<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1997
REGISTRATION NOS. 333-33331 AND 33331-01
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT
NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ENTERGY LONDON CAPITAL, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED
ENTERGY LONDON INVESTMENTS PLC IN PARTNERSHIP AGREEMENT)
(EXACT NAME OF REGISTRANT AS SPECIFIED
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
BARRINGTON HOUSE 40 WEST 57TH STREET
59-67 GRESHAM STREET NEW YORK, NEW YORK 10019
LONDON EC2V 7JA ENGLAND 212-603-2144
011-44-171-606-7080
(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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM AND CAPTION IN FORM S-1 CAPTION IN PROSPECTUS
---------------------------- ---------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front Outside Front Cover Page
Cover Page of Prospectus.....
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 Summary; Summary Financial Data; Risk
to Fixed Charges............. Factors
4. Use of Proceeds............... Use of Proceeds
5. Determination of Offering Not Applicable
Price........................
6. Dilution...................... Not Applicable
7. Selling Security Holders...... Not Applicable
8. Plan of Distribution.......... Underwriting
9. Description of Securities to Description of the Preferred Securities;
be Registered................ 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 Experts; Legal Opinions
Counsel......................
11. Information With Respect to Risk Factors; The Company; Capitalization;
the Registrant............... 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 Not Applicable
Liabilities..................
</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 3, 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 (the
"Indenture"), 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............ $25 (3) $25
Total............................. $300,000,000 (3) $300,000,000
</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 $ .
-----------
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 only in book-
entry form through the facilities of The Depository Trust Company ("DTC") in
New York, New York, on or about , 1997, against payment therefor in
immediately available funds.
- -----
*QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
-----------
The date of this Prospectus is , 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 , 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
, 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 the
occurrence and continuation of a Special Event (as defined herein), at the
2
<PAGE>
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 March 31, 1997, the
Company had approximately (Pounds)945 million ($1.54 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 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, asset 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 will publish 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 July 31,
1997 of $1.632 = (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 license (the "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 ($150 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 ($183 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 100kW. 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 100kW and above, both inside and
outside of London Electricity's Franchise Area, is 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
, 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 , 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 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 Power UK 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.......... (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> <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> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Property, plant and
equipment, net....... (Pounds) 701
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> <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>
<S> <C> <C> <C> <C>
<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>
PRO FORMA SIX MONTHS
PERIOD FROM INCEPTION FISCAL YEAR ENDED ENDED
(OCTOBER 9, 1996) TO MARCH 31, 1997 SEPTEMBER 30, 1997
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)(12)
----------------------- ----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
------------- -------- ------------- -------- -------------- -------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds) 234 $ 381 (Pounds)1,350 $ 2,203 (Pounds) $
Operating income...... 32 52 112 183
Interest expense, net. (13) (21) (93) (152)
Other, net............ (6) (10) 5 9
Provision for income
taxes................ (5) (7) (8) (13)
------------- -------- ------------- -------- -------------- -------
Net income............ (Pounds) 8 $ 14 (Pounds) 16 $ 27 (Pounds) $
============= ======== ============= ======== ============== =======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)(12)
----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11)
------------- -------- -------------- -------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Property, plant and
equipment, net....... (Pounds)1,266 $ 2,066 (Pounds) $
Total assets.......... 2,669 4,355
Total stockholder's
equity............... 248 405
Long-term debt........ 1,143 1,865
Short-term debt....... 162 264
<CAPTION>
SIX MONTHS
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR ENDED
(OCTOBER 9, 1996) TO ENDED MARCH 31, 1997 SEPTEMBER 30, 1997
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)(12)
----------------------- ----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
------------- -------- ------------- -------- -------------- -------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 34 $ 55 (Pounds) 135 $ 220 (Pounds) $
EBITDA(5)............. 42 69 215 351
Cash flow from
operations........... 64 104
Cash provided by (used
in) investing
activities........... (1,203.3) (1,963.8) (1,299.0) (2,120.0)
Cash provided by (used
in) financing
activities........... 1,164.6 1,900.6 1,167.9 1,906.0
Ratio of earnings to
fixed charges(7)..... 1.6 1.6 1.2 1.2
</TABLE>
15
<PAGE>
BUSINESS SEGMENTS
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR SIX MONTHS ENDED
OCTOBER 9, 1996 ENDED MARCH 31, 1997 SEPTEMBER 30, 1997
TO MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
------------------------------------------------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
-------------- ----------------------- ----------------------- -------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Electricity
distribution......... (Pounds) 61 $ 99 (Pounds) 336 $ 548 (Pounds) $
Electricity supply.... 213 347 1,265 2,065
Other................. 11 18 78 127
Intra-business(9)..... (51) (83) (329) (537)
-------------- ------- -------------- -------
Total............... (Pounds) 234 $ 381 (Pounds) 1,350 $ 2,203
============== ======= ============== =======
OPERATING INCOME:
Electricity
distribution......... (Pounds) 18 $ 29 (Pounds) 92 $ 150 (Pounds) $
Electricity supply.... 7 11 6 10
Other................. 7 12 14 23
-------------- ------- -------------- -------
Total............... (Pounds) 32 $ 52 (Pounds) 112 $ 183
============== ======= ============== =======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)
------------------------- ----------------------
(Pounds) $(11) (Pounds) $(11)
-------------- --------- -------------- -------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS(13):
Electricity
distribution......... (Pounds) 1,766 $ 2,882 (Pounds) $
Electricity supply.... 544 888
Other................. 359 585
-------------- -------
Total............... (Pounds)2,669 $ 4,355
============== =======
</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 July 31, 1997
of $1.632=(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) 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) million and (Pounds) 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 March 31, 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
69%. 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 revenue of the distribution business is controlled
by the Distribution Price Control Formula (as defined herein). The
Distribution Price Control Formula 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 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 in 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 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
17
<PAGE>
any future reviews by the Regulator will not result in additional price
reductions or that London 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
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 100kW ("Franchise Supply Customers").
However, the supply business is being progressively opened to 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 100kW ("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. The Regulator has indicated that some degree of
transitional price regulation will continue for smaller consumption customers
for a period of, initially, two years until an adequate level of competition
is established. This transitional price regulation, which is still in the
process of being developed and will require a number of license modifications,
is expected to eliminate the pass through of substantially all costs which are
currently passed through to supply customers, including purchased-power costs
from the Pool (as defined herein), thereby increasing the importance to London
Electricity of effective power purchasing and hedging activities. 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".
Regulatory Policies Affecting the Company's Capital Structure
Certain modifications to London Electricity's PES license proposed by the
Regulator 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 of 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. 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.
18
<PAGE>
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 to conclude with a
report to be issued at the end of 1997 as a basis for possible legislation.
The Company cannot predict the results of the Department of Trade and
Industry's review 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 a form of transitional
price regulation of electric supply sales to smaller consumption customers
which the Regulator has indicated will continue for an initial period of two
years effective April 1, 1998 until an adequate level of competition is
established, certain costs of power purchases from the Pool and related
hedging activities which are currently passed through to customers will become
subject to a maximum tariff cap. See "Business--Supply Business".
Currency Risks; 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.
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
19
<PAGE>
("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 March 31, 1997, Senior Debt
of the Company aggregated approximately (Pounds)945 million ($1.54 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 March 31,
1997, such subsidiaries had (Pounds)339.6 million ($554.3 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 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
20
<PAGE>
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 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 increase
the number of units of electricity distributed and supplied and to operate in
a more cost-efficient manner. 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
($150 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 ($183 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 100kW). 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 100kW and above), both inside and outside of London
Electricity's Franchise Area, is 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>
RESTRUCTURING OF ENTERGY'S OWNERSHIP INTERESTS
Entergy is in the process of restructuring its ownership interests in
certain of its international investments, including the Company and London
Electricity. The following organizational chart illustrates the ownership
structure of the Company and London Electricity following the restructuring
(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 March 31, 1997, the Company had borrowed
(Pounds)705 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 expects to restructure the Credit Facilities Agreement prior to
December 17, 1997, when the first principal amortization payment under
Facility B is due. The terms of the restructured facilities are expected to
increase London Electricity's permitted borrowing capacity and amend certain
existing covenants in order to accommodate the issuance of the Preferred
Securities. Facility C is also expected to be replaced with new and expanded
credit facilities.
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 March 31, 1997, Senior Debt, including
borrowings outstanding under the Credit Facilities Agreement, of the Company
aggregated approximately (Pounds)945 million ($1.54 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 to repay a portion of the borrowings
under Facility B. Such borrowings mature in installments through December 17,
1998 and currently bear interest at an effective rate of 7.43%.
25
<PAGE>
CAPITALIZATION
The following table sets forth, at March 31, 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>
MARCH 31, 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 $ 323 14% (Pounds) 198 $ 323 14%
Facility A............... 705 1,150 51 705 1,150 51
Facility B............... 240 392 17 62 101 4
Company-obligated
redeemable preferred
securities of subsidiary
holding solely junior
subordinated deferrable
debentures offered
hereby................... -- -- -- 184 300 13
Shareholder's equity...... 248 405 18 248 405 18
------------- ------ --- ------------- ------ ---
Total Capitalization....... (Pounds)1,391 $2,270 100% (Pounds)1,397 $2,279 100%
============= ====== === ============= ====== ===
Short-term debt and current
portion of long-term debt. (Pounds) 162 $ 265
</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 July 31, 1997
of $1.632 = (Pounds)1.00
EXCHANGE RATES
The following table sets out, for the periods indicated, certain information
concerning the exchange rates between UK pounds sterling and US dollars based
on the Noon Buying Rate in New York City for cable transfers in pounds
sterling as certified for customs purposes by the Federal Reserve Bank of New
York.
<TABLE>
<CAPTION>
FISCAL YEAR PERIOD END AVERAGE(1) HIGH LOW
----------- ---------- ---------- ---- ----
($ 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.................
</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.......... (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> <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> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Property, plant and
equipment, net....... (Pounds) 701
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> <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>
<S> <C> <C> <C> <C>
<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>
PRO FORMA SIX MONTHS
PERIOD FROM INCEPTION FISCAL YEAR ENDED ENDED
(OCTOBER 9, 1996) TO MARCH 31, 1997 SEPTEMBER 30, 1997
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)(12)
----------------------- ----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
------------- -------- ------------- -------- -------------- -------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Operating revenues.... (Pounds) 234 $ 381 (Pounds)1,350 $ 2,203 (Pounds) $
Operating income...... 32 52 112 183
Interest expense, net. (13) (21) (93) (152)
Other, net............ (6) (10) 5 9
Provision for income
taxes................ (5) (7) (8) (13)
------------- -------- ------------- -------- -------------- -------
Net income............ (Pounds) 8 $ 14 (Pounds) 16 $ 27 (Pounds) $
============= ======== ============= ======== ============== =======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)(12)
----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11)
------------- -------- -------------- -------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Property, plant and
equipment, net....... (Pounds)1,266 $ 2,066 (Pounds) $
Total assets.......... 2,669 4,355
Total stockholder's
equity............... 248 405
Long-term debt........ 1,143 1,865
Short-term debt....... 162 264
<CAPTION>
SIX MONTHS
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR ENDED
(OCTOBER 9, 1996) TO ENDED MARCH 31, 1997 SEPTEMBER 30, 1997
MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)(12)
----------------------- ----------------------- ----------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
------------- -------- ------------- -------- -------------- -------
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C>
OTHER CONSOLIDATED DATA:
EBIT(4)............... (Pounds) 34 $ 55 (Pounds) 135 $ 220 (Pounds) $
EBITDA(5)............. 42 69 215 351
Cash flow from
operations........... 64 104
Cash provided by (used
in) investing
activities........... (1,203.3) (1,963.8) (1,299.0) (2,120.0)
Cash provided by (used
in) financing
activities........... 1,164.6 1,900.6 1,167.9 1,906.0
Ratio of earnings to
fixed charges(7)..... 1.6 1.6 1.2 1.2
</TABLE>
32
<PAGE>
BUSINESS SEGMENTS
SUCCESSOR COMPANY
US GAAP(1)
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION PRO FORMA FISCAL YEAR SIX MONTHS ENDED
OCTOBER 9, 1996 ENDED MARCH 31, 1997 SEPTEMBER 30, 1997
TO MARCH 31, 1997(8) (UNAUDITED)(10) (UNAUDITED)
------------------------------------------------------------------------
(Pounds) $(11) (Pounds) $(11) (Pounds) $(11)
-------------- ----------------------- ----------------------- -------
(AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Electricity
distribution......... (Pounds) 61 $ 99 (Pounds) 336 $ 548 (Pounds) $
Electricity supply.... 213 347 1,265 2,065
Other................. 11 18 78 127
Intra-business(9)..... (51) (83) (329) (537)
-------------- ------- -------------- -------
Total............... (Pounds) 234 $ 381 (Pounds) 1,350 $ 2,203
============== ======= ============== =======
OPERATING INCOME:
Electricity
distribution......... (Pounds) 18 $ 29 (Pounds) 92 $ 150 (Pounds) $
Electricity supply.... 7 11 6 10
Other................. 7 12 14 23
-------------- ------- -------------- -------
Total............... (Pounds) 32 $ 52 (Pounds) 112 $ 183
============== ======= ============== =======
<CAPTION>
SEPTEMBER 30, 1997
MARCH 31, 1997 (UNAUDITED)
------------------------- ----------------------
(Pounds) $(11) (Pounds) $(11)
-------------- --------- -------------- -------
(AMOUNTS IN MILLIONS) (AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS(13):
Electricity
distribution......... (Pounds) 1,766 $ 2,882 (Pounds) $
Electricity supply.... 544 888
Other................. 359 585
-------------- -------
Total............... (Pounds)2,669 $ 4,355
============== =======
</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 July 31, 1997
of $1.632=(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) 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) million and (Pounds) 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
financial statements and the notes thereto of Entergy Power UK plc and
subsidiaries (the "Company" or "Successor Company") and with the consolidated
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
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)145.3 million at March
31, 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 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. 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
35
<PAGE>
plans to compensate them for any dimunition in value in London Electricity
shares as a result of NGG 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 to an extent by the inclusion of an index for inflation in costs of
operation in the determination of the appropriate price level.
Until April 1, 1998, London Electricity has an exclusive right to supply
electricity to customers in its Franchise Area with demand of less than 100kW.
At that time this segment of the supply business will be open to competition,
with the potential for a six-month transition period to full competition in
the supply business. 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 for full competition
36
<PAGE>
in its supply business in April 1998. The Company, along with the other RECs,
has petitioned the Regulator to recover such costs from customers, but cannot
predict whether and to what extent such recovery will be allowed.
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 income tax rates 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 income 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 income 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 income tax liability (with a corresponding reduction in income tax
expense) will be 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 700MW. 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 British Pounds Sterling. However,
the Company's obligations related to the Perpetual Junior Subordinated
Debentures will be due in US Dollars. The Company expects to utilize
derivative financial instruments to hedge a portion of the currency risks
associated with this exposure.
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
37
<PAGE>
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.
RESULTS OF OPERATIONS
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 fiscal
year 1996 to Pro Forma Fiscal Year 1997.
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>
38
<PAGE>
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 demands
of London Electricity's customers for electricity within London Electricity's
franchise area. Demand varies based in part 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, effective beginning in fiscal year 1996, by 14%, before
an allowed increase for inflation. Subsequently, the Regulator announced a
further distribution price reduction of 11%, before an allowed increase for
inflation, effective beginning at the start of fiscal year 1997, which has had
and will continue to have the effect of reducing London Electricity's
distribution revenues. See "The Electric Utility Industry in Great Britain".
In Pro Forma Fiscal Year 1997, application of the Distribution Price Control
Formula resulted in a reduction in London Electricity's distribution revenues
as compared to fiscal year 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 decrease in the average price of
units distributed. 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 April 1998.
Franchise Supply Customers, which are generally residential/domestic 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 service 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.
For Franchise Supply Customers, the number of electricity units supplied
increased by 1% but revenues declined by 2% due to the operation of the Supply
Price Control Formula.
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.
39
<PAGE>
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.
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% distribution price reduction, before an allowed increase
for inflation, 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 "--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.
40
<PAGE>
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.
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 fiscal year 1996 to Pro Forma Fiscal Year
1997. 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 average price of units
distributed. 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 unit prices
received as units supplied increased slightly.
41
<PAGE>
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
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.
42
<PAGE>
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 Acquisition Debt,
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.
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 Pro Forma
Fiscal Year 1997 were (Pounds)166 million from operations, (Pounds)945 million
from the (Pounds)1,250 million 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 March 31, 1997, the Successor Company had negative working capital of
(Pounds)47 million, compared to negative working capital of the Predecessor
Company of (Pounds)7 million at March 31, 1996. The increased working capital
deficit at 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)25 million of cash and cash equivalents at March 31,
1997.
43
<PAGE>
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 (Pounds)1,250 million Credit Facilities Agreement of
approximately (Pounds)305 million at March 31, 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 was borrowed under the London Electricity commercial paper
facility. The Company intends to use availability under existing facilities,
or replacements thereof, to finance its expected payments of windfall profits
taxes in December 1997 and 1998 which total (Pounds)140 million.
The Company's (Pounds)1,250 million 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. The Credit Facilities Agreement is
collateralized by the assets of the Company, consisting of all shares of
London Electricity. (Pounds)945 million of variable rate borrowings were
outstanding under this credit facility as of March 31, 1997. These tranches
have maturity dates ranging from December 17, 1998 to December 17, 2001.
Facility B requires additional guarantees or repayment by December 17, 1997 to
avoid an increase in the variable interest rates on all three facilities and
commencement of scheduled payments. The net proceeds of the Offering will be
used to repay a portion of Facility B.
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. This is likely to
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
44
<PAGE>
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.
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 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 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.
