgated by the National Radiological Protection Board and
relate to the levels above which non-reversible physiological effects may be
observed. London Electricity fully complies with these standards. However,
there is the possibility that passage of legislation and change of regulatory
standards would require measures to mitigate EMFs, with resulting increases in
capital and operating costs. In addition, the potential exists for public
liability with respect to lawsuits brought by plaintiffs alleging damages
caused by EMFs.
London Electricity has approximately 677 miles of fluid-filled underground
cables which operate at 33kV and 132kV. These cables generally supply
substantial amounts of electricity to large substations in urban areas and to
large customers. The majority of these cables are between 30 and 50 years old.
London Electricity operates these cables in accordance with the "Environment
Agency and Electricity Companies (in England and Wales) Operating Code on the
Management of Fluid-Filled Cables", monitoring and repairing both gradual and
substantial leaks, which arise through age deterioration and third party
damage. London Electricity has a program to minimize oil leakage and reduce
the possibility of pollution to watercourses and ground water. This involves
establishing a more effective standard procedure for dealing with cable leaks
and implementation of an effective monitoring system. There is also a forward
plan for gradual replacement of these cables with more modern solid cables.
London Electricity believes that the existing monitoring systems and planned
replacement program are sufficient to avoid major environmental incidents or
additional replacement expenditures. London Electricity could incur
significant expenditures if it were required to replace its fluid-filled
cables, other than in the ordinary course of business, pursuant to new or
existing legislation.
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London Electricity believes that it has taken, and it intends to continue
taking, measures to comply with the applicable laws and governmental
regulations for the protection of the environment. There are no material legal
or administrative proceedings pending against London Electricity or the Company
with respect to any environmental matter.
UK AND EU COMPETITION LAW
London Electricity's businesses are subject to the competition rules of both
the UK and the European Community.
The UK Restrictive Trade Practices Act 1976 stipulates that failure to
furnish to the Office of Fair Trading an agreement that is registrable under
the Act renders unenforceable certain restrictions contained in the agreement.
Briefly stated, the Fair Trading Act 1973 and the Competition Act 1980 both
regulate the activities of companies with market power. UK competition law,
particularly the law relating to restrictive agreements, is in the process of
reform and is likely to follow the approach of European Community law.
The Treaty of Rome contains provisions which prohibit anti-competitive
agreements and practices, including the abuse of a dominant position within the
European Union ("EU") or a substantial part of it. Penalties for violation of
these provisions include fines, third party damages and infringing contractual
provisions being unenforceable.
In January 1993, the UK implemented the EU Utilities Directive on the
procedures to be followed for the award of supply and works contracts by
utilities companies, including electricity utilities. This directive was
replaced by EU Directive 93/36, which was implemented by the UK in December
1996 and which covers service contracts as well as supply and work contracts.
Those contracts that exceed the relevant financial thresholds have to be
advertised in the Official Journal of the European Communities. Disappointed
suppliers and contractors who believe they have suffered harm from failure to
implement the correct procedure in awarding the contract are able to institute
proceedings in the English High Court. The European Commission also has the
power to intervene prior to the award of a contract. The Company believes that
London Electricity has complied with any obligations it may have under those
regulations but the interpretation and application of those regulations and of
the European Union directives which they implement is not free from doubt and
no assurance can be given that any claim for damages against London Electricity
for breach of the rules would be unsuccessful.
EMPLOYEES
London Electricity had 4,266 employees (3,916 full time equivalent) at the
end of fiscal year 1997. The Company has no employees because it is a holding
company with no operations. Approximately 60% of London Electricity's employees
are represented by labor unions. All London Electricity employees who are not
party to a personal employment contract are subject to a collective bargaining
agreement called The Electricity Business Agreement. This Agreement may be
amended by agreement between London Electricity and the unions and is
terminable with 12 months notice by either side. London Electricity believes
that its relations with its employees are favorable.
PROPERTY
London Electricity occupies approximately 300,000 square feet or 60% of its
principal executive offices on either a freehold basis or on leases where the
remaining term is more than 50 years. A further 200,000 square feet is held
under shorter leases.
Network Land and Buildings
At March 31, 1997, London Electricity had freehold and leasehold interests in
approximately 14,500 network properties, comprising principally substation
sites.
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Non-Network Land and Buildings
At March 31, 1997, London Electricity had freehold and leasehold interests
in non-network properties comprising chiefly offices, former retail outlets,
depots, warehouses and workshops.
The number of properties in each category is:
<TABLE>
<CAPTION>
FREEHOLD
OR LONG
LEASEHOLD LEASEHOLD
--------- ---------
<S> <C> <C>
Depot................................................. 1 --
Offices............................................... 21 6
Depot and Office...................................... 5 --
Shops................................................. 6 8
Industrial............................................ 32 2
Residential........................................... 9 0
Other................................................. 2 --
--- ---
Total............................................... 76 16
</TABLE>
LEGAL PROCEEDINGS
London Electricity is routinely party to legal proceedings arising in the
ordinary course of business which are not material, either individually or in
the aggregate. The Company is not a party to any material legal proceedings
nor is it currently aware of any threatened material legal proceedings.
However, as discussed under "Risk Factors--Factors Relating to the Company's
Business--Litigation Regarding Electricity Supply Pension Scheme", litigation
is ongoing with respect to the uses made by other employers of actuarial
surpluses declared in the ESPS. While the courts have ruled in favor of such
employers, such decisions are subject to appeal. If any of the decisions are
reversed on appeal they may have an adverse effect on London Electricity,
which has made similar use of its actuarial surplus, but no assurance can be
given as to the extent of that effect.
THE ELECTRIC UTILITY INDUSTRY IN GREAT BRITAIN
GENERAL
The electric utility industry in Great Britain consists of the following
principal activities:
Generation--the production of electricity at power stations;
Transmission--the bulk transfer of electricity across a high voltage
transmission system known as the Grid from generators to RECs;
Distribution--the transfer of electricity from the Grid and its
delivery, across the REC low voltage distribution networks, to end-user
consumers; and
Supply--the bulk purchase of electricity by RECs or other licensed
suppliers and its retail sale to end-user consumers.
INDUSTRY STRUCTURE
Great Britain has two separate but connected markets, each with a different
commercial framework. In England and Wales electricity is produced by
generators, the largest of which are National Power, PowerGen and Nuclear
Electric, a subsidiary of British Energy plc. Electricity is transmitted
through the Grid by NGC and distributed by the twelve RECs in their respective
franchise areas. Most customers are currently supplied with electricity by
their local REC, although there are other suppliers holding second tier supply
licenses, including other generators and RECs, who can compete to supply
larger customers in that REC's franchise area.
In Scotland there are two vertically integrated companies, Scottish Power
and Hydro-Electric, each generating, transmitting, distributing and supplying
electricity within their respective franchise
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areas as well as competing to supply electricity elsewhere. Scottish Nuclear,
another subsidiary of British Energy, sells all the electricity it generates
to Scottish Power and Hydro-Electric.
The interconnection between the two transmission systems, owned by Scottish
Power and NGC, is capable of transferring electricity between Scotland and
England and Wales. There is also an interconnection with France, owned by NGC
and Electricite de France, through which electricity can be transferred
between the transmission systems of France and England and Wales.
Virtually all electricity generated in England and Wales is sold by
generators and bought by suppliers through the Pool. A generator which is a
Pool member and also a licensed supplier must nevertheless sell all the
electricity it generates into the Pool and purchase all the electricity which
it supplies from the Pool. Because Pool prices fluctuate, generators and
suppliers may enter into bilateral arrangements, such as CFDs, to provide a
degree of protection against such fluctuations.
There is no equivalent to the Pool in Scotland, but Scottish Power and
Hydro-Electric are obligated by their licenses to offer electricity for sale
to second tier suppliers. They are also required to provide access to their
transmission and distribution systems on a non-discriminatory basis to
competing suppliers and generators.
Industry Background
The industry structure described above was put in place in March 1990 in
order to introduce competition into the generation and supply of electricity.
At the same time, a licensing regime was introduced for the electricity
industry both in England and Wales as well as in Scotland.
The RECs, which at that time collectively owned NGG, NGC's holding company,
were privatized in December 1990. National Power and PowerGen were privatized
in March 1991 (with the balance of the UK Government's holdings being sold in
March 1995). Scottish Power and Hydro-Electric were privatized in June 1991
and British Energy was privatized in July 1996. By December 1995, most of the
RECs ownership of NGG had been publicly sold, and NGG was listed on the London
Stock Exchange. Since the summer of 1995, 11 of the RECs have been acquired by
other companies. London Electricity was acquired by the Company in February
1997.
In 1990, the vast majority of generating capacity in England and Wales was
owned by three generators. However, since that time competition in generation
has increased as RECs and other new entrant generators have constructed new
plant and as imports through the interconnections with Scotland and France
have grown. In addition, pursuant to undertakings given to the Regulator,
National Power and PowerGen have disposed of an aggregate of 6,000 MW of
generating capacity to Eastern Group plc.
Competition in supply has been progressively introduced both in England and
Wales and in Scotland. The RECs in England and Wales, and Scottish Power and
Hydro-Electric in Scotland, are subject to competition from second tier
suppliers for the supply of electricity to larger customers in their
respective franchise areas. In April 1990, electricity users with demand in
excess of 1 MW became Non-Franchise Customers of a REC and therefore were
allowed to choose their electricity supplier. In April 1994, the Non-Franchise
Customer class was expanded to include users with a demand of 100 kW and
above. Currently, all electricity customers in Great Britain are scheduled to
be able to choose their electricity supplier over a six-month phase-in period
beginning April 1, 1998, according to customers' designated postal codes. The
Regulator has indicated, however, that such phase-in could be delayed, or
customer participation reduced, if the necessary infrastructure services are
not available on April 1, 1998 or the transition were to impose significant
burdens on Pool or supplier information and management systems.
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Distribution of Electricity
Each of the RECs is required to offer terms for connection to its
distribution system to any person, for use of its distribution system to any
authorized electricity operator and for the provision of supplemental and
backup supplies to any person. In providing use of its distribution system, a
REC must not discriminate between its own supply business and that of any
other authorized electricity operator, or between those of other authorized
electricity operators; nor may its charges differ except where justified by
differences in cost. Similar principles apply to the provision of supplemental
and backup supplies of electricity, and in the carrying out of connection
works. Disputes over the terms of offers may be determined by the Regulator.
Distribution charges are controlled by a formula principally based on P x
(1+(RPI-Xd)) where Xd is currently 3% (the "Distribution Price Control
Formula"). Since 1995, this formula has been divided into two components: one
associated with metering and the other associated with the remainder of the
distribution business. P is the previous year's maximum average price per unit
of electricity distributed. Because the maximum average price in any year is
therefore based in part on the maximum average price in the preceding year, a
price reduction in any given year has an ongoing effect on the maximum average
price for all subsequent years. RPI is a measure of inflation, and equals the
percentage change in the UK Retail Price Index between the previous year and
the current year. Because RPI is based on a weighted average of the prices of
goods and services purchased by a typical household, which bear little
resemblance to the inputs contributing to London Electricity's business costs,
the RPI calculation may not accurately reflect the price changes affecting
London Electricity's costs. The Xd factor is established by the Regulator
following review. This formula determines the maximum average price per unit
of electricity distributed (in pence per kilowatt hour) which a REC is
entitled to charge. The Distribution Price Control Formula permits RECs to
partially retain additional revenues due to increased distribution of units
and holds out the prospect of an increase in operating profits for efficient
operations and reduction of expenses.
Upon privatization, the Regulator set different Xd factors for each of the
RECs to permit annual price increases by the RECs of between 0% and 2.5% (0%
for London Electricity) greater than RPI for the five year period ending on
March 31, 1995. Following a scheduled distribution price review by the
Regulator of all twelve RECs in August 1994, the Regulator required an overall
real reduction in regulated distribution prices for Fiscal Year 1996 of
between 11% and 17% (14% for London Electricity) from the previous year, and
set the Xd factor for the subsequent four year period ending on March 31, 2000
of 2% in each such year. Also in connection with the August 1994 distribution
price review, the Regulator (i) halved from 100% to 50% the extent to which
distribution revenues would be allowed to vary with the number of units of
electricity distributed and (ii) determined hypothetical numbers of Franchise
Area customers for each year through and including fiscal year 2000, allowing
distribution revenues to vary by 50% of the predetermined annual change in
such hypothetical numbers. The stated intention of the Regulator in
introducing this change was "to remove any artificial incentive on the
companies to sell more electricity, while retaining a general incentive for
companies to seek out and meet the needs of their customers". In light of
information concerning the financial position of the RECs that emerged during
the course of the unsuccessful bid by Trafalgar House plc for Northern
Electric plc (one of the RECs), the Regulator conducted an unscheduled
distribution price review of all twelve RECs in July 1995. As a result of this
unscheduled review, the Regulator revised regulated distribution prices for
the four year period ending on March 31, 2000, requiring instead an overall
real reduction in regulated distribution prices for fiscal year 1997 of
between 10% and 13% (11% for London Electricity) from the previous year, and
resetting the Xd factor for the remaining three year period ending on March
31, 2000 of 3% in each such year.
The Distribution Price Control Formula is expected to be further reviewed
with effect from April 1, 2000. Following the review, the Regulator will make
a proposal for a revised formula to apply from that date. If a REC does not
agree with the proposal the Regulator may refer the lack of agreement
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to the MMC and, following the MMC's inquiry, the Regulator may make whatever
modifications to the REC's PES license are required.
In setting distribution charges each year, each REC must project the
permitted maximum average charge per unit to be distributed in that year. The
projection will have to take account of forecasts of units distributed,
distribution line losses and the actual change in RPI. Failure to forecast
accurately may result in overcharging or undercharging; this is taken into
account in the following year through a correction factor in the price control
formula. If a REC has overcharged in the previous year, the maximum average
charge per unit distributed is reduced by an amount to reflect the excess
income received, to which is added interest. In the event of undercharging,
the Distribution Price Control Formula allows the licensee to recover the
shortfall in income plus interest.
In certain instances, however, overcharging or undercharging by a REC above
specific percentage thresholds may result in adjustments by the Regulator. If,
in any year, the average charge per unit distributed exceeds the permitted
maximum average charge per unit distributed by more than 3%, then, in the next
following year, the REC may not increase distribution charges unless it has
satisfied the Regulator that the average charge per unit in that next
following year is not likely to exceed the permitted maximum average charge.
If, with respect to any two successive years, the sum of the amounts by which
the average charge per unit distributed has exceeded the permitted maximum
average charge per unit distributed in the second of those years is more than
4% of that permitted maximum average charge, then, in the next following year,
the REC may be required by the Regulator to adjust its charges so that they
fall within the maximum permitted average charge. If, in respect of two
successive years, the licensee undercharges by more than 10% of the maximum
average charge, the Regulator may, by directions to the licensee, limit the
amount by which such undercharging may be recovered.
Supply of Electricity
Subject to minor exceptions, all electricity customers in Great Britain must
be supplied by a licensed supplier. Licensed suppliers purchase electricity
and make open-access use of the transmission and distribution networks to
achieve delivery to customers' premises.
There are two types of licensed suppliers: public electricity (or first
tier) suppliers ("PESs") and second tier suppliers. PESs are the RECs,
Scottish Power and Hydro-Electric each supplying in its respective franchise
area. Second tier suppliers include National Power, PowerGen, Nuclear
Electric, Scottish Power, Hydro-Electric and other PESs (including RECs)
supplying outside their respective franchise areas and a number of independent
second tier suppliers.
At present, a Franchise Supply Customer can only buy electricity from the
REC authorized to supply the relevant franchise area. Franchise Supply
Customers typically include residential and small commercial and industrial
customers. Non-Franchise Supply Customers are not limited to buying
electricity from the local REC and can choose to buy from a second tier
supplier. Such customers are typically larger commercial, agricultural and
industrial electricity users. Second tier suppliers compete with one another
and with the local REC to supply customers in this competitive (or "non-
franchise") sector of the market.
Under the current licensing regime, over a six month period beginning on
April 1, 1998, all customers, including those who are currently Franchise
Supply Customers, will be permitted to choose their electricity supplier. The
present Supply Price Control Formula (discussed immediately below) will no
longer apply. However, the Regulator has indicated in his supply price
restraint proposals published on October 16, 1997, that price regulation for
supply to the smaller Franchise Supply Customers, whose annual demand is under
12,000 kWh, will be extended for an initial period of at least two years until
an adequate level of competition is established. See "--Supply Price Restraint
Proposals".
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The supply of electricity to Franchise Supply Customers currently remains
subject to price control. The maximum average charge per unit supplied (in
pence per kilowatt hour) is at present controlled by a formula principally
based upon (P x (1 + (RPI-Xs)) + Y (the "Supply Price Control Formula") where
Xs is currently 2%. The initial value of Xs was set at 0 for all the RECs on
March 31, 1990. The Supply Price Control Formula was reviewed by the Regulator
with effect from April 1, 1994, when the Xs factor was set at 2% for all the
RECs. This will apply through the period ending March 31, 1998. P is that part
of the previous year's maximum average price per unit of electricity supplied
(in pence per kilowatt hour) that relates to the REC supply business's own
costs and margin. RPI is a measure of inflation, and equals the percentage
change in the UK Retail Price Index between the previous year and the current
year. Because RPI is based on a weighted average of the prices of goods and
services purchased by a typical household, which bear little resemblance to
the inputs contributing to London Electricity's supply business costs, the RPI
calculation may not accurately reflect the price changes affecting London
Electricity. The Xs factor is established by the Regulator following review.
The Y factor is a pass through of certain costs which are either largely
outside the control of the REC or have been regulated elsewhere. It thus
covers the REC's electricity purchase costs, including both direct Pool
purchase costs and costs of hedging, transmission charges made by NGC, REC
distribution charges and the Fossil Fuel Levy (described below) or amounts
equivalent thereto in respect of the purchase of non-leviable electricity
which are attributable to Franchise Supply Customers. The Supply Price Control
Formula is therefore designed to focus downward pressure on costs and working
capital, which are viewed as being within suppliers' direct control.
As with the Distribution Price Control Formula there is a correction factor
in the Supply Price Control Formula in the event of overcharging or
undercharging. If a REC has overcharged in the previous year, the maximum
average charge per unit supplied is reduced by an amount to reflect the excess
income received, to which is added interest. In the event of undercharging,
the Supply Price Control Formula allows the licensee to recover the shortfall
in income plus interest. In certain instances, however, overcharging or
undercharging by a REC above specific percentage thresholds may result in
adjustment by the Regulator. For example, if, in any year, the average charge
per unit supplied exceeds the permitted maximum average charge per unit
supplied by more than 4%, then, in the next following year, the REC may not
increase supply charges to Franchise Supply Customers unless it has satisfied
the Regulator that the average charge per unit in that next following year is
not likely to exceed the permitted maximum average charge. If, with respect to
any two successive years, the sum of the amounts by which the average charge
per unit supplied has exceeded the permitted maximum average charge per unit
supplied in the second of those years is more than 5% of that permitted
maximum average charge, then, in the next following year, the REC may be
required by the Regulator to adjust its charges so that they fall within the
maximum permitted average charge. If, in respect of two successive years, the
licensee undercharges by more than 10% of the maximum average charge, the
Regulator may, by directions to the licensee, limit the amount by which such
undercharging may be recovered.
Supply Price Restraint Proposals
On October 16, 1997, the Regulator published proposals for new supply price
restraints to apply from April 1, 1998. Each PES license holder has one month
in which to decide whether to accept the proposals, failing which the
Regulator has stated he would refer the matter for investigation by the MMC.
The proposals would, among other things, implement a price reduction for
London Electricity's domestic and small business supply customers of 11.8%
compared to the supply price tariff in effect in August 1997. A further 3%
reduction is proposed to be effective in April 1999. The 11.8% price reduction
to be effective on April 1, 1998 would be decreased by the supply tariff
reductions announced by London Electricity on September 29, 1997 and effective
from October 1, 1997 which will return over-recoveries experienced under the
current Supply Price Control Formula. The license modifications which will be
implemented if the Regulator's proposals are accepted would discontinue the
automatic pass-through of all costs currently passed through to domestic and
small business customers, including purchased power costs from the Pool.
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The proposals also provide for an allowable charge to cover the additional
cost of providing data management services, comprising an annual allowance for
each PES license holder over the five years ending March 31, 2003 of
(Pounds)4.6 million to cover set-up costs plus (Pounds)3.04 million per annum
to cover operating costs for the period 1998 through 2000. The proposals also
provide for restraints on pre-payment meter charges.
The Pool
The Pool was established in April 1990 for bulk trading of electricity in
England and Wales between generators and suppliers. The Pool reflects two
principal characteristics of the physical generation and supply of electricity
from a particular generator to a particular supplier. First, it is not
possible to trace electricity from a particular generator to a particular
supplier. Second, it is not practicable to store electricity in significant
quantities, creating the need for a constant matching of supply and demand.
Subject to certain exceptions, all electricity generated in England and Wales
must be sold and purchased through the Pool. All licensed generators and
suppliers must become signatories to the Pooling and Settlement Agreement,
which governs the constitution and operation of the Pool and the calculation
of payments due to and from generators and suppliers. The Pool also provides
centralized settlement of accounts and clearing. The Pool does not itself buy
or sell electricity.
Prices for electricity are set by the Pool daily for each half hour of the
following day based on the bids of the generators and a complex set of
calculations matching supply and demand and taking account of system
stability, security and other costs. Each day, generators inform NGC of the
amount of electricity which each of their generating units will be able to
provide the next day and the price at which they are willing to operate each
such unit. NGC uses this information to construct a "merit order" which ranks
each generating unit in order of increasing price. NGC then schedules the
stations to operate according to such merit order, calling into service the
least expensive generating units first and continuing to call generating units
into service until enough are operating to meet the demand of all suppliers.
Factors which may constrain NGC's ability to order stations into operation in
strict observance of the merit order include transmission system constraints
and the inflexibility of some generating units. A computerized system (the
settlement system) is used to calculate prices and to process metered,
operational and other data and to carry out the other procedures necessary to
calculate the payments due under the Pool trading arrangements. The settlement
system is administered on a day-to-day basis by NGC Settlements Limited, a
subsidiary of NGC, as settlement system administrator.
Fossil Fuel Levy
All the RECs are obligated to obtain a specified amount of generating
capacity from non-fossil fuel sources (the "NFFOs"). Because electricity
generated from non-fossil fuel plants is generally more expensive than
electricity from fossil fuel plants, a levy system (the "Fossil Fuel Levy")
has been instituted to reimburse the generators and the RECs for the extra
costs involved. The Regulator sets the amount of the Fossil Fuel Levy
annually. The current Fossil Fuel Levy is 2.2% of the value of sales of
electricity generated from fossil fuel sources.
REGULATION UNDER THE ELECTRICITY ACT
The Regulator
The principal legislation governing the structure and regulation of the
electricity industry in Great Britain is the Electricity Act. The Electricity
Act established the industry structure described above so
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as to enable privatization to take place. The Electricity Act also created the
institutional framework under which the industry is currently regulated,
including the office of the Regulator, who is appointed by the Secretary of
State. The present Regulator, Professor Stephen Littlechild, was appointed for
a five year term commencing September 1, 1989 and he was reappointed in 1994
for a further five year term ending on August 31, 1999.
The Regulator's functions under the Electricity Act include granting
licenses to generate, transmit, distribute or supply electricity (a function
which he exercises under a general authority from the Secretary of State);
proposing modifications to licenses and making license modification references
to the MMC; enforcing compliance with license conditions; advising the
Secretary of State in respect of the setting of each NFFO; calculating the
Fossil Fuel Levy rate and collecting the levy; determining certain disputes
between electricity licensees and customers; and setting standards of
performance for electricity licensees.
The Regulator exercises concurrently with the Director General of Fair
Trading certain functions relating to monopoly situations under the Fair
Trading Act 1973 and certain functions relating to courses of conduct which
have, or are intended or likely to have, the effect of restricting, distorting
or preventing competition in the generation, transmission or supply of
electricity under the Competition Act 1980.
The Electricity Act requires the Regulator and the Secretary of State to
exercise their functions in the manner each considers is best calculated to:
ensure that all reasonable demands for electricity are satisfied; secure that
license holders are able to finance their licensed activities; and promote
competition in the generation and supply of electricity.
Subject to these duties, the Secretary of State and the Regulator are
required to exercise their functions in the manner which each considers is
best calculated: to protect the interests of consumers of electricity supplied
by licensed suppliers in respect of price, continuity of supply, and the
quality of electricity supply services; to promote efficiency and economy on
the part of licensed electricity suppliers and the efficient use of
electricity supplied to consumers; to promote research and development by
persons authorized by license to generate, transmit or supply electricity; to
protect the public from the dangers arising from the generation, transmission
or supply of electricity; and to secure the establishment of machinery for
promoting the health and safety of workers in the electricity industry. The
Secretary of State and the Regulator also have a duty to take into account the
effect on the physical environment of activities connected with the
generation, transmission, distribution or supply of electricity.
In performing their duties to protect the interests of consumers in respect
of prices and other terms of supply, the Secretary of State and the Regulator
have a duty to take into account in particular the interests of consumers in
rural areas. In performing their duties to protect the interests of consumers
in respect of the quality of electricity supply services, they have a duty to
take into account in particular the interests of those who are disabled or of
pensionable age.
LICENSES
Generation Licenses
Unless covered by an exemption, all electricity generators operating a power
station in Great Britain are required to have a generation license. There are
currently 43 generation license holders in Great Britain. Although generation
is not subject to price control, generators are not permitted to discriminate
between customers or cross-subsidize their licensed activities. The conditions
attached to a generation license in England and Wales require the holder,
among other things, to comply with a grid code, be a member of the Pool and
submit relevant generating sets for central dispatch. The
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conditions attached to a generation license in Scotland require the holder,
among other things, to comply with a grid code. Failure to comply with any of
the generation license conditions may subject the licensee to a variety of
sanctions, including enforcement orders by the Regulator or license revocation
if an enforcement order is not complied with.
PES Licenses
Each of the RECs, Scottish Power and Hydro-Electric has a PES license for
its franchise area and is required, under the Electricity Act, to supply
electricity upon request to any premises in that area, except in specified
circumstances. Each PES license holder is also required not to discriminate
between its own supply business and other users of its distribution system and
the PES license prohibits cross-subsidy between the various regulated
businesses. As described above, PES license holders are subject to separate
price controls on the amounts they may charge for the supply of electricity to
Franchise Supply Customers. The PES licenses also require the licensee to
procure electricity at the best price reasonably obtainable having regard to
the sources available.
The Regulator published on August 15, 1996 further information relating to
the RECs' performance in relation to their distribution price controls and
supply price controls. The publication entitled "Yardstick of Electricity
Purchase Costs" includes information about the generation costs which RECs
pass through to Franchise Supply Customers under the Supply Price Control
Formula. The Regulator has reviewed the supply price controls applicable to
PES license holders and published on October 16, 1997 proposals for new
controls to take effect on April 1, 1998, when the present franchise supply
market will be opened to competition. He issued a consultation paper on this
matter on September 5, 1996 entitled "The Competitive Electricity Market from
1998: Price Restraints". He has since issued four further consultation papers
in January, May, July and August, 1997. The October 16, 1997 proposals are for
maximum price restraints in respect of supply to domestic and small business
customers for a period of at least two years beginning April 1, 1998, which
will discontinue the automatic pass-through of all costs currently passed
through to such customers. See "--Industry Structure--Supply Price Restraint
Proposals".
In England and Wales, each PES license limits the extent of the generation
capacity in which the relevant REC may hold an interest without the prior
consent of the Regulator ("own-generation limits"). These own-generation
limits, expressed in megawatts, currently restrict the participation of a REC
in generation to a level of approximately 15% of the simultaneous maximum
electricity consumption in that REC's franchise area at the time of
privatization. In the case of London Electricity, the own-generation limit is
fixed at 700 MW. After taking into account London Electricity's current
ownership interest in Barking Power, the amount of additional generation
investment which could be made by London Electricity is 565 MW. Under the
terms of the PES license, investments by affiliates of Entergy in generating
assets in the UK would be counted towards the own-generation limit. London
Electricity has applied to the Regulator for an exception from this license
condition for certain planned investments by other Entergy subsidiaries that
would exceed London Electricity's own generation limit, but cannot predict
whether the application will be granted.
The Regulator has stated that it would be reasonable to consider a REC's
request to increase its own-generation limit on the condition that it accepted
explicit restrictions on the contracts it signed with its supply business, and
that at a minimum the REC would be prohibited from selling additional units of
electricity into its franchise supply market. The Regulator considers that an
increase in own-generation limits subject to such restrictions could allow a
REC to contribute more fully to the development of competition in generation
without the allegation that it was exploiting its captive market and local
monopoly position. In June 1996, the Regulator stated that he had indicated to
Eastern Group plc, in the context of its acquisition of 6,000 MW of generating
capacity from National Power and PowerGen, that he would be favorably inclined
to relax the own-generation limits subject
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to the Regulator and Eastern Group plc agreeing to license modifications as
set out in a consultation paper which he had published in August 1995.
As part of the Regulator's October 16, 1997 supply price restraint
proposals, the Regulator has proposed modifications to the 14 PES license
holders in connection with the introduction of competition for franchise
supply customers beginning April 1, 1998. These modifications propose a number
of new obligations to offer services to suppliers. These services are
generally known as data management services, including registration, data
collection and aggregation, meter operation and provision of prepayment meter
infrastructure. The PES license holders are also being required to provide
collectively a data transfer service. See "--Industry Structure--Supply Price
Restraint Proposals".
The RECs are also contributing to a program of work by the Pool to adopt
settlement arrangements for the competitive market in 1998. It has been agreed
that these costs, subject to a cap above which recovery would be partial, will
be recovered from charges to be made to suppliers by the Pool over a five year
period.
Second Tier Supply Licenses
Other than a PES license holder in its franchise area and subject to certain
other exceptions, a supplier of electricity to premises in Great Britain must
possess a second tier supply license. Subject to the restrictions described in
"--Industry Structure--Supply of Electricity" above, second tier licensees may
compete for the supply of electricity with one another and with the PES
license holder in the relevant area. There are currently 39 second tier supply
license holders for England and Wales and 24 for Scotland.
Transmission Licenses
In England and Wales, NGC is the only transmission license holder. The
transmission license imposes on NGC the obligation to operate the merit order
system for the central dispatch of generating units and gives NGC
responsibility for the economic purchasing of ancillary services from
generators and suppliers. The transmission license requires NGC to offer terms
on a non-discriminatory basis for the carrying out of works for connection to,
and use of, the transmission system and for use of the interconnections.
Modifications to Licenses
Subject to a power of veto by the Secretary of State, the Regulator may
modify license conditions with the agreement of the license holder. He must
first publish the proposed modifications and consider representations or
objections made. Following the acquisition of London Electricity by the
Company, the Regulator requested that London Electricity's PES license be
modified, by agreement, to take into account the fact that the PES license is
now held by a subsidiary company. In particular, the Regulator requested that
the license be modified to provide that, with few exceptions, the only
business activities which London Electricity is permitted to undertake
directly are its franchise and second tier supply businesses and its
distribution business. The license modifications also require London
Electricity to ensure that it has sufficient management and financial
resources and facilities to conduct its supply and distribution businesses and
to comply with its statutory and license obligations. The directors of London
Electricity are required to give annual certificates to the Regulator to that
effect. Further, the consent of the Regulator is required for London
Electricity to create security over its assets, to incur indebtedness or to
give guarantees, unless the transaction is on normal commercial and arm's
length terms and for a "permitted purpose" (which refers to the supply,
distribution or generation business, or any business conducted by London
Electricity or its affiliates or subsidiaries prior to the take-over) or the
transaction involves any business whose aggregate revenues in any financial
year does not exceed 5% of the aggregate turnover of the supply,
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second-tier supply and distribution businesses in the previous financial year.
The consent of the Regulator also is required before London Electricity may
transfer assets or make loans to affiliates or subsidiaries unless it is for a
permitted purpose. However, various matters, such as payment of dividends out
of distributable reserves, repayments of capital, and payments on normal
commercial and arm's length terms for goods, services or assets supplied,
would not require the consent of the Regulator. These provisions are subject
to an overriding provision in the PES license which prevents any REC from
disposing of (which would include creating a security interest in)
distribution assets without the Regulator's express prior consent.
Additionally, the license modifications require London Electricity to use
reasonable efforts to maintain the investment grade of its debt rated by
Moody's and Standard & Poor's. Finally, because London Electricity is now
owned by the Company, the Regulator required London Electricity to obtain from
Entergy a legally enforceable agreement to provide information to London
Electricity, as licensee, in order to comply with requirements to the
Regulator. These modifications to the PES license have been agreed upon and
took effect during October 1997.
If the Regulator fails to agree to modifications with a license holder, he
may refer a matter relating to generation, transmission or supply of
electricity under a license to the MMC. If the MMC finds that the matter
referred to it has, or may be expected to have, specified effects adverse to
the public interest which could be remedied or prevented by a license
modification, the Regulator is required to make modifications that appear to
him requisite for the purpose of remedying or preventing the adverse effects
identified by the MMC. Modifications to license conditions may also be made by
the Secretary of State as a consequence of monopoly, merger or other
competition references under general UK competition law.
Term and Revocation of Licenses
London Electricity's PES license will continue in effect until at least 2025
unless revoked. Under ordinary circumstances, the license may not be revoked
except on 25 years' prior notice, which notice may not be given until 2000.
Otherwise, the Secretary of State may revoke a PES license by not less than 30
days' notice in writing to the licensee in certain specified circumstances
including any failure to comply with a final order of the Regulator requiring
the license holder to comply with its license conditions or requirements, or
the insolvency of the licensee.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Company as of March 31, 1997:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Edwin A. Lupberger............. 60 Director, Chairman of the Board and Chief
Executive Officer
Michael B. Bemis............... 50 Director and President
Gerald D. McInvale............. 53 Director, Executive Vice President and
Chief Financial Officer
Terry L. Ogletree.............. 53 Director
Michael G. Thompson............ 56 Senior Vice President and Secretary
William J. Regan............... 51 Treasurer
Louis E. Buck.................. 48 Audit Controller
</TABLE>
Edwin A. Lupberger has been a Director of the Company since March 1997,
Chairman of the Board and Chief Executive Officer of the Company since July
1997, and Chairman of the Board, Chief Executive Officer and Director of
Entergy since 1985. Mr. Lupberger has also served as Chairman of the Board and
Chief Executive Officer of Entergy Arkansas, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc. and Entergy New Orleans, Inc. since 1993 and of
Entergy Gulf States, Inc. since 1994. He has also served as Chief Executive
Officer of Entergy Power Development Corporation and of Entergy Power
Development International Corporation since 1993 and 1995, respectively.
Michael B. Bemis has been a Director and President of the Company since
March 1997. Mr. Bemis has served as Executive Vice President, International
Retail Operations of Entergy and as President and Chief Executive Officer of
London Electricity since 1997. Mr. Bemis has also served as Executive Vice
President of Entergy Arkansas, Inc., Entergy Louisiana, Inc. and Entergy
Mississippi, Inc. since 1992, and of Entergy Gulf States, Inc. since 1993.
Gerald D. McInvale has been a Director, Executive Vice President, and Chief
Financial Officer of the Company since March 1997. Mr. McInvale has served as
Executive Vice President and Chief Financial Officer of Entergy, Entergy
Arkansas, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy
New Orleans, Inc., System Energy Resources, Inc., Entergy Services, Entergy
Operations and Entergy Enterprises since 1991, and of Entergy Gulf States,
Inc. since 1993. Mr. McInvale has also served as Senior Vice President,
Treasurer, and Director of Entergy Power Development Corporation and Entergy
Power Development International Corporation since 1993 and 1995, respectively.
Terry L. Ogletree has been a Director of the Company since March 1997 and
Executive Vice President-International of Entergy since 1996. Mr. Ogletree has
served as Chief Operating Officer, President and Director of Entergy Power
Development Corporation, Entergy Power, Inc. and Entergy Richmond Power
Corporation since 1993 and of Entergy Power Development International
Corporation since 1995. From 1989 to 1993, Mr. Ogletree served as President of
Constellation Energy.
Michael G. Thompson has been Senior Vice President and Secretary of the
Company since March 1997. Mr. Thompson has served as Senior Vice President and
General Counsel of Entergy and Entergy Services since 1992. Mr. Thompson has
also served as Senior Vice President, Secretary, and Director of Entergy Power
Development International Corporation since 1995. From 1987 to 1992, Mr.
Thompson served as a Senior Partner at Friday, Eldredge & Clark law firm.
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William J. Regan has been a Treasurer of the Company since March 1997. Mr.
Regan has served as Vice President and Treasurer of Entergy, Entergy Arkansas,
Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi,
Inc., Entergy New Orleans, Inc., System Energy Resources, Inc., Entergy
Operations, Inc. and Entergy Services, Inc. since 1995. From 1989 to 1995, Mr.
Regan served as Senior Vice President and Corporate Treasurer of United
Services Automobile Association.
Louis E. Buck has been Audit Controller of the Company since July 1997. Mr.
Buck has served as Vice President and Chief Accounting Officer of Entergy,
Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc., Entergy New Orleans, Inc., System Energy Resources,
Inc., Entergy Operations, Inc., and Entergy Services, Inc. since 1995. From
1992 to 1995, Mr. Buck served as Vice President and Chief Financial Officer of
North Carolina Electric Membership Corporation.
DIRECTOR AND OFFICER COMPENSATION
The officers and directors listed above (each an "Entergy Officer or
Director", as applicable), have received, and will continue to receive,
compensation in respect of services performed by such persons in their
capacities as Entergy Officers and Directors of the Company from either
Entergy Services, Inc., (Entergy Services), or Entergy Enterprises, Inc.
(Entergy Enterprises), their primary employer and both affiliates of the
Company. The Company is charged by Entergy Services and Entergy Enterprises
for the time spent by those Entergy Officers and Directors who do not devote
their full time to the affairs of the Company and for a portion of the
overhead costs associated with each such Entergy Officer and Director. The
salaries of all Entergy Officers and Directors are paid by Entergy Services or
Entergy Enterprises, and Entergy Services and Entergy Enterprises are
reimbursed by the Company. Entergy Officers and Directors receive no cash or
non-cash compensation as a result of these arrangements beyond that which they
would otherwise receive from Entergy Services or Entergy Enterprises for the
services performed by them for Entergy Services or Entergy Enterprises.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The Company is charged by Entergy Services and Entergy Enterprises for the
time spent by those Entergy Officers and Directors who do not devote their
full time to the affairs of the Company and for a portion of the overhead
costs associated with each such Entergy Officer and Director. The salaries of
all Entergy Officers and Directors are paid by Entergy Services or Entergy
Enterprises, and Entergy Services and Entergy Enterprises are reimbursed by
the Company. Entergy Officers and Directors receive no cash or non-cash
compensation as a result of these arrangements beyond that which they would
otherwise receive from Entergy Services or Entergy Enterprises for the
services performed by them for Entergy Services or Entergy Enterprises.
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<PAGE>
SECURITY OWNERSHIP
The Company is wholly owned indirectly by Entergy. The following table shows
the number of shares of the common stock of Entergy owned by the directors and
executive officers of the Company as of December 31, 1996.
<TABLE>
<CAPTION>
ENTERGY COMMON STOCK
-----------------------
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(A)
-----------------------
SOLE
VOTING AND OTHER
INVESTMENT BENEFICIAL
NAME POWER OWNERSHIP(B)
---- ---------- ------------
<S> <C> <C>
Michael B. Bemis........................................ 11,480 10,000
Gerald D. McInvale...................................... 16,030 10,000
Edwin A. Lupberger...................................... 34,392 41,324(c)
Terry L. Ogletree....................................... 6,741 --
Michael G. Thompson..................................... 13,319 7,500
William J. Regan........................................ 202 --
Louis E. Buck........................................... 80 --
------ ------
All directors and executive officers.................... 82,244 68,824
====== ======
</TABLE>
- --------
(a) Based on information furnished by the respective individuals. Except as
noted, each individual has sole voting and investment power. The amount
owned by each individual and by all directors and executive officers as a
group does not exceed one percent of the outstanding securities of any
class of security so owned.
(b) Includes shares of Entergy common stock in the form of unexercised stock
options awarded pursuant to the Equity Ownership Plan as follows: Michael
B. Bemis, 10,000 shares; Edwin Lupberger, 38,824 shares; Gerald D.
McInvale, 10,000 shares, and Michael G. Thompson, 7,500 shares.
(c) Includes 2,500 shares of Entergy common stock held by Edwin Lupberger's
spouse. Mr. Lupberger disclaims beneficial ownership in these shares.
DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to the terms of the Partnership Agreement, Entergy London Capital
will issue the Preferred Securities. The Preferred Securities will represent
limited partner interests in Entergy London Capital. This summary of certain
provisions of the Preferred Securities does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Partnership
Agreement, including the definitions therein of certain terms, and the
Delaware Act. Wherever particular defined terms of the Partnership Agreement
are referred to, such defined terms are incorporated herein by reference. The
form of the Partnership Agreement has been filed as an exhibit to the
Registration Statement.
GENERAL
All of the general partner interests in Entergy London Capital at all times
while the Preferred Securities are outstanding will be directly or indirectly
owned by Entergy. The Partnership Agreement authorizes and creates the
Preferred Securities, which represent limited partner interests in Entergy
London Capital and does not authorize the creation of any additional series of
limited partner interests. The limited partner interests represented by the
Preferred Securities will have a preference with respect to cash distributions
and amounts payable on dissolution, redemption or otherwise over
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the General Partner's interest in Entergy London Capital. The Company has,
through the Guarantee, the Partnership Agreement, the Perpetual Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guaranteed all of Entergy London Capital's obligations
with respect to the Preferred Securities.
DISTRIBUTIONS
Distributions on each Preferred Security will be payable at the rate of %
per annum of the stated Liquidation Preference Amount of $25, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year. Distributions that are in arrears for more than one quarter will
accumulate additional Distributions thereon at the rate of % per annum
thereof, compounded quarterly ("Additional Distributions"). The term
"Distributions" as used herein includes any Additional Distributions,
Additional Amounts or Additional Interest (as defined herein). Distributions
will accumulate from the date of original issuance of the Preferred
Securities. The first Distribution payment date for the Preferred Securities
will be December 31, 1997. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months.
So long as no Debenture Event of Default under the Indenture has occurred
and is continuing, the Company has the right under the Indenture to defer the
payment of interest indefinitely on the Perpetual Junior Subordinated
Debentures at any time and from time to time. As a consequence of any such
deferral, quarterly Distributions on the Preferred Securities would also be
deferred (but would continue to accumulate Additional Distributions thereon at
the rate of % per annum, compounded quarterly) by Entergy London Capital.
Until all deferred interest payments, together with interest thereon, have
been paid in full, the Company may not, directly or indirectly, (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock, (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any of its debt securities (including other junior subordinated
deferrable interest debentures) that rank pari passu with or junior in
interest to the Perpetual Junior Subordinated Debentures on which payment is
being deferred, (iii) make any guarantee payments with respect to any
guarantee if such guarantee ranks pari passu with or junior in interest to the
Perpetual Junior Subordinated Debentures on which payment is being deferred or
(iv) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of its debt securities held by any affiliate, or make
any loans or advances to, or make payments on any guarantee of the debt of,
any affiliate, in each case other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, the Company's common stock and exchanges or conversions of common stock of
one class for common stock of another class, (b) payments by the Company under
the Guarantee (or any other guarantee by the Company with respect to any
securities of its subsidiaries, provided that the proceeds from the issuance
of such securities were used to purchase junior subordinated deferrable
interest debentures issued by the Company), and (c) any dividend or payment by
the Company which is applied, directly or indirectly, to the payment of (x)
principal of, or interest or premium, if any, on Acquisition Debt as and when
due in accordance with the terms thereof, or (y) any UK Tax Payments.
"Acquisition Debt" shall mean the borrowings outstanding under the Credit
Facilities Agreement in the maximum principal amount of (Pounds)810 million
and any refinancings, replacements, renewals or refundings thereof that do not
increase the principal amount of such indebtedness in excess of (Pounds)810
million. "UK Tax Payments" shall mean any direct or indirect payment by the
Company to governmental authorities in respect of UK taxes arising from the
operations of the Company and London Electricity as and when such taxes become
due and payable. See "Description of the Perpetual Junior Subordinated
Debentures--Option to Defer Payment of Interest".
The Company currently has no intention of exercising its right to defer
payments of interest on the Perpetual Junior Subordinated Debentures.
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<PAGE>
In the event that any date on which Distributions are payable on the
Preferred Securities is not a Business Day (as defined below), payment of the
Distributions payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such Distributions shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date (each date on which Distributions are payable in accordance with
the foregoing, a "Distribution Date"). A "Business Day" shall mean any day
other than a Saturday or a Sunday, or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
remain closed, or a day on which the corporate trust office of the Debenture
Trustee is closed for business.
It is anticipated that the revenue of Entergy London Capital available for
distribution to holders of the Preferred Securities will be limited to
payments under the Perpetual Junior Subordinated Debentures in which Entergy
London Capital will invest the proceeds from the issuance and sale of the
Preferred Securities and the capital contribution of the General Partner. See
"Description of the Perpetual Junior Subordinated Debentures". If the Company
does not make interest payments on the Perpetual Junior Subordinated
Debentures, Entergy London Capital will not have funds available to pay
Distributions on the Preferred Securities. The payment of Distributions (if
and to the extent Entergy London Capital has funds available for the payment
of such Distributions and cash sufficient to make such payments) is guaranteed
by the Company as set forth herein under "Description of the Guarantee".
Distributions on the Preferred Securities will be payable to the holders of
record as they appear on the books and records of Entergy London Capital at
the close of business on the relevant record dates, which, as long as the
Preferred Securities remain in book-entry form, will be one Business Day prior
to the relevant Distribution Date. In the event that any Preferred Securities
are not in book-entry form, the relevant record date for such Preferred
Securities shall be the date 15 days prior to the relevant Distribution Date.
REDEMPTIONS
Mandatory Redemption. Upon the redemption, in whole or in part, of the
Perpetual Junior Subordinated Debentures, the proceeds from such redemption
will be applied by Entergy London Capital to redeem a Like Amount of Preferred
Securities, upon not less than 30 nor more than 60 days' notice to each holder
of Preferred Securities at its registered address, at the Redemption Price.
Optional Redemption of Perpetual Junior Subordinated Debentures. The Company
will have the right to redeem the Perpetual Junior Subordinated Debentures on
or after November , 2002, in whole at any time or in part from time to time,
at the Debentures Redemption Price and thereby cause a mandatory redemption of
a Like Amount of Preferred Securities at the Redemption Price. See
"Description of the Perpetual Junior Subordinated Debentures--Redemption".
The Company will also have the right to redeem the Perpetual Junior
Subordinated Debentures in whole (but not in part), at the Debentures
Redemption Price, if the Company has or will become obligated to pay
Additional Amounts as described under "Description of the Perpetual Junior
Subordinated Debentures--Additional Amounts", and thereby cause a mandatory
redemption of the Preferred Securities in whole (but not in part) at the
Redemption Price. See "Description of the Perpetual Junior Subordinated
Debentures--Optional Tax Redemption".
Special Event Redemption or Distribution of Perpetual Junior Subordinated
Debentures. If a Special Event shall have occurred and be continuing, the
Company shall have the right to redeem the Perpetual Junior Subordinated
Debentures at any time in whole (but not in part) at the Debentures Redemption
Price and thereby cause a mandatory redemption of the Preferred Securities in
whole
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<PAGE>
(but not in part) at the Redemption Price within 90 days following the
occurrence of such Special Event.
Whether or not a Special Event has occurred, the General Partner has the
right, at any time, to dissolve Entergy London Capital and, after satisfaction
of liabilities to creditors of Entergy London Capital, if any, as provided by
the Delaware Act, to cause a Like Amount of Perpetual Junior Subordinated
Debentures to be distributed to the holders of the Preferred Securities in
liquidation of Entergy London Capital. Under current US Federal income tax
law, provided Entergy London Capital is treated as a partnership at the time
of such distribution, such distribution would not be a taxable event to
holders of the Preferred Securities. See "Certain Income Tax Considerations--
US Income Tax Considerations--Receipt of Perpetual Junior Subordinated
Debentures or Cash in Certain Circumstances".
If a Special Event occurs and the Company does not elect to redeem the
Perpetual Junior Subordinated Debentures or to dissolve Entergy London
Capital, the Preferred Securities will remain outstanding and, if such Special
Event is a Tax Event, Additional Interest (as described under "Description of
the Perpetual Junior Subordinated Debentures--Certain Covenants of the
Company") will be payable on the Perpetual Junior Subordinated Debentures.
"Tax Event" means the receipt by Entergy London Capital or the Company of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the US, the UK or any
political subdivision or taxing authority thereof or therein affecting
taxation, or as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of this Prospectus, there is more than an
insubstantial risk that (i) Entergy London Capital is, or will be within 90
days of the date thereof, subject to US Federal or UK income tax with respect
to income received or accrued on the Perpetual Junior Subordinated Debentures,
(ii) interest payable by the Company on the Perpetual Junior Subordinated
Debentures is treated as a distribution within the meaning of Section 209 of
the Income and Corporation Taxes Act 1988 of the UK or in any other manner is
not, or within 90 days of the date thereof will not be, deductible by the
Company, in whole or in part, for UK corporation tax purposes, or (iii)
Entergy London Capital is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority
(an "Investment Company Act Change") to the effect that Entergy London Capital
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), which Investment Company Act Change becomes
effective on or after the date of this Prospectus.
"Special Event" means the occurrence of a Tax Event or an Investment Company
Act Event.
"Like Amount" means (i) with respect to a redemption of any Preferred
Securities, Preferred Securities having a Liquidation Preference Amount equal
to that portion of the principal amount of Perpetual Junior Subordinated
Debentures to be contemporaneously redeemed and the proceeds of which will be
used to pay the Redemption Price of such Preferred Securities, and (ii) with
respect to a distribution of Perpetual Junior Subordinated Debentures to
holders of the Preferred Securities in connection with a dissolution of
Entergy London Capital, Perpetual Junior Subordinated Debentures having a
principal amount equal to the Liquidation Preference Amount of the Preferred
Securities of the holder to whom such Perpetual Junior Subordinated Debentures
are distributed.
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"Liquidation Preference Amount" means the stated amount of $25 per Preferred
Security.
After the date fixed for any distribution of Perpetual Junior Subordinated
Debentures upon liquidation of Entergy London Capital (i) the Preferred
Securities will no longer be deemed to be outstanding, (ii) DTC or its
nominee, as the record holder of the Preferred Securities, will receive Global
Book-Entry Interests (as defined herein) representing the Perpetual Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Preference Amount of the Preferred Securities, or, if any Preferred Securities
are not held by DTC or its nominee, the certificates representing the
Preferred Securities will be deemed to represent Book-Entry Interests (as
defined herein) representing the Perpetual Junior Subordinated Debentures
having a principal amount equal to the Liquidation Preference Amount of the
Preferred Securities, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on the Preferred Securities
until such certificates are presented to the Company or its agent for transfer
or reissuance, and (iii) the Company will use its reasonable efforts to list
the Perpetual Junior Subordinated Debentures on the NYSE or such other
exchanges or other organizations, if any, on which the Preferred Securities
are then listed or traded.
There can be no assurance as to the market price for the Perpetual Junior
Subordinated Debentures that may be distributed if a dissolution and
liquidation of Entergy London Capital were to occur. Accordingly, the
Perpetual Junior Subordinated Debentures that the investor may receive upon a
dissolution and liquidation of Entergy London Capital may trade at a discount
to the price that the investor paid to purchase the Preferred Securities
offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Perpetual Junior Subordinated Debentures. Redemptions of the
Preferred Securities shall be made, and the Redemption Price shall be payable,
on each Redemption Date only to the extent that Entergy London Capital has
funds on hand available for the payment of such Redemption Price.
If Entergy London Capital gives a notice of redemption in respect of the
Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, Entergy London Capital
will deposit irrevocably with DTC funds sufficient to pay the applicable
Redemption Price and will give DTC irrevocable instructions and authority to
pay the Redemption Price to the holders of such Preferred Securities. See "--
Book-Entry Issuance". If the Preferred Securities are no longer in book-entry
form, Entergy London Capital, to the extent funds are available therefor, will
irrevocably deposit with the paying agent for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give such paying
agent irrevocable instructions and authority to pay the Redemption Price to
the holders thereof upon surrender of their certificates evidencing such
Preferred Securities. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Preferred Securities called for
redemption shall be payable to the holders of such Preferred Securities as of
the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon
the date of such deposit, all rights of the holders of such Preferred
Securities so called for redemption will cease, except the right of the
holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the Redemption
Date. In the event that payment of the Redemption Price in
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respect of Preferred Securities called for redemption is improperly withheld
or refused and not paid either by Entergy London Capital or by the Company
pursuant to the Guarantee as described under "Description of the Guarantee",
Distributions on the Preferred Securities will continue to accumulate at the
then applicable rate from the Redemption Date originally established by
Entergy London Capital for such Preferred Securities to the date such
Redemption Price is actually paid, in which case the actual payment date will
be the date fixed for redemption for purposes of calculating the Redemption
Price.
Subject to applicable law (including, without limitation, Rule 14e-1 under
the Exchange Act and any other applicable US Federal securities law), the
Company or its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Perpetual Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the holders of record as they appear on
the books and records of Entergy London Capital as of the relevant record
date, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Redemption Date or liquidation
date, as applicable; provided, however, that in the event that the Preferred
Securities are not in book-entry form, the relevant record date for the
Preferred Securities shall be the date 15 days prior to the Redemption Date or
liquidation date, as applicable.
If less than all of the Preferred Securities are to be redeemed on a
Redemption Date, the particular Preferred Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the General
Partner from the outstanding Preferred Securities not previously called for
redemption, by lot or by such method as the General Partner shall deem fair
and appropriate, which shall provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Preference Amount of Preferred Securities of a denomination
larger than $25. The General Partner shall promptly notify the registrar and
transfer agent in writing of the Preferred Securities selected for redemption
and, in the case of any Preferred Securities selected for partial redemption,
the aggregate Liquidation Preference Amount thereof to be redeemed.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Partnership Agreement, Entergy London Capital shall be
dissolved on the first to occur of: (i) the delivery of written direction by
the General Partner to dissolve Entergy London Capital (which direction is
optional and wholly within the discretion of the General Partner) (see "--
Redemptions--Special Event Redemption or Distribution of Perpetual Junior
Subordinated Debentures"); (ii) the occurrence of an event which results in
the General Partner ceasing to be a general partner under the Delaware Act,
unless the business of Entergy London Capital is continued in accordance with
the Partnership Agreement and the Delaware Act and (iii) the entry of an order
for the dissolution of Entergy London Capital under the Delaware Act by a
court of competent jurisdiction.
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of Entergy London Capital (other than a dissolution described under
"--Redemptions--Special Event Redemption or Distribution of Perpetual Junior
Subordinated Debentures" above) the holders of Preferred Securities at the
time outstanding will be entitled to receive the Liquidation Preference Amount
of the Preferred Securities plus all accumulated and unpaid Distributions to
the date of payment (the "Liquidation Distribution") out of the assets of
Entergy London Capital legally available for distribution to partners, after
satisfaction of liabilities to creditors as required by the Delaware Act,
prior to any distribution of assets by Entergy London Capital to the General
Partner. If such
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Liquidation Distribution can be paid only in part because Entergy London
Capital has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by Entergy London
Capital on the Preferred Securities shall be paid on a pro rata basis in
proportion to the full Liquidation Distribution for which the Preferred
Securities would be entitled.
MERGERS, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS
Entergy London Capital may not merge with or into, convert into,
consolidate, amalgamate, be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corporation or other
person, except as described below or as otherwise permitted or required in the
Partnership Agreement. Entergy London Capital may, without the consent of the
holders of the Preferred Securities, merge with or into, convert into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a limited partnership,
limited liability company or trust organized as such under the laws of any
jurisdiction; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of Entergy London Capital with respect to the
Preferred Securities or (b) substitutes for the Preferred Securities other
securities (the "Successor Securities") so long as the Successor Securities
rank the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Company expressly acknowledges such successor entity as the holder of the
Perpetual Junior Subordinated Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially identical to that of Entergy
London Capital, (vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Company has
received an opinion from independent counsel experienced in such matters to
the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, and (b)
following such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither Entergy London Capital nor such
successor entity will be required to register as an investment company under
the Investment Company Act and (viii) the Company or any permitted successor
or assignee guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, Entergy London Capital shall not, except with
the consent of holders of 100% in aggregate Liquidation Preference Amount of
the Preferred Securities, consolidate, amalgamate, merge with or into, convert
into, be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, convert into, or replace it if
such consolidation, amalgamation, merger, conversion or replacement would
cause Entergy London Capital or the successor entity to be classified as other
than a partnership or grantor trust for US Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF PARTNERSHIP AGREEMENT
Except as provided below and under "Description of the Guarantee--Amendments
and Assignment" and as otherwise required by law and the Partnership
Agreement, the holders of the Preferred Securities will have no voting rights.
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The Partnership Agreement may be amended from time to time by the General
Partner, without the consent of the holders of the Preferred Securities (i) to
cure any ambiguity, to correct or supplement any provisions in the Partnership
Agreement that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the
Partnership Agreement, that shall not be inconsistent with the other
provisions of the Partnership Agreement, or (ii) to modify, eliminate or add
to any provisions of the Partnership Agreement to such extent as shall be
necessary to ensure that Entergy London Capital will be classified for US
Federal income tax purposes as a partnership or a grantor trust at all times
that any Preferred Securities are outstanding or to ensure that Entergy London
Capital will not be required to register as an "investment company" under the
Investment Company Act, provided, however, that except in the case of clause
(ii), such action shall not adversely affect in any material respect the
interests of any holder of Preferred Securities, and, in the case of clause
(i), any such amendments of the Partnership Agreement shall become effective
when notice thereof is given to the holders of Preferred Securities. The
Partnership Agreement may be amended by the General Partner with the consent
of holders representing a majority (based upon aggregate Liquidation
Preference Amount) of the outstanding Preferred Securities and upon receipt by
the General Partner of an opinion from independent counsel to the effect that
such amendment or the exercise of any power granted to the General Partner in
accordance with such amendment will not affect Entergy London Capital's status
as a partnership for US Federal income tax purposes or Entergy London
Capital's exemption from the status as an "investment company" under the
Investment Company Act, provided that without the consent of each holder of
the Preferred Securities, the Partnership Agreement may not be amended to
change the amount or timing of any Distribution on the Preferred Securities or
otherwise adversely affect the amount of any Distribution required to be made
in respect of the Preferred Securities as of a specified date or restrict the
right of holders of the Preferred Securities to institute suit for the
enforcement of any such payment on or after such date as described below.
So long as any Perpetual Junior Subordinated Debentures are held by or for
the benefit of Entergy London Capital, the General Partner shall not (i)
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or power conferred
on the Debenture Trustee with respect to such Perpetual Junior Subordinated
Debentures, (ii) waive any past default that is waiveable under Section 813 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Perpetual Junior Subordinated Debentures shall be due
and payable or (iv) consent to any amendment, modification or termination of
the Indenture or the Perpetual Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of a majority in aggregate Liquidation Preference Amount of all
outstanding Preferred Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Perpetual
Junior Subordinated Debentures affected thereby, no such consent shall be
given by the General Partner without the prior written consent of each holder
of the Preferred Securities. The General Partner shall not revoke any action
previously authorized or approved by a vote of the Preferred Securities except
by subsequent vote of not less than 66 2/3% in Liquidation Preference Amount
of the holders of the Preferred Securities. The General Partner shall notify
all holders of Preferred Securities of any notice of default with respect to
the Perpetual Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the General Partner shall obtain an
opinion from independent counsel experienced in such matters to the effect
that the General Partner will be classified as a partnership and not as an
association taxable as a corporation for US Federal income tax purposes on
account of such action.
If the General Partner fails to enforce Entergy London Capital's rights
under the Perpetual Junior Subordinated Debentures or the Indenture, a holder
of Preferred Securities may institute a legal proceeding directly against the
Company to enforce Entergy London Capital's rights with respect to the
Perpetual Junior Subordinated Debentures or the Indenture, to the fullest
extent permitted by law,
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without first instituting any legal proceeding against the General Partner or
any other person. Notwithstanding the foregoing, a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of principal of or interest on the Perpetual Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation
Preference Amount of the Preferred Securities of such holder on or after the
due dates specified in the Perpetual Junior Subordinated Debentures. See
"Description of the Guarantee".
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The General Partner will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of Preferred Securities in the
manner set forth in the Partnership Agreement.
No vote or consent of the holders of Preferred Securities will be required
for Entergy London Capital to redeem and cancel the Preferred Securities in
accordance with the Partnership Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, or any affiliate of the Company,
shall, for purposes of such vote or consent, be treated as if they were not
outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of Preferred Securities held by DTC or its nominee shall
be made as described under "--Book-Entry Issuance". If any Preferred
Securities are not held by DTC or its nominee, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address
shall appear on the books and records of Entergy London Capital. The paying
agent for the Preferred Securities shall initially be The Bank of New York.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for the Preferred Securities. The
Preferred Securities will be issued as fully-registered global securities in
book-entry form registered in the name of Cede & Co. (DTC's partnership
nominee). Two fully-registered global certificates in book-entry form will be
issued for the Preferred Securities, representing the aggregate total number
of the Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the NYSE, the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or maintain
a custodial relationship with Direct Participants, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
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Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security ("Beneficial Owner") is in turn to be recorded on
the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in the Preferred
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Preferred Securities,
except in the event that use of the book-entry system for the Preferred
Securities is discontinued.
To facilitate subsequent transfers, all of the Preferred Securities
deposited by Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Preferred Securities with DTC
and their registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Preferred Securities; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Preferred Securities are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC's current practice is to
determine by lot the amount of the interest of each Direct Participant to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Preferred
Securities. Under its usual procedures, DTC mails an omnibus proxy (the
"Omnibus Proxy") to Entergy London Capital as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts such Preferred
Securities are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made to DTC. DTC's
current practice, upon receipt of any payment in respect of securities such as
the Preferred Securities, is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive
payment on such payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participant and not of DTC, Entergy London Capital
or the Company, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of Distributions to DTC is the
responsibility of Entergy London Capital, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
If (i) DTC discontinues providing its services as securities depositary with
respect to the Preferred Securities at any time by giving notice to Entergy
London Capital or the Company and a successor securities depositary is not
obtained, (ii) Entergy London Capital decides to discontinue use of the system
of book-entry transfers through DTC (or a successor depositary) or (iii)
Entergy London Capital fails to pay any amounts due and payable in respect of
the Preferred Securities or the Company fails
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to pay any amounts due and payable in respect of the Guarantee, as required by
their respective terms, definitive Preferred Securities certificates will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Entergy London Capital and the Company
believe to be accurate, but Entergy London Capital and the Company assume no
responsibility for the accuracy thereof. Neither Entergy London Capital nor
the Company has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
REGISTRAR AND TRANSFER AGENT
The Bank of New York will act as registrar and transfer agent for the
Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of Entergy London Capital, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. Entergy London Capital will not be required to register
or cause to be registered the transfer of Preferred Securities after such
Preferred Securities have been called for redemption.
MISCELLANEOUS
The General Partner is authorized and directed to conduct the affairs of and
to operate Entergy London Capital in such a way that Entergy London Capital
will not be deemed to be an "investment company" required to be registered
under the Investment Company Act or classified other than as a partnership for
US Federal income tax purposes and so that the Perpetual Junior Subordinated
Debentures will be treated as equity for US Federal income tax purposes. In
this connection, the General Partner is authorized to take any action, not
inconsistent with applicable law or the Partnership Agreement, that the
General Partner determines in its discretion to be necessary or desirable for
such purposes, as long as such action does not materially and adversely affect
the interests of the holders of the Preferred Securities.
Holders of the Preferred Securities will have no rights to remove or replace
the General Partner.
DESCRIPTION OF THE GUARANTEE
The Guarantee will be executed and delivered by the Company concurrently
with the issuance by Entergy London Capital of the Preferred Securities for
the benefit of the holders from time to time of the Preferred Securities. The
Bank of New York will act as indenture trustee (the "Guarantee Trustee") under
the Guarantee for the purposes of compliance with the Trust Indenture Act, and
the Guarantee will be qualified as an Indenture under the Trust Indenture Act.
This summary of certain provisions of the Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the Guarantee Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. The form of the
Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. The Guarantee Trustee will hold the Guarantee
for the benefit of the holders of the Preferred Securities.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to
the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that Entergy London Capital may
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have or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
Entergy London Capital (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
the Preferred Securities, to the extent that Entergy London Capital has funds
on hand available therefor, (ii) the Redemption Price with respect to any
Preferred Securities called for redemption to the extent that Entergy London
Capital has funds on hand available therefor, or (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of Entergy London Capital
(unless the Perpetual Junior Subordinated Debentures are distributed to
holders of the Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Preference Amount and all accumulated and unpaid Distributions on
the Preferred Securities to the date of payment and (b) the amount of assets
of Entergy London Capital remaining available for distribution to holders of
the Preferred Securities. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to
the holders of the Preferred Securities or by causing Entergy London Capital
to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
Entergy London Capital's obligations under the Preferred Securities, but will
apply only to the extent that Entergy London Capital has funds sufficient to
make such payments, and is not a guarantee of collection.
If the Company does not make interest payments on the Perpetual Junior
Subordinated Debentures held by Entergy London Capital, it is expected that
Entergy London Capital will not pay Distributions on the Preferred Securities
and will not have funds available therefor. The Guarantee will rank
subordinate and junior in right of payment to all Senior Debt. See "--Status
of the Guarantee". The Guarantee will not limit the incurrence or issuance of
other secured or unsecured debt of the Company, whether under the Indenture,
any other indenture that the Company may enter into in the future or
otherwise.
The Company has, through the Guarantee, the Partnership Agreement, the
Perpetual Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guaranteed all of Entergy London
Capital's obligations under the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such a guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of Entergy London Capital's obligations under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Perpetual Junior Subordinated Debentures and the Guarantee".
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt.
The Guarantee will rank pari passu with all other guarantees issued by the
Company with respect to any preferred securities issued by any trust,
partnership or other entity which is a financing vehicle of the Company. The
Guarantee will constitute a guarantee of payment and not of collection (i.e.,
the guaranteed party may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against any other person or entity). The Guarantee will be
held for the benefit of the holders of the Preferred Securities. The Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by or on behalf of Entergy London Capital or upon
distribution to the holders of the Preferred Securities of the Perpetual
Junior Subordinated Debentures. The Guarantee does not place a limitation on
the amount of additional Senior Debt that may be incurred by the Company. The
Company expects from time to time to incur additional indebtedness
constituting Senior Debt.
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AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of
the holders of a majority of the aggregate Liquidation Preference Amount of
the outstanding Preferred Securities. The manner of obtaining any such
approval is set forth under "Description of the Preferred Securities--Voting
Rights; Amendment of Partnership Agreement". All guarantees and agreements
contained in the Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate Liquidation Preference Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against Entergy London Capital, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than prior to the occurrence and after the
curing of a default by the Company in performance of the Guarantee, undertakes
to perform only such duties as are specifically set forth in the Guarantee
and, after default with respect to the Guarantee, must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Notwithstanding this provision, the
Guarantee Trustee is under no obligation to exercise any of the powers vested
in it by the Guarantee at the request of any holder of the Preferred
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of the Preferred Securities, upon full payment
of the amounts payable upon liquidation of Entergy London Capital or upon
distribution of the Perpetual Junior Subordinated Debentures to the holders of
the Preferred Securities. The Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of the Preferred
Securities must restore payment of any sums paid under the Preferred
Securities or the Guarantee.
GOVERNING LAW; SUBMISSION TO JURISDICTION
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York. Any suit, legal action or proceeding against the
Company or its properties, assets or revenues with respect to its obligations,
liabilities or any other matter arising out of or in connection
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with the Guarantee or a Perpetual Junior Subordinated Debenture may be brought
in the Supreme Court of New York, New York County or in the United States
District Court for the Southern District of New York and any appellate court
from either thereof. The Company has submitted to the non-exclusive
jurisdiction of such courts for the purposes of any such proceeding and has
irrevocably waived, to the fullest extent it may effectively do so, any
objection to the laying of venue of any such proceeding in any such court and
the defense of an inconvenient forum.
DESCRIPTION OF THE PERPETUAL JUNIOR SUBORDINATED DEBENTURES
The Perpetual Junior Subordinated Debentures are to be issued under the
Indenture with terms corresponding to the terms of the Preferred Securities.
This summary of certain terms and provisions of the Perpetual Junior
Subordinated Debentures and the Indenture does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the
Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Whenever particular defined terms of the Indenture (as supplemented or amended
from time to time) are referred to herein, such defined terms are incorporated
herein or therein by reference.
GENERAL
Concurrently with the issuance of the Preferred Securities, Entergy London
Capital will invest the proceeds thereof and the capital contribution of the
General Partner in the Perpetual Junior Subordinated Debentures issued by the
Company. The Perpetual Junior Subordinated Debentures will have no stated
maturity date. The Perpetual Junior Subordinated Debentures will be unsecured
and will rank junior and be subordinate in right of payment to all Senior Debt
of the Company and will rank pari passu with any other series of Indenture
Debentures (as defined below) issued by the Company. Additional series of
debentures (together with the Perpetual Junior Subordinated Debentures, the
"Indenture Debentures") may be issued, without limitation as to amount, under
the Indenture and the Indenture does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, whether under the Indenture,
any other indenture that the Company may enter into in the future or
otherwise. See "--Subordination". Application will be made to list the
Perpetual Junior Subordinated Debentures on the Luxembourg Stock Exchange.
INTEREST
The Perpetual Junior Subordinated Debentures will bear interest at the rate
of % per annum of the principal amount thereof, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year (each,
an "Interest Payment Date"), commencing December 31, 1997, initially, through
a Paying Agent to the Book-Entry Depository (as defined herein), as the holder
of the Global Debenture (as defined herein), and, otherwise, as described
under "--Form, Book-Entry Procedures and Transfer--Payments on the Perpetual
Junior Subordinated Debentures". The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. In
the event that any Interest Payment Date is not a Business Day, then payment
of the interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such Interest Payment Date. Interest that is in arrears for more than one
quarter will bear additional interest (to the extent permitted by law) at the
rate of % per annum thereof, compounded quarterly. The term "interest" as
used herein shall include quarterly interest payments, interest on quarterly
interest payments in arrears and Additional Amounts and Additional Interest,
as applicable.
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OPTION TO DEFER PAYMENT OF INTEREST
So long as no Debenture Event of Default under the Indenture has occurred
and is continuing, the Company has the right under the Indenture during the
term of the Perpetual Junior Subordinated Debentures to defer indefinitely the
payment of interest at any time or from time to time. Until all deferred
interest payments together with interest thereon have been paid in full,
interest will continue to accrue, together with interest thereon at the stated
rate of interest on the Perpetual Junior Subordinated Debentures, to the
extent permitted by law.
In the event that the Company exercises this right, until all deferred
interest payments together with interest thereon have been paid in full, the
Company may not, directly or indirectly, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of its capital stock, (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of its debt
securities (including other junior subordinated deferrable interest
debentures) that rank pari passu with or junior in interest to the Perpetual
Junior Subordinated Debentures on which payment is being deferred, (iii) make
any guarantee payments with respect to any guarantee if such guarantee ranks
pari passu with or junior in interest to the Perpetual Junior Subordinated
Debentures on which payment is being deferred or (iv) make any payment of
principal, interest or premium, if any, on, or repay, repurchase or redeem any
of its debt securities held by any affiliate, or make any loans or advances
to, or make payments on any guarantee of the debt of, any affiliate, in each
case other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, the Company's
common stock and exchanges or conversions of common stock of one class for
common stock of another class, (b) payments by the Company under the Guarantee
(or any other guarantee by the Company with respect to any securities of any
of its subsidiaries, provided that the proceeds from the issuance of such
securities were used to purchase junior subordinated deferrable interest
debentures issued by the Company), and (c) any dividend or payment by the
Company which is applied, directly or indirectly, to the payment of (x)
principal of, or interest or premium, if any, on Acquisition Debt as and when
due in accordance with the terms thereof, and (y) any UK Tax Payments. The
Company must give Entergy London Capital and the Debenture Trustee notice of
its intention to defer payment of interest at least one Business Day prior to
the earlier of (i) the next succeeding Interest Payment Date and (ii) the date
the Company is required to give notice to the NYSE or other applicable self-
regulatory organization or to holders of the Perpetual Junior Subordinated
Debentures of the record date or Interest Payment Date, but in any event not
less than one Business Day prior to such record date. The General Partner
shall give notice of the Company's intention to defer payment of interest on
the Perpetual Junior Subordinated Debentures to the holders of the Preferred
Securities within five Business Days of the receipt of notice thereof.
REDEMPTION
The Perpetual Junior Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after November , 2002, in
whole at any time or in part from time to time, (ii) at any time, in whole
(but not in part) within 90 days following the occurrence of a Special Event,
or (iii) at any time, in whole (but not in part) if the Company has or will
become obligated to pay Additional Amounts as provided under "--Optional Tax
Redemption", in each case, at the Debentures Redemption Price.
The proceeds of any such redemption will be used by Entergy London Capital
to redeem the Preferred Securities in accordance with their terms. The Company
may not redeem less than all of the Perpetual Junior Subordinated Debentures
unless all accrued and unpaid interest, if any, has been paid in full on all
outstanding Perpetual Junior Subordinated Debentures for all interest periods
terminating on or prior to the Redemption Date.
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Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Perpetual Junior
Subordinated Debentures to be redeemed at such holder's registered address.
Unless, in the case of an unconditional notice of redemption, the Company
defaults in payment of the Debentures Redemption Price, on and after the
Redemption Date interest ceases to accrue on the Perpetual Junior Subordinated
Debentures or portions thereof called for redemption.
ADDITIONAL AMOUNTS
All payments of principal and interest in respect of the Perpetual Junior
Subordinated Debentures shall be made free and clear of, and without
withholding or deduction for or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by or within the UK or by or within
any political subdivision thereof or any authority therein or thereof having
power to tax ("UK taxes"), unless such withholding or deduction is required by
law. In the event of any such withholding or deduction the Company shall pay
to the relevant holder of Perpetual Junior Subordinated Debentures such
Additional Amounts as will result in the payment to each such holder of the
amount that would otherwise have been receivable by such holder in the absence
of such withholding or deduction, except that no such Additional Amounts shall
be payable:
(a) to, or to a person on behalf of, a holder who is liable for such UK
taxes in respect of the Perpetual Junior Subordinated Debentures by reason
of such holder having some connection with the UK (including being a
citizen or resident or national of, or carrying on a business or
maintaining a permanent establishment in, or being physically present in,
the UK) other than the mere holding of a Perpetual Junior Subordinated
Debenture or the receipt of principal and interest in respect thereof;
(b) to, or to a person on behalf of, a holder who presents a Perpetual
Junior Subordinated Debenture (whenever presentation is required) for
payment more than 30 days after the Relevant Date (as defined below) except
to the extent that such holder would have been entitled to such Additional
Amounts on presenting such Perpetual Junior Subordinated Debenture for
payment on the last day of such period of 30 days;
(c) to, or to a person on behalf of, a holder who presents a Perpetual
Junior Subordinated Debenture (where presentation is required) in the UK;
(d) to, or to a person on behalf of, a holder who would not be liable or
subject to the withholding or deduction by making a declaration of non-
residence or similar claim for exemption to the relevant tax authority; or
(e) to, or to a person on behalf of, a holder of a Definitive Registered
Debenture (as defined herein) issued pursuant to the request of owners of
interests representing a majority in outstanding principal amount of the
Perpetual Junior Subordinated Debentures following and during the
continuance of a Debenture Event of Default if such holder (or any
predecessor holder) was one of such owners requesting that Definitive
Registered Debentures be so issued.
Such Additional Amounts will also not be payable where, had the beneficial
owner of the Perpetual Junior Subordinated Debentures (or any interest
therein) been the holder of the Perpetual Junior Subordinated Debentures, he
would not have been entitled to payment of Additional Amounts by reason of any
one or more of the clauses (a) through (e) above. If the Company shall
determine that Additional Amounts will not be payable because of the
immediately preceding sentence, the Company will inform such holder promptly
after making such determination setting forth the reason(s) therefor.
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"Relevant Date" means whichever is the later of (i) the date on which such
payment first becomes due and (ii) if the full amount payable has not been
received in The City of New York by the Book-Entry Depository or the Debenture
Trustee on or prior to such due date, the date on which, the full amount
having been so received, notice to that effect shall have been given to the
holders in accordance with the Indenture.
OPTIONAL TAX REDEMPTION
If (a) the Company satisfies the Debenture Trustee prior to the giving of a
notice as provided below that it has or will become obligated to pay
Additional Amounts with respect to the Perpetual Junior Subordinated
Debentures as a result of either (x) any change in, or amendment to, the laws
or regulations of the UK or any political subdivision or any authority or
agency thereof or therein having power to tax or levy duties, or any change in
the application or interpretation of such laws or regulations, which change or
amendment becomes effective on or after the date of this Prospectus or (y) the
issuance of Definitive Registered Debentures pursuant to the first sentence or
clause (a) or (b) of the third sentence of "--Form, Book-Entry Procedures and
Transfer--Definitive Perpetual Junior Subordinated Debentures" and (b) such
obligation cannot be avoided by the Company taking reasonable measures
available to it, the Company may, at its option, on giving not more than 60 or
less than 30 days' notice to the holders, redeem, as a whole but not in part,
the Perpetual Junior Subordinated Debentures at the Debentures Redemption
Price provided that no such notice of redemption shall be given earlier than
90 days prior to the earliest date on which the Company would be obligated to
pay such Additional Amounts were a payment in respect of the Perpetual Junior
Subordinated Debentures then due. Prior to the publication of any notice of
redemption pursuant to this paragraph, the Company shall deliver to the
Debenture Trustee a certificate signed by a director of the Company stating
that the obligation referred to in (a) above cannot be avoided by the Company
taking reasonable measures available to it, and the Debenture Trustee shall
accept such certificate as sufficient evidence of the condition precedent set
out in (b) above, in which event it shall be conclusive and binding on the
holders.
In the event that the Global Debenture is redeemed in whole or in part
pursuant to this provision or "-- Redemption" above, the Book-Entry Depository
will redeem, from the amount received by it in respect of the redemption of
the Global Debenture an equal amount of the related Book-Entry Interests. The
redemption price payable in connection with the redemption of such Book-Entry
Interests will be equal to the amount received by the Book-Entry Depository in
connection with the redemption of the Global Debenture.
DISTRIBUTION OF THE PERPETUAL JUNIOR SUBORDINATED DEBENTURES
Whether or not a Special Event has occurred, at any time, the General
Partner has the right at any time to dissolve Entergy London Capital, and, in
such event, cause the Perpetual Junior Subordinated Debentures to be
distributed to the holders of the Preferred Securities in liquidation of
Entergy London Capital after satisfaction of liabilities to creditors of
Entergy London Capital as provided by the Delaware Act. See "Description of
the Preferred Securities--Redemptions--Special Event Redemption or
Distribution of Perpetual Junior Subordinated Debentures". If distributed to
holders of the Preferred Securities in liquidation, the Perpetual Junior
Subordinated Debentures will initially be issued as described under "--Form,
Book-Entry Procedures and Transfer--General". If the Perpetual Junior
Subordinated Debentures are distributed to the holders of the Preferred
Securities upon the liquidation of Entergy London Capital, the Company will
use its best efforts to list the Perpetual Junior Subordinated Debentures on
the NYSE or such other stock exchanges or other organizations, if any, on
which the Preferred Securities are then listed. There can be no assurance as
to the market price of the Perpetual Junior Subordinated Debentures that may
be distributed to the holders of the Preferred Securities.
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DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Indenture Debentures that has occurred and
is continuing constitutes a "Debenture Event of Default" with respect to such
series of Indenture Debentures:
(i) failure for 60 days to pay any interest on such series of Indenture
Debentures when due and payable (subject to the Company's right to defer
such payment) (whether or not payment is prohibited by the subordination
provisions of the Indenture); or
(ii) failure to pay principal of or premium, if any, on such series of
Indenture Debentures when due and payable (whether or not payment is
prohibited by the subordination provisions of the Indenture); or
(iii) failure to perform, or breach of, any covenant or warranty of the
Company contained in the Indenture for 60 days after written notice to the
Company from the Debenture Trustee or to the Company and the Debenture
Trustee by the holders of at least 33% in aggregate principal amount of
such series of outstanding Indenture Debentures as provided in the
Indenture; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(v) any other Event of Default specified with respect to such series of
Indenture Debentures.
If a Debenture Event of Default due to the default in payment of principal
of, or interest on, any series of Indenture Debentures or due to the default
in the performance or breach of any other covenant or warranty of the Company
applicable to the Indenture Debentures of such series but not applicable to
all series occurs and is continuing, then either the Debenture Trustee or the
holders of not less than 33% in aggregate principal amount of the outstanding
Indenture Debentures of such series may declare the principal of all of the
Indenture Debentures of such series and interest accrued thereon to be due and
payable immediately (subject to the subordination provisions of the Indenture)
and, in the case of the Perpetual Junior Subordinated Debentures, should the
Debenture Trustee or such holders of such Perpetual Junior Subordinated
Debentures fail to make such declaration, the holders of at least 33% in
aggregate Liquidation Preference Amount of the Preferred Securities shall have
such right. If a Debenture Event of Default due to the default in the
performance of any covenants or agreements in the Indenture applicable to all
outstanding Indenture Debentures or due to certain events of bankruptcy,
insolvency or reorganization of the Company has occurred and is continuing,
either the Debenture Trustee or the holders of not less than 33% in aggregate
principal amount of all outstanding Indenture Debentures (or Preferred
Securities, as described above), considered as one class, and not the holders
of the Indenture Debentures (or Preferred Securities) of any one of such
series, may make such declaration of immediate payability (subject to the
subordination provisions of the Indenture).
At any time after such a declaration of immediate payability with respect to
the Indenture Debentures of any series has been made and before a judgment or
decree for payment of the money due has been obtained, the Debenture Event or
Events of Default giving rise to such declaration of immediate payability
will, without further act, be deemed to have been waived, and such declaration
and its consequences will, without further act, be deemed to have been
rescinded and annulled, if
(a) the Company has paid or deposited with the Debenture Trustee a sum
sufficient to pay
(1) all overdue interest on all Indenture Debentures of such series;
(2) the principal of and premium, if any, on any Indenture Debentures of
such series which have become due otherwise than by such declaration of
immediate payability and interest thereon at the rate or rates prescribed
therefor in such Indenture Debentures;
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(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Indenture Debentures, to the extent that payment of such
interest is lawful; and
(4) all amounts due to the Debenture Trustee under the Indenture; and
(b) any other Debenture Event or Events of Default with respect to Indenture
Debentures of such series, other than the nonpayment of the principal of the
Indenture Debentures of such series which has become due solely by such
declaration of immediate payability, have been cured or waived as provided in
the Indenture.
The holders of a majority in aggregate principal amount of the Indenture
Debentures of all series then outstanding may waive compliance by the Company
with certain restrictive provisions of the Indenture. The holders of a
majority in principal amount of the outstanding Indenture Debentures of any
series may, on behalf of the holders of all the Indenture Debentures of such
series, waive any past default under the Indenture with respect to such
series, except a default in the payment of principal or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by declaration of immediate
payability has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding
Indenture Debenture of such series affected. With respect to the Perpetual
Junior Subordinated Debentures, Entergy London Capital may not waive
compliance by the Company with certain restrictive provisions of the Indenture
or waive any past defaults thereunder without the consent of a majority in
aggregate Liquidation Preference Amount of the outstanding Preferred
Securities.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to the
Perpetual Junior Subordinated Debentures, Entergy London Capital will have the
right to declare the principal of and the interest on the Perpetual Junior
Subordinated Debentures and any other amounts payable under the Indenture, to
be immediately due and payable and to enforce its other rights as a creditor
with respect to the Perpetual Junior Subordinated Debentures. If the General
Partner fails to enforce Entergy London Capital's rights with respect to the
Perpetual Junior Subordinated Debentures or the Indenture, a holder of
Preferred Securities may institute a legal proceeding directly against the
Company to enforce Entergy London Capital's rights with respect to the
Perpetual Junior Subordinated Debentures or the Indenture, to the fullest
extent permitted by law, without first instituting any legal proceeding
against the General Partner or any other person. Notwithstanding the
foregoing, a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of principal of or
interest on the Perpetual Junior Subordinated Debentures having a principal
amount equal to the aggregate Liquidation Preference Amount of the Preferred
Securities of such holder on or after the due dates thereof. See "Description
of the Preferred Securities--Voting Rights; Amendment of Partnership
Agreement" and "Description of the Guarantee".
MODIFICATION OF INDENTURE
Without the consent of any holder of Indenture Debentures, the Company and
the Debenture Trustee may enter into one or more supplemental indentures for
any of the following purposes: (a) to evidence the succession of another
person to the Company and the assumption by any permitted successor to the
Company of the covenants of the Company in the Indenture and in the Indenture
Debentures; or (b) to add one or more covenants of the Company or other
provisions for the benefit
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of the holders of outstanding Indenture Debentures or to surrender any right
or power conferred upon the Company by the Indenture; or (c) to add any
additional Debenture Events of Default with respect to outstanding Indenture
Debentures; or (d) to change or eliminate any provision of the Indenture or to
add any new provision to the Indenture, provided that if such change,
elimination or addition will adversely affect the interests of the holders of
any series of Indenture Debentures in any material respect, such change,
elimination or addition will become effective with respect to such series only
(1) when the consent of the holders of Indenture Debentures of such series has
been obtained in accordance with the Indenture, or (2) when no Indenture
Debentures of such series remain outstanding under the Indenture; or (e) to
provide collateral security for the Indenture Debentures; or (f) to establish
the form or terms of Indenture Debentures of any other series as permitted by
the Indenture; or (g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other matters incidental
thereto; or (h) to evidence and provide for the acceptance of appointment of a
separate or successor Debenture Trustee under the Indenture with respect to
the Indenture Debentures of one or more series and to add to or change any of
the provisions of the Indenture as shall be necessary to provide for or to
facilitate the administration of the trusts under the Indenture by more than
one trustee; or (i) to provide for the procedures required to permit the
utilization of a non-certificated system of registration for the Indenture
Debentures of all or any series; or (j) to change any place where (1) the
principal of and premium, if any, and interest, if any, on all or any series
of Indenture Debentures shall be payable, (2) all or any series of Indenture
Debentures may be surrendered for registration of transfer or exchange and (3)
notices and demands to or upon the Company in respect of Indenture Debentures
and the Indenture may be served; or (k) to cure any ambiguity or inconsistency
or to add or change any other provisions with respect to matters and questions
arising under the Indenture, provided such changes or additions shall not
adversely affect the interests of the holders of Indenture Debentures of any
series in any material respect. The Indenture contains provisions permitting
the Company and the Debenture Trustee, with the consent of the holders of a
majority in principal amount of each outstanding series of Indenture
Debentures affected, to modify the Indenture in a manner affecting the rights
of the holders of such series of the Indenture Debentures; provided, that no
such modification may (i) change the Stated Maturity, if any, of any series of
Indenture Debentures, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon (except such extension
as is contemplated thereby), (ii) reduce the percentage of principal amount of
Indenture Debentures of any series, the holders of which are required to
consent to any such modification of the Indenture, or (iii) modify certain of
the provisions of the Indenture relating to supplemental indentures, waivers
of certain covenants and waivers of past defaults with respect to the
Indenture Debentures of any series, without the consent of the holder of each
outstanding Indenture Debenture affected thereby, provided, that in the case
of the Perpetual Junior Subordinated Debentures, so long as any of the
Preferred Securities remain outstanding, no such modification may be made, and
no termination of the Indenture may occur, and no waiver of any Debenture
Event of Default or compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of a majority of the
aggregate Liquidation Preference Amount of such Preferred Securities (or, in
the case of changes described in clauses (i), (ii) or (iii) above, all holders
of such Preferred Securities) unless and until the principal of the Perpetual
Junior Subordinated Debentures and all accrued and unpaid interest thereon
have been paid in full and certain other conditions are satisfied.
CERTAIN COVENANTS OF THE COMPANY
The Company will covenant in the Indenture that it will not, directly or
indirectly, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of its
capital stock, (ii) make any payment of principal, interest or premium, if
any, on
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or repay, repurchase, or redeem any of its debt securities (including other
junior subordinated deferrable interest debentures) that rank pari passu with
or junior in interest to the Perpetual Debentures on which payment is being
deferred, (iii) make any guarantee payments with respect to any guarantee if
such guarantee ranks pari passu with or junior in interest to the Perpetual
Debentures on which payment is being deferred or (iv) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
of its debt securities held by any affiliate, or make any loans or advances
to, or guarantee the debt of, any affiliate, in each case other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, the Company's common stock and exchanges
or conversions of common stock of one class for common stock of another class,
(b) payments by the Company under the Guarantee (or any other guarantee by the
Company with respect to any securities of any of its subsidiaries, provided
that the proceeds from the issuance of such securities were used to purchase
junior subordinated deferrable interest debentures issued by the Company), and
(c) any dividend or payment by the Company which is applied, directly or
indirectly, to the payment of (x) principal of, or interest or premium, if
any, on Acquisition Debt as and when due in accordance with the terms thereof,
or (y) any UK Tax Payments if at such time (i) there shall have occurred and
be continuing a payment default pursuant to the Indenture (whether before or
after expiration of any period of grace) or a Debenture Event of Default with
respect to any series of Indenture Debentures, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
any other such guarantee as described above or (iii) the Company shall have
given notice of its intention to defer payment of interest as provided in the
Indenture with respect to any series of Indenture Debentures, shall not have
rescinded such notice and such deferral shall be continuing until all deferred
interest payments together with interest thereon have been paid in full.
The Company also will covenant that so long as any Preferred Securities
remain outstanding, if Entergy London Capital shall be required to pay, with
respect to its income derived from the interest payments on the Perpetual
Junior Subordinated Debentures, any amounts for or on account of any taxes,
duties, assessments or governmental charges of whatever nature imposed by the
US, the UK or any other taxing authority, then, in any such case, the Company
will pay as interest on the Perpetual Junior Subordinated Debentures such
Additional Interest as may be necessary in order that the net amounts received
and retained by Entergy London Capital after the payment of such taxes,
duties, assessments or governmental charges shall result in Entergy London
Capital having such funds as it would have had in the absence of the payment
of such taxes, duties, assessments or governmental charges.
The Company will also covenant, (i) to maintain directly or indirectly 100%
ownership of all of the general partner interests in Entergy London Capital,
provided that certain successors which are permitted pursuant to the Indenture
may succeed to the Company's ownership of such general partner interests, (ii)
not to voluntarily (to the extent permitted by law) dissolve, wind-up or
liquidate Entergy London Capital, except (a) in connection with a distribution
of Perpetual Junior Subordinated Debentures to the holders of the Preferred
Securities in liquidation of Entergy London Capital, or (b) in connection with
certain mergers, conversions, consolidations or amalgamations permitted by the
Partnership Agreement, (iii) to timely perform in all material respects all of
its duties as General Partner (including the duty to pay Distributions and the
duty to pay all costs and expenses of Entergy London Capital), provided that
certain successors which are permitted pursuant to the Indenture may directly
or indirectly succeed to its duties as General Partner and (iv) to use its
reasonable efforts, consistent with the terms and provisions of the
Partnership Agreement, to cause Entergy London Capital to remain a limited
partnership and otherwise continue to be treated as a partnership for US
Federal income tax purposes.
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless (i) in case the
Company consolidates with or merges into another corporation or conveys or
transfers its properties and assets substantially as an entirety to any
person, the successor corporation expressly assumes the Company's obligations
on all Indenture Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time
or both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
In the event that any such successor entity is organized under the laws of a
country located outside of the UK and withholding or deduction is required by
law for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by or within such country in which the successor entity is
organized or by or within any political subdivision thereof or any authority
therein or thereof having power to tax, the successor entity shall pay to the
relevant holder of the Global Debenture or to the relevant holders of the
Definitive Registered Debentures, as the case may be, such Additional Amounts,
under the same circumstances and subject to the same limitations as are
specified for "UK taxes," as is set forth under "--Additional Amounts" above,
but substituting for the UK in each place the name of the country under the
laws of which such successor entity is organized. In addition, such successor
entity shall be entitled to effect an optional tax redemption of the Perpetual
Junior Subordinated Debentures under the same circumstances and subject to the
same limitations as are set forth under "--Optional Tax Redemption" above, but
substituting for the UK in each place the name of the country under the laws
of which such successor entity is organized.
The general provisions of the Indenture do not afford holders of the
Perpetual Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Perpetual Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The principal amount of Perpetual Junior Subordinated Debentures will be
deemed to have been paid for purposes of the Indenture and the entire
indebtedness of the Company in respect thereof will be deemed to have been
satisfied and discharged, if there shall have been irrevocably deposited with
the Debenture Trustee or any Paying Agent, in trust: (a) money in an amount
which will be sufficient, or (b) Government Obligations (as defined herein),
which do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with or held by the
Debenture Trustee, will be sufficient, or (c) a combination of (a) and (b)
which will be sufficient, to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on the Perpetual Junior
Subordinated Debentures that are outstanding. For this purpose, Government
Obligations include direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the US and entitled to
the benefit of the full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in
such obligations or in any specific interest or principal payments due in
respect thereof.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any Indenture
Debentures issued thereunder will be subordinate and junior in right of
payment to all Senior Debt to the extent provided in the Indenture. Upon any
payment or distribution of assets to creditors upon any liquidation,
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dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of, premium, if any, and
interest, if any, on such Senior Debt before the holders of Indenture
Debentures will be entitled to receive or retain any payment in respect of the
principal of, premium, if any, or interest, if any, on the Indenture
Debentures.
In the event of the declaration of immediate payability of any Indenture
Debentures, the holders of all Senior Debt outstanding at the time of such
declaration will be entitled to receive payment in full of all amounts due
thereon (including any amounts due upon such declaration) before the holders
of Indenture Debentures will be entitled to receive any payment upon the
principal of, premium, if any, or interest, if any, on the Indenture
Debentures.
No payments on account of principal, premium, if any, or interest, if any,
in respect of any Indenture Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof remaining uncured.
The term Senior Debt is defined in the Indenture to mean all obligations
(other than non-recourse obligations and the indebtedness issued under the
Indenture) of, or guaranteed or assumed by, the Company for borrowed money,
including, without limitation, borrowings outstanding under the Credit
Facilities Agreement and both senior and subordinated indebtedness for
borrowed money (other than Indenture Debentures), or for the payment of money
relating to any lease which is capitalized on the consolidated balance sheet
of the Company and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or evidenced by bonds,
debentures, notes or other similar instruments, and in each case, amendments,
renewals, extensions, modifications and refundings of any such indebtedness or
obligations, whether existing as of the date of the Indenture or subsequently
incurred by the Company unless, in the case of any particular indebtedness,
amendment, renewal, extension, modification or refunding, the instrument
creating or evidencing the same or the assumption or guarantee of the same
expressly provides that such indebtedness, amendment, renewal, extension,
modification or refunding is not superior in right of payment to or is pari
passu with the Indenture Debentures; provided that the Company's obligations
under the Guarantee and all other guarantees issued by the Company with
respect to any preferred securities issued by any trust, partnership or other
entity which is a financing vehicle of the Company shall not be deemed to be
Senior Debt.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness constituting Senior Debt.
FORM, BOOK-ENTRY PROCEDURES AND TRANSFER
General
The Perpetual Junior Subordinated Debentures will be issued initially only
as a global debenture in bearer form (the "Global Debenture") and will be
payable only in US dollars. Title to such Global Debenture will pass by
delivery. The Global Debenture will be deposited on issue with The Bank of New
York, as book-entry depository (the "Book-Entry Depository"), which will hold
the Global Debenture for the benefit of Entergy London Capital pursuant to the
terms of the deposit agreement (the "Deposit Agreement") dated as of ,
1997 among the Company, the Book-Entry Depository and the holders and
beneficial owners from time to time of interests in the Book-Entry Interests.
Pursuant to the Deposit Agreement, the Book-Entry Depository will issue one or
more certificateless depository interests (the "Book-Entry Interests"), which
together will represent a 100% interest in the Global Debenture. Such Book-
Entry Interests will initially be issued to Entergy London Capital.
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If Book-Entry Interests are distributed to holders of Preferred Securities
in liquidation of such holders' interests in Entergy London Capital, the
Global Debenture held by the Book-Entry Depository and representing all of the
Perpetual Junior Subordinated Debentures will cease to be held for the benefit
of Entergy London Capital and will, for all purposes under the Indenture and
the Deposit Agreement, be held by the Book-Entry Depository for the benefit of
DTC and its Participants, and all of the Book-Entry Interests in the Global
Debenture will be transferred by Entergy London Capital to DTC, which will
operate a book-entry system for interests in the Book-Entry Interests in
global form ("Global Book-Entry Interests"), and to the extent that Preferred
Securities are held in certificated form, the Book-Entry Interests will be
issued in certificated form. DTC will initially credit Direct Participants
holding Preferred Securities with interests in the Global Book-Entry Interests
(pro rata to their holding of Preferred Securities) registered in the name of
DTC or its nominee. Unless and until the Global Debenture is exchanged in
whole for Definitive Registered Debentures, Global Book-Entry Interests held
by DTC may not be transferred except as a whole by DTC to a nominee of DTC or
by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such
nominee to a successor of DTC or a nominee of such successor. For a
description of DTC and its book-entry system, see "Description of the
Preferred Securities--Book-Entry Issuance". As of the date of this Prospectus,
the description herein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the
Preferred Securities will apply in all material respects to any Global Book-
Entry Interests registered in the name of and held by DTC or its nominee. The
Company may appoint a successor to DTC or any successor depository in the
event DTC or such successor depository is unable or unwilling to continue as
depository for the Global Book-Entry Interests.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in the Global Debenture.
So long as the Book-Entry Depository, or its nominee, is the holder of the
Global Debenture, the Book-Entry Depository or such nominee, as the case may
be, will be considered the sole holder of the Global Debenture (and the
Perpetual Junior Subordinated Debentures) for all purposes under the
Indenture. Except as set forth below with respect to the issuance of
Definitive Registered Debentures, if the Perpetual Junior Subordinated
Debentures (represented by Global Book-Entry Interests) are held through the
facilities of DTC, Direct Participants or Indirect Participants will not be
entitled to have Perpetual Junior Subordinated Debentures registered in their
names, will not receive or be entitled to receive physical delivery of
Perpetual Junior Subordinated Debentures in definitive bearer or registered
form and will not be considered the owners or holders thereof under the
Indenture or the Deposit Agreement. Accordingly, if the Perpetual Junior
Subordinated Debentures (represented by Global Book-Entry Interests) are held
through the facilities of DTC, each person owning an interest in the Global
Book-Entry Interests must rely on the procedures of the Book-Entry Depository
and DTC and, if such person is not a Direct Participant in DTC, on the
procedures of the Direct Participant through which such person owns its
interest, to exercise any rights and obligations of a holder under the
Indenture or the Deposit Agreement.
In addition to a Paying Agent in the Borough of Manhattan, The City of New
York, the Company will, so long as Perpetual Junior Subordinated Debentures
are listed on the Luxembourg Stock Exchange and the rules of such stock
exchange so require, maintain a Paying Agent in Luxembourg.
Neither the Company nor any agent of the Company will have any
responsibility or liability for any aspect relating to payments made or to be
made by the Book-Entry Depository to the persons entitled thereto in respect
of the Perpetual Junior Subordinated Debentures or the Book-Entry
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Interests. None of the Company, the Debenture Trustee, the Book-Entry
Depository or any agent of any of the foregoing will have any responsibility
or liability for any aspect relating to payments made or to be made by DTC on
account of a Direct Participant's or Indirect Participant's ownership of an
interest in the Global Book-Entry Interests or for maintaining, supervising or
reviewing any records relating to a Direct Participant's or Indirect
Participant's interests in the Global Book-Entry Interests.
Payments on the Perpetual Junior Subordinated Debentures
Payments of any amounts in respect of the Global Debenture will be made
through a Paying Agent to the Book-Entry Depository, as the holder thereof.
The Book-Entry Depository will pay an amount equal to each such payment to
Entergy London Capital as the initial holder of the Book-Entry Interests. If
the Global Book-Entry Interests representing the Perpetual Junior Subordinated
Debentures are held through the facilities of DTC, such payments will be made
by the Book-Entry Depository to DTC, as the holder of the Global Book-Entry
Interests, which will distribute such payments to its Direct Participants.
If any Definitive Registered Debenture has been issued, the interest payable
on such Definitive Registered Debenture other than at maturity will be paid to
the holder in whose name such Definitive Registered Debenture is registered at
the close of business on the fifteenth day (whether or not a Business Day)
immediately preceding the relevant Interest Payment Date (each a "Record
Date"). The principal amount of a Definitive Registered Debenture will be
payable to the person in whose name such Definitive Registered Debenture is
registered at the close of business on the immediately preceding Record Date
upon surrendering such Definitive Registered Debenture at the Debenture
Trustee's office in the city of New York. Interest payable at maturity will be
payable to the person to whom principal is payable.
If any Definitive Registered Debenture has been issued, payments of interest
on such Definitive Registered Debenture to be paid other than at maturity will
be made by check to the person entitled thereto at such person's address
appearing on the Security Register. Payments of any interest on the Definitive
Registered Debentures may also be made, in the case of a holder of at least US
$1,000,000 aggregate principal amount of Perpetual Junior Subordinated
Debentures by wire transfer to a US Dollar account maintained by the payee
with a bank in the US; provided that such holder elects payment by wire
transfer by giving written notice to the Debenture Trustee or a Paying Agent
to such effect designating such account no later than 15 days immediately
preceding the relevant due date for payment (or such other date as the
Debenture Trustee may accept in its discretion).
Any monies paid by the Company to the Debenture Trustee or any Paying Agent,
or held by the Company in trust, or the payments of the principal of or any
interest or Additional Amounts on any Perpetual Junior Subordinated Debentures
and remaining unclaimed at the end of two years after such principal, interest
or Additional Amounts become due and payable will be repaid to the Company, or
released from the trust, upon its written request, and upon such repayment or
release all liability of the Company, the Debenture Trustee and such Paying
Agent with respect thereto will cease.
All payments to the Book-Entry Depository in respect of the Global
Debenture, and all payments to the holders of the Definitive Registered
Debentures, if issued, will be made without deduction or withholding for any
UK taxes or other governmental charges, or if any such deduction or
withholding is required to be made under the provisions of any applicable UK
law or regulation, except as described under "--Additional Amounts", such
Additional Amounts will be paid as may be necessary in order that the net
amounts received by any holder of the Global Debenture or of any Definitive
Registered Debenture, after such deduction or withholding, will equal the
amounts that such holder would have otherwise received in respect of the
Global Debenture or of such Definitive Registered Debenture absent such
deduction or withholding.
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If the due date for payment of principal or any interest installments or any
Additional Amount in respect of any Perpetual Junior Subordinated Debenture is
not a Business Day, the holder thereof will not be entitled to payment of the
amount due until the next succeeding Business Day and will not be entitled to
any further interest or other payment in respect of any such delay.
Redemption
In the event the Global Debenture (or a portion thereof) is redeemed, the
Book-Entry Depository will deliver all amounts received by it in respect of
the redemption of the Global Debenture to the persons entitled thereto and (in
the case of redemption in full) surrender the Global Debenture to the
Debenture Trustee for cancellation. The redemption price payable in connection
with the redemption of interests in a Book-Entry Interest will be equal to the
amount received by the Book-Entry Depository in connection with the redemption
of the Global Debenture (or a portion thereof). For any redemption of the
Global Debenture in part, if the Perpetual Junior Subordinated Debentures are
held through the facilities of DTC, selection of interests in the related
Global Book-Entry Interests to be redeemed will be made in accordance with the
procedures of DTC. Once redeemed in part, a new Global Debenture in the
principal amount equal to the unredeemed portion thereof will be issued and
delivered to the Book-Entry Depository.
Action by Holders of Perpetual Junior Subordinated Debentures
As soon as practicable after receipt by the Book-Entry Depository of notice
of any solicitation of consents or request for a waiver or other action by the
holders of Perpetual Junior Subordinated Debentures, the Book-Entry Depository
will mail to Entergy London Capital (or, if the Perpetual Junior Subordinated
Debentures (represented by Global Book-Entry Interests) are then held through
the facilities of DTC, to DTC) a notice containing (a) such information as is
contained in such notice, (b) a statement that at the close of business on a
specified record date Entergy London Capital (or DTC, as applicable) will be
entitled to instruct the Book-Entry Depository as to the consent, waiver or
other action, if any, pertaining to the Perpetual Junior Subordinated
Debentures and (c) a statement as to the manner in which such instructions may
be given. Upon the written request of the General Partner (or DTC, as
applicable), the Book-Entry Depository shall endeavor insofar as practicable
to take such action regarding the requested consent, waiver or other action in
respect of the Perpetual Junior Subordinated Debentures in accordance with any
instructions set forth in such request. DTC is expected to follow procedures
described under "Description of the Preferred Securities--Book-Entry Issuance"
with respect to soliciting instructions from Participants. The Book-Entry
Depository will not exercise any discretion in the granting of consents or
waivers or the taking of any other action relating to the Deposit Agreement or
the Indenture.
Meetings of Holders of Perpetual Junior Subordinated Debentures
A meeting of the holders of Perpetual Junior Subordinated Debentures may be
called at any time from time to time pursuant to the Indenture to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by the Indenture be made, given or taken by holders
of the Perpetual Junior Subordinated Debentures.
To be entitled to vote at any meeting of holders of Perpetual Junior
Subordinated Debentures, a person shall be (a) a holder of Perpetual Junior
Subordinated Debentures or (b) a person appointed by an instrument in writing
as proxy for a holder or holders of Perpetual Junior Subordinated Debentures
by such holder or holders. The only persons who shall be entitled to attend
any meeting of holders of Perpetual Junior Subordinated Debentures shall be
the persons entitled to vote at such meeting and their counsel, any
representatives of the Debenture Trustee and its counsel, and any
representatives of the Company and its counsel.
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At any meeting of holders of Perpetual Junior Subordinated Debentures, the
persons holding or representing Perpetual Junior Subordinated Debentures in an
aggregate principal amount sufficient under the appropriate provision of the
Indenture to take action upon the business for the transaction of which such
meeting was called shall constitute a quorum. No action at a meeting of
holders shall be effective unless approved by persons holding or representing
Perpetual Junior Subordinated Debentures in the aggregate principal amount
required by the provision of the Indenture pursuant to which such action is
being taken. At any meeting of holders of Perpetual Junior Subordinated
Debentures, each holder or proxy shall be entitled to one vote for each $1
principal amount of outstanding Perpetual Junior Subordinated Debentures held
or represented.
Until such time as written instruments shall have been delivered to the
Debenture Trustee, evidencing the taking of any action at a meeting of holders
by the holders of the percentage in aggregate principal amount of the
Perpetual Junior Subordinated Debentures specified in the Indenture in
connection with such action, any holder of a Perpetual Junior Subordinated
Debenture the serial number of which is included in the Perpetual Junior
Subordinated Debentures the holders of which have consented to such action
may, by filing written notice with the Debenture Trustee at its principal
corporate trust office and upon proof of holding as provided in the Indenture,
revoke such consent so far as concerns such Perpetual Junior Subordinated
Debentures. Except as aforesaid any such consent given by the holder of any
Perpetual Junior Subordinated Debentures shall be conclusive and binding upon
such holder and upon all future holders and owners of such Perpetual Junior
Subordinated Debentures and of any securities issued in exchange therefor, in
lieu thereof or upon transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon such securities. Any action taken by
the holders of the percentage in aggregate principal amount of the holders
specified in the Indenture in connection with such action shall be
conclusively binding upon the Company, the Debenture Trustee and the holders
of all the Perpetual Junior Subordinated Debentures.
Reports and Notices
So long as the Perpetual Junior Subordinated Debentures are listed on the
Luxembourg Stock Exchange and the rules of such Stock Exchange so require,
notice to holders of the Perpetual Junior Subordinated Debentures will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxembourg Wort) in addition to notifying the
Book-Entry Depository and any registered holders of the Perpetual Junior
Subordinated Debentures. If any Perpetual Junior Subordinated Debentures
(represented by Global Book-Entry Interests) have been distributed to holders
of Preferred Securities, the Book-Entry Depository will immediately send to
DTC a copy of any notices, reports and other communications received by it
relating to the Company or the Perpetual Junior Subordinated Debentures. In
the case of Definitive Registered Debentures, all notices regarding the
Perpetual Junior Subordinated Debentures will, in addition to publication as
referred to above, be mailed to holders by first-class mail at their
respective addresses as they appear on the registration books of the
registrar.
Amendment and Termination
The Deposit Agreement may be amended by agreement between the Company and
the Book-Entry Depository, and the consent of DTC shall not be required in
connection with any amendment to the Deposit Agreement (i) to cure any formal
defect, omission, inconsistency or ambiguity in the Deposit Agreement, (ii) to
add to the covenants and agreements of the Company or the Book-Entry
Depository, (iii) to effect the assignment of the Book-Entry Depository's
rights and duties to a qualified successor, (iv) to comply with the Securities
Act, the Exchange Act, or the Investment Company Act, or any other applicable
securities laws, (v) to modify the Deposit Agreement in connection with an
amendment of the Indenture that does not require the consent of the holders of
Perpetual Junior
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Subordinated Debentures or (vi) to modify, alter, amend or supplement the
Deposit Agreement in any other respect not inconsistent with such agreement
which, in the opinion of counsel acceptable to the Company, is not materially
adverse to DTC (if any Perpetual Junior Subordinated Debentures (represented
by Global Book-Entry Interests) are then held through the facilities of DTC)
or the beneficial owners of the interests in the Book-Entry Interests. No
amendment that materially adversely affects any holder or beneficial owner of
an interest in the Book-Entry Interests may be made to the Deposit Agreement
without the consent of such holder or beneficial owner.
If Definitive Registered Debentures are issued by the Company in exchange
for the entire Global Debenture, the Book-Entry Depository, as holder of the
Global Debenture, will surrender the Global Debenture against receipt of the
Definitive Registered Debentures and distribute the Definitive Registered
Debentures to the holders of Book-Entry Interests (or such other persons as
the Book-Entry Depository becomes aware are entitled thereto), whereupon the
Deposit Agreement will terminate. The Deposit Agreement may also be terminated
upon the resignation of the Book-Entry Depository if no successor has been
appointed within 120 days.
Resignation of Book-Entry Depository
The Book-Entry Depository may at any time resign as Book-Entry Depository
with respect to the Global Debenture. If a successor depository meeting the
requirements specified in the Deposit Agreement has agreed to enter into
arrangements with the same effect as the Deposit Agreement, the Book-Entry
Depository shall deliver the Global Debenture to that successor. If no such
successor has so agreed within 120 days, the terms of the Deposit Agreement
will oblige the Book-Entry Depository to request the Company to issue
Definitive Registered Debentures with respect to the Global Debenture. On
receipt of such Definitive Registered Debentures, the Book-Entry Depository
will surrender the Global Debenture and distribute such Definitive Registered
Debentures to the persons entitled thereto. The Deposit Agreement will then
terminate.
Obligation of Book-Entry Depository
The Book-Entry Depository will assume no obligation or liability under the
Deposit Agreement other than to act in good faith without negligence or
willful misconduct in the performance of its duties thereunder.
Definitive Perpetual Junior Subordinated Debentures
Owners of beneficial interests in a Book-Entry Interest will be entitled to
receive definitive Perpetual Junior Subordinated Debentures in registered form
("Definitive Registered Debentures") in respect of such interest only if a
Debenture Event of Default has occurred and is continuing with respect to the
Perpetual Junior Subordinated Debentures and the holder (which initially shall
be the Book-Entry Depository), in such circumstance, upon instructions from
owners of beneficial interests representing a majority in outstanding
principal amount of such Book-Entry Interests shall have requested in writing
that the Global Debenture be exchanged, in whole, for one or more Definitive
Registered Debentures. In addition, Definitive Registered Debentures shall be
issued if at any time (a) DTC notifies the Company and the Book-Entry
Depository that it is unwilling to or unable to continue to hold the Global
Book-Entry Interests or if any time it ceases to be a "clearing agency"
registered under the Exchange Act and, in either case, a successor is not
appointed by the Company within 120 days, (b) the Book-Entry Depository
notifies the Company that it is unwilling or unable to continue as Book-Entry
Depository with respect to the Global Debenture and no successor is appointed
by the Company within 120 days or (c) the Company in its sole discretion
determines that Definitive Registered Debentures shall be issued and executes
and delivers to the Debenture Trustee an officer's certificate providing that
the Global Debenture shall be so exchanged. Definitive Registered Debentures
so issued will be issued in denominations of $25 or integral multiples thereof
and will be
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issued in registered form only, without coupons. Such Definitive Registered
Debentures shall be registered in the name or names of such person or persons
as the Book-Entry Depository shall notify the Debenture Trustee. If the
Perpetual Junior Subordinated Debentures (represented by Global Book-Entry
Interests) are then held through the facilities of DTC, it is expected that
such instructions may be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in the Global
Book-Entry Interests. See "Certain Income Tax Considerations--UK Income Tax
Considerations".
In the event that Definitive Registered Debentures are issued, a holder may
transfer or exchange the Definitive Registered Debentures in accordance with
the Indenture. The Debenture Trustee may require a holder, among other things,
to furnish appropriate endorsements and transfer documents, and the Company
may require a holder to pay any taxes and fees required by law or permitted by
the Indenture. The Company is not required to transfer or exchange any
Perpetual Junior Subordinated Debentures selected for redemption or for a
period of 15 days before a selection of Perpetual Junior Subordinated
Debentures to be redeemed. Upon the issuance of Definitive Registered
Debentures, holders will be able to transfer and exchange Definitive
Registered Debentures at the offices of the Paying and Transfer Agents;
provided, that all transfers and exchanges must be effected in accordance with
the terms of the Indenture and, among other things, be recorded in the
register maintained by the registrar.
GOVERNING LAW; SUBMISSION TO JURISDICTION
The Indenture and the Perpetual Junior Subordinated Debentures will be
governed by and construed in accordance with the laws of the State of New
York. Any suit, legal action or proceeding against the Company or its
properties, assets or revenues with respect to its obligations, liabilities or
any other matter arising out of or in connection with the Indenture or a
Perpetual Junior Subordinated Debenture may be brought in the Supreme Court of
New York, New York County or in the United States District Court for the
Southern District of New York and any appellate court from either thereof. The
Company has submitted to the non-exclusive jurisdiction of such courts for the
purposes of any such proceeding and has irrevocably waived, to the fullest
extent it may effectively do so, any objection to the laying of venue of any
such proceeding in any such court and the defense of an inconvenient forum.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have, and shall be subject to, all the duties
and responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debenture Trustee is
under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Perpetual Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Debenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE PERPETUAL JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Perpetual Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Preferred Securities,
primarily because (i) the aggregate principal amount of the Perpetual Junior
Subordinated Debentures will be equal to the sum of the aggregate Liquidation
Preference Amount of the Preferred Securities and the capital contribution of
the General Partner; (ii) the interest rate and interest and other payment
dates on the Perpetual Junior Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Preferred
Securities; (iii) the Partnership Agreement provides that the General Partner
shall pay for all and any costs, expenses and liabilities of Entergy London
Capital except Entergy London Capital's obligations to holders of the
Preferred Securities under such Preferred Securities; and (iv) the Partnership
Agreement further provides that Entergy London Capital will not engage in any
activity that is not consistent with the limited purposes of Entergy London
Capital.
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent Entergy London Capital has funds available for the payment of
such Distributions) are irrevocably guaranteed by the Company as and to the
extent set forth under "Description of the Guarantee". Taken together, the
Company's obligations under the Perpetual Junior Subordinated Debentures, the
Indenture, the Partnership Agreement, and the Guarantee provide a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of Entergy London Capital's obligations under the
Preferred Securities. If and to the extent that the Company does not make
payments on the Perpetual Junior Subordinated Debentures, Entergy London
Capital will not pay Distributions or other amounts due on the Preferred
Securities. The Guarantee does not cover payment of Distributions when Entergy
London Capital does not have sufficient funds to pay such Distributions. In
such event, the remedies of holders of the Preferred Securities are as
described above under "Description of the Perpetual Junior Subordinated
Debentures--Debenture Events of Default" and "Description of the Preferred
Securities--Voting Rights; Amendment of Partnership Agreement". The
obligations of the Company under the Guarantee are subordinate and junior in
right of payment to all Senior Debt of the Company.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
A holder of any Preferred Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the General
Partner or any other person or entity.
The Preferred Securities evidence the rights of the holders thereof in
Entergy London Capital and Entergy London Capital exists for the sole purpose
of issuing the Preferred Securities and investing the proceeds thereof in the
Perpetual Junior Subordinated Debentures. A principal difference between the
rights of a holder of a Preferred Security and the rights of a holder of a
Perpetual Junior Subordinated Debenture is that a holder of a Perpetual Junior
Subordinated Debenture is entitled to receive the principal amount of and
interest accrued on Perpetual Junior Subordinated Debentures held, if and when
due, while a holder of Preferred Securities is entitled to receive
Distributions only from Entergy London Capital (or from the Company under the
Guarantee) if and to the extent Entergy London Capital has funds available for
the payment of such Distributions.
99
<PAGE>
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
Entergy London Capital not involving the distribution of the Perpetual Junior
Subordinated Debentures, after satisfaction of creditors of Entergy London
Capital, if any, as provided by the Delaware Act, the holders of Preferred
Securities will be entitled to receive, out of assets held by Entergy London
Capital, the Liquidation Distribution in cash. See "Description of the
Preferred Securities--Liquidation Distribution upon Dissolution". Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, Entergy
London Capital, as holder of the Perpetual Junior Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt, but entitled to receive payment in full of
principal and interest, before any stockholders of the Company receive
payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed to pay all costs, expenses and liabilities of Entergy
London Capital (other than Entergy London Capital's obligations to the holders
of the Preferred Securities), the positions of a holder of Preferred
Securities and a holder of Perpetual Junior Subordinated Debentures relative
to other creditors and to stockholders of the Company in the event of
liquidation or bankruptcy of the Company would be substantially the same.
A default or event of default under any Senior Debt would not constitute a
default or Debenture Event of Default. However, in the event of payment
defaults under, or acceleration of, Senior Debt, the subordination provisions
of the Indenture provide that no payments may be made in respect of the
Perpetual Junior Subordinated Debentures until such Senior Debt has been paid
in full or any payment default thereunder has been cured or waived. Failure to
make required payments on any Perpetual Junior Subordinated Debentures would
constitute a Debenture Event of Default.
100
<PAGE>
CERTAIN INCOME TAX CONSIDERATIONS
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED SOLELY FOR INFORMATIONAL
PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR
TAX ADVICE. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THEIR PARTICULAR CIRCUMSTANCES AND THE EFFECT OF STATE, LOCAL OR
FOREIGN LAWS, INCLUDING UK TAX LAWS, TO WHICH THEY MAY BE SUBJECT.
UK INCOME TAX CONSIDERATIONS
The comments below are of a general nature based on current UK law and UK
Inland Revenue practice and represent the opinion of Linklaters & Paines,
special UK counsel to the Company, so far as such comments relate to matters
of law or legal conclusions. They relate only to holders of Perpetual Junior
Subordinated Debentures who are the absolute beneficial owners thereof and
related interest and may not apply to certain classes of persons such as
dealers. Any prospective holders of Preferred Securities who are in any doubt
as to the tax position should consult their professional advisers.
Payments on the Perpetual Junior Subordinated Debentures
For UK tax purposes, while the Perpetual Junior Subordinated Debentures
remain represented by the Global Debenture in bearer form and continue to be
listed on the Luxembourg Stock Exchange or some other stock exchange
recognized by the UK Inland Revenue, payments of interest to Entergy London
Capital or any other holder may be made without withholding or deduction for
or on account of UK income tax for so long as the Company's paying agent, the
Book-Entry Depository, and Entergy London Capital are outside the UK.
In other cases, and in particular if Definitive Registered Debentures are
issued, interest will be paid after deduction of UK income tax (currently at
the rate of 20%). A US holder of Perpetual Junior Subordinated Debentures may
be eligible to recover in full any UK tax withheld from payments of interest
to which such holder is beneficially entitled by making a claim under the
US/UK Double Tax Treaty on the appropriate form. Alternatively, a claim may be
made by a US holder in advance of a payment of interest. If the claim is
accepted by the UK Inland Revenue, they will authorize subsequent payments to
that US holder to be made without withholding of UK income tax. Claims for
repayment must be made within six years of the end of the UK year of
assessment (generally April 5 in each year) to which the interest relates and
must be accompanied by the original statement provided by the Company when the
interest payment was made showing the amount of UK income tax deducted.
Because a claim is not considered until the UK tax authorities receive the
appropriate form from the Internal Revenue Service (the "IRS"), forms should
be sent to the IRS, in the case of an advance claim, well before the relevant
interest payment date or, in the case of a claim for the repayment of the tax,
well before the end of the appropriate limitation period.
Holders of Perpetual Junior Subordinated Debentures in other jurisdictions
may be entitled to a refund of all or part of any UK income tax deducted or
withheld or to make a claim for interest on the Perpetual Junior Subordinated
Debentures to be paid without, or subject to a reduced rate of, deduction or
withholding under the provisions of an applicable double tax treaty.
A refund of all or part of any UK income tax deducted or withheld may,
depending on individual circumstances, be available to a holder of Perpetual
Junior Subordinated Debentures who is resident in the UK or who carries on a
trade, profession or vocation in the UK through a branch or agency to which
the Preferred Securities are attributable, or who falls within certain other
categories.
101
<PAGE>
Holders of Preferred Securities should be aware that under current UK tax
law upon the issuance of Definitive Registered Debentures the interest payable
on such Definitive Registered Debentures will (subject to any entitlement to
make a claim under the provisions of an applicable double tax treaty as
described above) become subject to UK withholding tax, currently at the rate
of 20%. Such holders will be entitled to the payment of Additional Amounts in
respect of the tax withheld, except as set forth under "Description of the
Perpetual Junior Subordinated Debentures--Additional Amounts" and under
"Description of the Perpetual Junior Subordinated Debentures--Form, Book-Entry
Procedures and Transfer--Definitive Subordinated Debentures", and then subject
to the right of the Company in certain circumstances to redeem the Perpetual
Junior Subordinated Debentures. See "Description of the Perpetual Junior
Subordinated Debentures--Optional Tax Redemption".
Interest on the Perpetual Junior Subordinated Debentures constitutes UK
source income and, as such, may be subject to UK income tax by direct
assessment even where paid without deduction or withholding. However, UK tax
chargeable on interest from a UK source beneficially owned by persons not
regarded as resident in the UK for tax purposes will normally be limited to
the tax, if any, deducted at source on payment of such interest. This will not
apply if interest is beneficially owned by a person who is not resident for
tax purposes in the UK if that person carries on a trade, profession or
vocation in the UK through a UK branch or agency in connection with which the
interest is received or to which the Perpetual Junior Subordinated Debentures
are attributable. There are exemptions for interest received by certain
categories of agent (such as some brokers and investment managers).
US INCOME TAX CONSIDERATIONS
This section is a summary of the material US Federal income tax
considerations that may be relevant to prospective purchasers of Preferred
Securities and represents the opinion of Reid & Priest LLP, special counsel to
the Company and Entergy London Capital, insofar as it relates to matters of
law and legal conclusions. This section is based upon current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change. Subsequent changes may cause
tax consequences to vary substantially from the consequences described below.
No attempt has been made in the following discussion to comment on all US
Federal income tax matters affecting purchasers of Preferred Securities.
Moreover, the discussion focuses solely on holders of Preferred Securities who
are individual citizens or residents of the US ("US Holder") that hold the
Preferred Securities as a capital asset and has only limited application to
corporations, estates, trusts, non-resident aliens or foreign corporations.
Accordingly, each prospective purchaser of Preferred Securities should
consult, and should depend on, his or her own tax advisor in analyzing the
Federal, state, local and foreign tax consequences of the purchase, ownership
or disposition of Preferred Securities.
Income from Preferred Securities
In the opinion of Reid & Priest LLP, for US Federal income tax purposes, (i)
Entergy London Capital will be treated as a partnership and (ii) the Perpetual
Junior Subordinated Debentures will be treated as equity.
Each holder of Preferred Securities (a "Preferred Securityholder") will be
required to include in gross income the Preferred Securityholder's
distributive share of the net income of Entergy London Capital, which
generally will not exceed the distributions received on the Preferred
Securities. Such income will be ordinary income that will not be eligible for
the dividends received deduction. For that purpose, interest income and the
Additional Interest will generally be treated as foreign source "passive" or,
in the case of certain Preferred Securityholders, "financial services" income
for foreign tax credit purposes. The rules relating to foreign tax credits are
extremely complex, and US Holders
102
<PAGE>
should consult their own tax advisors regarding the availability of a foreign
tax credit and the application of the foreign tax credit to their particular
situation.
Disposition of Preferred Securities
Gain or loss will be recognized on a sale of Preferred Securities, including
a redemption for cash, equal to the difference between the amount realized and
the Preferred Securityholder's tax basis for the Preferred Securities sold.
Gain or loss recognized by a Preferred Securityholder on the sale or exchange
of Preferred Securities held for more than one year will generally be taxable
as long-term capital gain or loss. The maximum effective US Federal income tax
rate applicable to gains resulting from the sale of capital assets held by
individuals for longer than one year but less than 18 months is 28%. The
maximum effective tax rate on long-term capital gain will decrease to 20% if
the Preferred Securities are held for more than 18 months. Beginning in the
year 2006, capital assets held for more than five years will qualify for a
maximum 18% effective tax rate.
Receipt of Perpetual Junior Subordinated Debentures or Cash In Certain
Circumstances
The General Partner has the right, at any time, to dissolve Entergy London
Capital and to cause Perpetual Junior Subordinated Debentures to be
distributed to the holders of the Preferred Securities in liquidation of
Entergy London Capital. Such liquidating distribution will generally be tax-
free to each holder and will result in each holder of Preferred Securities
receiving an aggregate tax basis in its Perpetual Junior Subordinated
Debentures equal to such holder's aggregate tax basis in its Preferred
Securities. A holder's holding period in the Perpetual Junior Subordinated
Debentures will include the holding period for which the Preferred Securities
were held by each holder. If a liquidation of Entergy London Capital occurs
following a determination that due to a change in law, Entergy London Capital
is subject to US Federal income tax with respect to the amounts received on
the Perpetual Junior Subordinated Debentures, then such liquidation will be
taxable to the holders of the Preferred Securities. Gain or loss will be
recognized in the amount measured by the difference between the fair market
value of the Perpetual Junior Subordinated Debentures received in the
liquidation and the holder's aggregate tax basis in its Preferred Securities.
In such cases the holding period for the Perpetual Junior Subordinated
Debentures received in the liquidation will not include the period during
which the Preferred Securities were held.
The Perpetual Junior Subordinated Debentures may be redeemed for cash and
the proceeds of such redemption distributed to holders in redemption of their
Preferred Securities. Such redemption of the Preferred Securities would, for
US Federal income tax purposes, constitute a taxable disposition of the
redeemed Preferred Securities and a holder would recognize gain or loss as if
it had sold such redeemed Preferred Securities for cash. See "--Disposition of
Preferred Securities".
Entergy London Capital Information Returns and Audit Procedures
The General Partner will furnish each Preferred Securityholder with an
income information statement each year setting forth such Preferred
Securityholder's allocable share of income for the prior calendar year. The
General Partner is required to furnish this statement as soon as practicable
following the end of the year, but in any event prior to March 31.
Any person who holds Preferred Securities as a nominee for another person is
required to furnish to Entergy London Capital (a) the name, address and
taxpayer identification number of the beneficial owner and the nominee; (b)
information as to whether the beneficial owner is (i) a person that is not a
US person, (ii) a foreign government, an international organization or any
wholly-owned agency or instrumentality of either of the foregoing, or (iii) a
tax-exempt entity; (c) the amount and description of Preferred Securities
held, acquired or transferred for the beneficial owner; and (d) certain
information including the dates of acquisitions and transfers, means of
acquisitions and transfers and acquisition
103
<PAGE>
cost for purchases, as well as the amount of net proceeds from sales. Brokers
and financial institutions are required to furnish additional information,
including whether they are US persons and certain information on Preferred
Securities they acquire, hold or transfer for their own accounts. A penalty of
$50 per failure (up to a maximum of $100,000 per calendar year) is imposed by
the Code for failure to report such information to Entergy London Capital. The
nominee is required to supply the beneficial owners of the Preferred
Securities with the information furnished to Entergy London Capital.
The General Partner, as the tax matters partner, will be responsible for
representing the Preferred Securityholders in any dispute with the IRS. The
Code provides for administrative examination of a partnership as if the
partnership were a separate and distinct taxpayer. Generally, the statute of
limitations for partnership items does not expire before three years since the
later of the filing or the last date for filing of the partnership information
return. Any adverse determination following an audit of the return of Entergy
London Capital by the appropriate tax authorities could result in an
adjustment of the returns of the Preferred Securityholders, and, under certain
circumstances, a Preferred Securityholder may be precluded from separately
litigating a proposed adjustment to the items of Entergy London Capital. An
adjustment could also result in an audit of a Preferred Securityholder's
return and adjustments of items not related to the income and losses of
Entergy London Capital.
104
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company and Entergy London Capital have agreed that Entergy London Capital
will sell to each of the Underwriters named below, and each of such
Underwriters, for whom Goldman, Sachs & Co., Bear, Stearns & Co. Inc., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, Prudential Securities Incorporated and Smith
Barney Inc. are acting as representatives, has severally agreed to purchase
from Entergy London Capital the respective number of Preferred Securities set
forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Goldman, Sachs & Co. ..........................................
Bear, Stearns & Co. Inc. ......................................
Lehman Brothers Inc............................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............
Morgan Stanley & Co. Incorporated..............................
Prudential Securities Incorporated.............................
Smith Barney Inc...............................................
----------
Total........................................................ 12,000,000
</TABLE>
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Underwriters are committed to take and pay for all such Preferred
Securities offered hereby, if any are taken, provided, that under certain
circumstances involving a default of one or more Underwriters, less than all
of the Preferred Securities may be purchased. Default by one Underwriter would
not relieve any non-defaulting Underwriter from its several obligation, and in
the event of such a default, the non-defaulting Underwriters may be required
by the Company to purchase the Preferred Securities that they have severally
agreed to purchase and, in addition, to purchase the Preferred Securities that
the defaulting Underwriter or Underwriters shall have failed to purchase up to
an amount equal to one-ninth of the Preferred Securities that such non-
defaulting Underwriter or Underwriters have otherwise agreed to purchase.
The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and in part to certain securities dealers at such price
less a concession of not to exceed $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession of not to
exceed $ per Preferred Security to certain brokers and dealers. After
the Preferred Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
representatives.
In view of the fact that the proceeds from the sale of the Preferred
Securities will be used to purchase the Perpetual Junior Subordinated
Debentures, the Underwriting Agreement provides that the Company will pay as
Underwriters' Compensation for the Underwriters arranging the investment
therein of such proceeds an amount of $ per Preferred Security
($ per Preferred Security sold to certain institutions) for the
accounts of the several Underwriters.
The Company and Entergy London Capital have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the
105
<PAGE>
termination of trading restrictions on the Preferred Securities, as determined
by the Underwriters, and (ii) 30 days after the closing date, they will not
offer, sell, contract to sell or otherwise dispose of any limited partner
interests in Entergy London Capital, or any preferred stock or any other
securities of Entergy London Capital or the Company that are substantially
similar to the Preferred Securities, including any guarantee of such
securities, or any securities convertible into or exchangeable for or that
represent the right to receive limited partner interests, preferred stock or
any such substantially similar securities of Entergy London Capital or the
Company, without the prior written consent of the representatives, except for
the Preferred Securities and the Guarantee.
Prior to this offering, there has been no public market for the Preferred
Securities. Application will be made to list the Preferred Securities on the
NYSE. In order to meet one of the requirements for listing the Preferred
Securities on the NYSE, the Underwriters will undertake to sell lots of 100 or
more Preferred Securities to a minimum of 400 beneficial holders. Trading of
the Preferred Securities on the NYSE is expected to commence within a seven-
day period after the initial delivery of the Preferred Securities. The
representatives have advised the Company that they intend to make a market in
the Preferred Securities prior to commencement of trading on the NYSE, but are
not obligated to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of the trading market
for the Preferred Securities.
In connection with the offering, the Underwriters may purchase and sell the
Preferred Securities in the open market. These transactions may include over-
allotment and stabilizing transactions and purchases to cover short positions
created by the Underwriters in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of
preventing or retarding a decline in the market price of the Preferred
Securities; and short positions created by the Underwriters involve the sale
by the Underwriters of a greater number of Preferred Securities than they are
required to purchase from Entergy London Capital in the offering. The
Underwriters also may impose a penalty bid, whereby selling concessions
allowed to broker-dealers in respect of the Preferred Securities sold in the
offering may be reclaimed by the Underwriters in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Preferred Securities, which may be higher than the price
that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
in the over-the-counter market or otherwise.
Each Underwriter has also agreed that (a) it has not offered or sold and
prior to the date six months after the date of issuance of the Preferred
Securities will not offer or sell any Preferred Securities to persons in the
UK except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the UK within the
meaning of the Public Offers of Securities Regulations 1995, (b) it has
complied, and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Preferred Securities in, from or otherwise involving the UK, and (c) it has
only issued or passed on and will only issue or pass on in the UK any document
received by it in connection with the issuance of the Preferred Securities to
a person who is of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to
whom the document may otherwise lawfully be issued or passed on.
The Company and Entergy London Capital have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to the Company and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
106
<PAGE>
EXPERTS
The consolidated balance sheet of Entergy London Investments plc (formerly
Entergy Power UK plc) as of March 31, 1997, and consolidated statements of
operations, cash flows and changes in shareholder's equity and related
financial statement schedule for the period from October 9, 1996 (date of
inception) to March 31, 1997, and the consolidated balance sheet of London
Electricity plc as of March 31, 1996, and consolidated statements of
operations, cash flows and changes in shareholders' equity and related
financial statement schedule for the period from April 1, 1996 to January 31,
1997 and the years ended March 31, 1996 and 1995, included in this prospectus,
have been included herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Company and Entergy London Capital. Certain legal matters
relating to English law, including taxation, corporate matters and the binding
nature of the Perpetual Junior Subordinated Debentures and agreements related
thereto, will be passed upon for the Company by Linklaters & Paines, London,
England. Certain matters relating to the Perpetual Junior Subordinated
Debentures and the Guarantee and US Federal income tax considerations will be
passed upon by Reid & Priest LLP, New York, New York, special counsel to the
Company and Entergy London Capital. Certain legal matters will be passed upon
for the Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New
York.
NATURE OF FINANCIAL INFORMATION
The financial information in respect of the Company and the Predecessor
Company set forth in "Summary Financial Information", "Capitalization",
"Selected Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" herein does not constitute
statutory accounts under Section 240 of the Companies Act 1985. Statutory
accounts for the fiscal year 1997 to which such financial information relates
have been, and for fiscal year 1998 will be, delivered to the Registrar of
Companies in England and Wales. The auditors of the Company and the
Predecessor Company have made a report under Section 236 of the Companies Act
of 1985 on the statutory accounts for each such fiscal year which was not
qualified within the meaning of Section 262 of the Companies Act 1985 and did
not contain a statement made under Section 237(2) or 237(5) of that Act.
107
<PAGE>
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ENTERGY LONDON INVESTMENTS plc AND SUBSIDIARIES (Successor Company)
Report of the Independent Accountants...................................... F-2
Financial Statements:
Consolidated balance sheet as of March 31, 1997.......................... F-3
Consolidated statement of operations for the period from October 9, 1996
(date of inception) to March 31, 1997................................... F-4
Consolidated statement of changes in shareholder's equity for the period
from October 9, 1996 (date of inception) to March 31, 1997.............. F-5
Consolidated statement of cash flows for the period from October 9, 1996
(date of inception) to March 31, 1997................................... F-6
Notes to consolidated financial statements............................... F-7
LONDON ELECTRICITY plc AND SUBSIDIARIES (Predecessor Company)
Report of Independent Accountants.......................................... F-17
Financial Statements:
Consolidated balance sheet as of March 31, 1996.......................... F-18
Consolidated statements of operations for the period from April 1, 1996
to January 31, 1997 and the years ended March 31, 1996 and 1995......... F-19
Consolidated statements of changes in shareholders' equity for the period
from April 1, 1996 to January 31, 1997 and the years ended March 31,
1996 and 1995........................................................... F-20
Consolidated statements of cash flows for the period from April 1, 1996
to January 31, 1997 and the years ended March 31, 1996 and 1995......... F-21
Notes to consolidated financial statements............................... F-22
ENTERGY LONDON INVESTMENTS plc AND SUBSIDIARIES (Successor Company) and
LONDON ELECTRICITY plc AND SUBSIDIARIES (Predecessor Company)
Financial Statements:
Unaudited condensed consolidated balance sheet as of September 30, 1997
and March 31, 1997...................................................... F-33
Unaudited condensed consolidated statements of operations for the six
month periods ended September 30, 1997 and 1996......................... F-34
Unaudited condensed consolidated statements of cash flows for the six
month periods ended September 30, 1997 and 1996......................... F-35
Notes to unaudited condensed consolidated financial statements........... F-36
Unaudited Pro Forma Financial Statement:
Unaudited pro forma condensed consolidated statement of operations for
the year ended March 31, 1997 with related notes...................... F-40
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of Entergy London Investments plc:
We have audited the accompanying consolidated balance sheet of Entergy
London Investments plc (formerly Entergy Power UK plc) as of March 31, 1997,
and the related consolidated statements of operations, cash flows and changes
in shareholder's equity for the period from October 9, 1996 (date of
inception) to March 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Entergy
London Investments plc as of March 31, 1997, and the results of its operations
and its cash flows for the period from October 9, 1996 to March 31, 1997 in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
July 31, 1997
F-2
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ (Pounds) 25.1 $ 40.5
Accounts receivable:
Customer receivable net of reserve of (Pounds)11.8
($19.0)............................................... 104.8 168.9
Unbilled revenue....................................... 102.4 165.0
Deferred income tax asset ............................... 16.0 25.8
Income tax receivable.................................... 13.1 21.1
Other receivables........................................ 20.3 32.7
Prepayments and other.................................... 5.3 8.5
Inventory................................................ 8.5 13.7
Investments.............................................. 28.2 45.5
--------------- --------
Total current assets................................. 323.7 521.7
--------------- --------
Property, plant and equipment, net of accumulated deprecia-
tion of (Pounds)9.6 ($15.5)............................... 1,265.7 2,039.9
Construction work in progress.............................. 80.9 130.4
Distribution license, net of accumulated amortization of
(Pounds)3.3 ($5.3)........................................ 830.4 1,338.4
Investments, long-term..................................... 10.3 16.6
Long-term receivables...................................... 12.3 19.8
Prepaid pension asset...................................... 145.3 234.2
--------------- --------
Total assets............................................... (Pounds)2,668.6 $4,301.0
=============== ========
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt..................... (Pounds) 20.4 $ 32.9
Notes payable............................................ 141.7 228.4
Accounts payable......................................... 125.4 202.1
Income taxes payable..................................... 34.3 55.3
Deferred revenue......................................... 29.6 47.7
Other liabilities........................................ 19.2 30.9
--------------- --------
Total current liabilities............................ 370.6 597.3
Long-term debt............................................. 1,142.9 1,842.0
Deferred income tax liability.............................. 644.4 1,038.6
Other non-current liabilities.............................. 262.4 422.9
--------------- --------
Total liabilities.................................... 2,420.3 3,900.8
--------------- --------
<CAPTION>
Commitments and Contingencies
<S> <C> <C>
Shareholder's equity:
Common stock, (Pounds)1 ($1.61) par value per share,
50,000 shares authorized, issued and outstanding........ 0.1 0.2
Additional paid-in capital............................... 239.9 386.6
Retained earnings........................................ 8.3 13.4
--------------- --------
Total shareholder's equity........................... 248.3 400.2
--------------- --------
Total liabilities and shareholder's equity................. (Pounds)2,668.6 $4,301.0
=============== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM OCTOBER 9, 1996 TO MARCH 31, 1997
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PERIOD FROM OCTOBER
9, 1996
TO MARCH 31, 1997
--------------------
<S> <C> <C>
Operating revenues........................................ (Pounds)233.6 $376.5
Cost of sales............................................. 163.6 263.7
------------- ------
Gross profit.............................................. 70.0 112.8
Depreciation and amortization expense..................... 12.9 20.8
Property taxes............................................ 3.5 5.6
Restructuring charges..................................... 8.0 12.9
Selling, general and administrative expenses.............. 13.6 21.9
------------- ------
Income from operations................................ 32.0 51.6
Other expenses, net....................................... 6.5 10.5
Interest expense, net..................................... 12.7 20.5
------------- ------
Income before income taxes............................ 12.8 20.6
Income taxes.............................................. 4.5 7.2
------------- ------
Net income............................................ (Pounds) 8.3 $ 13.4
============= ======
Earnings per average common share......................... (Pounds) 166 $ 268
------------- ------
Average number of common shares outstanding............... 50,000 50,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE PERIOD FROM OCTOBER 9, 1996 TO MARCH 31, 1997
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK
-------------------------
SHARES ADDITIONAL PAID-IN
AMOUNT CAPITAL RETAINED EARNINGS SHAREHOLDER'S EQUITY
------ ------------------ ---------------------- ------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, October 9,
1996................... -- (Pounds) -- $ -- (Pounds) -- $ -- (Pounds) -- $ -- (Pounds) -- $ --
Common stock issued..... 50,000 0.1 0.2 239.9 386.6 -- -- 240.0 386.8
Net income.............. -- -- -- 8.3 13.4 8.3 13.4
------ ------------ ----- -------------- ------- ------------ ------ ------------- ------
Balance, March 31, 1997. 50,000 (Pounds) 0.1 $ 0.2 (Pounds) 239.9 $ 386.6 (Pounds) 8.3 $ 13.4 (Pounds)248.3 $400.2
====== ============ ===== ============== ======= ============ ====== ============= ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 9, 1996 TO MARCH 31, 1997
(IN MILLIONS)
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................... (Pounds) 8.3 $ 13.4
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 12.9 20.8
Deferred income taxes............................. 3.5 5.6
Change in assets and liabilities:
Inventory....................................... 0.9 1.5
Accounts receivable and unbilled revenue........ (3.1) (5.0)
Long-term receivables and other................. (35.1) (56.5)
Accounts payable................................ (18.2) (29.3)
Income taxes payable............................ 7.0 11.3
Other current assets and liabilities............ 21.2 34.2
Other long-term liabilities..................... 66.4 107.0
------------ ---------
Net cash provided by operating activities..... 63.8 103.0
Cash flows from investing activities:
Capital expenditures ............................... (35.9) (57.9)
Acquisition of London Electricity................... (1,174.3) (1,892.6)
Receipt of consumer contributions................... 6.9 11.1
------------ ---------
Net cash used in investing activities......... (1,203.3) (1,939.4)
Cash flows from financing activities:
Proceeds from issuance of debt...................... 945.0 1,523.0
Proceeds from issuance of common stock.............. 240.0 386.8
Net repayments from available lines of credit....... (20.4) (32.9)
------------ ---------
Net cash provided by financing activities..... 1,164.6 1,876.9
------------ ---------
Increase in cash and cash equivalents................. 25.1 40.5
Beginning of period cash and cash equivalents......... -- --
------------ ---------
End of period cash and cash equivalents............... (Pounds)25.1 $ 40.5
============ =========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest.............................. (Pounds) 8.2 $ 13.2
============ =========
Cash paid for income taxes.......................... (Pounds) 1.0 $ 1.6
============ =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS:
Entergy London Investments plc (formerly Entergy Power UK plc and referred
to herein as "the Company") is an indirect wholly-owned subsidiary of Entergy
Corporation formed on October 9, 1996 (date of inception) for the purpose of
acquiring London Electricity plc ("London Electricity"). London Electricity is
one of twelve regional electricity companies ("RECs") in England and Wales
licensed to supply, distribute and, to a limited extent, generate electricity.
The RECs were created as a result of the privatization of the United Kingdom
("UK") electric industry in 1990 after the state-owned low voltage
distribution networks were allocated to the then existing twelve regional
boards. London Electricity's main business, the distribution and supply of
electricity to customers in London, England, is regulated under the terms of
London Electricity's Public Electricity Supply License ("PES license") by the
Office of Electricity Regulation (the "Regulator").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation:
The financial statements of the Company are presented in pounds sterling
((Pounds)) and in conformity with accounting principles generally accepted in
the United States ("US GAAP"). The consolidated financial statements include
the accounts of the Company and its wholly-owned and majority-owned
subsidiaries and have been prepared from records maintained by the Company in
the UK. All significant intercompany accounts and transactions have been
eliminated in consolidation. The Company is not subject to rate regulation,
but rather is subject to price cap regulation and, therefore, the provisions
of Statement of Financial Accounting Standards No. 71, "Accounting for the
Effects of Certain Types of Regulation" ("SFAS 71") do not apply.
These financial statements are presented in pounds sterling ((Pounds)) and
in US dollars ($), solely for the convenience of the reader, at the exchange
rate of (Pounds)1=US $1.6117, the noon buying rate in New York City for cable
transfers in pounds sterling as certified for customs purposes by the Federal
Reserve Bank of New York on September 30, 1997 in accordance with Securities
and Exchange Commission Regulation S-X Rule 3-20. This presentation has not
been translated in accordance with Statement of Financial Accounting Standards
No. 52, "Foreign Currency Translation." No representation is made that the
pounds sterling amounts have been, could have been, or could be converted into
US Dollars at that or any other rate of exchange.
Use of Estimates in the Preparation of Financial Statements
The preparation of the Company's financial statements, in conformity with
generally accepted accounting principles, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the reported
amounts of revenues and expenses during the reporting period. Adjustments to
the reported amounts of assets and liabilities may be necessary in the future
to the extent that future estimates or actual results are different from the
estimates used in the financial statements.
Revenue Recognition
London Electricity distributes electricity to commercial, residential and
industrial customers within the London area. The Company records revenue net
of value added tax ("VAT") and accrues revenue for services provided but
unbilled at the end of each reporting period. London Electricity purchases
power primarily from the wholesale trading market for electricity in England
and Wales (the "Pool"). The Pool monitors supply and demand between generators
and suppliers, sets prices for generation and provides centralized settlement
of amounts due between generators and suppliers.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity
of three months or less to be cash and cash equivalents.
F-7
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Property, Plant and Equipment
Property, plant and equipment is stated at original cost and includes
materials, labor and appropriate overhead costs. The Company is entitled,
under certain conditions, to collect cash contributions from consumers to fund
improvements to the Company's distribution networks. Consumer contributions
are credited against the historical cost of the asset.
Depreciation is computed by the straight-line method at rates based on the
estimated service lives of each of the various classes of property. Consumer
contributions are amortized into income at a rate of 2.5%. Depreciation rates
on average depreciable property are shown below:
<TABLE>
<CAPTION>
<S> <C>
Distribution network assets................................... 2.5%--5.0%
Buildings..................................................... 2.5%
Vehicles and mobile plant..................................... 10%--20%
Furniture and equipment, including computer hardware and soft-
ware......................................................... 20%--33%
</TABLE>
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). This standard requires that deferred income taxes be recorded for all
temporary differences between the financial statement basis and tax basis of
assets and liabilities and loss carryforwards and that deferred tax balances
be based on enacted tax laws at rates that are expected to be in effect when
the temporary differences reverse.
Distribution License
Distribution license represents the value attributed by the Company to the
license to serve London Electricity customers within its franchise area
acquired in conjunction with the acquisition of London Electricity by the
Company. The license is being amortized over forty years using the straight-
line method.
Financial Instruments
The Company enters into interest rate swaps as a part of its overall risk
management strategy and does not hold or issue material amounts of derivative
financial instruments for trading purposes. The Company accounts for its
interest rate swaps in accordance with the concepts established in Statement
of Financial Accounting Standards No. 80, "Accounting for Futures Contracts"
("SFAS 80") and various Emerging Issue Task Force pronouncements. If the
interest rate swaps were to be sold or terminated, any gain or loss would be
deferred and amortized over the remaining life of the debt instrument being
hedged by the interest rate swap. If the debt instrument being hedged by the
interest rate swaps were to be extinguished, any gain or loss attributable to
the swap would be recognized in the period of the transaction.
The Company considers the carrying amounts of financial instruments
classified as current assets and liabilities to be a reasonable estimate of
their fair value because of the short maturity of these instruments.
Price Control
Charges for distribution of electricity and supply to customers with a
maximum demand under 100Kw are subject to a price control formula set out in
London Electricity's PES license which allows a maximum charge per unit of
electricity. Differences in the charges, or in the purchase cost of
electricity, can result in the under or overrecovery of revenues in a
particular year.
F-8
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Where there is an overrecovery of supply or distribution business revenues
against the regulated maximum allowable amount, revenues are deferred in an
amount equivalent to the overrecovered amount. The deferred amount is deducted
from operating revenues and included in other liabilities. Where there is an
underrecovery, no anticipation of any potential future recovery is made.
The Company enters into contracts for differences ("CFDs") primarily to
hedge its supply business against the price risk of electricity purchases from
the Pool. Use of these CFDs is carried out within the framework of the
Company's purchasing strategy and hedging guidelines. Risk of loss is
monitored through establishment of approved counterparties and maximum
counterparty limits and minimum credit ratings. The Company recognizes gains
(losses) on CFDs when settlement is made. Gains (losses) on CFDs are
recognized as a decrease (increase) to cost of sales based upon the difference
between fixed prices in the CFD compared to variable prices paid to the Pool
for the period. Gains (losses) based upon the difference between fixed prices
in the CFD compared to variable prices paid to the Pool for future electricity
purchases are not recognized until the period of such settlements.
Pursuant to Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of" ("SFAS 121") the Company periodically reviews its long-lived
assets whenever events or changes in circumstances indicate that
recoverability of these assets is uncertain. Generally, the determination of
recoverability is based on the undiscounted net cash flows expected to result
from such assets. Projected undiscounted net cash flows depend on the future
operating costs associated with the assets and future market prices over the
remaining life of the assets. Based on current estimates of future
undiscounted cash flows as prescribed under SFAS 121, management anticipates
that future revenues from such assets will fully recover all related costs.
3. REGULATORY MATTERS:
The distribution business of London Electricity is regulated under its PES
license, pursuant to which revenue of the distribution business is controlled
by the Distribution Price Control Formula ("DPCF"). The DPCF determines the
maximum average price per unit of electricity (expressed in kilowatt hours, a
"unit") that a REC may charge. The elements used in the DPCF are established
for a five-year period and are subject to review by the Regulator at the end
of each five-year period and at other times at the discretion of the
Regulator. At each review the Regulator can adjust the value of certain
elements in the DPCF. Following a review by the Regulator in August 1994, a
14% price reduction was set for London Electricity, effective April 1, 1995.
In July 1995, a further review of distribution prices was concluded by the
Regulator for fiscal years 1997 to 2000. As a result of this further review,
London Electricity's distribution prices were reduced an additional 11%,
effective April 1, 1996, 3% effective April 1, 1997 and will be reduced by a
further 3% on both April 1, 1998 and 1999.
The supply business of London Electricity is also regulated by the
Regulator, and prices are established based upon the Supply Price Control
Formula which is similar to the DPCF; however, it currently allows full pass
through for all properly incurred costs and is set for a four-year period by
the Regulator.
The non-franchise supply market, which typically includes larger commercial
and industrial customers was opened to competition for all customers with
usage above 1Mw upon privatization of the industry in 1990. The non-franchise
supply markets of 100 kW or more were opened to full competition starting in
April 1994.
F-9
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Currently London Electricity, under its PES license, has the exclusive right
to supply residential and small industrial and commercial customers within its
franchise area. It is anticipated that the supply market for customers will be
fully competitive over a six month period starting in April 1998.
4. INVESTMENTS:
The Company accounts for investments whose fair market values are readily
determinable in accordance with Statement of Financial Accounting Standards
No. 115, "Accounting for Investments for Certain Debt and Equity Securities"
("SFAS 115"). These securities are considered available-for-sale securities
under SFAS 115 and their fair values approximate cost. Other securities whose
fair market values are not readily determinable and in which the Company does
not have a significant interest are recorded at cost.
Investments in companies in which the Company's ownership interests range
from 20% to 50% or investments which are less than 20% owned but over which
the Company exercises significant influence over operating and financial
policies are accounted for using the equity method. The following are the
Company's equity method investments as of March 31, 1997:
<TABLE>
<CAPTION>
INVESTMENT PERCENTAGE OWNERSHIP
---------- --------------------
<S> <C>
London Total Gas Ltd................................. 50%
Thames Valley Power Ltd.............................. 50%
London Total Energy Ltd.............................. 50%
Barking Power Limited................................ 13.5%
</TABLE>
Equity in earnings from these investments was (Pounds)1.3 million ($2.1
million) for the period from October 9, 1996 to March 31, 1997 which is
included in "Other expenses, net" in the consolidated statement of operations.
5. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost, consists of the following (in
millions):
<TABLE>
<CAPTION>
MARCH 31, 1997
-------------------------
<S> <C> <C>
Distribution network assets................... (Pounds)1,322.3 $2,131.2
Land and buildings............................ 61.2 98.6
Vehicles and mobile plant..................... 5.8 9.3
Furniture, fixtures and equipment, including
computer hardware and software............... 51.2 82.5
Consumer contributions to construction........ (165.2) (266.2)
--------------- --------
1,275.3 2,055.4
Less accumulated depreciation and
amortization................................. (9.6) (15.5)
--------------- --------
(Pounds)1,265.7 $2,039.9
=============== ========
</TABLE>
6. INCOME TAXES:
The Company's income tax expense for the period from October 9, 1996 to
March 31, 1997 consists of the following (in millions):
<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 9, 1996
TO MARCH 31, 1997
-----------------
<S> <C> <C>
Current............................................... (Pounds) 1.0 $ 1.6
Deferred.............................................. 3.5 5.6
------------ -----
Total income tax expense............................ (Pounds) 4.5 $ 7.2
============ =====
</TABLE>
F-10
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company's total effective income tax rate of 35% differs from the
Company's statutory rate of 33% primarily due to permanent differences and tax
credits utilized in the Company's income tax return.
Significant components of the Company's net deferred tax liability as of
March 31, 1997 are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
Deferred tax liability
Property-related basis differences.............. (Pounds)352.9 $ 568.8
Prepaid pension asset........................... 47.9 77.2
Distribution license............................ 274.0 441.6
------------- --------
Total......................................... 674.8 1,087.6
Deferred tax asset
Reserves and other timing differences........... 46.4 74.8
------------- --------
Net deferred tax liability.................... (Pounds)628.4 $1,012.8
============= ========
</TABLE>
As a result of Parliamentary elections held on May 1, 1997, the Labor Party
gained control of the British government. On July 31, 1997, legislation
establishing a windfall profits tax, which affects regulated companies
privatized since 1979 including London Electricity, was enacted. In accordance
with SFAS 109 under US GAAP, the Company will record a charge to income for
the windfall profits tax during the quarter ending September 30, 1997. A
change in the UK statutory rate from 33% to 31% was also included in the
legislation. The impact of such changes in the quarter ending September 30,
1997 will be recognition of the (Pounds)140 million ($226 million) expense for
the windfall profits tax and approximately (Pounds)38 million ($61.2 million)
of income tax benefit as a result of the change in the UK statutory income tax
rate in the Company's results of operations.
The tax years since fiscal year 1990 are currently under review by the
Inland Revenue in the UK. The Company believes that there is no additional
liability related to the tax years under review.
7. LONG-TERM DEBT:
The long-term debt of the Company is summarized as follows (in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
8% Eurobonds repayable March 28, 2003............ (Pounds) 98.9 $ 159.4
8 5/8% Eurobonds repayable October 26, 2005...... 99.0 159.6
Loan notes due March 31, 2003.................... 20.4 32.9
Revolving bank debt facility:
Facility A..................................... 705.0 1,136.2
Facility B..................................... 240.0 386.8
--------------- --------
Total............................................ 1,163.3 1,874.9
Less current maturities.......................... 20.4 32.9
--------------- --------
Long-term debt, net of current maturities........ (Pounds)1,142.9 $1,842.0
=============== ========
</TABLE>
The 8% and 8 5/8% Eurobonds may become due prior to their stated maturity
only upon the occurrence of certain events including default, liquidation or
bankruptcy of London Electricity. The Company does not anticipate default
under these agreements.