45
<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
============= ============= =============
<CAPTION>
(IN MILLIONS)
<S> <C> <C> <C>
Distribution Revenues.............. (Pounds)379.1 (Pounds)357.1 (Pounds)336.1*
Distribution Operating Profit...... (Pounds)141.2 (Pounds)158.0 (Pounds) 92.2*
</TABLE>
- --------
* Represents amounts for the Pro Forma Fiscal Year ended March 31, 1997. See
"--Pro Forma Condensed Consolidated Statement of Operations" for
explanation of pro forma adjustments.
46
<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 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 performance standards
established by 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.
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
47
<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 is
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 100kW). This exclusive right is scheduled to continue until at
least
48
<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>
100kW and above.............. 4,858 7,043 9,428
Under 100kW.................. 10,917 11,077 11,332
--------------- --------------- ---------------
15,775 18,120 20,760
=============== =============== ===============
<CAPTION>
(IN MILLIONS)
<S> <C> <C> <C>
Supply Revenues................ (Pounds)1,113.6 (Pounds)1,188.9* (Pounds)1,264.5
Supply Operating Profit........ (Pounds)11.1 (Pounds)12.6* (Pounds)5.8
</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.
Competition in the Supply Business
The supply business is currently divided between Franchise Supply Customers,
customers with under 100kW demand within the Franchise Area, and Non-Franchise
Supply Customers, customers with 100kW and above demand inside or outside the
Franchise Area. The non-franchise threshold was lowered to 100kW 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. The Regulator has indicated that some transitional
price regulation will continue for smaller consumption customers for an
initial period of two years until an adequate level of competition is
established. See "The Electric Utility Industry in Great Britain--Industry
Structure--Supply of Electricity".
In 1994, London Electricity initially had difficulty competing in the 100kW
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 contracts to the needs of customers. The profitability in
the 100kW and above market on a per unit basis is significantly less than in
the under 100kW 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
49
<PAGE>
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 design,
build, finance and operate the high speed link from London to the Channel
Tunnel. The projected total cost of the project is (Pounds)4 billion, and
completion is scheduled in the year 2003. During construction LCR is
essentially a train-operating company using existing railtrack capacity. After
completion, LCR will own all the 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. Furthermore,
LES has provided (Pounds)5.6 million to acquire existing electrical assets at
stations and depots, and over the period 1996-2004 will be providing
approximately (Pounds)60-80 million in direct electrical asset investment. 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.
50
<PAGE>
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.
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 Total Energy Limited ("LTE") is a joint venture with Total Gas
Marketing Limited formed to take advantage of the liberalization of natural
gas retailing in the UK. Gas is sold to customers in the regional markets that
have been opened to competition. The gas is transported using the existing
pipelines of Transco (formerly British Gas plc) for which a service charge is
paid. It is expected that LTE will concentrate on the residential and small
commercial sectors as the gas market opens further to competition.
51
<PAGE>
Metering and Meter Reading
These activities will become increasingly 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.
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.
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
52
<PAGE>
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.
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
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.
The Treaty of Rome contains provisions which prohibit anti-competitive
agreements and practices, including the abuse of a dominant position within
the European Union or a substantial part of it. Penalties for violation of
these provisions include fines, third party damages and infringing contractual
provisions being unenforceable.
53
<PAGE>
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.
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.
54
<PAGE>
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
55
<PAGE>
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 transition were to impose significant
burdens on Pool or supplier information and management systems.
56
<PAGE>
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.
Revenue from the distribution business is controlled by a formula
principally based on P x (1+(RPI-Xd)) where Xd is currently 3% (the
"Distribution Price Control Formula"). 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. 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. This price, when multiplied by the expected number
of units to be distributed, determines the expected distribution revenues of
the REC for the relevant year. The Distribution Price Control Formula permits
RECs to partially retain additional revenues due to increased distribution of
units and allows for a pound-for-pound 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
to subtract 2% from RPI 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 to subtract 3% from RPI 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
57
<PAGE>
that date. If a REC does not agree with the proposal it may refer the proposal
to the Monopolies and Mergers Commission (the "MMC") and the Regulator may
make whatever modifications to the REC's PES license are required. A REC may
seek disapplication of its Distribution Price Control Formula with effect from
that date by request to the Regulator. If the Regulator wishes to refuse the
request, he must refer it to the MMC).
In setting the 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.
Since August 1994, the Distribution Price Control Formula has been divided
into metering and non-metering components. Operations related to the metering
of network connections to Franchise Supply Customers are subject to the
metering component of the Distribution Price Control Formula; however, such
price controls are scheduled to be disapplied from April 1, 2000, at which
time competitive market pricing is to be introduced. Competitive market
pricing already exists for operations related to the metering of network
connections to Non-Franchise Supply Customers.
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
58
<PAGE>
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 April
1, 1998 all customers, including those who are currently Franchise Supply
Customers, will be permitted to choose their electricity supplier. The Supply
Price Control Formula (discussed immediately below) will no longer apply.
However, the Regulator has indicated that price regulation for supply to the
smaller Franchise Supply Customers, whose annual demand is under 12,000 kWh,
is likely to be extended for an interim period until an adequate level of
competition is established.
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 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 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.
59
<PAGE>
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 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
60
<PAGE>
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 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,
61
<PAGE>
except in specified circumstances. Each PES 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, PESs 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 also stated that it was his intention to review the
supply price controls applicable to PESs with a view to proposing possible 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 three further consultation papers
in January, May and July, 1997. The latest of these indicates an intention to
propose 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 eliminate the pass-through of substantially all costs currently
passed through to such customers.
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 such 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 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.
The Regulator is currently considering modifications to 14 PES licenses 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 such 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 PESs are also being required to provide collectively a data transfer
service. Preparations are being made to provide these services as part of a
program of work and discussions are also being held with the Regulator about
how the costs of this program may be recovered. A consultation paper was
issued in May 1997
62
<PAGE>
that proposed additional allowed revenues over a five year period from 1998.
It is expected that license modifications and cost recovery arrangements will
be considered for formal agreement in September 1997.
The RECs are also contributing to a program of work by the Pool to adopt
settlement arrangements for the competitive market in 1998. There are also
discussions about the extent to which these costs 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 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 for
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 has 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 has 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 proposed license modifications also would 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 would be required to give annual certificates to the Regulator to
that effect. Further, the consent of the Regulator would be 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, second-tier
supply and distribution businesses in the previous financial year and London
Electricity's investment in which does not exceed 5% of the sum of London
Electricity's share capital in issue, share premium and distributable reserves
as shown by its audited financial statements for the previous year. The
consent of the Regulator also would be 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
63
<PAGE>
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 proposed license modifications would 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 has requested 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. It is anticipated that these proposed
modifications to the PES license will be executed by agreement by September
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 year's 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.
64
<PAGE>
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
---- --- --------
<C> <C> <S>
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.
65
<PAGE>
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.
66
<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
preferred 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
67
<PAGE>
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 , 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".
68
<PAGE>
The Company currently has no intention of exercising its right to defer
payments of interest on the Perpetual Junior Subordinated Debentures.
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 register of Entergy London Capital 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 , 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".
69
<PAGE>
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 (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 not, or within 90 days of the date thereof will not be,
deductible by the Company, in whole or in part, for UK income 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
70
<PAGE>
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.
"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 to be delivered upon such distribution, 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 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
71
<PAGE>
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 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 accrue 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 register 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 transfer agent
and registrar 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 Company to dissolve Entergy London Capital (which direction is optional
and wholly within the discretion of the Company) (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 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, prior
to any distribution of assets by Entergy London Capital to the General
Partner. If such Liquidation Distribution can be paid only in part because
Entergy London
72
<PAGE>
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, or 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 described 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, or 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, 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.
73
<PAGE>
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 of 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 of 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 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 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 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 of Counsel experienced in such matters to the effect
that the General Partner will be classified as a partnership or grantor trust
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,
74
<PAGE>
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 register of Entergy London Capital. The paying agent (the
"Paying Agent") 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.
75
<PAGE>
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.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
Entergy London Capital or the Company. Under such circumstances, in the event
that a successor securities depositary is not obtained, definitive Preferred
Security certificates are required to be printed and delivered. Entergy London
Capital or the Company may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor depositary). In that event,
definitive Preferred Securities certificates will be printed and delivered.
76
<PAGE>
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 or
grantor trust 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 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 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
77
<PAGE>
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.
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
78
<PAGE>
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
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
79
<PAGE>
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 , 1997, to the person in whose
name each Perpetual Junior Subordinated Debenture is registered, subject to
certain exceptions, as of the close of business on the Business Day next
preceding such Interest Payment Date. 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 date on which interest is payable on the
Perpetual Junior Subordinated Debentures 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 the date such payment was originally payable. 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.
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.
80
<PAGE>
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 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 , 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.
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 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
81
<PAGE>
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 in Book-
Entry Interests (as defined herein) 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.
"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 (as defined
herein) 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
82
<PAGE>
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 Debentures (as defined herein) are 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 Debentures 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
Debentures.
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". 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.
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); or
(ii) failure to pay principal of or premium, if any, on such series of
Indenture Debentures when due and payable; or
83
<PAGE>
(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;
(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
84
<PAGE>
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 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 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
85
<PAGE>
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 noncertificated 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 that adversely affects the
holders of the Preferred Securities, 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 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 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
86
<PAGE>
if at such time (i) there shall have occurred and be continuing a payment
default (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 terminate, 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.
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 Debentures or to the relevant holders of the
Definitive Registered Debentures, as the case may be, such additional amounts,
under
87
<PAGE>
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 unconditionally
guaranteed by, the US entitled to the benefit of the full faith and credit
thereof and certificates, depository 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,
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.
88
<PAGE>
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 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.
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, and to
the extent that Preferred Securities are held in certificated form, such Book-
Entry Interests will be issued in certificated form. DTC will initially credit
Direct Participants holding Preferred Securities with interests in the Book-
Entry Interests (pro rata to their holding of Preferred Securities) and DTC
will issue to such Direct Participants interests in such Book-Entry Interests
in the same form as the Preferred Securities which such interests replace and
any Preferred Security in global form will be replaced by one or more Book-
Entry Interests in global form ("Global Book-Entry Interests") registered in
the name of DTC or its nominee. Unless and until the Global Debenture is
exchanged in whole for Definitive Registered Debentures, 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
89
<PAGE>
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 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 Debentures.
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 such Global Debentures.
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 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 are held through
the facilities of DTC, each person owning an interest in the 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 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
Book-Entry Interests or for maintaining, supervising or reviewing any records
relating to a Direct Participant's or Indirect Participant's interests in the
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 the
persons entitled thereto. If the Perpetual Junior Subordinated Debentures are
held through the facilities of DTC, such payments will be made by the Book-
Entry Depository to DTC, 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
90
<PAGE>
such Definitive Registered Debenture is registered at the close of business on
the immediately preceding Record Date upon surrendering such Definitive
Registered Debenture. 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.
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 Debentures (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
Book-Entry Interest 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.
91
<PAGE>
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 Book-Entry Interests
representing the Perpetual Junior Subordinated Debentures 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, wavier 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 (a) to give any
notice to the Company or to the Debenture Trustee, or to consent to the
waiving of any Debenture Event of Default and its consequence, or to take any
other action authorized to be taken by holders, (b) to remove the Debenture
Trustee and appoint a successor trustee, or (c) to consent to the execution of
a supplemental indenture.
To be entitled to vote at any meeting of holders, a person shall be (a) a
holder or (b) a person appointed by an instrument in writing as proxy for a
holder or holders by such holder or holders. The only persons who shall be
entitled to be present or to speak at any meeting of holders shall be the
persons so 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.
At any meeting of holders, 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, each
holder or proxy shall be entitled to one vote for each $25 principal amount of
outstanding Perpetual Junior Subordinated Debentures held or represented.
At any time prior to (but not after) the evidencing to the Debenture Trustee
of 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
92
<PAGE>
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 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 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
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
93
<PAGE>
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 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, in such circumstance,
upon instructions from owners of interests representing a majority in
outstanding principal amount in such Book-Entry Interest shall have requested
in writing that the Global Debenture be exchanged for one or more Definitive
Registered Debentures. If any owners of interests in a Book-Entry Interest
make a request pursuant to the preceding sentence, all of the owners of
interests in such Book-Entry Interest will receive Definitive Registered
Debentures in respect of their interests. In addition, Definitive Registered
Debentures shall be issued if at any time (a) DTC notifies the Company and the
Book-Entry Depositary that it is unwilling to or unable to continue to hold
the 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 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 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
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
94
<PAGE>
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 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.
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
95
<PAGE>
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.
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.
96
<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.
97
<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
98
<PAGE>
"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 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
99
<PAGE>
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 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.
100
<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., and
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............................................
----------
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 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,
101
<PAGE>
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 of Great Britain 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 1995 of Great Britain 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.
102
<PAGE>
EXPERTS
The consolidated balance sheet of 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.
103
<PAGE>
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ENTERGY POWER UK plc(/1/) 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 POWER UK 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 1996................................................................ 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>
- --------
(/1/Entergy)Power UK plc's corporate name was changed to Entergy London
Investments plc effective on August 20, 1997.
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of Entergy Power UK plc:
We have audited the accompanying consolidated balance sheet of 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
Power UK 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 POWER UK 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 $ 41.0
Accounts receivable:
Customer receivable net of reserve of (Pounds)11.8
($19.3)............................................... 104.8 171.0
Unbilled revenue....................................... 102.4 167.1
Deferred income tax asset ............................... 16.0 26.1
Income tax receivable.................................... 13.1 21.4
Other receivables........................................ 20.3 33.1
Prepayments and other.................................... 5.3 8.7
Inventory................................................ 8.5 13.9
Investments.............................................. 28.2 46.0
--------------- --------
Total current assets................................. 323.7 528.3
--------------- --------
Property, plant and equipment, net of accumulated deprecia-
tion of (Pounds)9.6 ($15.7)............................... 1,265.7 2,065.6
Construction work in progress.............................. 80.9 132.0
Distribution license, net of accumulated amortization of
(Pounds)3.3 ($5.5)........................................ 830.4 1,355.2
Investments, long-term..................................... 10.3 16.8
Long-term receivables...................................... 12.3 20.1
Prepaid pension asset...................................... 145.3 237.1
--------------- --------
Total assets............................................... (Pounds)2,668.6 $4,355.1
=============== ========
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt..................... (Pounds) 20.4 $ 33.3
Notes payable............................................ 141.7 231.2
Accounts payable......................................... 125.4 204.7
Income taxes payable..................................... 34.3 56.0
Deferred revenue......................................... 29.6 48.3
Other liabilities........................................ 19.2 31.3
--------------- --------
Total current liabilities............................ 370.6 604.8
Long-term debt............................................. 1,142.9 1,865.2
Deferred income tax liability.............................. 644.4 1,051.7
Other non-current liabilities.............................. 262.4 428.2
--------------- --------
Total liabilities.................................... 2,420.3 3,949.9
--------------- --------
<CAPTION>
Commitments and Contingencies
<S> <C> <C>
Shareholder's equity:
Common stock, (Pounds)1 ($1.63) par value per share,
50,000 shares authorized, issued and outstanding........ 0.1 0.2
Additional paid-in capital............................... 239.9 391.5
Retained earnings........................................ 8.3 13.5
--------------- --------
Total shareholder's equity........................... 248.3 405.2
--------------- --------
Total liabilities and shareholder's equity................. (Pounds)2,668.6 $4,355.1
=============== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
ENTERGY POWER UK 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 $381.2
Cost of sales............................................. 163.6 267.0
------------- ------
Gross profit.............................................. 70.0 114.2
Depreciation and amortization expense..................... 12.9 21.1
Property taxes............................................ 3.5 5.7
Restructuring charges..................................... 8.0 13.1
Selling, general and administrative expenses.............. 13.6 22.2
------------- ------
Income from operations................................ 32.0 52.1
Other expenses, net....................................... 6.5 10.6
Interest expense, net..................................... 12.7 20.7
------------- ------
Income before income taxes............................ 12.8 20.8
Income taxes.............................................. 4.5 7.3
------------- ------
Net income............................................ (Pounds) 8.3 $ 13.5
============= ======
Earnings per average common share......................... (Pounds) 166 $ 270
------------- ------
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 POWER UK 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 0.2 239.9 391.5 -- -- 240.0 391.7
Net income.............. -- -- -- 8.3 13.5 8.3 13.5
------ ------------ ----- -------------- ------- ------------ ------ ------------- ------
Balance, March 31, 1997. 50,000 (Pounds) 0.1 $ 0.2 (Pounds) 239.9 $ 391.5 (Pounds) 8.3 $ 13.5 (Pounds)248.3 $405.2
====== ============ ===== ============== ======= ============ ====== ============= ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
ENTERGY POWER UK PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 9, 1996 TO MARCH 31, 1997
(IN MILLIONS)
<TABLE>
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................... (Pounds) 8.3 $ 13.5
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 12.9 21.1
Deferred income taxes............................. 3.5 5.7
Change in assets and liabilities:
Inventory....................................... 0.9 1.5
Accounts receivable and unbilled revenue........ (3.1) (5.1)
Long-term receivables and other................. (35.1) (57.3)
Accounts payable................................ (18.2) (29.7)
Income taxes payable............................ 7.0 11.4
Other current assets and liabilities............ 21.2 34.6
Other long-term liabilities..................... 66.4 108.4
------------ ---------
Net cash provided by operating activities..... 63.8 104.1
Cash flows from investing activities:
Capital expenditures ............................... (35.9) (58.6)
Acquisition of London Electricity................... (1,174.3) (1,916.5)
Receipt of consumer contributions................... 6.9 11.3
------------ ---------
Net cash used in investing activities......... (1,203.3) (1,963.8)
Cash flows from financing activities:
Proceeds from issuance of debt...................... 945.0 1,542.2
Proceeds from issuance of common stock.............. 240.0 391.7
Net repayments from available lines of credit....... (20.4) (33.2)
------------ ---------
Net cash provided by financing activities..... 1,164.6 1,900.7
------------ ---------
Increase in cash and cash equivalents................. 25.1 41.0
Beginning of period cash and cash equivalents......... -- --
------------ ---------
End of period cash and cash equivalents............... (Pounds)25.1 $ 41.0
============ =========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest.............................. (Pounds) 8.2 $ 13.4
============ =========
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 POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS:
Entergy Power UK plc ("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 $1.632, 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 July 31, 1997.
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.
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
F-7
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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>
<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.
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.
F-8
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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 accounts for CFDs
similar to hedge accounting under SFAS 80. Gains (losses) on CFDs are
recognized currently 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
purchases.
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.
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.
F-9
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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 $2,158.0
Land and buildings............................ 61.2 99.9
Vehicles and mobile plant..................... 5.8 9.5
Furniture, fixtures and equipment, including
computer hardware and software............... 51.2 83.5
Consumer contributions to construction........ (165.2) (269.6)
--------------- --------
1,275.3 2,081.3
Less accumulated depreciation and
amortization................................. (9.6) (15.7)
--------------- --------
(Pounds)1,265.7 $2,065.6
=============== ========
</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 5.7
------------ -----
Total income tax expense............................ (Pounds) 4.5 $ 7.3
============ =====
</TABLE>
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.
F-10
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Significant components of the Company's net deferred tax liability as of
March 31, 1997 are as follows (in millions):
<TABLE>
<S> <C> <C>
Deferred tax liability
Property-related basis differences.............. (Pounds)352.9 $ 575.9
Prepaid pension asset........................... 47.9 78.2
Distribution license............................ 274.0 447.2
------------- --------
Total......................................... 674.8 1,101.3
Deferred tax asset
Reserves and other timing differences........... 46.4 75.7
------------- --------
Net deferred tax liability.................... (Pounds)628.4 $1,025.6
============= ========
</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 ($229 million) expense for
the windfall profits tax and approximately (Pounds)38 million ($62 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 1990, 1996 and 1997 tax years are currently under review by the Inland
Revenue Service 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>
<S> <C> <C>
8% Eurobonds repayable March 28, 2003............ (Pounds) 98.9 $ 161.4
8 5/8% Eurobonds repayable October 26, 2005...... 99.0 161.6
Loan notes due March 31, 2003.................... 20.4 33.3
Revolving bank debt facility:
Facility A..................................... 705.0 1,150.5
Facility B..................................... 240.0 391.7
--------------- --------
Total............................................ 1,163.3 1,898.5
Less current maturities.......................... 20.4 33.3
--------------- --------
Long-term debt, net of current maturities........ (Pounds)1,142.9 $1,865.2
=============== ========
</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 POWER UK 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 ($392 million) and Facility C for
(Pounds)200 million ($326 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 floating interest rate for a fixed
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 ($979 million), fair value of
(Pounds)(2.4) million ($(3.8) 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 ($339 million) and a (Pounds)150
million ($245 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 ($231.2 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>
<S> <C> <C>
1998....................................................... (Pounds) 7.4 $ 12.1
1999....................................................... 6.9 11.2
2000....................................................... 6.0 9.8
2001....................................................... 5.8 9.5
2002....................................................... 5.7 9.3
Thereafter................................................. 72.0 117.5
------------- ------
Total.................................................... (Pounds)103.8 $169.4
============= ======
</TABLE>
F-12
<PAGE>
ENTERGY POWER UK 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 ($163 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 ($787 million) for the five year period.
Approximately (Pounds)186 million ($304 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 ($65 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 funding
purposes. Amounts funded to the pension are primarily invested in equity and
fixed income securities.
F-13
<PAGE>
ENTERGY POWER UK 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>
<S> <C> <C>
Accumulated benefit obligation:
Vested.......................................... (Pounds)611.6 $ 998.1
============= ========
Projected benefit obligation...................... 705.7 1,151.7
Plan assets at fair value......................... 851.0 1,388.8
------------- --------
Prepaid pension asset......................... (Pounds)145.3 $ 237.1
============= ========
</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 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 $ 4.1
Interest cost on projected benefit obligation...... 14.9 24.3
Expected return on plan assets..................... (18.0) (29.4)
------------ ------
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 ($11.50) per share which then entitled the
owners of the shares to the interim dividend of (Pounds).179 ($0.30) 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 ($11.50) 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 POWER UK 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 $2,209.9 (Pounds)1,187.7 $ 1,938.3
Net income.............. 16.3 26.6 308.1(a) 502.8
Net income per share.... 326.0 532.0 6,162.0 10,056.4
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, (Pounds)70.1
million, (Pounds)131 million, (Pounds)3 million, (Pounds)17.3 million and
(Pounds)82.6 million, respectively. The net after tax effect of the above
was to increase net income by (Pounds)248 million.
The assets and liabilities acquired as of February 1, 1997 and the cash used
for acquisition are as follows (in millions):
<TABLE>
<S> <C> <C>
Current assets............................... (Pounds) 323.4 $ 527.8
Network assets............................... 1,332.0 2,173.8
Other long-term assets....................... 999.3 1,630.9
Current liabilities.......................... (383.7) (626.2)
Long-term debt............................... (208.4) (340.1)
Other long-term liabilities.................. (802.5) (1,309.7)
--------------- ---------
Total purchase price....................... 1,260.1 2,056.5
Less: Loan Notes and liability to
shareholders................................ (76.7) (125.2)
Cash acquired in acquisition................. (9.1) (14.8)
--------------- ---------
Cash used for acquisition.................... (Pounds)1,174.3 $ 1,916.5
=============== =========
</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 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 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.
F-15
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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 $ 99.2 (Pounds)213.3 $348.1 (Pounds)10.2 $ 16.6 (Pounds)(50.7) $(82.7) (Pounds)233.6 $ 381.2
Operating
income......... 18.1 29.4 6.6 10.8 7.3 11.9 (Pounds) -- 32.0 52.1
Depreciation and
amortization... 13.9 22.7 0.8 1.3 (1.8) (2.9) (Pounds) -- 12.9 21.1
Total assets
employed at
period end..... 1,765.9 2,881.9 543.8 887.5 358.9 585.7 (Pounds) -- 2,668.6 4,355.1
Capital
expenditures... 25.3 41.3 2.6 4.2 8.0 13.1 (Pounds) -- 35.9 58.6
</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>
<S> <C> <C>
Provision for restructuring as of January 31, 1997........ (Pounds)25.9 $42.3
Adjustments to restructuring provision in period from date
of inception to March 31, 1997........................... 8.0 13.1
Payments made in period from date of inception to March
31, 1997................................................. (3.1) (5.1)
------------ -----
Balance March 31, 1997.................................. (Pounds)30.8 $50.3
============ =====
</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)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)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>
<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 accounts
for CFDs similar to hedge accounting under SFAS 80. Gains (losses) on CFDs are
recognized currently 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
purchases.
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>
<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 1990, 1996 and 1997 tax years are currently under review by the Inland
Revenue Service 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>
<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 floating interest rate for a fixed
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>
<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>
<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>
<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 POWER UK PLC
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS 1996(A) 1997
------ --------------- ----------------------
<S> <C> <C> <C>
Current assets.......................... (Pounds) 322.8 (Pounds) $
Other property and investments.......... 56.4
Fixed assets, net....................... 821.6
Deferred debits and other assets........ 82.6
--------------- -------------- -------
Total Assets.......................... (Pounds)1,283.4 (Pounds) $
=============== ============== =======
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C>
Current liabilities..................... (Pounds) 362.0
Deferred credits and other liabilities.. 270.8
Long term debt.......................... 197.8
Common shareholders' equity............. 452.8 (Pounds) $
--------------- -------------- -------
Total Liabilities and Shareholders'
Equity............................... (Pounds)1,283.4 (Pounds) $
=============== ============== =======
</TABLE>
- --------
(a) Represents historical financial position of London Electricity plc as
predecessor to Entergy Power UK plc. Excludes the effects of purchase
accounting adjustments.
See accompanying notes to condensed consolidated financial statements
F-33
<PAGE>
ENTERGY POWER UK 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>
1996(A) 1997
------------- ---------------
<S> <C> <C> <C>
Operating revenues.............................. (Pounds)617.1 (Pounds) $
Operating expenses.............................. 541.2
-------------
Operating income................................ 75.9
Other income (expense)
Interest expense, net......................... (8.1)
Investment income............................. 3.4
------------- -------- ------
Income before income taxes...................... 71.2
Income tax expense.............................. 19.5
------------- -------- ------
Net income...................................... (Pounds) 51.7 (Pounds) $
============= ======== ======
Net income per share............................ (Pounds) $
======== ======
Weighted average shares outstanding............. 50,000 50,000
======== ======
</TABLE>
- --------
(a) Represents historical results of operations of London Electricity plc as
predecessor to Entergy Power UK plc. Excludes the effects of purchase
accounting adjustments.
See accompanying notes to condensed consolidated financial statements
F-34
<PAGE>
ENTERGY POWER UK PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996(A) 1997
------------ --------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................... (Pounds)51.7 (Pounds) $
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............ 22.3
Deferred income taxes.................... 5.1
Change in assets and liabilities:
Current assets, excluding investments.... 125.9
Other long term assets................... (4.0)
Current liabilities...................... (83.5)
Other long term liabilities.............. 4.0
------------ ------------- ------
Net cash provided from operations...... 121.5
------------ ------------- ------
Cash flows from investing activities:
Capital expenditures..................... (56.8)
Proceeds from sales of fixed assets...... (3.5)
Decrease in investments, current......... 12.7
------------ ------------- ------
Net cash provided by (used in)
investing activities.................. (47.6)
------------ ------------- ------
Cash flows from financing activities:
Issuance of long term debt............... 8.3
Issuance of common stock................. 0.9
Dividends paid........................... (47.3)
------------ ------------- ------
Net cash provided by (used in)
financing activities.................. (38.1)
------------ ------------- ------
Increase (decrease) in cash and cash
equivalents............................. 35.8
Cash and cash equivalents, beginning..... 13.0
------------ ------------- ------
Cash and cash equivalents, ending........ (Pounds)48.8
============ ============= ======
Cash paid for interest................... (Pounds) 7.7 (Pounds) $
============ ============= ======
Cash paid for income taxes............... (Pounds) 9.3 (Pounds) $
============ ============= ======
</TABLE>
- --------
(a) Represents historical cash flows of London Electricity plc as predecessor
to Entergy Power UK plc.
See accompanying notes to condensed consolidated financial statements
F-35
<PAGE>
ENTERGY POWER UK, PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. DESCRIPTION OF BUSINESS:
Effective February 1, 1997, Entergy Power UK plc ("Successor" or "the
Company") 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 $ 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 October , 1997. 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 to
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 the
registration statement.
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,
require management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets
F-36
<PAGE>
ENTERGY POWER UK PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
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 Railway 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 Pro Forma 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 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)145.3 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
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 March 31, 1997,
the Company has outstanding CFD's 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 1000MW 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 Pro Forma Fiscal Year 1997, respectively.
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
F-37
<PAGE>
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 Power UK plc
("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 POWER UK 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 $2,202.9
Cost of Sales and
Operating Expenses..... 201.6 1,009.5 (Pounds)26.5 (a) 1,237.6 2,019.8
------------- --------------- --------------- --------
Income from
Operations........... 32.0 106.7 112.2 183.1
Other Income
(Deductions)......... (6.5) 4.6 7.5 (b) 5.6 9.1
Interest Expense, net. 12.7 17.1 63.6 (c) 93.4 152.4
------------- --------------- ------------ --------------- --------
Income Before Income
Taxes................ 12.8 94.2 24.4 39.8
Income Taxes.......... 4.5 32.1 (28.5)(d) 8.1 13.2
------------- --------------- --------------- --------
Net Income............ (Pounds) 8.3 (Pounds) 62.1 (Pounds) 16.3 $ 26.6
============= =============== =============== ========
</TABLE>
1. Effective February 1, 1997, Entergy Power UK 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 July 31, 1997 of $1.632 = (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.................................................................. 46
The Electric Utility Industry in Great Britain............................ 55
Management................................................................ 65
Certain Relationships and Related Transactions............................ 66
Security Ownership........................................................ 67
Description of the Preferred Securities................................... 67
Description of the Guarantee.............................................. 77
Description of the Perpetual Junior Subordinated Debentures............... 80
Relationship Among the Preferred Securities, the Perpetual Junior
Subordinated Debentures and the Guarantee................................ 95
Certain Income Tax Considerations......................................... 97
Underwriting.............................................................. 101
Experts................................................................... 103
Legal Opinions............................................................ 103
Index to the Consolidated Financial Statements............................ F-1
</TABLE>
THROUGH AND INCLUDING , 1997 (THE 25TH DAY AFTER THE DATE OF THIS PRO-
SPECTUS), 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)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS SET FORTH HEREIN, BY
ENTERGY LONDON INVESTMENTS PLC
---------------
PROSPECTUS
---------------
GOLDMAN, SACHS & CO.
REPRESENTATIVES OF THE UNDERWRITERS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Filing Fees--Securities and Exchange Commission..................... $90,909.10
*Rating Agencies' fees..............................................
*Trustee's fees.....................................................
*Fees of Company's Counsel:.........................................
Richards, Layton & Finger, P.A....................................
Reid & Priest LLP.................................................
Linklaters & Paines...............................................
*Fees of Entergy Services, Inc......................................
*Accounting fees....................................................
*Printing and engraving costs.......................................
*Miscellaneous expenses (including Blue-Sky expenses)...............
----------
*Total Expenses................................................. $
==========
</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>
<C> <S>
*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 August 20, 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 4.05 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 License dated March 26,
1990, as revised through January 8, 1996.
*10.02 Modifications of License Conditions dated .
*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>
<C> <S>
*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>
- --------
* To be filed by amendment
** 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. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
New Orleans, State of Louisiana, on the th 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 1, 1997
____________________________________ Executive Officer and
Edwin Lupberger Director
(Principal Executive
Officer)
/s/ William J. Regan, Jr. October 1, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
By:
Executive Vice President, October 1, 1997
____________________________________ Chief Financial Officer and
Gerald D. McInvale Director (Principal
Financial Officer)
/s/ William J. Regan, Jr. October 1, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
By:
Audit Controller October 1, 1997
____________________________________ (Principal Acounting
Louis E. Buck Officer)
/s/ William J. Regan, Jr. October 1, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
By:
Director October 1, 1997
____________________________________
Michael B. Bemis
/s/ William J. Regan, Jr. October 1, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
By:
Director October 1, 1997
____________________________________
Terry L. Ogletree
/s/ William J. Regan, Jr. October 1, 1997
____________________________________
William J. Regan, Jr.
Attorney-in-fact
By:
/s/ William J. Regan, Jr. Authorized Representative October 1, 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. 1 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Orleans, State of Louisiana, on the 3rd
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 Power UK plc
and London Electricity plc:
In connection with our audits of the consolidated financial statements of
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 POWER UK 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 4.01
THE COMPANIES ACTS 1985 and 1989
PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
- of -
ENTERGY POWER UK plc
1. The Company's name is "OYSTERWOOD PLC".*
2. The Company is to be a public company.
3. The Company's registered office is to be situated in
England and Wales.
4. The Company's objects are:**
(A) (i) (a) To acquire or take over, in any manner and hold an
interest in, shares or other securities of or the
business of a public electricity supplier.
(b) To carry on all or any of the businesses of
purchasing, importing, generating, transmitting,
transforming, converting, distributing, supplying,
exporting and dealing in electricity and all other
forms of energy and products or services associated
therewith and of promoting the conservation and
efficient use of electricity and all other forms of
energy.
(c) To do anything which a public electricity supplier
is empowered or required to do under or by virtue of or
under a license or other authorization granted under
the Electricity Act 1989 or any statutory instrument
made thereunder or any statutory modification or
re-enactment thereof.
(ii) To act as an investment holding company and to
co-ordinate the business of any companies in which the
Company is for the time being interested, and to acquire
(whether by original subscription, tender, purchase exchange
or otherwise) the whole of or any part of the stock, shares,
debentures, debenture stocks, bonds and other securities
issued or guaranteed by a body corporate constituted or
carrying on business in any part of the world or by an
government sovereign ruler, commissioners, public body or
authority and to hold the same as investments, and to sell,
exchange, carry and dispose of the same.
(iii) To carry on the businesses in any part of the world as
importers, exporters, buyers, sellers, distributors and
dealers and to win, process and work produce of all kinds.
(B) To carry on the following businesses, namely, contractors,
garage proprietors, filling station proprietors, owners and
charterers of road vehicles, aircraft and ships and boats of
every description, lightermen and carriers of goods and
passengers by road, rail, water or air, forwarding,
transport and commission agents, customs agents, stevedores,
wharfingers, cargo superintendents, packers, warehouse
storekeepers, cold store keepers, hotel proprietors,
caterers, publicans, consultants, advisers, financiers,
bankers, advertising agents, insurance brokers, travel
agents, ticket agents and agency business of all kinds and
generally to provide entertainment for and render services
of all kinds to others and to carry on any other trade or
business which can in the opinion of the directors be
advantageously carried on by the Company in connection with
or ancillary to any of the businesses of the Company.
(C) To buy, sell, manufacture, repair, alter, improve,
manipulate, prepare for market, let on hire, and generally
deal in all kinds of plant, machinery, apparatus, tools,
utensils, materials, produce, substances, articles and
things for the purpose of any of the businesses specified in
clause 4, or which may be required by persons having, or
about to have, dealings with the Company.
(D) To build, construct, maintain, alter, enlarge, pull down,
remove and replace any buildings, shops, factories, offices,
works, machinery and engines, and to work, manage and
control these things.
(E) To enter into contracts, agreements and arrangements with
any person for the carrying out by that person on behalf of
the Company of any object for which the Company is formed.
(F) To acquire, undertake and carry on the whole or any part of
the business, property and liabilities of any person
carrying on any business which may in the opinion of the
directors be capable of being conveniently carried on, or
calculated directly or indirectly to enhance the value of or
make profitable any of the Company's property or rights, or
any property suitable for the purposes of the Company.