Certain shareholders of London Electricity elected to receive Loan Notes
issued by the Company in exchange for their London Electricity shares in
conjunction with its acquisition by the Company. Such Loan Notes are included
as current maturities of long-term debt based on the option of holders to
redeem such notes on March 31 of each year until their final maturity on March
31, 2003. The Loan Notes bear interest at LIBOR (6.69% at March 31, 1997) less
1% which is adjusted annually on April 1.
F-11
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In conjunction with the acquisition of London Electricity, the Company
entered into a revolving loan facility with a consortium of banks that is
collateralized by the stock of London Electricity. This revolving loan
consists of three parts which are Facility A for (Pounds)810 million ($1.3
billion), Facility B for (Pounds)240 million ($387 million) and Facility C for
(Pounds)200 million ($322 million). Facility B requires additional guarantees
or repayment by December 17, 1997, to avoid an increase in the variable
interest rates on all three facilities ranging from .5% to 1%. The Company
intends to repay Facility B through a combination of issuing quarterly income
preferred securities and additional equity or loans from the Company's parent.
The revolving loan contains certain restrictive covenants, the most
restrictive of which are maximum capitalization ratios and restrictions on
disposals of assets. Failure to meet the capitalization ratio targets in the
agreement results in increases in the interest rate on the outstanding
facilities and acceleration of repayment schedules. Facilities A and C can be
repaid and reborrowed during the five year term of this agreement which ends
in December 2001 provided certain capitalization ratios are achieved. The
interest rates on the three facilities are based on LIBOR, plus a margin which
ranges from .25% to 1.5% based on capitalization ratios, plus a defined margin
which is computed based on a bank cost of funds. The interest rate at March
31, 1997 was 7.43% on Facilities A, B and C.
London Electricity entered into an interest rate swap agreement to reduce
the impact of interest rate changes on its outstanding debt. The interest rate
swap agreement involves the exchange of a fixed interest rate for a floating
interest rate periodically over the life of the agreement. If the counterparty
to the agreement was to default on contractual payments, the Company could be
exposed to increased cost related to replacing the original agreement.
However, the Company does not anticipate non-performance. Through July 31,
1997, the Company has entered into additional interest rate swaps with a
notional amount of (Pounds)600 million ($967 million), fair value of
(Pounds)(2.4) million ($(3.9) million) and maturity dates through the year
2001.
8. NOTES PAYABLE:
Other facilities available to London Electricity are short-term unsecured,
uncommitted facilities of (Pounds)208 million ($335 million) and a (Pounds)150
million ($242 million) Sterling Commercial Paper Program ("Sterling Program").
Uncommitted facilities are unsecured facilities which are available at the
Company's request, however there is no obligation by the bank counterparty to
make funds available to the Company. The Sterling Program is a negotiable
promissory note with short term maturities (up to 364 days) and issued at a
discount to face value. The Company had an outstanding balance of
(Pounds)141.7 million ($228.4 million) on all of these facilities as of March
31, 1997. The weighted average interest rate incurred on these borrowings was
6.2% for the period from October 9, 1996 to March 31, 1997.
9. COMMITMENTS AND CONTINGENCIES:
The Company has entered into operating lease agreements for the use of
buildings and vehicles. Minimum future rental payments under all operating
leases as of March 31, 1997 are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
1998....................................................... (Pounds) 7.4 $ 11.9
1999....................................................... 6.9 11.1
2000....................................................... 6.0 9.7
2001....................................................... 5.8 9.4
2002....................................................... 5.7 9.2
Thereafter................................................. 72.0 116.0
------------- ------
Total.................................................... (Pounds)103.8 $167.3
============= ======
</TABLE>
F-12
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Rental expense incurred under these lease agreements was (Pounds)1.3 million
($2.1 million) for the period from October 9, 1996 to March 31, 1997.
The Company is subject to an agreement whereby the UK government is entitled
to a proportion of certain property gains accruing to the Company as a result
of disposals or events treated as disposals occurring after March 31, 1990, of
properties held at that date. This commitment is effective until March 31,
2000.
The Company has recorded approximately (Pounds)100 million ($161 million) in
reserves as of March 31, 1997, related to unfavorable long-term contracts.
These reserves will be amortized over the remaining lives of the contracts
which range from 14 to 18 years. The reserves recorded are based on the excess
of estimated fair market value of these contracts over the present value of
the future cash flows under the contracts at the applicable discount rate and
prices.
London Electricity is required to file five-year projections with the
Regulator for capital expenditures related to its regulated distribution
network and updates of such projections annually. The most recent updated
projection was for the five-year period ended March 31, 2000 and was filed in
July 1997. This filing indicated London Electricity's current projection of
approximately (Pounds)482 million ($777 million) for the five year period.
Approximately (Pounds)186 million ($300 million) has been spent in fiscal
years 1996 and 1997 related to this five-year projection.
London Electricity uses CFDs and power purchase contracts with certain UK
generators to fix the price of electricity for a contracted quantity over a
specific period of time. At March 31, 1997 the Company has outstanding CFDs
and power purchase contracts for approximately 46,000 GWh of electricity.
These include a long term power purchase contract with an affiliate which is
based on 27.5% of the affiliate's capacity from its 1000 MW facility through
the year 2010. London Electricity's sales volumes were approximately 20,800
GWh, 18,100 GWh and 15,800 GWh in pro forma fiscal year 1997, and fiscal years
ended March 31, 1996 and 1995, respectively. Management's estimate of the fair
value of CFDs outstanding at March 31, 1997 is a net liability of
approximately (Pounds)40 million ($64.5 million). This estimate is based on
management's projections of future prices of electricity. The majority of this
net liability will be recovered through generation costs passed through to
franchise customers.
The UK Environmental Protection Act 1990 addresses waste management issues
and imposes certain obligations on companies which handle and dispose of
waste. Some of London Electricity's distribution activities produce waste but
London Electricity believes that it has taken and continues to take measures
to comply with the applicable laws and governmental regulations for the
protection of the environment. There are no material legal or administrative
proceedings pending against London Electricity with respect to any
environmental matter.
11. PENSION BENEFITS:
The Company participates in a defined benefit pension plan, which provides
pension and other related defined benefits, based on final pensionable pay, to
substantially all employees throughout the electricity supply industry in the
UK. The Company made no contributions to the plan for the period from October
9, 1996 to March 31, 1997.
The Company uses the projected unit credit actuarial method for accounting
purposes. Amounts funded to the pension are primarily invested in equity and
fixed income securities.
F-13
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following table sets forth the plan's funded status and amounts
recognized in the Company's balance sheet at March 31, 1997 (in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
Accumulated benefit obligation:
Vested.......................................... (Pounds)611.6 $ 985.7
============= ========
Projected benefit obligation...................... 705.7 1,137.4
Plan assets at fair value......................... 851.0 1,371.6
------------- --------
Prepaid pension asset......................... (Pounds)145.3 $ 234.2
============= ========
</TABLE>
The weighted average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation, and the expected long-term rate of return on
assets were 9%, 6.5% and 9% for the period October 9, 1996 to March 31, 1997.
The components of the plan's net pension income during the periods are shown
below (in millions):
<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 9, 1996
TO MARCH 31, 1997
--------------------
<S> <C> <C>
Service cost (benefits earned during the period)... (Pounds) 2.5 $ 4.0
Interest cost on projected benefit obligation...... 14.9 24.0
Expected return on plan assets..................... (18.0) (29.0)
------------ ------
Net pension income............................... (Pounds)(0.6) $ (1.0)
============ ======
</TABLE>
12. EMPLOYEE OPTIONS:
Prior to the acquisition of London Electricity by the Company, certain
employees of London Electricity were eligible to participate in either the
Employee Sharesave or Executive Sharesave plans. In conjunction with the
purchase of London Electricity, the holders of any outstanding options were
given the opportunity to exercise their options and sell their shares to the
Company at a price of (Pounds)7.05 ($11.36) per share which then entitled the
owners of the shares to the interim dividend of (Pounds).179 ($0.29) per
share. If the holders of the options did not exercise their options, such
options were canceled and the holders were paid (Pounds)7.05 ($11.36) per
share. There were 5,103,416 options outstanding, which were all exercised or
canceled subsequent to year-end as of March 31, 1997.
13. ACQUISITION OF LONDON ELECTRICITY:
Effective February 1, 1997, the Company acquired London Electricity in a
transaction accounted for as a purchase. Accordingly, the results of
operations of London Electricity have been consolidated into the results of
operations of the Company from February 1, 1997 to March 31, 1997. The Company
has no operations outside of its investment in London Electricity. Based on
the purchase method of accounting, the Company has allocated the purchase
price for London Electricity to London Electricity assets and liabilities
based on their estimated fair market value with the remainder allocated to
London Electricity's distribution license which is an identifiable intangible
asset.
The following table reflects, on an unaudited pro forma basis, the combined
operations of the Company and London Electricity as if the acquisition
occurred at the beginning of each of the
F-14
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
respective fiscal years presented. Appropriate adjustments have been made to
reflect the accounting basis used in recording the acquisition. This pro forma
information has been prepared for comparative purposes only and does not
purport to be indicative of the results of operations that would have resulted
had the combination been in effect on the dates indicated, that have resulted
since the date of acquisition or that may result in the future.
<TABLE>
<CAPTION>
PRO FORMA YEAR ENDED
MARCH 31,
----------------------------------------------------
(IN MILLIONS, EXCEPT
SHARE AND PER SHARE 1997 1996
AMOUNTS) ------------------------ ---------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues................. (Pounds)1,349.8 $2,175.5 (Pounds)1,187.7 $1,914.2
Net income............... 16.3 26.3 308.1(a) 496.6
Net income per share..... 326.0 525.4 6,162.0 9,931.3
Weighted average common
shares outstanding...... 50,000 50,000
</TABLE>
- --------
(a) Includes gain on revaluation of National Grid Holding Company plc, sale of
pumped storage business, special dividends, rights dividends, contribution
to ESOP and net customer refund of (Pounds)266.2 million ($429 million),
(Pounds)70.1 million ($113 million), (Pounds)131 million ($211.1 million)
, (Pounds)3 million ($4.8 million) , (Pounds)17.3 million ($27.9 million)
and (Pounds)82.6 million ($133.1 million), respectively. The net after tax
effect of the above was to increase net income by (Pounds)248 million
($399.7 million).
The assets and liabilities acquired as of February 1, 1997 and the cash used
for acquisition are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
Current assets............................... (Pounds) 323.4 $ 521.2
Network assets............................... 1,332.0 2,146.8
Other long-term assets....................... 999.3 1,610.6
Current liabilities.......................... (383.7) (618.4)
Long-term debt............................... (208.4) (335.9)
Other long-term liabilities.................. (802.5) (1,293.4)
--------------- ---------
Total purchase price....................... 1,260.1 2,030.9
Less: Loan Notes and liability to
shareholders................................ (76.7) (123.6)
Cash acquired in acquisition................. (9.1) (14.7)
--------------- ---------
Cash used for acquisition.................... (Pounds)1,174.3 $ 1,892.6
=============== =========
</TABLE>
Certain shareholders of London Electricity elected to receive Loan Notes
issued by the Company in exchange for their shares as permitted by the terms
of the Company's tender offer. Such debt instruments are included in long-term
debt in the above analysis. Additionally, as of March 31, 1997, certain London
Electricity shareholders had not yet tendered their shares as required by both
the terms of the tender offer and applicable law. Due to the Company's
unconditional commitment to purchase such shares, the purchase price for such
shares has been included in other long-term liabilities in the above analysis.
London Electricity has utilized a portion of the pension plan surplus to
increase benefits to members and reduce employer and employee contributions. A
recent court ruling in the UK upheld such uses of pension surplus. However,
the decision is under appeal and should the decision be reversed on appeal,
the Company could be required to repay pension surplus utilized and recompute
the Company's prepaid pension asset which was (Pounds)145.3 million ($234.2
million) at March 31, 1997. Additionally, as of March 31, 1997, a tax
valuation of fixed assets had not yet been prepared. Management expects that
this tax valuation will be completed by December 31, 1997. Should an
F-15
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
unfavorable outcome result from appeals on the pension matter subsequent to
February 1, 1998, results of operations may be unfavorably impacted. The
Company's allocation of purchase price is preliminary pending the outcome of
these matters.
14. SEGMENT INFORMATION:
The Company is engaged in two electric industry segments: distribution,
which involves the transfer and delivery of electricity across its network to
its customers, and supply, which involves bulk purchases of electricity from
the Pool for delivery to the distribution networks. Other consists principally
of the Company's investment in private distribution networks, electricity
contracting services and investments in generating assets. Information about
the Company's operations in these individual segments during the period from
date of inception to March 31, 1997 is as follows (in millions):
<TABLE>
<CAPTION>
FOR THE PERIOD FROM OCTOBER 9, 1996 TO MARCH 31, 1997
--------------------------------------------------------------------------------------------------------------
DISTRIBUTION SUPPLY OTHER ELIMINATIONS CONSOLIDATED
--------------------- -------------------- -------------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating
revenues....... (Pounds)60.8 $ 98.0 (Pounds)213.3 $343.8 (Pounds)10.2 $ 16.4 (Pounds)(50.7) $(81.7) (Pounds)233.6 $ 376.5
Operating
income......... 18.1 29.2 6.6 10.6 7.3 11.8 (Pounds) -- 32.0 51.6
Depreciation and
amortization... 13.9 22.4 0.8 1.3 (1.8) (2.9) (Pounds) -- 12.9 20.8
Total assets
employed at
period end..... 1,765.9 2,846.1 543.8 876.5 358.9 578.4 (Pounds) -- 2,668.6 4,301.0
Capital
expenditures... 25.3 40.8 2.6 4.2 8.0 12.9 (Pounds) -- 35.9 57.9
</TABLE>
15. RESTRUCTURING CHARGES:
In 1995 and 1996, London Electricity implemented a restructuring program to
reduce the number of employees in the Network Services, Customer Services,
Corporate and Information Technology groups. An initial plan was approved by
the Board of Directors of the Company in September of 1994 and was based on a
business plan developed subsequent to the 1994 Regulatory Review of
Distribution (the "Distribution Review").
Following the reopening of the Distribution Review during 1995, a further
plan was proposed leading to further reduction of employees in the same areas.
This plan was approved by the Board of Directors in May of 1996. The balance
as of March 31, 1997 for restructuring charges is shown below along with the
actual termination benefits paid under the program for the period from date of
inception to March 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C>
Provision for restructuring as of January 31, 1997........ (Pounds)25.9 $41.7
Adjustments to restructuring provision in period from date
of inception to March 31, 1997........................... 8.0 12.9
Payments made in period from date of inception to March
31, 1997................................................. (3.1) (5.0)
------------ -----
Balance March 31, 1997.................................. (Pounds)30.8 $49.6
============ =====
</TABLE>
F-16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of London Electricity plc:
We have audited the accompanying consolidated balance sheet of London
Electricity plc as of March 31, 1996 and the related consolidated statements
of operations, cash flows and changes in shareholders' equity for the period
from April 1, 1996 to January 31, 1997, and the years ended March 31, 1996 and
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of London
Electricity plc as of March 31, 1996 and the results of its operations and its
cash flows for the period from April 1, 1996 to January 31, 1997 and the years
ended March 31, 1996 and 1995 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
July 31, 1997
F-17
<PAGE>
LONDON ELECTRICITY PLC
CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
Current assets:
Cash and cash equivalents.................................... (Pounds) 13.0
Accounts receivable:
Customer receivable net of reserve of (Pounds)8.7........... 113.5
Unbilled revenue............................................ 77.2
Deferred income tax asset.................................... 15.8
Income tax receivable........................................ 125.1
Other receivables............................................ 53.9
Prepayments and other........................................ 8.1
Inventory.................................................... 7.4
Investments.................................................. 16.7
---------------
Total current assets....................................... 430.7
---------------
Property, plant and equipment, net of accumulated depreciation
of (Pounds)465.3.............................................. 701.3
Construction work in progress.................................. 82.3
Goodwill, net of accumulated amortization of (Pounds)2.2....... 41.3
Investments, long-term......................................... 10.6
Long-term receivables.......................................... 10.0
Prepaid pension asset.......................................... 73.1
---------------
Total assets................................................... (Pounds)1,349.3
===============
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C>
Current liabilities:
Notes payable................................................ (Pounds) 96.1
Accounts payable............................................. 117.5
Income taxes payable......................................... 155.1
Deferred revenue............................................. 20.1
Other liabilities............................................ 48.5
---------------
Total current liabilities.................................. 437.3
---------------
Long-term debt................................................. 197.7
Deferred income tax liability.................................. 208.1
Other.......................................................... 58.7
---------------
Total liabilities.......................................... 901.8
---------------
Commitments and Contingencies
Shareholders' equity:
Common stock, (Pounds).583 par value per share, 257,142,857
shares authorized, 174,290,836 shares issued and
outstanding................................................. 101.7
Additional paid-in capital................................... 9.6
Retained earnings............................................ 336.2
---------------
Total shareholders' equity................................. 447.5
---------------
Total liabilities and shareholders' equity..................... (Pounds)1,349.3
===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-18
<PAGE>
LONDON ELECTRICITY PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM APRIL 1, 1996 TO JANUARY 31, 1997 AND THE YEARS ENDED MARCH
31, 1996 AND 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996 YEARS ENDED MARCH 31,
TO JANUARY 31, --------------------------------
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Operating revenues.......... (Pounds)1,116.2 (Pounds)1,187.7 (Pounds)1,209.4
Cost of sales............... 768.4 834.5 740.1
--------------- --------------- ---------------
Gross profit................ 347.8 353.2 469.3
Depreciation and amortiza-
tion....................... 39.3 42.2 39.5
Property taxes.............. 19.4 20.3 24.8
Restructuring charges....... 11.7 -- 40.5
Selling, general and admin-
istrative.................. 134.0 146.8 146.3
Other operation and mainte-
nance costs................ 36.7 42.3 52.4
--------------- --------------- ---------------
Income from
operations........... 106.7 101.6 165.8
Other income:
National Grid Transaction
Gain on revaluation of
National Grid
investment............. -- 266.2 --
Gain on sale of pumped
storage business....... -- 70.1 --
Special dividends....... -- 131.0 --
Contribution to Employee
Stock Ownership Plan... -- (17.3) --
Dividend income........... 3.8 24.8 20.6
Equity in earnings (loss)
of affiliate............. 2.4 (2.2) (0.7)
Other, net................ (1.6) .1 2.6
--------------- --------------- ---------------
Total other income.... 4.6 472.7 22.5
Interest expense, net....... 17.1 4.9 1.1
--------------- --------------- ---------------
Income before income
taxes and
extraordinary item... 94.2 569.4 187.2
Extraordinary loss on extin-
guishment of debt.......... -- -- 9.5
--------------- --------------- ---------------
Income before income
taxes................ 94.2 569.4 177.7
Income taxes................ 32.1 110.0 57.2
--------------- --------------- ---------------
Net income............ (Pounds) 62.1 (Pounds) 459.4 (Pounds) 120.5
=============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-19
<PAGE>
LONDON ELECTRICITY PLC
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM APRIL 1, 1996 TO JANUARY 31, 1997 AND THE YEARS ENDED MARCH
31, 1996 AND 1995
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
UNREALIZED
GAIN ON
COMMON STOCK ADDITIONAL AVAILABLE FOR
-------------------------- PAID-IN RETAINED SALE SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INVESTMENTS EQUITY
----------- ------------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, April 1, 1994.. 219,082,592 (Pounds)109.5 (Pounds)2.0 (Pounds)559.6 (Pounds) -- (Pounds)671.1
Common stock issued..... 513,399 0.3 0.9 -- -- 1.2
Treasury shares
acquired............... (21,900,292) (11.0) -- (139.4) -- (150.4)
Net Income.............. -- -- -- 120.5 -- 120.5
Dividends declared...... -- -- -- (52.5) -- (52.5)
----------- ------------- ----------- ------------- -------------- -------------
Balance, March 31, 1995. 197,695,699 (Pounds) 98.8 (Pounds)2.9 (Pounds)488.2 (Pounds) -- (Pounds)589.9
Common stock issued..... 4,956,992 2.9 6.7 -- -- 9.6
Reduction in shares from
reverse stock split.... (27,522,282) -- -- -- -- --
Treasury shares
acquired............... (839,573) -- -- (0.8) -- (0.8)
Revaluation of National
Grid investment........ -- -- -- -- 178.4 178.4
Realized gain on
distribution of
National Grid
investment............. -- -- -- -- (178.4) (178.4)
Net income.............. -- -- -- 459.4 -- 459.4
Dividends declared:
Cash dividends........ -- -- -- (260.2) -- (260.2)
National Grid
Distribution......... -- -- -- (350.4) -- (350.4)
----------- ------------- ----------- ------------- -------------- -------------
Balance, March 31, 1996. 174,290,836 (Pounds)101.7 (Pounds)9.6 (Pounds)336.2 (Pounds) -- (Pounds)447.5
Common stock issued..... 390,712 0.1 -- 1.0 -- 1.1
Net income.............. -- -- -- 62.1 -- 62.1
Dividends declared...... -- -- -- (72.8) -- (72.8)
----------- ------------- ----------- ------------- -------------- -------------
Balance, January 31,
1997................... 174,681,548 (Pounds)101.8 (Pounds)9.6 (Pounds)326.5 (Pounds) -- (Pounds)437.9
=========== ============= =========== ============= ============== =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-20
<PAGE>
LONDON ELECTRICITY PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM APRIL 1, 1996 TO JANUARY 31, 1997 AND THE YEARS ENDED MARCH
31, 1996 AND 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED
PERIOD FROM MARCH 31,
APRIL 1, 1996 TO ----------------------------
JANUARY 31, 1997 1996 1995
---------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activ-
ities:
Net income.................... (Pounds) 62.1 (Pounds)459.4 (Pounds)120.5
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization............... 39.3 42.2 39.5
Deferred income taxes....... 14.4 17.4 26.8
Gain on revaluation of
National Grid investment... -- (266.2) --
Change in assets and
liabilities:
Inventory................. (2.0) (3.1) 0.3
Accounts receivable and
unbilled revenue......... (13.5) (15.8) (20.3)
Income tax receivable..... 115.1 (79.3) (34.2)
Other receivables......... 3.1 (32.4) (4.6)
Prepayments and other..... 2.0 (4.4) 0.9
Long-term receivables and
other.................... (6.0) (17.4) (19.6)
Accounts payable.......... 26.0 5.4 (0.6)
Income taxes payable...... (126.5) 75.0 15.8
Deferred revenue and other
current liabilities...... (10.9) 15.1 14.5
Other long-term
liabilities.............. (1.4) (4.9) (15.9)
------------- ------------- -------------
Net cash provided by
operating activities... 101.7 191.0 123.1
Cash flows from investing activ-
ities:
Capital expenditures.......... (115.6) (110.6) (110.4)
Proceeds from sale of fixed
assets....................... 0.5 1.2 3.8
Receipt of consumer
contributions................ 16.8 14.9 14.6
Purchase of investments....... (3.9) (23.7) (4.3)
Sales of investments.......... 6.5 36.9 118.5
------------- ------------- -------------
Net cash provided by
(used in) investing
activities............. (95.7) (81.3) 22.2
Cash flows from financing activ-
ities:
Proceeds from bond issue...... 0.2 99.1 --
Proceeds from issuance of
common stock................. 1.2 9.6 --
Repayments on bond issue...... -- -- (69.8)
Net proceeds from available
lines of credit.............. 66.2 36.9 56.3
Dividends paid................ (64.3) (260.2) (52.5)
Repurchase of common stock.... -- (0.8) (149.2)
------------- ------------- -------------
Net cash provided by
(used in) financing
activities............. 3.3 (115.4) (215.2)
------------- ------------- -------------
Increase (decrease) in cash and
cash equivalents............... 9.3 (5.7) (69.9)
Beginning of period cash and
cash equivalents............... 13.0 18.7 88.6
------------- ------------- -------------
End of period cash and cash
equivalents.................... (Pounds) 22.3 (Pounds) 13.0 (Pounds) 18.7
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest........ (Pounds) 28.0 (Pounds) 12.4 (Pounds) 13.8
============= ============= =============
Cash paid for income taxes.... (Pounds)169.0 (Pounds) 77.0 (Pounds) 43.0
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-21
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS:
London Electricity plc ("London Electricity") is one of the twelve regional
electricity companies ("RECs") in England and Wales licensed to supply,
distribute, and, to a limited extent, generate electricity. The RECs were
created as a result of the privatization of the United Kingdom ("UK") electric
industry in 1990 after the state-owned low voltage distribution networks were
allocated to the then existing twelve regional boards. London Electricity's
main business, the distribution and supply of electricity to customers in
London, England, is regulated under the terms of London Electricity's Public
Electricity Supply License ("PES license") by the Office of Electricity
Regulation (the "Regulator").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The financial statements of London Electricity are presented in pounds
sterling ((Pounds)) and in conformity with accounting principles generally
accepted in the United States ("US GAAP"). The consolidated financial
statements include the accounts of London Electricity and its wholly-owned and
majority-owned subsidiaries and have been prepared from records maintained by
London Electricity in the UK. All significant intercompany accounts and
transactions have been eliminated in consolidation. London Electricity is not
subject to rate regulation, but rather, is subject to price cap regulation
and, therefore, the provisions of Statement of Financial Accounting Standards
No. 71, "Accounting for the Effects of Certain Types of Regulation" ("SFAS
71") do not apply.
London Electricity was acquired by Entergy Power UK plc on February 1, 1997.
The financial statements include the results of operations of London
Electricity through the date of acquisition.
Use of Estimates in the Preparation of Financial Statements
The preparation of London Electricity's financial statements, in conformity
with generally accepted accounting principles, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses during the reporting period.
Adjustments to the reported amounts of assets and liabilities may be necessary
in the future to the extent that future estimates or actual results are
different from the estimates used in the financial statements.
Revenue Recognition
London Electricity distributes electricity to commercial, residential and
industrial customers within the London area. London Electricity records
revenue net of value added tax ("VAT") and accrues revenue for services
provided but unbilled at the end of each reporting period. London Electricity
purchases power primarily from the wholesale trading market for electricity in
England and Wales (the "Pool"). The Pool monitors supply and demand between
generators and suppliers, sets prices for generation and provides centralized
settlement of amounts due between generators and suppliers.
Cash and Cash Equivalents
London Electricity considers all short-term investments with an original
maturity of three months or less to be cash and cash equivalents.
Property, Plant and Equipment
Property, plant and equipment is stated at original cost and includes
materials, labor and appropriate overhead costs. London Electricity is
entitled, under certain conditions, to collect cash
F-22
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
contributions from consumers to fund improvements to London Electricity's
distribution networks. These consumer contributions are credited against the
historical cost of the asset.
Depreciation is computed by the straight-line method at rates based on the
estimated service lives of each of the various classes of property. Consumer
contributions are amortized into income at a rate of 2.5%. Depreciation rates
on average depreciable property are shown below:
<TABLE>
<CAPTION>
<S> <C>
Distribution network assets.......................................... 2.5%
Buildings............................................................ 1.7%
Vehicles and mobile plant............................................ 10%-20%
Furniture and equipment, including computer hardware and software.... 20%-33%
</TABLE>
Income Taxes
London Electricity accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). This standard requires that deferred income taxes be recorded for all
temporary differences between the financial statement basis and tax basis of
assets and liabilities and loss carryforwards, and that deferred tax balances
be based on enacted tax laws at rates that are expected to be in effect when
the temporary differences reverse.
Goodwill
Goodwill represents the excess of cost over the fair value of net assets
acquired and is being amortized over forty years using the straight-line
method.
Financial Instruments
London Electricity enters into interest rate swaps as a part of its overall
risk management strategy and does not hold or issue material amounts of
derivative financial instruments for trading purposes. London Electricity
accounts for its interest rate swaps in accordance with the concepts
established in Statement of Financial Accounting Standards No. 80, "Accounting
for Futures Contracts" ("SFAS 80") and various Emerging Issue Task Force
pronouncements. If the interest rate swaps were to be sold or terminated, any
gain or loss would be deferred and amortized over the remaining life of the
debt instrument being hedged by the interest rate swap. If the debt instrument
being hedged by the interest rate swaps were to be extinguished, any gain or
loss attributable to the swap would be recognized in the period of the
transaction.
London Electricity considers the carrying amounts of financial instruments
classified as current assets and liabilities to be a reasonable estimate of
their fair value because of the short maturity of these instruments.
Price Control
Charges for distribution of electricity and supply to customers with a
maximum demand under 100kW are subject to a price control formula set out in
London Electricity's PES license which allows a maximum charge per unit of
electricity.
Differences in the charges, or in the purchase cost of electricity, can
result in the under or overrecovery of revenues in a particular year.
Where there is an overrecovery of supply of distribution business revenues
against the regulated maximum allowable amount, revenues are deferred in an
amount equivalent to the overrecovered amount. The deferred amount is deducted
from operating revenues and included in other liabilities. Where there is an
underrecovery, no anticipation of any potential future recovery is made.
F-23
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
London Electricity enters into contracts for differences ("CFDs") primarily
to hedge its supply business against the price risk of electricity purchases
from the Pool. Use of these CFDs is carried out within the framework of London
Electricity's purchasing strategy and hedging guidelines. Risk of loss is
monitored through establishment of approved counterparties and maximum
counterparty limits and minimum credit ratings. London Electricity recognizes
gains (losses) on CFDs when settlement is made. Gains (losses) on CFDs are
recognized as a decrease (increase) to cost of sales based upon the difference
between fixed prices in the CFD compared to variable prices paid to the Pool
for the period. Gains (losses) based upon the difference between fixed prices
in the CFD compared to variable prices paid to the Pool for future electricity
purchases are not recognized until the period of such settlements.
Pursuant to Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of" ("SFAS 121") the Company periodically reviews its long-lived
assets whenever events or changes in circumstances indicate that
recoverability of these assets is uncertain. Generally, the determination of
recoverability is based on the undiscounted net cash flows expected to result
from such assets. Projected undiscounted net cash flows depend on the future
operating costs associated with the assets and future market prices over the
remaining life of the assets. Based on current estimates of future
undiscounted cash flows as prescribed under SFAS 121, management anticipates
that future revenues from such assets will fully recover all related costs.
3. REGULATORY MATTERS:
The distribution business of London Electricity is regulated under its PES
license, pursuant to which revenue of the distribution business is controlled
by the Distribution Price Control Formula (DPCF). The DPCF determines the
maximum average price per unit of electricity (expressed in kilowatt hours, a
"unit") that a REC may charge. The elements used in the DPCF are established
for a five-year period and are subject to review by the Regulator at the end
of each five-year period and at other times at the discretion of the
Regulator. At each review the Regulator can adjust the value of certain
elements in the DPCF. Following a review by the Regulator in August 1994, a
14% price reduction was set for London Electricity, effective April 1, 1995.
In July 1995, a further review of distribution prices was concluded by the
Regulator for fiscal years 1997 to 2000. As a result of this further review,
London Electricity's distribution prices were reduced an additional 11%,
effective April 1, 1996, 3% effective April 1, 1997 and will be reduced by a
further 3% on both April 1, 1998 and 1999.
The supply business of London Electricity is also regulated by the Regulator
and prices are established based upon the Supply Price Control Formula which
is similar to the DPCF; however, it allows full pass through for all properly
incurred costs and is set for a four-year period by the Regulator.
The non-franchise supply market, which typically includes larger commercial
and industrial customers was opened to competition for all customers with
usage above 1Mw upon privatization of the industry in 1990. The non-franchise
supply markets of 100 kW or more were opened to full competition starting in
April 1994.
Currently London Electricity, under its PES license, has the exclusive right
to supply residential and small industrial and commercial customers within its
franchise area. It is anticipated that the supply market will be fully
competitive over a six month period starting in April 1998.
4. INVESTMENTS:
London Electricity accounts for investments whose fair market value is
readily determinable in accordance with Statement of Financial Accounting
Standards No. 115, "Accounting for Investments
F-24
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
for Certain Debt and Equity Securities" ("SFAS 115"). These securities are
considered available-for-sale securities under SFAS 115 and their fair values
approximate cost. Other securities whose fair market values are not readily
determinable and in which London Electricity does not have a significant
interest are recorded at cost.
Investments in companies in which London Electricity's ownership interests
range from 20% to 50% and investments in which London Electricity's ownership
is less than 20% but over which London Electricity exercises significant
influence over operating and financial policies are accounted for using the
equity method. The following are London Electricity's equity method
investments as of March 31, 1996:
<TABLE>
<CAPTION>
INVESTMENT PERCENTAGE OWNERSHIP
- ---------- ---------------------------
<S> <C>
London Total Gas Ltd................................ 50%
Combined Power Systems Ltd.......................... 32% combined ownership in
common and preferred shares
Thames Valley Power Ltd............................. 50%
London Total Energy Ltd............................. 50%
Barking Power Ltd................................... 13.5%
</TABLE>
5. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost, consists of the following (in
millions):
<TABLE>
<CAPTION>
MARCH 31, 1996
---------------
<S> <C>
Distribution network assets................................... (Pounds)1,159.1
Land and buildings............................................ 77.0
Vehicles and mobile plant..................................... 15.9
Furniture, fixtures and equipment, including computer hardware
and software................................................. 118.8
Consumer contributions to construction........................ (204.2)
---------------
1,166.6
Less accumulated depreciation and amortization................ (465.3)
---------------
(Pounds) 701.3
===============
</TABLE>
6. INCOME TAXES:
London Electricity's income tax expense for the period from April 1, 1996 to
January 31, 1997, and the years ended March 31, 1996 and 1995, consists of the
following (in millions):
<TABLE>
<CAPTION>
PERIOD FROM YEARS ENDED MARCH 31,
APRIL 1, 1996 TO ---------------------------
JANUARY 31, 1987 1996 1995
---------------- ------------- ------------
<S> <C> <C> <C>
Current........................... (Pounds)17.7 (Pounds) 41.0 (Pounds)30.4
Deferred.......................... 14.4 17.4 26.8
Current taxes on National Grid
transactions:
Tax on special dividend......... -- 22.8 --
Tax on distribution in kind..... -- 59.7 --
Tax on ESOP contribution........ -- (3.6) --
Tax reduction related to
customer discount.............. -- (27.3) --
------------ ------------- ------------
Total......................... (Pounds)32.1 (Pounds)110.0 (Pounds)57.2
============ ============= ============
</TABLE>
F-25
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
London Electricity's total income taxes differ from the amounts computed by
applying the statutory income tax rate to income before taxes. The reasons for
the differences in the period from April 1, 1996 to January 31, 1997 and the
years ended March 31, 1996 and 1995 are (in millions):
<TABLE>
<CAPTION>
PERIOD FROM YEARS ENDED MARCH 31,
APRIL 1, 1996 TO ----------------------------
JANUARY 31, 1987 1996 1995
---------------- ------------- -------------
<S> <C> <C> <C>
Pre-tax income.................. (Pounds)94.2 (Pounds)569.4 (Pounds)177.7
============ ============= =============
Income taxes computed at statu-
tory rate...................... 31.1 187.9 58.6
National Grid transactions:
Revaluation of investment
excluded from taxable income. -- (28.1) --
Gain on sale of pumped storage
business excluded from
taxable income............... -- (23.1) --
Tax credit on contribution to
ESOP......................... -- (3.6) --
Special dividends not taxable. -- (6.9) --
Effect of difference between
statutory rate (33%) and rate
on dividends received (20%).... (0.5) (19.9) (2.6)
Amortization of goodwill........ 0.3 0.4 0.4
Loss on extinguishment of debt.. -- 3.1
Other........................... 1.2 3.3 (2.3)
------------ ------------- -------------
Total income tax expense.... (Pounds)32.1 (Pounds)110.0 (Pounds) 57.2
============ ============= =============
</TABLE>
Significant components of London Electricity's net deferred tax liability as
of March 31, 1996 are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C>
Deferred tax liability
Property-related basis differences....................... (Pounds)(184.0)
Prepaid pension asset.................................... (24.1)
--------------
Total.................................................. (208.1)
Deferred tax asset
Restructuring and other provisions....................... 15.8
--------------
Net deferred tax liability............................. (Pounds)(192.3)
==============
</TABLE>
As a result of Parliamentary elections held on May 1, 1997, the Labor Party
gained control of the British government. On July 31, 1997 legislation
establishing a windfall profits tax, which affects regulated companies
privatized since 1979 including London Electricity, was enacted. In accordance
with SFAS 109 under US GAAP, London Electricity will record a charge to income
for the windfall profits tax during the quarter ending September 30, 1997. A
change in the UK statutory rate from 33% to 31% was also included in the
legislation. The impact of such changes will be recognition in the quarter
ending September 30, 1997 of the (Pounds)140 million expense for the windfall
profits tax and approximately (Pounds)38 million of income tax benefit as a
result of the change in the UK statutory income tax rate in the Company's
results of operations.
The tax years since fiscal year 1990 are currently under review by the
Inland Revenue in the UK. The Company believes that there is no additional
liability related to the tax years under review.
F-26
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. LONG-TERM DEBT:
The long-term debt of London Electricity as of March 31, 1996 consists of
the following (in millions):
<TABLE>
<CAPTION>
<S> <C>
8% Eurobonds repayable March 28, 2003...................... (Pounds) 98.9
8 5/8% Eurobonds repayable October 26, 2005................ 98.8
-------------
Total.................................................... (Pounds)197.7
=============
</TABLE>
The 8% and 8 5/8% Eurobonds may become due prior to their stated maturity
only upon the occurrence of certain events including default, liquidation or
bankruptcy of London Electricity. The Company does not anticipate default
under the agreements.
London Electricity entered into an interest rate swap agreement to reduce
the impact of interest rate changes on its outstanding debt. The interest rate
swap agreement involves the exchange of a fixed interest rate for a floating
interest rate periodically over the life of the agreement. If the counterparty
to the interest rate swap was to default on contractual payments, London
Electricity could be exposed to increased cost related to replacing the
original agreement. However, London Electricity does not anticipate non-
performance. At March 31, 1996, London Electricity was party to a notional
amount of (Pounds)8 million for an interest rate swap agreement with a
maturity date of May 6, 2003.
In August 1994, London Electricity retired approximately (Pounds)70 million
of 12.66% bonds due in 1999. The debt was retired using proceeds from
borrowings under London Electricity's available lines of credit. The cash paid
to retire the debt exceeded the carrying value of the debt by approximately
(Pounds)9.5 million, which is recorded as an extraordinary loss on the
extinguishment of debt.
8. COMMON STOCK:
During 1996, London Electricity effected a reverse stock split of six for
every seven shares of common stock held. This reduced by approximately 28
million, the number of common shares outstanding and increased the par value
of the stock from (Pounds)0.50 to (Pounds)0.583 per share.
9. NOTES PAYABLE:
Other facilities available to London Electricity are short-term unsecured,
uncommitted facilities of (Pounds)228 million and a (Pounds)150 million
Sterling Commercial Paper Program ("Sterling Program"). Uncommitted facilities
are unsecured facilities which are available at London Electricity's request,
however there is no obligation by the bank counterparty to make funds
available to London Electricity. The Sterling Program is a negotiable
promissory note with short term maturities (up to 364 days) issued at a
discount to face value. London Electricity had an outstanding balance of
(Pounds)96.1 million on all of these facilities as of March 31, 1996. The
weighted average interest rate incurred on these borrowings was 6.3%, 6.1% and
6.4% for the period from April 1, 1996 to January 31, 1997 and for the years
ended March 31, 1996 and 1995, respectively.
F-27
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
10. COMMITMENTS AND CONTINGENCIES:
London Electricity has entered into operating lease agreements for the use
of buildings and vehicles. Minimum future rental payments under all operating
leases as of March 31, 1996 are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C>
1997........................................................ (Pounds) 7.1
1998........................................................ 6.9
1999........................................................ 6.6
2000........................................................ 6.6
2001........................................................ 6.4
Thereafter.................................................. 83.7
-------------
Total..................................................... (Pounds)117.3
=============
</TABLE>
Rental expense incurred under these lease agreements was (Pounds)6.7 million
, (Pounds)7.9 million and (Pounds)7.2 million for the period from April 1,
1996 to January 31, 1997 and for the years ended March 31, 1996 and March 31,
1995, respectively.
London Electricity is subject to an agreement whereby the UK government is
entitled to a proportion of certain property gains accruing to London
Electricity as a result of disposals or events treated as disposals occurring
after March 31, 1990 of properties held at that date. This commitment is
effective until March 31, 2000.
London Electricity has utilized a portion of the pension plan surplus to
increase benefits to members and reduce employer and employee contributions. A
recent court ruling in the UK upheld such uses of pension surpluses. However,
should the decision be reversed on appeal, London Electricity could be
required to repay pension surpluses utilized. Management is unable to predict
the likely outcome of this matter at this time.
The UK Environmental Protection Act 1990 addresses waste management issues
and imposes certain obligations on companies which handle and dispose of
waste. Some of London Electricity's distribution activities produce waste but
London Electricity believes that it has taken and continues to take measures
to comply with the applicable laws and governmental regulations for the
protection of the environment. There are no material legal or administrative
proceedings pending against London Electricity with respect to any
environmental matter.
London Electricity is required to file five-year projections with the
Regulator for capital expenditures related to its regulated distribution
network and updates of such projections annually. The most recent updated
projection was for the five-year period ended March 31, 2000 and was filed in
July 1997. This filing indicated London Electricity's current projection of
approximately (Pounds)482 million for the five-year period. Approximately
(Pounds)186 million has already been spent in fiscal years 1996 and 1997
related to this five-year projection.
London Electricity uses CFDs and power purchase contracts with certain UK
generators to fix the price of electricity for a contracted quantity over a
specific period of time. At March 31, 1996, the Company has outstanding CFDs
and power purchase contracts for approximately 52,000 GWh of electricity.
These include a long term power purchase contract with an affiliate which is
based on 27.5% of the affiliate's capacity from its 1000 MW facility through
the year 2010. London Electricity's sales volumes were approximately 17,000
GWh, 18,000 GWh and 16,000 GWh in the period from April 1, 1996 to January 31,
1997, and the years ended March 31, 1996 and 1995, respectively.
F-28
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
11. PENSION BENEFITS:
London Electricity participates in a defined benefit pension plan, which
provides pension and other related defined benefits, based on final
pensionable pay, to substantially all employees throughout the electric supply
industry in the UK. Contributions to the plan by London Electricity on behalf
of its employees were (Pounds)10.2 million and (Pounds)10.9 million for the
years ended March 31, 1996 and 1995, respectively. London Electricity made no
contributions to the plan during the period April 1, 1996 to January 31, 1997.
London Electricity uses the projected unit credit actuarial method for
funding purposes. Amounts funded to the pension are primarily invested in
equity and fixed income securities.
Statement of Financial Accounting Standards No. 87 "Employees Accounting for
Pensions" ("SFAS 87") was issued in 1988 and is effective for fiscal years
beginning after December 15, 1988. The provisions of SFAS 87 were initially
adopted by London Electricity on April 1, 1994. Accordingly, the unrecognized
net transition asset at the date of initial application of SFAS 87 is being
amortized over 15 years beginning April 1, 1989. The amount of the
unrecognized net transition asset credited to equity on April 1, 1994 was
(Pounds)29.2 million.
The following table sets forth the plan's funded status and amounts
recognized in London Electricity's balance sheet at March 31, 1996 (in
millions):
<TABLE>
<CAPTION>
<S> <C>
Accumulated benefit obligation:
Vested................................................... (Pounds)589.8
=============
Projected benefit obligation............................... 674.5
Plan assets at fair value.................................. 806.7
-------------
Assets in excess of projected benefit obligation........... 132.2
Unrecognized net gain...................................... (12.3)
Unrecognized net transition asset.......................... (46.8)
-------------
Prepaid pension asset.................................. (Pounds) 73.1
=============
</TABLE>
The weighted average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation, and the expected long-term rate of return on
assets was 9%, 6.5% and 9%, respectively, for the period from April 1, 1996 to
January 31, 1997 and for the years ended March 31, 1996 and 1995.
The components of the plan's net pension income during the periods are shown
below (in millions):
<TABLE>
<CAPTION>
PERIOD FROM YEARS ENDED MARCH 31,
APRIL 1, 1996 TO --------------------------
JANUARY 31, 1997 1996 1995
---------------- ------------ ------------
<S> <C> <C> <C>
Service cost (benefits earned dur-
ing the period).................. (Pounds) 6.6 (Pounds) 8.5 (Pounds) 7.6
Interest cost on projected
benefit obligations............ 44.4 54.5 54.1
Actual return on plan assets.... (58.4) (145.1) (5.6)
Net amortization and deferral... 2.5 73.6 (63.6)
------------ ------------ ------------
Net pension benefit .......... (Pounds)(4.9) (Pounds)(8.5) (Pounds)(7.5)
============ ============ ============
</TABLE>
F-29
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
12. DISTRIBUTION OF NATIONAL GRID INVESTMENT:
In December 1995, each of the RECs distributed their investments in the
National Grid Holding Company plc ("National Grid"). London Electricity
distributed its ownership shares in National Grid to its shareholders. Prior
to the distribution, the National Grid shares were listed on the London Stock
Exchange and revalued to reflect the market value of the common stock of
National Grid, whose shares had not previously been publicly traded and for
which there was no readily determinable fair market value. London Electricity
recorded a gain on the revaluation of (Pounds)266.2 million in the Statement
of Operations for the year ended March 31, 1996. National Grid also effected a
rights issue at (Pounds)2.04 per share to raise additional equity capital.
London Electricity invested an additional (Pounds)18 million in National Grid
as a result of the rights issue. Approximately 96% of the total National Grid
shares owned by London Electricity were then distributed in kind to the
shareholders of London Electricity.
The remaining shares owned by London Electricity were retained to establish
an Employee Stock Ownership Plan ("ESOP") to compensate participants of the
Employee and Executive Sharesave Plans (employee stock option plans) for any
diminution in value of London Electricity shares as a result of the demerger.
Approximately 5.1 million shares of National Grid were reserved for
contributions to the ESOP. The actual shares will be contributed to the ESOP
upon exercise of options under the employee stock option plans. The
contributed shares related to the establishment of the ESOP plus expenses and
cash contributions due to the ESOP to compensate the participants for taxes
payable related to this distribution were charged to expense during the fiscal
year ended March 31, 1996. The difference between actual National Grid shares
contributed and the total amount charged to expense is included in other
liabilities in London Electricity's balance sheet as of March 31, 1996.
National Grid also distributed to London Electricity its ownership shares in
PSB Holding Limited ("PSB"), the holding company of First Hydro Limited which
had been transferred to National Grid in 1990. As part of the demerger, PSB
was sold to Mission Energy and the Company recorded a (Pounds)70.1 million
gain on the sale.
Finally, as part of the demerger, the Regulator ordered a (Pounds)50 refund
to each of London Electricity's supply customers which was offset by a
reduction in the fossil fuel levy charged to the Company. The effect of the
refund, which was recorded in the year ended March 31, 1996, was to reduce
operating revenues, cost of sales and gross profit by (Pounds)90.9 million ,
(Pounds)8.3 million and (Pounds)82.6 million, respectively.
The investment in National Grid has been accounted for by London Electricity
as a cost method investment. The consolidated results of operations of London
Electricity therefore do not include any of the results of operations of
National Grid.
13. EMPLOYEE OPTIONS:
London Electricity was acquired by Entergy Power UK plc on February 1, 1997.
In conjunction with the purchase of London Electricity, the holders of any
outstanding options under the employee option plans were given the opportunity
to exercise their options and sell their shares to Entergy Power UK plc at a
price of (Pounds)7.05 per share which then entitled the owner of the shares to
the interim dividend of (Pounds).179 per share. If the holders of the options
did not exercise their options, such options were cash canceled and the
holders were paid (Pounds)7.05 per share.
Under the Employee Sharesave Plan, London Electricity was authorized to
issue shares of common stock pursuant to stock options granted to officers,
key employees and directors. Under the
F-30
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Executive Sharesave Plan, London Electricity was authorized to issue shares of
common stock pursuant to stock options granted to directors.
The stock options had an exercise price equal to the fair market value of
the common stock on the date of grant and a contractual term of 10 years. The
stock options became exercisable on the third anniversary of the date of grant
under the Executive Sharesave Plan.
A summary of the status of London Electricity's stock options for the period
from April 1, 1996 to January 31, 1997 and for the years ended March 31, 1996
and March 31, 1995 and the changes during the years ended on such dates is
presented below:
<TABLE>
<CAPTION>
PERIOD FROM YEARS ENDED MARCH 31,
APRIL 1, 1996 TO -------------------------------------------------
JANUARY 31, 1997 1996 1995
------------------------ ------------------------ ------------------------
# SHARES # SHARES # SHARES
OF OF OF
UNDERLYING EXERCISE UNDERLYING EXERCISE UNDERLYING EXERCISE
OPTIONS PRICES OPTIONS PRICES OPTIONS PRICES
---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year................ 1,873,505 (Pounds)3.56 6,985,705 (Pounds)2.26 7,731,474 (Pounds)2.23
Granted................. 3,625,911 4.82 89,628 5.94 -- 5.92
Exercised............... (390,712) 3.33 (4,956,992) 1.89 (513,399) 2.32
Forfeited............... -- -- (244,836) 2.09 (232,370) 2.05
Expired................. -- -- -- -- -- --
--------- ---------- ---------
Outstanding at end of
year................... 5,108,704 1,873,505 6,985,705
========= ========== =========
</TABLE>
14. RESTRUCTURING CHARGES:
In 1995 and 1996, London Electricity implemented a restructuring program to
reduce the number of employees in the Network Services, Customer Services,
Corporate and Information Technology groups. An initial plan was approved by
the Board of Directors of London Electricity in September 1994 and was based
on a business plan developed subsequent to the 1994 Regulatory Review of
Distribution (the "Distribution Review"). Approximately (Pounds)40.5 million
was recorded for the year ended March 31, 1995 related to this program.
Following the reopening of the Distribution Review during 1995, a further
plan was proposed leading to a further reduction of employees in the same
areas. This plan was approved by the Board of Directors in May 1996, and
approximately (Pounds)11.7 million in restructuring charges was recorded for
the period from April 1, 1996 to January 31, 1997. The balances for
restructuring charges and the actual termination benefits paid under the
program for the period from April 1, 1996 to January 31, 1997 and the years
ended March 31, 1996 and 1995 are as follows (in millions of pounds sterling):
<TABLE>
<CAPTION>
<S> <C>
Provision for restructuring as of March 31, 1994............ (Pounds) --
------------
Restructuring charges in 1995............................... 40.5
Payments made in 1995....................................... (21.8)
------------
Provision for restructuring as of March 31, 1995............ 18.7
Restructuring charges in 1996............................... --
Payments made in 1996....................................... --
------------
Balance March 31, 1996...................................... 18.7
Restructuring charges in 1997............................... 11.7
Payments made in 1997....................................... (10.5)
------------
Provision for restructuring as of January 31, 1997.......... (Pounds)19.9
============
</TABLE>
F-31
<PAGE>
LONDON ELECTRICITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The number of employees terminated under these plans was 250, 308, and 586
for the period from April 1, 1996 to January 31, 1997 and the years ended
March 31, 1996 and 1995, respectively.
15. SEGMENT INFORMATION:
London Electricity is engaged in two electric industry segments:
distribution, which involves the transfer and delivery of electricity across
London Electricity's network to its customers, and supply, which involves bulk
purchases of electricity from the Pool for delivery of supply to the
distribution networks. Other consists principally of London Electricity's
investment in private distribution networks, electricity contracting services
and investments in generating assets. Information about London Electricity's
operations in these individual segments during the period from April 1, 1996
to January 31, 1997 and for the years ended March 31, 1996 and 1995 is as
follows (in millions):
<TABLE>
<CAPTION>
PERIOD FROM APRIL 1, 1996 TO JANUARY 31, 1997
------------------------------------------------------------------------------
DISTRIBUTION SUPPLY OTHER ELIMINATIONS CONSOLIDATED
------------- --------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... (Pounds)275.3 (Pounds)1,051.2 (Pounds)67.5 (Pounds)(277.8) (Pounds)1,116.2
Operating income........ 100.6 (0.8) 6.9 -- 106.7
Depreciation and amorti-
zation................. 32.3 4.1 2.9 -- 39.3
Total assets employed at
period end............. 850.7 278.7 179.4 -- 1,308.8
Capital expenditures.... 96.8 9.5 9.3 -- 115.6
<CAPTION>
YEAR ENDED MARCH 31, 1996
------------------------------------------------------------------------------
DISTRIBUTION SUPPLY OTHER ELIMINATIONS CONSOLIDATED
------------- --------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... (Pounds)357.1 (Pounds)1,098.0 (a) (Pounds)59.1 (Pounds)(326.5) (Pounds)1,187.7
Operating income........ 158.0 (70.4)(b) 15.5 (1.5) 101.6
Depreciation and amorti-
zation................. 35.1 2.5 4.6 -- 42.2
Total assets employed at
period end............. 793.6 246.7 309.0 -- 1,349.3
Capital expenditures.... 96.8 4.5 9.3 -- 110.6
<CAPTION>
YEAR ENDED MARCH 31, 1995
------------------------------------------------------------------------------
DISTRIBUTION SUPPLY OTHER ELIMINATIONS CONSOLIDATED
------------- --------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Operating revenues...... (Pounds)379.1 (Pounds)1,113.6 (Pounds)44.4 (Pounds)(327.7) (Pounds)1,209.4
Operating income........ 141.2 11.1 13.5 -- 165.8
Depreciation and amorti-
zation................. 31.8 2.4 5.3 -- 39.5
Total assets employed at
period end............. 726.0 207.3 304.3 -- 1,237.6
Capital expenditures.... 98.3 6.8 5.3 -- 110.4
</TABLE>
- --------
(a) Includes (Pounds)90.9 million refund to customers related to National Grid
transaction.
(b) Includes net effect of (Pounds)90.9 million refund and (Pounds)8.3
reduction of fossil fuel levy related to National Grid transaction.
F-32
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONDENSED CONSOLIDATED BALANCE SHEET
(AMOUNTS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1997 MARCH 31, 1997
------ ------------------------ ---------------
<S> <C> <C> <C>
Current assets........................ (Pounds) 311.5 $ 502.1 (Pounds) 323.7
Fixed assets, net..................... 1,357.9 2,188.5 1,346.6
Distribution license, net............. 811.7 1,308.2 830.4
Other long term assets................ 164.7 265.4 167.9
--------------- -------- ---------------
Total Assets........................ (Pounds)2,645.8 $4,264.2 (Pounds)2,668.6
=============== ======== ===============
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
<S> <C> <C> <C>
Current liabilities................... (Pounds) 348.2 $ 561.2 (Pounds) 370.6
Long term liabilities................. 313.7 505.6 262.4
Deferred income taxes................. 603.6 972.8 644.4
Long term debt........................ 1,228.1 1,979.3 1,142.9
Common shareholder's equity........... 152.2 245.3 248.3
--------------- -------- ---------------
Total Liabilities and Shareholder's
Equity............................. (Pounds)2,645.8 $4,264.2 (Pounds)2,668.6
=============== ======== ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements
F-33
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996(a)
----------------------- -------------
<S> <C> <C> <C>
Operating revenues...................... (Pounds) 547.5 $ 882.4 (Pounds)617.1
Operating expenses:
Cost of sales......................... 349.8 563.8 421.4
Other................................. 137.1 220.9 119.8
-------------- ------- -------------
486.9 784.7 541.2
-------------- ------- -------------
Operating income........................ 60.6 97.7 75.9
Other income (expense)
Interest expense, net................. (54.8) (88.3) (8.1)
Investment income..................... 2.3 3.7 3.4
Windfall profits tax.................. (140.0) (225.6) --
-------------- ------- -------------
Income (loss) before income taxes....... (131.9) (212.5) 71.2
Income tax expense (benefit)............ (35.9) (57.8) 19.5
-------------- ------- -------------
Net income (loss)....................... (Pounds) (96.0) $(154.7) (Pounds) 51.7
============== ======= =============
Net income (loss) per share............. (Pounds)(1,920) $(3,094)
============== =======
Weighted average shares outstanding..... 50,000 50,000
============== =======
</TABLE>
- --------
(a) Represents historical results of operations of London Electricity plc as
predecessor to Entergy London Investments plc. Excludes the effects of
purchase accounting adjustments.
See accompanying notes to condensed consolidated financial statements
F-34
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996(a)
---------------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................... (Pounds)(96.0) $(154.7) (Pounds)51.7
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization......... 39.2 63.2 22.3
Deferred income taxes................. (40.8) (65.8) 5.1
Change in assets and liabilities:
Current assets, excluding cash and
equivalents and current investments. 6.1 9.8 125.9
Other long term assets............... 3.2 5.2 (4.0)
Current liabilities, excluding notes
payable............................. 76.5 123.3 (83.5)
Long term liabilities................ 51.3 82.7 4.0
------------- ------- ------------
Net cash provided by operations.... 39.5 63.7 121.5
------------- ------- ------------
Cash flows from investing activities:
Capital expenditures................... (40.5) (65.3) (60.3)
Sales of current investments........... 28.2 45.5 12.7
------------- ------- ------------
Net cash used in investing
activities........................ (12.3) (19.8) (47.6)
------------- ------- ------------
Cash flows from financing activities:
Net change in notes payable............ (90.3) (145.5) 8.3
Issuance of long term debt............. 85.2 137.3 --
Issuance of common stock............... -- -- 0.9
Dividends paid......................... -- -- (47.3)
------------- ------- ------------
Net cash provided by (used in)
financing activities.............. (5.1) (8.2) (38.1)
------------- ------- ------------
Increase in cash and cash equivalents.... 22.1 35.7 35.8
Beginning of period cash and cash
equivalents............................. 25.1 40.4 13.0
------------- ------- ------------
End of period cash and cash equivalents.. (Pounds) 47.2 $ 76.1 (Pounds)48.8
============= ======= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest................. (Pounds) 57.1 $ 92.0 (Pounds) 7.7
============= ======= ============
Cash paid for income taxes............. (Pounds) -- $ -- (Pounds) 9.3
============= ======= ============
</TABLE>
- --------
(a) Represents historical cash flows of London Electricity plc as predecessor
to Entergy London Investments plc.
See accompanying notes to condensed consolidated financial statements
F-35
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. DESCRIPTION OF BUSINESS:
Effective February 1, 1997, Entergy London Investments plc ("Successor" or
"the Company") (formerly Entergy Power UK plc) acquired London Electricity plc
("Predecessor" or "London Electricity") in a transaction accounted for as a
purchase. London Electricity is one of the twelve regional electricity
companies ("RECs") in England and Wales licensed to supply, distribute and to
a limited extent, generate electricity. The RECs were created as a result of
the privatization of the UK electricity industry in 1990 after the state owned
low voltage distribution networks were allocated to the then existing twelve
regional boards. London Electricity's main business, the distribution and
supply of electricity to customers in London, England, is regulated under the
terms of London Electricity's Public Electricity Supply License by the Office
of Electricity Regulation. The Company does not have any operations outside
its investment in London Electricity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation and Comparability:
The financial statements of the Company and London Electricity are presented
in pounds sterling ("(Pounds)") and in US Dollars ("$"). The US Dollar
statements are presented solely for the convenience of the reader at the
exchange rate of (Pounds)1= US $1.6117 which is based on the noon buying rate
in New York City for cable transfers in pounds sterling as certified for
customs purposes by the Federal Reserve Bank of New York on September 30, 1997
in accordance with Securities and Exchange Commission Regulation S-X Rule 3-
20. This presentation has not been translated in accordance with Statement of
Financial Accounting Standards No. 52, "Foreign Currency Translation." No
representation is made that the pounds sterling amounts have been, could have
been, or could be converted into US Dollars at that or any other rate of
exchange.
The financial statements are prepared in conformity with accounting
principles generally accepted in the United States ("U.S. GAAP"). London
Electricity's financial statements are presented based on its historical costs
and do not reflect purchase accounting adjustments applied by the Company at
the time of its acquisition of London Electricity. Such adjustments include
the Company's assignment of fair values at date of acquisition to the assets
and liabilities of London Electricity with the excess assigned to London
Electricity's distribution license and issuance of debt to finance the
acquisition. This distribution license represents an other identifiable
intangible which is being amortized over a useful life of 40 years.
The accompanying financial statements have not been prepared in accordance
with the policies of Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation" ("SFAS No. 71")
since London Electricity's regulated business is based on price cap regulation
rather than cost based regulation.
The unaudited condensed consolidated financial statements include the
accounts of the Predecessor and Successor and their wholly-owned and majority-
owned subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation. In the opinion of management of the
Company, the financial statements of the Company and London Electricity
reflect all adjustments (consisting of normal recurring adjustments)
considered necessary for fair presentation of their financial position and
results of operations for the periods presented. Such unaudited interim
financial statements should be read in conjunction with the audited financial
statements of the Company and London Electricity contained elsewhere in this
registration statement.
F-36
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
Use of Estimates in the Preparation of Financial Statements
The preparation of the financial statements of the Company and London
Electricity, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities and the reported amounts of revenues and expenses during the
reporting period. Adjustments to the reported amounts of assets and
liabilities may be necessary in the future to the extent that future estimates
or actual results are different from the estimates used in the financial
statements.
3. COMMITMENTS AND CONTINGENCIES:
London Electricity owns a 13.5% interest in a joint venture, Barking Power,
Ltd ("Barking"), which owns and operates a gas fired power station.
Additionally, London Electricity has certain other private investments which
require it to contribute additional equity contributions over the next several
years. The largest is its investment in London & Continental Railways Limited
which won the concession to design, build, finance and operate the high speed
rail link from London to the Channel Tunnel Rail Link.
London Electricity is required to file five-year projections with the
Regulator for capital expenditures related to its regulated distribution
network and updates of such projections annually. The most recent projection
was for the five-year period ended March 31, 2000 and was filed in July 1997.
The filing indicated London Electricity's current projection of approximately
(Pounds)482 million for the five year period. Approximately (Pounds)186
million have already been spent in fiscal year 1996 and fiscal year 1997
related to this five-year projection.
London Electricity is subject to an agreement whereby the UK government is
entitled to a proportion of certain property gains accruing to London
Electricity as a result of disposals or events treated as disposals occurring
after March 31, 1990 of properties held at that date. This commitment is
effective until March 31, 2000.
London Electricity participates in a defined benefit pension plan which
applies to substantially all employees throughout the electricity industry in
the United Kingdom. London Electricity has utilized a portion of the pension
plan surplus to increase benefits to members and reduce employer and employee
contributions. A recent court ruling in the UK upheld such uses of pension
surplus. However, the decision is under appeal and should the decision be
reversed on appeal, the Company could be required to repay pension surplus
utilized and recompute the Company's prepaid pension asset which was
(Pounds)146 million at September 30, 1997. Additionally, as of September 30,
1997, a tax valuation of fixed assets had not yet been prepared. Management
expects that this tax valuation will be completed by December 31, 1997. Should
an unfavorable outcome result from appeals on the pension matter subsequent to
February 1, 1998, results of operations may be unfavorably impacted. The
Company's allocation of purchase price is preliminary pending the outcome of
these matters.
London Electricity utilizes contracts for differences ("'CFD's") and power
purchase contracts with certain UK generators to fix the price of electricity
for a contracted quantity over a specific period of time. At September 30,
1997, the Company has outstanding CFD's and power purchase contracts for
approximately 39,000 GWh of electricity. These include a long term power
purchase contract with an affiliate which is based on 27.5% of the affiliate's
capacity from its 1,000 MW facility through the year 2010. London
Electricity's electricity sales volumes were approximately 15,771 GWh; 18,117
GWh and 20,758 GWh for fiscal years 1995, 1996 and fiscal year 1997,
respectively.
F-37
<PAGE>
4. TAX LAW CHANGES:
On July 31, 1997, legislation establishing a windfall profits tax which
affects regulated companies privatized since 1979 including London Electricity
was enacted. In accordance with SFAS 109, the Company recorded a charge to
income for the windfall profits tax during the six months ended September 30,
1997. A change in the UK statutory income tax rate from 33% to 31% was also
included in this legislation. The impact of such changes in the six months
ended September 30, 1997 financial statements was recognition of the
(Pounds)140 million expense for the windfall profits tax and approximately
(Pounds)38 million of income tax benefit as a result of the change in the UK
statutory income tax rate in London Electricity's results of operations.
F-38
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
The accompanying unaudited pro forma condensed consolidated statement of
operations has been prepared in accordance with generally accepted accounting
principles in the United States. Amounts are expressed in either British
Pounds Sterling ("(Pounds)") or US Dollars ("$"). The purchase price
allocation for London Electricity plc ("Predecessor") is based on preliminary
information. The unaudited pro forma condensed consolidated statement of
operations should be read in conjunction with the related notes thereto.
The accompanying unaudited pro forma condensed consolidated statements of
operations for the year ended March 31, 1997 has been prepared assuming that
the acquisition of London Electricity plc by Entergy London Investments
(formerly Entergy Power UK plc and referred to herein as the "Successor")
occurred on April 1, 1996.
The pro forma condensed consolidated statement of operations has been
prepared for comparative purposes only and does not purport to be indicative
of the results of operations had the combination been in effect on the date
indicated, that have resulted since the date of acquisition or that may result
in the future.
F-39
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------
SUCCESSOR PREDECESSOR
INCEPTION- APRIL 1, 1996- SUCCESSOR PRO FORMA YEAR
MARCH 31, JANUARY 31, ENDED
1997 1997 ADJUSTMENTS MARCH 31, 1997
------------- --------------- ------------ ------------------------
<S> <C> <C> <C> <C> <C>
Operating Revenues...... (Pounds)233.6 (Pounds)1,116.2 (Pounds)1,349.8 $2,175.4
Cost of Sales and
Operating Expenses..... 201.6 1,009.5 (Pounds)26.5 (a) 1,237.6 1,994.6
------------- --------------- --------------- --------
Income from
Operations........... 32.0 106.7 112.2 180.8
Other Income
(Deductions)......... (6.5) 4.6 7.5 (b) 5.6 9.0
Interest Expense, net. 12.7 17.1 63.6 (c) 93.4 150.5
------------- --------------- --------------- --------
Income Before Income
Taxes................ 12.8 94.2 24.4 39.3
Income Taxes.......... 4.5 32.1 (28.5)(d) 8.1 13.0
------------- --------------- --------------- --------
Net Income............ (Pounds) 8.3 (Pounds) 62.1 (Pounds) 16.3 $ 26.3
============= =============== =============== ========
</TABLE>
1. Effective February 1, 1997, Entergy London Investments plc acquired
London Electricity plc for approximately (Pounds)1.3 billion. The Successor
has accounted for this acquisition using the purchase method of accounting
whereby the purchase price is allocated to assets and liabilities based on
fair market value, with the remainder allocated to the distribution license of
the Successor which is an identifiable intangible asset.
2. The Successor's historical results of operations presented above include
the Predecessor's post acquisition results of operations for the period from
February 1, 1997 (date of acquisition) until March 31, 1997. The Successor had
no operations prior to the date of acquisition.
3. The pro forma condensed consolidated statement of income reflects the
following adjustments in order to present the historical results of operations
of the Predecessor for the period prior to its inclusion in the Successor's
consolidated financial statements:
a. Primarily an increase in depreciation and amortization expense
resulting from applying the purchase method of accounting to the
Predecessor fixed assets and distribution license based on 40 year useful
lives;
b. Adjustments to other deductions to eliminate Predecessor's acquisition
defense costs;
c. Primarily additional interest associated with debt incurred to
purchase the Predecessor at an assumed average rate of 7.3%. The impact of
a change of .125% in the assumed average rate of interest would change
income before income taxes by (Pounds)1.3 million annually; and
d. Adjustment to income tax expense to provide for a 33% United Kingdom
statutory income tax rate for the twelve months ended March 31, 1997.
4. The US Dollar column above is presented solely for the convenience of the
reader. British Pound Sterling amounts have been converted to US Dollars based
on the Noon Buying Rate in New York City for cable transfers in British Pounds
Sterling as certified for customs purposes by the Federal Reserve Bank of New
York on September 30, 1997 of $1.6117 = (Pounds)1.00.
F-40
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SO-
LICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DE-
SCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITA-
TION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ENTERGY LONDON CAPITAL
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 4
Enforceability of Civil Liabilities....................................... 4
Presentation of Currency and Financial Information........................ 5
UK Selling Restrictions................................................... 5
Forward Looking Statements................................................ 5
Summary................................................................... 6
Risk Factors.............................................................. 17
Entergy London Capital.................................................... 22
The Company............................................................... 23
Accounting Treatment...................................................... 25
Use of Proceeds........................................................... 25
Capitalization............................................................ 26
Exchange Rates............................................................ 26
Selected Financial Data................................................... 27
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 34
Business.................................................................. 49
The Electric Utility Industry in Great Britain............................ 58
Management................................................................ 68
Certain Relationships and Related Transactions............................ 69
Security Ownership........................................................ 70
Description of the Preferred Securities................................... 70
Description of the Guarantee.............................................. 80
Description of the Perpetual Junior Subordinated Debentures............... 83
Relationship Among the Preferred Securities, the Perpetual Junior
Subordinated Debentures and the Guarantee................................ 99
Certain Income Tax Considerations......................................... 101
Underwriting.............................................................. 105
Experts................................................................... 107
Legal Opinions............................................................ 107
Nature of Financial Information........................................... 107
Index to the Consolidated Financial Statements............................ F-1
</TABLE>
THROUGH AND INCLUDING DECEMBER , 1997 (THE 25TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE PREFERRED SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER
A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOT-
MENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
12,000,000 PREFERRED SECURITIES
ENTERGY LONDON CAPITAL
% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES,
SERIES A (QUIPSSM)
(LIQUIDATION PREFERENCE $25 PERPREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS SET FORTH HEREIN, BY
ENTERGY LONDON INVESTMENTS PLC
---------------
PROSPECTUS
---------------
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
REPRESENTATIVES OF THE UNDERWRITERS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
<S> <C>
Filing Fees--Securities and Exchange Commission....................... $ 90,909
*Rating Agencies' fees................................................ 50,000
*Trustee's fees....................................................... 10,000
*Fees of Company's Counsel:
Richards, Layton & Finger, P.A...................................... 50,000
Reid & Priest LLP................................................... 75,000
Linklaters & Paines................................................. 75,000
*Fees of Entergy Services, Inc........................................ 60,000
*Accounting fees...................................................... 200,000
*Printing and engraving costs......................................... 200,000
*Miscellaneous expenses (including Blue-Sky expenses)................. 50,000
--------
*Total Expenses................................................... $860,909
========
</TABLE>
- --------
*Estimated
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under English law there is a general rule that any provision (whether
contained in a company's articles or in any other arrangement with the
company) exempting an officer of the company from, or indemnifying him
against, any liability for negligence or other breach of duty in relation to
the company is void (this would include liability for fraud or dishonesty). As
an exception to this rule, a company may indemnify an officer against a
liability incurred by him in defending any proceedings in which judgment is
given in his favor or in which he is acquitted. A company may also give an
indemnity where, in any proceedings against a director, the court relieves him
from liability for negligence or breach of duty where he has acted honestly
and reasonably and ought fairly to be excused from liability. An indemnity is
permitted where a director acts within his powers and is not guilty of
negligence or other breach of duty. A company is also permitted to purchase
insurance against any such liability.
Entergy has insurance covering the expenditures of Entergy and its direct
and indirect subsidiaries which might arise in connection with its
indemnification of their directors and officers for certain of their
liabilities and expenses, such directors and officers also have insurance
which insures them against certain other liabilities and expenses.
Subject to the general rule set out above, the Articles of Association of
the Company provide that, without prejudice to an indemnity to which he may
otherwise be entitled, every person who is a director, alternate director or
secretary of the Company shall be indemnified out of the assets of the Company
against all costs, charges, losses and liabilities incurred by him in the
proper execution of his duties or the proper exercise of his powers,
authorities and discretions including, without limitation, a liability
incurred defending proceedings (whether civil or criminal) in which judgment
is given in his favor or in which he is acquitted, or which are otherwise
disposed of without a finding or admission of material breach of duty on his
part, or in connection with any application in which relief is granted to him
by the court from liability for negligence, default, breach of duty or breach
of trust in relation to the affairs of the Company.
In addition the directors may exercise all the powers of the Company to
purchase and maintain insurance for the benefit of a person who is or was a
director, alternate director, secretary or auditor
II-1
<PAGE>
of the Company which is or was a subsidiary undertaking of the Company or in
which the Company has or had an interest (whether direct or indirect) or
trustee of a retirement benefits scheme or other trust in which a director,
alternate director, secretary or auditor of the Company is or has been
interested, indemnifying him against liability for negligence, default, breach
of duty or breach of trust or other liability which may lawfully be insured
against by the Company. For the purposes of the Articles "subsidiary
undertaking" shall have the same meanings as in the Companies Acts 1985 to
1989.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not Applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
<S> <C>
1.01 Form of Underwriting Agreement relating to the Preferred Securities.
**4.01 Memorandum and Articles of Association of the Company and amendments
thereto through September 1, 1997.
4.02 Form of Indenture for Unsecured Subordinated Debt Securities relating
to Preferred Securities.
**4.03 Certificate of Limited Partnership of Entergy London Capital, L.P.
**4.04 Agreement of Limited Partnership of Entergy London Capital, L.P.
**4.05 Certificate of Amendment to Certificate of Limited Partnership of
Entergy London Capital, L.P.
**4.06 Amendment No. 1 to Agreement of Limited Partnership of Entergy London
Capital, L.P.
4.07 Form of Amended and Restated Limited Partnership Agreement of Entergy
London Capital, L.P.
4.08 Form of Preferred Security Certificate of Entergy London Capital, L.P.
(included in
Exhibit 4.07 hereto).
4.09 Form of Guarantee Agreement in respect of Entergy London Capital, L.P.
4.10 Form of Officer's Certificate establishing terms of the Perpetual
Junior Subordinated Debentures (including form of Perpetual Junior
Subordinated Debenture).
5.01 Opinion of Linklaters & Paines, counsel to the Company, relating to
the validity of the Perpetual Junior Subordinated Debentures and the
Guarantee.
5.02 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel,
relating to the validity of the Preferred Securities.
5.03 Opinion of Reid & Priest LLP, counsel to the Company, relating to the
validity of the Perpetual Junior Subordinated Debentures and the
Guarantee.
8.01 Opinion of Linklaters & Paines, as to United Kingdom tax matters
(included in Exhibit 5.01 hereto).
8.02 Opinion of Reid & Priest LLP, as to United States tax matters
(included in Exhibit 5.03 hereto).
**10.01 London Electricity Public Electricity Supply ("PES") License dated
March 26, 1990, as revised through January 8, 1996.
10.02 Modifications to the PES License issued to London Electricity
effective October 1997.
10.03 Second-Tier License to Supply Electricity for London Electricity dated
March 25, 1991.
**10.04 Pooling and Settlement Agreement dated March 30, 1990, as amended and
restated at October 17, 1996, and as supplemented through July 28,
1997 among the Generators named therein, the Suppliers named therein
(including London Electricity), Energy Settlements and Information
Services (as Settlement System Administrator), Energy Pool Funds
Administration Limited (as Pool Funds Administrator), The National
Grid Company plc (as Grid Operator and Ancillary Services Provider),
London Electricity and Other Parties.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.05 Master Connection and Use of System Agreement dated as of March 30,
1990 among The National Grid Company plc and its users (including
London Electricity).
10.06 Master Agreement dated as of October 25, 1995 among The National Grid
Holding plc, The National Grid Company plc, London Electricity and the
other RECs.
10.07 Memorandum of Understanding between The National Grid Group plc,
London Electricity and each of the RECs, dated November 17, 1995.
**10.08 The (Pounds)1,250,000,000 Credit Facilities Agreement dated December
17, 1996 among Entergy Power UK plc, ABN AMRO Bank N.V., Bank of
America International Limited and Union Bank of Switzerland as
arrangers and ABN AMRO Bank N.V. as Agent for the banks named therein.
12.01 Statement Re: Computation of Ratio of Earnings to Fixed Charges.
21.01 List of subsidiaries of Entergy London Investments plc.
23.01 Consent of Coopers & Lybrand L.L.P.
23.02 Consent of Linklaters & Paines (included in Exhibit 5.01 hereto).
23.03 Consent of Richards, Layton & Finger, P.A., (included in Exhibit 5.02
hereto).
23.04 Consent of Reid & Priest LLP (included in Exhibit 5.03 hereto).
**24.01 Powers of Attorney of certain officers and directors of the Company
(included herein at page II-4).
25.01 Statement of Eligibility under the Trust Indenture Act of The Bank of
New York, as Trustee for the Indenture for Unsecured Subordinated Debt
Securities relating to Preferred Securities.
25.02 Statement of Eligibility under the Trust Indenture Act of The Bank of
New York, as Guarantee Trustee for the Guarantee Agreement in respect
of Entergy London Capital, L.P.
27.01 Financial Data Schedule.
</TABLE>
- --------
** Previously filed.
(b) Financial Statement Schedules
The following financial statement schedule is filed as part of this
Registration Statement:
Schedule II--Valuation and Qualifying Accounts.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) To provide to the underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to
each purchaser.
(4) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933, may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing
provisions, or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed
II-3
<PAGE>
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY
Each director and/or officer of the registrant whose signature appears below
hereby appoints Gerald D. McInvale, William J. Regan, Jr., Laurence M. Hamric
and Denise C. Redmann, and each of them severally, as his attorney-in-fact to
sign in his name and behalf, in any and all capacities stated below, and to
file with the Securities and Exchange Commission, any and all amendments,
including post-effective amendments, to this registration statement, and any
registration statement filed to register additional securities related to this
offering pursuant to Rule 462(b) under the Securities Act, and the registrants
hereby also appoint each such named person as their attorney-in-fact with like
authority to sign and file any such amendments or registration statement in
their name and behalf.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has duly caused this Amendment No. 2 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
New Orleans, State of Louisiana, on the 24th day of October, 1997.
ENTERGY LONDON INVESTMENTS plc
By: /s/ William J. Regan, Jr.
-----------------------------------
William J. Regan, Jr.
Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman of the Board, Chief October 24, 1997
____________________________________ Executive Officer and
Edwin Lupberger Director
(Principal Executive
Officer)
By: /s/ William J. Regan, Jr. October 24, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
Executive Vice President, October 24, 1997
____________________________________ Chief Financial Officer and
Gerald D. McInvale Director (Principal
Financial Officer)
By: /s/ William J. Regan, Jr. October 24, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
Audit Controller October 24, 1997
____________________________________ (Principal Acounting
Louis E. Buck Officer)
By: /s/ William J. Regan, Jr. October 24, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
Director October 24, 1997
____________________________________
Michael B. Bemis
By: /s/ William J. Regan, Jr. October 24, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
Director October 24, 1997
____________________________________
Terry L. Ogletree
By: /s/ William J. Regan, Jr. October 24, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
/s/ William J. Regan, Jr. Authorized Representative October 24, 1997
____________________________________ in the United States
William J. Regan, Jr.
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant, Entergy London Capital, L.P., certifies that it has duly caused
this Amendment No. 2 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Orleans, State of Louisiana, on the 24th
day of October, 1997.
ENTERGY LONDON CAPITAL, L.P.
By: Entergy London Investments plc,
as General Partner
/s/ William J. Regan, Jr.
By: _________________________________
Name: William J. Regan, Jr.
Title: Treasurer
II-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Boards of Directors and Shareholders of Entergy London Investments plc
and London Electricity plc:
In connection with our audits of the consolidated financial statements of
Entergy London Investments plc (formerly Entergy Power UK plc) as of March 31,
1997 and for the period from October 9, 1996 (date of inception) to March 31,
1997 and London Electricity plc as of March 31, 1996 and for the period from
April 1, 1996 to January 31, 1997 and the years ended March 31, 1996 and 1995,
which financial statements are included in this Prospectus, we have also
audited the financial statement schedules listed in Item 16 herein.
In our opinion, these financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
July 31, 1997
<PAGE>
LONDON ELECTRICITY PLC
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE PERIOD FROM APRIL 1, 1996 TO JANUARY 31, 1997
AND FOR THE YEARS ENDED MARCH 31, 1996 AND 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ------------ ---------------------- ----------- ------------
ADDITIONS
----------------------
DEDUCTIONS
BALANCE AT FROM BALANCE AT
BEGINNING OF CHARGED TO OTHER PROVISIONS END OF
DESCRIPTION PERIOD INCOME CHANGES (NOTE 1) PERIOD
----------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Period ended January 31,
1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts..... (Pounds) 8.7 (Pounds)6.4 (Pounds)-- (Pounds)4.2 (Pounds)10.9
============ =========== ========== =========== ============
Accumulated Provisions
Not Deducted from
Assets:
Insurance(2).......... (Pounds)16.0 (Pounds)1.5 (Pounds)-- (Pounds)5.8 (Pounds)11.7
============ =========== ========== =========== ============
Period ended March 31,
1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts..... (Pounds) 8.5 (Pounds)0.7 (Pounds)-- (Pounds)0.5 (Pounds) 8.7
============ =========== ========== =========== ============
Accumulated Provisions
Not Deducted from
Assets:
Insurance(2).......... (Pounds)16.3 (Pounds)0.3 (Pounds)-- (Pounds)0.6 (Pounds)16.0
============ =========== ========== =========== ============
Period ended March 31,
1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts..... (Pounds) 7.8 (Pounds)7.3 (Pounds)-- (Pounds)6.6 (Pounds) 8.5
============ =========== ========== =========== ============
Accumulated Provisions
Not Deducted from
Assets:
Insurance(2).......... (Pounds)12.7 (Pounds)5.6 (Pounds)-- (Pounds)2.0 (Pounds)16.3
============ =========== ========== =========== ============
</TABLE>
- --------
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Represents the deductible portion of casualty losses to be incurred before
third party reimbursement begins.
<PAGE>
ENTERGY LONDON INVESTMENTS PLC
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE PERIOD FROM OCTOBER 9, 1996 (DATE OF INCEPTION) TO MARCH 31, 1997
(IN MILLIONS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ------------ ------------------------ ----------- -------------
ADDITIONS
------------------------
DEDUCTIONS
BALANCE AT FROM
BEGINNING OF CHARGED TO OTHER PROVISIONS BALANCE AT
DESCRIPTION PERIOD INCOME CHANGES (NOTE 1) END OF PERIOD
----------- ------------ ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts..... (Pounds)10.9 (Pounds)5.7 (Pounds) -- (Pounds)4.8 (Pounds) 11.8
============ =========== ============ =========== =============
Accumulated Provisions
Not Deducted from
Assets:
Insurance............. (Pounds)11.7 0.6 -- -- (Pounds) 12.3
Provision for
unfavorable
contracts............ (Pounds) -- (Pounds) -- (Pounds)99.5 (Pounds) .2 (Pounds) 99.3
------------ ----------- ------------ ----------- -------------
Total............... (Pounds)11.7 (Pounds) .6 (Pounds)99.5 (Pounds) .2 (Pounds)111.6
============ =========== ============ =========== =============
</TABLE>
- --------
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
EXHIBIT 1.01
12,000,000 Preferred Securities
Entergy London Capital, L.P.
[____]% Cumulative Quarterly Income Preferred Securities, Series
A ("QUIPS"4)
(liquidation preference $25 per preferred security)
fully and unconditionally guaranteed, as set forth herein, by
Entergy London Investments plc
UNDERWRITING AGREEMENT
[________], 1997
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As representatives of the several
Underwriters named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies & Gentlemen:
The undersigned, Entergy London Capital, L.P. (the
"Partnership"), a special purpose limited partnership formed
under the Revised Uniform Limited Partnership Act of the State of
Delaware (Title 6, Chapter 17 of the Delaware Code, (the
"Delaware Act"), proposes to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters,"
which term, when the context permits, shall also include any
underwriters substituted as hereinafter in Section 11 provided),
for whom you are acting as representatives (in such capacity, you
shall hereinafter be referred to as the "Representatives"),
12,000,000 of its [____]% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred
security), representing limited partner interests in the
Partnership (the "Preferred Securities"), as follows:
__________________________
4 QUIPS is a servicemark of Goldman, Sachs & Co.
SECTION 1. Purchase and Sale of Preferred Securities. On
the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, the
Partnership shall issue and sell to each of the Underwriters
named in Schedule I hereto, and each Underwriter shall purchase
from the Partnership at the time and place herein specified,
severally and not jointly, the number of Preferred Securities set
forth opposite the name of such Underwriter in Schedule I hereto
at a purchase price of $25.00 per Preferred Security.
The Company (as defined herein) (a) agrees to issue the
Company Securities (as defined herein) concurrently with the
issue and sale of the Preferred Securities as contemplated herein
and (b) guarantees the timely performance by the Partnership of
its obligations under this Section 1. The Partnership agrees to
purchase the Debentures (as defined herein) with the proceeds of
the Preferred Securities (as defined herein) and the capital
contribution of the Company, as general partner of the
Partnership (in such capacity, the "General Partner"), as
contemplated herein.
Because the proceeds of the sale of the Preferred
Securities, together with the capital contribution of the General
Partner, will be used to purchase the Debentures, the Company
hereby agrees to pay on the Closing Date (as defined herein) to
Goldman, Sachs & Co., for the accounts of the several
Underwriters, as compensation for their arranging the investment
therein of such proceeds, an amount equal to $[_____] per
Preferred Security ($[_____] per Preferred Security sold to
certain institutions).
SECTION 2. Description of Preferred Securities, Debentures
and Guarantee. The Preferred Securities will be guaranteed by
Entergy London Investments plc, a public limited company
incorporated under the laws of England and Wales (the "Company"
and, together with the Partnership, the "Offerors"), with respect
to distributions and payments upon liquidation, redemption and
otherwise (the "Guarantee") pursuant to, and to the extent set
forth in, the Guarantee Agreement (the "Guarantee Agreement"),
dated as of [________], 1997, between the Company and The Bank of
New York, as Trustee (the "Guarantee Trustee").
The proceeds from the sale of the Preferred Securities will
be combined with the capital contribution of the General Partner
and will be used by the Partnership to purchase $ _______
aggregate principal amount of [____]% Junior Subordinated
Deferrable Interest Debentures, Series A issued by the Company
(the "Debentures" and, together with the Guarantee, the "Company
Securities"). The Preferred Securities will be issued pursuant
to the Amended and Restated Limited Partnership Agreement, dated
as of [________], 1997 (the "Partnership Agreement"), among the
Company, as General Partner, William J. Regan, Jr., as the
initial limited partner (the "Initial Limited Partner"), and such
other Persons (as defined therein) who become Partners (as
defined therein) as provided therein. The Debentures will be
issued pursuant to an Indenture for Unsecured Subordinated Debt
Securities relating to Preferred Securities, dated as of
[_________], 1997, as supplemented by a certificate of an officer
of the Company pursuant to resolutions of the Board of Directors
of the Company (the "Indenture"), between the Company and The
Bank of New York, as Trustee (the "Debenture Trustee"). The
Preferred Securities and the Company Securities are referred to
herein as the "Securities."
SECTION 3. Representations and Warranties of the Offerors.
Each of the Offerors jointly and severally represents and
warrants to the several Underwriters, and covenants and agrees
with the several Underwriters, that:
(a) The Company is duly organized and validly existing
as a public limited company in good standing under the laws of
England and Wales and has the necessary corporate power and
authority to conduct the business that it is described in the
Prospectus (as defined herein) as conducting, to own and operate
the properties owned and operated by it in such business, to
issue the Company Securities, to enter into and perform its
obligations under this Underwriting Agreement, the Partnership
Agreement, the Indenture, the Guarantee Agreement and the Company
Securities, to purchase, own, and hold the general partner
interests of the Partnership and to consummate the transactions
herein and therein contemplated. The Company is the sole General
Partner of the Partnership. The Company is duly qualified as a
foreign corporation to transact business and is in good standing
in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the financial condition of the
Company and its subsidiaries taken as a whole and would not
subject the Company to any material liability or disability.
(b) Each of London Electricity plc, London Electricity
Services Limited, The London Power Company Limited and London
Electricity Enterprises Limited (collectively, the "Significant
Subsidiaries") is (i) duly organized and validly existing as a
public limited company in good standing under the laws of England
and Wales, has the necessary corporate power and authority to
conduct the business that it is described in the Prospectus as
conducting and to own and operate the properties owned and
operated by it in such business and (ii) duly qualified as a
foreign corporation to transact business and is in good standing
in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the financial condition of the
Company and its subsidiaries taken as a whole and would not
subject the Company to any material liability or disability.
(c) The Partnership has been duly formed and is
validly existing as a limited partnership in good standing under
the Delaware Act, has the power and authority to own its
property, to conduct its business as described in the Prospectus,
to issue and sell the Preferred Securities, to enter into and
perform its obligations under this Underwriting Agreement and the
Preferred Securities and to consummate the transactions herein
contemplated; the Partnership has no subsidiaries and is duly
qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Partnership; the Partnership has conducted and will conduct no
business other than the transactions contemplated by this
Underwriting Agreement and described in the Prospectus; the
Partnership is not a party to or otherwise bound by any agreement
other than those described in the Prospectus and is not a party
to any action, suit or proceeding of any nature; the Partnership
is not and will not be classified as an association taxable as a
corporation for United States federal or United Kingdom income
tax purposes; and the Partnership is and will be treated as a
consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(d) The Offerors have filed with the Securities and
Exchange Commission (the "Commission") a registration statement
on Form S-1 (File Nos. 333-33331 and 333-33331-01) and a related
Preliminary Prospectus (as defined below) for the registration of
the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), and such registration statement, as amended,
has become effective. Such registration statement, as amended at
the time it, or the most recent post-effective amendment thereto
(or any registration statement filed pursuant to Rule 462(b)
under the Securities Act and hereinafter referred to as a "Rule
462(b) Registration Statement"), became or becomes effective,
including the information deemed to be part thereof pursuant to
Rule 430A(b) under the Securities Act, is hereinafter referred to
as the "Registration Statement," and the prospectus constituting
a part thereof, in the form filed pursuant to subsection (1) or
(4) of Rule 424(b) under the Securities Act ("Rule 424(b)), and
as it may thereafter be amended or supplemented pursuant to
Section 6(d) hereof, is hereinafter referred to as the
"Prospectus," except that if any revised prospectus shall be
provided to the Underwriters by the Offerors for use in
connection with the offering of the Securities that differs from
the Prospectus filed with the Commission pursuant to Rule 424(b),
the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for
such use. For purposes herein, (i) "Preliminary Prospectus"
shall mean any preliminary prospectus included in the
Registration Statement prior to the Effective Date (as defined
below) or filed with the Commission pursuant to Rule 424(a) under
the Securities Act and (ii) "Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment
thereto (or any Rule 462(b) Registration Statement) became or
becomes effective under the Securities Act.
(e) After the time of effectiveness of this
Underwriting Agreement and during the time specified in Section
6(d), the Offerors will not file any amendment to the
Registration Statement or supplement to the Prospectus, without
prior notice to the Underwriters and to Winthrop, Stimson, Putnam
& Roberts ("Counsel for the Underwriters"), or any such amendment
or supplement to which said Counsel shall reasonably object on
legal grounds in writing.
(f) The Registration Statement, the Indenture and the
Guarantee Agreement, at the Effective Date, will fully comply or
fully complied, and any Preliminary Prospectus, when delivered to
the Underwriters for their use in marketing the Preferred
Securities, fully complied, and the Prospectus, when delivered to
the Underwriters for their use in making confirmations of sales
of the Preferred Securities and at the Closing Date, as it may
then be amended or supplemented, will fully comply, in all
material respects with the applicable provisions of the
Securities Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the
Commission thereunder or pursuant to said rules and regulations
did or will be deemed to comply therewith. On the Effective
Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. At the time that any
Preliminary Prospectus was delivered to the Underwriters for
their use in marketing the Preferred Securities, such Preliminary
Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. At the time the Prospectus
is delivered to the Underwriters for their use in making
confirmations of sales of the Preferred Securities and at the
Closing Date, the Prospectus, as it may then be amended or
supplemented, will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they are made, not misleading. The foregoing
representations and warranties in this paragraph (e) shall not
apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Offerors by
the Underwriters or on behalf of any Underwriter specifically for
use in connection with the preparation of the Registration
Statement or the Prospectus, as they may be then amended or
supplemented, or to any statements in or omissions from the
statements of eligibility on Form T-1 of the Guarantee Trustee
and the Debenture Trustee, respectively, as they may be amended,
filed as exhibits to the Registration Statement (the "Form T-
1s").
(g) All of the issued general and limited partner
interests of the Partnership (other than the Preferred
Securities) are owned by the General Partner and the Initial
Limited Partner, respectively, and have been duly and validly
authorized and validly issued, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(h) This Agreement has been duly authorized, executed
and delivered by each of the Partnership and the Company.
(i) The Partnership Agreement has been duly authorized
by the General Partner and, at the Closing Date, will have been
duly executed and delivered by the General Partner, and will
constitute a valid and binding instrument of the General Partner,
in its capacity as general partner of the Partnership,
enforceable against the General Partner in accordance with its
terms, except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law); and the Partnership Agreement
will conform to the description thereof in the Prospectus.
(j) The Guarantee Agreement has been duly qualified
under the Trust Indenture Act, has been duly authorized by the
Company and, at the Closing Date, will have been duly executed
and delivered by the Company, and assuming due authorization,
execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding instrument
of the Company, enforceable against the Company in accordance
with its terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in
a proceeding in equity or at law); and the Guarantee and the
Guarantee Agreement will conform to the descriptions thereof
contained in the Prospectus.
(k) The Preferred Securities have been duly authorized
by the Partnership and, when issued and delivered against payment
therefor in accordance with the provisions of this Agreement and
the Partnership Agreement, will constitute validly issued and
(subject to the terms of the Partnership Agreement) fully paid
and non-assessable limited partner interests in the Partnership
and will be entitled to the benefits of the Partnership
Agreement; the issuance of the Preferred Securities is not
subject to preemptive or other similar rights; there are no
provisions in the Partnership Agreement the inclusion of which,
subject to the terms and conditions therein, or, assuming that
holders of the Preferred Securities, as limited partners of the
Partnership, take no action other than actions permitted by the
Partnership Agreement, the exercise of which, in accordance with
the terms and conditions therein, would cause holders of the
Preferred Securities, as limited partners of the Partnership, to
be deemed to be participating in the control of the business of
the Partnership; and the Preferred Securities will conform to the
description thereof contained in the Prospectus.
(l) The Indenture has been duly qualified under the
Trust Indenture Act, has been duly authorized by the Company and,
at the Closing Date, will have been duly executed and delivered
by the Company, and assuming due authorization, execution and
delivery of the Indenture by the Debenture Trustee, will
constitute a valid and binding instrument of the Company,
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law); and the Indenture will conform
to the description thereof contained in the Prospectus.
(m) The Debentures have been duly authorized and, on
the Closing Date, will have been duly executed by the Company
and, when authenticated in the manner provided for in the
Indenture and delivered against payment therefor by the
Partnership as described in the Prospectus, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law)
and will be entitled to the benefits of the Indenture; and the
Debentures will conform to the description thereof contained in
the Prospectus.
(n) Neither the Company nor any of its subsidiaries
has sustained since the date of the most recent audited financial
statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth in the Prospectus; and, since the
respective dates as of which information is given in the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a
prospective material adverse change, in the business, property or
financial condition of the Company and its subsidiaries taken as
a whole, otherwise than as set forth in the Prospectus.
(o) The issuance and sale by the Company of the
Company Securities and the execution, delivery and performance by
the Company of the Indenture, this Underwriting Agreement, the
Partnership Agreement and the Guarantee Agreement, and the
consummation of the transactions herein and therein contemplated,
will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under,
[the Credit Facility Agreement dated December 17, 1996, as
amended, among the Company, ABN AMRO Bank, N.V., Bank of America
International Limited and Union Bank of Switzerland], [credit
facilities resulting from the reorganization of the corporate
structure so that the Company is no longer the acquisition
facility borrower] (collectively, the "Acquisition Debt
Agreements"), or any other indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company, the Significant Subsidiaries or [upstream entities that
will be a party to the Acquisition Debt Agreements after the
corporate reorganization] are a party or by which the Company,
the Significant Subsidiaries or [upstream entities that will be a
party to the Acquisition Debt Agreements after the corporate
reorganization] are bound or to which any of the property or
assets of the Company, the Significant Subsidiaries or [upstream
entities that will be a party to the Acquisition Debt Agreements
after the corporate reorganization] are subject, nor will such
action result in any violation of the provisions of the
Memorandum and Articles of Association of the Company or the
Significant Subsidiaries, each as amended, or any statute, rule,
regulation or other law, or any order or judgment, of any court
or governmental agency or body having jurisdiction over the
Company or the Significant Subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the formation of the
Partnership, the issue and sale of the Securities or the
consummation by the Partnership or the Company of the
transactions contemplated by this Underwriting Agreement, the
Indenture, the Partnership Agreement or the Guarantee Agreement
except such as have been, or will be prior to the Closing Date,
obtained under the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Trust Indenture Act
and the Public Utility Holding Company Act of 1935, as amended
(the "1935 Act"), and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters.
(p) The Company has an authorized capitalization as
set forth in the Prospectus and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are
owned by direct or indirect subsidiaries of Entergy Corporation;
and all of the issued shares of capital stock of each subsidiary
of the Company (including, without limitation, London Electricity
plc) have been duly and validly authorized and issued, are fully
paid and non-assessable and, except as otherwise set forth in the
Prospectus, are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims.
(q) Neither the Company nor any of the Significant
Subsidiaries is in violation of its Memorandum and Articles of
Association, as amended, or is in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which
the Company or the Significant Subsidiaries is a party or by
which any of them is bound or to which any of their respective
properties or assets is subject.
(r) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the
Company or the Significant Subsidiaries is a party or of which
any property of the Company or the Significant Subsidiaries is
the subject that, if determined adversely to the Company or the
Significant Subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a
whole; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated.
(s) The Company, London Electricity plc and the other
Significant Subsidiaries are entitled to the exemption from the
1935 Act provided by Sections 33(a)(1) and (c)(1) thereof.
(t) The independent certified public accountants,
Coopers & Lybrand L.L.P., who have audited the financial
statements included in the Registration Statement and the
Prospectus are independent public accountants as required by the
Securities Act and the rules and regulations of the Commission
thereunder.
(u) The financial statements, together with the
related schedules and notes, included in the Registration
Statement and the Prospectus, present fairly the consolidated
financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the
basis stated in the Registration Statement and the Prospectus at
the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; the other financial and statistical
information and data included in the Registration Statement and
the Prospectus are accurately presented and prepared on a basis
consistent with such financial statements and the books and
records of the Company and its subsidiaries; and the pro forma
financial statements included in the Registration Statement and
the Prospectus comply in all material respects with Article 11 of
Regulation S-X under the Securities Act.
(v) Neither the Company nor the Partnership is, and
upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus, will be, an "investment company" or
a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(w) The Partnership is not in violation of its
Certificate of Limited Partnership dated as of August 4, 1997
filed with the State of Delaware on August 4, 1997, as amended,
or the Partnership Agreement; the execution, delivery and
performance by the Partnership of its obligations under this
Underwriting Agreement and the Preferred Securities will not
result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
the Partnership is now a party.
(x) Except as set forth in or contemplated by the
Prospectus, each of the Company and the Significant Subsidiaries
possesses adequate franchises, licenses, permits and other rights
to conduct its respective business and operations as now
conducted, without any known conflicts with the rights of others
that could have an adverse effect on the Company and the
Significant Subsidiaries.
(y) No labor dispute with the employees of the Company
or the Significant Subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company does not have knowledge
of any existing or imminent labor disturbance by the employees of
any of the principal customers or contractors of the Company or
the Significant Subsidiaries, which, in either case, may
reasonably be expected to result in a material adverse effect on
the financial condition of the Company and its subsidiaries taken
as a whole.
(z) Each of the Company and the Significant
Subsidiaries has good and marketable title to all real property
and other properties owned by the Company and the Significant
Subsidiaries (other than properties which are not material to the
financial condition of the Company and its subsidiaries taken as
whole or the conduct of the business of the Company and the
Significant Subsidiaries), in each case, free and clear of all
mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Registration Statement and the Prospectus or (b)
do not, singly or in the aggregate, materially adversely affect
the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the
Company and the Significant Subsidiaries; and all of the leases
and subleases material to the business of the Company and the
Significant Subsidiaries and under which the Company and the
Significant Subsidiaries hold properties described in the
Registration Statement and the Prospectus are in full force and
effect, and the Company has no notice of any material claim of
any sort that has been asserted by anyone adverse to the rights
of the Company or the Significant Subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning
the rights of the Company or the Significant Subsidiaries to the
continued possession of the leased or subleased premises under
any such lease or sublease.
(aa) Except as described in the Registration Statement
and the Prospectus and except such matters as would not, singly
or in the aggregate, result in a material adverse effect on the
financial condition of the Company and its subsidiaries, taken as
a whole, (A) the Company and the Significant Subsidiaries are not
in violation of any national, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health,
the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and the Significant Subsidiaries have all
permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance with their
requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or the Significant
Subsidiaries and (D) there are no events or circumstances known
to the Company or the Significant Subsidiaries that may
reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the
Company or the Significant Subsidiaries relating to Hazardous
Materials or Environmental Laws.
(bb) The Company and its obligations under this
Underwriting Agreement, the Company Securities, the Partnership
Agreement, the Guarantee Agreement and the Indenture are subject
to civil and commercial actions, suits or proceedings and neither
it nor any of its properties, assets or revenues has, in the
United Kingdom or any political subdivision thereof or in the
United States or any political subdivision thereof, any right of
immunity from any legal action, suit or proceeding, from the
giving of any relief in any such legal action, suit or
proceeding, from setoff or counterclaim, from the jurisdiction of
any court, from service of process, attachment upon or prior to
judgment, or attachment in aid of execution of judgment, or from
execution of a judgment, or other legal process or proceeding for
the giving of any relief or for the enforcement of a judgment, in
any such jurisdiction, with respect to its obligations,
liabilities or any other matter under or arising out of or in
connection with the issuance of the Company Securities; and, to
the extent that the Company or the Significant Subsidiaries or
any of their respective properties, assets or revenues may have
or may hereafter become entitled to any such right of immunity in
any jurisdiction, the Company has effectively waived such right
and consented to such relief and enforcement pursuant to
Section 15 of this Underwriting Agreement; nothing in this clause
(bb) shall be deemed to waive any defense (other than any such
immunity) available to the Company.
(cc) The Company has the power to submit to the
jurisdiction of any federal or state court in the State of New
York, County of New York, and has the power to designate, appoint
and empower an agent for service of process in any legal action,
suit or proceeding based on or arising under this Underwriting
Agreement in any federal or state court in the State of New York,
County of New York.
(dd) Payments of principal and interest in respect of
the Debentures to persons outside the United Kingdom are not
subject under the laws of the United Kingdom or any political
subdivision thereof or therein to any withholding or similar
charges for or on account of taxation or otherwise.
(ee) No exchange control authorization or any other
authorization, approval, consent or license of any governmental
authority or agency of or in the United Kingdom is required for
the payment by the Company of any amounts in United States
dollars pursuant to the terms of the Debentures or the Guarantee
Agreement.
SECTION 4. Offering. The Offerors are advised by the
Representatives that the Underwriters propose to make a public
offering of their respective portions of the Preferred Securities
as soon after the effectiveness of this Underwriting Agreement as
in their judgment the Underwriters deem advisable. The Offerors
are further advised by the Representatives that the Preferred
Securities will be offered to the public at the initial public
offering price specified in the Prospectus.
SECTION 5. Time and Place of Closing; Delivery to
Underwriters. Delivery of certificates for the Preferred
Securities and payment of the purchase price therefor by wire
transfer of immediately available funds shall be made at the
offices of Reid & Priest LLP, 40 West 57th Street, New York, New
York, at 10:00 A.M., New York time, on [________], 1997, or at
such other time on the same or such other day as shall be agreed
upon by the Offerors and the Representatives, or as may be
established in accordance with Section 11 hereof. The hour and
date of such delivery and payment are herein called the "Closing
Date."
Certificates for the Preferred Securities shall be in
definitive form and registered in such names and in such
denominations as the Underwriters shall request not later than
two full business days prior to the Closing Date. The
certificates evidencing the Preferred Securities shall be
delivered to the Representatives through the facilities of The
Depository Trust Company in New York, New York for the account of
the Representatives with any transfer taxes payable in connection
with the transfer of the Preferred Securities duly paid, against
payment of the purchase price therefor.
On the Closing Date, the Company will pay, or cause to be
paid, the compensation payable at such time to the Underwriters
pursuant to Section 1 hereof by wire transfer in immediately
available funds to an account designated by Goldman, Sachs & Co.,
for the accounts of the several Underwriters.
SECTION 6. Covenants of the Offerors. Each of the
Offerors jointly and severally covenants and agrees with the
several Underwriters that:
(a) Not later than the Closing Date, the Offerors will
deliver to the Representatives a copy of the Registration
Statement in the form that it became effective or a conformed
copy thereof, certified by an officer of the Company to be in
such form.
(b) The Company will deliver to the Underwriters as
many copies of the Prospectus (and any amendments or supplements
thereto) as the Underwriters may reasonably request.
(c) The Company will cause the Prospectus to be filed
with, or transmitted for filing to, the Commission pursuant to
and in compliance with Rule 424(b) and will advise the
Representatives promptly of the issuance of any stop order under
the Securities Act with respect to the Registration Statement or
the institution of any proceedings therefor that either of the
Offerors shall have received notice. Each of the Offerors will
use its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) During such period of time as the Underwriters are
required by law to deliver a prospectus after this Underwriting
Agreement has become effective, if any event relating to or
affecting the Company or the Partnership, or of which the Company
or the Partnership shall be advised by the Representatives in
writing, shall occur which in the opinion of the Company should
be set forth in a supplement or amendment to the Prospectus in
order to make the Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser of the
Preferred Securities, the Company will amend or supplement the
Prospectus so that, as supplemented or amended, it will not
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading. Unless such event
relates solely to the activities of the Underwriters (in which
case the Underwriters shall assume the expense of preparing any
such amendment or supplement), the expenses of complying with
this Section 6(d) shall be borne by the Company until the
expiration of nine months from the time of effectiveness of this
Underwriting Agreement, and such expenses shall be borne by the
Underwriters thereafter.
(e) The Company will, on behalf of the Partnership,
make generally available to the Partnership's security holders,
as soon as practicable, an earning statement (which need not be
audited) covering a period of at least twelve months beginning
after the "effective date of the registration statement" within
the meaning of Rule 158 under the Securities Act, which earning
statement shall be in such form, and be made generally available
to security holders in such a manner, as to meet the requirements
of the last paragraph of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act.
(f) At any time within six months of the date hereof,
the Offerors will furnish such proper information as may be
lawfully required, and will otherwise cooperate in qualifying the
Preferred Securities and the Debentures for offer and sale, under
the blue sky laws of such jurisdictions as the Representatives
may reasonably designate, provided that the Offerors shall not be
required to qualify as a foreign corporation or dealer in
securities, to file any consents to service of process under the
laws of any jurisdiction, or to meet any other requirements
deemed by the Offerors to be unduly burdensome.
(g) The Company will, except as herein provided, pay
all fees, expenses and taxes incident to the performance of each
Offeror's obligations under this Underwriting Agreement
including, but not limited to, (i) the preparation and filing of
the Registration Statement and any post-effective amendment
thereto, (ii) the printing, issuance and delivery of the
certificates for the Preferred Securities to the Underwriters,
(iii) legal counsel relating to the qualification of the
Preferred Securities and the Debentures under the blue sky laws
of various jurisdictions, in an amount not to exceed $12,500,
(iv) the printing and delivery to the Underwriters of reasonable
quantities of copies of the Registration Statement, the
preliminary (or any supplemental) blue sky survey, any
Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, except as otherwise provided in paragraph (d)
of this Section 6, (v) the rating of the Preferred Securities and
the Debentures by one or more nationally recognized statistical
rating agencies, (vi) filings or other notices (if any) with or
to, as the case may be, the National Association of Securities
Dealers, Inc. (the "NASD") in connection with its review of the
terms of the offering, and (vii) the listing of the Preferred
Securities on the New York Stock Exchange (the "NYSE"), the
listing of the Debentures on the Luxembourg Stock Exchange and
the registration of the Preferred Securities and, if the
Preferred Securities are exchanged for Debentures, the Debentures
under the Exchange Act in accordance with Section 6(i) hereof.
Except as provided above, the Company shall not be required to
pay any expenses of the Underwriters, except that, if this
Underwriting Agreement shall be terminated in accordance with the
provisions of Section 7, 8 or 12 hereof, the Company will
reimburse the Underwriters for (A) the reasonable fees and
expenses of Counsel for the Underwriters, whose fees and expenses
the Underwriters agree to pay in any other event, and (B)
reasonable out-of-pocket expenses incurred in contemplation of
the performance of this Underwriting Agreement. The Company
shall not in any event be liable to the Underwriters for damages
on account of loss of anticipated profits.
(h) Each of the Offerors will not offer, sell,
contract to sell or otherwise dispose of any limited partner
interests in the Partnership, or any preferred stock or any other
securities of the Partnership or the Company that are
substantially similar to the Preferred Securities, including any
guarantee of such securities, or any securities convertible into
or exchangeable for or that represent the right to receive
limited partner interests, preferred stock or any such
substantially similar securities of either the Partnership or the
Company, except for the Preferred Securities and the Guarantee,
without the consent of the Representatives until the earlier to
occur of (i) thirty (30) days after the Closing Date and (ii) the
date of the termination of the trading restrictions on the
Preferred Securities, as determined by the Underwriters. The
Representatives agree to notify the Offerors of such termination
if it occurs prior to the Closing Date.
(i) The Offerors will use their best efforts to cause
the Preferred Securities to be duly authorized for listing on the
NYSE, subject to notice of issuance, and to be registered under
the Exchange Act and to cause the Debentures to be duly
authorized for listing on the Luxembourg Stock Exchange; if the
Preferred Securities are exchanged for Debentures, the Company
will use its best efforts to have the Debentures listed on the
exchange or other organization on which the Preferred Securities
were then listed, and to have the Debentures registered under the
Exchange Act.
(j) If the Company elects to rely upon Rule 462(b)
under the Securities Act, the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with
Rule 462(b) under the Securities Act and pay the applicable fees
in accordance with Rule 111 under the Securities Act by the
earlier of (i) 10:00 p.m., New York City time, on the date of the
Prospectus, and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2) under the Securities Act.
SECTION 7. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase and pay for the
Preferred Securities shall be subject to the accuracy on the date
hereof and on the Closing Date of the representations and
warranties made herein on the part of the Offerors and of any
certificates furnished by the Offerors on the Closing Date and to
the following conditions:
(a) The Prospectus shall have been filed with, or
transmitted for filing to, the Commission pursuant to Rule 424(b)
prior to 5:30 P.M., New York time, on the second business day
following the date of this Underwriting Agreement, or such other
time and date as may be agreed upon by the Offerors and the
Representatives.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date; no proceedings for such purpose shall be pending
before, or, to the knowledge of the Offerors or the Underwriters,
threatened by, the Commission on the Closing Date; and the
Underwriters shall have received a certificate, dated the Closing
Date and signed by the President, a Vice President, the Treasurer
or an Assistant Treasurer of the Company and the General Partner,
to the effect that no such stop order has been or is in effect
and that no proceedings for such purpose are pending before or,
to the knowledge of the Company or the Partnership, as the case
may be, threatened by the Commission.
(c) At the Closing Date, there shall have been issued
and there shall be in full force and effect an order of the
Commission under the 1935 Act, authorizing the formation of the
Partnership and [list other actions].
(d) At the Closing Date, the Underwriters shall have
received from Linklaters and Paines and Reid & Priest LLP,
opinions, dated the Closing Date, substantially in the forms set
forth in Exhibits A and B hereto, respectively, (i) with such
changes therein as may be agreed upon by the Offerors and the
Representatives, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus shall be supplemented
after being furnished to the Underwriters for use in offering the
Preferred Securities, with changes therein to reflect such
supplementation.
(e) At the Closing Date, the Underwriters shall have
received from Richards, Layton & Finger, P.A., special Delaware
counsel for the Company and the Partnership, an opinion, dated
the Closing Date, substantially in the form set forth in Exhibit
C hereto (i) with such changes therein as may be agreed upon by
the Offerors and the Representatives, with the approval of
Counsel for the Underwriters, and (ii) if the Prospectus shall be
supplemented after being furnished to the Underwriters for use in
offering the Preferred Securities, with changes therein to
reflect such supplementation.
(f) At the Closing Date, the Underwriters shall have
received from Counsel for the Underwriters, an opinion, dated the
Closing Date, substantially in the form set forth in Exhibit D
hereto, with such changes therein as may be necessary to reflect
any supplementation of the Prospectus prior to the Closing Date.
(g) On or prior to the effective date of this
Underwriting Agreement, the Underwriters shall have received from
Coopers & Lybrand L.L.P., the Company's independent certified
public accountants (the "Accountants"), a letter dated the date
hereof and addressed to the Underwriters to the effect that (i)
they are independent certified public accountants with respect to
the Company and its consolidated subsidiaries within the meaning
of the Securities Act and the applicable published rules and
regulations thereunder; (ii) in their opinion, the financial
statements and financial statement schedules examined by them and
included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the applicable published
rules and regulations thereunder; (iii) on the basis of
performing the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, on the latest unaudited financial statements, if
any, included in the Prospectus, a reading of the latest
available interim unaudited financial statements of the Company,
the minutes of the meetings of the Board of Directors of the
Company, [the Executive Committee thereof, if any, and the
stockholder of the Company,] since December 31, 1996 to a
specified date not more than five days prior to the date of such
letter, and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it being
understood that the foregoing procedures do not constitute an
examination made in accordance with generally accepted auditing
standards and they would not necessarily reveal matters of
significance with respect to the comments made in such letter
and, accordingly, that the Accountants make no representations as
to the sufficiency of such procedures for the purposes of the
Underwriters), nothing has come to their attention which caused
them to believe that, to the extent applicable, (A) the unaudited
financial statements of the Company and its consolidated
subsidiaries (if any) included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published
rules and regulations thereunder; (B) any material modifications
should be made to said unaudited financial statements for them to
be in conformity with generally accepted accounting principles;
and (C) at a specified date not more than five days prior to the
date of the letter, there was any change in the capital stock or
long-term debt of the Company, or decrease in its net assets, in
each case as compared with amounts shown in the most recent
balance sheet included in the Prospectus, except in all instances
for changes or decreases which the Prospectus discloses have
occurred or may occur or for changes or decreases as set forth in
such letter, identifying the same and specifying the amount
thereof; (iv) on the basis of a reading of the unaudited pro
forma financial statements included in the Prospectus, carrying
out certain specified procedures, inquiries of certain officials
of the Company and the company acquired who have responsibility
for financial and accounting matters and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in such pro forma financial statements,
nothing came to their attention that caused them to believe that
such pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that such pro forma adjustments
have not been properly applied to such historical amounts in the
compilation of such pro forma financial statements; [(v)
formulation for comfort levels on selected and summary financial
data tables to be discussed]; and (vi) stating that they have
compared specific dollar amounts, percentages of revenues and
earnings and other financial information pertaining to the
Company set forth in the Prospectus to the extent that such
amounts, numbers, percentages and information may be derived from
the general accounting records of the Company, and excluding any
questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures do
not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found
them to be in agreement.
(h) At the Closing Date, the Underwriters shall have
received a certificate, dated the Closing Date and signed by the
President, a Vice President, the Treasurer or an Assistant
Treasurer of the Company, to the effect that (i) the
representations and warranties of the Company contained herein
are true and correct, and (ii) the Company has performed and
complied with all agreements and conditions in this Underwriting
Agreement to be performed or complied with by the Company at or
prior to the Closing Date.
(i) At the Closing Date, the Underwriters shall have
received a certificate, dated the Closing Date and signed by the
General Partner, to the effect that (i) the representations and
warranties of the Partnership contained herein are true and
correct, (ii) the Partnership has performed and complied with all
agreements and conditions in this Underwriting Agreement to be
performed or complied with by the Partnership at or prior to the
Closing Date and (iii) since the most recent date as of which
information is given in the Prospectus, as it may then be amended
or supplemented, there has not been any material adverse change
in the business, property or financial condition of the
Partnership and there has not been any material transaction
entered into by the Partnership, other than transactions in the
ordinary course of business, in each case other than as referred
to in, or contemplated by, the Prospectus, as it may then be
amended or supplemented.
(j) At the Closing Date, the Underwriters shall have
received duly executed counterparts of the Partnership Agreement,
the Guarantee Agreement and the Indenture.
(k) At the Closing Date, the Underwriters shall have
received from the Accountants a letter, dated the Closing Date,
confirming, as of a date not more than five days prior to the
Closing Date, the statements contained in the letter delivered
pursuant to Section 7(g) hereof.
(l) Between the date hereof and the Closing Date, no
event shall have occurred with respect to or otherwise affecting
the Company or the Partnership that, in the reasonable opinion of
the Representatives, materially impairs the investment quality of
the Preferred Securities.
(m) On or prior to the Closing Date, the Underwriters
shall have received from the Company evidence reasonably
satisfactory to Goldman, Sachs & Co. that Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group have publicly
assigned to the Preferred Securities ratings of ___ and ___,
respectively, which ratings shall be in full force and effect on
the Closing Date.
(n) Between the date hereof and the Closing Date
neither [insert names of rating agencies] shall have lowered its
rating of any of the Company's outstanding debt securities in any
respect.
(o) On or prior to the Closing Date, (i) the Preferred
Securities shall have been duly listed, subject to notice of
issuance, on the NYSE, (ii) the Debentures shall have duly
authorized for listing on the Luxembourg Stock Exchange and (iii)
the Company's registration statement on Form 8-A relating to the
Preferred Securities shall have become effective under the
Exchange Act.
(p) All legal matters in connection with the issuance
and sale of the Preferred Securities shall be satisfactory in
form and substance to Counsel for the Underwriters.
(q) The Offerors will furnish the Underwriters with
additional conformed copies of such opinions, certificates,
letters and documents as may be reasonably requested.
If any of the conditions specified in this Section 7 shall
not have been fulfilled, this Underwriting Agreement may be
terminated by the Underwriters upon notice thereof to the
Offerors. Any such termination shall be without liability of any
party to any other party, except as otherwise provided in
paragraph (g) of Section 6 and in Section 10.
SECTION 8. Condition of Obligations of the Offerors. The
obligations of the Offerors hereunder shall be subject to the
following condition:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the Closing
Date.
(b) At the Closing Date, there shall have been issued
and there shall be in full force and effect an order of the
Commission under the 1935 Act authorizing the formation of the
Partnership and [list other actions].
In case the condition specified in this Section 8 shall not
have been fulfilled, this Underwriting Agreement may be
terminated by the Offerors upon notice thereof to the
Representatives. Any such termination shall be without liability
of any party to any other party, except as otherwise provided in
paragraph (g) of Section 6 and in Section 10.
SECTION 9. Indemnification.
(a) The Offerors shall, jointly and severally, indemnify,
defend and hold harmless each Underwriter and each person who
controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against
any and all losses, claims, damages or liabilities, joint or
several, to which each Underwriter or any or all of them may
become subject under the Securities Act or any other statute or
common law and shall reimburse each Underwriter and any such
controlling person for any legal or other expenses (including to
the extent hereinafter provided, reasonable counsel fees)
incurred by them in connection with investigating any such
losses, claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon
an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, as amended or
supplemented, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or upon
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, or in the
Prospectus, as each may be amended or supplemented, or the
omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the indemnity agreement contained in this
paragraph shall not apply to any such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon,
any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, if such statement or omission
was made in reliance upon and in conformity with information
furnished herein or in writing to the Offerors by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement, any Preliminary Prospectus or the
Prospectus or any amendment or supplement to any thereof or
arising out of, or based upon, statements in or omissions from
the Form T-1s; and provided further, that the indemnity agreement
contained in this subsection shall not inure to the benefit of
any Underwriter or to the benefit of any person controlling any
Underwriter on account of any such losses, claims, damages,
liabilities, expenses or actions arising from the sale of the
Preferred Securities to any person in respect of any Preliminary
Prospectus or the Prospectus as supplemented or amended,
furnished by any Underwriter to a person to whom any of the
Preferred Securities were sold (excluding in both cases, however,
any document then incorporated by reference therein), insofar as
such indemnity relates to any untrue or misleading statement or
omission made in any Preliminary Prospectus or the Prospectus but
eliminated or remedied prior to the consummation of such sale in
the Prospectus, or any amendment or supplement thereto furnished
on a timely basis by the Offerors to the Underwriters pursuant to
Section 6(d) hereof, respectively, unless a copy of the
Prospectus (in the case of such a statement or omission made in
any Preliminary Prospectus) or such amendment or supplement (in
the case of such a statement or omission made in the Prospectus)
(excluding, however, any document then incorporated by reference
in the Prospectus or such amendment or supplement) is furnished
by such Underwriter to such person (i) with or prior to the
written confirmation of the sale involved or (ii) as soon as
available after such written confirmation (if it is made
available to the Underwriters prior to settlement of such sale).
(b) The Company shall indemnify, defend and hold
harmless the Partnership against any and all losses, claims,
damages or liabilities that may become due from the Partnership
under Section 9(a) hereof.
(c) Each Underwriter shall indemnify, defend and hold
harmless the Offerors, its directors and officers and each person
who controls the foregoing within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under
the Securities Act or any other statute or common law and shall
reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable
counsel fees) incurred by them in connection with investigating
any such losses, claims, damages or liabilities or in connection
with defending any action, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as amended
or supplemented, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or upon
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus or in the
Prospectus, as each may be amended or supplemented, or the
omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
in each case, if, but only if, such statement or omission was
made in reliance upon and in conformity with information
furnished herein or in writing to the Offerors by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement, any Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto.
(d) In case any action shall be brought, based upon
the Registration Statement, any Preliminary Prospectus or the
Prospectus (including amendments or supplements thereto), against
any party in respect of which indemnity may be sought pursuant to
any of the preceding paragraphs, such party (hereinafter called
the indemnified party) shall promptly notify the party or parties
against whom indemnity shall be sought hereunder (hereinafter
called the indemnifying party) in writing, and the indemnifying
party shall have the right to participate at its own expense in
the defense or, if it so elects, to assume (in conjunction with
any other indemnifying party) the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses. If the
indemnifying party shall elect not to assume the defense of any
such action, the indemnifying party shall reimburse the
indemnified party for the reasonable fees and expenses of any
counsel retained by such indemnified party. Such indemnified
party shall have the right to employ separate counsel in any such
action in which the defense has been assumed by the indemnifying
party and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel has been
specifically authorized by the indemnifying party or (ii) the
named parties to any such action (including any impleaded
parties) include each of such indemnified party and the
indemnifying party and such indemnified party shall have been
advised by such counsel that a conflict of interest between the
indemnifying party and such indemnified party may arise and for
this reason it is not desirable for the same counsel to represent
both the indemnifying party and the indemnified party (it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm
of attorneys for such indemnified party (plus any local counsel
retained by such indemnified party in its reasonable judgment)).
The indemnified party shall be reimbursed for all such fees and
expenses as they are incurred. The indemnifying party shall not
be liable for any settlement of any such action effected without
its consent, but if any such action is settled with the consent
of the indemnifying party or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless the indemnified party from and
against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and
indemnity has or could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party and any person
controlling any indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(e) If the indemnification provided for under
subsections (a), (b), (c) or (d) in this Section 9 is unavailable
to any extent to an indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Offerors and the
Underwriters from the offering of the Preferred Securities or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Offerors on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Offerors
on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total proceeds from the
offering (after deducting underwriting discounts and commissions
but before deducting expenses) to the Offerors bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Offerors on
the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by any of the
Underwriters and such parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9(e)
were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable to an indemnified party as
a result of the losses, claims, damages and liabilities referred
to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 9(e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Preferred
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 9(e) are several in
proportion to their respective underwriting obligations and not
joint. The obligations of the Company under this Section 9 shall
be in addition to any liability which the Company may otherwise
have.
SECTION 10. Survival of Certain Representations and
Obligations. Any other provision of this Underwriting Agreement
to the contrary notwithstanding, (a) the indemnity and
contribution agreements contained in Section 9 of, and the
representations and warranties and other agreements of the
Offerors contained in, this Underwriting Agreement shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or by or on
behalf of the Offerors or its directors or officers, or any of
the other persons referred to in Section 9 hereof and (ii)
acceptance of and payment for the Preferred Securities and (b)
the indemnity and contribution agreements contained in Section 9
shall remain operative and in full force and effect regardless of
any termination of this Underwriting Agreement.
SECTION 11. Default of Underwriters. If any Underwriter
shall fail or refuse (otherwise than for some reason sufficient
to justify, in accordance with the terms hereof, the cancellation
or termination of its obligations hereunder) to purchase and pay
for the Preferred Securities that it has agreed to purchase and
pay for hereunder, and the number of Preferred Securities that
such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the number of the
Preferred Securities, the other Underwriters shall be obligated
to purchase the Preferred Securities that such defaulting
Underwriter agreed but failed or refused to purchase; provided
that in no event shall the number of Preferred Securities that
any Underwriter has agreed to purchase pursuant to Schedule I
hereof be increased pursuant to this Section 11 by an amount in
excess of one-ninth of such number of Preferred Securities
without written consent of such Underwriter. If any Underwriter
shall fail or refuse to purchase Preferred Securities and the
number of Preferred Securities with respect to which such default
occurs is more than one-tenth of the number of the Preferred
Securities, the Offerors shall have the right (a) to require the
non-defaulting Underwriters to purchase and pay for the
respective number of Preferred Securities that it had severally
agreed to purchase hereunder, and, in addition, the number of
Preferred Securities that the defaulting Underwriter shall have
so failed to purchase up to an amount thereof equal to one-ninth
of the respective number of Preferred Securities that such non-
defaulting Underwriters have otherwise agreed to purchase
hereunder, and/or (b) to procure one or more others, members of
the NASD (or, if not members of the NASD, who are foreign banks,
dealers or institutions not registered under the Exchange Act and
who agree in making sales to comply with the NASD's Rules of Fair
Practice), to purchase, upon the terms herein set forth, the
number of Preferred Securities that such defaulting Underwriter
had agreed to purchase, or that portion thereof that the
remaining Underwriters shall not be obligated to purchase
pursuant to the foregoing clause (a). In the event the Offerors
shall exercise its rights under clause (a) and/or (b) above, the
Offerors shall give written notice thereof to the Representatives
within 24 hours (excluding any Saturday, Sunday, or legal
holiday) of the time when the Offerors learn of the failure or
refusal of any Underwriter to purchase and pay for its respective
number of Preferred Securities, and thereupon the Closing Date
shall be postponed for such period, not exceeding three business
days, as the Offerors shall determine. In the event the Offerors
shall be entitled to but shall not elect (within the time period
specified above) to exercise its rights under clause (a) and/or
(b), the Offerors shall be deemed to have elected to terminate
this Underwriting Agreement. In the absence of such election by
the Offerors, this Underwriting Agreement will, unless otherwise
agreed by the Offerors and the non-defaulting Underwriters,
terminate without liability on the part of any non-defaulting
party except as otherwise provided in paragraph (g) of Section 6
and in Section 10. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect
of its default under this Underwriting Agreement.
SECTION 12. Termination. This Underwriting Agreement
shall be subject to termination by notice given by written notice
from the Representatives to the Offerors if (a) after the
execution and delivery of this Underwriting Agreement and prior
to the Closing Date (i) trading of the Preferred Securities or
trading in securities generally shall have been suspended or
materially limited on the NYSE by The New York Stock Exchange,
Inc., the Commission or other governmental authority or on The
International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited (the "London Stock Exchange"), (ii)
minimum or maximum ranges for prices shall have been generally
established on the NYSE by The New York Stock Exchange, Inc., the
Commission or other governmental authority or on the London Stock
Exchange, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal
or New York State authorities, (iv) a change or development
involving a prospective change in United Kingdom taxation
materially adversely affecting the Company, the Debentures or the
Guarantee, or (v) there shall have occurred any outbreak or
escalation of hostilities or any calamity or crisis that, in the
judgment of the Representatives, is material and adverse and (b)
in the case of any of the events specified in clauses (a)(i)
through (v), such event singly or together with any other such
event makes it, in the reasonable judgment of the
Representatives, impracticable to market the Preferred
Securities. This Underwriting Agreement shall also be subject to
termination, upon notice by the Representatives as provided
above, if, in the judgment of the Representatives, the subject
matter of any amendment or supplement (prepared by the Offerors)
to the Prospectus (except for information relating solely to the
manner of public offering of the Preferred Securities or to the
activity of the Underwriters or to the terms of any series of
securities of the Offerors other than the Preferred Securities)
filed or issued after the effectiveness of this Underwriting
Agreement by the Offerors shall have materially impaired the
marketability of the Preferred Securities. Any termination
hereof, pursuant to this Section 12, shall be without liability
of any party to any other party, except as otherwise provided in
paragraph (g) of Section 6 and in Section 10.
SECTION 13. Consent to Jurisdiction; Appointment of Agent
to Accept Service of Process.
(a) The Company agrees (i) that any legal action, suit or
proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection
with this Underwriting Agreement may be brought in any federal or
state court in the State of New York, County of New York, and
(ii) to file such consents with such authorities as may be
required to irrevocably evidence such agreement.
(b) The Company agrees to designate a designee, appointee
and agent in The City of New York satisfactory to the
Underwriters for the purpose of consenting and agreeing to the
service of any and all legal process, summons, notices and
documents in any such action, suit or proceeding against the
Company, by serving a copy thereof upon the relevant agent for
service of process referred to in this Section 13 (whether or not
the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such
service) with a copy to the Company as provided in Section 18.
The Company agrees that the failure of any such designee,
appointee and agent to give any notice of such service to it
shall not impair or affect in any way the validity of such
service. Nothing herein shall in any way be deemed to limit the
ability of the holders of the Preferred Securities or the
Debentures, the Underwriters and the other persons referred to in
Section 9 to serve any such legal process, summons, notices and
documents in any other manner permitted by applicable law or to
obtain jurisdiction over the Company, or bring actions, suits or
proceedings against it in such other jurisdictions, and in such
manner, as may be permitted by applicable law. The Company
irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have
to the laying of venue of any of the aforesaid actions, suits or
proceedings arising out of or in connection with this
Underwriting Agreement brought in the federal courts located in
The City of New York or the courts of the State of New York
located in The City of New York and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.
(c) The provisions of this Section 13 shall survive any
termination of this Underwriting Agreement, in whole or in part.
SECTION 14. Foreign Taxes. All payments by the Company to
the Underwriters hereunder shall be made free and clear of, and
without deduction or withholding for or on account of, any and
all present and future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by
the United Kingdom, any political subdivision thereof, or any
other jurisdiction in which the Company has a branch or an office
from which payment is made or deemed to be made, excluding
(i) any such tax imposed by reason of any Underwriter having some
connection with any such jurisdiction other than its
participation as an Underwriter hereunder, and (ii) any income or
franchise tax on the overall net income of any Underwriter
imposed by the United States or by the State of New York or any
political subdivision of the United States or of the State of New
York (all such non-excluded taxes, "Foreign Taxes"). If the
Company is prevented by operation of law or otherwise from
paying, causing to be paid or remitting that portion of amounts
payable hereunder represented by Foreign Taxes withheld or
deducted, then amounts payable under this Underwriting Agreement
shall, to the extent permitted by law, be increased to such
amount as is necessary to yield and remit to such Underwriter an
amount that, after deduction of all Foreign Taxes (including all
Foreign Taxes payable on such increased payments), equals the
amount that would have been payable if no Foreign Taxes applied.
SECTION 15. Waiver of Immunities. To the extent that the
Company or any of its properties, assets or revenues may have or
may hereafter become entitled to, or have attributed to it, any
right of immunity, on the grounds of sovereignty or otherwise,
from any legal action, suit or proceeding, from the giving of any
relief in any thereof, from set-off or counterclaim, from the
jurisdiction of any court, from service or process, from
attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other
legal process or proceeding for the giving of any relief or for
the enforcement of any judgment, in any jurisdiction in which
proceedings may at any time be commenced, with respect to its
obligations, liabilities or any other matter under or arising out
of or in connection with the Company Securities, the Partnership
Agreement, the Guarantee Agreement, the Indenture or this
Underwriting Agreement, the Company hereby irrevocably and
unconditionally waives and agrees not to plead or claim any such
immunity and consents to such relief and enforcement. Nothing in
this Section 15 shall be deemed to waive any defense (other than
any such immunity) available to the Company.
SECTION 16. Judgment Currency. Each of the parties hereto
agrees to indemnify each other party hereto, and its controlling
persons, officers and directors referred to in Section 9, against
any loss incurred by any such indemnified party as a result of
any judgment or order being given or made for any amount due
hereunder and such judgment or order being expressed and paid in
a currency (the "Judgment Currency") other than United States
dollars and as a result of any variation as between (i) the rate
of exchange at which the United States dollar amount is converted
into the Judgment Currency for the purpose of such judgment or
order, and (ii) the rate of exchange at which any such
indemnified party is able to purchase United States dollars on
the business day next succeeding the date of such judgment, with
the amount of the Judgment Currency actually received by any such
indemnified party. If, alternatively, any such indemnified party
receives a profit as a result of such currency conversion, it
will return any such profits to the party or parties from whom
indemnification could have been sought under this Section 16
(after taking into account any taxes or other costs arising in
connection with such conversion and repayment). The foregoing
indemnity shall constitute a separate and independent obligation
of the parties hereto, and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid.
The term "rate of exchange" shall include any premiums and costs
of exchange payable in connection with the purchase of, or
conversion into, United States dollars.
SECTION 17. Miscellaneous. THE RIGHTS AND DUTIES OF THE
PARTIES TO THIS UNDERWRITING AGREEMENT SHALL, PURSUANT TO NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK. This Underwriting Agreement shall
become effective when a fully executed copy thereof is delivered
to the Offerors and to the Representatives. This Underwriting
Agreement may be executed in any number of separate counterparts,
each of which, when so executed and delivered, shall be deemed to
be an original and all of which, taken together, shall constitute
but one and the same agreement. This Underwriting Agreement
shall inure to the benefit of each of the Offerors, the
Underwriters and, with respect to the provisions of Section 9,
each director, officer and other person referred to in Section 9,
and their respective successors. Should any part of this
Underwriting Agreement for any reason be declared invalid, such
declaration shall not affect the validity of any remaining
portion, which remaining portion shall remain in full force and
effect as if this Underwriting Agreement had been executed with
the invalid portion thereof eliminated. Nothing herein is
intended or shall be construed to give to any other person, firm
or corporation any legal or equitable right, remedy or claim
under or in respect of any provision in this Underwriting
Agreement. The term "successor" as used in this Underwriting
Agreement shall not include any purchaser, as such purchaser, of
any Preferred Securities from the Underwriters.
SECTION 18. Notices. All communications hereunder shall be
in writing and, if to the Underwriters, shall be mailed or
delivered to Goldman, Sachs & Co. at the address set forth at the
beginning of this Underwriting Agreement (to the attention of its
General Counsel) or, if to the Offerors, shall be mailed or
delivered to it at 639 Loyola Avenue, New Orleans, Louisiana
70113, Attention: _________, or, if to Entergy Services, Inc.,
shall be mailed or delivered to it at 639 Loyola Avenue, New
Orleans, Louisiana 70113, Attention: Treasurer.
If the foregoing is in accordance with your
understanding, please sign and return to us counterparts of this
Underwriting Agreement, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this Underwriting Agreement
and such acceptance hereof, shall constitute a binding agreement
among each of the Underwriters, the Company and the Partnership.
It is understood that your acceptance of this Underwriting
Agreement on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company
and the Partnership for examination upon request, but without
warranty on the part of the Representatives as to the authority
of the signers thereof.
Very truly yours,
Entergy London Investments plc
By:___________________________
Name:
Title:
Entergy London Capital, L.P.
By: Entergy London Investments plc,
as General Partner
By:___________________________
Name:
Title:
Accepted as of the date first above written:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As representatives of the other several
Underwriters named in Schedule I hereto
By:____________________________
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
Entergy London Capital, L.P.
[____]% Cumulative Quarterly Income Preferred Securities, Series A
Number of
Underwriter Preferred Securities
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
____________
Total 12,000,000
============
<PAGE>
Exhibit A
[Letterhead of Linklaters & Paines]
Entergy Power Capital, L.P.
639 Loyola Avenue
New Orleans
Louisiana 70113
USA
(the "Partnership")
November 1997
Entergy Power Investments plc
Templar House
81-87 High Holborn
London
WC1V 6NU
(the "Company")
Goldman, Sachs & Co.
[Other Representatives]
As Representatives of the several Underwriters named in Schedule
I to the Underwriting Agreement referred to below (the
"Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York
New York
10004
USA
Dear Sirs
Entergy London Capital, L.P.
% Cumulative Quarterly Income Preferred Securities, Series A
(liquidation preference $25 per preferred security)
fully and unconditionally guaranteed by Entergy London
Investments plc
1 We have acted as English legal advisers to the
Partnership and the Company in connection with the issue
and sale by the Partnership to the several Underwriters
pursuant to the Underwriting Agreement, dated November
1997 (the "Underwriting Agreement") among the Company, the
Partnership and the representatives of the several
Underwriters of 12,000,000 % Cumulative Quarterly Income
Preferred Securities, Series A (liquidation preference $25
per preferred security) (the "Preferred Securities"),
guaranteed to the extent the Partnership has funds by the
Company. This opinion is delivered to you at the request
of the Company and the Partnership and is delivered
pursuant to section 7(d) of the Underwriting Agreement.
Expressions defined in the Underwriting Agreement have the
same meanings when used in this opinion except where
otherwise defined herein.
2 This opinion is limited to English law as currently
applied by the English Courts and is given on the basis
that it will be governed by and construed in accordance
with English law. We express no opinion on matters of
United States federal or state law or the laws of any
other jurisdiction.
3 For the purposes of this opinion we have examined and
relied upon copies of the documents listed and, where
appropriate, defined in the Schedule to this letter and
any other documents we have deemed appropriate. We have
assumed that:-
3.1(except in the case of the Company) all relevant
documents are within the capacity and powers of, and have
been validly authorised by, each party and (in the case of
each party) that those documents have been or (in the case
of the Preferred Securities and Debentures) will be
validly executed and delivered by the relevant party in
the same form as examined by us for the purpose of this
opinion;
3.2each of the Principal Agreements (as defined in
paragraph 4.1 below) and the Preferred Securities and
Debentures is valid and binding on and (without detracting
from the exception in assumption 3.1 above) enforceable
against each party under the law to which it is expressed
to be subject;
3.3words and phrases used in the Principal Agreements, the
Preferred Securities, the Debentures, the Registration
Statement and the Prospectus filed under the Securities
Act have the same meanings and effect as they would if
those documents were governed by English law and there is
no provision of any law (other than English law) which
would affect anything in this opinion;
3.4the Underwriters have complied and will comply with all
applicable provisions of the Financial Services Act 1986
with respect to anything done or to be done by them in
relation to the Preferred Securities or the Debentures in,
from or otherwise involving the United Kingdom (including
Section 3 (carrying on investment business) 56
(unsolicited calls) and 57 (investment advertisements));
3.5all copy documents examined by us for the purpose of
this opinion conform to the originals;
3.6no Principal Agreement nor any Preferred Security or
Debenture has been amended, supplemented or terminated;
3.7the copies of the Memorandum and Articles of
Association of each of the Company and the Significant
Subsidiaries (as defined below) examined by us for the
purpose of this opinion are complete and up-to-date;
3.8the Minutes of which copies have been examined by us
for the purpose of this opinion are a true record of the
proceedings described therein of duly convened,
constituted and quorate meetings of the Board of Directors
of the Company and that the resolutions set out in those
Minutes and in the Written Consents were duly passed and
remain in full force and effect without modification; and
3.9all documents submitted to us as originals are
authentic and all signatures are genuine and are those of
persons authorised by the relevant resolutions to execute
(or, as the case may be, witness the execution of) the
relevant document on behalf of the Company.
4 Based on and subject to the foregoing and subject to
the exceptions and qualifications mentioned below and to
any matters not disclosed to us, we are of the following
opinion:-
4.1The Company has been duly incorporated as a public
limited company under the laws of England and Wales and
has the necessary corporate power and authority under its
Memorandum and Articles of Association to conduct the
business that it is described in the Prospectus as
conducting, to own and operate properties owned and
operated by it in such business, to issue the Company
Securities, to enter into and perform its obligations
under the Underwriting Agreement, the Agreement of Limited
Partnership (as amended and restated) (the "Partnership
Agreement"), the Indenture, the Guarantee Agreement,
(together the "Principal Agreements") and the Company
Securities, to make the capital contribution to the
Partnership as General Partner.
4.2a search made on 1997 at the Companies Registration
Office in London revealed no order or resolution for the
winding up of the Company or of London Electricity plc,
London Electricity Services Limited, the London Power
Company Limited or London Electricity Enterprises Limited
(together, the "Significant Subsidiaries") and no notice
of appointment in respect of the Company or of its
Significant Subsidiaries of a liquidator, receiver,
administrative receiver or administrator. It should be
noted that such a search is not capable of revealing
whether or not a petition for winding up or administration
has been presented in a County Court or District Registry
or in the High Court of Justice, and that notice of a
winding up or administration order made or winding up
resolution passed or of the appointment of a receiver or
administrative receiver may not be filed at the Companies
Registration Office immediately;
4.3London Electricity plc and each of the other
Significant Subsidiaries has been duly incorporated as a
public limited company or private company limited by
shares under the laws of England and Wales, has the
necessary corporate power and authority under its
Memorandum and Articles of Association, as amended, to
conduct the business that it is described in the
Prospectus as conducting and to own and operate the
properties owned and operated by it in such business.
4.4The Partnership Agreement, the Indenture and the
Guarantee Agreement have been, insofar as English law is
concerned, duly authorised, executed and delivered by the
Company; the Underwriting Agreement has been, insofar as
English law is concerned, duly authorised, executed and
delivered by the Company for itself and as General Partner
under the Partnership Agreement.
4.5Insofar as English law is concerned, the Debentures
have been duly authorised and, when authenticated in the
manner provided for in the Indenture and delivered against
payment therefor as described in the Prospectus, will have
been duly executed, issued and delivered by the Company.
4.6No consent, approval, authorisation or order of any
governmental or regulatory agency in Great Britain is
required (i) for the formation of the Partnership or the
capital contribution of the Company to the Partnership, as
General Partner of the partnership; (ii) for the execution
and delivery by the Company of the Principal Agreements;
(iii) to permit the issue and sale of the Securities or
the performance by the Partnership of its obligations with
respect to the Preferred Securities or (iv) to permit the
performance by the Company of its obligations with respect
to the Principal Agreements.
4.7The Company has duly authorised the capital
contribution to the Partnership made by the Company as
General Partner and, insofar as English law is concerned,
has taken all necessary action to make such capital
contribution.
4.8Neither the issue, offering and sale by the Company of
the Company Securities in the manner contemplated by the
Underwriting Agreement and by the Prospectus nor the
execution and delivery by the Company of any of the
Principal Agreements nor the performance by the Company of
its obligations under any of the Principal Agreements will
conflict with or result in a breach or violation of (i)
the Memorandum of Association or Articles of Association
of the Company or the Significant Subsidiaries or (ii) any
law, rule or regulation of any governmental or other
regulatory authority in Great Britain applicable to the
Company or the Significant Subsidiaries or (iii) the
provision of any licence granted to London Electricity plc
under the Electricity Act 1984.
4.9Except as set forth in or contemplated by the
Prospectus, London Electricity plc possesses adequate
franchises, licences, permits and other rights to conduct
is businesses of distribution and supply of electricity as
set forth in the Prospectus the absence of which could
have a material adverse effect on the Company and the
Significant Subsidiaries.
4.10 The statements under the captions "Business - UK
Environmental Regulation," "Business - UK and EU
Competition Law" and "The Electric Utility Industry in
Great Britain" in the Prospectus, in each case insofar as
such statements purport to summarise orders, statutes,
laws, rules or regulations, or other legal matters,
involving English law or relating to the Great Britain
electric utility industry, constitute fair and accurate
summaries of such matters in all material respects.
4.11 The statements under the caption "Certain Income
Tax Considerations - UK Income Tax Consideration" in the
Prospectus constitute a fair and accurate summary of the
matters addressed therein in all material respects.
4.12 The English Courts will recognise and give effect
to the choice of the laws of the State of New York ("New
York law") as the law governing the Principal Agreements
(except the Partnership Agreement). The validity and
binding nature of the obligations contained in the
Principal Agreements (except the Partnership Agreement)
are governed by and construed in accordance with New York
law.
4.13 The English Courts will recognise and give effect
to the choice of law of the State of Delaware ("Delaware
law") as the law governing the Partnership Agreement. The
validity and binding nature of the obligations contained
in the Partnership Agreement are governed by and construed
in accordance with Delaware law.
4.14 On the assumption that the Underwriting Agreement,
the Indenture, the Guarantee Agreement and the Company
Securities create valid and binding obligations of the
parties under New York law and the Partnership Agreement
creates valid and binding obligations of the parties under
Delaware law, English law will not prevent any provisions
of the Underwriting Agreement, the Indenture, the
Guarantee Agreement, the Company Securities and the
Partnership Agreement from being valid and binding
obligations of the Company, subject to all limitations
resulting from bankruptcy, insolvency, liquidation,
receivership, administration, re-organisation of the
Company and similar laws of general application relating
to or affecting the rights of creditors applicable to the
Company.
4.15 A final and conclusive judgment against the
Company for a definite sum of money entered by a state or
federal court in the United States of America in any suit,
action or proceeding arising out of or in connection with
the Underwriting Agreement, the Indenture, the Guarantee
Agreement or the Partnership Agreement would normally be
enforced by the English Courts (although this is a matter
within such Courts' discretion), without re-examination or
re-litigation of the matters adjudicated upon, provided
that:-
(i) the judgment was not obtained by fraud;
(ii) the enforcement of the judgment would not be
contrary to English public policy or Section 5 of
the Protection of Trading Interests Act 1980;
(iii) the judgment was not given in a manner
contrary to the principles of natural justice (as
applied by the English Courts);
(iv) the judgment is not inconsistent with an
English judgment in respect of the same matter;
(v) the judgment is not for multiple damages or
amounts to a penalty under English law;
(vi) the proceedings before the state or federal
court in the United States of America were not of
a revenue nature (i.e. relating to taxation);
(vii) enforcement proceedings are instituted within
the limitation periods under the Limitation Act
1980;
(viii) the state or federal court in the United
States of America has jurisdiction over the
Company in accordance with the rules of English
law;
(ix) claims have not become subject to set-off or
counter claim; and
(x) the judgement of a court of the United States
or any part thereof did not predicate solely upon
the federal securities laws of the United States
as it is doubtful whether an English Court would
enforce such a judgement.
4.16 In relation to any action against the Company
under any of the Principal Agreements to which it is a
party or the Company Securities, an English Court might
assume jurisdiction on the basis that the Company (as
defendant) has its seat in England but an English Court
could decline jurisdiction or stay its proceedings in
relation to any dispute arising from the Principal
Agreements or the Company Securities:
(i) on the ground that proceedings involving the
same or a related issue are pending in a foreign
jurisdiction; or
(ii) on the ground of forum non conveniens, in
other words that a foreign forum is more
appropriate.
A plaintiff who is not resident in England or Wales may be
required by an English Court, on the application of the
defendant, to provide security for the defendant's costs.
4.17 Under English law and UK Inland Revenue practice
as applied and interpreted on the date hereof and on the
basis of the United Kingdom/United States Double Taxation
Treaty (the "Treaty") currently in force, no taxes,
levies, imposts or charges of the United Kingdom or any
political subdivision or taxing authority thereof or
therein would be required to be deducted or withheld (a)
from any payment to a beneficial owner of the Preferred
Securities who is a resident of the United States (who is
not also a resident of the United Kingdom and who does not
have a permanent establishment or a fixed base in the
United Kingdom to which the Preferred Securities are
connected) (a "United States Holder"), made (i) by the
Partnership pursuant to the Preferred Securities or (ii)
by the Company pursuant to the Guarantee Agreement or (b)
from any payment by the Company in respect of the
Debentures, provided that, in respect of a payment or in
respect of quarterly amounts due on the Debentures by the
Company, the Debentures are in bearer form and are quoted
on a recognised stock exchange and such payment is made by
a non-United Kingdom paying agent or by a United Kingdom
paying agent in circumstances where the Debentures are
held in a recognised clearing system or it is proved that
the person who is the beneficial owner of the Debentures
and entitled to the payment (or the person whose income
the payment is deemed to be for United Kingdom tax
purposes) is not resident in the United Kingdom; and
provided further that, in respect of a payment made by the
Company to a United States Holder pursuant to the
Guarantee Agreement as regards the portion of any such
payment which represents income in respect of the
Preferred Securities:
(A) that portion is exempt from taxation in
the United Kingdom under Article 22 of the
Treaty ("Other Income");
(B) the United States Holder is entitled to
and has claimed the benefit of the Treaty in
respect of such payment; and
(C) the Company has received from the UK
Inland Revenue prior to the payment being made
a direction pursuant to the Treaty allowing
payment to be made without deduction of United
Kingdom tax.
If (B) or (C) above is not satisfied so that tax is
withheld by the Company, a person entitled to exemption
under the Treaty may claim repayment of such tax from the
UK Inland Revenue.
5 Our reservations or qualifications are as follows:-
5.1We express no opinion as to whether the equitable
remedies of specific performance or injunctive relief
would be available in respect of any obligation of the
Company or the Partnership. Insofar as any obligation
under the Principal Agreements or the Company Securities
is to be performed in any jurisdiction other than England
and Wales, an English Court may have to have regard to the
law of that jurisdiction in relation to the manner of
performance and the steps to be taken in the event of
defective performance.
5.2The obligations of the Company under the Principal
Agreements and the Company Securities will be subject to
any law from time to time in force relating to liquidation
or administration or any other law or legal procedure
affecting generally the enforcement of creditors' rights.
5.3An English Court will not apply New York law or
Delaware law if:
(a) it is not pleaded and proved; or
(b) to do so would be contrary to the mandatory rules of
English law or manifestly incompatible with English
public policy.
5.4To the extent it relates to United Kingdom stamp
duties, any undertaking or indemnity given by the Company
or the Partnership may be void under section 117 of the
Stamp Act 1891.
5.5An English Court may refuse to give effect to any
provision of an agreement which amounts to an indemnity in
respect of the costs of unsuccessful litigation brought
before an English Court or where the Court has itself made
an order for costs.
5.6Where obligations are to be performed in a jurisdiction
outside England, they may not be enforceable in England to
the extent that performance would be illegal under the
laws of that other jurisdiction.
5.7Any certificate, determination, notification, opinion
or the like might be held by English court not be
conclusive if it could be shown to have an unreasonable or
arbitrary basis or in the event of manifest error despite
any provision in the relevant agreements to the contrary.
5.8This opinion is given as at the date set out above. We
express no opinion as to effect that any further event, or
any act of the Company or a Significant Subsidiary, may
have on the matters referred to herein.
6 This opinion is addressed to you solely for your
benefit in connection with the issue of the Preferred
Securities and the Debentures. It is not to be transmitted
to anyone else nor is it to be relied upon by anyone or
for any other purpose or quoted or referred to in any
public document or filed with anyone without our express
consent.
Yours faithfully
Linklaters & Paines
<PAGE>
Schedule
1 A certified copy of the Memorandum and Articles of
Association of the Company
2 Copies of the Memorandum and Articles of Association of
each of the Significant Subsidiaries
3 Certified copies of the Written Consents of the Board
of Directors of the Company held on July 1997 and
November 1997
4 Searches in relation to the Company and each of the
Significant Subsidiaries obtained form the Companies
Registration Office on November 1997
5 Form S-1 Registration Statement dated November 1997
relating to the Preferred Securities (the "Registration
Statement" and "Prospectus")
6 Prospectus dated November 1997 relating to the %
Perpetual Junior Subordinated Debentures, Series A (the
"Debentures") as submitted to the Luxembourg Stock
Exchange ("Luxembourg Prospectus")
7 Underwriting Agreement relating to the Preferred
Securities dated November 1997 between the Company, the
Partnership and Goldman, Sachs & Co. and others (the
"Underwriters")
8 Indenture for Unsecured Subordinated Debt Securities
relating to the Preferred Securities dated November 1997
between the Company and the Bank of New York as Trustee
(the "Trustee") (the "Indenture")
9 Amended and Restated Limited Partnership Agreement of
Entergy London Capital, L.P. between the Company as
General Partner and William J. Regan, Jr. as the Initial
Limited Partner (the "Partnership Agreement")
10 Guarantee Agreement dated November 1997 between the
Company the Trustee (the "Guarantee Agreement")
11 Form of Perpetual Junior Subordinated Debenture
relating to the Debentures.
12 Officer's Certificate of the Company dated November
1997 establishing the terms of the Debentures (the
"Officer's Certificate")
13 Copy of the opinion of Richards, Layton & Finger, P.A.,
relating to the validity of the Preferred Securities
14 Copy of the opinion of Reid & Priest LLP, relating to
the validity of the Perpetual Junior Subordinated
Debentures and the Guarantee
15 Copy of the opinion of Reid & Priest LLP, as to United
States tax matters
16 Copies of the licences granted to London Electricity plc
under the Electricity Act 1984
<PAGE>
EXHIBIT B
[Letterhead of Reid & Priest LLP]
[_______ __], 1997
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred
to below (the "Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We, together with Linklaters & Paines, London, England,
and Richards, Layton & Finger, P.A., Wilmington, Delaware, have
acted as counsel for Entergy London Investments plc, a public
limited company incorporated under the laws of England and Wales
(the "Company"), and Entergy London Capital, L.P., a special
purpose limited partnership formed under the laws of the State of
Delaware (the "Partnership"), in connection with the issuance and
sale by the Partnership to the several Underwriters pursuant to
the Underwriting Agreement, effective [________ __], 1997 (the
"Underwriting Agreement"), among the Company, the Partnership and
you, as the representatives of the several Underwriters, of
12,000,000 [___]% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred
security) (the "Preferred Securities"), guaranteed to the extent
the Partnership has funds by the Company. This opinion is
rendered to you at the request of the Company and the
Partnership. Capitalized terms used herein and not otherwise
defined have the meanings ascribed to such terms in the
Underwriting Agreement.
In our capacity as such counsel, we have either
participated in the preparation of or have examined and are
familiar with: (a) the Underwriting Agreement; (b) the
Indenture; (c) the Partnership Agreement; (d) the Guarantee
Agreement; (e) the Registration Statement and Prospectus filed
under the Securities Act; (f) the records of various corporate
proceedings relating to the authorization, issuance and sale of
the Company Securities and the execution and delivery by the
Company of the Indenture, the Underwriting Agreement, the
Partnership Agreement, and the Guarantee Agreement; and (g) the
proceedings before and the order entered by the Commission under
the 1935 Act relating to the formation of the Partnership and
[list other actions]. We have also examined or caused to be
examined such other documents and have satisfied ourselves as to
such other matters as we have deemed necessary in order to render
this opinion. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to the originals
of the documents submitted to us as certified or photostatic
copies. We have not examined the Debentures, except a specimen
thereof, and we have relied upon a certificate of the Debenture
Trustee as to the authentication and delivery thereof.
Subject to the foregoing and to the further exceptions
and qualifications set forth below, we are of the opinion that:
(1) Assuming that the Indenture has been duly
authorized, executed and delivered by the Company insofar as the
laws of England and Wales are concerned, the Indenture (except as
to Section ___ thereof or any provisions thereof that purport to
waive any immunity with respect to the attachment of property of
the Company prior to the entry of judgment, upon which we do not
pass) is a legal, valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
(2) Assuming that the Debentures have been duly
authorized, executed, issued and delivered by the Company insofar
as the laws of England and Wales are concerned, the Debentures
are legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law), and are entitled to the benefits
provided by the Indenture.
(3) Assuming that the Guarantee Agreement has been
duly authorized, executed and delivered by the Company insofar as
the laws of England and Wales are concerned, the Guarantee
Agreement (except as to Section ___ thereof or any provisions
thereof that purport to waive any immunity with respect to the
attachment of property of the Company prior to the entry of
judgment, upon which we do not pass) is a legal, valid and
binding instrument of the Company enforceable against the Company
in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws affecting creditors' rights and by general
equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(4) Each of the Indenture and the Guarantee Agreement
is duly qualified under the Trust Indenture Act, and no
proceedings to suspend such qualifications have been instituted
or, to our knowledge, threatened by the Commission.
(5) The statements made in the Prospectus under the
captions "Risk Factors", "Entergy London Capital", "Description
of the Preferred Securities", "Description of the Guarantee",
"Description of the Perpetual Junior Subordinated Debentures" and
"Relationship Among the Preferred Securities, the Perpetual
Junior Subordinated Debentures and the Guarantee" insofar as they
purport to constitute summaries of the documents referred to
therein, constitute accurate summaries of the terms of such
documents in all material respects.