(G) To enter into any arrangement with a government or
authority, whether national, international, supreme,
municipal, local or otherwise, that may in the opinion of
the directors be conducive to any object of the Company, and
to obtain from that government or authority any right,
privilege or concession which in the opinion of the
directors is desirable, and to carry out, exercise and
comply with that arrangement, right, privilege or
concession.
(H) To apply for, purchase and by other means acquire, protect,
prolong and renew any patent, patent right, brevet
d'invention, license, secret process, invention, trade mark,
service mark, copyright, registered design, protection,
concession and right of the same or similar effect or
nature, and to use, turn to account, manufacture under and
grant licenses and privileges in respect of those things,
and to spend money in experimenting with, testing,
researching, improving and seeking to improve any of those
things.
(I) To acquire an interest in, amalgamate with and enter into
partnership or any arrangement for the sharing of profits,
union of interests, co-operation, joint venture, reciprocal
concession or otherwise with any person, or with any
employees of the Company. To lend money to, guarantee the
contracts of, and otherwise assist that person or those
employees, and to take and otherwise acquire an interest in
that person's shares or other securities and to sell, hold,
re-issue, with or without guarantee, and otherwise deal with
those shares or other securities.
(J) To lend money to, subsidize and assist any person, to act as
agents for the collection, receipt and payment of money and
generally to act as agents and brokers for and perform
services for any person, and to undertake and perform
sub-contracts.
(K) To enter into any guarantee or contract of indemnity or
suretyship, and to provide security, including, without
limitation, the guarantee and provision of security for the
performance of the obligations of or the payment of any
money (including, without limitation, capital, principal,
premiums, dividends, interest, commissions, charges,
discount and any related costs or expenses whether on shares
or other securities) by any person including, without
limitation, any body corporate which is for the time being
the Company's holding company, the Company's subsidiary, a
subsidiary of the Company's holding company or any person
which is for the time being a member or otherwise has an
interest in the Company or is associated with the Company in
any business or venture, with or without the Company
receiving any consideration or advantage (whether direct or
indirect), and whether by personal covenant or mortgage,
charge or lien over all or part of the Company's
undertaking, property, assets or uncalled capital (present
and future) or by other means. For the purposes of paragraph
(K) "guarantee" includes any obligation, however described,
to pay, satisfy, provide funds for the payment or
satisfaction of (including, without limitation, by advance
of money, purchase of or subscription for shares or other
securities and purchase of assets or services), indemnify
against the consequences of default in the payment of, or
otherwise be responsible for, any indebtedness of any other
person.
(L) To promote, finance and assist any person for the purpose of
acquiring all or any of the property, rights and undertaking
or assuming the liabilities of the Company, or for any other
purpose which may in the opinion of the directors directly
or indirectly benefit the Company, and in that connection to
place, guarantee the placing of, underwrite, subscribe for
and otherwise acquire all or any part of the shares or other
securities of a body corporate.
(M) To pay out of the funds of the Company all or any expenses
which the Company may lawfully pay of or incidental to the
formation, registration, promotion and advertising of and
raising money for the Company and the issue of its shares or
other securities, including, without limitation, those
incurred in connection with the advertising and offering of
its shares or other securities for sale or subscription,
brokerage and commissions for obtaining applications for and
taking, placing, underwriting or procuring the underwriting
of its shares or other securities.
(N) To remunerate any person for services rendered or to be
rendered to the Company, including, without limitation, by
cash payment or by the allotment of shares or other
securities of the Company, credited as paid up in full or in
part.
(O) To purchase, take on lease, exchange, hire and otherwise
acquire any real or personal property and any right or
privilege over or in respect of it.
(P) To receive money on deposit on any terms the directors think
fit.
(Q) To invest and deal with the Company's money and funds in any
way the directors think fit.
(R) To lend money and give credit with or without security.
(S) To borrow, raise and secure the payment of money in any way
the directors think fit, including, without limitation, by
the issue of debentures and other securities, perpetual or
otherwise, charged on all or any of the Company's property
(present and future) or its uncalled capital, and to
purchase, redeem and pay off those securities.
(T) To remunerate any person for services rendered or to be
rendered in placing, assisting and guaranteeing the placing
and procuring the underwriting of any share or other
security of the Company or of any person in which the
Company may be interested or proposes to be interested, or
in connection with the conduct of the business of the
Company, including, without limitation, by cash payment or
by the allotment of shares or other securities of the
Company, credited as paid up in full or in part.
(U) To subscribe for, acquire and hold (in each case absolutely
or conditionally) shares, debentures and other securities of
any person and to coordinate, finance and manage the
business and operation of any person in which the Company
has an interest.
(V) To draw, make, accept, endorse, discount, execute and issue
promissory notes, bills of exchange, bills of lading,
warrants, debentures and other negotiable or transferable
instruments.
(W) To sell, lease, exchange, let on hire and dispose of any
real or personal property and the whole or part of the
undertaking of the Company, for such consideration as the
directors think fit, including, without limitation, for
shares, debentures or other securities, whether fully or
partly paid up, of any person, whether or not having objects
(altogether or in part) similar to those of the Company. To
hold any shares, debentures and other securities so
acquired, and to improve, manage, develop, sell, exchange,
lease, mortgage, dispose of, grant options over, turn to
account or otherwise deal with all or any part of the
property or rights of the Company.
(X) To adopt any means of publicizing and making known the
businesses, services and products of the Company as the
directors think fit, including, without limitation,
advertisement, publication and distribution of notices,
circulars, books and periodicals, purchase and exhibition of
works of art and interest and granting and making of prizes,
rewards and donations.
(Y) To support, subscribe to and contribute to any charitable or
public object and any institution, society and club which
may be for the benefit of the Company or persons who are or
were directors, officers or employees of the Company, its
predecessor in business, any subsidiary of the Company or
any person allied to or associated with the Company, or
which may be connected with any town or place where the
Company carries on business. To subsidize and assist any
association of employers or employees and any trade
association. To grant pensions, gratuities, annuities and
charitable aid and to provide advantages, facilities and
services to any person (including any director or former
director) who may have been employed by or provided services
to the Company, its predecessor in business, any subsidiary
of the Company or any person allied to or associated with
the Company and to the spouses, children, dependents and
relatives of those persons and to make advance provision for
the payment of those pensions, gratuities and annuities by
establishing or acceding to any trust, scheme or arrangement
(whether or not capable of approval by the Commissioners of
Inland Revenue under any relevant legislation) the directors
think fit, to appoint trustees and to act as trustee of any
trust, scheme or arrangement, and to make payments towards
insurance for the benefit of those persons and their
spouses, children, dependents and relatives.
(Z) To establish and contribute to any scheme for the purchase
or subscription by trustees of shares or other securities of
the Company to be held for the benefit of the employees of
the Company, any subsidiary of the Company or any person
allied to or associated with the Company, to lend money to
those employees or to trustees on their behalf to enable
them to purchase or subscribe for shares or other securities
of the Company and to formulate and carry into effect any
scheme for sharing the profits of the Company with
employees.
(AA)To apply for, promote and obtain any Act of Parliament and
any order or license of any government department or
authority (including, without limitation, the Department of
Trade and Industry) to enable the Company to carry any of
its objects into effect, to effect any modification of the
Company's constitution and for any other purpose which the
directors think fit, and to oppose any proceeding or
application which may in the opinion of the directors
directly or indirectly prejudice the Company's interests.
(BB)To establish, grant and take up agencies, and to do all
other things the directors may deem conducive to the
carrying on of the Company's business as principal or agent,
and to remunerate any person in connection with the
establishment or granting of an agency on the terms and
conditions the directors think fit.
(CC)To distribute among the shareholders in specie any of the
Company's property and any proceeds of sale or disposal of
any of the Company's property and for that purpose to
distinguish and separate capital from profits, but no
distribution amounting to a reduction of capital may be made
without any sanction required by law.
(DD)To purchase and maintain insurance for the benefit of any
person who is or was an officer or employee of the Company,
a subsidiary of the Company or a company in which the
Company has or had an interest (whether direct or indirect)
or who is or was trustee of any retirement benefits scheme
or any other trust in which any officer or employee or
former officer or employee is or has been interested,
indemnifying that person against liability for negligence,
default, breach of duty or breach of trust or any other
liability which may lawfully be insured against.
(EE)To amalgamate with any other person and to procure the
Company to be registered or recognized in any part of the
world.
(FF) To do all or any of the things provided in any paragraph of
clause 4:
(I) in any part of the world;
(ii) as principal, agent, contractor, trustee or otherwise;
(iii) by or through trustees, agents, subcontractors or
otherwise; and
(iv) alone or with another person or persons.
(GG)To do all things that are in the opinion of the directors
incidental or conducive to the attainment of all or any of
the Company's objects, or the exercise of all or any of its
powers.
(HH)The objects specified in each paragraph of clause 4 shall,
except where otherwise provided in that paragraph, be
regarded as independent objects, and are not limited or
restricted by reference to or inference from the terms of
any other paragraph or the name of the Company. None of the
paragraphs of clause 4 or the objects or powers specified or
conferred in or by them is deemed subsidiary or ancillary to
the objects or powers mentioned in any other paragraph. The
Company has as full a power to exercise all or any of the
objects and powers provided in each paragraph as if each
paragraph contained the objects of a separate company.
(II) In clause 4, a reference to:
(i) a "person" includes a reference to a body corporate,
association or partnership whether domiciled in
the United Kingdom or elsewhere and whether incorporated
or unincorporated;
(ii) the "Act" is, unless the context otherwise requires, a
reference to the Companies Act 1985, as modified or
re-enacted or both from time to time; and
(iii) a "subsidiary" or "holding company" is to be
construed in accordance with section 736 of the
Act.
5. The liability of the members is limited.
6. The Company's share capital is pounds 50,000 divided into 50,000
shares of pounds 1 each.
<PAGE>
WE, the subscribers to this Memorandum of Association wish to be
formed into a Company pursuant to this Memorandum and we agree to
take the number of shares in the capital of the Company shown
opposite our respective names.
NAMES AND ADDRESSES Number of Shares
OF SUBSCRIBERS taken by each
Subscriber
CHANTAL ELIZABETH BRACKENBURY ONE
For and on behalf of
Legibus Nominees Limited
200 Aldersgate Street
London EC1A 4JJ
ANGELA ORBAN ONE
For and on behalf of
Legibus Secretaries Limited
200 Aldersgate Street
London EC1A 4JJ
DATED this day of , 199 .
WITNESS to the above Signatures:
DENISE WARD
200 Aldersgate Street
London EC1A 4JI
CONTENTS
PRELIMINARY
<PAGE>
1. Interpretation
2. Table A not to apply
SHARE CAPITAL
3. Authorised capital
4. Allotment
5. Power to attach rights
6. Redeemable shares
7. Variation of rights
8. Commission
9. Trusts not recognised
10. Uncertificated shares
SHARE CERTIFICATES
11. Right to certificates
12. Replacement certificates
LIEN
13. Company's lien on shares not fully paid
14. Enforcement of lien by sale
15. Application of proceeds of sale
CALLS ON SHARES
16. Calls
17. Power to differentiate
18. Interest on calls
19. Payment in advance
20. Amounts due on allotment or issue treated as calls
FORFEITURE
21. Notice if call not paid
22. Forfeiture for non-compliance
23. Notice after forfeiture
24. Disposal of forfeited shares
25. Arrears to be paid notwithstanding forfeiture
26. Surrender
UNTRACED SHAREHOLDERS
27. Power of sale
28. Application of proceeds of sale
TRANSFER OF SHARES
29. Form of transfer
30. Right to refuse registration
31. Fees on registration
32. Suspension of registration and closing of register
TRANSMISSION OF SHARES
33. On death
34. Election of person entitled by transmission
35. Rights on transmission
ALTERATION OF SHARE CAPITAL
36. Increase, consolidation, sub-division and cancellation
37. Fractions
38. Reduction of capital
39. Purchase of own shares
GENERAL MEETINGS
40. Annual general meeting
41. Extraordinary general meeting
42. Convening of extraordinary general meetings
43. Length and form of notice
44. Omission to send notice
45. Special business
PROCEEDINGS AT GENERAL MEETINGS
46. Quorum
47. Procedure if quorum not present
48. Chairman
49. Director's right to attend and speak
50. Power to adjourn
51. Notice of adjourned meeting
52. Business at adjourned meeting
53. Accommodation of members at meeting
54. Security
VOTING
55. Method of voting
56. Procedure on a poll
57. Votes of members
58. Casting vote
59. Restriction on voting rights for unpaid calls etc.
60. Voting by proxy
61. Deposit of proxy
62. When votes by proxy valid though authority revoked
MISCELLANEOUS
63. Corporate representative
64. Objections to and error in voting
65. Amendments to resolutions
66. Members' written resolutions
67. Class meetings
68. Failure to disclose interests in shares
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
69. Number of directors
70. Power of the Company to appoint directors
71. Power of the board to appoint directors
72. Appointment of executive directors
73. Eligibility of new directors
74. Voting on resolution for appointment
75. Retirement by rotation
76. Directors subject to retirement
77. Position of retiring director
78. Deemed reappointment
79. No retirement on account of age
80. Removal by ordinary resolution
81. Vacation of office by director
ALTERNATE DIRECTORS
82. Appointment
83. Revocation of appointment
84. Participation in board meetings
85. Responsibility
REMUNERATION, EXPENSES AND PENSIONS
86. Directors' fees
87. Additional remuneration
88. Expenses
89. Remuneration and expenses of alternate director
90. Directors' pensions and other benefits
91. Remuneration of executive director
POWERS AND DUTIES OF THE BOARD
92. Powers of the board
93. Powers of directors being less than minimum required number
94. Powers of executive directors
95. Delegation to committees
96. Local management
97. Agents
98. Associate directors
99. Exercise of voting powers
100. Provision for employees
101. Registers
102. Borrowing powers
103. Register of charges
104. Directors' interests
PROCEEDINGS OF DIRECTORS AND COMMITTEES
105. Board meetings
106. Notice of board meetings
107. Quorum
108. Chairman of board
109. Voting
110. Participation by telephone
111. Resolution in writing
112. Proceedings of committees
113. Minutes of proceedings
114. Validity of proceedings of board or committee
SECRETARY AND AUTHENTICATION OF DOCUMENTS
115. Secretary
116. Authentication of documents
SEALS
117. Safe custody
118. Application of seals
119. Official seal for use abroad
DIVIDENDS AND OTHER PAYMENTS
120. Declaration of dividends
121. Interim dividends
122. Entitlement to dividends
123. Method of payment
124. Dividends not to bear interest
125. Calls or debts may be deducted from dividends etc.
126. Unclaimed dividends etc.
127. Uncashed dividends
128. Payment of dividends in specie
129. Payment of scrip dividends
130. Capitalisation of profits
131. Record dates
ACCOUNTS
132. Keeping and inspection of accounts
133. Accounts to be sent to members etc.
NOTICES
134. Notices to be in writing
135. Service of notices and other documents on members
136. Notice by advertisement
137. Evidence of service
138. Notice binding on transferees etc.
139. Notice in case of entitlement by transmission
MISCELLANEOUS
140. Destruction of documents
141. Winding up
142. Indemnity
<PAGE>
THE COMPANIES ACTS 1985 AND 1989
_______________________________________
PUBLIC COMPANY LIMITED BY SHARES
_______________________________________
ARTICLES OF ASSOCIATION
OF
OYSTERWOOD PLC
PRELIMINARY
<PAGE>
1. Interpretation
(A) In the articles:
"Act" means, unless the context otherwise requires, the
Companies Act 1985, including any statutory modification or
re-enactment for the time being in force;
"Acts" means the Companies Acts 1985 and 1989 and all
statutes and subordinate legislation for the time being in
force concerning companies so far as they apply to the
Company;
"articles" means these articles of association as amended
from time to time;
"auditors" means the auditors of the Company;
"board" means the board of directors of the Company or the
directors present or deemed to be present at a duly convened
meeting of the directors at which a quorum is present;
"business day" means a day (not being a Saturday or Sunday)
on which clearing banks are open for business in London;
"certificated" means, in relation to a share, a share which
is recorded in the register as being held in certificated
form;
"clear days" means, in relation to a period of notice, that
period excluding the day when the notice is given or deemed
to be given and the day for which it is given or on which it
is to take effect;
"company" includes any body corporate (not being a
corporation sole) or association of persons, whether or not
a company within the meaning of the Act;
"director" means, unless the context otherwise requires, a
director of the Company;
"dividend" includes bonus;
"entitled by transmission" means, in relation to a share,
entitled as a consequence of the death or bankruptcy of a
member or of another event giving rise to a transmission of
entitlement by operation of law;
"executed" includes, in relation to a document, execution
under hand or under seal or by another method permitted by
law;
"holder" means, in relation to a share, the member whose
name is entered in the register as the holder of that share;
"London Stock Exchange" means London Stock Exchange Limited;
"member" means, unless the context otherwise requires, a
member of the Company;
"office" means the registered office of the Company;
"paid", "paid up" and "paid-up" include credited as paid or
paid up;
"recognised person" means a recognised clearing house or a
nominee of a recognised clearing house or of a recognised
investment exchange which is designated for the purposes of
section 185(4) of the Act;
"register" means, unless the context otherwise requires, the
register of members kept pursuant to section 352 of the Act;
"seal" means, unless the context otherwise requires, the
common seal of the Company or any official or securities
seal that the Company may have or may be permitted to have
under the Acts;
"secretary" means the secretary of the Company and includes
any assistant or deputy secretary and a person appointed by
the board to perform the duties of the secretary;
"Uncertificated Securities Regulations" means the
Uncertificated Securities Regulations 1995, including any
statutory modification or re-enactment for the time being in
force;
"uncertificated" means, in relation to a share, a share
title to which is recorded in the register as being held in
uncertificated form and title to which, by virtue of the
Uncertificated Securities Regulations, may be transferred by
means of a relevant system.
(B) Words and expressions contained in these articles which are
not defined in paragraph (A) have, unless the contrary is
indicated, the same meaning as in the Acts, but excluding
any statutory modification to the Acts not in force at the
date of adoption of these articles. In particular, the
expressions "Operator", "participating issuer",
"participating security" and "relevant system" have the same
meanings as in the Uncertificated Securities Regulations.
(C) Where an ordinary resolution of the Company is expressed to
be required for any purpose, a special or extraordinary
resolution is also effective for that purpose, and where an
extraordinary resolution is expressed to be required for any
purpose, a special resolution is also effective for that
purpose.
(D) The headings in the articles do not affect the
interpretation of the articles.
2. Table A not to apply
No regulations contained in any statute or subordinate
legislation, including the regulations contained in Table A
in the schedule to the Companies (Tables A to F) Regulations
1985 (as amended), apply as the regulations or articles of
association of the Company.
SHARE CAPITAL
3. Authorised capital
The authorised share capital of the Company at the date of
adoption of these articles is pounds 50,000 divided into 50,000
shares of pounds 1 each.
4. Allotment
(A) Subject to the Acts and relevant authority of the Company in
general meeting required by the articles and the Acts, the
board has general and unconditional authority to allot (with
or without conferring rights of renunciation), grant options
over, offer or otherwise deal with or dispose of unissued
shares (whether forming part of the original or any
increased capital), or rights to subscribe for or convert
any security into shares, to such persons, at such times and
on such terms and conditions as the board may decide but no
share may be issued at a discount.
(B) The board has general and unconditional authority, pursuant
to section 80 of the Act, to exercise all powers of the
Company to allot relevant securities for a period expiring
on the fifth anniversary of the date of incorporation of the
Company.
(C) The maximum amount of relevant securities which may be
allotted pursuant to the authority conferred by paragraph
(B) is the amount of the authorised but as yet unissued
share capital of the Company at the date of incorporation of
the Company.
(D) The board has general power, pursuant to section 95 of the
Act, to allot equity securities pursuant to the authority
conferred by paragraph (B), as if section 89(1) of the Act
does not apply to such allotment. This power is limited to:
(i) allotments to equity securities where the
securities have been offered (whether by way of rights
issue, open offer or otherwise) to holders of shares
made in proportion (as nearly as may be) to their
existing holdings of shares but subject to the board
having a right to make such exclusions or other
arrangements in connection with such offering as it
deems necessary or expedient:
(a) to deal with equity securities
representing fractional entitlements; and
(b) to deal with legal or practical problems
under the laws of, or the requirements of the
recognised regulatory body or a stock exchange in,
any territory; and
(ii) allotments of equity securities for cash other
than pursuant to paragraph (i) up to an aggregate
nominal amount equal to the amount of the authorised
shares but as yet unissued share capital at the date of
incorporation of the Company.
(E) By the authority and power conferred by paragraphs (B) and
(D), the board may before the authority or power expires
make an offer or agreement which would or might require
equity securities or other relevant securities to be
allotted after it expires and may allot securities in
pursuance of that offer or agreement.
(F) The board may at any time after the allotment of a share but
before a person has been entered in the register as the
holder of the share recognise a renunciation of the share by
the allottee in favour of another person and may grant to an
allottee a right to effect a renunciation on the terms and
conditions the board thinks fit.
5. Power to attach rights
Subject to the Acts and to the rights attached to existing
shares, new shares may be allotted or issued with or have
attached to them such special rights or restrictions as the
Company may by ordinary resolution decide, or, if no
resolution is passed, as the board may decide.
6. Redeemable shares
Subject to the Acts and to the rights attached to existing
shares, shares may be issued on terms that they are to be
redeemed or, at the option of the Company or the holder, are
liable to be redeemed.
7. Variation of rights
(A) Subject to the Acts, the rights attached to a class of
shares may be varied whether or not the Company is being
wound up (i) in such manner (if any) as may be provided by
those rights, or (ii) in the absence of provision, either
with the consent in writing of the holders of at least
three-fourths of the nominal amount of the issued shares of
that class or with the sanction of an extraordinary
resolution passed at a separate meeting of the holders of
the issued shares of that class validly held in accordance
with the articles, but not otherwise.
(B) The rights attached to a class of shares are not, unless
otherwise expressly provided in the rights attaching to
those shares, deemed to be varied by the creation, allotment
or issue of further shares ranking pari passu with or
subsequent to them or by the purchase or redemption by the
Company of its own shares in accordance with the Acts and
article 39.
8. Commission
The Company may exercise all powers conferred or permitted
by the Acts of paying commission or brokerage. Subject to
the Acts, commission or brokerage may be satisfied by the
payment of cash or the allotment of fully- or partly-paid
shares or the grant of an option to call for an allotment of
shares or by any combination of these methods.
9. Trusts not recognised
Except as ordered by a court of competent jurisdiction or as
required by law, the Company may not recognise a person as
holding a share on trust and is not bound by or otherwise
compelled to recognise (even if it has notice of it) an
equitable, contingent, future, partial or other claim to or
interest in a share other than an absolute right in the
holder to the whole of the share.
10. Uncertificated shares
(A) Subject to the Acts, the board may resolve that a class of
shares is to become a participating security and that a
class of shares shall cease to be a participating security.
(B) Uncertificated shares of a class are not to be regarded as
forming a separate class from certificated shares of that
class.
(C) A member may, in accordance with the Uncertificated
Securities Regulations, change a share of a class which is a
participating security from a certificated share to an
uncertificated share and from an uncertificated share to a
certificated share.
(D) The Company may give notice to a member requiring the member
to change uncertificated shares to certificated shares by
the time stated in the notice. The notice may also state
that the member may not change certificated shares to
uncertificated shares. If the member does not comply with
the notice, the board may authorise a person to change the
uncertificated shares to certificated shares in the name and
on behalf of the member.
(E) While a class of shares is a participating security, these
articles only apply to an uncertificated share of that class
to the extent that they are consistent with:
(i) the holding of shares of that class in
uncertificated form;
(ii) the transfer of title to shares of that class by
means of a relevant system; and
(iii) the Uncertificated Securities Regulations.
SHARE CERTIFICATES
11. Right to certificate
(A) Subject to the Acts and the requirements of the London Stock
Exchange, a person (except a recognised person in respect of
whom the Company is not required by law to complete and have
ready for delivery a certificate) on becoming the holder of
a certificated share is entitled, unless the terms of issue
of the shares provide otherwise, without charge, to one
certificate for all the certificated shares of a class
registered in his name or, in the case of certificated
shares of more than one class being registered in his name,
to a separate certificate for each class of shares.
(B) Where a member (other than a recognised person) transfers
part of his shares comprised in a certificate he is
entitled, without charge, to one certificate for the balance
of certificated shares retained by him.
(C) The Company is not bound to issue more than one certificate
for certificated shares held jointly by two or more persons
and delivery of a certificate to one joint holder is
sufficient delivery to all joint holders.
(D) A certificate shall specify the number and class and the
distinguishing numbers (if any) of the shares in respect of
which it is issued and the amount paid up on the shares. It
shall be issued under a seal, which may be affixed to or
printed on it, or in such other manner as the board may
approve, having regard to the terms of allotment or issue of
the shares and the requirements of the London Stock
Exchange.
12. Replacement certificates
(A) Where a member holds two or more certificates for shares of
one class, the board may at his request, on surrender of the
original certificates and without charge, cancel the
certificates and issue a single replacement certificate for
certificated shares of that class.
(B) At the request of a member, the board may cancel a
certificate and issue two or more in its place (representing
certificated shares in such proportions as the member may
specify), on surrender of the original certificate and on
payment of such reasonable sum as the board may decide.
(C) Where a certificate is worn out, defaced, lost or destroyed,
the board may cancel it and issue a replacement certificate
on such terms as to provision of evidence and indemnity and
to payment of any exceptional out-of-pocket expenses
incurred by the Company in the investigation of that
evidence and the preparation of that indemnity as the board
may decide, and on surrender of the original certificate
(where it is worn out or defaced).
LIEN
13. Company's lien on shares not fully paid
(A) The Company has a first and paramount lien on every share
(other than a fully-paid share) registered in the name of a
member (whether solely or jointly with another person) for
an amount payable in respect of the share, whether the due
date for payment has arrived or not. The lien applies to
all dividends from time to time declared or other amounts
payable in respect of the share.
(B) The board may either generally or in a particular case
declare a share to be wholly or partly exempt from the
provisions of this article. Unless otherwise agreed with
the transferee, the registration of a transfer of a share
operates as a waiver of the Company's lien (if any) on that
share.
14. Enforcement of lien by sale
(A) For the purpose of enforcing the lien, the board may sell
shares subject to the lien in such manner as it may decide,
if the due date for payment of the relevant amounts has
arrived and payment is not made within 14 clear days after
the service of a notice in writing (stating, and demanding
payment of, the amounts and giving notice of the intention
to sell in default of payment) on the member concerned (or
to a person entitled by transmission to the shares).
(B) To give effect to a sale, the board may authorise a person
to transfer the shares in the name and on behalf of the
holder of or the person entitled by transmission to the
shares to the purchaser or his nominee. The purchaser is
not bound to see to the application of the purchase money
and the title of the transferee is not affected by an
irregularity in or invalidity of the proceedings connected
with the sale.
15. Application of proceeds of sale
The net proceeds of a sale effected under article 14, after
payment of the costs of the sale, shall be applied by the
Company in or towards satisfaction of the amount in respect
of which the lien exists. Any residue shall (on surrender
to the Company for cancellation of any certificate for the
shares sold, or the provision of an indemnity (with or
without security) as to any lost or destroyed certificate
required by the board and subject to a like lien for amounts
not presently payable as existed on the shares before the
sale) be paid to the member or a person entitled by
transmission to the shares immediately before the sale.
CALLS ON SHARES
16. Calls
Subject to the terms of allotment or issue, the board may
make calls on members in respect of amounts unpaid on the
shares or a class of shares held by them respectively
(whether in respect of nominal value or a premium) and not
payable on a date fixed by or in accordance with the terms
of allotment or issue. Each member shall (on receiving at
least 14 clear days' notice specifying when and where
payment is to be made) pay to the Company the amount called
as required by the notice. A call may be made payable by
instalments and may, at any time before receipt by the
Company of an amount due, be revoked or postponed in whole
or in part as the board may decide. A call is deemed made
at the time when the resolution of the board authorising it
is passed. A person on whom a call is made remains liable
to pay the amount called despite the subsequent transfer of
the share in respect of which the call is made. The joint
holders of a share are jointly and severally liable for
payment of a call in respect of that share.
17. Power to differentiate
The board may make arrangements on the allotment or issue of
shares for a difference between the allottees or holders in
the amounts and times of payment of a call on their shares.
18. Interest on calls
If the whole of the amount called is not paid on or before
the date fixed for payment, the person by whom it is payable
shall pay interest on the unpaid amount at such rate as may
be fixed by the terms of allotment or issue of the share or,
if no rate is fixed, at such rate (not exceeding, without
the sanction of the Company given by ordinary resolution, 20
per cent. per annum) as the board may decide, from and
including the date fixed for payment until but excluding the
date of actual payment and all costs, charges and expenses
incurred by the Company by reason of the non-payment. The
board may waive payment of the interest in whole or in part.
19. Payment in advance
The board may, if it thinks fit, receive from a member all
or part of the amounts uncalled and unpaid on shares held by
him. A payment in advance of calls extinguishes to the
extent of the payment the liability of the member on the
shares in respect of which it is made. The Company may pay
interest on the amount paid in advance, or on so much of it
as from time to time exceeds the amount called on the shares
in respect of which the payment in advance has been made, at
such rate (not exceeding, without the sanction of the
Company given by ordinary resolution, 20 per cent. per
annum) as the board may decide.
20. Amounts due on allotment or issue treated as calls
An amount which becomes payable in respect of a share on
allotment or issue or on a date fixed pursuant to the terms
of allotment or issue (whether in respect of nominal value
or a premium) or as an instalment of a call is deemed to be
a call. In case of non-payment, the provisions of the
articles as to payment of interest and costs, charges and
expenses, forfeiture or otherwise apply as if that amount
has become payable by virtue of a call.
FORFEITURE
21. Notice if call not paid
If a member fails to pay the whole of a call or an
instalment of a call on or before the date fixed for
payment, the board may serve notice on the member or on a
person entitled by transmission to the share in respect of
which the call was made demanding payment, on a date not
less than 14 clear days from the date of the notice, of the
amount of the call outstanding and any interest that may
have accrued on it and all costs, charges and expenses
incurred by the Company by reason of the non-payment. The
notice shall state (i) the place where payment is to be
made, and (ii) that if the notice is not complied with the
share in respect of which the call was made will be liable
to be forfeited.
22. Forfeiture for non-compliance
If the notice referred to in article 21 is not complied
with, a share in respect of which it is given may, at any
time before payment required by the notice has been made, be
forfeited by a resolution of the board. The forfeiture
includes all dividends declared or other amounts payable in
respect of the forfeited share and not paid before the
forfeiture.
23. Notice after forfeiture
When a share has been forfeited, the Company shall serve
notice of the forfeiture on the person who was before
forfeiture the holder of the share or the person entitled by
transmission to the share but no forfeiture is invalidated
by an omission to give notice. An entry of the fact and
date of forfeiture shall be made in the register.
24. Disposal of forfeited shares
(A) Until cancelled in accordance with the Acts, a forfeited
share and all rights attaching to it are deemed to be the
property of the Company and may be sold, re-allotted or
otherwise disposed of either to the person who was before
the forfeiture the holder or to another person, on such
terms and in such manner as the board may decide. Where for
this purpose a forfeited share is to be transferred, the
board may authorise a person to transfer the share to the
transferee. The Company may receive the consideration (if
any) for the share on its disposal and may register the
transferee as the holder of the share.
(B) The board may before a forfeited share has been cancelled,
sold, re-allotted or otherwise disposed of annul the
forfeiture on such conditions as it thinks fit.
(C) A statutory declaration by a director or the secretary that
a share has been forfeited on the date stated in the
declaration is conclusive evidence of the facts stated in
the declaration against all persons claiming to be entitled
to the share. The declaration (subject if necessary to the
transfer of the share) constitutes good title to the share
and the person to whom the share is disposed of is not bound
to see to the application of the consideration (if any).
His title to the share is not affected by an irregularity in
or invalidity of the proceedings connected with the
forfeiture or disposal.
25. Arrears to be paid notwithstanding forfeiture
A person whose share has been forfeited ceases on forfeiture
to be a member in respect of it and shall surrender to the
Company for cancellation any certificate for the forfeited
share or shares. He remains liable to pay, and shall
immediately pay to the Company, all calls, interest, costs,
charges and expenses owing in respect of the share at the
time of forfeiture, with interest, from the time of
forfeiture until payment, at such rate as may be fixed by
the terms of allotment or issue of the share or, if no rate
is fixed, at the rate (not exceeding, without the sanction
of the Company given by ordinary resolution, 20 per cent.
per annum) as the board may decide. The board may if it
thinks fit enforce payment without allowance for the value
of the share at the time of forfeiture or for consideration
received on disposal.
26. Surrender
The board may accept the surrender of a share liable to be
forfeited and in that case references in the articles to
forfeiture include surrender.
UNTRACED SHAREHOLDERS
27. Power of sale
(A) The Company may sell the share of a member or of a person
entitled by transmission if:
(i) during a period of not less than 12 years before
the date of publication of the advertisements referred
to in paragraph (A)(iii) (or, if published on two
different dates, the first date) (the "relevant
period") the Company has paid at least three cash
dividends (whether interim or final) in respect of the
share;
(ii) throughout the relevant period no cheque, warrant
or money order sent by the Company by post in a pre-
paid envelope addressed to the holder of the share or
to the person entitled by transmission to the share in
accordance with article 123(B) has been presented to
the paying bank, no payment made by the Company by any
other means permitted by article 123(B) has been
claimed or accepted and no communication has been
received by the Company from the member or person
entitled by transmission (in his capacity as member or
person entitled by transmission);
(iii) on expiry of the relevant period the Company
has given notice of its intention to sell the share by
advertisement in a national newspaper and in a
newspaper circulating in the area of the address
referred to in paragraph (A)(ii);
(iv) the Company has not, so far as the board is aware,
during a further period of three months after the date
of the advertisements referred to in paragraph (A)(iii)
(or the later advertisement if the advertisements are
published on different dates) and before the exercise
of the power of sale received a communication from the
member or person entitled by transmission (in his
capacity as member or person entitled by transmission);
and
(v) the Company has first given notice in writing to
the London Stock Exchange of its intention to sell the
share.
(B) In addition to the power of sale conferred by paragraph (A),
if during the relevant period or a further period ending on
the date when all the requirements of paragraphs (A)(i) to
(v) have been satisfied an additional share has been
allotted or issued in right of that held at the beginning
of, or previously so allotted or issued during, those
periods and all the requirements of paragraphs (A)(i) to (v)
have been satisfied in respect of the additional share, the
Company is entitled to sell the additional share.
(C) To give effect to a sale pursuant to paragraphs (A) or (B),
the board may authorise a person to transfer the share in
the name and on behalf of the holder of, or the person
entitled by transmission to, the share to the purchaser or
his nominee. The purchaser is not bound to see to the
application of the purchase money and the title of the
transferee is not affected by an irregularity or invalidity
in the proceedings connected with the sale of the share.
28. Application of proceeds of sale
The Company shall account to the member or other person
entitled by transmission to the share for the net proceeds
of sale by carrying any amount received on sale to a
separate account. The Company is deemed to be a debtor and
not a trustee in respect of that amount for the member or
other person. Any amount carried to the separate account
may either be employed in the business of the Company or
invested as the board may think fit. No interest is payable
on that amount and the Company is not required to account
for money earned on it.