(6) The statements made in the Prospectus under the
caption "Certain Income Tax Considerations - US Income Tax
Considerations" constitute a fair and accurate summary of the
matters addressed therein, based upon current law and the
assumptions stated or referred to therein.
(7) Neither the Company nor the Partnership is, and
upon the issuance and sale of the Securities as contemplated by
the Underwriting Agreement and the application of the net
proceeds therefrom as described in the Prospectus, will be, an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
(8) Except in each case as to the financial statements
and other financial data included therein, upon which we do not
pass, the Registration Statement, at the Effective Date, and the
Prospectus, as of its date, complied as to form in all material
respects with the applicable requirements of the Securities Act
and (except with respect to the Form T-1s, upon which we do not
pass) the Trust Indenture Act, and the applicable instructions,
rules and regulations of the Commission thereunder or pursuant to
said instructions, rules and regulations are deemed to comply
therewith; and the Registration Statement has become, and on the
date hereof is, effective under the Securities Act and, to the
best of our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings
for that purpose are pending or threatened under Section 8(d) of
the Securities Act.
(9) The Company, London Electricity plc and the other
Significant Subsidiaries are entitled to the exemption from the
1935 Act provided by Sections 33(a)(1) and (c)(1) thereof.
(10) An appropriate order has been entered by the
Commission under the 1935 Act authorizing the formation of the
Partnership and [list other actions]; to the best of our
knowledge, said order is in full force and effect; no further
approval, authorization, consent or other order of any
governmental body of the United States or the State of New York
(other than orders of the Commission under the Securities Act,
the Exchange Act and the Trust Indenture Act, which have been
duly obtained, or in connection or compliance with the provisions
of the securities or blue sky laws of any jurisdiction) is
legally required to form the Partnership, or to permit the
issuance and sale of the Securities or the performance by the
Partnership of its obligations with respect to the Preferred
Securities, or by the Company of its obligations with respect to
the Company Securities or under the Indenture, the Underwriting
Agreement, the Partnership Agreement or the Guarantee Agreement.
(11) The issuance and sale by the Company of the
Company Securities and the execution, delivery and performance by
the Company of the Indenture, the Underwriting Agreement, the
Partnership Agreement and the Guarantee Agreement (a) will not
violate any provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance on or security interest in any assets of the Company,
the Significant Subsidiaries or [upstream entities that will be a
party to the Acquisition Debt Agreements after the corporate
reorganization] pursuant to the provisions of, the Acquisition
Debt Agreements or any other mortgage, indenture, contract,
agreement or other undertaking known to us (having made due
inquiry with respect thereto) to which either of the Company, the
Significant Subsidiaries or [upstream entities that will be a
party to the Acquisition Debt Agreements after the corporate
reorganization] is a party or which purports to be binding upon
either of the Company, the Significant Subsidiaries or [upstream
entities that will be a party to the Acquisition Debt Agreements
after the corporate reorganization] or upon any of their
respective assets and (b) will not violate any provision of any
Federal law of the United States or any law of the State of New
York applicable to the Company or the Significant Subsidiaries
or, to the best of our knowledge (having made due inquiry with
respect thereto), any provision of any order, writ, judgment or
decree of any governmental instrumentality of the United States
or the State of New York applicable to the Company or the
Significant Subsidiaries (except that various consents of, and
filings with governmental authorities of the State of New York
may be required to be obtained or made, as the case may be, in
connection or compliance with the provisions of the securities or
blue-sky laws of the State of New York).
In passing upon the forms of the Registration Statement
and the Prospectus, we necessarily assume the correctness,
completeness and fairness of the statements made by the Company
and the Partnership and information included or incorporated by
reference in the Registration Statement and the Prospectus and
take no responsibility therefor, except insofar as such
statements relate to us and as set forth in paragraphs (5) and
(6) above. In connection with the preparation by the Company and
the Partnership of the Registration Statement and the Prospectus,
we have had discussions with certain officers and representatives
of the Company and its subsidiaries and the Partnership, with
other counsel for the Company and the Partnership, and with the
independent certified public accountants of the Company who
examined certain of the financial statements included in the
Registration Statement. Our examination of the Registration
Statement and the Prospectus and such discussions did not
disclose to us any information which gives us reason to believe
that the Registration Statement, at the Effective Date, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, as
of its date and at the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. We do not express any opinion or belief as
to the financial statements or other financial data included in
the Registration Statement or the Prospectus or as to the Form T-
1s.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of any other jurisdiction.
We have not examined into and are not passing upon matters
relating to the incorporation of the Company.
The opinion set forth above is solely for the benefit
of the addressees of this letter in connection with the
Underwriting Agreement and the transactions contemplated
thereunder and it may not be relied upon in any manner by any
other person or for any other purpose, without our prior written
consent.
Very truly yours,
REID & PRIEST LLP
<PAGE>
EXHIBIT C
[Letterhead of Richards, Layton & Finger, P.A.]
[________ __], 1997
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As representatives of the several
Underwriters named in Schedule I
to the Underwriting Agreement
referred to below
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as special Delaware counsel for Entergy
London Investments plc, a public limited company incorporated
under the laws of England and Wales (the "Company"), and Entergy
London Capital, L.P., a Delaware limited partnership (the
"Partnership"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Limited Partnership of the
Partnership, dated as of August 4, 1997 (the "Original
Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on August 4,
1997;
(b) The Agreement of Limited Partnership of the
Partnership, dated as of August 4, 1997 (the "Original
Partnership Agreement"), between the Company, as general partner
of the Partnership (the "General Partner"), and William J. Regan,
Jr., as initial limited partner of the Partnership (the "Initial
Limited Partner);
(c) The Certificate of Amendment to the Original
Certificate, dated as of [________ __,] 1997 (the "Certificate of
Amendment"), as filed in the office of the Secretary of State on
[_________ __,] 1997 (the Original Certificate as amended by the
Certificate of Amendment being hereinafter referred to as the
"Certificate");
(d) Amendment No. 1 to the Original Partnership
Agreement, dated as of [________ __,] 1997, between the General
Partner and the Initial Limited Partner;
(e) The Amended and Restated Limited Partnership
Agreement of the Partnership, dated as of [________ __,] 1997
(including Annex A, Annex B and Exhibit I to Annex B thereto)
(the "Partnership Agreement"), among the General Partner, the
Initial Limited Partner and such Persons who become limited
partners of the Partnership;
(f) The Underwriting Agreement, dated [_______ __],
1997 (the "Underwriting Agreement"), among the Partnership, the
Company and you, as Representatives of the several underwriters
named in Schedule I to the Underwriting Agreement;
(g) The Prospectus, dated [__________ __], 1997 (the
"Prospectus"), relating to 12,000,000 [__]% Cumulative Quarterly
Income Preferred Securities, Series A, of the Partnership
representing limited partner interests in the Partnership (each,
a "Preferred Security" and collectively, the "Preferred
Securities"); and
(h) A Certificate of Good Standing for the
Partnership, dated [________ __], 1997, obtained from the
Secretary of State.
Capitalized terms used herein and not otherwise defined
are used as defined in the Partnership Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (h) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (h) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our
own, but rather have relied solely upon the foregoing documents,
the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that
the Partnership Agreement constitutes the entire agreement among
the parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the Partnership, and that the Partnership Agreement and the
Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph (1)
below, the due creation, due organization or due formation, as
the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of each natural person who is a party to
the documents examined by us, (iv) except to the extent provided
in paragraph (2) below, that each of the parties to the documents
examined by us has the power and authority to execute and
deliver, and to perform its obligations under, such documents,
(v) except to the extent provided in paragraph (9) below, that
each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the
receipt by each Person to whom a Preferred Security is to be
issued by the Partnership (the "Preferred Security Holders") of a
Preferred Securities Certificate for the Preferred Security and
the payment for the Preferred Security acquired by it, in
accordance with the Partnership Agreement, and as described in
the Prospectus, (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the
Partnership Agreement, and as described in the Prospectus and
(viii) that the books and records of the Partnership set forth
all information required by the Partnership Agreement and the
Delaware Revised Uniform Limited Partnership Act (6 Del. C. 17-
101, et seq.) (the "Partnership Act"), including all information
with respect to all Persons to be admitted as partners of the
Partnership and their contributions to the Partnership. We have
not participated in the preparation of the Prospectus and assume
no responsibility for its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
(1) The Partnership has been duly formed and is
validly existing in good standing as a limited partnership under
the Partnership Act, and all filings required under the laws of
the State of Delaware with respect to the formation and valid
existence of the Partnership as a limited partnership have been
made.
(2) Under the Partnership Agreement and the
Partnership Act, the Partnership has the partnership power and
authority (i) to own property and conduct its business, all as
described in the Prospectus, (ii) to issue and sell the Preferred
Securities in accordance with the Partnership Agreement, and as
described in the Prospectus, and to perform its other obligations
under the Partnership Agreement, the Underwriting Agreement and
the Preferred Securities, (iii) to execute and deliver the
Underwriting Agreement, and (iv) to consummate the transactions
contemplated by the Underwriting Agreement.
(3) The Partnership Agreement constitutes a valid and
binding obligation of the Company and the General Partner, and is
enforceable against the General Partner, in accordance with its
terms.
(4) The Preferred Securities have been duly authorized
by the Partnership Agreement and are duly and validly issued and,
subject to the qualifications set forth in paragraph (5) below,
fully paid and nonassessable limited partner interests in the
Partnership.
(5) Assuming that the Preferred Security Holders, as
limited partners of the Partnership, do not participate in the
control of the business of the Partnership, the Preferred
Security Holders, as limited partners of the Partnership, will
have no liability in excess of their obligations to make payments
provided for in the Partnership Agreement and their share of the
Partnership's assets and undistributed profits (subject to the
obligation of a Preferred Security Holder to repay any funds
wrongfully distributed to it).
(6) There are no provisions in the Partnership
Agreement the inclusion of which, subject to the terms and
conditions therein, or, assuming that the Preferred Security
Holders, as limited partners of the Partnership, take no action
other than permitted by the Partnership Agreement, the exercise
of which, in accordance with the terms and conditions therein,
would cause the Preferred Security Holders, as limited partners
of the Partnership, to be deemed to be participating in the
control of the business of the Partnership.
(7) Under the Partnership Agreement and the
Partnership Act, the issuance of the Preferred Securities is not
subject to preemptive rights.
(8) The issuance and sale by the Partnership of the
Preferred Securities and the execution, delivery and performance
by the Partnership of the Underwriting Agreement and the
consummation of the transactions contemplated by the Underwriting
Agreement do not violate (a) the Certificate or the Partnership
Agreement or (b) any applicable Delaware law, rule or regulation.
(9) Under the Partnership Agreement and the
Partnership Act, (i) the issuance and sale by the Partnership of
the Preferred Securities and the execution and delivery by the
Partnership of the Underwriting Agreement, and the performance by
the Partnership of its obligations thereunder, have been duly
authorized by all necessary partnership action on the part of the
Partnership and (ii) assuming the due authorization, execution
and delivery of the Underwriting Agreement by the General Partner
under the Partnership Agreement on behalf of the Partnership and
of the Preferred Certificates for the Preferred Securities by the
General Partner on behalf of the Partnership, the Underwriting
Agreement and the Preferred Securities Certificates have been
duly executed and delivered by the Partnership.
The opinion expressed in paragraph (3) above is
subject, as to enforcement, to the effect upon the Partnership
Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance
or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in
equity or at law) and (iii) the effect of applicable public
policy on the enforceability of provisions relating to
indemnification or contribution.
We consent to your relying as to matters of Delaware
law upon this opinion in connection with the Underwriting
Agreement. We also consent to the reliance upon this opinion as
to matters of Delaware law by Winthrop, Stimson, Putnam &
Roberts, as if it were addressed to it, in rendering its opinion
to you of even date herewith. Except as stated above, without
our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER, P.A.
<PAGE>
EXHIBIT D
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[_________ __], 1997
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Smith Barney Inc.
As representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred
to below (the "Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as counsel for the several Underwriters
of 12,000,000 [___]% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred
security) (the "Preferred Securities"), issued by Entergy London
Capital, L.P., a special purpose limited partnership formed under
the laws of the State of Delaware (the "Partnership"), pursuant
to the agreement among you, as the representatives of the several
Underwriters, Entergy London Investments plc, a public limited
company incorporated under the laws of England and Wales (the
"Company"), and the Partnership effective [__________], 1997 (the
"Underwriting Agreement").
We are members of the New York Bar and, for purposes of
this opinion, do not hold ourselves out as experts on the laws of
any jurisdiction other than the State of New York and the United
States of America. We have, with your consent, relied upon an
opinion of even date herewith addressed to you of Richards,
Layton & Finger, P.A., special Delaware counsel for the Company
and the Partnership, as to the matters covered in such opinion
relating to Delaware law. We have reviewed said opinion and
believe that it is satisfactory. We have also reviewed the
opinion of Reid & Priest LLP required by Section 7(d) of the
Underwriting Agreement, and we believe said opinion to be
satisfactory.
We have also reviewed such documents and satisfied
ourselves as to such other matters as we have deemed necessary in
order to enable us to express this opinion. We have also
reviewed, and have relied as to matters of fact material to this
opinion upon, the documents delivered to you at the closing of
the transactions contemplated by the Underwriting Agreement, and
we have reviewed such other documents and have satisfied
ourselves as to such other matters as we have deemed necessary in
order to enable us to render this opinion. As to such matters of
fact material to this opinion, we have relied upon
representations and certifications of the Company and the
Partnership in such documents and in the Underwriting Agreement,
and upon statements in the Registration Statement. In such
review, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the conformity to the
originals of the documents submitted to us as certified or
photostatic copies, the authenticity of the originals of such
documents and all documents submitted to us as originals and the
correctness of all statements of fact contained in all such
original documents. We have not examined the certificates
representing the Preferred Securities or the Debentures except in
each case for specimens thereof, and we have relied upon a
certificate of the General Partner as to the execution and
delivery of the Preferred Securities and a certificate of the
Debenture Trustee as to the authentication and delivery of the
Debentures. Capitalized terms used herein and not otherwise
defined have the meanings ascribed to such terms in the
Underwriting Agreement.
Subject to the foregoing and to the further exceptions
and qualifications set forth below, we are of the opinion that:
(1) The Preferred Securities have been duly authorized
by the Partnership Agreement and are duly and validly issued and
fully paid and nonassessable limited partner interests in the
partnership. Assuming that the holders of the Preferred
Securities, as limited partners of the Partnership, do not
participate in the control of the business of the Partnership,
such holders will have no liability in excess of their
obligations to make payments provided for in the Partnership
Agreement and their share of the Partnership's assets and
undistributed profits (subject to the obligation of a holder of
Preferred Securities to repay any funds wrongfully distributed to
it).
(2) Assuming that the Indenture has been duly
authorized, executed and delivered by the Company insofar as the
laws of England and Wales are concerned, the Indenture (except as
to Section ___ thereof or any provisions thereof that purport to
waive any immunity with respect to the attachment of property of
the Company prior to the entry of judgment, upon which we do not
pass) is a legal, valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or
at law), and by an implied covenant of good faith and fair
dealing.
(3) The statements made in the Prospectus under the
captions "Description of the Preferred Securities", "Description
of the Guarantee", "Description of the Perpetual Junior
Subordinated Debentures", "Relationship Among the Preferred
Securities, the Perpetual Junior Subordinated Debentures and the
Guarantee" and "Underwriting", insofar as they purport to
constitute summaries of the documents referred to therein,
constitute accurate summaries of the terms of such documents in
all material respects.
(4) Assuming that the Debentures have been duly
authorized, executed, issued and delivered by the Company insofar
as the laws of England and Wales are concerned, the Debentures
are legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms,
except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or
at law), and by an implied covenant of good faith and fair
dealing, and the Debentures are entitled to the benefits provided
by the Indenture.
(5) Assuming that the Guarantee Agreement has been
duly authorized, executed and delivered by the Company insofar as
the laws of England and Wales are concerned, the Guarantee
Agreement (except as to Section ___ thereof or any provisions
thereof that purport to waive any immunity with respect to the
attachment of property of the Company prior to the entry of
judgment, upon which we do not pass) is a legal, valid and
binding instrument of the Company enforceable against the Company
in accordance with its terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors' rights and general equitable
principles (regardless of whether enforceability is considered in
a proceeding in equity or at law), and by an implied covenant of
good faith and fair dealing.
(6) To the best of our knowledge, each of the
Indenture, and the Guarantee Agreement is duly qualified under
the Trust Indenture Act, and no proceedings to suspend such
qualification have been instituted or threatened by the
Commission.
(7) An appropriate order has been issued by the
Commission under the 1935 Act authorizing the formation of the
Partnership and [list other actions], and to the best of our
knowledge, such order is in full force and effect; and no further
approval, authorization, consent or other order of any
governmental body of the United States or the State of New York
(other than orders of the Commission under the Securities Act,
the Exchange Act and the Trust Indenture Act, which have been
duly obtained, or in connection or compliance with the provisions
of the securities or blue sky laws of any jurisdiction) is
legally required to permit the issuance and sale of the
Securities.
(8) Except in each case as to the financial statements
and other financial data included therein, upon which we do not
pass, the Registration Statement, at the Effective Date, and the
Prospectus, as of its date, complied as to form in all material
respects with the applicable requirements of the Securities Act
and (except with respect to the Form T-1s, upon which we do not
pass) the Trust Indenture Act, and the applicable instructions,
rules and regulations of the Commission thereunder or pursuant to
said instructions, rules and regulations are deemed to comply
therewith; and, to the best of our knowledge, the Registration
Statement has become, and on the date hereof is, effective under
the Securities Act and no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings
for that purpose are pending or threatened under Section 8(d) of
the Securities Act.
In passing upon the form of the Registration Statement
and the form of the Prospectus, we necessarily assume the
correctness, completeness and fairness of statements made by the
Company and the Partnership and the information included or
incorporated by reference in the Registration Statement and the
Prospectus and take no responsibility therefor, except insofar as
such statements relate to us and as set forth in paragraph (3)
hereof. In connection with the preparation by the Company and
the Partnership of the Registration Statement and the Prospectus,
we had discussions with certain officers, employees and
representatives of the Company and its subsidiaries, the
Partnership and Entergy Services, Inc., with counsel for the
Company and the Partnership, with your representatives and with
the independent certified public accountants of the Company who
examined certain of the financial statements included in the
Registration Statement. Our review of the Registration Statement
and the Prospectus, and such discussions, did not disclose to us
any information that gives us reason to believe that the
Registration Statement, at the Effective Date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, as
of its date and at the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. We do not express any opinion or belief as
to the financial statements or other financial data included in
the Registration Statement or Prospectus or as to the Form T-1s.
This opinion is solely for the benefit of the
addressees hereof in connection with the Underwriting Agreement
and the transactions contemplated thereunder and may not be
relied upon in any manner by any other person or for any other
purpose, without our prior written consent.
Very truly yours,
WINTHROP, STIMSON, PUTNAM & ROBERTS
Exhibit 4.02
__________________________________________
ENTERGY LONDON INVESTMENTS UK plc
TO
THE BANK OF NEW YORK
Trustee
_________
Indenture
(For Unsecured Subordinated Debt Securities
relating to Preferred Securities)
Dated as of _______ __, 1997
__________________________________________
<PAGE>
ENTERGY LONDON INVESTMENTS UK plc
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of _______ __, 1997
Trust Indenture Act Section Indenture Section
310 (a)(1) 909
(a)(2) 909
(a)(3) 914
(a)(4) Not Applicable
(b) 908
910
311 (a) 913
(b) 913
(c) 913
312 (a) 1001
(b) 1001
(c) 1001
313 (a) 1002
(b) 1002
(c) 1002
314 (a) 1002
(a)(4) 606
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
315 (a) 901
903
(b) 902
(c) 901
(d) 901
(e) 814
316 (a) 812
813
(a)(1)(A) 802
812
(a)(1)(B) 813
(a)(2) Not Applicable
(b) 808
317 (a)(1) 803
(a)(2) 804
(b) 603
318 (a) 107
<PAGE>
INDENTURE, dated as of _______ __, 1997, between
ENTERGY LONDON INVESTMENTS UK plc, a corporation duly
incorporated and existing under the laws of England and
Wales (herein called the "Company"), having its principal
office at Templar House, 81-87 High Holborn, London WC1V
6NU, England, and THE BANK OF NEW YORK, a New York banking
corporation, having its principal corporate trust office at
101 Barclay Street, New York, New York 10286, as Trustee
(herein called the "Trustee").
RECITAL OF THE COMPANY Error! Bookmark not defined.
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from
time to time of its unsecured subordinated debentures, notes
or other evidences of indebtedness (herein called the
"Securities") in an unlimited aggregate principal amount to
be issued in one or more series as contemplated herein; and
all acts necessary to make this Indenture a valid agreement
of the Company have been performed.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires, capitalized terms used herein shall have the
meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions
upon which the Securities are to be authenticated, issued
and delivered and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(b) all terms used herein without definition which
are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to
them therein;
(c) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles in the
United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting
principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles
as are generally accepted in the United States at the
date of such computation or, at the election of the
Company from time to time, at the date of the execution
and delivery of this Indenture; provided, however, that
in determining generally accepted accounting principles
applicable to the Company, the Company shall, to the
extent required, conform to any order, rule or regulation
of any administrative agency, regulatory authority or
other governmental body having jurisdiction over the
Company; and
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or
other subdivision.
Certain terms, used principally in Article Nine, are
defined in that Article.
"Act", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"Additional Interest" has the meaning specified in
Section 312.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such
specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person (other than
the Company or an Affiliate of the Company) authorized by
the Trustee to act on behalf of the Trustee to authenticate
one or more series of Securities.
"Authorized Officer" means the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, or any other duly authorized officer of
the Company.
"Board of Directors" means either the board of
directors of the Company or any committee thereof duly
authorized to act in respect of matters relating to this
Indenture.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or
other location are generally authorized or required by law,
regulation or executive order to remain closed, on a day on
which the Corporate Trust Office of the Trustee is closed
for business, except as may be otherwise specified as
contemplated by Section 301.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, as amended, or, if at
any time after the date of execution and delivery of this
Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act,
then the body, if any, performing such duties at such time.
"Company" means the Person named as the "Company" in
the first paragraph of this Indenture until a successor
Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at
the date of execution and delivery of this Indenture is
located at 101 Barclay Street, 21 West, New York, New York
10286.
"corporation" means a corporation, association,
company, joint stock company or business trust.
"Defaulted Interest" has the meaning specified in
Section 307.
"Dollar" or "$" means a dollar or other equivalent
unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and
private debts.
"Event of Default" with respect to Securities of a
particular series has the meaning specified in Section 801.
"Governmental Authority" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any
department, agency, authority or other instrumentality of
any of the foregoing.
"Government Obligations" means:
(a) direct obligations of, or obligations the
principal of and interest on which are
unconditionally guaranteed by, the United States and
entitled to the benefit of the full faith and credit
thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership
interest in obligations described in clause (a)
above or in any specific interest or principal
payments due in respect thereof; provided, however,
that the custodian of such obligations or specific
interest or principal payments shall be a bank or
trust company (which may include the Trustee or any
Paying Agent) subject to Federal or state
supervision or examination with a combined capital
and surplus of at least $50,000,000; and provided,
further, that except as may be otherwise required by
law, such custodian shall be obligated to pay to the
holders of such certificates, depositary receipts or
other instruments the full amount received by such
custodian in respect of such obligations or specific
payments and shall not be permitted to make any
deduction therefrom.
"Guarantee" means the guarantee agreement delivered
from the Company to a Partnership, for the benefit of the
holders of Preferred Securities issued by such
Partnership.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indenture" means this instrument as originally
executed and delivered and as it may from time to time be
supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms
of a particular series of Securities established as
contemplated by Section 301.
"Interest Payment Date", when used with respect to
any Security, means the Stated Maturity of an installment
of interest on such Security.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security or
an installment of principal becomes due and payable as
provided in such Security or in this Indenture, whether at
the Stated Maturity, by declaration of immediate
payability, upon call for redemption or otherwise.
"Officer's Certificate" means a certificate signed by
an Authorized Officer and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, or other
counsel acceptable to the Trustee.
"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled or
delivered to the Securities Registrar for
cancellation;
(b) Securities deemed to have been paid in
accordance with Section 701; and
(c) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and
delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to
it and the Company that such Securities are held by a
bona fide purchaser or purchasers in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether or not the
Holders of the requisite principal amount of the
Securities Outstanding under this Indenture, or the
Outstanding Securities of any series, have given any
request, demand, authorization, direction, notice,
consent or waiver hereunder or whether or not a quorum is
present at a meeting of Holders of Securities, Securities
owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this
Indenture, or (except for purposes of actions to be taken
by Holders generally under Section 812 or 813) all
Outstanding Securities of each such series, as the case
may be, determined without regard to this provision)
shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or
upon any such determination as to the presence of a
quorum, only Securities which the Trustee knows to be so
owned shall be so disregarded; provided, however, that
Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such
other obligor; and provided, further, that, in the case
of any Security the principal of which is payable from
time to time without presentment or surrender, the
principal amount of such Security that shall be deemed to
be Outstanding at any time for all purposes of this
Indenture shall be the original principal amount thereof
less the aggregate amount of principal thereof
theretofore paid.
"Partnership" means Entergy London Capital, L.P., a
limited partnership created under the laws of the State of
Delaware, or any other Partnership designated pursuant to
Section 301 hereof or any permitted successor under the
Partnership Agreement pertaining to such Partnership .
"Partnership Agreement" means the Amended and
Restated Partnership Agreement, dated as of _______ __,
1997, relating to Entergy London Capital, L.P., or an
Amended and Restated Partnership Agreement relating to a
Partnership designated pursuant to Section 301 hereof, in
each case, among the Company, as General Partner, the
trustees named therein and several holders referred to
therein, in each case, as such agreements may be amended
from time to time.
"Paying Agent" means any Person, including the
Company, authorized by the Company to pay the principal
of, and premium, if any, or interest, if any, on any
Securities on behalf of the Company.
"Person" means any individual, corporation,
partnership, joint venture, trust, limited liability
company, limited liability partnership or unincorporated
organization or any Governmental Authority.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places,
specified as contemplated by Section 301, at which,
subject to Section 602, principal of and premium, if any,
and interest, if any, on the Securities of such series are
payable.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion
of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed (to the extent lawful) to
evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Preferred Securities" means any preferred trust
interests issued by a Partnership or similar securities
issued by permitted successors to such Partnership in
accordance with the Partnership Agreement pertaining to
such Partnership.
"Property Trustee" has the meaning specified in
Section 111.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to
be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series
means the date specified for that purpose as contemplated
by Section 301.
"Responsible Officer", when used with respect to the
Trustee, means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any
securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means all obligations (other
than non-recourse obligations and the indebtedness issued
under this Indenture) of, or guaranteed or assumed by, the
Company for borrowed money, including both senior and
subordinated indebtedness for borrowed money (other than
the Securities), or for the payment of money relating to
any lease which is capitalized on the consolidated balance
sheet of the Company and its subsidiaries in accordance
with generally accepted accounting principles as in effect
from time to time, or evidenced by bonds, debentures,
notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations,
whether existing as of the date of this Indenture or
subsequently incurred by the Company unless, in the case
of any particular indebtedness, amendment, renewal,
extension, modification or refunding, the instrument
creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such
indebtedness, amendment, renewal, extension, modification
or refunding is not superior in right of payment to or is
pari passu with the Securities; provided that the
Company's obligations under the Guarantee shall not be
deemed to be Senior Indebtedness.
"Special Record Date" for the payment of any
Defaulted Interest on the Securities of any series means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any
obligation or any installment of principal thereof or
interest thereon, means the date on which the principal of
such obligation or such installment of principal or
interest is stated to be due and payable (without regard
to any provisions for redemption, prepayment, declaration
of immediate payability, purchase or extension); provided
that, with regard to any installment of interest, Stated
Maturity shall not include any date as to which the
Company shall have elected to extend the interest payment
period or defer the payment of interest in accordance with
Section 311.
"Trust Indenture Act" means, as of any time, the
Trust Indenture Act of 1939, or any successor statute, as
in effect at such time.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor
Trustee shall have become such with respect to one or more
series of Securities pursuant to the applicable provisions
of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities
of that series.
"United States" means the United States of America,
its Territories, its possessions and other areas subject
to its political jurisdiction.
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company
to the Trustee to take any action under any provision of
this Indenture, the Company shall, if requested by the
Trustee, furnish to the Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action
(including any covenants compliance with which constitutes
a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such
application or request as to which the furnishing of such
documents is specifically required by any provision of
this Indenture relating to such particular application or
request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in
this Indenture shall include:
(a) a statement that each Person signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and
scope of the examination or investigation upon which
the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each
such Person, such Person has made such examination
or investigation as is necessary to enable such
Person to express an informed opinion as to whether
or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion
of each such Person, such condition or covenant has
been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required
to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or
covered by only one document, but one such Person may
certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows,
or in the exercise of reasonable care should know, that
the certificate or opinion or representations with
respect to the matters upon which such Officer's
Certificate or opinion are based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers
of the Company stating that the information with respect
to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or
opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever, subsequent to the receipt by the
Trustee of any Board Resolution, Officer's Certificate,
Opinion of Counsel or other document or instrument, a
clerical, typographical or other inadvertent or
unintentional error or omission shall be discovered
therein, a new document or instrument may be substituted
therefor in corrected form with the same force and effect
as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution
and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or
delivered as of the date or dates required with respect
to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary
notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at
the request of the Company which could not have been
taken had the original document or instrument not
contained such error or omission, the action so taken
shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and
effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without
limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or
instrument shall nevertheless be the valid obligations of
the Company entitled to the benefits of this Indenture
equally and ratably with all other Outstanding
Securities, except as aforesaid.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization,
direction, notice, consent, election, waiver or
other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and
evidenced by one or more instruments of
substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing
or, alternatively, may be embodied in and evidenced
by the record of Holders voting in favor thereof,
either in person or by proxies duly appointed in
writing, at any meeting of Holders duly called and
held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and
any such record. Except as herein otherwise
expressly provided, such action shall become
effective when such instrument or instruments or
record or both are delivered to the Trustee and,
where it is hereby expressly required, to the
Company. Such instrument or instruments and any
such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument
or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding
by any Person of a Security, shall be sufficient for
any purpose of this Indenture and (subject to Sec
tion 901) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall
be proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be
proved by the affidavit of a witness of such
execution or by a certificate of a notary public or
other officer authorized by law to take
acknowledgments of deeds, certifying that the
individual signing such instrument or writing
acknowledged to him the execution thereof or may be
proved in any other manner which the Trustee and the
Company deem sufficient. Where such execution is by
a signer acting in a capacity other than his
individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his
authority.
(c) The principal amount and serial numbers of
Securities held by any Person, and the date of
holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization,
direction, notice, consent, election, waiver or
other Act of a Holder shall bind every future Holder
of the same Security and the Holder of every
Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is
made upon such Security.
(e) Until such time as written instruments
shall have been delivered to the Trustee with
respect to the requisite percentage of principal
amount of Outstanding Securities for the action
contemplated by such instruments, any such
instrument executed and delivered by or on behalf of
a Holder may be revoked with respect to any or all
of such Securities by written notice by such Holder
or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series authenticated and
delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by
such Act of Holders. If the Company shall so
determine, new Securities of any series so modified
as to conform, in the opinion of the Trustee and the
Company, to such action may be prepared and executed
by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities
of such series.
(g) If the Company shall solicit from Holders
any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company
may, at its option, by Board Resolution, fix in
advance a record date for the determination of
Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation
to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or
after such record date, but only the Holders of
record at the close of business on the record date
shall be deemed to be Holders for the purposes of
(i) determining whether Holders of the requisite
percentage of principal amount of Outstanding
Securities have authorized or agreed or consented to
such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed
as of the record date or (ii) determining which
Holders may revoke any such Act (notwithstanding
Section 104(e)).
SECTION 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of Holders
or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
the Trustee by any Holder or by the Company, or the
Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and delivered
personally to an officer or other responsible employee of
the addressee, or transmitted by facsimile transmission,
telex or other direct written electronic means to such
telephone number or other electronic communications
address as the parties hereto shall from time to time
designate, or transmitted by registered mail, charges
prepaid, to the applicable address set opposite such
party's name below or to such other address as either
party hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5287
Telecopy: (212) 815-5915
If to the Company, to:
Entergy London Investments UK plc
Templar House
81-87 High Holborn
London WC1V 6NU
England
Attention: Treasurer
Telephone: (504) 576-4308
Telecopy: (504) 576-5000
With a copy to:
Entergy London Investments UK plc
c/o 639 Loyola Avenue
New Orleans, Louisiana 70113
Attention: Legal Department - Corporate and
Securities Law Division
Telephone: (504) 576-2272
Telecopy: (504) 576-4150
Any communication contemplated herein shall be
deemed to have been made, given, furnished and filed if
personally delivered, on the date of delivery, if
transmitted by facsimile transmission or other direct
written electronic means, on the date of transmission,
and if transmitted by registered mail, on the date of
receipt.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein,
where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given, and
shall be deemed given, to Holders if in writing and
mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as
it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular
mail service or by reason of any other cause it shall be
impracticable to give such notice to Holders by mail,
then such notification as shall be made with the approval
of the Trustee shall constitute a sufficient notification
for every purpose hereunder. In any case where notice to
Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of
such notice with respect to other Holders.
Any notice required by this Indenture may be
waived in writing by the Person entitled to receive such
notice, either before or after the event otherwise to be
specified therein, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act.
If any provision of this Indenture limits,
qualifies or conflicts with another provision hereof
which is required or deemed to be included in this
Indenture by, or is otherwise governed by, any of the
provisions of the Trust Indenture Act, such other
provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the
Trust Indenture Act shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings in this
Indenture and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture
by the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in
the Securities shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or the Securities,
express or implied, shall give to any Person, other than
the parties hereto, their successors hereunder, the
Holders and, so long as the notice described in Section
1513 hereof has not been given, the holders of Senior
Indebtedness, any benefit or any legal or equitable
right, remedy or claim under this Indenture; provided,
however, if the general partner of the related
Partnership Agreement (the "General Partner") fails to
enforce such Partnership's rights under this Indenture
with respect to the Securities, a holder of Preferred
Securities may institute a legal proceeding directly
against the Company to enforce such Partnership's rights
with respect to the Securities or this Indenture, to the
fullest extent permitted by law, without first
instituting any legal proceeding against the General
Partner or any other Person.
SECTION 112. Governing Law.
This Indenture and the Securities shall be
governed by and construed in accordance with the laws of
the State of New York, except to the extent that the law
of any other jurisdiction shall be mandatorily
applicable.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or
of the Securities other than a provision in Securities of
any series, or in the Board Resolution or Officer's
Certificate which establishes the terms of the Securities
of such series, which specifically states that such
provision shall apply in lieu of this Section) payment of
interest or principal and premium, if any, need not be
made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of
Payment, except that if such Business Day is in the next
succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with
the same force and effect, and in the same amount, as if
made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, as the case may be, and, if such
payment is made or duly provided for on such Business
Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be,
to such Business Day.
SECTION 114. Consent to Jurisdiction; Appointment of
Agent to Accept Service of Process.
(a) The Company agrees (I) that any legal action,
suit or proceeding against it with respect to its
obligations, liabilities or any other matter arising out
of or in connection with this Indenture may be brought in
any federal or state court in the State of New York,
County of New York, and (ii) to file such consents with
such authorities as may be required to irrevocably
evidence such agreement.
(b) The Company agrees to designate a designee,
appointee and agent in The City of New York satisfactory
to the Trustee for the purpose of consenting and agreeing
to the service of any and all legal process, summons,
notices and documents in any such action, suit or
proceeding against the Company, by serving a copy thereof
upon the relevant agent for service of process referred
to in this Section 114 (whether or not the appointment of
such agent shall for any reason prove to be ineffective
or such agent shall accept or acknowledge such service)
with a copy to the Company as provided in Section 105.
The Company agrees that the failure of any such designee,
appointee and agent to give any notice of such service to
it shall not impair or affect in any way the validity of
such service. Nothing herein shall in any way be deemed
to limit the ability of the Trustee or the holders of the
Securities of any series to serve any such legal process,
summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction
over the Company, or bring actions, suits or proceedings
against it in such other jurisdictions, and in such
manner, as may be permitted by applicable law. The
Company irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection that it
may now or hereafter have to the laying of venue of any
of the aforesaid actions, suits or proceedings arising
out of or in connection with this Indenture brought in
the federal courts located in The City of New York or the
courts of the State of New York located in The City of
New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or
proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 115. Waiver of Immunities. To the extent that
the Company or any of its properties, assets or revenues
may have or may hereafter become entitled to, or have
attributed to it, any right of immunity, on the grounds
of sovereignty or otherwise, from any legal action, suit
or proceeding, from the giving of any relief in any
thereof, from set-off or counterclaim, from the
jurisdiction of any court, from service or process, from
attachment upon or prior to judgment, from attachment in
aid of execution of judgment, or from execution of
judgment, or other legal process of proceeding fro the
giving of any relief or for the enforcement of any
judgment, in any jurisdiction in which proceedings may at
any time be commenced, with respect to its obligations,
liabilities or any other matter under or arising out of
or in connection with this Indenture or the Securities of
any series, the Company hereby irrevocably and
unconditionally waives and agrees not to plead or claim,
any such immunity and consents to such relief and
enforcement. Nothing in this Section 115 shall be deemed
to waive any defense (other than any such immunity)
available to the Company.
SECTION 116. Judgment Currency. The Company agrees to
indemnify the Trustee and the Holders of the Securities
of any series against any loss incurred by such
indemnified party as a result of any judgment or order
being given or made for any amount due under this
Indenture or the Securities of any series and such
judgment or order being expressed and paid in a currency
(the "Judgment Currency") other than United States
dollars and as a result of any variation as between (i)
the rate of exchange at which the United States dollar
amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of
exchange at which any such indemnified party is able to
purchase Untied States dollars, at the business day
nearest the date of judgment, with the amount of the
Judgment Currency actually received by any such
indemnified party. If, alternatively, any such
indemnified party receives a profit as a result of such
currency conversion, it will return any such profits to
the Company (after taking into account any taxes or other
costs arising in connection with such conversion and
repayment). The foregoing indemnity shall constitute a
separate and independent obligation of the Company, and
shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of, or
conversion into, the relevant currency.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The definitive Securities of each series shall
be in substantially the form or forms thereof established
in the indenture supplemental hereto establishing such
series or in a Board Resolution establishing such series,
or in an Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, in each case
with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their
execution of the Securities. If the form or forms of
Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a
Board Resolution, such Board Resolution and Officer's
Certificate, if any, shall be delivered to the Trustee at
or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and
delivery of such Securities.
Unless otherwise specified as contemplated by
Sections 301 or 1201(g), the Securities of each series
shall be issuable in registered form without coupons.
The definitive Securities shall be produced in such
manner as shall be determined by the officers executing
such Securities, as evidenced by their execution thereof.
SECTION 202. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication
shall be in substantially the form set forth below:
This is one of the Securities of
the series designated therein referred to in
the within-mentioned Indenture.
Dated:
_________________________________
as Trustee
By:
___________________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities
which may be authenticated and delivered under this
Indenture is unlimited; provided, however, that all
Securities shall be issued to a Partnership in exchange
for securities of the Company or to evidence loans by a
Partnership of the proceeds of the issuance of Preferred
Securities of such Partnership plus the amount
contributed by the General Partner of such Partnership
from time to time.
The Securities may be issued in one or more
series. Prior to the authentication, issuance and
delivery of Securities of any series there shall be
established by specification in a supplemental indenture
or in a Board Resolution, or in an Officer's Certificate
pursuant to a supplemental indenture or a Board
Resolution:
(a) the title of the Securities of such series
(which shall distinguish the Securities of such
series from Securities of all other series);
(b) any limit upon the aggregate principal
amount of the Securities of such series which may be
authenticated and delivered under this Indenture
(except for Securities authenticated and delivered
upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section
303, are deemed never to have been authenticated and
delivered hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of
such series shall be payable on any Interest Payment
Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities)
are registered at the close of business on the
Regular Record Date for such interest;
(d) the date or dates, if any, on which the
principal of the Securities of such series is
payable or any formulary or other method or other
means by which such date or dates shall be
determined, by reference to an index or other fact
or event ascertainable outside this Indenture or
otherwise (without regard to any provisions for
redemption, prepayment, declaration of immediate
payability, purchase or extension);
(e) the rate or rates at which the Securities
of such series shall bear interest, if any
(including the rate or rates at which overdue
principal shall bear interest, if different from the
rate or rates at which such Securities shall bear
interest prior to Maturity, and, if applicable, the
rate or rates at which overdue premium or interest
shall bear interest, if any), or any formulary or
other method or other means by which such rate or
rates shall be determined, by reference to an index
or other fact or event ascertainable outside this
Indenture or otherwise; the date or dates from which
such interest shall accrue; the Interest Payment
Dates on which such interest shall be payable and
the Regular Record Date, if any, for the interest
payable on such Securities on any Interest Payment
Date; the right of the Company, if any, to extend
the interest payment periods and the duration of any
such extension or to defer the payment of interest
as contemplated by Section 311; and the basis of
computation of interest, if other than as provided
in Section 310;
(f) the place or places at which or methods by
which (1) the principal of and premium, if any, and
interest, if any, on Securities of such series shall
be payable, (2) registration of transfer of
Securities of such series may be effected, (3)
exchanges of Securities of such series may be
effected and (4) notices and demands to or upon the
Company in respect of the Securities of such series
and this Indenture may be served; the Security
Registrar and Paying Agent or Agents for such
series; and if such is the case, and if acceptable
to the Trustee, that the principal of such
Securities shall be payable without presentment or
surrender thereof;
(g) the period or periods within which, or the
date or dates on which, the price or prices at which
and the terms and conditions upon which the
Securities of such series may be redeemed, in whole
or in part, at the option of the Company and any
restrictions on such redemptions, including but not
limited to a restriction on a partial redemption by
the Company of the Securities of any series,
resulting in delisting of such Securities from any
national exchange;
(h) the obligation or obligations, if any, of
the Company to redeem or purchase the Securities of
such series pursuant to any sinking fund or other
analogous mandatory redemption provisions or at the
option of a Holder thereof and the period or periods
within which or the date or dates on which, the
price or prices at which and the terms and
conditions upon which such Securities shall be
redeemed or purchased, in whole or in part, pursuant
to such obligation, and applicable exceptions to the
requirements of Section 404 in the case of mandatory
redemption or redemption at the option of the
Holder;
(i) the denominations in which Securities of
such series shall be issuable if other than
denominations of $25 and any integral multiple
thereof;
(j) the currency or currencies, including com
posite currencies, in which payment of the principal
of and premium, if any, and interest, if any, on the
Securities of such series shall be payable (if other
than in Dollars);
(k) if the principal of or premium, if any, or
interest, if any, on the Securities of such series
are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than
that in which the Securities are stated to be
payable, the period or periods within which and the
terms and conditions upon which, such election may
be made;
(l) if the principal of or premium, if any, or
interest, if any, on the Securities of such series
are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in
securities or other property, the type and amount of
such securities or other property, or the formulary
or other method or other means by which such amount
shall be determined, and the period or periods
within which, and the terms and conditions upon
which, any such election may be made;
(m) if the amount payable in respect of
principal of or premium, if any, or interest, if
any, on the Securities of such series may be
determined with reference to an index or other fact
or event ascertainable outside this Indenture, the
manner in which such amounts shall be determined to
the extent not established pursuant to clause (e) of
this paragraph;
(n) if other than the principal amount
thereof, the portion of the principal amount of
Securities of such series which shall be payable
upon declaration of immediate payability or ac
celeration of the Maturity thereof pursuant to
Section 802;
(o) any Events of Default, in addition to
those specified in Section 801, with respect to the
Securities of such series, and any covenants of the
Company for the benefit of the Holders of the
Securities of such series, in addition to those set
forth in Article Six and whether any such covenants
may be waived pursuant to Section 607;
(p) the terms, if any, pursuant to which the
Securities of such series may be converted into or
exchanged for shares of capital stock or other
securities of the Company or any other Person;
(q) the obligations or instruments, if any,
which shall be considered to be Government
Obligations in respect of the Securities of such
series denominated in a currency other than Dollars
or in a composite currency, and any additional or
alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities
after the satisfaction and discharge thereof as
provided in Section 701;
(r) if the Securities of such series are to be
issued in global form, (i) any limitations on the
rights of the Holder or Holders of such Securities
to transfer or exchange the same or to obtain the
registration of transfer thereof, (ii) any
limitations on the rights of the Holder or Holders
thereof to obtain certificates therefor in
definitive form in lieu of global form and (iii) any
and all other matters incidental to such Securities;
(s) if the Securities of such series are to be
issuable as bearer securities, any and all matters
incidental thereto which are not specifically
addressed in a supplemental indenture as
contemplated by clause (g) of Section 1201;
(t) to the extent not established pursuant to
clause (r) of this paragraph, any limitations on the
rights of the Holders of the Securities of such
Series to transfer or exchange such Securities or to
obtain the registration of transfer thereof; and if
a service charge will be made for the registration
of transfer or exchange of Securities of such series
the amount or terms thereof;
(u) any exceptions to Section 113, or
variation in the definition of Business Day, with
respect to the Securities of such series;
(v) the designation of the Partnership to
which Securities of such series are to be issued;
and
(w) any other terms of the Securities of such
series not inconsistent with the provisions of this
Indenture.
The Securities of each series shall be
subordinated in right of payment to Senior Indebtedness
as provided in Article Fifteen.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the
Securities of each series shall be issuable in
denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and
Dating.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the
Securities shall be executed on behalf of the Company by
an Authorized Officer and may have the corporate seal of
the Company affixed thereto or reproduced thereon
attested by any other Authorized Officer or by the
Secretary or an Assistant Secretary of the Company. The
signature of any or all of these officers on the Secu
rities may be manual or facsimile.
Securities bearing the manual or facsimile
signatures of individuals who were at the time of
execution Authorized Officers or the Secretary or an
Assistant Secretary of the Company shall bind the
Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
The Trustee shall authenticate and deliver
Securities of a series, for original issue, at one time
or from time to time in accordance with the Company Order
referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing
the form or forms and terms of such series, as
provided in Sections 201 and 301;
(b) a Company Order requesting the
authentication and delivery of such Securities and,
to the extent that the terms of such Securities
shall not have been established in an indenture
supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated
by Sections 201 and 301, establishing such terms;
(c) the Securities of such series, executed on
behalf of the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such
Securities have been duly authorized by the
Company and have been established in conformity
with the provisions of this Indenture;
(ii) the terms of such Securities
have been duly authorized by the Company and
have been established in conformity with the
provisions of this Indenture; and
(iii) such Securities, when
authenticated and delivered by the Trustee and
issued and delivered by the Company in the
manner and subject to any conditions specified
in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute
valid and legally binding obligations of the
Company, entitled to the benefits provided by
this Indenture, and enforceable in accordance
with their terms, subject, as to enforcement,
to laws relating to or affecting generally the
enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency
laws and to general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law).
If the form or terms of the Securities of any
series have been established by or pursuant to a Board
Resolution or an Officer's Certificate as permitted by
Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such
Securities pursuant to this Indenture will materially or
adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable
to the Trustee.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities,
each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, no
Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for
herein executed by the Trustee or an Authenticating Agent
by manual signature of an authorized officer thereof, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has
been duly authenticated and made available for delivery
hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if any
Security shall have been authenticated and made available
for delivery hereunder to the Company, or any Person
acting on its behalf, but shall never have been issued
and sold by the Company, and the Company shall deliver
such Security to the Trustee for cancellation as provided
in Section 309 together with a written statement (which
need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company,
for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and made
available for delivery hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. Temporary Securities.
Pending the preparation of definitive
Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which
are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities
in lieu of which they are issued, with such appropriate
insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine,
as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not
recite specific redemption, sinking fund, conversion or
exchange provisions.
Unless otherwise specified as contemplated by
Section 301 with respect to the Securities of any series,
after the preparation of definitive Securities of such
series, the temporary Securities of such series shall be
exchangeable, without charge to the Holder thereof, for
definitive Securities of such series upon surrender of
such temporary Securities at the office or agency of the
Company maintained pursuant to Section 602 in a Place of
Payment for such Securities. Upon such surrender of
temporary Securities, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and
make available for delivery in exchange therefor
definitive Securities of the same series, of authorized
denominations and of like tenor and aggregate principal
amount.
Until exchanged in full as hereinabove
provided, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and
of like tenor authenticated and made available for
delivery hereunder.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept in one of
the offices designated pursuant to Section 602, with
respect to the Securities of each series, a register (the
register kept in accordance with this Section being
referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities
of such series and the registration of transfer thereof.
The Company shall designate one Person to maintain the
Security Register for the Securities of each series, and
such Person is referred to herein, with respect to such
series, as the "Security Registrar." Anything herein to
the contrary notwithstanding, the Company may designate
one of its offices as the office in which the register
with respect to the Securities of one or more series
shall be maintained, and the Company may designate itself
the Security Registrar with respect to one or more of
such series. The Security Register shall be open for
inspection by the Trustee and the Company at all
reasonable times.
Except as otherwise specified as contemplated
by Section 301 with respect to the Securities of any
series, upon surrender for registration of transfer of
any Security of such series at the office or agency of
the Company maintained pursuant to Section 602 in a Place
of Payment for such series, the Company shall execute,
and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or
transferees, one or more new Securities of the same
series, of authorized denominations and of like tenor and
aggregate principal amount.
Except as otherwise specified as contemplated
by Section 301 with respect to the Securities of any
series, any Security of such series may be exchanged at
the option of the Holder, for one or more new Securities
of the same series, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, the
Securities which the Holder making the exchange is
entitled to receive.
All Securities delivered upon any registration
of transfer or exchange of Securities shall be valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as
the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company, the Trustee or the Security
Registrar) be duly endorsed or shall be accompanied by a
written instrument of transfer in form satisfactory to
the Company, the Trustee or the Security Registrar, as
the case may be, duly executed by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise specified as contemplated by
Section 301 with respect to Securities of any series, no
service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in
connection with any registration of transfer or exchange
of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or
to provide for the registration of transfer of or the
exchange of (a) Securities of any series during a period
of 15 days immediately preceding the date notice is to be
given identifying the serial numbers of such series
called for redemption or (b) any Security so selected for
redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange
therefor a new Security of the same series, and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and
the Trustee (a) evidence to their satisfaction of the
ownership of and the destruction, loss or theft of any
Security and (b) such security or indemnity as may be
reasonably required by them to save each of them and any
agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Security, a new
Security of the same series, and of like tenor and
principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under
this Section, the Company may require the payment of a
sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security of any series issued
pursuant to this Section in lieu of any destroyed, lost
or stolen Security shall constitute an original
additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone other than the Holder of
such new Security, and any such new Security shall be
entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of
such series duly issued hereunder.
The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 307. Payment of Interest; Interest Rights
Preserved.
Unless otherwise specified as contemplated by
Section 301 with respect to the Securities of any series,
interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record
Date for such interest.
Subject to Section 311, any interest on any
Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the
related Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in
clause (a) or (b) below:
(a) The Company may elect to make payment of
any Defaulted Interest to the Persons in whose names
the Securities of such series (or their respective
Predecessor Securities) are registered at the close
of business on a date (herein called a "Special
Record Date") for the payment of such Defaulted
Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed
to be paid on each Security of such series and the
date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the
proposed payment, such money when deposited to be
held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the
name and at the expense of the Company, shall
promptly cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at the
address of such Holder as it appears in the Security
Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective
Predecessor Securities) are registered at the close
of business on such Special Record Date and shall be
no longer payable pursuant to the following clause
(b).
(b) The Company may make payment of any
Defaulted Interest on the Securities of any series
in any other lawful manner not inconsistent with the
requirements of any securities exchange on which
such Securities may be listed, and upon such notice
as may be required by such exchange, if, after
notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this
Section and Section 305, each Security delivered under
this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name
such Security is registered as the absolute owner of such
Security for the purpose of receiving payment of
principal of and premium, if any, and (subject to
Sections 305 and 307) interest, if any, on such Security
and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall
be affected by notice to the contrary.
SECTION 309. Cancellation by Security Registrar.
All Securities surrendered for payment, re
demption, registration of transfer or exchange shall, if
surrendered to any Person other than the Security
Registrar, be delivered to the Security Registrar and, if
not theretofore canceled, shall be promptly canceled by
the Security Registrar. The Company may at any time
deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered
hereunder which the Company may have acquired in any
manner whatsoever or which the Company shall not have
issued and sold, and all Securities so delivered shall be
promptly canceled by the Security Registrar. No
Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Security Registrar
shall be disposed of in accordance with a Company Order
delivered to the Security Registrar and the Trustee, and
the Security Registrar shall promptly deliver a
certificate of disposition to the Trustee and the Company
unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned
to it. The Security Registrar shall promptly deliver
evidence of any cancellation of a Security in accordance
with this Section 309 to the Trustee and the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated
by Section 301 for Securities of any series, interest on
the Securities of each series shall be computed on the
basis of a 360-day year consisting of twelve 30-day
months.
SECTION 311. Extension of Interest Payment Period;
Deferral of Interest Payment.
The Company shall have the right at any time, so
long as no Event of Default shall have occurred and be
continuing with respect to the Securities of any series
hereunder, to extend interest payment periods, or to
defer the payment of interest, on all Securities of one
or more series, if so specified as contemplated by
Section 301 with respect to such Securities and upon such
terms as may be specified as contemplated by Section 301
with respect to such Securities.
SECTION 312. Additional Interest.
So long as any Preferred Securities remain
outstanding, if the Partnership which issued such
Preferred Securities shall be required to pay, with
respect to its income derived from the interest payments
on the Securities of any series, any amounts for or on
account of any taxes, duties, assessments or governmental
charges of whatever nature imposed by the United States,
the United Kingdom, or any other taxing authority, then,
in any such case, the Company will pay as interest on
such series such additional interest ("Additional
Interest") as may be necessary in order that the net
amounts received and retained by such Partnership after
the payment of such taxes, duties, assessments or
governmental charges shall result in such Partnership's
having such funds as it would have had in the absence of
the payment of such taxes, duties, assessments or
governmental charges.
SECTION 313. CUSIP Numbers.
The Company in issuing Securities of any series
may use a "CUSIP" number (if then generally in use) and,
if so, the Trustee shall use the CUSIP number in notices
of redemption or exchange as a convenience to the Holders
of the Securities of such series; provided, that any such
notice may state that no such representation is made as
to the correctness or accuracy of the CUSIP number
printed in the notice or in the Securities of such
series, and that reliance may be placed only on the other
identification numbers printed on the Securities of such
series.
ARTICLE FOUR
Redemption of Securities
SECTION 401. Applicability of Article.
Securities of any series which are redeemable
shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section
301 for Securities of such series) in accordance with
this Article.
SECTION 402. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any
Securities shall be evidenced by a Board Resolution or an
Officer's Certificate. The Company shall, at least 45
days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemp
tion Date and of the principal amount of such Securities
to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction
on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant
to an election of the Company which is subject to a
condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officer's
Certificate evidencing compliance with such restriction
or condition.
SECTION 403. Selection of Securities to Be Redeemed.
If less than all the Securities of any series
are to be redeemed, the particular Securities to be
redeemed shall be selected by the Security Registrar from
the Outstanding Securities of such series not previously
called for redemption, by such method as shall be
provided for any particular series, or, in the absence of
any such provision, by such method of random selection as
the Security Registrar shall deem fair and appropriate
and which may, in any case, provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any
integral multiple thereof) of the principal amount of
Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of
such series; provided, however, that if, as indicated in
an Officer's Certificate, the Company shall have offered
to purchase all or any principal amount of the Securities
then Outstanding of any series, and less than all of such
Securities as to which such offer was made shall have
been tendered to the Company for such purchase, the
Security Registrar, if so directed by Company Order,
shall select for redemption all or any principal amount
of such Securities which have not been so tendered.
The Security Registrar shall promptly notify
the Company and the Trustee in writing of the Securities
selected for redemption and, in the case of any
Securities selected to be redeemed in part, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities
which has been or is to be redeemed.
SECTION 404. Notice of Redemption.
Notice of redemption shall be given in the
manner provided in Section 106 to the Holders of the
Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any
series are to be redeemed, the identification of the
particular Securities to be redeemed and the portion
of the principal amount of any Security to be
redeemed in part,
(d) that on the Redemption Date the Redemption
Price, together with accrued interest, if any, to
the Redemption Date, will become due and payable
upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to
accrue on and after said date,
(e) the place or places where such Securities
are to be surrendered for payment of the Redemption
Price and accrued interest, if any, unless it shall
have been specified as contemplated by Section 301
with respect to such Securities that such surrender
shall not be required,
(f) that the redemption is for a sinking or
other fund, if such is the case, and
(g) such other matters as the Company shall
deem desirable or appropriate.
Unless otherwise specified with respect to any
Securities in accordance with Section 301, with respect
to any notice of redemption of Securities at the election
of the Company, unless, upon the giving of such notice,
such Securities shall be deemed to have been paid in
accordance with Section 701, such notice may state that
such redemption shall be conditional upon the receipt by
the Paying Agent or Agents for such Securities, on or
prior to the date fixed for such redemption, of money
sufficient to pay the principal of and premium, if any,
and interest, if any, on such Securities and that if such
money shall not have been so received such notice shall
be of no force or effect and the Company shall not be
required to redeem such Securities. In the event that
such notice of redemption contains such a condition and
such money is not so received, the redemption shall not
be made and within a reasonable time thereafter notice
shall be given, in the manner in which the notice of
redemption was given, that such money was not so received
and such redemption was not required to be made, and the
Paying Agent or Agents for the Securities otherwise to
have been redeemed shall promptly return to the Holders
thereof any of such Securities which had been surrendered
for payment upon such redemption.
Notice of redemption of Securities to be
redeemed at the election of the Company, and any notice
of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the
Company's request, by the Security Registrar in the name
and at the expense of the Company. Notice of mandatory
redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. Securities Payable on Redemption Date.
Notice of redemption having been given as
aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities or portions
thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein
specified, and from and after such date (unless, in the
case of an unconditional notice of redemption, the
Company shall default in the payment of the Redemption
Price and accrued interest, if any) such Securities or
portions thereof, if interest-bearing, shall cease to
bear interest. Upon surrender of any such Security for
redemption in accordance with such notice, such Security
or portion thereof shall be paid by the Company at the
Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such
surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to
such Security; and provided, further, that except as
otherwise specified as contemplated by Section 301 with
respect to such Security, any installment of interest on
any Security the Stated Maturity of which installment is
on or prior to the Redemption Date shall be payable to
the Holder of such Security, or one or more Predecessor
Securities, registered as such at the close of business
on the related Regular Record Date according to the terms
of such Security and subject to the provisions of Section
307.
SECTION 406. Securities Redeemed in Part.
Upon the surrender of any Security which is to
be redeemed only in part at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly
authorized in writing), the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder
of such Security, without service charge, a new Security
or Securities of the same series, of any authorized
denomination requested by such Holder and of like tenor
and in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE FIVE
Sinking Funds
SECTION 501. Applicability of Article.
The provisions of this Article shall be
applicable to any sinking fund for the retirement of the
Securities of any series, except as otherwise specified
as contemplated by Section 301 for Securities of such
series.
The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is
herein referred to as a "mandatory sinking fund payment",
and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein
referred to as an "optional sinking fund payment". If
provided for by the terms of Securities of any series,
the cash amount of any mandatory sinking fund payment may
be subject to reduction as provided in Section 502. Each
sinking fund payment shall be applied to the redemption
of Securities of the series in respect of which it was
made as provided for by the terms of such Securities.
SECTION 502. Satisfaction of Sinking Fund Payments with
Securities.
The Company (a) may deliver to the Trustee
Outstanding Securities (other than any previously called
for redemption) of a series in respect of which a
mandatory sinking fund payment is to be made and (b) may
apply as a credit Securities of such series which have
been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of such mandatory sinking
fund payment; provided, however, that no Securities shall
be applied in satisfaction of a mandatory sinking fund
payment if such Securities shall have been previously so
applied. Securities so applied shall be received and
credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be
reduced accordingly.
SECTION 503. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking
fund payment date for the Securities of any series, the
Company shall deliver to the Trustee an Officer's
Certificate specifying:
(a) the amount of the next succeeding
mandatory sinking fund payment for such series;
(b) the amount, if any, of the optional
sinking fund payment to be made together with such
mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate
sinking fund payment which is to be satisfied by the
payment of cash;
(e) the portion, if any, of such mandatory
sinking fund payment which is to be satisfied by
delivering and crediting Securities of such series
pursuant to Section 502 and stating the basis for
such credit and that such Securities have not
previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so
delivered. If the Company shall not deliver such
Officer's Certificate, the next mandatory sinking
fund payment for such series shall be made entirely
in cash in the amount of the mandatory sinking fund
payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 403
and cause notice of the redemption thereof to be
given in the name of and at the expense of the
Company in the manner provided in Section 404. Such
notice having been duly given, the redemption of
such Securities shall be made upon the terms and in
the manner stated in Sections 405 and 406.
ARTICLE SIX
Covenants
SECTION 601. Payment of Principal, Premium and Interest.
The Company shall pay the principal of and
premium, if any, and interest, if any (including
Additional Interest), on the Securities of each series in
accordance with the terms of such Securities and this
Indenture.
SECTION 602. Maintenance of Office or Agency.
The Company shall maintain in each Place of
Payment for the Securities of each series an office or
agency where payment of such Securities shall be made,
where the registration of transfer or exchange of such
Securities may be effected and where notices and demands
to or upon the Company in respect of such Securities and
this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency
and prompt notice to the Holders of any such change in
the manner specified in Section 106. If at any time the
Company shall fail to maintain any such required office
or agency in respect of Securities of any series, or
shall fail to furnish the Trustee with the address
thereof, payment of such Securities shall be made,
registration of transfer or exchange thereof may be
effected and notices and demands in respect thereof may
be served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent
for all such purposes in any such event.
The Company may also from time to time
designate one or more other offices or agencies with
respect to the Securities of one or more series, for any
or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that,
unless otherwise specified as contemplated by Section 301
with respect to the Securities of such series, no such
designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency
for such purposes in each Place of Payment for such
Securities in accordance with the requirements set forth
above. The Company shall give prompt written notice to
the Trustee, and prompt notice to the Holders in the
manner specified in Section 106, of any such designation
or rescission and of any change in the location of any
such other office or agency.
Anything herein to the contrary
notwithstanding, any office or agency required by this
Section may be maintained at an office of the Company, in
which event the Company shall perform all functions to be
performed at such office or agency.
SECTION 603. Money for Securities Payments to Be Held in
Trust.
If the Company shall at any time act as its own
Paying Agent with respect to the Securities of any
series, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any,
on any of such Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and premium or interest
so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided. The
Company shall promptly notify the Trustee of any failure
by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any,
or interest, if any, on such Securities.
Whenever the Company shall have one or more
Paying Agents for the Securities of any series, it shall,
on or before each due date of the principal of and
premium, if any, and interest, if any, on such
Securities, deposit with such Paying Agents sums
sufficient (without duplication) to pay the principal and
premium or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify
the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for
the Securities of any series, other than the Company or
the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section,
that such Paying Agent shall:
(a) hold all sums held by it for the payment
of the principal of and premium, if any, or
interest, if any, on such Securities in trust for
the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any failure by
the Company (or any other obligor upon such
Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such
Securities; and
(c) at any time during the continuance of any
failure referred to in the preceding paragraph (b),
upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such
Paying Agent and furnish to the Trustee such
information as it possesses regarding the names and
addresses of the Persons entitled to such sums.
The Company may at any time pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent,
such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by the Company or
such Paying Agent and, if so stated in a Company Order
delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for
the payment of the principal of and premium, if any, or
interest, if any, on any Security and remaining unclaimed
for two years after such principal and premium, if any,
or interest has become due and payable shall be paid to
the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon
such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a
Holder of an Outstanding Security, look only to the
Company for payment of the amount so due and payable and
remaining unpaid, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and
all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such
payment to the Company, may at the expense of the Company
cause to be mailed, on one occasion only, notice to such
Holder that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30
days from the date of such mailing, any unclaimed balance
of such money then remaining will be paid to the Company.
SECTION 604. Corporate Existence.
Subject to the rights of the Company under
Article Eleven, the Company shall do or cause to be done
all things necessary to preserve and keep in full force
and effect its corporate existence.
SECTION 605. Maintenance of Properties.
The Company shall cause (or, with respect to
property owned in common with others, make reasonable
effort to cause) all its properties used or useful in the
conduct of its business to be maintained and kept in good
condition, repair and working order and shall cause (or,
with respect to property owned in common with others,
make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the
Company, may be necessary so that the business carried on
in connection therewith may be properly conducted;
provided, however, that nothing in this Section shall
prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any
of its properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its
business.
SECTION 606. Annual Officer's Certificate as to
Compliance.
Not later than June 30 in each year, commencing
June 30, 1998, the Company shall deliver to the Trustee
an Officer's Certificate which need not comply with
Section 102, executed by the principal executive officer,
the principal financial officer or the principal
accounting officer of the Company, as to such officer's
knowledge of the Company's compliance with all conditions
and covenants under this Indenture, such compliance to be
determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 607. Waiver of Certain Covenants.
The Company may omit in any particular instance
to comply with any term, provision or condition set forth
in (a) any covenant or restriction specified with respect
to the Securities of any series, as contemplated by
Section 301 as being subject to waiver pursuant to this
Section 607, if before the time for such compliance the
Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series with respect to
which compliance with such covenant or restriction is to
be omitted, considered as one class, shall, by Act of
such Holders, either waive such compliance in such
instance or generally waive compliance with such term,
provision or condition and (b) Section 604, 605 or
Article Eleven if before the time for such compliance the
Holders of a majority in principal amount of Securities
Outstanding under this Indenture shall, by Act of such
Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or
condition; but, in the case of (a) or (b), no such waiver
shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect
of any such term, provision or condition shall remain in
full force and effect; provided, however, so long as a
Partnership is the beneficial owner of Securities of any
series, such Partnership may not waive compliance or
waive any default in compliance by the Company with any
covenant or other term contained in this Indenture or the
Securities of such series without the approval of the
holders of a majority in aggregate liquidation preference
of the outstanding Preferred Securities issued by such
Partnership affected, obtained as provided in the
Partnership Agreement pertaining to such Partnership.
SECTION 608. Restriction on Payment of Dividends.
Except as may be provided on a supplemental
indenture or an officer's Certificate with respect to a
series of Securities, the Company shall not (a) declare
or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with
respect to, any of the Company's capital stock, or (b)
make any payment of principal of or, interest or premium,
if any, on or repay or repurchase or redeem any debt
securities (including other Securities) that rank pari
passu with or junior in interest to the Securities or
make any guarantee payments with respect to the foregoing
(other than dividends or distributions in common stock of
the Company and payments under the Guarantee relating to
any Preferred Securities) if at such time (i) there shall
have occurred and be continuing a payment default
pursuant to Section 801(a) or 801(b) (whether before or
after expiration of any period of grace) or an Event of
Default hereunder, or (ii) the Company shall be in
default with respect to its payment or other obligations
under the Guarantee relating to such Preferred
Securities, or (iii) the Company shall have elected to
extend any interest payment period or defer the payment
of interest as provided in Section 311, and, in the case
of such an extension, any such period, or any extension
thereof, shall be continuing or, in the case of such a
deferral, payment of all such deferred interest, together
with any interest accrued thereon, should not have been
made.
SECTION 609. Maintenance of Partnership Existence.
So long as Preferred Securities of any series
remain outstanding, the Company shall (a) maintain direct
or indirect ownership of all interests in the Partnership
which issued such Preferred Securities, other than such
Preferred Securities, provided that certain successors
which are permitted pursuant hereto may succeed to the
Company's ownership of such interests, (b) not
voluntarily (to the extent permitted by law) dissolve,
liquidate or wind up such Partnership, except (i) in
connection with a distribution of the Securities to the
holders of the Preferred Securities in liquidation of
such Partnership, or (ii) in connection with certain
mergers, conversions, consolidations of amalgamations
permitted by the Partnership Agreement pertaining to such
Partnership, (c) timely perform in all material respects
all of its duties as General Partner (including the duty
to pay distributions on such Preferred Securities and the
duty to pay all costs and expenses of such Partnership) ,
provided that certain successors which are permitted
pursuant hereto may directly or indirectly succeed to its
duties as General Partner and (d) use reasonable efforts
to cause such Partnership to remain a limited liability
partnership and otherwise continue to be treated as a
partnership for Federal income tax purposes; provided
that the Company may permit such Partnership to
consolidate or merge with or into or convert into another
limited liability partnership or other permitted
successor under the Partnership Agreement pertaining to
such Partnership so long as the Company agrees to comply
with this Section 609 with respect to such successor
limited liability partnership or other permitted
successor.
SECTION 610. Rights of Holders of Preferred Securities.
The Company agrees that, for so long as any
Preferred Securities remain outstanding, its obligations
under this Indenture will also be for the benefit of the
holders from time to time of Preferred Securities, and
the Company acknowledges and agrees that if the General
Partner of a Partnership fails to enforce such
Partnership's rights with respect to the Securities, a
holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce such
Partnership's rights with respect to the Securities, to
the fullest extent permitted by law, without first
instituting any legal proceeding against the General
Partner or any other Person.
ARTICLE SEVEN
Satisfaction and Discharge
SECTION 701. Satisfaction and Discharge of Securities.
Any Security or Securities, or any portion of
the principal amount thereof, shall be deemed to have
been paid for all purposes of this Indenture, and the
entire indebtedness of the Company in respect thereof
shall be deemed to have been satisfied and discharged, if
there shall have been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in
trust:
(a) money in an amount which shall be
sufficient, or
(b) in the case of a deposit made prior to the
Maturity of such Securities or portions thereof,
Government Obligations, which shall not contain
provisions permitting the redemption or other
prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which
when due, without any regard to reinvestment
thereof, will provide moneys which, together with
the money, if any, deposited with or held by the
Trustee or such Paying Agent, shall be sufficient,
or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such
Securities or portions thereof on or prior to Maturity;
provided, however, that in the case of the provision for
payment or redemption of less than all the Securities of
any series, such Securities or portions thereof shall
have been selected by the Security Registrar as provided
herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have
been given or irrevocable authority shall have been given
by the Company to the Trustee to give such notice, under
arrangements satisfactory to the Trustee; and provided,
further, that the Company shall have delivered to the
Trustee and such Paying Agent:
(x) if such deposit shall have been
made prior to the Maturity of such Securities,
a Company Order stating that the money and
Government Obligations deposited in accordance
with this Section shall be held in trust, as
provided in Section 703; and
(y) if Government Obligations shall
have been deposited, an Opinion of Counsel that
the obligations so deposited constitute
Government Obligations and do not contain
provisions permitting the redemption or other
prepayment at the option of the issuer thereof,
and an opinion of an independent public
accountant of nationally recognized standing,
selected by the Company, to the effect that the
requirements set forth in clause (b) above have
been satisfied; and
(z) if such deposit shall have been
made prior to the Maturity of such Securities,
an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's
Certificate, its indebtedness in respect of
such Securities or portions thereof will have
been satisfied and discharged as contemplated
in this Section.
Upon the deposit of money or Government Obli
gations, or both, in accordance with this Section,
together with the documents required by clauses (x), (y)
and (z) above, the Trustee shall, upon receipt of a
Company Request, acknowledge in writing that the Security
or Securities or portions thereof with respect to which
such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been
satisfied and discharged as contemplated in this Section.
In the event that all of the conditions set forth in the
preceding paragraph shall have been satisfied in respect
of any Securities or portions thereof except that, for
any reason, the Officer's Certificate specified in clause
(z), if required, shall not have been delivered, such
Securities or portions thereof shall nevertheless be
deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions
thereof shall nevertheless be no longer entitled to the
benefits of this Indenture or of any of the covenants of
the Company under Article Six (except the covenants
contained in Sections 602 and 603) or any other covenants
made in respect of such Securities or portions thereof as
contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged
prior to Maturity for any other purpose, and the Holders
of such Securities or portions thereof shall continue to
be entitled to look to the Company for payment of the
indebtedness represented thereby; and, upon Company
Request, the Trustee shall acknowledge in writing that
such Securities or portions thereof are deemed to have
been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all
of the Securities of any series is to be provided for in
the manner and with the effect provided in this Section,
the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner
specified by Section 403 for selection for redemption of
less than all the Securities of a series.
In the event that Securities which shall be
deemed to have been paid for purposes of this Indenture,
and, if such is the case, in respect of which the
Company's indebtedness shall have been satisfied and
discharged, all as provided in this Section do not mature
and are not to be redeemed within the 60 day period
commencing with the date of the deposit of moneys or
Government Obligations, as aforesaid, the Company shall,
as promptly as practicable, give a notice, in the same
manner as a notice of redemption with respect to such
Securities, to the Holders of such Securities to the
effect that such deposit has been made and the effect
thereof.
Notwithstanding that any Securities shall be
deemed to have been paid for purposes of this Indenture,
as aforesaid, the obligations of the Company and the
Trustee in respect of such Securities under Sections 304,
305, 306, 404, 503 (as to notice of redemption), 602,
603, 907 and 915 and this Article Seven shall survive.
The Company shall pay, and shall indemnify the
Trustee or any Paying Agent with which Government
Obligations shall have been deposited as provided in this
Section against, any tax, fee or other charge imposed on
or assessed against such Government Obligations or the
principal or interest received in respect of such
Government Obligations, including, but not limited to,
any such tax payable by any entity deemed, for tax
purposes, to have been created as a result of such
deposit.
Anything herein to the contrary
notwithstanding, (a) if, at any time after a Security
would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's
indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section
(without regard to the provisions of this paragraph), the
Trustee or any Paying Agent, as the case may be, shall be
required to return the money or Government Obligations,
or combination thereof, deposited with it as aforesaid to
the Company or its representative under any applicable
Federal or State bankruptcy, insolvency or other similar
law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction
and discharge of the Company's indebtedness in respect
thereof shall retroactively be deemed not to have been
effected, and such Security shall be deemed to remain
Outstanding and (b) any satisfaction and discharge of the
Company's indebtedness in respect of any Security shall
be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease
to be of further effect (except as hereinafter expressly
provided), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding
hereunder; and
(b) the Company has paid or caused to be paid
all other sums payable hereunder by the Company;
provided, however, that if, in accordance with the last
paragraph of Section 701, any Security, previously deemed
to have been paid for purposes of this Indenture, shall
be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to
have been satisfied and discharged, as aforesaid, and to
remain in full force and effect, and the Company shall
execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge
of this Indenture as aforesaid, the obligations of the
Company and the Trustee under Sections 304, 305, 306,
404, 503 (as to notice of redemption), 602, 603, 907 and
915 and this Article Seven shall survive.
Upon satisfaction and discharge of this
Indenture as provided in this Section, the Trustee shall
assign, transfer and turn over to the Company, subject to
the lien provided by Section 907, any and all money,
securities and other property then held by the Trustee
for the benefit of the Holders of the Securities other
than money and Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. Application of Trust Money.
Neither the Government Obligations nor the
money deposited pursuant to Section 701, nor the
principal or interest payments on any such Government
Obligations, shall be withdrawn or used for any purpose
other than, and shall be held in trust for, the payment
of the principal of and premium, if any, and interest, if
any, on the Securities or portions of principal amount
thereof in respect of which such deposit was made, all
subject, however, to the provisions of Section 603;
provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default any cash
received from such principal or interest payments on such
Government Obligations, if not then needed for such pur
pose, shall, to the extent practicable, be invested upon
Company Request and upon receipt of the documents
referred to in clause (y) of Section 701 in Government
Obligations of the type described in clause (b) in the
first paragraph of Section 701 maturing at such times and
in such amounts as shall be sufficient together with any
other moneys and the principal of and interest on any
other Government Obligations then held by the Trustee to
pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such
Securities or portions thereof on and prior to the
Maturity thereof, and interest earned from such
reinvestment shall be paid over to the Company as
received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section
907; and provided, further, that, so long as there shall
not have occurred and be continuing an Event of Default,
any moneys held in accordance with this Section on the
Maturity of all such Securities in excess of the amount
required to pay the principal of and premium, if any, and
interest, if any, then due on such Securities shall be
paid over to the Company free and clear of any trust,
lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if
an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company
pursuant to this Section shall be held until such Event
of Default shall have been waived or cured.
ARTICLE EIGHT
Events of Default; Remedies
SECTION 801. Events of Default.
"Event of Default", wherever used herein with
respect to Securities of any series, means any one or
more of the following events which has occurred and is
continuing:
(a) failure to pay interest, if any, including
any Additional Interest, on any Security of such
series within 60 days after the same becomes due and
payable (whether or not payment is prohibited by the
provisions of Article Fifteen hereof); provided,
however, that a valid extension of the interest
payment period or deferral of interest payment by
the Company as contemplated in Section 311 of this
Indenture shall not constitute a failure to pay
interest for this purpose; or
(b) failure to pay the principal of or
premium, if any, on any Security of such series
(whether or not payment is prohibited by the
provisions of Article Fifteen hereof) when due and
payable; or
(c) failure to perform or breach of any
covenant or warranty of the Company in this
Indenture (other than a covenant or warranty a
default in the performance of which or breach of
which is elsewhere in this Section specifically
dealt with or which has expressly been included in
this Indenture solely for the benefit of one or more
series of Securities other than such series) for a
period of 60 days after there has been given, by
registered or certified mail, to the Company by the
Trustee, or to the Company and the Trustee by the
Holders of at least 33% in principal amount of the
Outstanding Securities of such series, a written
notice specifying such default or breach and
requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder, unless
the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not
less than the principal amount of Securities the
Holders of which gave such notice, as the case may
be, shall agree in writing to an extension of such
period prior to its expiration; provided, however,
that the Trustee, or the Trustee and the Holders of
such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed
to an extension of such period if corrective action
is initiated by the Company within such period and
is being diligently pursued; or
(d) the entry by a court having jurisdiction
in the premises of (1) a decree or order for relief
in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other
similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons
other than the Company seeking reorganization,
arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any
substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any
such decree or order for relief or any such other
decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a
voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company
in a case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by
it to the filing of such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or
of any substantial part of its property, or the
making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its
inability to pay its debts generally as they become
due, or the authorization of such action by the
Board of Directors; or
(f) any other Event of Default specified with
respect to Securities of such series as contemplated
by Section 301.
SECTION 802. Declaration of Immediate Payability;
Rescission and Annulment.
If an Event of Default due to the default in
payment of principal of, or interest on, any series of
Securities or due to the default in the performance or
breach of any other covenant or warranty of the Company
applicable to the Securities of such series but not
applicable to all Outstanding Securities shall have
occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal
of all Securities of such series and interest accrued
thereon to be due and payable immediately (provided that
the payment of principal and interest on such Securities
shall remain subordinated to the extent provided in
Article Fifteen hereof). If the Trustee or the Holders of
not less than 33% in principal amount of the Securities
of such series fail to make such declaration, and the
Preferred Securities issued by the Partnership to which
such series of Securities relate are still outstanding,
then the holders of not less than 33% in aggregate
liquidation preference of such series of Preferred
Securities may make such declaration. If an Event of
Default due to default in the performance of any other of
the covenants or agreements herein applicable to all
Outstanding Securities or an Event of Default specified
in Section 801(d) or (e) shall have occurred and be
continuing, either the Trustee or the Holders of not less
than 33% in principal amount of all Securities then
Outstanding (or Preferred Securities), considered as one
class, and not the Holders of the Securities (or
Preferred Securities), of any one of such series, may
declare the principal of all Securities and interest
accrued thereon to be due and payable immediately
(provided that the payment of principal and interest on
such Securities shall remain subordinated to the extent
provided in Article 15).
At any time after such a declaration of
immediate payability with respect to Securities of any
series shall have been made and before a judgment or
decree for payment of the money due shall have been
obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to
such declaration of immediate payability shall, without
further act, be deemed to have been waived, and such
declaration and its consequences shall, without further
act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited
with the Trustee a sum sufficient to pay
(1) all overdue interest on all
Securities of such series;
(2) the principal of and premium, if
any, on any Securities of such series which
have become due otherwise than by such
declaration of immediate payability and
interest thereon at the rate or rates
prescribed therefor in such Securities;
(3) to the extent that payment of
such interest is lawful, interest upon overdue
interest, if any, at the rate or rates
prescribed therefor in such Securities;
(4) all amounts due to the Trustee
under Section 907;
and
(b) any other Event or Events of Default with
respect to Securities of such series, other than the
non-payment of the principal of Securities of such
series which shall have become due solely by such
declaration of immediate payability, shall have been
cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereon.
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee.
If an Event of Default described in clause (a)
or (b) of Section 801 shall have occurred and be con
tinuing, the Company shall, upon demand of the Trustee,
pay to it, for the benefit of the Holders of the Securi
ties of the series with respect to which such Event of
Default shall have occurred, the whole amount then due
and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent per
mitted by law, interest on premium, if any, and on any
overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to
cover any amounts due to the Trustee under Section 907.
If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name
and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company
or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to
Securities of any series shall have occurred and be
continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate
judicial proceedings as the Trustee shall deem most ef
fectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 804. Trustee May File Proofs of Claim.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of
such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the
payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole
amount of principal, premium, if any, and interest,
if any, owing and unpaid in respect of the
Securities and to file such other papers or
documents as may be necessary or advisable in order
to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section
907) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims
and to distribute the same;
and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the
Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this
Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of
the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for
the ratable benefit of the Holders in respect of which
such judgment has been recovered.
SECTION 806. Application of Money Collected.
Subject to the provisions of Article Fifteen,
any money collected by the Trustee with respect to a
particular series of Securities pursuant to this Article
shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or
premium, if any, or interest, if any, upon presentation
of the Securities in respect of which or for the benefit
of which such money shall have been collected and the
notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
First: To the payment of all amounts due the
Trustee under Section 907;
Second: To the payment of the amounts then due
and unpaid upon the Securities for principal of and
premium, if any, and interest, if any, in respect of
which or for the benefit of which such money has
been collected, ratably, without preference or
priority of any kind, according to the amounts due
and payable on such Securities for principal,
premium, if any, and interest, if any, respectively;
and
Third: To the payment of the remainder, if
any, to the Company or to whomsoever may be lawfully
entitled to receive the same or as a court of
competent jurisdiction may direct.
SECTION 807. Limitation on Suits.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given
written notice to the Trustee of a continuing Event
of Default with respect to the Securities of such
series;
(b) the Holders of a majority in aggregate
principal amount of the Outstanding Securities of
all series in respect of which an Event of Default
shall have occurred and be continuing, considered as
one class, shall have made written request to the
Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders shall have offered
to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity shall
have failed to institute any such proceeding; and
(e) no direction inconsistent with such
written request shall have been given to the Trustee
during such 60-day period by the Holders of a
majority in aggregate principal amount of the
Outstanding Securities of all series in respect of
which an Event of Default shall have occurred and be
continuing, considered as one class;
it being understood and intended that no one or more of
such Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of
any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. Unconditional Right of Holders to Receive
Principal,
Premium and Interest.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and
(subject to Section 307 and 311) interest, if any, on
such Security on the Stated Maturity or Maturities, if
any, expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Any holder of related Preferred Securities shall have the
right to institute suit for the enforcement of any such
payment to such holder with respect to Securities
relating to such Preferred Securities having a principal
amount equal to the aggregate liquidation preference
amount of the related Preferred Securities held by such
holder.
SECTION 809. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding shall have been
discontinued or abandoned for any reason, or shall have
been determined adversely to the Trustee or to such
Holder, then and in every such case, subject to any
determination in such proceeding, the Company, and
Trustee and such Holder shall be restored severally and
respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and
such Holder shall continue as though no such proceeding
had been instituted.
SECTION 810. Rights and Remedies Cumulative.
Except as otherwise provided in the last
paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 811. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 812. Control by Holders of Securities.
If an Event of Default shall have occurred and
be continuing in respect of a series of Securities, the
Holders of a majority in principal amount of the
Outstanding Securities of such series shall have the
right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series;
provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one
series of Securities, the Holders of a majority in
aggregate principal amount of the Outstanding Securities
of all such series, considered as one class, shall have
the right to make such direction, and not the Holders of
the Securities of any one of such series; and provided,
further, that
(a) such direction shall not be in conflict
with any rule of law or with this Indenture, and
could not involve the Trustee in personal liability
in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate; and
(b) the Trustee may take any other action
deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 813. Waiver of Past Defaults.
The Holders of a majority in principal amount
of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series
and its consequences, except a default
(a) in the payment of the principal of or
premium, if any, or interest, if any, on any
Security of such series, or
(b) in respect of a covenant or provision
hereof which under Section 1202 cannot be modified
or amended without the consent of the Holder of each
Outstanding Security of such series affected;
provided, however, that so long as a Partnership is the
beneficial owner of the Securities of any series, such
Partnership may not waive any past default without the
consent of a majority in aggregate liquidation preference
of the outstanding Preferred Securities issued by such
Partnership affected, obtained as provided in the
Partnership Agreement pertaining to such Partnership.
Upon any such waiver, such default shall cease
to exist, and any and all Events of Default arising
therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 814. Undertaking for Costs.
The Company and the Trustee agree, and each
Holder by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any
suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the
Outstanding Securities of all series in respect of which
such suit may be brought, considered as one class, or to
any suit instituted by any Holder for the enforcement of
the payment of the principal of or premium, if any, or
interest, if any, on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 815. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it
may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had
been enacted.
ARTICLE NINE
The Trustee
SECTION 901. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event
of Default with respect to Securities of any series,
(1) the Trustee undertakes to
perform, with respect to Securities of such
series, such duties and only such duties as are
specifically set forth in this Indenture, and
no implied covenants or obligations shall be
read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on
its part, the Trustee may, with respect to
Securities of such series, conclusively rely,
as to the truth of the statements and the
correctness of the opinions expressed therein,
upon certificates or opinions furnished to the
Trustee and conforming to the requirements of
this Indenture; but in the case of any such
certificates or opinions which by any provision
hereof are specifically required to be
furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements
of this Indenture (but need not confirm or
investigate the accuracy of mathematical
calculations or other facts stated therein).
(b) In case an Event of Default with respect
to Securities of any series shall have occurred and
be continuing, the Trustee shall exercise, with
respect to Securities of such series, such of the
rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own
affairs.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this subsection shall not be
construed to limit the effect of subsection (a)
of this Section;
(2) the Trustee shall not be liable
for any error of judgment made in good faith by
a Responsible Officer, unless it shall be
proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable
with respect to any action taken or omitted to
be taken by it in good faith in accordance with
the direction of the Holders of a majority in
principal amount of the Outstanding Securities
of any one or more series, as provided herein,
relating to the time, method and place of
conducting any proceeding for any remedy
available to the Trustee, or exercising any
trust or power conferred upon the Trustee,
under this Indenture with respect to the
Securities of such series; and
(4) no provision of this Indenture
shall require the Trustee to expend or risk its
own funds or otherwise incur any financial
liability in the performance of any of its
duties hereunder, or in the exercise of any of
its rights or powers, if it shall have
reasonable grounds for believing that repayment
of such funds or adequate indemnity against
such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so
provided, every provision of this Indenture relating
to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject
to the provisions of this Section.
SECTION 902. Notice of Defaults.
The Trustee shall give notice of any default
hereunder with respect to the Securities of any series to
the Holders of Securities of such series in the manner
and to the extent required to do so by the Trust
Indenture Act, unless such default shall have been cured
or waived; provided, however, that in the case of any
default of the character specified in Section 801(c), no
such notice to Holders shall be given until at least 75
days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which
is, or after notice or lapse of time, or both, would
become, an Event of Default.
SECTION 903. Certain Rights of Trustee.
Subject to the provisions of Section 901 and to
the applicable provisions of the Trust Indenture Act:
(a) the Trustee may conclusively rely and
shall be protected in acting or refraining from
acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to
be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by
a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an
Officer's Certificate;
(d) the Trustee may consult with counsel of
its selection and the written advice of such counsel
or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it
by this Indenture at the request or direction of any
Holder pursuant to this Indenture, unless such
Holder shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses
and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or
investigation, it shall (subject to applicable legal
requirements) be entitled to examine, during normal
business hours, the books, records and premises of
the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys
and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
and
(h) the Trustee shall not be charged with
knowledge of any Event of Default with respect to
the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer
of the Trustee shall have actual knowledge of the
Event of Default or (2) written notice of such Event
of Default shall have been given to the Trustee by
the Company, any other obligor on such Securities or
by any Holder of such Securities.
SECTION 904. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the
Securities (except the Trustee's certificates of
authentication) shall be taken as the statements of the
Company, and neither the Trustee nor any Authenticating
Agent assumes responsibility for their correctness. The
Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 905. May Hold Securities.
Each of the Trustee, any Authenticating Agent,
any Paying Agent, any Security Registrar or any other
agent of the Company or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it
would have if it were not the Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other
agent.
SECTION 906. Money Held in Trust.
Money held by the Trustee in trust hereunder
need not be segregated from other funds, except to the
extent required by law. The Trustee shall be under no
liability for interest on or investment of any moneys
received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit
of, the Company.
SECTION 907. Compensation and Reimbursement.
The Company shall
(a) pay to the Trustee from time to time
reasonable compensation for all services rendered by
it hereunder (which compensation shall not be
limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided
herein, reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances
reasonably incurred or made by the Trustee in
accordance with any provision of this Indenture
(including the reasonable compensation and the
expenses and disbursements of its agents and
counsel), except to the extent that any such
expense, disbursement or advance may be attributable
to its negligence, wilful misconduct or bad faith;
and
(c) indemnify the Trustee for, and hold it
harmless from and against, any loss, liability or
expense reasonably incurred by it arising out of or
in connection with the acceptance or administration
of the trust or trusts hereunder or the performance
of its duties hereunder, including the reasonable
costs and expenses of defending itself against any
claim or liability in connection with the exercise
or performance of any of its powers or duties
hereunder, except to the extent any such loss,
liability or expense may be attributable to its
negligence, wilful misconduct or bad faith.
As security for the performance of the
obligations of the Company under this Section, the
Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee
as such other than property and funds held in trust under
Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall
include any predecessor Trustee; provided, however, that
the negligence, wilful misconduct or bad faith of any
Trustee hereunder shall not affect the rights of any
other Trustee hereunder.
SECTION 908. Disqualification; Conflicting Interests.
If the Trustee shall have or acquire any
conflicting interest within the meaning of the Trust
Indenture Act, it shall either eliminate such conflicting
interest or resign to the extent, in the manner and with
the effect, and subject to the conditions, provided in
the Trust Indenture Act and this Indenture. For purposes
of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee, in its
capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting
interest arising from its capacity as trustee in respect
of the Securities of any other series. The Partnership
Agreement and the Guarantee Agreement pertaining to each
Partnership shall be deemed to be specifically described
in this Indenture for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 909. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder
which shall be
(a) a corporation organized and doing business
under the laws of the United States, any State or
Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the
Commission by rule, regulation or order upon
application, a corporation or other Person organized
and doing business under the laws of a foreign
government, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and
subject to supervision or examination by authority of
such foreign government or a political subdivision
thereof substantially equivalent to supervision or
examination applicable to United States institutional
trustees,
and, in either case, qualified and eligible under this
Article and the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of such supervising or
examining authority, then for the purposes of this
Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condi
tion so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
SECTION 910. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee
and no appointment of a successor Trustee pursuant to
this Article shall become effective until the
acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of
Section 911.
(b) The Trustee may resign at any time with
respect to the Securities of one or more series by
giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee
required by Section 911 shall not have been delivered
to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to
the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the
Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to
the Trustee and to the Company; provided that so long
as any Preferred Securities remain outstanding, the
Partnership which issued such Preferred Securities
shall not execute any Act to remove the Trustee
without the consent of the holders of a majority in
aggregate liquidation preference of Preferred
Securities issued by such Partnership outstanding,
obtained as provided in the Partnership Agreement
pertaining to such Partnership.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 908 after written request therefor by the
Company or by any Holder who has been a bona fide
Holder for at least six months, or
(2) the Trustee shall cease to be
eligible under Section 909 and shall fail to resign
after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take
charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (x) the Company by a Board
Resolution may remove the Trustee with respect to all
Securities or (y) subject to Section 814, any Holder who
has been a bona fide Holder for at least six months may,
on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause (other
than as contemplated in clause (y) in subsection (d)
of this Section), with respect to the Securities of
one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of
that or those series (it being understood that any
such successor Trustee may be appointed with respect
to the Securities of one or more or all of such
series and that at any time there shall be only one
Trustee with respect to the Securities of any
particular series) and shall comply with the
applicable requirements of Section 911. If, within
one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of
any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of
such appointment in accordance with the applicable
requirements of Section 911, become the successor
Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee ap
pointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have
been so appointed by the Company or the Holders and
accepted appointment in the manner required by
Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six
months may, on behalf of itself and all others
similarly situated, petition any court of competent
jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such
series.
(f) So long as no event which is, or after
notice or lapse of time, or both, would become, an
Event of Default shall have occurred and be
continuing, and except with respect to a Trustee
appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the
Company shall have delivered to the Trustee (i) a
Board Resolution appointing a successor Trustee,
effective as of a date specified therein, and (ii) an
instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee
in accordance with Section 911, the Trustee shall be
deemed to have resigned as contemplated in subsection
(b) of this Section, the successor Trustee shall be
deemed to have been appointed by the Company pursuant
to subsection (e) of this Section and such
appointment shall be deemed to have been accepted as
contemplated in Section 911, all as of such date, and
all other provisions of this Section and Section 911
shall be applicable to such resignation, appointment
and acceptance except to the extent inconsistent with
this subsection (f).
(g) The Company shall give notice of each
resignation and each removal of the Trustee with
respect to the Securities of any series and each
appointment of a successor Trustee with respect to
the Securities of any series by mailing written
notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series
as their names and addresses appear in the Security
Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of
such series and the address of its corporate trust
office.
SECTION 911. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of
all series, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become
effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company
or the successor Trustee, such retiring Trustee
shall, upon payment of all sums owed to it, execute
and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts
of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such
appointment and which (1) shall contain such
provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the
Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if
the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of
that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be
necessary to provide for or facilitate the
administration of the trusts hereunder by more than
one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the
extent provided therein and each such successor
Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to
which the appointment of such successor Trustee
relates; but, on request of the Company or any succes
sor Trustee, such retiring Trustee, upon payment of
all sums owed to it, shall duly assign, transfer and
deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to
which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee,
the Company shall execute any instruments which fully
vest in and confirm to such successor Trustee all
such rights, powers and trusts referred to in
subsection (a) or (b) of this Section, as the case
may be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance
such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of
any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so
authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 913. Preferential Collection of Claims Against
Company.
If the Trustee shall be or become a creditor of
the Company or any other obligor upon the Securities
(other than by reason of a relationship described in
Section 311(b) of the Trust Indenture Act), the Trustee
shall be subject to any and all applicable provisions of
the Trust Indenture Act regarding the collection of
claims against the Company or such other obligor. For
purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any
transaction in which full payment for goods or
securities sold is made within seven days after
delivery of the goods or securities in currency or
in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means
any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise
previously constituting the security, provided the
security is received by the Trustee simultaneously
with the creation of the creditor relationship with
the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 914. Co-trustees and Separate Trustees.
At any time or times, for the purpose of
meeting the legal requirements of any applicable
jurisdiction, the Company and the Trustee shall have
power to appoint, and, upon the written request of the
Trustee or of the Holders of at least 33% in principal
amount of the Securities then Outstanding, the Company
shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons
approved by the Trustee either to act as co-trustee,
jointly with the Trustee, or to act as separate trustee,
in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or
Persons, in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Company
does not join in such appointment within 15 days after
the receipt by it of a request so to do, or if an Event
of Default shall have occurred and be continuing, the
Trustee alone shall have power to make such appointment.
Should any written instrument or instruments
from the Company be required by any co-trustee or
separate trustee so appointed to more fully confirm to
such co-trustee or separate trustee such property, title,
right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the
Company.
Every co-trustee or separate trustee shall, to
the extent permitted by law, but to such extent only, be
appointed subject to the following conditions:
(a) the Securities shall be authenticated and
delivered, and all rights, powers, duties and
obligations hereunder in respect of the custody of
securities, cash and other personal property held
by, or required to be deposited or pledged with, the
Trustee hereunder, shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations
hereby conferred or imposed upon the Trustee in
respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or
performed either by the Trustee or by the Trustee
and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall
be incompetent or unqualified to perform such act,
in which event such rights, powers, duties and
obligations shall be exercised and performed by such
co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument
in writing executed by it, with the concurrence of
the Company, may accept the resignation of or remove
any co-trustee or separate trustee appointed under
this Section, and, if an Event of Default shall have
occurred and be continuing, the Trustee shall have
power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the
concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with
the Trustee in the execution and delivery of all
instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in
this Section;
(d) no co-trustee or separate trustee
hereunder shall be personally liable by reason of
any act or omission of the Trustee, or any other
such trustee hereunder; and
(e) any Act of Holders delivered to the
Trustee shall be deemed to have been delivered to
each such co-trustee and separate trustee.
SECTION 915. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent
or Agents with respect to the Securities of one or more
series, which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued
upon original issuance and upon exchange, registration of
transfer or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to
the Company and shall at all times be a corporation
organized and doing business under the laws of the United
States, any State or territory thereof or the District of
Columbia or the Commonwealth of Puerto Rico, authorized
under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining
authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so pub
lished. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating
Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall
be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time
by giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the agency
of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable
to the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authen
ticating Agent shall be appointed unless eligible under
the provisions of this Section.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section.
The provisions of Sections 308, 904 and 905
shall be applicable to each Authenticating Agent.
If an appointment with respect to the Securities
of one or more series shall be made pursuant to this
Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication
substantially in the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
Dated:
________________________
As Trustee
By______________________
As Authenticating Agent
By______________________
Authorized Signatory
<PAGE>
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not
have an office capable of authenticating Securities upon
original issuance located in a Place of Payment where the
Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so
requested by the Company in writing (which writing need
not comply with Section 102 and need not be accompanied by
an Opinion of Counsel), shall appoint, in accordance with
this Section and in accordance with such procedures as
shall be acceptable to the Trustee, an Authenticating
Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE TEN
Holders' Lists and Reports by Trustee and Company
SECTION 1001. Lists of Holders.
Semiannually, not later than December 31 and
June 30 in each year, commencing December 31, 1997, and at
such other times as the Trustee may request in writing,
the Company shall furnish or cause to be furnished to the
Trustee information as to the names and addresses of the
Holders, and the Trustee shall preserve such information
and similar information received by it in any other
capacity and afford to the Holders access to information
so preserved by it, all to such extent, if any, and in
such manner as shall be required by the Trust Indenture
Act; provided, however, that no such list need be
furnished so long as the Trustee shall be the Security
Registrar.
SECTION 1002. Reports by Trustee and Company.
Not later than June 30 in each year, commencing
June 30, 1998, the Trustee shall transmit to the Holders,
the Commission and each securities exchange upon which any
Securities are listed a report, dated as of the next
preceding April 30, with respect to any events and other
matters described in Section 313(a) of the Trust Indenture
Act, in such manner and to the extent required by the
Trust Indenture Act. The Trustee shall transmit to the
Holders, the Commission and each securities exchange upon
which any Securities are listed and the Company shall file
with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and
furnished to the Trustee) and transmit to the Holders,
such other information, reports and other documents, if
any, at such times and in such manner, as shall be
required by the Trust Indenture Act. The Company shall
notify the Trustee of the listing of any Securities on any
securities exchanges.
To the extent required by the Trust Indenture
Act, the Company shall file with the Trustee the following
documents and reports within 30 days after such documents
or reports (or consolidated documents or reports
containing such documents or reports) are filed with the
Commission:
(a) The Company's annual reports on Form 10-K;
(b) The Company's quarterly reports on Form 10-Q;
(c) The Company's current reports on Form 8-K; and
(d) Any other documents filed with the
Commission which are filed with or incorporated
by reference in the foregoing reports, related
to the Company, and have not previously been
filed with the Trustee.
To the extent that any of the foregoing documents or
reports are consolidated with similar documents or reports
filed by an affiliate, the Company may file such
consolidated document or report with the Trustee in lieu
of the separate document or report.
ARTICLE ELEVEN
Consolidation, Merger, Conveyance or Other Transfer
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge
into any other corporation, or convey or otherwise
transfer or lease its properties and assets substantially
as an entirety to any Person, unless
(a) the corporation formed by such
consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Com
pany substantially as an entirety shall expressly
assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the
principal of and premium, if any, and interest, if
any, on all Outstanding Securities and the
performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(b) immediately after giving effect to such
transaction and treating any indebtedness for
borrowed money which becomes an obligation of the
Company as a result of such transaction as having
been incurred by the Company at the time of such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be
continuing; and
(c) the Company shall have delivered to the
Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation,
merger, conveyance, or other transfer or lease and
such supplemental indenture comply with this Article
and that all conditions precedent herein provided for
relating to such transactions have been complied
with.
SECTION 1102. Successor Corporation Substituted.
Upon any consolidation by the Company with or
merger by the Company into any other corporation or any
conveyance, or other transfer or lease of the properties
and assets of the Company substantially as an entirety in
accordance with Section 1101, the successor corporation
formed by such consolidation or into which the Company is
merged or the Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company
under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants
under this Indenture and the Securities Outstanding
hereunder.
ARTICLE TWELVE
Supplemental Indentures
SECTION 1201. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company
and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another
Person to the Company and the assumption by any such
successor of the covenants of the Company herein and
in the Securities, all as provided in Article Eleven;
or
(b) to add one or more covenants of the Company
or other provisions for the benefit of all Holders or
for the benefit of the Holders of, or to remain in
effect only so long as there shall be Outstanding,
Securities of one or more specified series, or to
surrender any right or power herein conferred upon
the Company; or
(c) to add any additional Events of Default
with respect to all or any series of Securities
Outstanding hereunder; or
(d) to change or eliminate any provision of
this Indenture or to add any new provision to this
Indenture; provided, however, that if such change,
elimination or addition shall adversely affect the
interests of the Holders of Securities of any series
Outstanding on the date of such indenture
supplemental hereto in any material respect, such
change, elimination or addition shall become
effective with respect to such series only pursuant
to the provisions of Section 1202 hereof or when no
Security of such series remains Outstanding; or
(e) to provide collateral security for the
Securities; or
(f) to establish the form or terms of
Securities of any series as contemplated by Sections
201 and 301; or
(g) to provide for the authentication and
delivery of bearer securities and coupons
appertaining thereto representing interest, if any,
thereon and for the procedures for the registration,
exchange and replacement thereof and for the giving
of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all
other matters incidental thereto; or
(h) to evidence and provide for the acceptance
of appointment hereunder by a separate or successor
Trustee or co-trustee with respect to the Securities
of one or more series and to add to or change any of
the provisions of this Indenture as shall be
necessary to provide for or facilitate the administra
tion of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section
911(b); or
(i) to provide for the procedures required to
permit the Company to utilize, at its option, a non-
certificated system of registration for all, or any
series of, the Securities; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if
any, on all or any series of Securities shall be
payable, (2) all or any series of Securities may be
surrendered for registration of transfer, (3) all or
any series of Securities may be surrendered for
exchange and (4) notices and demands to or upon the
Company in respect of all or any series of Securities
and this Indenture may be served; or
(k) to cure any ambiguity, to correct or
supplement any provision herein which may be
defective or inconsistent with any other provision
herein, or to make any other changes to the
provisions hereof or to add other provisions with
respect to matters or questions arising under this
Indenture, provided that such other changes or
additions shall not adversely affect the interests of
the Holders of Securities of any series in any
material respect.
Without limiting the generality of the
foregoing, if the Trust Indenture Act as in effect at the
date of the execution and delivery of this Indenture or at
any time thereafter shall be amended and
(x) if any such amendment shall
require one or more changes to any provisions
hereof or the inclusion herein of any additional
provisions, or shall by operation of law be
deemed to effect such changes or incorporate
such provisions by reference or otherwise, this
Indenture shall be deemed to have been amended
so as to conform to such amendment to the Trust
Indenture Act, and the Company and the Trustee
may, without the consent of any Holders, enter
into an indenture supplemental hereto to effect
or evidence such changes or additional
provisions; or
(y) if any such amendment shall
permit one or more changes to, or the
elimination of, any provisions hereof which, at
the date of the execution and delivery hereof or
at any time thereafter, are required by the
Trust Indenture Act to be contained herein, this
Indenture shall be deemed to have been amended
to effect such changes or elimination, and the
Company and the Trustee may, without the consent
of any Holders, enter into an indenture
supplemental hereto to evidence such amendment
hereof.
SECTION 1202. Supplemental Indentures With Consent of
Holders.
With the consent of the Holders of a majority in
aggregate principal amount of the Securities of all series
then Outstanding under this Indenture, considered as one
class, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or
modifying in any manner the rights of the Holders of
Securities of such series under the Indenture; provided,
however, that if there shall be Securities of more than
one series Outstanding hereunder and if a proposed
supplemental indenture shall directly affect the rights of
the Holders of Securities of one or more, but less than
all, of such series, then the consent only of the Holders
of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal
of, or any installment of principal of or interest on
(except as provided in Section 311 hereof), any
Security, or reduce the principal amount thereof or
the rate of interest thereon (or the amount of any
installment of interest thereon) or change the method
of calculating such rate or reduce any premium
payable upon the redemption thereof, or change the
coin or currency (or other property), in which any
Security or any premium or the interest thereon is
payable, or impair the right to institute suit for
the enforcement of any such payment on or after the
Stated Maturity of any Security (or, in the case of
redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder
of such Security, or
(b) reduce the percentage in principal amount
of the Outstanding Securities of any series (or, if
applicable, in liquidation preference of any series
of Preferred Securities), the consent of the Holders
of which is required for any such supplemental in
denture, or the consent of the Holders of which is
required for any waiver of compliance with any
provision of this Indenture or of any default
hereunder and its consequences, or reduce the
requirements of Section 1304 for quorum or voting,
without, in any such case, the consent of the Holders
of each Outstanding Security of such series, or
(c) modify any of the provisions of this
Section, Section 607 or Section 813 with respect to
the Securities of any series, except to increase the
percentages in principal amount referred to in this
Section or such other Sections or to provide that
other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, how
ever, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this pro
viso, in accordance with the requirements of Sections
911(b) and 1201(h).
Notwithstanding the foregoing, so long as any of the
Preferred Securities remain outstanding, the Trustee may
not consent to a supplemental indenture under this Section
1202 without the prior consent, obtained as provided in a
Partnership Agreement pertaining to a Partnership which
issued such Preferred Securities, of the holders of a
majority in aggregate liquidation preference of all
Preferred Securities issued by such Partnership affected,
considered as one class, or, in the case of changes
described in clauses (a), (b) and (c) above, 100% in
aggregate liquidation preference of all such Preferred
Securities then outstanding which would be affected
thereby, considered as one class. A supplemental
indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of
Securities of any other series.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance
thereof. A waiver by a Holder of such Holder's right to
consent under this Section shall be deemed to be a consent
of such Holder.
SECTION 1203. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 901) shall be fully
protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own
rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 1204. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound
thereby. Any supplemental indenture permitted by this
Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such
restatement shall supersede this Indenture as theretofore
in effect for all purposes.
SECTION 1205. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant
to this Article shall conform to the requirements of the
Trust Indenture Act as then in effect.
SECTION 1206. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and
delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to
any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such
series.
SECTION 1207. Modification Without Supplemental
Indenture.
If the terms of any particular series of
Securities shall have been established in a Board
Resolution or an Officer's Certificate pursuant to a Board
Resolution as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or
the elimination of any of such terms may be effected by
means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and
accepted by, the Trustee; provided, however, that such
supplemental Board Resolution or Officer's Certificate
shall not be accepted by the Trustee or otherwise be
effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately
satisfied. Upon the acceptance thereof by the Trustee,
any such supplemental Board Resolution or Officer's
Certificate shall be deemed to be a "supplemental
indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
Meetings of Holders; Action Without Meeting
SECTION 1301. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of one or
more, or all, series may be called at any time and from
time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1302. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting
of Holders of Securities of one or more, or all,
series for any purpose specified in Section 1301, to
be held at such time and at such place in the Borough
of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the
Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such
meeting and in general terms the action proposed to
be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the
meeting.
(b) If the Trustee shall have been requested to
call a meeting of the Holders of Securities of one or
more, or all, series by the Company or by the Holders
of 33% in aggregate principal amount of all of such
series, considered as one class, for any purpose
specified in Section 1301, by written request setting
forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 21 days after
receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities
of such series in the amount above specified, as the
case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved
by the Company, for such meeting and may call such
meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one
or more, or all, series shall be valid without notice
if the Holders of all Outstanding Securities of such
series are present in person or by proxy and if rep
resentatives of the Company and the Trustee are
present, or if notice is waived in writing before or
after the meeting by the Holders of all Outstanding
Securities of such series, or by such of them as are
not present at the meeting in person or by proxy, and
by the Company and the Trustee.
SECTION 1303. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders
of Securities of one or more, or all, series a Person
shall be (a) a Holder of one or more Outstanding
Securities of such series, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled
to attend any meeting of Holders of Securities of any
series shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. Quorum; Action.
The Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities
of the series with respect to which a meeting shall have
been called as hereinbefore provided, considered as one
class, shall constitute a quorum for a meeting of Holders
of Securities of such series; provided, however, that if
any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders
of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Securities of such
series, considered as one class, the Persons entitled to
vote such specified percentage in principal amount of the
Outstanding Securities of such series, considered as one
class, shall constitute a quorum. In the absence of a
quorum within one hour of the time appointed for any such
meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In
any other case the meeting may be adjourned for such
period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for such period as may be
determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided
by Section 1305(e), notice of the reconvening of any
meeting adjourned for more than 30 days shall be given as
provided in Section 1302(a) not less than 10 days prior to
the date on which the meeting is scheduled to be recon
vened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of
such series which shall constitute a quorum.
Except as limited by Section 1202, any
resolution presented to a meeting or adjourned meeting
duly reconvened at which a quorum is present as aforesaid
may be adopted only by the affirmative vote of the Holders
of a majority in aggregate principal amount of the
Outstanding Securities of the series with respect to which
such meeting shall have been called, considered as one
class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture
expressly provides may be taken by the Holders of a
specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such
series, considered as one class, may be adopted at a
meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of such
series, considered as one class.
Any resolution passed or decision taken at any
meeting of Holders of Securities duly held in accordance
with this Section shall be binding on all the Holders of
Securities of the series with respect to which such
meeting shall have been held, whether or not present or
represented at the meeting.
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights;
Conduct and Adjournment of Meetings.
(a) Attendance at meetings of Holders of
Securities may be in person or by proxy; and, to the
extent permitted by law, any such proxy shall remain
in effect and be binding upon any future Holder of
the Securities with respect to which it was given
unless and until specifically revoked by the Holder
or future Holder (except as provided in Section
104(g)), of such Securities before being voted.
(b) Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting
of Holders of Securities in regard to proof of the
holding of such Securities and of the appointment of
proxies and in regard to the appointment and duties
of inspectors of votes, the submission and
examination of proxies, certificates and other
evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall
deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of
Securities shall be proved in the manner specified in
Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104. Such
regulations may provide that written instruments
appointing proxies, regular on their face, may be
presumed valid and genuine without the proof
specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in
writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the
Company or by Holders as provided in Section 1302(b),
in which case the Company or the Holders of
Securities of the series calling the meeting, as the
case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of all
series represented at the meeting, considered as one
class.
(d) At any meeting each Holder or proxy shall
be entitled to one vote for each $1 principal amount
of Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a
Security or proxy.
(e) Any meeting duly called pursuant to Section
1302 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a
majority in aggregate principal amount of the
Outstanding Securities of all series represented at
the meeting, considered as one class; and the meeting
may be held as so adjourned without further notice.
SECTION 1306. Counting Votes and Recording Action of
Meetings.
The vote upon any resolution submitted to any
meeting of Holders shall be by written ballots on which
shall be subscribed the signatures of the Holders or of
their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Securities, of the
series with respect to which the meeting shall have been
called, held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with
the secretary of the meeting their verified written
reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Holders shall be prepared
by the secretary of the meeting and there shall be
attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided
in Section 1302 and, if applicable, Section 1304. Each
copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one
such copy shall be delivered to the Company, and another
to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
SECTION 1307. Action Without Meeting.
In lieu of a vote of Holders at a meeting as
hereinbefore contemplated in this Article, any request, de
mand, authorization, direction, notice, consent, waiver or
other action may be made, given or taken by Holders by
written instruments as provided in Section 104.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Dire
ctors
SECTION 1401. Liability Solely Corporate.
No recourse shall be had for the payment of the
principal of or premium, if any, or interest, if any, on
any Securities, or any part thereof, or for any claim
based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation,
covenant or agreement under this Indenture, against any
incorporator, stockholder, officer or director, as such,
past, present or future of the Company or of any
predecessor or successor corporation (either directly or
through the Company or a predecessor or successor
corporation), whether by virtue of any constitutional pro
vision, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly
agreed and understood that this Indenture and all the
Securities are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be
incurred by, any incorporator, stockholder, officer or
director, past, present or future, of the Company or of
any predecessor or successor corporation, either directly
or indirectly through the Company or any predecessor or
successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the
obligations, covenants or agreements contained in this
Indenture or in any of the Securities or to be implied
herefrom or therefrom, and that any such personal
liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the
Securities.
ARTICLE FIFTEEN
Subordination of Securities
SECTION 1501. Securities Subordinate to Senior
Indebtedness.
The Company, for itself, its successors and
assigns, covenants and agrees, and each Holder of the
Securities of each series, by its acceptance thereof,
likewise covenants and agrees, that the payment of the
principal of and premium, if any, and interest, if any, on
each and all of the Securities is hereby expressly
subordinated and subject to the extent and in the manner
set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.
Each Holder of the Securities of each series, by
its acceptance thereof, authorizes and directs the Trustee
on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in
this Article, and appoints the Trustee its attorney-in-
fact for any and all such purposes.
SECTION 1502. Payment Over of Proceeds of Securities.
In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation,
reorganization or other similar proceedings in respect of
the Company or a substantial part of its property, or of
any proceedings for liquidation, dissolution or other
winding up of the Company, whether or not involving
insolvency or bankruptcy, or (b) subject to the provisions
of Section 1503, that (i) a default shall have occurred
with respect to the payment of principal of or interest on
or other monetary amounts due and payable on any Senior
Indebtedness, or (ii) there shall have occurred a default
(other than a default in the payment of principal or
interest or other monetary amounts due and payable) in
respect of any Senior Indebtedness, as defined therein or
in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the
maturity thereof (with notice or lapse of time, or both),
and such default shall have continued beyond the period of
grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default
shall not have been cured or waived or shall not have
ceased to exist, or (c) that the principal of and accrued
interest on the Securities of any series shall have been
declared due and payable pursuant to Section 801 and such
declaration shall not have been rescinded and annulled as
provided in Section 802, then:
(1) the holders of all Senior
Indebtedness shall first be entitled to
receive payment of the full amount due
thereon, or provision shall be made for
such payment in money or money's worth,
before the Holders of any of the Securities
are entitled to receive a payment on
account of the principal of or interest on
the indebtedness evidenced by the
Securities, including, without limitation,
any payments made pursuant to Articles Four
and Five;
(2) any payment by, or distribution
of assets of, the Company of any kind or
character, whether in cash, property or
securities, to which any Holder or the
Trustee would be entitled except for the
provisions of this Article, shall be paid
or delivered by the person making such
payment or distribution, whether a trustee
in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the
holders of such Senior Indebtedness or
their representative or representatives or
to the trustee or trustees under any
indenture under which any instruments
evidencing any of such Senior Indebtedness
may have been issued, ratably according to
the aggregate amounts remaining unpaid on
account of such Senior Indebtedness held or
represented by each, to the extent
necessary to make payment in full of all
Senior Indebtedness remaining unpaid after
giving effect to any concurrent payment or
distribution (or provision therefor) to the
holders of such Senior Indebtedness, before
any payment or distribution is made to the
Holders of the indebtedness evidenced by
the Securities or to the Trustee under this
Indenture; and
(3) in the event that,
notwithstanding the foregoing, any payment
by, or distribution of assets of, the
Company of any kind or character, whether
in cash, property or securities, in respect
of principal of or interest on the
Securities or in connection with any
repurchase by the Company of the
Securities, shall be received by the
Trustee or any Holder before all Senior
Indebtedness is paid in full, or provision
is made for such payment in money or
money's worth, such payment or distribution
in respect of principal of or interest on
the Securities or in connection with any
repurchase by the Company of the Securities
shall be paid over to the holders of such
Senior Indebtedness or their representative
or representatives or to the trustee or
trustees under any indenture under which
any instruments evidencing any such Senior
Indebtedness may have been issued, ratably
as aforesaid, for application to the
payment of all Senior Indebtedness
remaining unpaid until all such Senior
Indebtedness shall have been paid in full,
after giving effect to any concurrent
payment or distribution (or provision
therefor) to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, at any time after
the 123rd day following the date of deposit of cash or
Government Obligations pursuant to Section 701 (provided
all conditions set out in such Section shall have been
satisfied), the funds so deposited and any interest
thereon will not be subject to any rights of holders of
Senior Indebtedness including, without limitation, those
arising under this Article Fifteen; provided that no event
described in clauses (d) and (e) of Section 801 with
respect to the Company has occurred during such 123-day
period.
For purposes of this Article only, the words
"cash, property or securities" shall not be deemed to
include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other
corporation provided for by a plan or reorganization or
readjustment which are subordinate in right of payment to
all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in
this Article. The consolidation of the Company with, or
the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article Eleven
hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this
Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article Eleven hereof.
Nothing in Section 1501 or in this Section 1502 shall
apply to claims of, or payments to, the Trustee under or
pursuant to Section 907.
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness.
Any failure by the Company to make any payment
on or perform any other obligation in respect of Senior
Indebtedness, other than any indebtedness incurred by the
Company or assumed or guaranteed, directly or indirectly,
by the Company for money borrowed (or any deferral,
renewal, extension or refunding thereof) or any other
obligation as to which the provisions of this Section
shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or
obligation, shall not be deemed a default under clause (b)
of Section 1502 if (i) the Company shall be disputing its
obligation to make such payment or perform such obligation
and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which
is in full force and effect and is not subject to further
review, including a judgment that has become final by
reason of the expiration of the time within which a party
may seek further appeal or review, or (B) in the event
that a judgment that is subject to further review or
appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review and a
stay or execution shall have been obtained pending such
appeal or review.
SECTION 1504. Subrogation.
Senior Indebtedness shall not be deemed to have
been paid in full unless the holders thereof shall have
received cash (or securities or other property
satisfactory to such holders) in full payment of such
Senior Indebtedness then outstanding. Subject to the
prior payment in full of all Senior Indebtedness, the
rights of the Holders of the Securities shall be
subrogated to the rights of the holders of Senior
Indebtedness to receive any further payments or
distributions of cash, property or securities of the
Company applicable to the holders of the Senior
Indebtedness until all amounts owing on the Securities
shall be paid in full; and such payments or distributions
of cash, property or securities received by the Holders of
the Securities, by reason of such subrogation, which
otherwise would be paid or distributed to the holders of
such Senior Indebtedness shall, as between the Company,
its creditors other than the holders of Senior
Indebtedness, and the Holders, be deemed to be a payment
by the Company to or on account of Senior Indebtedness, it
being understood that the provisions of this Article are
and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
SECTION 1505. Obligation of the Company Unconditional.
Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other
than the holders of Senior Indebtedness and the Holders,
the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and
interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the
holders of Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of
any such remedy.
Upon any payment or distribution of assets or
securities of the Company referred to in this Article, the
Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in
which such dissolution, winding up, liquidation or
reorganization proceedings are pending for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon, and all other facts pertinent thereto or to this
Article.
SECTION 1506. Priority of Senior Indebtedness Upon
Maturity.
Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise,
all matured principal of Senior Indebtedness and interest
and premium, if any, thereon shall first be paid in full
before any payment of principal or premium, if any, or
interest, if any, is made upon the Securities or before
any Securities can be acquired by the Company or any
sinking fund payment is made with respect to the
Securities (except that required sinking fund payments may
be reduced by Securities acquired before such maturity of
such Senior Indebtedness).
SECTION 1507. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all rights set
forth in this Article with respect to any Senior
Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness. Nothing in this
Article shall deprive the Trustee of any of its rights as
such holder.
SECTION 1508. Notice to Trustee to Effectuate
Subordination.
Notwithstanding the provisions of this Article
or any other provision of the Indenture, the Trustee shall
not be charged with knowledge of the existence of any
facts which would prohibit the making of any payment of
moneys to or by the Trustee unless and until the Trustee
shall have received written notice thereof from the
Company, from a Holder or from a holder of any Senior
Indebtedness or from any representative or representatives
of such holder and, prior to the receipt of any such
written notice, the Trustee shall be entitled, subject to
Section 901, in all respects to assume that no such facts
exist; provided, however, that, if prior to the fifth
Business Day preceding the date upon which by the terms
hereof any such moneys may become payable for any purpose,
or in the event of the execution of an instrument pursuant
to Section 702 acknowledging satisfaction and discharge of
this Indenture, then if prior to the second Business Day
preceding the date of such execution, the Trustee shall
not have received with respect to such moneys the notice
provided for in this Section, then, anything herein
contained to the contrary notwithstanding, the Trustee
may, in its discretion, receive such moneys and/or apply
the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary, which
may be received by it on or after such date; provided,
however, that no such application shall affect the
obligations under this Article of the persons receiving
such moneys from the Trustee.
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness.
The holders of Senior Indebtedness may, without
affecting in any manner the subordination of the payment
of the principal of and premium, if any, and interest, if
any, on the Securities, at any time or from time to time
and in their absolute discretion, agree with the Company
to change the manner, place or terms of payment, change or
extend the time of payment of, or renew or alter, any
Senior Indebtedness, or amend or supplement any instrument
pursuant to which any Senior Indebtedness is issued, or
exercise or refrain from exercising any other of their
rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without
notice to or assent from the Holders or the Trustee.
SECTION 1510. Trustee Has No Fiduciary Duty to Holders of
Senior Indebtedness.
With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and objectives as are
specifically set forth in this Indenture, and no implied
covenants or obligations with respect to the holders of
Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior
Indebtedness, and shall not be liable to any such holders
if it shall mistakenly pay over or deliver to the Holders
or the Company or any other Person, money or assets to
which any holders of Senior Indebtedness shall be entitled
by virtue of this Article or otherwise.
SECTION 1511. Paying Agents Other Than the Trustee.
In case at any time any Paying Agent other than
the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in
this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the
Trustee; provided, however, that Sections 1507, 1508 and
1510 shall not apply to the Company if it acts as Paying
Agent.
SECTION 1512. Rights of Holders of Senior Indebtedness
Not Impaired.
No right of any present or future holder of
Senior Indebtedness to enforce the subordination herein
shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or
by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of
any knowledge thereof any such holder may have or be
otherwise charged with.
SECTION 1513. Effect of Subordination Provisions .
Notwithstanding anything contained herein to the
contrary, all the provisions of this Indenture shall be
subject to the provisions of this Article, so far as the
same may be applicable thereto.
_________________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to
be an original, but all such counterparts shall together
constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ENTERGY LONDON INVESTMENTS UK plc
By:______________________________
ATTEST:
____________________________
Assistant Secretary
<PAGE>
THE BANK OF NEW YORK, Trustee
By:______________________________
Vice President
ATTEST:
_______________________________
Assistant Treasurer
<PAGE>
STATE OF LOUISIANA )
) ss.:
PARISH OF ORLEANS )
On the ___ day of _______, 1997, before me
personally came __________ __________, to me known, who,
being by me duly sworn, did depose and say that he is the
____________________________ of Entergy London Investments
UK plc, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like
authority.
__________________________________
Notary Public
Parish of Orleans, State of Louisiana
My Commission is _______________
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of _______, 1997, before me
personally came, _________ ______, to me known, who, being
by me duly sworn, did depose and say that he is a Vice
President of The Bank of New York, one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed by authority of the Board of Directors of
said corporation, and that he signed his name thereto by
like authority.
Notary Public, State of New York
No. __________
Qualified in __________ County
Certificate Filed in ________ County
Commission Expires ____________
<PAGE>
Exhibit 4.07
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
ENTERGY LONDON CAPITAL, L.P.
<PAGE>
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
ENTERGY LONDON CAPITAL, L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of
Entergy London Capital, L.P., a Delaware limited partnership (the
"Partnership"), dated as of ________ __, 1997, among Entergy
London Investments UK plc (formerly known as Entergy Power UK
plc), a public limited company incorporated under the laws of
England and Wales, in its capacity as the general partner (the
"General Partner"), William J. Regan, Jr., as the initial limited
partner (the "Initial Limited Partner"), and such other Persons
(as defined herein) who become Partners (as defined herein) as
provided herein.
WHEREAS, the General Partner and the Initial Limited
Partner entered into an Agreement of Limited Partnership, dated
as of August 4, 1997 (as amended, the "Original Limited
Partnership Agreement");
WHEREAS, the Certificate of Limited Partnership of the
Partnership was filed with the Office of the Secretary of State
of the State of Delaware on August 4, 1997, and was later amended
by a Certificate of Amendment filed with the Office of the
Secretary of State of the State of Delaware on September ____,
1997; and
WHEREAS, the Partners desire to continue the
Partnership under the Act (as defined herein) and to amend and
restate the Original Limited Partnership Agreement in its
entirety.
NOW, THEREFORE, in consideration of the mutual
covenants, rights and obligations set forth herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree to amend
and restate the Original Limited Partnership Agreement as
follows:
ARTICLE I
DEFINED TERMS
Section I.1 Definitions. Unless the context otherwise
requires the terms defined in this Article I shall, for the
purposes of this Agreement, have the meanings herein specified.
"Act" means the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time.
"Action" has the meaning set forth in Section 6.1(b).
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled or under
direct or indirect common control with such specified Person. As
used in this definition, the term "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" means this Amended and Restated Limited
Partnership Agreement, as amended, modified, supplemented or
restated from time to time in accordance with its terms.
"Business Day" means any day other than a Saturday or
Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
remain closed, or a day on which the corporate trust office of
the Debenture Trustee is closed for business.
"Capital Account" has the meaning set forth in Section
3.3.
"Certificate" means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State
of the State of Delaware on August 4, 1997, as it may be amended
and/or restated from time to time.
"Clearing Agency" means, with respect to a particular
series of Preferred Securities, an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
designated in accordance with the provisions of Article VI to act
as depository for that series and in whose name (or nominee's
name) shall be registered one or more global Preferred Securities
evidenced by Preferred Certificates and which shall undertake to
effect book-entry transfers and pledges of beneficial interests
in such Preferred Securities.
"Closing Date" means, with respect to the Preferred
Securities of any series, the date of original issuance of such
Preferred Securities.
"Code" means the United States Internal Revenue Code of
1986, as amended, or any corresponding federal tax statute
enacted after the date of this Agreement. A reference to a
specific section () of the Code refers not only to such specific
section but also to any corresponding provision of any federal
tax statute enacted after the date of this Agreement, as such
specific section or corresponding provision is in effect on the
date of application of the provisions of this Agreement
containing such reference.
"Covered Person" means any Partner, any Affiliate of
any Partner and any officer, director, shareholder, partner,
employee, representative or agent of any Partner or their
respective Affiliates, or any employee or agent of the
Partnership or its Affiliates.
"Debenture Trustee" means the entity serving as the
trustee under the Indenture.
"Debentures" means a particular series of junior
subordinated deferrable interest debentures of Entergy London
Investments issued to the Partnership from time to time in
connection with the issuance and sale by the Partnership of a
related series of Preferred Securities.
"Definitive Preferred Certificates" shall refer to the
Preferred Certificates distributed in the circumstances described
in Section 10.5.
"Dividends" means the distributions from the
Partnership with respect to the Preferred Securities of a
particular series, accumulating and payable in accordance with
their terms.
"Entergy London Investments" means Entergy London
Investments UK plc (formerly known as Entergy Power UK plc), a
public limited company incorporated under the laws of England and
Wales.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Fiscal Period" means each calendar quarter.
"Fiscal Year" means (i) the period commencing upon the
formation of the Partnership and ending on December 31, 1997, and
(ii) any subsequent twelve (12) month period commencing on
January 1 and ending December 31. For United States federal
income tax reporting purposes the Fiscal Year of the Partnership
shall be the calendar year.
"General Partner" means Entergy London Investments, in
its capacity as general partner of the Partnership, its permitted
successors, or any successor general partner in the Partnership
admitted as such pursuant to the applicable provisions of this
Agreement.
"Guarantee" means the Guarantee Agreement dated as of
_______ __, 1997, between Entergy London Investments and the
Guarantee Trustee, as the same may be amended, modified,
supplemented or restated from time to time in accordance with its
terms, which was executed and delivered by Entergy London
Investments for the benefit of the Holders, and any additional
Guarantee Agreements entered into by Entergy London Investments
for the benefit of the Holders.
"Guarantee Trustee" means the entity serving as the
trustee under the Guarantee.
"Holder" means a Limited Partner in whose name
Preferred Securities evidenced by Preferred Certificates are
registered on the books and records of the Partnership; provided,
however, that in determining whether the Holders of the requisite
percentage of Preferred Securities of a particular series have
given any request, notice, consent or waiver hereunder, "Holder"
shall not include the General Partner or any Affiliate thereof.
"Indemnified Person" means the General Partner, any
Affiliate of the General Partner, any officer, director,
shareholder, partner, employee, representative or agent of the
General Partner and any employee or agent of the Partnership
designated as such by the General Partner, or its Affiliates.
"Indenture" means the Indenture for Unsecured
Subordinated Debt Securities relating to Preferred Securities,
dated as of ____________ ____, 1997, between Entergy London
Investments and the Trustee, as the same may be amended and
supplemented from time to time, pursuant to which the Debentures
are issued.
"Initial Limited Partner" means William J. Regan, Jr.,
in his capacity as limited partner of the Partnership.
"Interest" means the entire ownership interest of a
Partner in the Partnership at any particular time, including,
without limitation, its interest in the capital, profits, losses
and distributions of the Partnership.
"Investment Company Act" means the United States
Investment Company Act of 1940, as amended.
"Investment Company Event" means the occurrence of a
change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (an "Investment
Company Act Change") to the effect that the Partnership is or
will be considered an "investment company" that is required to be
registered under the Investment Company Act, which Investment
Company Act Change becomes effective on or after __________,
1997.
"Limited Partner" means the Initial Limited Partner or
any Person who is admitted to the Partnership as a Limited
Partner pursuant to the terms of this Agreement, but does not
include any Person that has transferred to another Person in
accordance with Section 10.2 all Preferred Securities of which it
is the registered Holder.
"Liquidation Distribution" has the meaning set forth in
the applicable Action relating to a series of Preferred
Securities as described in Section 6.1(b)(v).
"Liquidation Preference" means the stated liquidation
preference that would be paid on redemption or maturity.
"Liquidator" has the meaning set forth in Section
11.3.
"Majority or other stated Percentage in Liquidation
Preference" means Holder(s) of a series of Preferred Securities
or, as the context may require, Holder(s) of more than one series
of Preferred Securities voting as a class, who are the registered
owners of Preferred Securities whose Liquidation Preference
(including the stated liquidation preference that would be paid
on redemption or maturity plus, if applicable to such series,
accumulated and unpaid Dividends, whether or not declared, to the
date upon which the voting percentages are determined) represents
more than 50% or, as the case may be, such other percentage of
the Liquidation Preference of all Preferred Securities of such
series or, as applicable, multiple series.
"Original Limited Partnership Agreement" has the
meaning set forth in the recitals to this Agreement.
"Partners" means the General Partner and the Limited
Partners, collectively, where no distinction is required by the
context in which the term is used.
"Partnership" means the limited partnership formed
under the Act pursuant to the Original Limited Partnership
Agreement upon filing of the Certificate, and continued pursuant
to this Agreement, its permitted successors, or any successor
partnership created pursuant to the applicable provisions of this
Agreement.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
"Power of Attorney" means the Power of Attorney granted
pursuant to Section 13.2.
"Preferred Certificate" means a certificate evidencing
Preferred Securities, substantially in the form attached hereto
as Annex A or in such other form as may be set forth in the
Action establishing a particular series of Preferred Securities.
"Preferred Securities" has the meaning set forth in
Section 6.1(b).
"Purchase Price" for any Preferred Security means the
amount paid per such Preferred Security in the initial sale by
the Partnership of such Preferred Security.
"Securities Act" means the United States Securities Act
of 1933, as amended.
"Series A Preferred Securities" has the meaning set
forth in Section 6.2(a).
"Special Event" means the occurrence of a Tax Event or
an Investment Company Act Event.
"Tax Event" means, with respect to Preferred Securities
of a particular series, the receipt by the Partnership or Entergy
London Investments of an opinion of counsel experienced in such
matters to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws
(or any regulations thereunder) of the United States, the United
Kingdom or any political subdivision or taxing authority thereof
or therein affecting taxation, or as a result of any official
administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or
after __________ __, 1997, there is more than an insubstantial
risk that (i) the Partnership is, or will be within 90 days of
such date, subject to United States federal income or United
Kingdom income tax, with respect to income accrued or received on
the related series of Debentures, (ii) interest payable by
Entergy London Investments on such Debentures is treated as a
distribution within the meaning of Section 209 of the Income and
Corporation Taxes Act 1988 of the United Kingdom or in any other
manner is not, or within 90 days of such date will not be,
deductible by Entergy London Investments, in whole or in part,
for United Kingdom corporation tax purposes, or (iii) the
Partnership is, or will be within 90 days of such date, subject
to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Tax Matters Partner" means the General Partner
designated as such in Section 9.10 hereof.
"Transfer Agent" means the transfer agent, if any,
designated by the General Partner with respect to a particular
series of Preferred Securities and in accordance with the terms
thereof and its successors and assigns.
"Treasury Regulations" means the income tax
regulations, including temporary regulations, promulgated under
the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
Section I.2 Headings. The headings and subheadings in
this Agreement are included for convenience and identification
purposes only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or
any provision hereof.
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section II.1 Continuation of the Partnership. The
parties hereto agree to continue the Partnership in accordance
with the terms of this Agreement. The General Partner, for
itself and as agent for the Limited Partners, shall make every
reasonable effort to ensure that all necessary or appropriate
certificates and documents are properly executed and shall
accomplish all filing, recording, publishing and other acts, in
each case necessary or appropriate for compliance with the
requirements for the continuation of the Partnership as a limited
partnership under the Act and under all other laws of the State
of Delaware or such other jurisdictions in which the General
Partner determines that the Partnership may conduct business.
The rights and duties of the Partners shall be as provided herein
and, subject to the terms hereof, in the Act.
Section II.2 Name. The name of the Partnership is
"Entergy London Capital, L.P." Such name may be modified from
time to time by the General Partner following written notice to
the Limited Partners.
Section II.3 Business of the Partnership. The
purposes of the Partnership are (a) to issue from time to time
limited partner Interests in the Partnership including, without
limitation, Preferred Securities, and to use the aggregate
proceeds received by the Partnership from the issuance thereof,
together with the proceeds of any capital contribution of the
General Partner made at the time of such issuance for the
purchase of a related series of Debentures, (b) to maintain at
all times a portion (which shall not be less than $_______) of
the capital contributed to the Partnership by the General Partner
in an Eligible Investment Account or invested in Eligible
Investments as provided herein and (c) to engage in any other
business or activity that now or hereafter may be necessary,
incidental, proper, advisable or convenient to accomplish the
foregoing purposes and that is not forbidden by the law of the
jurisdiction in which the Partnership engages in that business;
provided, however, that the Partnership shall have no power to
borrow money, to become liable for the borrowings of any third
party or to engage in any financial or other trade or business.
Specifically, the Partnership may invest in investment assets,
such as the Debentures, but may not invest in assets which are
likely to result in Partnership liabilities, such as active
business assets.
Section II.4 Term. The term of the Partnership
commenced upon the filing of the Certificate in the Office of the
Secretary of State of the State of Delaware and shall continue
thereafter unless the Partnership is dissolved in accordance with
the provisions of this Agreement.
Section II.5 Registered Agent and Office. The
Partnership's registered agent and office in Delaware shall be
The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, New Castle County, Delaware 19801. At
any time, the General Partner may designate another registered
agent and/or registered office.
Section II.6 Principal Place of Business. The
principal place of business of the Partnership shall be at 639
Loyola Avenue, New Orleans, Louisiana 70113. Upon ten days'
prior written notice to the Limited Partners, the General Partner
may change the location of the Partnership's principal place of
business.
Section II.7 Name and Business Address of General
Partner. The name and address of the General Partner are as
follows:
Entergy London Investments UK plc
Templar House
81-87 High Holborn
London WClV 6NU, England
The General Partner may change its name or business address from
time to time, in which event the General Partner shall promptly
notify the Limited Partners of any such change in the manner set
forth in Section 13.1 and shall file an appropriate amendment to
the Certificate with the Office of the Secretary of State of the
State of Delaware.
Section II.8 Admission of Holders of Preferred
Securities; Withdrawal of Initial Limited Partner.
(a) Upon the issuance of a Preferred Certificate in
the name of a Person pursuant to this Agreement and receipt by
the Partnership of the Purchase Price paid in respect of the
Preferred Security represented by such Preferred Certificate,
which payment shall be deemed to constitute a direction of the
General Partner to execute this Agreement on its behalf and a
request by such Person that the books and records of the
Partnership reflect such Person's admission as a Limited Partner,
such Person shall be admitted to the Partnership as a Limited
Partner and shall become bound by this Agreement.
(b) Immediately following the first admission of a
Holder to the Partnership as a Limited Partner, the Initial
Limited Partner shall be deemed to have withdrawn from the
Partnership, shall cease to be a limited partner of the
Partnership and shall receive the return of its capital
contributions without interest or deduction.
(c) The name and mailing address of each Partner and
the amount contributed by such Partner to the capital of the
Partnership shall be listed on the books and records of the
Partnership. The General Partner shall be required to update the
books and records from time to time as necessary to accurately
reflect such information.
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
HOLDER'S INTEREST; CAPITAL ACCOUNTS
Section III.1 Capital Contributions.
(a) The General Partner has, on or prior to the date
hereof, contributed an aggregate of $_______ to the capital of
the Partnership, which amount is equal to at least 1% of the
total capital contributions to the Partnership on the date
hereof. The General Partner shall, hereafter from time to time,
make such additional capital contributions as are necessary to
maintain its aggregate capital contributions in an amount equal
to at least 1% of the aggregate capital contributions made by all
Partners.
(b) The Initial Limited Partner has, prior to the date
hereof, contributed the amount of $10 to the capital of the
Partnership, which amount will be returned to the Initial Limited
Partner as contemplated by Section 2.8(b).
(c) Each Person who acquires a Preferred Security from
the Partnership shall, in connection with the acquisition of such
Preferred Security, contribute to the capital of the Partnership
an amount in cash equal to the Purchase Price for such Preferred
Security.
(d) No Limited Partner shall at any time be required
to make any additional capital contributions to the Partnership,
except as may be required by law.
Section III.2 Holder's Interest Represented by
Preferred Securities. A Holder's Interest shall be represented
by the Preferred Certificate held by such Holder. Each Holder's
ownership of Preferred Securities shall be set forth on the books
and records of the Partnership. Each Holder hereby agrees that
its Interest represented by its Preferred Certificate shall for
all purposes be personal property. A Holder shall have no
interest in specific Partnership property.
Section III.3 Capital Accounts. An individual
capital account (a "Capital Account") shall be established and
maintained for each Partner which shall be credited with the
capital contributions made and the profits allocated to the
Partner (or predecessor in interest) and debited by the
distributions made and losses allocated to the Partner (or
predecessor in interest). Any syndication expenses incurred by
the Partnership shall be allocated exclusively to the Capital
Account of the General Partner. All provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to
comply with the Treasury Regulations promulgated under Code
704(b), and shall be interpreted and applied in a manner
consistent with such Treasury Regulations.
Section III.4 Interest on Capital Contributions. No
Partner shall be entitled to interest on or with respect to any
capital contribution to the Partnership.
Section III.5 Withdrawal and Return of Capital
Contributions. Except as provided in Section 2.8(b), no Partner
shall be entitled to withdraw any part of such Partner's capital
contribution to the Partnership. No Partner shall be entitled to
receive any Dividends from the Partnership, except as provided in
this Agreement or in the Action creating a particular series of
Preferred Securities.
ARTICLE IV
ALLOCATIONS
Section IV.1 Profits. Each fiscal period, the net
profits of the Partnership will be allocated (a) first, to the
Holders, in proportion to the number of Preferred Securities held
by each such Holder, in an amount equal to the excess of (x) the
Dividends accumulated on the Preferred Securities since their
date of issuance through and including the close of the current
fiscal period (whether or not paid) over (y) the amount of
profits allocated to the Holders pursuant to this Section 4.1(a)
in all prior fiscal periods and (b) thereafter, to the General
Partner.
Section IV.2 Losses. Except in connection with a
dissolution and liquidation of the Partnership, the net losses of
the Partnership shall be allocated each year to the General
Partner. Upon a dissolution and liquidation of the Partnership,
net losses shall be allocated to each Holder in an amount equal
to the excess of (a) such Holder's Capital Account over (b) such
Holder's Liquidation Distribution (as defined with respect to
each Preferred Security in the Action establishing such Preferred
Security), with any remaining net losses being allocated to the
General Partner.
Section IV.3 Allocation Rules.
(a) For purposes of determining the profits, losses or
any other items allocable to any period, profits, losses and any
such other items shall be determined on a daily, monthly or other
basis, as determined by the General Partner using any method that
is permissible under 706 of the Code and the Treasury
Regulations thereunder.
(b) The Partners are aware of the income tax
consequences of the allocations made by this Article IV and
hereby agree to be bound by the provisions of this Article IV in
reporting their shares of Partnership income and loss for income
tax purposes.
Section IV.4 Withholding. The Partnership shall
comply with all withholding requirements under federal, state and
local law. The Partnership shall request, and the Partners shall
provide to the Partnership, such forms or certificates as are
necessary to establish an exemption from withholding with respect
to each Partner, and any representations and forms as shall
reasonably be requested by the Partnership to assist it in
determining the extent of, and in fulfilling, its withholding
obligations. The Partnership shall file required forms with
applicable jurisdictions and, unless an exemption from
withholding is properly established by a Partner, shall remit
amounts withheld with respect to the Partners to applicable
jurisdictions. To the extent that the Partnership is required to
withhold and pay over any amounts to any authority with respect
to distributions or allocations to any Partner, the amount
withheld shall be deemed to be a distribution in the amount of
the withholding to the Partner. In the event of any claimed
overwithholding, Partners shall be limited to an action against
the applicable jurisdiction. If the amount withheld was not
withheld from actual distributions, the Partnership may reduce
subsequent distributions by the amount of such withholding.
ARTICLE V
DIVIDENDS AND DISTRIBUTIONS
Section V.1 Dividends. Limited Partners shall receive
periodic Dividends, if any, a Redemption Price and a Liquidation
Preference in accordance with the applicable terms of any series
of Preferred Securities as established in the Action with respect
thereto. The General Partner shall determine whether and when
Dividends shall be payable pursuant to the terms and conditions
of the Action establishing a particular series of Preferred
Securities, and shall give notice thereof to all Limited Partners
of record as of the date of such determination. Subject to the
rights of the Preferred Securities, all remaining cash shall be
distributed to the General Partner at such time as the General
Partner shall determine.
Section V.2 Limitations on Distributions. The
Partnership shall not make a distribution to any Partner on
account of such Partner's Interest if such distribution would
violate Section 17-607 of the Act or other applicable law.
ARTICLE VI
ISSUANCE OF PREFERRED SECURITIES
Section VI.1 General Provisions Regarding Preferred
Securities.
(a) The aggregate number of Preferred Securities which
the Partnership shall have authority to issue is unlimited.
(b) The General Partner on behalf of the Partnership
is, subject to Section 6.2(b), authorized to issue from time to
time limited partner interests in the Partnership (the "Preferred
Securities") in one or more series having such designations,
rights, privileges, restrictions, preferences and other terms and
provisions as may from time to time be established in a written
action or actions (each, an "Action") of the General Partner
providing for the issue of such series. In connection with the
foregoing, the General Partner is expressly authorized, prior to
issuance, to set forth in an Action or Actions providing for the
issue of such series, the following:
(i) the distinctive designation of such series of
Preferred Securities, which shall distinguish it from other
series of Preferred Securities and the Liquidation
Preference with respect to such series;
(ii) the number of Preferred Securities included
in such series, which number may be increased or decreased
from time to time unless otherwise provided by the General
Partner in creating the series;
(iii) the annual Dividend rate (or method of
determining such rate) for Preferred Securities of such
series and the date or dates upon which such Dividends shall
be payable, provided, however, that Dividends on any series
of Preferred Securities shall be payable, if and to the
extent determined to be so payable by the General Partner in
accordance with the Action providing for the issuance of
such series, on a quarterly basis to Holders of such series
of Preferred Securities as of a record date in each quarter
during which such series of Preferred Securities are
outstanding;
(iv) whether Dividends on the Preferred Securities
of such series shall be cumulative, and, in the case of
Preferred Securities of any series having cumulative
Dividend rights, the date or dates or method of determining
the date or dates from which Dividends on the Preferred
Securities of such series shall be cumulative;
(v) the amount or amounts which shall be paid out
of the assets of the Partnership to the Holders of the
Preferred Securities of such series upon voluntary or
involuntary dissolution, winding-up or liquidation of the
Partnership (the "Liquidation Distribution");
(vi) the obligation, if any, of the Partnership to
purchase or redeem Preferred Securities of such series and
the price or prices at which, the period or periods within
which, and the terms and conditions upon which, the
Preferred Securities of such series shall be purchased or
redeemed, in whole or in part, pursuant to such obligation
and, whether any such redemption shall be at the option of
the Partnership or the General Partner or otherwise;
provided, however, that unless otherwise set forth in the
Action providing for the issuance of such series, the
Preferred Securities of such series may at any time and from
time to time be purchased by the Partnership, at its option,
by tender, in the open market or by private agreement
subject to applicable law (including, without limitation,
Rule 14e-1 under the Exchange Act and any other applicable
United States federal securities laws);
(vii) the voting rights, if any, of the
Preferred Securities of such series in addition to those
required by law, including the number of votes per Preferred
Security and any requirement for the approval by the Holders
of Preferred Securities, or of the Preferred Securities of
one or more series, or of both, as a condition to specified
action or amendments to this Agreement;
(viii) the particular series of Debentures to
be purchased by the Partnership pursuant to Section 2.3(a);
and
(ix) any other relative rights, powers,
preferences or limitations of the Preferred Securities of
the series not inconsistent with this Agreement or with
applicable law.
(c) In connection with the foregoing and without
limiting the generality thereof, the General Partner is hereby
expressly authorized, without the vote or approval of any
existing Holder or other Person (i) to take any Action to create
under the provisions of this Agreement a series of Preferred
Securities that was not previously outstanding and (ii) to admit
Persons as Limited Partners, without the vote or approval of any
existing Holder or any other Person, and (iii) to execute, swear
to, acknowledge, deliver, file and record whatever documents may
be required in connection with the issue from time to time of
Preferred Securities in one or more series as shall be necessary,
convenient or desirable to reflect the issue of such series. The
General Partner shall do all things it deems to be appropriate or
necessary to comply with the Act and is authorized and directed
to do all things it deems to be necessary or permissible in
connection with any future issuance, including compliance with
any statute, rule, regulation or guideline of any federal, state
or other governmental agency or any securities exchange.
(d) Any Action or Actions taken by the General Partner
pursuant to the provisions of this Section 6.1 shall be deemed an
amendment and supplement to and part of this Agreement.
(e) The payment of Dividends and payments on
dissolution of the Partnership or on redemption in respect of
Preferred Securities shall be guaranteed by Entergy London
Investments pursuant to and to the extent set forth in the
Guarantee. Each Holder hereby authorizes the Guarantee Trustee
to hold the Guarantee on its behalf. The Guarantee Trustee has
the right to enforce the Guarantee on behalf of the Holders. The
Holders of a majority in Liquidation Preference of the Preferred
Securities of any series shall have the right to direct the
method and place of conducting any proceeding for any remedy
available in respect of the Guarantee with respect to such series
including the giving of directions to the Guarantee Trustee. A
Holder may institute a legal proceeding directly against Entergy
London Investments to enforce its rights under the Guarantee,
without first instituting a legal proceeding against the
Partnership or any other Person. Each Holder, by acceptance of a
Preferred Security, thereby agrees to the subordination
provisions and other terms of the Guarantee.
(f) Except as may be provided in the Action creating
the Preferred Securities of a particular series, the aggregate
proceeds received by the Partnership from the issuance of any
series of Preferred Securities, together with the proceeds of any
capital contribution of the General Partner made at the time of
such issuance, shall be invested by the Partnership in the
purchase of a related series of Debentures with (i) an aggregate
principal amount at least equal to such aggregate proceeds and
(ii) an interest rate at least equal to the Dividend rate of such
series of Preferred Securities.
(g) All Preferred Securities shall rank senior to the
General Partner's Interest in respect of the right to receive
Dividends, any Redemption Price and payments out of the assets of
the Partnership upon voluntary or involuntary dissolution,
winding-up or liquidation of the Partnership. All Preferred
Securities redeemed, purchased or otherwise acquired by the
Partnership (including Preferred Securities surrendered for
conversion or exchange) shall be canceled.
(h) No Holder shall be entitled as a matter of right
to subscribe for or purchase, or have any preemptive or similar
right with respect to, all or any part of any new or additional
issue of Preferred Securities of any class whatsoever, or of
securities convertible into any Preferred Securities of any class
whatsoever, whether now or hereafter authorized and whether
issued for cash or other consideration or by way of a Dividend.
(i) Neither Entergy London Investments nor any
Affiliate of Entergy London Investments shall have the right to
vote or give or withhold consent with respect to any Preferred
Security owned by it, directly or indirectly, and, for purposes
of any matter upon which the Limited Partners may vote or give or
withhold consent as provided in this Agreement, Preferred
Securities owned by Entergy London Investments or any Affiliate
shall be treated as if they were not outstanding.
Section VI.2 Series A Preferred Securities. (a)
Without prejudice to the power of the General Partner to
establish from time to time further series of Preferred
Securities pursuant to Section 6.1(b), the Partnership is hereby
authorized to issue and sell ________ ___% Cumulative Quarterly
Income Preferred Securities, Series A (the "Series A Preferred
Securities"), having the designation, annual Dividend rate,
Liquidation Preference, Redemption Price, redemption terms,
voting rights and other powers, preferences and special rights
and limitations set forth in Annex B hereto. The authorization
set forth in this Section 6.2(a) with respect to the
establishment of the Series A Preferred Securities shall
constitute an Action for all purposes of this Agreement.
(b) So long as any of the Series A Preferred
Securities remain outstanding, no other series of Preferred
Securities may be issued.
ARTICLE VII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section VII.1 Books and Records.
(a) Proper and complete records and books of account
of the Partnership shall be kept by the General Partner in which
shall be entered fully and accurately all transactions and other
matters relative to the Partnership's business as are usually
entered into records and books of account maintained by Persons
engaged in businesses of a like character, including a Capital
Account for each Partner. The books and records of the
Partnership, together with a certified copy of this Agreement and
of the Certificate, shall at all times be maintained at the
principal office of the General Partner and shall be open to the
inspection and examination of the Limited Partners or their duly
authorized representatives during reasonable business hours for a
purpose reasonably related to such Limited Partner's interest in
the Partnership.
(b) The General Partner may, for such period of time
that the General Partner deems reasonable, keep confidential from
the Partners any information with respect to the Partnership the
disclosure of which the General Partner in good faith believes is
not in the best interests of the Partnership or could damage the
Partnership or its business or which the Partnership is required
by law or by an agreement with any Person to keep confidential.
(c) Within three months after the close of each Fiscal
Year, the General Partner shall transmit to each Partner, a
statement indicating such Partner's share of each item of
Partnership income, gain, loss, deduction or credit for such
Fiscal Year for federal income tax purposes.
Section VII.2 Accounting Method. For both financial
and tax reporting purposes and for purposes of determining
profits and losses, the books and records of the Partnership
shall be kept on the accrual method of accounting applied in a
consistent manner and shall reflect all Partnership transactions
and be appropriate and adequate for the Partnership's business.
ARTICLE VIII
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section VIII.1 Limitations. The Limited Partners
shall not participate in the management or control of the
Partnership's business, property or other assets nor shall the
Limited Partners transact any business for the Partnership, nor
shall the Limited Partners have the power to act for or bind the
Partnership, said powers being vested solely and exclusively in
the General Partner. The Limited Partners shall, however, have
the rights set forth in this Agreement. The Limited Partners
shall have no interest in the properties or assets of the General
Partner, or any equity therein, or in any proceeds of any sales
thereof (which sales shall not be restricted in any respect by
virtue of acquiring or owning an Interest in the Partnership).
The Limited Partners will have no rights to remove or replace the
General Partner.
Section VIII.2 Liability. Subject to the provisions
of the Act, no Limited Partner shall be liable for the repayment,
satisfaction or discharge of any debts or other obligations of
the Partnership in excess of the Capital Account balance of such
Limited Partner.
ARTICLE IX
POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNER
Section IX.1 Authority. Subject to the limitations
provided in this Agreement, the General Partner shall have
exclusive and complete authority and discretion to manage the
operations and affairs of the Partnership and to make all
decisions regarding the business of the Partnership. Any action
taken by the General Partner shall constitute the act of and
serve to bind the Partnership. In dealing with the General
Partner acting on behalf of the Partnership no Person shall be
required to inquire into the authority of the General Partner to
bind the Partnership. Persons dealing with the Partnership are
entitled to rely conclusively on the power and authority of the
General Partner as set forth in this Agreement.
Section IX.2 Powers and Duties of General Partner.
Except as otherwise specifically provided herein, the General
Partner shall have all rights and powers of a general partner
under the Act and shall have all authority, rights and powers in
the management of the Partnership business to do any and all
other acts and things necessary, proper, convenient or advisable
to effectuate the purposes of this Agreement, including by way of
illustration but not by way of limitation, the following:
(a) to secure the necessary goods and services
required in performing the General Partner's duties for the
Partnership;
(b) to exercise all powers of the Partnership, on
behalf of the Partnership, in connection with enforcing the
Partnership's rights under any series of Debentures;
(c) to cause the Partnership to issue particular
series of Preferred Securities, to execute and deliver Preferred
Certificates and to admit Limited Partners in connection
therewith in accordance with this Agreement;
(d) to act as registrar and Transfer Agent for the
Preferred Securities or designate a Person to act as registrar
and Transfer Agent;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including with respect to Dividends and voting
rights, and to make determinations as to the payment of
Dividends, and make or cause to be made all other required
payments to Holders and to the General Partner;
(f) to open, maintain and close bank accounts and to
draw checks and other orders for the payment of money;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Partnership;
(h) to deposit, withdraw, invest, pay, retain and
distribute the Partnership's funds in a manner consistent with
the provisions of this Agreement;
(i) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Partnership's valid existence, rights, franchises and privileges
as a limited partnership under the laws of the State of Delaware
and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Limited
Partners or to enable the Partnership to conduct the business in
which it is engaged;
(j) to cause the Partnership to enter into and
perform, on behalf of the Partnership, an underwriting or other
agreement in connection with the issuance and sale of a
particular series of Preferred Securities and to cause the
Partnership to purchase the related series of Debentures without
any further act, vote or approval of any Partner;
(k) to cause the Partnership to redeem or purchase
Preferred Securities of any series for cancellation, subject to
any limitation on such redemption or purchase set forth in the
Action providing for the issuance of such series of Preferred
Securities; and
(l) to execute and deliver any and all documents or
instruments, perform all duties and powers and do all things for
and on behalf of the Partnership in all matters necessary or
desirable or incidental to the foregoing.
Section IX.3 Liability. The General Partner shall not
be personally liable for (a) the return of any portion of the
capital contributions (or any return thereon) of the Limited
Partners, which shall be made solely from assets of the
Partnership; or (b) to the Partnership or to any Limited Partner
of any deficit in any Limited Partner's Capital Account upon
dissolution, liquidation or otherwise.
Section IX.4 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Partnership or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Partnership and in a manner
reasonably believed to be within the scope of the authority
conferred on such Indemnified Person or its principal by this
Agreement or by law except that, for the avoidance of doubt, an
Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's bad faith,
recklessness or willful misconduct.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Partnership and
upon such information, opinions, reports or statements presented
to the Partnership by any Person as to matters the Indemnified
Person reasonably believes are within such Person's professional
or expert competence and who has been selected with reasonable
care by the General Partner on behalf of the Partnership,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets
from which distributions to Partners might properly be paid.
Section IX.5 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to any other
Covered Person, an Indemnified Person acting under this Agreement
shall not be liable to the Partnership or to any other Covered
Person for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that
they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties
hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein, (i)
whenever a conflict of interest exists or arises between Covered
Persons in connection with the taking of some action by an
Indemnified Person on behalf of the Partnership or a Partner, as
such, or (ii) whenever this Agreement or any other agreement or
instrument contemplated herein provides that an Indemnified
Person shall act in a manner that is fair and reasonable to the
Partnership or any Partner, the Indemnified Person shall resolve
such conflict of interest or shall take such action, considering
in each case the relative interest of each party (including its
own interest) to such conflict, agreement or instrument and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of
bad faith by the Indemnified Person, the resolution made or
action taken or provided for by the Indemnified Person shall not
constitute a breach of this Agreement or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person
is permitted or required to make a decision (i) in its
"discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider only such
interests and factors as it desires, including its own interests,
and shall have no duty or obligation to give any consideration to
any interest of, or factors affecting, the Partnership or any
other Person, or (ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Agreement or other applicable
law.
Section IX.6 Indemnification.
(a) To the fullest extent permitted by applicable law,
the Partnership shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good
faith on behalf of the Partnership and in a manner reasonably
believed to be within the scope of authority conferred on such
Indemnified Person by this Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence or willful misconduct with respect to
such acts or omissions; provided, however, that any indemnity
under this Section 9.6 shall be provided out of and to the extent
of Partnership assets only, and no Covered Person shall have any
personal liability on account thereof.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to the
final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Partnership of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled
to be indemnified as authorized in Section 9.6(a).
Section IX.7 Investment Company or Tax Actions. The
General Partner is authorized and directed to conduct the affairs
of and to operate the Partnership in such a way that the
Partnership will not be deemed to be an "investment company"
required to be registered under the Investment Company Act or
classified other than as a partnership for United States federal
income tax purposes and so that the Debentures of any series will
be treated as equity of Entergy London Investments for United
States federal income tax purposes. In this connection, the
General Partner is authorized to take any action not inconsistent
with applicable law or this Agreement, and that does not
materially and adversely affect the interests of Holders, that
the General Partner determines in its discretion to be necessary
or desirable for such purposes.
Section IX.8 Outside Businesses. Any Partner or
Affiliate thereof may engage in or possess an interest in other
business ventures of any nature or description, independently or
with others, similar or dissimilar to the business of the
Partnership, and the Partnership and the other Partners shall
have no rights by virtue of this Agreement in and to such
independent ventures or the income or profits derived therefrom
and the pursuit of any such venture, even if competitive with the
business of the Partnership, shall not be deemed wrongful or
improper. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to
the Partnership, could be undertaken by the Partnership, and any
Partner or Affiliate thereof shall have the right to take for its
own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment opportunity.
Section IX.9 Limits on General Partner's Powers. (a)
Anything in this Agreement to the contrary notwithstanding, the
General Partner shall not cause or permit the Partnership to:
(i) acquire any assets other than as expressly
provided herein;
(ii) do any act that would make it impractical or
impossible to carry on the ordinary business of the
Partnership;
(iii) possess Partnership property other than for a
Partnership purpose;
(iv) perform any act that would subject any Limited
Partner to liability as a general partner in any
jurisdiction;
(v) engage in any activity that is not consistent with
the purposes of the Partnership, as set forth in Section
2.3; or
(vi) borrow money or become liable for the borrowings
of any third party or to engage in any financial or other
trade or business.
(b) The General Partner shall not revoke any action
previously authorized or approved by a vote of such Holders
except by subsequent vote of the Holders of not less than 66 2/3%
in Liquidation Preference of the Preferred Securities of such
series.
Section IX.10 Tax Matters Partner.
(a) The General Partner is hereby designated as "Tax
Matters Partner" of the Partnership for purposes of 6231(a)(7)
of the Code and shall have the power to manage and control, on
behalf of the Partnership, any administrative proceeding at the
Partnership level with the Internal Revenue Service relating to
the determination of any item of Partnership income, gain, loss,
deduction or credit for federal income tax purposes.
(b) The General Partner shall not make an election in
accordance with 754 of the Code.
(c) The General Partner and the Holders acknowledge
that they intend, for federal income tax purposes, that the
Partnership shall be treated as a partnership and that the
General Partner and the Holders shall be treated as Partners of
such partnership for such purposes.
Section IX.11 Expenses.
(a) The General Partner shall pay directly (without
any obligation to first exhaust the assets of the Partnership)
all, and the Partnership shall not be obligated to pay, directly
or indirectly, for any, indebtedness, costs and expenses of the
Partnership (including, but not limited to, costs and expenses
relating to the organization of, and offering of limited partner
interests in, the Partnership and costs and expenses relating to
the operation of the Partnership, including without limitation,
costs and expenses of accountants, attorneys, statistical or
bookkeeping services and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and costs and expenses incurred in
connection with the acquisition, financing, and disposition of
Partnership assets).
(b) The General Partner will pay any and all taxes
(other than United States withholding taxes) of the Partnership
and all liabilities, costs and expenses with respect to such
taxes of the Partnership.
Section IX.12 Mergers, Conversions, Consolidations,
Amalgamations or Replacements.
The General Partner shall not cause or allow the
Partnership to merge with or into, convert into, consolidate,
amalgamate, be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described below or as permitted or required under
Section 11.3. The Partnership may, without the consent of the
Holders, merge with or into, convert into, consolidate,
amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a limited
partnership, limited liability company or trust organized as such
under the laws of any jurisdiction; provided, that (i) such
successor entity either (a) expressly assumes all of the
obligations of the Partnership with respect to the Preferred
Securities of a particular series or (b) substitutes for such
series of Preferred Securities other securities (the "Successor
Securities") so long as the Successor Securities rank the same as
such series of Preferred Securities rank in priority with respect
to distributions and payments upon liquidation, redemption and
otherwise, (ii) Entergy London Investments expressly acknowledges
such successor entity as the holder of the related series of
Debentures, (iii) the Successor Securities are listed or traded,
or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or
other organization on which such series of Preferred Securities
are then listed, if any, (iv) such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause such series of Preferred Securities
(including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such
merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders (including any
Successor Securities) in any material respect, (vi) such
successor entity has a purpose substantially identical to that of
the Partnership, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, Entergy
London Investments has received an opinion from independent
counsel experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including any
Successor Securities) in any material respect, and (b) following
such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the
Partnership nor such successor entity will be required to
register as an investment company under the Investment Company
Act and (viii) Entergy London Investments or any permitted
successor or assignee guarantees the obligations of such
successor entity under the Successor Securities at least to the
extent provided by the Guarantee. Notwithstanding the foregoing,
the Partnership shall not, except with the consent of the Holders
of 100% in Liquidation Preference of the Preferred Securities,
consolidate, amalgamate, merge with or into, convert into, be
replaced by or convey, transfer or lease its properties and
assets substantially as an entirety or any other entity or permit
any other entity to consolidate, amalgamate, merge with or into,
convert into, or replace it if such consolidation, amalgamation,
merger, conversion or replacement would cause the Partnership or
the successor entity to be classified as other than a partnership
or grantor trust for United States federal income tax purposes.
ARTICLE X
TRANSFERS OF INTERESTS BY PARTNERS
Section X.1 Transfer of Interests.
(a) Preferred Securities shall be freely transferable
by a Holder.
(b) The General Partner may not assign or transfer its
interest in the Partnership in whole or in part unless (i) prior
to such assignment or transfer, the General Partner has obtained
the consent of the Holders of not less than 66 2/3% in
Liquidation Preference of the Preferred Securities or (ii) the
successor is a directly or indirectly wholly owned subsidiary of
Entergy London Investments that assumes all the obligations of
the General Partner, provided, however, in the case of
clause (ii), that the Partnership has received an opinion of
nationally recognized independent counsel to the Partnership
experienced in such matters to the effect that the Partnership
will continue to be treated as a partnership for federal income
tax purposes following the admission of such subsidiary as the
general partner. The admission of such successor as a general
partner of the Partnership shall be effective upon the filing of
an amendment to the Certificate with the Secretary of State of
the State of Delaware which indicates that such successor has
been admitted as a general partner in the Partnership, and the
General Partner shall cease to be a general partner in the
Partnership immediately following the admission of the successor
as a general partner in the Partnership. Any such successor
general partner in the Partnership is hereby authorized to and
shall continue the business of the Partnership without
dissolution.
(c) Except as provided above, no Interest shall be
transferred, in whole or in part, except in accordance with the
terms and conditions set forth in this Agreement. To the fullest
extent permitted by law, any transfer or purported transfer of
any Interest not made in accordance with this Agreement shall be
null and void.
Section X.2 Transfer of Preferred Certificates. The
General Partner shall provide for the registration and transfer
of Preferred Securities. Subject to the restrictions on transfer
of global Preferred Certificates issued pursuant to Section 10.4,
upon surrender for registration of transfer of any Preferred
Certificate, the General Partner shall cause one or more new
Preferred Certificates to be issued in the name of the designated
transferee or transferee. Every Preferred Certificate
surrendered for registration of transfer shall be accompanied by
a written instrument of transfer in form satisfactory to the
General Partner duly executed by the Holder or his or her
attorney duly authorized in writing. Each Preferred Certificate
surrendered for registration of transfer shall be canceled by the
General Partner. A transferee of a Preferred Security shall be
admitted to the Partnership as a Limited Partner and shall be
entitled to the rights and subject to the obligations of a Holder
hereunder upon the registration of such transfer on the books and
records of the Partnership. By acceptance of a Preferred
Certificate, each transferee of a Preferred Security shall be
deemed to have requested admission as a Limited Partner, to have
authorized the General Partner to execute this Agreement on its
behalf, and to have agreed to be bound by this Agreement.
Registration of transfer of Preferred Securities will
be effected without charge by or on behalf of the Partnership,
but upon payment of any tax or other governmental charges that
may be imposed in connection with any transfer or exchange. The
Partnership will not be required to register or cause to be
registered the transfer of Preferred Securities after such
Preferred Securities have been called for redemption.
Section X.3 Persons Deemed Holders. The Partnership
may treat the Person in whose name any Preferred Security shall
be registered on the books and records of the Partnership as the
sole Holder of such Preferred Security for purposes of receiving
Dividends and any notices required to be delivered to Holders by
this Agreement and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Preferred Certificate or in
the Preferred Securities represented by such Preferred
Certificate on the part of any other Person, whether or not the
Partnership shall have actual or other notice thereof.
Section X.4 Book-Entry Interests. (a) Except as
otherwise provided in the Action establishing a particular series
of Preferred Securities, the Preferred Securities of each series,
on original issuance, will be issued in the form of a global
Preferred Certificate or Preferred Certificates, to be delivered
to the Clearing Agency designated as such with respect to such
series by, or on behalf of, the Partnership. Such global
Preferred Certificate or Certificates shall be executed and
delivered by the General Partner and shall initially be
registered on the books and records of the Partnership in the
name of the Clearing Agency or its nominee and no Definitive
Preferred Certificates shall be issued except as provided in
Section 10.5 and shall bear such legends with respect to transfer
and related matters as may be required by the rules and
regulations of such Clearing Agency.
(b) None of the Partnership, the General Partner nor
any agent of the General Partner or the Partnership shall have
any liability with respect to or responsibility for the records
of the Clearing Agency.
Section X.5 Definitive Preferred Certificates. If (a)
the Clearing Agency elects to discontinue its services as
securities depository by giving notice to the Partnership or the
General Partner, and a successor Clearing Agency is not
appointed, (b) the Partnership fails to pay any amounts due and
payable on any series of the Preferred Securities or the
Guarantor fails to pay any amounts due and payable in respect of
the Guarantee as required by their respective terms, or (c) if
the General Partner on behalf of the Partnership elects to
terminate the book-entry system through the Clearing Agency, then
Definitive Preferred Certificates shall be prepared by the
Partnership. Upon surrender of the global Preferred Certificate
or Preferred Certificates registered in the name of the Clearing
Agency or its nominee, accompanied by registration instructions,
the General Partner shall cause Definitive Preferred Certificates
to be printed and delivered in accordance with the Cleaning
Agency's instructions. Neither the General Partner nor the
Partnership shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected
in relying on, such instructions. The Definitive Preferred
Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as may be required by any national
securities exchange on which the Preferred Securities may be
listed and as is reasonably acceptable to the General Partner, as
evidenced by its execution thereof. Definitive Preferred
Certificates shall be executed and delivered by the General
Partner and countersigned by the registrar and transfer agent
with respect thereto.
ARTICLE XI
WITHDRAWAL; DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section XI.1 Withdrawal of Partners. The General
Partner shall not at any time retire or withdraw from the
Partnership except as otherwise permitted hereunder. If the
General Partner retires or withdraws in contravention of this
Section 11.1, it shall indemnify, defend and hold harmless the
Partnership and the other Partners from and against any losses,
expenses, judgments, fines, settlements or damages suffered or
incurred by the Partnership or such other Partners arising out of
or resulting from such retirement or withdrawal.
Section XI.2 Dissolution of the Partnership.
(a) The Partnership shall not be dissolved by the
admission or withdrawal of Partners in accordance with the terms
of this Agreement. Except as provided in Section 11.2(b)(ii),
the death, retirement, resignation, expulsion, bankruptcy or
dissolution of a Partner, or the occurrence of any other event
which terminates the Interest of a Partner in the Partnership,
shall not cause the Partnership to be dissolved and its affairs
wound up so long as the Partnership at all times has at least two
Partners. Upon the occurrence of any such event, the business of
the Partnership shall be continued without dissolution.
(b) The Partnership shall be dissolved and its affairs
shall be wound up upon the earliest to occur of any of the
following events:
(i) the delivery of written direction by the General
Partner to dissolve the Partnership (which direction is
optional and wholly within the discretion of the General
Partner);
(ii) upon the assignment by the General Partner of its
entire interest in the Partnership when the assignee is not
admitted to the Partnership as a general partner of the
Partnership in accordance with Section 10.1(b), or the
filing of a certificate of dissolution or its equivalent,
with respect to the General Partner, or the revocation of
the General Partner's charter and the expiration of 90 days
after the date of notice to the General Partner of
revocation without a reinstatement of its charter, or any
other event occurs which causes the General Partner to cease
to be a general partner of the Partnership under the Act,
unless the business of the Partnership is continued in
accordance with this Agreement and the Act;
(iii) the entry of an order for the dissolution of
the Partnership under Section 17-802 of the Act by a court
of competent jurisdiction; or
(iv) in accordance with the provisions of each Action
establishing any series of Preferred Securities then
outstanding.
(c) Upon dissolution of the Partnership, the
Liquidator, as defined below, shall promptly notify the Partners
of such dissolution.
Section XI.3 Liquidation.
(a) In the event of the dissolution of the Partnership
for any reason, the General Partner (or, if the Partnership is
dissolved pursuant to Section 11.2(b)(ii), then a liquidating
trustee appointed by Holders of not less than 66 2/3% of the
aggregate Liquidation Preference of each series of Preferred
Securities then outstanding (the General Partner or such Person
so appointed is hereinafter referred to as the "Liquidator"))
shall commence to wind up the affairs of the Partnership and to
liquidate the Partnership's assets; provided, however, that a
reasonable time shall be allowed for the orderly liquidation of
the assets of the Partnership and the satisfaction of liabilities
to creditors so as to enable the Partners to minimize the normal
losses attendant upon liquidation. The Partners shall continue
to share all income, losses and distributions during the period
of liquidation in accordance with Articles IV and V. Subject to
the provisions of this Article XI, the Liquidator shall have full
right and unlimited discretion to determine the time, manner and
terms of any sale or sales of Partnership property pursuant to
such liquidation, giving due regard to the activity and condition
of the relevant market and general financial and economic
conditions.
(b) The Liquidator shall have all of the rights and
powers with respect to the assets and liabilities of the
Partnership in connection with the liquidation and termination of
the Partnership that the General Partner would have with respect
to the assets and liabilities of the Partnership during the term
of the Partnership, and the Liquidator is hereby expressly
authorized and empowered to execute any and all documents
necessary or desirable to effectuate the liquidation and
termination of the Partnership and the transfer of any assets.
(c) Notwithstanding the foregoing, a Liquidator that
is not the General Partner shall not be deemed a Partner in this
Partnership and shall not have any of the economic interests in
the Partnership of a Partner; and such Liquidator may be
compensated by the Limited Partners for its services to the
Partnership at normal, customary and competitive rates for its
services to the Partnership as reasonably determined by at least
50% of the Limited Partners.
Section XI.4 Distribution in Liquidation. The
proceeds of liquidation shall be applied in the following order
of priority (and without regard to the provisions of Section
17-804 of the Act):
(i) to creditors of the Partnership, including
Partners who are creditors, to the extent otherwise
permitted by law, in satisfaction of the liabilities of the
Partnership (whether by payment or the making of reasonable
provision for payment thereof), other than liabilities for
distributions (including Dividends) to Partners;
(ii) to the Limited Partners to the extent of and in
proportion to the Liquidation Preference of their respective
Preferred Securities; and
(iii) to the Partners in proportion to each
Partner's positive Capital Account balance.
Section XI.5 Rights of Limited Partners. Each Limited
Partner shall look solely to the assets of the Partnership for
all distributions with respect to the Partnership and such
Partner's capital contribution (including returns thereof), and
such Partner's share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against the
General Partner; provided, however, that nothing in this Section
11.5 shall limit the obligations of Entergy London Investments in
its capacity as Guarantor under the Guarantee. No Partner shall
have any right to demand or receive property other than cash upon
dissolution and termination of the Partnership.
Section XI.6 Termination. The Partnership shall
terminate when all of the assets of the Partnership shall have
been disposed of and the assets shall have been distributed as
provided in Section 11.4. The Liquidator shall then execute and
cause to be filed a certificate of cancellation of the
Certificate.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section XII.1 Amendments. Except as otherwise
provided in this Agreement or by any applicable terms of any
Action establishing a series of Preferred Securities, this
Agreement may be amended by, and only by, a written instrument
executed by the General Partner and may be effected only as
permitted by the terms of any Action establishing such series of
Preferred Securities.
Section XII.2 Amendment of Certificate. In the event
this Agreement shall be amended pursuant to Section 12.1, the
General Partner shall cause the Certificate to be amended to
reflect such change if it deems such amendment of the Certificate
to be necessary or appropriate.
Section XII.3 Meetings of Partners.
(a) Meetings of the Limited Partners who are Holders
may be called at any time by the General Partner to consider and
act on any matter on which Limited Partners are entitled to act
under the terms of this Agreement or the Act. The General
Partner shall call a meeting of Holders of all of the outstanding
Preferred Securities or of Holders of any particular series of
Preferred Securities if directed to do so by Holders of not less
than 10% in Liquidation Preference of all the outstanding
Preferred Securities, or of that series, respectively, as
permitted by this Agreement. Such direction shall be given by
delivering to the General Partner a request in writing stating
that the signing Limited Partners desire a meeting to be called
and indicating the general or specific purpose for which the
meeting is to be called.
(b) Notice of any such meeting shall be given to all
Partners not less than seven Business Days nor more than 60 days
prior to the date of such meeting. Each such notice shall set
forth the date, time and place of the meeting, a description of
any matter on which Holders are entitled to vote and instructions
for the delivery of proxies or written consents.
(c) Any required approval of Holders of any Preferred
Securities may be given at a meeting of such Holders convened for
such purpose or pursuant to written consent. The Partnership
will cause a notice of any meeting at which Holders of any
Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of such Preferred
Securities. Each such notice will include a statement setting
forth (x) the date, time and place of such meeting or the date by
which such action is to be taken, (y) a description of any matter
on which such Holders are entitled to vote or upon which written
consent is sought and (z) instructions for the delivery of
proxies or written consents. No vote or consent of the Holders
of Preferred Securities will be required for the Partnership to
redeem and cancel Preferred Securities in accordance with the
provisions of this Agreement or the terms of the Action
establishing the relevant series of Preferred Securities.
(d) Each Partner may authorize any Person to act for
it by proxy on all matters as to which a Partner is entitled to
participate, including waiving notice of any meeting, or voting
or participating at a meeting. Every proxy must be signed by the
Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the Partner executing it.
(e) Each meeting of Partners shall be conducted by the
General Partner or by such other Person that the General Partner
may designate.
(f) The General Partner may establish all other
reasonable procedures relating to meetings of Partners or the
giving of written consents, in addition to those expressly
provided, including waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person, by representative or by proxy or
any other matter with respect to the exercise of any such right
to vote.
ARTICLE XIII
MISCELLANEOUS
Section XIII.1 Notices. All notices provided for in
this Agreement shall be in writing, and shall be delivered or
mailed by first class or registered or certified mail or, with
respect to the Partnership and General Partner, telecopied, as
follows:
(a) if given to the Partnership, in care of the
General Partner at the Partnership's mailing address set forth
below:
Entergy London Capital, L.P.
c/o Entergy London Investments UK plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Attention: _______________________
Telecopy No: (504) 576-4455
(b) if given to the General Partner, at its mailing
address set forth below:
Entergy London Investments UK plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Attention: _______________________
Telecopy No: (504) 576-4455
(c) if given to any other Partner, at the address set
forth on the books and records of the Partnership.
Section XIII.2 Power of Attorney. Each Holder does
hereby constitute and appoint the General Partner as its true and
lawful representative and attorney-in-fact, with full power of
substitution, in its name, place and stead to make, execute,
sign, deliver and file (a) any amendment of the Certificate
required because of an amendment of this Agreement or in order to
effect any change in the Partnership consistent with the terms of
this Agreement, (b) this Agreement, (c) any duly adopted
amendments to this Agreement and (d) all such other instruments,
documents and certificates which from time to time may be
required by the laws of the United States of America, the State
of Delaware or any other jurisdiction, or any political
subdivision or agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Partnership or
to dissolve the Partnership or for any other purpose consistent
with this Agreement and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the
subsequent death, incapacity, disability, dissolution,
termination, or bankruptcy of the Holder granting the same or the
transfer of all or any portion of such Holder's Interest and (b)
extend to such Holder's successors, assigns and legal
representatives.
Section XIII.3 Entire Agreement. This Agreement
constitutes the entire agreement among the parties. It
supersedes any prior agreement or understandings among them, and
it may not be modified or amended in any manner other than as set
forth herein.
Section XIII.4 GOVERNING LAW. THIS AGREEMENT AND THE
RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section XIII.5 Effect. Except as herein otherwise
specifically provided, this Agreement shall be binding upon and
inure to the benefit of the parties and their legal
representatives, successors and assigns.
Section XIII.6 Pronouns and Number. Wherever from the
context it appears appropriate, each term stated in either the
singular or the plural shall include the singular and the plural,
and pronouns stated in the masculine, feminine or neuter shall
include the masculine, feminine and neuter.
Section XIII.7 Captions. Captions contained in this
Agreement are inserted only as a matter of convenience and in no
way define, limit or extend the scope or intent of this Agreement
or any provision hereof.
Section XIII.8 Partial Enforceability. If any
provision of this Agreement, or the application of such provision
to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section XIII.9 Counterparts. This Agreement may
contain more than one counterpart of the signature page and this
Agreement may be executed by the affixing of the signature of
each of the signers to one of such counterpart signature pages.
All of such counterparts signature pages shall be read as though
one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
Section XIII.10 Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict
performance of, any provision of this Agreement shall not prevent
a subsequent act, which would have originally constituted a
violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and
the use of any one right or remedy by any party shall not
preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or
otherwise.
Section XIII.11 Acceptance of Terms of the Guarantee
and the Indenture.
The receipt and acceptance of a Preferred Security or
any interest therein by or on behalf of a Holder or any
beneficial owner, without any signature or further manifestation
of assent, shall constitute the unconditional agreement by the
Holder and all others having a beneficial interest in such
Preferred Security to the subordination provisions and other
terms of the Guarantee and the Indenture and shall constitute the
agreement of the Partnership, such Holder and such others that
those terms and provisions shall be binding, operative and
effective as between the Partnership and such Holder and such
others.
Section XIII.12 Consent to Jurisdiction.
(a) The General Partner agrees (i) that any legal
action, suit or proceeding against it with respect to its
obligations, liabilities or any other matter arising out of or in
connection with this Agreement may be brought in any federal or
state court in the State of Delaware, and (ii) to file such
consents with such authorities as may be required to irrevocably
evidence such agreement.
(b) The General Partner irrevocably and
unconditionally waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of
venue of any of the aforesaid actions, suits or proceedings
arising out of or in connection with this Agreement brought in
any federal or state courts located in the State of Delaware and
hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in
an inconvenient forum.
Section XIII.13 Waiver of Immunities. To the extent
that the General Partner or any of its properties, assets or
revenues may have or may hereafter become entitled to, or have
attributed to it, any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or
proceeding, from the giving of any relief in any thereof, from
set-off or counterclaim, from the jurisdiction of any court, from
service process, from attachment upon or prior to judgment, from
attachment in aid of execution of judgment, or from execution of
judgment, or other legal process or proceeding for the giving of
any relief or for the enforcement of any judgment, in any
jurisdiction in which proceedings may at any time be commenced,
with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement or
the Preferred Securities of any series, the General Partner
hereby irrevocably and unconditionally waives and agrees not to
plead or claim, any such immunity and consents to such relief and
enforcement. Nothing in this Section 13.13 shall be deemed to
waive any defense (other than any such immunity) available to the
General Partner.
Section XIII.14 Judgment Currency. The General
Partner agrees to indemnify the Holders of the Preferred
Securities of any series against any loss incurred by such
indemnified party as a result of any judgment or order being
given or made for any amount due under this Agreement or the
Preferred Securities of any series and such judgment or order
being expressed and paid in a currency (the "Judgment Currency")
other than United States dollars and as a result of any variation
as between (i) the rate of exchange at which the United States
dollar amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of exchange
at which any such indemnified party is able to purchase United
States dollars, at the business day nearest the date of judgment,
with the amount of the Judgment Currency actually received by any
such indemnified party. If, alternatively, any such indemnified
party receives a profit as a result of such currency conversion,
it will return any such profits to the General Partner (after
taking into account any taxes or other costs arising in
connection with such conversion and repayment). The foregoing
indemnity shall constitute a separate and independent obligation
of the General Partner, and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid.
The term "rate of exchange" shall include any premiums and costs
or exchange payable in connection with the purchase of, or
conversion into, the relevant currency.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above stated.
General Partner:
ENTERGY LONDON INVESTMENTS UK plc
By:
Name:
Title:
INITIAL LIMITED PARTNER:
WILLIAM J. REGAN, JR.
LIMITED PARTNERS:
All Limited Partners now and hereafter
admitted as limited partners pursuant to
powers of attorney and/or authorizations
now or hereafter given in favor of the
General Partner
By: Entergy London Investments UK plc
By:
Name:
Title:
<PAGE>
ANNEX A
[INSERT ANY LEGEND REQUIRED BY CLEARING AGENCY]
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
Entergy London Capital, L.P.
__% Cumulative Quarterly Income Preferred Securities, Series _
(liquidation preference $__ per Preferred Security)
Entergy London Capital, L.P., a limited partnership
formed under the laws of the State of Delaware (the
"Partnership"), hereby certifies that _____________ (the
"Holder") is the registered owner of _______% Cumulative
Quarterly Income Preferred Securities, Series __ (liquidation
preference $_____ per Preferred Security) (the "Series __
Preferred Securities") representing limited partner interests in
the Partnership. The Series __ Preferred Securities are fully
paid and are nonassessable limited partner interests in the
Partnership, as to which the Limited Partners in the Partnership
who hold the Preferred Securities (the "Holders"), in their
capacities as limited partners in the Partnership, will, assuming
such Holders do not participate in the control of the business of
the Partnership, have no liability solely by reason of being
Holders (subject to the obligation of a limited partner to repay
any funds wrongfully distributed to it), and [[,subject to any
restrictions on transfer required by a Clearing Agency,] , INSERT
IF GLOBAL CERTIFICATE], are freely transferable on the books and
records of the Partnership, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The rights, privileges or preference
of the Series __ Preferred Securities are set forth in, and this
certificate and the Series __ Preferred Securities represented
hereby are issued and shall in all respects be subject to the
terms and provisions of, the Amended and Restated Limited
Partnership Agreement, dated as of _____ __, 1997, as the same
may be amended from time to time in accordance with its terms
(the "Limited Partnership Agreement"), and the Action of the
General Partner (the "Action") taken pursuant thereto authorizing
the issuance of the Series __ Preferred Securities and
determining the designations, rights, privileges, restrictions,
preferences and other terms and provisions regarding Dividends,
voting, return of capital and other matters relating to the
Series __ Preferred Securities. Capitalized terms used herein
but not defined herein shall have the meaning given them in the
Limited Partnership Agreement or the Action. The Holder is
entitled to the benefits of the Guarantee Agreement between
Entergy London Investments UK plc, a public limited company
incorporated under the laws of England and Wales ("Entergy London
Investments"), and the Guarantee Trustee dated as of _______ __,
______ (as amended from time to time in accordance with its
terms, the "Guarantee") to the extent provided therein. The
Partnership will furnish a copy of the Limited Partnership
Agreement and the Guarantee to the Holder without charge upon
written request to the Partnership at its principal place of
business or registered office.
The Holder, by accepting this certificate, is deemed to
have agreed (i) to be bound by the provisions of the Limited
Partnership Agreement and the Action and (ii) to the
subordination provisions and other terms of the Indenture and the
Guarantee. Upon registration of this Certificate in the books
and records of the Partnership, the Holder was admitted to the
Partnership as a limited partner of the Partnership, is bound by
the Limited Partnership Agreement and is entitled to the benefits
thereunder.
Reference is hereby made to the further provisions of
the Series ____ Preferred Securities set forth on the reverse
hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Partnership has executed this
certificate this __ the day of __________.
ENTERGY LONDON CAPITAL, L.P.
By: ENTERGY LONDON INVESTMENTS UK
plc, its General Partner
By:___________________________
Name:
Title:
[Countersigned and Registered:
By:[_____________________________]
Transfer Agent and Registrar
By:_________________________
Name:
Title: ]*
__________________________
* Only for Preferred Securities in definitive form.
[REVERSE OF CERTIFICATE]
[Insert Terms of Particular Series of Preferred Securities from
Action with Respect Thereto]
<PAGE>
ANNEX B
TERMS OF THE _____% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES, SERIES A
OF ENTERGY LONDON CAPITAL, L.P.
(liquidation preference $25 per Preferred Security)
I Designation. __________ Preferred Securities of
the Partnership are hereby constituted as a series of Preferred
Securities, with a liquidation preference of $25 each (the
"Liquidation Preference"), designated as "______% Cumulative
Quarterly Income Preferred Securities, Series A" (hereinafter
called the "Series A Preferred Securities"). The Series A
Preferred Securities are being issued pursuant to the Amended and
Restated Limited Partnership Agreement of Entergy London Capital,
L.P., dated as of _____ __, 1997 (as amended from time to time in
accordance with its terms, the "Limited Partnership Agreement").
Capitalized terms used but not defined herein have the meanings
set forth in the Limited Partnership Agreement.
2. Ranking. The limited partner interests
represented by the Series A Preferred Securities will have a
preference with respect to cash distributions and amounts payable
on dissolution, redemption or otherwise over the general partner
interests in the Partnership.
3. Dividends. Holders of the Series A Preferred
Securities shall be entitled to receive, when, as and if declared
by the Partnership, cumulative dividends out of funds of the
Partnership legally available therefor, accumulating from the
date of original issuance and payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year
(each, a "Dividend Payment Date"), commencing ____ __, 1997
("Dividends"). The Dividends payable on each Series A Preferred
Security will be fixed at a rate per annum of $_______, or _____%
of the initial Liquidation Preference of $25. Dividends that are
in arrears for more than one quarter will accumulate additional
Dividends thereon at the rate of __% per annum thereof compounded
quarterly ("Additional Dividends"). The term "Dividends" as used
herein includes any Additional Dividends. Additional Amounts (as
defined herein) or Additional Interest (as defined in the
Indenture). The amount of Dividends payable for any period will
be computed on the basis of twelve 30-day months and a 360-day
year and, for any period shorter than a full quarter, will be
computed on the basis of the actual number of days elapsed in
such period.
If the payment of interest on the series of Debentures
issued in connection with the issuance and sale of the Series A
Preferred Securities (the "Series A Debentures") is deferred
pursuant to Section 311 of the Indenture, then Dividends on the
Series A Preferred Securities will be deferred for as long as
such interest payments are deferred and the rate per annum at
which Dividends on the Series A Preferred Securities accumulate
shall be increased by an amount such that the aggregate amount of
Dividends that accumulate on all Series A Preferred Securities
during any such deferral is equal to the aggregate amount of
interest (including, to the extent permitted by law, interest
payable on unpaid interest at the percentage rate per annum set
forth above, compounded quarterly) that accrues while interest is
so deferred on the Series A Debentures. The General Partner
shall give notice of Entergy London Investments' intention to
defer payment of interest on the Series A Debentures to the
Holders of the Series A Preferred Securities within five Business
Days of the receipt of notice thereof.
The Partnership will be required to declare and pay in
full on each Dividend Payment Date Dividends on the Series A
Preferred Securities to the extent that the Partnership has funds
legally available for the payment of such Dividends and cash on
hand sufficient to make such payments. The Partnership will be
prohibited from paying Dividends in any other circumstances.
Dividends declared on the Series A Preferred Securities
will be payable to the Holders thereof as they appear on the
books and records of the Partnership at the close of business on
the relevant record date, which will be one Business Day prior to
the relevant Dividend Payment Date. In the event that any
Dividend Payment Date is not a Business Day, then payment of the
Dividends payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year,
payment of such Dividends shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date.
Holders of the Series A Preferred Securities will not
be entitled to any Dividend or other payment (other than the
Redemption Price or the Liquidation Preference), whether payable
in cash, property or shares, in excess of full cumulative
Dividends.
4. Redemptions.
Mandatory Redemption. Upon the redemption, in whole or
in part, of the Series A Debentures, the proceeds from such
redemption will be applied by the Partnership to redeem a Like
Amount (as defined below) of Series A Preferred Securities, upon
not less than 30 nor more than 60 days' notice to each Holder of
Series A Preferred Securities at its registered address, at a
redemption price equal to $25 per Series A Preferred Security,
plus accumulated and unpaid Dividends thereon to the date of
redemption (the "Redemption Price").
Optional Redemption of Series A Debentures. Entergy
London Investments will have the right to redeem the Series A
Debentures on or after ________, 2002, in whole at any time or in
part from time to time, and thereby cause a mandatory redemption
of a Like Amount of Series A Preferred Securities at the
Redemption Price.
Entergy London Investments will also have the right to
redeem the Series A Debentures in whole (but not in part), if
Entergy London Investments has or will become obligated to pay
Additional Amounts (as defined in the Officer's Certificate dated
________, 1997 delivered pursuant to Sections 201 and 301 of the
Indenture), and thereby cause a mandatory redemption of the
Series A Preferred Securities in whole (but not in part) at the
Redemption Price.
Special Event Redemption or Distribution of Series A
Debentures. If a Special Event shall have occurred and be
continuing, Entergy London Investments shall have the right to
redeem the Series A Debentures at any time and thereby cause a
mandatory redemption of the Series A Preferred Securities in
whole (but not in part) at the Redemption Price within 90 days
following the occurrence of such Special Event.
Whether or not a Special Event has occurred, the
General Partner has the right, at any time, to dissolve and,
after satisfaction of liabilities to creditors of the
Partnership, if any, as provided by the Act, to cause a Like
Amount of Series A Debentures to be distributed to the Holders of
the Series A Preferred Securities in liquidation of the
Partnership.
If a Special Event occurs and Entergy London
Investments does not elect to redeem the Series A Debentures or
to dissolve the Partnership, the Series A Preferred Securities
will remain outstanding and, if such Special Event is a Tax
Event, Additional Interest will be payable on the Series A
Debentures.
"Like Amount" means (i) with respect to a redemption of
any Series A Preferred Securities, Series A Preferred Securities
having a Liquidation Preference equal to that portion of the
principal amount of Series A Debentures to be contemporaneously
redeemed and the proceeds of which will be used to pay the
Redemption Price of such Series A Preferred Securities, and (ii)
with respect to a distribution of Series A Debentures to Holders
of the Series A Preferred Securities in connection with a
dissolution of the Partnership, Series A Debentures having a
principal amount equal to the Liquidation Preference of the
Series A Preferred Securities of the Holder to whom such Series A
Debentures are distributed.
5. Redemption Procedures. Series A Preferred
Securities redeemed on each redemption date shall be redeemed at
the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Series A Debentures.
Redemptions of the Series A Preferred Securities shall be made,
and the Redemption Price shall be payable, on each redemption
date only to the extent that the Partnership has funds on hand
available for the payment of such Redemption Price.
If the Partnership gives a notice of redemption in
respect of the Series A Preferred Securities, then, by 12:00
noon, New York City time, on the redemption date, to the extent
funds are available, the Partnership will deposit irrevocably
with the Clearing Agency funds sufficient to pay the applicable
Redemption Price and will give the Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the
Holders of such Series A Preferred Securities. If the Series A
Preferred Securities are no longer in book-entry form, the
Partnership, to the extent funds are available therefor, will
irrevocably deposit with the paying agent for the Series A
Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the
holders thereof upon surrender of their certificates evidencing
such Series A Preferred Securities. Notwithstanding the
foregoing, Dividends payable on or prior to the redemption date
for any Series A Preferred Securities called for redemption shall
be payable to the Holders of such Series A Preferred Securities
as of the relevant record dates for the related Dividend Payment
Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all
rights of the Holders of such Series A Preferred Securities so
called for redemption will cease, except the right of the Holders
of such Series A Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such
Series A Preferred Securities will cease to be outstanding. In
the event that any date fixed for redemption of Series A
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if
such Business Day falls in the next succeeding calendar year,
such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on
the redemption date. In the event that payment of the Redemption
Price in respect of Series A Preferred Securities called for
redemption is improperly withheld or refused and not paid either
by the Partnership or by Entergy London Investments pursuant to
the Guarantee, Dividends on the Series A Preferred Securities
will continue to accumulate at the then applicable rate from the
redemption date originally established by the Partnership for
such Series A Preferred Securities to the date such Redemption
Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating
the Redemption Price.
Subject to applicable law (including, without
limitation, Rule 14e-1 under the Exchange Act and any other
applicable United States federal securities law), Entergy London
Investments or its subsidiaries may at any time and from time to
time purchase outstanding Series A Preferred Securities by
tender, in the open market or by private agreement.
Payment of the Redemption Price on the Series A
Preferred Securities and any distribution of Series A Debentures
to Holders of Series A Preferred Securities shall be made to the
holders of record as they appear on the books and records of the
Partnership as of the relevant record date, which, as long as the
Series A Preferred Securities remain in book-entry form, will be
one Business Day prior to the relevant redemption date or
liquidation date, as applicable; provided, however, that in the
event that the Series A Preferred Securities are not in book-
entry form, the relevant record date for the Series A Preferred
Securities shall be the date 15 days prior to the redemption date
or liquidation date, as applicable.
If less than all of the Series A Preferred Securities
are to be redeemed on a redemption date, the particular Series A
Preferred Securities to be redeemed shall be selected not more
than 60 days prior to the redemption date by the General Partner
from the outstanding Series A Preferred Securities not previously
called for redemption, by lot or by such method as the General
Partner shall deem fair and appropriate, which shall provide for
the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation
Preference of Series A Preferred Securities of a denomination
larger than $25. The General Partner shall promptly notify the
transfer agent and registrar in writing of the Series A Preferred
Securities selected for redemption and, in the case of any Series
A Preferred Securities selected for partial redemption, the
aggregate Liquidation Preference thereof to be redeemed.
If, upon any liquidation of the Partnership, the
Holders of Series A Preferred Securities are paid in full the
aggregate Liquidation Distribution to which they are entitled,
then such Holders will not be entitled to receive or share in any
other assets of the Partnership then or thereafter available for
distribution to any other holders of partnership interests in the
Partnership.
7. Voting Rights. The Limited Partnership Agreement
may be amended from time to time by the General Partner, without
the consent of the Holders of the Series A Preferred Securities
(i) to cure any ambiguity, to correct or supplement any
provisions in the Limited Partnership Agreement that may be
inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the
Limited Partnership Agreement, that shall not be inconsistent
with the other provisions of the Limited Partnership Agreement,
or (ii) to modify, eliminate or add to any provisions of the
Limited Partnership Agreement to such extent as shall be
necessary to ensure that the Partnership will be classified for
United States federal income tax purposes as a partnership or a
grantor trust at all times that any Series A Preferred Securities
are outstanding or to ensure that the Partnership will not be
required to register as an "investment company" under the
Investment Company Act, provided, however, that except in the
case of clause (ii), such action shall not adversely affect in
any material respect the interests of any Holder of Series A
Preferred Securities, and, in the case of clause (i), any such
amendments of the Limited Partnership Agreement shall become
effective when notice thereof is given to the Holders of Series A
Preferred Securities. The Limited Partnership Agreement may be
amended by the General Partner with the consent of Holders of a
majority in Liquidation Preference of the outstanding Series A
Preferred Securities and upon receipt by the General Partner of
an opinion from independent counsel experienced in such matters
to the effect that such amendment of the exercise of any power
granted to the General Partner in accordance with such amendment
will not affect the Partnership's status as a partnership for
United States federal income tax purposes or the Partnership's
exemption from the status as an "investment company" under the
Investment Company Act, provided that without the consent of each
Holder of the Preferred Securities, the Limited Partnership
Agreement may not be amended to change the amount or timing of
any Dividend on the Series A Preferred Securities or otherwise
adversely affect the amount of any Dividend required to be made
in respect of the Series A Preferred Securities as of a specified
date or restrict the right of Holders of the Series A Preferred
Securities to institute suit for the enforcement of any such
payment on or after such date as described below.
So long as any Series A Debentures are held by the
Partnership, the General Partner shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
power conferred on the Debenture Trustee with respect to the
Series A Debentures, (ii) waive any past default that is
waiveable under Section 813 of the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all
the Series A Debentures shall be due and payable or (iv) consent
to any amendment, modification or termination of the Indenture or
the Series A Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the
Holders of a Majority in Liquidation Preference of all
outstanding Series A Preferred Securities; provided, however,
that where a consent under the Indenture would require the
consent of each holder of Series A Debentures affected thereby,
no such consent shall be given by the General Partner without the
prior written consent of each Holder of the Series A Preferred
Securities. The General Partner shall not revoke any action
previously authorized or approved by a vote of the Series A
Preferred Securities except by subsequent vote of not less than
66 2/3% in Liquidation Preference of the Holders of the Series A
Preferred Securities. The General Partner shall notify all
Holders of Series A Preferred Securities of any notice of default
with respect to the Series A Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Series A
Preferred Securities, prior to taking any of the foregoing
actions, the General Partner shall obtain an opinion from
independent counsel experienced in such matters to the effect
that the Partnership will be classified as a partnership and not
as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
If the General Partner fails to enforce the
Partnership's rights under the Series A Debentures or the
Indenture, a Holder of Series A Preferred Securities may
institute a legal proceeding directly against Entergy London
Investments to enforce the Partnership's rights with respect to
the Series A Debentures or the Indenture, to the fullest extent
permitted by law, without first instituting any legal proceeding
against the General Partner or any other Person. Notwithstanding
the foregoing, a Holder of Series A Preferred Securities may
directly institute a proceeding for enforcement of payment to
such Holder of principal of or interest on the Series A
Debentures having a principal amount equal to the Liquidation
Preference of the Series A Preferred Securities of such Holder on
or after the due dates specified in the Series A Debentures.
Any required approval of Holders of Series A Preferred
Securities may be given at a meeting of Holders of Series A
Preferred Securities convened for such purpose or pursuant to
written consent. The General Partner will cause a notice of any
meeting at which Holders of Series A Preferred Securities are
entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be given to each
Holder of record of Series A Preferred Securities in the manner
set forth in the Limited Partnership Agreement.
No vote or consent of the Holders of Series A Preferred
Securities will be required for the Partnership to redeem and
cancel the Series A Preferred Securities in accordance with the
Limited Partnership Agreement.
Notwithstanding that Holders of Series A Preferred
Securities are entitled to vote or consent under any of the
circumstances described above, any of the Series A Preferred
Securities that are owned by Entergy London Investments, or any
Affiliate of Entergy London Investments, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
8. Clearing Agency. The Depository Trust Company
will act as the initial Clearing Agency for the Series A
Preferred Securities.
9. Registrar and Transfer Agent. The Bank of New
York will act as the initial registrar and initial transfer agent
for the Series A Preferred Securities.
10. Guarantee. It shall be a condition precedent to
the issuance of the Series A Preferred Securities that Entergy
London Investments execute and deliver the Guarantee.
11. Form of Security. The Preferred Certificates in
respect of the Series A Preferred Securities shall be in the form
set forth as Exhibit I to this Annex B.
<PAGE>
EXHIBIT I
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
Entergy London Capital, L.P.
____% Cumulative Quarterly Income Preferred Securities, Series A
(liquidation preference $25 per Preferred Security)
Entergy London Capital, L.P., a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), hereby
certifies that __________ (the "Holder") is the registered owner
of _________ ____% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per Preferred
Security) (the "Securities") representing limited partner
interests in the Partnership. The Securities are fully paid and
are nonassessable limited partner interests the Partnership, as
to which the Limited Partners in the Partnership who hold the
Securities (the "Holders"), in their capacities as limited
partners in the Partnership, will, assuming such Holders do not
participate in the control of the business of the Partnership,
have no liability solely by reason of being Holders (subject to
the obligation of a limited partner to repay any funds wrongfully
distributed to it), and are freely transferable on the books and
records of the Partnership, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The rights, privileges or preference
of the Securities are set forth in, and this certificate and the
Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended
Restated Limited Partnership Agreement of the Partnership, dated
as of __________ __, 1997, as the same may be amended from time
to time in accordance with its terms (the "Limited Partnership
Agreement"), and the Action of the General Partner (the "Action")
taken pursuant thereto authorizing the issuance of the Securities
and determining the designations, rights, privileges,
restrictions, preferences and other terms and provisions
regarding Dividends, voting, return of capital and other matters
relating to the Securities. Capitalized terms used herein but
not defined herein shall have the meaning given them in the
Limited Partnership Agreement or the Action. The Holder is
entitled to the benefits of the Guarantee Agreement between
Entergy London Investments UK plc, a public limited company
incorporated under the laws of England and Wales ("Entergy London
Investments"), and the Guarantee Trustee, dated as of __________
__, 1997 (as amended from time to time in accordance with its
terms, the "Guarantee") to the extent provided therein. The
Partnership will furnish a copy of the Limited Partnership
Agreement and the Guarantee to the Holder without charge upon
written request to the Partnership at its principal place of
business or registered office.
The Holder, by accepting this certificate, is deemed to
have agreed (i) to be bound by the provisions of the Limited
Partnership Agreement and the Action and (ii) to the
subordination provisions and other terms of the Indenture and the
Guarantee. Upon registration of this Certificate in the books
and records of the Partnership, the Holder was admitted to the
Partnership as a Limited Partner, is bound by the Limited
Partnership Agreement and is entitled to the benefits thereunder.
Reference is hereby made to the further provisions of
the Securities set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, this certificate has been executed
on behalf of the Partnership by its duly authorized General
Partner, this ____ day of __________ 1997.
ENTERGY LONDON CAPITAL, L.P.
By: ENTERGY LONDON INVESTMENTS
UK plc, its General Partner
By:______________________________
Name: [ ]
Title: [ ]
<PAGE>
[REVERSE OF CERTIFICATE]
Ranking. The limited partner interests represented by the
Securities will have a preference with respect to cash
distributions and amounts payable on dissolution, redemption or
otherwise over the general partner interests in the Partnership.
Dividends. Holders shall be entitled to receive cumulative
dividends out of funds of the Partnership legally available
therefor, accumulating from , 1997 and payable
quarterly in arrears on , ,
and of each year (each, a "Dividend Payment Date"),
commencing , 1997 ("Dividends"). The Dividends
payable on each Security will be fixed at a rate per annum of
$__________ or _____% of the initial Liquidation Preference of
$25. Dividends that are in arrears for more than one quarter
will accumulate additional Dividends thereon at the rate of __%
per annum thereof compounded quarterly ("Additional Dividends").
The term "Dividends" as used herein includes any Additional
Dividends. Additional Amounts (as defined herein) or Additional
Interest (as defined in the Indenture). The amount of Dividends
payable for any period will be computed on the basis of twelve 30-
day months and a 360-day year and, for any period shorter than a
full quarter, will be computed on the basis of the actual number
of days elapsed in such period.
If the payment of interest on the series of Debentures issued in
connection with the issuance and sale of the Securities (the
"Series A Debentures") is deferred pursuant to Section 311 of the
Indenture, then Dividends on the Securities will be deferred for
as long as such interest payments are deferred and the rate per
annum at which Dividends on the Securities accumulate shall be
increased by an amount such that the aggregate amount of
Dividends that accumulate on all Securities during any such
deferral is equal to the aggregate amount of interest (including,
to the extent permitted by law, interest payable on unpaid
interest at the percentage rate per annum set forth above,
compounded quarterly) that accrues while interest is so deferred
on the Series A Debentures. The General Partner shall give
notice of Entergy London Investments' intention to defer payment
of interest on the Series A Debentures to the Holders of the
Securities within five Business Days of the receipt of notice
thereof.
The Partnership will be required to declare and pay in full on
each Dividend Payment Date Dividends on the Securities to the
extent that the Partnership has funds legally available for the
payment of such Dividends and cash on hand sufficient to make
such payments. The Partnership will be prohibited from paying
Dividends in any other circumstances.
Dividends declared on the Securities will be payable to the
Holders thereof as they appear on the books and records of the
Partnership at the close of business on the relevant record date,
which will be one Business Day prior to the relevant Dividend
Payment Date. In the event that any Dividend Payment Date is not
a Business Day, then payment of the Dividends payable on such
date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any
such delay), except that if such Business Day is in the next
succeeding calendar year, payment of such Dividends shall be made
on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. If such Business
Day is in the next succeeding calendar year, however, the payment
will be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
Holders will not be entitled to any Dividend or other payment
(other than the Redemption Price or the Liquidation Preference),
whether payable in cash, property or shares, in excess of full
cumulative Dividends.
If accumulated and unpaid Dividends have not been paid in full on
the Securities, the Partnership may not: (i) pay, or declare and
set aside for payment, any dividends (other than dividends in the
forms of additional partner interests that rank subordinate to
the Securities as regards participation in the profits and assets
of the Partnership) on any partner interests that rank junior to
the Securities as regards participation in the profits and assets
of the Partnership; or (ii) redeem, purchase or otherwise acquire
any other partner interest; until, in each case, such time as all
accumulated and unpaid Dividends on all of the Securities shall
have been paid in full for all dividend periods terminating on or
prior to the date of such payment or the date of such redemption,
purchase, or acquisition, as the case may be.
If accumulated and unpaid Dividends have been paid in full on the
Securities for all prior whole Dividend periods, then Holders
will not be entitled to receive or share in any dividends paid,
declared or set aside for payment on any other Interest.
Redemptions.
Mandatory Redemption. Upon the redemption, in whole or in
part, of the Series A Debentures, the proceeds from such
redemption will be applied by the Partnership to redeem a Like
Amount (as defined below) of Securities, upon not less than 30
nor more than 60 days' notice to each Holder of Securities at its
registered address, at a redemption price equal to $25 per
Security, plus accumulation and unpaid Dividends thereon to the
date of redemption (the "Redemption Price").
Optional Redemption of Series A Debentures. Entergy London
Investments will have the right to redeem the Series A Debentures
on or after ________, 2002, in whole at any time or in part from
time to time, and thereby cause a mandatory redemption of a Like
Amount of Securities at the Redemption Price.
Entergy London Investments will also have the right to redeem
the Series A Debentures in whole (but not in part), if Entergy
London Investments has or will become obligated to pay Additional
Amounts (as defined in the Officer's Certificate dated ________,
1997 delivered pursuant to Sections 201 and 301 of the
Indenture), and thereby cause a mandatory redemption of the
Securities in whole (but not in part) at the Redemption Price.
Special Event Redemption or Distribution of Series A
Debentures. If a Special Event shall have occurred and be
continuing, Entergy London Investments shall have the right to
redeem the Series A Debentures at any time in whole (but not in
part) and thereby cause a mandatory redemption of the Securities
in whole (but not in part) at the Redemption Price within 90 days
following the occurrence of such Special Event.
Whether or not a Special Event has occurred, the General
Partner has the right, at any time, to dissolve and, after
satisfaction of liabilities to creditors of the Partnership, if
any, as provided by the Act, to cause a Like Amount of Series A
Debentures to be distributed to the Holders in liquidation of the
Partnership.
If a Special Event occurs and Entergy London Investments does
not elect to redeem the Series A Debentures or to dissolve the
Partnership, the Securities will remain outstanding and, if such
Special Event is a Tax Event, Additional Interest will be payable
on the Series A Debentures.
"Like Amount" means (i) with respect to a redemption of any
Securities, Securities having a Liquidation Preference equal to
that portion of the principal amount of Series A Debentures to be
contemporaneously redeemed and the proceeds of which will be used
to pay the Redemption Price of such Securities, and (ii) with
respect to a distribution of Series A Debentures to Holders in
connection with a dissolution of the Partnership, Series A
Debentures having a principal amount equal to the Liquidation
Preference of the Securities of the Holder to whom such Series A
Debentures are distributed.
Under no circumstances will the Securities be redeemable at the
option of the Holders.
If an Investment Company Event (as defined below) shall occur and
be continuing, the Partnership may at its option (but only with
the Guarantor's consent) redeem the Securities in whole (but not
in part) at the Redemption Price within 90 days following the
occurrence of such Investment Company Event; provided, however,
that, if and as long as at the time there is available to the
General Partner the opportunity to eliminate, within such 90-day
period, the Investment Company Event by taking some ministerial
action, such as the filing of a form or the making of an
election, or the pursuit of some other similar reasonable measure
that has no adverse effect on the Partnership or Entergy London
Investments, the General Partner will pursue such measure in lieu
of redemption. An "Investment Company Event" shall have occurred
if as a result of the occurrence of a change in law or regulation
or a change in the interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in Investment Company Act Law")
the Partnership is or will be considered an "investment company"
that is required to be registered under the Investment Company
Act, which Change in Investment Company Act Law becomes effective
on or after _______ , 1997; provided, however, that no
Investment Company Event shall be deemed to have occurred if
Entergy London Investments has successfully issued an additional
or supplemental irrevocable and unconditional guarantee or taken
such other actions as may be necessary so that notwithstanding
such Change in Investment Company Act Law, the Partnership in not
required to be registered as an "investment company" within the
meaning of the Investment Company Act. In case of any
uncertainty regarding an Investment Company Event, the good faith
determination of the General Partner shall be conclusive.
Redemption Procedures. Securities redeemed on each redemption
date shall be redeemed at the Redemption Price with the
applicable proceeds from the contemporaneous redemption of the
Series A Debentures. Redemptions of the Securities shall be
made, and the Redemption Price shall be payable, on each
redemption date only to the extent that the Partnership has funds
on hand available for the payment of such Redemption Price.
If the Partnership gives a notice of redemption in respect of
the Securities, then, by 12:00 noon, New York City time, on the
redemption date, to the extent funds are available, the
Partnership will deposit irrevocably with the Clearing Agency
funds sufficient to pay the applicable Redemption Price and will
give the Clearing Agency irrevocable instructions and authority
to pay the Redemption Price to the Holders of such Securities.
If the Securities are no longer in book-entry form, the
Partnership, to the extent funds are available therefor, will
irrevocably deposit with the paying agent for the Securities
funds sufficient to pay the applicable Redemption Price and will
give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of
their certificates evidencing such Securities. Notwithstanding
the foregoing, Dividends payable on or prior to the redemption
date for any Securities called for redemption shall be payable to
the Holders of such Securities as of the relevant record dates
for the related Dividend Payment Date. If notice or redemption
shall have been given and funds deposited as required, then upon
the date of such deposit, all rights of the Holders of such
Securities so called for redemption will cease, except the right
of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such
Securities will cease to be outstanding. In the event that any
date fixed for redemption of Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next
succeeding calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on the redemption date. In the event
that payment of the Redemption Price in respect of Securities
called for redemption is improperly withheld or refused and not
paid either by the Partnership or by Entergy London Investments
pursuant to the Guarantee, Dividends on the Securities will
continue to accumulate at the then applicable rate from the
redemption date originally established by the Partnership for
such Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the Redemption
Price.
Subject to applicable law (including, without limitation,
Rule 14e-1 under the Exchange Act and any other applicable United
States federal securities law), Entergy London Investments or its
subsidiaries may at any time and from time to time purchase
outstanding Securities by tender, in the open market or by
private agreement.
Payment of the Redemption Price on the Securities and any
distribution of Series A Debentures to Holders of Securities
shall be made to the holders of record as they appear on the
books and records of the Partnership as of the relevant record
date, which, as long as the Securities remain in book-entry form,
will be one Business Day prior to the relevant redemption date or
liquidation date, as applicable; provided, however, that in the
event that the Securities are not in book-entry form, the
relevant record date for the Securities shall be the date 15 days
prior to the redemption date or liquidation date, as applicable.
If less than all of the Securities are to be redeemed on a
redemption date, the particular Securities to be redeemed shall
be selected not more than 60 days prior to the redemption date by
the General Partner from the outstanding Securities not
previously called for redemption, by lot or by such method as the
General Partner shall deem fair and appropriate, which shall
provide for the selection for redemption of portions (equal to
$25 or an integral multiple of $25 in excess thereof) of the
Liquidation Preference of Securities of a denomination larger
than $25. The General Partner shall promptly notify the transfer
agent and registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected for
partial redemption, the aggregate Liquidation Preference thereof
to be redeemed.
Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Partnership, the Holders at the time outstanding will be entitled
to receive a liquidation preference of $25 per Security plus all
accumulated and unpaid Dividends (whether or not earned or
declared), to the date of payment (the "Liquidation Preference")
out of the assets of the Partnership legally available for
distribution to Partners prior to any distribution by the
Partnership on any of its Partnership Interests that rank junior
in liquidation to the Securities.
If, upon any liquidation of the Partnership, the Holders are paid
in full the aggregate Liquidation Distribution to which they are
entitled, then such Holders will not be entitled to receive or
share in any other assets of the Partnership then or thereafter
available for distribution to any other holders of partnership
interests in the Partnership.
Voting Rights. The Limited Partnership Agreement may be amended
from time to time by the General Partner, without the consent of
the Holders (i) to cure any ambiguity, to correct or supplement
any provisions in the Limited Partnership Agreement that may be
inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the
Limited Partnership Agreement, that shall not be inconsistent
with the other provisions of the Limited Partnership Agreement,
or (ii) to modify, eliminate or add to any provisions of the
Limited Partnership Agreement to such extent as shall be
necessary to ensure that the Partnership will be classified for
United States federal income tax purposes as a partnership or a
grantor trust at all times that any Securities are outstanding or
to ensure that the Partnership will not be required to register
as an "investment company" under the Investment Company Act,
provided, however, that except in the case of clause (ii), such
action shall not adversely affect in any material respect the
interests of any Securities, and, in the case of clause (i), any
such amendments of the Limited Partnership Agreement shall become
effective when notice thereof is given to the Holders. The
Limited Partnership Agreement may be amended by the General
Partner with the consent of Holders of a Majority in Liquidation
Preference of the outstanding Securities and upon receipt by the
General Partner of an opinion from independent counsel
experienced in such matters to the effect that such amendment of
the exercise of any power granted to the General Partner in
accordance with such amendment will not affect the Partnership's
status as a partnership for United States federal income tax
purposes or the Partnership's exemption from the status as an
"investment company" under the Investment Company Act, provided
that without the consent of each Holder of the Securities, the
Limited Partnership Agreement may not be amended to change the
amount or timing of any Dividend on the Securities or otherwise
adversely affect the amount of any Dividend required to be made
in respect of the Securities as of a specified date or restrict
the right of Holders to institute suit for the enforcement of any
such payment on or after such date as described below.
Any required approval of Holders may be given at a meeting of
Holders convened for such purpose or pursuant to written consent.
The General Partner will cause a notice of any meeting at which
Holders are entitled to vote, or of any matter upon which action
by written consent of such Holders is to be taken, to be given to
each Holder of record of Securities in the manner set forth in
the Limited Partnership Agreement.
No vote or consent of the Holders will be required for the
Partnership to redeem and cancel the Securities in accordance
with the Limited Partnership Agreement.
Notwithstanding that Holders are entitled to vote or consent
under any of the circumstances described above, any of the
Securities that are owned by Entergy London Investments, or any
affiliate of Entergy London Investments, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
Exhibit 4.09
GUARANTEE AGREEMENT
Between
Entergy London Investments UK plc
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
_______ __, 1997
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................... Page
.
SECTION 1.01 Definitions................................. 1
ARTICLE II TRUST INDENTURE ACT............................... 4
SECTION 2.01 Trust Indenture Act; Application............ 4
SECTION 2.02 List of Holders of Preferred Securities..... 4
SECTION 2.03 Reports by the Guarantee Trustee............ 4
SECTION 2.04 Periodic Reports to Guarantee Trustee....... 4
SECTION 2.05 Evidence of Compliance with Conditions 5
Precedent...................................
SECTION 2.06 Events of Default; Waiver................... 5
SECTION 2.07 Events of Default; Notice................... 5
SECTION 2.08 Conflicting Interests....................... 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE.... 5
SECTION 3.01 Powers and Duties of Guarantee Trustee...... 5
SECTION 3.02 Certain Rights of Guarantee Trustee......... 7
ARTICLE IV GUARANTEE TRUSTEE................................. 9
SECTION 4.01 Guarantee Trustee; Eligibility.............. 9
SECTION 4.02 Compensation and Reimbursement 10
SECTION 4.03 Appointment, Removal and Resignation of
Guarantee Trustee........................... 10
ARTICLE V GUARANTEE......................................... 11
SECTION Guarantee..................................... 11
5.01
SECTION Waiver of Notice and Demand................. 11
5.02
SECTION Obligations Not Affected...................... 12
5.03
SECTION Rights of Holders............................ 12
5.042
SECTION Guarantee of Payment.......................... 13
5.05
SECTION Subrogation................................... 13
5.06
SECTION Independent Obligations...................... 13
5.07
ARTICLE VI SUBORDINATION...................................... 13
SECTION Subordination................................. 13
6.01
ARTICLE VII TERMINATION........................................ 14
SECTION Termination................................... 14
7.01
ARTICLE MISCELLANEOUS...................................... 14
VIII
SECTION Successors and Assigns..................... 14
8.01
SECTION Amendments.................................... 14
8.02
SECTION Notices....................................... 15
8.03
SECTION Benefit....................................... 16
8.04
SECTION Interpretation................................ 16
8.05
SECTION Governing Law................................. 16
8.06
CROSS-REFERENCE TABLE
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a)........................................... 4.01(a)
310(b)........................................... 4.01(c), 2.08
310(c)........................................... Inapplicable
311(a)........................................... 2.02(b)
311(b)........................................... 2.02(b)
311(c)........................................... Inapplicable
312(a)........................................... 2.02(a)
312(b)........................................... 2.02(b)
313.............................................. 2.03
314(a)........................................... 2.04
314(b)........................................... Inapplicable
314(c)........................................... 2.05
314(d)........................................... Inapplicable
314(e)........................................... 1.01, 2.05, 3.02
314(f)........................................... 2.01, 3.02
315(a)........................................... 3.01(d)
315(b)........................................... 2.07
315(c)........................................... 3.01
315(d)........................................... 3.01(d)
316(a)........................................... 5.04(a), 2.06
316(b)........................................... 5.03
316(c)........................................... 2.02
317(a)........................................... Inapplicable
317(b)........................................... Inapplicable
318(a)........................................... 2.01(b)
318(b)........................................... 2.01
318(c)........................................... 2.01(a)
_____________
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated
as of _______ __, 1997, is executed and delivered by Entergy
London Investments UK plc, a corporation incorporated under the
laws of England and Wales (the "Guarantor"), and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of Entergy London
Capital, L.P., a special purpose Delaware limited liability
partnership (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Limited
Partnership Agreement (the "Partnership Agreement"), dated as of
_______ __, 1997 among Entergy London Investments UK plc, as
General Partner (the "General Partner"), the Initial Limited
Partner (as defined therein) and the several Holders (as defined
therein), as Limited Partners, the Issuer is issuing as of the
date hereof __________ of its _____% Cumulative Quarterly Income
Preferred Securities, Series A ($___________ in aggregate
liquidation amount) (the "Preferred Securities") representing
preferred limited partnership interests in the Issuer and having
the terms set forth in the Partnership Agreement;
WHEREAS, the Preferred Securities are to be issued by
the Issuer and the proceeds thereof are to be used to purchase
the Debentures (as defined in the Partnership Agreement) which
will be issued in the name of the Partnership or to its order and
held as assets of the Partnership for the benefit of the Holders;
and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and
unconditionally agree, to the extent set forth herein, to pay to
the Holders the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the purchase by
each Holder of the Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time.
IDEFINITIONS
1.01 Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise
defined terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Partnership Agreement
as in effect on the date hereof.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the
foregoing.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Guarantee
Agreement.
"Guarantee Payments" shall mean the following payments
or distributions, without duplication, with respect to the
Preferred Securities, to the extent not paid or made by or on
behalf of the Issuer: (i) any accumulated and unpaid
Distributions that are required to be paid on such Preferred
Securities but only if and to the extent that the Partnership has
available funds sufficient to make such payment, (ii) the
redemption price (the "Redemption Price"), and all accumulated
and unpaid Distributions to the date of redemption, with respect
to the Preferred Securities called for redemption by the Issuer
but only if and to the extent that the Partnership has available
funds sufficient to make such payment, (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with a redemption of all of the
Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions
on the Preferred Securities to the date of payment, and (b) the
amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Guarantee
Trustee.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities then
outstanding; provided, however, that in determining whether the
holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indenture" means the Indenture (for Unsecured
Subordinated Debt Securities relating to Preferred Securities)
dated as of _______ __, 1997, among the Guarantor (the "Debenture
Issuer") and The Bank of New York, as trustee, pursuant to which
the Debentures are issued.
"Majority in liquidation amount of the Preferred
Securities" means a vote by Holders, voting separately as a
class, of more than 50% of the aggregate liquidation amount of
all Preferred Securities.
"Officers' Certificate" means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the
Guarantor, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any vice-president, any assistant vice-
president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Corporate Trust Department of
the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
IITRUST INDENTURE ACT
2.01 Trust Indenture Act; Application
(a) This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required or deemed to be part
of this Guarantee Agreement and shall, to the extent applicable,
be governed by such provisions; and
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
2.02 Lists of Holders of Preferred Securities
(a) The Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee (a) semiannually, not later than ________
__ and ________ __ in each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such
other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days
prior to the time such list is furnished; provided that, the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the
Guarantor. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a) of the Trust Indenture Act, subject to the
provisions of Section 311(b) and Section 312(b) of the Trust
Indenture Act.
2.03 Reports by the Guarantee Trustee. Within 60 days after
________ __ of each year, commencing ________ __, 199_, the
Guarantee Trustee shall provide to the Holders such reports, if
any, as are required by Section 313(a) of the Trust Indenture Act
in the form and in the manner provided by Section 313(a) of the
Trust Indenture Act. The Guarantee Trustee shall also comply
with the requirements of Sections 313(b), (c) and (d) of the
Trust Indenture Act.
2.04 Periodic Reports to Guarantee Trustee The Guarantor
shall provide to the Guarantee Trustee such documents, reports
and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
2.05 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this
Guarantee Agreement as and to the extent required by Section
314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1)
of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
2.06 Events of Default; Waiver. The Holders of a Majority
in liquidation amount of Preferred Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any
right consequent thereon.
2.07 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders, notices of all Events of Default
known to the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided that, the
Guarantee Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive
committee, or a trust committee of directors or Responsible
Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice, or a Responsible Officer
charged with the administration of the Partnership Agreement
shall have obtained written notice, of such Event of Default.
2.08 Conflicting Interests. The Partnership Agreement and
the Indenture shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture
Act.
III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
3.01 Powers and Duties of the Guarantee Trustee
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement or any rights
hereunder to any Person except a Holder exercising his or her
rights pursuant to Section 5.04 or to a Successor Guarantee
Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right,
title and interest of the Guarantee Trustee shall automatically
vest in any Successor Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Guarantee Agreement,
and no implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties
and obligations as are specifically set forth in
this Guarantee Agreement; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Guarantee Trustee, unless it
shall be proved that the Guarantee Trustee or such
Responsible Officer was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of
the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability
in the performance of any of its duties or in the
exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
3.02 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem
it desirable that a matter be proved or established
before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with
counsel of its choice, and the written advice or
opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any
of its employees; the Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any
court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing
contained in this Section 3.02(a)(v) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee
Agreement;
(vi) the Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably
believed by it to be genuine, but the Guarantee
Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as
it may see fit;
(vii) the Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or
attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care
by it hereunder;
(viii) whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it
desirable to receive instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (1) may request
instructions from the Holders, (2) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and (3)
shall be protected in acting in accordance with such
instructions; and
(ix) the Guarantee Trustee shall not be liable for
any action taken, suffered or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Guarantee.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed
to be a duty.
IV
GUARANTEE TRUSTEE
4.01 Guarantee Trustee; Eligibility
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section
4.01(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee
shall immediately resign in the manner and with the effect set
out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
4.02 Compensation and Reimbursement
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time
such reasonable compensation as the Guarantor and the Guarantee
Trustee shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee (including the reasonable compensation and
expenses of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from
and against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based upon the income
of the Guarantee Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance of the administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any its powers or duties hereunder.
As security for the performance of the obligations of
the Guarantor under this Section, the Guarantee Trustee shall
have a lien prior to the Preferred Securities upon all the
property and funds held or collected by the Guarantee Trustee as
such, except funds held in trust for the payment of principal of,
and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the
termination of this Guarantee Agreement.
4.03 Appointment, Removal and Resignation of Guarantee
Trustee.
(a) Subject to Section 4.03(b), unless an Event of Default
shall have occurred and be continuing, the Guarantee Trustee may
be appointed or removed without cause at any time by the
Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.03 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and
each removal of the Guarantee Trustee and each appointment of a
successor Guarantee Trustee to all Holders in the manner provided
in Section 8.03 hereof. Each notice shall include the name of
the successor Guarantee Trustee and the address of its Corporate
Trust Office.
V
GUARANTEE
5.01 Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
5.02 Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of
any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
5.03 Obligations Not Affected. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee
Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of
any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the
extension of any interest payment period or deferral of
interest payment on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities,
or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section
5.03 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
5.04 Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited
with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders
of a Majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this
Guarantee Agreement without first instituting a legal proceeding
against the Issuer or any other person or entity.
5.05 Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the
Guarantee Payments in full (without duplication).
5.06 Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect of
any amounts paid to the Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any
amounts of Guarantee Payments are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
5.07 Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that
the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of
this Guarantee Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of
Section 5.03.
VI
SUBORDINATION
6.01 Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all Senior Debt
of the Guarantor (which is defined as all obligations (other than
non-recourse obligations and the indebtedness issued under the
Indenture) of, or guaranteed or assumed by, the Guarantor for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Debentures), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Guarantor
and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or
evidenced by bonds, debentures, notes or other similar
instruments, and in each case, amendments, renewals, extensions,
modifications and refundings of any such indebtedness or
obligations, whether existing as of the date of the Indenture or
subsequently incurred by the Guarantor unless, in the case of any
particular indebtedness, obligation, renewal, extension or
refunding, the instrument creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension or refunding is not superior in
right of payment to or is pari passu with the Debentures;
provided that the Guarantor's obligations under this Guarantee or
any guarantee issued by the Guarantor on behalf of the holders of
Preferred Securities issued by entities affiliated with the
Guarantor similar to the Issuer shall not be deemed to be Senior
Debt of the Guarantor), and (ii) pari passu with any similar
guarantee now or hereafter issued by the Guarantor on behalf of
the holders of preferred securities issued by entities affiliated
with the Guarantor similar to the Issuer. Nothing in this
Section 6.01 shall apply to claims of, or payments to, the
Guarantee Trustee under or pursuant to Section 4.02 hereof.
VII
TERMINATION
7.01 Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon: (i) full payment of
the Redemption Price of all Preferred Securities, (ii) the
distribution of Debentures to Holders in exchange for all of the
Preferred Securities or (iii) full payment of the amounts payable
in accordance with the Partnership Agreement upon dissolution of
the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or
under this Guarantee Agreement.
VIII
MISCELLANEOUS
8.01 Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is
permitted under Article Eleven of the Indenture and pursuant to
which the assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
8.02 Amendments. This Guarantee Agreement may be amended
only by an instrument in writing entered into by the Guarantor
and the Guarantee Trustee. Except with respect to any changes
which do not materially adversely affect the rights of Holders
(in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than a majority in aggregate
liquidation amount of all the outstanding Preferred Securities.
The provisions of Article __ of the Partnership Agreement
concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require
that the Guarantee Trustee enter into any amendment of this
Guarantee Agreement.
8.03 Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set
forth below or such other address as the Guarantor may give
notice of to the Holders of the Preferred Securities:
Entergy London Investments UK plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No: (504) 576-4455
Attention: Treasurer
(b) if given to the Issuer, in care of the General
Partner, at the Issuer's (and the General Partner's) address
set forth below or such other address as the General Partner
on behalf of the Issuer may give notice of to the Holders:
Entergy London Capital, L.P.
c/o Entergy London Investments UK plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No: (504) 576-4455
Attention: General Partner
(c) if given to the Guarantee Trustee, to the address
set forth below or such other address as the Guarantee
Trustee may give notice of to the Holders of the Preferred
Securities:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder shall be deemed to have been
given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
8.04 Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.
8.05 Interpretation. In this Guarantee Agreement, unless
the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement
but not defined in the preamble hereto have the respective
meanings assigned to them in Section 1.01;
(b) a term defined anywhere in this Guarantee
Agreement has the same meaning throughout;
(c) all references to "the Guarantee Agreement" or
"this Guarantee Agreement" are to this Guarantee Agreement
as modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the
context otherwise requires;
(f) a reference to the singular includes the plural
and vice versa; and
(g) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter
genders.
8.06 Governing Law. This Guarantee Agreement shall be
governed by and construed and interpreted in accordance with the
laws of the State of New York.
9.01 Consent to Jurisdiction; Appointment of Agent to
Accept Service of Process.
(a) The Guarantor agrees (i) that any legal action, suit
or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in
connection with this Guarantee Agreement may be brought in any
federal or state court in the State of New York, County of New
York, and (ii) to file such consents with such authorities as
may be required to irrevocably evidence such agreement.
(b) The Guarantor agrees to designate a designee,
appointee and agent in The City of New York satisfactory to
the Guarantee Trustee for the purpose of consenting and
agreeing to the service of any and all legal process, summons,
notices and documents in any such action, suit or proceeding
against the Guarantor, by serving a copy thereof upon the
relevant agent for service of process referred to in this
Section 9.01 (whether or not the appointment of such agent
shall for any reason prove to be ineffective or such agent
shall accept or acknowledge such service) with a copy to the
Guarantor as provided in Section ____. The Guarantor agrees
that the failure of any such designee, appointee and agent to
give any notice of such service to it shall not impair or
affect in any way the validity of such service. Nothing
herein shall in any way be deemed to limit the ability of the
Guarantee Trustee or the Holders of the Preferred Securities
to serve any such legal process, summons, notices and
documents in any other manner permitted by applicable law or
to obtain jurisdiction over the Guarantor, or bring actions,
suits or proceedings against it in such other jurisdictions,
and in such manner, as may be permitted by applicable law.
The Guarantor irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection that it may now
or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings arising out of or in
connection with this Guarantee Agreement brought in the
federal courts located in The City of New York or the courts
of the State of New York located in The City of New York and
hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
10.01. Waiver of Immunities. To the extent that the
Guarantor or any of its properties, assets or revenues may have
or may hereafter become entitled to, or have attributed to it,
any right of immunity, on the grounds of sovereignty or
otherwise, from any legal action, suit or proceeding, from the
giving of any relief in any thereof, from set-off or
counterclaim, from the jurisdiction of any court, from service or
process, from attachment upon or prior to judgment, from
attachment in aid of execution of judgment, or from execution of
judgment, or other legal process of proceeding fro the giving of
any relief or for the enforcement of any judgment, in any
jurisdiction in which proceedings may at any time be commenced,
with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Guarantee
Agreement, the Guarantor hereby irrevocably and unconditionally
waives and agrees not to plead or claim, any such immunity and
consents to such relief and enforcement. Nothing in this Section
10.01 shall be deemed to waive any defense (other than any such
immunity) available to the Guarantor.
11.01. Judgment Currency. The Guarantor agrees to
indemnify the Guarantee Trustee and the Holders of the Preferred
Securities against any loss incurred by such indemnified party as
a result of any judgment or order being given or made for any
amount due under this Guarantee Agreement and such judgment or
order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of
any variation as between (i) the rate of exchange at which the
United States dollar amount is converted into the Judgment
Currency for the purpose of such judgment or order, and (ii) the
rate of exchange at which any such indemnified party is able to
purchase Untied States dollars, at the business day nearest the
date of judgment, with the amount of the Judgment Currency
actually received by any such indemnified party. If,
alternatively, any such indemnified party receives a profit as a
result of such currency conversion, it will return any such
profits to the Guarantor (after taking into account any taxes or
other costs arising in connection with such conversion and
repayment). The foregoing indemnity shall constitute a separate
and independent obligation of the Guarantor, and shall continue
in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the
purchase of, or conversion into, the relevant currency.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and
year
first above written.
Entergy London Investments UK plc
By:
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By:
Name:
Title:
Exhibit 4.10
Entergy London Investments UK plc
OFFICER'S CERTIFICATE
_____________________ the ____________________________ of
Entergy London Investments UK plc, a public limited company
incorporated under the laws of England and Wales (the "Company"),
pursuant to the authority granted in the Board Resolutions of the
Company dated _______ __, 1997, and Sections 201 and 301 of the
Indenture defined herein, does hereby certify to The Bank of New
York (the "Trustee"), as Trustee under the Indenture of the
Company (For Unsecured Subordinated Debt Securities relating to
Preferred Securities) dated as of _______ __, 1997 (the
"Indenture") that (all capitalized terms used in this Certificate
which are not defined herein but are defined in the Indenture
shall have the meanings set forth in the Indenture):
The securities of the first series to be issued under the
Indenture shall be designated "____% Junior Subordinated
Deferrable Interest Debentures, Series A" (the "Debentures of the
First Series"). ;
1. The Debentures of the First Series shall be limited in
aggregate principal amount to $___________ at any time
Outstanding, except as contemplated in Section 301(b) of the
Indenture;
2. The Debentures of the First Series shall not mature, and the
principal of the Debentures of the First Series shall not become
due and payable, other than by reason of redemption or
declaration of immediate payability as provided in the Indenture
and herein;
3. The Debentures of the First Series shall bear interest from,
and including, the date of original issuance, at the rate of
____% per annum payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each, an "Interest
Payment Date") commencing _____ __, 1997. The amount of interest
payable for any such period will be computed on the basis of a
360-day year of twelve 30-day months. Interest on the Debentures
of the First Series will accrue from, and including, the date of
original issuance and will accrue to, and including, the first
Interest Payment Date, and thereafter will accrue from, and
excluding, the last Interest Payment Date through which interest
has been paid or duly provided for. In the event that any
Interest Payment Date is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such Interest
Payment Date. Interest that is in arrears for more than one
quarter will bear additional interest (to the extent permitted by
law) at the rate of ___% per annum thereof, compounded quarterly.
The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments in
arrears and Additional Amounts (as defined below) and Additional
Interest, as applicable;
All payments of principal and interest in respect
of the Debentures of the First Series shall be made
free and clear of, and without withholding or deduction
for or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever
nature imposed, levied, collected, withheld or assessed
by or within the United Kingdom (the "UK") or by or
within any political subdivision thereof or any
authority therein or thereof having power to tax ("UK
taxes"), unless such withholding or deduction is
required by law. In the event of any such withholding
or deduction the Company shall pay to the Holders such
additional amounts (the "Additional Amounts") as will
result in the payment to each such Holder of the amount
that would otherwise have been receivable by such
Holder in the absence of such withholding or deduction,
except that no such Additional Amounts shall be
payable:
(a) to, or to a Person on behalf
of, a Holder who is liable for such UK taxes in
respect of the Debentures of the First Series by
reason of such Holder having some connection with
the UK (including being a citizen or resident or
national of, or carrying on a business or
maintaining a permanent establishment in, or being
physically present in, the UK) other than the mere
holding of a Debenture of the First Series or the
receipt of principal and interest in respect
thereof;
(b) to, or to a Person on behalf
of, a Holder who presents a Debenture of the First
Series (whenever presentation is required) for
payment more than 30 days after the Relevant Date
(as defined below) except to the extent that such
Holder would have been entitled to such Additional
Amounts on presenting such Debenture of the First
Series for payment on the last day of such period
of 30 days;
(c) to, or to a Person on behalf
of, a Holder who presents a Debenture of the First
Series (where presentation is required) in the UK;
(d) to, or to a Person on behalf
of, a Holder who would not be liable or subject to
the withholding or deduction by making a
declaration on non-residence or similar claim for
exemption to the relevant tax authority; or
(e) to, or to a Person on behalf
of, a Holder of a Registered Debenture of the
First Series (as defined below) issued pursuant to
the request of owners of interests representing a
majority in outstanding principal amount of the
Debentures of the First Series following and
during the continuance of an Event of Default with
respect to the Debentures of the First Series if
such Holder (or any predecessor Holder) was one of
such owners requesting that Registered Debentures
of the First Series be so issued.
Such Additional Amounts will also not be payable
where, had the beneficial owner of the Debentures of
the First Series (or any interest therein) been the
Holder of the Debentures of the First Series, he would
not have been entitled to payment of Additional Amounts
by reason of any one or more or the clauses (a) through
(e) above. If the Company shall determine that
Additional Amounts will not be payable because of the
immediately preceding sentence, the Company will inform
such Holder promptly after making such determination
setting forth the reason(s) therefor.
"Relevant Date" means whichever is the later of
(i) the date on which such payment first becomes due
and (ii) if the full amount payable has not been
received in The City of New York by the Trustee on or
prior to such due date, the date on which, the full
amount having been so received, notice to that effect
shall have been given to the Holders in accordance with
the Indenture;
4. Each installment of interest on a Registered Debenture of
the First Series shall be payable to the Person in whose name
such Debenture of the First Series is registered at the close of
business on the Business Day next preceding the corresponding
Interest Payment Date (the "Regular Record Date")for the
Debentures of the First Series; provided, however, that if the
Debentures of the First Series are held neither by or on behalf
of the Partnership nor by a securities depositary, the Company
shall have the right to change the Regular Record Date by one or
more Officer's Certificates. Any installment of interest on the
Registered Debentures of the First Series not punctually paid or
duly provided for shall forthwith cease to be payable to the
Holders of such Debentures of the First Series on such Regular
Record Date, and may be paid to the Persons in whose name the
Debentures of the First Series are registered at the close of
business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest. Notice of such Defaulted
Interest and Special Record Date shall be given to the Holders of
the Registered Debentures of the First Series not less than 10
days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures
of the First Series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture;
5. The principal and each installment of interest on the
Debentures of the First Series shall be payable at, and
registration and registration of transfers and exchanges in
respect of the Debentures of the First Series may be effected at,
the office or agency of the Company in The City of New York;
provided that payment of interest may be made at the option of
the Company by check mailed to the address of the persons
entitled thereto under the Indenture. Payments of any interest
on the Debentures of the First Series may also be made, in the
case of a Holder of at least US $1,000,000 aggregate principal
amount of Debentures of the First Series, by wire transfer to a
United States Dollar account maintained by the payee with a bank
in the United States; provided that such Holder elects payment by
wire transfer by giving written notice to the Trustee or a Paying
Agent to such effect designating such account no later than 15
days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
Notices to, or demands upon, the Company in respect of the
Debentures of the First Series may be served at the office or
agency of the Company in The City of New York. The Trustee will
initially be the agency of the Company for such service of
notices and demands; provided, however, that the Company reserves
the right to change, by one or more Officer's Certificates any
such office or agency. The Company will be the Security
Registrar and the Paying Agent for the Debentures of the First
Series. In addition, as long as the Debentures of the First
Series are listed on the Luxembourg Stock Exchange and the rules
of such Stock Exchange so require, the Company will maintain a
Paying Agent in Luxembourg and notices to Holders of Debentures
of the First Series will be published in a leading newspaper
having general circulation in Luxembourg (which is expected to be
the Luxembourg Wort);
6. The Debentures of the First Series will be redeemable on or
after _______ __, 2002 at the option of the Company, at any time
and from time to time, in whole or in part, at a redemption price
equal to 100% of the principal amount of the Debentures of the
First Series being redeemed, together with any accrued and unpaid
interest, to, but not including, the redemption date (the
"Redemption Price"), upon not less than 30 nor more than 60 days'
notice given as provided in the Indenture;
The Debentures of the First Series will also be
redeemable at the option of the Company upon the
occurrence and during the continuation of a Tax Event
or Investment Company Event in whole but not in part on
any date within 90 days of the occurrence of such Tax
Event or an Investment Company Event, at the Redemption
Price, upon not less than 30 nor more than 60 days'
notice given as provided in the Indenture. "Tax Event"
means the receipt by the Partnership (as defined below)
or the Company of an Opinion of Counsel experienced in
such matters to the effect that, as a result of any
amendment to, or change (including any announced
prospective change) in, the laws (or any regulations
thereunder) of the United States, the UK or any
political subdivision or taxing authority thereof or
therein affecting taxation, or as a result of any
official administrative pronouncement or judicial
decision interpreting or applying such laws or
regulations, which amendment or change is effective or
which pronouncement or decision is announced on or
after ____________ __, 1997, there is more than an
insubstantial risk that (i) the Partnership is, or will
be within 90 days of the date thereof, subject to
United States Federal or UK income tax with respect to
income received or accrued on the Debentures of the
First Series, (ii) interest payable by the Company on
the Debentures of the First Series is treated as a
distribution within the meaning of Section 209 of the
Income and Corporation Taxes Act 1988 of the UK or in
any other matter is not, or within 90 days of the date
thereof will not be, deductible by the Company, in
whole or in part, for UK corporation income tax
purposes, or (iii) the Partnership is, or will be
within 90 days of the date thereof, subject to more
than a de minimis amount of other taxes, duties or
other governmental charges. "Investment Company Event"
means the occurrence of a change in law or regulation
or a change in interpretation or application of law or
regulation by any legislative body, court, governmental
agency or regulatory authority to the effect that the
Partnership is or will be considered an "investment
company" that is required to be registered under the
Investment Company Act of 1940, as amended, which
change in law becomes effective on or after _________
__, 1997.
If (a) the Company satisfies the Trustee prior to
the giving of a notice as provided below that it has or
will become obligated to pay Additional Amounts with
respect to the Debentures of the First Series as a
result of either (x) any change in, or amendment to,
the laws or regulations of the UK or any political
subdivision or any authority or agency thereof or
therein having power to tax or levy duties, or any
change in the application or interpretation of such
laws or regulations, which change or amendment becomes
effective on or after ________ __, 1997 or (y) the
issuance of Registered Debentures of the First Series
pursuant to the first sentence or clause (i) or (ii) of
the third sentence of paragraph (15(b)) of this
Certificate and (b) such obligation cannot be avoided
by the Company taking reasonable measures available to
it, the Company may, at its option, on giving not more
that 60 or less that 30 days' notice to the Holders,
redeem, as a whole but not in part, the Debentures of
the First Series at the Redemption Price; provided,
that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such
Additional Amounts were a payment in respect of the
Debentures of the First Series then due. Prior to the
publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the
Trustee a certificate signed by a director of the
Company stating that the obligation referred to in (a)
above, cannot be avoided by the Company taking
reasonable measures available to it, and the Trustee
shall accept such certificate as sufficient evidence of
the condition precedent set out in (b) above, in which
event it shall be conclusive and binding on the
Holders.
The Company may not redeem Debentures of the First
Series Outstanding unless all accrued and unpaid
interest has been paid in full on all Debentures of
the First Series Outstanding under the Indenture for
all quarterly interest periods terminating on or prior
to the date of redemption;
7. So long as any Debentures of the First Series are
Outstanding, the failure of the Company to pay interest on any
Debentures of the First Series within 60 days after the same
becomes due and payable (whether or not payment is prohibited by
the provisions of Article Fifteen of the Indenture) shall
constitute an Event of Default; provided, however, that a valid
deferral of the payment of interest by the Company as
contemplated in Section 311 of the Indenture and paragraph (9) of
this Certificate shall not constitute a failure to pay interest
for this purpose;
8. Pursuant to Section 311 of the Indenture, so long as the
Company is not in default under the Indenture the Company shall
have the right, at any time and from time to time during the term
of the Debentures of the First Series, to defer indefinitely the
payment of interest. However, until all deferred interest
payments, together with interest thereon at the annual rate of
___%, compounded quarterly, to the extent permitted by applicable
law, have been paid in full, the Company may not, directly or
indirectly (i) declare or pay any dividends or distributions, on,
or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock, (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase
or redeem any of its debt securities that rank pari passu with or
junior in interest to the Debentures of the First Series
(including other Securities issued under the Indenture), (iii)
make any guarantee payments with respect to any guarantee if such
guarantee ranks pari passu with or junior in interest to the
Debentures of the First Series, or (iv) make any payment of
principal, interest or premium, if any, on, or repay, repurchase
or redeem any of its debt securities held by any affiliate, or
make any loans or advances to, or make payments on any guarantee
of the debt of, any affiliate, in each case other than (a)
dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, the Company's
common stock and exchanges or conversions of common stock of one
class for common stock of another class, (b) payments by the
Company under the Guarantee (or any other guarantee by the
Company with respect to any securities of any of its
subsidiaries, provided that the proceeds from the issuance of
such securities were used to purchase junior subordinated
deferrable interest debentures of the Company), and (c) any
dividend or payment by the Company which is applied, directly or
indirectly, to the payment of (x) principal of or interest or
premium, if any, on Acquisition Debt (as defined below) as and
when due in accordance with the terms thereof, and (y) and UK Tax
Payments (as defined below). The Company shall give the
Partnership and the Trustee written notice of (i) any election by
the Company to defer the payment of interest and (ii) any
election by the Company to make a full payment of deferred
interest on the Debentures of the First Series and the amount of
such payment. The Company shall give such notice at least one
Business Day prior to the earlier of (i) the relevant Interest
Payment Date and (ii) the date the Company is required to give
notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Debentures of
the First Series of the record date or the date such
distributions are payable, but in any event not less than one
Business Day prior to such record date;
For the purposes of this paragraph (9),
"Acquisition Debt" shall mean the borrowings
outstanding under the Credit Facilities Agreement dated
December 17, 1996 among the Company, ABN AMRO Bank
N.V., Bank of America International Limited and Union
Bank of Switzerland in the maximum principal amount of
810 million Pounds Sterling and any refinancings,
replacements, renewals or refundings thereof that do
not increase the principal amount of such indebtedness
in excess of 810 million Pounds Sterling, and "UK Tax
Payments" shall mean any payment by the Company
directly or indirectly to governmental authorities in
respect of UK taxes arising from the operations of the
Company or London Electricity plc as and when such
taxes become due and payable.
9. In the event that, at any time subsequent to the initial
authentication and delivery of the Debentures of the First
Series, the Debentures of the First Series are to be held by a
securities depositary, the Company may at such time establish the
matters contemplated in clause (r) in the second paragraph of
Section 301 of the Indenture in an Officer's Certificate
supplemental to this Certificate;
10. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the First Series;
provided, however, that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with the exchange or transfer;
11. The Debentures of the First Series shall have such other
terms and provisions as are provided in the form set forth in
Exhibit A hereto, and shall be issued in substantially such form;
12. In the event that the Debentures of the First Series are
distributed to holders of the ___% Cumulative Quarterly Income
Preferred Securities Series A upon the dissolution of the
Partnership, the Company will use its best efforts to list the
Debentures of the First Series on the New York Stock Exchange or
on such other exchange or organization, if any, as the Preferred
Securities are then listed or traded;
13. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures of the
First Series, or any portion of the principal amount thereof, as
contemplated by Section 701 of the Indenture, the Company shall
not deliver an Officer's Certificate described in clause (z) in
the first paragraph of said Section 701 unless the Company shall
also deliver to the Trustee, together with such Officer's
Certificate, either:
(a) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures of the First
Series, shall assume the obligation (which shall be
absolute and unconditional) to irrevocably deposit with
the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations
(meeting the requirements of Section 701), if any, or
any combination thereof, at such time or times, as
shall be necessary, together with the money and/or
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures of
the First Series or portions thereof, all in accordance
with and subject to the provisions of said Section 701;
provided, however, that such instrument may state that
the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery
to the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation
thereof; or
(b) an Opinion of Counsel to the effect that
the Holders of such Debentures of the First Series, or
portions of the principal amount thereof, will not
recognize income, gain or loss for United States
Federal income tax purposes as a result of the
satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to
United States Federal income tax on the same amounts,
at the same times and in the same manner as if such
satisfaction and discharge had not been effected;
14. (a) The Debentures of the First Series shall be
issued, upon original issuance, in the form of a single global
debenture in bearer form to the Bank of New York, as custodian
for the owners of beneficial interests in the Debentures of the
First Series.
(b) Owners of beneficial interests in the
Debentures of the First Series will be entitled to
receive definitive Debentures of the First Series in
registered form ("Registered Debentures of the First
Series") in respect of such interest only if an Event
of Default with respect to the Debenture of the First
Series has occurred and is continuing and the Holder,
in such circumstance, upon instructions from owners of
beneficial interests representing a majority in
Outstanding principal amount of the Debentures of the
First Series shall have requested in writing that the
Debentures of the First Series be exchanged, in whole,
for one or more Registered Debentures of the First
Series. In addition, Registered Debentures of the
First Series shall be issued if at any time (i) any
securities depository of certificates representing
ownership of beneficial interests in the Debentures of
the First Series notifies the Company and the Holder
that it is unwilling to or unable to continue to hold
such certificates or if any time it ceases to be a
"clearing agency" registered under the Securities
Exchange Act of 1934, as amended, and, in either case,
a successor is not appointed by the Company within 120
days, (ii) such Holder notifies the Company that it is
unwilling or unable to continue as such Holder with
respect to the Debentures of the First Series and no
successor is appointed by the Company within 120 days
or (iii) the Company in its sole discretion determines
that Registered Debentures shall be issued and executes
and delivers to the Trustee an Officer's Certificate
providing that the Debentures of the First Series shall
be so exchanged.
15. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the
Debentures of the First Series and the definitions in the
Indenture relating thereto and in respect of which this
certificate is made;
16. The statements contained in this certificate are based upon
the familiarity of the undersigned with the Indenture, the
documents accompanying this certificate, and upon discussions by
the undersigned with officers and employees of the Company
familiar with the matters set forth herein;
17. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to express an
informed opinion whether or not such covenants and conditions
have been complied with; and
18. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including any
covenants compliance with which constitutes a condition
precedent) to the authentication and delivery of the Debentures
of the First Series requested in the accompanying Company Order
have been complied with.
IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate this ____ day of _______, 1997.
Name: _____________________
Title: _____________________
<PAGE>
No. R-1
EXHIBIT A
ENTERGY LONDON INVESTMENTS UK plc
__% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, SERIES A
ENTERGY LONDON INVESTMENTS UK plc, a corporation duly
incorporated and existing under the laws of England and Wales
(herein referred to as the "Company", which term includes any
successor Person under the Indenture), for value received, hereby
promises to pay to [bearer] [
, or registered assigns], the principal sum of
Dollars, and to pay interest on said principal sum, from and
including, _______ __, 1997 or from, and excluding, the most
recent Interest Payment Date through which interest has been paid
or duly provided for, quarterly on March 31, June 30, September
30 and December 31 of each year, commencing _____ __, 1997 at the
rate of ____% per annum until the principal hereof is paid or
made available for payment. The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a 360-
day year of twelve 30-day months. Interest on the Securities of
this series will accrue from, and including, _______ __, 1997
through the first Interest Payment Date, and thereafter will
accrue, from, and excluding, the last Interest Payment Date
through which interest has been paid or duly provided for. In
the event that any Interest Payment Date is not a Business Day,
then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any
interest or other payment in respect of such delay), except that,
if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on
the Interest Payment Date. Interest that is in arrears for more
than one quarter will bear additional interest (to the extent
permitted by law) at the rate of ___% per annum thereof,
compounded quarterly. The term "interest" as used herein shall
include quarterly interest payments, interest on quarterly
interest payments in arrears and Additional Amounts (as defined
below) and Additional Interest, as applicable. The interest so
payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the [bearer hereof] [Person in whose name this Security
(or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest,
which shall be the Business Day next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.]
All payments of principal and interest in respect of
the Securities of this series shall be made free and clear of,
and without withholding or deduction for or on account of, any
present or future taxes, duties, assessments or governmental
charges of whatever nature imposed, levied, collected, withheld
or assessed by or within the United Kingdom (the "UK") or by or
within any political subdivision thereof or any authority therein
or thereof having power to tax, unless such withholding or
deduction is required by law. In the event of any such
withholding or deduction the Company shall pay Additional Amounts
(as defined in, and subject to the limitations and qualifications
set forth in, the Certificate( as herein defined)).
Payment of the principal of and premium, if any, and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts [provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register].
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
ENTERGY LONDON INVESTMENTS UK plc
ATTEST:
By:____________________________
CERTIFICATE OF AUTHENTICATION
Dated: _____ __, 1997
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:_____________________
Authorized Signatory
<PAGE>
REVERSE OF ____% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE, SERIES A
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture,
dated as of _______ __, 1997 (herein, together with any
amendments thereto, called the "Indenture", which term shall have
the meaning assigned to it in such instrument), between the
Company and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture,
including the Board Resolutions and Officer's Certificate filed
with the Trustee on _______ __, 1997 (herein called the
"Certificate") creating the series designated on the face hereof,
for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and
the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $___________.
The Securities of this series are subject to redemption
upon not less than 30 nor more than 60 days' notice given as
provided in the Indenture, at any time on or after _______ __,
2002 as a whole or in part, at the election of the Company, at a
redemption price equal to 100% of the principal amount, together
in the case of any such redemption with accrued and unpaid
interest, if any, to, but not including, the redemption date
(herein called the "Redemption Price"), but interest installments
whose Stated Maturity is on or prior to such redemption date will
be payable to [the bearer of such Security] [the Holder of such
Security, or one or more Predecessor Securities, of record at the
close of business on the related Regular Record Date referred to
on the face hereof], all as provided in the Indenture.
The Securities of this series will also be redeemable
at the option of the Company if a Tax Event or an Investment
Company Event shall occur and be continuing, in whole but not in
part on any date within 90 days of the occurrence of such Tax
Event or Investment Company Event, at the Redemption Price, upon
not less than 30 nor more than 60 days' notice given as provided
in the Indenture. "Tax Event" means the receipt by Entergy
London Capital, L.P., a Delaware limited liability partnership
(the "Partnership"), or the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the
United States, the UK or any political subdivision or taxing
authority thereof or therein affecting taxation, or as a result
of any official administrative pronouncement or decision
interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or
decision is announced on or after __________ __, 1997, there is
more than an insubstantial risk that (i) the Partnership is, or
will be within 90 days of the date thereof, subject to United
States Federal or UK income tax with respect to income received
or accrued on the Securities of this series, (ii) interest
payable by the Company on the Securities of this series not, or
within 90 days of the date thereof will not be, deductible by the
Company, in whole or in part, for United States Federal earnings
and profits purposes or UK income tax purposes, or (iii) the
Partnership is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties
or other governmental charges. "Investment Company Event" means
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority to the effect that the Partnership is or will be
considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended,
which change in law becomes effective on or after __________ __,
1997.
If (a) the Company satisfies the Trustee prior to the giving
of a notice as provided below that it has or will become
obligated to pay Additional Amounts with respect to the
Securities of this series as a result of either (x) any change
in, or amendment to, the laws or regulations of the UK or any
political subdivision or any authority or agency thereof or
therein having power to tax or levy duties, or any change in the
application or interpretation of such laws or regulations, which
change or amendment becomes effective on or after ________ __,
1997 or (y) the issuance of registered Securities of this series
pursuant to the first sentence or clause (i) or (ii) of the third
sentence of paragraph (15(b)) of the Certificate and (b) such
obligation cannot be avoided by the Company taking reasonable
measures available to it, the Company may, at its option, on
giving not more that 60 or less that 30 days' notice to the
Holders, redeem, as a whole but not in part, the Securities of
this series at the Redemption Price; provided, that no such
notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to pay
such Additional Amounts were a payment in respect of the
Securities of this series then due.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued [to the
bearer] [in the name of the Holder] hereof upon the cancellation
hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of not less
than a majority in aggregate principal amount of the Securities
of all series at the time Outstanding in respect of which an
Event of Default shall have occurred and be continuing shall have
made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
So long as the Company is not in default under the
Indenture the Company has the right, at any time and from time to
time during the term of the Securities of this series, to defer
indefinitely the payment of interest. However, until all
deferred interest payments, together with interest thereon at the
annual rate of ___%, compounded quarterly, to the extent
permitted by applicable law, have been paid in full, the Company
may not, directly or indirectly (i) declare or pay any dividends
or distributions, on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock,
(ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any of its debt securities that
rank pari passu with or junior in interest to the Securities of
this series (including other Securities issued under the
Indenture), (iii) make any guarantee payments with respect to any
guarantee if such guarantee ranks pari passu with or junior in
interest to the Securities of this series, or (iv) make any
payment of principal, interest or premium, if any, on, or repay,
repurchase or redeem any of its debt securities held by any
affiliate, or make any loans or advances to, or make payments on
any guarantee of the debt of, any affiliate, in each case other
than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, the
Company's common stock and exchanges or conversions of common
stock of one class for common stock of another class, (b)
payments by the Company under the Guarantee (or any other
guarantee by the Company with respect to any securities of any of
its subsidiaries, provided that the proceeds from the issuance of
such securities were used to purchase junior subordinated
deferrable interest debentures of the Company), and (c) any
dividend or payment by the Company which is applied, directly or
indirectly, to the payment of (x) principal of or interest or
premium, if any, on Acquisition Debt (as defined in the
Certificate) as and when due in accordance with the terms
thereof, and (y) and UK Tax Payments (as defined in the
Certificate).
The Securities of this series are issuable only in
registered form without coupons in denominations of $25 and any
integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
As provided in the Indenture, the Company shall not be
required to make transfers or exchanges of Securities of this
series for a period of 15 days immediately preceding the date of
the mailing of any notice of redemption of such Securities and
the Company shall not be required to make transfers or exchanges
of any Securities of this series so selected for redemption in
whole or in part (except the unredeemed portion of thereof).
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the [bearer] [Person in whose name this
Security is registered] as the absolute owner hereof for all
purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
Exhibit 5.01 and 8.01
24 October 1997
Entergy London Investments plc (the Company)
639 Loyola Avenue
New Orleans
Louisiana 70113
USA
Dear Sirs
Junior Subordinated Deferrable Interest Debentures, Series A
1 This opinion is furnished to you in connection
with the joint Registration Statement on Form S-1,
including the exhibits thereto, filed with the United
States Securities and Exchange Commission on 11
August 1997 of the Company and Entergy London
Capital, L.P. (the Partnership) as amended by
Amendment No.1 on Form S-1 filed on 3 October 1997
and Amendment No.2 on Form S-1 filed on 24 October
1997 (the Registration Statement), for the
registration under the Securities Act of 1933 of the
United States (as amended) of (i) preferred
securities (the Preferred Securities) of the
Partnership in an aggregate liquidation preference of
US$300,000,000 proposed to be offered in an
underwritten public offer; (ii) junior subordinated
debentures (the Debentures) of the Company proposed
to be issued pursuant to the terms of an indenture
from the Company to The Bank of New York, as trustee
(the Indenture), proposed to be issued and sold by
the Company to the Partnership; and (iii) the
guarantee of the Company with respect to the
Preferred Securities proposed to be issued pursuant
to the terms of a guarantee agreement between the
Company and The Bank of New York, as trustee (the
Guarantee Agreement).
2 We have acted as advisers to the Company on
matters of English law in connection with the
Debentures, the Indenture and the Guarantee Agreement
(hereinafter together referred to as the Instruments)
and have taken instructions solely from the Company.
3 This opinion is limited to English law as
currently applied by the English courts, applies only
to the extent that the matters referred to herein are
governed by English law and is given on the basis
that it will be governed by and construed in
accordance with English law. We express no opinion on
matters of United States federal or state law or the
laws of any other jurisdiction.
In this opinion English law includes statutes of
general applicability in the United Kingdom.
4 For the purposes of this opinion, we have examined
and relied upon copies or drafts of the Instruments
and any other documents which we have deemed
appropriate. We have assumed that:
4.1(except in the case of the Company) all relevant
documents will be within the capacity and powers of,
and will be validly authorised, executed and
delivered by, each relevant party in the same form as
examined by us for the purpose of this opinion; and
each such party will take all necessary corporate or
other action to effect the transactions contemplated
by such documents and will do all such further acts,
including any necessary filings with appropriate
governmental authorities required in order to give
full force and effect to the documents and the
transactions contemplated thereby;
4.2(without detracting from the exception in
assumption 4.1 above) each of the Instruments will be
valid and binding on and enforceable against each
party under the law to which it is expressed to be
subject;
4.3words and phrases used in the Instruments have the
same meanings and effect as they would if those
documents were governed by English law and there is
no provision of any law (other than English law)
which would affect anything in this opinion;
4.4the Underwriters (as defined in the agreement
proposed to be entered into by the Company in respect
of the underwriting of the Debentures (the
Underwriting Agreement)) will comply with all
applicable provisions of the Financial Services Act
1986 with respect to anything done or to be done by
them in relation to the Debentures in, from or
otherwise involving the United Kingdom (including
Section 3 (carrying on investment business), Section
56 (unsolicited calls) and Section 57 (investment
advertisements));
4.5all copy documents examined by us for the purpose
of this opinion conform to the original documents of
which they are copies;
4.6no documents submitted to us have been or will be
amended or supplemented subsequently and all such
documents remain in full force and effect in the same
form submitted to us for examination;
4.7the copy of the Memorandum and Articles of
Association of the Company examined by us for the
purpose of this opinion is complete and up-to-date;
and
4.8all documents submitted to us as originals are
authentic and complete and the signatures on the
documents are genuine and are those of persons
authorised by the relevant resolutions to execute
(or, as the case may be, witness the execution of)
the relevant document on behalf of the Company).
5 Based on and subject to the foregoing and subject
to the exceptions, qualifications and reservations
mentioned below and to any matters not disclosed to
us, we are of the opinion that:
5.1the Company has been duly incorporated as a public
limited company under the laws of England and Wales
and has the necessary corporate power and authority
under its Memorandum and Articles of Association to
enter into and to perform its obligations under the
Instruments;
5.2insofar as English law is concerned, the Indenture
and the Guarantee Agreement, when approved by a duly
convened, constituted and quorate meeting of the
Board of Directors of the Company in accordance with
the Memorandum and Articles of Association of the
Company, will have been duly authorised, and when
executed and delivered in accordance with such
authorisation, will have been duly executed and
delivered by the Company, and the Debentures, when
approved by a duly convened, constituted and quorate
meeting of the Board of Directors of the Company in
accordance with the Memorandum and Articles of
Association of the Company, will have been duly
authorised and, on the Closing Date (as defined in
the Underwriting Agreement), when executed, issued
and delivered in accordance with such authorisation,
authenticated in the manner provided for in the
Indenture and delivered against payment therefor,
will have been duly executed, issued and delivered by
the Company;
5.3neither the issue, offering and sale by the
Company of the Debentures in the manner contemplated
by the Underwriting Agreement nor the execution and
delivery by the Company of any of the Instruments and
performance by the Company of its obligations
thereunder will conflict with or result in a
violation of the Memorandum and Articles of
Association of the Company or any law, rule or
regulation of any governmental or other regulatory
authority in Great Britain; and
5.4on the assumption that the Instruments will create
valid and binding obligations of the parties under
the law of the State of New York, English law will
not prevent any provisions of the Instruments from
being valid and binding obligations of the Company,
subject to all limitations resulting from bankruptcy,
insolvency, liquidation, receivership,
administration, reorganisation of the Company and
other laws or legal procedures of general application
relating to or affecting the rights of creditors
applicable to the Company;
6 This opinion is subject to the following
qualifications and reservations:
6.1we express no opinion on:
(a) whether the equitable remedies of specific
performance or injunctive relief would be
available in respect of any obligation of the
Company under the Instruments; insofar as any
obligation under the Instruments is to be
performed by the Company in any jurisdiction
other than England and Wales, an English court
may have to have regard to the law of that
jurisdiction in relation to the manner of
performance and the steps to be taken in the
event of defective performance; and
(b) whether an order or resolution for winding up
or order for administration has been made in
respect of the Company since the date of our
last search at Companies House;
6.2an English Court will not apply the law of the
State of New York if:
(a) it is not pleaded and proved; or
(b) to do so would be contrary to the mandatory
rules of English law or manifestly incompatible
with English public policy;
6.3undertakings or indemnities relating to United
Kingdom stamp duty may be void under Section 117
Stamp Act 1891;
6.4any term of an agreement may be amended orally by
the parties notwithstanding any provision in the
Instruments to the contrary; and
6.5this opinion is given as at the date set out
above; and we express no opinion as to the effect
that any future event, or any act of the Company or
any governmental authority or agency may have on the
matters referred to herein.
7 We confirm our opinion as set forth under the
caption OCertain Income Tax Considerations - UK
Income Tax ConsiderationsO in the Registration
Statement.
8 This opinion is addressed to you solely for your
benefit and solely for the purpose of providing an
opinion to you in relation to the Instruments. It is
not to be transmitted to anyone else, nor is it to be
relied on by anyone else or for any other purpose or
quoted or referred to in any public document or filed
with anyone without our express consent. We hereby
expressly consent to this opinion being relied on by
Reid & Priest LLP in its capacity as adviser to the
Company on matters of NY law in relation to the
Instruments and solely for the purpose of giving such
advice, and to the reference to this opinion under
the heading OLegal OpinionsO in the Registration
Statement.
Yours faithfully
/s/ Linklaters & Paines
Linklaters & Paines
Exhibit 5.02
[Letterhead of Richards, Layton & Finger]
October 24, 1997
Entergy London Capital, L.P.
c/o Entergy London Investments UK plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Re: Entergy London Capital, L.P.
Ladies and Gentlemen:
We have acted as special Delaware counsel for
Entergy London Investments UK plc, a public limited company
incorporated under the laws of England and Wales (the
"Company"), and Entergy London Capital, L.P., a Delaware
limited partnership (the "Partnership"), in connection with
the matters set forth herein. At your request, this opinion
is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Limited Partnership of the
Partnership, dated as of August 4, 1997 (the "Original
Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on
August 4, 1997;
(b) The Agreement of Limited Partnership of the
Partnership, dated as of August 4, 1997 (the "Original
Agreement");
(c) The Certificate of Amendment to the Original
Certificate, dated as of September 30, 1997 (the
"Amendment"), as filed in the office of the Secretary of
State on October 1, 1997 (the Original Certificate as amended
by the Amendment being hereinafter referred to as the
"Certificate");
(d) Amendment No. 1 to the Original Agreement,
dated as of September 30, 1997;
(e) A form of Amended and Restated Limited
Partnership Agreement of the Partnership (including Annexes A
and B and Exhibit I thereto) (the "Partnership Agreement"),
to be entered into among the Company, William J. Regan, Jr.,
and such other Persons who become limited partners of the
Partnership, attached as an exhibit to the Registration
Statement (as defined below);
(f) Amendment No. 2 to the Registration Statement
on Form S-1 (the "Registration Statement"), including a
preliminary prospectus (the "Prospectus"), relating to
Preferred Securities representing limited partner interests
in the Partnership (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as filed by the
Company and the Partnership with the Securities and Exchange
Commission on or about October 24, 1997; and
(g) A Certificate of Good Standing for the
Partnership, dated October 24, 1997, obtained from the
Secretary of State.
Capitalized terms used herein and not otherwise
defined are used as defined in the Partnership Agreement.
For purposes of this opinion, we have not reviewed
any documents other than the documents listed in paragraphs
(a) through (g) above. In particular, we have not reviewed
any document (other than the documents listed in paragraphs
(a) through (g) above) that is referred to in or incorporated
by reference into the documents reviewed by us. We have
assumed that there exists no provision in any document that
we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual
investigation of our own, but rather have relied solely upon
the foregoing documents, the statements and information set
forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and
accurate in all material respects.
With respect to all documents examined by us, we
have assumed (i) the authenticity of all documents submitted
to us as authentic originals, (ii) the conformity with the
originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i)
that the Partnership Agreement constitutes the entire
agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the
admission of partners to, and the creation, operation and
termination of, the Partnership, and that the Partnership
Agreement and the Certificate are in full force and effect
and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or the due
organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents
examined by us under the laws of the jurisdiction governing
its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the
documents examined by us, (iv) that each of the parties to
the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under,
such documents, (v) that all documents examined by us have
been duly authorized, executed and delivered by all parties
thereto, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Partnership (collectively,
the "Preferred Security Holders") of a Preferred Certificate
and the payment for the Preferred Security acquired by it, in
accordance with the Partnership Agreement and the
Registration Statement, (vii) that the books and records of
the Partnership set forth all information required by the
Partnership Agreement and the Delaware Revised Uniform
Limited Partnership Act (6 Del. C. 17-101, et seq.) (the
"Partnership Act"), including all information with respect to
all Persons to be admitted as Partners and their contribu
tions to the Partnership, and (viii) that the Preferred
Securities are issued and sold to the Preferred Security
Holders in accordance with the Registration Statement and the
Partnership Agreement. We have not participated in the
preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion
on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in
effect.
Based upon the foregoing, and upon our examination
of such questions of law and statutes of the State of
Delaware as we have considered necessary or appropriate, and
subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Partnership has been duly formed and is
validly existing in good standing as a limited partnership
under the Partnership Act.
2. The Preferred Securities will represent valid
and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable limited partner interests
in the Partnership.
3. Assuming that the Preferred Security Holders,
as limited partners of the Partnership, do not participate in
the control of the business of the Partnership, the Preferred
Security Holders, as limited partners of the Partnership,
will have no liability in excess of their obligations to make
payments provided for in the Partnership Agreement and their
share of the Partnership's assets and undistributed profits
(subject to the obligation of a Preferred Security Holder to
repay any funds wrongfully distributed to it).
4. There are no provisions in the Partnership
Agreement the inclusion of which, subject to the terms and
conditions therein, or, assuming that the Preferred Security
Holders, as limited partners of the Partnership, take no
action other than actions permitted by the Partnership
Agreement, the exercise of which, in accordance with the
terms and conditions therein, would cause the Preferred
Security Holders, as limited partners of the Partnership, to
be deemed to be participating in the control of the business
of the Partnership.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. In addition, we hereby consent to
the use of our name under the heading "Legal Opinions" in the
Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons
whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion
may not be furnished or quoted to, or relied upon by, any
other Person for any purpose.
Very truly yours,
/s/ Richard, Layton & Finger, P.A.
Exhibit 5.03 and 8.02
October 24, 1997
Entergy London Investments plc
639 Loyola Avenue
New Orleans, Louisiana 70113
Ladies and Gentlemen:
We refer to the joint Registration Statement on Form
S-1, including the exhibits thereto, filed with the Securities
and Exchange Commission (the "Commission") on August 11, 1997
of Entergy London Investments plc (the "Company") and Entergy
London Capital, L.P. (the "Partnership") as amended by
Amendment No. 2 to such Registration Statement on Form S-1
filed on October 24, 1997 (as so amended, the "Registration
Statement"), for the registration under the Securities Act of
1933, as amended (the "Securities Act"), of (i) Preferred
Securities (the "Preferred Securities") of the Partnership in
an aggregate liquidation preference of $300,000,000 to be
offered in an underwritten public offering; (ii) Junior
Subordinated Debentures (the "Debentures") of the Company to be
issued pursuant to the terms of an indenture from the Company
to The Bank of New York, as trustee (the "Indenture"), to be
issued and sold by the Company to the Partnership; and (iii)
Guarantee of the Company with respect to the Preferred
Securities (the "Guarantee") to be issued pursuant to the terms
of a guarantee agreement between the Company and The Bank of
New York, as trustee (the "Guarantee Agreement").
We are of the opinion that all action necessary to make
valid and legal the proposed issuance and sale of the
Debentures and the Guarantee of the Company will have been
taken when:
(a) the Company's and the Partnership's joint
Registration Statement, as it may be amended, shall have
become effective in accordance with the applicable
provisions of the Securities Act, and the Indenture and
the Guarantee Agreement shall have been qualified under
the Trust Indenture Act of 1939, as amended;
(b) an appropriate order or orders shall have been issued
by the Commission under the Public Utility Holding Company
Act of 1935, as amended, with respect to the related
Application-Declaration on Form U-1 (File No. 70-9081), as
amended and as it may be further amended, authorizing the
issuance and sale of the Debentures and the Guarantee;
(c) appropriate action shall have been taken by the Board
of Directors of the Company for the purpose of authorizing
the consummation of the issuance and sale of the
Debentures and the Guarantee;
(d) the proposed Indenture and the Guarantee Agreement
shall have been appropriately executed and delivered;
(e) the specific terms of the Debentures and the
Guarantee shall have been determined by supplemental
indenture, board resolution or officer's certificate; and
(f) the Debentures and the Guarantee shall have been
appropriately issued and delivered for the consideration
contemplated by, and otherwise in conformity with, the
acts, proceedings and documents referred to above.
We are further of the opinion that when the foregoing
steps have been taken, the Debentures and the Guarantee will be
legal, valid and binding obligations of the Company enforceable
in accordance with their respective terms, in each case, except
as limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights and general equitable
principles. This opinion does not pass upon the matter of
compliance with "blue sky" laws or similar laws relating to the
sale or distribution of the Debentures and Guarantee by the
underwriters.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of any other state or
country. As to all matters of English law, we have relied upon
an opinion of even date addressed to you by Linklaters &
Paines, special United Kingdom counsel to the Company. We
consent to the reliance of Linklaters & Paines upon our opinion
insofar as it relates to matters of New York law.
We confirm our opinion as set forth under the caption
"Certain Income Tax Considerations - US Income Tax
Considerations" in the Prospectus constituting a part of the
joint Registration Statement.
We hereby consent to the use of this opinion as an
exhibit to the joint Registration Statement, as it may be
amended, and consent to such references to our firm as may be
made in the joint Registration Statement and in the Prospectus
constituting a part thereof.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
Exhibit 10.02
MODIFICATIONS TO THE PES LICENCE ISSUED TO LONDON ELECTRICITY plc
SCHEDULE
The following modifications shall apply on and after [date
modifications become effective].
1. In paragraph 3 of Condidon 1 the definition of an affiliate
shall be replaced by the following
"in relation to the licensee means any holding company of the
licensee, any subsidiary of the licensee any subsidiary of a
holding company of the licensee."
2. In paragraph 3 of Condition 1 the definition of financial
year shall be amended to read:
"bears the meaning given to it in paragraph 1 of Condition 2,
subject to the provisions of Condition 2C."
3. In paragraph 3 of Condition 1 the following definition shall
be inserted after the definition of affiliate:
"auditied group accounts" means accounts produced in
accordance with paragraph 3 of
Condition 2C and having the content
assigned to them by paragraph 4 of
that Condition.
4. In paragraph 3 of Condition 1 the following definition shall
be inserted after the definition of authorised electricity
operator:
"Companies Act amount" means the annual accounts of the
licensee prepared. under section
226 and, where appropriate, section
227 of the Companies Act 1985.
5. In paragraph 3 of Condition 1 the follow definitions shall
be inserted after the definition of grid supply point:
"group of companies" means the licensee and every
undertaking which is a subsidiary
undertaking of the licensee.
"holding company" means a holding company within the
meaning of Sections 736, 736A, and
736B of the Companies Act 1985."
6. In paragraph 3 of Condition 1 the following definition shall
be inserted after the definition of over 0.1 MW premises:
"permitted purpose " means the purpose of all or any of
the following;
(a) the Supply Business, the
Second-Tier Suppley Business,
the Distribution Business or
any business or activity
within the limits of paragraph
4(e) of Condition 2A;
(b) the Generation Business;
(c) any business conducted or
activity carried on by the
licensee or by an affiliate or
related undertaking of the
licensee on 6 February 1997;
and
(d) without prejudice to the
generality of paragraphs (a)
to (c), any payment or
transaction lawfully made or
undertaken by the licensee for
a purpose within sub-
paragraphs (i) to (ix)
7. In paragraph 3 of Condition1 the following definitionshall
be inserted after the definition of standby:
"subsidiary" means a subsidiary with the meaning
of Section 736, 736A and 73B of the
Companies Act 1985."
8. In paragraph 1 of Condition 2, the words "Save as provided
in Condition 2C' shall be inserted before "The first financial
year"
9. After Condition 2, now Conditions 2A, 2B, 2C and 2D (the
terms of which are set out in Annex A hereto) shall be inserted.
10. After paragraph 4 of Condition 27, new paragraphs 5 and 6
(the terms of which are set out in Annex B hereto) shall be
inserted, and paragraph 5 of that Condition shall be renumbered
7.
11. After paragraph 1 of Condition 28 the new paragraphs 1A, 1B
and 1C (the terms of which are set out in Annex C hereto) shall
be inserted.
<PAGE>
ANNEX A
CONDITION 2A (Restriction on activity and financial ring-fencing)
1. Save as provided by paragraphs 3 and 4, the license shall
not conduct any business or cany on any activity other than the
Supply Business, the Second-Tier Supply Business and the
Distribution Business.
2. The licensee shall not without the written consent of the
Director acquire shares in any affiliate or related undertaking
after 6 February 1997 except
a) shares in my body corporate which was. a subsidiary of the
licensee on 6 February 1997;
b) shares acquired in a body corporate to satisfy the
obligation imposed by paragraph 3;
c) shares in a body corporate which conducts business only for
a permitted purpose, or
d) shares acquired in order to avoid dilution of a shareholding
in a body corporate in which the licensee holds shares in
conformity with this licence.
3. Notwithstanding paragraph 1, the licensee may continue to
conduct any business or carry on any activity otherwise
prohibited by paragraph 1 which it was conducting or carrying on
as at 6 February 1997, but by 6 February 1998 or such later date
as the Director shall specify to the licensee in writing, shall
transfer to an affiliate or otherwise cease to conduct or carry
on any such other business or activity.
4. Noting in this Condition shall prevent;
(a) any affiliate or related undertaking from conducting any
business or carrying on any activity;
(b) the licensee from holding shares as, or performing the
supervisory or management functions of, an investor in respect of
any body corporate in which it holds an interest consistently
with the provisions of this licence;
(c) the licensee from performing the supervisory or management
functions of a holding company in respect of any subsidiary;
(d) the licensee from carrying on any business or conducting any
activity to which the Director has given his consent in writing;
or
(e) the licensee from carrying on any business or conducting any
active other than the Supply Business, the Second-Tier Supply
Business and the Distribution Business provided that the
aggregate turnover of all such other business or activities does
not in any financial year exceed 5% of the aggregate turnover
Supply Business, the Second-Tier Business and the Distribution
Business (excluding the tumover on transactions which the Supply
Business the Second-Tier Supply Business and the Distribution
Business make with each
other) in the immediately preceding financial year.
CONDITION 2B (Availability of resources)
1. The licensee shall at all times act in a manner calculated
to secure that it has sufficient management resources and
financial resources and financial facilities to enable it:
(a) to carry on the Supply Business and the Distribution
Business; and
(b) to comply with its obligations under the Act of this
licence.
2. The licensee shall submit a certificate addressed to the
Director; approved by a resolution of the board of directors of
the licensee and signed by a director of the licensee pursuant to
that resolution. Such certificate shall be submitted on 30 June
1997 and 30 June of each subsequent year. Each certificate shall
be in one of the following forms:
A "After making enquiries, the directors of the licensee have
a reasonable expectation that the licensee will have available to
it, after taking into account in particular (but without
limitation) any dividend or other distribution which might
reasonably be expected to be declared or paid, sufficient
financial resources and financial facilities to enable the
licensee to carry on the Supply Business and Distribution
Business for a period of 12 months from the date of this
certificate."
B "After making enquiries, the directors of the licensee have
a reasonable expectation, subject to what is said below, that the
licensee will have available to it, after taking into account in
particular (but without limitation) any divided or other
distribution which might reasonably be expected to be declared or
paid, sufficient financial resources and financed facilities to
enable the licensee to carry on the Supply Business and
Distribution Business for a period of 12 months from the date of
this certificate. However, they would like to draw attention to
the following factors which may cast doubt on the ability of the
licensee to carry on the Supply Business and Distribution
Business.
C "In the opinion of the directors of the licensee, the
licensee will not have available to it sufficient financial
resources and financial facilities to enable the licensee to
carry on the Supply Business and Distribution Business for a
period of 12 months from the date of this certificate."
3. The licensee shall submit to the Director with that
certificate a statement of the main factors which the directors
of the licensee have taken into account in giving that
certificate.
4. The licensee shall inform the Director in writing
immediately if the directors of the licensee become aware of any
circumstance which causes them no longer to have the reasonable
expectation expressed in the then most recent certificate given
under paragraph 2.
5. The licensee shall use its best endeavours to obtain and
submit to the Director with each certificate provided for in
paragraph 2 a report prepared by its auditors and addressed to
the Director stating whether or not the auditors are aware of any
inconsistencies between on the one hand, that certificate and the
statement submitted with it and, on the other hand, any
information which they obtained during their audit work.
6. The licensee shall procure from the holding company of the
licensee a legal enforceable undertaking in favour of the
licensee in a form already specified by the Director that the
holding company will refrain from any action, and will procure
that every subsidiary of the holding company (other than the
licensee and in subsidiaries) will refrain from any action, which
would then be likely to cause the licensee to breach any of its
obigations under the Act or this license. Such undertaking shall
be obtained by [7 days after modifications come into effect] and
shall remain in force for as long as the licensee remains the
holder of this license and the giver of the undertaking remains
the holding company of the licensee.
7. The licensee shall:
(a) deliver to the Director evidence (including a copy of such
undertaking) that the licensee has complied with the obligation
to procure an undertaking pursuant to paragraph 6, and
(b) inform the Director immediately in writing if the directors
of the licensee become aware that the undertaking has ceased lo
be legally enforceable or that its terms have been breached.
CONDITION 2C {Change of financial year]
1. Paragraph 1 of Condition 2 shall, for the purpose only of
the Companies Act accounts of the licensee, cease to apply to the
licensee if the Director consents in writing to a change in the
financial year of the licensee for that purpose.
2. Such written consent:
(a) shall specify the date from which, for the purpose set out
at paragraph 1, the current and subsequent financial years of the
licensee shall run;
(b) shall apply to the licensee from the date of grant of the
consent or from any other date specified therein, and
(c) shall continue in effect until revoked in writing by the
Director.
3, While the consent continues in effect the licensee shall
procure the preparation of and shall deliver to the Director
audited group accounts for its group of companies for the
financial years specified in paragraph 1 of Condition 2.
4. Audited group accounts produced in accordamc with paragraph
3:
(a) shall comprise consolidated group accounts in respect of the
group of companies,
(b) shall, save insofar as is necessary to reject a different
financial year, have the same form and content as the Companies
Act accounts of the license;
(c) shall be accompanied by a report by the Auditors and
addressed to the Director stating whether in their opinion the
audited group accounts have been properly prepared in accordance
with this Condition and give a true and fair view of the state of
affairs of the group of companies and of its profits, total
recognized gains and cash Bows dunng the financial year;
(d) may, with the prior written consent of the Director, omit or
provide in a different form, specified in the consent, such
information as may be specified in the consent; and
(e) shall clearly disclose any differences between the
accounting policy underlying the preparation of the Companies Act
accounts of the licensee and the accounting policy underlying the
preparation of the audited group account.
5. Where the written consent of the Director is revoked, as
provided by sub-paragraph 2(c) of this Condition, the licensee
shall change back to a 31 March year end as soon as practicable
within the constraints of the statutory requirements applicable
to Companies Act accounts in respect of its then current and all
subsequent final years. The licensee shall, within six weeks of
the date of the notice of revocation, notify the Director in
writing of the date on which it proposes that its then current
financial year end will change to the date specified in paragraph
1 of Condition 2. Notwithstanding the revocation, the licensee
shall continue to procure the production of audited group
accounts in accordance with this Condition until it has reverted
for all purposes to a financial year of 12 months duration in
accordance with paragraph 1 of Condition 2.
6. No provisions of this Condition shall apply to the financial
year of the licensee specified in paragraph 1 of Condition 2 for
the purpose of accounts produced in compliance with that
Condition, or for the purpose of paragraph 4(e) of Condition 2A.
CONDITION 2D (Credit rating of licensee
1. The licensee shall use all reasonable endeavours to ensure
that:
(a) any corporate debt of the licensee in issue at 6 February
1997 which had aninvestment grade credit rating at that date
maintains an investment grade credit rating throughout the period
during which such debt remains outstanding, and
(b) any corporate debt, other than corporate debt issued by way
of negotiated private placement, issued by the licensee on or
after the 7 February 1997 has and maintains as investment grade
credit rating throughout the period during which such debt
remains outstanding.
2. For the purpose of paragraph 1:
(a) "corporate debt" means any unsecured and unsubordinated
borrowing of money having an initial maturity of five years or
more, and
(b) "investment grade credit rating" rneans a rating of not less
then BBB - by Standard & Poor's Ratings Group or any of its
subsidiaries or not less than Baa3 by Moody's Investors Service,
Inc. or any of its subsidiaries or an equivalent rating from any
other reputable credit rating agency which has comparable
standing in the UK and the USA.
ANNEX B
5. Without prejudice to paragraphs 1 to 4, the licensee shall
not after [date when modifications become effective] without the
written consent of the Director after disclosure of all material
facts:
(a) create any mortgage, charge, pledge, lies or other form of
security or encumbrance whatsoever, undertake any indebtedness to
any other person or enter into any guarantee of any obligation
otherwise than:
(i) on an arm's length basis,
(ii) on normal commercial terms;
(iii) for a permitted purpose; and
(iv) (if the transition is within the ambit of paragraph 1)
in accordance with paragraphs 3 and 4;
Provided that nothing in this Condition shall prevent the
licensee guaranteeing any obligation owed by an affiliate or
related undertaking of the licensee which has been or is to be
incurred for a permitted purpose.
(b) transfer, lease, license or lend any sum or sums, asset, to
any affiliate or related undertaking of the licensee than by way
of:
(i) a dividend or other distribution out of distributable
reserves;
(ii) repayment of capital;
(iii) payment properly due for any goods, services or assets
provided on an arm's length basis and on normal commercial terms,
(iv) a transfer, lease , licensce or loan of any asset,
right or benefit on an arm's length basis and on normal
commercial terms;
(v) repayment of any loan or part of any interest on such a loan
on an arm's length basis and on normal commercial terms;
(vi) payments for group corporation tax relief or for the
surrender of Advance Corporation Tax;
(vii) a transfer for the purpose of satisfying paragraph 3 of
Contition 2A;
(viii) an acquisition of shares in conformity with paragraph 2
of Condition 2A;
(ix) a loan not prohibited by sub-paragraph (c);
(c) make loans to any affiliate or related undertaking of the
licensee, other than loans for a permitted purpose.
6. In this Condition:
"indebtedness" means all liabilities now or
hereafter due, owing or incurred,
whether actual or contingent,
whether solely or jointly with any
other person and whether as
principal or surety, together with
any interest accruing thereon and
all costs, charges, penalties and
expenses incurred in connection
therewith.
ANNEX C
1A. The license shall by [7 days after modifications take
effect] procure from the holding company of the licensee a
legally enforecable undertaking in favour of the licensee in a
form already specified by the Director, such undertaking shall
provide that the holding company will give to the licensee, and
will procure that each subsidiary of that holding company (other
than the licensee and its subsidiaries) will give to the
licensee, all such information as may be necessary to enable the
licensee to comply fully with paragraph l. Such undertaking
shall remain in force for as long as the licensee remains the
holder of this licence and the giver of the undertaking remains
the holding company of the licensee.
lB. The licensee shall deliver to the Director evidence
(including a copy of such undertaking) that the licensee has
complied with the obligation to procure any undertaking pursuant
to paragraph 1A.
1C. The license shall not, save with the consent in writing of
the Director, enter (directly or indirectly) into any contract or
arrangement with the holding company of the license or any of the
subsidiaries of the holding company (other than the subsidiaries
of the licensee) at a time when:
(i) an undertaking complying with paragraph 1A is not in place;
or
(ii) there is an unremedied breach of such undertaking.
<PAGE>
Exhibit 10.03
SECOND-TIER LICENSE TO SUPPLY ELECTRICITY
- for -
London Electricity plc
<PAGE>
NOTE
The licenceholder is subject to the
environmental obligations set out in
Schedule 9 (Preservation of Amenity
and Fisheries) of the Electricity Act 1989
<PAGE>
TABLE OF CONTENTS
Page
PART I: TERMS OF THE LICENCE
PART II: THE CONDITIONS
1. Interpretation. 2
2. Restriction on supply to certain premises. 16
3. Connection and use of system - requirement to offer 22
terms.
3A. Connection and use of system - functions of the 28
Director.
4. Compliance with the Grid Code. 30
5. Compliance with Distribution Codes. 31
6. Pooling and Settlement Agreement. 32
7. Licensee's system planning. 33
8. Generation security standard. 34
9. Security arrangements. 39
10. Health and safety of employees. 40
11. Provision of information to the Director. 41
12. Payment of fees 43
13. Compulsory acquisition of land etc 45
14. Powers to carry out road works etc. 46
SCHEDULE 1: Specified premises 48
SCHEDULE 2: Terms as to revocation 49
<PAGE>
SECOND-TIER LICENCE TO SUPPLY ELECTRICITY
PART I: TERMS OF THE LICENCE
1. The Director General of Electricity Supply in accordance
with a general authority given by the Secretary of State
under Sections 6(1) and (2) of the Electricity Act 1989
(hereinafter referred to as "the Act") and in exercise of
the powers conferred by Section 6t2)(a), Section 6(6), and
Section 7 of the Act hereby licenses London Electricity plc
(registered in England undo- ,~,imher 2366852, to supply
electricity to the premises specified in Schedule 1 below
during the period specified in paragraph 3 below, subject to
the Conditions set out in Part II below
(hereinafter.referred to as the "Conditions").
2. The Conditions are subject to modification or amendment in
accordance with their terms or with Sections 11, 14 or 15 of
the Act. The licence i. further subject to the terms as to
revocation specified in Schedule 2.
3. This licence shall come into force on 1 April 1991 and
unless revoked in accordance with the provisions of Schedule
2 shall continue until determined by not less than 25 years'
notice in writing given by the Director General of
Electricity Supply to the licensee, such notice not to be
served earlier than a da-e being 10 years after the licence
comes into force.
Dr. Eileen Marshall
authorized on behalf of the
25 March 1991 Director General of Electricity Supply
<PAGE>
PART II: THE CONDITIONS
Condition 1: Interpretation
1. Unless the contrary intention appears, words and expressions
used in the Conditions shall be construed as if they were in
an Act of Parliament and the Interpretation Act 1978 applied
to them and references to an enactment shall include any
statutory modification or re-enactment thereof after the
date when this license comes into force.
2. Any word or expression defined for-the purposes of any
provision of Part I of the Act shall, unless the contrary
intention appears, have the same meaning when used in the
Conditions.
3. In the Conditions unless the context otherwise requires:
"affiliate" in relation to the licensee or
any person means any holding
company or subsidiary of the
licensee or such person or any
subsidiary of a holding company
of the licensee or such person,
in each case within the meaning
of Sections 736, 736A and 736B
of the Companies Act 1985 as
substituted by Section 144 of
the Companies Act 1989 and if
that section is not in force at
the date of grant of this
licence as if such section were
in force at such date.
"authorised" in relation to any business or
activity means authorised by
licence granted under Section 6
or exemption granted under
Section 5 of the Act.
"authorised electricity means any person (other than
operator" the licensee) who is authorised
to generate, transmit or supply
electricity and for the
purposes of Conditions 3 and 3A
shall include any person who
has made application to be so
authorised which application
has no t been refused and any
person transferring electricity
to or from England and dales
across an interconnector or who
has made application for use of
interconnector which has not
been refused.
"connection and use means an agreement under which
of system agreement" the licensee agrees to provide
to any person a connection or
connections or a modification
to an existing connection to
the licensee's system and/or to
any authorized electricity
operator, use of system to
transport electricity on such
system, as more fully described
in Condition 3.
"designated" in relation to any agreement or
arrangement or code or proposal
therefor means designated by
the Secretary of State or on
his behalf by such means as he
may consider appropriate
whether for the purposes of any
Condition of this licence or
otherwise, but so that an
agreement or arrangement or
code or proposal therefor so
designated may at the
discretion of the Secretary of
State cease to be designated if
amended or modified in any
material respect.
"Distribution Code" means in relation to any public
electricity supplier the
Distribution Code required to
be drawn up by such supplier
and approved by the Director as
from time to time revised with
the approval of the Director.
"distribution system" means the system consisting
(wholly or mainly) of electric
lines owned or operated by any
authorised electricity operator
and used for the distribution
of electricity from grid supply
points or generation sets or
other entry points to the point
of delivery to customers, and
includes any remote
transmission assets operated by
such authorised electricity
operator and any electrical
plant and meters owned or
operated by the authorized
electricity operator in
connection with the
distribution of electricity,
but shall not include any part
of the transmission system.
"equivalent megawatt" in circumstances where demand
is only measured in megavolt
amperes means megavolt amperes
converted into megawatts using
for this purpose a power factor
of 0.9 megawatts per megavolt
ampere or such other factor as
may with the approval of the
Director be taken as being
appropriate having regard to
electrical characteristics of
the supply, and cognate
expressions shall be construed
accordingly.
"Fuel Security Code" means the document of that
title designated as such by the
Secretary of State as from time
to time amended.
"generation set" means any plant or apparatus
for the production of
electricity and shall where
appropriate include a
generating station comprising
more than one generation set.
"Grid Code" means the Grid Code required to
be drawn up by the Transmission
Company and approved by the
Director as from time to time
revised with the approval of
the Director.
"grid supply point" means any point where
electricity is delivered to the
licensee's system or to the
distribution system of any
authorised electricity operator
from the transmission system.
"interconnectors" means the electric lines and
electrical plant and meters
owned or operated by the
Transmission Company solely for
the transfer of electricity to
or from the transmission system
into or out of England and
Wales.
"licensee" means London Electricity plc
(registered In England under
number 2366852)
and (where the context so
requires) shall include any
business in respect of which
the licensee is the successor
company.
"licensee's systems means the electric lines owned
or operated bail the licensee
for the transport of
electricity from generation
sets or grid or bulk supply
points to the point of delivery
to customers, and includes any
electrical plant and meters
associated therewith.
"megawatt" or "MW" includes an equivalent
megawatt.
"Pooling and Settlement means the agreement of that
Agreements title approved (or to be
approved) by the Secretary of
State or by the Director as
from time to time amended with
the approval of the Director
(where so required pursuant to
its terms) and shall where the
context permits include the
Initial Settlement Agreement
approved (or to be approved) by
the Secretary of State (as from
time to time amended wit the
consent of the Secretary of
State)
"related undertaking" in relation to the licensee or
any person means any
undertaking in which the
licensee or such person has a
participating interest as
defined by Section 260 of the
Companies Act 1985 as
substituted by Section 22 of
the Companies Act 1989 and if
that section is not in force at
the date of grant of this
licence as if such section were
in force at such date.
"remote transmission means any electric lines,
assets" electrical plant or meters
owned by the Transmission
Company which (a) are embedded
in the licensee's system or in
the distribution system of any
authorised electricity operator
other than the Transmission
Company and are not directly
connected by lines or plant
owned by the Transmission
Company to a substation owned
by the Transmission Company and
(b) are by agreement between
the Transmission Company and
the licensee or such authorized
electricity operator operated
under the direction and control
of the licensee or such
authorized electricity
operator.
"Retail Price Index!' means the general index of
retail prices published by the
Department or Employment each
month in respect of all items
or:
(a) if the index for any month in
any year shall not have been
published on or before the last
day of the third month after
such month, such index for such
month or months as the Director
may after consultation with the
licensee determine to be
appropriate in the
circumstances; or
(b) if there is a material change
in the basis of the index, such
other index as the Director may
after consultation with the
licensee determine to be
appropriate in the
circumstances.
"Transmission Company" means The Rational Grid Company
plc or any other holder for the
time being of a licence to
transmit electricity in England
and Wales under Section 6(1)(b)
of the Act.
"transmission system" means the system consisting
(wholly or mainly) of high
voltage electric lines owned or
operated by the Transmission
Company and used for the
transmission of electricity
from one generating station to
a sub-station or to another
generating station or between
substations or to any
interconnector, and includes
any electrical plant and meters
owned or operated by the
Transmission Company in
connection with the
transmission of electricity but
shall not include any remote
transmission assets.
"undertaking" bears the meaning ascribed to
that expression by Section 259
of the Companies Act 1985 as
substituted by Section 22 of
the Companies Act 1989 and if
that section is not in force at
the date of grant of this
licence as if such section were
in force at such date.
4. Any reference to a numbered Condition (with or without a
suffix letter) or Schedule is a reference to the Condition
(with or without a suffix letter) or Schedule bearing that
number in this licence, and any reference to a numbered
paragraph (with or without a suffix letter) is a reference
to the paragraph (with or without a suffix letter) bearing
that number in the Condition or Schedule in which the
reference occurs:.
5. In construing the Conditions, the heading or title of any
Condition or paragraph shall be disregarded.
6. Where, in the Conditions, any obligation of the licensee is
required to be performed within a specified time limit that
obligation shall be deemed to continue after that time limit
if the licensee fails to comply with that obligation within
that time limit.
7. The provisions of Section 109 of the Act shall apply for the
purposes of the delivery or service of any documents,
directions or notices to be delivered or served pursuant to
any Condition, and directions issued by the Director
pursuant to any Condition shall be delivered or served as
aforesaid.
Condition 2: Restriction on supply to certain Premises
1. Save as provided in paragraphs 3 and 5 below the licensee
shall not during the franchise period supply electricity to
any single premises at which the relevant demand in
megawatts is at or below the franchise limit.
2. In determining for the purposes of this Condition whether
any single premises falls within the franchise limit the
licensee shall have regard to the following bases of
assessment:
(a) in respect of premises occupied by existing customers
the relevant demand in megawatts shall be calculated as
an average of the maximum monthly demands under normal
operating conditions at such single premises supplied
by one or more authorized electricity operators and/or
the licensee In the three months of highest maximum
demand as recorded over the most recent twelve-month
period in respect of which figures are available; and
(b) in respect of premises occupied by a new customer
seeking a supply from the licensee the relevant demand
in megawatts shall be calculated by reference to the
average maximum monthly demand which might reasonably
be expected in the three months of highest maximum
demand over a twelve-month period at premises having
similar,demand characteristics to the premises occupied
by such new customer. '.
2A. For the purposes of paragraph 2, if any electricity which
has been or is to be supplied by the licensee to any single
premises ("premises A") is or will be on-supplied by another
person from premises A to one or more other single premises
("premises B'') then:
(a) if the on-supply to premises B fro`.. premises A was
made on 31 March 1990 by than other person pursuant to
an agreement for that other person to supply premises B
which was subsisting on that date that demand at
premises B which is met by such on-supply from premises
A may be regarded as part of the relevant demand in
megawatts at premises A; and
(b) save as provided in sub-paragraph (a) above, that
demand at premises B which is met by such on-supply
from premises A shall not be regarded as part of the
relevant demand in megawatts at premises A.
3. Subject to paragraph 4 below, if at any time during the
franchise period the relevant demand in megawatts
(calculated in accordance with paragraphs 2 and 2A above) at
any single premises to which a supply is given by the
licensee in accordance with the provisions of this Condition
should fall to or below the franchise limit the licensee
may, notwithstanding such fact,'-continue to supply such
premises without being in breach of this Condition until
such time as:
(a) '''any contract existing between:the 'licensee and the
customer occupying such premises is determined by
effluxion of time or otherwise; or
(b) the supply arrangements between the licensee and the
customer occupying such premises shall for any other
reason be terminated.
4. Save where the Director otherwise agrees, if (having regard
to the basis of assessment referred to in paragraph 2(b)
above) the relevant demand in megawatts of a customer who
was a new customer at the time of commencement of supply by
the licensee should, in the first twelve-month period for
which figures are available, prove to be less than was
reasonably expected of such customer and to fall to or below
the franchise limit, the licensee shall cease to supply such
customer.
5. Not withstanding paragraph l, the licensee may supply
electricity to single premises.at which the relevant demand
in megawatts is at or below the franchise limit where such
single premises are specified for the purposes of this
licence by the Director with the prior approval of the
Secretary of State.
6. For the purposes of paragraph 2(a), where the average
calculated as there provided, but ignoring for this
purpose.the reference to normal operating conditions, was no
more than lo per cent. higher than the average (calculated
in the same-manner) over the twelve-month period preceding
the twelve-month period referred to in.paragraph 2(a), the
maximum monthly demands from which the average was derived
shall be presumed to have occurred under normal operating
conditions.
7. Any dispute arising uncle_ the.provisions of this
Condition.between the licenseetand any authorized
electricity operator or any person requiring a supply of
electricity from the licensee may be referred to the
Director and the Director shal! determine whether the
premises in respect of which the customer requires a supply
to be given fall within the franchise limit.
8. In this Condition:
"existing customer" means any person occupying
premises to which a supply is
being given by the licensee or
any other authorised
electricity operator, which
person (or any affiliate or
related undertaking of such
person) and premises have been
supplied for a clear period of
at least 12 months prior to the
date on which application for
supply by the licensee is made.
"franchise limit" means:
(a) during the four year period
from 31st March, 1990 to Both
March, 1994 one megawatt; and
(b) during the succeeding four yea'
period from 31st March, 1994 to
30th March, 1998 0.1 megawatt.
"franchise period" means the period of eight years
commencing on 31st March, 1990.
"new customer" means any person supplied or
applying for a supply to
premises other than an existing
customer.
"single premises" includes in the case of sites
or buildings in multi-
occupation, each area in
respect of which the supply of
electricity was as at 31st
December, 1989 or is or is to
be separately metered and the
occupier individually invoiced
by the licensee or any
authorised electricity
operator.
Condition 3: Connection and use of system = requirement to
offer terms.
1. The licensee shall, subject 'o paragraphs 6, 7 and 11 below,
offer to enter into on agreement Faith any authorized
electricity operator who has made application for use of
system:
(a) to accept into the licensee's system at such entry
point and in such quantities as may be specified in the
application, electricity to be provided by or for the
authorized electricity operator;
(b) to deliver electricity equal in quantity to that
accepted into the licensee's system (less only any
distribution losses) from such exit points on that
system and in such quantities as may be specified in
the application to such person as the authorized
electricity operator may specify; and
(c) containing terms in accordance with paragraphs 3 and 4
below and such other terms and conditions as may be
appropriate for the purposes of the agreement in the
circumstances in which it is likely to be made.
2. The licensee shall, subject to paragraphs 6 and 7 below,
offer terms for a connection and use of system agreement in
accordance with paragraph 1 above as soon as practicable and
in any event not more than the period specified in paragraph
8 below after receipt by the licensee of an application from
the authorized electricity operator containing all such
information as the licensee may reasonably require for the
purpose of formulating the terms of his offer.
3. The licensee's offer made in accordance with paragraph 1
shall make detailed provision regarding:
(a) the carrying out of works (if any) required for the
construction or modification of the entry point to
connect the licensee's system to the transmission
system or to any distribution system or in connection
with the construction or modification of any exit
points for the delivery of the electricity to be
distributed as specified in the agreement, and for the
obtaining or any consents necessary for such purpose;
(b) the carrying out of works (if any) for the provision of
electrical plant or for the extension or reinforcement
of the licensee's system which are required, in the
opinion of the licensee, to be undertaken for the
provision of use of system to the authorised
electricity operator and for the obtaining of any
consents necessary for such purpose;
(c) the installation of appropriate meters or other
apparatus (if any) required to enable the licensee to
measure electricity being accepted into the licensee's
system at the specified entry point and leaving such
system -at the specified exit points;
(d) the installation of such switchgear or other apparatus
(if any) as may be required for interrupting the use of
system should there be a failure by or for an
authorised electricity operator to provide electricity
at its entry point on the licensee's system for
delivery to the person specified by the authorised
electricity operator from the exit points on such
system;
(e) the date by which any works required so as to permit
access to the licensee's system (including for this
purpose any works to extend or reinforce them) shall be
completed (time being of the essence unless otherwise
agreed by the authorized electricity operator); and
(f) the charges to be paid by the authorized electricity
operator for the provision of electrical plant, for
connections to or modification of connections to, or
the extension or reinforcement of, the licensee's
system and for use of system shall, unless manifestly
inappropriate, be set in conformity with paragraph 4
below.
4. The charges referred to in paragraph 3 to be contained in
every agreement the subject of an offer by the licensee
shall be such that:
(a) charges for the provision of electrical plant,
connection charges, charges for modification of
connections or any charges for extension or
reinforcement of the licensee's system or for use of
system are set at a level which will enable the
licensee to recover no more than:
(i) the appropriate proportion. (taking account c the
factors referred to in paragraph 5) or the costs
directly or Indirectly incurred b, the licensee;
and
(ii) a reasonable rate of return on the capital
represented by such costs;
(b) charges for the installation of meters, switchgear or
other apparatus and for their maintenance shall not
exceed the costs thereof and a reasonable rate of
return on the capital represented by such cost.
5. For the purpose of determining an appropriate proportion of
the costs directly or indirectly incurred in carrying
outworks, the.licensee shall have regard to:
(a) the benefit (if any) to be obtained or likely in the
future to be obtained by the licensee or any other
authorised electricity operator as a result of the
carrying out of such works whether by virtue o.~ the
provision of electrical plant, the reinforcement or
extension of the licensee's system, or the provision of
additional entry or exit points on such system or
otherwise; and
(b) the ability or likely future ability of the licensee to
recoup a proportion of such costs from other authorized
electricity operators or other persons.
6. The licensee shall not be obliged pursuant to this Condition
to offer to enter into any agreement with an authorized
electricity, operator to make connections or to provide use
of system where, by reason of the capacity of the licensee's
system and the use made or reasonably expected to be made of
it, the licensee would be required to expand or reinforce
the capacity of the licensee's system.
7. The licensee shall not be obliged pursuant to this Condition
to offer to enter into any agreement with an authorised
electricity operator if:
(a) to do so would be likely to involve the licensee:
(i) in breach of the Grid Code;
(ii) in breach of the Distribution Code;
(iii) in breach of the Electricity Supply
Regulations 1988 or any regulations made under
Section 29 of the Act; or
(iv) in breach of any other enactment relating to
safety or standards applicable to the licensee's
system; or
(b) the person making the application does not undertake to
be bound, insofar as applicable, by the terms of the
Distribution code or the Grid Code from time to time in
force; or
(c) the person making the application ceases to be an
authorized electricity operator.
8. For the purpose of paragraph 2, the period specified shall
be:
(a) in the case of persons seeking use of system only, 28
days; and
(b) in the case of persons seeking connection, modification
of an existing connection or use of system in
conjunction with connection, three months.
9. The preceding paragraphs of this Condition shall apply
mutatis mutandis in the case of any person (not being an
authorised electricity operator) who wishes to be connected
at an exit point on the licensee's system.
10, The licensee shall within 28 days following receipt of a
request from any person, give or send to such person such
information in the possession of the licensee as may be
reasonably required by such person fc- the purpose of
completing paragraph 8 of Part 1 and paragraphs 2(v) and
(vi) of Part 2 of Schedule 2 of The Electricity (Application
for Licences and Extensions of Licences) Regulations 1990 or
such provisions to like effect contained in any further
regulations then in force meae pursuant to Section 6(3),.60
and 64(1) of the Act.
11. Paragraphs 1 to 10 inclusive above shall apply only if, and
to the extent that,.the Director so directs and the licensee
shall comply with any such direction. .
Condition 3A: Connection And use of System - functions of
the Director
1. If, after a period which appears to the Director . be
reasonable for the purpose, the licensee has failed to enter
into an agreement with an authorised electricity operator
(or in the case of connection at any exit point, any person)
entitled or claiming to be entitled thereto pursuant to an
application in accordance with Condition g, 'he Director may
pursuant to Section 7(3)(c) of the Act, on the application
of such authorized electricity operator or person or the
licensee, settle any terms of the agreement in dispute
between-the licensee and the authorised electricity operator
or person in such manner as appears to the Director to be
reasonable having (in so far as relevant) regard, in
particular, to the following considerations:
(a) that the.authorised electricity operator or person
should pay to the licensee the whole or an appropriate
proportion (as determined in accordance with
paragraph 5 of Condition 3) of the costs directly or
indirectly incurred by the licensee in the carrying out
of any works or in providing or doing any other thing'
under the.agreement in question together with
a-reasonable rate of return on the capital represented
by such costs -calculated in accordance with the
principles set out in paragraph 4 of Condition 3;
(b) that the performance~by the.licensee of its obligations
under..the.agreement should not cause it to be in
breach of any other Condition of this licence;
(c) that any methods by which the licensee's system is
connected to the transmission system or to any
distribution system accords with good engineering
principles and practices; and
(d) that the terms and conditions of agreements entered
into by the licensee pursuant to an application in
accordance with Condition 3 should be, so far as
circumstances allow, as similar in substance and form
as is practicable.
2. If the authorised electricity operator or person (as the
case may be) wishes to proceed on the basis of the agreement
as settled by the Director, the licensee shall forthwith
enter into and implement such agreement in accordance with
its terms.
Condition 4: Compliance with the Grid Code
1. The licensee shall comply with the provisions of the Grid
Code in so far as applicable to it.
2. The Director may (following consultation with the
Transmission Company) issue directions relieving the
licensee of its obligation under paragraph 1 in respect of
such parts of the Grid Code and to such extent as may be
specified in those directions.
Condition 5: Compliance with Distribution Codes
1. The licensee shall comply with the provisions of the
Distribution Code of any public electricity supplier in so
far as applicable to it.
2. The Director may (following consultation with any public
electricity supplier directly affected thereby) issue
directions relieving the licensee of its obligation under
paragraph l in respect of such parts of the Distribution
Code of any public electricity supplier and to such extent
as may be specified in those directions.
Condition 6: Pooling and Settlement Agreement
1. The licensee shall be party to and, within 3 months after
the date on which this licence comes into force (or such
longer period as may be specified by the Director in
directions issued for the purposes of this Condition), shall
become a pool member under and shall in either case comply
with the provisions of, the Pooling and Settlement Agreement
insofar as the same shall apply to it in its capacity as a
private electricity supplier.
2. Paragraph 1 shall not apply for so long as the aggregate
amounts to be supplied by the licensee and any affiliate or
related undertaking of the licensee in its or their capacity
as a public or private electricity supplier do not exceed
500 kW.
Condition 7: Licensee's system Planning
1. The licensee shall plan and develop the licensee's system in
accordance with a standard not less than that set out in
Engineering Recommendation P. 2/5 (October 1978 revision) of
the Electricity Council Chief Engineers' Conference in so
far as applicable to it or such other standard of planning
as the licensee may, following consultation with the
Transmission Company and any authorized electricity operator
liable to be materially affected thereby and with the
approval of the Director, adopt from time to time.
2. The Director may (following consultation with the licensee
and, where appropriate, with the Transmission Company and
any authorised electricity operator liable to be materially
affected thereby) issue directions relieving the licensee of
its obligation under paragraph 1 in respect of such parts of
the licensee's system and to such extent as may be specified
in the directions.
Condition 8: Generation security standard
1. The licensee shall make arrangements sufficient to meet the
generation security standard.
2. The duty imposed by paragraph 1 shall be discharged either
by the licensee's complying with the provisions of paragraph
3 below or by the making by the licensee of such other
arrangements-as may have been previously approved in writing
for the purpose by the Director.