TRANSFER OF SHARES
29. Form of transfer
(A) A member may transfer all or any of his certificated shares
by instrument of transfer in writing in any usual form or in
another form approved by the board, and the instrument shall
be executed by or on behalf of the transferor and (in the
case of a transfer of a share which is not fully paid) by or
on behalf of the transferee.
(B) A member may transfer all or any of his uncertificated
shares in accordance with the Uncertificated Securities
Regulations.
(C) The transferor of a share is deemed to remain the holder of
the share until the name of the transferee is entered in the
register in respect of it.
30. Right to refuse registration
(A) Subject to article 68 and the requirements of the London
Stock Exchange, the board may, in its absolute discretion
and without giving a reason, refuse to register the transfer
of a certificated share which is not fully paid or the
transfer of a certificated share on which the Company has a
lien. If that share has been admitted to the Official List
of the London Stock Exchange, the board may not refuse to
register the transfer if this would prevent dealings in the
share from taking place on an open and proper basis.
(B) Subject to article 68 and the requirements of the London
Stock Exchange, the board may also, in its absolute
discretion and without giving a reason, refuse to register
the transfer of a certificated share or a renunciation of a
renounceable letter of allotment unless all of the following
conditions are satisfied:
(i) it is in respect of only one class of shares;
(ii) it is in favour of a single transferee or
renouncee or not more than four joint transferees or
renouncees;
(iii) it is duly stamped (if required); and
(iv) it is delivered for registration to the office or
such other place as the board may decide, accompanied
by the certificate for the shares to which it relates
(except in the case of a transfer by a recognised
person where a certificate has not been issued, or in
the case of a renunciation) and such other evidence as
the board may reasonably require to prove the title of
the transferor or person renouncing and the due
execution by him of the transfer or renunciation or, if
the transfer or renunciation is executed by some other
person on his behalf, the authority of that person to
do so.
(C) If the board refuses to register the transfer of a
certificated share it shall, within two months after the
date on which the transfer was lodged with the Company, send
notice of the refusal to the transferee. An instrument of
transfer which the board refuses to register shall (except
in the case of suspected fraud) be returned to the person
depositing it. Subject to article 140, the Company may
retain all instruments of transfer which are registered.
31. Fees on registration
The Company may not charge a fee for registering the
transfer of a share or the renunciation of a renounceable
letter of allotment or other document relating to or
affecting the title to a share or the right to transfer it
or for making any other entry in the register.
32. Suspension of registration and closing of register
Subject to the Acts and the requirements of the London Stock
Exchange, the registration of transfers may be suspended at
such times and for such period (not exceeding 30 days in any
year) as the board may decide and either generally or in
respect of a particular class of shares.
TRANSMISSION OF SHARES
33. On death
(A) The Company may recognise only the personal representative
or representatives of a deceased member as having title to a
share held by that member alone or to which he alone was
entitled. In the case of a share held jointly by more than
one person, the Company may recognise only the survivor or
survivors as being entitled to it.
(B) Nothing in the articles releases the estate of a deceased
member from liability in respect of a share which has been
solely or jointly held by him.
34. Election of person entitled by transmission
(A) A person becoming entitled by transmission to a share may,
on production of any evidence the board may require, elect
either to be registered as a member or to have a person
nominated by him registered as a member.
(B) If he elects to be registered himself, he shall give notice
to the Company to that effect. If he elects to have another
person registered, he shall:
(i) if it is a certificated share, execute an
instrument of transfer of the share to that person; or
(ii) if it is an uncertificated share:
(a) transfer the share to that person by
means of a relevant system; or
(b) change the share to a certificated share
and execute an instrument of transfer of the share
to that person.
(C) All the provisions of the articles relating to the transfer
of certificated shares apply to the notice or instrument of
transfer (as the case may be) as if it were an instrument of
transfer executed by the member and his death, bankruptcy or
other event giving rise to a transmission of entitlement had
not occurred.
(D) The board may give notice requiring a person to make the
election referred to in article 34(A). If that notice is
not complied with within 60 days, the board may withhold
payment of all dividends and other amounts payable in
respect of the share until notice of election has been made.
35. Rights on transmission
Where a person becomes entitled by transmission to a share,
the rights of the holder in relation to that share cease.
The person entitled by transmission may, however, give a
good discharge for dividends and other amounts payable in
respect of the share and, subject to articles 34 and 123,
has the rights to which he would be entitled if he were the
holder of the share. The person entitled by transmission is
not, however, before he is registered as the holder of the
share entitled in respect of it to receive notice of or
exercise rights conferred by membership in relation to
meetings of the Company or a separate meeting of the holders
of a class of shares.
ALTERATION OF SHARE CAPITAL
36. Increase, consolidation, sub-division and cancellation
The Company may by ordinary resolution:
(i) increase its share capital by a sum to be divided
into shares of an amount prescribed by the resolution;
(ii) consolidate and divide all or any of its share
capital into shares of a larger amount than its
existing shares;
(iii) subject to the Acts, sub-divide all or any of
its shares into shares of a smaller amount and may by
the resolution decide that the shares resulting from
the sub-division have amongst themselves a preference
or other advantage or be subject to a restriction; and
(iv) cancel shares which, at the date of the passing of
the resolution, have not been taken or agreed to be
taken by a person and diminish the amount of its share
capital by the amount of the shares so cancelled.
37. Fractions
(A) If, as the result of consolidation and division or sub-
division of shares, members become entitled to fractions of
a share, the board may on behalf of the members deal with
the fractions as it thinks fit. In particular, the board
may:
(i) sell fractions of a share to a person (including,
subject to the Acts, to the Company) for the best price
reasonably obtainable and distribute the net proceeds
of sale in due proportion amongst the persons entitled
(except that if the amount due to a person is less than
,3, or such other sum as the board may decide, the sum
may be retained for the benefit of the Company); or
(ii) subject to the Acts, allot or issue to a member
credited as fully paid by way of capitalisation the
minimum number of shares required to round up his
holding of shares to a number which, following
consolidation and division or sub-division, leaves a
whole number of shares (such allotment or issue being
deemed to have been effected immediately before
consolidation or sub-division, as the case may be).
(B) To give effect to a sale pursuant to article 37(A)(i) the
board may authorise a person to transfer the shares to the
purchaser or his nominee and may cause the name of the
purchaser or his nominee to be entered in the register as
the holder of the shares. The purchaser is not bound to see
to the application of the purchase money and the title of
the transferee to the shares is not affected by an
irregularity or invalidity in the proceedings connected with
the sale.
(C) If shares are allotted or issued pursuant to article
37(A)(ii), the amount required to pay up those shares may be
capitalised as the board thinks fit out of amounts standing
to the credit of reserves (including a share premium
account, capital redemption reserve and profit and loss
account), whether or not available for distribution, and
applied in paying up in full the appropriate number of
shares. A resolution of the board capitalising part of the
reserves has the same effect as if the capitalisation had
been declared by ordinary resolution of the Company pursuant
to article 130. In relation to the capitalisation the board
may exercise all the powers conferred on it by article 130
without an ordinary resolution of the Company.
38. Reduction of capital
Subject to the Acts and to the rights attached to existing
shares, the Company may by special resolution reduce its
share capital, capital redemption reserve and share premium
account in any way.
39. Purchase of own shares
Subject to the Acts and the requirements of the London Stock
Exchange, the Company may purchase shares of any class
(including redeemable shares) in its own capital in any way.
GENERAL MEETINGS
40. Annual general meeting
The Company shall hold annual general meetings, which shall
be convened by the board, in accordance with the Acts.
41. Extraordinary general meeting
All general meetings of the Company other than annual
general meetings are called extraordinary general meetings.
42. Convening of extraordinary general meetings
The board may convene an extraordinary general meeting
whenever it thinks fit. The board must convene an
extraordinary general meeting immediately on receipt of a
requisition from members in accordance with the Acts and in
default a meeting may be convened by requisitionists as
provided in the Acts. At a meeting convened on a
requisition or by requisitionists no business may be
transacted except that stated by the requisition or proposed
by the board. An extraordinary general meeting may also be
convened in accordance with article 93.
43. Length and form of notice
(A) An annual general meeting and an extraordinary general
meeting called for the passing of a special resolution shall
be called by not less than 21 clear days' notice. All other
extraordinary general meetings shall be called by not less
than 14 clear days' notice.
(B) Subject to the Acts, and although called by shorter notice
than that specified in paragraph (A), a general meeting is
deemed to have been duly called if it is so agreed:
(i) in the case of an annual general meeting, by all
the members entitled to attend and vote at the meeting;
and
(ii) in the case of another meeting, by a majority in
number of the members having a right to attend and vote
at the meeting, being a majority together holding not
less than 95 per cent. in nominal value of the shares
giving that right.
(C) The notice of meeting shall specify:
(i) whether the meeting is an annual general meeting
or an extraordinary general meeting;
(ii) the place, the date and the time of the meeting;
(iii) in the case of special business, the general
nature of that business;
(iv) if the meeting is convened to consider a special
or an extraordinary resolution, the intention to
propose the resolution as such; and
(v) with reasonable prominence, that a member entitled
to attend and vote may appoint one or more proxies to
attend and, on a poll, vote instead of him and that a
proxy need not also be a member.
(D) The notice of meeting shall be given to the members (other
than any who, under the provisions of the articles or the
terms of allotment or issue of shares, are not entitled to
receive notice), to the directors and to the auditors.
44. Omission to send notice
The accidental omission to send a notice of meeting or, in
cases where it is sent out with the notice, an instrument of
proxy to, or the non-receipt of either by, a person entitled
to receive it does not invalidate the proceedings at a
general meeting.
45. Special business
All business transacted at a general meeting is deemed
special except the following business at an annual general
meeting:
(i) the receipt and consideration of the annual
accounts, the directors' report and auditors' report on
those accounts;
(ii) the appointment of directors and other officers in
place of those retiring by rotation or otherwise
ceasing to hold office;
(iii) the declaration of dividends; and
(iv) the appointment of the auditors (when special
notice of the resolution for appointment is not
required by the Acts) and the fixing, or determination
of the manner of the fixing, of their remuneration.
PROCEEDINGS AT GENERAL MEETINGS
46. Quorum
(A) No business may be transacted at a general meeting unless a
quorum is present. The absence of a quorum does not prevent
the appointment of a chairman in accordance with the
articles, which is not treated as part of the business of
the meeting.
(B) The quorum for a general meeting is for all purposes two
members present in person or by proxy and entitled to vote.
47. Procedure if quorum not present
(A) If a quorum is not present within thirty minutes from the
time fixed for the start of the meeting, the meeting, if
convened by or on the requisition of members, is dissolved.
In any other case it stands adjourned to such time (being
not less than 14 days nor more than 28 days later) and place
as the chairman (or, in default, the board) decides.
(B) At an adjourned meeting the quorum is two members present in
person or by proxy and entitled to vote. If a quorum is not
present within five minutes from the time fixed for the
start of the meeting, the adjourned meeting is dissolved.
(C) The Company shall give not less than seven clear days'
notice of any meeting adjourned for the lack of a quorum and
the notice shall state the quorum requirement.
48. Chairman
The chairman (if any) of the board or, in his absence, the
deputy chairman (if any) shall preside as chairman at a
general meeting. If there is no chairman or deputy chairman,
or if at a meeting neither is present within five minutes
after the time fixed for the start of the meeting or neither
is willing to act, the directors present shall select one of
their number to be chairman. If only one director is
present and willing to act, he shall be chairman. In
default, the members present in person and entitled to vote
shall choose one of their number to be chairman.
49. Director's right to attend and speak
A director is entitled to attend and speak at a general
meeting and at a separate meeting of the holders of a class
of shares or debentures whether or not he is a member.
50. Power to adjourn
(A) The chairman may, with the consent of a meeting at which a
quorum is present (and shall, if so directed by the meeting)
adjourn a meeting from time to time and from place to place
or for an indefinite period.
(B) Without prejudice to any other power which he may have under
the provisions of the articles or at common law, the
chairman may, without the consent of the meeting, interrupt
or adjourn a meeting from time to time and from place to
place or for an indefinite period if he decides that it has
become necessary to do so in order to (i) secure the proper
and orderly conduct of the meeting, (ii) give all persons
entitled to do so a reasonable opportunity of speaking and
voting at the meeting, or (iii) ensure that the business of
the meeting is properly disposed of.
51. Notice of adjourned meeting
Without prejudice to article 47(C), whenever a meeting is
adjourned for 28 days or more or for an indefinite period,
at least seven clear days' notice specifying the place, date
and time of the adjourned meeting and the general nature of
the business to be transacted shall be given to the members
(other than any who, under the provisions of the articles or
the terms of allotment or issue of the shares, are not
entitled to receive notice), the directors and the auditors.
Except in these circumstances, and subject to article 47(C),
it is not necessary to give notice of an adjourned meeting
or of the business to be transacted at the adjourned
meeting.
52. Business at adjourned meeting
No business may be transacted at an adjourned meeting other
than the business which might properly have been transacted
at the meeting from which the adjournment took place.
53. Accommodation of members at meeting
If it appears to the chairman that the meeting place
specified in the notice convening the meeting is inadequate
to accommodate all members entitled and wishing to attend,
the meeting is duly constituted and its proceedings valid if
the chairman is satisfied that adequate facilities are
available to ensure that a member who is unable to be
accommodated is able to (i) participate in the business for
which the meeting has been convened, (ii) hear and see all
persons present who speak (whether by the use of
microphones, loud-speakers, audio-visual communications
equipment or otherwise), whether in the meeting place or
elsewhere, and (iii) be heard and seen by all other persons
present in the same way.
54. Security
The board may make any arrangement and impose any
restriction it considers appropriate to ensure the security
of a meeting including, without limitation, the searching of
a person attending the meeting and the restriction of the
items of personal property that may be taken into the
meeting place. The board is entitled to refuse entry to a
meeting to a person who refuses to comply with these
arrangements or restrictions.
VOTING
55. Method of voting
(A) At a general meeting, a resolution put to the vote of the
meeting is decided by a show of hands unless (before or on
the declaration of the result of the show of hands) a poll
is duly demanded.
(B) Subject to the Acts, a poll may be demanded on any question
by:
(i) the chairman of the meeting;
(ii) not less than five members present in person or by
proxy and entitled to vote;
(iii) a member or members present in person or by
proxy representing in aggregate not less than one-tenth
of the total voting rights of all the members having
the right to vote at the meeting; or
(iv) a member or members present in person or by proxy
holding shares conferring a right to vote at the
meeting, being shares on which an aggregate sum has
been paid up equal to not less than one-tenth of the
total sum paid up on all the shares conferring that
right.
A demand by a proxy is deemed to be a demand by the member
appointing the proxy.
(C) Unless a poll is demanded and the demand is not withdrawn, a
declaration by the chairman that the resolution has been
carried, or carried by a particular majority, or lost or not
carried by a particular majority, and an entry to that
effect in the book containing the minutes of proceedings, is
conclusive evidence of the fact without proof of the number
or proportion of the votes recorded in favour of or against
the resolution.
56. Procedure on a poll
(A) If a poll is properly demanded, it shall be taken in such
manner as the chairman directs. He may appoint scrutineers,
who need not be members, and may fix a time and place for
declaring the result of the poll. The result of the poll is
deemed to be the resolution of the meeting at which the poll
is demanded.
(B) A poll demanded on the election of a chairman or on any
question of adjournment shall be taken at the meeting and
without adjournment. A poll demanded on another question
shall be taken at such time and place as the chairman
decides, either at once or after an interval or adjournment
(but not more than 30 clear days after the date of the
demand).
(C) No notice need be given of a poll not taken immediately if
the time and place at which it is to be taken are announced
at the meeting at which it is demanded. In any other case
at least seven clear days' notice shall be given specifying
the time and place at which the poll is to be taken.
(D) The demand for a poll may be withdrawn but only with the
consent of the chairman. A demand withdrawn in this way
validates the result of a show of hands declared before the
demand is made. In the case of a poll demanded before the
declaration of the result of a show of hands, the meeting
shall continue as if the demand has not been made.
(E) The demand for a poll (other than on the election of the
chairman or on a question of adjournment) does not prevent
the meeting continuing for the transaction of business other
than the question on which a poll has been demanded.
(F) On a poll, votes may be given in person or by proxy and a
member entitled to more than one vote need not, if he votes,
use all his votes or cast all the votes he uses in the same
way, whether present in person or by proxy.
57. Votes of members
(A) Subject to special terms as to voting on which shares have
been allotted or issued, or a suspension or abrogation of
voting rights pursuant to the articles, at a general meeting
every member present in person has on a show of hands one
vote and every member present in person or by proxy has on a
poll one vote for every share of which he is the holder.
(B) In the case of joint holders of a share, the vote of the
senior who tenders a vote, whether in person or by proxy,
shall be accepted to the exclusion of the vote or votes of
the other joint holder or holders, and seniority is
determined by the order in which the names of the holders
stand in the register.
(C) A member in respect of whom an order has been made by a
court or official having jurisdiction (whether in the United
Kingdom or elsewhere) that he is or may be suffering from
mental disorder or is otherwise incapable of running his
affairs may vote, whether on a show of hands or on a poll,
by his guardian, receiver, curator bonis or other person
authorised for that purpose and appointed by the court. A
guardian, receiver, curator bonis or other authorised and
appointed person may, on a poll, vote by proxy if evidence
(to the satisfaction of the board) of the authority of the
person claiming to exercise the right to vote is deposited
at the office (or at another place specified in accordance
with the articles for the deposit of instruments of proxy)
within the time limits prescribed by the articles for the
deposit of instruments of proxy for use at the meeting,
adjourned meeting or poll at which the right to vote is to
be exercised.
58. Casting vote
In the case of an equality of votes the chairman has, on a
show of hands and on a poll, a casting vote in addition to
any vote to which he is entitled as a member.