3. The licensee may discharge the duty imposed by paragraph 1
by:
(a) for so long as 'he relevant condition is met, purchasing as
a pool member under the terms of the Pooling and Settlement
Agreement quantities of electricity which are at all times
sufficient to meet the demands of all qualifying customers
of the licensee; and
(b) for so long as the relevant condition is met, and save by
reason of planned maintenance undertaken on the licensee's
system or in circumstances of force majeure affecting either
the licensee's system or the quantities of electricity
delivered into that system, not:
(i) making voltage reductions outside statutory limits; or
(ii) interrupting or reducing supplies to any qualifying
customer otherwise than as instructed pursuant to the
Grid Code by the Transmission. Company or in accordance
with any apo~icable Distribution Code.
4. The relevant condition referred to in paragraph 3 is that
there should at any relevant time be electricity available
to be purchased under the terms of the Pooling and
Settlement Agreement at a price less than the ceiling price.
5. The licensee shall upon request by the Director provide to
the Director such information as the Director may require
for the purpose of monitoring compliance with this Condition
and to enable the Director (having regard to his statutory
duties) to review the operation of the generation security
standard.
6. The provisions of this Condition are without prejudice to
the duties of the licensee under the Electricity Supply
Regulations 1988.
7. In this Condition:
"ceiling price" means such price as would be equal
to the Pool Selling Price in
circumstances where the
corresponding Pool Purchase Price
was an amount equal to the Value of
Lost Load.
"generation security means such standard of general on
standard" security as will ensure that:
(a) the supply of electricity to
qualifying customers will not be
discontinued in more than 9 years
in any 100 years; and
(b) the voltage or frequency of
electricity supplied to qualifying
customers will not be reduced
below usual operational limits in
more than 30 years in any 100
years by reason of insufficiency
of electricity generation
available for the purposes of
supply by the licensee to its
qualifying customers at times of
annual system peak demand.
"Pool Purchase Price" shall each have the meaning from
and "Pool Selling Price"time to time ascribed to them in
Schedule 9 to the Pooling and
Settlement Agreement.
"qualifying customer" means any purchase from the
licensee but shall exclude
(a) a contract purchaser under an
interruptible contract or a
contract containing load
management terms to the extent
that supplies to that purchaser
may be interrupted or reduced in
accordance with the terms of that
contract; and
(b) a customer on special tariff terms
which restrict supplies to
particular time periods to the
extent that supplies to that
customer may be interrupted or
reduced in accordance with such
tariff.
"Value of Lost Loads" means in respect or the financial
year, ending 31 March 1991 the sum
of pound2 per kWh and, in respect
of each succeeding financial year.
the sum which corresponds to pound
2 per kWh as adjusted to reflect
the percentage change in the Retail
Price Index between the index
published or determined in respect
to the December prior to the start
of that financial year and the
index published or determined for
December 1989.
Condition 9: Security Arrangements
1. The licensee shall comply with the provisions of the Fuel
Security Code and such provisions shall have effect as if
they were set out in this licence.
Condition 10: Health and safety of employees
1. It shall be the duty of the licensee to act together with
other licensees to consult with appropriate representatives
of the employees for the purpose of establishing and
maintaining an appropriate machinery or forum for the joint
consideration of matters of mutual concern in respect of the
health and safety of persons employed by those licensees.
Condition 11: Provision of information to the Director
1. Subject to paragraphs 2 and 3, the licensee shall furnish to
the Director, in such manner and at such times as the
Director may require, such information and shall procure and
furnish to him such reports, as the Director may consider
necessary in the light of the Conditions or as he may
require for the purpose of performing:
(a) the functions assigned to him by or under the Act; and
(b) any functions transferred to him under the Act.
2. The licensee may not be required by the Director to furnish
him under this Condition with information for the purpose of
the exercise of his functions under Section 48 of the Act.
3. The licensee may not be required by the Director to furnish
him under this Condition with any information required in
relation to "` enforcement matter which the licensee could
not be compelled to produce or give under Section 28(3) of
the Act.
4. The power of the Director to call for information under
paragraph 1 is in addition to the power of the Director to
call for information ever or pursuant to any other
Conditions.
5. In paragraphs 1 to 4, "information" shall include any
documents, accounts, estimates, returns or reports (whether
or not prepared specifically at the request of the Director)
of any description specified by the Director.
6. The licensee shall, if so requested by the Director give
reasoned comments on the accuracy and text of any
information and advice (so far as relating to supply of
electricity authorised by this licence) which the Director
proposes to publish pursuant to Section 48 of the Act.
Condition 12: Payment of fees
1. The licensee shall, at the times stated hereunder, pay to
the Director fees of the amount specified in, or determined
under, the following paragraphs of this Condition.
2. Within 30 days after the grant of this license but, in any
event, before 2 May 1991 the licensee shall pay to the.
Director an initial fee of pound 250.
3. In respect of the year beginning on 1st April 1992 and in
each sub.,2~'ent year, the licensee shall pay to the
Director a fee which is the aggregate of the following
amounts:
(a) an amount which is a proportion as determined by the
Director of the amount estimated by the Director,
according to a method which has previously been
disclosed in writing to the licensee, as likely to be
his costs during the coming year in the exercise of his
general functions under the Act in relation to the
holders of licenses granted under Section 6(1) and 6(2)
of the Act;
(b) an amount whicn is a proportion as determined by the
Director of the amount estimated by the Director (in
consultation with the Monopolies Commission) as having
been incurred in the calendar year immediately
preceding the 1st April in question by the Monopolies
Commission in connection with references made to it
under Section 12 of the Act with respect to this
licence or any other licence issued under Section o(2)
a. the Act; and
(c) the difference (being a positive or a negative amount),
if any, between:
(i) the amount of the fee paid by the licensee in
respect of the year immediately preceding the 1st
April in question; and
(ii) the amount which that fee would have been in
respect of that year had the amount comprised
therein under sub-paragraph (a) above (or, where
that period commenced on 1 April 1991 the amount
attributable to the matters referred to in that
sub-paragraph) been calculated by reverence to the
total costs of the Director and the proportion
thereof actually attributable to the licensee
(such total costs being apportioned as determined
by the Director according to a method previously
disclosed in writing to the licensee)
and the fee shall be paid by the licensee to the Director
within one month of the Director giving notice to the
licensee. of its amount if that notice is given within six
months of the beginning of the year~in respect of which the
fee is payable.
Condition 13: Compulsory acquisition of land etc
1. All the powers and rights conferred by or under the
provisions of Schedule 3 of the Act (compulsory acquisition
of land etc.) shall have effect in relation to the licensee
to the extent that they are . maintenance, removal or
replacement of the licensee's system or any part thereof
which are necessary to enable the licensee to supply
electricity to the premises specified in Schedule 1 of this
licence.
2. Paragraph 1. shall cease to have effect on 3 March 1994.
Condition 14: Powers to carry out street works etc
1. The powers and rights conferred by or under the provisions
of Schedule 4 to the Act (powers to carry out street works
etc.) shall have effect and may, subject to paragraph 2
below, be exercised by carrying out works in relation to, or
in pursuance of, the installation, inspection, maintenance,
adjustment, repair, alteration, replacement and removal of:
(a) electric lines which are necessary to enable the
licensee to supply electricity to premises specified in
Schedule 1 below;
(b) electrical plant associated with such lines; and
(c) any structures for housing or covering such lines or
plant.
2. Works which are under, over, in, on, along or ar-oss any
street, which for the purposes of the Highways Act 1980
constitutes a highway or part of a highway maintainable at
the public expense, may be undertaken in pursuance of
paragraph 1 above subject to the following conditions:
(a) that such works shall not be carried out except with
the consent, which shall not unreasonably be withheld,
of the highway authority and in accordance with such
reasonable conditions as may be attached to such
consent;
(b) that any question as to whether or not a consent of
highway authority is unreasonably withheld, or as to
the reasonableness of conditions attached to such
consent, shall be determined by a single arbiter to be
appointed:
(i) by agreement between the licensee and the highway
authority; or
(ii) in default of such agreement, by the Director on
the application of either party.
3. Paragraph 1. shall cease to have effect on 31 March 1994.
<PAGE>
SCHEDULE 1
Specified Premises
All non-domestic premises having a maximum demand over low in the
authorised areas as at 31 March 1990 of the following public
electricity suppliers:
East Midlands Electricity pl
Eastern Electricity p]
MANWEB plc
Midlands Electricity plc
Northern Electric plc
NORWEB plc
SEEBOARD plc
Southern Electric plc
South Wales Electricity plc
South Western Electricity plc
Yorkshire Electricity Group plc
<PAGE>
SCHEDULE 2
Terms as to revocation
1. The Director may at any time revoke this licence by not less
than 30 days' notice in writing to the licensee:
(a) if the licensee agrees in writing with the Director
that this licence should be revoker.
(b) if any amount payable under Condition 12 is unpaid 30
days after ic has become due and remains unpaid for a
period of 14 days after the Director has given the
licensee notice that the payment is overdue. Provided
that no such notice shall be given earlier than the
sixteenth day after the day on which the amount payable
become due;
(c) if the licensee fa is to comply with a final order
(within the meaning of Section 25 of the Act) or with a
provisional order (within the meaning of that section)
which has been confirmed under that section and (in
either case) such failure is not rectified to the
satisfaction of the Director within three months after
the Director has given notice of such failure to the
licensee. Provided that no such notice shall be given
by the Director before the expiration of the period
within which an application under Section 27 of the Act
could be made questioning the validity of the final or
provisional order or before the
3. The provisions of Section 109 of the Act shall apply for the
purposes of the service of any notice under this Schedule.
<PAGE>
Exhibit 10.05
CONNECTION AND USE OF SYSTEM DOCUMENTATION
THE NATIONAL GRID COMPANY PLC
CONNECTION AND USE OF SYSTEM DOCUMENTATION
[CONFORMED COPY]
<PAGE>
CONTENTS
Master Agreement
Schedule 1 - NGC/Users' Details
Schedule 2 - Definitions
Schedule 3 - Accession Agreement
Exhibit 1 - Supplemental Agreement Type 1
Exhibit 2 - Supplemental Agreement Type 2
Exhibit 3 - Supplemental Agreement Type 3
Exhibit 4 - Supplemental Agreement Type 4
Exhibit 5 - Supplemental Agreement Type 5
Exhibit 6 - Supplemental Agreement Type 6
Exhibit 7 - Connection Application
Exhibit 8 - Connection Offer
Exhibit 9 - Use of System Application (Generators)
Exhibit 10 - Use of System Application (Suppliers)
Exhibit 11 - Modification Application
Exhibit 12 - Modification Offer
Exhibit 13 - Modification Notification
Exhibit 14 - Ancillary Services Agreement
Exhibit 15 - Interface Agreement Type 1 (Generators)
Exhibit 16 - Interface Agreement Type 2 (Suppliers)
Exhibit 17 - Interface Agreement Type 3 (Suppliers - Licence)
<PAGE>
DATED 30TH MARCH 1990
THE NATIONAL GRID COMPANY PLC (1)
and
OTHERS (2)
_______________________________________________________
MASTER
CONNECTION AND USE OF SYSTEM AGREEMENT
________________________________________________________
<PAGE>
MASTER AGREEMENT
CONTENTS
Clause Title
1 Interpretation and Construction
2 Supplemental Agreements
3 Ancillary Services
4 Interface Agreement
5 Nuclear Installations
6 Principles of Ownership
7 Metering
8 NGC Obligations
9 Compliance with the Grid Code/Distribution Code
10 Modifications
11 New Connection Sites
12 General Provisions concerning Modifications and
New Connection Sites
13 Additional Parties
14 Payment
15 Limitation of Liability
16 Duration and Termination
17 Events of Default/Deenergisation
18 Transfer and Subcontracting
19 Confidentiality
20 Intellectual Property
21 Force Majeure
22 Waiver
23 Notices
24 Counterparts
25 Variations
26 Dispute Resolution
27 Jurisdiction
28 Governing Law
29 Severance of Terms
30 Language
<PAGE>
THIS MASTER AGREEMENT is made the 30th day of March 1990 and
becomes effective on the 31st day of March 1990
BETWEEN:
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SE1 9JU ("NGC", which
expression shall include its successors and/or permitted assigns)
and whose address, telex and facsimile numbers for notices are
set out in Schedule 1; and
(2) THE PERSONS whose names, registered numbers, registered
offices, and addresses, telex and facsimile numbers for notices
are set out in Schedule I (each a "User", which expression shall
include its successors and/or permitted assigns)
WHEREAS:
This Master Agreement has the following principal purposes:-
(i) to establish a contractual framework between NGC and all
Users pursuant to which Supplemental Agreements will from time to
time be made which will provide for, amongst other things:
(a) connection of a User's Equipment at a Connection Site
to the NGC Transmission System;
(b) the use by a User of the NGC Transmission System in
connection with the generation and/or transmission of
electricity;
(c) the payment to NGC of Connection Charges and/or Use of
System Charges; and
(ii) to provide for the enforcement of the Grid Code.
NOW IT IS HEREBY AGREED as follows:-
INTERPRETATION AND CONSTRUCTION
1.1 In this Agreement and in each Supplemental Agreement the
words and expressions defined in Schedule 2 shall, unless the
subject matter or context otherwise requires or is inconsistent
therewith, apply.
1.2 In the event of any inconsistency between the provisions of
any Supplemental Agreement and this Agreement, the provisions of
the Supplemental Agreement shall prevail in relation to the
Connection Site which is the subject thereof to the extent that
the rights and obligations of Users not party to that
Supplemental Agreement are not affected.
1.3.1 If in order to comply with any obligation in this
Agreement or any Supplemental Agreement any Party is under a duty
to obtain the consent or approval (including any statutory
licence or permission) ("the Consent") of a third party (or the
Consent of another Party to this Agreement) such obligation shall
be deemed to be subject to the obtaining of such Consent which
the Party requiring the Consent shall use its reasonable
endeavours to obtain including (if there are reasonable grounds
therefor) pursuing any appeal in order to obtain such Consent.
1.3.2 If such Consent is required from any Party to this
Agreement then such Party shall grant such Consent unless it is
unable to do so or it would be unlawful for it to do so provided
that such grant by such Party may be made subject to such
reasonable conditions as such Party shall reasonably determine.-
1.3.3 For the avoidance of doubt if the Party who is under a
duty to obtain such Consent fails to obtain such Consent having
complied with this Clause 1.3 the obligation on that Party (in
relation to which such Consent is required) shall cease.
1.4 In this Agreement:-
(i) unless the context otherwise requires all references to
a particular Clause, Sub-Clause, paragraph, Schedule or Exhibit
shall be a reference to that Clause, Sub-Clause, paragraph,
Schedule or Exhibit in or to this Agreement and all references to
a particular Appendix shall be a reference to that Appendix to a
Supplemental Agreement;
(ii) a table of Contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement or a Supplemental Agreement, as the case may be;
(iii) references to the words "include" or "including"
are to be construed without limitation to the generality of the
preceding words;
(iv) unless the context otherwise requires any reference to
an Act of Parliament or any Part or Section or other provision of
or Schedule to an Act of Parliament shall be construed, at the
particular time, as including a reference to any modification,
extension or re-enactment thereof then in force and to all
instruments, orders or regulations then in force and made under
or deriving validity from the relevant Act of Parliament; and
(v) references to the masculine shall include the feminine
and references in the singular shall include the plural and vice
versa and words denoting persons shall include any individual,
partnership, firm, company, corporation, joint venture, trust,
association, organisation or other entity, in each case whether
or not having separate legal personality.
SUPPLEMENTAL AGREEMENTS
2.1 Exhibits 1 to 6 to this Master Agreement contain the forms
of agreements contemplated to be entered into pursuant to this
Clause, being:
Exhibit I
Supplemental Agreement "Type I", in respect of Connection
Sites of Users which are in existence and Commissioned at the
Transfer Date;
Exhibit 2
Supplemental Agreement "Type 2", in respect of New
Connection Sites of Users which have not been Commissioned at the
Transfer Date;
Exhibit 3
Supplemental Agreement "Type 3", for Generators with
Embedded Generating Plant or with Embedded Small Independent
Generating Plant and who are acting in that capacity and who are
passing power onto a Distribution System through a connection
with a Distribution System Commissioned at the Transfer Date;
Exhibit 4
Supplemental Agreement "Type 4", for Generators with
Embedded Generating Plant or with Embedded Small Independent
Generating Plant and who are acting in that capacity and who are
passing power on to a Distribution System through a connection
with a Distribution System which has not been Commissioned at the
Transfer Date;
Exhibit 5
Supplemental Agreement "Type 5", for Second Tier Suppliers
acting in that capacity taking Energy through any Grid Supply
Point and through a Distribution System owned or operated by any
other person; and
Exhibit 6
Supplemental Agreement "Type 6", for Generators with Minor
Independent Generating Plant which is Embedded and who are acting
in that capacity and who are Pool Members.
2.2 The Supplemental Agreements which are to be entered into
between NGC and Users who are parties to this Master Agreement as
at the Transfer Date, and which are in respect of Connection
Sites existing as at the Transfer Date, shall be in or
substantially in the relevant exhibited form of Supplemental
Agreement unless the parties thereto agree otherwise.
2.3 Any Supplemental Agreements which are entered into between
NGC and Users who are parties to this Master Agreement as at the
Transfer Date, but in respect of New Connection Sites, shall be
in or substantially in the relevant exhibited form of
Supplemental Agreement unless the parties thereto agree
otherwise.
2.4 All other Supplemental Agreements shall be in such form as
may be agreed between NGC and each User.
2.5 Obligations of Users who own or operate Distribution Systems
2.5.1 Any User who owns or operates a Distribution
System shall not Energise the connection between any Generating
Plant or Small Independent Generating Plant or Minor Independent
Generating Plant and its Distribution System nor permit the use
of its Distribution System by the same until the person owning or
operating the plant has where required completed the Use of
System Application (Generators) and has entered into a
Supplemental Agreement in the appropriate form (if any) with NGC
and (if such person is not already a party to this Master
Agreement) has where required entered into an Accession Agreement
with NGC pursuant to Clause 13.
2.5.2 Any User who owns or operates a Distribution
System shall not Energise the connection between any Customer of
another Authorised Electricity Operator connected to such
Distribution System if the Demand (Active Power) being supplied
to such Customer is being purchased by such Authorised
Electricity Operator pursuant to the Pooling and Settlement
Agreement unless such Authorised Electricity Operator has first
completed the Use of System Application (Suppliers) and has
entered into a Supplemental Agreement in the appropriate form
with NGC and has notified NGC of the details relevant to such
Customer to be notified to NGC pursuant to such Supplemental
Agreement and (if the Authorised Electricity Operator is not
already a party to this Agreement) has entered into an Accession
Agreement with NGC pursuant to Clause 13.
2.5.3 NGC shall notify the relevant owner or operator of
the Distribution System in writing as soon as the conditions set
out in Sub-Clause 2.5.1 and Sub- Clause 2.5.2 have been satisfied
in any particular case together with, if appropriate, a copy of
Appendix A of Supplemental Agreement Type 5. NGC undertakes to
each Party that, for so long as it is the case, NGC shall from
time to time forthwith upon receipt of any written request from
that Party to do so, confirm in writing to any person specified
in such request that the Party is a party to this Agreement and
any Supplemental Agreement specified in such request.
2.5.4 Each owner or operator of a Distribution System
shall Deenergise the connection equipment of any such User the
subject of Sub-Clause 2.5.1 or Customer the subject of Sub-Clause
2.5.2 as soon as reasonably practicable following the instruction
of NGC in accordance with the terms of this Agreement. NGC shall
reimburse such owner or operator any expense incurred in relation
to such act of Deenergisation, if any, and shall indemnify such
owner or operator against any liability, loss or damage suffered
by it as a result of such Deenergisation. Details of any
circumstances likely to lead to such a Deenergisation shall be
notified promptly by NGC to the said owner or operator. The
owner or operator of a Distribution System shall promptly notify
NGC when the connection equipment of any User or Customer the
subject of Sub-Clauses 2.5.1 or 2.5.2 is Deenergised or
Disconnected from its Distribution System or ceases to use its
Distribution System as the case may be following the instruction
of NGC in accordance with the terms of this Agreement.
2.6 Each and every Supplemental Agreement entered into by a User
and in force from time to time will constitute a separate
agreement governed by the terms of this Master Agreement and
will be read and construed accordingly. For the avoidance of
doubt no User shall enjoy any rights nor incur any obligations
against any other User pursuant to the terms of any Supplemental
Agreement.
2.7 Each and every User connected to or using the NGC
Transmission System shall be a Pool Member except for
Non-Embedded Customers being supplied by a Pool Member.
ANCILLARY SERVICES
3.1 NGC and each User agree that any Ancillary Services
agreement in respect of any Ancillary Services to be provided by
the User at or from a Connection Site or New Connection Site or a
site where an Embedded User is connected to a Distribution
System shall be in a form to be agreed between them but based
substantially on the form set out in Exhibit 14.
INTERFACE AGREEMENT
4.1 NGC and each User undertake to enter into an Interface
Agreement with each other in a form to be agreed between them but
based substantially on the forms set out in Exhibits 15, 16 and
17 as appropriate in relation to Connection Site(s) and New
Connection Site(s) where Interface Agreement(s) is/are required
pursuant to the applicable Supplemental Agreement or otherwise.
NUCLEAR INSTALLATIONS
5.1 Save as provided in Sub-Clause 5.2 below notwithstanding
anything to the contrary contained in this Agreement (but subject
to the following proviso), in circumstances affecting a generator
of nuclear electricity (a "Nuclear Generator") in which:
(a) a breach of any of the matters specified in Sub-Clause
5.4 below may be reasonably anticipated; and
(b) there is no defence (other than that provided for under
this Sub-Clause) available to the Nuclear Generator in respect of
the breach referred to in Sub-Clause 5.1(a);
the Nuclear Generator shall be entitled to take any action
or refrain from taking any action which ;.s reasonably necessary
in order to avert the breach referred to in Sub Clause 5.1(a) and
each and every provision of this Agreement shall be read and
construed subject to this Clause:
Provided that the Nuclear Generator shall:
(i) make reasonable efforts to verify the factors that it
takes into account in its assessment of the circumstances and
anticipated breach referred to above; and
(ii) use its best endeavours to comply with the relevant
provision in a manner which will not cause the Nuclear Generator
to breach any of the matters specified in Sub-Clause 5.4 below.
5.2 Sub-Clauses 5.1 and 5.3 shall not apply in relation to the
provisions of SDC1, SDC2 and SDC3 of the Grid Code which will
apply with full force and effect notwithstanding the occurrence
of the circumstances referred to in Sub-Clause 5.1(a) (including
those provisions specified in Sub-Clause 5.4 which relate to
Safety of Personnel and Plant).
5.3 Save as provided in Sub-Clause 5.2 above notwithstanding
anything in this Agreement, the Nuclear Generator shall be
entitled upon giving reasonable notice to all affected Parties to
require any Party to take any reasonable and proper action
whatsoever to the extent necessary in order to comply with (or
avert an anticipated breach of) any of the matters specified in
Sub-Clause 5.4 below.
5.4 The matters referred to in Sub-Clauses 5.1 and 5.3 above are
any covenant, agreement, restriction, stipulation, instruction,
provision, condition or notice contained, or referred to, in a
licence for the time being in force, granted in accordance with
the Nuclear Installations Act 1965 (or legislation amending,
replacing or modifying the same) or any consent, or approval
issued, or to take effect from time to time, under such licence,
any emergency arrangements, operating rules or other matters
from time to time, under such licence, any emergency
arrangements, operating rules or other matters from time to time
approved by the relevant authority under, or pursuant to, any
such agreements, restrictions, stipulations, instructions,
provisions, conditions or notices.
5.5 The Nuclear Generator shall indemnify and keep indemnified
any Party for any loss, damage, costs and expenses incurred by
that Party as a consequence of any action of that Party pursuant
to Sub-Clause 5.3 (to the extent that the action was not required
by any licence or agreement binding on that Party).
5.6 Notwithstanding the fact that any action or inaction allowed
by Clause 5.1 above does not constitute a breach of this
Agreement or an Event of Default under Clause 17 below, the
Nuclear Generator shall be liable to the other Parties to this
Agreement for any loss, claims, costs, liabilities and expenses
arising from such action or inaction to the extent only that
such loss, claims, costs, liabilities and expenses (had it arisen
as a result of a breach of this Agreement) would not have been
limited or excluded under the provisions of Clause 15 below.
PRINCIPLES OF OWNERSHIP
6.1 Ownership - Electrical boundaries
Subject to the Transfer Scheme or any contrary agreement in
this Agreement, any Supplemental Agreement or elsewhere the
division of ownership of Plant and Apparatus shall be at the
electrical boundary, such boundary to be determined in
accordance with the following principles:
(i) in relation to Plant and Apparatus located between the
NGC Transmission System and a Power Station, the electrical
boundary is at the busbar clamp on the busbar side of the busbar
isolators on Generators and Power Station transformer circuits;
(ii) save as specified in Clause 6.1 (iii) below, in
relation to Plant and Apparatus located between the NGC
Transmission System and a Distribution System, the electrical
boundary is at the busbar clamp on the busbar side of the
Distribution System voltage busbar selector isolator(s) of the
NGC Transmission System circuit or, if a conventional busbar does
not exist, an equivalent isolator. If no isolator exists an
agreed bolted connection at or adjacent to the tee point shall be
deemed to be an isolator for these purposes;
(iii) in relation to Plant and Apparatus located between
the NGC Transmission System and a Distribution System and owned
by NGC but designed for a voltage of 132KV or below, the
electrical boundary is at the busbar clamp on the busbar side of
the busbar selector isolator on the Distribution System circuit
or, if a conventional busbar does not exist, an equivalent
isolator. If no isolator exists, an agreed bolted connection at
or adjacent to the tee point shall be deemed to be an isolator
for these purposes; and
(iv) in the case of a metal clad switchgear bay the
electrical boundary will be the equivalent of those specified in
this Clause 6.1 save that:-
(a) for rack out switchgear, the electrical boundary
will be at the busbar shutters;
(b) for SF6 switchgear, the electrical boundary will
be at the gas zone separators on the busbar side of the busbar
selection devices.
6.2 If a User wants to use transformers of specialised design
for unusual load characteristics at the electrical boundary, NGC
shall own such transformers but the User shall pay NGC for the
proper and reasonable additional cost thereof as identified by
NGC in the Offer covering such transformers. In this Sub-Clause
6.2 "unusual load characteristics" means loads which have
characteristics which are significantly different from those of
the normal range of domestic, commercial and industrial loads
(including loads which vary considerably in duration or
magnitude).
6.3 For the avoidance of doubt nothing in this Clause 6 shall
effect any transfer of ownership in any Plant or Apparatus.
METERING
7.1 Each User consents to NGC having access to and copies of all
meter readings taken from Energy Metering Equipment pursuant to
the Pooling and Settlement Agreement in any Financial Year for
the purposes of calculating Connection Charges and Use of System
Charges due from Users or for the purpose of operating the NGC
Transmission System. Such access and copies shall be obtained
from the Settlement System Administrator appointed under the
Pooling and Settlement Agreement from time to time provided
always that if the Settlement System Administrator fails to
provide such access and copies at NGC's request the User shall
supply any such meter readings in the possession of the User
direct to NGC.
7.2 The relationship between the Parties hereto with respect to
Energy Metering Equipment shall be regulated by Part XV of the
Pooling and Settlement Agreement.
7.3 In respect of Operational Metering Equipment owned by one
Party and in respect of which access and rights to deal with such
Operational Metering Equipment are not set down in any other
document the Parties shall grant each other such access and other
rights as are reasonably necessary to enable them to perform
their obligations under this Agreement and the Grid Code upon
presentation of a suitable indemnity and the Parties shall take
such action as may be necessary to regularise the position
forthwith thereafter.
NGC OBLIGATIONS
8.1 NGC agrees with each User to make available, plan, develop,
operate and maintain the NGC Transmission System in accordance
with the NGC Transmission Licence and with the Grid Code subject
to any Derogations from time to time.
COMPLIANCE WITH THE GRID CODE/DISTRIBUTION CODE
9.1 Subject to Sub-Clause 9.3 each Party agrees with each other
Party to be bound by and to comply in all respects with the
provisions of the Grid Code in so far as applicable to that
Party.
9.2 Subject to Sub-Clause 9.3 each Party agrees with each other
Party to be bound by and to comply in all respects with the
provisions of the relevant Distribution Code(s) in so far as
applicable to that Party except as may be otherwise provided in
any agreement for connection to a Distribution System.
9.3 Neither NGC nor a User need comply with the Grid Code or any
relevant Distribution Code(s) to the extent (if any) that:
(i) either the Director has issued directions relieving NGC
or that User from the obligation under its respective licence to
comply with the Licence Standards, the Grid Code or any relevant
Distribution Code(s) in respect of such parts of the Grid Code or
any relevant Distribution Code(s) respectively as may be
specified in those directions or to the extent that NGC and a
User which does not have a Licence under the Act can and have so
agreed in any Supplemental Agreement in relation to any
Connection Site or New Connection Site and/or Derogated Plant; or
(ii) (in the case of a User) the Grid Code relates to the
provision by that User of any Ancillary Services unless there is
an Ancillary Services Agreement in force between that User and
NGC for the payment by NGC for such Ancillary Services; or
(iii) (in the case of NGC) the Grid Code imposes any
obligation on NGC to make available Additional Scheduling Data
(as defined in the Grid Code) before 31st December 1990.
9.4 In this Sub-Clause 9.4 the following expressions shall bear
the following meanings:
"Required Standard" in relation to an item of Derogated
Plant, the respective standard required of that item (which shall
not exceed that required by the Grid Code or the Licence
Standards, as the case may be) as specified in or pursuant to the
relevant Derogation;
"Back Stop Date" in relation to an item of Derogated
Plant, the date by which it is to attain its Required Standard,
as specified in or pursuant to the relevant Derogation.
Each User undertakes to NGC and NGC undertakes to each User
to use all reasonable endeavours to carry out such works as are
necessary to ensure that each item of Derogated Plant owned or
operated by that User or NGC (as appropriate) is brought up to
the Required Standard applicable to it no later than the
Back-Stop Date applicable to it.
9.5 The terms and provisions of the Fuel Security Code shall
prevail to the extent that they are inconsistent with the Grid
Code or any Distribution Code and the Parties' obligations under
this Agreement shall be construed accordingly.
MODIFICATIONS
10.1 No Modification may be made by or on behalf of a User or NGC
otherwise than in accordance with the provisions of this Clause
10.
10.2 Modifications Proposed v Users
10.2.1 If a User wishes to make a Modification it shall
complete and submit to NGC a Modification Application and comply
with the terms thereof.
10.2.2 NGC shall make the Modification Offer to that User as
soon as practicable and (save where the Director consents to a
longer period) in any event not more than 3 months after receipt
by NGC of the Modification Application. The Modification Offer
shall include details of any variations NGC proposes to make to
the Supplemental Agreement which applies to the Connection Site
in question. During such period NGC and the User concerned shall
discuss in good faith the implications of the proposed
Modifications.
10.2.3 The Modification Offer shall remain open for acceptance
for 3 months from the date of its receipt by that User unless
either that User or NGC makes an application to the Director
under Condition 10C of the NGC Transmission Licence, in which
event the Modification Offer shall remain open for acceptance by
that User until the date 14 days after any determination by the
Director pursuant to such application.
10.2.4 If the Modification Offer is accepted by that User the
Supplemental Agreement relating to the Connection Site in
question shall be varied to reflect the terms of the Modification
Offer and the Modification shall proceed according to the terms
of the Supplemental Agreement as so varied.
10.3 Modifications Proposed by NGC
10.3.1 If NGC wishes to make a Modification to the NGC
Transmission System, NGC shall complete and submit to each User a
Modification Notification and shall advise each User of any works
which NGC reasonably believes that User may have to carry out as
a result.
10.3.2 Any User which considers that it shall be required to
make a modification (an "Affected User Modification") as a result
of the Modification proposed by NGC (an "Affected User") may as
soon as practicable after receipt of the Modification
Notification and (save where the Director consents to a longer
period) within the period stated therein (which shall be
sufficient to enable the User to assess the implications of the
proposed Modification and in any event shall not be less than 3
months) may make an application to the Director under Condition
10C of the Transmission Licence.
10.3.3 As soon as practicable after the receipt of the
Modification Notification or, if an application to the Director
has been made, the determination by the Director, and in any
event within two months thereof, each Affected User shall
complete and submit a Modification Application to NGC and comply
with the terms thereof. No fee shall be payable by any User to
NGC in respect of any such Modification Application.
10.3.4 Once a Modification Application has been made by a User
pursuant to Sub-Clause 10.3.2 the provisions of Sub-Clauses
10.2.2, 10.2.3 and 10.2.4 shall thereafter apply.
10.4 To the extent that the provisions of the Nuclear Site
Licence Provisions Agreement (being an agreement dated 30th March
1990 between NGC and Nuclear Electric plc and described as such)
relate to Modifications (either by a User or by NGC) as (and only
as) between the parties to such agreement they shall prevail over
the provisions of this Clause 10 to the extent that they are
inconsistent.
NEW CONNECTION SITES
11.1 If a User wishes to connect a New Connection Site it shall
complete and submit to NGC a Connection Application and comply
with the terms thereof.
11.2 Without prejudice to Condition 1OB4 of the NGC Transmission
Licence NGC shall make a Connection Offer to that User as soon as
practicable after receipt of the Connection Application and (save
where the Director consents to a longer period) in any event not
more than 3 months after receipt by NGC of the Connection
Application.
11.3 The Connection Offer shall remain open for acceptance for 3
months from its receipt by that User unless either that User or
NGC makes an application to the Director under Condition 1OC of
the NGC Transmission Licence, in which event the Connection Offer
shall remain open for acceptance until the date 14 days after any
determination by the Director pursuant to such application.
11.4 If the Connection Offer is accepted by that User the
connection shall proceed according to the terms of the
Supplemental Agreement entered into consequent upon acceptance of
the Offer.
GENERAL PROVISIONS CONCERNING MODIFICATIONS AND NEW
CONNECTION SITES
12.1 Subject to the payment of its Reasonable Charges, if any, as
provided for in this sub clause NGC undertakes to each User to
provide all advice and assistance reasonably requested by that
User to enable that User adequately to assess the implications
(including the feasibility) of making a Modification to the
User's Equipment or the User's System (whether such Modification
is to be made at the request of NGC or of the User) or of
constructing a New Connection Site (including adequately
assessing the feasibility of making any Connection Application or
considering the terms of any Connection Offer). If the proposed
Modification by the User is or may be required as a result of a
Modification proposed by NGC then NGC shall provide such advice
and assistance free of charge. If the proposed Modification is
or may be proposed by the User or if the advice and assistance is
in respect of a New Connection Site NGC may charge the User
Reasonable Charges for such advice and assistance. The provision
of such advice and assistance shall be subject to any
confidentiality obligations binding on NGC and that User.
12.2 When giving such advice and assistance NGC shall comply with
Good Industry Practice.
12.3 NGC shall have no obligation to compensate any User (the
"First User") for the cost or expense of any Modification
required to be made by any User as a result of any NGC
Modification under Sub-Clause 10.3.1. Where such NGC Modification
is made as a result of the construction of a New Connection Site
or a Modification for another User (the "Other User"), the Other
User shall compensate the First User for the reasonable and
proper cost and expense of any Modifications required to be made
by the First User as a result of that NGC Modification. Such
compensation shall be paid to the First User by the Other User
within thirty days of production to the Other User of a receipted
invoice (together with a detailed breakdown of such reasonable
costs and expenses) for the expenditure which has been incurred
by the First User.
12.4 Modification Offers and Connection Offers Conditional Union
Other Modification Offers and Connection Offers
If at the time of making any Offer or Modification Offer or
Connection Offer to a User ("the Second Offer") there is an
outstanding Modification Offer(s) or Connection Offer(s) to
another User(s) ("the First Offer") which if accepted would
affect the terms of the Second Offer NGC shall at the time of
making the Second Offer
(i) inform the recipient(s) of both the First Offer(s) and
Second Offer(s) in writing that there is another Offer
outstanding which might affect them; and
(ii) be entitled to make the First Offer(s) and Second
Offer(s) conditional upon other outstanding Offers not having
been or being accepted; and
(iii) be entitled to vary the terms of either Offer if
the other Offer is accepted first on the same procedures as those
set out in Clauses 10.2.2 to 10.2.4 or 11.2 to 11.4 inclusive as
the case may be.
ADDITIONAL PARTIES
13.1 The Parties shall admit as an additional party to this
Master Agreement any person who accepts a Connection Offer from
NGC or any new Embedded User (the "New Party") and who is not at
the time already a Party. Such admission shall take effect by
way of Accession Agreement prepared by NGC at the expense and
cost of the New Party and to be executed by NGC for itself and on
behalf of all other Parties. Upon execution of the Accession
Agreement by NGC and the New Party and subject to the terms and
conditions of that Accession Agreement, the New Party shall
become a Party for all purposes of this Agreement.
13.2 Each Party hereby authorises and instructs NGC to sign any
such Accession Agreement on its behalf and undertakes not to
withdraw, qualify or revoke any such authority or instruction at
any time.
13.3 NGC shall promptly notify all Parties in writing that the
New Party has become a Party.
PAYMENT
14.1 NGC will invoice Users for Connection Charges and/or Use of
System Charges due under each Supplemental Agreement in the
following manner:
(i) in the case of recurrent monthly charges other than the
Energy related charges identified in Appendix D to the relevant
Supplemental Agreement NGC shall despatch an invoice on or before
the 15th day of the month for the charges due in relation to that
month;
(ii) in the case of the Energy related recurrent monthly
charges identified in Appendix D to the relevant Supplemental
Agreement NGC shall despatch an invoice on or before the 1st day
of a month covering the charges due in relation to the period
expiring on the 15th day of the preceding month and commencing on
the 16th day of the month before that;
(iii) unless otherwise specified in this Agreement where
charges are payable other than monthly NGC shall despatch an
invoice not less than 30 days prior to the due date for payment
specified in the relevant Appendix to the Supplemental Agreement.
14.2 Payment
Users shall pay NGC Connection Charges and/or Use of System
Charges due under each Supplemental Agreement in the following
manner.
(i) in the case of recurrent monthly charges on the 15th
day of the month in which NGC's invoice therefor was despatched
(if despatched on the first day of that month) or, in all other
cases, on the 15th day of the month following the month in which
NGC's invoice therefor was despatched unless, in any such case,
the said date is not a Business Day in which case payment shall
be made on the next Business Day;
(ii) unless otherwise specified in this Agreement where
charges are payable other than monthly within 30 days of the date
of NGC's invoice therefor.
14.3 All payments hereunder shall be made by the variable direct
debit method or such other form of bankers automated payment as
shall be approved by NGC to the account number, bank and branch
specified by NGC in Schedule I or in the case of sums payable to
a User the account number, bank and branch of the User set out in
Schedule I (or such other account and/or bank as NGC or a User
may from time to time notify in writing to the other).
14.4 If any Party fails to pay on the due date any amount
properly due under this Agreement such Party shall pay to the
Party to whom such amount is due interest on such overdue amount
from and including the date of such failure to (but excluding)
the date of actual payment (as well after as before judgement) at
the rate of 4% over Barclays Bank PLC base rate for the time
being and from time to time. Interest shall accrue from day to
day.
14.5 All sums payable by one Party to the other pursuant to this
Agreement whether of charges, interest or otherwise shall (except
to the extent otherwise required by law) be paid in full, free
and clear of and without deduction set off or deferment in
respect of sums the subject of any disputes or claims whatsoever
save for sums the subject of a final award or judgement (after
exhaustion of all appeals if this opportunity is taken) or which
by agreement between NGC and those Parties may be so deducted or
set-off.
14.6 All amounts specified hereunder or under any Supplemental
Agreement shall be exclusive of any Value Added Tax or other
similar tax.
14.7 If upon the request of any User the Director determines that
the NGC Connection Charges and/or Use of System Charges payable
by that User (including any variations thereof) have not been
calculated strictly in accordance with the terms of the
statements prepared for the purposes of Condition 10 of the NGC
Transmission Licence (setting out the basis upon which the
charges for use of system and for connection to the NGC
Transmission System will be made) NGC shall pay to such User an
amount in respect of each charging period equal to the amount (if
any) by which the User has been overcharged as a result, together
with interest thereon from the date upon which such charges were
paid until the date of payment of such interest. Such interest
shall accrue from day to day at the rate specified in Sub-Clause
14.4.
LIMITATION OF LIABILITY
15.1 Subject to Sub-Clauses 15.5, 2.5.4 and 5.5 and any
liquidated damages provisions of any Supplemental Agreement and
the payment adjustment provisions of the relevant Ancillary
Services Agreement and save where any provision of this Agreement
provides for an indemnity each Party agrees and acknowledges that
no Party (the "Party Liable") nor any of its officers, employees
or agents shall be liable to any of the other Parties for loss
arising from any breach of this Agreement other than for loss
directly resulting from such breach and which at the date hereof
was reasonably foreseeable as not unlikely to occur in the
ordinary course of events from such breach in respect of:
15.1.1 physical damage to the property of any of the
other Parties, or its or their respective officers, employees or
agents; and/or
15.1.2 the liability of any such other Party to any other
person for loss in respect of physical damage to the property of
any other person.
15.2 Nothing in this Agreement shall exclude or limit the
liability of the Party Liable for death or personal injury
resulting from the negligence of the Party Liable or any of its
officers, employees or agents and the Party Liable shall
indemnify and keep indemnified each of the other Parties, its
officers, employees or agents, from and against all such and any
loss or liability which any such other Party may suffer or incur
by reason of any claim on account of death or personal injury
resulting from the negligence of the Party Liable or any of its
officers, employees or agents.
15.3 Subject to Sub-Clauses 15.5, 2.5.4 and 5.5 and any
liquidated damages provision of any Supplemental Agreement and
save where any provision of this Agreement provides for an
indemnity, neither the Party Liable nor any of its officers,
employees or agents shall in any circumstances whatsoever be
liable to any of the other Parties for:
15.3.1 any loss of profit, loss of revenue, loss of use,
loss of contract or loss of goodwill; or
15.3.2 any indirect or consequential loss; or
15.3.3 loss resulting from the liability of any other
Party to any other person howsoever and whensoever arising save
as provided in Sub-Clauses 15.1.2 and 15.2.
15.4 The rights and remedies provided by this Agreement to the
Parties are exclusive and not cumulative and exclude and are in
place of all substantive (but not procedural) rights or remedies
express or implied and provided by common law or statute in
respect of the subject matter of this Agreement, including
without limitation any rights any Party may possess in tort which
shall include actions brought in negligence and/or nuisance.
Accordingly, each of the Parties hereby waives to the fullest
extent possible all such rights and remedies provided by common
law or statute, and releases a Party which is liable to another
(or others), its officers, employees and agents to the same
extent from all duties, liabilities, responsibilities or
obligations provided by common law or statute in respect of the
matters dealt with in this Agreement and undertakes not to
enforce any of the same except as expressly provided herein.
15.5 Save as otherwise expressly provided in this Agreement, this
Clause 15 insofar as it excludes or limits liability shall
override any other provision in this Agreement provided that
nothing in this Clause 15 shall exclude or restrict or otherwise
prejudice or affect any of:
15.5.1 the rights, powers, duties and obligations of any
Party which are conferred or created by the Act, the Licence or
the Regulations; or
15.5.2 the rights, powers, duties and obligations of the
Director or the Secretary of State under the Act, any Licence or
otherwise howsoever.
15.6 Each of the Sub-Clauses of this Clause 15 shall:
15.6.1 be construed as a separate and severable contract
term, and if one or more of such Sub-Clauses is held to be
invalid, unlawful or otherwise unenforceable the other or others
of such Sub-Clauses shall remain in full force and effect and
shall continue to bind the Parties; and
15.6.2 survive termination of this Agreement.
15.7 Each Party acknowledges and agrees that each of the other
Parties holds the benefit of Sub-Clauses 15.1 and 15.2 and 15.3
above for itself and as trustee and agent for its officers,
employees and agents.
15.8 Each Party acknowledges and agrees that the provisions of
this Clause 15 have been the subject of discussion and
negotiation and are fair and reasonable having regard to the
circumstances as at the date hereof.
15.9 For the avoidance of doubt, nothing in this Clause 15 shall
prevent or restrict any Party enforcing any obligation (including
suing for a debt) owed to it under or pursuant to this Agreement.
DURATION AND TERMINATION
16.1 This Agreement shall continue in relation to each User until
terminated in accordance with this Clause 16 or pursuant to
Clause 17.
16.2 A User shall automatically cease to be a Party to this
Agreement upon termination of all Supplemental Agreements entered
into by that User.
16.3 Termination or expiry of a particular Supplemental Agreement
shall not, of itself, cause the relevant User to cease to be a
Party to this Agreement.
16.4 Termination or a person ceasing to be a Party to this
Agreement shall not affect any rights or obligations of any Party
which may have accrued to the date of termination or expiry and
shall not affect any continuing obligations of any Party under
this Agreement.
16.5 Following termination of this Agreement Clause 19 shall
remain in full force and effect.
EVENTS OF DEFAULT/DEENERGISATION
17.1 It shall be an event of default if:
(i) a User shall fail to pay (other than by inadvertent
error in funds transmission which is discovered by NGC, notified
to that User and corrected within 2 Business Days thereafter) any
amount properly due or owing from that User to NGC pursuant to
this Agreement and such failure continues unremedied for 7
Business Days after the due date for payment; or
(ii) in respect of a User:
(a) an order of the High Court is made or an effective
resolution passed for-its insolvent winding up or dissolution; or
(b) a receiver (which expression shall include an
administrative receiver within the meaning of Section 29
Insolvency Act 1986) of the whole or any material part of its
assets or undertaking is appointed; or
(c) an administration order under Section 8 of the
Insolvency Act 1986 is made or if a voluntary arrangement is
proposed under Section I of that Act; or
(d) a User enters into any scheme of arrangement
(other than for the purpose of reconstruction or amalgamation
upon terms and within such period as may previously have been
approved in writing by the Director); or
(e) any of the events referred to in (a) to (d) above
has occurred and is continuing and a User is unable to pay its
debts (within the meaning of Section 123(1) or (2) of the
Insolvency Act 1986 save that such sections shall have effect as
if for pounds 750 there was inserted pounds 250,000 and a User
shall not be deemed to be unable to pay its debts if any demand
for payment is being contested in good faith by that User with
recourse to all appropriate measures and procedures)
and in any such case within 28 days of his appointment
the liquidator, receiver, administrative receiver, administrator,
nominee or other similar officer has not provided to NGC a
guarantee of future performance by the User of this Agreement and
all Supplemental Agreements to which the User is a party in such
form and amount as NGC may reasonably require.
17.2 Provided that at the time the failure specified in
Sub-Clause 17.1(i) is still continuing or the circumstances
referred to in Sub-Clause 17.1(ii) still exist NGC may having
given 48 hours notice of an event of default Deenergise all of
the User's Equipment which is the subject of a Supplemental
Agreement with that User or may as appropriate instruct the
operator of a Distribution System to Deenergise such User's
Equipment provided that prior to Deenergisation the User may
refer the matter to the Disputes Resolution Procedure.
17.3 If notice is given to a User in accordance with Clause
60.1.3 or 60.2.2 of Part XVII of the Pooling and Settlement
Agreement and that User shall fail to take such action as is
referred to in Clause 60.4.1 of Part XVII of the Pooling and
Settlement Agreement within 48 hours after the date of any such
notice referred to therein, NGC may Deenergise the User's
Equipment.
17.4 if the event of default under Sub-Clause 17.2 or 17.3 is
still continuing six months after the later of Deenergisation and
the conclusion of the Disputes Resolution Procedure in favour of
NGC, NGC may Disconnect all that User's Equipment at each
Connection Site where that User's Equipment is connected and:
(i) NGC and that User shall remove any of the User's
Equipment and NGC Assets on the other Party's land within 6
months or such longer period as may be agreed between the Parties
concerned;
(ii) that the User shall pay to NGC forthwith all
Termination Amounts; and
(iii) that the User shall cease to be a Party to this
Agreement.
TRANSFER AND SUBCONTRACTING
18.1 The rights, powers, duties and obligations of a User under
this Agreement or any Supplemental Agreement are personal to that
User and that User may not assign or transfer the benefit or
burden of this Agreement save in the following circumstances:
(i) upon the disposal by that User of the whole of its
business or undertaking it shall have the right to transfer its
rights and obligations under this Agreement and all relevant
Supplemental Agreements to the purchaser thereof on condition
that the purchaser if not already a User enters into an Accession
Agreement with NGC under Clause 13 and confirms to NGC in writing
either that all of the technical or related conditions, data,
information, operational issues or other matters specified in or
pursuant to the relevant Supplemental Agreement(s) or Grid Code
by the User seeking the transfer will remain unchanged or, if any
such matters are to be changed, the purchaser first notifies NGC
in writing of such changes which NGC will consider promptly and
in any event within 28 days of receiving notice of such change
and until such consideration is complete the transfer shall not
be effective. If having considered such changes NGC in its
reasonable opinion does not consider the proposed changes
reasonably satisfactory to NGC it shall consult with the User
seeking to undertake such transfer and pending the outcome
thereof to NGC's reasonable satisfaction the transfer shall not
be effective provided always that the User may refer any dispute
to the Disputes Resolution Procedure. Such transfer shall become
effective once the changes are reasonably satisfactory to NGC or
have been determined to be so under the Disputes Resolution
Procedure;
(ii) upon the disposal by a User of part of its business
undertaking comprising User's Equipment at one or more Connection
Sites that User shall have the right to transfer its rights and
obligations under all relevant Supplemental Agreements to the
purchaser thereof on condition that the Purchaser (if not already
a User) enters into an Accession Agreement with NGC under Clause
13 and confirms to NGC in writing either that all of the
technical or related conditions, data, information, operational
issues or other matters specified in or pursuant to the relevant
Supplemental Agreement(s) or Grid Code by the User seeking the
transfer will remain unchanged or, if any such matters are to be
changed, the purchaser first notifies NGC in writing of such
changes which NGC will consider promptly and in any event within
28 days of receiving notice of such change and until such
consideration is complete the assignment shall not be effective.
If having considered such changes NGC in its reasonable opinion
does not consider the proposed changes reasonably satisfactory to
NGC it shall consult with the User seeking to undertake such
transfer and pending the outcome thereof to NGC's reasonable
satisfaction the transfer shall not be effective provided always
that the User may refer any dispute to the Disputes Resolution
Procedure. Such transfer shall become effective once the changes
are reasonably satisfactory to NGC or have been determined to be
so under the Disputes Resolution Procedure;
(iii) a User may assign or charge its benefit under this
Agreement and any Supplemental Agreements in whole or in part by
way of security.
18.2 Each Party shall have the right to sub-contract or delegate
the performance of any of its obligations or duties arising under
this Agreement or any Supplemental Agreement including activities
envisaged by the Grid Code without the prior consent of any other
Party. The sub-contracting by a Party of the performance of any
obligations or duties under this Agreement or any Supplemental
Agreement or of any activities envisaged by the Grid Code shall
not relieve that Party from liability for performance of such
obligation or duty.
CONFIDENTIALITY
Confidentiality for NGC and its subsidiaries
19.1 NGC and its subsidiaries in each of their capacities in this
Agreement shall secure that Protected Information is not:
19.1.1 divulged by Business Personnel to any person
unless that person is an Authorised Recipient;
19.1.2 used by Business Personnel for the purposes of
obtaining for NGC or any of its subsidiaries or for any other
person:
(a) any electricity licence; or
(b) any right to purchase or otherwise acquire, or to
distribute electricity (including rights under any electricity
purchase contract, as defined in the NGC Transmission Licence);
or
(c) any contract or arrangement for the supply of
electricity to Customers or Suppliers; or
(d) any contract for the use of any electrical lines
or electrical plant belonging to or under the control of a
Supplier; or
(e) control of any body corporate which, whether
directly or indirectly, has the benefit of any such licence,
contract or arrangement; and
19.1.3 used by Business Personnel for the purpose of
carrying on any activities other than Permitted Activities
except with the prior consent in writing of the Party to
whose affairs such Protected Information relates.
19.2 Nothing in Sub-Clause 19.1 shall apply:
19.2.1 to any Protected Information which, before it is
furnished to Business Personnel, is in the public domain; or
19.2.2 to any Protected Information which, after it is
furnished to Business Personnel:
(a) is acquired by NGC or any subsidiary of NGC in
circumstances in which Sub-Clause 19.1 does not apply; or
(b) is acquired by NGC or any subsidiary of NGC in
circumstances in which Sub-Clause 19.1 does apply and thereafter
ceases to be subject to the restrictions imposed by such
Sub-Clause; or (c) enters the public domain, and in any such case
otherwise than as a result of a breach by NGC or any subsidiary
of NGC of its obligations in Sub-Clause 19.1, or a breach by the
person who disclosed the Protected Information of that person's
confidentiality obligation and NGC or any of its subsidiaries is
aware of such breach; or
19.2.3 to the disclosure of any Protected Information
to any person if NGC or any subsidiary of NGC is required
or expressly permitted to make such disclosure to such person:
(a) in compliance with the duties of NGC or any
subsidiary under the Act or any other requirement of a Competent
Authority; or
(b) in compliance with the conditions of the
Transmission Licence or any document referred to in the
Transmission Licence with which NGC or any subsidiary of NGC is
required by virtue of the Act or the NGC Transmission Licence to
comply; or
(c) in compliance with any other requirement of law;
or
(d) in response to a requirement of any stock exchange
or regulatory authority or the Panel on Take-overs and Mergers;
or
(e) pursuant to the Arbitration Rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal having
jurisdiction in relation to NGC or any of its Subsidiaries; or
(f) in compliance with the requirements of Section 35
of the Act and with the provisions of the Fuel Security Code; or
19.2.4 to any Protected Information to the extent that
NGC or any of its subsidiaries is expressly permitted or required
to disclose that information under the terms of any agreement or
arrangement (including this Agreement, the Grid Code, the
Distribution Codes and the Fuel Security Code) with the Party to
whose affairs such Protected Information relates.
19.3 NGC and each of its subsidiaries may use all and any
information or data supplied to or acquired by it, from or in
relation to the other Parties in performing Permitted Activities
including for the following purposes:
19.3.1 the operation and planning of the NGC Transmission
System;
19.3.2 the calculation of charges and preparation of
offers of terms for connection to or use of the NGC Transmission
System;
19.3.3 the operation and planning of the Ancillary
Services Business and the calculation of charges therefor;
19.3.4 the operation of the Settlements Business;
19.3.5 the provision of information under the British
Grid Systems Agreement and the EdF Documents;
and may pass the same to subsidiaries of NGC which carry out
such activities and the Parties hereto agree to provide all
information to NGC and its subsidiaries for such purposes.
19.4 NGC undertakes to each of the other Parties that, having
regard to the activities in which any Business Person is engaged
and the nature and effective life of the Protected Information
divulged to him by virtue of such activities, neither NGC nor any
of its subsidiaries shall unreasonably continue (taking into
account any industrial relations concerns reasonably held by it)
to divulge Protected Information or permit Protected Information
to be divulged by any subsidiary of NGC to any Business Person:
19.4.1 who has notified NGC or the relevant subsidiary of
his intention to become engaged as an employee or agent of any
other person (other than of NGC or any subsidiary thereof) who
is:
(a) authorised by licence or exemption to generate,
transmit or supply electricity; or
(b) an electricity broker or is known to be engaged in
the writing of electricity purchase contracts (as defined in the
NGC Transmission Licence); or
(c) known to be retained as a consultant to any such
person who is referred to in (a) or (b) above; or
19.4.2 who is to be transferred to the Generation
Business, save where NGC or such subsidiary could not, in all the
circumstances, reasonably be expected to refrain from divulging
to such Business Person Protected Information which is required
for the proper performance of his duties.
19.5 Without prejudice to the other provisions of this Clause 19
NGC shall procure that any additional copies made of the
Protected Information whether in hard copy or computerised form,
will clearly identify the Protected Information as protected.
19.6 NGC undertakes to use all reasonable endeavours to procure
that no employee is a Corporate Functions Person unless the same
is necessary for the proper performance of his duties.
19.7 Without prejudice to Clause 19.3, NGC and each of its
subsidiaries may use and pass to each other all and any Period
Metered Demand data supplied to or acquired by it and all and any
information and data supplied to it pursuant to Section OC6 of
the Grid Code for the purposes of Demand Control (as defined in
the Grid Code), but in each case only for the purposes of its
estimation and calculation from time to time of the variable
"system maximum ACS demand" (as defined in Condition 4 of the NGC
Transmission Licence).
19.8 NGC shall secure that Protected Information which is subject
to the provisions of Clause 19.1 and which relates to the cost of
Reactive Power provided by each individual Generator is not
divulged to any Business Person engaged in the provision of
static compensation for use by the Grid Operator (as defined in
the Pooling and Settlement Agreement).
19.9 Any information regarding, or data acquired by the
Settlement System Administrator or its agent from Energy Metering
Equipment at Sites which are a point of connection to a
Distribution System shall and may be passed by the Settlement
System Administrator or his agent to the operator of the relevant
Distribution System. The said operator of the relevant
Distribution System may only use the same for the purposes of the
operation of such Distribution System and the calculation of
charges for use of and connection to the Distribution System.
Confidentiality other than for NGC and its subsidiary
19.10 Each User hereby undertakes with each other User and
with NGC and its subsidiaries that it shall preserve the
confidentiality of, and not directly or indirectly reveal,
report, publish, disclose or transfer or use for its own purposes
Confidential Information except in the circumstances set out in
Sub-Clause 19.11 or to the extent otherwise expressly permitted
by this Agreement or with the prior consent in writing of the
Party to whose affairs such Confidential Information relates.
19.11 The circumstances referred to in Sub-Clause 19.10 are:
19.11.1 where the Confidential Information, before it is
furnished to the User, is in the public domain; or
19.11.2 where the Confidential Information, after it is
furnished to the User:
(a) is acquired by the User in circumstances in which
Sub-Clause 19.10 does not apply; or
(b) is acquired by the User in circumstances in which
Sub-Clause 19.10 does apply and thereafter ceases to be subject
to the restrictions imposed by Sub-Clause 19.10; or
(c) enters the public domain, and in any such case
otherwise than as a result of a breach by the User of its
obligations in Sub-Clause 19.10 or a breach by the person who is
disclosed that Confidential Information of that person's
confidentiality obligation and the User is aware of such breach;
or
19.11.3 if the User is required or permitted to make
disclosure of the Confidential Information to any person:
(a) in compliance with the duties of the User under
the Act or any other requirement of a Competent Authority; or
(b) in compliance with the conditions of any Licence
or any document referred to in any Licence with which the User is
required to comply; or
(c) in compliance with any other requirement of law;
or
(d) in response to a requirement of any stock exchange
or regulatory authority or the Panel on Take-overs and Mergers;
or
(e) pursuant to the Arbitration Rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal having
jurisdiction in relation to the User; or
19.11.4 where Confidential Information is furnished by the
User to the employees, directors, agents, consultants and
professional advisors of the User, in each case on the basis set
out in Sub-Clause 19.12. 19.12 With effect from the date of this
Agreement the User shall adopt procedures within its organisation
for ensuring the confidentiality of all Confidential Information
which it is obliged to preserve as confidential under Clause
19.10. These procedures are:
19.12.1 the Confidential Information will be disseminated
within the User only on a "need to know" basis;
19.12.2 employees, directors, agents, consultants and
professional advisers of the User in receipt of Confidential
Information will be made fully aware of the User's obligations of
confidence in relation thereto; and
19.12.3 any copies of the Confidential Information,
whether in hard copy or computerised form, will clearly identify
the Confidential Information as confidential.
19.13 For the avoidance of doubt, data and other information
which any Party is permitted or obliged to divulge or publish to
any other Party pursuant to this Agreement shall not necessarily
be regarded as being in the public domain by reason of being so
divulged or published.
19.14 Notwithstanding any other provision of this Agreement,
the provisions of this Clause 19 shall continue to bind a person
after its cessation as a Party for whatever reason.
20 INTELLECTUAL PROPERTY
All Intellectual Property relating to the subject matter of
this Agreement conceived, originated, devised, developed or
created by a Party, its officers, employees, agents or
consultants during the currency of this Agreement or any
Supplemental Agreement shall vest in such Party as sole
beneficial owner thereof save where the Parties agree 'in writing
otherwise.
21 FORCE MAJEURE
If any Party (the "Non-Performing Party") shall be unable to
carry out any of its obligations under this Agreement due to a
circumstance of Force Majeure this Master Agreement and the
relevant Supplemental Agreement shall remain in effect but:
(a) the Non-Performing Party's relevant obligations;
(b) the obligations of each of the other Parties owed to
the Non-Performing Party tinder this Agreement and/or the
relevant Supplemental Agreement as the case may be; and
(c) any other obligations of such other Parties under this
Agreement owed between themselves which the relevant Party is
unable to carry out directly as a result of the suspension of the
Non-Performing Party's obligations shall be suspended for a
period equal to the circumstance of Force Majeure provided that:
(i) the suspension of performance is of no greater
scope and of no longer duration than is required by the Force
Majeure;
(ii) no obligations of any Party that arose before the
Force Majeure causing the suspension of performance are excused
as a result of the Force Majeure;
(iii) the Non-Performing Party gives the other
Parties prompt notice describing the circumstance of Force
Majeure, including the nature of the occurrence and its expected
duration, and continues to furnish regular reports with respect
thereto during the period of Force Majeure;
(iv) the Non-Performing Party uses all reasonable
efforts to remedy its inability to perform; and
(v) as soon as practicable after the event which
constitutes Force Majeure the Parties shall discuss how best to
continue their operations so far as possible in accordance with
this Agreement, any Supplemental Agreement and the Grid Code.
22 WAIVER
No delay by or omission of any Party in exercising any
right, power, privilege or remedy under this Master Agreement or
any Supplemental Agreement or the Grid Code shall operate to
impair such right, power, privilege or remedy or be construed as
a waiver thereof. Any single or partial exercise of any such
right, power, privilege or remedy shall not preclude any other or
future exercise thereof or the exercise of any other right,
power, privilege or remedy.
NOTICES
23.1 Save as otherwise expressly provided in this Agreement, any
notice or other communication to be given by one Party to another
under, or in connection with the matters contemplated by, this
Agreement shall be addressed to the recipient and sent to the
address, telex number or facsimile number of such other Party set
out in Schedule I to this Agreement for the purpose and marked
for the attention of the company secretary or to such other
address, telex number and/or facsimile number and/or marked for
such other attention as such other Party may from time to time
specify by notice given in accordance with this Clause 23 to the
Party giving the relevant notice or other communication to it.
23.2 Save as otherwise expressly provided in this Agreement, any
notice or other communication to be given by any Party to any
other Party under, or in connection with the matters contemplated
by, this Agreement shall be in writing and shall be given by
letter delivered by hand or sent by first class prepaid post
(airmail if overseas) or telex or facsimile, and shall be deemed
to have been received:
23.2.1 in the case of delivery by hand, when delivered;
or
23.2.2 in the case of first class prepaid post, on the
second day following the day of posting or (if sent airmail from
overseas) on the fifth day following the day of posting; or
23.2.3 in the case of telex, on the transmission of the
automatic answer-back of the address (where such transmission
occurs before 1700 hours o.n the day of transmission) and in any
other case on the day following the day of transmission; or
23.2.4 in the case of facsimile, on acknowledgement by
the addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement.
24 COUNTERPARTS
This Agreement and any Supplemental Agreement may be
executed in any number of counterparts and by the different
Parties on separate counterparts, each of which when executed and
delivered shall constitute an original, but all the counterparts
shall together constitute but one and the same instrument.
25 VARIATIONS
25.1 No variations to this Master Agreement shall be effective
unless made in writing and signed by or on behalf of all the
Parties. The Parties shall effect any amendment required to be
made to this Master Agreement by the Director as a result of a
change in the Transmission Licence or an order or direction made
pursuant to the Act or a Licence or as a result of settling the
terms of any Supplemental Agreement and each Party hereby
authorises and instructs NGC to make any such amendment on its
behalf and undertakes not to withdraw, qualify or revoke such
authority or instruction at any time.
25.2 NGC and each User acknowledges that, because there has been
insufficient time to discuss and agree the details of the
Appendices to each Supplemental Agreement, those details may be
inaccurate. Accordingly,
(a) each User and NGC undertake to discuss in good faith
the correct identification of the details of each part of
Appendix F of each Supplemental Agreement entered into between
NGC and the User with a view to amending the same as necessary to
reflect the correct position. To the extent that agreement on
the correct position cannot be reached within 12 months after
the date of that Supplemental Agreement the matter shall be
referred to arbitration for determination in accordance with
Clause 26 of this Agreement and such details shall be amended
accordingly following such agreement or determination (as the
case may be); and
(b) during the Financial Year ending 31st March 1991 each
User and NGC undertake to discuss in good faith the correct
identification of the details of each part of Appendix A to D of
each Supplemental Agreement entered into between NGC and the
User. In relation to Appendix A of each Supplemental Agreement,
NGC undertakes to establish a new asset register, specifying all
Plant and Apparatus owned by NGC which is necessary to connect
each User's Equipment to the NGC Transmission System at each
Connection Site, during the course of the Financial Year ending
31st March 1991 in accordance with paragraph 2.2 of Appendix E to
such Supplemental Agreement. Such new asset register shall,
provided that NGC has complied with such paragraph 2.2 , take
effect from 1st April 1991. Following the establishment of such
new asset register, each such Appendix A and any provisions of
the relevant Supplemental Agreement which refer to it shall, to
the extent appropriate, be amended accordingly.
26 DISPUTE RESOLUTION
26.1 Save where expressly stated in this Agreement to the
contrary and subject to any contrary provision of the Act, any
Licence, or the Regulations, or the rights, powers, duties and
obligations of the Director or the Secretary of State under the
Act, any Licence or otherwise howsoever, any dispute or
difference of whatever nature howsoever arising under out of or
in connection with this Agreement between any one or more Parties
hereto shall be and is hereby referred to arbitration pursuant to
the arbitration rules of the Electricity Supply Industry
Arbitration Association in force from time to time.
26.2 Whatever the nationality, residence or domicile of any Party
to this Agreement and wherever the dispute or difference or any
part thereof arose the law of England shall be the proper law of
any reference to arbitration hereunder and in particular (but not
so as to derogate from the generality of the foregoing) the
provisions of the Arbitration Acts 1950 (notwithstanding anything
in section 34 thereof) to 1979 shall apply to any such
arbitration wherever the same or any part of it shall be
conducted.
26.3 Subject always to Sub-Clause 26.6 below, if any tariff
customer (as defined in Section 22(4) of the Electricity Act
1989) brings any legal proceedings in any court (as defined in
the Rules of the Supreme Court 1965 and in the County Courts
Act 1984) against one or more persons, any of which is a Party to
this Agreement (the "Defendant Party"), and the Defendant Party,
and the Defendant Party wishes to make a Third Party Claim (as
defined in Sub-Clause 26.5 below) against any other Party to this
Agreement ("the Other Party") which would but for this Sub-Clause
have been a dispute or difference referred to arbitration by
virtue of Sub-Clause 26.1 above then, notwithstanding the
provisions of Sub-Clause 26.1 above which shall not apply and in
lieu of arbitration, the court in which the legal proceedings
have been commenced shall hear and completely determine and
adjudicate upon the legal proceedings and the Third Party Claim
not only between the tariff customer and the Defendant Party but
also between either or both of them and any Other Party whether
by way of third party proceedings (pursuant to the Rules of the
Supreme Court 1965 or the County Court Rules 1981) or otherwise
as may be ordered by the court.
26.4 Where a Defendant Party makes a Third Party Claim against
any Other Party and such Other Party wishes to make a Third Party
Claim against a further Party the provisions of Sub-Clause 26.3
above shall apply mutatis mutandis as if such Party had been the
Defendant Party and similarly in relation to any such further
Party.
26.5 For the purposes of this Clause 26 "Third Party Claim" shall
mean:
(a) any claim by a Defendant Party against any other Party
(whether or not already a party to the legal proceedings) for any
contribution or indemnity; or
(b) any claim by a Defendant Party against such an Other
Party for any relief or remedy relating to or connected with the
subject matter of the legal proceedings and substantially the
same as some relief or remedy claimed by the tariff customer; or
(c) any requirement by a Defendant Party that any question
or issue relating to or connected with the subject matter of the
legal proceedings should be determined not only as between the
tariff customer and the Defendant Party but also as between
either or both of them and an Other Party (whether or not already
a party to the legal proceedings).
26.6 Sub-Clause 26.3 above shall apply only if at the time the
legal proceedings are commenced no arbitration has been commenced
between the Defendant Party and another Party raising or
involving the same or substantially the same issues as would be
raised by or involved in the Third Party Claim. The tribunal in
any arbitration which has been commenced prior to the
commencement of legal proceedings shall determine the question,
in the event of dispute, whether the issues raised or involved
are the same or substantially the same.
27 JURISDICTION
27.1 Subject and without prejudice to Clause 26 and to Sub-Clause
27.4 below, all the Parties irrevocably agree that the courts of
England are to have exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement
including the Grid Code and any Supplemental Agreement and that
accordingly any suit, action or proceeding (together in this
Clause 27 referred to as "Proceedings") arising out of or in
connection with this Agreement and any Supplemental Agreement may
be brought in such courts.
27.2 Each Party irrevocably waives any objection which it may
have now or hereafter to the laying of the venue of any
Proceedings in any such court as is referred to in this Clause 27
and any claim that any such Proceedings have been brought in an
inconvenient forum and further irrevocably agrees that judgement
in any Proceedings brought in the English courts shall be
conclusive and binding upon such Party and may enforced in the
courts of any other jurisdiction.
27.3 Each Party which is not incorporated in any part of England
and Wales agrees that if it does not have, or shall cease to
have, a place of business in England and Wales it will promptly
appoint, and shall at all times maintain, a person in England and
Wales irrevocably to accept service of process on its behalf in
any Proceedings in England.
27.4 For the avoidance of doubt nothing contained in Sub-Clauses
27.1 to 27.3 above shall be taken as permitting a Party to
commence Proceedings in the courts where this Agreement otherwise
provides for Proceedings to be referred to arbitration.
28 GOVERNING LAW
This Agreement and each Supplemental Agreement shall be
governed by and construed in all respects in accordance with
English law.
29 SEVERANCE OF TERMS
If any provision of this Agreement or any Supplemental
Agreement is or becomes or is declared invalid, unenforceable or
illegal by the courts of any competent jurisdiction to which it
is subject or by order of any other Competent Authority such
invalidity, unenforceability or illegality shall not prejudice or
affect the remaining provisions of this Agreement or any
Supplemental Agreement which shall continue in full force and
effect notwithstanding such invalidity, unenforceability or
illegality.
30 LANGUAGE
Each notice, instrument, certificate or other document to be
given by one Party to another under this Agreement shall be in
the English language.
<PAGE>
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the Parties the date first above written
THE NATIONAL GRID COMPANY PLC
By E. CHEFNEUX E. Chefneux
_______________________________________
NATIONAL POWER PLC
By A. SWANSON A. Swanson
_______________________________________
POWERGEN PLC
By D.J. JACKSON David J. Jackson
________________________________________
NUCLEAR ELECTRIC PLC
By R. MELVILLE R. Melville
_______________________________________
THE NATIONAL GRID COMPANY PLC (PUMPED STORAGE DIVISION)
By E. CHEFNEUX E. Chefneux
_______________________________________
BRITISH NUCLEAR FUELS PLC
By J.J.R. RYCROFT Jeremy J.R. Rycroft
_______________________________________
UNITED KINGDOM ATOMIC ENERGY AUTHORITY
By R. PECKOVER Richard Peckover
_______________________________________
CENTRAL POWER LTD
By R.D. MURRAY R.D. Murray
_______________________________________
EASTERN ELECTRICITY PLC
By W.G. WATSON W.G. Watson
_______________________________________
EAST MIDLAND'S ELECTRICITY PLC
By P.J. CHAMP P.J. Champ
_______________________________________
LONDON ELECTRICITY PLC
By C.L. MYERS C.L. Myers
_______________________________________
MANWEB PLC
By C.W. LEONARD C.W. Leonard
_______________________________________
MIDLANDS ELECTRICITY PLC
By R.D. MURRAY R.D. Murray
_______________________________________
NORTHERN ELECTRIC PLC
By J.A. HARMSWORTH J.A. Harmsworth
_______________________________________
NORWEB PLC
By A.CROWDER A. Crowder
_______________________________________
SEEBOARD PLC
By S.M. WIDE S.M. Wide
_______________________________________
SOUTHERN ELECTRIC PLC
By J.HART J. Hart
_______________________________________
SOUTH WALES ELECTRICITY PLC
By J.W. EVANS J. Winford Evans
_______________________________________
SOUTH WESTERN ELECTRICITY PLC
By M.J. CARSON M.J. Carson
_______________________________________
YORKSHIRE ELECTRICITY GROUP PLC
By A.W.J. COLEMAN A.W.J. Coleman
_______________________________________
<PAGE>
SCHEDULE I
NGC/USERS
NAME NOTICES BANK DETAILS
(and registered number) (address as registered
(and registered office) office unless otherwise stated)
(telex number)
(fax number)
THE NATIONAL GRID COMPANY PLC TELEX: 25815
2366977 FAX: 01-620 8547
National Grid House
Sumner Street,
London SEl 9JU
NATIONAL POWER PLC TELEX: 883141
2366963 FAX: 01-634 5811
Sudbury House
15 Newgate Street
London EC1A 7AU
POWERGEN PLC TELEX: 881 1400
2366970 FAX: 01-826 2890
53 New Broad Street,
London EC2M 1JJ
NUCLEAR ELECTRIC PLC TELEX: 883141
2264251 FAX: 01-634 7282
Barnett Way Sudbury House
Barnwood 15 Newgate Street
Gloucester GL4 7RS London ECIA 7AU
THE NATIONAL GRID COMPANY PLC
(PUMPED STORAGE DIVISION)
(details as above)
BRITISH NUCLEAR FUELS PLC TELEX: 627581
1002607 FAX: 0925 822711
Warrington Road
Risley
Warrington
Cheshire WA3 6AS
UNITED KINGDOM ATOMIC ENERGY TELEX: 22565
AUTHORITY FAX: 01 930 8403
11 Charles II Street, AEA Technology
London SW1Y 4QP Winfrith
Dorchester
Dorset DT2 8DH
CENTRAL POWER LIMITED TELEX: 338 092
2251099 FAX: 021 423 1907
Mucklow Hill
Halesowen
West Midlands B62 8BP
EASTERN ELECTRICITY PLC TELEX: 98123
2366906 FAX: 0473 601036
PO Box 40
Wherstead
Ipswich IP9 2AQ
EAST MIDLANDS ELECTRICITY PLC TELEX: 37424
2366923 FAX: 0602 209789
PO Box 4, North PD0
398 Coppice Road
Arnold
Nottingham NG5 7HX
LONDON ELECTRICITY PLC TELEX: 885342
2366852 FAX: 01-242 2815
Templar House
81-87 High Holborn
London WC1V 6NU
MANWEB PLC TELEX: 61277
2366937 FAX: 0244 377269
Sealand Road
Chester CH1 4LR
MIDLANDS ELECTRICITY PLC TELEX: 338092
2366928 FAX: 021 422331
Mucklow Hill
Halesowen
West Midlands B62 8BP
NORTHERN ELECTRIC PLC TELEX: 53324
2366942 FAX: 091 235 2109
Carliol House
Newcastle-Upon-Tyne NE99 1SE
NORWEB PLC TELEX: 6695971
2366949 FAX: 061 875 7360
Talbot Road
Manchester M16 OHQ
SEEBOARD PLC TELEX: 87230
2366867 FAX: 0273 21705
Grand Avenue
Hove, East Sussex BN3 2LS
SOUTHERN ELECTRIC PLC TELEX: 848282
2366879 FAX: 0628 827124
Littlewick Green
Maidenhead
Berks SL6 3QB
SOUTH WALES ELECTRICITY PLC TELEX: 498331
2366985 FAX: 0222 777759
St Mellons
Cardiff CF3 9XW
SOUTH WESTERN ELECTRICITY PLC TELEX:
2366894 FAX: 0454 616369
800 Park Avenue
Aztec West
Almondsbury
Avon BS12 4SE
YORKSHIRE ELECTRICITY TELEX: 55128
GROUP PLC FAX: 0532 892123
2366995
Scarcroft
Leeds LS14 3HS
<PAGE>
SCHEDULE 2
DEFINITIONS
"Accession Agreement" an agreement in or substantially in
the form set out in Schedule 3.
"the Act" the Electricity Act 1989.
"Active Power" the product of voltage and the in-phase
component of alternating current measured in units of watts and
standard multiples thereof ie:
1000 watts = 1kW
1000 kW = 1MW
1000 MW = 1GW
1000 GW = 1TW
"Affiliate" in relation to NGC means any
holding company or subsidiary of NGC or any subsidiary of a
holding company of NGC, in each case within the meaning of
Sections 736, 736A and 736B of the Companies Act 1985 as
substituted by Section 144 of the Companies Act 1989 and if that
section is not in force at the date of this Agreement as if such
latter section were in force at such date.
"Agency Business" any business of NGC or any
Affiliate or Related Undertaking in the purchase or other
acquisition or sale or other disposal of electricity as agent for
any other Authorised Electricity Operator.
"this Agreement" this Agreement including the
Schedules and any Supplemental Agreements and the Appendices
thereto as the same may be amended, extended, supplemented,
novated or modified in accordance with the terms hereof f rom
time to time provided that each Supplemental Agreement shall
constitute an agreement separate from each other Supplemental
Agreement.
"Agreed Ancillary Services" Commercial Ancillary Services and
Part 2 System Ancillary Services.
"Ancillary Service" a System Ancillary Service and/or a
Commercial Ancillary Service as the case may be.
"Ancillary Services Business" the business of NGC or any
Affiliate or Related Undertaking as operator of NGC's
Transmission System in the acquisition and/or sale (other than as
part of the Generation Business) of Ancillary Services.
"Annual Average Cold Spell
(ACS) Conditions" a particular combination of weather
elements which gives rise to a level of peak Demand within an NGC
Financial Year which has a 50% chance of being exceeded as a
result of weather variation alone.
"Apparatus" all equipment in which electrical
conductors are used, supported or of which they may form a part.
"Authorised Electricity
Operator" any person (other than NGC in its
capacity as operator of the NGC Transmission System) who is
authorised to generate, transmit or supply electricity and for
the purposes of Condition 10A to 10C inclusive of the
Transmission Licence shall include any person who has made
application to be so authorised which application has not been
refused and any person transferring electricity to or from
England and Wales across an interconnector or who has made
application for use of interconnector which has not been refused.
"Authorised Recipient" in relation to any Protected
Information, means any Business Person who, before the Protected
Information had been divulged to him by NGC or any Subsidiary of
NGC, had been informed of the nature and effect of Sub-Clause
19.1 of the Master Agreement and who requires access to such
Protected Information for the proper performance of his duties as
a Business Person in the course of Permitted Activities.
"Black Start Capability" as defined in the Grid Code.
"Business Day" any week-day other than a Saturday on
which banks are open for domestic business in the City of London.
"Business Person" any person who is a Main Business
Person or a Corporate Functions Person and "Business Personnel
shall be construed accordingly.
"Central Despatch" the process of Scheduling and
issuing direct instructions by NGC referred to in paragraph I of
Condition 7 of the Transmission Licence.
"Charging Rules" the provisions of Appendix E to the
Supplemental Agreements.
"Commercial Ancillary
Services" Ancillary Services, other than System
Ancillary Services, utilised by NGC in operating the Total System
if a User has agreed to provide them under a Supplemental
Agreement with payment being dealt with under an Ancillary
Services Agreement or in the case of Externally interconnected
Parties or External Pool Members (as defined in the Grid Code)
under any other agreement. A non-exhaustive list of commercial
Ancillary Services is set out below:-
- Frequency Control by means of a
Pumped Storage Unit Spinning in Air
- Frequency Control by means of
adjustment to a Pumped Storage Unit
Pumping Programme
- Frequency Control by means of
Demand reduction
- Reactive Power supplied by means of
synchronous or static compensators
- Hot Standby
In addition, there is also the Ancillary
Service of cancelled start which arises as part of the ordinary
operational instruction of Generating Units and therefore needs
no separate capability description. Defined terms used in this
definition are defined in the Grid Code.
"Commissioned" in respect of Plant and Apparatus
commissioned before the Transfer Date means Plant and Apparatus
recognised as having been commissioned according to the
commissioning procedures current at the time of commissioning and
in respect of Plant and Apparatus commissioned after the Transfer
Date means Plant and/or Apparatus certified by the Independent
Engineer as having been commissioned in accordance with the
relevant Commissioning Programme.
"Competent Authority" the Secretary of State, the
Director and any local or national agency, authority, department,
inspectorate, minister, ministry, official or public or statutory
person (whether autonomous or not) of, or of the government of,
the United Kingdom or the European Community.
"Confidential Information" all data and other information
supplied to a User by another Party under the provisions of this
Agreement.
"Connection Application" an application for a New Connection
Site in the form or substantially in the form set out in Exhibit
7.
"Connection Charges" charges made or levied or to be
made or levied for the carrying out (whether before or after the
date on which the NGC Transmission Licence comes into force) of
works and provision and installation of electrical plant,
electric lines and ancillary meters in constructing entry and
exit points on NGC's Transmission System, together with charges
in respect of maintenance and repair of such items in so far as
not otherwise recoverable as Use of System Charges, all as more
fully described in the Transmission Licence, whether or not such
charges are annualised.
"Connection Conditions" or
"CC" that portion of the Grid Code which is
identified as the Connection Conditions.
"Connection Offer" an offer for a New Connection Site
in the form or substantially in the form set out in Exhibit 8
including any revision or extension of such offer.
"Connection Site" each location more particularly
described in the relevant Supplemental Agreement at which a
User's Equipment and the NGC Assets required to connect that User
to the NGC Transmission System are situated. If two or more
Users own or operate Plant and Apparatus which is connected at
any particular location that location shall constitute two (or
the appropriate number of) Connection Sites.
"Connection Site Demand
Capability" the capability of a Connection Site
to take power to the maximum level forecast by the User from time
to time and forming part of the Forecast Data supplied to NGC
pursuant to the Grid Code together with such margin as NGC shall
in its reasonable opinion consider necessary having regard to
NGC's duties under its Transmission Licence.
"Control Telephony" as defined in the Grid Code.
"Corporate Functions Person" any person who is:
(a) a director of NGC; or
(b) an employee of NGC or any of its
Subsidiaries carrying out any administrative, finance or other
corporate services of any kind which in part relate to the Main
Business; or
(c) engaged as an agent of or adviser
to or performs work in relation to or services for the Main
Business.
"Customer" a person to whom electrical power
is provided (whether or not he is the provider of such electrical
power) other than power to meet Station Demand of that person.
"Data Registration Code"
or "DRC" the portion of the Grid Code which is
identified as the Data Registration Code.
"Decommission" cessation of use by a User of that
User's Equipment at any given Connection Site for a continuous
period exceeding 12 months pursuant to the relevant Supplemental
Agreement.
"Deenergisation" or
"Deenergise(d)" the movement of any isolator,
breaker or switch or the removal of any fuse whereby no
Electricity can flow to or from the relevant System through the
User's Equipment.
"Demand" the demand of MW and MVAr of electricity
(ie both Active Power and Reactive Power), unless otherwise
stated.
"Derogation" a direction issued by the Director
relieving a Party from the obligation under its Licence to comply
with such parts of the Grid Code or any Distribution Code or in
the case of NGC the Transmission Licence as may be specified in
such direction and "Derogated" shall be construed accordingly.
"Derogated Plant" shall mean Plant or Apparatus which
is the subject of a Derogation.
"Despatch" the issue by NGC of instructions
for Generating Plant to achieve specific Active Power and
Reactive Power Levels or target voltage levels within Generation
Scheduling and Despatch Parameters and by stated times.
"Detailed Planning Data" detailed additional data which NGC
requires under the PC in support of Standard Planning Data.
"Directive" includes any present or future
directive, requirement, instruction, direction or rule of any
Competent Authority, (but only, if not having the force of law,
if compliance with the Directive is in accordance with the
general practice of persons to whom the Directive is addressed)
and includes any modification, extension or replacement thereof
then in force.
"Director" the Director General of Electricity
SupPly appointed for the time being pursuant to Section I of the
Act.
"Disconnection" permanent physical disconnection of
a User's Equipment at any given Connection Site which permits
removal thereof from the Connection Site or removal of all NGC's
Assets therefrom (as the case may be).
"Disputes Resolution
Procedure" arbitration pursuant to the
arbitration rules of the Electricity Supply Industry Arbitration
Association in force from time to time.
"Distribution Code(s)" the Distribution Code(s) drawn up
by Public Electricity Suppliers pursuant to the terms of their
respective Licence(s) as from time to time revised in accordance
with those Licences.
"Distribution System" the system consisting (wholly or
mainly) of electric lines owned or operated by any Authorised
Electricity Operator and used for the distribution of electricity
from Grid Supply Points or generation sets or other entry points
to the point of delivery to Customers or Authorised Electricity
Operators, and includes any Remote Transmission Assets operated
by such Authorised Electricity Operator and any electrical plant
and meters owned or operated by the Authorised Electricity
Operator in connection with the distribution of electricity, but
shall not include any part of NGC's Transmission System.
"Earthing" as defined in the Grid Code.
"the EdF Documents" as defined in the Pooling and Settlement
Agreement.
"Electricity" Active Energy and Reactive Energy
(in each case as defined in the Pooling and Settlement
Agreement).
"Embedded" a direct connection to a
Distribution System or the System of any other User to which
Customers and/or Power Stations are connected.
"Energisation" or
"Energise(d)" the movement of any isolator, breaker or
switch or the insertion of any fuse so as to enable Energy to
flow from and to the relevant System through the User's
Equipment.
"Energy" the electrical energy produced, flowing
or supplied by an electric circuit during a time interval, being
the integral with respect to time of the power, measured in units
of watt-hours or standard multiples thereof ie:
1000 Wh = 1kWh
1000 kWh = 1MWh
1000 MWh = 1GWh
1000 GWh = 1TWh
"Energy Metering Equipment" has the meaning given to the phrase
"Metering Equipment" in the Pooling and Settlement Agreement.
"Energy Metering System" has the meaning given to the phrase
"Metering System" in the Pooling and Settlement Agreement.
"Estimated Demand" the forecast Demand (Active Power) data
filed with NGC pursuant to paragraph 1.2 of the Charging Rules.
"Executive Committee" the committee established pursuant
to Clause 14.1 of the Pooling and Settlement Agreement.
"Financial Year" the period of 12 months ending on
31st March in each calendar year.
"FMS Date" has the meaning given in the
Pooling and Settlement Agreement.
"Force Majeure" in relation to any Party any event
or circumstance which is beyond the reasonable control of such
Party and which results in or causes the failure of that Party to
perform any of its obligations under this Agreement including act
of God, strike, lockout or other industrial disturbance, act of
the public enemy, war declared or undeclared, threat of war,
terrorist act, blockade, revolution, riot, insurrection, civil
commotion, public demonstration, sabotage, act of vandalism,
lightning, fire, storm, flood, earthquake, accumulation of snow
or ice, lack of water arising from weather or environmental
problems, explosion, fault or failure of Plant and Apparatus
(which could not have been prevented by Good Industry Practice),
governmental restraint, Act of Parliament, other legislation, bye
law and Directive (not being any order, regulation or direction
under Section 32, 33, 34 and 35 of the Act) provided that lack of
funds shall not be interpreted as a cause beyond the reasonable
control of that Party.
"Fuel Security Code" the document of that title
designated as such by the Secretary of State as from time to time
amended.
"Generation Business" the authorised business of NGC or
any Affiliate or Related Undertaking in the generation of
electricity or the provision of Ancillary Services, in each case
from pumped storage and from the Kielder hydro-electric
generating station.
"Generation Licence" the licence granted to a Generator
pursuant to Section 6(l)(a) of the Act.
"Generating Plant" a Power Station subject to Central
Despatch.
"Generating Unit" unless otherwise provided in the
Grid Code any Apparatus which produces electricity.
"Generator" a person who generates electricity
under licence or exemption under the Act.
"Good Industry Practice" in relation to any undertaking and
any circumstances, the exercise of that degree of skill,
diligence, prudence and foresight which would reasonably and
ordinarily be expected from a skilled and experienced operator
engaged in the same type of undertaking under the same or similar
circumstances.
"Grid Code" the Grid Code drawn up pursuant to
the Transmission Licence, as from time to time revised in
accordance with the Transmission Licence.
"Grid Supply Point" a point of delivery from the NGC
Transmission System to a Distribution System or a Non-Embedded
Customer.
"Gross Asset Value" the value calculated by NGC in
accordance with recognised accounting principles and procedures
as published by NGC f rom time to time.
"High Voltage" voltage exceeding 650 volts.
"Independent Generating
Plant" Power Station not subject to
Central Despatch.
"Intellectual Property" patents, trade marks, service
marks, rights in designs, trade names, copyrights and topography
rights (whether or not any of the same are registered and
including applications for registration of any of the same) and
rights under licences and consents in relation to any of the same
and all rights or forms of protection of a similar nature or
having equivalent or similar effect to any of the same which may
subsist anywhere in the world.
"Interconnectors" the electric lines and electrical
plant and meters owned or operated by NGC solely for the transfer
of electricity to or from the NGC Transmission System into or out
of England and Wales.
"Interconnectors Business" the business of NGC or any
Affiliate or Related Undertaking in the operation of any
interconnector.
"Isolation" as defined in the Grid Code.
"Licence" any licence granted pursuant to Section
6 of the Act.
"Licence Standards" the standards to be met by NGC
under Condition 12 of the Transmission Licence.
"Local Safety Instructions" as defined in the Grid Code.
"Main Business" any business of NGC or any of its
Subsidiaries as at the Transfer Date or which it is required to
carry on under the Transmission Licence, other than the
Generation Business.
"Main Business Person" any employee of NGC or any director
or employee of its Subsidiaries who is engaged solely in the Main
Business and "Main Business Personnel" shall be construed
accordingly.
"Master Agreement" the Agreement to which this is Schedule
2, excluding any Supplemental Agreements.
"Material Effect" an effect causing a Party to effect
any works or to alter the manner of operation of its Plant and/or
Apparatus at the Connection Site or the site of connection which
in either case involves that Party in expenditure of more than
pounds 10,000.
"Maximum Export Capacity" the maximum amount of power to be
passed into the NGC Transmission System at the Connection Site as
notified by the User to NGC as part of the Registered Data from
time to time.
"Minor Independent
Generating Plant" any Independent Generating Plant
with a Registered Capacity of less than 50 mw.
"Modification" any actual or proposed replacement,
renovation, modification, alteration, or construction by or on
behalf of a User or NGC to either that Party's Plant or Apparatus
or the manner of its operation which has or may have a Material
Effect on another Party at a particular Connection Site.
"Modification Application" an application in the form or
substantially in the form set out in Exhibit 11.
"Modification Notification" a notification in the form or
substantially in the form set out in Exhibit 13.
"Modification Offer" an offer in the form or
substantially in the form set out in Exhibit 12, including any
revision or extension of such offer.
"Natural Demand" the Demand (Active Power) which is
necessary to meet the needs of Customers excluding that Demand
(Active Power) met by Embedded Generating Units which is to be
paid for otherwise than pursuant to the Pooling and Settlement
Agreement.
"Net Asset Value" the Gross Asset Value of the NGC
Asset in question less depreciation over the Replacement Period
calculated in accordance with recognised accounting principles
and procedures.
"New Connection Site" a proposed Connection Site in
relation to which there is no Supplemental Agreement in force
between the Parties.
"NGC Assets" the Plant and Apparatus owned by NGC
necessary to connect the User's Equipment to the NGC Transmission
System at any particular Connection Site in respect of which NGC
charges Connection Charges (if any) as listed or identified in
Appendix A to the Supplemental Agreement relating to each such
Connection Site.
"NGC Engineering Charges" reasonable Charges for time spent
by NGC engineers and other staff in relation to NGC Transmission
System development and related services as published from time to
time by NGC.
"NGC Transmission System" the system consisting (wholly or
mainly) of high voltage electric lines owned or operated by NGC
and used for the transmission of electricity from one Power
Station to a sub-station or to another Power Station or between
sub-stations or to or from any External Interconnection and
includes any Plant and Apparatus and meters owned or operated by
NGC in connection with the transmission of electricity but does
not include any Remote Transmission Assets.
"Non-embedded Customer" a Customer except for a PES receiving
electricity direct from the NGC Transmission System irrespective
of from whom it is supplied.
"Operating Code" or "OC" the portion of the Grid Code which
is identified as the Operating Code.
"Operation Diagrams" as defined in the Grid Code.
"Operational" in relation to a Connection Site means
that the same has been Commissioned (which for the avoidance of
doubt does not necessarily include commissioning of Generating
Units connected at the Connection Site) and that the User can use
such User's Equipment to undertake those acts and things capable
of being undertaken by Pool Members.
"Operational Effect" any effect on the operation of any
System which causes that System to operate (or be at a materially
increased risk of operating) differently to the way in which it
would have normally operated in the absence of that effect.
"Operational Intertripping" the automatic tripping of
circuit-breakers to prevent abnormal system conditions occurring,
such as over voltage, overload, system instability etc. after the
tripping of other circuit breakers following power system
fault(s) which includes System to Generating Plant and System to
Demand intertripping schemes.
"Operational Metering
Equipment" meters, instrument transformers
(both voltage and current), transducers, metering protection
equipment including alarms circuitry and their associated
outstations as may be necessary for the purpose of CC.6.5.5 of
the Grid Code and the corresponding provision of the relevant
Distribution Code.
"Operator" has the meaning defined in the
Pooling and Settlement Agreement.
"Part 1 System Ancillary
Services" Ancillary Services which are required
for System reasons and which must be provided by Users in
accordance with the Connection Conditions. An exhaustive list of
Part 1 System Ancillary Services is included in the Grid Code (in
that part of CC8.1 headed Part 1) namely:
- Reactive Power supplied otherwise
than by means of synchronous or static
compensators;
- Frequency Control by means of
Frequency Sensitive Generation.
"Part 2 System Ancillary
Services" Ancillary Services which are required
for System reasons and which must be provided by a User if the
User has agreed to provide them under a Supplemental Agreement.
A non-exhaustive list of Part 2 System Ancillary Services is
included in the Grid Code (in that part of CC8.1 headed Part 2)
namely:
- Frequency Control by means of Gas
Turbine Unit Fast Start;
- Frequency Control by means of
Pumped Storage Unit Fast Start.
- Black Start Capability.
"Party" each person for the time being and from
time to time party to the Master Agreement and any successor(s)
in title to, or permitted assign(s) of, such person.
"Payment Date" a date for payment of NGC Connection
Charges and/or Use of System Charges, determined in accordance
with Sub-Clause 14.2 of the Master Agreement.
"Permitted Activities" activities carried on for the
purposes of the Main Business.
"PES Supply Business Demand" the Demand (Active Power) of any
PES which is attributable to each Grid Supply Point.
"Planning Code" or "PC" that portion of the Grid Code which
is identified as the Planning Code.
"Plant" fixed and moveable items used in the
generation and/or supply and/or transmission of electricity other
than Apparatus.
"Pool Member" any person who is admitted to membership
in accordance with the Pooling and Settlement Agreement.
"Pooling and Settlement
Agreement" the agreement of that title for the
time being approved (or to be approved) by the Secretary of State
or by the Director as from time to time amended and, where the
context so permits, includes the agreement known as the Initial
Settlement Agreement of even date with the above agreement, and
made between the parties to the above agreement as at such date.
"Power Station" an installation comprising one or
more Generating Units (even where sited separately) owned and/or
controlled by the same Generator, which may reasonably be
considered as being managed as one Power Station.
"Protected Information" any information relating to the
affairs of a Party which is furnished to Business Personnel
pursuant to this Agreement or pursuant to a direction under
Section 34 of the Act or pursuant to the provisions of the Fuel
Security Code unless, prior to such information being furnished,
such Party has informed the recipient thereof by notice in
writing or by endorsement on such information, that the said
information is not to be regarded as Protected Information.
"Public Electricity Supplier"
or "PES" a holder of a Public Electricity Supply
Licence.
"Public Electricity Supply
Licence" a licence issued under Section 6(l)(c)
of the Act.
"Reasonable Charges" reasonable cost reflective charges
comparable to charges for similar services obtainable in the open
market.
"Registered Capacity" the normal full load capacity of a
Generating Unit as declared by the Generator, less the MW
consumed by the Generating Unit through the Generating Units unit
transformer when producing the same.
"Registered Data" those items of Standard Planning
Data and Detailed Planning Data which upon connection become
fixed (subject to any subsequent changes).
"Registrant" has the meaning defined in the
Pooling and Settlement Agreement.
"Regulations" the Electricity Supply Regulations 1988
or any amendment or re-enactment thereof.
"Related Undertaking" in relation to NGC means any
undertaking in which NGC has a participating interest as defined
by Section 260(1) of the Companies Act 1985 as substituted by
Section 22 of the Companies Act 1989 and if that latter section
is not in force at the date of this Agreement as if such latter
section were in force at such date.
"Remote Transmission Assets" any Plant and Apparatus or meters
owned by NGC which (a) are embedded in a Distribution System or a
User System and which are not directly connected by Plant and/or
Apparatus owned by NGC to a substation owned by NGC and (b) are
by agreement between NGC and such PES or User under the direction
and control of such PES or User.
"Replacement Period" in relation to an NGC Asset, the
period commencing on the date on which such NGC Asset is or was
originally commissioned, after which it is assumed for accounting
purposes such NGC Asset will need to be replaced, which shall be
40 years unless otherwise agreed between the Parties to a
Supplemental Agreement and recorded in the relevant Supplemental
Agreement.
"Safety Coordinator(s)" a person or persons nominated by
NGC and each User to be responsible for the co ordination of
Safety Precautions (as defined in the Grid Code) at each
Connection Point when work and/or testing is to be carried out on
a system which necessitates the provision of Safety Precautions
on HV Apparatus, pursuant to OC8.
"Safety Rules" the rules of NGC or a User that seek to
ensure that persons working on Plant and/or Apparatus to which
the rules apply are safeguarded from hazards arising from the
System.
"Scheduling" the process of compiling and
issuing a Generation Schedule (as that expression is defined in
the Grid Code) as set out in SDC1.
"SDC or Scheduling and
Despatch Code" that portion of the Grid Code which
specifies the Scheduling and Despatch process.
"Second Tier Supplier" or
"STS" a holder of a Second Tier Supply
Licence.
"Second Tier Supply Licence" a licence granted under Section
6(2)(a) of the Act.
"Separate Business" each of the Transmission,
Settlements, Generation, Interconnectors and Ancillary Services
Businesses taken separately from one another and f rom any other
business of NGC, but so that where all or any part of such
business is carried out by an Affiliate or Related Undertaking of
NGC such part of the business as is carried out by that Affiliate
or Related Undertaking shall be consolidated with any other such
business of NGC (and of any other Affiliate or Related
Undertaking) so as to form a single Separate Business.
"Settlement Business" means the business of NGC or any
Affiliate or Related Undertaking as settlement system
administrator under the Pooling and Settlement Agreement.
"Site Common Drawings" as defined in the Grid Code.
"Site Responsibility
Schedule" a schedule containing the information
and prepared on the basis of the provisions set out in Appendix 1
of the CC.
"Small Independent
Generating Plant" any Independent Generating Plant
with a Registered Capacity of 50 MW or more.
"Station Demand" in respect of any generating
station and Generator, means that consumption of electricity
(excluding any supply to any Customer of the relevant Generator
who is neither such Generator nor a member of a qualifying group
of which such Generator is a part) from the NGC Transmission
System or a Distribution System at premises on the same site as
such generating station, with premises being treated as on the
same site as each other if they are:
(i) the same premises;
(ii) immediately adjoining each other; or
(iii) separated from each other only
by road, railway or watercourse or by other premises (other than
a pipe-line, electric line or similar structure) occupied by the
consumer in question or by any other person who together with
that consumer forms a qualifying group;
and for the purpose of this definition
"generating station" and "qualifying group" shall have the
meanings given those expressions when used in the Electricity
(Class Exemptions from the Requirement for a Licence) Order 1990.
"STS Demand" the Demand (Active Power) of any STS
which is attributable to each Grid Supply Point.
"Supplemental Agreement" has the meaning set out in Clause 2 of
the Master Agreement.
"Supplier" a Public Electricity Supplier or
Second Tier Supplier.
"System" any User System or the NGC Transmission
System as the case may be.
"Termination Amount" in relation to a Connection Site,
the amount calculated in accordance with paragraph 4 of the
Charging Rules.
"Total System" the NGC Transmission System and all User
Systems in England and Wales.
"Transfer Date" 2400 hours on 30th March 1990.
"Transfer Scheme" the transfer scheme made by Central
Electricity Generating Board established under Section 66 of the
Act or by the Secretary of State under Section 69 of the Act.
"Transmission Business" the authorised business of NGC or
any Affiliate or Related Undertaking in the planning,
development, construction and maintenance of the NGC Transmission
System (whether or not pursuant to directions of the Secretary of
State made under Section 34 or 35 of the Act) and the operation
of such system for the transmission of electricity, including any
business in providing connections to the NGC Transmission System
but shall not include (i) any other Separate Business or (ii)
any other business (not being a Separate Business) of NGC or any
Affiliate or Related Undertaking in the provision of services to
or on behalf of any one or more persons.
"Transmission Licence" the licence granted to NGC under
Section 6(l)(b) of the Act.
"Undertaking" bears the meaning ascribed to that
expression by Section 259 of the Companies Act 1985 as
substituted by Section 22 of the Companies Act 1989 and if that
latter section is not in force at that date of this Agreement as
if such latter section were in force at such date.
"Use of System" use of NGC's Transmission System
for the transport of electricity by any Authorised Electricity
Operator.
"Use of System Application" an application for a Supplemental
Agreement Type 5 or Type 6 in the form or substantially in the
form set out in Exhibit 9 or 10 as appropriate.
"Use of System Charges" charges made or levied or to be
made or levied by NGC for the provision of services as part of
the transmission Business to any Authorised Electricity Operator
as more fully described at paragraph 2 of Condition 10 and
paragraph 2 of Schedule 3 to the Transmission Licence and in the
Supplemental Agreements but shall not include Connection Charges.
"User's Licence" a User's licence to carry on its
business granted pursuant to Section 6 of the Act.
"User's Equipment" the Plant and Apparatus owned by a
User (ascertained in the absence of agreement to the contrary by
reference to the rules set out in Clause 6 of the Master
Agreement) which either is connected to the NGC Assets forming
part of the NGC Transmission System at any particular Connection
Site or which that User wishes so to connect or is connected to a
Distribution System or which that User wishes so to connect.
"User System" any system owned or operated by a User
comprising Generating Units and/or Distribution Systems (and/or
other systems consisting (wholly or mainly) of electric lines
which are owned or operated by a person other than a PES) and
Plant and/or Apparatus connecting Generating Units, Distribution
Systems (and/or other systems consisting (wholly or mainly) of
electric lines which are owned or operated by a person other than
a PES) or Non-Embedded Customers to the NGC Transmission System
or (except in the case of Non-Embedded Customers) to the relevant
other User System, as the case may be, including any Remote
Transmission Assets operated by such User or other person and any
Plant and/or Apparatus and meters owned or operated by such User
or other person in connection with the distribution of
electricity but does not include any part of the NGC Transmission
System.
<PAGE>
SCHEDULE 3
THIS ACCESSION AGREEMENT is made on
between:
1. [ ], a company incorporated [with limited
liability] under the laws of [ ] [(registered
number]) and having its [registered office] at [ ]
(the "New Party"); and
2. The National Grid Company PLC ("NGC") on its own behalf and
on behalf of all the other parties to the Master Agreement
referred to below.
WHEREAS:
By an agreement (the "Master Connection and Use of System
Agreement") dated [ ] 1990 made between the
Parties named therein and NGC the parties thereto agreed to give
effect to and be bound by certain rules and procedures for
establishing a contractual framework between the Parties pursuant
to which Supplemental Agreements will from time to time be made
for the connection of Plant and Apparatus to the NGC Transmission
System, the use by Parties of the NGC Transmission System and the
payment of charges to NGC.
IT IS HEREBY AGREED as follows:
1. Unless the context otherwise requires, words and expressions
defined in the Master Agreement shall bear the same meanings
respectively when used herein.
2. NGC (acting on its own behalf and on behalf of each of the
other Parties) hereby admits the New Party as an additional Party
under the Master Agreement on the terms and conditions hereof.
3. The New Party hereby accepts its admission as a Party and
undertakes with NGC (acting on its own behalf and on behalf of
each of the other Parties) to perform and to be bound by the
terms and conditions of the Master Agreement as a Party as from
the date hereof.
4. For all purposes in connection with the Master Agreement the
New Party shall as from the date hereof be treated as if it has
been a signatory of the Master Agreement, and as if this
Agreement were part of the Master Agreement, and the rights and
obligations of the Party shall be construed accordingly.
5. This Agreement and the Master Agreement shall be read and
construed as one document and references in the Master Agreement
to the Master Agreement (howsoever expressed) should be read and
construed as references to the Master Agreement and this
Agreement.
6. This Agreement shall be governed by and construed in all
respects in accordance with English law and the provisions of
Clause 27 of the Master Agreement shall apply hereto mutatis
mutandis.
AS WITNESS the hands of the duly authorised representatives of
the parties hereto the day and year first above written.
[New Party]
By:
Registered Number:
Registered Office:
Address for Notices (if different from Registered Office):
Telex No:
Facsimile No:
Attention:
Bank Details:
The National Grid Company PLC
(for itself and on behalf of each of the
Parties to the Master Agreement).
By:
<PAGE>
EXHIBIT 1
DATED 30th March 1990
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
________________________________________________________
SUPPLEMENTAL AGREEMENT TYPE 1
________________________________________________________
(in respect of Connection Sites of Users
which are in existence and Commissioned at the Transfer Date)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation and Construction
2 Being Operational/Connection/Energisation
3 The Connection Site and NGC Assets
4 Connection Charges
5 Use of System Charges
6 Charging Rules
7 Ancillary Services
8 (Clause deleted)
9 Special Automatic Facilities
10 Protection and Control Relay Settings/Fault Clearance Times
11 Safety Rules
12 Other Site Specific Technical Conditions
13 Metering
14 Joint System Incidents
15 Term
16 Emergency Deenergisation
17 Deenergisation and Disconnection
18 Notice to Decommission or Disconnect
19 Disconnection
20 Decommissioning
21 Master Agreement
22 Variations
Appendix A NGC's Assets/Connection Site
Appendix B Connection Charges/Payment
Appendix C Zone/Registered Capacity/Peak Half-Hours/Estimated Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix F1 Site Specific Technical Conditions - Agreed Ancillary Services
Appendix F2 (Not used)
Appendix F3 Site Specific Technical Conditions - Special Automatic
Facilities
Appendix F4 Site Specific Technical Conditions - Protection and Control
Relay Settings/ Fault Clearance
Appendix F5 Site Specific Technical Conditions - Load Shedding Frequency
Sensitive Relays
Appendix F6 Site Specific Technical Conditions - Metering
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the 30th day of March 1990
and becomes effective on the 31st day of March 1990
BETWEEN
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SEI 9JU ("NGC", which
expression shall include its successors and/or permitted
assigns); and
(2) [ ] a company registered in [
] with number [ ] whose registered office is at [
] (the "User", which expression shall include its successors
and/or permitted assigns)
WHEREAS
(A) NGC and the User are parties to a Master Connection and Use
of System Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith, terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement.
2. BEING OPERATIONAL/CONNECTION/ENERGISATION
2.1 Right to remain connected
Subject to the other terms and conditions of this
Supplemental Agreement and the Grid Code, the User shall have the
right for the User's Equipment to remain connected to the NGC
Transmission System at the Connection Site for the duration of
this Supplemental Agreement.
2.2 Right to be and remain Energised and Operational
Subject to the other provisions of this Agreement and the
Grid Code, the User shall have the right for the User's Equipment
at the Connection Site to be and remain Energised and Operational
for the duration of this Supplemental Agreement.
2.3 Obligation to remain connected
Without prejudice to its rights to make Modifications to the
User's Equipment pursuant to the Master Agreement and subject to
the provisions of Sub-Clause 16.2 and the other provisions of
this Agreement and the Grid Code the User shall keep the User's
Equipment at the Connection Site connected to the NGC
Transmission System until Decommissioning or Disconnection is
permitted pursuant to this Supplemental Agreement.
2.4 Registered Capacity
The User if a Generator shall not operate its Users
Equipment such that any of it exceeds its Registered Capacity
save as expressly permitted or instructed pursuant to the Grid
Code or the Fuel Security Code or as may be necessary or
expedient in accordance with Good Industry Practice.
2.5 Data
Data of a technical or operational nature collected recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefor.
2.6 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall use all reasonable endeavours to maintain
the NGC Assets at the Connection Site in the condition necessary
to render the same fit for the purpose of passing power up to the
Maximum Export Capacity and/or the Connection Site Demand
Capability as appropriate between the User's Equipment and the
NGC Transmission System.
2.7 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall accept into the NGC Transmission System at
the Connection Site power generated by the User up to the Maximum
Export Capacity except to the extent (if any) that NGC is
prevented from doing so by transmission constraints which could
not be avoided by the exercise of Good Industry Practice by NGC.
2.8 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall transport a supply of power to the
Connection Site through the NGC Transmission System up to the
Connection Site Demand Capability except to the extent (if any)
that NGC is prevented from doing so by transmission constraints
or by insufficiency of generation which, in either case, could
not have been avoided by the exercise of Good Industry Practice
by NGC.
2.9 Subject to the provisions of the Grid Code each Party shall
be entitled to plan and execute outages of parts of its System or
Plant or Apparatus at any time and from time to time.
2.10 Provision of Data
The majority of the data required under the Grid Code has
been supplied by the User prior to the Transfer Date. However,
in respect of the following data required under the Planning Code
of the Grid Code it is agreed that the User need only supply it
under the Grid Code within one year of the Transfer Date, unless
NGC requests it in writing before the expiry of that period, in
which case the User from whom the data is requested must supply
it within 6 weeks of receiving that request, except in the case
of the data referred to in PCA 5.3.1(g) which need only @e
supplied within 3 months of receiving this request. The data to
which this Sub-Clause applies is that referred to in the
following paragraphs of the Planning Code:
PCA 2.3
PCA 4.3.7
PCA 4.3.9
PCA 5.2.1
PCA 5.2.2
PCA 5.3.I(g)
NGC shall also be able to request a User in writing at any
time to supply to NGC any data under the Planning Code which it
should have supplied to NGC prior to the Transfer Date, but which
it did not supply, and the User must supply that data upon that
request.
3. THE CONNECTION SITE AND NGC ASSETS
The Connection Site and NGC Assets to which this
Supplemental Agreement relates are more particularly described in
Appendix A.
4. CONNECTION CHARGES
Subject to the provisions of Clause 6 of this Supplemental
Agreement the User shall with effect from the commencement of
this Supplemental Agreement pay the Connection Charges set out in
Appendix B which are calculated by reference to the NGC Assets
specified in Appendix A in accordance with the provisions of
Appendix B.
5. USE OF SYSTEM CHARGES
Subject to the provisions of Clause 6 of this Supplemental
Agreement the User shall with effect from the commencement of
this Supplemental Agreement pay to NGC the Use of System Charges
set out in Appendix D in accordance with the provisions of
Appendix E.
6. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
7. ANCILLARY SERVICES
The User shall provide the Agreed Ancillary Services set out
in Appendix F1 in accordance with the Grid Code.
8. GRID CODE NON-COMPLIANCE
(Clause deleted)
9. SPECIAL AUTOMATIC FACILITIES
NGC and the User shall operate respectively the NGC
Transmission System and the User System in accordance with the
schemes set out in Appendix F3-
10. PROTECTION AND CONTROL RELAY SETTINGS/FAULT CLEARANCE TIMES
NGC and the User shall record the respective protection and
control relay settings and fault clearance times to be operated
by each of them in documents in the format set out in Appendix F4
and shall operate them accordingly.
11. SAFETY RULES
11.1 Safety Rules
NGC and the User will each supply to the other a copy of
their Safety Rules current from time to time except where already
supplied under another Supplemental Agreement (save that this
exception shall not apply to site specific Safety Rules) and also
a copy of the Local Safety Instructions applicable at the
Connection Site from time to time except where supplied under
another Supplemental Agreement.
11.2 Decommissioning
Decommissioning of Plant and/or Apparatus at the Connection
Site will be undertaken in accordance with the procedures of the
Safety Rules of whichever of NGC or the User applied when the
Plant and/or Apparatus concerned was in commission.
12. OTHER SITE SPECIFIC TECHNICAL CONDITIONS
12.1 Initial Obligation
The User shall ensure that on the Transfer Date the User's
Equipment complies with the site specific technical conditions
set out in Appendix F5.
12.2 The User shall use all reasonable endeavours to ensure
during the period of this Supplemental Agreement that the User's
Equipment shall continue to comply with the site specific
technical conditions set out in Appendix F5.
12.3 If the User or NGC wishes to modify, alter or otherwise
change the site specific technical conditions or the manner of
their operation:
(i) under Appendix F4 it may do so upon obtaining the
agreement of the other Party such agreement not to be
unreasonably withheld.
(ii) under Appendix Fl, F3, F5 or F6 this shall be deemed to
be a Modification for the purposes of the Master Agreement.
12.4 Where on or immediately prior to the Transfer Date the
User's Equipment has any of the following technical attributes or
facilities:
(i) circuit breaker fail protection;
(ii) pole slipping protection;
(iii) fault disconnection facilities;
(iv) automatic switching equipment;
(v) control arrangements;
(vi) voltage and current signals for system monitoring;
(vii) control telephony;
(viii) operational metering;
the User shall use all reasonable endeavours to ensure that
during the period of this Supplemental Agreement the User's
Equipment retains such technical attributes or facilities
provided always that if the User wishes to modify alter or
otherwise change the same or their operation it may do so by
following the procedures relating to a Modification in accordance
with the Master Agreement.
13. METERING
The provisions of Appendix F6 shall have effect.
14. JOINT SYSTEM INCIDENTS
Each Party confirms to the other that its Senior Management
Representatives whose names have been nominated and notified to
the other pursuant to OC9 are fully authorised to make binding
decisions on its behalf for the purposes of OC9.
15. TERM
Subject to the provisions for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User's Equipment
is Disconnected from the NGC Transmission System at the
Connection Site in accordance with Clause 17 or 19 hereof.
16. EMERGENCY DEENERGISATION
16.1 Emergency Deenergisation by a NGC
If, in the reasonable opinion of NGC, the condition or
manner of operation of the NGC Transmission System or the User's
System poses an immediate threat of injury or material damage to
any person or to the Total System or to any User's System or to
the NGC Transmission System NGC shall have the right to
Deenergise the User's Equipment if it is necessary or expedient
to do so to avoid the occurrence of such injury or damage.
16.2 Emergency Deenergisation by a User
If, in the reasonable opinion of the User, the condition or
manner of operation of the NGC Transmission System, the Total
System or any User's System, poses an immediate threat of injury
or material damage to any person or to the User's System, the
User shall have the right to Deenergise the User's Equipment if
it is necessary or expedient to do so to avoid the occurrence of
such injury or damage.
16.3 Reenergisation
NGC or, as the case may be, the User shall Reenergise the
User's Equipment at the Connection Site as quickly as practicable
after the circumstances leading to any Deenergisation under this
Clause 16 have ceased to exist.
17. DEENERGISATION AND DISCONNECTION
17.1 Breach by the User
If the User shall be in breach of any of the provisions of
this Supplemental Agreement or of the provisions of the Master
Agreement enforcing the provisions of the Grid Code (but subject
always to Sub-Clauses 9.3 and 9.4 of the Master Agreement) and
such breach causes or can reasonably be expected to cause a
material adverse effect on the business or condition of NGC or
other Users or the NGC Transmission System or Users Systems then
NGC may:
(i) where the breach is capable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and requiring the User to remedy the breach within 28
days after receipt of such notice or within any longer period
agreed between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why the breach is incapable of remedy
and requiring the User within 5 Business Days after receipt of
such notice to undertake to NGC not to repeat the breach.
17.2 Grid Code Procedures
Whenever NGC serves a notice on the User pursuant to
Sub-Clause 17.1, NGC and the User shall discuss in good faith and
without delay the nature of the breach and each shall use all
appropriate procedures available to it under the Grid Code
(including testing rights and the procedures set out in OC5
(Testing and Monitoring)) in an attempt to establish as quickly
as reasonably practicable a mutually acceptable way of ensuring
future compliance by the User with the relevant provision of the
Grid Code.
17.3 De-Energisation
17.3.1 If:
(a) the User fails to comply with the terms of any valid
notice served on it by NGC in accordance with Sub-Clause 17.1(i)
or is in breach of any undertaking given in accordance with
Sub-Clause 17.1(ii) and such breach causes or can be reasonably
expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
User Systems; or
(b) five Business Days have elapsed since the date of any
valid notice served on the User in accordance with Sub-Clause
17.2(ii) and no undertaking is given by the User in accordance
with Sub-Clause 17.2(ii);
NGC may, provided NGC has first complied with OC5
Monitoring and Testing if appropriate De-Energise the User's
Equipment upon the expiry of at least 48 hours prior written
notice to the User, provided that at the time of expiry of such
notice the breach concerned remains unremedied and that neither
Party has referred the matter to the Dispute Resolution Procedure
set out in Clause 27 of the Master Agreement. In such event NGC
may De-Energise forthwith following completion of the Dispute
Resolution Procedure and final determination of the dispute in
NGC's favour.
17.3.2 If the User fails to comply with the Grid Code and
the Director makes a final order or a confirmed provisional order
as set out in Sections 25 and 26 of the Act against the User in
respect of such non-compliance which order the User breaches NGC
may De-energise the Users Equipment upon the expiry of at least
48 hours prior written notice to the User provided that at the
time of expiry of the notice the User continues to fail to comply
with the order.
17.4 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 17.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may De-Energise the User's Equipment
upon the expiry of at least 12 hours prior written notice to the
User, provided that at the time of expiry of such notice the
breach concerned remains unremedied.
17.5 Re-Energisation Disputes
If, following any De-Energisation pursuant to this Clause
17, the User applies to NGC for the User's Equipment to be
Re-Energised and is refused or is offered terms which the User
does not accept, this shall be recognised as a dispute over the
terms for connection and use of system which the User may refer
to the Director for determination under the NGC Transmission
Licence. If the User accepts any terms offered by NGC or settled
by the Director pursuant to any such reference, NGC shall
Re-Energise the User's Equipment forthwith after any request from
the User for NGC to do so.
17.6 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 17 remains unremedied at the expiry of at least 6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:
(a) all disputes arising out of the subject-matter of this
Clause 17 which are referred to the Dispute Resolution Procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to sub-clause
17.5 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
17.7 Disconnection
Once NGC has given a valid notice of an event of default
pursuant to Sub-Clause 17.6 NGC may give notice of termination
to that User whereupon this Supplemental Agreement shall
terminate and:
(i) NGC shall Disconnect all the User's Equipment at the
Connection Site and NGC and the User concerned shall by
arrangement between them remove any of the Users Equipment and
NGC Assets on the other Party's land within 6 months of the date
of termination or such longer period as may be agreed between the
Parties; and
(ii) that User shall be obliged to pay to NGC forthwith the
Termination Amounts applicable to the Connection Site.
18. NOTICE TO DECOMMISSION OR DISCONNECT
Without prejudice to Sub-Clause 16.2, the User shall give to
NGC not less than 6 months written notice of any intention of the
User either to Decommission the User's Equipment or to Disconnect
the User's Equipment.
19. DISCONNECTION
If notice to Disconnect is given by the User under Clause 18
the User may upon expiry of the period specified in such notice
and not before Disconnect the User's Equipment. At the expiry of
such period this Supplemental Agreement shall terminate. The
User shall pay to NGC all Termination Amounts applicable to the
Connection Site within 28 days after termination of this
Agreement. Within 6 months of the date of such termination or
such longer period as may be agreed between the Parties the
Parties shall by arrangement with each other remove any of the
User's Equipment and NGC Assets on the other Party's land.
20. DECOMMISSIONING
If notice to Decommission is given by the User under Clause
18 the User may upon expiry of the period specified in such
notice and not before, Decommission the User's Equipment. This
Supplemental Agreement shall not terminate and:
(i) until the end of the Financial Year in which the
Decommissioning takes place all Connection Charges and Use of
System Charges payable by the User under this Supplemental
Agreement shall continue to be payable in full; and
(ii) following the end of the Financial Year in which the
Decommissioning takes place the Use of System Charges payable by
the User under this Supplemental Agreement shall no longer be
payable by the User but the Connection Charges so payable shall
continue to be payable If and when the User wishes to
recommission it shall give NGC not less than 3 months written
notice unless a shorter period is agreed between the User and
NGC.
21. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental Agreement
as if set out in full herein.
22. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order or directions made pursuant to the Act or a Licence
or as a result of settling any of the terms hereof and the User
hereby authorises and instructs NGC to make any such amendment on
its behalf and undertakes not to withdraw, qualify or revoke such
authority or instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
[the USER] )
By )
<PAGE>
APPENDIX A
NGC'S ASSETS/CONNECTION SITE
COMPANY :
CONNECTION SITE :
TYPE :
NGC ASSETS :
QUANTITY VOLTAGE DESCRIPTION AGE (Years)
SCHEMATIC DIAGRAM:
AREA:
<PAGE>
APPENDIX B
CONNECTION CHARGES/PAYMENT
1) CONNECTION CHARGE
COMPANY :
CONNECTION :
SITE
TYPE :
CHARGES : pounds for the period from 1st
April 1990 to 31st March 1991 and thereafter as determined in
accordance with the Charging Rules.
2) PAYMENT:
The charges shall be payable in 12 equal monthly instalments
as specified in Clause 14 of the Master Agreement.
<PAGE>
APPENDIX C
ZONE/REGISTERED CAPACITY/PEAK HALF-HOURS/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND
ZONE :
a. GENERATION:
SET TYPE/FUEL REGISTERED
CAPACITY MW
b. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
c. In the Financial Year 1st April 1990 to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial year and the Energy produced.
d. ESTIMATED DEMAND for the period between 1st April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
__________________________________ MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1) TYPE OF CHARGE SYSTEM SERVICE
Demand related
pounds......... in respect of the period from 1st
April 1990 to 31st March 1991 payable in 12 equal monthly
instalments subject to adjustment in accordance with the Charging
Rules.
Note: based upon a charge of pounds.. per KW and
...... KW of Estimated Demand as set out in Appendix C.
2) TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds......... in respect of the period from 1st
April 1990 to 31st March 1991 payable in 12 equal monthly
instalments subject to adjustment in accordance with the Charging
Rules.
Note: based upon a charge of pounds.. per KW and
...... KW of Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds........... in respect of the period from 1st
April 1990 to 31st March 1991 payable in 12 equal monthly
instalments subject to adjustment in accordance with the Charging
Rules based upon a charge of pounds... per KW Registered Capacity
and ....... KW being the Registered Capacity as set out in
Appendix C.
C. Energy Related
pounds ......... per KWh in respect of each KWh of
Energy entering the Total System in the period from 31st March
1990 to 31st March 1991 payable as described in Clause 14 of the
Master Agreement.
Payment shall be made in accordance with Clause 14 of the
Master Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. Use of System Charges - General and Data Requirements
1.1 NGC's Demand related Use of System Charges are
calculated by reference to Demand (Active Power) attributable to
each Grid Supply Point excluding that Demand (Active Power) met
by embedded Generating Units which is to be paid for otherwise
than pursuant to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 31st December in each Financial Year
the User shall supply NGC with such data as NGC may from time to
time reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 31st December in each Financial Year,
(i) Users who are Public Electricity Suppliers shall
supply to NGC a forecast for the following Financial Year of the
following :-
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half-hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable
to each Grid Supply Point equal to the average of the forecasts
of PES Supply Business Demand under Annual Average Cold Spell
(ACS) Conditions attributable to such Grid Supply Point for each
of a number of peak half-hours as notified by NGC to the User
under paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply
to NGC a forecast for the following Financial Year of the STS
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of STS Demand attributable to such Grid Supply
Point for each of a number of peak half-hours as notified by NGC
to the User under paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecast of such Station Demand (Active Power attributable to
such Grid Supply Point for each of a number of peak half-hours as
notified by NGC to the User under paragraph 2.1 of this Appendix
E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System charges shall
be calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC
shall:-
(i) determine from meter readings of Energy Metering
Equipment and actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year; and
(ii) shall compare the User's highest Registered
Capacity during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of
the actual position determined in accordance with paragraph 1.3.2
the amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payment by the
User under this supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall
then compare the Actual Amount with the amount of Demand related
or Capacity related Use of System Charges (as the case may be)
paid during each month during that Financial Year by the User
under this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement
and send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information from
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC
shall send the User and invoice in relation to any sums shown by
the reconciliation statement to be due to NGC and interest
thereon calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 31st March in such
Financial Year.
1.3.6 In respect of each month during that Financial
Year:-
(a) the User shall, following receipt of an
appropriate invoice, pay to NGC an amount equal to the amount (if
any) by which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate
invoice, repay to the User an amount equal t the amount (if any)
by which the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the
other on such amounts from the Payment Date applicable to the
month concerned until the date of actual payment of such amounts
(which shall not be later than 31st March in such Financial
Year). Such interest shall be calculated on a daily basis at the
rate equal to the base rate of Barclays Bank PLC for the time
being and from time to time during such period.
2. Revision of Charges
2.1 To the extent permitted by the Transmission Licence NGC
may revise its Connection Charges and Use of System Charges or
the basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the Use of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new
asset register during the course of the Financial Year ending
31st March 1991. As a result, NGC shall have the right to vary
the asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:-
(a) NGC has first consulted the User in advance in
good faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set
out in the statements required by Condition 10(2)D of the
Transmission Licence, the form of which has been approved by the
Director.
Such asset reallocation shall be effective from 1st
April 1991 and the provisions of Appendices A and B shall be
amended automatically (and a copy sent to the User) to reflect
such reallocation which effect from such date.
2.3 Subject to the provision of paragraph 3.2 below if in
the reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective and provisions of Sub-
Clauses 11.2 and 11.4 shall apply mutatis mutandis. Following
any such variation the provisions of Appendices A and B shall be
amended automatically (and a copy sent to the User) to reflect
such variation with effect from the date such variation comes
into effect.
3. Replacement of NGC Assets
3.1 Appendix A specifies the age of each of the NGC Assets
at the Connection Site at the date of this Supplemental
Agreement. NGC Connection Charges and Use of System Charges are
calculated on the assumption that NGC Assets will not require
replacement until the expiry of the Replacement Period applicable
to each NGC Asset concerned. Such Replacement Periods have been
agreed between NGC and the User. For the avoidance of doubt,
they have been prepared for accounting purposes and carry no
implication that they represent the actual useful lives of such
assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of which varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to replace such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC
Asset, NGC shall replace such NGC Asset if requested to do so by
the User or if in NGC's reasonable opinion it is necessary to do
so to enable NGC to comply with its Licence obligations. Unless
so replaced, NGC shall keep the NGC Asset in service. In the
event that it is left in service the User shall pay Connection
Charges in respect of such NGC Asset calculated by reference to
Net Asset Value derived from a revaluation of the asset by NGC
(which in the reasonable opinion o NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. Termination Amounts
4.1 Until the end of the Financial Year in which the
termination occurs the User shall pay to NGC the Connection
charges and Use of System Charges for which the User is liable in
full. Where the User has a Connection Site the User shall at the
end of such Financial Year pay to NGC a sum equal to the
following:-
(i) the then current Net Asset Value of the NGC Assets
at the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing
such NGC Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another connection Site and renders and receives a Connection
Charge therefore NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to re-
use such NGC Assets where it is economic to do so. Upon request
and at the cost of the User, NGC shall issue a certificate no
more frequently than once each calendar year indicating whether
or not such NGC Assets have or have not been so re-used.
5. Variation of Charges by NGC during the Financial Year
If NGC is notified of a reduced Demand forecast by a
PES or STS from the forecast submitted under paragraph 1.2 of
this Appendix and is also notified of a corresponding increase in
such a Demand forecast by another PES or STS NGC shall vary the
Use of System charges due from the User notifying the reduction
such that the charges payable reflect the revised forecast within
30 days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect from the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. Deductions
In respect of any NGC Engineering Charges which have
been paid by the User in connection with a Connection Application
or under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one third of such
NGC Engineering Charges.
APPENDIX F1
SITE SPECIFIC TECHNICAL CONDITIONS
Agreed Ancillary Services
[Black Start Capability
Gas Turbine Unit Fast Start
Synchronous Compensation
Pumped Storage Unit Spinning-in-Air
Pumped Storage
Pumped Storage Plant Fast Start
Demand Reduction
Adjustment to Pumped Storage Unit Pumping Programme
Hot Standby]
APPENDIX F2
(NOT USED)
APPENDIX F3
SITE SPECIFIC TECHNICAL CONDITIONS
Special Automatic Facilities
(a) NGC Transmission System to Generating Unit Intertripping schemes
(b) NGC Transmission System to Demand Intertripping schemes
(c) NGC Transmission System to Directly Connected Customers Intertripping
schemes
(d) Auto open/close schemes
(e) System splitting or islanding schemes which impact on the User's
system or plant.
<PAGE>
APPENDIX F4
SITE SPECIFIC TECHNICAL CONDITIONS
Protection and Control Relay Settings/Fault Clearance Times
Pro-formas attached
APPENDIX F5
SITE SPECIFIC TECHNICAL CONDITIONS
Load Shedding Frequency Sensitive Relays
This only applies to Suppliers. The manner in which Users Demand
subject to low frequency disconnection is to be split into
discrete MW Groups is set down in OC6 and is to be achieved for
Winter 1990/91.
The settings and MW blocks applicable to Winter 1989/90 were as
set down below. The transition from the 1989/90 settings to the
1990/91 settings is to be coordinated through NGC to ensure that
a viable overall scheme exists throughout the period.
<PAGE>
APPENDIX F6
SITE SPECIFIC TECHNICAL CONDITIONS
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:-
1.1.1 NGC may resign as Operator of such Energy
Metering Equipment on giving no less than 12 months' notice in
writing; and
1.1.2 the User may remove NGC as Operator upon giving
no less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as Operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any of the Energy Metering System owned by
NGC for which the User is Registrant NGC shall charge and the
User shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent serious
damage to property proximate to the Energy Metering Equipment or
to the extent that such action is authorised under the Master
Agreement or any other agreement between NGC and the User).
1.4 Pulse date
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and equipment as maybe
reasonably necessary therefor.
<PAGE>
EXHIBIT 2
DATED 19
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
- -----------------------------------------------------------------
SUPPLEMENTAL AGREEMENT TYPE 2
- -----------------------------------------------------------------
(in respect of New Connection Sites of Users
which have not been Commissioned at the
Transfer Date)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation, Construction
2 Carrying out of the Works
3 Delays
4 Liquidated Damages
5 Approval to Connect/Energise/Become Operational
6 Independent Engineer
7 Connection/Energisation/Becoming Operational
8 The Connection Site and NGC Assets
9 Connection Charges
10 Use of System Charges
11 Charging Rules
12 Ancillary Services
13 (Clause deleted)
14 Special Automatic Facilities
15 Protection and Control Relay Settings
16 Safety Rules
17 Other Site Specific Technical Conditions
18 Metering
19 Joint Systems Incidents
20 Term
21 Emergency Deenergisation
22 Deenergisation and Disconnection
23 Notice to Decommission or Disconnect
24 Disconnection
25 Decommissioning
26 Master Agreement
27 Variations
Appendix A NGC Assets/Connection Site
Appendix B Connection Charges/Payment
Appendix C Zone/Registered Capacity/Peak Half-Hours/Estimated Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix F1 Site Specific Technical Conditions - Agreed Ancillary Services
Appendix F2 (Not used)
Appendix F3 Site Specific Technical Conditions - Special Automatic Facility
Appendix F4 Site Specific Technical Conditions - Protection and Control
Relay Settings/Fault Clearance
Appendix F5 Site Specific Technical Conditions - Other Technical Conditions
Appendix F6 Site Specific Technical Conditions - Metering
Appendix G NGC Asset Works
Appendix H NGC Reinforcement Works
Appendix I Users Works
Appendix J Construction Programme
Appendix K Liquidated Damages
Appendix L Independent Engineer
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the day of
19
BETWEEN
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SEI 9JU ("NGC", which
expression shall include its successors and/or permitted
assigns); and
(2) [ ] a company registered in [ ]
with number [ ] whose registered office is at [
] (the "User", which expression shall include its successors
and/or permitted assigns)
WHEREAS
(A) [By an Accession Agreement dated [ ]] The
User entered into the Master Connection and Use of System
Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement
and the following words and expressions shall have the meanings
shown:
"Charging Date" the date upon which the
Connection Site is first Commissioned and is available for use
by the User.
"Commissioning Programme
Commencement Date" the date specified in the
Construction Programme for commencement of the Commissioning
Programme or any substituted date fixed under the terms of the
relevant Supplemental Agreement.
"Commissioning Programme" the programme to be determined
pursuant to Sub-Clause 2.9 of this Supplemental Agreement.
"Completion Date" the date calculated by adding
the period specified in the Commissioning Programme for the
execution of the Commissioning Programme to the Commissioning
Programme Commencement Date or any substituted date fixed under
this Supplemental Agreement.
"Connected Planning Data" data required pursuant to the
Planning Code which replaces data containing estimated values
assumed for planning purposes by validated actual values and
updated estimates for the future and by updated forecasts for
forecast data items.
"Construction Programme" the agreed programme for the
Works to be carried out by NGC and the User set out in detail in
Appendix J to this Supplemental Agreement including the supply by
one to the other of data during the period of the Works.
"Independent Engineer" the engineer specified in
Appendix L to this Supplemental Agreement or such other engineer
as may from time to time be agreed between the Parties.
"Liquidated Damages" either:
(i) where payment is to be made to
NGC, a sum equivalent to NGC's Connection Charges and applicable
Use of System Charges that would otherwise have been payable on
account of the relevant period; or
(ii) where payment is to be made to
the User the sum specified in or calculated pursuant to Appendix
K to this Supplemental Agreement.
"NGC Asset Works" the works necessary for
construction and installation of the NGC Assets at the Connection
Site specified in Appendix G to this Supplemental Agreement.
"NGC Works" the NGC Asset Works and
the NGC Reinforcement Works.
"NGC Reinforcement Works" means those works other than
the NGC Asset Works which in the reasonable opinion of NGC are
necessary to extend or reinforce the NGC Transmission System in
relation to and prior to the connection of the User's Equipment
at a New Connection Site and which are specified in Appendix H to
this Supplemental Agreement.
"Practical Completion Date" the date upon which the
Connection Site is Commissioned.
"User's Works" those works necessary for
installation of the User's Equipment which are specified in
Appendix I to this Supplemental Agreement.
"Works" the NGC Asset Works, the User's
Works and the NGC Reinforcement Works.
2. CARRYING OUT OF THE WORKS
2.1 Forthwith following the date of this Agreement NGC and the
User shall agree the Safety Rules and Local Safety Instructions
to apply during the Construction Programme and Commissioning
Programme.
2.2 Forthwith following the date of this Agreement NGC shall use
its best endeavours to obtain in relation to the NGC Asset Works
and the NGC Reinforcement Works, and the User shall use its best
endeavours to obtain in relation to the User's Works, all such
planning and other statutory consents and all wayleave,
easements, rights over or interests in land or any other consent
or permission of any kind as shall be necessary to enable the
parties to carry out the Works. Each shall give advice and
assistance to the other to the extent reasonably required by the
other in the furtherance of these obligations. Further each
Party shall, so far as it is legally able to do so, grant to the
other all such wayleave, easements, rights over or interests (but
not estates) in land or any other consents reasonably required by
the other in order to be enable the Works to be completed and to
enable that other to carry out its obligations to the other under
this Supplemental Agreement and in all cases subject to such
terms and conditions as are reasonable.
2.3 The User shall pay to NGC within 28 days of the date of its
invoice therefor all NGC's Engineering Charges and proper and
reasonable out-of- pocket ancillary expenses in seeking the
planning and other statutory consents and all wayleave,
easements, rights over or interests in land or other consents or
permissions the subject of Sub-Clause 2.2 (which process the User
acknowledges may include planning inquiries or appeals). NGC
shall keep the User informed of the level of such charges and
expenses being incurred which shall not exceed pounds[ ] without
the User's consent.
2.4 Prior to commencement of the NGC- Asset Works and NGC
Reinforcement Works the User shall have the right to terminate
this Agreement upon giving 7 days notice in writing to NGC in
which event NGC shall return the unused balance (if any) of any
NGC Engineering Charges advanced by the User to NGC in relation
to the Connection Site.
2.5 Both Parties shall be entitled to sub contract the carrying
out of their respective parts of the Works. The User or any
contractor on its behalf shall be responsible for commencing and
for carrying out the User's Works (to such stage of completion as
shall render them capable of being Commissioned) in accordance
with the Construction Programme by the Commissioning Programme
Commencement Date and NGC or any contractor on its behalf shall
be responsible for commencing and carrying out the NGC Asset
Works and the NGC Reinforcement Works (to such stage of
completion as shall render them capable of being Commissioned) in
accordance with the Construction Programme by the Commissioning
Programme Commencement Date.
2.6 If at any time during the period prior to the Practical
Completion Date a Party (in this Sub-Clause, the "Requesting
Party") wishes to make any addition to or omission from any of
the Requesting Party's Works being undertaken (which addition or
omission is such as may reasonably be expected materially to
affect the other Party's ability to perform its obligations under
this Supplemental Agreement) or to vary the Construction
Programme or the Commissioning Programme for whatever reason
(including by reason of inaccurate data furnished by the other
Party (in this Sub-Clause, the "Requested Party")) the Requesting
Party shall give written notice to the Requested Party requesting
such change or variation which specifies the precise alteration
or variation which it is proposing, including an estimate of any
delay necessary to enable the Parties to carry out the varied
Works. As quickly as practicable and in any event within 14 days
of receipt of such notice by the Requested Party it shall by
written notice to the Requesting Party specify in the form of an
offer:
(i) any corresponding changes or variations the Requested
Party considers in its reasonable opinion are necessary to the
Requested Party's Works; and
(ii) corresponding changes or variations the Requested Party
considers in its reasonable opinion are necessary to the
Construction Programme including to the Commissioning Programme
Commencement Date and Completion Date;
(iii) appropriate and/or alternative rights to those
referred to in Sub-Clause 2.2;
and
(iv) corresponding variations to the other terms of this
Supplemental Agreement which the Requested Party considers in
its reasonable opinion are necessary.
The Requesting Party shall have 28 days from the date of
receipt of the Requested Party's offer under this Sub-Clause 2.6
to give written notice to the Requested Party accepting the
Requested Party's offer. The Requested Party shall not
unreasonably withhold or delay agreement to any amendments to
such offer proposed by the Requesting Party. If the Requested
Party's offer (including any amended offer) under this Sub-Clause
2.6 is so accepted by the Requesting Party the Works, the
Construction Programme, the Commissioning Programme, the
Commencement Date, the Completion Date and this Supplemental
Agreement shall be deemed automatically amended with effect from
the date of receipt of such acceptance by the Requested Party so
as to incorporate the terms of the Requested Party's offer
(including any changes proposed by the Requesting Party which
have been accepted by the Requested Party) under this Sub-Clause
2.6. If the Parties are not able to agree on the terms of the
Requested Party's offer within such 14 day period either Party
may refer the matter to the Independent Engineer pursuant to
Clause 7 hereof. The Parties shall diligently proceed with the
Works and Construction Programme in accordance with their terms
as amended or varied from time to time, to the extent reasonable
and practicable having regard to the nature of any such amendment
or variation.
2.7 The Parties shall continuously liaise throughout the
Construction Programme and Commissioning Programme and each shall
provide to the other all information necessary to assist the
other in performance of that other's part of the Works, and shall
use all reasonable endeavours to coordinate and integrate their
respective part of the Works. There shall be on-site meetings
between representatives of the parties not less than once every
calendar month. Each Party shall deliver to the other Party a
written report of progress during each calendar quarter within 7
days of the end of each quarter.
2.8 During the period of and at the times and otherwise as
provided in the Construction Programme and the Commissioning
Programme NGC and the User will each allow the other, its
employees, agents, suppliers, contractors and sub-contractors
necessary access to its own site to enable that other to carry
out the NGC Asset Works or User's Works but not so as to disrupt
or delay the construction and completion of the other's works on
the said sites or the operation of the other's Plant and
Apparatus located thereon, such access to be in accordance with
any reasonable regulations relating thereto made by the site
owner or occupier.
2.9 Not later than [6] weeks prior to the Commissioning
Programme Commencement Date the User shall provide NGC with a
draft commissioning programme. NGC shall, as quickly as
practicable and in any event within 21 days of receipt thereof,
determine whether or not to approve the proposed commissioning
programme (which approval shall not be unreasonably withheld or
delayed) and shall either notify the User of its approval or, in
the event that NGC reasonably withholds its approval, notify the
User of any charges or variations to the proposed commissioning
programme recommended by NGC. If the User does not accept the
form of commissioning programme submitted by NGC any dispute
shall be referred to the Independent Engineer for determination.
The Commissioning Programme approved by NGC or determined by the
Independent Engineer as the case may be shall be implemented by
the Parties or their contractors in accordance with its terms.
3. DELAYS
3.1 If prior to the Practical Completion Date a Party (in this
Sub-Clause, "the Affected Party') shall be delayed in carrying
out any of the Affected Party's Works (including their
commissioning) by reason of any act, default or omission on the
part of the other Party (in this Sub-Clause, the "Defaulting
Party") or the Defaulting Party's employees, agents, contractors
or sub-contractors or of an event of Force Majeure, the Affected
Party shall be entitled to have such later date or dates fixed as
the Commissioning Programme Commencement Date and/or (as the case
may be) the Completion Date as may be fair and reasonable in the
circumstances provided that it notifies the Defaulting Party in
writing of such act, default or omission or event of Force
Majeure within [28] days thereof together with an estimate of the
proposed delay which it will cause the Affected Party. In the
event of a dispute between the Parties over what is or are any
fair and reasonable new date or dates to be fixed in the
circumstances this shall be promptly referred to and determined
by the Independent Engineer. Once the new date or dates are
fixed the Construction Programme and/or Commissioning Programme
shall be deemed automatically amended as appropriate.
3.2 If either Party shall have reason to believe that he is
being delayed or will be delayed in carrying out that Party's
Works for any reason (whether it is one entitling him to the
fixing of a new date under Sub-Clause 3.1 or not) he shall
forthwith notify the other party in writing of the circumstances
giving rise to the delay and of the extent of the actual and/or
anticipated delay.
4. LIQUIDATED DAMAGE
4.1 Each Party shall each give written notice to the other
declaring its readiness to commence the Commissioning Programme
when this is the case.
4.2 The Commissioning Programme shall commence forthwith once
both Parties have given written notice under Sub-Clause 4.I.
4.3 To the extent that the date of actual commencement of the
Commissioning Programme is later than the Commissioning Programme
Commencement Date due to the failure of one Party only to give
notice under Sub-Clause 5.1 in time such Party shall pay to the
other Party Liquidated Damages for each day that the date of
actual commencement of the Commissioning Programme is later than
the Commissioning Programme Commencement Date. It is declared
and agreed that such Liquidated Damages shall cease to be payable
in respect of any period after the date of actual commencement of
the Commissioning Programme.
4.4 The Works shall be deemed to have been Commissioned on the
date that the Independent Engineer certifies in writing that the
Commissioning Programme has been completed.
4.5 If the Practical Completion Date is later than the
Completion Date either Party if and to the extent that it is
responsible for delayed completion of the Commissioning Programme
(such responsibility and/or its extent to be determined by the
Independent Engineer failing agreement between the Parties) shall
pay to the other Party Liquidated Damages for each day that the
Practical Completion Date is later than the Completion Date.
4.6 Liquidated Damages payable under Sub-Clauses 4.3 and 4.5
shall accumulate on a daily basis but shall be payable monthly.
On or before the 15th day of each month the Party due to receive
Liquidated Damages shall send to the other Party ("the Paying
Party") a statement of the Liquidated Damages which have accrued
due in the previous calendar month. The Paying Party shall in
the absence of manifest error pay the Liquidated Damages shown on
the statement by the end of the calendar month in which the
statement is received by the Paying Party.
4.7 The payment or allowance of Liquidated Damages pursuant to
this Clause 4 shall be in full satisfaction of either Party's
Liability for failure to perform its respective obligations by
the Commissioning Programme Commencement Date and/or the
Completion Date.
5. APPROVAL TO CONNECT/ENERGISE/BECOME OPERATIONAL
5.1 Not later than [4] months prior to the Completion Date or by
such other time as may be agreed between the Parties the Parties
shall prepare and submit the Operation Diagrams and Site Common
Drawings required to be prepared and submitted by each of them
respectively under CC 7.4.4 and 7.4.6.
5.2 Not later than [3] months prior to the Completion Date or by
such other time as may be agreed between the Parties the-.Parties
shall prepare and submit the Operation Diagrams and Site Common
Drawings required to be prepared and submitted by each of them
respectively under CC 7.4.5 and 7.4.7
5.3 Not later than [3] months prior to the expected Completion
Date or by such other time as may be agreed between the Parties
each Party shall submit to the other:
(i) data within its possession needed to enable the
completion of Appendices F3 and F4; and
(ii) evidence reasonably satisfactory to NGC that the Users
Equipment complies or will on Completion comply with the
provisions of Clauses 12, 17.1 and 18.
5.4 Not later than [8] weeks prior to the - expected Completion
Date or by such other time as may be agreed between the Parties
the each Party shall submit to the other:
(i) information to enable preparation of Site
Responsibility Schedules complying with the provisions of
Appendix [11 to the Connection Conditions together with a list of
managers who have been duly authorised by the User to sign such
Site Responsibility Schedules on the User's behalf;
(ii) a list of Safety Coordinators pursuant to Operating
Code 8 and a list of telephone numbers for Joint System Incidents
at which senior management representatives nominated for the
purpose can be contacted; and
(iii) a list of the telephone numbers for the facsimile
machines referred to in CC 6.5.8.
5.5 Not later than 30 days prior to the expected Completion Date
the User shall submit a statement of readiness to complete-the
Commissioning Programme to NGC together with relevant Connected
Planning Data and a report certifying to NGC that, to the best of
the information, knowledge and belief of the User, all relevant
Connection Conditions applicable to the User have been considered
and complied with. If NGC considers that it is necessary, it
will require this report to be prepared by the Independent
Engineer at NGC's sole cost and expense. The report shall
incorporate if requested by NGC type test reports and test
certificates produced by the manufacturer showing that the User's
Equipment meets the criteria specified in CC6.
6. INDEPENDENT ENGINEER
The Parties agree and shall procure that when the
Independent Engineer is appointed he shall act as an expert and
not as an arbitrator and shall decide those matters referred or
reserved to him under this Supplemental Agreement by reference to
Good Industry Practice using his skill, experience and knowledge
and with regard to such other matters as the Independent Engineer
in his sole discretion considers appropriate. All references to
the Independent Engineer shall be made as soon as reasonably
practicable and in any event within 14 days of the occurrence of
the dispute to be referred to the Independent Engineer. The
Parties shall promptly supply the Independent Engineer with such
documents and information as he may request when considering such
question. The Independent Engineer shall use his best endeavours
to give his decision upon the question before him as soon as
possible following its referral to him. The parties shall share
equally the fees and expenses of the Independent Engineer. The
Parties expressly acknowledge that submission of disputes for
resolution by the Independent Engineer does not preclude
subsequent submission of disputes for resolution by arbitration
under Clause 26 of the Master Agreement. Pending any such
arbitration the Parties shall treat the Independent Engineer's
decision as final and binding.
7. CONNECTION/ENERGISATION/BECOMING OPERATIONAL
7.1 Right to become Operational
NGC shall connect and Energise the User's Equipment at the
Connection Site during the course of and in accordance with the
Commissioning Programme and upon compliance by the User with the
provisions of Clause 5 NGC shall forthwith notify the User in
writing that it has the right to become Operational.
7.2 Right to remain connected
Subject to the other provisions of this Agreement and the
Grid Code the User shall have the right for the User's Equipment
to remain connected to the NGC Transmission System at the
Connection Site for the duration of this Supplemental Agreement.
7.3 Right to be and remain Energised and Operational
Subject to the other provisions of this Agreement and the
Grid Code the User shall have the right for the User's Equipment
at the Connection Site to be and remain Energised and Operational
for the duration of this Supplemental Agreement.
7.4 Obligation to remain connected
Without prejudice to its rights to make Modifications to the
User's Plant pursuant to the Master Agreement and subject to the
provisions of sub-clause 21.2 and the other provisions of this
Agreement and the Grid Code the User shall keep the User's
Equipment at the Connection Site connected to the NGC
Transmission System until Decommissioning or Disconnection is
permitted pursuant to this Supplemental Agreement.
7.5 Registered Capacity
The User if a Generator shall not operate its User's
Equipment such that any of it exceeds its Registered Capacity
save as expressly permitted or instructed pursuant to the Grid
Code or the Fuel Security Code or as may be necessary or
expedient in accordance with Good Industry Practice.
7.6 Data
Data of technical or operational nature collected, recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefore.
7.7 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall use all reasonable endeavours to maintain
the NGC Assets at the Connection Site in the condition necessary
to render the same fit for the purpose of passing power up to the
Maximum Export Capacity and/or the Connection Site Demand
Capability as appropriate between the User's Equipment and the
NGC Transmission System.
7.8 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall accept into the NGC Transmission System at
the Connection Site power generated by the User up to the Maximum
Export Capacity except to the extent (if any) that NGC is
prevented from doing so by transmission constraints which could
not be avoided by the exercise of Good Industry Practice by NGC.
7.9 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall transport a supply of power to the
Connection Site through the NGC Transmission System up to the
Connection Site Demand Capability except to the extent (if any)
that NGC is prevented from doing so by transmission constraints
or by insufficiency of generation which, in either case, could
not have been avoided by the exercise of Good industry Practice
by NGC.
7.10 Subject to the provisions of the Grid Code each Party shall
be entitled to plan and execute outages of parts of its System or
Plant or Apparatus at any time from time to time.
8. THE CONNECTION SITE AND NGC ASSETS
The Connection Site and NGC Assets to which this
Supplemental Agreement relates are more particularly described in
Appendix A.
9. CONNECTION CHARGES
Subject to the provisions of Clause 6 of this Supplemental
Agreement the User shall pay with effect from the Charging Date
the Connection Charges set out in Appendix B which are calculated
by reference to the NGC Assets specified in Appendix A in
accordance with the provisions of Appendix B.
10. USE OF SYSTEM CHARGES
Subject to the provisions of Clause -6 of this Supplemental
Agreement the User shall pay with effect from the Charging Date
to NGC the Use of System Charges set out in Appendix D payable in
accordance with the provisions of Appendix D.
11. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
12. ANCILLARY SERVICES
The User shall provide the Agreed Ancillary Services set out
in Appendix Fl in accordance with the Grid Code.
13. GRID CODE NON-COMPLIANCE
(Clause deleted)
14. SPECIAL AUTOMATIC FACILITIES
NGC and the User shall operate respectively the NGC
Transmission System and the User System in accordance with the
schemes set out in Appendix F3 hereto.
15. PROTECTION AND CONTROL RELAY SETTINGS/FAULT CLEARANCE TIMES
NGC and the User shall record the respective protection and
control relay settings and fault clearance times to be operated
by each of them in documents in the format set out in Appendix F4
and shall operate them accordingly.
16. SAFETY RULES
16.1 Safety Rules:
NGC and the User will each supply to the other a copy of
their Safety Rules current from time to time except where already
supplied under another Supplemental Agreement (save that this
exception shall not apply to site specific Safety Rules) and also
a copy of the Local Safety Instructions applicable at the
Connection Site from time to time except where supplied under
another Supplemental Agreement.
16.2 Decommissioning
Decommissioning of Plant and/or Apparatus at the Connection
Site will be undertaken in accordance with the procedures of the
Safety Rules of whichever of NGC or the User applied when the
Plant and/or Apparatus concerned was in commission.
17. OTHER SITE SPECIFIC TECHNICAL CONDITIONS
17.1 Initial Obligation
The User shall ensure that on the Completion Date the User's
Equipment complies with the site specific technical conditions
set out in Appendix F5.
17.2 The User shall use all reasonable endeavours to ensure
during the period of this Supplemental Agreement that the User's
Equipment shall continue to comply with the site specific
technical conditions set out in Appendix F5-
17.3 If the User or NGC wishes to modify, alter or otherwise
change the site specific technical conditions or the manner of
their operation:
(i) under Appendix F4 it may do so upon obtaining the
agreement of the other Party such agreement not to be
unreasonably withheld.
(ii) under Appendix Fl, F3, F5 or F6 this shall be deemed to
be a Modification for the purposes of the Master Agreement.
18. METERING
The provisions of Appendix F6 shall have effect.
19. JOINT SYSTEMS
Each Party confirms to the other that its Senior Management
Representatives whose names have been nominated and notified to
the other pursuant to OC9 are fully authorised to make binding
decisions on its behalf for the purposes of OC9.
20. TERM
Subject to the provisions for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User's Equipment
is Disconnected from the NGC Transmission System at the
Connection Site in accordance with Clauses 22 or 23 hereof.
21. EMERGENCY DEENERGISATION
21.1 Emergency Deenergisation by NGC
If, in the reasonable opinion of NGC, the condition or
manner of operation of the NGC Transmission System or the User's
System poses an immediate threat of injury or material damage to
any person or to the Total System or to any User's System or to
the NGC Transmission System, NGC shall have the right to
Deenergise the User's Equipment if it is necessary or expedient
to do so to avoid the occurrence of such injury or damage.
21.2 Emergency Deenergisation by a User
If, in the reasonable opinion of the User, the condition or
manner of operation of the NGC Transmission System, the Total
System or any other User's System, poses an immediate threat of
injury or material damage to any person or to the User's System
the User shall have the right to Deenergise the User's Equipment
if it is necessary or expedient to do so to avoid the occurrence
of such injury or damage.
21.3 Reenergisation:
NGC or, as the case may be, the User shall Reenergise the
User's Equipment at the Connection Site as quickly as practicable
after the circumstances leading to any Deenergisation under this
Clause 16 have ceased to exist.
22. DEENERGISATION AND DISCONNECTION
22.1 Breach by the User
If the User shall be in breach of any of the provisions of
this Supplemental Agreement or of the provisions of the Master
Agreement enforcing the provisions of the Grid Code (but subject
always to Sub-Clauses 9.3 and 9.4 of the Master Agreement) and
such breach causes reasonably be expected to cause a material
adverse effect on the business or condition of NGC or other Users
or the NGC Transmission System or Users Systems then NGC may:
(i) where the breach is capable of remedy, give notice to
the User specifying in reasonable detail the nature of the breach
and requiring the User within 28 days after receipt of such
notice to remedy the breach or within any longer period agreed
between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why NGC is of the reasonable opinion
that the breach is incapable of remedy and requiring the User
within 5 Business Days after receipt of such notice to undertake
to NGC not to repeat the breach.
22.2 Grid Code Procedures
Whenever NGC serves a notice on the User pursuant to
Sub-Clause 22. 1, NGC and the User shall discuss in good faith
and without delay the nature of the breach and each shall use all
appropriate procedures available to it under the Grid Code
(including testing rights and the procedures set out in OC5
(Testing and Monitoring)) in an attempt to establish as quickly
as reasonably practicable a mutually acceptable way of ensuring
future compliance by the User with the relevant provision of the
Grid Code.
22.3 De-Energisation
22.3.1 If:
(a) the User fails to give or comply with any valid notice
served on it by NGC in accordance with Sub-Clause 22.1(ii) or is
in breach of any undertaking given in accordance with Sub-Clause
22.1(ii) and such breach causes or can be reasonably expected to
cause a material adverse effect on the business or condition of
NGC or other Users or the NGC Transmission System or User
Systems; or
(b) five Business Days have elapsed since the date of any
valid notice served on the User in accordance with Sub-Clause
22.2(ii) and no undertaking is given by the User in accordance
with Sub-Clause 22.2(ii);
NGC may, provided NGC has first complied with OC5 Monitoring
and Testing if appropriate De-Energise the User's Equipment upon
the expiry of at least 48 hours prior written notice to the User,
provided that at the time of expiry of such notice the breach
concerned remains unremedied and that neither Party has referred
the matter to the Dispute Resolution Procedure set out in Clause
27 of the Master Agreement. in such event NGC may De-Energise
forthwith following completion of the Dispute Resolution
Procedure and final determination of the dispute in NGC's favour.