59. Restriction on voting rights for unpaid calls etc.
Unless the board otherwise decides, no member is entitled in
respect of a share held by him to be present or to vote,
either in person or by proxy, at a general meeting or at a
separate meeting of the holders of class of shares or on a
poll, or to exercise other rights conferred by membership in
relation to the meeting or poll, if a call or other amount
due and payable in respect of the share is unpaid. This
restriction ceases on payment of the amount outstanding and
all costs, charges and expenses incurred by the Company by
reason of the non-payment.
60. Voting by proxy
(A) An instrument appointing a proxy shall be in writing in any
usual form (or in another form approved by the board)
executed by the appointor or his duly constituted attorney
or, if the appointor is a company, under its seal or under
the hand of its duly authorised officer or attorney or other
person authorised to sign.
(B) An instrument of proxy is deemed (unless the contrary is
stated in it) to confer authority to demand or join in
demanding a poll and to vote on a resolution or amendment of
a resolution put to, or other business which may properly
come before, the meeting or meetings for which it is given,
as the proxy thinks fit.
(C) A proxy need not be a member.
(D) A member may appoint more than one proxy to attend on the
same occasion. When two or more valid but differing
instruments of proxy are delivered for the same share for
use at the same meeting, the one which is last validly
delivered (regardless of its date or the date of its
execution) shall be treated as replacing and revoking the
other or others as regards that share.
(E) Deposit of an instrument of proxy does not prevent a member
attending and voting in person at the meeting or an
adjournment of the meeting or on a poll.
(F) An instrument of proxy is (unless the contrary is stated in
it) valid for an adjournment of the meeting as well as for
the meeting or meetings to which it relates. An instrument
of proxy is valid for 12 months from the date of execution.
(G) Subject to the Acts and the requirements of the London Stock
Exchange, the Company may send an instrument of proxy to all
or none of the persons entitled to receive notice of and to
vote at a meeting. If sent the instrument shall provide for
two-way voting (without prejudice to a right to abstain) on
all resolutions set out in the notice of meeting.
61. Deposit of proxy
An instrument of proxy, and (if required by the board) a
power of attorney or other authority under which it is
executed or a copy of it notarially certified or certified
in some other way approved by the board, shall be:
(i) deposited at the office, or another place in the
United Kingdom specified in the notice convening the
meeting or in an instrument of proxy or other
accompanying document sent by the Company in relation
to the meeting, not less than 48 hours before the time
for holding the meeting or adjourned meeting or the
taking of a poll at which the person named in the
instrument proposes to vote;
(ii) in the case of a meeting adjourned for less than
28 days but more than 48 hours or in the case of a poll
taken more than 48 hours after it is demanded,
deposited as required by paragraph (i) not less than 24
hours before the time appointed for the holding of the
adjourned meeting or the taking of the poll; or
(iii) in the case of a meeting adjourned for less
than 48 hours or in the case of a poll not taken
immediately but taken not more than 48 hours after it
was demanded, delivered at the adjourned meeting or at
the meeting at which the poll was demanded to the
chairman or to the secretary or to a director.
An instrument of proxy not deposited or delivered in
accordance with this article is invalid.
62. When votes by proxy valid though authority revoked
A vote given or poll demanded by a proxy or authorised
representative of a company is valid despite termination of
his authority unless notice of termination is received by
the Company at the office (or other place specified for
depositing the instrument of proxy) at least one hour before
the time for holding the meeting or adjourned meeting at
which the vote is given or (in the case of a poll taken
otherwise than at or on the same day as the meeting or
adjourned meeting) the time appointed for the taking of the
poll at which the vote is cast.
CORPORATE REPRESENTATIVE
63. A company which is a member may, by resolution of its
directors or other governing body, authorise a person to act
as its representative at a meeting or at a separate meeting
of the holders of a class of shares (the "representative").
The representative is entitled to exercise on behalf of the
company those powers that the company could exercise if it
were an individual member. The company is for the purposes
of the articles deemed to be present in person at a meeting
if the representative is present. All references to
attendance and voting in person shall be construed
accordingly. A director, the secretary or other person
authorised for the purpose by the secretary may require the
representative to produce a certified copy of the resolution
of authorisation before permitting him to exercise his
powers.
OBJECTIONS TO AND ERROR IN VOTING
64. No objection may be made to the qualification of a voter or
to the counting of, or failure to count, a vote, except at
the meeting or adjourned meeting at which the vote objected
to is tendered or at which the error occurs. An objection
properly made shall be referred to the chairman and only
invalidates the result of the voting if, in the opinion of
the chairman, it is of sufficient magnitude to affect the
decision of the meeting. The decision of the chairman is
conclusive and binding on all concerned.
AMENDMENTS TO RESOLUTIONS
65. No amendment to a resolution duly proposed as a special or
extraordinary resolution other than an amendment to correct
a patent error may be considered or voted on. No amendment
to a resolution duly proposed as an ordinary resolution
other than an amendment to correct a patent error may be
considered or voted on unless either (i) at least 48 hours
before the time appointed for holding the meeting or
adjourned meeting at which the ordinary resolution is to be
considered, notice of the terms of the amendment and
intention to move it has been lodged at the office, or (ii)
the chairman in his absolute discretion decides that the
amendment may be considered or voted on. If an amendment
proposed to a resolution under consideration is ruled out of
order by the chairman the proceedings on the substantive
resolution are not invalidated by an error in his ruling.
MEMBERS' WRITTEN RESOLUTIONS
66. A resolution in writing executed by or on behalf of each
member who would have been entitled to vote upon it if it
had been proposed at a general meeting at which he was
present is as effective as if it had been passed at a
general meeting duly convened and held. The resolution in
writing may consist of several instruments in the same form
each duly executed by or on behalf of one or more members.
If the resolution in writing is described as a special
resolution or as an extraordinary resolution, it has effect
accordingly.
CLASS MEETINGS
67. A separate meeting for the holders of a class of shares
shall be convened and conducted as nearly as possible in the
same way as an extraordinary general meeting, except that:
(i) no member, other than a director, is entitled to
notice of it or to attend unless he is a holder of
shares of that class;
(ii) no vote may be given except in respect of a share
of that class;
(iii) the quorum at the meeting is two persons
present in person holding or representing by proxy at
least one-third in nominal value of the issued shares
of that class;
(iv) the quorum at an adjourned meeting is two persons
holding shares of that class who are present in person
or by proxy; and
(v) a poll may be demanded in writing by a member
present in person or by proxy and entitled to vote at
the meeting and on a poll each member has one vote for
every share of that class of which he is the holder.
FAILURE TO DISCLOSE INTERESTS IN SHARES
68.
(A) Where notice is served by the Company under section 212 of
the Act (a "section 212 notice") on a member, or another
person appearing to be interested in shares held by that
member, and the member or other person has failed in
relation to any shares (the "default shares", which
expression includes any shares allotted or issued after the
date of the section 212 notice in right of those shares) to
give the Company the information required within the
prescribed period from the date of the section 212 notice,
the following sanctions apply, unless the board otherwise
decides:
(i) the member is not entitled in respect of the
default shares to be present or to vote (either in
person or by proxy) at a general meeting or at a
separate meeting of the holders of a class of shares or
on a poll; and
(ii) where the default shares represent at least 0.25
per cent. in nominal value of the issued shares of
their class:
(a) a dividend (or any part of a dividend)
or other amount payable in respect of the default
shares shall be withheld by the Company, which has
no obligation to pay interest on it, and the
member is not entitled to elect, pursuant to
article 129, to receive shares instead of a
dividend; and
(b) no transfer of any certificated default
shares shall be registered unless the transfer is
an excepted transfer or:
(1) the member is not himself in
default in supplying the information
required; and
(2) the member proves to the
satisfaction of the board that no person in
default in supplying the information required
is interested in any of the shares the
subject of the transfer.
(B) For the purpose of enforcing the sanction in paragraph
(A)(ii)(b), the board may give notice to the member
requiring the member to change default shares held in
uncertificated form to certificated form by the time stated
in the notice. The notice may also state that the member
may not change any default shares held in certificated form
to uncertificated form. If the member does not comply with
the notice, the board may authorise a person to change
default shares held in uncertificated form to certificated
form in the name and on behalf of the member.
(C) The sanctions under paragraph (A) cease to apply seven days
after the earlier of:
(i) receipt by the Company of notice of an excepted
transfer, but only in relation to the shares
transferred; and
(ii) receipt by the Company, in a form satisfactory to
the board, of all the information required by the
section 212 notice.
(D) Where, on the basis of information obtained from a member in
respect of a share held by him, the Company issues a section
212 notice to another person, it shall at the same time send
a copy of the section 212 notice to the member, but the
accidental omission to do so, or the non-receipt by the
member of the copy, does not invalidate or otherwise affect
the application of paragraphs (A) or (B).
(E) For the purposes of this article 68:
(i) a person, other than the member holding a share,
is treated as appearing to be interested in that share
if the member has informed the Company that the person
is or may be interested, or if the Company (after
taking account of information obtained from the member
or, pursuant to a section 212 notice, from anyone else)
knows or has reasonable cause to believe that the
person is or may be so interested;
(ii) "interested" is construed as it is for the purpose
of section 212 of the Act;
(iii) reference to a person having failed to give
the Company the information required by a section 212
notice, or being in default in supplying such
information, includes (a) reference to his having
failed or refused to give all or any part of it, and
(b) reference to his having given information which he
knows to be false in a material particular or having
recklessly given information which is false in a
material particular;
(iv) the "prescribed period" means 14 days;
(v) an "excepted transfer" means, in relation to
shares held by a member:
(a) a transfer pursuant to acceptance of a
takeover offer for the Company (within the meaning
of section 428(1) of the Act); or
(b) a transfer in consequence of a sale made
through a recognised investment exchange (as
defined in the Financial Services Act 1986) or
another stock exchange outside the United Kingdom
on which shares in the capital of the Company are
normally traded; or
(c) a transfer which is shown to the
satisfaction of the board to be made in
consequence of a sale of the whole of the
beneficial interest in the shares to a person who
is unconnected with the member and with any other
person appearing to be interested in the shares.
(F) The provisions of this article are in addition and without
prejudice to the provisions of the Acts.
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
69. Number of directors
Unless and until otherwise decided by the Company by
ordinary resolution the number of directors is not subject
to a maximum but must not be less than two.
70. Power of the Company to appoint directors
Subject to the articles, the Company may by ordinary
resolution appoint a person who is willing to act to be a
director, either to fill a vacancy or as an addition to the
board, but the total number of directors may not exceed any
maximum number fixed in accordance with the articles.
71. Power of the board to appoint directors
Without prejudice to the power of the Company to appoint a
person to be a director pursuant to the articles, the board
may appoint a person who is willing to act as a director,
either to fill a vacancy or as an addition to the board, but
the total number of directors may not exceed any maximum
number fixed in accordance with the articles. A director
appointed in this way may hold office only until the
dissolution of the next annual general meeting after his
appointment unless he is reappointed during that meeting.
He is not required, and is not taken into account in
determining the number of directors who are, to retire by
rotation at the meeting.
72. Appointment of executive directors
Subject to the Acts, the board may appoint one or more of
its body to hold employment or executive office (including,
without limitation, that of managing director) with the
Company for such term (subject to the Acts) and on any other
conditions the board thinks fit. The board may revoke or
terminate an appointment, without prejudice to a claim for
damages for breach of contract or otherwise.
73. Eligibility of new directors
(A) No person other than a director retiring (by rotation or
otherwise) may be appointed or reappointed a director at a
general meeting unless:
(i) he is recommended by the board; or
(ii) not less than seven nor more than 42 days before
the date fixed for the meeting, notice has been given
to the Company by a member (other than the person to be
proposed) qualified to vote at the meeting of the
intention to propose that person for appointment or
reappointment. The notice shall (a) state the
particulars which would, if the proposed director were
appointed or reappointed, be required to be included in
the Company's register of directors, (b) be accompanied
by notice given by the proposed director of his
willingness to be appointed or reappointed, and (c) be
lodged at the office.
(B) A director need not be a member.
74. Voting on resolution for appointment
A resolution for the appointment of two or more persons as
directors by a single resolution is void unless an ordinary
resolution that the resolution for appointment is proposed
in this way has first been agreed to by the meeting without
a vote being given against it.
75. Retirement by rotation
At each annual general meeting one-third of the directors
who are subject to retirement by rotation or, if their
number is not three or a multiple of three, the number
nearest to but not exceeding one-third, shall retire from
office. If there are fewer than three directors who are
subject to retirement by rotation, one shall retire from
office.
76. Directors subject to retirement
Subject to the Acts and the articles, the directors to
retire by rotation at an annual general meeting include, so
far as necessary to obtain the number required, first, a
director who wishes to retire and not offer himself for
reappointment, and, second, those directors who have been
longest in office since their last appointment or
reappointment. As between two or more who have been in
office an equal length of time, the director to retire
shall, in default of agreement between them, be determined
by lot. The directors to retire on each occasion (both as
to number and identity) shall be determined on the basis of
the composition of the board at the start of business on the
date of the notice convening the annual general meeting,
disregarding a change in the number or identity of the
directors after that time but before the close of the
meeting.
77. Position of retiring director
A director who retires at an annual general meeting (whether
by rotation or otherwise) may, if willing to act, be
reappointed. If he is not reappointed or deemed
reappointed, he may retain office until the meeting appoints
someone in his place or, if it does not do so, until the end
of the meeting.
78. Deemed reappointment
At a general meeting at which a director retires by rotation
the Company may fill the vacancy and, if it does not do so,
the retiring director is, if willing, deemed reappointed
unless it is expressly resolved not to fill the vacancy or a
resolution for the reappointment of the director is put to
the meeting and lost.
79. No retirement on account of age
No person is incapable of being appointed a director by
reason of his having reached the age of 70 or another age.
Special notice is not required in connection with the
appointment or the approval of the appointment of such
person. No director is required to vacate his office
because he has reached the age of 70 or another age and
section 293 of the Act does not apply to the Company. Where
a general meeting is convened at which, to the knowledge of
the board, a director is to be proposed for appointment or
reappointment who is at the date of the meeting 70 or more,
the board shall give notice of his age in the notice
convening the meeting or in a document accompanying the
notice, but the accidental omission to do so does not
invalidate proceedings or an appointment or reappointment of
that director at that meeting.
80. Removal by ordinary resolution
In addition to any power of removal conferred by the Acts,
the Company may by ordinary resolution remove a director
before the expiration of his period of office (without
prejudice to a claim for damages for breach of contract or
otherwise) and may (subject to the articles) by ordinary
resolution appoint another person who is willing to act to
be a director in his place. A person appointed in this way
is treated, for the purposes of determining the time at
which he or another director is to retire, as if he had
become a director on the date on which the person in whose
place he is appointed was last appointed or reappointed a
director.
81. Vacation of office by director
(A) Without prejudice to the provisions for retirement (by
rotation or otherwise) contained in the articles, the office
of a director is vacated if:
(i) he resigns by notice delivered to the secretary at
the office or tendered at a board meeting;
(ii) he ceases to be a director by virtue of a
provision of the Acts, is removed from office pursuant
to the articles or becomes prohibited by law from being
a director;
(iii) he becomes bankrupt, has an interim receiving
order made against him, makes an arrangement or
compounds with his creditors generally or applies to
the court for an interim order under section 253 of the
Insolvency Act 1986 in connection with a voluntary
arrangement under that Act;
(iv) an order is made by a court of competent
jurisdiction on the ground (however formulated) of
mental disorder for his detention or for the
appointment of a guardian, receiver, curator bonis or
other person to exercise powers with respect to his
affairs or he is admitted to hospital in pursuance of
an application for admission for treatment under the
Mental Health Act 1983 or, in Scotland, under the
Mental Health (Scotland) Act 1984 and the board
resolves that his office be vacated;
(v) both he and his alternate director appointed
pursuant to the provisions of the articles (if any) are
absent, without the permission of the board, from board
meetings for six consecutive months and the board
resolves that his office be vacated; or
(vi) he is removed from office by notice addressed to
him at his last-known address and signed by all his co-
directors (without prejudice to a claim for damages for
breach of contract or otherwise).
(B) A resolution of the board declaring a director to have
vacated office under the terms of this article is conclusive
as to the fact and grounds of vacation stated in the
resolution.
ALTERNATE DIRECTORS
82. Appointment
(A) A director (other than an alternate director) may by notice
delivered to the secretary at the office, or in any other
manner approved by the board, appoint as his alternate
director:
(i) another director, or
(ii) another person approved by the board and willing
to act.
No appointment of an alternate director who is not already a
director is effective until his consent to act as a director
in the form prescribed by the Acts has been received at the
office.
(B) An alternate director need not be a member and is not
counted in reckoning the number of directors for the purpose
of article 69.
83. Revocation of appointment
A director may by notice delivered to the secretary at the
office revoke the appointment of his alternate director and,
subject to the provisions of article 82, appoint another
person in his place. If a director ceases to hold the
office of director or if he dies, the appointment of his
alternate director automatically ceases. If a director
retires but is reappointed or deemed reappointed at the
meeting at which his retirement takes effect, a valid
appointment of an alternate director which was in force
immediately before his retirement continues to operate after
his reappointment as if he has not retired. The appointment
of an alternate director ceases on the happening of an event
which, if he were a director otherwise appointed, would
cause him to vacate office.
84. Participation in board meetings
An alternate director is, if he gives the Company an address
in the United Kingdom at which notices may be served on him,
entitled to receive notice of all meetings of the board and
all committees of the board of which his appointor is a
member and, in the absence from those meetings of his
appointor, to attend and vote at the meetings and to
exercise all the powers, rights, duties and authorities of
his appointor. A director acting as alternate director has
a separate vote at meetings of the board and committees of
the board for each director for whom he acts as alternate
director but he counts as only one for the purpose of
determining whether a quorum is present.
85. Responsibility
A person acting as an alternate director is an officer of
the Company, is alone responsible to the Company for his
acts and defaults, and is not deemed to be the agent of his
appointor.