22.3.2 If the User fails to comply with the Grid Code and the
Director makes a final order or a confirmed provisional order as
set out in Sections 25 and 26 of the Act against the User in
respect of such non-compliance which order that User breaches NGC
may DeEnergise the User's Equipment upon the expiry of at least
48 hours prior written notice to the User provided that at the
time of expiry of the notice the User fails to comply with the
order.
22.4 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 22.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may De-Energise the User's Equipment
upon the expiry of at least 12 hours prior written notice to the
User, provided that at the time of expiry of such notice the
breach concerned remains unremedied.
22.5 Reenergisation Disputes
If, following any De-Energisation pursuant to this Clause
22, the User applies to NGC for the User's Equipment to be Re
Energised and is refused or is offered terms which the User does
not accept, this shall be recognised as a dispute over the terms
for connection and use of system which the User may refer to the
Director for determination under the NGC Transmission Licence.
If the User accepts any terms offered by NGC or settled by the
Director pursuant to any such reference, NGC shall Re-Energise
the User's Equipment forthwith after any request from the User
for NGC to do so.
22.6 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 22 remains unremedied at the expiry of at least_6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:
(a) all disputes arising out of the subject-matter to this
Clause 22 which are referred to the Dispute Resolution procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to Sub-Clause
22.5 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
22.7 Disconnection
Once NGC has given a valid notice of an event of default
Pursuant to Sub-Clause 22.6 NGC may give notice of termination to
that User whereupon this Supplemental Agreement shall terminate
and:
(i) NGC shall Disconnect all the User's Equipment at the
Connection Site and NGC and the User concerned shall by
arrangement between them remove any of the User's Equipment and
NGC Assets on the other Party's land within 6 months of the date
of termination or such longer period as may be agreed between the
Parties; and
(ii) that User shall be obliged to pay to NGC forthwith the
Termination Amounts applicable to the Connection Site.
23. NOTICE TO DECOMMISSION OR DISCONNECT
Without prejudice to Sub-Clause 21.2 the User shall give to
NGC not less than 6 months written notice of any intention of the
User either to Decommission the User's Equipment or to Disconnect
the User's Equipment.
24. DISCONNECTION
If notice to Disconnect is given by the User under Clause 23
the User may upon expiry of the period specified in such notice
and not before Disconnect the User's Equipment. At the expiry of
such period this Supplemental Agreement shall terminate. The
User shall pay to NGC all Termination Amounts applicable to the
Connection Site within 28 days after termination of this
Agreement. Within 6 months of the date of such termination or
such longer period as may be agreed between the Parties the
Parties shall by arrangement with each other remove any of the
User's Equipment and NGC Assets on the other Party's land.
25. DECOMMISSIONING
If notice to Decommission is given by the User under Clause
23 the User may upon expiry of the period specified in such
notice and not before, Decommission the User's Equipment. This
Supplemental Agreement shall not terminate and:
(i) until the end of the Financial Year in which the
Decommissioning takes place all Connection Charges and Use of
System Charges payable by the User under this Supplemental
Agreement shall continue to be payable in full; and
(ii) following the end of the Financial Year in which the
Decommissioning takes place the Use of System Charges payable by
the User under this Supplemental Agreement shall no longer @e
payable by the User but the Connection Charges so payable shall
continue to be payable.
If and when the User wishes to recommission it shall give
NGC not less than 3 months written notice unless a shorter period
is agreed between the User and NGC.
26. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental Agreement
as if set out in full herein.
27. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order or directions made pursuant to the Act or a Licence
or as a result of settling any of the terms hereof and the User
hereby authorises and instructs NGC to make any such amendment on
its behalf and undertakes not to withdraw, qualify or revoke such
authority or instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
[the USER) )
By )
<PAGE>
APPENDIX A
NGC'S ASSETS/CONNECTION SITE
COMPANY :
CONNECTION SITE :
TYPE :
NGC ASSETS :
QUANTITY VOLTAGE DESCRIPTION AGE (Years)
SCHEMATIC DIAGRAM :
AREA :
<PAGE>
APPENDIX B
CONNECTION CHARGES/PAYMENT
1) CONNECTION CHARGES
COMPANY :
CONNECTION :
SITE
TYPE :
CHARGES : pounds for the period from 1st
April 1990 to 31st March 1991 and thereafter as determined in
accordance with the Charging Rules.
2) PAYMENT
The charges shall be payable in 12 equal monthly instalments
as specified in Clause 14 of the Master Agreement.
<PAGE>
APPENDIX C
ZONE/REGISTERED CAPACITY/PEAK HALF HOURS/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND
ZONE :
a. GENERATION:
SET TYPE/FUEL REGISTERED CAPACITY MW
b. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half -hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
c. In the Financial Year 1st April 1990 to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial Year and the Energy produced.
d. ESTIMATED DEMAND for the period between 1st April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
______________________________________MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1) TYPE OF CHARGE: SYSTEM SERVICE
Demand related
pounds...... in respect of the period from 1st April 1990 to
31st March 1991 payable in 12 equal monthly instalments subject
to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds... per KW and..... KW of
Estimated Demand as set out in Appendix C.
2) TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds............ in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds... per KW and..... KW of
Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds.... in respect of the period from 1st April 1990 to
31st March 1991 payable in 12 equal monthly instalments subject
to adjustment in accordance with the Charging Rules based upon a
charge of : pounds.... per KW Registered Capacity and .... KW being
the Registered Capacity as set out in Appendix C.
C. Energy Related
pounds....... per KWh in respect of each KWh of Energy
entering the Total System in the period from 31st March 1990 to
31st March 1991 payable as described in Clause 14 of the Master
Agreement.
Payment shall be made in accordance with Clause 14 of the Master
Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. USE OF SYSTEM CHARGES - GENERAL AND DATA REQUIREMENTS
1.1 NGC's Demand related Use of System Charges are calculated by
reference to Demand (Active Power) attributable to each Grid
Supply Point excluding that Demand (Active Power) met by embedded
Generating Units which is to be paid for otherwise than pursuant
to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 31st December in each Financial Year
the User shall supply NGC with such data as NGC may from time to
time reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 3 1st December in each Financial
Year;
(i) Users who are Public Electricity Suppliers shall
supply to NGC a forecast for the following Financial Year of the
following:
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half -hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable
to each Grid Supply Point equal to the average of the forecasts
of PES Supply Business Demand under Annual Average Cold Spell
(ACS) Conditions attributable to such Grid Supply Point for each
of a number of peak half-hours as notified by NGC to the User
under paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply
to NGC a forecast for the following Financial Year of the STS
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of STS Demand attributable to such Grid Supply
Point for each of a number of peak half-hours as notified by NGC
to the User under paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of such Station Demand (Active Power) attributable
to such Grid Supply Point far each of a number of peak half
- -hours as notified by NGC to the User under paragraph 2.1 of this
Appendix E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System Charges shall be
calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC shall:-
(i) determine from meter readings of Energy Metering
Equipment the actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year; and
(ii) shall compare the User's highest Registered Capacity
during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of the
actual position determined in accordance with paragraph 1.3.2 the
amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payable by the
User under this Supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall
then compare the Actual Amount with the amount of Demand related
or Capacity related Use of System Charges (as the case may be)
paid during each month during that Financial Year by the User
under this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement and
send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information from
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC shall
send the User an invoice in relation to any sums shown by the
reconciliation statement to be due to NGC and interest thereon
calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 31st March in such
Financial Year.
1.3.6 In respect of each month during that Financial Year:
(a) the User shall, following receipt of an appropriate
invoice, pay to NGC an amount equal to the amount (if any) by
which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate invoice,
repay to the User an amount equal to the amount (if any) by which
the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the other
on such amounts from the Payment Date applicable to the month
concerned until the date of actual payment of such amounts (which
shall not be later than 31st March in such Financial Year). Such
interest shall be calculated on a daily basis at the rate equal
to the base rate of Barclays Bank PLC for the time being and from
time to time during such period.
2. REVISION OF CHARGES
2.1 To the extent permitted by the Transmission Licence NGC may
revise its Connection Charges and Use of System Charges or the
basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the User of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new asset
register during the course of the Financial Year ending 31st
March 1991. As a result, NGC shall have the right to vary the
asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:
(a) NGC has first consulted the User in advance in good
faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set out in
the statements required by Condition 10(2)D of the Transmission
Licence, the form of which has been approved by the Director.
Such asset reallocation shall be effective from 1st April
1991 and the provisions of Appendices A and B shall be amended
automatically (and a copy sent to the User) to reflect such
reallocation with effect from such date.
2.3 Subject to the provisions of paragraph 3.2 below if in the
reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective the provisions of
Sub-Clauses 11.2 and 11.4 shall apply mutatis mutandis.
Following any such variation the provisions of Appendices A and B
shall be amended automatically (and a copy sent to the User) to
reflect such variation with effect from the date such variation
comes into effect.
3. REPLACEMENT OF NGC ASSETS
3.1 Appendix A specifies the age of each of the NGC Assets at
the Connection Site at the date of this Supplemental Agreement.
NGC Connection Charges and Use of System Charges are calculated
on the assumption that NGC Assets will not require replacement
until the expiry of the Replacement Period applicable to each NGC
Asset concerned. Such Replacement Periods have been agreed
between NGC and the User. For the avoidance of doubt, they have
been prepared for accounting purposes and carry no implication
that they represent the actual useful lives of such assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of such varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to reflect such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC Asset,
NGC shall replace such NGC Asset if requested to do so by the
User or if in NGC's reasonable opinion it is necessary to do so
to enable NGC to comply with its Licence obligations. Unless so
replaced, NGC shall keep the NGC Asset in service. In the event
that it is left in service the User shall pay Connection Charges
in respect of such NGC Asset calculated by reference to Net Asset
Value derived from a revaluation of the asset by NGC (which in
the reasonable opinion of NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. TERMINATION AMOUNTS
4.1 Until the end of the Financial Year in which the termination
occurs the User shall pay to NGC the Connection Charges and Use
of System Charges for which the User is liable in full. Where
the User has a Connection Site the User shall at the end of such
Financial Year pay to NGC a sum equal to the following:
(i) the then current Net Asset Value of the NGC Assets at
the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing such NGC
Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another Connection Site and renders and receives a Connection
Charge therefor NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to
re-use such NGC Assets where it is economic to do so. Upon
request and at the cost of the User, NGC shall issue a
certificate no more frequently than once each calendar year
indicating whether or not such NGC Assets have or have not,been
so re-used.
5. VARIATION OF CHARGES BY NGC DURING THE FINANCIAL YEAR
If NGC is notified of a reduced Demand forecast by a PES or
STS from the forecast submitted under paragraph 1.2 of this
Appendix and is also notified of a corresponding increase in such
a Demand forecast by another PES or STS NGC shall vary the Use of
System charges due from the User notifying the reduction such
that the charges payable reflect the revised forecast within 30
days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect from the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. DEDUCTIONS
In respect of any NGC Engineering Charges which have been
paid by the User in connection with a Connection Application or
under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one third of such
NGC Engineering Charges.
<PAGE>
APPENDIX F1
SITE SPECIFIC TECHNICAL CONDITIONS
Agreed Ancillary Services
[Black Start Capability
Gas Turbine Unit Fast Start
Synchronous Compensation
Pumped Storage Unit Spinning-in-Air
Pumped Storage
Pumped Storage Plant Fast Start from Standstill
Demand Reduction
Adjustment to Pumped Storage Unit Pumping Programme
Hot Standby]
<PAGE>
APPENDIX F2
(NOT USED)
APPENDIX F3
SITE SPECIFIC TECHNICAL CONDITIONS
Special Automatic Facilities
(a) NGC Transmission System to Generating Unit Intertripping schemes.
(b) NGC Transmission System to Demand Intertripping schemes.
(c) NGC Transmission System to Directly Connected Customers Intertripping
Schemes
(d) Auto open/close schemes.
(e) System splitting or islanding schemes which impact on the User's system
or plant.
<PAGE>
APPENDIX F4
SITE SPECIFIC TECHNICAL CONDITIONS
Protection and Control Relay Settings/Fault Clearance Times
Pro-formas attached
<PAGE>
APPENDIX F5
SITE SPECIFIC TECHNICAL CONDITIONS
1. Protection of Interconnecting Connection
This applies if the User is a Generator or a Supplier. The
term "interconnecting connection" means the primary conductors
from the current transformer accommodation on the circuit
transformer accommodation on the circuit side of the circuit
breaker to the Connection Point.
NGC will design the protection scheme for the
Interconnecting Connections at the New Connection Site after the
Construction Programme has commenced. In order to provide the
required dependability and setting the User will be required to
install relays and auxiliary components for the User circuits
which are compatible with those used by NGC. NGC will provide
the common and per zone equipment. The User shall:
(a) provide the per circuit equipment specified below.
[NGC to propose - parties to agree]
(b) provide AC and DC buswiring including back trip
buswires, specified below.
[NGC to propose - parties to agree]
(c) the CT characteristics required of the above buswiring
are set out below.
[NGC to propose - parties to agree]
2. Circuit breaker fail protection
If the User is a Generator:
(a) The User shall install the circuit breaker fail
protection equipment specified below.
[NGC to propose - parties to agree]
(b) The User will also provide a back-trip signal in the
event of a loss of air from its pressurised head circuit-breakers
during the Users run-up sequence.
3. Pole Slipping
The User shall fit pole-slipping protection complying with
the performance of criteria specified below.
[NGC to propose - parties to agree]
4. Fault Disconnection Facilities
If the User is a PES or Non-Embedded Customer and no NGC
circuit-breaker is provided at the Users connection voltage the
User shall provide NGC with the means of tripping all of the
Users circuit breakers necessary to isolate faults or system
abnormalities on the NGC Transmission System. In these
circumstances for faults on the Users System, the Users
protection should also trip higher voltage NGC circuit breakers.
These tripping facilities shall comply with requirements set out
below.
[NGC to propose - parties to agree]
5. Automatic Switching Equipment
If the User is a PES or Non-Embedded Customer only and if
automatic reclosure of NGC circuit-breakers is required following
faults on the Users System the User shall provide automatic
switching equipment for reclosure of NGC circuit-breakers
following faults on the Users System. This equipment shall be
designed in accordance with the requirements set out below.
[NGC to propose - parties to agree]
6. Control Arrangements
If the User is a Generator: The User shall install a
continuously-acting automatic excitation control system to
control the Generating Unit terminal voltage without instability
over the entire operating range of the Generating Unit. System
requirements for excitation control facilities including power
system stabilisers are set out below.
[NGC to propose - parties to agree]
7. Control Telephony
The User shall provide the Control Telephony specified
below.
[NGC to propose - parties to agree]
8. System
The voltage and current signals for system monitoring
purposes to be provided by the User at the sole expense of
NGC-are set out below:
[NGC to specify: these will consist only of signals
from the User's current transformer and voltage transformer in
the manner and from the locations set out here]
9. Operational Metering
The User shall provide the operational metering set out
below.
[NGC to propose - parties to agree]
<PAGE>
APPENDIX F6
SITE SPECIFIC TECHNICAL CONDITIONS
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC, shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:
1.1.1 NGC may resign as Operator of such Energy Metering
Equipment on giving no less than 12 months' notice in writing;
and
1.1.2 the User may remove NGC as Operator upon giving no
less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as Operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any other Energy Metering System owned by NGC
for which the User is Registrant NGC shall charge and the User
shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent
serious damage to property proximate to the Energy Metering
Equipment or to the extent that such action is authorised under
the Master Agreement or any other agreement between NGC and the
User).
1.4 Pulse data
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and equipment as maybe
reasonably necessary therefor.
<PAGE>
APPENDIX G
NGC ASSET WORM
APPENDIX H
NGC REINFORCEMENT WORKS
APPENDIX I
USERS WORKS
APPENDIX J
CONSTRUCTION PROGRAMME
APPENDIX K
LIQUIDATED DAMAGES
APPENDIX L
INDEPENDENT ENGINEER
<PAGE>
EXHIBIT 3
DATED 30th March 1990
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
____________________________________________________________
SUPPLEMENTAL AGREEMENT TYPE 3
____________________________________________________________
(for Generators with Embedded Generating Plant or
Small Independent Generating Plant and who are acting in that
capacity and who are passing power on to a Distribution
System through a connection with a Distribution System
Commissioned at the Transfer Date)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation, Construction
2 Right to Use the NGC Transmission System
3 The Site of Connection to the Distribution System
4 Use of System Charges
5 Charging Rules
6 Ancillary Services
7 (Clause deleted)
8 Other Site Specific Technical Conditions
9 Metering
10 Joint System Incidents
11 Term
12 Emergency Deenergisation
13 Deenergisation and Disconnection
14 Notice to Decommission or Disconnect
15 Disconnection
16 Decommissioning
17 Master Agreement
18 Variations
Appendix A Site of Connection
Appendix B
Appendix C Location of Generation/Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix F1 Site Specific Technical Conditions - Ancillary Services
Appendix F2 (Not used)
Appendix F3 Site Specific Technical Conditions - Special Automatic
Facilities
Appendix F4 Site Specific Technical Conditions - Metering
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the 30th day of March 1990
and becomes effective on the 31st day of March 1990
BETWEEN
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SE1 9JU ("NGC" which
expression shall include its successors and/or permitted
assigns); and
(2) [ ] a company registered in [
] with number [ ] whose registered office is
at [ ] (the "User" which expression shall include
its successors and/or permitted assigns)
WHEREAS
(A) NGC and the User are parties to a Master Connection and Use
of System Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement.
2. RIGHT TO USE THE NGC TRANSMISSION SYSTEM
2.1 Subject to the other provisions of this Agreement including
the provisions of the Grid Code, the User may transmit supplies
of power on to and/or take supplies of power from the NGC
Transmission System as the case may be.
2.2 Registered Capacity
The User if a Generator shall not operate its User's
Equipment such that any of it exceeds its Registered Capacity
save as expressly permitted and instructed pursuant to the Grid
Code or the Fuel Security Code or as may be necessary or
expedient in accordance with Good Industry Practice.
2.3 Data
Data of a technical or operational nature collected recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefor.
2.4 Subject to the other provisions of this Agreement and the
Grid Code, NGC shall accept into the NGC Transmission System
Active Power generated by the User up to the Maximum Export
Capacity except to the extent (if any) that NGC is prevented from
doing so by transmission constraints which could not be avoided
by the exercise of Good Industry Practice by NGC.
2.5 Subject to the provisions of the Grid Code each Party shall
be entitled to plan and execute outages of parts of its System or
Plant or Apparatus at any time and from time to time.
2.6 Provision of Data
The majority of the data required under the Grid Code has
been supplied by the User prior to the Transfer Date. However, in
respect of the following data required under the Planning Code of
the Grid Code it is agreed that the User need only supply it
under the Grid Code within one year of the Transfer Date, unless
NGC requests it in writing before the expiry of that period, in
which case the User from whom the data is requested must supply
it within six weeks of receiving that request, except in the case
of the data referred to in PCA 5.3.1(g) which need only be
supplied within three months of receiving that request. The data
to which this clause applies is that referred to in the following
paragraphs of the Planning Code:
PCA 2.3
PCA 4.3.7
PCA 4.3.9
PCA 5.2.1
PCA 5.2.2
PCA 5.3.1 (g)
NGC shall also be able to request a User in writing at any
time to supply to NGC any data under the Planning Code which it
should have supplied to NGC prior to the Transfer Data, but which
it did not supply, and the User must supply that data upon
receiving that request.
3. THE SITE OF CONNECTION TO THE DISTRIBUTION SYSTEM
The Site of connection to the Distribution System to which
this Supplemental Agreement relates is more particularly
described in Appendix A.
4. USE OF SYSTEM CHARGES
Subject to the provisions of Clause 5 of this Supplemental
Agreement the User shall with effect from the commencement of
this Supplemental Agreement pay to NGC the Use of System Charges
set out in Appendix D payable in accordance with the provisions
of Appendix E.
5. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
6. ANCILLARY SERVICES
The User shall provide the Agreed Ancillary Services set out
in Appendix F1 in accordance with the Grid Code.
7. GRID CODE NON-COMPLIANCE
(Clause deleted)
8. OTHER SITE SPECIFIC TECHNICAL CONDITIONS
8.1 NGC and the User shall operate respectively the NGC
Transmission System and the User System with the special
automatic facilities and schemes set out in Appendix F3.
8.2 If the User or NGC wishes to modify, alter or otherwise
change the site specific technical conditions or the manner of
their operation under Appendix F1, F2, F3 or F4 this shall be
deemed to be a Modification for the purposes of the Master
Agreement.
8.3 Where on or immediately prior to the Transfer Date the Users
Equipment has any of the following technical attributes or
facilities:
(i) control arrangements
(ii) voltage and current signals for system monitoring
(iii) control telephony
(iv) operational metering
the User shall use all reasonable endeavours to ensure that
during the period of this Supplemental Agreement the Users
Equipment retains such technical attributes or facilities
provided always that if the User wishes to modify alter or
otherwise change the same or their operation it may do so by
following the procedures relating to a Modification in accordance
with the Master Agreement.
9. METERING
The provisions of Appendix F4 shall have effect.
10. JOINT SYSTEM INCIDENTS
Each Party confirms to the other that its Senior Management
Representatives whose names have been nominated and notified to
the other pursuant to OC9 are fully authorised to make binding
decisions on its behalf for the purposes of OC9.
11. TERM
Subject to the provisions for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User's Equipment
is Disconnected from the Distribution System in accordance with
Clause 13 or 15 hereof.
12. EMERGENCY DEENERGISATION
12.1 Emergency Deenergisation requested by NGC
If, in the reasonable opinion of NGC, the condition or
manner of operation of the NGC Transmission System or the User's
System poses an immediate threat of injury or material damage to
any person or to the Total System or to any User's System or to
the NGC Transmission System, NGC shall have the right to request
the owner of the Distribution System to which the User is
connected to Deenergise the User's Equipment if it is necessary
or expedient to do so to avoid the occurrence of such injury or
damage.
12.2 Emergency Deenergisation by a User
If, in the reasonable opinion of the User, the condition or
manner of operation of the NGC Transmission System, the Total
System or any other User's System, poses an immediate threat of
injury or material damage to any person or to the User's System
the User shall have the right to Deenergise the User's Equipment
if it is necessary or expedient to do so to avoid the occurrence
of such injury or damage.
12.3 Reenergisation
The User's Equipment at the Connection Site shall be
Re-Energised as quickly as practicable after the circumstances
leading to any Deenergisation under this Clause 12 have ceased to
exist.
13. DEENERGISATION AND DISCONNECTION
13.1 Breach by the User
If the User shall be in breach of any of the provisions of
this Supplemental Agreement or of the provisions of the Master
Agreement enforcing the provisions of the Grid Code (but subject
always to Sub-Clauses 9.3 and 9.4 of the Master Agreement) and
such breach causes or can reasonably be expected to cause a
material adverse effect on the business or condition of NGC or
other Users or the NGC Transmission System or Users Systems then
NGC may:
(i) where the breach is capable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and requiring the User within 28 days after receipt of
such notice to remedy the breach or within any longer period
agreed between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why the breach is incapable of remedy
and requiring the User within 5 Business Days after receipt of
such notice to undertake to NGC not to repeat the breach.
13.2 Grid Code Procedures
Whenever NGC serves a notice on the User pursuant to
Sub-Clause 13.1, NGC and the User shall discuss in good faith and
without delay the nature of the breach and each shall use all
appropriate procedures available to it under the Grid Code
(including testing rights and the procedures set out in the OC5
(Testing and Monitoring) in an attempt to establish as quickly as
reasonably practicable a mutually acceptable way of ensuring
future compliance by the User with the relevant provision of the
Grid Code.
13.3 De-Energisation
13.3.1 If:
(a) the User fails to comply with the terms of any valid
notice served on it by NGC in accordance with Sub-Clause 13.1(i)
or is in breach of any undertaking given in accordance with
Sub-Clause 13.1 (ii) and such breach causes or can be reasonably
expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
User Systems; or
(b) five Business Days have elapsed since the date of any
valid notice served on the User in accordance with Sub-Clause
13.2(ii) and no undertaking is given by the User in accordance
with Sub-Clause 13.2(ii);
NGC may, provided NGC has first complied with OC5 Testing
and Monitoring if appropriate, request the owner of the
Distribution System to which the User is connected to De-Energise
the User's Equipment upon the expiry of at least 48 hours prior
written notice to the User, provided that at the time of expiry
of such notice the breach concerned remains unremedied and that
neither Party has referred the matter to the Dispute Resolution
Procedure set out in Clause 27 of the Master Agreement. In such
event NGC may request the owner of the Distribution System to
which the User is connected to De-Energise forthwith following
completion of the Dispute Resolution Procedure and final
determination of the dispute in NGC's favour.
13.3.2 If the User fails to comply with the Grid Code and the
Director makes a final order or a confirmed provisional order as
set out in Sections 25 and 26 of the Act against the User in
respect of such non-compliance which order the User breaches NGC
may request the owner of the Distribution System to which the
User is connected to De-Energise the User's Equipment upon the
expiry of at least 48 hours prior written notice to the User
provided that at the time of expiry of the notice the User fails
to comply with the order.
13.4 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 13.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may request the owner of the
Distribution System to which the User is connected to De-Energise
the User's Equipment upon the expiry of at least 12 hours prior
written notice to the User, provided that at the time of expiry
of such notice the breach concerned remains unremedied.
13.5 Re-Energisation Disputes
If, following any De-Energisation pursuant to this Clause
13, the User applies to NGC for NGC to issue instructions that
the User's Equipment should be Re-Energised and is refused or is
offered terms which the User does not accept, this shall be
recognised as a dispute over the terms for connection and use of
system which the User may refer to the Director for determination
under the NGC Transmission Licence. If the User accepts any terms
offered by NGC or settled by the Director pursuant to any such
reference, NGC shall request the owner of the Distribution System
to which the User is connected to Re-Energise the User's
Equipment forthwith after any request from the User for NGC to do
so.
13.6 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 13 remains unremedied at the expiry of at least 6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:
(a) all disputes arising out of the subject-matter to this
Clause 13 which are referred to the Dispute Resolution Procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to sub-clause
13.5 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
13.7 Disconnection
Once NGC has given a valid notice of an event of default
pursuant to Sub-Clause 13.6
NGC may give notice of termination to that User whereupon
this Supplemental Agreement shall terminate and:
(i) NGC shall request the owner of the Distribution System
to which the User is connected to Disconnect all the User's
Equipment at the site of connection; and
(ii) that User shall be obliged to pay to NGC forthwith the
Use of System Charges due hereunder up to the end of the
Financial Year in which Termination occurs.
14. NOTICE TO DECOMMISSION OR DISCONNECT
Without prejudice to Sub-Clause 12.2 the User shall give to
NGC not less than 6 months written notice of any intention of the
User either to Decommission the User's Equipment or to Disconnect
the User's Equipment.
15. DISCONNECTION
If notice to Disconnect is given by the User under Clause 14
the User may upon expiry of the period specified in such notice
and not before Disconnect the User's Equipment. At the expiry of
such period this Supplemental Agreement shall terminate. The
User shall pay to NGC all Use of System Charges due hereunder up
to the end of the Financial Year in which termination occurs
within 28 days after termination of this Agreement.
16. DECOMMISSIONING
If notice to Decommission is given by the User under Clause
14 the User may upon expiry of the period specified in such
notice and not before, Decommission the Users Equipment. This
Supplemental Agreement shall not terminate and:
(i) until the end of the Financial Year in which the
Decommissioning takes place all Use of System Charges payable by
the User under this Supplemental Agreement shall continue to be
payable in full;
(ii) following the end of the Financial Year in which the
Decommissioning takes place the Use of System Charges payable by
the User under this Supplemental Agreement shall no longer be
payable by the User If and when the User wishes to recommission
it shall give NGC not less than 3 months written notice unless a
shorter period is agreed between NGC and the User.
17. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental Agreement
as if set out in full herein.
18. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order or directions made pursuant to the Act or a Licence
or as a result of settling any of the terms hereof and the User
hereby authorises and instructs NGC to make any such amendment on
its behalf and undertakes not to, withdraw, qualify or revoke
such authority or instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
[the USER] )
By )
<PAGE>
APPENDIX A
SITE OF CONNECTION
COMPANY :
SITE OF CONNECTION :
OWNER/OPERATOR OF
DISTRIBUTION SYSTEM :
TYPE :
<PAGE>
APPENDIX B
(NOT USED)
APPENDIX C
ZONE/REGISTERED CAPACITY/ PEAK HALF-HOURS/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND:
ZONE :
A. GENERATION:
SET TYPE/FUEL REGISTERED CAPACITY MW
B. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half-hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
C. In the Financial Year 1st April 1990,-to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial Year and the Energy produced.
D. ESTIMATED DEMAND for the period between I April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
___________________________________MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1. TYPE OF CHARGE: SYSTEM SERVICE
Demand related
pounds........ in respect of the period from 1st April 1990
to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds..... per KW and..... KW of
Estimated Demand as set out in Appendix C.
2. TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds.............. in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds.... per KW and .........KW of
Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds..... in respect of the period from 1st April 1990 to
31st March 1991 payable in 12 equal monthly instalments subject
to adjustment in accordance with the Charging Rules based upon-a
charge of f....... per KW Registered Capacity and .... KW being
the Registered Capacity as set out in Appendix C.
C. Energy Related
pounds....... per KWh in respect of each KWh of Energy
entering the Total System in the period from 3 1 st March 1990 to
3 1 st March 1991 payable as described in Clause 14 of the Master
Agreement.
Payment shall be made in accordance with Clause 14 of the Master
Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. Use of System Charges - General and Data Requirements
1.1 NGC's Demand related Use of System Charges are calculated by
reference to Demand (Active Power) attributable to each Grid
Supply Point excluding that Demand (Active Power) met by embedded
Generating-Units which is to be paid for otherwise than pursuant
to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 31st December in each Financial Year
the User shall supply NGC with such data as NGC may from time to
time reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 31st December in each Financial Year;
(i) Users who are Public Electricity Suppliers shall
supply to NGC a forecast for the following Financial Year of the
following:
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable to
each Grid Supply Point equal to the average of the forecasts of
PES Supply Business Demand under Annual Average Cold Spell (ACS)
Conditions attributable to such Grid Supply Point for each of a
number of peak half -hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply
to NGC a forecast for the following Financial Year of the STS
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of STS Demand attributable to such Grid Supply
Point for each of a number of peak half-hours as notified by NGC
to the User under paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of such Station Demand (Active Power) attributable
to such Grid Supply Point for each of a number of peak half-hours
as notified by NGC to the User under paragraph 2.1 of this
Appendix E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System Charges shall be
calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC shall:
(i) determine from meter readings of Energy Metering
Equipment the actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year; and
(ii) shall compare the User's highest Registered Capacity
during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of the
actual position determined in accordance with paragraph 1.3.2 the
amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payable by the
User under this Supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall then
compare the Actual Amount with the amount of Demand related or
Capacity related Use of System Charges (as the case may be) paid
during each month during that Financial Year by the User under
this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement and
send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information f rom
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC shall
send the User an invoice in relation to any sums shown by the
reconciliation statement to be due to NGC and interest thereon
calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 3 1st March in such
Financial Year.
1.3.6 In respect of each month during that Financial Year:
(a) the User shall, following receipt of an appropriate
invoice, pay to NGC an amount equal to the amount (if any) by
which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate invoice,
repay to the User an amount equal to the amount (if any) by which
the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the other
on such amounts from the Payment Date applicable to the month
concerned until the date of actual payment of such amounts (which
shall not be later than 31st March in such Financial Year). Such
interest shall be calculated on a daily basis at the rate equal
to the base rate of Barclays Bank PLC for the time being and from
time to time during such period.
2. Revision of Charges
2.1 To the extent permitted by the Transmission Licence NGC may
revise its Connection Charges and Use of System Charges or the
basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the User of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new asset
register during the course of the Financial Year ending 31st
March 1991. As a result, NGC shall have the right to vary the
asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:
(a) NGC has first consulted the User in advance in good
faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set out in
the statements required by Condition 10(2)D of the Transmission
Licence, the form of which has been approved by the Director.
Such asset reallocation shall be effective from 1st April
1991 and the provisions of Appendices A and B shall be amended
automatically (and a copy sent to the User) to reflect such
reallocation with effect from such date.
2.3 Subject to the provisions of paragraph 3.2 below if in the
reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective the provisions of
Sub-Clauses 11.2 and 11.4 shall apply mutatis mutandis.
Following any such variation the provisions of Appendices A and B
shall be amended automatically (and a copy sent to the User) to
reflect such variation with effect from the date such variation
comes into effect.
3. Replacement of NGC Assets
3.1 Appendix A specifies the age of each of the NGC Assets at
the Connection Site at the date of this Supplemental Agreement.
NGC Connection Charges and Use of System Charges are calculated
on the assumption that NGC Assets will not require replacement
until the expiry of the Replacement Period applicable to each NGC
Asset concerned. Such Replacement Periods have been agreed
between NGC and the User. For the avoidance of doubt, they have
been prepared for accounting purposes and carry no implication
that they represent the actual useful lives of such assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall-, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of such varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to reflect such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC Asset,
NGC shall replace such NGC Asset if requested to do so by the
User or if in NGC's reasonable opinion it is necessary to do so
to enable NGC to comply with its Licence obligations. Unless so
replaced, NGC shall keep the NGC Asset in service. In the event
that it is left in service the User shall pay Connection Charges
in respect of such NGC Asset calculated by reference to Net Asset
Value derived from a revaluation of the asset by NGC (which in
the reasonable opinion of NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. Termination Amounts
4.1 Until the end of the Financial Year in which the termination
occurs the User shall pay to NGC the Connection Charges and Use
of System Charges for which the User is liable in full. Where
the User has a Connection Site the User shall at the end of such
Financial Year pay to NGC a sum equal to the following:
(i) the then current Net Asset Value of the NGC Assets at
the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing such NGC
Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another Connection Site and renders and receives a Connection
Charge therefor NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to
re-use such NGC Assets where it is economic to do so. Upon
request and at the cost of the User, NGC shall issue a
certificate no more frequently than once each calendar year
indicating whether or not such NGC Assets have or have not been
so re-used.
5. Variation of Charges by NGC during the Financial Year
If NGC is notified of a reduced Demand forecast by a PES or
STS from the forecast submitted under paragraph 1.2 of this
Appendix and is also notified of a corresponding increase in such
a Demand forecast by another PES or STS NGC shall vary the Use of
System charges due from the User notifying the reduction such
that the charges payable reflect the revised forecast within 30
days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect fro@m the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. Deductions
in respect of any NGC Engineering Charges which have been
paid by the User in connection with a Connection Application or
under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one
third of such NGC Engineering Charges.
<PAGE>
APPENDIX F1
SITE SPECIFIC TECHNICAL CONDITIONS
Agreed Ancillary Services
[Black Start Capability
Gas Turbine Unit Fast Start
Synchronous Compensation
Pumped Storage Unit Spinning-in-Air
Pumped Storage
Pumped Storage Plant Fast Start from Standstill
Demand Reduction
Adjustment to Pumped Storage Unit Pumping Programme
Hot Standby]
<PAGE>
APPENDIX F2
(NOT USED)
<PAGE>
APPENDIX F3
SITE SPECIFIC TECHNICAL CONDITIONS
Special Automatic Facilities
(a) NGC Transmission System to Generating Unit Intertripping schemes.
(b) NGC Transmission System to Demand Intertripping schemes.
(c) NGC Transmission System to Directly Connected Customers Intertripping
Schemes
(d) Auto open/close schemes.
(e) System splitting or islanding schemes which impact on the Users system
or plant.
<PAGE>
APPENDIX F4
SITE SPECIFIC TECHNICAL CONDITIONS
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:
1.1.1 NGC may resign as Operator of such Energy Metering
Equipment on giving no less than 12 months' notice in writing;
and
1.1.2 the User may remove NGC as Operator upon giving no
less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as Operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any other Energy Metering System owned by NGC
for which the User is Registrant NGC shall charge and the User
shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent serious
damage to property proximate to the Energy Metering Equipment or
to the extent that such action is authorised under the Master
Agreement or any other agreement between NGC and the User).
1.4 Pulse data
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and equipment as maybe
reasonably necessary therefor.
<PAGE>
EXHIBIT 4
DATED 19
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
______________________________________________________________
SUPPLEMENTAL AGREEMENT TYPE 4
______________________________________________________________
(for Generators with Embedded Generating Plant or
with Embedded Small Independent Generating Plant
and who are acting in that capacity and who are passing
power on to a Distribution System through a
connection with a Distribution System which has not been
Commissioned at the Transfer Date)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation, Construction
2 Approval to become Operational
3 The Site of connection to the Distribution System
4 Use of System Charges
5 Charging Rules
6 Ancillary Services
7 (Clause deleted)
8 Other Site Specific Technical Conditions
9 Metering
10 Joint System Incidents
11 Term
12 Emergency Deenergisation
13 Deenergisation and Disconnection
14 Notice to Decommission or Disconnect
15 Disconnection
16 Decommissioning
17 Master Agreement
18 Variations
Appendix A Connection Site
Appendix B
Appendix C Zone/Registered Capacity/Peak Half-Hours/Estimated Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix Fl Site Specific Technical Conditions- Ancillary Services
Appendix F2 (Not used)
Appendix F3 Site Specific Technical Conditions- Special Automatic Facilities
Appendix F4 Site Specific Technical Conditions - Other
Appendix F5 Site Specific Technical Conditions - Metering
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the day of
19
BETWEEN
1. THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SEI 9JU ("NGC", which
expression shall include its successors and/or permitted
assigns); and
2. [ ] a company registered in [
] with number [ ] whose registered office is at [
] (the "User", which expression shall include its successors
and/or permitted assigns)
WHEREAS
(A) NGC and the User are parties to Master Connection and Use of
System Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement.
2. APPROVAL TO BECOME OPERATIONAL
2.1 Not later than [ ] or by such other times as may be
agreed between the Parties each Party shall submit to the other:
(i) data within its possession needed to enable the
completion of Appendix F3;
(ii) evidence reasonably satisfactory to NGC that the Users
Equipment complies or will on Completion comply with the
provisions of Clauses 6, 8 and 9.
2.2 Not later than [ ] or by such other time as
may be agreed between the Parties each Party shall submit to the
other:
(i) information to enable preparation of Site
Responsibility Schedules complying with the provisions of
Appendix [ I ] to the Connection Conditions together with a list
of managers who have been duly authorised by the User to sign
such Site Responsibility Schedules on the User's behalf;
(ii) a list of Safety Coordinators pursuant to Operating
Code 8 and a list of telephone numbers for Joint System Incidents
at which senior management representatives nominated for the
purpose can be contacted; and
(iii) a list of telephone numbers for the facsimile
machines referred to in CC 6.5.8.
2.3 Not later than [ ] or by such other time as may be
agreed between the Parties the User shall submit to NGC a
statement of readiness to complete the Commissioning Programme,
together with Connected Planning Code Data and a report
certifying to NGC that, to the best of the information, knowledge
and belief of the User, all relevant Connection Conditions
applicable to the User have been considered and that to the best
of the information, knowledge and belief of the User Connection
Conditions CC 6 have been complied with. If NGC considers that
it is necessary, it will require this report to be prepared by
the Independent Engineer at NGC's sole cost and expense. The
report shall incorporate if requested by NGC type test reports
and test certificates produced by the manufacturer showing that
the User's Equipment meets the criteria specified in CC. 6.
2.4 Upon compliance by the User with the provisions of
Sub-Clauses 2.1, 2.2 and 2.3 NGC shall forthwith notify the User
in writing that it has the right to become Operational.
2.5 Right to use the NGC Transmission System
Subject to the other provisions of this Agreement including
the provisions of the Grid Code, the User may transmit supplies
of power on to and/or take supplies of power from the NGC
Transmission System as the case may be.
2.6 Registered Capacity
The User if a Generator shall not operate its User's
Equipment such that any of it exceeds its Registered Capacity
save as expressly permitted and instructed pursuant to the Grid
Code or the Fuel Security Code or as may be necessary or
expedient in accordance with Good Industry Practice.
2.7 Data
Data of a technical or operational nature collected recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefor.
2.8 Subject to the provisions of this Agreement and the Grid
Code, NGC shall accept into the NGC Transmission System Active
Power generated by the User up to the Maximum Export Capacity
except to the extent (if any) that NGC is prevented from doing so
by transmission constraints which could not be avoided by the
exercise of Good Industry Practice by NGC.
2.9 Subject to the provisions of the Grid Code each Party shall
be entitled to plan and execute outages of parts of its System or
Plant or Apparatus at any time and from time to time.
3. THE SITE OF CONNECTION TO THE DISTRIBUTION SYSTEM
The site of connection to the Distribution System to which
this Supplemental Agreement relates is more particularly
described in Appendix A.
4. USE OF SYSTEM CHARGE
Subject to the provisions of Clause 5 of this Supplemental
Agreement the User shall with effect from the Charging Date pay
to NGC the Use of System Charges set out in Appendix D payable in
accordance with the provisions of Appendix E.
5. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
6. ANCILLARY SERVICES
The User shall provide the Agreed Ancillary Services set out
in Appendix F1 in accordance with the Grid Code.
7. GRID CODE NON-COMPLIANCE
(Clause deleted)
8. OTHER SITE SPECIFIC TECHNICAL CONDITION
8.1 NGC and the User shall operate respectively the NGC
Transmission System and the User System with the special
automatic facilities and schemes set out in Appendix F3.
8.2 The User shall ensure that on the Completion Date the User's
Equipment complies with the site specific technical conditions
set out in Appendix F4.
8.3 The User shall use all reasonable endeavours to ensure
during the period of this Supplemental Agreement that the User's
Equipment shall continue to comply with the site specific
technical conditions set out in Appendix F5.
8.4 If the User or NGC wishes to modify, alter or otherwise
change the site specific technical conditions or the manner of
their operation under Appendix Fl, F2, F3, F4 or F5 this shall be
deemed to be a Modification for the purposes of the Master
Agreement.
9. METERING
The provisions of Appendix F5 shall have effect.
10. JOINT SYSTEM INCIDENT
Each Party confirms to the other that its Senior Management
Representatives whose names have been nominated and notified to
the other pursuant to OC9 are fully authorised to make binding
decisions on its behalf for the purposes of OC9.
11. TERM
Subject to the provisions for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User's Equipment
is Disconnected from the PES Distribution System in accordance
with Clause 13 or 15 hereof.
12. EMERGENCY DEENERGISATION
12.1 Emergency Deenergisation requested by NGC
If, in the reasonable opinion of NGC, the condition or
manner of operation of the NGC Transmission System or the User's
System poses an immediate threat of injury or material damage to
any person or to the Total System or to any User's System or to
the NGC Transmission System, NGC shall have the right to request
the owner of the Distribution System to which the User is
connected to Deenergise the User's Equipment, if it is necessary
or expedient to do so to avoid the occurrence of such injury or
damage.
12.2 Emergency Deenergisation by a User
If, in the reasonable opinion of the User, the condition or
manner of operation of the NGC Transmission System, the Total
System or any other User's System, poses an immediate threat of
injury or material damage to any person or to the User's System
the User shall have the right to Deenergise the User's Equipment,
if it is necessary or expedient to do so to avoid the occurrence
of such injury or damage.
12.3 Reenergisation
The User's Equipment at the Connection Site shall be Re
Energised as quickly as practicable after the circumstances
leading to any Deenergisation under this Clause 12 have ceased to
exist.
13. DEENERGISATION AND DISCONNECTION
13.1 Breach by the User:
If the User shall be in breach of any of the provisions of
this Supplemental Agreement or of the provisions of the Master
Agreement enforcing the provisions of the Grid Code (but subject
always to Sub-Clauses 9.3 and 9.4 of the Master Agreement) and
such breach causes or can reasonably be expected to cause a
material adverse effect on the business or condition of NGC or
other Users or the NGC Transmission System or Users Systems then
NGC may:
(i) where the breach is capable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and requiring the User within 28 days after receipt of
such notice to remedy the breach or within any longer period
agreed between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why the breach is incapable of remedy
and requiring the User within 5 Business Days after receipt of
such notice to undertake to NGC not to repeat the breach.
13.2 Grid Code Procedures
Whenever NGC serves a notice on the User pursuant to
Sub-Clause 13. 1, NGC and the User shall discuss in good faith
and without delay the nature of the breach and each shall use all
appropriate procedures available to it under the Grid Code
(including testing rights and the procedures set out in OC5
Testing and Monitoring) in an attempt to establish as quickly as
reasonably practicable a mutually acceptable way of ensuring
future compliance by the User with the relevant provision of the
Grid Code.
13.3 Deenergisation
13.3.1 If:
(a) the User fails to comply with the terms of any valid
notice served on it by NGC in accordance with Sub Clause 13.1(i)
or is in breach of any undertaking given in accordance with
Sub-Clause 13.1 (ii) and such breach causes or can be reasonably
expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
User Systems; or
(b) five Business Days have elapsed since the date of any
valid notice served on the User in accordance with Sub-Clause
13.2(ii) and no undertaking is given by the User in accordance
with Sub-Clause 13.2(ii);
NGC may, provided NGC has if appropriate first complied with
OC5 Testing and Monitoring request the owner of the Distribution
System to which the User is connected to De-Energise the User's
Equipment upon the expiry of at least 48 hours prior written
notice to the User, provided that at the time of expiry of such
notice the breach concerned remains unremedied and that neither
Party has referred the matter to the Dispute Resolution Procedure
set out in Clause 27 of the Master Agreement. In such event NGC
may request the owner of the Distribution System to which the
User is connected to De-Energise forthwith following completion
of the Dispute Resolution Procedure and final determination of
the dispute in NGC's favour.
13.3.2 If the User fails to comply with the Grid Code and the
Director makes a final order or a confirmed provisional order as
set out in Sections 25 and 26 of the Act against the User in
respect of such non-compliance which order the User breaches NGC
may request to the owner of the Distribution System to which the
User is connected to De-Energise the User's Equipment upon the
expiry of at least 48 hours prior written notice to the User
provided that at the time of expiry of the notice the User fails
to comply with the notice.
13.4 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 13.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may request the owner of the
Distribution System to which the User is connected to De Energise
the User's Equipment upon the expiry of at least 12 hours prior
written notice to the User, provided that at the time of expiry
of such notice the breach concerned remains unremedied.
13.5 Reenergisation Disputes
If, following any De-Energisation pursuant to this Clause
13, the User applies to NGC for NGC to issue instructions that
the User's Equipment should be Re-Energised and is refused or is
offered terms which the User does not accept, this shall be
recognised as a dispute over the terms for connection and use of
system which the User may refer to the Director for determination
under the NGC Transmission Licence. If the User accepts any terms
offered by NGC or settled by the Director pursuant to any such
reference, NGC shall request the owner of the Distribution System
to which the User is connected to Re-Energise the User's
Equipment forthwith after any request from the User for NGC to do
so.
13.6 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 13 remains unremedied at the expiry of at least 6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:
(a) all disputes arising out of the subject-matter to this
Clause 13 which are referred to the Dispute Resolution Procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to sub-clause
13.5 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
13.7 Disconnection
Once NGC has given a valid notice of an event of default
pursuant to Sub-Clause 13.6 NGC may give notice of termination to
that User whereupon this Supplemental Agreement shall terminate
and:
(i) NGC shall request the owner of the Distribution System
to which the User is connected to Disconnect all the User's
Equipment at the Connection Site; and
(ii) that User shall be obliged to pay to NGC forthwith the
Use of System Charges due hereunder up to the end of the
Financial Year in which Termination occurs.
14. NOTICE TO DECOMMISSION OR DISCONNECT
Without prejudice to Sub-Clause 12.2 the User shall give to
NGC not less than 6 months written notice of any intention of the
User either to Decommission the User's Equipment or to Disconnect
the User's Equipment.
15. DISCONNECTION
If notice to Disconnect is given by the User under Clause 14
the User may upon expiry of the period specified in such notice
and not before Disconnect the User's Equipment. At the expiry of
such period this Supplemental Agreement shall terminate. The
User shall pay to NGC all Use of System Charges due hereunder up
to the end of the Financial Year in which termination occurs
within 28 days after termination of this Agreement.
16. DECOMMISSIONING
If notice to Decommission is given by the User under Clause
14 the User may upon expiry of the period specified in such
notice and not before, Decommission the User's Equipment. This
Supplemental Agreement shall not terminate and:
(i) until the end of the Financial Year in which the
Decommissioning takes place all Use of System Charges payable by
the User under this Supplemental Agreement shall continue to be
payable in full;
(ii) following the end of the Financial Year in which the
Decommissioning takes place the Use of System Charges payable by
the User under this Supplemental Agreement shall no longer be
Payable by the User.
If and when the User wishes to recommission it shall give
NGC not less than 3 months written notice unless a shorter period
is agreed between NGC and the User.
17. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental-Agreement
as if set out in full herein.
18. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order or directions made pursuant to the Act or a Licence
or as a result of setting any of the terms hereof and the User
hereby authorises and instructs NGC to make any such amendment on
its behalf and undertakes not to, withdraw, qualify or revoke
such authority or instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
[the USER] )
By )
<PAGE>
APPENDIX A
SITE OF CONNECTION
COMPANY :
SITE OF CONNECTION :
OWNER/OPERATOR OF
DISTRIBUTION SYSTEM :
TYPE :
<PAGE>
APPENDIX B
(NOT USED)
<PAGE>
APPENDIX C
ZONE/REGISTERED CAPACITY/PEAK HALF-HOURS/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND:
ZONE :
A. GENERATION:
SET TYPE/FUEL REGISTERED CAPACITY MW
B. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half-hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
C. in the Financial Year 1st April 1990 to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial Year and the Energy produced.
D. ESTIMATED DEMAND for the period between I April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
___________________________________MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1. TYPE OF CHARGE: SYSTEM SERVICE
Demand related
pounds......... in respect of the period from 1st April 1990
to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds.... per KW and KW of Estimated
Demand as set out in Appendix C.
2. TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds.............. in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds.... per KW and..... KW of
Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds....... in respect of the period from 1st April 1990 to
31st March 1991 payable in 12 equal monthly instalments subject
to adjustment in accordance with the Charging Rules based upon a
charge of pounds.... per KW Registered Capacity and .... KW being
the Registered Capacity as set out in Appendix C.
C. Energy Related
pounds........ per KWh in respect of each KWh of Energy
entering the Total System in the period from 31 st March 1990 to
31 st March 1991 payable as described in Clause 14 of the Master
Agreement.
Payment shall be made in accordance with Clause 14 of the
Master Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. Use of System Charges - General and Data Requirements
1.1 NGC's Demand related Use of System Charges are calculated by
reference to Demand (Active Power) attributable to each Grid
Supply Point excluding that Demand (Active Power) met by embedded
Generating Units which is to be paid for otherwise than pursuant
to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 3 1st December in each Financial Year the
User shall supply NGC with such data as NGC may from time to time
reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 31st December in each Financial Year;
(i) Users who are Public Electricity Suppliers shall supply
to NGC a forecast for the following Financial Year of the
following:
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half-hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable to
each Grid Supply Point equal to the average of the forecasts of
PES Supply Business Demand under Annual Average Cold Spell (ACS)
Conditions attributable to such Grid Supply Point for each of a
number of peak half-hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply to NGC
a forecast for the following Financial Year of the STS Demand
under Annual Average Cold Spell (ACS) Conditions attributable to
each Grid Supply Point equal to the average of the forecasts of
STS Demand attributable to such Grid Supply Point for each of a
number of peak half-hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of such Station Demand (Active Power) attributable
to such Grid Supply Point for each of a number of peak half-hours
as notified by NGC to the User under paragraph 2.1 of this
Appendix E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System Charges shall be
calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC shall:
(i) determine from meter readings of Energy Metering
Equipment the actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year, and
(ii) shall compare the User's highest Registered Capacity
during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of the
actual position determined in accordance with paragraph 1.3.2 the
amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payable by the
User under this Supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall then
compare the Actual Amount with the amount of Demand related or
Capacity related Use of System Charges (as the case may be) paid
during each month during that Financial Year by the User under
this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement and
send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information f rom
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC shall
send the User an invoice in relation to any sums shown by the
reconciliation statement to be due to NGC and interest thereon
calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 3 1st March in such
Financial Year.
1.3.6 In respect of each month during that Financial Year:
(a) the User shall, following receipt of an appropriate
invoice, pay to NGC an amount equal to the amount (if any) by
which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate invoice,
repay to the User an amount equal to the amount (if any) by which
the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the other on
such amounts from the Payment Date applicable to the month
concerned until the date of actual payment of such amounts (which
shall not be later than 31st March in such Financial Year). Such
interest shall be calculated on a daily basis at the rate equal
to the base rate of Barclays Bank PLC for the time being and from
time to time during such period.
2. Revision of Charges
2.1 To the extent permitted by the Transmission Licence NGC may
revise its Connection Charges and Use of System Charges or the
basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the User of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy- sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new asset
register during the course of the Financial Year ending 31st
March 1991. As a result, NGC shall have the right to vary the
asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:
(a) NGC has first consulted the User in advance in good
faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set out in
the statements required by Condition 10(2)D of the Transmission
Licence, the form of which has been approved by the Director.
Such asset reallocation shall be effective from 1st April
1991 and the provisions of Appendices A and B shall be amended
automatically (and a copy sent to the User) to reflect such
reallocation with effect from such date.
2.3 Subject to the provisions of paragraph 3.2 below if in the
reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective the provisions of
Sub-Clauses 11.2 and 11.4 shall apply mutatis mutandis.
Following any such variation the provisions of Appendices A and B
shall be amended automatically (and a copy sent to the User) to
reflect such variation with effect from the date such variation
comes into effect.
3. Replacement of NGC Assets
3.1 Appendix A specifies the age of each of the NGC Assets at
the Connection Site at the date of this Supplemental Agreement.
NGC Connection Charges and Use of System Charges are calculated
on the assumption that NGC Assets will not require replacement
until the expiry of the Replacement Period applicable to each NGC
Asset concerned. Such Replacement Periods have been agreed
between NGC and the User. For the avoidance of doubt, they have
been prepared for accounting purposes and carry no implication
that they represent the actual useful lives of such assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of such varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to reflect such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC Asset,
NGC shall replace such NGC Asset if requested to do so by the
User or if in NGC's reasonable opinion it is necessary to do so
to enable NGC to comply with its Licence obligations. Unless so
replaced, NGC shall keep the NGC Asset in service. In the event
that it is left in service the User shall pay Connection Charges
in respect of such NGC Asset calculated by reference to Net Asset
Value derived from a revaluation of the asset by NGC (which in
the reasonable opinion of NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. Termination Amounts
4.1 Until the end of the Financial Year in which the termination
occurs the User shall pay to NGC the Connection Charges and Use
of System Charges for which the User is liable in full. Where
the User has a Connection Site the User shall at the end of such
Financial Year pay to NGC a sum equal to the following:
(i) the then current Net Asset Value of the NGC Assets at
the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing such NGC
Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another Connection Site and renders and receives a Connection
Charge therefor NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to
re-use such NGC Assets where it is economic to do so. Upon
request and at the cost of the User, NGC shall issue a
certificate no more frequently than once each calendar year
indicating whether or not such NGC Assets have or have not been
so re-used.
5. Variation of Charges by NGC during the Financial Year
If NGC is notified of a reduced Demand forecast by a PES or
STS from the forecast submitted under paragraph 1.2 of this
Appendix and is also notified of a corresponding increase in such
a Demand forecast by another PES or STS NGC shall vary the Use of
System charges due from the User notifying the reduction such
that the charges payable reflect the revised forecast within 30
days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect from the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. Deductions
In respect of any NGC Engineering Charges which have been
paid by the User in connection with a Connection Application or
under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one third of such
NGC Engineering Charges.
<PAGE>
APPENDIX Fl
SITE SPECIFIC TECHNICAL CONDITIONS
Agreed Ancillary Services
[Black Start Capability
Gas Turbine Unit Fast Start
Synchronous Compensation
Pumped Storage Unit Spinning-in-Air
Pumped Storage
Pumped Storage Plant Fast Start from Standstill
Demand Reduction
Adjustment to Pumped Storage Unit Pumping Programme
Hot Standby]
<PAGE>
APPENDIX F2
(NOT USED)
<PAGE>
APPENDIX F3
SITE SPECIFIC TECHNICAL CONDITIONS
Special Automatic Facilities
(a) NGC Transmission System to Generating Unit Intertripping schemes.
(b) NGC Transmission System to Demand Intertripping schemes.
(c) NGC Transmission System to Directly Connected Customers Intertripping
Schemes
(d) Auto open/close schemes.
(e) System splitting or islanding schemes which impact on the Users system
or plant.
<PAGE>
APPENDIX F4
SITE SPECIFIC TECHNICAL CONDITIONS
(1) Control Arrangements
If the User is a Generator: The User shall install a
continuously-acting automatic excitation control system to
control the Generating Unit terminal voltage without instability
over the entire operating range of the Generating Unit. System
requirements for excitation control facilities including power
system stabilisers are set out below.
[NGC to propose - parties to agree]
(2) Control Telephony
The User shall provide the Control Telephony specified
below.
[NGC to propose - parties to agree]
(3) System Monitoring
The voltage and current signals for system monitoring
purpose to be provided by the User at the sole expense of NGC are
set out below:
[NGC to specify: these will consist only of signals
form the User's current transformer and voltage transformer in
the manner and from the locations et out here]
(4) Operational metering
The User shall provide the operation metering set out below.
[NGC to propose - parties to agree]
<PAGE>
APPENDIX F5
SITE SPECIFIC TECHNICAL CONDITIO@
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:
1.1.1 NGC may resign as Operator of such Energy Metering
Equipment on giving no less than 12 months' notice in writing;
and
1.1.2 the User may remove NGC as Operator upon giving no
less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as Operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any other Energy Metering System owned by NGC
for which the User is Registrant NGC shall charge and the User
shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent serious
damage to property proximate to the Energy Metering Equipment or
to the extent that such action is authorised under the Master
Agreement or any other agreement between NGC and the User).
1.4 Pulse data
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and@equipment as maybe
reasonably necessary therefor.
<PAGE>
EXHIBIT 5
DATED 19
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
___________________________________________________________
SUPPLEMENTAL AGREEMENT TYPE 5
___________________________________________________________
(for Second Tier Suppliers acting in that capacity
taking Energy through any Grid Supply Point and
through a Distribution System owned or operated
by any other person)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation, Construction
2 Right to use the NGC Transmission System
3 User's Customers
4 Use of System Charges
5 Charging Rules
6 Metering
7 Term
8 Deenergisation and Disconnection
9 Notice to Terminate
10 Master Agreement
11 Variations
Appendix A User's Customers
Appendix B
Appendix C Zone/Registered Capacity/Peak Half-Hours/Estimated Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix F1 Site Specific Technical Conditions - Metering
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the day of 19
BETWEEN
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London, SE1 9JU ("NGC", which
expression shall include its successors and/or permitted
assigns); and
(2) [ ] a company registered in [ ] with
number [ ] whose registered office is at [ ]
(the "User", which expression shall include its successors and/or
permitted assigns)
WHEREAS
(A) NGC and the User are parties to a Master Connection and Use
of System Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement.
2. RIGHT TO USE THE NGC TRANSMISSION SYSTEM
2.1 Subject to the other provisions of this Agreement including
the provisions of the Grid Code, the User may take supplies of
power from the NGC Transmission System.
2.2 Data of a technical or operational nature collected recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefor.
2.3 Subject to the provisions of this Agreement and the Grid
Code, NGC shall transport a supply of power through the NGC
Transmission System to the level forecast by the User from time
to time pursuant to Appendices E and C hereof together with such
margin as NGC shall in its reasonable opinion consider necessary
having due regard to NGC's duties under its Transmission Licence
except to the extent (if any) that NGC is prevented from doing so
by transmission constraints or by insufficiency of generation
which, in either case, could not have been avoided by the
exercise of Good Industry Practice by NGC.
2.4 Subject to the provisions of the Grid Code NGC shall be
entitled to plan and execute outages of parts of the NGC
Transmission System or Plant or Apparatus at any time and from
time to time.
3. USER'S CUSTOMERS
3.1 The User shall give written notice to NGC of the following
details of all exit points from time to time in existence between
any Distribution System and the User's Customer:-
(i) the electrical location and nomenclature of the Energy
Metering
(ii) the identity of the operator of the Distribution System
to which such Customers are connected;
(iii) the Grid Supply Point meeting the Demand (Active
Power) of each such customer;
(iv) the loss factors applying to the Energy Metering
Equipment installed in relation to each such Customer, save where
the User's Customer is connected to a Distribution System owned
by PES in which case the PES's published statement of loss
factors shall apply.
Such written notice shall be given to NGC no later than 28
days prior to the commencement or cessation of use of any such
exit point. If the Grid Supply Point referred to in (iii)
changes the User shall notify NGC forthwith after being notified
of such change by the PES in question. The information submitted
by the User from time to time shall be recorded in Appendix A
which shall be deemed automatically amended to reflect the
current position from time to time. If NGC's basis of charging
changes pursuant to Appendix E paragraph 2.1 at any time NGC
shall be entitled to ask for other information it reasonably
requires for charging purposes under this Clause 3.
4. USE OF SYSTEM CHARGES
With effect from the commencement of this Supplemental
Agreement the User shall pay to NGC the Use of System Charges set
out in Appendix D payable in accordance with the provisions of
Appendix E.
5. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
6. METERING
The provisions of Appendix F1 shall have effect.
7. TERM
Subject to the provision for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User ceases to
use the NGC Transmission System.
8. DEENERGISATION AND DISCONNECTION OF THE USER'S CUSTOMERS
8.1 Breach by the User:
If the User shall be in breach of the provisions of this
Supplemental Agreement and such breach causes or can reasonably
be expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
Users Systems then NGC may:-
(i) where the breach is capable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and requiring the User within 28 days after receipt of
such notice to remedy the breach or within any longer period
agreed between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why the breach is incapable of remedy
and requiring the User within 5 Business Days after receipt of
such notice to undertake to NGC not to repeat the breach.
8.2 De-Energisation
If:-
(a) the User fails to comply with the terms of any valid
notice serviced on it by NGC in accordance with Sub-Clause 8.1(i)
or is in breach of any undertaking given in accordance with Sub-
Clause 8.1(ii) and such breach causes or can be reasonable
expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
Users Systems; or
(b) five Business Days have elapsed since the date of any
valid notice served on the User in accordance with Sub-Clause
8.2(ii) and no undertaking is given by the User in accordance
with Sub-Clause 8.2(ii);
NGC may request the owner of the Distribution System to
which the User's Customers are connected to De-Energise such
User's customers upon the expiry of at least 48 hours prior
written notice to the User provided that at the time of expiry of
such notice the breach concerned remains unremedied and that
neither the User nor NGC has referred the matter to the Dispute
Resolution Procedure. In such event NGC may request the owner of
the Distribution system to which the User's Customers are
connected to De-Energise such User's Customers forthwith
following completion of the Dispute Resolution Procedure and
final determination of the dispute in NGC's favour.
8.3 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 8.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may request the owner of the
Distribution System to which the User's Customers are connected
to De-Energise such User's Customers upon the expiry of at least
12 hours prior written notice to the User, provided that at the
time of expiry of such notice the breach concerned remains
unremedied.
8.4 Re-Energisation Disputes
If, following any De-Energisation pursuant to this Clause 8,
a User applies to NGC for NGC to issue instructions that the
User's Customers be Re-Energised and is refused or is offered
terms which the User does not accept, this shall be recognised as
a dispute over the terms for use of system which the User may
refer to the Director for determination under the NGC
Transmission Licence. If the User accepts any terms offered by
NGC or settled by the Director pursuant to any such reference,
NGC shall request the owner of the Distribution System to which
the User's Customers are connected to Re-Energise the User's
Customers forthwith after any request from the User for NGC to do
so.
8.5 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 8 remains unremedied at the expiry of at least 6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:-
(a) all disputes arising out of the subject-matter to this
Clause 8 which are referred to the Dispute Resolution Procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to Sub-Clause
8.4 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
8.6 Disconnection
Once NGC has given a valid notice of an event of default
pursuant to Sub-Clause 8.5 NGC may give notice of termination to
that User whereupon this Supplemental Agreement shall terminate
and:
(i) NGC shall request the owner of the Distribution System
to which that User's Customers are connected to disconnect such
Customers; and
(ii) the User shall be obliged to pay to NGC forthwith the
Use of System Charges due hereunder up to the end of the
Financial Year in which Termination occurs.
9. NOTICE TO TERMINATE
9.1 The User may terminate the Supplemental Agreement upon
giving to NGC not less than 28 days written notice of
termination.
9.2 If notice to terminate is given by the User under Sub-Clause
9.1 this Supplemental Agreement shall terminate upon the expiry
of the notice period. Immediately prior thereto the User shall
pay NGC all Use of System Charges payable by the User under this
Supplemental Agreement in respect of the Financial Year in which
termination takes place.
This provision shall survive the termination of this
Supplemental Agreement.
10. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental Agreement
as if set out in full herein.
11. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order made pursuant to the Act or as a result of settling
any of the terms hereof and the User hereby authorises and
instructs NGC to make any such amendment on its behalf and
undertakes not to withdraw, qualify or revoke such authority or
instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
(the USER) )
By )
<PAGE>
APPENDIX A
CUSTOMER INFORMATION
Customer - exit point
1. Location and nomenclature of Energy Metering Equipment
2. Distribution System operator
3. Grid Supply Point meeting Demand
4. Loss factor
<PAGE>
APPENDIX B
(NOT USED)
<PAGE>
APPENDIX C
ZONE/REGISTERED CAPACITY/PEAK HALF-HOURS/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND:
ZONE :
a. GENERATION
SET TYPE/FUEL REGISTERED
CAPACITY MW
b. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half-hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
c. In the Financial Year 1st April 1990 to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial Year and the Energy produced.
d. ESTIMATED DEMAND for the period between 1 April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
- --------------MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1. TYPE OF CHARGE: SYSTEM SERVICE
Demand related
pounds........... in respect of the period from 1st April 1990
to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds..... per KW and..... KW of
Estimated Demand as set out in Appendix C.
2. TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds.............. in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds..... per KW and..... KW of
Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds...... in respect of the period from 1st April 1990 to
31st March 1991 payable in 12 equal monthly instalments subject
to adjustment in accordance with the Charging Rules based upon a
charge of pounds..... per KW Registered Capacity and .... KW being
the Registered Capacity as set out in Appendix C.
C. Energy Related
pounds........ per KWh in respect of each Kwh of Energy
entering the Total System in the period from 31st March 1990 to
31st March 1991 payable as described in Clause 14 of the Master
Agreement.
Payment shall be made in accordance with Clause 14 of the Master
Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. Use of System Charges - General and Data Requirements
1.1 NGC's Demand related Use of System Charges are calculated by
reference to Demand (Active Power) attributable to each Grid
Supply Point excluding that Demand (Active Power) met by embedded
Generating Units which is to be paid for otherwise than pursuant
to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 3 1st December in each Financial Year
the User shall supply NGC with such data as NGC may from time to
time reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 31st December in each Financial Year;
(i) Users who are Public Electricity Suppliers shall
supply to NGC a forecast for the following Financial Year of the
following:
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half-hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable
to each Grid Supply Point equal to the average of the forecasts
of PES Supply Business Demand under Annual Average Cold Spell
(ACS) Conditions attributable to such Grid Supply Point for each
of a number of peak half-hours as notified by NGC to the User
under paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply
to NGC a forecast for the following Financial Year of the STS
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of STS Demand attributable to such Grid Supply
Point for each of a number of peak half-hours as notified by NGC
to the User under paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of such Station Demand (Active Power) attributable
to such Grid Supply Point for each of a number of peak half-hours
as notified by NGC to the User under paragraph 2.1 of this
Appendix E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System Charges shall
be calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC
shall:
(i) determine from meter readings of Energy Metering
Equipment the actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year; and
(ii) shall compare the User's highest Registered
Capacity during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of
the actual position determined in accordance with paragraph 1.3.2
the amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payable by the
User under this Supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall
then compare the Actual Amount with the amount of Demand related
or Capacity related Use of System Charges (as the case may be)
paid during each month during that Financial Year by the User
under this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement
and send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information from
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC
shall send the User an invoice in relation to any sums shown by
the reconciliation statement to be due to NGC and interest
thereon calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 3 1 st March in such
Financial Year.
1.3.6 In respect of each month during that Financial
Year;
(a) the User shall, following receipt of an
appropriate invoice, pay to NGC an amount equal to the amount (if
any) by which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate
invoice, repay to the User an amount equal to the amount (if any)
by which the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the
other on such amounts from the Payment Date applicable to the
month concerned until the date of actual payment of such amounts
(which shall not be later than 31st March in such Financial
Year). Such interest shall be calculated on a daily basis at the
rate equal to the base rate of Barclays Bank PLC for the time
being and from time to time during such period.
2. Revision of Charges
2.1 To the extent permitted by the Transmission Licence NGC may
revise its Connection Charges and Use of System Charges or the
basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the User of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new asset
register during the course of the Financial Year ending 31st
March 1991. As a result, NGC shall have the right to vary the
asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:
(a) NGC has first consulted the User in advance in good
faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set out in
the statements required by Condition 10(2)D of the Transmission
Licence, the form of which has been approved by the Director.
Such asset reallocation shall be effective from 1st April
1991 and the provisions of Appendices A and B shall be amended
automatically (and a copy sent to the User) to reflect such
reallocation with effect from such date.
2.3 Subject to the provisions of paragraph 3.2 below if in the
reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective the provisions of
Sub-Clauses 11.2 and 11.4 shall apply mutatis mutandis. Following
any such variation the provisions of Appendices A and B shall be
amended automatically (and a copy sent to the User) to reflect
such variation with effect from the date such variation comes
into effect.
3. Replacement of NGC Assets
3.1 Appendix A specifies the age of each of the NGC Assets at
the Connection Site at the date of this Supplemental Agreement.
NGC Connection Charges and Use of System Charges are calculated
on the assumption that NGC Assets will not require replacement
until the expiry of the Replacement Period applicable to each NGC
Asset concerned. Such Replacement Periods have been agreed
between NGC and the User. For the avoidance of doubt, they have
been prepared for accounting purposes and carry no implication
that they represent the actual useful lives of such assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of such varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to reflect such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC Asset,
NGC shall replace such NGC Asset if requested to do so by the
User or if in NGC's reasonable opinion it is necessary to do so
to enable NGC to comply with its Licence obligations. Unless so
replaced, NGC shall keep the NGC Asset in service. In the event
that it is left in service the User shall pay Connection Charges
in respect of such NGC Asset calculated by reference to Net Asset
Value derived from a revaluation of the asset by NGC (which in
the reasonable opinion of NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. Termination Amounts
4.1 Until the end of the Financial Year in which the termination
occurs the User shall pay to NGC the Connection Charges and Use
of System Charges for which the User is liable in full. Where
the User has a Connection Site the User shall at the end of such
Financial Year pay to NGC a sum equal to the following:
(i) the then current Net Asset Value of the NGC Assets at
the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing such NGC
Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another Connection Site and renders and receives a Connection
Charge therefor NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to
re-use such NGC Assets where it is economic to do so. Upon
request and at the cost of the User, NGC shall issue a
certificate no more frequently than once each calendar year
indicating whether or not such NGC Assets have or have not been
so re-used.
5. Variation of Charges by NGC during the Finance Year
If NGC is notified of a reduced Demand forecast by a PES or
STS from the forecast submitted under paragraph 1.2 of this
Appendix and is also notified of a corresponding increase in such
a Demand forecast by another PES or STS NGC shall vary the Use of
System charges due from the User notifying the reduction such
that the charges payable reflect the revised forecast within 30
days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect from the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. Deductions
In respect of any NGC Engineering Charges which have been
paid by the User in connection with a Connection Application or
under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one third of such
NGC Engineering Charges.
<PAGE>
APPENDIX F1
SITE SPECIFIC TECHNICAL CONDITIONS
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:-
1.1.1 NGC may resign as Operator of such Energy Metering
Equipment on giving no less than 12 months' notice in writing;
and
1.1.2 the User may remove NGC as Operator upon giving no
less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as Operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any other Energy Metering System owned by NGC
for which the User is Registrant NGC shall charge and the User
shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent serious
damage to property proximate to the Energy Metering Equipment or
to the extent that such action is authorised under the Master
Agreement of any other agreement between NGC and the User).
1.4 Pulse data
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and equipment as maybe
reasonably necessary therefor.
<PAGE>
EXHIBIT 6
DATED 30th March 19
THE NATIONAL GRID COMPANY PLC (1)
and
[ ] (2)
_________________________________________________________________
SUPPLEMENTAL AGREEMENT TYPE 6
_________________________________________________________________
(for Generators with Minor Independent
Generating Plant which is Embedded and who are acting in that
capacity and also are Pool Members)
<PAGE>
CONTENTS
Clause Title
1 Definitions, Interpretation, Construction
2 Right to use the NGC Transmission System
3 Site of Connection to the Distribution System
4 Use of System Charges
5 Charging Rules
6 Metering
7 Term
8 Emergency Deenergisation
9 Deenergisation and Disconnection
10 Notice to Terminate
11 Master Agreement
12 Variations
Appendix A Site of Connection
Appendix B
Appendix C Zone/Registered Capacity/Peak Half-Hours/Estimated Demand
Appendix D Use of System Charges/Payment
Appendix E Charging Rules
Appendix Fl Site Specific Technical Conditions - Metering
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the and
becomes effective on the 31st day of March 1990.
BETWEEN
(1) THE NATIONAL GRID COMPANY PLC a company registered in
England with number 2366977 whose registered office is at
National Grid House, Sumner Street, London SE1 9JU ("NGC", which
expression shall include its successors and/or permitted
assigns); and
(2) [ ] a company registered in [ ] with
number [ ] whose registered office at [ ] (the
"User", which expression shall include its successors and/or
permitted assigns)
WHEREAS
(A) NGC and the User are parties to a Master Connection and Use
of System Agreement dated [ ] ("Master Agreement").
(B) This Supplemental Agreement is entered into pursuant to the
terms of the Master Agreement and shall be read as being governed
by them.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS, INTERPRETATION AND CONSTRUCTION
1.1 General
Unless the subject matter or context otherwise requires or
is inconsistent therewith terms and expressions defined in
Schedule 2 to the Master Agreement have the same meanings,
interpretations or constructions in this Supplemental Agreement.
2. RIGHT TO USE THE NGC TRANSMISSION SYSTEM
2.1 Subject to the other provisions of this Agreement including
the provisions of the Grid Code, the User may take supplies of
power on to and/or take supplies of power from the NGC
Transmission System as the case may be.
2.2 The User shall not operate its User's Equipment such that
any of it exceeds its Registered Capacity save as expressly
permitted and instructed pursuant to the Fuel Security Code or as
may be necessary to expedient in accordance with Good Industry
Practice.
2.3 Data of a technical or operational nature collected recorded
or otherwise generated pursuant to this Supplemental Agreement
shall be deemed data lodged pursuant to the Grid Code to the
extent that the Grid Code makes provision therefor.
2.4 Subject to the provisions of this Agreement and the Grid
Code, NGC shall accept into the NGC Transmission System power
generated by the User up to the Maximum Export Capacity except to
the extent (if any) that NGC is prevented from doing so by
transmission constraints which could not be avoided by the
exercise of Good Industry Practice by NGC.
2.5 Subject to the provisions of the Grid Code NGC shall be
entitled to plan and execute outages of parts of the NGC
Transmission System or Plant or Apparatus at any time and from
time to time.
3. SITE OF CONNECTION TO THE DISTRIBUTION SYSTEM
The site where the User is connected to the Distribution
System is more particularly described in Appendix A.
4. USE OF SYSTEM CHARGES
With effect from the commencement of this Supplemental
Agreement the User shall pay to NGC the Use of System Charges set
out in Appendix D payable in accordance with the provisions of
Appendix E.
5. CHARGING RULES
The provisions of the Charging Rules set out in Appendix E
to this Supplemental Agreement shall apply.
6. METERING
The provisions of Appendix F1 shall have effect.
7. TERM
Subject to the provisions for earlier termination set out
herein and in Clause 17 of the Master Agreement, this
Supplemental Agreement shall continue until the User's Plant is
Disconnected from the Distribution System in accordance with
Clause 9 or 10.
8. EMERGENCY DEENERGISATION
8.1 Emergency Deenergisation requested by NGC:
If, in the reasonable opinion of NGC, the condition or
manner of operation of the NGC Transmission System or the User's
System (if any) poses an immediate threat of injury or material
damage to any person or to the Total System or to any User's
System or to the NGC Transmission System, NGC shall have the
right to request the owner of the Distribution System to which
the User is connected to Deenergise the User's Equipment if it is
necessary or expedient to do so to avoid the occurrence of such
injury or damage.
8.2 Emergency Deenergisation by a User:
If, in the reasonable opinion of the User the condition or
manner of operation of the NGC Transmission System, the Total
System or any other User's System, poses an immediate threat of
injury or material damage to any person or to the User's System
the User shall have the right to Deenergise the User's Equipment
if it is necessary or expedient to do so to avoid the occurrence
of such injury or damage.
8.3 Reenergisation:
The User's Equipment at the Connection Site shall be Re-
Energised as quickly as practicable after the circumstances to
any Deenergisation under this Clause 12 have ceased to exist.
9. DEENERGISATION AND DISCONNECTION
9.1 Breach by the User:
If the User shall be in breach of the provisions of this
Supplemental Agreement and such breach causes or can reasonably
be expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission System or
User Systems then NGC may:-
(i) where the breach is capable or remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and requiring the User within 28 days after receipt of
such notice to remedy the breach or within any longer period
agreed between NGC and the User, the agreement of NGC not to be
unreasonably withheld or delayed; or
(ii) where the breach is incapable of remedy, give written
notice to the User specifying in reasonable detail the nature of
the breach and the reasons why the breach is incapable of remedy
and requiring the User within 5 Business Days after the receipt
of such notice to undertake to NGC not to repeat the breach.
9.2 De-Energisation
If:-
(a) the User fails to comply with the terms of any valid
notice served on it by NGC in accordance with Sub-Clause 9.1(i)
or is in breach of any undertaking given in accordance with Sub-
Clause 9.1(ii) and such breach causes or can be reasonably
expected to cause a material adverse effect on the business or
condition of NGC or other Users or the NGC Transmission or User
Systems;
or
(b) five Business Days have elapsed the date of any valid
notice served on the User in accordance with Sub-Clause 9.2(ii)
and no undertaking is given by the User in accordance with Sub-
Clause 9.2(ii);
NGC may request the owner of the Distribution System to
which the User is connected to De-Energise the User's Plant at
that site upon expiry of at least 48 hours prior written notice
to the User, provided that at the time of expiry of such notice
the breach concerned remains unremedied and that neither the User
nor NGC has referred the matter to the Dispute Resolution
Procedure. In such event NGC may request the owner of the
Distribution System to which the User is connected to De-Energise
the User's Plant at that site forthwith following completion of
the Dispute Resolution Procedure and final determination of the
dispute in NGC's favour.
9.3 NGC Transmission Licence
If a breach of the nature referred to in Sub-Clause 9.1
continues to the extent that it places or seriously threatens to
place in the immediate future NGC in breach of the NGC
Transmission Licence, NGC may request the owner of the
Distribution System to which the User's Customers are connected
to De-Energise such User's Customers upon the expiry of at least
12 hours prior written notice to the User, provided that at the
time of expiry of such notice the breach concerned remains
unremedied.
9.4 Re-Energisation Disputes
If, following any De-Energisation pursuant to this Clause 9,
a User applies to NGC for NGC to issue instructions that the
User's Customer(s) be Re-Energised and is refused or is offered
terms which the User does not accept, this shall be recognised as
a dispute over the terms for use of system which the User may
refer to the Director for determination under the NGC
Transmission Licence. If the User accepts any terms offered by
NGC or settled by the Director pursuant to any such reference,
NGC shall request the owner of the Distribution system to which
the User's Plant is connected to Re-Energise the User's Plant
forthwith after any request from the User for NGC to do so.
9.5 Event of Default
If the breach which led to any De-Energisation pursuant to
this Clause 9 remains unremedied at the expiry of at least 6
months after the date of such De-Energisation, NGC may declare by
notice in writing to the User that such breach has become an
event of default provided that:-
(a) all disputes arising out of the subject-matter to this
Clause 9 which are referred to the Dispute Resolution Procedure
have then been finally determined in favour of NGC; and
(b) any reference to the Director pursuant to Sub-Clause
8.4 has then been finally determined in favour of NGC or any
terms settled by the Director pursuant to such application have
not been accepted by the User.
9.6 Disconnection
Once NGC has given a valid notice of an event of default
pursuant to Sub-Clause 9.5 NGC may give notice of termination to
that User whereupon this Supplemental Agreement shall terminate
and:
(i) NGC shall request the owner of the Distribution System
to which that User is connected to Disconnect all the User's
Plant at the site; and
(ii) the User shall be obliged to pay to NGC forthwith the
Use of System Charges due hereunder up to the end of the
Financial Year in which Termination occurs.
10. NOTICE TO TERMINATE
10.1 The User may terminate the Supplemental Agreement upon
giving to NGC not less than 6 months written notice of
termination.
10.2 If notice to terminate is given by the User under Sub-Clause
10.1 this Supplemental Agreement shall terminate upon the expiry
of the notice period. Immediately prior thereto the User shall
pay NGC all Use of System Charges payable by the User under this
Supplemental Agreement in respect of the Financial Year in which
termination takes place. This provision shall survive the
termination of this Supplemental Agreement.
11. MASTER AGREEMENT
The provisions of Clauses 18 to 24 and 26 to 30 inclusive of
the Master Agreement shall apply to this Supplemental Agreement
as if set out in full herein.
12. VARIATIONS
No variation to this Supplemental Agreement shall be
effective unless made in writing and signed by or on behalf of
both NGC and the User. NGC and the User shall effect any
amendment required to be made to this Supplemental Agreement by
the Director as a result of a change in the Transmission Licence
or an order made pursuant to the Act or as a result of settling
any of the terms hereof and the User hereby authorises and
instructs NGC to make any such amendment on its behalf and
undertakes not to withdraw, qualify or revoke such authority or
instruction at any time.
IN WITNESS WHEREOF the hands of the duly authorised
representatives of the parties hereto at the date first above
written
THE NATIONAL GRID COMPANY PLC )
By )
the USER )
By )
<PAGE>
APPENDIX A
COMPANY :
SITE OF CONNECTION TO DISTRIBUTION SYSTEM:
<PAGE>
APPENDIX B
NOT USED
<PAGE>
APPENDIX C
ZONE/REGISTERED CAPACITY/PEAK HALF/ESTIMATED DEMAND
COMPANY :
GRID SUPPLY POINT/
CONNECTION SITE :
ELECTRICAL LOCATION OF ENERGY METERING
EQUIPMENT MEASURING STATION DEMAND:
ZONE :
a. GENERATION:
SET TYPE/FUEL REGISTERED
CAPACITY MW
b. In the Financial Year 1st April 1990 to 31st March 1991
NGC's Demand related Use of System charges shall be calculated by
reference to the Demand attributable to the User at the Grid
Supply Point identified above in relation to the 3 half-hours of
peak Demand (Active Power) occurring on the 3 days of peak Demand
(Active Power) which occur in the period from 1st November 1990
to 28th February 1991 and are at least 10 days apart.
c. In the Financial Year 1st April 1990 to 31st March 1991
NGC's generation related Use of System Charges shall be
calculated by reference to the highest Registered Capacity during
such Financial Year and the Energy produced.
d. ESTIMATED DEMAND for the period between 1 April 1990 and
31st March 1991 and thereafter as notified in accordance with the
Charging Rules.
- ---------------------MW
<PAGE>
APPENDIX D
USE OF SYSTEM CHARGES/PAYMENT
COMPANY :
LOCATION :
1) TYPE OF CHARGE: SYSTEM SERVICE
Demand related
pounds..........in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds....per KW and
......KW of Estimated Demand as set out in Appendix C.
2) TYPE OF CHARGE: INFRASTRUCTURE
A. Demand related
pounds.......... in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules.
Note: based upon a charge of pounds....per KW and
........KW of Estimated Demand as set out in Appendix C.
B. Capacity Related
pounds..........in respect of the period from 1st April
1990 to 31st March 1991 payable in 12 equal monthly instalments
subject to adjustment in accordance with the Charging Rules based
upon a charge of pounds...per KW Registered Capacity and .......KW
being the Registered Capacity as set out in Appendix C.
C. Energy Related
pounds.......per KWh in respect of each KWh of Energy
entering the Total System in the period from 31st March 1990 to
31st March 1991 payable as described in Clause 14 of the Master
Agreement.
Payments shall be made in accordance with Clause 14 of the
Master Agreement.
<PAGE>
APPENDIX E
CHARGING RULES
1. Use of System Charges - General and Data Requirements
1.1 NGC's Demand related Use of System Charges are calculated by
reference to Demand (Active Power) attributable to each Grid
Supply Point excluding that Demand (Active Power) met by embedded
Generating Units which is to be paid for otherwise than pursuant
to the Pooling and Settlement Agreement.
1.2 Data Requirements
1.2.1 On or before 31st December in each Financial Year the
User shall supply NGC with such data as NGC may from time to time
reasonably request to enable NGC to calculate the Connection
Charges and/or Use of System Charges due from the User to NGC in
respect of the Connection Site including the data specified in
Appendix C.
1.2.2 On or before 31st December in each Financial Year,
(i) Users who are Public Electricity Suppliers shall supply
to NGC a forecast for the following Financial Year of the
following:-
(a) the Natural Demand attributable to each Grid
Supply Point equal to the average of the forecasts of Natural
Demand under Annual Average Cold Spell (ACS) Conditions
attributable to such Grid Supply Point for each of a number of
peak half-hours as notified by NGC to the User under paragraph
2.1 of this Appendix E; and
(b) the PES Supply Business Demand attributable to
each Grid Supply Point equal to the average of the forecasts of
PES Supply Business Demand under Annual Average Cold Spell (ACS)
Conditions attributable to such Grid Supply Point for each of a
number of peak half-hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
(ii) Users who are Second Tier Suppliers shall supply to NGC
a forecast for the following Financial Year of the STS Demand
under Annual Average Cold Spell (ACS) Conditions attributable to
each Grid Supply Point equal to the average of the forecasts of
STS Demand attributable to such Grid Supply Point for each of a
number of peak half-hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
(iii) Users who are Generators shall supply to NGC a
forecast for the following Financial Year of the Station Demand
(Active Power) under Annual Average Cold Spell (ACS) Conditions
attributable to each Grid Supply Point equal to the average of
the forecasts of such Station Demand (Active Power) attributable
to such Grid Supply Point for each of a number of peak half-hours
as notified by NGC to the User under paragraph 2.1 of this
Appendix E.
1.3 Annual Adjustment
1.3.1 NGC's Demand related Use of System Charges shall be
calculated on the basis of actual Demand (Active Power)
attributable to each User at each Grid Supply Point for each of a
number of peak half hours as notified by NGC to the User under
paragraph 2.1 of this Appendix E.
1.3.2 On or before 1st March each Financial Year NGC shall:-
(i) determine from meter readings of Energy Metering
Equipment the actual Demand (Active Power) attributable to each
User at each Grid Supply Point for each of the Number of Peak
Half Hours applicable during such Financial Year; and
(ii) shall compare the User's highest Registered Capacity
during such year with the Registered Capacity used when
estimating the charges due during such Financial Year;
1.3.3 NGC shall then promptly calculate on the basis of the
actual position determined in accordance with paragraph 1.3.2 the
amount of Demand related or Capacity related Use of System
Charges (as the case may be) that would have been payable by the
User under this Supplemental Agreement during each month during
that Financial Year if they had been calculated on the basis of
that of the actual position (the "Actual Amount"). NGC shall
then compare the Actual Amount with the amount of Demand related
or Capacity related Use of System Charges (as the case may be)
paid during each month during that Financial Year by the User
under this Supplemental Agreement (the "Notional Amount").
1.3.4 NGC shall then prepare a reconciliation statement and
send it to the User. Such statement shall specify the Actual
Amount and the Notional Amount for each month during the relevant
Financial Year and, in reasonable detail, the information from
which such amounts were derived and the way in which they were
calculated.
1.3.5 Together with the reconciliation statement NGC shall
send the User an invoice in relation to any sums shown by the
reconciliation statement to be due to NGC and interest thereon
calculated pursuant to paragraph 1.3.6 below. Forthwith
following receipt of any reconciliation statement the User shall
send to NGC an invoice in relation to any sum shown by the
reconciliation statement to be due to the User and interest
thereon calculated pursuant to paragraph 1.3.6 below. Such
invoices shall be payable on or before 31st March in such
Financial Year.
1.3.6 In respect of each month during that Financial Year:-
(a) the User shall, following receipt of an appropriate
invoice, pay to NGC an amount equal to the amount (if any) by
which the Actual Amount exceeds the Notional Amount; and
(b) NGC shall, following receipt of an appropriate invoice,
repay to the User an amount equal to the amount (if any) by which
the Notional Amount exceeds the Actual Amount.
Interest shall be payable by the paying Party to the other
on such amounts from the Payment Date applicable to the month
concerned until the date of actual payment of such amounts (which
shall not be later than 31st March in such Financial Year). Such
interest shall be calculated on a daily basis at the rate equal
to the base rate of Barclays Bank PLC for the time being and from
time to time during such period.
2. Revision of Charges
2.1 To the extent permitted by the Transmission Licence NGC may
revise its Connection Charges and Use of System Charges or the
basis of their calculation including issuing revisions to
Appendices B, C and D hereto. On or before 31st October in each
Financial Year NGC shall notify the User of the intended basis of
calculation to be used by NGC in the following Financial Year
(including the number and timing of peak half-hours if any to be
used when calculating Demand related infrastructure charges) and
shall consult with the User concerning the same. On or before
30th November in each Financial Year NGC shall confirm to the
User the basis of calculation to be used in the following
Financial Year. NGC shall give the User not less than 2 months
prior written notice of any revised charges, including revisions
to Appendices B, C and D hereto, which notice shall specify the
date upon which such revisions become effective (which may be at
any time). The User shall pay any such revised charges and
Appendix B, C and/or D as appropriate shall be amended
automatically (and a copy sent to the User) to reflect any
changes to such Appendices with effect from the date specified in
such notice.
2.2 The User acknowledges that NGC will establish a new asset
register during the course of the Financial Year ending 31st
March 1991. As a result, NGC shall have the right to vary the
asset allocation reflected in Appendix A upon giving not less
than 2 months prior written notice to the User provided that:-
(a) NGC has first consulted the User in advance in good
faith, including informing the User of the nature of the
reallocation insofar as it materially affects the Connection Site
and indicating the likely implications for the User of such
reallocation; and
(b) the principles of asset allocation are those set out in
the statements required by Condition 10(2)D of the Transmission
Licence, the form of which has been approved by the Director.
Such asset reallocation shall be effective from 1st April
1991 and the provisions of Appendices A and B shall be amended
automatically (and a copy sent to the User) to reflect such
reallocation with effect from such date.
2.3 Subject to the provisions of paragraph 3.2 below if in the
reasonable opinion of NGC any development, replacement,
renovation, alteration, construction or other work to the NGC
Transmission System means that NGC needs to vary the Connection
Charges payable by the User in relation to the Connection Site
NGC shall have the right to vary such charges accordingly upon
giving to the User not less than 2 months prior written notice.
Such notice shall be deemed to be a revised Connection Offer and
before any such variation become effective the provision of Sub-
Clauses 11.2 and 11.4 shall apply mutatis mutandis. Following
any such variation the provisions of Appendices A and B shall be
amended automatically (and a copy sent to the User) to reflect
such variation with effect from the date such variation comes
into effect.
3. Replacement of NGC Assets
3.1 Appendix A specifies the age of each of the NGC Assets at
the Connection Site at the date of this Supplemental Agreement.
NGC Connection Charges and Use of System Charges are calculated
on the assumption that NGC Assets will not require replacement
until the expiry of the Replacement Period applicable to each NGC
Asset concerned. Such Replacement Periods have been agreed
between NGC and the User. For the avoidance of doubt, they have
been prepared for accounting purposes and carry no implication
that they represent the actual useful lives of such assets.
3.2 Where in NGC's reasonable opinion an NGC Asset requires
replacement before the expiry of its Replacement Period NGC
shall, with the prior written approval of the User (except where
in NGC's reasonable opinion such replacement is necessary, in
which case such approval shall not be required but in such case
the User shall have the right to give notice to Disconnect) have
the right to replace the NGC Asset at no additional cost to the
User until expiry of its original Replacement Period. Upon the
expiry of such original Replacement Period NGC shall be entitled
to vary the Connection Charges in respect of the replaced NGC
Asset so that they are calculated on the basis of the then
current Net Asset Value of such NGC Assets. NGC shall give the
User not less than 2 months prior written notice of such varied
charges which notice shall specify the date upon which such
increase becomes effective. The User shall pay such varied
charges and Appendices A and B shall be amended automatically
(and a copy sent to the User) to reflect such revised charges
with effect from the date specified in such notice.
3.3 Upon the expiry of the Replacement Period of any NGC Asset,
NGC shall replace such NGC Asset if requested to do so by the
User or if in NGC's reasonable opinion it is necessary to do so
to enable NGC to comply with its Licence obligations. Unless so
replaced, NGC shall keep the NGC Asset in service. In the event
that it is left in service the User shall pay Connection Charges
in respect of such NGC Asset calculated by reference to Net Asset
Value derived from a revaluation of the asset by NGC (which in
the reasonable opinion of NGC, taking into account the
depreciation already paid over the lifetime of that asset,
reflects the then expected life expectancy of the asset plus
capitalised renovation or refurbishment costs). Upon any such
replacement NGC shall be entitled to vary the Connection Charges
in respect of the replaced NGC Asset so that they are calculated
on the basis of the then current Net Asset Value of such NGC
Asset. NGC shall give the User not less than 2 months prior
written notice of such varied charges which notice shall specify
the date upon which such increase becomes effective. The User
shall pay such varied charges and Appendices B and D shall be
amended automatically (and a copy sent to the User) to reflect
such revised charges with effect from the date notified to the
User by NGC.
4. Termination Amounts
4.1 Until the end of the Financial Year in which the termination
occurs the User shall pay to NGC the Connection Charges and Use
of System Charges for which the User is liable in full. Where
the User has a Connection Site the User shall at the end of such
Financial Year pay to NGC a sum equal to the following:-
(i) the then current Net Asset Value of the NGC Assets at
the Connection Site in question; and
(ii) a sum equal to the reasonable cost of removing such NGC
Assets.
4.2 Where a Termination Amount is paid to NGC under this
Agreement and subsequently NGC uses the NGC Assets at the same or
another Connection Site and renders and receives a Connection
Charge therefor NGC shall pay to the User the Net Asset Value
component of the Termination Amount less reasonable maintenance
and storage costs. NGC shall use its reasonable endeavours to re-
use such NGC Assets where it is economic to do so. Upon request
and at the cost of the User, NGC shall issue a certificate no
more frequently than once each calendar year indicating whether
or not such NGC Assets have or have not been so re-used.
5. Variation of Charges by NGC during the Financial Year
If NGC is notified of a reduced Demand forecast by a PES or
STS from the forecast submitted under paragraph 1.2 of this
Appendix and is also notified of a corresponding increase in such
a Demand forecast by another PES or STS NGC shall vary the Use of
System charges due from the User notifying the reduction such
that the charges payable reflect the revised forecast within 30
days of receipt of the 2 notices. NGC shall vary or commence
charging as the case may be the Use of System charges due from
the User notifying the increase with effect from the date that
the increase becomes effective. Save where NGC receives 2
corresponding notifications there shall unless NGC decides
otherwise be no variation of charges downwards during the
Financial Year to cover this eventuality and reconciliation shall
be effected pursuant to paragraph 1.3 of this Appendix.
6. Deductions
In respect of any NGC Engineering Charges which have been
paid by the User in connection with a Connection Application or
under Sub-Clause 2.3 of the Supplemental Agreement Type 2 NGC
shall reduce the amount of Connection Charges payable by the User
in relation to the respective Connection Site on 1st April in
each of the first 3 years of the payment of such Connection
Charges by an amount equal on each occasion to one third of such
NGC Engineering Charges.
<PAGE>
APPENDIX F1
SITE SPECIFIC TECHNICAL CONDITIONS
Metering
1.1 Operator
Where the Connection Site is a Grid Supply Point, and the
User is or will be Registrant in relation to the Energy Metering
Equipment required by the Pooling and Settlement Agreement at the
Grid Supply Point and/or at the bulk supply point(s) which are
related to that Grid Supply Point, NGC shall install and be the
Operator of all such Energy Metering Equipment from the Transfer
Date until the FMS Date and thereafter:-
1.1.1 NGC may resign as operator of such Energy Metering
Equipment on giving no less than 12 months' notice in writing;
and
1.1.2 the User may remove NGC as Operator upon giving no
less than 12 months' notice in writing.
Provided that where the User agrees to become owner of any
such Energy Metering Equipment NGC may resign as Operator upon
such transfer of ownership and shall agree such terms as shall be
reasonably necessary to enable the User to perform its
obligations as operator of such Energy Metering Equipment.
1.2 Charges
NGC shall recover its charges for acting as Operator of any
Energy Metering System which is an NGC Asset charged for under
this Supplemental Agreement as part of such charges. Where NGC
acts as Operator of any other Energy Metering System owned by NGC
for which the User is Registrant NGC shall charge and the User
shall pay such amount which is reasonable in all the
circumstances.
1.3 Interference
The User shall ensure that its employees, agents and
invitees will not interfere with any Energy Metering Equipment in
respect of which NGC is Operator or the connections to such
Energy Metering Equipment, without the prior written consent of
NGC (except to the extent that emergency action has to be taken
to protect the health and safety of persons or to prevent serious
damage to property proximate to the Energy Metering Equipment or
to the extent that such action is authorised under the Master
Agreement or any other agreement between NGC and the User).
1.4 Pulse data
The User shall have the right to collect and record pulses
from the meters comprised in the Energy Metering System(s) at the
Connection Site. NGC shall give the User access in accordance
with the Interface Agreement to collect and record such pulses
and to install and maintain such lines and equipment as maybe
reasonably necessary therefor.
<PAGE>
EXHIBIT 7
CONNECTION APPLICATION
NOTES
PLEASE STUDY THE FOLLOWING NOTES BEFORE COMPLETING AND SIGNING
THIS APPLICATION FORM
1. NGC requires the information requested in this application
form for the purposes of preparing an offer ("the Offer") to
enter into an agreement for connection to and/or use of the NGC
Transmission System in accordance with Condition 10(B) of the NGC
Transmission Licence. It is essential that the Applicant should
supply all information requested in this application form and
that every effort should be made to ensure that such information
should be accurate.
Please note that certain expressions which are used in this
application form are defined in the glossary of definitions
(contained in Schedule 2 to the Master Agreement) and when this
occurs the expressions have capital letters at the beginning of
each word.
2. Should NGC consider that any information provided is
incomplete or unclear or should NGC require further information
in order that it may prepare the Offer, the Applicant will be
requested to provide further information or clarification.
3. Should there be any change in any information provided by
the Applicant after it has been submitted to NGC, the Applicant
must immediately inform NGC of such a change.
4. NGC shall charge the Applicant and the Applicant shall pay
to NGC NGC's Engineering Charges in relation to the application.
An advance will be charged by NGC which will be reasonable in all
the circumstances. No application will be considered until such
advance has been paid. The balance of the NGC Engineering
Charges shall be notified and invoiced by NGC to the Applicant
together with a breakdown of such charges and the Applicant shall
pay the same within 28 days of the date of NGC's invoice. If NGC
does not make an Offer to the Applicant in accordance with
Condition 10(B) of the NGC Transmission Licence otherwise than by
reason of withdrawal of the application by the Applicant NGC will
return the charges to the Applicant. NGC will deduct from the
Connection Charges and/or Use of System Charges payable during
the first 3 years following the Practical Completion Date any NGC
Engineering Charges paid by the applicant in 3 equal instalments.
In the event that the advance and any other payments exceed the
appropriate NGC Engineering Charges the excess shall be repaid
forthwith to the Applicant.
5. The effective date upon which the application is made shall
be the later of the date when NGC has received the application
fee under Paragraph 4 above and the date when NGC is reasonably
satisfied that the Applicant has completed Sections A-D. NGC
shall notify the Applicant of such date.
6. NGC will make the Offer in accordance with the terms of
Clauses 11 and 12 of the Master Agreement and the NGC
Transmission Licence.
7. NGC will make the Offer as soon as is reasonably practicable
and in any event-within 3 months of the effective date of the
application or such later period as the Director agrees to. The
Offer may, where it is necessary to carry out additional
extensive system studies to evaluate more fully the impact of the
proposed development, indicate the areas that require more
detailed analysis. Before such additional studies are required,
the Applicant shall indicate whether it wishes NGC to undertake
the work necessary to proceed to make a revised offer within the
3 month period or, where relevant the timescale consented to by
the Director. To enable NGC to carry out any of the above
mentioned necessary detailed system studies the Applicant may, at
the request of NGC, be required to provide some or all of the
Detailed Planning Data listed in Part 2 of the Appendix to the
Planning Code which is part of the Grid Code.
8. If the Applicant has not already entered into a Master
Connection and Use of System Agreement with NGC the Applicant
will be required as part of this Application Form to undertake
that he will comply with the provisions of the Grid Code for the
time being in force. Copies of the Grid Code and the Master
Connection and Use of System Agreement are sent with this
application form and the Applicant is advised to study them
carefully. Further copies are available on payment of NGC's
reasonable copying charges, postage and packing. Data submitted
pursuant to this application shall be deemed submitted pursuant
to the Grid Code.
9. NGC's Offer will be based upon its standard form terms of
Connection Offer a copy of which is attached and the statement of
charges issued by NGC under Condition 10 of NGC's Transmission
Licence. The Applicant should bear in mind NGC's standard form
terms of offer when making this application.
10. In particular, NGC prepares Offers upon the basis that each
party will design, construct, install, control, operate and
maintain the Plant and Apparatus which he will own usually but
not necessarily applying the ownership rules set out in Clause 6
of the Master Agreement. If the Applicant wishes NGC to carry
out any of these matters on the Applicant's behalf please contact
NGC for further details.
11. In particular please note that NGC may require as a
condition of the Offer that the Applicant's Plant or Apparatus
should meet or provide some or all of the technical requirements
set out in the Appendices of the draft Supplemental Agreement
attached to NGC's standard form terms of offer and may propose
that the Applicant's Plant or Apparatus should have the
capability to provide Agreed Ancillary Services.
12. Please complete this application form in black print and
return it duly signed to [name of contact] at the Commercial
Department, NGC, National Grid House, Sumner Street, London SE1
9JU (Telephone No. [ ]).
<PAGE>
CONNECTION APPLICATION
1. We hereby apply to connect our Plant and Apparatus to the
NGC Transmission System at a New Connection Site. We agree to
pay NGC's Engineering Charges on the terms specified in the Notes
to the Connection Application.
2. We will promptly inform NGC of any change in the information
given in this Application as quickly as practicable after
becoming aware of any such change.
3. If we have not already signed a Master Agreement or
Accession Agreement we undertake for the purposes of this
Application to be bound by the terms of the Grid Code from time
to time in force and to sign an Accession Agreement.
Signed:
...................................................
For and on behalf of the Applicant
Date: ..........................................
<PAGE>
NGC - APPLICATION FOR A NEW CONNECTION
A. DETAILS OF APPLICANT
1. Name: ...................................................
2. Address:.................................................
3. Registered Office/Address:
........................................................
4. Name, title and address of contacts for the purposes of
this application, giving descriptions of the field of responsibility
of each person:
.................................................................
5. If Applicant is an agent, please give name(s) and
address(es) of person(s) for whom the Applicant is acting:
.................................................................
B. THE PROPOSED POINT OF CONNECTION
1. Please identify (preferably by reference to an extract from
Ordnance Survey Map) the intended location (the "Connection
Site") of the Plant and Apparatus ("the User Development") which
it is desired should be connected to the NGC Transmission System
and where the application is in respect of a proposed New
Connection Site other than at an existing sub-station please
specify the proposed location and name of the New Connection Site
(which name should not be the same as or confusingly similar to
the name of any other Connection Site) together with details of
access to the Connection Site including from the nearest main
road.
.................................................................
2. Please provide a plan or plans of the proposed Connection
Site indicating (so far as you are now able) the position of all
buildings, structures, Plant and Apparatus and of all services
located on the Connection Site.
.................................................................
3. Give details of the intended legal estate in the Connection
Site (to include leasehold and freehold interests) insofar as you
are aware.
.................................................................
4. Who occupies the Connection Site insofar as you are aware?
.................................................................
5. If you believe that a new sub-station will be needed, please
indicate by reference to the plan referred to in (2) above the
Applicant's suggested location for it - giving dimensions of the
area.
.................................................................
6. If you are prepared to make available to NGC the land
necessary for the said sub-station, please set out brief
proposals for NGC's interest in it including (if relevant) such
interest and the consideration to be paid by NGC for it.
.................................................................
7. What space is available on the Connection Site for working
storage and accommodation areas for NGC contractors? If so,
please indicate by reference to the plan referred to in (2) above
the location of such areas, giving the approximate dimensions of
the same.
.................................................................
8. Please provide details (including copies of any surveys or
reports) of the physical nature of land in which you have a legal
estate at the proposed Connection Site including the nature of
the ground and the sub-soil including the results of the
following tests:-
[NGC to specify]
.................................................................
9. Please give details and provide copies of all existing
relevant planning and other consents (statutory or otherwise)
relating to the Connection Site and the User Development and/or
details of any pending applications for the same.
.................................................................
10. Is access to or use of the Connection Site for the purposes
of installing, maintaining and operating Plant and Apparatus
subject to any existing restrictions? If so, please give
details:
.................................................................
11. If you are aware of them, identify by reference to a plan
(if possible) the owners and (if different) occupiers of the land
adjoining the Connection Site. To the extent that you have
information, give brief details of the owner's and occupier's
estates and/or interests in such land.
.................................................................
12. Please provide details of the values and methods of
calculation of liquidated damages to be payable by NGC if the
proposed works are delayed or not completed through NGC's fault.
.................................................................
C. TECHNICAL INFORMATION
1. Please provide the data listed in Part 1 of the Appendix to
the Planning Code which are applicable to you. Note: the data
concerned form part of the Planning Code and Data Registration
Code. Applicants should refer to these sections of the Grid Code
for an explanation.
2. Please provide a copy of your Safety Rules if not already
provided to NGC
3. Please indicate any terms which you are prepared to offer
for:-
(a) Black Start Capability
(b) Gas Turbine Unit Fast Start
(c) Synchronous Compensation
(d) Pumped Storage Unit Spinning-in-Air
(e) Pumped Storage
(f) Pumped Storage Plant Fast Start from Standstill
(g) Demand Reduction
(h) Adjustment to Pumped Storage Unit Pumping Programme
(i) Hot Standby
4. Please enclose a draft Interface Agreement (if applicable).
D. PROGRAMME
Please provide a suggested construction programme in bar
chart form for the construction works necessary to install the
User Development (not the NGC Assets needing to be installed)
indicating the anticipated date when the connection will be
required to be made.
<PAGE>
EXHIBIT 8
CONNECTION OFFER
Date: [ ]
Dear Sirs
We refer to your application dated [ ] for a New
Connection Site for your proposed development at [
] and to [here list other documents submitted by applicant in
support his application together with any relevant NGC
communications relating to the application] and now set out below
our offer for the New Connection Site. Please note that certain
expressions which are used int his offer are defined in the
glossary of definitions (contained in Schedule 2 to the Master
Agreement) and when this occurs the expressions have capital
letters at the beginning of each word.
1. NGC offers to enter into a Supplemental Agreement in the
form and terms attached as Section A. If you are not already a
User you are required to enter into the enclosed Accession
Agreement.
2. This offer has been prepared upon the basis that each party
will construct, install, control, operate and maintain the Plant
and Apparatus which will own applying where necessary the
ownership rules set out in Clause 6 of the Master Agreement. If
you wish us to carry out any of these matters on your behalf
please contact us for further details.
3. [It is a part of this offer that you also enter into an
Interface Agreement in the form set out in Section B].
4. This offer has been prepared upon the basis that you have or
will obtain the legal estate which you expressed as your
intention in the said application in the land described in
Section C.
5. If so indicated by a tick in the relevant box:
(i) you are required to provide us with your credit rating
over he past ten years and the name of your credit rating agency;
and/or
(ii) you are required to enter into a bond in the sum of pounds[
] in a form approved by NGC such approval not to be unreasonably
withheld or delayed.
6. The technical conditions with which you must comply as a
term of this offer are set out in the Grid Code. Additional or
different technical conditions set out in the Appendices to the
Supplemental Agreement are set out in Section A.
7. This offer is open for acceptance according to the terms of
Clause 11 of the Master Agreement and the Transmission Licence.
Please note your right to make an application to the Director to
settle the terms of the Offer pursuant to Condition 10C1 of the
Transmission Licence.
8. If you have not yet entered into a Master Agreement with us
please not that in your application you have undertaken to be
bound by the Grid Code and that the provisions of the Grid Code
bind you until this offer lapses.
9. To accept this offer, please execute and return the
[Accession Agreement and] Supplemental Agreement [Interface
Agreement] attached to offer as Section A. Subject to the
provisions of paragraph 7 above NGC will then itself execute the
Agreement(s). THE AGREEMENTS ARE ONLY EFFECTIVE IN ACCORDANCE
WITH THEIR TERMS ONCE THEY HAVE BEEN EXECUTED BY NGC.
10. All communications in relation to this offer must, in the
first instance, be directed to the Commercial Department of NGC
for the attention of [description].
Yours faithfully
_________________________________
for and on behalf of
The National Grid Company PLC
<PAGE>
SECTION A
FORM OF SUPPLEMENTAL AGREEMENT
<PAGE>
SECTION B
FORM OF INTERFACE AGREEMENT
<PAGE>
SECTION C
USERS LAND
<PAGE>
EXHIBIT 9
USE OF SYSTEM APPLICATION GENERATORS
NOTES
PLEASE STUDY THE FOLLOWING NOTES BEFORE COMPLETING AND SIGNING
THIS APPLICATION FORM.
1. NGC requires the information requested in this application
form for the purposes of preparing an offer ('the Offer") to
enter into an agreement for use of the NGC Transmission System in
accordance with Condition 10(B) of the NGC Transmission Licence.
It is essential that the Applicant should supply all information
requested in this application form and that every effort should
be made to ensure that such information should be accurate.
Please note that certain expressions which are used in this
application form @defined in the glossary of definitions
(contained in Schedule 2 to the Master Agreement) and when this
occurs the expressions have capital letters at the beginning of
each word.
2. Should NGC consider that any information provided is
incomplete or unclear or should NGC require further information
in order that it may prepare the Offer, the Applicant will be
requested to provide further information or clarification.
3. Should there be any change in any information provided by
the Applicant after it has been submitted to NGC, the Applicant
must immediately inform NGC of such a change.
4. The effective date upon which the application is made shall
be the date when NGC is reasonably satisfied that the Applicant
has completed Sections A-D. NGC shall notify the Applicant of
such date.
5. NGC will make the Offer in accordance with the terms of
Clauses II and 12 of the Master Agreement and the NGC
Transmission Licence.
6. NGC will make the Offer as soon as is reasonably practicable
and in any event within 3 months of the effective date of the
application or such later period as the Director agrees to. The
offer may, where it is necessary to carry out additional
extensive system studies to evaluate more fully the impact of the
proposed development, indicate the areas that require more
detailed analysis. Before such additional studies are required,
the Applicant shall indicate whether it wishes NGC to undertake
the work necessary to proceed to make a revised offer within the
3 month period or, where relevant the timescale consented to by
the Director. To enable NGC to carry out any of the above
mentioned necessary detailed system studies the Applicant may, at
the request of NGC, be required to provide some or all of the
Detailed Planning Data listed in Part 2 of the Appendix to the
Planning Code which is part of the Grid Code.
7. If the Applicant has not already entered into a Master
Connection and Use of System Agreement with NGC the Applicant
will be required as part of this Application Form to undertake
that he will comply with the provisions of the Grid Code for the
time being in force. Copies of the Grid Code and the Master
Connection and Use of System Agreement are sent with this
application form and the Applicant is advised to study them
carefully. Further copies are available on payment of NGC's
reasonable copying charges, postage and packing. Data submitted
pursuant to this application shall be deemed submitted pursuant
to the Grid Code.
8. NGC's Offer will be based to the extent appropriate upon its
standard form terms of Connection Offer a copy of which is
attached and the statement of charges issued by NGC under
Condition 10 of NGC's Transmission Licence. The Applicant should
bear in mind NGC's standard form terms of offer when making this
application.
9. In particular please note that NGC may require as a
condition of the Offer, that the Applicant's Plant or Apparatus
should meet or provide some or all of the technical requirements
set out in the Appendices of the draft Supplemental Agreement
attached to NGC's standard form terms of offer and may propose
that the Applicant's Plant or Apparatus should have the
capability to provide Agreed Ancillary Services.
10. Please complete this application form in black print and
return it duly signed to [name of contact] at the Commercial
Department, NGC, National Grid House, Sumner Street, London, SEI
9JU (Telephone No. [ ]).
<PAGE>
USE OF SYSTEM APPLICATION
1. We hereby apply to use the NGC Transmission System from our
connection to Distribution System.
2. We will promptly inform NGC of any change in the information
given in this Application as quickly as practicable after
becoming aware of any such change.
If we have not already signed a Master Agreement or
Accession Agreement we undertake for the purposes of this
Application to be bound by the terms of the Grid Code from time
to time in force and to sign an Accession Agreement.
Signed:
...................................................
For and on behalf of the Applicant
Date: ..........................................
<PAGE>
APPLICATION FOR USE OF SYSTEM
A. DETAILS OF APPLICANT
1. Name :
........................................................
........................................................
........................................................
2. Address:
........................................................
........................................................
........................................................
........................................................
3. Registered Office/Address:
........................................................
........................................................
........................................................
........................................................
4. Name, title and address of contacts for the purposes of this
application giving description of the field of responsibility of
each person:
........................................................
........................................................
........................................................
........................................................
........................................................
5. If Applicant is an agent, please give name(s) and
address(es) of person(s) for whom the Applicant is acting:
........................................................
........................................................
........................................................
........................................................
........................................................
........................................................
........................................................
........................................................
........................................................
B. THE PROPOSED POINT OF CONNECTION TO A DISTRIBUTION SYSTEM
1. Please identify (preferably by reference to an extract from
Ordnance Survey Map) the intended location of the Plant and
Apparatus ("the User Development") which it is desired should be
connected to the Distribution System.
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
2. If you believe that a new sub-station will be needed, please
indicate by reference to a plan your suggested location for it.
.................................................................
.................................................................
.................................................................
3. Please provide details of the values and methods of
calculation of liquidated damages to be payable by NGC if any
proposed NGC Reinforcement Works are delayed or not completed
through NGC's fault.
.................................................................
.................................................................
.................................................................
C. TECHNICAL INFORMATION
1. Please provide the data listed in Part I of the Appendix to
the Planning Code. Note: the data concerned form part of the
Planning Code and Data Registration Code. Applicants should
refer to these sections of the Grid Code for an explanation.
2. Please provide a copy of your Safety Rules if not already
provided to NGC.
3. Please indicate any terms which you are prepared to offer
for:
(a) Black Start Capability
(b) Gas Turbine Unit Fast Start
(c) Synchronous Compensation
(d) Pumped Storage Unit Spinning-in-Air
(e) Pumped Storage
(f) Pumped Storage Plant Fast Start from Standstill
(9) Demand Reduction
(h) Adjustment to Pumped Storage Unit Pumping Programme
(i) Hot Standby
D. PROGRAMME
Please provide a suggested construction programme in bar
chart form for the construction works necessary to install the
User Development indicating the anticipated date when the
connection will be required to be made.
<PAGE>
EXHIBIT 10
USE OF SYSTEM APPLICATION SUPPLIERS
NOTES
PLEASE STUDY THE FOLLOWING NOTES BEFORE COMPLETING AND SIGNING
THIS APPLICATION FORM.
1. NGC requires the information requested in this application
form for the purposes of preparing an offer ("the Offer") to
enter into an agreement for use of the NGC Transmission System in
accordance with Condition 10(B) of the NGC Transmission Licence.
It is essential that the Applicant should supply all information
requested in this application form and that every effort should
be made to ensure that such information should be accurate.
Please note that certain expressions which are used in this
application form are defined in the glossary of definitions
(contained in Schedule 2 to the Master Agreement) and when this
occurs the expressions have capital letters at the beginning of
each word.
2. Should NGC consider that any information provided is
incomplete or unclear or should NGC require further information
in order that it may prepare the Offer, the Applicant will be
requested to provide further information or clarification.
3. Should there be any change in any information provided by
the Applicant after it has been submitted to NGC, the Applicant
must immediately inform NGC of such a change.
4. The effective date upon which the application is made shall
be the date when NGC is reasonably satisfied that the_Applicant
has completed Sections A and B. NGC shall notify the Applicant of
such date.
5. NGC will make the Offer in accordance with to the terms of
Clauses 11 and 12 of the Master Agreement and the NGC
Transmission Licence.
6. NGC will make the Offer as soon as is reasonably practicable
and in any event-within 3 months of the effective date of the
application or such later period as the Director agrees to.
7. If the Applicant has not already entered into a Master
Connection and Use of System Agreement with NGC the Applicant
will be required as part of this Application Form to undertake
that he will comply with the provisions of the Grid Code for the
time being in force. Copies of the Grid Code and the Master
Connection and Use of System Agreement are sent with this
application form and the Applicant is advised to study them
carefully. Further copies are
8. Please complete this application form in black print and
return it duly signed to [name of contact] at the Commercial
Department, NGC, National Grid House, Sumner Street, London, SEI
9JU (Telephone No.
<PAGE>
USE OF SYSTEM APPLICATION
1. We hereby apply to use the NGC Transmission System.
2. We will promptly inform NGC of any change in the information
given in this Application as quickly as practicable after
becoming aware of any such change.
3. If we have not already signed a Master Agreement or
Accession Agreement we undertake for the purposes of this
Application to be bound by the terms of the Grid Code from time
to time in force and to sign an Accession Agreement.
Signed:
...................................................
For and on behalf of the Applicant
Date: ..........................................
<PAGE>
NGC - APPLICATION FOR A NEW CONNECTION
A. DETAILS OF APPLICANT
1. Name:
.......................................................
.......................................................
.......................................................
2. Address:
.......................................................
.......................................................
.......................................................
.......................................................
3. Registered Office/Address:
.................................................................
.................................................................
.................................................................
.................................................................
4. Name, title and address of contacts for the purposes of this
application, giving description of the field of responsibility of
each person:
.................................................................
.................................................................
.................................................................
.................................................................
5. If Applicant is an agent, please give name(s) and
address(es) of person(s) for whom the Applicant is acting:
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
B. DATA REQUIREMENTS
Please provide the data required under Appendix E, A, C and
D as appropriate of Supplemental Agreement Type 5 upon which our
terms of offer of use of system will be based.
C. TECHNICAL INFORMATION
1. Please provide the data listed in Part 1 of the Appendix to
the Planning Code which are applicable to you. Note: the data
concerned form part of the Planning Code and Data Registration
Code. Applicants should refer to these sections of the Grid Code
for an explanation.
2. Please provide a copy of your Safety Rules if not already
provided to NGC.
3. Please indicate any terms which you are prepared to offer
for:
(a) Black Start Capability
(b) Gas Turbine Unit Fast Start
(c) Synchronous Compensation
(d) Pumped Storage Unit Spinning-in-Air
(e) Pumped Storage
(f) Pumped Storage Plant Fast Start from Standstill
(g) Demand Reduction
(h) Adjustment to Pumped Storage Unit Pumping Programme
(i) Hot Standby
4. Please enclose a draft Interface Agreement (if applicable).
D. PROGRAMME
Please provide a suggested construction programme in bar
chart form for the construction works necessary to install the
User Development (not the NGC Assets needing to be installed)
indicating the anticipated date when the connection will be
required to be made.
<PAGE>
EXHIBIT 11
MODIFICATION APPLICATION
NOTES
PLEASE STUDY THE FOLLOWING NOTES BEFORE COMPLETING AND SIGNING
THIS APPLICATION FORM.
1. NGC requires the information requested in this application
form for the purposes of preparing an offer ("the Offer") of
terms for the construction of a proposed Modification and for the
variation of the existing Supplemental Agreement covering the
Connection Site affected by the Modification. It is essential
that the Applicant should supply all information requested in
this application form and that every effort should be made to
ensure that such information should be accurate.
Please note that certain expressions which are used in this
application form are defined in the glossary of definitions
(contained in Schedule 2 to the Master Agreement) and when this
occurs the expressions have capital letters at the beginning of
each word.
2. Should NGC consider that any information provided is
incomplete or unclear or should NGC require further information
in order that it may prepare the Offer, the Applicant will be
requested to provide further information or clarification.
3. Should there be any change in any information provided by
the Applicant after it has been submitted to NGC, the Applicant
must immediately inform NGC of such a change.
4. NGC shall charge the Applicant and the Applicant shall pay
to NGC NGC's Engineering Charges in relation to the application.
An advance will be charged by NGC which will be reasonable in all
the circumstances. No application will be considered until such
advance has been paid. The balance of the NGC Engineering
Charges shall be notified and invoiced by NGC to the Applicant
together with a breakdown of such charges and the Applicant shall
pay the same within 28 days of the date of NGC's invoice. If NGC
does not make an Offer to the Applicant in accordance with the
NGC Transmission Licence otherwise than by reason of withdrawal
of the application by the Applicant NGC will return the charges
to the Applicant. NGC will deduct from the Connection Charges
and/or Use of System Charges payable during the first 3 years
following the Practical Completion Date of the Modification any
NGC Engineering Charges paid by the applicant in 3 equal
instalments. In the event that the advance and any other
payments exceed the appropriate NGC Engineering Charges the
excess shall be repaid forthwith to the Applicant.
5. The effective date upon which the application is made shall
be the later of the date when NGC has received the application
fee under Paragraph 4 above and the date when NGC is reasonably
satisfied that the Applicant has completed Sections A-D. NGC
shall notify the Applicant of such date.
6. NGC will make the Offer in accordance with the terms of
Clauses 10 and 12 of the Master Agreement and the NGC
Transmission Licence.
7. NGC will make an Offer as soon as is reasonably practicable
and in any event within 3 months of the effective date of the
application or such later period as the Director agrees to. The
Offer may, where it is necessary to carry out additional
extensive system studies to evaluate more fully the impact of the
proposed development, indicate the areas that require more
detailed analysis. Before such additional studies are required,
the Applicant shall indicate whether it wishes NGC to undertake
the work necessary to proceed to make a revised offer within the
3 month period or, where relevant the timescale consented to by
the Director. To enable NGC to carry out any of the above
mentioned necessary detailed system studies the Applicant may, at
the request of NGC, be required to provide some or all of the
Detailed Planning Data listed in Part 2 of the Appendix to the
Planning Code which is part of the Grid Code.
8. Data submitted pursuant to this application shall be deemed
submitted pursuant to the Grid Code.
9. NGC's Offer will to the extent appropriate be based upon its
standard form terms of Modification Offer a copy of which is
attached and the statement of charges issued by NGC under
Condition I 0 of NGC's Transmission Licence. The Applicant
should bear in mind NGC's standard form terms of offer when
making this application.
10. Please complete this application form in black print and
return it duly signed to [name of contact] at the Commercial
Department, NGC, National Grid house, Sumner Street, London, SEI
9JU (Telephone No.
<PAGE>
MODIFICATION APPLICATION
1. We hereby apply to modify our connection to the NGC
Transmission System at Connection Site. We agree to pay NGC's
Engineering Charges on the terms specified in the Notes to the
Connection Application.
2. We will promptly inform NGC of any change in the information
given in this Application as quickly as practicable after
becoming aware of any such change.
Signed:
...................................................
For and on behalf of the Applicant
Date: ..........................................
<PAGE>
MODIFICATION - APPLICATION
A. DETAILS OF APPLICANT
1. Name:
.......................................................
.......................................................
.......................................................
2. Address:
.......................................................
.......................................................
.......................................................
.......................................................
3. Registered Office/Address:
.................................................................
.................................................................
.................................................................
.................................................................
4. Name, title and address of contacts for the purposes of this
application, giving description of the field of responsibility of
each person:
.................................................................
.................................................................
.................................................................
.................................................................
5. If Applicant is an agent, please give name(s) and
address(es) of person(s) for whom the Applicant is acting:
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
B. THE CONNECTION SITE TO BE MODIFIED
Please identify by name the Connection Site at which the
Modification is to be undertaken.
.................................................................
.................................................................
.................................................................
.................................................................
2. Give details of the rights in any additional land which you
are proposing to acquire at the Connection Site (to include
leasehold and freehold interests) so as to undertake the
modification.
.................................................................
.................................................................
.................................................................
.................................................................
3. What space is available on the Connection Site for working
storage and accommodation areas for NGC contractors? if so,
please indicate by reference to a plan the location of such
areas, giving the approximate dimensions of the same.
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
4. Please provide details (including copies of any surveys or
reports) of the physical nature of any additional land the
subject to your answer to Question 2 above including the nature
of the ground and the sub-soil including the results of the
following tests:
[NGC to specify]
.................................................................
.................................................................
.................................................................
.................................................................
5. Please give details and provide copies of all existing
relevant planning and other consents (statutory or otherwise)
held by you relating to the Connection Site or the Modification
and/or details of any pending applications for the same.
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
6. Please provide details of the values and methods of
calculation of liquidated damages to be payable by NGC if the
proposed works are delayed or not completed through NGC's fault.
.................................................................
.................................................................
.................................................................
7. Please indicate what, if any, of the necessary construction
works necessary for the Modification you would like NGC to
conduct upon your behalf.
C. TECHNICAL INFORMATION
1. Please provide full details of the proposed Modification
together with the relevant Standard Planning Data as listed in
Part I of the Appendix to the Planning Code to the extent that
the data will change from previously submitted Committed Project
Planning Data or Connected Planning Data as a result of the
proposed Modification. Note: the data concerned form part of the
Planning Code and Data Registration Code. Applicants should
refer to these sections of the Grid Code for an explanation.
D. PROGRAMME
Please provide a suggested construction programme in bar
chart form for the construction works necessary to install the
Modification (not the NGC Assets needing to be installed)
indicating the anticipated date when the connection will be
required to be made.
<PAGE>
EXHIBIT 12
MODIFICATION OFFER
Date: [ ]
Dear Sirs
We refer to your application dated [ ] for a
Modification for your proposed development at [ ]
and to [here list other documents submitted by applicant in
support of his application together with any relevant NGC
communications relating to the application] and now set out below
our offer for the Modification. Please note that certain
expressions which are used in this offer are defined in the
glossary of definitions (contained in Schedule 2 to the Master
Agreement) and when this occurs the expressions have capital
letters at the beginning of each word.
1. NGC offers to enter into an agreement covering the
construction of the Modification in the terms set out in Section
A and to vary the Supplemental Agreement covering the Connection
Site as specified in Section B.
2. This offer has been prepared upon the basis that you have or
will obtain the legal estate which you expressed as your
intention in the said application in the land described in
Section C.
3. If so indicated by a tick in the relevant box you are
required to enter into a bond in the sum of pounds[ ] in a
form approved by NGC such approval not to be unreasonably
withheld or delayed.
4. The technical conditions with which you must comply as a
term of this offer are set out in the Grid Code. Additional or
different technical conditions set out in the Appendices to the
Supplemental Agreement are set out in Section A and/or Section B.
5. This offer is open for acceptance according to the terms of
Clause 10 of the Master Agreement and the Transmission Licence.
Please note your right to make an application to the Director to
settle the terms of the Offer pursuant to Condition 10C1 of the
Transmission Licence.
6. To accept this offer, please execute and return the
agreements attached to this offer as Section A and Section B.
Subject to the provisions of paragraph 7 above NGC will then
itself execute the Agreement(s). THE AGREEMENTS ARE ONLY
EFFECTIVE IN ACCORDANCE WITH THEIR TERMS ONCE THEY HAVE BEEN
EXECUTED BY NGC.
7. All communications in relation to this offer must, in the
first instance, be directed to the Commercial Department of NGC
for the attention of [description].
Yours faithfully,
....................................
for and on behalf of
The National Grid Company PLC
<PAGE>
SECTION A
AGREEMENT FOR CONSTRUCTION WORKS
<PAGE>
SECTION B
FORM OF VARIED SUPPLEMENTAL AGREEMENT
<PAGE>
SECTION C
USERS LAND
<PAGE>
EXHIBIT 13
MODIFICATION NOTIFICATION
1. This Modification Notification is issued by NGC pursuant to
Clause 10.3.1 to the Master Agreement. The User has certain
rights under Clause 10.3 and is advised to consider whether it
wishes to avail itself to such rights upon receipt of this
Modification Notification.
2. NGC proposes to make the Modification to the NGC
Transmission System set out below:
3. NGC reasonably believes that you may have to carry out the
following works as a result of the proposed Modification:
4. The latest date upon which you may apply to the Director
under Condition 10C of the Transmission Licence is [date: to be
supplied by NGC, subject to Clause 10.3.2 of the Master
Agreement.]
Dated:
Signed for and on behalf of
The National Grid Company Plc
<PAGE>
EXHIBIT 14
DATED 1990
THE NATIONAL GRID COMPANY PLC (1)
and
(2)
_____________________________________________________________
AGREEMENT FOR PAYMENT BY NGC FOR
ANCILLARY SERVICES
_____________________________________________________________
NOTE: THIS IS A "STANDARD FORM" FOR ALL ANCILLARY SERVICES AND
WILL REQUIRE AMENDMENT TO REFLECT THE ACTUAL SERVICES PROVIDED BY
THE GENERATOR IN QUESTION.
<PAGE>
CONTENTS
Clause Title
1. Definitions and Interpretation
2. Commencement and Term
3. Reactive Power
4. Future Method of Paying for Reactive Energy
5. Cancelled Starts
6. Hot Standby
7. Frequency Response
8. Black Start Capability
9. Payment
10. Limitation of Liability
11. Metering
12. Termination
13. Assignment
14. Confidentiality for NGC and its Subsidiaries
15. Confidentiality for the Generator
16. Additional Costs
17. Waiver
18. Notices
19. Counterparts
20. Variations
21. Dispute Resolution
22. Jurisdiction
23. Governing Law
24. Severance of Terms
25. Entire Agreement
Schedule A Term of the Agreement for Commercial Ancillary
Services and periods of notice
Schedule B Form of Amending Agreement
Schedule C Charging Principles
Schedule D Reactive Power
Schedule E Frequency Response
Schedule F Fast Starts and Load Reduction
Schedule G Black Start
Schedule H Notices
Schedule I Indexation Formulae
Schedule J Definitions
Schedule K Cancelled Start and Hot Standby
<PAGE>
THIS AGREEMENT is made the day of 1990
BETWEEN:
THE NATIONAL GRID COMPANY PLC a company registered in England
with Number 2366977 whose registered office is at National Grid
House, Sumner Street, London SEI 9JU ("NGC" which expression
shall include its permitted successors and/or assigns).
[NP] [POWERGEN] [PUMPED STORAGE] [NUCLEAR ELECTRIC]
[OTHERS]........................ (the "Generator" which
expression shall include its permitted successors and/or
assigns).
WHEREAS
For the purposes of the operation and use of the NGC Transmission
System, the Grid Code the Master Connection Agreement and the
Supplemental Agreements require that certain Ancillary Services
be provided by the Generator.
NGC has agreed to pay for such Ancillary Services at the rates
and prices and in the manner hereinafter set out.
NOW IT IS HEREBY AGREED as follows:
DEFINITIONS AND INTERPRETATION
In this Agreement unless the subject matter or context otherwise
requires or is inconsistent therewith, the definitions set out in
Schedule J shall apply.
In this Agreement:
except where the context otherwise requires, references to a
particular Sub-Clause, Clause, Paragraph or Schedule shall be a
reference to that Sub-Clause, Clause, Paragraph or Schedule in or
to this Agreement;
the table of contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement;
references to the words "include" or "including" are to be
construed without limitation; except where the context otherwise
requires, any reference to an Act of Parliament or any Part or
Section or other provision of, or Schedule to, an Act of
Parliament shall be construed, at the particular time, as
including a reference to any modification, extension or
re-enactment thereof then in force and to all instruments, orders
or regulations then in force and made under or deriving validity
from the relevant Act of Parliament;
references to the masculine shall include the feminine and
references in the singular shall include references in the plural
and vice versa;
except where the context otherwise requires, any reference
to a "person" includes any individual, partnership, firm,
company, corporation, joint venture, trust, association,
organisation or other entity, in each case whether or not having
separate legal personality.
COMMENCEMENT AND TERM
This Agreement shall come into effect on the Effective Date and
shall continue in force and effect as follows:
in respect of System Ancillary Services until terminated
pursuant to the terms of this Agreement;
in respect of Commercial Ancillary Services, for the
respective period or periods from the Effective Date shown in
Schedule A for the particular Generating Units and Ancillary
Services there set out unless in any case terminated earlier
pursuant to the terms of this Agreement.
If at any time after the Effective Date the Parties enter into a
Supplemental Agreement in relation to a New Connection Site or a
variation to a Supplemental Agreement following a Modification to
an existing Connection Site which in either case (either by
agreement or pursuant to an obligation under the Grid Code)
requires the Generator to provide Ancillary Services of any kind
to NGC, the Parties shall at the same time enter into an
agreement in the form set out in Schedule B amending this
Agreement to reflect the terms agreed as to the payments to be
made by NGC for the Ancillary Services concerned.
At least three months prior to the date when this Agreement
expires by affluxion of time in respect of any Commercial
Ancillary Service from a Generating Unit, the Parties shall
discuss the price payable and the period for which such price
will be payable for such an Ancillary Service with effect from
such date. Provided that the Parties reach agreement prior to
such date this Agreement will be amended accordingly; otherwise
this Agreement will expire in respect of that Commercial
Ancillary Service from the Generating Unit concerned on such
expiry date.
Price Adjustment
The rates, prices and indexation formulae set out in this
Agreement for System Ancillary Services shall be reviewed as at
and (if appropriate) adjusted as from each Review Date during the
term of this Agreement.
The Parties shall endeavour to agree the amount of any such
adjustment to the rates and prices and any adjustment to the
indexation formulae and in endeavouring to agree such adjustments
they shall have regard to the Charging Principles set out in
Schedule C. If the adjustment to the rates, prices or indexation
formulae shall not have been so agreed between the Parties three
months before the Relevant Review Date (whether through failure
or omission to agree or to negotiate or to initiate any
negotiations or any other cause) either Party may at any time
(whether before or after the Relevant Review Date) by notice in
writing to the other Party require any adjustment not so agreed
to be determined by arbitration pursuant to Clause 21.
If any adjustment to the rates, prices and indexation formulae
(or any of them) has not been ascertained (by agreement or
determination) by the Relevant Review Date in accordance with the
provisions of Sub-Clauses 2.4 to 2.6, NGC shall pay to the
Generator for any interval between the Relevant Review Date and
the date when such rates, prices or indexation formulae have been
ascertained as aforesaid sums for Ancillary Services calculated
at the corresponding rates and prices applicable during the
period immediately preceding the Relevant Review Date. Upon any
adjustment to the rates, prices and indexation formulae (or any
of them) being ascertained as aforesaid any additional amount or
reduced amount payable or repayable for the period commencing on
the Relevant Review Date and ending on the date when the rates,
prices or indexation formulae concerned shall have been
ascertained shall be paid by NGC to the Generator (or deducted by
NGC from the sum otherwise due to the Generator) together with
interest on the additional amounts which would have been payable
(or the amounts by which the payments would have been reduced)
had the adjustment been ascertained a-( the Relevant Review Date
at the rate applicable to overdue payments provided in Clause 9.
On each occasion that the rates, prices and indexation formulae
are ascertained pursuant to the provisions of this Clause, the
Parties shill enter into an amending agreement in the form set
out in Schedule B recording the revised rates, prices and
indexation formulae so ascertained.
Save in respect of System Ancillary Services in a year when rates
and prices are to be reviewed under Sub-Clauses 2.4 to 2.7, the
rates and prices set out in this Agreement shall be adjusted as
at and as from 1st April each year ("the Indexation Date") or at
such other Intervals and as at and as from such other dates as
NGC may in its sole discretion agree during the term of this
Agreement. Such adjustment shall be calculated by the
application of the formulae set out in Schedule 1.
REACTIVE POWER
Subject to Sub-Clauses 3.9 and 3.10, NGC shall pay the Generator
for producing Reactive Power from a Generating Unit in accordance
with the Grid Code SDC the sums calculated by reference to the
amounts shown in Schedule D Part 1 in relation to that Generating
Unit.
The Parties agree that the provisions of Sub-Clause 3.1 represent
an interim arrangement for paying for Reactive Power pending
implementation of the payment regime referred to in Clause 4.
Synchronous Compensation
Subject to Clause 3.13, NGC shall pay the Generator for producing
Reactive Power by means of Synchronous Compensation in accordance
with instructions issued under the Grid Code SDC (in addition to
the sum payable under Clause 3.1) the following amounts for each
Generating Unit:
in respect of each Synchronous Compensation Start-Up of the
Generating Unit concerned a sum equal to the Start-Up Price
contained in the Generator's Generation Offer Prices for the
Schedule Day in which the Start-Up for Synchronous Compensation
occurs; and
an amount calculated by reference to the figures in Schedule
D Part 2 for the operating time spent In response to the
instruction for Synchronous Compensation, being the time
expressed in minutes from Synchronisation to Desynchronisation.
Opportunity Costs
As soon as the Generator becomes aware that any Generating Unit
falls below the standard of Reactive Power capability required by
the Grid Code or, where relevant, the capability specified in the
applicable Supplemental Agreement, the Generator may notify NGC
in writing to that effect. In that event the Parties shall
discuss the matter and the Generator shall submit in writing to
NGC for approval the date and time by which the Generator shall
have brought the Generating Unit concerned to a condition where
it complies with such Reactive Power capability. NGC shall not
unreasonably withhold or delay its approval of the Generator's
proposed date and time. Should NGC not approve the Generator's
proposed date or time (or any revised proposal) the Generator
shall amend such proposal having regard to any comments NGC may
have made and re-submit it for approval.
If, in consequence of the approval by NGC of any proposal made by
the Generator pursuant to the Grid Code OC 5.5.1.8 or Sub-Clause
3.4, the Generator shall take or keep a Generating Unit out of
service for any period other than:
(a) an outage period identified pursuant to the Grid Code OC2 as
at the time when:the default was first notified to NGC under
Sub-Clause 3.4; or
the Generating Unit concerned was determined pursuant to the
Grid Code OC 5.5.1.8 not to have the Reactive Power capability
required by the Grid Code or, where relevant, the capability
specified in the applicable Supplemental Agreement; or
(b) any adjustment by up to four weeks of such previously
identified outage period without affecting the duration of such
period; or
(c) the period first requested by the Generator under OC 5.5.1.8
or Sub-Clause 3.4, for the purpose of the repair, maintenance,
renewal, modification or replacement of equipment needed to
enable the Generator to comply with the terms of the approved
proposal, NGC shall pay to the Generator 50% of the amount of any
opportunity costs the Generator may incur as a direct result of
the Generating Unit being out of service for the period
concerned.
If the Generator intends to carry out any work of repair,
maintenance, renewal, modification or replacement ("the
Concurrent Work") other than the repair, maintenance, renewal,
modification or replacement referred to in Sub-Clause 3.5 in
connection with the Generating Unit concerned during the period
referred to and for the purposes referred to in Sub-Clause 3.5,
it shall forthwith notify NGC of such intention. If the carrying
out of the Concurrent Work is likely to reduce the length of any
outage identified pursuant to the Grid Code OC2 as at the time
referred to in Sub-Sub-Clause 3.5(a) for the Generating Unit
concerned, the sum payable to the Generator under Sub-Clause 3.5
shall be reduced by such sum as is equal to 50% of the net
present value of the forecast opportunity cost saving, as
determined, in the absence of agreement, by arbitration in
accordance with Clause 21.
The opportunity costs for each day of an outage referred to in
Sub-Clause 3.5 (and to which the percentage figure referred to
shall be applied) shall be calculated in the following manner:
If "N" is non-zero, calculate the average bid price ("ABP")
during the Reference Period:
RP Genset Bid Price
ABP = 1
N
RP is the sum over all Settlement Periods during the
Reference Period for which Genset Declared Availability (XAij)
is not zero;
"N" is the number of such Settlement Periods where XAii is
non-zero;
If "M" is non-zero, calculate the Average Genset Price
("AGSP") during the Reference Period.
RP Genset Price
AGSP = 1
M
RP is the sum over all Settlement Periods during the
Reference Period for which Genset Unconstrained Generation (Uij)
is not zero;
"M" is the number of such Settlement Periods where Uij is
non-zero;
Calculate opportunity costs ("OC") in accordance with the
appropriate one of the following formulae:
if M equals zero and N equals zero for the Reference Period;
OC = GRC x 0.85 x SPD x (LOLP x (VLL - SMPI))
j
if M equals zero and N does not equal zero for the Reference
Period;
OC GRC x 0.85 x SPD x (max ((SMPJ - ABP), 0) + LOLP
x (VLL - max (ABP, SMPj)));
if M does not equal zero for the Reference Period;
OC = GRC x 0.85 x SPD x (max (SMPI - AGSP), 0) + LOLP
x
j
x (VLL - max (ABP, Smpj)));
In this Sub-Sub-Clause 3.7(c) "j" means the sum over all
Settlement Periods of any Settlement Day that the Generating Unit
concerned is out of service.
(d) In this Sub-Clause the following terms shall have the
following meanings:-
"Genset Bid Price" the meaning attributed to it in the
Pool Rules;
"Genset Price" the meaning attributed to it in the
Pool Rules;
"GRC" MW rating of the Generating Unit
concerned as recorded under the Data Registration Code of the
Grid Code;
"i" refers to a Generating Unit;
"i" refers to an integrated value over a
Settlement Period;
"LOLP" Loss of Load Probability as defined in
the Pool Rules;
"max" the value of the largest data item
In that set;
"Reference Period" a period of 30 Settlement Days
immediately before notification under Sub-Clause 3.4 or the date
when the Generating Unit first failed to pass the Reactive Power
Test under the Grid Code;
"SMP" System Marginal Price as defined in the
Pool Rules;
"SPD" Settlement Period Duration, being
the duration in decimal hours of a standard Settlement Period;
"VLL" Value of Lost Load as defined in the
Pool Rules.
The Parties agree that there is no presumption arising from the
foregoing that Sub-Clauses 3.4 to 3.7 inclusive shall apply to
Generating Units not listed in Schedule D, Part 1.
Default by Generator
If a Generating Unit fails to provide Reactive Power in
accordance with instructions issued under the Grid Code, then
subject to Sub-Clause 3.10 the Generator shall not be entitled to
payment under Sub-Clause 3.1 for the Generating Unit concerned in
respect of the half hour when the failure occurred.
If the failure by the Generator to provide Reactive Power in
accordance with instructions issued under the Grid Code shall be
a partial failure, NGC shall pay to the Generator for the
Generating Unit concerned in respect of the half hour when the
failure occurred the sum payable under Sub-Clause 3.1 reduced by
the application of the following formula:
Registered MVAr - 2 x Actual MVArh half hourly payment
as set out
Registered MVAr x in Schedule D, Part
1.
where "Registered MVAr = MVAr capacity of the
Generating Unit concerned at GRC (as defined in Sub-Clause 3.7)
taken from the charts submitted by the Generator pursuant to the
Grid Code OC2.4;
"Actual MVArh" = the recorded half hourly integrated
MVAr output for the Generating Unit concerned averaged between
the two sets of data referred to in Sub-Clauses 3.11(a) and (b)
respectively or if only one set of such data is available, that
set.
The failure or partial failure referred to in Sub-Clauses 3.9 and
3.10 shall be deemed to have occurred if:
NGC Control Room Voltage and MVAR metering; and readings
from Power Station voltage and MVAR metering,
show that:
voltage was below the target voltage (to an accuracy of
0.5%) Instructed pursuant to the Grid Code or the Generating Unit
concerned was instructed to full lagging Reactive Power output
and the lagging Reactive Power output (to an accuracy of 5%) was
less than the Registered MVAR; or
voltage was above the target voltage (to an accuracy of
0.5%) instructed pursuant to the Grid Code or the Generating Unit
concerned was instructed to full leading Reactive Power output
and the leading Reactive Power output (to an accuracy of 5%) was
less than the Registered MVAR.
NGC shall have the right at any time to call for the prompt
production of the data referred to in Sub-Sub-Clause 3.11(b) upon
production of NGC's own data indicating that a failure or partial
failure to provide Reactive Power has occurred.
If the Generator falls to provide any Reactive Power within ten
minutes of the time of an instruction to provide Reactive Power
by means of Synchronous Compensation NGC shall forthwith notify
the Generator to that effect and the Generator shall be deemed to
have failed to comply with the instruction and shall not be
entitled to any payment under Sub-Clause 3.3(i).
NGC's right to withhold or reduce payment shall be NGC's sole
remedy against the Generator under this Agreement in respect of
failure to provide Reactive Power but shall be without prejudice
to any other rights NGC may have against the Generator under the
Grid Code and/or the Master Connection Agreement and/or any
Supplemental Agreement.
FUTURE METHOD OF PAYING FOR REACTIVE ENERGY
The Parties agree that, as from the end of a period of six months
following the FMS Date, or as from the next Review Date following
the FMS date if this be earlier, the monthly payment provided for
by Clauses 3.1 and 3.3 will be replaced by a charge based upon
the metered output (to the extent instructed and to accuracies to
be agreed) of Reactive Energy from that Generating Unit, adjusted
as appropriate to derive the Reactive Energy delivered to the NGC
Transmission System or the relevant User System as the case may
be. The charge shall be calculated in accordance with the
following formulae:
For Lagging Reactive Energy:
Y = Ax2
"y" means the payment in L per half hour for Lagging
Reactive Energy;
"A" means a sum to be agreed between NGC and the Generator;
and
"X" means 2 x half hourly integrated lagging MVAR output
maximum lagging MVAR output at rated MW
For Leading Reactive Energy:
Z = Bw2
"Z" means the payment in L per half hour for Leading
Reactive Energy;
"B" means a sum to be agreed between NGC and the Generator;
"W" means 2 x half hourly integrated leading MVAR output
maximum leading MVAR output at rated MW
The Parties will negotiate with a view to agreeing the detailed
calculations for the new payment having regard to the Charging
Principles set out in Schedule C. If agreement is reached,
Clauses 3 and 4 and Schedule D will be amended accordingly. If
the Parties are unable to reach agreement within 28 days of
either Party serving on the other notice of its intention to
refer the matter to arbitration either Party may refer the matter
to arbitration for determination pursuant to Clause 21.
CANCELLED STARTS
In this Clause and in Clause 6 the following terms shall have the
following meanings:
"NTS" at any time, the appropriate period (in
minutes) required to Synchronise as notified by the Generator to
NGC in accordance with the Grid Code DRC;
"NTS Start Time" the point in time calculated by
subtracting NTS from t2;
"t1" the time, given In the instruction to come to Hot
Standby, when the state of Hot Standby is to be achieved;
"t2" the time, specified in an instruction to
Synchronise, at which readiness to Synchronise is to be achieved;
"t3" the time when the Cancellation Instruction was
issued;
"SUP" the Start-Up Price bid by the Generator for
the Generating Unit in question for the Schedule Day when the
Cancellation Instruction was issued;
"H" the factor (expressed as a decimal and set out in
Schedule K, Part 2) by which the Start-Up Price bid by the
Generator for the Generating Unit in question for the Schedule
Day is multiplied to derive the price of operating at Hot
Standby;
"T" the period in minutes to be taken to achieve
readiness to Synchronise notified by the Generator to NGC and
specified in the instruction to come to Hot Standby.
Where NGC issues a Cancellation Instruction before NTS Start Time
or where the Cancellation Instruction is followed within 2
minutes by an instruction which has the effect of cancelling the
Cancellation Instruction, no payment shall be due to the
Generator in respect of a Cancelled Start.
If NGC issues to the Generator a Cancellation Instruction within
the period before Synchronisation set out in Schedule K, Part 1
for the Generating Unit concerned, the Cancellation Instruction
shall be deemed not to have been given and no payment for
Cancelled Start shall be due to the Generator under this
Agreement.
Subject to Sub-Clause 5.5, where NGC issues a Cancellation
Instruction on or after NTS Start
Time, NGC shall pay the Generator, for each such Cancellation
Instruction with which the Generator complies an amount
calculated as follows:
t3 - (t2 - NTS)
NTS
If, following a Cancellation Instruction the Generating Unit
supplies Active Power in the absence of any other instruction
issued to the Generator which would result in the Generating Unit
concerned supplying Active Power at that time, the Generator
shall be deemed to have failed to comply with the Cancellation
Instruction and shall not be entitled to any payment under
Sub-Clause 5.3 in respect of the Generating Unit concerned.
NGC's right to withhold payment shall be NGC's sole remedy
against the Generator under this Agreement in respect of failure
to comply with a Cancellation Instruction but shall be without
prejudice to any other rights which NGC may have against the
Generator under the Grid Code and/or the Master Connection
Agreement and/or any Supplemental Agreement.
HOT STANDBY
Subject to Sub- Clause 6.4, where NGC issues an instruction to
come to Hot Standby followed by an instruction to Synchronise,
NGC shall pay to the Generator for complying with such
instructions a sum calculated as follows:
(t2 - T - t1) x H x SUP
Where NGC issues an instruction to come to Hot Standby followed
by an instruction cancelling Hot Standby after Hot Standby has
been reached NGC shall pay to the Generator for complying with
such Instruction a sum calculated as follows:
NTS - T x SUP + (t3 - t1) x H x SUP
NTS
Where NGC issues an instruction to come to Hot Standby followed
by an instruction cancelling Hot Standby before Hot Standby is
reached, NGC shall pay to the Generator for complying with such
instruction a sum calculated as follows:
t3 - tl + (NTS - T) x SUP
NTS
In the case of an instruction to come to Hot Standby followed by
an instruction to Synchronise, If the Generating Unit concerned
fails to Synchronise within five minutes of the end of the period
specified in the instruction to come to Hot Standby the Generator
shall be deemed to have failed to comply with the instruction to
come to Hot Standby and shall not be entitled to any payment
under Sub-Clause 6.1 In respect of the Generating Unit
concerned.
NGC's right to withhold payment shall be NGC's sole remedy
against the Generator under this Agreement in respect of failure
to comply with instructions relating to Hot Standby but shall be
without prejudice to any other right which NGC may have against
the Generator under the Grid Code and/or the Master Connection
Agreement and/or any Supplemental
Agreement.
FREQUENCY RESPONSE
Payment for Frequency Sensitive Generation
Subject to Sub-Clause 7.4, NGC shall pay to the Generator for
operating a Generating Unit in:
Primary Response mode; or
Primary and Secondary Response mode; or
Primary and Secondary Response and Five Minute Reserve mode; or
Secondary Response and Five Minute Reserve; or
Five Minute Reserve mode;
in accordance with instructions issued to it under the Grid Code
SDC a sum calculated in accordance with the figures set out in
the relevant column of Schedule E for each Generating Unit for
the period expressed in minutes that the Generator is so
operating. The Parties acknowledge and agree that the value for
Loading, Response and Reserve given in Schedule E are interim
value only and are not necessarily the values achievable at the
prices given in the Schedule. The Parties shall endeavour to
agree such values within 12 months of the Effective Date. If the
Parties are unable to reach agreement within that period, either
party may by notice in writing to the other party at any time
after the end of such period, refer the matter to arbitration
pursuant to Clause 21. As soon as the relevant figures have been
agreed or determined in accordance with the foregoing, they shall
be substituted for the corresponding figures in Schedule E with
effect from the date of such agreement or determination.
Where in any Settlement Period a Generating Unit generates Energy
at or above its Offered Availability for that Settlement Period
but has not been instructed by NGC to provide Primary Response,
Secondary Response or Five Minute Reserve or any combination of
these three, no payment for Frequency Response shall be due to
the Generator in respect of that Settlement Period.
Where in any Settlement Period a Generating Unit is operating in
Frequency Sensitive Mode at an instructed level below its Offered
Availability but has not been instructed by NGC to provide
Primary Response, Secondary Response or Five Minute Reserve or
any combination of these three for that Settlement Period, NGC
shall pay the Generator the sum which would be payable to the
Generator for that Settlement Period in response of that
Generating Unit had NGC instructed that Generating Unit to
operate in Primary Response Mode.
If a Generating Unit fails (as measured by OC5.5.2 of the Grid
Code or by routine testing and/or monitoring procedures to be
agreed by NGC and the Generator) to provide whether automatically
(MW/Hz) or by manual instruction the level of response specified
in Schedule E for the MW loading instructed for that Generating
Unit when operating in any of the modes set out in Sub-Clause
7.1, NGC shall pay to the Generator In respect of the Settlement
Period in which such failure shall occur, the same proportion of
the sum payable under Sub-Clause 7.1 as the actual level of
response bears to the level of response specified in Schedule E
for that Generating Unit.
Each Party shall use its best endeavours to put in place as soon
as is reasonably possible such routine testing and/or monitoring
procedures as are appropriate to the purposes of Sub-Clause 7.4.
NGC's right to withhold or reduce payment shall be NGC's sole
remedy against the Generator under this Agreement in respect of
failure to operate In Frequency Sensitive Mode, but shall be
without prejudice to any other rights NGC may have against the
Generator under the Grid Code and/or the Master Connection
Agreement and/or any Supplemental Agreement.
Payment for Fast Start Capability and Load Reduction Capability
Subject to Sub-Clause 7.14, NGC shall pay to the Generator a
capability payment calculated in accordance with Schedule F Part
1 in respect of each [Gas Turbine Unit] [Pumped Storage Unit] for
each Settlement Period when it is declared available by the
Generator for Low Frequency Relay initiated or manual response
[or for Load Reduction] in accordance with the Grid Code SDC.
Should a [Gas Turbine Unit] [Pumped Storage Unit] be determined
pursuant to the Grid Code OC 5.5.3 not to have Its Fast Start
Capability no payment shall be made under SubClause 7.7 to the
Generator for the [Gas Turbine Unit] [Pumped Storage Unit]
concerned in respect of the period commencing with the time
agreed by the Parties or determined by arbitration pursuant to
the Grid Code when the [Gas Turbine Unit] [Pumped Storage Unit]
first failed to have the Fast Start Capability and expiring at
the time the [Gas Turbine Unit] [Pumped Storage Unit] Is next
declared available for Low Frequency Relay initiated or manual
response following. the time when it is determined that the [Gas
Turbine Unit] [Pumped Storage Unit] concerned has its Fast Start
Capability restored pursuant to the Grid Code OC5.5.3.
Payment for Fast Start from Gas Turbine Units
Subject to Sub-Clause 7.14, NGC shall pay to the Generator a sum
calculated in accordance with Schedule F Part 1 for each Fast
Start It makes from a Gas Turbine Unit in automatic response to a
frequency deviation in accordance with the Grid Code or in
accordance with an instruction issued to the Generator under the
Grid Code.
Payment for Pumped Storage Generation Spinnings in Air and Mode
Changes
NGC shall pay to the Generator a sum calculated in accordance
with Schedule F, Part 2 in respect of each Pumped Storage Unit
each time it adopts the Spinning in Air mode in accordance with
instructions issued to the Generator under the Grid Code.
NGC shall pay to the Generator a sum calculated in accordance
with Schedule F, Part 2 for each Pumped Storage Unit for the
period during which it is operating in Spinning in Air mode for
Frequency Response purposes in accordance with instructions
issued to the Generator
under the Grid Code.
Subject to Sub-Clause 7.14, NGC shall pay to the Generator a sum
calculated in accordance with Schedule F, Part 2 for each Pumped
Storage Unit for each Fast Start it makes from Spinning in Air
mode in automatic response to a frequency deviation in accordance
with the Grid Code or in accordance with instructions issued to
the Generator under the Grid Code. Subject to Sub-Clause 7.14,
NGC shall pay to the Generator a sum calculated in accordance
with Schedule F, Part 3 for each Pumped Storage Unit for each
Fast Start it makes from standstill in automatic response to a
frequency deviation in accordance with the Grid Code or in
accordance with instructions issued to the Generator under the
Grid Code.
Fast Start Default by Generator
If a Generating Unit shall fail (according to routine testing
and/or monitoring procedures to be agreed by NGC and the
Generator) to be Synchronised and Loaded to reach full Load
within five minutes of a decrease in System Frequency occurring
sufficient to initiate a Fast Start by means of the Low Frequency
Relays set at the setting required by NGC under the Grid
Code SDC or within seven minutes of a manual instruction to Fast
Start:-
the capability payment under Sub-Clause 7.7 shall be reduced
for the day in which the failure occurs in proportion to the
amount by which the Active Power actually supplied within five or
seven minutes as the case may be falls short of full Load; and
the Generator shall not be entitled to payment under Sub-Clause
7.9, 7.12 or 7.13 as the case may be.
Each Party shall use its best endeavours to put in place as soon
as is reasonably possible such routine testing and/or monitoring
procedures as are appropriate to the purposes of Sub Clause 7.14.
NGC's right to withhold or reduce payment shall be NGC's sole
remedy against the Generator under this Agreement in respect of
failure to provide Fast Start Capability or a Fast Start, but
shall be without prejudice to any other rights NGC may have
against the Generator under the Grid Code and/or the Master
Connection Agreement and/or any Supplemental Agreement.
Payment for Load Reduction and Despatch of Pumped Storage Plant
Subject to Sub-Clause 7.18, NGC shall pay the Generator for
providing Load Reduction and/or agreeing to Despatch its Final
Pumping Programme in accordance with instructions issued to it
under the Grid Code a sum calculated in accordance with the
following formulae for each Final Pumping Programme Period in
which a Load Reduction service is provided or the Final Pumping
Programme is subject to Despatch instructions:-
(a) exact pumping DC
(b) over-pumping, but less than permitted
tolerance DC - m x DE
(c) over-pumping, but greater than permitted
tolerance DC - m x dE
(d) under-pumping, but less than permitted
tolerance DC + m x DE
(e) under-pumping, but greater than tolerance DC + P x (DE-de) = m x dE
Where:
"exact pumping" means that the exact amount of Energy
has actually been consumed for pumping in the Final Pumping
Programme Period as would have been consumed had the Final
Pumping Programme been followed;
"over-pumping" means that more Energy has actually been
consumed for pumping in the Final Pumping Programme Period than
would have been the case had the Final Pumping Programme been
followed;
"under pumping" means that less Energy has actually been
consumed for pumping in the Final Pumping Programme Period than
would have been the case had the Final Pumping Programme been
followed;
"DE" means the total shortfall or surplus of
actual Energy consumed for pumping in the Final Pumping Programme
Period as measured against the Energy that would have been
consumed had the Final Pumping Programme been followed; the value
of DE is always positive;
"dE" and "permitted
tolerance" means 350 MWb, being the permitted
tolerance allowed to NGC for the shortfall or surplus of actual
Energy consumed for pumping in the Final Pumping Programme
Period;
"DC" means the difference, whether positive or
negative, in the cost of Energy consumed for pumping in the Final
Pumping Programme Period, being the actual cost thereof minus the
cost that would have been incurred had the Final Pumping
Programme been followed;
"m" means the Weighted Average Price that would
have been paid for Energy for pumping in any Settlement Period
had the Final Pumping Programme been followed;
"P" means the average of the Genset Bid Prices of
a tranche of 500 MW of available Open Cycle Gas Turbine Units
with the lowest Genset Bid Prices in the Settlement Day
commencing at 0000 after the start of the Final Pumping Programme
Period;
"Weighted Average
Price" means the price in pounds per MWh calculated
by taking the total Energy cost that would have been incurred had
the Final Pumping Programme been followed and dividing it by the
total Energy that would have been consumed had the Final Pumping
Programme been followed.
The Generator shall not be entitled to payment under Sub-Clause
7.17 if and to the extent that it has been prevented from pumping
during the Final Pumping Programme Period by reason of physical
transmission constraints or widespread load shedding within the
zone containing Pumped Storage Plant.
NGC shall pay to the Generator a capability payment calculated in
accordance with Schedule F, Part 4 for each Final Pumping
Programme Period when the Generator and NGC have agreed that NGC
should have the ability to Despatch the Generator's Final Pumping
Programme.
NGC shall pay the Generator a sum calculated in accordance with
the figures set out in the relevant column of Schedule F, Part 5,
6 and 7 and in respect of each Pumped Storage Unit on each
occasion that it makes a Mode Change in accordance with the Grid
Code during any period when the Generator is providing a Load
Reduction service or has agreed to the Despatch of its Final
Pumping Programme.
NGC shall pay to the Generator a sum calculated in accordance
with the figures set out in the relevant column of Schedule F,
Part 5 in respect of each Pumped Storage Unit for the time it is
operating in Spin Pump Mode in accordance with the Grid Code
during any period when it is providing a Load Reduction service
or has agreed to the Despatch of its Final Pumping Programme.
BLACK START CAPABILITY
NGC shall pay the Generator in respect of each Black Start
Station for providing a Black Start Capability the amounts per
Settlement Period provided in Schedule G for each Settlement
Period for which the Generator declares any Generating Unit at
the Black Start Station available for generation pursuant to the
Grid Code SDC.
Should a Black Start Station be determined not to have a Black
Start Capability pursuant to the Grid Code OC5.5.4, no payment
shall be made under Clause 8.1 to the Generator for the Black
Start Station concerned in respect of the period commencing on
the date and time agreed by the Parties or determined by
arbitration pursuant to the Grid Code OC5.5.4 when the Black
Start Station first failed to have the Black Start Capability and
expiring on the date and time when the Generator next declares
any Generating Unit at the Black Start Station available for
generation following the date and time when the Black Start
Station is next determined to have its Black Start Capability
restored pursuant to the Grid Code OC5.5.4.
If following an instruction from NGC pursuant to the Grid Code
OC9 the Generator fails to provide a Black Start at a Black Start
Station within a period consistent with its current registered
dynamic parameters, no payment shall be made under Sub-Clause 8.1
from the date and time of such failure until such date and time
as the Generator next declares any Generating Unit at that Black
Start Station available for generation following the date and
time when the Black Start Station is next determined to have its
Black Start Capability restored pursuant to the Grid Code
OC5.5.4.
PAYMENT
On the fifth day of each month NGC shall send to the Generator a
detailed statement ("the Monthly Statement") setting out all
Ancillary Services supplied by the Generator during the previous
month and calculating the payments due to the Generator in
respect of such services for that month in accordance with this
Agreement.
If the Generator has failed to supply any Ancillary Service in
accordance with the Grid Code or any instructions issued under
the Grid Code, NGC shall produce to the Generator at the same
time as it sends the Monthly Statement next follOWing the time
when such records or evidence become available, the records of
the monitoring and/or tests carried out pursuant to the Grid Code
OC 5.5, the records of the agreed monitoring and/or testing
procedures set out or provided for in this Agreement and any
other evidence upon which it relies as showing such failure. If
the Generator disagrees with such records or with any other fact
or calculation set out in the Monthly Statement, it shall produce
to NGC the evidence which it relies upon in support of such
disagreement. The Parties shall discuss and endeavour to resolve
the matter but if it cannot be resolved the records of the
monitoring and/or test procedures and the facts and calculations
set out in the Monthly Statement shall be binding upon the
Parties until such time as they are reversed or revised by
agreement or by an arbitrator appointed pursuant to Clause 21.
Should any dispute or disagreement under this Clause concern the
same facts and matters as a dispute or disagreement under the
Settlement calculation procedures set out in the Pooling and
Settlement Agreement the outcome of the dispute or disagreement
under the Pooling and Settlement Agreement shall be binding upon
the Parties in relation to the dispute or disagreement under this
Agreement.
Notwithstanding the provisions of Sub-Clause 9.2, if any fact or
matter set out in the Monthly Statement shall be inconsistent
with any fact or matter set out in a final run of the Settlement
calculation issued by the Settlement System Administrator under
the Pooling and Settlement Agreement, the facts and matters set
out in the Settlement calculation or which, following a dispute,
it is found or agreed should be there set out shall be binding
upon both Parties.
If either Party intends to dispute any fact or matter contained
in a final run of a Settlement calculation which is inconsistent
with any fact or matter contained in a Monthly Statement it shall
serve notice in writing on the other Party to that effect in
order that the other Party may make such representations as it
wishes to the Settlement System Administrator or exercise such
rights as it may have under the Pooling and Settlement Agreement.
NGC shall send to the Generator 20 days after the date of the
Monthly Statement an amended statement ("the Amended Monthly
Statement") to take into account any changes which require to be
made to it in consequence of the procedures set out in Sub-
Clauses 9.2 to 9.5 inclusive.
Where dispute is resolved later than 20 days after the date of
the Monthly Statement or where pursuant to the procedures set out
in Sub-Clause 9.2 it is determined that the Generator was not
entitled to receive a payment already made, NGC shall adjust the
account between itself and the Generator accordingly in the next
Monthly Statement or Amended Monthly Statement which it issues.
The due date of payment for the purposes of Sub-Clause 9.9 in
respect of any disputed amount shall be the date for payment of
the Monthly Statement from which the dispute arises.
NGC shall pay to the Generator the amount shown as due in an
Amended Monthly Statement within three Business Days of the date
on which the Amended Monthly Statement is or should be issued.
If NGC fails to pay on the due date any amount properly due under
this Agreement NGC shall pay to the Generator interest on such
overdue amount from and including the date of such failure to
(but excluding) the date of actual payment (as well after as
before judgement) at the rate of 4% over Barclays Bank PLC base
lending rate for the time being and from time to time. Interest
shall accrue from day to day.
Notwithstanding any other provision of this Agreement, the
Parties shall not be limited in any way as to the evidence they
may rely upon in any proceedings arising out of or in connection
with payment for any Ancillary Service under this Agreement and
the Parties agree that in the event and to the extent that either
Party succeeds in proving in any such proceedings that any
Ancillary Service was or was not provided, the successful Party
shall be entitled to repayment of the sums previously paid under
this Agreement or payment of sums not paid as the case may be in
respect of such Ancillary Service.
If following a dispute or pursuant to the procedures set out in
Sub-Clause 9.2 it is determined or agreed that the Generator was
not entitled to any payment it has received, NGC shall be
entitled to interest on the amount so paid from the date of
payment until the date of repayment or the date when NGC makes a
payment to the Generator which takes such repayment into account.
Such interest shall be calculated in the same manner and at the
same rate as is provided for overdue payments under Sub-Clause
9.9
Save as otherwise expressly provided in this Agreement, sums
payable by NGC pursuant to this Agreement whether of charges,
interest or otherwise shall (except to the extent otherwise
required by law) be paid in full, free and clear of and without
deduction, set-of f or deferment in respect of any disputes or
claims whatsoever provided that NGC may deduct from such sums the
amount of any final award or judgment obtained by NGC pursuant to
the Master Connection Agreement or agreed by the Generator which
arises out of any failure by the Generator to provide or make
available Ancillary Services pursuant to the Grid Code and/or any
Supplemental Agreement.
NGC represents and warrants to the Generator that it enters into
this Agreement as principal and not as agent f or any other
person.
All amounts specified hereunder shall be exclusive of any Value
Added Tax or other similar tax and NGC shall pay to the Generator
Value Added Tax at the rate for the time being and from time to
time properly chargeable in respect of the making available
and/or supply of Ancillary Services under this Agreement, the
Grid Code, the Master Connection Agreement or any Supplemental
Agreement.
LIMITATION OF LIABILITY
Subject to Sub-Clause 10.2 and Clause 9 and save where any
provision of this Agreement provides for an indemnity, the
Parties agree and acknowledge that neither Party (the "Party
Liable") nor any of its officers, employees or agents shall be
liable to the other Party for loss arising from any breach of
this Agreement other than for loss directly resulting from such
breach and which at the date of this Agreement was reasonably
foreseeable as not unlikely to occur in the ordinary course of
events from such breach in respect of:
physical damage to the property of the other Party, its
officers, employees or agents; and/or
the liability of such other Party to any other person for
loss in respect of physical damage to the property of any person.
Nothing in this Agreement shall exclude or limit the liability of
the Party Liable for death or personal injury resulting from the
negligence of the Party Liable or any of its officers, employees
or agents and the Party Liable shall indemnify and keep
indemnified the other Party, its officers, employees or agents,
from and against all such and any loss or liability which such
other Party may suffer or incur by reason of any claim on account
of death or personal injury resulting from the negligence of the
Party Liable or any of its officers,
employees or agents.
Subject to Sub-Clause 10.2 and Clause 9 and save where any
provision of this Agreement provides for an indemnity neither the
Party Liable nor any of its officers, employees or agents shall
in any circumstances whatsoever be liable to the other Party for:
any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or any indirect or consequential
loss; or
loss resulting from the liability of the other Party to any
other person howsoever and whensoever arising save as provided in
Sub-Sub-Clause 10.1(ii) and Sub-Clause 10.2.
Each Party acknowledges and agrees that the other Party holds the
benefit of Sub-Clauses 10.1 and 10.2 and 10.3 for itself and as
trustee and agent for its officers, employees and agents.
Each of Sub-Clauses 10.1, 10.2, 10.3 and 10.4 shall:
be construed as a separate and severable contract term, and
If one or more of such Sub-Clauses is held to be invalid,
unlawful or otherwise unenforceable the other or others of such
Sub Clauses shall remain in full force and effect and shall
continue to bind the Parties; and
survive termination of this Agreement.
For the avoidance of doubt, nothing in this Clause 10 shall
prevent or restrict any Party enforcing any obligation (including
suing for a debt) owed to it under or pursuant to this Agreement.
Each Party acknowledges and agrees that the provisions of this
Clause 10 have been the subject of discussion and negotiation and
are fair and reasonable having regard to the circumstances as at
the date of this Agreement.
METERING
The relationship between the Parties with respect to Energy
Metering Equipment shall be regulated in accordance with the
Pooling and Settlement Agreement.
The relationship between the Parties with respect to Operational
Metering Equipment shall be regulated by the Master Connection
Agreement.
TERMINATION
This Agreement shall automatically terminate upon:
(i) the Generator ceasing to be a Pool Member; or
(ii) termination of the Pooling and Settlement Agreement; or
(iii) termination of the Master Connection Agreement; or
(iv) Revocation or withdrawal of the Generation Licence or the
Transmission Licence.
Upon termination of any Supplemental Agreement, this Agreement
shall be terminated to the extent that it applies to the
Generating Units at and Ancillary Services supplied or made
available from the Connection Site which is the subject of the
said Supplemental Agreement. Where the Generator serves notice
to Decommission or Disconnect the Generator's Equipment at a
Connection Site under a Supplemental Agreement, the Parties shall
discuss the possibility of terms being offered for the continued
provision following the date when Decommissioning or
Disconnection would otherwise have occurred of any Ancillary
Service which was being provided by the Generator at that
Connection Site immediately before service of the Notice to
Decommission or Disconnect and for which NGC are unable to find a
reasonable alternative.
No payments will be made under this Agreement in respect of an
Ancillary Service to be provided from a Generating Unit in
relation to any period when the Generating Unit or the
Generator's Equipment at any Connection Site used by that
Generating Unit is prevented from providing that Ancillary
Service by reason of a circumstance of Force Majeure under the
Master Connection Agreement or is Deenergised, Decommissioned or
Disconnected for any reason pursuant to the relevant Supplemental
Agreement or the Master Connection Agreement.
Termination by the Generator
In the event that:
NGC shall fall to pay (other than by inadvertent error in
funds transmission which is discovered by the Generator, notified
to NGC and corrected within 48 hours following such notification)
any amount properly due or owing from it pursuant to this
Agreement according to its terms and such non-payment continues
unremedied and not disputed in good faith and upon reasonable
grounds at the expiry of 7 Business Days immediately following
receipt by NGC of written notice from the Generator of such
non-payment; or
In respect of NGC:
an order of the High Court is made or an effective
resolution passed for its insolvent winding-up or dissolution; or
a receiver (which expression shall include an
administrative receiver within the meaning of Section 29 of the
Insolvency Act 1986) of the whole or any material part of its
assets or undertaking is appointed; or
an administration order under Section 8 of the
Insolvency Act 1986 is made or If a voluntary arrangement is
proposed under Section I of that Act; or
it enters into any scheme of arrangement (other than
for the purpose of reconstruction or amalgamation upon terms and
within such period as may previously have been approved in
writing by the Director); or
it is unable to pay its debts (within the meaning of
Section 123(1) or (2) of the Insolvency Act 1986 save that such
section shall have effect as if for pounds750.00 there was inserted
pounds 250,000 (and NGC shall not be deemed to be unable to pay its
debts if any demand for payment is being contested in good faith
by it with recourse to all appropriate measures and procedures);
and in any such case within 28 days of appointment of the
liquidator, receiver, administrative receiver, administrator
nominee or other similar officer, such person has not provided to
the Generator a guarantee of future performance by NGC of the
Agreement in such form and amount as the Generator may reasonably
require and there has been no agreement reasonably satisfactory
to the Generator reached between Pool Members as to payment of
amounts due in the future under this Agreement,
the Generator may declare by notice in writing to NGC that such
event has become an event of default.
Once the Generator has given notice of an event of default this
Agreement shall terminate. Termination of this Agreement as a
whole or in relation to any Generating Unit and/or any Ancillary
Service under Sub-Clauses 12.1 to 12.5 or any of them shall not
affect any rights or obligations of the Parties which have
accrued at the time of such termination.
ASSIGNMENT
The Generator shall not assign or transfer nor purport to assign
or transfer the benefit or burden of this Agreement save in the
following circumstances:
the Generator may assign or charge its benefit under this
Agreement in whole or in part by way of security;
upon the disposal of the whole of the Generator's business
or undertaking, the Generator may transfer its rights and
obligations under this Agreement to the purchaser thereof
provided that NGC has consented to the transfer of the
Generator's rights and obligations under the Master Connection
Agreement and all Supplemental Agreements;
upon disposal of part of the Generator's business or
undertaking comprising Generator's Equipment at one or more
Connection Sites the Generator may transfer such of its rights
and obligations under this Agreement as relate to the Generating
Units and Ancillary Services concerned to the purchaser thereof
provided that NGC has consented to the transfer of the
Generator's rights and obligations under all Supplemental
Agreements relevant to the part of the business or undertaking to
be transferred.
NGC shall not assign or transfer nor purport to assign or
transfer the benefit or burden of this Agreement save to a
successor Ancillary Services. Provider.
CONFIDENTIALITY FOR NGC AND ITS SUBSIDIARIES
NGC and its subsidiaries shall secure that Protected Information
is not:
divulged by Business Personnel to any person unless that
person is an Authorised Recipient;
used by Business Personnel for the purposes of obtaining for
NGC or for any of its subsidiaries or for any other person:
any electricity licence; or
any right to purchase or otherwise acquire, or to
distribute electricity (including rights under any electricity
purchase contract as defined in the Transmission Licence); or
any contract or arrangement for the supply of
electricity to Customers or any contract or Suppliers; or
any contract for the use of any electrical lines or
electrical plant belonging to or under the control of a Supplier;
or
control of any body corporate which, whether directly
or indirectly, has the benefit of any such licence, contract or
arrangement; and
used by Business Personnel for the purpose of carrying on
any activities other than Permitted Activities,
except with the prior consent in writing of the Party to whose
affairs such Protected Information relates.
Nothing in this Clause 14 shall apply:
to any Protected Information which, before it is furnished
to Business Personnel, is in the public domain; or
to any Protected Information which, after it is furnished to
Business Personnel:
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does not apply; or
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does apply and thereafter
ceases to be subject to the restrictions imposed by this Clause
14; or enters the public domain,
and in any such case otherwise than as a result of:
(i) a breach by NGC or any subsidiary of NGC of its
obligations in this Clause 14; or
(ii) a breach by the person who disclosed that Protected
Information of that person's confidentiality obligation and NGC
or any of its subsidiaries is aware of such breach; or
to the disclosure of any Protected Information to any person
if NGC or any subsidiary of NGC is required or expressly
permitted to make such disclosure to such person:
in compliance with the duties of NGC or any subsidiary
of NGC under the Act or any other requirement of Competent
Authority; or
in compliance with the conditions of the Transmission
Licence or any document referred to in the Transmission Licence
with which NGC or any subsidiary of NGC is required by virtue of
the Act or the Transmission Licence to comply; or
in compliance with any other requirement of law; or
in response to a requirement of any stock exchange or
regulatory authority or the Panel on Take-Overs and Mergers; or
pursuant to the arbitration rules for the Electricity
Supply Industry Arbitration Association or pursuant to any
judicial or other arbitral process or tribunal having
jurisdiction in relation to NGC or any of its subsidiaries; or
to any Protected Information to the extent that NGC or any
of its subsidiaries is required or expressly permitted to
disclose that information under the terms of any agreement or
arrangement (including this Agreement, the Grid Code, the
Distribution Codes and the Fuel Security Code) with the Party to
whose affairs such Protected Information relates.
NGC and each of Its subsidiaries may use all and any information
or data supplied to or acquired by it from or in relation to the
other Party in performing Permitted Activities including for the
following purposes:
the operation and planning of the NGC Transmission System;
the calculation of charges and preparation of offers of
terms for connection to or use of the NGC Transmission System;
the operation and planning of the Ancillary Services
Business and the calculation of charges therefor;
the operation of the Settlements Business;
the provision of information under the British Grid Systems
Agreement and the EdF Documents (as defined in the Pooling and
Settlement Agreement),
and may pass the same to subsidiaries of NGC which carry out such
activities and the Generator agrees to provide all information to
NGC and its subsidiaries for such purposes. NGC undertakes with
the Generator, that having regard to the activities in which any
Business Person is engaged and the nature and effective life of
the Protected Information divulged to him by virtue of such
activities, neither NGC nor any of its subsidiaries shall
unreasonably continue (taking into account any industrial
relations concerns reasonably held by it) to divulge Protected
Information or permit Protected Information to be divulged by any
subsidiary of NGC to any Business Person:
who has notified NGC or the relevant subsidiary of his
intention to become engaged as an employee or agent of any other
person (other than of NGC or any subsidiary thereof) who is:
authorised by licence or exemption to generate,
transmit or supply electricity; or
an electricity broker or is known to be engaged in the
writing of electricity purchase contracts (as hereinbefore
defined); or known to be retained as a consultant to any such
person who is referred to in paragraph (a) or (b) above; or
or who is to be transferred to the Generation Business,
save where NGC or such subsidiary could not, in all the
circumstances, reasonably be expected to refrain from divulging
to such Business Person Protected Information which is required
for the proper performance of his duties.
Without prejudice to the other provisions of this Clause 14, NGC
shall procure that any additional copies made of the Protected
information whether in hard copy or computerised form, will
clearly identify the Protected Information as protected.
NGC undertakes to use all reasonable endeavours to procure that
no employee is a Corporate Functions Person unless the same is
necessary for the proper performance of his duties.
NGC shall secure that Protected Information which is subject to
the provisions of this Clause 14 and which relates to the cost of
Reactive Power provided by the Generator is not divulged to any
Business Person engaged in the provision of static compensation
for use by the Grid Operator.
Notwithstanding any other provision of this Agreement, the
provisions of this Clause 14 shall continue to bind a person
after termination of this Agreement, in whole or in part, for
whatever reason.
For the avoidance of doubt, data and other information which
either Party is permitted or obliged to divulge or publish to the
other Party pursuant to this Agreement shall not necessarily be
regarded as being in the public domain by reason of being so
divulged or published.
CONFIDENTIALITY FOR THE GENERATOR
The Generator hereby undertakes with NGC and Its subsidiaries
that it shall preserve the confidentiality of, and not directly
or indirectly reveal, report, publish, disclose or transfer or
use for its own purposes Confidential Information, except:
in the circumstances set out in Sub-Clause 15.2; or
to the extent otherwise expressly permitted by this
Agreement; or
with the prior consent in writing of the Party to whose
affairs such Confidential Information relates.
The circumstances referred to in Sub-Sub-Clause 15.1(i) are:
where the Confidential Information, before it is furnished
to the Generator, is in the public domain; or
where the Confidential Information, after it is furnished to
the Generator:
is acquired by the Generator In circumstances in which
this Clause 15 does not apply; or
is acquired by the Generator in circumstances in which
this Clause 15 does apply and thereafter ceases to be subject to
the restrictions imposed by this Clause 15; or
enters the public domain,
and in any such case otherwise than as a result of:
(i) a breach by the Generator of its obligations in this
Clause 15; or
(ii) a breach by the person who disclosed that Confidential
Information of that person's confidentiality obligation and the
Generator is aware of such breach; or
if the Generator is required or permitted to make disclosure
of the Confidential Information to any person:
In compliance with the duties of the Generator under
the Act or any other requirement of a Competent Authority; or
in compliance with the conditions of any Licence or any
document referred to in any Licence with which the Generator is
required to comply; or
in compliance with any other requirement of law; or in
response to a requirement of any stock exchange or regulatory
authority or the Panel or Take-Overs and Mergers; or
pursuant to the Arbitration Rules for the Electricity
Supply Industry Arbitration Association or pursuant to any
judicial or other arbitral process or tribunal having
jurisdiction in relation to the Generator; or
where Confidential Information is furnished by the
Generator to the employees, directors, agents, consultants and
professional advisers of the Generator, in each case on the basis
set out in Clause 15.4.
The Generator further undertakes with NGC and its subsidiaries
that it shall preserve the confidentiality of, and not directly
or indirectly reveal, report, publish, disclose or transfer any
data and other information of a commercially confidential nature
relating to the details (including the financial details) of this
Agreement, the negotiations leading up to the making of this
Agreement and any other discussions or negotiations arising
during the term of this Agreement and relating thereto except in
the circumstances set out in Sub-Clause 15.2(iii) and (iv) or
unless the Generator has obtained the prior written consent of
NGC. With effect from the date of this Agreement the Generator
shall adopt procedures within its organisation for ensuring the
confidentiality of all Confidential Information which it is
obliged to preserve as confidential under this Clause 15. These
procedures are:
the Confidential Information will be disseminated within the
Generator only on a "need to know" basis;
employees, directors, agents, consultants and professional
advisers of the Generator in receipt of Confidential Information
will be made fully aware of the Generator's obligations of
confidence in relation thereto; and
any copies of the Confidential Information, whether in hard
copy or computerised form, will clearly identify the Confidential
Information as confidential.
Notwithstanding any other provision of this Agreement, the
provisions of this Clause 15 shall continue to bind a person
after termination of this Agreement, In whole or in part, for
whatever reason.
For the avoidance of doubt, data and other information which
either Party is permitted or obliged to divulge or publish to the
other Party pursuant to this Agreement shall not necessarily be
regarded as being in the public domain by reason of being so
divulged or published.
ADDITIONAL COSTS
If:
the Generator is of the opinion that in order to comply with
any change in or amendment to the Grid Code (other than the
withdrawal of or reduction in the scope of a Derogation) or any
statutory or regulatory obligation coming into force after the
Effective Date the Generator is obliged to incur costs and
expenses for the purpose of carrying out modifications to any
Generating Unit or otherwise for the purposes of changing the
manner of operation of a Generating Unit in relation to the
provision of any Ancillary Service; or
NGC is of the opinion that by reason of any change in or
amendment to the Grid Code or any statutory or regulatory
obligation coming into force after the Effective Date the
Generator is able to make savings in the cost and expense of
providing any Ancillary Service from any Generating Unit,
then either the Generator or NGC as the case may be may by notice
in writing require that the provisions of Sub-Clauses 2.4 to 2.8
shall be brought into operation in relation to the Generating
Unit and the Ancillary Service which the Generator or NGC claims
to be affected by the change in or amendment to the Grid Code.
In accordance with the provisions of Sub-Clause 2.5, the Parties
shall endeavour to agree any adjustment in the rates, prices and
indexation formulae for the Ancillary Service and the Generating
Unit concerned having regard to the Charging Principles set out
in Schedule C. The revised rates and prices and (if appropriate)
indexation formulae shall be calculated as at and shall take
effect as from the end of a period of 12 weeks following the date
of the notice served under Sub-Clause 16.1 and the provisions of
Sub-Clauses 2.6 to 2.8 shall apply, mutatis mutandis, to the
price review under this Clause 16.
WAIVER
No delay by or omission of any Party in exercising any right,
power, privilege or remedy under this Agreement shall operate to
impair such right, power, privilege or remedy or be construed as
a waiver thereof. Any single or partial exercise of any such
right, power, privilege or remedy shall not preclude any other or
further exercise thereof or the exercise of any other right,
power, privilege or remedy. Payment of any sum or the submission
of any Monthly Statement or Amended Monthly Statement by NGC to
the Generator under this Agreement shall not operate to impair or
be construed as a waiver of any right, power, privilege or remedy
NGC way have against the Generator under this Agreement and/or
the Grid Code and/or the Master Connection Agreement and/or any
Supplemental Agreement.
The rights and remedies provided by this Agreement to the Parties
are exclusive and not cumulative and exclude and are in place of
all substantive (but not procedural) rights or remedies express
or implied and provided by common law or statute in respect of
the subject matter of this Agreement, including any rights either
Party may possess in tort which shall include actions brought in
negligence and/or nuisance. Accordingly, each of the Parties
hereby waives to the fullest extent possible all such rights and
remedies provided by common law or statute and releases the other
Party, its officers, employees and agents to the same extent from
all duties, liabilities, responsibilities or obligations provided
by common law or statute in respect of the matters dealt with in
this Agreement and undertakes not to enforce any of the same
except as expressly provided herein.
For the avoidance of doubt, the Parties acknowledge and agree
that nothing in this Agreement shall exclude or restrict or
otherwise prejudice or affect any of the rights, powers,
privileges, remedies, duties and obligations of the Secretary of
State or the Director under the Act, any Licence or otherwise
howsoever.
NOTICES
Any notice or other communication to be given by one Party to the
other under, or in connection with the matters contemplated by,
this Agreement shall be addressed to the recipient and sent to
the address, telex number or facsimile number of such other Party
given in Schedule H for the purpose and marked for the attention
of the person so given or to such other address, telex number
and/or facsimile number and/or marked for such other attention as
such other Party may from time to time specify by notice given in
accordance with this Clause IS to the Party giving the relevant
notice or other communication to it.
Any notice or other communication to be given by one Party to the
other Party under, or in connection with the matters contemplated
by, this Agreement shall be in writing and shall be given by
letter delivered by hand or sent by first class prepaid post
(airmail if overseas) or telex or facsimile, and shall be deemed
to have been received:
in the case of delivery by hand, when delivered; or
in the case of first class prepaid post, on the second day
following the day of posting or (if sent airmail from overseas)
on the fifth day following the day of posting; or
in the case of telex, on the transmission of the automatic
answer-back of the addressee (where such transmission occurs
before 1700 hours on the day of transmission) and in any other
case on the day following the day of transmission; or
in the case of facsimile, on acknowledgement by the
addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement.
COUNTERPARTS
This Agreement may be executed in any number of counterparts and
by the different Parties on separate counterparts, each of which
when executed and delivered shall constitute an original but all
the counterparts shall together constitute but one and the same
instrument.
VARIATIONS
No variations to this Agreement shall be effective unless made in
writing and signed by or on behalf of both Parties.
DISPUTE RESOLUTION
Save where expressly stated in this Agreement to the contrary and
subject to any contrary provision of the Act or any Licence or
the rights, powers, duties and obligations of the Director or the
Secretary of State under the Act, any Licence or otherwise
howsoever, any dispute or difference of whatever nature howsoever
arising under out of or in connection with this Agreement between
the Parties shall be and is hereby referred to arbitration
pursuant to the arbitration rules of the Electricity Supply
Industry Arbitration Association in force from
time to time.
Whatever the nationality, residence or domicile of either Party
and wherever the dispute or difference or any part thereof arose,
the law of England shall be the proper law of any reference to
arbitration hereunder and in particular (but not so as to
derogate from the generality of the foregoing) the provisions of
the Arbitration Acts 1950 (notwithstanding anything in Section 34
thereof) to 1979 shall apply to any such arbitration wherever the
same or any part of it shall be conducted.
Subject always to Sub-Clause 21.5, if any tariff customer (as
defined in Section 22(4) of the Act) brings any legal proceedings
in any court (as defined in the Rules of the Supreme Court 1965
and in the County Courts Act 1984) against one or more persons,
any of which is a Party (the "defendant contracting party") and
the defendant contracting party wishes to make a third party
claim (as defined in Sub-Clause 21.4) against the other party to
this Agreement ("a contracting party") which would but for this
Sub-Clause have been a dispute or difference referred to
arbitration by virtue of Sub-Clause 21.1 then, notwithstanding
the provisions of Sub-Clause 21.1 which shall not apply and in
lieu of arbitration, the court in which the legal proceedings
have been commenced shall hear and completely determine and
adjudicate upon the legal proceedings and the third party claim
not only between the tariff customer and the defendant
contracting party but also between either or both of them and the
other contracting party whether by way of third party proceedings
(pursuant to the Rules of the Supreme Court 1965 or the County
Court Rules 1981) or otherwise as may be ordered by the court.
For the purposes of this Clause third party claim shall mean:
any claim by a defendant contracting party against a
contracting party (whether or not already a party to the legal
proceedings) for any contribution or indemnity; or
any claim by a defendant contracting party against such a
contracting party for any relief or remedy relating to or
connected with the subject matter of the legal proceedings and
substantially the same as some relief or remedy claimed by the
tariff customer; or
any requirement by a defendant contracting party that any
question or issue relating to or connected with the subject
matter of the legal proceedings should be determined not
only as between the tariff customer and the defendant contracting
party but also as between either or both of them and a
contracting party (whether or not already a party to the legal
proceedings).
Sub-Clause 21.3 shall apply only If at the time the legal
proceedings are commenced no arbitration has been commenced
between the defendant contracting party and the other contracting
party raising or involving the same or substantially the same
issues as would be raised by or involved in the third party
claim. The tribunal in any arbitration which has been commenced
prior to the commencement of legal proceedings shall determine
the question, in the event of dispute, whether the issues raised
or involved are the same or substantially the same.
JURISDICTION
Subject and without prejudice to Clause 21 and to Sub-Clause
22.4, both Parties irrevocably agree that the courts of England
are to have exclusive jurisdiction to settle any disputes which
may arise out of or in connection with this Agreement and that
accordingly any suit, action or proceeding (together in this
Clause 22 referred to as "Proceedings") arising out of or in
connection with this Agreement may be brought in such courts.
Each Party irrevocably waives any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in any
such court as is referred to in this Clause 22 and any claim that
any such Proceedings have been brought in an inconvenient forum
and further irrevocably agrees that judgment in any proceedings
brought in the English courts shall be conclusive and binding
upon such Party and may be enforced in the courts of any other
jurisdiction.
Each Party which is not incorporated in any part of England and
Wales agrees that if it does not have, or shall cease to have, a
place of business In England and Wales it will promptly appoint,
and shall at all times maintain, a person in England and Wales to
accept service of process on its behalf in any Proceedings in
England.
For the avoidance of doubt nothing contained in the foregoing
provisions of this Clause 22 shall be taken as permitting a party
to commence Proceedings in the courts where this Agreement
otherwise provides for Proceedings to be referred to arbitration.
GOVERNING LAW
This Agreement shall be governed by and construed in all respects
in accordance with English law.
SEVERANCE OF TERMS
If any provision of this Agreement is or becomes or is declared
invalid, unenforceable or illegal by the courts of any
jurisdiction to which it is subject or by order of the Commission
of the European Communities or by order of the Secretary of
State, such invalidity, unenforceability or illegality shall not
prejudice or affect the remaining provisions of this Agreement
which shall continue in full force and effect notwithstanding
such invalidity, unenforceability or illegality.
ENTIRE AGREEMENT
This Agreement contains or expressly refers to the entire
agreement between the Parties with respect to the subject matter
hereof, and expressly excludes any warranty, condition or other
undertaking implied at law or by custom, and supersedes all
previous agreements and understandings between the Parties with
respect thereto and each of the Parties acknowledges and confirms
that it does not enter into this Agreement in reliance on any
representation, warranty or other undertaking not fully reflected
in the terms of this Agreement.
IN WITNESS whereof the Parties have caused their respective
Common Seals to be hereunto affixed the day and year first above
written.
THE COMMON SEAL of )
THE NATIONAL GRID COMPANY PLC )
was hereunto affixed in )
the presence of: )
_____________________________________ Director
_____________________________________ Secretary
THE COMMON SEAL of )
[ ] )
was hereunto affixed )
in the presence of: )
_____________________________________ Director
_____________________________________ Secretary
<PAGE>
Schedule A
The Term of the Agreement
Generating Unit Ancillary Service Term
<PAGE>
Schedule B
Form of Agreement Amending Ancillary Services
Agreement to Correspond to Supplemental Agreement
for a New Connection Site or variation of an existing
Supplemental Agreement following a Modification
or following annual review of rates and prices
THIS AGREEMENT is made the day of 19
BETWEEN
THE NATIONAL GRID COMPANY PLC a company registered in
England with Number 2366977 whose registered off ice is at
National Grid House, Sumner Street, London SEI 9JU ("NGC" which
expression shall include its permitted successors and/or
assigns);
[NP] [POWERGEN] [PUMPED STORAGE] [NUCLEAR ELECTRIC]
[OTHERS] whose registered office is at [ ] ("the
Generator" which expression shall include its permitted
successors and/or assigns).
WHEREAS
By an Agreement ("the Ancillary Services Agreement") dated
1990 made between NGC and the Generator the parties thereto made
provision for the payment by NGC for Ancillary Services provided
by the Generator.
The Parties have agreed to amend that agreement in the terms
hereinafter set out.
NOW IT IS HEREBY AGREED as follows:
1. Unless the context otherwise requires, words and expressions
defined in the Ancillary Services Agreement shall bear the same
meanings respectively when used herein.
2. The provisions of this Agreement shall come into effect on
[date] [the date when the Commissioning Programme referred to in
Sub-Clause [ ] of the Supplemental Agreement dated [
] actually commences] [Note: second alternative applies only
where this agreement complements Supplemental Agreement for a New
Connection Site.]
3. As and from the effective date of this Agreement, the
Ancillary Services Agreement shall be amended as follows:
<PAGE>
HERE SET OUT AMENDMENTS TO CLAUSES
AND/OR SCHEDULES
4. This Agreement and the Ancillary Services Agreement shall be
read and construed as one document and references in the
Ancillary Services Agreement to the Ancillary Services Agreement
(howsoever expressed) shall be read and construed as references
to the Ancillary Services Agreement as amended by this Agreement
and by any other agreement amending the same f rom time to time.
5. This Agreement shall be governed by and construed in all
respects in accordance with English law and the provisions of
Clauses 19 and 20 of the Ancillary Services Agreement shall apply
hereto mutatis mutandis.
IN WITNESS whereof the Parties have caused their respective
Common Seals to be hereunto affixed the day and year first above
written.
THE COMMON SEAL of )
THE NATIONAL GRID COMPANY PLC )
was hereunto affixed )
in the presence of: )
________________________________ Director
________________________________ Secretary
THE COMMON SEAL of )
[ ] )
was hereunto affixed )
in the presence of: )
_______________________________ Director
_______________________________ Secretary
<PAGE>
Schedule C
Ancillary Service
Charging Principles
1. Introduction
1.1 These principles are to be used to establish the basic
arrangements but are not intended to stifle innovation in the
development of new services or the giving of appropriate economic
signals.
2. General
2.1 The charges shall be "cost reflective" ie. based and founded
upon the actual or estimated costs directly incurred or to be
incurred by the Generator for the purpose of providing the
service or capability concerned.
2.2 Where a capability to provide an Ancillary Service is
required by the Grid Code from all Generating Units (as opposed
to a capability made available by agreement between the Parties
from some only of the Generator's Generating Units), no Ancillary
Service Capability payment shall be made.
2.3 The cost of "Grandfathering" Generator's Equipment (i.e.
bringing equipment owned by the Generator on the Effective Date
to a condition of compliance with the Grid Code) shall not be
included in Ancillary Services payments. Where a Derogation is
withdrawn or reduced in scope then, except in relation to
Reactive Power and Frequency Response, the Generator shall be
entitled to take the cost of meeting the withdrawal or reduction
in the scope of the Derogation into account in its charges.
2.4 Subject to the other provisions of this Schedule, the
charges shall take due account of any change in or amendments to
the Grid Code or any other statutory or regulatory obligation
coming into force after the Effective Date affecting the
provision of Ancillary Services.
2.5 If as a result of any changes to the Pooling and Settlement
Agreement the Generator ceases to be entitled to receive payment
under that agreement in respect of any elements of Ancillary
Services provided by it which are expressed in this Schedule to
be paid for under that agreement, the Generator shall be entitled
to charge for such elements under this Agreement. Where however
such change entitles the Generator to be paid for any elements of
Ancillary Services which are expressed in this Schedule to be
paid for under this Agreement the Generator shall cease to be
entitled to charge for such elements under this Agreement.
3. Reactive Power
3.1 The fixed cost of providing the capability to supply
Reactive Power specified in the Grid Code shall not be included
in the charge.
3.2 The variable cost of providing Reactive Power shall include:
(i) the additional heat losses incurred as a consequence of
producing Reactive Power, measured at the High Voltage side of
the Generator/Transformer terminals; the calculation of such heat
losses to take account of the square law relationship between the
electric current and the additional heat losses incurred; for the
purposes of calculating the charges under the interim payment
system estimates of Reactive Energy likely to be provided shall
be used for the purposes of calculating heat losses;
(ii) maintenance costs incurred as a direct result of
Reactive Power output (including a sum in respect of any
reduction in the working life of Generating Unit components
consequent upon Reactive Power output).
3.3 Payments for Reactive Power shall relate to Reactive Power
provided to the relevant User System or the NGC Transmission
System.
3.4 Any MW part-loading required for the purpose of MVAR
production Is paid for through the Pooling and Settlement
Agreement.
3.5 Charges for Reactive Power shall be predicated on the basis
that any Generating Units brought on out of merit for the purpose
of MVAR production are paid for MW production through the Pooling
and Settlement Agreement and MVAR production through Ancillary
Services Agreement.
3.6 Payments for Reactive Power may include payments for a
proportion of opportunity costs incurred as a direct consequence
of a Generating Unit being taken or kept out of service outside
normal outage periods for the sole purpose of the maintenance or
repair of equipment essential to the production of Reactive
Power. Payments shall be made on an "as arising" basis but
arrangements shall be put in place to avoid sudden increases in
payments to the Generator which would distort the Pool Purchase
Price. There is no presumption arising from the foregoing that
opportunity costs should be paid in relation to Generating Units
brought into service for the first time after the Effective Date.
3.7 On the changeover from the interim payment system to the
final payment system no sudden change is expected to the total
industry amounts paid for Reactive Power.
3.8 The Generator is paid for the Start-Up of a Gas Turbine Unit
providing Synchronous Compensation by Ancillary Services together
with a payment for time actually spent in Synchronous
Compensation mode.
4. Cancelled Starts
4.1 Payments for Cancelled Starts are based upon the Generator's
Start-Up Price and the time it would have required to Synchronise
to the System.
5. Hot Standby
5.1 Payments for Hot Standby are based upon the Generator's
Start-Up Price and the time spent on Hot Standby.
5.2 Charges for Hot Standby shall be predicated on the basis
that where Hot Standby is reached and then followed by an
instruction to Synchronise to the System which is not cancelled
the Generator is paid from Start-Up to Hot Standby through the
Pooling and Settlement Agreement.
6. Frequency Sensitive Generation
6.1 The variable cost of producing Primary and Secondary
Response and Five Minute Reserve shall include sums in respect
of:
throttling losses;
lost boiler efficiency (steam plant only);
additional works power.
6.2 Part-loading of Generating Units is paid for through the
Pooling and Settlement Agreement.
7. Fast Starts
7.1 Payments for Fast Starts from Gas Turbine or Pumped Storage
Units shall include a payment for maintaining the Fast Start
Capability.
7.2 Any energy produced as a result of a Fast Start Is paid for
through the Pooling and Settlement Agreement.
7.3 In the case of a Fast Start, a normal start is paid for
through the Pooling and Settlement Agreement and costs over and
above those of a normal start are paid for through the Ancillary
Services Agreement.
7.4 Payments to Pumped Storage for selecting spin-in-air mode
for frequency response purposes include a sum in respect of the
fixed cost of adopting such a mode.
8. Load Reduction
8.1 The cost of providing Load Reduction shall include sums in
respect of:
(a) maintaining the capability to trip load automatically
in response to a frequency deviation; and
(b) in the case of Pumped Storage, the additional cost of
energy over that programmed.
9. Black Start
9.1 The cost of providing a Black Start Capability shall include
the maintenance costs incurred as a direct result of providing
the Capability.
<PAGE>
Schedule D
Schedule of Payments for Supply of Reactive Pome-r
Part 1
Generating Unit Amount (pounds / half hour)
Part 2
SYNCHRONOUS COMPENSATION
Operating Charges
Generating [Plant] [Unit] Amount per minute
<PAGE>
Schedule E
[Part Loaded] Plant
Tariff for Primary and Secondary
Frequency Response and 5 Minute Reserve
Generating Primary Primary 5 M
Unit Secondary &
5 minute
Loading Response Reserve pounds/min Loading Response Reserve pounds/min
MW MW/Hz MW MW MW/Hz Loading
Response
Reserve
pounds/min
MW
<PAGE>
Schedule F
Part 1
Gas Turbine [Pumped Storage] Units in service for Low Frequency
Relay initiated or manual Frequency Response or Load Reduction
Unit Amount per half hour Amount per Start*
Part 2
Pumped Storage Adopting Spinning in Air Mode + Fast Start from
Spinning in Air Mode
Pumped Storage Amount Per Amount Per Hour Amount Per Start Unit
Mode Adoption
Part 3
Pumped Storage Fast Start From Standstill
Pumped Storage Unit Amount Per Start
Part 4
Pumped Storage - Despatch of Final Pumping Programme Capability
Payment
Part 5
Pumped Storage Adopting Spin Pump Mode and Start from Spin Pump
Mode
Unit Amount Per Mode Adoption Amount Per Hour Amount per Start
Part 6
Pumped Storage Trap De-Load and Re-Start
Unit Amount Per Trip Amount Per Re-Start Amount Per De-Load
Part 7
Payments for Emergency Mode Changes
* Note : applicable only to Gas Turbine Units.
<PAGE>
Schedule H
Notices
NGC's address for service of Notices :
Generator's address for service of Notices :
<PAGE>
Schedule I
Indexation Formulae
<PAGE>
SCHEDULE J
Definitions
"the Act" the Electricity Act 1989;
"Active Power" The product of voltage and the in-phase
component of alternating current measured in units of Watts and
standard multiples thereof ie.
1000 Watts = lkW
1000 kW = 1MW
1000 MW = 1GW
1000 GW = 1TW;
"Affiliate" in relation to NGC means any holding
company or subsidiary of NGC or any subsidiary of a holding
company of NGC, in each case within the meaning of Sections 736,
736A and 736B of the Companies Act 1985 as substituted by Section
144 of the Companies Act 1989 and if that section is not in force
at the date of this Agreement as if such latter section were in
force at such date;
"Agreement" this agreement (including the Schedules)
as amended, extended, supplemented, novated or modified from time
to time;
"Ancillary
Services" any or all of the following:
Reactive Power;
Reactive Power supplied by means of
Synchronous Compensation;
Cancelled Start;
Hot Standby;
Primary Response;
Secondary Response;
Five Minute Reserve;
Frequency Response by means of Gas Turbine Unit Fast
Start;
Frequency Response by means of a Pumped
Storage Unit Fast Start;
Frequency Response by means of a Fast Start
from a Pumped Storage Unit Spinning-in-Air;
Despatch of Pumped Storage Plant pumping programme;
Frequency Response by means of Load Reduction;
Black Start Capability;
such other ancillary services as the Parties
may agree from time to time;
"Ancillary Services
Agreement" an agreement between a User and the
Ancillary Services Provider for the payment by the Ancillary
Services Provider to that User in respect of the provision by
such User of Ancillary Services;
"Ancillary Services
Business" the business relating to Ancillary Services
carried on by the Ancillary Services Provider;
"Ancillary Services
Provider" the person who for the time being and from
time to time is required by the terms of a licence granted under
Section 6(l)(b) of the Act to contract for Ancillary Services;
"Apparatus" all equipment in which electrical
conductors are used, supported or of which they may form a
part;
"Authorised Electricity
Operator" any person (other than NGC in its capacity as
operator of the NGC Transmission System) who is authorised to
generate, transmit or supply electricity;
Authorised Recipient" in relation to any Protected
Information, any Business Person who, before the Protected
Information had been divulged to him by NGC or any subsidiary of
NGC had been informed of the nature and effect of Clause 14 of
this Agreement and who requires access to such Protected
Information for the proper performance of his duties as a
Business Person in the course of Permitted Activities;
"Availability
Declaration" a statement of the availability for
generation of a Centrally Despatched Generating Unit submitted by
the Generator pursuant to the Grid Code;
"Black Start" the procedure necessary for a recovery
from a Total Shutdown or Partial Shutdown;
"Black Start
Capability" an ability in respect of a Black Start
Station for at least one of its Generating Units to Start-Up from
Shutdown and to energise a part of the System and be Synchronised
to the System upon instruction from NGC within two hours without
an external electrical power supply;
"Black Start Station" a Power Station which is registered
pursuant to a Supplemental Agreement as having a Black Start
Capability;
"British Grid Systems
Agreement" the agreement of that name made or to be
made between NGC, Scottish Hydro Electric PLC and Scottish Power
PLC Inter alia regulating the relationship between their
respective grid systems;
"Bulk Supply Point" any point of supply where Energy
Metering Equipment for the purposes of the bulk supply tariff is
or would have been located as more particularly defined in the
Pooling and Settlement Agreement;
"Business Day" a week-day other than a Saturday on which
banks are open for domestic business in the City of London;
"Business Person" any person who is a Main Business
Person or a Corporate Functions Person and "Business Personnel"
shall be construed accordingly;
"Cancellation
Instruction" an instruction issued by NGC cancelling
a previous instruction in the circumstances set out in Clauses 5
or 6;
"Cancelled Start" a response by the Generator to a
Cancellation Instruction;
"Central Despatch" the process of Scheduling and
issuing direct instructions by NGC referred to in paragraph I of
Condition 7 of the Transmission Licence;
"Centrally Despatched
Generating Unit" a Generating Unit within a
Generating Plant;
"Commercial Ancillary
Services" Ancillary Services other than System
Ancillary Services;
"Competent Authority" the Secretary of State, the Director and
any local or national agency, authority, department,
inspectorate, minister, ministry, official or public or statutory
person (whether autonomous or not) of, or of the government of,
the United Kingdom or the European Community;
"Confidential
Information" all data and other information supplied
to the Generator by NGC under the provisions of this Agreement;
"Connection Site" each location more particularly
described in the relevant Supplemental Agreement at which the
Generator's Equipment and NGC Assets required to connect the
Generator to the NGC Transmission System are situated or at which
the Generator's Equipment is connected to a User System;
"Corporate Functions
Person" any person who:
(a) is a director of NGC; or
(b) is an employee of NGC or any of its
subsidiaries carrying out any administrative, finance or other
corporate services of any kind which in part relate to the Main
Business; or
(c) is engaged as an agent of or adviser to or
performs work in relation to or services for the Main Business;
"Customer" a person to whom electrical power is
provided (whether or not he is the same person as the person who
provides the electrical power);
"Decommission" cessation of use by the Generator of the
Generator's Equipment at any given Connection Site for a
continuous period exceeding 12 months pursuant to the relevant
Supplemental Agreement;
"Deenergise" the movement of any isolator breaker or
switch or the removal of any fuse whereby no Electricity can flow
to or from the relevant User System at a Connection Site through
the Generator's Equipment; "Deenergised" shall be construed
accordingly;
"Demand" the demand of MW and MVAR of electricity;
"Derogation" a direction issued by the Director or
any provision of any Supplemental Agreement, which in either
case, relieves the Generator from its obligation under the
Generation Licence or under the Master Connection Agreement to
comply with such parts of the Grid Code as may be specified in
such direction or provision;
"Despatch" the issue by NGC of Instructions for
Generating Plant to achieve specific Active Power and Reactive
Power levels or target voltage levels within Generation
Scheduling and Despatch Parameters listed in the Grid Code SDC
and by stated times;
"Desynchronisation" the act of taking a Generating Unit
off a System to which It has been Synchronised, by opening any
connecting circuit breaker;
"Director" the Director-General of Electricity
Supply appointed for the time being pursuant to Section 1 of the
Act;
"Disconnect" permanent physical disconnection of the
Generator's Equipment at any given Connection Site;
"Distribution Code" the Distribution Code required to
be drawn up by each PES and approved by the Director, as f rom
time to time revised with the approval of the Director;
"Distribution System" the system consisting (wholly or
mainly) of electric lines owned or operated by any Authorised
Electricity Operator and used for the distribution of electricity
from Grid Supply Points or Generating Units or other entry points
to the point of delivery to Customers or Authorised Electricity
Operators and includes any Remote Transmission Assets operated by
Such Authorised Electricity Operator and any electrical plant and
meters owned or operated by the Authorised Electricity Operator
in connection with the distribution of electricity, but does not
include any part of the NGC Transmission System;
"Effective Date" 31st March 1990;
"Electricity" Active Energy and Reactive Energy;
"Embedded" having a direct connection to a
Distribution System or the System of any other User to which
Customers and/or Power Stations are connected such connection
being either a direct connection or a connection via a busbar of
another User or of NGC (but with no other connection to the NGC
Transmission System);
"Energy" or
"Active Energy" the electrical energy produced, flowing
or supplied by an electric circuit during a time interval, being
the integral with respect to time of the instantaneous power,
measured in units of Watt-hours or standard multiples thereof ie:
1000 Wh = 1kWh
1000 kWh = 1MWh
1000 MWh = 1GWh
1000 GWh = 1TWh;
"Energy Metering
Equipment" meters instruments transformers (both
voltage and current), metering protection equipment including
alarms, circuitry and their associated data collection
outstations and wiring which are part of the Activity Energy or
Reactive Energy measuring equipment at or relating to a Site;
"External
Interconnection" Apparatus owned or operated by NGC
for the transmission of electricity to or from the NGC
Transmission System into or out of an External System;
"Externally
Interconnected Party" a person operating an External System
which is connected to the NGC Transmission System by an External
Interconnection;
"External System" in relation to an Externally
Interconnected Party, the transmission or distribution system
which it owns or operates and any Apparatus or Plant which
connects that system to the External Interconnection and which is
owned or operated by such Externally Interconnected Party;
"FMS Date" the date (which is expected to fall on
or as soon as is reasonably practicable after 31st October 1992)
to be specified by the Executive Committee (as defined in the
Pooling and Settlement Agreement) in agreement with the Grid
Operator and the Settlement System Administrator under the
Pooling and Settlement Agreement for the national implementation
of the revised standards specified by Codes of Practice in
relation to the Energy Metering Equipment of all Parties to the
Pooling and Settlement Agreement;
"Fast Start" a start by a Generating Unit with a Fast
Start Capability;
"Fast Start Capability" the ability of a Generating Unit to be
Synchronised and Loaded to reach full Load within 5 minutes;
"Final Pumping
Programme" a programme submitted by NGC Pumped
Storage Business to NGC Operations not later than 2000 hours
daily Indicating Demand of each Pumped Storage Unit (including
intended on and off times) over the period 2200 hours the same
day to 0700 hours the following day or if the following day is
not a Business Day, 0800 hours, adjusted for the purposes of
calculating payments under this Agreement to take account of any
Pumped Storage Plant breakdown and any additional pumping
required by NGC Pumped Storage Business In accordance with the
Grid Code during the Final Pumping Programme Period;
"Final Pumping
Programme Period" in relation to Load Reduction
and/or Despatch by NGC the period covered by the Final Pumping
Programme extended until whichever is the earlier of:
the time at which NGC Pumped Storage
Business Is next Instructed to generate; or
the time at which NGC Pumped Storage
Business is next programmed to generate; or
the time of the start of the next Final
Pumping Programme;
"Five minute Reserve" in relation to a Generating Unit a
response which is fully available within five minutes from the
time of Frequency change or a Despatch instruction pursuant to
the Grid Code SDC3, and which is sustainable for a period of four
hours;
"Frequency" the number of alternating current cycles
per second (expressed in Hertz) at which a System is running;
"Frequency Response" a response by a Generating Unit to a
change in Frequency with the aim of containing System Frequency
within the limits provided for under the Grid Code;
"Frequency Sensitive
Mode" automatic incremental or decremental
generation response to contain initial System Frequency transient
together with a sustained generation response which is sufficient
to contain the System Frequency within the limits defined in the
Frequency Control Strategy as defined under the Grid Code;
"Frequency Sensitive
Generation" the operation of a Generating Unit in
Frequency Sensitive Mode;
"Fuel Security Code" the document of that title
designated as such by the Secretary of State, as from time to
time amended;
"Gas Turbine Unit" a Generating Unit driven by a gas
turbine, (for instance by an aero engine);
"Generating Plant" a Power Station subject to Central
Despatch including any Generating Unit therein;
"Generating Unit" any Apparatus which produces
electricity;
"Generation Business" the authorised business of NGC or any
Affiliate or Related Undertaking in the generation of electricity
or the provision of Ancillary Services, in each case f rom Pumped
Storage Plant;
"Generation Licence" the licence granted to the
Generator pursuant to Section 6(l)(a) of the Act;
"Generation Offer
Prices" the set of prices submitted by the Generator
in respect of each Centrally Despatched Generating Unit under the
Grid Code SDC;
"Generator's Equipment" the Plant and Apparatus owned by the
Generator (ascertained in the absence of agreement to the
contrary by reference to the principles of ownership set out in
the Master Connection Agreement) which is connected to the NGC
Transmission System or to a Distribution System at any particular
Connection Site or which the Generator wishes so to connect;
"Genset Bid Price" the meaning attributed to it in the
Pool Rules;
"Grid Code" the Grid Code drawn up pursuant to
Condition 8 of the Transmission Licence as from time to time
revised in accordance with Condition 8.2 of the Transmission
Licence; references in this Agreement to any specific provision
or part of the Grid Code shall be construed as references to such
provision or part as from time to time amended;
"Grid Code OC" the operating Codes of the Grid Code;
"Grid Code SDC" the Scheduling and Despatch Codes of the
Grid Code;
"Grid Entry Point" a point at which a Non-Embedded
Generating Unit connects to the NGC Transmission System;
"Grid Supply Point" a point of supply from the NGC
Transmission System to PES's or to other Users with User Systems
with Customers connected to them or Non-Embedded Customers;
"Hot Standby" in relation to a Steam Turbine Generating
Plant a condition of readiness to be able to Synchronise and
attain an instructed output In a specified timescale;
"Lagging" in relation to Reactive Power, exporting
MVAR;
"Leading" in relation to Reactive Power, importing
MVAR;
"Licence" any one or more as appropriate of the
Licences granted pursuant to Section 6 of the Act;
"Load" the Active or Reactive Power as the context
requires generated, transmitted or distributed;
"Loaded" supplying electrical power to the system;
"Load Reduction" interruption of Demand by means of
Low Frequency Relays;
"Low Frequency Relay" an electrical measuring relay intended
to operate when its characteristic quantity (Frequency) reaches
the relay settings by decrease in Frequency;
"Main Business" any business of NGC or any of its
subsidiaries as at the Effective Date or which it is required to
carry on under the Transmission Licence other than the Generation
Business;
"Main Business Person" any employee of NGC or any director or
employee of its subsidiaries who is engaged solely in the Main
Business and "Main Business Personnel" shall be construed
accordingly;
"Master Connection
Agreement" the agreement designated as the Master
Connection and Use of System Agreement made between all Users of
the NGC Transmission System and NGC for connection of Plant
and/or Apparatus and/or use of the NGC Transmission System, and
any amendment, extension, variation or modification of that
agreement;
"Mode Change" in relation to a Pumped Storage Unit a change
from one operating condition to another;
"Modification" any actual or proposed replacement,
renovation, modification, alteration or construction by or on
behalf of either Party to that Party's Plant or Apparatus or the
manner of its operation which has or may have a Material Effect
on the other Party for the purposes of the Master Connection
Agreement at a particular Connection Site;
"New Connection Site" a proposed Connection Site in relation
to which there is no Supplemental Agreement in force between the
Parties;
"NGC Assets" the Plant and Apparatus owned by NGC
necessary to connect the Generator's Equipment to the NGC
Transmission System at any particular Connection Site;
"NGC's Pumped
Storage Business" the authorised business of NGC or
any Affiliate or Related Undertaking in the generation of
electricity or the provision of Ancillary Services from Pumped
Storage Plant;
"NGC Transmission
System" the System consisting (wholly or mainly) of
High Voltage electric lines owned or operated by NGC and used for
the transmission of electricity f rom one Power Station to a
sub-station or to another Power Station or between sub-stations
or to or from any External Interconnection and includes any Plant
and Apparatus and meters owned or operated by NGC in connection
with the transmission of electricity but does not include any
Remote Transmission Assets;
"Non-Embedded
Customer" a Customer except for a PES receiving
electricity direct from the NGC Transmission System irrespective
of from whom it is supplied;
"Offered Availability" the availability, expressed in MW
less the MW consumed by that Centrally Despatched Generating Unit
through the Centrally Despatched Generating Unit's unit
transformer when producing the same, of a Centrally Despatched
Generating Unit as set out in the relevant Availability
Declaration or revision thereof, which in the case of an Embedded
Centrally Despatched Generating Unit grossed up to represent MW
metered at the relevant Grid Supply Point using the conversion
factor supplied pursuant to the Grid Code SDC;
"Operational Metering
Equipment" meters, instrument transformers (both
voltage and current), transducers metering protection equipment
including alarms circuitry and their associated outstations as
may be necessary for the purposes of the Grid Code CC 6.5.5 and
the corresponding provision of the relevant Distribution Code;
"Part Loaded" in relation to a Generating Unit, on load but
not running at Registered Capacity;
"Partial Shutdown" the same as a Total Shutdown except
that all generation has ceased in a separate part of the Total
System and there is no supply from External Interconnections or
other parts of the Total System to that part of the Total System
and, therefore, that part of the Total System is shutdown, with
the result that it Is not possible for that part of the Total
System to begin to f unction again without NGC's directions
relating to a Black Start;
"Party" each person for the time being and from time
to time a party to this Agreement and any successor(s) in title
to, or permitted assign(s) of, such person;
"Permitted Activities" activities carried on for the
purposes of the Main Business;
"PES" a holder of a licence granted under
Section 6(l)(c) of the Act;
"Plant" fixed and movable items used in the
generation and/or supply and/or transmission of electricity other
than Apparatus;
"Pool Members" the Founder Generators and Founder Suppliers
and any other person admitted to pool membership under the
Pooling and Settlement Agreement in each case until it shall have
resigned from pool membership or otherwise ceased to be a member
in accordance therewith;
"Pool Purchase Price" the Pool Purchase Price for a Settlement
Period determined pursuant to the Pool Rules;
"Pool Rules" the rules set out in Schedule 9 to the
Pooling and Settlement Agreement as amended, varied or
substituted from time to time in accordance with the terms of the
Pooling and Settlement Agreement;
"Pooling and
Settlement Agreement" the agreement of that title f or the
time being approved (or to be approved) by the Secretary of State
or by the Director as from time to time amended;
"Power Station" an installation comprising one or more
Generating Units (even where separately sited) owned or
controlled by the same Generator which may reasonably be
considered as being managed as one Power Station;
"Primary Response" in relation to a Generating Unit
the automatic response to Frequency changes released increasingly
with time over the period 0 to 10 seconds from the time of
Frequency change and fully available by the latter and which is
sustainable for at least a further 20 seconds;
"Protected Information" any information relating to the affairs
of a Party which is furnished by such Party to Business Personnel
pursuant to this Agreement unless prior to such information being
furnished, such Party has informed the recipient thereof by
notice in writing or by endorsement on such information, that the
said information is not to be regarded as Protected Information;
and any data and other information of a commercially confidential
nature relating to the details (including the financial details)
of this Agreement, the negotiations leading up to the making of
this Agreement and any other discussions or negotiations arising
during the term of this Agreement and relating thereto;
"Pumped Storage Plant" the Dinorwig and/or Ffestiniog
Generating Plants owned by NGC;
"Pumped Storage Unit" a Generating Unit within a Pumped
Storage Plant;
"Reactive Energy" the integral with respect to time
of the Reactive Power;
"Reactive Power" the product of voltage and current
and the sine of the phase angle between them measured in units of
voltamperes reactive and standard multiples thereof ie.
1000 VAr = 1 kVAr
1000 kVAr = 1 MVAr;
"Reactive Power Test" a test specified in the Grid Code OC5
carried out by the Generator on the instructions of NGC in order
to demonstrate that a Generating Unit meets the Reactive Power
capability required by the Grid Code;
"Registered Capacity" the normal full load capacity of a
Generating Unit as declared by the Generator, less the MW
consumed by the Generating Unit through the Generating Unit's
unit transformer when producing the same;
"Related Undertaking" in relation to NGC means any undertaking
in which NGC has a participating interest as defined by Section
260 of the Companies Act 1985 as substituted by Section 22 of the
Companies Act 1989 and If that section is not in force at the
date of this Agreement as if such section were in force at such
date;
"Remote Transmission
Assets" any Plant and Apparatus or meters owned by
NGC which are (a) embedded in the Distribution System of an
Authorised Electricity Operator and are not directly connected by
lines and plant owned by NGC to a sub station owned by NGC and
(b) are by agreement between NGC and such Authorised Electricity
Operator under the direction and control of such Authorised
Electricity Operator;
"Review Date" 1st April 1993 and each successive third
anniversary of such date during the term of this Agreement but
construed subject to the provisions of Sub-Clauses 2.4 to 2.8 and
the expression "Relevant Review Date" shall be construed
accordingly;
"Schedule Day" the period from 0500 hours In the Settlement
Day until 0500 hours In the next following Settlement Day;
"Second Tier Customer" a person who Is supplied with
Electricity by a Second Tier Supplier;
"Second Tier Supplier" a holder of a Second Tier Supply Licence
granted under Section 6(2)(a) of the Act;
"Secondary Response" in relation to a Generating Unit the
automatic response to Frequency changes which is fully available
by 30 seconds from the time of Frequency change to take over from
Primary Response and which is sustainable for at least a further
30 minutes;
"Secretary of State" the same meaning as in the
Act;
"Settlement Day" the period from 0000 to 2400 hours
each day;
"Settlement Period" a period of 30 minutes ending on
the hour and half hour in each hour during the Schedule Day;
"Settlement System" those assets, systems and
procedures for the calculation in accordance with the Pool Rules
of payments which become due thereunder, as modified from time to
time;
"Settlement System
Administrator" the person appointed for the time being or
any replacement thereof from time to time pursuant to the Pooling
and Settlement Agreement to operate all or part of the Settlement
System;
"Shutdown" the condition of a Generating Unit where
the generator rotor is at rest or on barring;
(i) a Grid Entry Point;
(ii) a Grid Supply Point or Bulk Supply
Point;
(iii) the point of connection of a
Generator which is Embedded or of a Second Tier Supplier or of a
Second Tier Customer to a Distribution System or the NGC
Transmission System;
(iv) the point of connection of two
Distribution Systems; or
(v) the point of connection of an External
Interconnection to the NGC Transmission System;
"Site Pump Mode" in relation to a Pumped Storage
Unit the condition where the Pumped Storage Unit is rotating at
Synchronous Speed with the pump de-watered;
Spinning in Air" the condition where a Pumped
Storage Unit is rotating at Synchronous Speed with the turbine
de-watered and is programmed to generate automatically if System
Frequency falls to a designated level;
"Start-Up" the action of bringing a Generating Unit
from Shutdown to Synchronous Speed;
"Start-up Price" the start-up component of the
Generation Offer Prices;
"Supplemental
Agreement" an agreement to be entered into between
NGC and the Generator covering each Connection Site of the
Generator pursuant to the Master Connection Agreement and in the
form required by the Master Connection Agreement;
"Supplier" a PES or a Second Tier Supplier;
"Synchronous
Compensation" the operation of rotating synchronous
Apparatus for the specific purpose of either the generation or
absorption of Reactive Power;
"Synchronised" the condition where an incoming Generating
Unit or System is connected to the busbars of another System so
that the Frequencies and phase relationships of that Generating
Unit or the System, as the case may be, and the System to which
it is connected are identical; "Synchronise" and
"Synchronisation" shall be construed accordingly;
"Synchronous Speed" that speed required by a Generating Unit
to enable it to be synchronised to a System;
"System" any User System or the NGC Transmission
System as the case may be;
"System Ancillary
Services" any or all of the following:
Reactive Power;
Primary Response;
Secondary Response;
Five Minute Reserve;
Frequency Response by means of Gas Turbine
Unit Fast Start;
Frequency Response by means of Pumped Storage
Unit Fast Start;
Black Start Capability;
"Total Shutdown" the situation existing when all
generation has ceased and there is no electricity supply from
External Interconnections and, therefore, the Total System has
shutdown with the result that it is not possible for the Total
System to begin to function again without NGC's directions
relating to a Black Start;
"Total System" the NGC Transmission System and all User
Systems in England and Wales;
"Transfer Scheme" the transfer scheme made by the
Central Electricity Generating Board established under Section 66
of the Act or by the Secretary of State under Section 69 of the
Act;
"Transmission Licence" the Licence granted to NGC under Section
6(l)(b) of the Act;
"User" any person using the NGC Transmission System;
"User System" any System owned or operated by a User
comprising Generating Units and/or Distribution Systems (and/or
other systems consisting (wholly or mainly) of electric lines
which are owned or operated by a person other than a PES) and
Plant and/or Apparatus connecting Generating Units, Distribution
Systems (and/or other systems consisting (wholly or mainly) of
electric lines which are owned or operated by a person other than
a PES) or Non-Embedded Customers to the NGC Transmission System
or (except in the case of Non-Embedded Customers) to the relevant
other User Systems, as the case may be, including any Remote
Transmission Assets operated by such User or other person and any
Plant and/or Apparatus and meters owned or operated by the User
or other person in connection with the distribution of
electricity but does not include any part of the NGC Transmission
System.
<PAGE>
Schedule K
Part 1
Cancelled Starts
Generating Unit Period before Synchronisation
Part 2
Hot Standby
Generating Unit Value of H
<PAGE>
EXHIBIT 15
DATED 1990
THE NATIONAL GRID COMPANY PLC
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at [ ]
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<PAGE>
INTERFACE AGREEMENT
THIS DEED OF AGREEMENT is made on the date stated on the Cover
between the Parties stated thereon
WHEREAS
(A) Certain assets of NGC (including assets of third parties
used by NGC under
arrangements with such third parties) are situated on
property title to which (by way of freehold or leasehold) is
vested in Genco;
(B) Certain assets of Genco (including assets of third parties
used by Genco under arrangements with such third parties) are
situated on property title to which (by way of freehold or
leasehold) is vested in NGC; and
(C) Certain assets and facilities of one party, whether situated
on that party's property or not, are required for use by both
parties in the carrying on of their respective undertakings.
(D) This Agreement is entered into by the parties to give effect
to appropriate arrangements in respect of such assets and the use
of assets and facilities.
NOW IT IS HEREBY AGREED as follows:
DEFINITIONS AND INTERPRETATION
In this Agreement, the following words and expressions shall,
unless the subject-matter or context otherwise requires or is
inconsistent therewith, bear the following meanings:
"the Act" the Electricity Act 1989;
"Asset" a Genco Asset or an NGC Asset (as the case may
be);
"Affiliate" in relation to a Party means any holding
company or subsidiary of that Party or any subsidiary of a
holding company of that Party, in each case within the meaning of
Sections 736, 736A and 736B of the Companies Act 1985 as
substituted by Section 144 of the Companies Act 1989 and if that
section is not in force at the date of this Agreement as if such
section were in force at such date;
"CEGB" the Central Electricity Generating Board;
"Common Asset" an asset specified in Schedule 6;
"Competent
Authority" includes the Director and any local or
national agency, authority, department, inspectorate, minister,
ministry, official or public or statutory person (whether
autonomous or not) of, or of the government of, the United
Kingdom or the European Community;
"Connection
Agreement" the Master Connection and Use of System
Agreement entered into by, among others, the Parties regarding,
among other things, the connection of Genco's Plant and Apparatus
(as defined therein) to the NGC Transmission System (as defined
therein) and the use by Genco of such system;
"Cover" the page of this Deed headed as such which page
shall form part of this Deed;
"Directive" includes any present or future directive,
requirement, instruction, direction or rule of any Competent
Authority, (but only, if not having the force of law, if
compliance with the Directive is in accordance with the general
practice of persons to whom the Directive is addressed) and
includes any modification, extension or replacement thereof then
in force;
"the Director" the Director General of Electricity Supply
appointed for the time being pursuant to Section 1(1) of the Act
by the Secretary of State;
"Electricity
Generating
Licence" Genco's licence granted pursuant to S.6(l)(a) of
the Act;
"Emergency
Personnel" in relation to a Party, all employees of that
Party who have appropriate knowledge and experience and are
recognised by that Party as being able to carry out competently
and safely emergency action for the purposes of clause 10;
"Force Majeure" in relation to a Party, any event or
circumstance which is beyond the reasonable control of that
Party, and which results in or causes the failure of that Party
to perform any of its obligations under this Agreement including
any act of God, strike, lockout or other industrial disturbance,
act of the public enemy, war declared or undeclared, threat of
war, terrorist act, blockade, revolution, riot, insurrection,
civil commotion, public demonstration, sabotage, act of
vandalism, lightning, fire, storm, flood, earthquake,
accumulation of snow or ice, lack of water arising from weather
or environmental problems, explosion, fault or failure of plant
and apparatus which could not have been prevented by Good
Industry Practice, governmental restraint, Act of Parliament
legislation, bye-law, and Directive (not being any order,
regulation or directive under Section 32, 33, 34 or 35 of the
Act) Provided that lack of funds shall not be interpreted as a
cause beyond the reasonable control of that Party;
"Genco's Assets" those assets listed in Schedule 1
(including any plinths or other structures (excluding buildings)
to or upon which the same are affixed and to or upon which no
assets of any other person are affixed and any straps, bolts or
other such things for attachment thereto) as any of the same may
be Modified pursuant to this Agreement;
"Genco's Land" the land described in Schedule 2;
"Genco Radio
Equipment" all that telecommunications equipment owned
or operated by Genco and situated on NGC Radio Towers and Masts
and listed in Schedule 1;
"Genco Radio
Towers and Masts" those radio towers and masts owned by
Genco and not situated on NGC's Land but on which NGC Radio
Equipment is situated;
"Good Industry
Practice" the exercise of that degree of skill, diligence,
prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced operator engaged in the
same type of undertaking under the same or similar circumstances;
"Grantee" in any particular case the owner of the Asset in
question;
"Grantor" the owner of Grantor's land;
"Grantor's Land" Genco's Land and/or NGC's Land as the
context so requires;
"the Grid Code" the document or documents produced pursuant
to the NGC Transmission Licence, as from time to time revised in
accordance with the NGC Transmission Licence;
"High Voltage
Lines" electric lines of a nominal voltage exceeding 132
kilovolts;
"HV' of a nominal voltage exceeding 650 volts;
"Intellectual
Property" patents, trademarks, service marks, rights in
designs, trade names, copyrights and topography rights (whether
or not any of the same is registered and including applications
for registration of any of the same) and rights under licences
and consents in relation to any of the same and all rights or
forms of protection of a similar nature or having equivalent or
similar effect to any of the same which may subsist anywhere in
the world;
"Interconnectors" the electric lines, electrical plant and
meters owned or operated by NGC for the transmission of
electricity into or out of transmission systems in France or
Scotland;
"Modification" in relation to an Asset, any alteration to or
replacement of such Asset pursuant to clause 3.1 of this
Agreement and "Modify" and "Modified" shall be construed
accordingly;
"NGC's Assets" those assets listed in Schedule 3 (including any
plinths or other structures (excluding buildings) to or upon
which the same are affixed and to or upon which no assets of any
other person are affixed and any straps, bolts or other such
things for attachment thereto) as any of the same may be Modified
pursuant to this Agreement;
"NGC's Land" the land described in Schedule 4;
"NGC Radio
Equipment" all that telecommunications equipment owned
or operated by NGC and situated from time to time on Genco Radio
Towers and Masts as listed in Schedule 3;
"NGC Radio Towers
and Masts" those radio towers and masts owned by NGC and
not situated on Genco's Land but on which Genco Radio Equipment
is situated;
"NGC Transmission
Licence" NGC's licence granted pursuant to Section 6(1)(b)
of the Act;
"Party" each person for the time being and from time to
time party to this Agreement and any successor(s) in title to, or
permitted assign(s) of, in relation to a Right of Access, the
such person;
"Permitted
Purpose" in relation to a Right of Access, the purpose
specified in the clause granting such Right of Access;
"Providing Party" in the context of clause 8, a Party in
whom title to a Common Asset is vested;
"Recipient" in the context of clause 8, the Party which
is the recipient of the Services;
"Relocation
Proposal" a proposal by the Grantor to the Grantee pursuant
to sub-clause 5.1 for the relocation of any of the Grantee's
Assets;
"Right of Access" full right and liberty during the
currency of this Agreement to enter upon and through and remain
upon any part of the Grantor's Land to the extent necessary for a
Permitted Purpose and subject to the provisions of clause 7;
"Services" in the context of clause 8, the goods and
services specified in Schedule 7;
"Supplemental
Connection
Agreement" an agreement entered into between the Parties
in substantially the form set out in the appropriate schedule to
the Connection Agreement;
"Supplier" in the context of clause 8, the Party which
is the provider of Services to the Recipient;
"Transfer Scheme" the scheme of that name made pursuant to
the Act; and
"Using Party" in relation to a Common Asset, the Party (not
being the Providing Party) which uses that Asset.
In this Agreement:
(i) unless the context otherwise requires all references to a
particular clause, sub-clause, paragraph or Schedule shall be a
reference to that clause, subclause, paragraph or Schedule in or
to this Agreement;
(ii) the table of contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement;
(iii) references to the words "include" or "including" are to
be construed without limitation to the generality of the
preceding words;
(iv) unless there is something in the subject matter or the
context which is inconsistent therewith, any reference to an Act
of Parliament or any Section thereof or Schedule thereto, or
other provision thereof or any instrument, order or regulation
made thereunder shall be construed at the particular time as
including a reference to any modification, extension, replacement
or reenactment thereof then in force and to all instruments,
orders or regulations then in force and made under or deriving
validity f rom the relevant Act of Parliament; and
(v) references to the masculine shall include the feminine and
references in the singular shall include the plural and vice
versa and words denoting natural persons shall include companies,
corporations and any other legal entity and vice versa.
RIGHT TO RETAIN ASSET
Subject to sub-clause 5.1, NGC hereby grants to Genco the right
to retain and replace as provided in this Agreement Genco's
Assets on NGC's Land in such places as they are currently
situated and such right shall extend to any Modified Genco Asset.
NGC shall maintain any shelter and/or support enjoyed by any such
Asset at the date of this Agreement or, if later, when relocated
on NGC's Land in accordance with clause 5 and shall further
maintain in good condition any NGC Radio Towers and Masts to
which Genco Radio Equipment is attached or by which it is
supported and grants to Genco a Right of Access for the purpose
of the maintenance, inspection, testing, removal, operation,
Modification or repair of any of Genco's Assets. For the purpose
of carrying out the said maintenance of the NGC Radio Towers and
Masts NGC may upon the expiry of reasonable prior notice to Genco
take any steps reasonably necessary in respect of Genco's Radio
Equipment to enable such maintenance work to be carried out.
Subject to sub-clause 5.1, Genco hereby grants to NGC the right
to retain and replace as provided in this Agreement NGC's Assets
on Genco's Land in such places as they are currently situated and
such right shall extend to any Modified NGC Asset. Genco shall
maintain any shelter and/or support enjoyed by any such Asset at
the date of this Agreement or, if later, when relocated on
Genco's Land in accordance with clause 5 and shall further
maintain in good condition any Genco Radio Towers and Masts to
which NGC Radio Equipment is attached or by which it is supported
and grants to NGC a Right of Access for the purpose of the
maintenance, inspection, testing, removal, operation,
Modification or repair of any of NGC's Assets. For the purpose
of carrying out the said maintenance of the Genco Radio Towers
and Masts Genco may upon the expiry of reasonable prior notice to
NGC take any steps reasonably necessary in respect of NGC's Radio
Equipment to enable such maintenance work to be carried out.
MODIFICATIONS REPLACEMENTS AND ALTERATIONS
A Party may at its own expense replace or alter any of its Assets
provided that:
the replacement Asset or the Asset as so altered:
(i) is placed in the same or approximately the same position;
(ii) fulfils the same or a similar purpose;
(iii) can, where relevant, be accommodated In and on existing
buildings or structures;
(iv) does not require additional or improved facilities or
services from the Grantor;
(v) does not restrict the actual and intended use of the
Grantor's Land and any equipment thereon or therein to any
materially greater extent than the Asset so replaced or altered;
and
(vi) is either of the same or a similar or smaller size or
the alteration is effected substantially within the space
occupied by such Asset to enable the Asset to be used up to its
full capability; and
prior written notification has been given to the Grantor.
If any replacement or alteration permitted by clause 3.1 shall
require minor alterations or works to the existing buildings or
structures housing or supporting the Asset in question, such
alterations or works may be carried out (with the prior written
approval of the Grantor (such approval not to be unreasonably
withheld or delayed)) but at the cost of the Grantee.
To the extent that any of the conditions of clause 3.1 are not
met In relation to any replacement or alteration, the Grantor may
by notice in writing require the Grantee promptly to remove such
replacement or alteration and, If the Grantee fails to do so, may
remove the same itself at the cost and expense of the Grantee.
On such removal, the Grantee may reinstate the Asset so replaced
or altered.
The Grantee shall, if considering moving, replacing, or altering
any of the Grantee's Assets, give due consideration as to whether
it shall be operationally practicable, desirable and reasonably
economic to move such Asset to (or place the replacement or
altered Asset on) its own property.
SECURITY AND COMPLIANCE WITH STATUTES etc
Each Party undertakes to maintain and provide security in
relation to the other Party's Assets in accordance with the
arrangements set out in Part I of Schedule 5.
Each Party shall procure that, as between the Parties, all
reasonable and necessary steps are taken, as and when necessary
or desirable, in cooperation with the other (and, so far as
applicable, with any third party), to ensure compliance with the
provisions (each such provision or part thereof being in this
clause 4 an "Obligation") of:
(i) all statutes and Directives applicable to any Asset and/or
any part (including the whole) of Genco's Land and/or NGC's Land;
(ii) any statute or Directive which may affect any other property
(of whatever nature) of either Party as a result of the
existence, nature, location, or manner of operation of any Asset;
and
(iii) any statute or Directive requiring the reporting of any
occurrence relating to or affecting any Asset and/or Genco's Land
and/or NGC's Land (including the Reporting of Injuries Diseases
and Dangerous Occurrence Regulations 1985 and the Electricity
Supply Regulations 1988).
Each Party shall, so far as it is aware of the same, unless it
has reasonable grounds for believing that the other Party
possesses the information, keep the other Party informed of all
matters relating to any Obligation or potential Obligation and/or
the extent to which such Obligation may be applicable.
In the event of any dispute as to responsibility, as between the
Parties, pursuant to clause 4.2, for compliance with an
Obligation, that responsibility shall be allocated, so far as
practicable, on the basis that:
(i) each Party shall refrain from taking or permitting any act
or omission which would prevent compliance with an Obligation;
and
(ii) positive action required in relation to a Party's property
as a consequence of the existence, nature, location or manner of
operation of that property or any other property of that Party
shall be the responsibility of that Party, and, to the extent
that such action is required in respect of or affecting any
property of the other Party (or property of a third party located
in or on that other Party's Land), such action may be taken with
the prior approval of that other Party (such approval, subject to
(i) above, not to be unreasonably withheld or delayed).
The provisions for safety coordination between the Parties
contained in Part II of Schedule 5 shall apply.
RELOCATIONS
At any time and from time to time during the term of this
Agreement, the Grantor may with the prior written consent of the
Grantee (such consent not to be unreasonably withheld or delayed)
require the Grantee to relocate any of the Grantee's Assets
either to a different location on the Grantor's Land or to the
Grantee's or a third party's land, such consent to be sought and
given or refused in accordance with the following procedure:
The Grantor shall serve a written notice on the Grantee, which
notice shall specify:
(a) the Grantee's Assets which the Grantor wishes to be relocated;
(b) the reasons for such wish;
(c) the proposed new location for such Assets; and
(d) the timing of the carrying out of such relocation.
The Grantee shall within one month of receipt of any such notice
(or such longer period as shall be reasonably necessary) serve a
counter notice stating:
(a) whether or not in its reasonable opinion such Relocation
Proposal is acceptable to it;
(b) if the Relocation Proposal is not acceptable to the Grantee,
the grounds for such opinion and the terms of any alternative
proposal (the "Alternative Relocation Proposal") covering so far
as relevant the matters referred to in items (a) - (d) of clause
5.1.1 which would be acceptable to the Grantee; and
(c) in respect of the Relocation Proposal (if accepted) or of
any Alternative Relocation Proposal, the costs likely to be
incurred in connection with considering the Relocation Proposal
or the Alternative Relocation Proposal and effecting the said
relocation of the Assets and the proper and reasonable costs of
relocating any other equipment that may be necessary as a result
of the relocation of those Assets and any consequential losses
including payments to third parties incurred as a result of the
relocation of those Assets and the proposed manner and timing of
payment of the same by the Grantor.
If within one month of the date of such counter notice (or such
longer period as shall be reasonably necessary) the Grantor has
not withdrawn the Relocation Proposal and the Parties have not
agreed upon it or the Alternative Relocation Proposal (if any) or
a variation of either of them (such agreement to include
agreement on the costs referred to in item (c) of clause 5.1.2)
the matter shall be dealt with in accordance with Clause 12.
Upon approval or settlement of any Relocation Proposal,
Alternative Relocation Proposal or variation thereof pursuant to
clause 5.1, the Grantee shall relocate or procure the relocation
of the relevant Assets as quickly as reasonably practicable
(having regard to, amongst other things, technical and
operational requirements and to its obtaining all necessary
licences and consents).
The Grantor shall pay to the Grantee all costs referred to in
item (c) of clause 5.1.2 as agreed or settled pursuant to clause
5.1 provided that all reasonable endeavours are used to minimise
such costs and in the event that a Relocation Proposal is
withdrawn or consent thereto is reasonably withheld pursuant to
clause 5.1, the Grantor shall pay to the Grantee all costs
reasonably incurred by the Grantee in connection with considering
the Relocation Proposal and any counter notice.
Such of the provisions of this Agreement as are appropriate
and relevant (including the provisions of this clause 5),
shall continue to apply to any relocated Assets.
REMOVALS
Whenever any of NGC's Assets shall become unusable for the
purpose for which it was designed or shall not have been used for
a continuous period of at least twelve months, Genco may, by
notice in writing to NGC, require NGC to remove such Asset, at
NGC's expense, from Genco's Land as quickly as practicable and in
any event before the first anniversary ("the Removal Date") of
the date of service of such notice unless:
(i) Genco shall within the thirty days following service of such
notice have been reasonably satisfied that the Asset will be used
by NGC before the Removal Date, (or such later date as NGC shall
propose as is reasonable in all the circumstances including the
plans of either Party for subsequent use of the Asset in question
or the space occupied by such Asset); and
(ii) the Asset is so used.
In the event that there shall cease to be any Supplemental
Connection Agreement relating to any of Genco's Assets on NGC's
Land Genco shall remove all of Genco's Assets from NGC's Land as
quickly as practicable and in any event within the period
provided in the Connection Agreement.
In the event that there shall be a Disconnection (as defined in
the Connection Agreement) of all Plant and Apparatus (as so
defined) of Genco on NGC's Land then NGC will within 24 months of
the date of notice of intended Disconnection remove from Genco's
Land all of NGC's Assets not falling within the definition "NGC
Assets" under the Connection Agreement and Genco shall pay to NGC
one half of the costs reasonably incurred by NGC in so doing.
Provided that where NGC's Land comprises two (or more) separate
parcels of land and it is operationally necessary for the
purposes of the business carried on by NGC on NGC's land for NGC
to retain any of NGC's Assets on Genco's Land notwithstanding the
Disconnection then in respect of such of NGC's Assets aforesaid
NGC shall not be under the obligation to remove them from Genco's
Land until NGC no longer has any operational necessity to retain
such Assets (or any of them) on NGC's Land Provided further that
the provisions of Clause 5 hereof shall continue to apply to such
of NGC's Assets as remain on Genco's Land.
Where the Grantee is obliged to remove any of its Assets from the
Grantor's Land, whether under this Clause 6 or otherwise, and
fails to do so in accordance with the relevant provisions, the
Grantor shall be entitled to remove the Asset to land of the
Grantee and the Grantee shall provide all reasonable assistance
to enable the Grantor safely so to do and shall pay and reimburse
to the Grantor all costs and expenses (or one half of such costs
where the obligation to remove such Assets arose pursuant to sub
clause 6.3) reasonably incurred by the Grantor in so doing.
RIGHTS OF ACCESS
A Right of Access includes the right to bring on to the Grantor's
Land such vehicles, plant, machinery and maintenance or
construction materials as shall be reasonably necessary for the
Permitted Purpose.
A Right of Access given to the Grantee may be exercised by any
person, including third party contractors, reasonably nominated
from time to time by the Grantee. To the extent (if any) that
any particular authorisation or clearances may be required to be
given by the Grantor and the procedures for giving and obtaining
the same are not for the time being stipulated in arrangements
made pursuant to clause 7.3, the same shall be given within a
reasonable time from the date of the request therefor, save in
the case of emergency in which case it shall be given without
delay.
The Parties shall procure that all reasonable arrangements and
provisions are made and/or revised from time to time, as and when
necessary or desirable, to facilitate the safe exercise of any
Right of Access with the minimum of disruption, disturbance or
inconvenience to both Parties. Such arrangements and provisions
may, to the extent that the same is reasonable, limit or restrict
the exercise of the Right of Access and/or provide for one Party
to make directions or regulations from time to time in relation
to a specified matter. Matters to be covered by such
arrangements and/or provision include:
(i) the identification of any relevant Assets;
(ii) the particular access routes applicable to the land in
question having particular regard for the weight and size limits
on those routes;
(iii) any limitations on times of exercise of a Right of
Access;
(iv) any requirements as to prior notification and as to
authorisation or security clearance of individuals exercising
such Rights of Access, and procedures for obtaining the same;
(v) the means of communication to the other Party and all
employees and/or contractors who may be authorised from time to
time by that Party to exercise a Right of Access of any relevant
directions or regulations made by one Party;
(vi) the identification of and arrangements applicable to
Emergency Personnel.
Each Party shall procure that any such arrangements and/or
provisions (or directions or regulations issued pursuant thereto)
made from time to time between the Parties shall be observed and
performed by it and all persons authorised by it to exercise any
Right of Access.
The Grantee shall procure that all reasonable steps are taken
in the exercise of any Right of Access to:
(a) avoid or minimise damage to the Grantor's Land, or any other
property thereon or therein;
(b) cause as little disturbance and inconvenience as possible to
the Grantor or other occupier of the Grantor's Land.
And shall promptly make good any damage caused to the Grantor's
Land and/or such other property in the course of the exercise of
such rights and shall indemnify the other Party against all
actions, claims, proceedings, losses, costs and demands arising
out of such exercise.
Subject to clause 7.4.1, all such rights shall be exercisable
free of any charge or payment of any kind.
Subject to any contrary arrangements for the time being made
under clause 7.3:
a Right of Access for operation or inspection shall be
available without prior notice;
a Right of Access for the purpose of maintenance, testing or
repair of HV apparatus granted in respect of land on which
exposed HV conductors are sited shall only be exercisable on the
giving of at least seven days prior written notice to the Grantor
except in the case of loss of generation or other emergency (in
which event the Grantor shall render all possible assistance in
procuring that the Right of Access shall be exercisable as soon
as possible); and
a Right of Access for the purpose of Modifying any Asset
shall be exercisable only after two weeks prior written notice to
the Grantor.
SERVICES AND USE OF ASSETS
Subject as hereinafter provided, in relation to each Common
Asset, the Providing Party shall, if required by the Using Party,
make the Common Asset in question available for continued use by
the Using Party to at least the same extent as it was available
for use by the Using Party immediately prior to the date of this
Agreement.
Subject as hereinafter provided, in relation to each Service, the
Supplier shall, if required by the Recipient, continue to provide
the same to the Recipient. Such provision shall be of such a
quality and quantity and shall be provided at such times as the
Recipient shall reasonably request. The Supplier shall not be
required to exceed the level of quality or quantity of the
Service normally provided prior to the date of this Agreement,
unless specifically agreed otherwise between the Parties.
Where the use of any Common Asset is made available or such
Service is supplied as aforesaid, the Parties shall procure that
all reasonable arrangements and provisions are made and/or
revised from time to time, as and when necessary or desirable
between the local personnel employed by each of them in that
regard, such arrangements to include:
the identification of the Common Assets and/or Services in
question including (where relevant) the extent of their
availability;
the hours during which such use or provision shall be
allowed or made; any requirements as to notification of use or
call for supply or temporary suspension thereof;
any requirements as to authorisation or security clearance
of individuals and the procedures for obtaining the same;
any safety requirements;
administration of payment arrangements; and
In the case of helicopter landing facilities arrangements as to
the particular areas of Genco's Land to be available for the
purpose.
The provision of use of the Common Assets listed in Schedule 6,
Part One and the supply of the Services listed in Schedule 7,
Part One shall not be terminated unless the Providing Party
ceases to require the Common Asset or Service for its own use in
which case the supply of the Service or use of the Common Asset
may be terminated by not less than one year's notice in writing;
The provision of use of the Common Assets listed in Schedule 6,
Part Two and the supply of the Services listed in Schedule 7,
Part Two shall continue until terminated by not less than one
year's notice in writing by either Party.
Each Party shall maintain any Common Asset owned by that Party in
accordance with Good Industry Practice.
PAYMENT
The Parties agree that the provision of the use of Common Assets
shall be free of charge.
The Recipient agrees to pay the Supplier the fees for the
provision of the Services calculated and payable in accordance
with the relevant provisions of Schedule 8.
The Recipient shall maintain all its relevant assets in such
repair and condition that the level of services provided does not
substantially increase as a result of the lack of repair or
condition of the relevant assets.
Each Party shall pay to the other a fee for that other's
maintenance costs in respect of that other's Radio Towers and
Masts such fee to be paid annually and calculated in accordance
with the relevant provisions of Schedule 8.
Any sums payable under this Agreement shall be payable together
with any Value Added Tax chargeable on the same. Any costs,
expenses or other sums to be repaired or reimbursed to a Party
under this Agreement shall include any Value Added Tax paid by
that Party in relation to such sums to the extent that no credit
is available in respect thereof under Section 15 of the Value
Added Tax Act 1983.
If either Party fails to pay on the due date any amount properly
due under this Agreement such Party shall pay to the other
interest on such overdue amount from and including the date of
such failure to (but excluding) the date of actual payment (as
well after as before judgment) at the rate of 4% over Barclays
Bank PLC base rate for the time being and from time to time.
Interest shall accrue from day to day.
NON-INTERFERENCE
Each Party agrees that neither it nor its agents, employees and
invitees will interfere in any way with any of the other Party's
Assets without the consent of that other. For the purposes of
this clause "interfere" shall include:
disconnect or alter the connection of any Asset to any
system of cables, foundations, pipes, drains or other media to
which it may be connected from time to time or to prevent supply
of any substance or thing through such connected system;
affix or remove any item or substance of any nature
whatsoever to or from any Asset;
damage any Asset;
allowing any other person to interfere with any Asset;
alter any meters or settings on any Asset;
the obstruction of access to any Asset.
The obligations contained in this clause 10 shall be suspended to
the extent that emergency action is taken by Emergency Personnel
in good faith to protect the health and safety of persons or to
prevent damage to property. All reasonable care shall be taken
in the course of such emergency action. When the emergency has
ended, any damaged property will be reinstated by the Party whose
Asset gave rise to the emergency, save for damage occurring by
reason of lack of reasonable care in the course of the emergency
action which shall be the responsibility of the Party taking the
emergency action.
CABLE TUNNELS
Any cable tunnels situated under land owned by either Party to
this Agreement shall be kept fully maintained and repaired on the
following basis:
in the case of cable tunnels containing the HV cables of one
Party only from time to time, maintenance of the whole tunnel
shall be the responsibility of that Party; in the case of cable
tunnels containing HV cables of more than one Party, maintenance
of the whole tunnel shall be the responsibility of the Party with
the majority in number of such cables for the time being and the
cost of such maintenance shall be apportioned between the Parties
according to level of use;
in the case of cable tunnels containing solely cables other
than HV cables maintenance shall be the responsibility of the
Party with the majority in number of such cables for the time
being and the cost of maintenance shall be apportioned between
the Parties according to level of use;
where any part of any cable tunnel lies on or under land of
a Party not responsible in accordance with the above provisions
for the maintenance thereof that Party grants to the responsible
Party a Right of Access for all purposes necessary to discharge
its obligations under this clause 11 and shall give all
reasonable cooperation and assistance to the responsible Party as
may be requisite for the proper discharge by the responsible
Party of its obligations under this clause;
in relation to clauses 11.2 and 11.3 if neither Party has a
majority of the HV or other cables (as the case may be)
responsibility for maintenance of the tunnel shall rest with the
owner of the tunnel.
DISPUTE RESOLUTION
Any dispute arising under this Agreement between location
managers of the Parties shall, if not resolved within 14 days of
first arising, be referred at the instance of either party to the
respective Line Managers, or those fulfilling a similar function
whether or not so called, of NGC and Genco who shall use all
reasonable endeavours to resolve the matter in dispute within one
month.
Save where expressly stated in this Agreement to the contrary and
subject to any contrary provision of the Act, any Licence, or the
Regulations, or the rights, powers, duties and obligations of the
Director or the Secretary of State under the Act, any Licence or
otherwise howsoever, any dispute or difference of whatever nature
howsoever arising under out of or in connection with this
Agreement between the Parties shall be and is hereby referred to
arbitration pursuant to the arbitration rules of the Electricity
Supply Industry Arbitration Association in force from time to
time.
Whatever the nationality residence or domicile of any Party and
wherever the dispute or difference or any part thereof arose the
law of England shall be the proper law of any reference to
arbitration hereunder and in particular (but not so as to
derogate from the generality of the foregoing) the provisions of
the Arbitration Acts 1950 (notwithstanding anything in Section 34
thereof) to 1979 (including any modification, extension,
replacement or re-enactment thereof for the time being in force)
shall apply to any such arbitration wherever the same or any part
of it shall be conducted.
Subject always to sub-clause 12.5 below, if any tariff customer
(as defined in Section 22(4) of the Electricity Act 1989) brings
any legal proceedings in any court (as defined in the Rules of
the Supreme Court 1965 and in the County Courts Act 1984) against
one or more parties, any of which is a Party ("the Defendant
Contracting Party") and the Defendant Contracting Party wishes to
make a Third Party Claim (as defined in subclause 12.5 below)
against the other Party ("the Other Party") which would but for
this sub-clause have been a dispute or difference referred to
arbitration by virtue of subclause 12.3 above then,
notwithstanding the provisions of sub-clause 12.3 above which
shall not apply and in lieu of arbitration, the court in which
the legal proceedings have been commenced shall hear and
completely determine and adjudicate upon the legal proceedings
and the third party claim not only between the tariff customer
and the Defendant Party but also between either or both of them
and the Other Party whether by way of third party proceedings
(pursuant to the Rules of the Supreme Court 1965 or the County
Court Rules 1981) or otherwise as may be ordered by the Court.
For the purposes of this clause Third Party Claim shall mean:
any claim by a Defendant Party against the Other Party
(whether or not already a party to the legal proceedings) for any
contribution or indemnity; or
any claim by a Defendant Contracting Party against the Other
Party for any relief or remedy relating to or connected with the
subject matter of the legal proceedings and substantially the
same as some relief or remedy claim by the tariff customer; or
any requirement by a Defendant Party that any question or
issue relating to or connected with the subject matter of the
legal proceedings should be determined not only as between the
tariff customer and the Defendant Contracting Party but also as
between either or both of them and the Other Party (whether or
not already a party to the legal proceedings).
Sub-Clause 12.4 above shall apply only if at the time the legal
proceedings are commenced no arbitration has been commenced
between the Defendant Contracting Party and the Other Party
raising or involving the same or substantially the same issues as
would be raised by or involved in the third party claim. The
tribunal in any arbitration which has been commenced prior to the
commencement of legal proceedings shall determine the question,
in the event of dispute, whether the issues raised or involved
are the same or substantially the same.
GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in all respects
in accordance with English law.
Subject and without prejudice to clause 12 and to clause 13.4 the
Parties irrevocably agree that the courts of England are to have
exclusive Jurisdiction to settle any dispute which may arise out
of or in connection with this Agreement and that accordingly any
suit, action or proceeding (together in this clause 13 referred
to as "Proceedings") arising out of or in connection with this
Agreement may be brought in such courts.
Each Party irrevocably waives any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in any
such court as is referred to in this clause 13 and any claim that
any such Proceedings have been brought in an inconvenient forum
and further irrevocably agrees that a judgment in any Proceedings
brought in the English courts shall be conclusive and binding
upon such Party and may be enforced in the courts of any other
jurisdiction.
For the avoidance of doubt nothing contained in the foregoing
provisions of this clause 13 shall be taken as permitting a Party
to commence Proceedings in the courts where this Agreement
otherwise provides for proceedings to be referred to arbitration.
CONFIDENTIALITY
For the purposes of this Clause 14 except where the context
otherwise requires:
"Authorised Recipient", in relation to any Protected
Information, means any Business Person who, before the Protected
Information had been divulged to him by NGC or any subsidiary of
NGC, had been informed of the nature and effect of this clause 14
and who requires access to such Protected Information for the
proper performance of his duties as a Business Person in the
course of Permitted Activities;
"Business Person" means any person who is a Main Business
Person, or a Corporate Functions Person and "Business Personnel"
shall be construed accordingly.
"Confidential Information" means all data and other
information supplied to Genco under the provisions of this
Agreement.
"Corporate Functions Person" means any person who:
is a director of NGC; or
is an employee of NGC or any of its subsidiaries
carrying out any administrative, finance or other corporate
services of any kind which in part relate to the Main Business;
or
is engaged as an agent of or adviser to or performs
work in relation to or services for the Main Business and the
Generation Business;
"Generation Business" has the same meaning as in the NGC
Transmission Licence;
"Main Business" means any business of NGC or any of its
associates other than the Generation Business;
"Main Business Person" means any employee of NGC or any
director or employee of its subsidiaries who is engaged solely in
the Main Business and "Main Business Personnel" shall be
construed accordingly;
"Permitted Activities" means activities carried on for the
purposes of the Main Business;
"Protected Information" means an information relating to the
affairs of a Party which is furnished to Business Personnel
pursuant to this Agreement unless, prior to such information
being furnished, such Party has informed the recipient thereof by
notice in writing or by endorsement on such information, that the
said information is not to be regarded as Protected Information.
Confidentiality for NGC and its Subsidiaries
NGC and its subsidiaries in each of their capacities in this
Agreement shall secure that Protected Information is not:
divulged by Business Personnel to any person unless that
person is an Authorised Recipient;
used by Business Personnel for the purposes of obtaining for
NGC or any of its subsidiaries or for any other person:
any electricity licence; or
any right to purchase or otherwise require, or to
distribute, electricity including by means of an electricity
purchase contract (as defined in the NGC Transmission Licence);
or
any contract or arrangement for the supply of
electricity to customers or suppliers; or
any contract for the use of any electrical lines or
electrical plant belonging to or under the control of a
supplier; and
used by Business Personnel for the purpose of carrying
on any activities other than Permitted Activities;
except with the consent in writing of the Party to whose
affairs such Protected Information relates.
Nothing in this Clause 14 shall apply:
to any Protected Information which, before it is furnished
to Business Personnel is in the public domain;
to any Protected Information which, after it is furnished to
Business Personnel:
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does not apply; or
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does apply and thereafter
ceases to be subject to the restrictions imposed by this Clause
14; or
enters the public domain otherwise than as a result of
a breach by NGC; or
any subsidiary of NGC of its obligations in this Clause
14;
to the disclosure of any Protected Information to any person
if NGC or any subsidiary is required or permitted to make such
disclosure to such person:
in compliance with the duties of NGC or any associate
under the Act or any other requirement of a Competent Authority;
or
in compliance with the conditions of the NGC
Transmission Licence or any document referred to in the NGC
Transmission Licence with which NGC is required to comply; or
in compliance with any other requirement of law; or
in response to a requirement of any recognised stock
exchange or regulatory authority or the Panel on Take-overs and
Mergers; or
pursuant to the Arbitration Rules for the Electricity
Supply Industry Arbitration Association or pursuant to any
judicial or other arbitral process
or tribunal; or
to any Protected Information to the extent that NGC or any
of its subsidiaries is expressly permitted or required to
disclose that information under the terms of any agreement or
arrangement (including the Grid Code and the Fuel Security Code)
with the Party to whose affairs such Protected Information
relates.
NGC and its subsidiaries may use all and any information or data
supplied to or acquired by it, from or in relation to the other
Party to this Agreement in performing Permitted Activities
including for the following purposes:
the operation and planning of the NGC Transmission System;
the calculation of charges and preparation of offers of
terms for connection to or use of the NGC Transmission System;
the operation and planning of the Ancillary Services
Business (as defined in the NGC Transmission Licence) and the
calculation of charges therefor;
the operation of the Settlements Business (as defined in the
NGC Transmission Licence);
the provision of information under the British Grid Systems
Agreement and the EdF Protocol;
and may pass the same to subsidiaries of NGC which carry out such
activities and the Parties hereto agree to provide all
information to NGC and its subsidiaries for such purposes.
NGC undertake that, having regard to the activities in which any
Business Person is engaged and the nature and effective life of
the Protected Information divulged to him by virtue of such
activities, neither NGC nor any of its subsidiaries shall
unreasonably continue (taking into account any industrial
relations concerns reasonably held by it) to divulge Protected
Information or permit Protected Information to be divulged to any
Business Person who has notified NGC or the relevant subsidiary
of his intention to
become engaged as an employee or agent of any other person
(other than of NGC or any subsidiary thereof) who is authorised
by licence or exemption to generate, transmit or supply
electricity, or who is to be transferred to the Generation
Business save where NGC or such subsidiary could not, in all
circumstances reasonably be expected to refrain from divulging to
such Business Person Protected Information which Is required for
the proper performance of his duties.
Any copies of the Protected Information, whether in hard copy or
computerised form, will clearly identify the Protected
Information as protected.
NGC undertakes to use all reasonable endeavours to procure that
no employee is a Corporate Functions Person unless the same is
necessary for the proper performance of his duties.
Confidentiality other than for NGC and its Subsidiaries
Genco hereby undertakes with NGC and its subsidiaries that it
shall preserve the confidentiality and secrecy of, and not
directly or indirectly reveal, report, publish, disclose or
transfer or use for its own purposes Confidential Information
except:
in the circumstances set out in Clause 14.9.2;
to the extent expressly permitted by this Agreement; or
with the consent in writing of NGC.
Exceptions: the circumstances referred to in Clause 14.8.1.1 are:
where the Confidential Information, before It is furnished
to Genco, is in the public domain; or
where the Confidential Information, after it is furnished to
Genco:
is acquired by Genco in circumstances in which this
Clause 14 does not apply; or
is acquired by Genco in circumstances in which this
Clause 14 does apply and thereafter ceases to be subject to the
restrictions imposed by this Clause 14; or
enters the public domain otherwise than as a result of
a breach by Genco of its obligations in this Clause 14; or
if Genco is required or permitted to make disclosure of the
Confidential Information to any person:
in compliance with the duties of Genco under the Act or
any other requirement of a Competent Authority;
in compliance with the conditions of any Licence or any
document referred to in any Licence with which Genco is required
to comply; in compliance with any other requirement of law;
in response to a requirement of any stock exchange or
regulatory authority or the Panel on Takeovers and Mergers;
or pursuant to the Arbitration Rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal.
TITLE TO ASSETS
Genco and NGC hereby agree and declare that, the Transfer Scheme
having divided the property rights and liabilities of CEGB
between the successor companies named in the Transfer Scheme,
Genco's Assets are intended to benefit the undertaking, land and
business of Genco and NGC's Assets are intended to benefit the
undertaking, land and business of NGC, and such Assets shall
accordingly be and remain severed f rom the Grantor's Land and be
and remain chattels of the Grantee.
Each Party acknowledges that it does not have and will not
acquire any title, right or interest in any of the other Party's
Assets save for such rights as are expressly granted herein or
otherwise provided nevertheless that, if according to any rule of
law, either Party should have any such title, right or interest
in any of the other Party's Assets, then such title right or
interest shall be held upon trust, insofar as it relates to the
Asset, for the other Party absolutely and, insofar as it relates
to the airspace occupied by the Asset and/or any adjoining
property of the first Party, for that Party absolutely.
Each Party agrees that it shall not by any act or default render
the other party's Assets liable to any distress execution or
other legal process, and in the event that such assets shall
become so liable, shall forthwith give notice of any such
proceedings to the other Party and shall forthwith notify any
third party instituting any such process of the ownership of such
Assets.
If a Party desires to mortgage or charge any of its land or its
interest therein on which any of the other Party's Assets are
located or to mortgage or charge any of its own Assets or to
enter into any arrangement which, if made, might affect the
rights of the other Party expressly granted herein, then that
Party shall ensure that the other Party's Assets are not and will
not be subject to the rights granted therein and are not and will
not be affected by the mortgage, legal charge or other agreement
or arrangement, and shall give written notification thereof to
the other Party.
In the event that either Party shall wish to grant rights over or
dispose of any interest in or change the use of any land to which
arrangements under Clauses 2 to 7 inclusive apply, that Party
shall notify the other Party of such wish and fully consult that
other in respect thereof and shall not grant such rights or make
such disposal or change of use save on terms securing to the
reasonable satisfaction of that other the Rights of Access
granted in respect of such land.
LIMITATION OF LIABILITY
Subject to sub-clauses 5.3, 6.4, 9.6, 10.2 and 16.5 and save as
provided in this subclause 16.1 and sub-clause 16.2 neither Party
("the Party Liable") nor any of its officers, employees or agents
shall be liable to the other Party for loss arising from any
breach of this Agreement other than for loss directly resulting
from such breach and which at the date hereof was reasonably
foreseeable as not unlikely to occur in the ordinary course of
events from such breach and which resulted from:
physical damage to the property of the other Party, its
officers, employees or agents; and/or
the liability of the other Party to any other person for
loss arising from physical damage to the property of any person.
Nothing in this Agreement shall exclude or limit the liability of
the Party Liable for death or personal injury resulting from the
negligence of the Party Liable or any of its officers, employees
or agents and the Party Liable shall indemnify and keep
indemnified the other Party, its officers, employees or agents,
from and against all such and any loss or liability which the
other Party may suffer or incur by reason of any claim on account
of death or personal injury resulting from the negligence of the
Party Liable or any of
its officers, employees or agents.
Subject to sub-clauses 5.3, 6.4, 9.6, 10.2 and 16.5 neither
Party, nor any of its officers, employees or agents shall in any
circumstances whatsoever be liable to the other Party for:
any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or
any indirect or consequential loss; or
loss resulting from the liability of the other Party to any
other person howsoever and whensoever arising save as provided in
sub-clauses 16.1.2 and 16.2.
The rights and remedies provided by this Agreement to the Parties
are exclusive and not cumulative and exclude and are in place of
all substantive (but not procedural) rights or remedies express
or implied and provided by common law or statute in respect of
the subject matter of this Agreement, including any rights either
Party may possess in tort which shall include actions brought in
negligence and/or nuisance. Accordingly, each of the Parties
hereby waives in the fullest extent possible all such rights and
remedies provided by common law or statute, and releases the
Party Liable, its officers, employees and agents to the same
extent from all duties, liabilities, responsibilities or
obligations provided by common law or statute in respect of the
matters dealt with in this Agreement and undertakes not to
enforce any of the same except as expressly provided herein.
Save as otherwise expressly provided in this Agreement, this
clause 16 insofar as it excludes or limits liability shall
override any other provision in this Agreement provided that
nothing in this clause 16 shall exclude or restrict or otherwise
prejudice or affect any of:
the rights, powers, duties and obligations of either Party
which are conferred or created by the Act, the Electricity
Generating Licence, the NGC Transmission Licence or the
Electricity Supply Regulations 1988 or any amendment or
re-enactment thereof; or
the rights, powers, duties and obligations of the Director
or the Secretary of State under the Act, any such Licence as
aforesaid or otherwise howsoever.
Each of the sub-clauses of this clause 16 shall:
be construed as a separate and severable contract term, and
if one or more of such sub-clauses is held to be invalid,
unlawful or otherwise unenforceable the other or others of such
sub-clauses shall remain in full force and effect and shall
continue to bind the Parties; and
survive termination of this Agreement.
Each Party agrees that the Other Party holds the benefit of sub
clauses 16.1, 16.2 and 16.3 above for itself and as trustee and
agent for its officers, employees and agents Each Party hereby
acknowledges and agrees that the provisions of this clause 16
have been the subject of discussion and negotiation and are fair
and reasonable having regard to the circumstances as at the date
hereof.
INTELLECTUAL PROPERTY
All Intellectual Property relating to the subject matter of this
Agreement conceived, originated, devised, developed or created by
a Party, its officers employees, agents or consultants during the
currency of this Agreement shall vest in such Party as the sole
beneficial owner thereof save where the Parties agree in writing
otherwise.
FORCE MAJEURE
If either Party (the "Non-Performing Party") shall be unable to
carry out any of its obligations under this Agreement due to a
circumstance of Force Majeure this Agreement shall remain in
effect but save as otherwise provided herein the Non-Performing
Party's obligations hereunder shall be suspended without
liability for a period equal to the circumstance of Force Majeure
provided that:-
(i) the Non-Performing Party gives the other Party prompt notice
describing the circumstance of Force Majeure, including the
nature of the occurrence, its expected duration and the
particular obligations affected by It, and continues to furnish
regular reports with respect thereto during the period of Force
Majeure;
(ii) the suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure;
(iii) no liabilities of either Party that arose before the
Force Majeure causing the suspension of performance are excused
as a result of the Force Majeure;
(iv) the non-performing Party uses all reasonable efforts to
remedy its inability to perform; and
(v) as soon as practicable after the event which constitutes
Force Majeure the Parties shall discuss how best to continue
their operations so far as possible in accordance with this
Agreement.
WAIVER
No delay by or omission of a Party in exercising any right,
power, privilege or remedy under this Agreement shall operate to
impair such right, power, privilege or remedy or be construed as
a waiver thereof. Any single or partial exercise of any such
right, power, privilege or remedy shall not preclude any other or
future exercise thereof or the exercise of any other right,
power, privilege or remedy.
NOTICES
Any notice or other communication to be given by one Party to the
other under, or in connection with the matters contemplated by,
this Agreement shall be addressed to the recipient and sent to
the address, telex number or facsimile number of such other Party
given in Schedule 9 and marked for the attention of the person so
given or to such other address, telex number and/or facsimile
number and/or marked for such other attention as such other Party
may from time to time specify by notice given in accordance with
this clause 20 to the Party giving the relevant notice or other
communication to it.
Any notice or other communication to be given by one Party to the
other Party under, or in connection with the matters contemplated
by, this Agreement shall be in writing and shall be given by
letter delivered by hand or sent by first class prepaid post
(airmail if overseas) or telex or facsimile, and shall be deemed
to have been received:
in the case of delivery by hand, when delivered; or
in the case of first class prepaid post, on the second day
following the day of posting or (if sent airmail from overseas)
on the fifth day following the day of posting; or
in the case of telex, on the transmission of the automatic
answerback of the addressee (where such transmission occurs
before 1700 hours on the day of transmission) and in any other
case on the day following the day of transmission; or
in the case of facsimile, on acknowledgement by the
addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement.
VARIATIONS
The provisions of Schedules 1, 3, 6, 7 and 8 may be varied from
time to time by written memorandum signed by an authorised
officer of each of the Parties. Subject thereto no variations to
this Agreement shall be effective unless made by way of
supplemental deed.
OVERRIDING PROVISIONS
In the event of any conflict between NGC's or Genco's obligations
hereunder and their obligations under the Electricity Generating
Licence and NGC Transmission Licence, the Act, any direction of
the Secretary of State, the Director or ruling of the Monopolies
and Mergers Commission, the Grid Code, under any Connection
Agreement or under any Supplemental Connection Agreement, the
provisions of the Electricity Generating Licence and NGC
Transmission Licence, the Act, the Grid Code, any Connection
Agreement or Supplemental Connection Agreement, the direction of
the Secretary of State, the Director, or ruling of the Monopolies
and Mergers Commission shall prevail and accordingly NGC and
Genco respectively shall not be responsible for any failure to
perform their respective obligations hereunder to the extent that
any such failure is directly attributable to proper compliance
with such provisions, rulings or directions.
The provisions of the Agreement of even date herewith between the
Parties relating to access to or use of property or equipment
affected by a nuclear site licence ("the Nuclear Sites
Agreement") shall apply to this Agreement and in the event of any
inconsistency between the provisions of this Agreement and the
provisions of the Nuclear Sites Agreement the provisions of the
latter shall prevail.
ASSIGNMENT AND SUB-CONTRACTING
The rights and obligations of a Party may not be assigned
(otherwise than to an Affiliate or by way of a charge or an
assignment by way of security) without the consent of the other
Party, such consent not to be unreasonably withheld.
Each Party shall have the right to sub-contract or delegate the
performance of any of its obligations or duties arising under
this Agreement without the consent of the other. The
sub-contracting by either Party of the performance of any
obligations or duties under this Agreement shall not relieve such
Party from the liability for performance of such obligation or
duty.
ILLEGALITY AND PARTIAL INVALIDITY
If at any time any provision of this Agreement should become or
be declared unlawful, invalid, illegal or unenforceable in any
respect under the law of any jurisdiction, neither the validity,
legality or enforceability of the remaining provisions nor the
validity, legality or enforceability of such provision under the
law of any other jurisdiction shall
be affected.
If any part of a provision of this Agreement is or becomes or is
declared invalid, unlawful, illegal or unenforceable but the rest
of such provision would remain valid, lawful or enforceable if
part of the wording were deleted the provision shall apply with
such modifications as may be necessary to make it valid, lawful,
enforceable and effective but without affecting the meaning of
legality, validity or enforceability of any other provision of
this Agreement.
TERM AND TERMINATION
This Agreement shall continue until none of NGC's Assets are on
Genco's land, and none of Genco's Assets are on, NGC's land and
no Common Assets or Services are shared or provided.
REGISTRATION AND MEMORANDUM
Where any or all of the Grantor's Land is registered or the
Grantee's interest therein is subject to compulsory registration
at H.M. Land Registry, the parties hereto agree to apply to the
Chief Land Registrar for the registration as appropriate of the
rights and obligations granted by or contained in this Agreement
and further agree to place on deposit at H.M. Land Registry all
relevant Land or Charge Certificates to enable such registration
to be effected.
Where any of the Grantor's Land is not so registered or subject
to compulsory registration, each Party shall procure within six
months of the date hereof that memoranda of this agreement are
endorsed on or otherwise securely attached to the most recent
conveyance (in the case of a freehold interest) or the lease
under or pursuant to which they hold such land.
ENTIRE AGREEMENT
This Agreement contains the entire agreement between the Parties
with respect to the subject-matter hereof, and expressly excludes
any warranty, condition or other undertaking implied at law or by
custom, and supersedes all previous agreements and understandings
between the Parties with respect thereto and:
(i) each of the Parties acknowledges and confirms that it does
not enter into this Agreement in reliance on any representation,
warranty or other undertaking not fully reflected in the terms of
this Agreement; but
(ii) the parties acknowledge that each of them may have entered
or may enter into agreements with any Public Electricity Supplier
(as defined in the Act) containing similar rights and/or
liabilities to those contained in this Agreement affecting NGC's
Land and/or Genco's Land and any assets thereon. The Parties
shall, when entering into such agreement with any of the said
Public Electricity Suppliers, use reasonable endeavours to avoid
conflicts between the provisions thereof and the provisions of
this Agreement but in the event of any conflict the parties shall
procure that appropriate arrangements are made to settle the same
to give full effect (so far as practicable) to the rights and
liabilities under this Agreement and under such other agreements
as aforesaid. Where relevant the provisions of Clause 7.3 shall
apply. In the event of any dispute as to such conflict and/or
arrangements the dispute shall be dealt with in accordance with
Clause 12.
IN WITNESS whereof this Agreement has been entered into under
seal the day and year first above written.
<PAGE>
SCHEDULE 1
Genco's Assets on NGC's Land
[To be drawn from appropriate Schedule to Divisionalisation
Scheme, but to comprise fundamental operational assets on the
relevant site, eg:
(a) HV Apparatus [including/comprising] busbar isolators,
circuit breaker, earth switch, current transformer, voltage
transformer;
(b) Termination Apparatus including/comprising] overhead
connection tension insulators and downdroppers/HV cable sealing
ends;
(c) Protection, control and alarm apparatus (including
associated panels and multicore cabling);
(d) Intertrip apparatus;
(e) Standby diesels;
(f) Connections to compressed air installations;
(g) Sections of water washing installations.
(h) Spares] excluding Strategic Sparest.
(i) Metering equipment.
To the extent not included as part of such assets the same shall
be deemed to include all control and auxiliary cables and their
associated terminations, pipes and ducts and other ancillary
equipment exclusively serving the same.
<PAGE>
SCHEDULE 2
Genco's Land
All that the land with the buildings and/or structures thereon
all which land is shown for the purpose of identification only
edged red on the attached plan but excluding the area coloured
pink thereon.
<PAGE>
SCHEDULE 3
NGC's Assets on Genco's Land
[To be drawn from appropriate Schedule to Divisionalisation
Scheme, but to comprise fundamental operational assets on the
relevant site,] eg:
(a) HV Apparatus including/comprising HV Cable, Cable
Termination and Circuit Breaker;
(b) MV Apparatus including/comprising MV Cable, Cable
Termination and Circuit Breaker;
(c) Protection, control and alarm apparatus (including
associated panels and multicore cabling);
(d) Intertrip apparatus;
(e) Standby diesels;
(f) Connections to compressed air installations;
(g) Sections of water washing installations.
(h) Cathodic Protection
(i) Aerials
(i) Telecoms equipment
(k) Spares
(l) Metering equipment
To the extent not included as part of such assets the same shall
be deemed to include all control and auxiliary cables and their
associated terminations, pipes and ducts and other ancillary
equipment exclusively serving the same.
<PAGE>
SCHEDULE 4
NGC's Land
All that the land with the buildings and/or structures thereon
all which land is shown for the purpose of identification only
coloured pink on the attached plan.
<PAGE>
SCHEDULE 5
Part I
1. NGC's Land
Security of NGC Site Compounds will be maintained in
accordance with the Electricity Supply Regulations 1988, which in
the case of compounds containing exposed HV apparatus will be by
a fence not less than 2.4 metres high or alternative enclosure.
All buildings not enclosed within a site compound fence will be
securely locked to restrict unauthorised access. A local
management instruction will apply to the issue of security keys.
2. Genco's Land
Security arrangements for Genco's Land will take the general
form as described below but specifically to accord with the
instructions issued by the Station Manager (or other person
fulfilling the same or a similar function whether or not so
called):
(a) Controlled entry points
(b) Security monitoring system
(c) Specific high security fencing or alternative enclosure
of any HV apparatus with any live exposed connections.
<PAGE>
Part II
Plant MV LV Apparatus Safety Co-Ordination Procedures (C1.4.5)
1. In this Clause:
"Apparatus" means all equipment in which electrical
conductors are used, supported or of which they may form a part;
"Connection
Site" shall have the meaning given to it in the Grid
Code;
"Existing
Rules" means the rules, procedures or current
arrangements for and relating to safety coordination across
boundaries (to permit work to or testing on the System of one of
the Parties which, for this to be done safely, requires isolation
and/or other precautions on Plant and/ or MV and/or LV Apparatus
whether at, adjacent to or remote from the location of the work
or testing) which are in force followed or complied with at
Genco's Land and NGC's Land at the date of this Agreement;
"Low Voltage"
or "LV" means a voltage not exceeding 250 volts;
"Medium Voltage"
or MV" means a voltage exceeding 250 volts but not
exceeding 650 volts;
"Plant" means fixed and moveable items used in the
generation and/or supply and/or transmission of electricity,
other than Apparatus.
2. The Parties will continue to comply with the Existing Rules
pending any agreed modifications thereto.
3. The Parties will arrange for the Existing Rules (if not
already in writing) to be written down and, in any event, to be
agreed between the person or persons responsible on behalf of the
relevant Parties for the coordination of safety at each
Connection Site(s).
<PAGE>
SCHEDULE 6
Common Assets (Cl.8.1)
Part One
(a) The Batteries Synchronisers and Highland alarm and data
loggers (if any) detailed on the attached list.
Part Two
Such of the following items (if any) and any other items shown on
the attached list:
(b) Communicating Equipment
(c) Connections to insulating oil and SF6 gas installations
(d) Site lighting
(e) Miscellaneous LV/MV cabling
(f) Mobile Radioactive Apparatus
<PAGE>
SCHEDULE 7
Services (Cl.8.2)
Part One
Such of the following services (if any) detailed on the attached
list:
(a) AC electrical supplies
(b) Compressed air for switchgear operation
(c) Water supplies (other than domestic)
(d) DC electrical supplies
Part Two
Such of the following services (if any) and any other items
detailed on the attached list:
(e) Fire fighting systems and use of adjacent fire hydrants
(f) Use of system f or transporting Insulating oil
(g) Use of system for transporting Sulphur hexafluoride
(h) Distilled Water
(i) Helicopter landing Facilities.
<PAGE>
SCHEDULE 8
Charges
A. Provision of Services by Genco to NGC
Service Charge Period of Charge
AC Electrical such amount as shall be Monthly
Supplies agreed between the Parties
from time to time
Water Supplies (if substantial supply to be Monthly
(Other than metered, (meter installed by
Domestic) Genco) & charged at local
authority or NRA rate)
(otherwise nil)
Distilled WaterAs agreed from time to time As used
Supplies between local representatives
of the Parties as being fair
and reasonable in all the
circumstances
Other services Nil
per Schedule 7
B. Provision of Services by NGC to Genco
All Services Nil
per Schedule 7
C. Radio Towers and Masts
An aggregate annual fee calculated in accordance with the
following formula which will be applied to each Genco Radio Tower
or Mast for that period of any year in which it supports NGC
Radio Equipment and each NGC Radio Tower or Mast for that period
of any year in which it supports Genco Radio Equipment:
Annual Fee = A X B
C
Where A = annual maintenance cost of the Grantors Radio
Tower or Masts in question.
B = tower loading of Grantee's Radio Equipment
thereon.
C = combined tower loading of all radio equipment
on the Grantor's Radio Tower or Mast in question.
Tower loading to be measured in Kgf at wind speed of 120 mph.
<PAGE>
SCHEDULE 9
Addresses, Fax Nos etc (Cl 20.)
THE COMMON SEAL of NUCLEAR )
ELECTRIC plc was hereunto )
affixed in the presence of: )
THE COMMON SEAL of NATIONAL )
GRID was hereunto )
affixed in the presence of: )
MWR-DO154a
<PAGE>
INTERFACE AGREEMENT - CONTENTS
Clause Title Page
1 Definitions and Interpretation 1
2 Right to Retain Asset 12
3 Modifications, Replacements and Alterations 13
4 Security and Compliance with Statues etc 14
5 Relocations 17
6 Removals 19
7 Rights of Access 20
8 Services and Use of Assets 23
9 Payment 24
10 Non-Interference 25
11 Cable Tunnels 26
12 Dispute Resolution 27
13 Governing Law and Jurisdiction 30
14 Confidentiality 31
15 Title to Assets 37
16 Limitation of Liability 39
17 Intellectual Property 41
18 Force Majeure 42
19 Waiver 43
20 Notices 43
21 Variations 44
22 Overriding Provisions 44
23 Assignment and Sub-Contracting 45
24 Illegality and Partial Invalidity 45
25 Term and Termination 46
26 Registration and Memorandum 46
27 Entire Agreement 47
Schedule 1 Genco's Assets on NGC's Land
Schedule 2 Genco's Land
Schedule 3 NGC's Assets on Genco's Land
Schedule 4 NGC's Land
Schedule 5 Part I - Security Details
Part 11 - Plant MV LV Apparatus
Safety Coordination Procedures
Schedule 6 Common Assets
Schedule 7 Services
Schedule 8 Charges
Schedule 9 Addresses, Fax No's etc.
<PAGE>
EXHIBIT 16
DATED 1990
THE NATIONAL GRID COMPANY PLC
- to -
[ ]
__________________________________________________
at [ ]
__________________________________________________
<PAGE>
INTERFACE AGREEMENT - CONTENTS
Clause Title Page
1 Definitions and Interpretation 1
2 Right to Retain Asset 12
3 Modifications 12
4 Safety, Security and Compliance with Statutes etc 14
5 Relocations of Grantee 9 s Assets 15
6 Removals 18
7 Rights of Access 19
8 Services and Use of Common Assets 22
9 Payment 24
10 Non-interference 25
11 Cable Tunnels 26
12 Dispute Resolution 27
13 Governing Law and Jurisdiction 29
14 Confidentiality 30
15 Dealings with Land 39
16 Limitation of Liability 40
17 Intellectual Property 42
18 Force Majeure 43
19 Waiver 44
20 Notices 44
21 Variations 45
22 Overriding Provisions 46
23 Assignment and Sub-Contracting 47
24 Illegality and Partial Invalidity 47
25 Term and Termination 48
26 Registration and Memorandum 48
27 Entire Agreement 48
Schedule 1 PES's Assets on NGC's Land 51
Schedule 2 PES's Land 52
Schedule 3 NGC's Assets on PES's Land 53
Schedule 4 NGC's Land 54
Schedule 5 Part I - Security Details 55
Part 11 - Plant MV LV Apparatus 55
Safety Co-Ordination Procedures
Schedule 6 Common Assets 57
Schedule 7 Shared Services 58
Schedule 8 Charges for the provision of 59
Site AC Supplies and Insulating Oil
Schedule 9 Addresses, Fax Nos etc. 60
<PAGE>
INTERFACE AGREEMENT
THIS DEED OF AGREEMENT is made on the date stated on the Cover
between the Parties stated thereon
WHEREAS
(A) Certain assets of NGC (including assets of third parties
used by NGC under arrangements with such third parties) are
situated on property title to which (by way of freehold or
leasehold) is vested in PES;
(B) Certain assets of PES (including assets of third parties
used by PES under arrangements with such third parties) are
situated on property title to which (by way of freehold or
leasehold) is vested in NGC;
(C) Certain assets and facilities of one party, whether situated
on that party's property or not, are required for use by both
parties in the carrying on of their respective undertakings; and
(D) This Agreement is entered into by the parties to give effect
to appropriate arrangements in respect of such assets and the use
of assets and facilities.
NOW IT IS HEREBY AGREED as follows:
DEFINITIONS AND INTERPRETATION
In this Agreement the following words and expressions shall,
unless the subject-matter or context otherwise requires or is
inconsistent therewith, bear the following meanings:
"the Act" the Electricity Act 1989;
"Asset" a PES's Asset or an NGC's Asset (as the case
may be);
"Affiliate" in relation to a Party means any holding
company or subsidiary of that Party or any subsidiary of a
holding company of that Party, in each case within the meaning of
Sections 736, 736A and 736B of the Companies Act 1985 as
substituted by Section 144 of the Companies Act 1989 and if that
section is not in force at the date of this agreement as if such
section were in force at such date;
"CEGB" The Central Electricity Generating Board;
"Common Asset" assets of the kind listed in Schedule 6 to be
agreed pursuant to Clause 21.2 or determined pursuant to Clause
12;
"Competent Authority" includes the Director and any local or
national agency authority, department inspectorate, minister,
ministry, official or public or statutory person (whether
autonomous or not) of, or of the government of, the United
Kingdom or the European Community;
"Connection Agreement" the Master Connection and Use of System
Agreement to be entered into by, among others, the Successors to
NGC and PES regarding, among other things, the connection of PES
Plant and Apparatus (as defined therein) to the NGC Transmission
System (as defined therein) and the use by PES of such system;
"Cover" the page of this Deed headed as such which
page shall form part of this Deed;
"Directive" includes any present or future
directive, requirement, instruction, direction or rule of any
Competent Authority, (but only, if not having the force of law if
compliance with the Directive is in accordance with the general
practice of persons to whom the Directive is addressed), and
includes any modification, extension or replacement thereto then
in force;
"the Director" the Director General of Electricity Supply
appointed for the time being pursuant to Section 1(1) of the Act
by the Secretary of State;
"Emergency Personnel" in relation to a Party, all employees of
that Party who have appropriate knowledge and experience and are
recognised by that Party as being able to carry out competently
and safely emergency action for the purposes of clause 10;
"Force Majeure" in relation to a Party, any event or
circumstance which is beyond the reasonable control of that Party
and which results in or causes the failure of that Party to
perform any of its obligations under this Agreement including any
act of God, strike, lockout or other industrial disturbance, act
of the public enemy, war declared or undeclared, threat of war,
terrorist act, blockade, revolution, riot, insurrection, civil
commotion, public demonstration, sabotage, act of vandalism,
lightning, fire, storm, flood, earthquake, accumulation of snow
or ice, lack of water arising from weather or environmental
problems, explosion, fault or failure of that Party's plant and
apparatus which could not have been prevented by Good Industry
Practice, governmental restraint, any Act of Parliament or
legislation, bye-law, prohibition, measure or Directive (not
being any order, regulation or directive under Section 32, 33, 34
or 35 of the Act) Provided that lack of funds shall not be
interpreted as a cause beyond the reasonable control of that
Party;
"Good Industry
Practice" the exercise of that degree of skill,
diligence, prudence and foresight which would reasonably and
ordinarily be expected from a skilled and experienced operator
engaged in the same type of undertaking under the same or similar
circumstances;
"Grantee" in any particular case the owner of the Asset
in question;
"Grantor" in any particular case the owner of the Land
in question;
"the Grid Code" the document or documents produced
pursuant to one of the conditions of the NGC Transmission
Licence, as from time to time revised in accordance with the
Conditions of the NGC Transmission Licence;
"HV" of a nominal voltage exceeding 650 volts;
"Intellectual Property" patents, trademarks, service marks,
rights in designs, trade names, copyrights and topography rights
(whether or not any of the same is registered and including
applications for registration of any of the same) and rights
under licences and consents in relation to any of the same and
all rights or forms of protection of a similar nature or having
equivalent or similar effect to any of the same which may subsist
anywhere in the world;
"Land" NGC's Land or PES's Land (as the case may
be);
"Licence" any Licence granted pursuant to Section 6 of
the Act;
"Modification" in relation to an Asset, any alteration to or
replacement of such Asset pursuant to sub-clause 3.1 of this
Agreement and "Modify" and "Modified" shall be construed
accordingly;
"NGC's Assets" assets (to be agreed pursuant to Clause 21.2
or determined pursuant to Clause 12) of the kind listed in
Schedule 3 (including any plinths or other structures (excluding
buildings) to or upon which the same are affixed and to or upon
which no assets of any other person are affixed and any straps,
bolts or other such things for attachment thereto as any of the
same may be Modified pursuant to this Agreement;
"NGC's Land" the land described in Schedule 4;
"NGC Transmission
Licence" NGC's licence granted pursuant to Section 6
(1)(b) of the Act;
"Party" each person for the time being and from time
to time party to this Agreement and any successor(s) in title to,
or permitted assign(s) of, such person;
"Permitted Purpose" in relation to a Right of Access, the purpose
specified in this Agreement for which such Right of Access is
granted;
"PES's Assets" assets (to be agreed pursuant to Clause 21.2
or determined pursuant to Clause 12) of the kind listed in
Schedule 1 (including any plinths or other structures (excluding
buildings) to or upon which the same are affixed, and to or upon
which no assets of any other person are affixed and any straps,
bolts or other such things for attachment thereto as any of the
same may be Modified pursuant to this Agreement;
"PES's Land" the land described in Schedule 2;
"PES Licence" PES's licence granted pursuant to Section 6
of the Act;
"Providing Party" in the context of clause 8, a Party in
whom title to a Common Asset is vested;
"Recipient" in the context of clause 8, the Party
which is the recipient of the provision of Services;
"Regulations" the Electricity Supply Regulations 1988 or
any amendment or re-enactment thereof;
"Relocation Proposal" a proposal by the Grantor to the Grantee
pursuant to sub-clause 5.1 for the relocation of any of the
Grantee's Assets on the Grantor's Land;
"Full Right" full right and liberty during the
currency of this Agreement to enter upon and through and remain
upon any part of the Grantor's Land subject to the provisions of
this Agreement;
"Services" in the context of clause 8, goods and
services of the kind listed in Schedule 7 to be agreed pursuant
to Clause 21.2 or determined pursuant to Clause 12;
"Supplemental
Connection Agreement" agreement entered into a site-specific
connection between the Parties in substantially the form set out
in the appropriate schedule to the Connection Agreement;
"Supplier" in the context of clause 8, the Party
which is the provider of Services to the Recipient; and
"Using Party" in relation to a Common Asset, the Party
which is not the Providing Party.
References in this Agreement to "the Grantor" shall mean NGC in
relation to PES's Assets on NGC's land and PES in relation to
NGC's Assets on PES's Land and references to"the
Grantee","Grantor's Land" and"Grantee's Assets" shall be
construed accordingly.
In this Agreement:
(i) unless the context otherwise requires all references to a
particular clause, sub-clause, paragraph or Schedule shall be a
reference to that clause, sub-clause paragraph or Schedule in or
to this Agreement;
(ii) the table of contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement;
(iii) references to the words "include" or "including" are to
be construed without limitation to the generality of the
preceding words;
(iv) unless there is something in the subject matter or the
context which is inconsistent therewith, any reference to an Act
of Parliament or any Section thereof or Schedule thereto, or
other provision thereof or any instrument, order or regulation
made thereunder shall be construed at the particular time, as
including a reference to any modification, extension, replacement
or re-enactment thereof then in force and to all instruments,
orders or regulations then in force and made under or deriving
validity from the relevant Act of Parliament; and
(v) references to the masculine shall include the feminine and
references in the singular shall include the plural and vice
versa and words denoting natural persons shall include companies,
corporations and any other legal entity and vice versa.
RIGHT TO RETAIN ASSET
Subject to sub-clause 5.1, NGC hereby grants to PES the right to
use, retain and Modify as provided in this Agreement PES's Assets
on NGC's Land in such places as they are currently situated and
such right shall extend to any Modified PES Asset. NGC
undertakes to maintain any shelter or support enjoyed by any such
Asset at the date of this Agreement or, if later, when relocated
on NGC's Land in accordance with clause 5 and grants to PES a
Right of Access for the purpose of the use, maintenance,
inspection, testing, removal, operation, Modification or repair
of any of PESTS Assets or for the purpose of compliance with any
statute or Directive under the provisions of Clause 4.
Subject to sub-clause 5.1, PES hereby grants to NGC the right to
use, retain and Modify as provided in this Agreement NGC's Assets
on PES's Land in such places as they are currently situated and
such right shall extend to any Modified NGC Asset. PES
undertakes to maintain any shelter or support enjoyed by any such
Asset at the date of this Agreement or, if later, when relocated
on PES's Land in accordance with clause 5 and grants to NGC a
Right of Access for the purpose of the use, maintenance,
inspection, testing, removal, operation, Modification or repair
of any of NGC's Assets or for the purpose of compliance with any
statute or Directive under the provisions of Clause 4.
MODIFICATIONS
The Grantee may at its own expense replace or alter any of its
Assets provided that:
The replacement Asset or the Asset as so altered:
(i) is placed in the same or approximately the same
position;
(ii) fulfils the same or a similar purpose;
(iii) can, where relevant, be accommodated in and on
existing buildings or structures;
(iv) does not require additional or improved facilities or
services from the Grantor;
(v) does not restrict the actual and intended use of the
Grantor's Land and any equipment thereon or therein to any
materially greater extent than the Asset so replaced or altered;
and
(vi) is (unless otherwise agreed by the Grantor, such
agreement not to be unreasonably withheld or delayed) either of
the same or a similar smaller size or the alteration is effected
substantially within the space occupied by such Asset to enable
the Asset to be used up to its full capability
Prior written notification has been given to the Grantor.
Subject to the Grantor's prior approval (such approval not
to be unreasonably withheld or delayed) the Modified Asset may be
installed adjacent to the Asset to be replaced so as to enable
dual running whilst the Modified Asset is commissioned provided
that the Grantee shall remove the Asset which the Modified Asset
replaces as soon as practicable.
If any Modification shall require minor alterations or works to
the existing buildings or structures of the Grantor housing or
supporting the Asset in question such alterations or works may be
carried out (with the prior written approval of the Grantor (such
approval not to be unreasonably withheld or delayed)), but at the
cost of the Grantee. To the extent that any of the conditions of
sub-clause 3.1 are not met in relation to any Modification, the
Grantor may by notice in writing require the Grantee promptly to
remove such replacement or alteration and, if the Grantee fails
to do so, may remove the same itself at the cost and expense of
the Grantee. On such removal, the Grantee may
reinstate the Asset to its state prior to such Modification.
The Grantee shall, If considering moving or Modifying any of the
Grantee's Assets, give due consideration as to whether it shall
be operationally practicable, desirable and reasonably economic
to move such Asset to (or place the Modified Asset on) its own
property.
SAFETY-SECURITY AND COMPLIANCE WITH STATUTES ETC
Each Party undertakes at its own expense to maintain and provide
security in relation to the other Party's Assets in accordance
with the arrangements set out in Part I of Schedule 5.
Each Party shall procure that, as between the Parties, all
reasonable and necessary steps are taken, as and when necessary
or desirable, In co-operation with the other (and, so far as
applicable, with any third party), to ensure compliance with the
provisions (each such provision or part thereof being in this
clause 4 an "Obligation") of:
(i) all statutes and Directives applicable to any Asset and/or
any part (including the whole) of any Land and/or the employees
of either Party;
(ii) any statute or Directive which may affect any other property
(of whatever nature) of either Party as a result of the
existence, nature, location, or manner of operation of any Asset.
Each Party shall, so far as it is aware of the same, unless it
has reasonable grounds for believing that the other Party
possesses the information, keep the other Party informed of all
material matters relating to any Obligation.
In the event of any dispute as to responsibility, as between the
Parties, pursuant to subclause 4.2, for compliance with an
Obligation, that responsibility shall be allocated, so far as
practicable, on the basis that:
(i) each Party shall refrain from taking or permitting any act
or omission which would prevent compliance with an Obligation;
and
(ii) positive action required in relation to a Party's Land or
Asset as a consequence of the existence, nature, location or
manner of operation of that Land or Asset shall be the
responsibility of that Party, and, to the extent that such action
is required in respect of or affecting any property of the other
Party (or property of a third party located in or on that other
Party's land), such action may be taken with the prior approval
of that other Party (such approval, subject to (i) above, not to
be unreasonably withheld or delayed) and/or third party as the
case may be.
The provisions for safety coordination between the Parties
contained in Part II of Schedule 5 shall apply.
RELOCATIONS OF GRANTEE'S
At any time and from time to time during the term of this
Agreement the Grantor may with the prior written consent of the
Grantee (such consent not to be unreasonably withheld or delayed)
require the Grantee to relocate any of the Grantee's Assets
either to a different location on the Grantor's Land or to the
Grantee's or a third party's land, such consent to be sought and
given or refused in accordance with the following procedure:
The Grantor shall serve a written notice on the Grantee,
which notice shall specify:
(a) the Grantee's Assets which the Grantor wishes to be
relocated;
(b) the reasons for such wish;
(c) the proposed new location for such Assets; and
(d) the timing of the carrying out of such relocation.
The Grantee shall within four months of receipt of any such
notice (or such longer period as shall be reasonably necessary)
serve a counter notice stating:
(a) whether or not in its reasonable opinion such
Relocation Proposal is acceptable to it;
(b) if the Relocation Proposal is not acceptable to the
Grantee, the grounds for such opinion and the terms of any
alternative proposal ("the Alternative Relocation Proposal")
covering so far as relevant the matters referred to in items (a)
- - (d) of sub-clause 5.1.1. which would be acceptable to the
Grantee; and
(c) in respect of the Relocation Proposal (if accepted) or
of any Alternative Relocation Proposal, an estimate (sufficiently
detailed in the circumstances) of the proper costs likely to be
incurred in connection with considering the Relocation Proposal
or the Alternative Relocation Proposal and effecting the said
relocation of the Assets and the proper costs of relocating any
other equipment that may be necessary as a result of the
relocation of those Assets and any consequential losses including
payments to third parties incurred as a result of the relocation
of those Assets and the proposed manner and timing of payment of
the same by the Grantor.
If within one month of the date of such counter notice (or
such longer period as shall be reasonably necessary) the Grantor
has not withdrawn the Relocation Proposal and the Parties have
not agreed upon It or the Alternative Relocation Proposal (if
any) or a variation of either of them the matter shall be dealt
with in accordance with Clause 12.
Upon approval or settlement of any Relocation Proposal,
Alternative Relocation Proposal or variation thereof pursuant to
clause 5.1, subject to all necessary licences, consents and
approvals thereto being obtained by the Grantee from the relevant
Competent Authority and to the Grantor making a new location
available (if not on Grantee's Land) and otherwise taking any
necessary steps to facilitate such relocations, the Grantee shall
relocate or procure the relocation of the relevant Assets as
quickly as reasonably practicable (having regard to, amongst
other things, technical and operational requirements and to its
obtaining all necessary licences and consents).
The Grantor shall pay to the Grantee all costs Incurred pursuant
to Clause 5.1 which shall be (as far as practicable) in line with
the estimate agreed or settled pursuant to Clause 5.1 provided
that all reasonable endeavours are used to minimise such costs
and in the event that a Relocation Proposal is withdrawn or
consent thereto is reasonably withheld pursuant to clause 5.1 or
such licence consent or approval as aforesaid is not granted, the
Grantor shall pay to the Grantee all costs reasonably incurred by
the Grantee in connection with considering the Relocation
Proposal and any counter notice and making application for any
necessary licences, consents or approvals, provided that
documentary evidence shall be provided by the Grantee to show how
such costs have
actually been incurred.
Such of the provisions of this Agreement as are appropriate and
relevant (including the provisions of this clause 5), shall
continue to apply to any relocated Assets.
REMOVALS
Whenever any of the Grantee's Assets shall become unusable for
the purpose for which it was designed or shall not have been used
for a continuous period of at least twelve months, the Grantor
may, by notice in writing to the Grantee, require the Grantee to
remove such Asset, at the Grantee's expense, from the Grantor's
Land as quickly as practicable and in any event before the first
anniversary ("the Removal Date") of the date of service of such
notice unless:
(i) the Grantor shall within the thirty days following service
of such notice have been reasonably satisfied that the Asset will
be or is likely to be used by the Grantee before the Removal Date
(or such later date as the Grantee shall reasonably propose); and
(ii) the Asset is so used.
In the event that there shall cease to be any Supplemental
Connection Agreement relating to any of PES's Assets on any
particular site within NGC's Land each Party shall remove its
relevant Assets from that site in accordance with the relevant
provisions of the Connection Agreement. The parties shall
negotiate in good faith appropriate arrangements to minimise any
adverse effect on the other Party of such removal.
Where the Grantee is obliged to remove any of its Assets from the
Grantor's Land, whether under this clause 6 or otherwise, and fails
to do so in accordance with the relevant provisions, the Grantor
shall be entitled to remove the Asset to land of the Grantee and
the Grantee shall provide all reasonable assistance to enable the
Grantor safely so to do and shall pay and reimburse to the
Grantor all costs and expenses reasonably incurred by the Grantor
in so doing.
RIGHT'S OF ACCESS
A Right of Access includes the right to bring on to the Grantor's
Land such vehicles, plant, machinery tools, equipment and
maintenance or construction materials as shall be reasonably
necessary for the Permitted Purpose.
A Right of Access given to the Grantee may be exercised by any
person, including third party contractors, reasonably nominated
from time to time by the Grantee. To the extent (if any) that
any particular authorisation or clearances may be required to be
given by the Grantor and the procedures for giving and obtaining
the same are not for the time being stipulated in arrangements
made pursuant to clause 7.3, the same shall be given within a
reasonable time from the date of the request therefor, save in
the case of emergency In which case it shall be given without
delay.
The Parties shall procure that all reasonable arrangements and
provisions are made and/or revised from time to time as and when
necessary or desirable to facilitate the safe exercise of any
Right of Access with the minimum of disruption, disturbance or
inconvenience to both Parties. Such arrangements and provisions
may, to the extent that the same are reasonable, limit or
restrict the exercise of the Right of Access and/or provide for
one Party to make reasonable directions or regulations from time
to time in relation to a specified matter. Matters to be covered
by such arrangements and/or provision include:
(i) the identification of any relevant Assets;
(ii) the particular access routes applicable to the land in
question having particular regard for the weight and size limits
on those routes;
(iii) any limitations on times of exercise of a Right of
Access;
(iv) any requirements as to prior notification and as to
authorisation of security clearance f individuals exercising such
Rights of Access, and procedures for obtaining the same;
(v) the means of communication to the other Party and all
employees and/or contractors who may be authorised from time to
time by that Party to exercise a Right of Access of any relevant
directions or regulations made by one Party;
(vi) the identification of and arrangements applicable to
Emergency Personnel;
(vii) safety.
Each Party shall procure that any such arrangements and/or
provisions (or directions or regulations issued pursuant thereto)
made from time to time between the Parties shall be observed and
performed by it and all persons authorised by it to exercise any
Right of Access.
In the exercise of any right hereunder or otherwise whenever
on the Grantor's Land the Grantee shall procure that all
reasonable steps are taken to:
(a) avoid or minimise damage to the Grantor's Land, any
other property thereon or therein;
(b) cause as little disturbance and inconvenience as
possible to the Grantor or other occupier of the Grantor's Land
And shall promptly make good any damage caused to the
Grantor's Land and/or such other property in the course of the
exercise of such rights and shall indemnify the other Party
against all actions, claims, proceedings, losses, costs and
demands arising out of such exercise.
Subject to clause 7.4.1, all such rights shall be
exercisable free of any charge or payment of any kind.
Subject to any contrary arrangements for the time being made
under clause 7.3;
a Right of Access for operation or inspection shall be
immediately available without prior notice and local procedures
shall be put in place to provide such immediate access;
a Right of Access for the purpose of maintenance,
adjustment, testing or repair of HV apparatus granted in respect
of land on which exposed HV conductors are sited shall only be
exercisable on the giving to the Grantor of at least 7 days prior
written notice or such other notice as may be agreed locally or
If less, such notice as may be reasonable in the circumstances
except in the case of loss of load or other system emergency in
which event the Grantor shall render all possible assistance in
procuring that the Right of Access shall be exercisable as soon
as possible. The parties will make local arrangements to ensure
that the Grantee is not delayed in its ability to deal with an
emergency which has resulted in loss of load or a reduction in
system security;
a Right of Access for the purpose of Modifying any Asset
shall be exercisable only after the giving of two weeks prior
written notice to the Grantor or such notice as may be agreed
locally or if less, such notice as may be reasonable in the
circumstances.
SERVICES AND USE OF COMMON ASSETS
Subject as hereinafter provided, in relation to each Common
Asset, the Providing Party shall if required by the Using Party
make the Common Asset in question available for continued use by
the Using Party to at least the same extent as it was available
for use by the Using Party immediately prior to the date of this
Agreement.
Subject as hereinafter provided, in relation to each Service, the
Supplier shall, if required by the Recipient, continue to provide
the same to the Recipient. Such provision shall be of such a
quality and quantity and shall be provided at such times as the
Recipient shall reasonably request. The Supplier shall not be
required to exceed the level of quality or quantity of the
Service normally provided prior to the date of this Agreement
unless, in the case of those Services listed in Part One of
Schedule 7 only, specifically agreed between the Parties, such
agreement not to be unreasonably withheld or delayed and where
appropriate to include a provision for payment for such increased
Service.
Where the use of any Common Asset is made available or such
Services are supplied as aforesaid, the Parties shall procure
that appropriate arrangements and provisions are made and/or
revised from time to time, as and when necessary or desirable to
give effect to the rights and obligations pursuant to Clause 8.1
and 8.2 between the local personnel employed by each of them in
that regard such arrangements to include:
the identification of the Common Assets and/or Services in
question including (where relevant) the extent of their
availability;
the hours during which such use or provision shall be
allowed or made;
any requirements as to notification of use or call for
supply or temporary suspension thereof;
any requirements as to authorisation or security clearance
of individuals and the procedure for obtaining the same;
any safety requirements; and
administration of payment arrangements.
The provision of use of the Common Assets listed in Schedule 6
Part One and the supply of the Services listed in Schedule 7,
Part One shall not be terminated unless the Providing Party
ceases to require the Common Asset or Service for its own use in
which case the supply of the Service or use of the Common Asset
may be terminated by not less than one year's notice in writing.
The provision of use of the Common Assets listed in Schedule 6,
Part Two and the supply of those Services listed in Schedule 7,
Part Two shall continue until terminated by not less than one
year's notice in writing by either Party.
In the event of a termination under Clause 8.4.1 or 8.4.2 if the
Using Party of the Common Asset in question or the Recipient of
the Service in question shall not be able to obtain an adequate
alternative therefor the Providing Party or Supplier as the case
may be shall cooperate with the Recipient or Using Party so as to
minimise the effect of such termination on the operations of the
latter including where reasonably practicable the provision of
the use of land for the location of an alternative to the Common
Asset in question or an alternative source of supply for the
Service in question.
Each Party shall maintain any Common Asset owned by that Party in
accordance with Good Industry Practice.
The Recipient shall maintain all its relevant assets in such
repair and condition that the level of Services provided does not
substantially increase as a result of the lack of repair or
condition of the relevant assets.
PAYMENT
The Parties agree that the provision of the use of Common Assets,
and the provision of Services other than Site AC supplies and
Insulating oil shall be free of charge.
The Recipient agrees to pay the Supplier for the provision of
Site AC supplies and Insulating oil a fee, calculated and payable
in accordance with the provisions of Schedule 8.
Any sums payable under this Agreement shall be payable together
with an additional amount equivalent to any Value Added Tax
chargeable on the same. Where any costs, expenses or other sums
are repaid or reimbursed to a Party under this Agreement the
amount of the repayment or reimbursement shall include any Value
Added Tax paid by that Party in relation to the goods or services
supplied to the extent that no credit is available to that Party
in respect thereof under Sections 14 and 15 of the Value Added
Tax Act 1983.
If either Party fails to pay on the due date any amount properly
due under this Agreement such Party shall pay to the other
interest on such overdue amount from and including the date of
such failure to (but excluding) the date of actual payment (as
well after as before judgment) at the rate of 4% over Barclays
Bank PLC base rate for the time being and from time to time.
Interest shall accrue from day to day.
NON-INTERFERENCE
Subject to the terms of the Agreement, the Grantor agrees that
neither it nor its agents, employees and invitees will interfere
in any way with any of the Grantee's Assets which are located at
any time on the Grantor's land without the consent of the
Grantee. For the purposes of this clause "interfere" shall
include:
disconnecting or altering the connection of any Asset to any
system of cables, foundations, pipes, drains or other media to
which it may be connected from time to time or to prevent supply
of any substance or thing through such connected system;
affixing or removing any item or substance of any nature
whatsoever to or from any Asset;
damaging any Asset or doing or omitting to do any act, or
allowing any state of affairs to subsist, as a result of which
any Asset would be likely to sustain any material damage;
allowing any other person to interfere with any Asset;
altering any meters or settings on any Asset;
the obstruction of access to any Asset;
impairing the effectiveness of any gate, fence, wall, alarm
system or the means of keeping out intruders.
The obligations contained in this clause 10 shall be suspended to
the extent that emergency action is taken by Emergency Personnel
in good faith to protect the health and safety of persons or to
prevent damage to property. All reasonable care shall be taken
In the course of such emergency action. When the emergency has
ended, any damaged property will be reinstated by the Party whose
Asset gave rise to the emergency, save for damage occurring by
reason of lack of reasonable care in the course of the emergency
action which shall be the responsibility of the Party taking the
emergency action.
CABLE TUNNELS
Any cable tunnels situated under any site within the Land owned
by either Party shall be kept fully maintained and repaired on
the following basis:
in the case of cable tunnels containing the HV cables of one
Party only for the time being maintenance of the whole tunnel
shall be the responsibility of that Party;
in the case of cable tunnels containing HV cables of both
Parties maintenance of the whole tunnel shall be the
responsibility of the Party with the majority in number of such
cables for the time being and the cost of such maintenance shall
be apportioned between the Parties according to level of use;
in the case of cable tunnels containing solely cables other
than HV cables maintenance shall be the responsibility of the
Party with the majority in number of such cables for the time
being and the cost of maintenance shall be apportioned between
the parties according to level of use;
where any part of any cable tunnel lies on or under land of
a Party not responsible in accordance with the above provisions
for the maintenance thereof that Party grants to the responsible
Party a Right of Access for all purposes necessary to discharge
its obligations under this clause 11 and shall give all
reasonable cooperation and assistance to the responsible Party as
may be requisite for the proper discharge by the responsible
Party of its obligations under this clause.
DISPUTE RESOLUTION
Save where expressly stated in this Agreement to the contrary and
subject to any contrary provision of the Act, any Licence, or the
Regulations, or the rights, powers, duties and obligations of the
Director or the Secretary of State for Energy under the Act, any
Licence or otherwise howsoever, any dispute or difference of
whatever nature howsoever arising under, out of, or in connection
with this Agreement between the parties hereto shall be and is
hereby referred to arbitration pursuant to the arbitration rules
of the Electricity Supply Industry Arbitration Association in
force from time to time.
Whatever the nationality, residence or domicile of the parties
hereto and wherever the dispute or difference or any part thereof
arose the law of England shall be the proper law of any reference
to arbitration hereunder and in particular (but not so as to
derogate from the generality of the foregoing) the provisions of
the Arbitration Acts 1950 (notwithstanding anything in Section 34
thereof) to 1979 (including any modification, extension,
replacement or re-enactment thereof for the time being in force)
shall apply to any such arbitration wherever the same or any part
of it shall be conducted.
Subject always to sub-clause 12.5 below, if any tariff customer
(as defined in Section 22(4) of the Act) brings any legal
proceedings in any court (as defined in the Rules of the Supreme
Court 1965 and in the County Courts Act 1984) against one of the
Parties (the "defendant contracting party"), and the defendant
contracting party wishes to make a third party claim (as defined
in sub-clause 12.4 below) against the other Party ("contracting
party") which would but for this sub-clause 12.3 have been a
dispute or difference referred to arbitration by virtue of
sub-clause 12.1 above then, notwithstanding the provisions of
sub-clause 12.1 above which shall not apply and in lieu of
arbitration, the court in which the legal proceedings have been
commenced shall hear and completely determine and adjudicate upon
the legal proceedings and the third party claim not only between
the tariff customer and the defendant contracting party but also
between either or both of them and the other contracting party
whether by way of third party proceedings (pursuant to the Rules
of the Supreme Court 1965 or the County Court Rules 1981) or
otherwise as may be ordered by the court.
For the purpose of this Clause 12 "third party claim" shall mean:
any claim by a defendant contracting party against a
contracting party (whether or not already a party to the legal
proceedings) for any contribution or indemnity; or
any claim by a defendant contracting party against such a
contracting party for any relief or remedy relating to or
connected with the subject matter of the legal proceedings and
substantially the same as some relief or remedy claimed by the
said tariff customer; or
any requirement by a defendant contracting party that any
question or issue relating to or connected with the subject
matter of the legal proceedings should be determined not only as
between the said tariff customer and the defendant contracting
party but also as between either or both of them and a
contracting party (whether or not already a party to the legal
proceedings).
Sub-clause 12.3 above shall apply only if at the time the legal
proceedings are commenced no arbitration has been commenced
between the defendant contracting party and the contracting party
raising or involving the same or substantially the same issues as
would be raised by or involved in the third party claim. The
tribunal in any arbitration which has been commenced prior to the
commencement of legal proceedings shall determine the question,
in the event of dispute, whether the issues raised or involved
are the same or substantially the same.
GOVERNING LAW AND JURISDICTION
This Agreement shall be governed and construed in all respects in
accordance with English law.
Subject and without prejudice to clause 12 and to clause 13.4 the
Parties irrevocably agree that the courts of England are to have
exclusive jurisdiction to settle any dispute which may arise out
of or in connection with this Agreement and that accordingly any
suit, action or proceeding (together in this clause 13 referred
to as "Proceedings") arising out of or in connection with this
Agreement may be brought in such courts.
Each Party irrevocably waives any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in any
such court as is referred to in this clause 13 and any claim that
any such Proceedings have been brought in an inconvenient forum
and further irrevocably agrees that a judgment in any Proceedings
brought in the English courts shall be conclusive and binding
upon such Party and may be enforced in the courts of any other
jurisdiction.
For the avoidance of doubt nothing contained in the foregoing
provisions of this clause 13 shall be taken as permitting a Party
to commence proceedings in the courts where this Agreement
otherwise provides for proceedings to be referred to arbitration.
CONFIDENTIALITY
For the purposes of this Clause 14 except where the context
otherwise requires:
"Authorised Recipient" in relation to any Protected
Information, means any Business Person who, before the Protected
Information had been divulged to him by NGC or any subsidiary of
NGC, had been informed of the nature and effect of this clause 14
and who requires access to such Protected Information for the
proper performance of his duties as a Business Person in the
course of Permitted Activities;
"Business Person" means any person who is a Main Business
Person, or a Corporate Functions Person and "Business Personnel"
shall be construed accordingly.
"Confidential
Information" means all data and other information
supplied to PES under the provisions of this Agreement.
"Corporate Functions
Person" means any person who:
is a director of NGC; or
is an employee of NGC or any of its
subsidiaries carrying out any administrative, finance or other
corporate services of any kind which in part relate to the Main
Business; or
is engaged as an agent of or adviser to or
performs work in relation to or services for the Main Business;
"Customer" has the same meaning as in the
Connection Agreement.
"Generation Business" has the same meaning as in the NGC
Transmission Licence;
"Main Business" means any business of NGC or any of its
subsidiaries other than the Generation Business;
"Main Business Person" means any employee of NGC or any
director or employee of its subsidiaries who is engaged solely in
the Main Business and "Main Business Personnel" shall be
construed accordingly;
"Permitted Activities" means activities carried on for the
purposes of the Main Business;
"Protected Information" means an information relating to the
affairs of a Party which is furnished to Business Personnel
pursuant to this Agreement unless, prior to such information
being furnished, such Party has informed the recipient thereof by
notice in writing or by endorsement on such information, that the
said information is not to be regarded as Protected Information;
"Supplier" has the same meaning as in the
Connection Agreement.
For the avoidance of doubt, data and other information which a
Party is permitted or obliged to divulge or publish to the other
Party pursuant to this Agreement shall not necessarily be
regarded as being in the public domain by reason of being so
divulged or published.
Confidentiality for NGC and its Subsidiaries
NGC and its subsidiaries in each of their capacities in this
Agreement shall secure that Protected information is not:
divulged by Business Personnel to any person unless that
person is an Authorised Recipient;
used by Business Personnel for the purposes of obtaining for
NGC or any of its subsidiaries or for any other person:
any electricity licence; or
any right to purchase or otherwise require, or to
distribute, electricity (including by means of an electricity
purchase contract as defined in the NGC Transmission Licence); or
any contract or arrangement for the supply of
electricity to customers or suppliers (as defined in the
Connection Agreement); or
any contract f or the use of any electrical lines or
electrical plant belonging to or under the control of a supplier
(as defined as aforesaid); or
control of any body corporate which, whether directly
or indirectly, has the benefit of any such licence contract or
arrangement; and
used by Business Personnel for the purpose of carrying on
any activities other than Permitted Activities;
except with the prior consent in writing of the Party to whose
affairs such Protected Information relates.
Nothing in Clause 14 shall apply:
to any Protected Information which, before it is furnished
to Business Personnel is in the public domain;
to any Protected Information which, after it is furnished to
Business Personnel:
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does not apply; or
is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 14 does apply and thereafter
ceases to be subject to the restrictions imposed by this Clause
14; or
enters the public domain and in any such case otherwise
than as a result of:
(i) a breach by NGC or any subsidiary of NGC of its
obligations in this Clause 14; or
(ii) a breach by the person who disclosed that
Protected Information of that person's confidentiality obligation
and NGC or any of its subsidiaries is aware of such breach;
to the disclosure of any Protected Information to any person
if NGC or any subsidiary of NGC is required or expressly
permitted to make such disclosure to such person:-
in compliance with the duties of NGC or any subsidiary
of NGC under the Act or any other requirement of a Competent
Authority; or
in compliance with the conditions of the NGC
Transmission Licence or any document referred to in the NGC
Transmission Licence with which NGC or any subsidiary of NGC is
required to comply; or
in compliance with any other requirement of law; or
in response to a requirement of any stock exchange or
regulatory authority or the Panel on Take-overs and Mergers; or
pursuant to the arbitration rules for the Electricity
Supply Industry Arbitration Association or pursuant to any
judicial or other arbitral process or tribunal.
to any Protected Information to the extent that NGC or any
of its subsidiaries is expressly permitted or required to
disclose that information under the terms of any agreement or
arrangement (including the Pooling and Settlement Agreement, the
Grid Code, the Distribution Code and the Fuel Security Code as
those terms are defined in the Connection Agreement) with the
Party to whose affairs such Protected Information relates.
NGC and its subsidiaries may use all and any information or data
supplied to or acquired by it, from or in relation to the other
Party in performing Permitted Activities including for the
following purposes:
the operation and planning of the NGC Transmission System;
the calculation of charges and preparation of offers of
terms for connection to or use of the NGC Transmission System;
the operation and planning of the Ancillary Services
Business (as defined in the NGC Transmission Licence) and the
calculation of charges therefor;
the operation of the Settlements Business (as defined in the
NGC Transmission Licence);
the provision of information under the British Grid Systems
Agreement and the EdF Documents (as defined in the Connection
Agreement);
and may pass the same to subsidiaries of NGC which carry out such
activities and the Parties agree to provide all information to
NGC and its subsidiaries for such purposes. NGC undertakes that,
having regard to the activities In which any Business Person is
engaged and the nature and effective life of the Protected
Information divulged to him by virtue of such activities, neither
NGC nor any of its subsidiaries shall unreasonably continue
(taking into account any industrial relations concerns reasonably
held by it) to divulge Protected Information or permit Protected
Information to be divulged by any subsidiary of NGC to any
Business Person:
who has notified NGC or the relevant subsidiary of his
intention to become engaged as an employee or agent of any other
person (other than of NGC or any subsidiary thereof) who is:
authorised by licence or exemption to generate,
transmit or supply electricity; or
an electricity broker or is known to be engaged in the
writing of electricity purchase contracts (as defined in the NGC
Transmission Licence); or
known to be retained as a consultant to any such person
who is referred to in (a) or (b) above; or
who is to be transferred to the Generation Business;
save where NGC or such subsidiary could not, In all circumstances
reasonably be expected to ref rain from divulging to such
Business Person Protected Information which is required for the
proper performance of his duties.
Without prejudice to the other provisions of this Clause 14 NGC
shall procure that any additional copies made of the Protected
Information, whether in hard copy or computerised form, will
clearly identify the Protected Information as protected.
NGC undertakes to use all reasonable endeavours to procure that
no employee is a Corporate Functions Person unless the same is
necessary for the proper performance of his duties.
Confidentiality other than for NGC and its Subsidiaries
PES hereby undertakes with NGC and its subsidiaries that it shall
preserve the confidentiality and secrecy of, and not directly or
indirectly reveal, report, publish, disclose or transfer or use
for its own purposes Confidential Information except:
in the circumstances set out in sub-clause 14.8.2;
to the extent otherwise expressly permitted by this
Agreement; or
with the consent in writing of NGC.
Exceptions: the circumstances referred to in sub-clause 14.8.1.1
are:
where the Confidential Information, before it is furnished
to PES, is in the public domain; or
where the Confidential Information, after it is furnished to
PES:
is acquired by PES in circumstances in which this
clause 14 does not
apply; or
is acquired by PES in circumstances in which this
clause 14 does apply and thereafter ceases to be subject to the
restrictions imposed by this clause 14; or
enters the public domain and in any such case otherwise
than as a result of:
(i) a breach by PES of its obligations in this clause
14; or
(ii) a breach by the person who disclosed that
Confidential Information of that persons confidentiality
obligation.
if PES is required or permitted to make disclosure of
the Confidential Information to any person:
in compliance with the duties of PES under the Act
or any other requirement of a Competent Authority; or
in compliance with the conditions of any Licence
or any document referred to in any Licence with which PES is
required to comply; or
in compliance with any other requirement of law;
or
in response to a requirement of any stock exchange
or regulatory authority or the Panel on Take-overs and Mergers;
or
pursuant to the arbitration rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal; or
when Confidential Information is furnished by PES to an
employee,
director, agent, consultant or professional adviser of
PES, in each case on the basis set out in Clause 14.8.3.
With effect from the date of this Agreement PES shall adopt
procedures within its organisation for ensuring the
confidentiality of all Confidential Information which it is
obliged to preserve as confidential under clause 14.8.1. These
procedures are:
the Confidential Information will be disseminated within PES
only on a "need to know" basis;
employees, directors, agents, consultants and professional
advisers of PES in receipt of Confidential Information will be
made fully aware of PESTS obligations of confidence in relation
thereto; and any copies of the Confidential Information, whether
in hard copy or computerised form, will clearly identify the
Confidential Information as confidential.
DEALINGS WITH LAND
The Parties hereby agree and declare that the Grantee's Assets
are Intended to benefit the undertaking, land and business of the
Grantee and that so far as is possible such Assets are hereby and
shall hereafter remain severed from the Grantor's Land and shall
be and hereafter remain chattels of the Grantee.
Each Party agrees that it shall not by any act or default render
the other party's Assets liable to any distress, execution or
other legal process, and in the event that such Assets shall
become so liable, shall forthwith give notice of any such
proceedings to the other Party and shall forthwith notify any
third party instituting any such process of the ownership of such
Assets.
If a Party desires to mortgage or charge any of Its land or Its
interest therein on which any of the other Party's Assets are
located or to mortgage or charge any of its own Assets or to
enter into any arrangement which, if made, might affect the
rights of the other Party expressly granted herein, then that
Party shall ensure that the other Party's Assets are not and will
not be subject to the rights granted therein and are not and will
not be affected by the mortgage, legal charge or other agreement
or arrangement, and shall give written notification thereof to
the other Party.
In the event that the Grantor shall wish to grant rights over or
dispose of any interest in or change the use of any Land the
Grantor shall notify the Grantee of such wish in accordance with
the procedures set out in sub-clause 5.1 and fully consult the
Grantee in respect thereof and shall not grant such rights or
make such disposal or change of use save on terms satisfactory to
the Grantee requiring any recipient or assignee of any such Land
to be bound, so far as relevant by the terms of this Agreement
and otherwise ensuring that the Grantee's rights pursuant to this
Agreement are not in any way prejudiced thereby.
16. LIMITATION OF LIABILITY
16.1 Save where any provision of this Agreement provides for an
indemnity and save as provided in this sub-clause 16.1 and
sub-clause 16.2 neither party (the "Party Liable") nor its
officers, employees or agents shall be liable to the other party
for loss arising from any breach of this Agreement other than for
loss directly resulting from such breach and which at the date
hereof was reasonably foreseeable as not unlikely to occur in the
ordinary course of events from such breach and in respect of:
16.1.1 physical damage to the property of the other
Party, its officers, employees or agents; and/or
16.1.2 the liability of the other Party to any other
person for loss arising f rom physical damage to the property of
such other person.
16.2 Nothing in this Agreement shill exclude or limit the
liability of the Party Liable f or death or personal injury
resulting from the negligence of the Party Liable or any of its
officers, employees or agents and the Party Liable shall
indemnify and keep indemnified the other Party, its officers,
employees or agents, from and against all such and any loss or
liability which such other party may suffer or incur by reason of
any claim on account of death or personal injury resulting from
the negligence of the Party Liable, its officers, employees or
agents.
16.3 Save where any provision of this Agreement provides for an
indemnity neither the Party Liable, nor any of its officers,
employees or agents shall in any circumstances whatsoever be
liable to the other Party for:
16.3.1 any loss of profit, loss of revenue, loss of use,
loss of contract or loss of goodwill; or
16.3.2 any indirect or consequential loss; or
16.3.3 loss resulting from the liability of such other
Party to any other person howsoever and whensoever arising save
as provided in sub-clauses 16.1.2 and 16.2.
16.4 The rights and remedies provided by this Agreement to the
parties are exclusive and not cumulative and exclude and are in
place of all substantive (but not procedural) rights or remedies
express or implied and provided by common law or statute in
respect of the subject matter of this Agreement, including
without limitation any Tights either party may possess in tort
which shall include actions brought in negligence and/or
nuisance. Accordingly, each of the parties hereby waives in the
fullest extent possible all such rights and remedies provided by
common law or statute, and releases the Party Liable its
officers, employees and agents to the same extent from all
duties, liabilities, responsibilities or obligations provided by
common law or statute in respect of the matters dealt with in
this Agreement and undertakes not to enforce any of the same
except as expressly provided herein.
16.5 Save as otherwise expressly provided in this Agreement, this
clause 16 insofar as it excludes or limits liability shall
override any other provision in this Agreement provided that
nothing in this clause 16 shall exclude or restrict or otherwise
prejudice or affect any of:
the rights, powers, duties and obligations of either Party
which are conferred or created by the Act, the NGC Transmission
Licence, the PES Licence or the Electricity SuPPly Regulations
1988 or any amendment or re-enactment thereof; or
the rights, powers, duties and obligations of the Director
or the Secretary Of state under the Act, any such Licence as
aforesaid or otherwise howsoever.
16.6 Each of the sub-clauses of this clause 16 shall:
16.6.1 be construed its a separate and severable contract
term, and if one or more of such sub-clauses is held to be
invalid, unlawful or otherwise unenforceable the other or others
of such sub-clauses shall remain in full force and effect and
shall continue to bind the Parties; and
16.6.2 survive termination of this Agreement.
16.7 Each Party acknowledges and agrees that the other Party
holds the benefit of subclauses 16.1 and 16.2 and 16.3 above for
itself and as trustee and agent for its officers, employees and
agents.
16.8 Each Party acknowledges and agrees that the provisions of
this clause 16 have been the subject of discussion and
negotiation and are fair and reasonable having regard to the
circumstances as at the date hereof.
17. INTELLECTUAL PROPERTY
All Intellectual Property relating to the subject matter of this
Agreement conceived, originated, devised, developed or created by
a Party its officers employees, agents or consultants during the
currency of this Agreement shall vest in such Party as the sole
beneficial owner thereof save where the Parties agree in writing
otherwise.
18. FORCE MAJEURE
If either Party (the "Non-Performing Party") shall be unable to
carry out any of its agreement due to a circumstance of Force
Majeure this Agreement obligations under this Agreement shall
remain in effect but save as otherwise provided herein the
Non-Performing Party's obligations hereunder shall be suspended
without liability for a period equal to the circumstance of Force
Majeure provided that:
(i) the Non-Performing Party gives the other Party prompt
notice describing the circumstances of Force Majeure, including
the nature of the occurrence, its expected duration and the
particular obligations affected by it, and continues to furnish
regular reports with respect thereto during the period of Force
Majeure;
(ii) the suspension of performance is of no greater scope
and of no longer duration than is required by the Force Majeure;
(iii) no liabilities of either Party that arose before
the Force Majeure causing the suspension of performance are
excused as a result of the Force Majeure;
(iv) the Non-Performing Party uses all reasonable efforts to
remedy its inability to perform; and
(v) as soon as practicable after the event which
constitutes Force Majeure the Parties shall discuss how best to
continue their operations so far as possible in accordance with
this Agreement.
19. WAIVER
No delay or omission of NGC or PES in exercising any right,
power, privilege or remedy under this Agreement shall operate to
impair such right, power, privilege or remedy or be construed as
a waiver thereof. Any single or partial exercise of any such
right, power, privilege or remedy shall not preclude any other or
future exercise thereof or the exercise of any other right,
power, privilege or remedy.
20. NOTICES
20.1 Any notice or other communication to be given by one Party
to the other under, or in connection with the matters
contemplated by, this Agreement shall be addressed to the
recipient and sent to the address, telex number or facsimile
number of such other Party given in Schedule 9 and marked for the
attention of the person so given or to such other address, telex
number and/or facsimile number and/or marked for such other
attention as such other Party may from time to time specify by
notice given in accordance with this clause 20 to the Party
giving the relevant notice or other communication to it.
20.2 Any notice or other communication to be given by one Party
to the other Party under, or in connection with the matters
contemplated by, this Agreement shall be in writing and shall be
given by letter delivered by hand or sent by first class prepaid
post (airmail if overseas) or telex or facsimile, and shall be
deemed to have been received:
20.2.1 in the case of delivery by hand, when delivered;
or
20.2.2 in the case of first class prepaid post, on the
second day following the day of posting or (if sent airmail f rom
overseas) on the fifth day following the day of posting; or
20.2.3 in the case of telex, on the transmission of the
automatic answerback of the addressee (where such transmission
occurs before 1700 hours on the day of transmission) and in any
other case on the day following the day of transmission; or
20.2.4 in the case of facsimile, on acknowledgement by
the addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement.
21. VARIATIONS
21.1 The provisions of Schedules 1, 3, 6, 7 and 9 may be varied
from time to time by written memorandum referring to this Clause
21 and signed by an authorised officer of each of the Parties.
Subject thereto no variations to this Agreement shall be
effective unless made by way of supplemental deed.
21.2 The parties shall within twelve months of the date hereof
agree on the following in respect of each of the sites listed in
Schedules 2 and 4:
21.2.1 NGC's Assets which are actually on PES's Land and
PES's Assets which are actually on NGC's Land as at the date
hereof;
21.2.2 The Services and Common Assets in existence as at
the date hereof; and
21.2.3 In respect of the Services agreed upon pursuant to
the preceding subclause of the kind specified in Part Two of
Schedule 7 details of the level of quality or quantity of such
Service as at the date hereof.
21.3 If the parties fail to agree any of the matters referred to
in sub-clause 21.2 within the period stated therein or (if
sooner) when a disagreement relating thereto arises either may
refer the same for determination pursuant to clause 12.
22. OVERRIDING PROVISIONS
22.1 In the event of any conflict between NGC's or PES's
obligations hereunder and their obligations under the NGC
Transmission Licence and PES Licence, the Act, any direction of
the Secretary of State for Energy, the Director or ruling of the
Monopolies and Mergers Commission, the Grid Code, under any
Connection Agreement or under any Supplemental Connection
Agreement between the Parties, the provisions of the NGC
Transmission Licence and PES Licence, the Act, the Grid Code, the
Connection Agreement or Supplemental Connection Agreement, the
direction of the Secretary of State for Energy, the Director, or
ruling of the Monopolies and Mergers Commission shall prevail and
accordingly NGC and PES respectively shall not be responsible for
any failure to perform their respective obligations hereunder to
the extent that any such failure is directly attributable to
proper compliance with such provisions, rulings or directions.
22.2 In the event of any inconsistency between the terms of this
Agreement and the terms of any agreement between either of the
Parties and Nuclear Electric plc relating to access to or use of
property or equipment affected by a nuclear site licence the
terms of the latter shall prevail. Any inconsistency between the
terms of any such agreement as aforesaid between NGC and Nuclear
Electric plc on the one hand and between PES and Nuclear Electric
plc on the other hand shall be resolved pursuant to paragraph
(ii) of clause 27.
23. ASSIGNMENT AND SUB-CONTRACTING
23.1 The rights and obligations of a Party may not be assigned
(otherwise than to an Affiliate or by way of a charge or an
assignment by way of security) without the consent of the other
Party, such consent not to be unreasonably withheld. In respect
of any such assignment the assigning Party shall ensure that the
assignee agrees in terms and form acceptable to the other Party
to be bound by and comply with the terms of this Agreement.
23.2 Each Party shall have the right to sub-contract or delegate
the performance of any of its obligations or duties arising under
this Agreement without the consent of the other. The
sub-contracting by either Party of the performance of any
obligations or duties under this Agreement shall not relieve such
Party from the liability for performance of such obligation or
duty.
24. ILLEGALITY AND PARTIAL INVALIDITY
24.1 If at any time any provision of this Agreement should become
or be declared unlawful, invalid, illegal or unenforceable in any
respect under the law of any jurisdiction, neither the validity,
legality or enforceability of the remaining provisions nor the
validity, legality or enforceability of such provision under the
law of any other jurisdiction shall be affected.
24.2 If any part of a provision of this Agreement is or becomes
or is declared invalid, unlawful, illegal or unenforceable but
the rest of such provision would remain valid, lawful or
enforceable if part of the wording were deleted the provision
shall apply with such modifications as may be necessary to make
it valid, lawful, enforceable and effective but without affecting
the meaning of legality, validity or enforceability of any other
provision of this Agreement.
25. TERM AND TERMINATION
This Agreement shall continue on a site by site basis until none
of NGC's Assets are on PESTS land, and none of PES's Assets are
on NGC's land and no Common Assets or Services are shared or
provided Provided always that insofar as the provisions of this
Agreement relate to a particular site of NGC and/or PES the
provisions of this Agreement shall in relation to each such site
determine on a site by site basis.
26. REGISTRATION AND MEMORANDUM
26.1 Where any or all of PES's Land and/or NGC's Land is
registered or PES's or NGC's interest therein is subject to
compulsory registration at H.M. Land Registry the Parties agree
to apply to the Chief Land Registrar for the registration as
appropriate of the rights and obligations granted by or contained
in this Agreement and further agree to place on deposit at H.M.
Land Registry all relevant Land or Charge Certificates to enable
such registration to be effected.
26.2 Where any of PES's Land and/or NGC's Land is not so
registered or subject to compulsory registration, NGC and PES are
respectively free to procure within six months of the date hereof
that memoranda of this Agreement are endorsed on or otherwise
securely attached to the most recent conveyance (in the case of a
freehold interest) or the lease under or pursuant to which they
hold such land.
27. ENTIRE AGREEMENT
This Agreement contains or expressly refers to the entire
agreement between the Parties with respect to the subject-matter
hereof, and expressly excludes any warranty, condition or other
undertaking implied at law or by custom, and supersedes all
previous agreements and understandings between the Parties with
respect thereto and
(i) each of the Parties acknowledges and confirms that it does
not enter into this Agreement in reliance on any representation,
warranty or other undertaking not fully reflected in the terms of
this Agreement; but
(ii) the Parties acknowledge that each of them may have entered
or may enter into agreements with any generating company (as
defined in the Act) containing similar rights and/or liabilities
to those contained in this Agreement affecting NGC's Land and/or
PES's Land and any assets thereon. The Parties shall, when
entering into such agreement with any of the said generating
companies, use reasonable endeavours to avoid conflicts between
the provisions thereof and the provisions of this Agreement but
in the event of any conflict the parties shall procure that
appropriate arrangements are made to settle the same to give full
effect (so far as practicable) to the rights and liabilities
under this Agreement and under such other agreements as
aforesaid. Where relevant the provisions of Clause 7.3 shall
apply. In the event of any dispute as to such conflict and/or
arrangements the dispute shall be dealt with in accordance with
Clause 12.
IN WITNESS whereof this Agreement has been entered into under
seal the day and year first above written.
<PAGE>
SCHEDULE 1
PES's Assets on NGC's Land
Assets of the following kind:
(a) HV apparatus including/comprising busbar isolators, circuit
breaker, earth switch, current transformer, voltage transformer;
(b) Termination apparatus including/comprising overhead
connection tension insulators and downdroppers/HV cable and
sealing ends;
(c) Protection, control and alarm apparatus (including
associated panels and multicore cabling);
(d) Intertrip apparatus;
(e) Standby diesels;
(f) Connections to compressed air and oil installations;
(g) Sections of water washing installations.
(h) Spares excluding Strategic Spares.
(i) Metering Equipment.
(j) Aerials.
(k) MV supply cables and apparatus.
(l) Batteries and associated apparatus.
(m) Telecommunications apparatus.
(n) Cathodic protection.
To the extent not included as part of such assets the same shall
be deemed to include all control and auxiliary cables and the
associated terminations, pipes and ducts and other ancillary
equipment exclusively serving the same.
<PAGE>
SCHEDULE 2
PES's Land
[List of site addresses]
<PAGE>
SCHEDULE 3
NGC's Assets on PES's Land
Assets of the following kind:
(a) HV apparatus including/comprising busbar isolators, circuit
breaker, earth switch, current transformer, voltage transformer;
(b) Termination apparatus including/comprising overhead
connection tension insulators and downdroppers/HV cable and
sealing ends;
(c) Protection, control and alarm apparatus (including
associated panels and multicore cabling);
(d) Intertrip apparatus;
(e) Standby diesels;
(f) Connections to compressed air and oil installations;
(g) Sections of water washing installations.
(h) Spares excluding Strategic Spares.
(i) Metering Equipment
(j) Aerials
(k) MV Supply cables and apparatus
(l) Batteries and associated apparatus
(m) Telecommunications apparatus
(n) Cathodic protection.
To the extent not included as part of such assets the same shall
be deemed to include all control and auxiliary cables and the
associated terminations, pipes and ducts and other ancillary
equipment exclusively serving the same.
<PAGE>
SCHEDULE 4
NGC's Land
[List of Site addresses]
<PAGE>
SCHEDULE 5
[Part I]
Security Details (Cl. 4.1)
1. NGC and PES Land
Security of Site Compounds will be maintained in accordance
with the Electricity Supply Regulations 1988, which in the case
of compounds containing exposed HV apparatus will be by a fence
not less than 2.4 metres high or alternative enclosure. All
buildings not enclosed within a site compound fence will be
securely locked to restrict unauthorised access. A local
management instruction will apply to the issue of security keys.
Part II
Plant MV LV Apparatus Safety Co-Ordination Procedures (Cl. 4.5)
(1) In this Clause:
"Apparatus" means all equipment in which electrical
conductors are used, supported or of which they may form a part;
"Connection Site" shall have the meaning given to it in
the Grid Code;
"Existing Rules" means the rules, procedures or current
arrangements for and relating to safety coordination across
boundaries (to permit work to or testing on the system of one of
the Parties which, for this to be done safely, requires isolation
and/or other precautions on Plant and/or MV and/or LV Apparatus
whether at, adjacent to or remote from the location of the work
or testing) which are in force followed or complied with at PES's
Land and NGC's Land at the date of this Agreement;
"Low Voltage"
or "LV" means a voltage not exceeding 250 volts;
"Medium Voltage"
or "MV" means a voltage exceeding 250 volts but not
exceeding 650 volts;
"Plant" means fixed and moveable items used in the
generation and/or supply and/or transmission and/or distribution
of electricity, other than Apparatus.
(2) The Parties will continue to comply with the Existing Rules
pending any agreed modifications thereto.
(3) The Parties will arrange for the Existing Rules (if not
already in writing) to be written down and, in any event, to be
agreed between the person or persons responsible on behalf of the
relevant Parties for the coordination of safety at each
Connection Site(s).
<PAGE>
SCHEDULE 6
Common Assets (Cl. 8.1)
PART ONE
(a) Batteries
(b) Telemetering equipment
(c) Communicating equipment (other than telemetering equipment)
(d) Connections to insulating oil and SF6 gas installations
(e) Miscellaneous MV/LV cabling
PART TWO
Site lighting
<PAGE>
SCHEDULE 7
Shared Services (Cl 8.2)
PART ONE
(a) AC and DC electrical supplies
(b) Compressed air for switchgear operation
(c) Water supplies
(d) Insulating Oil
(e) Fire fighting systems and use of adjacent fire hydrants
(f) Use of system for transporting insulating oil
(g) Use of system for transporting Sulphur hexafluoride
PART TWO
(h) Toilet Facilities
(i) Mess Facilities
(j) Public Telephones
(k) Cranes and Lifting Equipment
(l) Security Alarms Systems
<PAGE>
SCHEDULE 8
Charges for the provision of Site AC Supplies and Insulating Oil
The Recipient shall pay a due proportion of the cost of Site AC
supplies to the Providing Party based on the use of such supplies
by the Recipient as established by local agreement where the
Providing Party purchases AC Supplies on a commercial basis.
The Recipient shall pay for Insulating oil such charges as may be
agreed from time to time by reference to the cost of supply of
the same in respect of any of the sites the subject of this
Agreement where the same is provided. In the event of any
dispute as to such charges the provisions of Clause 12 shall
apply.
Save as otherwise agreed in any particular case invoices shall be
rendered in monthly arrears
and payment shall be made within 14 days of the date of invoice.
<PAGE>
SCHEDULE 9
Addresses, Fax Nos etc (Cl 20.)
THE SEAL of THE CENTRAL )
ELECTRICITY GENERATING )
BOARD hereunto affixed )
Is authenticated by: )
THE COMMON SEAL of MIDLAND )
ELECTRICITY BOARD is hereunto )
affixed and is authenticated )
by: )
G\MWR-DO160
<PAGE>
EXHIBIT 17
DATED 1990
THE NATIONAL GRID COMPANY PLC
- to -
[ ]
______________________________________________________________
LICENCE TO RETAIN ASSETS
AT [ ]
______________________________________________________________
INDEX
Clause Description Page
1. Definitions and Interpretation 1
2. Right to Retain Asset Lines and Cables 12
3. Modification 12
4. Safety Security and Compliance
with Statutes 13
5. Relocation of PES's Assets 15
6. Relocation of Lines and Cables 18
7. Removals 19
8. Rights of Access 20
9. Services and Use of Common Assets 23
10. Payment 25
11. Non-Interference 26
12. Cable Tunnels and Lines and Cables 28
13. Dispute Resolution 29
14. Governing Law and Jurisdiction 31
15. Confidentiality 31
16. Dealings with Land 40
17. Limitation of Liability 41
18. Intellectual Property 43
19. Force Majeure 43
20. Waiver 44
21. Notices 44
22. Variations 45
23. Overriding Provisions 46
24. Assignment and Sub-Contracting 47
25. Illegality and Partial Invalidity 47
26. Term and Termination 48
27. Agreement as to Assets Services and
Common Assets 48
28. Registration and Memorandum 49
29. Entire Agreement 49
Schedule 1 The PES's Assets on NGC's Land 51
Schedule 2 NGC's Land 53
Schedule 3 Security Details 54
Schedule 4 Common Assets 56
Schedule 5 Shared Services 57
Schedule 6 Charges for the provision of Services 58
Schedule 7 Addresses Fax Nos. etc. 59
<PAGE>
PARTICULARS
DATE :
NGC : THE NATIONAL GRID COMPANY PLC of National Grid
House, Sumner Street, London SE1 9JU
PES : [ ] of
<PAGE>
LICENCE TO RETAIN ASSETS
THIS LICENCE is made on the date stated and BETWEEN the parties
stated in the particulars
WHEREAS
(A) Certain assets of the PES (including assets of third parties
used by the PES under arrangements with such third parties) are
situated on property title to which (by way of freehold or
leasehold) is vested in NGC;
(B) Certain assets and facilities of NGC are required for use by
both parties in the carrying on of their respective undertakings;
and
(C) This Agreement is entered into by the parties to give effect
to appropriate arrangements in respect of such assets and the use
of assets and facilities.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement the following words and expressions shall,
unless the subject-matter or context otherwise requires or is
inconsistent therewith, bear the following meanings:
"the Act" the Electricity Act 1989;
"Ancillary Lines and Cables" any wire cable tube conductor
or similar thing (including its casing or coating) used or
designed to be used for the operation monitoring or control of
the PES's Assets which belong to the PES and pass through or
under NGC's Land;
"PES" the Public Electricity
Supplier named in the particulars and its successors in title and
assigns;
"PES's Assets" (a) assets (to be agreed or
determined pursuant to Clause 27) of the kind listed in Schedule
I (including any plinths or other structures (excluding
buildings) to or upon which the same are affixed and to or upon
which no assets of any other person are affixed and any straps,
bolts or other such things for attachment thereto) as any of the
same may be Modified pursuant to this Agreement and;
(b) the Ancillary Lines and Cables
"Cable" any wire cable or other similar
thing (including other similar thing (including its casing or
coating) for transmitting and/or distributing electricity
together with cooling systems and junction boxes fibre optic
cables and other ancillary equipment which belong to the PES and
pass through NGC's Land;
"NGC" the Party so named in the
Particulars and its successors in title to NGC's Land;
"NGC's Land" the land belonging to NGC described
in Schedule 2;
"Common Asset" assets of the kind listed in
schedule 4 to be agreed or determined pursuant to Clause 27
"Competent Authority" includes the Director and any
local or national agency authority, departments inspectorate
minister, ministry, official or public or statutory person
(whether autonomous or not) of, or of the government of, the
United Kingdom or the European Economic Community;
"Connection Agreement" the Master Connection and Use
of System Agreement entered into by, among others, NGC and the
PES regarding, among other things, the connection of PES Plant
and Apparatus (as defined therein) to the NGC Transmission System
(as defined herein) and the use by the PES of such system;
"Directive" includes any present or future
directive, requirements instruction, direction or rule of any
Competent Authority, (but only, if not having the force of law if
compliance with the Directive is in accordance with the general
practice of persons to whom the Directive is addressed), and
includes any modifications extension or replacement thereto then
in force;
"the Director" the Director General of Electricity
supply appointed for the time being pursuant to Section 1(1) of
the Act by the Secretary of State;
"Emergency Personnel" in relation to a Party, all
employees of that Party who have appropriate knowledge and
experience and are recognised by that Party as being able to
carry out competently and safely emergency action for the
purposes of Clause 11;
"Force Majeure" in relation to a Party, any
event or circumstance which is beyond the reasonable control of
that Party and which results in or causes the failure of that
party to perform any of its obligations under this Agreement
including any act of God, strike, lockout or other industrial
disturbance, act of the public enemy, war, declared or undeclared
threat Of war, terrorist act, blockade, revolution, riot,
insurrection, civil commotion, public demonstration, sabotage,
act of vandalism, lightning, fire, storm, flood, earthquake,
accumulation of snow or ice, lack of water arising from weather
or environmental problems, explosion, fault or failure of that
Party's plant and apparatus which could not have been prevented
by Good Industry Practice, governmental restraint, any Act of
Parliament or legislation, by-law, prohibition, measure or
Directive (not being any order regulations or directive under
Section 32, 33, 34 or 235 of the Act) provided that lack of funds
shall not be interpreted as a cause beyond the reasonable control
of that Party;
"Good Industry Practice" the exercise of that degree of
skill, diligence, prudence and foresight which would reasonably
and ordinarily be expected from a skilled and experienced
operator engaged in the same type of undertaking under the same
or similar circumstances;
"the Grid Code" the document or documents
produced pursuant to one of the conditions of the NGC
Transmission Licence, as from time to time revised in accordance
with the Conditions of the NGC Transmission Licence;
"HV" of a nominal voltage exceeding 650
volts;
"Intellectual Property" patents, trademarks, service
marks, rights in design, trade names, copyrights and topography
rights (whether or not any of the same is registered and
including applications for registration of any of the same) and
rights under licences and consents in relation to any of the same
and all rights or forms of protection of a similar nature or
having equivalent or similar effect to any of the same which may
subsist anywhere in the world;
"Line" any line which is used for
transmitting and/or distributing electricity and incudes anything
exclusively supporting such line that is to say any structure
pole or other thing in on by or from which any such line is or
may be supported carried or suspended any apparatus connected to
any such line for the purpose of carrying electricity and any
wire cable tube pipe or other similar thing (including its casing
or coating) which surrounds or supports or is surrounded or
supported by or is installed in close proximity to or is
supported carried or suspended in association with any such line
earthing wires fibre optic cables and other ancillary equipment
which belong to the PES;
"Modification" in relation to a Line Cable or
Asset, any alteration to or replacement of such Line Cable or
Asset pursuant to Clauses 2.2 or 3.1 of this Agreement and
"Modify" and "Modified" shall be construed accordingly;
"NGC Transmission Licence" NGC's licence granted pursuant
to Section 6(1)(b) of the Act;
"Party" each person for the time being and
from time to time party to this Agreement and any successor(s) in
title to, or permitted assign(s) of, such person;
"Permitted Purpose" in relation to a Right of Access,
the purpose specified in this Agreement for which such Right of
Access is granted;
"Public Electricity Supply
Licence" the PES's licence granted pursuant
to Section 6 of the Act;
"Relocation Proposal" a proposal by NGC to the PES
pursuant to sub-clause 5.1 for the relocation of any of the PES's
Assets on NGC's Land;
"Regulations" the Electricity Supply Regulations
1988 or any amendment thereof;
"Right of Access" full right and liberty during
the currency of this Agreement to enter upon and through and
remain upon any part of NGC's Land subject to the provisions of
Clause 8;
"Services" in the context of Clause 9,
goods and services of the kind listed in Schedule 5 to be agreed
or determined pursuant to Clause 27;
"Supplemental Connection
Agreement" a site specific connection
agreement to be entered into between NGC and the PES in
substantially the form set out in the appropriate schedule to the
Connection Agreement;
1.2 In this Agreement:
(i) unless the context otherwise requires all references to
a particular clause, sub-clause, paragraph or Schedule shall be a
reference to that clause, sub-clause paragraph or Schedule in or
to this Agreement;
(ii) the table of contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement;
(iii) references to the words "include" or "including"
are to be construed without limitation to the generality of the
preceding words;
(iv) unless there is something in the subject matter or the
context which is inconsistent therewith, any reference to an Act
of Parliament or any Section thereof or Schedule thereto, or
other provision thereof or any instrument, order or regulation
made thereunder shall be construed at the particular time, as
including a reference to any modification, extension, replacement
or reenactment thereof then in force and to all instruments,
orders or regulations then in force and made under or deriving
validity from the relevant Act of Parliament; and
(v) reference to the masculine shall include the feminine
and references in the singular shall include the plural and vice
versa and words demoting natural persons shall include companies,
corporations and any other legal entity and vice versa.
2. RIGHT TO RETAIN ASSETS LINES AND CABLES
2.1 Subject to sub-clause 5.1, NGC hereby grants to the PES the
right to retain use and Modify as provided in this Agreement the
PES's Assets on NGC's Land in such places as they are currently
situated and such right shall extend to any Modified PES Asset.
NGC undertakes to maintain any shelter or support enjoyed by the
PES's Assets at the date of this Agreement or, if later, when
Modified as aforesaid and grants to the PES a Right of Access for
the purpose of the use, maintenance, inspection, testing,
removal, operation, Modification or repair of any of the PES's
Assets or for the purpose of compliance with any statute or
Directive under the provisions of Clause 4.
2.2 Subject to Clause 6 NGC hereby grants the PES the right:
2.2.1 to retain and use all Lines and Cables which are
now or shall (in accordance with the terms of this Agreement) be
installed in over or through NGC's Land and grants to the PES a
Right of Access for the purpose of the use maintenance,
inspection, testing, removal, operation, Modification or repair
of any of the Lines and Cables;
2.2.2 subject to obtaining the prior written consent of
NGC (such consent not to be unreasonably withheld or delayed) to
replace such Lines and Cables with Lines and Cables of the same
or a similar type either in the same position or in such other
position as the NGC may approve (such approval not to be
unreasonably withheld or delayed and not to be granted subject to
the payment of any sums of money) and forthwith after any such
replacement to remove the Lines and Cables from NGC's Land and
repair any damage so caused.
2.2.3 to install new or additional Lines and Cables over
on or through NGC's Land but only to the extent necessary to
exploit the capability of the PES's Assets as at the date of this
Agreement on NGC's Land such installation to be subject to the
prior written consent of NGC (such consent not to be unreasonably
withheld or delayed) and subject to compliance with the
following:
(i) the PES shall in such circumstances give to NGC
written notice requiring NGC to grant a wayleave (as hereinafter
defined) within a period specified in the notice not being less
than 21 days;
(ii) within the period specified in the said notice or
such longer period as the Parties may agree NGC may:
(a) grant the required wayleave or;
(b) grant or indicate a willingness to grant a
wayleave subject to such terms and conditions as NGC may consider
reasonable (such terms and conditions to include terms and
conditions relating to the route of the Line or Cable the period
during which the wayleave may continue in force and any payment
to be made by the PES whether of a capital or periodic nature as
consideration for the wayleave).
(iii) in the event that NGC shall have failed to
grant the wayleave as required by the PES or indicated a
willingness to grant a wayleave subject to terms and conditions
to which the PES objects the PES may refer the matter for
resolution in accordance with Clause 13.
(iv) a "wayleave" means consent for the PES to install
and keep installed a new Line or Cable on under or over NGC's
Land and to have access thereto for the purposes of inspecting
testing maintaining repairing removing renewing operating
altering or replacing the same.
2.2.4 All other provisions of this Agreement shall apply
to any new Line or Cable so installed.
2.3 NGC hereby grants to the PES the right to use any conducting
media under over or on the NGC's Land for the passage and running
of gas water electricity telephone and other communication media
and services now benefiting the PES's Assets.
2.4 The PES shall, if considering moving replacing, or altering
any of the PES's Assets, give due consideration as to whether it
shall be operationally practicable, desirable and reasonably
economic to move such Asset to (or place the replacement or
altered Asset on) its own property.
3. MODIFICATION
3.1 The PES may replace or alter any the PES's Assets provided
that:
3.1.1 the replacement Asset or the Asset as so altered:
(i) is placed in the same or approximately the same
position;
(ii) fulfils the same or a similar purpose;
(iii) can, where relevant, be accommodated in and
on existing buildings or structures;
(iv) does not require additional or improved facilities
or services from NGC;
(v) does not restrict the actual and intended use of
NGC's Land and any equipment thereon or therein to any materially
greater extent than the Asset so replaced or altered; and
(vi) is (unless otherwise agreed by NGC (such agreement
not to be unreasonably withheld or delayed)) either of the same
or a similar size or the alteration is effected substantially
within the space occupied by such Asset to enable the Asset to be
used up to its full capability.
3.1.2 prior written notification has been given to NGC;
3.1.3 subject to NGC's prior approval (such approval not
to be unreasonably withheld or delayed) the PES may if necessary
install the modified Asset adjacent to the Asset to be replaced
so as to enable dual running whilst the modified Asset is
commissioned provided that the PES shall remove the Asset for
which the replacement is substituted as soon as practicable.
3.1.4 NGC shall if considering materially moving any of
its assets to a position adjacent to any of the PES's Assets or
replacing or altering any of its assets which are situated
adjacent to the PES's Assets or making any substantial alteration
to any building in which the PES's Assets are situated give due
consideration to the PES's operational requirements of which NGC
is aware.
3.2 If any Modification shall require minor alterations or works
to the existing buildings or structures of NGC housing or
supporting the PES's Asset in question, such alterations or works
may be carried out (with the prior written approval of NGC (such
approval not to be unreasonably withheld or delayed)) but at the
cost of the PES.
3.3 To the extent that any of the conditions of Clause 3.1 are
not met in relation to any Modification, NGC may by notice in
writing require the PES promptly to remove such replacement or
alteration and if the PES fails to do so may remove the same
itself at the cost and expense of the PES. On such removal, the
PES may reinstate the Asset so replaced or altered.
4. SAFETY SECURITY AND COMPLIANCE WITH STATUTES
4.1 NGC undertakes in relation to the PES's Assets to maintain
and provide security in accordance with the arrangements set out
in Part 1 of Schedule 3.
4.2 Each Party shall procure that as between the parties all
reasonable and necessary steps are taken, as and when necessary
or desirable, in co-operation with the other (and, so far as
applicable, with any third party), to ensure compliance with the
provisions (each such provision or part thereof being in this
Clause 4 and "Obligation") of:
(i) all statutes and Directives applicable to any of the
PES's Assets and/or any part (including the whole) of NGC's Land
and/or the employees of either party; and
(ii) any statute or Directive which may affect any other
property (of whatever nature) of either Party as a result of the
existence, nature, location, or manner of operation of any of the
PES's Assets.
4.3 Each Party shall, so far as it is aware of the same, unless
it has reasonable grounds for believing that the other party
possesses the information keep the other Party informed of all
material matters relating to any Obligation.
4.4 In the event of any dispute as to responsibility, as between
the Parties, pursuant to Clause 4.2, for compliance with an
Obligation, that responsibility shall be allocated, so far as
practicable, on the basis that:
(i) each Party shall refrain from taking or permitting any
action which would prevent compliance with an Obligation; and
(ii) positive action required in relation to a Party's land
or asset as a consequence of the existence nature, location or
manner of operation of that land or asset shall be the
responsibility of that Party, and, to the extent that such action
is required in respect of or affecting any property of the other
Party (or property of a third party located in or on that other
Party's land), such action may be taken with the prior approval
of that other Party (such approval, subject to (i) above, not to
be unreasonably withheld or delayed).
4.5 The provisions for safety co-ordination between the Parties
contained in Part 2 of Schedule 3 shall apply.
5. RELOCATION OF PRESS ASSETS
5.1 At any time and from time to time NGC may (with the prior
written consent of the PES (such consent not to be unreasonably
withheld or delayed)) request the PES to relocate any of the
PES's Assets either to a different location on NGC's Land or to
the PES's or a third party's land, such consent to be sought
given or referred in accordance with the following procedure:
5.1.1 NGC shall serve a written notice on the PES, which
notice shall specify:
(a) the PES's Assets (other than the Lines and Cables)
which NGC wishes to be relocated;
(b) the reasons for such wish;
(c) the proposed new location for such assets;
(d) the timing of carrying out such relocation;
(e) the route of any Ancillary Lines and Cables
required to be relocated; and
(f) any reasonable conditions with which such
relocation or repositioning must comply.
5.1.2 The PES shall within four months of receipt of any
such notice serve a counter notice stating:
(a) whether or not in its reasonable opinion such
Relocation Proposal is acceptable to it;
(b) if the Relocation Proposal is not acceptable to
the PES, the grounds for such opinion and the terms of any
alternative proposal ("the Alternative Relocation Proposal")
covering so far as relevant the matters referred to in terms (a)
to (f) of sub clause 5.1.1 which would be acceptable to the PES;
and
(c) in respect of the Relocation Proposal (if
accepted) or of any Alternative Relocation Proposals, an estimate
(sufficiently detailed having regard to the circumstances) of the
proper costs likely to be incurred in connection with considering
the Relocation Proposal or the Alternative Relocation Proposal
and effecting the said relocation of the PES's Assets and the
proper costs of relocating any other equipment that may be
necessary as a result of the relocation of those Assets and the
reasonable cost of employing staff involved in the relocation and
reasonable internal management costs and any consequential losses
(excluding any relating to operating costs) including payments to
third parties incurred as a result of the relocation of those
Assets and the proposed manner and timing of payment of the same
by the NGC.
5.1.3 If within one month of the date of such counter
notice (or such longer period as may be reasonably necessary) NGC
has not withdrawn the Relocation Proposal and the Parties have
not agreed upon it or the Alternative Relocation Proposal (if
any) or a variation of either of them and upon the best estimate
reasonably available of the costs likely to be involved on the
basis referred to in Clause 5.1.2(c) of the matter shall be dealt
with in accordance with Clause 13.
5.2 Upon approval or settlement of any Relocation Proposal
Alternative Relocation Proposal or variation thereof pursuant to
Clause 5.1 the PES shall proceed diligently to obtain or procure
all necessary consents permissions and licences to enable it to
relocate the PES's Assets (and any Lines and/or Cables
consequently required to be relocated) provided that if the PES
having used all reasonable endeavours (including the lodging and
pursuing of an appeal to the appropriate authority if there are
reasonable grounds for any appeal) shall have failed to obtain
such consents permissions and licences as aforesaid then the
Relocation Proposal or the Alternative Relocation Proposal or
variation thereof shall be of no further effect save that NGC
shall not be prevented from making at any other time further
Relocation Proposals.
5.3 On receipt of any necessary consents as aforesaid and
provided NGC has taken any necessary steps to facilitate such
relocation the PES shall relocate or procure the relocation of
the relevant PES's Assets as quickly as reasonably practicable
(having regard to, amongst other things, technical and
operational requirements and to its obtaining all necessary
licences and consents).
5.4 NGC shall pay to the PES all costs incurred pursuant to
Clause 5.1 which shall be (as far as practicable) in line with
the estimate agreed or settled pursuant to Clause 5.1 provided
that all reasonable endeavours are used to minimise such costs
and provided further that in the event the Relocation Proposal is
withdrawn by NGC or consent thereto is reasonably withheld by the
PES pursuant to Clause 5.1 or the PES shall be unable to obtain
all the said necessary consents licences or permission NGC shall
within 28 days of demand pay to the PES all costs incurred as
aforesaid by the PES in connection with the Relocation Proposal
and any Alternative Relocation Proposal.
5.5 The rights and obligations of the parties hereunder shall
continue to apply to any of the PES's Assets as relocated
including the provisions of this Clause 5.
6. RELOCATION OF LINES AND CABLES
6.1 At any time and from time to time NGC may with the prior
written consent of the PES (such consent not to be unreasonably
withheld or delayed) by notice in writing addressed to the PES
require the PES to relocate or reposition the then existing Lines
and Cables of the PES (or any or all of such Lines and Cables)
which are situated in on over or through NGC's Land (in this
paragraph all such Lines and Cables being hereinafter referred to
as "the Equipment").
6.2 The said notice to be served by NGC on the PES shall specify
(a) the Equipment which the NGC wishes to be relocated or
repositioned (b) a reasonable time in which such relocation or
repositioning is to be carried out (c) a suitable alternative
location or route for the Equipment and (d) reasonable conditions
(if any) in which such relocation or repositioning shall be
carried out.
6.3 As soon as possible after receipt of the said notice the PES
shall proceed to apply for all necessary consents permissions and
licences necessary for the said relocation or repositioning
(hereinafter in this Clause 6 called "the Consents") using all
reasonable endeavours to obtain the same.
6.4 If the PES having used all reasonable endeavours (including
the lodging and pursuing of an appeal to the appropriate
authority if there are reasonable grounds for an appeal) shall
have failed to obtain the Consents then the said Notice shall be
of no further effect save that NGC shall not be precluded from
serving at any other time further notices under this or any other
Clause or Sub Clause and save further that NGC shall forthwith
reimburse to the PES all costs properly incurred by the PES in
connection with the provisions of this Clause 6.
6.5 If the PES shall obtain the Consents the PES shall as soon
as practicable diligently carry out such relocation or
repositioning of the Equipment to the reasonable satisfaction of
NGC and shall make good all damage caused by the said relocation
or repositioning of the Equipment.
6.6 From time to time NGC shall pay to the PES all costs (a)
properly incurred by the PES in effecting the said relocation or
repositioning of the Equipment and (b) properly incurred in
complying with the obligations under the preceding sub clauses of
this Clause 6 such costs to include any consequential losses
(excluding any relating to operating costs) the reasonable cost
of employing staff involved in the relocation or repositioning of
the Equipment and the compliance with the said obligations
including reasonable internal management costs such payment(s) to
be made within 28 days of receipt by NGC of documentary evidence
of the aforesaid costs incurred by the PES.
6.7 The rights and obligations of the Parties hereunder shall
continue to apply to the Equipment as relocated or repositioned
including the provisions of this Clause 6.
7. REMOVALS
7.1 In the event that there shall cease to be any Supplemental
Connection Agreement relating to any of the PES's Assets on NGC's
Land the PES shall remove those of the PES's Assets to which such
Supplemental Connection relates (except Ancillary Cables which
shall be made safe) from NGC's Land as quickly as practicable and
in any event within the period provided in the Supplemental
Connection Agreement for the removal of the PES's Equipment (as
therein defined) consequent upon a disconnection (as defined in
the Connection Agreement) and shall remedy any damage caused to
NGC's Land as a result thereof. The Parties shall negotiate in
good faith appropriate arrangements to minimise the effects of
the removal.
7.2 In the event that the PES is obliged to remove any of its
Assets from NGC's Land, whether under this Clause 7 or otherwise,
and fails to do so in accordance with the relevant provisions,
NGC shall be entitled to remove the PES's Assets and the PES
shall provide all reasonable assistance to enable NGC safely so
to do and shall pay and reimburse to NGC all costs and expenses
reasonably incurred by NGC in so doing.
8. RIGHTS OF ACCESS
8.1 A Right of Access includes the right to bring on to NGC's
Land such vehicles, plant, machinery, tools, equipment and
maintenance or construction materials as shall be reasonably
necessary for the Permitted Purpose.
8.2 A Right of Access given to the PES may be exercised by any
person, including third party contractors, reasonably nominated
from time to time by the PES. To the extent (if any) that any
particular authorisation or clearances may be required to be
given by NGC and the procedures for giving and obtaining the same
are not for the time being stipulated in arrangements made
pursuant to Clause 8.3, NGC shall give the same within a
reasonable time from the date of the request therefor, save in
the case of emergency in which case it shall be given without
delay.
8.3 The NGC shall procure that all reasonable arrangements and
provisions are made and/or revised from time to time as and when
necessary or desirable to facilitate the safe exercise of the
Right of Access with the minimum of disruption, disturbance or
inconvenience to both Parties. Such arrangements are provisions
may, to the extent that the same is reasonable, limit or restrict
the exercise of the Right of Access and/ or provide for NGC to
make reasonable directions or regulations from time to time in
relation to a specified matter. Matters to be covered by such
arrangements and/or provision include:
(i) the identification of any relevant PES's Assets;
(ii) the particular access routes applicable to the land in
question having particular regard for the weight and size limits
on those routes;
(iii) any limitations on times of exercise of a Right of
Access;
(iv) any requirements as to prior notification and as to
authorisation of security clearance of individuals exercising
such Rights of Access, and procedures for obtaining the same;
(v) the means of communication to the PES and all employees
and/or contractors who may be authorised from time to time by the
PES to exercise a Right of Access of any relevant directions or
regulations made by NGC;
(vi) the identification of and arrangements applicable to
Emergency Personnel;
the PES shall procure that any such arrangements and/or
provisions or directions or regulations issued pursuant thereto)
properly made from time to time by NGC shall be observed and
performed by the PES and all persons exercising any Right of
Access.
8.4.1 The PES shall procure that all reasonable steps
are taken in the exercise of any Right of Access to:
(a) Avoid or minimise damage to NGC's Land, any other
property thereon or therein;
(b) cause as little disturbance and inconvenience as
possible to NGC or other occupier of NGC's Land.
and shall promptly make good any damage caused to NGC's
Land and/or such other property in the course of the exercise of
such rights and shall indemnify NGC against all actions, claims,
proceedings, losses, costs and demands arising out of such
exercise.
8.4.2 Subject to Clause 8.4.1, all Rights of Access
shall be exercisable free of any charge or payment of any kind.
8.5 Subject to any contrary arrangements for the time being made
under Clause 8.3 to enable a Right of Access to be exercised
safely where exceptional circumstances so require:
8.5.1 a Right of Access for operation or inspection
shall be immediately available without prior notice and local
procedures shall be put in place to provide such immediate
access;
8.5.2 a Right of Access for the purpose of maintenance,
adjustment, testing or repair of HV apparatus granted in respect
of land on which exposed HV conductors are sited shall only be
exercisable on the giving to NGC of at least 7 days prior written
notice (or such other notice as may be agreed locally or (if
less) such notice as may be reasonable in the circumstances)
except in the case of loss of load or other system emergency (in
which event NGC shall render all possible assistance in procuring
that the Right of Access shall be exercisable as soon as
possible). The Parties will make local arrangements to ensure
that the PES is not delayed in its ability to deal with any
emergency which has resulted in loss of load or has resulted in a
reduction in system security.
8.5.3 a Right of Access for the purpose of Modifying any
of the PES's Assets shall be exercisable only after two weeks
prior notice to NGC (or such other notice as may be agreed
locally or (if less) may be reasonable in the circumstances).
8.6 NGC shall procure that all reasonable steps are taken in
respect of its use and occupation of NGC's Land to:
(i) avoid or minimise damage to the PES's Assets and to any
Common Assets;
(ii) cause as little disturbance and inconvenience as
possible to the PES by such use of occupation and operation and
shall promptly make good any damage so caused to the PES's Assets
and/or any Common Assets.
9. SERVICES AND USE OF COMMON ASSETS
9.1 Subject as hereinafter provided, in relation to each Common
Asset, NGC shall if required by the PES make the Common Asset in
question available for continued use by the PES to at least the
same extent as it was available for use by the PES immediately
prior to the date of this Agreement.
9.2 Subject as hereinafter provided, in relation to each
Service, NGC shall, if required by the PES, continue to provide
the same to the PES. Such provision shall be of such a quality
and quantity and shall be provided at such times as the PES shall
reasonably request. NGC shall not be required to exceed the
level of quality or quantity of the Service normally provided
prior to the date of this Agreement unless specifically agreed
otherwise between the Parties (such agreement not to be
unreasonably withheld or delayed and where appropriate to include
a provision for payment for such increased Service) save that
with regard to the Services listed in Part 2 of Schedule 5 NGC
shall be under no obligation at any time to increase the quality
or quantity of any of such Services normally provided prior to
the date of this Agreement.
9.3 Where the use of any Common Asset is made available or such
Services are supplied as aforesaid, the Parties shall procure
that appropriate arrangements and provisions are made between the
local personnel employed by each of them in that regard such
arrangements to include:
9.3.1 the identification of the Common Assets and/or
Services in question including (where relevant) the extend of
their availability;
9.3.2 the hours during which such use or provision shall
be allowed or made;
9.3.3 any requirements as to notification of use or call
for supply or temporary suspension thereof;
9.3.4 any requirements as to authorisation or security
clearance of individuals and the procedure for obtaining the
same;
9.3.5 any safety requirements;
9.3.6 administration of payment arrangements.
9.4 9.4.1 The provision of use of the Common Assets listed
in Part 1 of Schedule 4 and the supply of the Services listed in
Part 1 of Schedule 5 shall not be terminated unless NGC ceases to
require the Common Asset or Service for its own use in which case
the supply of the Service or use of the Common Asset may be
terminated by not less than one year's notice in writing.
9.4.2 The provision of use of the Common Assets listed
in Part 2 of Schedule 4, and the supply of those Services listed
in Part 2 Schedule 5 shall continue until terminated by not less
than one year's notice in writing.
9.4.3 In the event of a termination under Sub Clauses
9.4.1 and 9.4.2 above if the PES still has at the time of such
termination a bona fide requirement for the Common Asset or
Service and shall not be able to obtain an adequate alternative
therefor whether from a third party or otherwise NGC shall
cooperate with the PES so as to minimise the effect of such
termination on the operations of the PES including where
practicable the provision of a right to use land for the location
of an alternative to the Common Asset in question or an
alternative source of supply for the Service in question provided
that (for the avoidance of doubt) any cost of the provision of
the replacement of the Common Asset or Service shall be borne by
the PES.
9.5 NGC shall maintain the Common Assets in accordance with Good
Industry Practice.
9.6 The PES shall maintain all its relevant assets in such
repair and condition that the level of Services provided does not
substantially increase as a result of the lack of repair or
condition of the relevant assets.
10. PAYMENT
10.1 The Parties agree that save as provided in Clause 10.2 the
provision o the use of Common Assets and the provision of
Services, shall be free of charge for the purposes of this
Agreement.
10.2 The PES agrees to pay NGC for the provision of Insulating
Oil a fee calculated in accordance with the provisions of
Schedule 6.
10.3 Any sums payable under this Agreement shall be payable
together with any Value Added Tax chargeable on the same. Any
costs, expenses or other sums to be repaid or reimbursed to
either Party under this Agreement shall include any irrecoverable
Value Added Tax paid by that Party in relation to such sums to
the extent that no credit is available in respect thereof under
Section 15 of the Value Added Tax Act 1983.
10.4 If either Party fails to pay on the due date any amount
properly due under this Licence such Party shall pay to the other
interest on such overdue amount from and including the date of
such failure to (but excluding) the date of actual payment (as
well after as before judgment) at the rate of 4% over Barclays
Bank PLC base rate for the time being and from time to time.
Interest shall accrue from day to day.
11. NON INTERFERENCE
11.1 NGC and the PES agree that neither of them nor their agents,
employees and invitees will respectively interfere in any way
with any of the PES's Assets or the property and assets of NGC
which are located at any time on NGC's Land without the consent
of the other Party. For the purposes of this clause "interfere"
shall include:
11.1.1 disconnecting or altering the connection of any of
the PES's Asset or the property or any asset of NGC to any system
of cables, foundations, pipes, drains or other media to which it
may be connected form time to time or to prevent supply of any
substance or thing through such connected system;
11.1.2 affixing or removing any item or substance of any
nature whatsoever to or from any of the PES's Assets or the
property or any asset of NGC;
11.1.3 damaging any of the PES's Assets or the property
or any assets of NGC or doing or omitting to do any act or
allowing any state of affairs to subsist as a result of which the
PES's Assets or the property or assets of NGC would be likely to
sustain any material damage;
11.1.4 allowing any other person to interfere with any of
the PES's Assets;
11.1.5 alter any meters or settings on any of the PES's
Assets;
11.1.6 the obstruction of access to any of the PES's
Assets;
11.1.7 impairing the effectiveness of any gate fence wall
alarm system or means of keeping out intruders.
11.2 The obligations contained in this Clause 11 shall be
suspended to the extent that emergency action is taken by
Emergency Personnel in good faith to protect the health and
safety of persons or to prevent damage to property. All
reasonable care shall be taken in the course of such emergency
action. When the emergency has ended, any damaged property will
be reinstated by the Party whose asset gave rise to the
emergency, save for damage occurring by reason of lack of
reasonable care in the course of the emergency action which shall
be the responsibility of the Party taking the emergency action.
11.3 NGC agrees with the PES:
(i) to keep NGC's Land or to procure that it be kept in
such state of repair and condition as shall not cause damage to
the PES's Assets and Lines and Cables and shall not prevent the
PES from exercising the rights granted to it herein or from using
the PES's Assets for the purpose of the PES's business;
(ii) in the event that NGC intends to carry out any works to
NGC's Land or to exercise the rights referred to herein which
shall involve the removal or other material interference with any
PES's Asset (including the construction repair or alteration of
any building or other erection on land on which such Asset is
situate) and/or any such works which may materially prejudice any
of the PES's rights hereunder in respect of the same NGC shall
not commence such works until NGC has given notice in writing of
its intentions to the PES and (if necessary) has at the NGC's
expense made adequate provision to ensure that the PES's Asset is
still capable of use by the PES to the same extent as previously
enjoyed.
(iii) to permit the PES to display warning notices on
NGC's Land as the PES may reasonably require and other notices as
the PES reasonably requires with the prior written consent of NGC
(such consent not to be unreasonably withheld and to include
reasonable conditions as to appearance size and location) or are
required by statute.
12. CABLE TUNNELS AND LINES AND CABLES
Any cable situated under NGC's land shall be kept fully
maintained and repaired on the following basis:
12.1 in the case of cable tunnels containing the HV cables of one
Party only maintenance of the whole tunnel shall be the
responsibility of that Party;
12.2 in the case of cable tunnels containing HV cables of more
than one Party maintenance of the whole tunnel shall be the
responsibility of the Party with the majority in number of such
cables for the time being and the cost of such maintenance shall
be apportioned between the Parties according to level of use;
12.3 in the case of cable tunnels containing solely cables other
than HV cables maintenance shall be the responsibility of the
Party with the majority in number of such cables for the time
being and the cost of maintenance shall be apportioned between
the Parties according to level of use;
12.4 to the extent that any part of any cable tunnel for which
the PES is responsible in accordance with the above provisions
for the maintenance thereof is within NGC's Land NGC grants to
the PES a Right of Access for all purposes necessary to discharge
its obligations under this Clause 12 and shall give all
reasonable co-operation and assistance to the PES as may be
requisite for the proper discharge by the PES of its obligations
under this Clause.
13. DISPUTE RESOLUTION
13.1 Save where expressly stated in this Agreement to the
contrary and subject to any contrary provision of the Act, any
Licence, or the Regulations, or the rights, power, duties and
obligations of the Director or the Secretary of State for Energy
under the Act, any Licence or otherwise howsoever, any dispute or
difference of whatever nature howsoever arising under, out of, or
in connection with this Agreement between the parties hereto
shall be and is hereby referred to arbitration pursuant to the
arbitration rules of the Electricity Supply Industry Arbitration
Association in force from time to time.
13.2 Whatever the nationality, residence or domicile of the
parties hereto and wherever the dispute or difference or any part
thereof arose the law of England shall be the proper law of any
reference to arbitration hereunder and in particular (but not so
as to derogate from the generality of the foregoing) the
provisions of the Arbitration Acts 1950 (notwithstanding anything
in Section 34 thereof) to 1979 (including any modification,
extension, replacement or re-enactment thereof for the time being
in force) shall apply to any such arbitration wherever the same
or any part of it shall be conducted.
13.3 Subject always to Clause 13.5 below, if any tariff customer
(as defined in Section 22(4) of the Act) brings any legal
proceedings in any court (as defined in the Rules of the Supreme
Court 1965 and in the County Courts Act 1984) against one of the
Parties (the "defendant contracting party"), and the defendant
contracting party wishes to make a third party claim (as defined
in Clause 13.4 below) against the other Party ("contracting
party") which would but for this Clause 13.3 have been a dispute
or difference referred to arbitration by virtue of Clause 13.1
above then, notwithstanding the provisions of Clause 13.1 above
which shall not apply and in lieu of arbitration, the court in
which the legal proceedings have been commenced shall hear and
completely determine and adjudicate upon the legal proceedings
and the third party claim not only between the third party and
the defendant contracting party but also between either or both
of them and the other contracting party whether by way of third
party proceedings (pursuant to the Rules of the Supreme Court
1965 or the County Court Rules 1981) or otherwise as may be
ordered by the court.
13.4 For the purpose of this Clause 13 third party claim shall
mean:
(a) any claim by a defendant contracting party against a
contracting party (whether or not already a party to the legal
proceedings) for any contribution or indemnity; or
(b) any claim by a defendant contracting party against such
a contracting party for any relief or remedy relating to or
connected with the subject matter of the legal proceedings and
substantially the same as some relief or remedy claimed by the
said tariff customer; or
(c) any requirement by a defendant contracting party that
any question or issue relating to or connected with the subject
matter of the legal proceedings should be determined not only as
between the said tariff customer and the defendant contracting
party but also as between either or both of them and a
contracting party (whether or not already a party to the legal
proceedings).
13.5 Clause 13.3 above shall apply only if at the time the legal
proceedings are commenced no arbitration has been commenced
between the defendant contracting party and the contracting party
raising or involving the same or substantially the same issues as
would be raised by or involved in the third party claim. The
tribunal in any arbitration which has been commenced prior to the
commencement of legal proceedings shall determine the question,
in the event of dispute, whether the issues raised or involved
are the same or substantially the same.
14. GOVERNING LAW AND JURISDICTION
14.1 This Agreement shall be governed and construed in all
respects in accordance with English law.
14.2 Subject and without prejudice to Clause 13 and to Clause
14.4 the Parties irrevocably agree that the courts of England are
to have exclusive jurisdiction to settle any dispute which may
arise out of or in connection with this Agreement and that
accordingly any suit, action or proceeding (together in this
Clause 14 referred to as "Proceedings") arising out of or in
connection with this Agreement may be brought in such courts.
14.3 Each Party irrevocably waives any objection which it may
have now or hereafter to the laying of the venue of any
Proceedings in any such court as is referred to in this Clause 14
and any claim that any such Proceedings have been brought in an
inconvenient forum and further irrevocably agrees that a judgment
in any Proceedings brought in the English courts shall be
conclusive and binding upon such Party and may be enforced in the
courts of any other jurisdiction.
14.4 For the avoidance of doubt nothing contained in the
foregoing provisions of this Clause 14 shall be taken as
permitting a Party to commence proceedings in the courts where
this Agreement otherwise provides for proceedings to be referred
to arbitration.
15. CONFIDENTIALITY
15.1.1 For the purposes of this Clause 15 except where
the context otherwise requires:
"Authorised Recipient" in relation to any Protected
Information, means any Business Person who, before the Protected
Information had been divulged to him by NGC or any subsidiary of
NGC, had been informed of the nature and effect of this Clause 15
and who requires access to such Protected Information for the
proper performance of his duties as a Business Person in the
course of Permitted Activities.
"Business Person" means any person who is a Main
Business Person, or a Corporate Functions Person and "Business
Personnel" shall be construed accordingly.
"Confidential
Information" means all data and other
information supplied to the PES under the provisions of this
Agreement.
"Corporate Functions
Person" means any person who:
(a) is a director of NGC; or
(b) is an employee of NGC or any of its
subsidiaries carrying out any administrative, finance or other
corporate services of any kind which in part relate to the Main
Business; or
(c) is engaged as an agent of or
adviser to or performs work in relation to or services for the
Main Business.
"Customer" has the same meaning as in the
Connection Agreement.
"Generation Business" has the same meaning as in the NGC
Transmission Licence.
"Main Business" means any business of NGC or any of
its subsidiaries as at the Transfer Date (as defined in the
Connection Agreement) or which it is required to carry on under
the NGC Transmission Licence other than the Generation Business.
"Main Business Person" means any employee of NGC or any
director or employee of its subsidiaries who is engaged solely in
the Main Business and "Main Business Personnel" shall be
construed accordingly.
"Permitted Activities" means activities carried on for the
purposes of the Main Business.
"Protected Information" means any information relating to
the affairs of a Party which is furnished to Business Personnel
pursuant to this Agreement unless prior to such information being
furnished, such Party has informed the recipient thereof by
notice in writing or by endorsement on such information, that the
said information is not to be regarded as Protected Information.
"Supplier" has the same meaning as in the
Connection Agreement.
15.1.2 For the avoidance of doubt data and other
information which a Party is permitted to divulge or publish to
the other Party pursuant to this Agreement shall not necessarily
be regarded as being in the public domain by reason of being so
discharged or published.
15.2 Confidentiality for NGC and its Subsidiaries
NGC and its subsidiaries in each of their capacities in this
Agreement shall secure that Protected Information is not:
15.2.1 divulged by Business Personnel to any person
unless that person is an Authorised Recipient;
15.2.2 used by Business personnel for the purpose of
obtaining for NGC or any of its subsidiaries or for any other
person:
(a) any electricity licence; or
(b) any right to purchase or otherwise require, or to
distribute, electricity including rights under any electricity
purchase contract (as defined in the NGC Transmission Licence);
or
(c) any contract or arrangement for the supply of
electricity to Customers or Suppliers; or
(d) and contract for the use of any electrical lines
or electrical plant belonging to or under the control of a
Supplier; or
(e) control of any body corporate which, whether
directly or indirectly, has the benefit of any such licence
contract or arrangement; and
15.2.3 used by Business Personnel for the purpose of
carrying on any activities other than Permitted Activities;
except with the prior consent in writing of the Party to
whose affairs such Protected Information relates.
15.3 Nothing in Clause 15 shall apply:
15.3.1 to any Protected Information which, before it is
furnished to Business Personnel is in the public domain;
15.3.2 to any Protected Information which, after it is
furnished to Business Personnel:
(a) is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 15 does not apply; or
(b) is acquired by NGC or any subsidiary of NGC in
circumstances in which this Clause 15 does apply and thereafter
ceases to be subject to the restrictions imposed by this Clause
15; or
(c) enters the public domain;
and in any such case otherwise than as a result of:
(i) a breach by NGC or any subsidiary of NGC of its
obligation in this Clause 15; or
(ii) a breach by the person who disclosed that
Protected Information of that person's confidentiality obligation
and NGC or any of its subsidiaries is aware of such breach; or
15.3.3 to the disclosure of any Protected Information to
any person if NGC or any subsidiary of NGC is required or
expressly permitted to make such disclosure to such person:
(a) in compliance with the duties of NGC or any
subsidiary under the Act or any other requirement of a Competent
Authority; or
(b) in compliance with the conditions of the NGC
Transmission Licence or any document referred to in the NGC
Transmission Licence with which NGC or any subsidiary of NGC is
required to comply by virtue of the Act or the NGC Transmission
Licence; or
(c) in compliance with any other requirement of law;
or
(d) in response to a requirement of any recognised
stock exchange or regulatory authority or the Panel on Takeovers
and Mergers; or
(e) pursuant to the Arbitration Rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal having
jurisdiction in relation to NGC or any of its subsidiaries; or
(f) in compliance with the requirements of Section 35
of the Act and with the provisions of the Fuel Security Code; or
15.3.4 to any Protected Information to the extent that
NGC or any of its subsidiaries is expressly permitted or required
to disclose that information under the terms of any agreement or
arrangement (including this Agreement the Grid Code the
Distribution Codes and the Fuel Security Code as defined in the
Connection Agreement) with the Party to whose affairs such
Protected Information relates.
15.4 NGC and its subsidiaries may use all and any information or
data supplied to or acquired by it, from or in relation to the
other Party in performing Permitted Activities including for the
following purposes:
15.4.1 the operation and planning of the NGC Transmission
System;
15.4.2 the calculation of charges and preparation of
offers of terms for connection to or use of the NGC Transmission
System;
15.4.3 the operation and planning of the Ancillary
Services Business (as defined in the NGC Transmission Licence)
and the calculation of charges therefor;
15.4.4 the operation of the Settlements Business (as
defined in the NGC Transmission Licence);
15.4.5 the provision of information under the British
Grid Systems Agreement and the EdF Protocol (as defined in the
Connection Agreement);
and may pass the same to subsidiaries of NGC which carry out
such activities and the Parties hereto agree to provide all
information to NGC and its subsidiaries for such purposes.
15.5 NGC undertakes that, having regard to the activities in
which any Business Person is engaged and the nature and effective
life of the Protected Information divulged to him by virtue of
such activities, neither NGC nor any of its subsidiaries shall
unreasonably continue (taking into account any industrial
relations concerns reasonably held by it) to divulge Protected
Information or permit Protected Information to be divulged by any
subsidiary of NGC to any Business person.
15.5.1 who has notified NGC or the relevant subsidiary of
his intention to become engaged as an employee or agent of any
other person (other than of NGC or any subsidiary thereof) who
is:
(a) authorised by licence or exemption to generate,
transmit or supply electricity; or
(b) an electricity broker or is know to be engaged in
the writing of electricity purchase contracts (as defined in the
NGC Transmission Licence); or
(c) known to be retained as a consultant to any such
person who is referred to in (a) or (b) above; or
15.5.2 who is to be transferred to the Generation
Business save where NGC or such subsidiary could not, in all
circumstances reasonably be expected to refrain from divulging to
such Business Person Protected Information which is required for
the proper performance of his duties.
15.6 Without prejudice to the other provisions of this Clause 15
NGC shall procure that any additional copies made of the
Protected Information, whether in hard copy of computerised form,
will clearly identify the Protected Information as protected.
15.7 NGC undertakes to use all reasonable endeavours to procure
that no employee is a Corporate Functions Person unless the same
if necessary for the proper performance of his duties.
15.8 Confidentiality other than for NGC and its Subsidiaries
15.8.1 The PES hereby undertakes with NGC and its
subsidiaries that it shall preserve the confidentiality of, and
not directly or indirectly reveal, report, publish, disclose or
transfer or use for its own purposes Confidential Information
except in the circumstances set out in Clause 15.8.2 or to the
extent expressly permitted by this Agreement or with the consent
in writing of NGC.
15.8.2 Exceptions: the circumstances referred to in
Clause 15.8.1 are:
15.8.2.1 where the Confidential Information, before it
is furnished to the PES, is in the public domain; or
15.8.2.2 where the Confidential Information, after it
is furnished to the PES:
(a) is acquired by the PES in circumstances
in which this Clause 15 does not apply; or
(b) is acquired by the PES in circumstances
in which this Clause 15 does apply and thereafter ceases to be
subject to the restrictions imposed by this Clause 15; or
(c) enters the public domain;
and in any such case otherwise than as a
result of a breach by the PES of its obligations in this Clause
15 or a breach by the person who disclosed that Confidential
Information of that person's confidentiality obligation; or
15.8.2.3 if the PES is required or permitted to make
disclosure of the Confidential Information to any person:
(i) in compliance with the duties of the PES
under the Act or any other requirement of a Competent Authority;
(ii) in compliance with the conditions of any
Licence or any document referred to in any Licence with which the
PES is required to comply;
(iii) in compliance with any other
requirement of law;
(iv) in response to a requirement of any
stock exchange or regulatory authority or the Panel on Takeovers
and Mergers; or
(v) pursuant to the Arbitration Rules for
the Electricity Supply Industry Arbitration Association or
pursuant to any judicial or other arbitral process or tribunal
having jurisdiction in relation to the PES; or
15.8.2.4 when Confidential Information is furnished by
the PES to the employees, directors, agents, consultants and
professional advisers of the PES, in each case on the basis set
out in the sub clause 15.9.
15.9 With effect from the date of this Agreement the PES shall
adopt procedures within its organisation for ensuring the
confidentiality of all Confidential Information which it is
obliged to preserve as confidential under Clause 15.8. The
procedures are:
15.9.1 the Confidential Information will be disseminated
within the PES only on a "need to know" basis;
15.9.2 employees, directors, agents, consultants and
professional advisers of the PES in receipt of Confidential
Information will be made fully aware of the PES's obligations of
confidence in relation thereto; and
15.9.3 any copies of the Confidential Information whether
in hard copy or computerised form will clearly identify the
Confidential Information as confidential.
16. DEALINGS WITH LAND
16.1 Each party agrees that it shall not by any act or default
render the PES's Assets or the assets of NGC on NGC's Land (as
appropriate) liable to any distress, execution or other legal
process, and in the event that such assets shall become so
liable, shall forthwith give notice of any such proceedings to
the other Party and shall forthwith notify any third party
instituting any such process of the ownership of such assets.
16.2 If NGC desires to mortgage or charge any of its land or its
interest therein on which any of the PES's Assets are located or
if either party desires to mortgage or charge any of its own
assets or to enter into any arrangement which, if made, might
affect the rights of the other Party expressly granted herein,
then that Party shall ensure that the other Party's assets are
not and will not be subject to the rights granted therein and are
not and will not be affected by the mortgage, legal charge or
other agreement or arrangement, and shall give written
notification thereof to the other Party.
16.3 In the event that NGC shall wish to grant rights over or
dispose of any interest in or change the use of any land to which
this Agreement applies NGC shall notify the PES of such wish and
fully consult with the PES in respect thereof and shall not grant
such rights or make such disposal or change of use subject to and
where appropriate with the benefit of this Agreement and where
the disposal involves the Common Assets and/or Services shall
procure that the party to whom the interests are disposed of
shall complete a deed of covenant with the PES in such form as
the PES shall reasonably require to enable the PES to continue to
have the use of such Common Assets or Services to the same extent
as prior to such disposal.
17. LIMITATION OF LIABILITY
17.1 Save where any provision of this Agreement provides for an
indemnity and save as provided in this sub-clause 17.1 and sub-
clause 17.2 neither party (the "Party Liable") nor its officers,
employees or agents shall be liable to the other party for loss
arising from any breach of this Agreement other than for loss
directly resulting from such breach and which at the date hereof
was reasonably foreseeable as not unlikely to occur in the
ordinary course of events from such breach and which resulted
from:
17.1.1 physical damage to the property of the other
Party, its officers, employees or agents; and/or
17.1.2 the liability of the other Party to any other
person for loss arising from physical damage to the property of
such other person.
17. Nothing in this Agreement shall exclude or limit the
liability of the Party Liable for death or personal injury
resulting from the negligence of the Party Liable or any of its
officers, employees or agents and the Party Liable shall
indemnify and keep indemnified the other Party, its officers,
employees or agents, from and against all such and any loss or
liability which such other party may suffer or incur by reason of
any claim on account of death or personal injury resulting from
the negligence of the Party Liable, its officers, employees or
agents.
17.3 Save where any provision of this Agreement provides for an
indemnity neither the Party liable, nor any of its officers,
employees or agents shall in any circumstances whatsoever be
liable to the other Party for:
17.3.1 any loss of profit, loss of revenue, loss of use,
loss of contract or loss of goodwill; or
17.3.2 any direct or consequential loss; or
17.3.3 loss resulting from the liability of such other
Party to any other person howsoever and whensoever arising save
as provided in sub-clauses 17.1.2 and 17.2.
17.4 The rights and remedies provided by this Agreement to the
parties are exclusive and not cumulative and exclude and are in
place of all substantive (but not procedural) rights or remedies
express or implied and provided by common law or statute in
respect of the subject matter of this Agreement, including
without limitation any rights either party may possess in tort
which shall include actions brought in negligence and/or
nuisance. Accordingly, each of the parties hereby waives in the
fullest extent possible all such rights and remedies provided by
common law or statute, and releases the Party liable its
officers, employees and agents to the same extent from all
duties, liabilities, responsibilities or obligations provided by
common law or statute in respect of the matters dealt with in
this Agreement and undertakes not to enforce any of the same
except as expressly provided herein.
17.5 Save as otherwise expressly provided in this Agreement, this
Clause 17 insofar as it excludes or limits liability shall
override any other provision in this Agreement provided that
nothing in this Clause 17 shall exclude or restrict or otherwise
prejudice or affect any of:
17.5.1 the rights, power, duties and obligations of
either Party which are conferred or created by the Act, the NGC
Transmission Licence, the PES Licence or the Electricity Supply
Regulations 1988 or any amendment or re-enactment thereof; or
17.5.2 the rights, powers, duties and obligations of the
Director or the Secretary of State under the Act, any such
Licence as aforesaid or otherwise howsoever.
17.6 Each of the sub-clauses of this Clause 17 shall:
17.6.1 be construed as a separate and severable contract
term, and if one or more of such sub-clauses is held to be
invalid, unlawful or otherwise unenforceable the other or others
of such sub-clauses shall remain in full force and effect and
shall continue to bind the parties; and
17.6.2 survive termination of this Agreement.
17.7 Each Party acknowledges and agrees that the other Party
holds the benefit of sub-clauses 17.1 and 17.2 and 17.3 above for
itself and as trustee and agent for its officers, employees and
agents.
17.8 Each Party acknowledges and agrees that the provisions of
this Clause 17 have been the subject of discussion and
negotiation and are fair and reasonable having regard to the
circumstances as at the date hereof.
18. INTELLECTUAL PROPERTY
All Intellectual Property relating to the subject matter of
this Agreement conceived, originated, devised, developed or
created by a Party its officers employees, agents or consultants
during the currency of this Agreement shall vest in such Party as
the sole beneficial owner thereof save where the Parties agree in
writing otherwise.
19. FORCE MAJEURE
If either Party (the "Non-Performing Party") shall be unable
to carry out any of its obligations under this Agreement due to a
circumstance of Force Majeure this Agreement shall remain in
effect but save as otherwise provided herein the Non-Performing
Party's obligations hereunder shall be suspended without
liability for a period equal to the circumstance of Force Majeure
provided that:
(i) the Non-Performing Party gives the other Party prompt
notice describing the circumstances of Force Majeure, including
the nature of the occurrence, its expected duration and the
particular obligations affected by it, and thereafter furnishes
regular reports with respect thereto during the period of Force
Majeure;
(ii) the suspension of performance is of no greater scope
and of no longer duration than is required by the Force Majeure;
(iii) no liabilities of either Party that arose before the
Force Majeure causing the suspension of performance are affected
as a result of the Force Majeure;
(iv) the Non-Performing Party uses all reasonable efforts to
remedy its inability to perform; and
(v) as soon as practicable after the event which
constitutes Force Majeure the Parties shall discuss how best to
continue their operations so far as possible in accordance with
this Agreement.
20. WAIVER
No delay or omission of NGC or the PES in exercising any
right, power, privilege or remedy under this Agreement shall
operate to impair such right, power, privilege or remedy or be
construed as a waiver thereof. Any single or partial exercise of
any such right, power, privilege or remedy shall not preclude any
other or future exercise thereof or the exercise of any other
right, power, privilege or remedy.
21. NOTICES
21.1 Any notice or other communication to be given by one party
to the other under, or in connection with the matters
contemplated by, this Agreement shall be addressed to the
recipient and sent to the address, telex number or facsimile
number of such other Party given in Schedule 7 and marked for the
attention of the person so given or to such other address, telex
number and/or facsimile number and/or marked for such other
attention as such other Party may from time to time specify by
notice given in accordance with this Clause 21 to the Party
giving the relevant notice or other communication to it.
21.2 Any notice or other communication to be given by one Party
to the other Party under, or in connection with the matters
contemplated by, this Agreement shall be in writing and shall be
given by letter delivered by hand or sent by first class prepaid
post (airmail if overseas) or telex or facsimile, and shall be
deemed to have been received:
21.2.1 in the case of delivery by hand, when delivered;
or
21.2.2 in the case of first class prepaid post, on the
second day following the day of posting or (if sent from
overseas) on the fifth day following the day of posting; or
21.2.3 in the case of telex, on the transmission of the
automatic answerback of the addressee (where such transmission
occurs before 1700 hours on the day of transmission) and in any
other case on the day following the day of transmission; or
21.2.4 in the case of facsimile, on acknowledgement by
the addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement.
22. VARIATIONS
The provisions of Schedules 4 and 5 may be varied from time
to time by written memorandum referring to this Clause 22 and
signed by an authorised officer of each of the Parties. Subject
thereto no variations to this Agreement shall be effective unless
made by way of supplemental deed.
23. OVERRIDING PROVISIONS
23.1 In the event of any conflict between the obligations of a
successor to NGC or the PES hereunder and their obligations under
the NGC Transmission Licence and PES Licence, the Act, any
direction of the Secretary of State for Energy, the Director or
ruling of the Monopolies and Mergers Commission, the Grid Code,
under any Connection Agreement or under any Supplemental
Connection Agreement relating to any of the PES's Assets, the
direction of the Secretary of State for Energy, the Director or
ruling of the Monopolies and Mergers Commission shall prevail and
accordingly NGC and the PES respectively shall not be responsible
for any failure to perform their respective obligations hereunder
to the extent that any such failure is directly attributable to
proper compliance with such provisions, ruling or directions.
23.2 In the event of any inconsistency between the terms of this
Agreement and the terms of an agreement between NGC and Nuclear
Electric plc to take effect from 31st March 1990 relating to
access to or use of property or equipment affected by a Nuclear
Site Licence ("the Nuclear Site Licence Agreement") a copy of
which has been disclosed to the PES prior to the date hereof the
terms of the latter shall prevail.
23.3 The PES hereby covenants with NGC to comply with the
provisions of the Nuclear Site Licence Agreement in so far as it
affects the PES's Assets and the exercise by the PES of its
rights under this Agreement.
23.4 NGC hereby covenants with the PES to comply with the
provisions of the Nuclear Site Licence Agreement is so far as its
affects the NGC's Land and assets of the NGC thereon.
24. ASSIGNMENT AND SUB-CONTRACTING
24.1 The PES shall not assign or otherwise deal (in whole or in
part) with its rights hereunder save that the PES may with the
prior written consent of NGC such consent not to be unreasonably
withheld:
24.1.1 charge the rights as a whole;
24.1.2 assign the rights as a whole to a person holding a
Licence granted pursuant to Section 6(1)(c) or 6(2) of the Act or
to a company of which the PES holds beneficially the whole of the
issued share capital or which holds the whole of the issued share
capital of the PES;
24.1.3 assign the rights as a whole to an assignee which
is contemporaneously acquiring a substantial part of the
undertaking of the PES in connection with the distribution of
electricity.
24.2 Each Party shall have the right to sub-contract or delegate
the performance of any of its obligations or duties arising under
this Agreement without the consent of the other. The sub-
contracting by either Party of the performance of any obligations
or duties under this Agreement shall not relieve such Party from
the liability for performance of such obligations or duty.
25. ILLEGALITY AND PARTIAL INVALIDITY
25.1 If at any time any provision of this Agreement should become
or be declared unlawful, invalid, illegal or unenforceable in any
respect under the lay of any jurisdiction, neither the validity,
legality or enforceability of the remaining provisions nor the
validity, legality or enforceability of such provision under the
law of any other jurisdiction shall be affected.
25.2 If any part of a provision of this Agreement is or becomes
or is declared invalid, unlawful, illegal or enforceable but the
rest of such provision would remain valid, lawful or enforceable
if part of the wording were deleted the provision shall apply
with such modifications as may be necessary to make it valid,
lawful, enforceable and effective but without affecting the
meaning of legality, validity or enforceability of any other
provision of this Agreement.
26. TERM AND TERMINATION
This Agreement shall continue until non of the PES's Assets
are on any part of NGC's Land and no Common Assets or Services
are shared by or provided to the PES pursuant to this Agreement.
27. AGREEMENT AS TO ASSETS, SERVICES AND COMMON ASSETS
27.1 The Parties shall within twelve months of the date hereof
agree on the following:
27.1.1 The PES's Assets which are actually on NGC's Land
as at the date hereof; and
27.1.2 The Services and Common Assets which are on NGC's
Land and are required by the PES as at the date hereof;
27.1.3 The Lines and Cables belonging to the PES and the
routes thereof which are on and/or under NGC's Land as at the
date hereof.
27.1.4 In respect of the Services agreed upon pursuant to
the preceding sub-clause of the kind specified in Part 2 of
Schedule 5 details of the level of quality or quantity of such
Service as at the date hereof.
27.2 If the Parties fail to agree any of the matters referred to
in this Clause either may refer the same for resolution in
accordance with Clause 13 at any time after a disagreement
arises.
28. REGISTRATION AND MEMORANDUM
28.1 Where any or all of NGC's Land is registered or NGC's
interest therein is subject to compulsory registration at HM Land
Registry NGC agrees to apply to the Chief Land Registrar for the
registration as appropriate of the rights and obligations granted
by or contained in this Agreement and further agrees to place on
deposit at HM Land Registry all relevant Land or Charge
Certificates to enable such registration to be effected as and
when such Land or Charge Certificate are available.
28.2 Where any of NGC's Land is not so registered or subject to
compulsory registration, NGC is entitled to procure within six
months of the date hereof that a memorandum of this agreement is
endorsed on or otherwise securely attached to the most recent
conveyance (in the case of a freehold interest) or the lease
under or pursuant to which NGC holds NGC's land.
29. ENTIRE AGREEMENT
29.1 This Agreement contains or expressly refers to the entire
agreement between the Parties with respect to the subject-matter
hereof, and expressly excludes any warranty, condition or other
undertaking implied at law or by custom, and supersedes all
previous agreements and understandings between the Parties with
respect thereto and each of the Parties acknowledges and confirm
that it does not enter into this Agreement in reliance on any
representation, warranty or other undertaking not fully reflected
in the terms of this Agreement.
29.2 The Parties acknowledge that each of them may have entered
or may enter into agreements with any generating company (as
defined in the Act) containing similar rights and/or liabilities
to those contained in this Agreement affecting the PES's Assets
NGC's Land and any assets thereon. The Parties shall, when
entering into such agreement with any of the said generating
companies, use reasonable endeavours to avoid conflicts between
the provisions thereof and the provisions of this Agreement but
in the event of any conflict the Parties shall procure that
appropriate arrangements are made to settle the same to give full
effect (so far as practicable) to the rights and liabilities
under this Agreement and under such other agreements as
aforesaid. Where relevant the provisions of Clause 8.3 shall
apply. In the event of any dispute with in accordance with
Clause 13.
IN WITNESS whereof this Agreement has been entered into under the
seal the day and year first above written.
<PAGE>
SCHEDULE 1
The PES's Assets On NGC's Land
Assets of the following kinds:
(a) HV Apparatus including/comprising busbar isolators, circuit
breaker, earth switch, current transformer, voltage transformer;
(b) Termination Apparatus including/comprising overhead
connection tension insulators and downdroppers/HV cable and
sealing ends;
(c) Protection, control and alarm apparatus (including
associated panels and multicore cabling);
(d) Intertrip apparatus;
(e) Standby diesels;
(f) Connection to compressed air and oil installations;
(g) Section of water washing installations;
(h) Spares excluding Strategic Spares;
(i) Metering equipment;
(j) Aerials;
(k) MV supply cables and apparatus;
(l) Batteries and associated apparatus;
(m) Telecommunications apparatus;
(n) Cathodic protection.
To the extent not included as part of such assets the same shall
be deemed to include all control and auxiliary cables and
associated terminations pipes and ducts and other auxiliary
equipment exclusively serving the same.
<PAGE>
SCHEDULE 2
NGC's Land
[Site Address]
<PAGE>
SCHEDULE 3
Security Details (Cl 4)
Part 1
1. NGC Land
Security of NGC Site Compounds will be maintained in
accordance with the Electricity Supply Regulations 1988. All
buildings not enclosed within a site compound fence will be
securely locked to restrict unauthorised access. A local
management instruction will apply to the issue of security keys.
Part 2
Plant MV LV Apparatus Safety Co-ordination Procedures (Cl 4.5)
1. In this Schedule:
"Apparatus" means all equipment in which
electrical conductors are used, supported or of which they may
form a part;
"Connection Site" shall have the meaning given to it
in the Grid Code;
"Existing Rules" means the rules, procedures or
current arrangements for and relating to safety co-ordination
across boundaries (to permit work to or testing on the System of
one of the Parties which, for this to be done safely, requires
isolation and/or other precautions on Plant and/or MG and/or LV
Apparatus whether at, adjacent to or remote from the location of
the work or testing) which are in force followed or complied with
at NGC's Land at the date of this Agreement;
"Low Voltage" or "LV" means a voltage not exceeding 250
volts;
"Medium Voltage" or
"MV" means a voltage exceeding 250 volts but
not exceeding 650 volts;
"Plant" means fixed and moveable items used in
the generation and/or supply and/or transmission and/or
distribution of electricity, other than Apparatus.
2. The Parties will continue to comply with the Existing Rules
pending any agreed modifications thereto.
3. The Parties will arrange for the Existing Rules (if not
already in writing) to be written down and, in any event, to be
agreed between the person or persons responsible on behalf of the
relevant Parties for the co-ordination of safety at each
Connection Site(s).
<PAGE>
SCHEDULE 4
Common Assets (Cl 9.1)
Part 1
(a) Batteries
(b) Earthing Systems
(c) Telemetering Equipment
(d) Connections to insulating oil and SF6 gas installations
(e) Miscellaneous MV/LV cabling
Part 2
(a) Communicating Equipment (excepting Telemetering Equipment)
(b) Site Lighting
<PAGE>
SCHEDULE 5
Shared Services (Cl 9.2)
Part 1
(a) AC and DC electrical supplies
(b) Compressed air for switchgear operation
(c) Water supplies
(d) Insulating Oil
(e) Fire fighting systems and use of adjacent fire hydrants
(f) Use of system for transporting insulating oil
(g) Use of system for transporting Sulphur hexafluoride
Part 2
(a) Toilet facilities
(b) Canteen facilities
(c) Public telephones
(d) Cranes and lifting equipment
(e) Security alarm systems
<PAGE>
SCHEDULE 6
Charges For The Provision Of Services
The charges to be made by NGC for the supply of Insulating Oil
shall be a proper charge having regard to the quantity of the
supply which charge shall be agreed locally from time to time.
<PAGE>
SCHEDULE 7
Addresses, Fax Nos, etc (Cl 21)
Exhibit 10.06
25 OCTOBER 1995
EASTERN GROUP plc
EAST MIDLANDS ELECTRICITY plc
LONDON ELECTRICITY plc
MANWEB plc
MIDLANDS ELECTRICITY plc
NORTHERN ELECTRIC plc
NORWEB plc
SEEBOARD plc
SOUTHERN ELECTRIC plc
SOUTH WALES ELECTRICITY plc
SOUTH WESTERN ELECTRICITY plc
YORKSHIRE ELECTRICITY GROUP plc
THE NATIONAL GRID HOLDING plc
THE NATIONAL GRID COMPANY plc
_____________________________________________
MASTER AGREEMENT
______________________________________________
Herbert Smith
Exchange House
Primrose Street
London
EC2A 2HS
Ref: 223/C267/30438764
<PAGE>
CONTENTS
CLAUSE
1. Definitions and Interpretation 4
2. Conditions 6
3. NGH EGM 6
4. NGC Written Resolutions 7
5. The Memorandum of Understanding 7
6. PSB Demerger 7
7. The Special Dividends 7
8. The Rights Issue 8
9. Application for Listing 9
10. The REC Review Committee 10
11. Publication of REC Circulars 10
12. The Specie Dividends 11
13. Flotation not effective 11
14. Customer Discount 12
15. Other Undertakings by the RECs 12
16. Cost Sharing 13
17. Waiver 13
18. Announcements 13
19. NGC Option Schemes 14
20. Variations 14
21. Good Faith 15
22. Force Majeure 15
23. Notices 16
24. RTPA 18
25. Governing Lad and jurisdiction 18
SCHEDULES
I. The Memorandum of Understanding
II. The Timetable
III. The NGG Memorandum and Articles
IV. The NGH EGM Circular and The NGH EGM Notice
V. The NGC Written Resolutions
VI. The Listing Particulars
VII. The Summary Particulars
VIII. The Rights Issue Circular
IX. The NGH announcement and the pro forma REC announcement
X. The Customer Discount
XI. Pro-forma notice of extraordinary general meeting for REC
circulars
XII. Procedure and formula for option adjustments
XIII. Distributing RECs
XIV. NGC contribution to advisers' fees
XV. Pumped storage asset acquisition agreement
<PAGE>
THIS MASTER AGREEMENT is made on 25 October 1995
BETWEEN
A. Each of:
EASTERN GROUP plc whose registered office is Wherstead Park. P O
Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ
EAST MIDLANDS ELECTRICITY plc whose registered office is 398
Coppice Road, Arnold, Nottingham NG5 7HX
LONDON ELECTRICITY plc whose registered office is Templar House,
81-87 High Holbom, London WC1V 6NU
MANWEB plc whose registered office is Sealand Road, Chester, CH1
4LR
MIDLANDS ELECTRICITY plc whose registered office is Mucklow Hill,
Halesowen, West Midlands, B62 8BP
NORTHERN ELECTRIC plc whose registered office is Carliol House,
Market Street, Newcastle Upon Tyne NE1 6NE
NORWEB plc whose registered office is Talbot Road, Manchester, M16
OHQ
SEEBOARD plc whose registered office is Forest Gate, Brighton Road,
Crawley, West Sussex, RH1l 9BH
SOUTHERN ELECTRIC plc whose registered office is Southern Electric
House, Westacott Way, Littlewick Green. Maidenhead, Berkshire SL6
3QB
SOUTH WALES ELECTRICITY plc whose registered office is Newport
Road, St. Mellons, Cardiff CF3 9XW
SOUTH WESTERN ELECTRICITY plc whose registered office is 800 Park
Avenue, Aztec West, Almondsbury, Bristol BS12 4SE
YORKSHIRE ELECTRICITY GROUP plc whose registered office is Wetherby
Road, Scarcroft, Leeds LS14 3HS
collectively the "RECS" and each a "REC")
AND
B. THE NATIONAL GRID HOLDING plc whose registered office is 185
Park Street, London SE1 9DU ("NGH")
AND
C. THE NATIONAL GRID COMPANY plc whose registered office is Kirby
Corner Road, Coventry CV4 8JY ("NGC")
WHEREAS
A. The parties have agreed the terms on which a listing of NGH on
the London Stock Exchange will be sought.
B. Prior to such listing, certain changes to the capital
structure of NGH will be effected.
C. Prior to such listing the PSB Demerger (as defined below) will
be effected.
THE PARTIES HEREBY AGREE as follows:
1. Definitions and Interpretation
1.1 In this Agreement, unless the context otherwise requires, the
following words and expressions bear the meanings respectively set
out below:
the "Act" the Companies Act 1985 (as
amended prior to the date
hereof).
the "Announcement" means the public announcement to
be made by NGH and NGC in the
form set out in Schedule IX.
the "Customer Discount" means the reduction in future
electricity charges by the RECs
to Eligible Customers (as
defined in Schedule X) on the
basis set out in Schedule X.
"Distributing RECs" means the RECs listed in
Schedule XIII.
the "Flotation" means the admission of the
ordinary shares of NGH (issued
and to be issued) to the
official list of the London
Stock Exchange and, where the
context so allows, shall mean
such admission becoming
effective in accordance with the
Listing Rules of the London
Stock Exchange.
"Kleinwort Benson" means Kleinwort Benson Limited,
sponsor to the Flotation.
the "Listing Particulars" means the document of record to
be issued in connection with the
Flotation pursuant to the
Listing Rules of the London
Stock Exchange, proof 15: 17
l0.95 of which is set out in
Schedule VI.
"The London Stock Exchange" means the International Stock
Exchange of the United Kingdom
and the Republic of Ireland
Limited.
the "Long Stop Date" means 31 January 1996.
"Memorandum of Understanding" means the document to be entered
into following the NGH EGM . in
the form set out in Schedule I
(or such other form as shall be
agreed between the parties).
"NGC Board" means the board of directors of
NGC from time to time.
"NGC Interim Dividend" means an interim dividend of
pounds 70 million to be paid by
NGC to NGH on 4 December 1995.
"NGC Special Dividend" means an interim dividend of
pounds 1,111 million to be paid
by NGC to NGH on 4 December
1995.
"NGC Written Resolutions" means the resolutions in writing
of NGC, in the form set out in
Schedule V.
the "NGG Memorandum and NGG means the Memorandum of
Articles" Association and Articles of
Association of NGH respectively,
which will be adopted upon
Flotation, in the form set out
in Schedule III.
"NGH Board" means the board of directors of
NGH from time to time or. where
the context so permits, a duly
authorised committee thereof.
"NGH EGM" means the extraordinary general
meeting of NGH to be convened by
the NGH EGM Notice.
"NGH EGM Circular" means the document to be
circulated to NGH shareholders
in the form set out in Schedule
IV.
"NGH EGM Notice" means the notice to convene the
NGH EGM which is to form part of
the NGH EGM Circular.
"NGH Interim Dividend" means an interim dividend of
pounds 70 million to be paid by
NGH to its ordinary shareholders
on the register on 21 November
1995.
"NGH Rights Dividend" means an interim dividend of
pounds 66 million (assuming that
the rights offer of the NGH
Rights Shares is fully takenup)
to be paid by NGH to the persons
who are issued the NGH Rights
Shares
"NGH Rights Shares" means new ordinary shares of 10p
each in NGH carrying the
exclusive right to receive the
NGH Rights Dividend to be
offered by way of rights on the
basis set out in the Rights
Issue Circular.
"NGH Second Dividend" means a second interim dividend
of pounds 172.5 million to be
paid by NGH to the persons who
are issued the Special Bonus
Shares immediately following
payment of the NGH Special
Dividend.
"NGH Special Dividend" means an interim dividend of
pounds 872.5 million to be paid
by NGH to the persons who are
issued the Special Bonus Shares.
"PSB Demerger" has the meaning ascribed to it
in the proof of the NGH EGM
Circular set out in Schedule IV.
"REC Circular" means the circular which will be
posted by each of the
Distributing RECs to its own
shareholders on 22, November
1995 containing a notice of
extraordinary general meeting.
the "REC Oversight Comndttee" means the committee to be
established pursuant to Clause 3
of the Memorandum of
Understanding.
the "REC Review Committee" means the committee described in
Clause 10.
the "Rights Issue Circular" means the document (including an
application form) which,
together with the Listing
Particulars, will be posted to
NGH shareholders on 22 November
1995, proof 2 of which is set
out in Schedule VIII.
the "Special Bonus Issue" has the meaning ascribed to it
in the proof of the NGH EGM
Circular set out in Schedule IV.
the "Special Bonus Shares" have the meaning ascribed to
them in the proof of the NGH EGM
Circular set out in Schedule IV.
the "Special Shareholder" means the holder of the special
rights redeemable preference
share of pounds 1 in each of NGH
and NGC.
the "Summary Particulars" means the document to be
published by NGH, proof 10 of
which is set out in Schedule
VII.
the "Timetable" means the timetable set out in
Schedule II.
1.2 Unless the context otherwise requires:
(A) any reference in this Agreement to a Clause, Sub-clause or
Schedule is to a clause, sub-clause or schedule, as the case may
be, of or to this Agreement;
(B) this Agreement includes the Schedules; and
(C) the singular shall be deemed to include the plural and vice
versa.
1.3 The headings in this Agreement are for ease of reference only
and shall not affect the construction of this Agreement.
2. Conditions
This Agreement is conditional upon, and shall not be effective
until
(a) the Special Shareholder gives (or, subject to each of the
parties to this Agreement being satisfied with the forth thereof,
indicates that he will give) his unconditional prior written
consent to the passing of the NGC Written Resolutions and the
resolutions set out in the NGH EGM Notice;
(b) the Special Shareholder issues, (or subject to each of the
parties to this Agreement being satisfied with the form thereof,
indicates that he will issue) a notice to NGC requiring NGC to
redeem the special rights redeemable preference share of pounds 1
in NGC conditionally upon Flotation.
3. NGH EGM
3.1 NGH shall convene the NGH EGM for 11 a.m. on 17 November 1995
by means of despatching the NGH EGM Circular.
3.2 Each REC undertakes to each of the other RECs and to NGC and
NGH to vote in favour of each of the resolutions to be set out in
the NGH EGM Notice. The NGG Memorandum and NGG Articles referred to
in resolution 9 thereof shall be in the form set out in Schedule
III.
3.3 Each REC and NGH agrees that it will not seek to amend any of
the resolutions to be set out in the NGH EGM Notice without the
prior written consent of NGC and of the Special Shareholder.
4. NGC Written
Each of NGH and Midlands Electricity plc undertake to the other
RECs and to NGC to sign the NGC Written Resolutions prior to the
NGH EGM.
5. The Memorandum of Understanding
5.1 NGH will, conditionally upon the resolutions set out in.the
NGH EGM Notice and the NGC Written Resolutions having been passed
(without amendment). execute the Memorandum of Understanding as
soon as practicable following the NGH EGM and prior to the
publication of the Listing Particulars.
5.2 Each of the RECs will execute the Memorandum of Understanding
as soon as practicable following the NGH EGM and prior to the
publication of the Listing Particulars.
5.3 On or prior to the execution of the Memorandum of
Understanding, NGC will procure that each member of the NGC Board
who is to join the NGH Board will confirm in writing that, if the
Flotation does not become effective before the Long Stop Date, he
will resign without compensation from the NGH Board on request by
the REC Oversight Committee.
6. PSB Demerger
6.1 Each of the parties undertakes to each of the other parties,
conditionally upon the resolutions set out in the NGH EGM Notice
and the NGC Written Resolutions having been passed (without
amendment) and subject to Sub-clauses 6.4 and 22.3, to take all
steps within its power to ensure that the PSB Demerger is effected
prior to Flotation in accordance with the procedure set out in
Appendix I of the NGH EGM Circular.
6.2 The RECs' share of the NGH dividend forming part of the PSB
Demerger shall be paid inside the existing consortium elections
made by NGH and each of the RECs.
6.3 Without limitation to the generality of its obligations under
Sub-clause 6.1 and conditionally as set out in that Sub-clause, NGC
undertakes to NGH and to the RECs to enter into an agreement for
the sale of its pumped storage business to First Hydro Limited in
the form set out in Schedule XV, subject only to such amendments as
are made pursuant to Sub-clause 6.4 and to such other filial
amendments as may be agreed between NGC and each of the RECs.
6.4 It is acknowledged and agreed by all the parties that the PSB
Demerger is to be effected so as to ensure that NGC shall continue
to be able to fulfil its duties under the North Wales Hydro-
Electric Power Acts of 1955 and 1973 and that First Hydro will
contract to perform these on NGC's behalf and that NGC and NGH will
agree the necessary documentation and/or amendments to the
agreement referred to in Subclause 6.3 by 7 November 1995 to give
effect to the above acknowledgment and agreement.
7. The Special Dividends
7.1 NGC undertakes to each of the RECs and to NGH, conditionally
upon the resolutions set out in the NGH EGM Notice and the NGC
Written Resolutions having been passed (without amendment) and
subject to Subclause 22.3:
(a) to file interim accounts complying with section 272 of the Act
which interim accounts shall show profits available for
distribution of not less than pound 1759 million (including special
reserves) or, if such accounts provide for payment of one or more
of the dividend forming part of the PSB Demerger. the NGC Interim
Dividend and the NGC Special Dividend, shall show profits available
for distribution of not less than pound 1759 million (including
special reserves) less the amounts provided in respect of such
dividends; and
(b) to pay the NGG interim Dividend and the NGC Special Dividend
7.2 NGH undertakes to each of the RECs, conditionally upon the
passing (without amendment) at the NGH EGM of all of the
resolutions set out in the NGH EGM Notice and subject to Sub-clause
22.3:
(a) to effect the Special Bonus Issue;
(b) to file interim accounts complying with section 272 of the Act
which interim accounts shall provide for one or more of the
dividend forming part of the PSB Demerger, the NGH Interim
Dividend, the NGH Special Dividend, :he NGH Second Dividend and the
NGH Rights Dividend or, to the extent not so provided, show that
NGH has profits available for distribution at least equal to the
amount of the dividends to be paid prior to payment thereof;
(c) to give notice to the Inland Revenue (pursuant to section 247
(3) of the Income and Corporation Taxes Act 1988), following
payment of the relevant dividends. that all but the RECs' share of
the dividend forming part of the PSB Demerger. the NGH Rights
Dividend and of the NGH Second Dividend will be paid outside the
existing consortium elections made by NGH and each of the RECs;
(d) to pay the NGH Interim Dividend on 4 December 1995;
(e) to pay the NGH Special Dividend on 4 December 1995;
(f) to pay the NGH Second Dividend immediately following payment
of the NGH Special Dividend on 4 December 1995; and
(g) to pay the NGH Rights Dividend on 7 December 1995.
7.3 On request by a REC, NGH will pay that REC's share of the NGH
Interim Dividend, the NGH Special Dividend, the NGH Second Dividend
and the NGH Rights Dividend by CHAPS automated transfer to such REC
bank account as may be notified by the REC in such request.
8. The Rights Issue
8.1 NGH undertakes to each of the RECs conditionally upon all of
the resolutions set out in the NGH EGM Notice having been passed
(without amendment) at the NGH EGM and subject to Sub-clause 22.3:
(a) to effect a rights issue on the basis of one new ordinary
share of NGH for every I 9 existing ordinary shares held on
November [995 at pound 2.()4 per new share and that of such new
ordinary shares to be offered to any shareholder, 44.6 per cent.
will be NGH Rights Shares and 55.4 per cent. will be new ordinary
shares which do not carry an entitlement to the NGH Rights Dividend
t-Ordinary Shares") (save that the allocation of Ordinary Shares
and NGH Rights Shares amongst the RECs shall be as set out in the
NGH EGM Notice), in the manner set out in the Rights Issue
Circular;
(b) to post the Rights Issue Circular and the Listing Particulars
to each of the shareholders of NGH one 1995;
(c) to procure that each REC which complies with its obligations
under clause 8.3 shall have the interest for which it shoal have
subscribed pursuant to the Rights Issue entered on the register of
members of NGH on or before 7 December 1995.
8.2 Any changes to the proof of the Rights Issue Circular set out
in Schedule VIII which are material to the RECs (or any thereof)
shall require the prior approval of each of the RECs. Any other
changes shall require the prior approval (not to be unreasonably
withheld or delayed) of each of the RECs or of Herbert Smith acting
on behalf of all the RECs. Subject thereto, the final version of
the Rights Issue Circular shall be in the form approved by the NGH
Board.
8.3 Each REC undertakes to NGH and to NGC, conditionally upon
receipt by it of its entitlement under the NGH Interim Dividend,
the NGH Special Dividend and the NGH Second Dividend, that it will
take up its full entitlement to the rights for which it may
subscribe under the terms of the Rights Issue Circular and will
make payment, in cleared funds. to NGH in accordance with the
procedure set out in the application form attached to the Rights
Issue Circular on or before 5 December 1995.
8.4 NGH undertakes to NGC to subscribe for new ordinary shares in
NGC for a subscription price equal to the proceeds of the rights
issue contemplated in this Clause 8 as soon as practicable
following receipt by NGH of the proceeds of the rights issue.
8.5 Each REC shall accept for its own tax purposes that Section 29
of the Taxation of Chargeable Gains Act 1992 shall apply on a basis
consistent with that assumed for the calculation of the NGH Rights
Dividend payable to each REC.
9. Application for Listing
9.1 NGH undertakes to each of the RECs, conditionally upon all of
the resolutions set out in the NGH EGM Notice having been passed
(without amendment) at the NGH EGM and subject to Sub-clause ".3:
(a) to use all reasonable endeavours to effect the Flotation in
accordance with the Timetable;
(b) to use all reasonable endeavours to publish the Listing
Particulars and the Summary Particulars on 22 November 1995;
(c) that the Listing Particulars will continua declaration that
the directors of NGH accept responsibility for the information
contained in the Listing Particulars and that to the best of their
knowledge and belief (having taken all reasonable care to ensure
that such is the case) the information contained in the Listing
Particulars is in accordance with the facts and does not omit
anything likely to affect the import of such information;
(d) that the Summary Particulars will contain a statement that the
directors of NGH are satisfied that the Summary Particulars contain
a fair summary of the key information set out in the Listing
Particulars; and not, without the prior approval of each of the
RECs (which, in the case of the description referred to in (ii)
below, shall not be unreasonably withheld or delayed) to make any
material alteration or addition to (i) those sections of the
Listing Particulars or Summary Particulars which repeat or restate
information relating to the RECs or to the dividend policy or
dividend forecasts of NGH which is contained in the Announcement or
(ii) the description of the prospects of NGH and its subsidiaries
set out in the proof of the Listing Particulars forming Schedule
VI.
9.9 NGH additionally undertakes to each of the RECs that it will:
(a) notify the REC Review Committee at any other proposed
alteration to the Listing Particulars or the Summary Particulars
which may materially affect the content or import of any part of
either document (other than any such alteration which has been
approved under Sub-clause 9.l(e));
(b) consider any comments made by the REC Review Committee or any
REC relating to any such proposed alteration; and
(c) in the event that NGH is required to publish supplementary
listing particulars, so far as practicable consult with the REC
Review Committee regarding their contents and consider any comments
made by it.
9.3 NGC undertakes to provide all reasonable co-operation and
assistance to NGH in relation to its obligations under Sub-clauses
9.1 and 9.2.
10. The REC Review Committee.
10.1 The REC Review Committee shall consist of not less than three
members, each appointed by the unanimous agreement of the RECs. The
first members of the REC Review Committee shall be B. Townsend
(Midlands), E. Anstee (Eastern), A. Coleman (Yorkshire) and J.
Tebbs (East Midlands).
10.2 A member of the REC Review Committee may be removed from the
REC Review Committee only upon his resignation, by notice from the
REC by which he is (or was) employed in the event of such
employment terminating or notice of termination having been given
or by the unanimous agreement of the RECs. In such event a new
member of the REC Review Committee shall be appointed by the
unanimous agreement of the RECs. Any changes to the members of the
REC Review Committee shall be notified to NGH and NGC as soon as
practicable following such change.
10.3 Comments to be submitted by the REC Review Committee pursuant
to Sub-clause 9.2(b) on any proposed alteration to the Listing
Particulars or Summary Particulars or pursuant to Sub-clause 9.2(c)
on any supplementary listing particulars shall be signed by or on
behalf of a majority of the members of the REC Review Committee and
shall be returned to NGH within 2 business days of notification to
Kleinwort Benson of the relevant proposals or, if earlier, prior to
the deadline for printing the relevant document. If no comments
have been given within the applicable time limit, NGH can proceed
as though the relevant document was approved by the REC Review
Committee without continent.
11. Publication of REC Circulars
11.1 Each Distributing REC undertakes to each of the other RECs and
to NGH and NGC conditionally upon:
(i) the passing of all the resolutions set out in the NGH EGM
Notice at the NGH EGM;
(ii) the publication by NGH of the Listing Particulars and the
Summary Particulars as contemplated in Clause 9; and
(iii) not having been subject to a public takeover which has become
or been declared wholly unconditional prior to the date on which it
would otherwise have posted its REC Circular in accordance with
this Agreement;
(a) to post its REC Circular to its shareholders on 22 November
1995; and
(b) to convene an extraordinary general meeting for 10 am. on 8
December 1995.
11.2 Each Distributing REC undertakes to NGH and NGC that the
resolution shall be in substantially the form set out in Schedule
XI provided that the proportion of 25 per cent. in paragraph (i)
thereof shall be reduced to such lower percentage as may be agreed
by NGH with the London Stock Exchange as permissible in the context
of the Flotation. The final form of each such resolution shall be
approved by the Board of the relevant Distributing REC.
11.3 Each Distributing REC confirms that its board of directors has
resolved or will resolve (conditionally upon there having been no
relevant material change of circumstances between the date hereof
and the date of publication of the REC Circular) to recommend its
shareholders to vote in favour of the resolution to be proposed at
such extraordinary general meeting and that the REC Circular will
contain a statement to this effect.
11.4 Each Distributing REC shall give NGC the opportunity to review
prior to despatch those sections of its Circular which contain
information relating to NGH, NGC or the Flotation and will consider
any comments made thereon by NGC.
11.5 If a REC which is not a Distributing REC (and which does not
fall within Sub-clause 1l.l(iii) above) determines to declare and
pay a specie dividend of some or all of its holding of shares in
NGH to be effective on Flotation, the provisions of Sub-clauses
11.2 and 11.4 shall apply as it were named in this Agreement as a
Distributing REC. For the avoidance of doubt the foregoing
provisions of this Sub-Clause 11.5 shall not apply to a REC which
has been subject to a public takeover which has become or been
declared wholly unconditional prior to the date of this Agreement.
12. The Specie Dividends
Each Distributing REC undertakes to the other parties,
conditionally upon the resolution-to be proposed at its
extraordinary general meeting having been passed and having become
unconditional in accordance with its terms, that it will declare
and pay a specie dividend with the effect that not less than the
proportion of its holding of shares in NGH on Flotation set
opposite its name in Schedule XIV is distributed to its
shareholders.
13. Flotation not effective
In the event that the Flotation does not become effective before
the Long Stop Date:
(a) NGH undertakes to the RECs to convene an extraordinary general
meeting to take place within 95 days of the Long Stop Date at which
an ordinary resolution will be proposed which will provide that the
directors of NGH shall cease to be its directors and a new NGH
Board shall be appointed, consisting of 12 persons, each of whom
shall have been nominated by a different REC; and
(b) each of the RECs undertakes to notify NGH within 5 days of the
Long Stop Date of the identity of the person nominated by it to be
a director of NGH and to vote in favour of the resolutions referred
to in Sub-clause 1 3(a).
14. Customer Discount
Subject to Flotation becoming effective and to receipt of its share
of the NGH Interim Dividend, the NGH Special Dividend, the NGH
Second Dividend and the NGH Rights Dividend, each of the RECs
undertakes to each of the other RECs that it will grant the
Customer Discount in the manner set out in Schedule X: provided
that nothing in this Clause 14 shall prevent a REC from granting
the Customer Discount to customers who are not Eligible Customers
(as defined in Schedule X) as well as to Eligible Customers. If
Flotation has not become effective by 31st December 1995, the
Record Date for the purposes of Schedule X shall be 4 February
1996.
15. Other undertakings by the RECs
15.1 Each of the RECs undertakes to NGH that, save for any p
ermitted disposal, it has not made any decision to sell all or any
part of its holding of shares in NGH (where the context so allows,
as increased by the matters provided for in the NGH EGM Circular
and the Rights Issue Circular) on or prior to Flotation and that it
will not make any such decision prior to Flotation (or until the
date on which it becomes clear that Flotation cannot occur by the
Long Stop Date). For the avoidance of doubt, there shall be no
breach of this undertaking solely by reason of the provisions in
the NGG Articles to be adopted on Flotation.
15.2 For the purposes of Subclause 15.1, a permitted disposal shall
be:
(a) a dividend in specie of shares in NGH by a REC to its
shareholders becoming effective on or after Flotation;
(b) disposals forming part of arrangements to compensate holders
of options in the REC for the loss in value consequent upon any
such dividend in specie as is contemplated in Clause 12;
(c) the disposal of any aggregated fractional entitlements
following any such dividend in specie as is contemplated in Clause
12;
(d) intra-group transfers or sales (including, without limitation,
a dividend in specie) on or after Flotation;
(e) a disposal by Manweb plc (or any transferee thereof under (d)
above) pursuant to the undertaking to dispose of such shares given
by Scottish Power plc to the Secretary of State.
15.3 Each of the RECs confirms to NGH, NGC and to the other RECs
that the section headed "Intentions of the RECs" in the
Announcement contains a correct statement of its intentions as at
the date of this Agreement with regard to its shareholding in NGH.
Each of the RECs undertakes to inform Kleinwort Benson (on behalf
of NGH and NGC) as soon as is reasonably practicable of any change
in this intention prior to the date on which the Flotation becomes
effective.
15.4 Each of the RECs and NGH undertake to each other and to NGC
that they will not withdraw or revoke the existing consortium
elections so long as the same remain relevant to the payment of
dividends by NGH contemplated in this Agreement.
16. Cost Sharing
16.1 Save as otherwise set out in this Agreement (or as otherwise
agreed between the RECs in relation to cost sharing between the
RECs), the RECs and NGC shall each pay their own legal,
accountancy, printing, public relations, registrar's fees, postage
and other charges and expenses of and incidental to all matters
arising in relation to, or in preparation for. or in contemplation
of or incidental to, the Flotation and the matters contemplated by
this Agreement. The RECs and NGC confirm that NGH is not liable to
pay any such charges or expenses other than the charges and
expenses of Barclays Registrars attributable to NGH and, with
effect from their appointment taking effect, Lloyds Bank Registrars
and any costs associated with the NGH share dealing facility.
16.2 NGC undertakes to the RECs to pay to Eastem Group plc (on
behalf of the RECs) or to the adviser concerned the proportion (as
set out in column 2 of Schedule XIV opposite the name of the
relevant adviser set out in column I of that Schedule) of the fees
(including disbursements and value added tax) of each of the
advisers to the RECs whose names are set out in column 1 of
Schedule XIV arising in relation to, or in preparation for. or in
contemplation of or incidental to, the Flotation and the matters
contemplated by this Agreement.
16.3 Eastem Group pie shall provide to NGC copies of the relevant
invoices in relation to the fees to be shared pursuant to
Sub-clause 16.2. NGC's obligation to make payments in respect of
Ernst & Young's fees is subject to having first received evidence
reasonably satisfaction to it that such costs have been properly
incurred.
17. Waiver
Each REC hereby releases and discharges each other REC and the
directors and employees of such RECs from any and all actions,
proceedings, claims, demands or other liabilities whatsoever
relation to liabilities arising in connection with or out of the
preparation and approval of the L~stmg Particulars and Summary
Particulars.
18. Announcements
18.1 NGH undertakes to issue an announcement in the form set out in
Schedule Do as soon as practicable following the signature by all
parties of this Agreement. NGC shall be entitled to issue an
announcement in substantially similar terms to comply with its
obligations under the rules of the London Stock Exchange.
18.2 Each of the Distributing RECs undertakes to NGH and to the
other Distributing RECs that any announcement it makes following
the signature of this Agreement shall, insofar as it relates to the
Flotation or to the other matters provided for in this Agreement,
be based on the pro forma REC announcement set out in Schedule DC.
18.3 If any Distributing REC intends to make an announcement
following the signature of this Agreement which, insofar as it
relates to NGH. NGC, the Flotation or to the other matters
provided for in this Agreement. differs in any significant respect
from such pro forma, or if any REC which is not a Distributing REC
intends to make such an announcement, it shall consult with
Kleinwort Benson prior to the making of such announcement.
18.4 Each party will use all reasonable endeavours not to issue any
further public announcements or other public statement or
advertisement prior to Flotation which contains information
relating to NGH or NGC which is material to the Flotation or which
may be relevant to effecting Flotation within the Timetable without
first having consulted Kleinwort Benson.
18.5 In relation to any consultation with Kleinwort Benson pursuant
to Sub-clauses 18.3 and 18.4, the party obliged to so consult
shall, unless it shall consider that to do so would put it in
breach of any statutory or regulatory requirement binding upon it
or a member of its parent company's group, or in breach of the
requirements of the London Stock Exchange or of the City Code on
Takeovers and Mergers, comply with all reasonable requests from
Kleinwort Benson in relation to the contents, timing or
distribution of such announcement, statement or advertisement.
19. NGC Option Schemes
NGH undertakes to the RECs that it will seek to agree with the
Inland Revenue that the adjustments to be made to subsisting
options granted under the NGC savings related share option scheme
and the NGC executive share option scheme will be calculated on the
basis set out in Schedule XII. No adjustments will be made on
terms that would be materially more advantageous to the
optionholders than the terms contemplated in Schedule XII without
the prior approval of the NGH Board (if approved prior to the SIGH
EGM ~ or of the REC Oversight Committee (if approved after tit. NGH
EGM).
20. Variations
20.1 Save as set out in Sub-clauses 20.2, 20.3 arid 20.4,
variations to this Agreement shall not be effected save by means of
an instrument executed on behalf of all the parties.
20.2 Alterations to the Timetable may be effected by notice from
Kleinwort Benson provided that no such alteration has the effect of
altering the process described in Appendix I1 of the NGH EGM
Circular or of causing the Flotation to take place after the Long
Stop Date. In the event of any such alteration to the Timetable
dates specified elsewhere in this Agreement shall be deemed to be
amended to conform to such alteration.
20.3 Each of the RECs and SIGH authorises Herbert Smith to consent
on their behalf to minor changes or corrections to an' of the
documents of which drafts or proofs are set out in the Schedules.
20.4 The parties recognise that all cash dividends referred to in
this Agreement will be declared as an amount per share which will
be calculated, so far as is practicable, so as to result in the
total dividend paid being equal to the total amount for such
dividend specified in this Agreement. Any minor variation between
the actual total dividend paid and the total specified in this
Agreement as a result of rounding or as a result of calculating
such amount per share shall not constitute a variation of this
Agreement for the purposes of Sub-clause 20.1.
21. Good Faith
Each of the parties undertakes to each of the other parties to act
in good faith and to take all reasonable steps to ensure a
successful Flotation in accordance with the Timetable.
22. Force Majeure
22.1 If at any time prior to the publication of the Listing
Particulars, NGC becomes aware of any event or change in
circumstances (which was not known to the NGC Board at the date
hereof) which is so significant that it would, notwithstanding
compliance by NGC with its obligations pursuant to Clause 21,
prevent it from fulfilling or make it unlawful to fulfil any of its
obligations under this Agreement, it shall forthwith notify the
other parties of such circumstance. If no variation to this
Agreement (having regard to Clause 21 ) is agreed pursuant to
Sub-clause 20.1 within 5 business days of such notification NGC may
terminate this Agreement (subject to Sub-clause 22.5) by notice to
the other parties without further liability whatsoever to those
parties.
22.2 If at any time prior to the date on which the extraordinary
general meetings of the Distributing RECs are to be held (as
contemplated in Sub-clause 11.1(b)) there shall be announced by the
Government, Inland Revenue, Office of Electricity Regulation or
some other competent authority an actual or proposed change in the
legislative, regulatory or taxation treatment of the RECs generally
(an "Adverse Announcement"), which change may result in a
significant adverse financial consequence for the RECs, RECs
together holding a majority in number of the NGH shares may
terminate this Agreement (subject to Sub-clause 22.5) by notice to
the other parties within 10 business days of the Adverse
Announcement without further liability whatsoever to those parties.
Upon an Adverse Announcement NGC and NGH shall be entitled to defer
performance of any of their respective obligations under this
Agreement until they are satisfied that this Agreement will not be
terminated as a result of such Adverse Announcement.
22.3 The obligations of NGC under Sub-clauses 6 and 7.-and the
obligations of NGH under Sub-clauses 6, 7.2, 8.1 and 9.1(a) and (b)
(each such obligation being a "Relevant Obligation") shall be
conditions, upon each of the RECs having complied in all respects
material to the Flotation with the obligations undertaken by it
under this Agreement (insofar as the same fall to be performed
under the terms of this Agreement prior to the time of performance
of the Relevant Obligation). If such condition is not fulfilled at
the time otherwise provided for performance by NGC or NGH of a
Relevant Obligation. NGC or NGH (as the case may be) shall be
entitled without prejudice to any other rights it may have whether
under this Agreement or otherwise to waive the condition or (if
such default is capable of rectification without having a material
adverse effect on the Flotation) to require the REC in default to
rectify such default and. pending such rectification, to defer
performance of the Relevant Obligation. If such default is not
rectified within 3 business days of notification or, if earlier, by
21st January, 1996, or if the default is incapable of rectification
without a material adverse effect on Flotation, NGC or NGH (as the
case may be) may forthwith terminate this Agreement (subject to
Sub-clause 22.5) by notice to the other parties without further
liability whatsoever to those parties.
22.4 In the event that the Agreement is terminated pursuant to
Sub-clauses 22.1, 22.2 or 22.3 the Flotation shall not proceed and
the parties shall use all reasonable endeavours to agree the form
of each announcement to be issued in respect of such termination.
If the Agreement is terminated pursuant to Sub-clause 22.2, NGH
undertakes to the RECs to withdraw forthwith any application for
listing which may have been made.
22.5 The termination of this Agreement under Sub-clauses 22.1 22.2
or ".3 shall be without prejudice to the provisions of Clause 13
(Flotation not effective). Clause 16 (Cost Sharing) and Sub-clause
22.4, which shall continue to have effect and to any liability for
antecedent breaches.
22.6 In Sub-clause 22.1-, references to NGC shall include re
ferences to NGH with effect from the date on which the appointment
of the NGC Board to the NGH Board becomes effective.
23. Notices
23.1 Any notice required to be given under this Agreement may be
served personally or by prepaid registered or recorded delivery
letter or by telex or facsimile addressed to the relevant party at
its address stated on the first page of this Agreement and marked
for the attention of the person described alongside that party
below or at the relevant number set out below or at such other
address or number as it may have notified to the other for this
purpose:
Facsimile No.
EASTERN GROUP plc 01473 553002
For the attention of
The Company Secretary
EAST MIDLANDS ELECTRICITY plc 0115 967 0459
For the attention of
The Company Secretary
LONDON ELECTRICITY plc 01713313424
For the attention of
The Company Secretary
MANWEB pie 0!41 6364578
For the attention of
Ian Russell
MIDLANDS ELECTRICITY plc 0121423 1907
For the attention of
The Company Secretary
NORTHERN ELECTRIC pie 0191 210 9409
For the attention of
Valerie Giles
NORWEB plc 0161 875 7211
For the attention of
Peter Rothwell
SEEBOARD plc 01293 657 3~5
For the attention of
The Company Secretary
SOUTHERN ELECTRIC plc 01628 584 408
For the attention of
The Company Secretary
SOUTH WALES ELECTRICITY plc 01222 773 880
For the attention of
The Company Secretary
SOUTH WESTERN ELECTRICITY plc 01454 617 702
For the attention of
The Company Secretary
YORKSHIRE ELECTRICITY GROUP plc 0113 289 S926
For the attention of
Roger Dickinson
THE NATIONAL GRID HOLDING pie 0121 423 1907
For the attention of
Hugh Hamilton
)Notices given before
)Memorandum of Understanding
)takes effect
For the attention of 01203 423026
David Jones
)Notices given after
)Memorandum of Understanding
)takes effect
THE NATIONAL GRID COMPANY plc 01903 423096
For the attention of
David Jones
23.2 Any notice so given by letter shall be deemed to have been
served 48 hours after the same shall have been posted and any
notice given by facsimile shall be deemed to have been served upon
receipt of a facsimile receipt form indicating satisfactory receipt
by the receiving machine, and in proving such service it shall be
sufficient to prove, in the case of a letter, it was properly
addressed, and in the case of a facsimile by producing the relevant
facsimile receipt form.
23.3 Any notification to the REC Review Committee under Clause 9
shall be sent to Kleinwort Benson Limited, P O Box 560, 20
Fenchurch Street, London EC3P 3DB (fax no. 0171 929 2676) for the
attention of Andrew Smith-Maxwell/Rita Theil.
24. RTPA
To the extent that any provision of this Agreement, or of any other
arrangement of which it forms part, is a restriction or information
provision for the purposes of the Restrictive Trade Practices Act
1976 ("RTPA") by virtue of which this Agreement or any such
agreement is registrable under the RTPA, no such restriction or
provision shall take effect until the day after particulars of this
Agreement or, as the case may be, that arrangement, have been
furnished to the Director General of Fair Trading in accordance
with the RTPA.
25. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance
with, English law and the High Court of Justice in England shall
have exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
It
THIS AGREEMENT has been signed by the duly authorised
representatives of the parties the day and year first before
written.
Signed by John Delaney )
for and on behalf of )
EASTERN GROUP plc )
Signed by ROBERT DAVIES )
for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by ALAN TOWERS )
for and on behalf of )
LONDON ELECTRICITY plc )
Signed by IAN RUSSELL )
for and on behalf of )
MANWEB plc )
Signed by PETER CHAPMAN )
for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by JOHN EDWARDS )
for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by KENNETH HARVEY )
for and on behalf of )
NORWEB plc )
Signed by MICHAEL PAVIA )
for and on behalf of )
SEEBOARD plc )
Signed by HENRY CASLEY )
for and on behalf of )
SOUTHERN ELECTRIC plc )
Signed by WYNFORD EVANS )
for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by JOHN SEED )
for and on behalf of )
SOUTH WESTERN ELECTRICITY plc )
Signed by ROGER DICKINSON )
for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
Signed by K. G. Harvey )
for and on behalf of THE )
NATIONAL GRID HOLDING plc )
Signed by D. H. Bones )
for and on behalf of )
THE NATIONAL GRID COMPANY plc )
<PAGE>
Exhibit 10.07
17th NOVEMBER 1995
THE NATIONAL GRID GROUP plc
EASTERN GROUP plc
EAST MIDLANDS ELECTRICITY plc
LONDON ELECTRICITY plc
MANWEB plc
MIDLANDS ELECTRICITY plc
NORTHERN ELECTRIC plc
NORWEB plc
SEEBOARD plc
SOUTHERN ELECTRIC plc
SOUTH WALES ELECTRICITY plc
SOUTH WESTERN ELECTRICITY plc
YORKSHIRE ELECTRICITY GROUP plc
______________________________________
MEMORANDUM OF UNDERSTANDING
_______________________________________
Herbert South
Exchange House
Primrose Street
London EC2A 2HS
Ref:223/C267/30438764
<PAGE>
THIS MEMORANDUM OF UNDERSTANDING is made the 17th of
1995
BETWEEN
A The National Grid Group plc (formerly The National Grid Holding
plc) ("EGG") whose registered office is at Kirby Corner Road,
Conentry CV4 8JY
AND
B Each of:
Eastern Group plc whose registered office is at Wherstead Park, P.O
Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ
East Midlands Electricity plc whose registered office is at 398
Coppice Road, Arnold, Nottingham NG5 7HX
London Electricity plc whose registered office is at Templar House,
81-87 High Holborn, London WClV 6NU
Manweb plc whose registered office is at Sealand Road, Chester, CH1
4LR
Midlands Electricity plc whose registered office is at Mucklow Hill,
Halesowen, West Midlands. B62 8BP
Northern Electric plc whose registered office is at Carliol House,
Market Street, Newcastle Upon Tyne. NE1 6NE
NORWEB plc whose registered office is at Talbot Road, Manchester, M16
0HQ
SEEBOARD plc whose registered office is at Forest Gate. Brighton
Road, Crawley, West Sussex RH 11 9BH
Southern Electric plc whose registered office is at Southern Electric
House, Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB
South Wales Electricity plc whose registered office is at Newport
Road, St. Melllons, Cardiff CF3 9XW
South Western Electricity plc whose registered office is at 800 Park
Avenue, Aztec West, Almondsbury, Bristol SB12 4SE
Yorkshire Electricity Group plc whose registered office is at
Wetherby Road, Scarcroft, Leeds, LS 14 3HS
(collectively the "RECs" and each a "REC")
WHEREAS
Following certain changes made at the NGH EGM to the Anicles of
Association of NGG and, effective upon execution of this Agreement,
to the board of directors of NGG. the parties have agreed that the
relationship between RECs (being the principal shareholders of NGG)
and NGG should be regulated in the period prior to Flotation.
NOW IT IS AGREED as follows:
1. Definitions and Interpretation
1.1 In this Agreement, unless the context otherwise requires, the
following words and expressions bear the meanings respectively set
out below:
the "EGMs" means the NGH EGM and the passing
of the NGC Written Resolutions.
"NGC" means The National Grid Company
plc.
the "Master Agreement" means the agreement of that name
dated 25th October 1995 between
each of the RECs, NGG and NGC.
the "REC Oversight Committee" means the committee established
pursuant to Clause 3.
the "Relevant Period" means the period commencing with
the execution of this Agreement
and terminating upon the earlier
of the Flotation or the
Termination Date.
the "Termination Date" means the date or. which
directors of 'GO cease to be
directors of NGG and
representatives of the RECs are
appointed in their place.
1.2 Unless the context otherwise requires:
(a) any reference in this Agreement to a Clause, Sub-clause or
Schedule is to a clause, sub-clause or schedule, as the case may be.
of or to this Agreement;
(b) capitalized terms which are not defined in Clause 1.1 shall have
the meanings ascribed to them in the Master Agreement; and
(c) the singular shall be deemed to include the plural and vice
versa.
1.3 The headings in this Agreement are for ease of reference only
and shall not affect the construction of this Agreement.
2. The Relevant Period
2.1 Save as set out in Clause 2.2 below, during the Relevant Period:
(a) NGG will not engage in any activity outside the ordinary course
of its business;
(b) no material contracts or commitments will be entered into by NGG
unless such contracts or commitments are conditional on Flotation;
(c) NGG shall procure that no matters relating to NGC (or its
subsidiaries) which prior to the EGMs would have required either
consultation with or the approval of the NGG Board pursuant to the
Articles of Association of either NGG or NGC which were in force
prior to the EGMs, will be carried out by NGC (or such subsidiaries);
without the prior approval of the REC Oversight Committee or, in the
case of matters falling within paragraph (c) above which would have
required consultation only with the NGG Board, consultation with the
REC Oversight Committee.
(i) The REC Oversight Committee shall not unreasonably delay in
giving or withholding its approval in any case.
(ii) In relation to any proposal or matter concermag the carrying on
of the National Grid Business (as defined in the articles of
association of NGC in the form in force prior to the EGMs) which
requires the approval of the REC Oversight Committee, such committee
shall not be entitled to withhold approval unless it has reasonable
grounds for believing that implementation is likely adversely to
affect the financial viability of NGC and/or EGG and if the REC
Oversight Committee does withhold approval it shall provide NGC and
NGG with a written statement giving details of the grounds for such
belief; and
(iii) In relation to any business or proposed business of NGC or NGG
or any subsidiary undertakings, other than National Grid Business,
the REC Oversight Committee shall be entitled to give or withhold
approval to such plans in whole or in part on any grounds it shall
think fit.
(iv) No consent of the REC Oversight Committee shall be required to
the planning and implementation of any Business Plan (as defined in
the articles of association of NGC in the form in force prior to the
EGMs) except as provided in this Agreemeno
2.2 The following matters may be carried out by NGG or NGC during
the Relevant Period without prior consultation with or the prior
approval of the REC Oversight Committee:
(a) matters expressly referred to in the Master Agreement or
otherwise necessary to effect Flotation;
(b) matters expressed to be, or whose effect is, conditional on
Flotation;
(c) arrangements for a low cost dealing facility for shareholders of
NGG after Flotation provided that such arrangements will be
conditional upon Flotation becoming effective and shall release NGG
from all obligations in respect thereof in the event that the
Flotation does not become effective; and
(d) arrangements for the establishment of an ADR programrne in
respect of NGG shares provided that such arrangements will be
conditional upon Flotation becoming effective and shall release NGG
from all obligations in respect thereof in the event that the
Flotation does not become effective.
3. The REC Oversight Committee
3.1 The REC Oversight Committee shall consist of up to 12 persons,
each appointed by a different REC and at the date hereof shall
consist of the members of the NGH Board at the date of the NGH EGM.
3.2 The Chairman of the REC Oversight Committee shall be Mr K Harvey
or failing him, that person appointed to the Committee by NORWEB plc
3.3 Any consultation with or request for the approval of the REC
Oversight Committee pursuant to Clause 2.1 or pursuant to any
provisions of the Master Agreement which expressly contemplate
approval by the REC Oversight Committee shall be made by notice in
writing to all members of the REC Oversight Committee in accordance w
ith Clause 6.
3.4 On receipt of such consultation or request the Chairman of the
REC Oversight Committee shall call a meeting of the committee by
notice to all its members and to the Chairman of NGG in accordance
with Clause 6 specifying the date, time and place of such meeting
which shall be within 7 days of receipt of the consultation or
request for approval provided that if Kleinwort Benson informs the
Chairman that it is necessary for a shorter notice period to apply
such meeting shall be called as soon as is practicable thereafter.
3.5 A meeting of the REC Oversight Committee will be quorate if 2
members are present in person, on the telephone or by other
telecommunication facility or by duly authorised representative. The
Chairman of NGG or his representative shall be entitled to be present
and to speak at the meeting, but not to vote.
3.6 Such meeting shall, by the votes of a majority of the committee
members so present, decide whether the approval is granted and shall
give notice to EGG in accordance with Clause 6 of its decision within
one business day of the close of the meeting. The Chairman shall not
have a second or casting vote. In the event of an equality of votes
approval shall not be given.
3.7 If no meeting of the REC Oversight Committee is held following a
valid request for approval within the time limit in Clause 3.4, or no
notice to EGG of its decision pursuant to Clause 3.6 is served
pursuant to Clause 6.2. NGC shall be entitled to proceed as though
such approval had been given.
4. Termination
This Agreement shall terminate (without prejudice to any liability
for any liability for antecedent breach) on the earlier of the
Flotation or the Termination Date.
5. Variations
Variations to this Agreement shall not be effected except by means of
an instrument executed on behalf of all the parties save that
alterations to the Timetable made pursuant to Clause 20.2 of the
Master Agreement shall have the effect of altering any relevant date
specified herein to confirm to the Timetable as so altered.
6. Notices
6.1 Any notice required to be given under this Agreement may be
served personally or by prepaid registered or recorded delivery
letter or by facsimile addressed to the relevant party at the address
stated on the first page of this Agreement and marked for the
attention of the person described alongside that party below or at
the relevant number set out below or at such other address or number
as it may have notified to the other for this purpose:
Party Facsimile No
THE NATIONAL GRID GROUP plc
for the attention of The Company
Secretary
EASTERN GROUP plc 01473 553002
for the attention of Tne Company
Secretary
EAST.MIDLANDS ELECTRICITY plc 0115 967 0459
for the attention of The Company
Secretary
LONDON ELECTRICITY plc 01713313424
for the attention of The Company
Secretary
MANWEB plc 0141 6364578
for the anention of Ian Russell
MIDLANDS ELECTRICITY plc 0121423 1907
for the attention of The Company
Secretary
NORTHERN ELECTRIC plc 0191210 2409
for the attention of Valerie
Giles
NORWEB plc 0161 875 7211
for the attention of Peter
Rothwell
SEEBOARD plc 01293 657 325
for the attention of The Company
Secretary
SOUTHERN ELECTRIC plc 01628 584 408
for the attention of The Company
Secretary
SOUTH WALES ELECTRICITY plc 01222 723 880
for the attention of The Company
Secretary
SOUTH WESTERN ELECTRICITY plc 01454 617702
for the attention of The Company
Secretary
YORKSHIRE ELECTRICITY GROUP plc 0113 289 5926
for the attention of Roger
Dickinson
6.2 Save in respect of a notice calling a meeting of the REC
Oversight Committee which shall, in addition to the following
provisions of this clause, only be deemed to have been duly served
upon production of evidence that such notice was acknowledged by its
recipient any notice so given by letter shall be deemed to have been
served 48 hours after the serve shall have been posted and any notice
given by facsimile shall be deemed to have been served upon receipt
of a facsimile receipt form indicating satisfactory receipt by the
receiving machine, and in proving such service it shall be sufficient
to prove, in the case of a letter, that it was properly addressed,
and in the case of a facsimile, by producing the relevant facsimile
receipt form.
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with
English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim dispute or difference
concerning this Agreement.
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by )
for and on behalf of THE NATIONAL )
GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by. and construed in accordance
with. English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by )
for and on behalf of THE NATIONAL )
GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by Robert John Davies for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance
with, English Law and the High Court of justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by )
for and on behalf of THE NATIONAL )
GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by AV Towers for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with
English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by
for and on behalf of THE NATIONAL
GRID GROUP plc
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by Ian Russell for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOAR:D plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by. and construed in accordance
with. English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by
for and on behalf of THE NATIONAL
GRID GROUP plc
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by. and construed in accordance
with. English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by
for and on behalf of THE NATIONAL
GRID GROUP plc
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance
with. English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by
for and on behalf of THE NATIONAL
GRID GROUP plc
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with
English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by )
for and on behalf of THE NATIONAL )
GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with
English Law and the High Court of Justice in England shall have
exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
THIS AGREEMENT has been signed by or on behalf of each of the parties
the day and year first before written
Signed by )
for and on behalf of THE NATIONAL )
GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by Henry Roberts
Casley for and on behalf of )
SOUTHERN ELECTRIC plc )
<PAGE>
Signed by for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by for and on behalf of )
SOUTH WESTERN ELECTRICITY plc )
Signed by for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
<PAGE>
Signed by for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by John Junior
Seed for and on behalf of )
SOUTH WESTERN ELECTRICITY plc )
Signed by for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
<PAGE>
Signed by for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by for and on behalf of )
SOUTH WESTERN ELECTRICITY plc )
Signed by R. Dickinson for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
Exhibt 12.01
Entergy London Investments plc
Computation of Ratios of Earnin to Fixed Charges
US GAAP basis
(Amounts in millions except ratio)
<TABLE>
<CAPTION>
For the year Six Months Ended
ended March 31, September 30, September 30,
1997 1997 1996 (a)
<S> <C> <C> <C>
Fixed charges, as defined:
Interest expense Pound 21 Pound 55 Pound 16
Interest applicable to rentals - 1 1
--------------- -------------- ------------
Total fixed charges, as defined 21 56 17
Earnings as defined:
Net Income 8 (96) 52
Add:
Provision for income taxes: 5 (36) 19
Fixed charges as above 21 56 17
--------------- -------------- ------------
Total earnings, as defined Pound 34 Pound (76) Pound 88
=============== =============== =============
Ratio of earnings to fixed
charges, as defined 1.62 (b) 5.18
=============== =============== ============
(a) Amounts are for Predecessor Company
(b) Earnings for the six months ended September 30, 1997 were not adequate to cover fixed charges by Pound 132 million.
</TABLE>
Entergy London Investments plc
Pro Forma Computation of Ratios of Earnings to Fixed Charges
US GAAP basis
(Amounts in millions except ratio)
For the year ended
March 31, 1997
Fixed charges, as defined:
Interest expense Pound 111
Interest applicable to rentals 2
------------------
Total fixed charges, as defined 113
Earnings as defined:
Net Income 16
Add:
Provision for income taxes: 8
Fixed charges as above 113
------------------
Total earnings, as defined Pound 137
==================
Ratio of earnings to fixed charges, as defined 1.21
==================
London Electricity plc
Computation of Ratios of Earnings to Fixed Charges
UK GAAP basis
(Amounts in millions except ratio)
<TABLE>
<CAPTION>
For the years ended March 31,
1993 1994 1995 1996
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt Pound 9 Pound 16 Pound 12 Pound 12
Interest on notes payable 2 2 2 5
Interest applicable to rentals 3 2 2 3
--------------- ------------- ------------- --------------
Total fixed charges, as defined 14 20 16 20
Earnings as defined:
Net Income 108 142 150 187
Add:
Provision for income taxes 38 45 23 89
Fixed charges as above 14 20 16 20
---------------- ------------- ------------- --------------
Total earnings, as defined Pound 160 Pound 207 Pound 189 Pound 296
================ ============= ============= ==============
Ratio of earnings to fixed
charges, as defined 11.4 10.4 11.8 14.8
================ ============= ============= ==============
</TABLE>
London Electricity plc
Computation of Ratios of Earnings to Fixed Charges
US GAAP basis
(Amounts in millions except ratio)
<TABLE>
<CAPTION>
For the year For the year For the period
ended March 31, ended March 31, April 1, 1996 to
1995 1996 January 31, 1997
--------------- --------------- ----------------
<S> <C> <C> <C>
Fixed charges, as defined:
Interest expense Pound 14 Pound 17 Pound 26
Interest applicable to rentals 2 3 2
--------------- ------------- --------------
Total fixed charges, as defined 16 20 28
Earnings as defined:
Net Income 121 459 62
Add:
Provision for income taxes 57 110 32
Fixed charges as above 16 20 28
--------------- ------------- --------------
Total earnings, as defined Pound 194 Pound 589 Pound 122
=============== ============= ==============
Ratio of earnings to fixed charges,
as defined 12.1 30.0 4.3
=============== ============= ==============
</TABLE>
EXHIBIT 21.01
SUBSIDIARIES OF
ENTERGY LONDON INVESTMENT PLC
London Electricity plc,
a public limited company incorporated under the laws of
England and Wales.
London Electricity Services Limited,
a company incorporated under the laws of England and Wales.
London Electricity Enterprises Limited,
a company incorporated under the laws of England and Wales.
London Power Company Limited,
a company incorporated under the laws of England and Wales.
Exhibit 25.01
=====================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
_______________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________
ENTERGY LONDON INVESTMENTS plc
(Exact name of obligor as specified in its charter)
England and Wales Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Templar House
81-87 High Holborn
London WC1V 6NU England
(Address of principal executive offices) (Zip code)
______________________
Junior Subordinated Deferrable
Interest Debentures
(Title of the indenture securities)
=====================================================================
<PAGE>
1. General information. Furnish the following information as to
the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ---------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank
of New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence business
and a grant of powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration Statement
No. 33-31019.)
6. The consent of the Trustee required by Section
321(b) of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the requirements of
its supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on
the 17th day of October, 1997.
THE BANK OF NEW YORK
By: /s/MARY JANE MORRISSEY
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
-----------
Total assets ......................... $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
----------
Total liabilities .................... 52,937,421
==========
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
------------
Total equity capital ................ 4,577,537
------------
Total liabilities and equity
capital ........................... $57,514,958
============
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions is
sued by the Board of Governors of the Federal Reserve System and is
true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
Alan R. Griffith )
J. Carter Bacot )
Thomas A. Renyi ) Directors
Exhibit 25.02
=========================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
_________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________
ENTERGY LONDON INVESTMENTS plc
(Exact name of obligor as specified in its charter)
England and Wales Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Templar House
81-87 High Holborn
London WC1V 6NU England
(Address of principal executive offices) (Zip code)
_______________________________________________________________
Guarantee of Preferred Securities
of Entergy London Capital, L.P.
(Title of the indenture securities)
<PAGE>
===============================================================
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ---------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect,
which contains the authority to commence business and a
grant of powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration Statement
No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit
4 to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 17th day of October, 1997.
THE BANK OF NEW YORK
By: /s/MARY JANE MORRISSEY
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
-----------
Total assets ......................... $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
----------
Total liabilities .................... 52,937,421
==========
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
------------
Total equity capital ................ 4,577,537
------------
Total liabilities and equity
capital ........................... $57,514,958
============
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions is
sued by the Board of Governors of the Federal Reserve System and is
true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
Alan R. Griffith )
J. Carter Bacot )
Thomas A. Renyi ) Directors
<TABLE> <S> <C>
<ARTICLE> UT
<RESTATED>
<CIK> 0001042730
<NAME> ENTERGY LONDON INVESTMENTS PLC
<SUBSIDIARY>
<NUMBER> 036
<NAME> ENTERGY LONDON INVESTMENTS PLC
<MULTIPLIER> 1,000,000
<CURRENCY> BRITISH POUNDS STERL
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1.6117
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,358
<OTHER-PROPERTY-AND-INVEST> 10
<TOTAL-CURRENT-ASSETS> 312
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 966
<TOTAL-ASSETS> 2,646
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 240
<RETAINED-EARNINGS> (88)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 152
0
0
<LONG-TERM-DEBT-NET> 1,228
<SHORT-TERM-NOTES> 3
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 45
<LONG-TERM-DEBT-CURRENT-PORT> 23
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,195
<TOT-CAPITALIZATION-AND-LIAB> 2,646
<GROSS-OPERATING-REVENUE> 548
<INCOME-TAX-EXPENSE> (36)
<OTHER-OPERATING-EXPENSES> 487
<TOTAL-OPERATING-EXPENSES> 487
<OPERATING-INCOME-LOSS> 61
<OTHER-INCOME-NET> (138)
<INCOME-BEFORE-INTEREST-EXPEN> 77
<TOTAL-INTEREST-EXPENSE> 55
<NET-INCOME> (96)
0
<EARNINGS-AVAILABLE-FOR-COMM> (96)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 8
<CASH-FLOW-OPERATIONS> 40
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
EXHIBIT 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 of
our reports dated July 31, 1997, on our audits of the financial statements and
financial statement schedules of Entergy London Investments plc (formerly
Entergy Power UK plc) and London Electricity plc. We also consent to the
reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
October 22, 1997