REMUNERATION, EXPENSES AND PENSIONS
86. Directors' fees
Unless otherwise decided by the Company by ordinary
resolution, the Company shall pay to the directors (but not
alternate directors) for their services as directors such
amount of aggregate fees as the board decides. The
aggregate fees shall be divided among the directors in such
proportions as the board decides or, if no decision is made,
equally. A fee payable to a director pursuant to this
article is distinct from any salary, remuneration or other
amount payable to him pursuant to other provisions of the
articles and accrues from day to day.
87. Additional remuneration
A director who, at the request of the board, goes or resides
abroad, makes a special journey or performs a special
service on behalf of the Company may be paid such reasonable
additional remuneration (whether by way of salary,
percentage of profits or otherwise) and expenses as the
board may decide.
88. Expenses
A director is entitled to be repaid all reasonable
travelling, hotel and other expenses properly incurred by
him in the performance of his duties as director including,
without limitation, expenses incurred in attending meetings
of the board or of committees of the board or general
meetings or separate meetings of the holders of a class of
shares or debentures.
89. Remuneration and expenses of alternate directors
An alternate director is not entitled to a fee from the
Company for his services as an alternate director. The fee
payable to an alternate director is payable out of the fee
payable to his appointor and consists of such portion (if
any) of the fee as he agrees with his appointor. The
Company shall, however, repay to an alternate director
expenses incurred by him in the performance of his duties if
the Company would have been required to repay the expenses
to him under article 88 had he been a director.
90. Directors' pensions and other benefits
(A) The board may exercise all the powers of the Company to
provide pensions or other retirement or superannuation
benefits and to provide death or disability benefits or
other allowances or gratuities (by insurance or otherwise)
for a person who is or has at any time been a director of
(i) the Company, (ii) a company which is or was a subsidiary
undertaking of the Company, (iii) a company which is or was
allied to or associated with the Company or a subsidiary
undertaking of the Company, or (iv) a predecessor in
business of the Company or of a subsidiary undertaking of
the Company (or, in each case, for any member of his family,
including a spouse or former spouse, or a person who is or
was dependent on him). For this purpose the board may
establish, maintain, subscribe and contribute to any scheme,
trust or fund and pay premiums. The board may arrange for
this to be done by the Company alone or in conjunction with
another person.
(B) A director or former director is entitled to receive and
retain for his own benefit a pension or other benefit
provided under paragraph (A) and is not obliged to account
for it to the Company.
91. Remuneration of executive director
The salary or other remuneration of a director appointed to
hold employment or executive office in accordance with the
articles may be a fixed sum of money, or wholly or in part
governed by business done or profits made, or as otherwise
decided by the board, and may be in addition to or instead
of a fee payable to him for his services as director
pursuant to the articles.
POWERS AND DUTIES OF THE BOARD
92. Powers of the board
Subject to the Acts, the memorandum of association of the
Company and the articles and to directions given by special
resolution of the Company, the business of the Company is
managed by the board which may exercise all the powers of
the Company whether relating to the management of the
business or not. No alteration of the memorandum of
association or of the articles and no direction given by the
Company invalidate a prior act of the board which would have
been valid if the alteration had not been made or the
direction had not been given. The provisions of the
articles giving specific powers to the board do not limit
the general powers given by this article.
93. Powers of directors being less than minimum required number
If the number of directors is less than the minimum
prescribed by the articles or decided by the Company by
ordinary resolution, the remaining director or directors may
act only for the purposes of appointing an additional
director or directors to make up that minimum or convening a
general meeting of the Company for the purpose of making
such appointment. If no director or directors is or are
able or willing to act, two members may convene a general
meeting for the purpose of appointing directors. An
additional director appointed in this way holds office
(subject to the articles) only until the dissolution of the
next annual general meeting after his appointment unless he
is reappointed during the meeting.
94. Powers of executive directors
The board may delegate to a director holding executive
office (including, without limitation, a managing director)
any of its powers, authorities and discretions for such time
and on such terms and conditions as it thinks fit. In
particular, without limitation, the board may grant the
power to sub-delegate, and may retain or exclude the right
of the board to exercise the delegated powers, authorities
or discretions collaterally with the director. The board may
at any time revoke the delegation or alter its terms and
conditions.
95. Delegation to committees
The board may delegate any of its powers, authorities and
discretions for such time and on such terms and conditions
as it thinks fit to a committee consisting of one or more
directors and (if thought fit) one or more other persons.
In particular, without limitation, the board may grant the
power to sub-delegate, and may retain or exclude the right
of the board to exercise the delegated powers, authorities
or discretions collaterally with the committee. The board
may at any time revoke the delegation or alter its terms and
conditions or discharge the committee in whole or in part.
Where a provision of the articles refers to the exercise of
a power, authority or discretion by the board and that
power, authority or discretion has been delegated by the
board to a committee, the provision shall be construed as
permitting the exercise of the power, authority or
discretion by the committee.
96. Local management
The board may establish local or divisional boards or
agencies for managing the affairs of the Company in a
specified locality, either in the United Kingdom or
elsewhere, and may appoint persons to be members of a local
or divisional board or agency, and may fix their
remuneration. The board may delegate to a local or
divisional board or agency any of its powers, authorities
and discretions for such time and on such terms and
conditions as it thinks fit. In particular, without
limitation, the board may grant the power to sub-delegate,
may retain or exclude the right of the board to exercise the
delegated powers, authorities or discretions collaterally
with the local or divisional board or agency and may
authorise the members of a local or divisional board or
agency (or any of them) to fill a vacancy or to act despite
a vacancy. The board may at any time revoke or alter the
terms and conditions of the appointment or delegation.
Subject to terms and conditions imposed by the board, the
proceedings of a local or divisional board or agency with
two or more members are governed by those articles that
regulate the proceedings of the board, so far as applicable.
97. Agents
The board may by power of attorney or otherwise appoint a
person to be the agent of the Company and may delegate to
that person any of its powers, authorities and discretions
for such purposes, for such time and on such terms and
conditions (including as to remuneration) as it thinks fit.
In particular, without limitation, the board may grant the
power to sub-delegate and may retain or exclude the right of
the board to exercise the delegated powers, authorities or
discretions collaterally with the agent. The board may at
any time revoke or alter the terms and conditions of the
appointment or delegation.
98. Associate directors
The board may appoint a person (not being a director) to an
office or employment having a designation or title including
the word "director" or attach to an existing office or
employment that designation or title and may terminate the
appointment or use of that designation or title. The
inclusion of the word "director" in the designation or title
of an office or employment does not imply that the person
is, or is deemed to be, or is empowered to act as, a
director for any of the purposes of the Acts or the
articles.
99. Exercise of voting powers
Subject to article 102, the board may exercise or cause to
be exercised the voting powers conferred by shares in the
capital of another company held or owned by the Company, or
a power of appointment to be exercised by the Company, in
any manner it thinks fit (including the exercise of the
voting power or power of appointment in favour of the
appointment of a director as an officer or employee of that
company or in favour of the payment of remuneration to the
officers or employees of that company).
100. Provision for employees
The board may exercise the powers conferred on the Company
by the Acts to make provision for the benefit of a person
employed or formerly employed by the Company or any of its
subsidiary undertakings (or any member of his family,
including a spouse or former spouse, or any person who is or
was dependent on him) in connection with the cessation or
the transfer to a person of the whole or part of the
undertaking of the Company or the subsidiary undertaking.
101. Registers
Subject to the Acts, the board may exercise the powers
conferred on the Company with regard to the keeping of an
overseas, local or other register and may make and vary
regulations as it thinks fit concerning the keeping of a
register.
102. Borrowing powers
Subject to the following provisions of this article, the
board may exercise all the powers of the Company to borrow
money and to mortgage or charge all or part of the
undertaking, property and assets (present or future) and
uncalled capital of the Company and, subject to the Acts, to
issue debentures and other securities, whether outright or
as collateral security for a debt, liability or obligation
of the Company or of a third party.
103. Register of charges
The Company shall keep a register of charges in accordance
with the Acts and the fee to be paid by a person other than
a creditor or member for each inspection of the register of
charges is the maximum sum prescribed by the Acts or,
failing which, decided by the board.
DIRECTORS' INTERESTS
104.
(A) Subject to the Acts and paragraph (B) of this article 104, a
director, notwithstanding his office:
(i) may enter into or otherwise be interested in a
contract, arrangement, transaction or proposal with the
Company or in which the Company is otherwise interested
either in connection with his tenure of an office or
place of profit or as seller, buyer or otherwise;
(ii) may hold another office or place of profit with
the Company (except that of auditor or auditor of a
subsidiary of the Company) in conjunction with the
office of director and may act by himself or through
his firm in a professional capacity to the Company, and
in that case on such terms as to remuneration and
otherwise as the board may decide either in addition to
or instead of remuneration provided for by another
article;
(iii) may be a director or other officer of, or
employed by, or a party to a contract, transaction,
arrangement or proposal with or otherwise interested
in, a company promoted by the Company or in which the
Company is otherwise interested or as regards which the
Company has a power of appointment; and
(iv) is not liable to account to the Company for a
profit, remuneration or other benefit realised by such
office, employment, contract, arrangement, transaction
or proposal and no such contract, arrangement,
transaction or proposal is avoided on the grounds of
any such interest or benefit.
(B) A director who, to his knowledge, is in any way (directly or
indirectly) interested in a contract, arrangement,
transaction or proposal with the Company shall declare the
nature of his interest at the meeting of the board at which
the question of entering into the contract, arrangement,
transaction or proposal is first considered, if he knows his
interest then exists or, in any other case, at the first
meeting of the board after he knows that he is or has become
interested. For the purposes of this article:
(i) a general notice given to the board by a director
that he is to be regarded as having an interest (of the
nature and extent specified in the notice) in a
contract, transaction, arrangement or proposal in which
a specified person or class of persons is interested is
a sufficient disclosure under this article in relation
to that contract, transaction, arrangement or proposal;
and
(ii) an interest of which a director has no knowledge
and of which it is unreasonable to expect him to have
knowledge is not treated as his interest.
(C) A director may not vote on a resolution of the board or of a
committee of the board concerning a contract, arrangement,
transaction or proposal to which the Company is or is to be
a party and in which he has an interest which is, to his
knowledge, a material interest (otherwise than by virtue of
his interest in shares or debentures or other securities of
or otherwise in or through the Company), but this
prohibition does not apply to a resolution concerning any of
the following matters:
(i) the giving of a guarantee, security or indemnity
in respect of money lent or obligations incurred by him
or any other person at the request of or for the
benefit of the Company or any of its subsidiary
undertakings;
(ii) the giving of a guarantee, security or indemnity
in respect of a debt or obligation of the Company or
any of its subsidiary undertakings for which he himself
has assumed responsibility in whole or in part, either
alone or jointly with others, under a guarantee or
indemnity or by the giving of security;
(iii) a contract, arrangement, transaction or
proposal concerning an offer of shares, debentures or
other securities of the Company or any of its
subsidiary undertakings for subscription or purchase,
in which offer he is or may be entitled to participate
as a holder of securities or in the underwriting or sub-
underwriting of which he is to participate;
(iv) a contract, arrangement, transaction or proposal
to which the Company is or is to be a party concerning
another company (including a subsidiary undertaking of
the Company) in which he is interested (directly or
indirectly) whether as an officer, shareholder,
creditor or otherwise (a "relevant company"), if he
does not to his knowledge hold an interest in shares
(as that term is used in sections 198 to 211 of the
Act) representing one per cent. or more of either any
class of the equity share capital of or the voting
rights in the relevant company;
(v) a contract, arrangement, transaction or proposal
for the benefit of the employees of the Company or any
of its subsidiary undertakings which does not award him
a privilege or benefit not generally awarded to the
employees to whom it relates; and
(vi) a contract, arrangement, transaction or proposal
concerning the purchase or maintenance of any insurance
policy under which he may benefit.
(D) A director may not vote or be counted in the quorum on a
resolution of the board or committee of the board concerning
his own appointment (including, without limitation, fixing
or varying the terms of his appointment or its termination)
as the holder of an office or place of profit with the
Company or any company in which the Company is interested.
Where proposals are under consideration concerning the
appointment (including, without limitation, fixing or
varying the terms of appointment or its termination) of two
or more directors to offices or places of profit with the
Company or a company in which the Company is interested,
such proposals shall be divided and a separate resolution
considered in relation to each director. In that case each
of the directors concerned (if not otherwise debarred from
voting under this article) is entitled to vote (and be
counted in the quorum) in respect of each resolution except
that concerning his own appointment.
(E) If a question arises at a meeting as to the materiality of a
director's interest (other than the interest of the chairman
of the meeting) or as to the entitlement of a director
(other than the chairman) to vote or be counted in a quorum
and the question is not resolved by his voluntarily agreeing
to abstain from voting or being counted in the quorum, the
question shall be referred to the chairman and his ruling in
relation to the director concerned is conclusive and binding
on all concerned.
(F) If a question arises at a meeting as to the materiality of
the interest of the chairman of the meeting or as to the
entitlement of the chairman to vote or be counted in a
quorum and the question is not resolved by his voluntarily
agreeing to abstain from voting or being counted in the
quorum, the question shall be decided by resolution of the
directors or committee members present at the meeting
(excluding the chairman) whose majority vote is conclusive
and binding on all concerned.
(G) For the purposes of this article, the interest of a person
who is for the purposes of the Acts connected with (within
the meaning of section 346 of the Act) a director is treated
as the interest of the director and, in relation to an
alternate director, the interest of his appointor is treated
as the interest of the alternate director in addition to an
interest which the alternate director otherwise has. This
article applies to an alternate director as if he were a
director otherwise appointed.
PROCEEDINGS OF DIRECTORS AND COMMITTEES
105. Board meetings
Subject to the articles, the board may meet for the despatch
of business, adjourn and otherwise regulate its proceedings
as it thinks fit.
106. Notice of board meetings
A director may, and the secretary at the request of a
director shall, summon a board meeting at any time. Notice
of a board meeting is deemed to be duly given to a director
if it is given to him personally or by word of mouth or sent
in writing to him at his last-known address or another
address given by him to the Company for that purpose. A
director may waive the requirement that notice be given to
him of a board meeting, either prospectively or
retrospectively. A director absent or intending to be
absent from the United Kingdom may request that notices of
board meetings during his absence be sent in writing to him
at an address given by him to the Company for that purpose.
If no request is made it is not necessary to give notice of
a board meeting to a director who is absent from the United
Kingdom.
107. Quorum
The quorum necessary for the transaction of business may be
decided by the board and until otherwise decided is two
directors present in person or by alternate director. A
duly convened meeting of the board at which a quorum is
present is competent to exercise all or any of the
authorities, powers and discretions vested in or exercisable
by the board.
108. Chairman of board
The board may appoint one of its body as chairman to preside
at every board meeting at which he is present and one or
more deputy chairman or chairmen and decide the period for
which he is or they are to hold office (and may at any time
remove him or them from office). If no chairman or deputy
chairman is elected, or if at a meeting neither the chairman
nor a deputy chairman is present within five minutes of the
time fixed for the start of the meeting, the directors and
alternate directors (in the absence of their appointors)
present shall choose one of their number to be chairman. If
two or more deputy chairmen are present, the senior of them
shall act as chairman, seniority being determined by length
of office since their last appointment or reappointment or
deemed reappointment. As between two or more who have held
office for an equal length of time, the deputy chairman to
act as chairman shall be decided by those directors and
alternate directors (in the absence of their appointors)
present. A chairman or deputy chairman may hold executive
office or employment with the Company.
109. Voting
Questions arising at a meeting of the board are determined
by a majority of votes. In case of an equality of votes the
chairman has a second or casting vote.
110. Participation by telephone
A director or his alternate director may participate in a
meeting of the board or a committee of the board through the
medium of conference telephone or similar form of
communication equipment if all persons participating in the
meeting are able to hear and speak to each other throughout
the meeting. A person participating in this way is deemed
to be present in person at the meeting and is counted in a
quorum and entitled to vote. Subject to the Acts, all
business transacted in this way by the board or a committee
of the board is for the purposes of the articles deemed to
be validly and effectively transacted at a meeting of the
board or a committee of the board although fewer than two
directors or alternate directors are physically present at
the same place. The meeting is deemed to take place where
the largest group of those participating is assembled or, if
there is no such group, where the chairman of the meeting
then is.
111. Resolution in writing
A resolution in writing executed by all directors for the
time being entitled to receive notice of a board meeting and
not being less than a quorum or by all members of a
committee of the board is as valid and effective for all
purposes as a resolution passed at a meeting of the board
(or committee, as the case may be). The resolution in
writing may consist of several documents in the same form
each executed by one or more of the directors or members of
the relevant committee. The resolution in writing need not
be signed by an alternate director if it is signed by his
appointor and a resolution signed by an alternate director
need not be signed by his appointor.
112. Proceedings of committees
(A) Proceedings of committees of the board shall be conducted in
accordance with terms prescribed by the board (if any).
Subject to those terms and article 112(B), proceedings shall
be conducted in accordance with applicable provisions of the
articles regulating the proceedings of the board.
(B) Where the board resolves to delegate any of its powers,
authorities and discretions to a committee and that
resolution states that the committee shall consist of any
one or more unnamed directors, it is not necessary to give
notice of a meeting of that committee to directors other
than the director or directors who form the committee.
113. Minutes of proceedings
(A) The board shall cause minutes to be made in books kept for
the purpose of:
(i) all appointments of officers and committees made
by the board and of any remuneration fixed by the
board; and
(ii) the names of directors present at every meeting of
the board, committees of the board, the Company or the
holders of a class of shares or debentures, and all
orders, resolutions and proceedings of such meetings.
(B) If purporting to be signed by the chairman of the meeting at
which the proceedings were held or by the chairman of the
next succeeding meeting, minutes are receivable as prima
facie evidence of the matters stated in them.
114. Validity of proceedings of board or committee
All acts done by a meeting of the board, or of a committee
of the board, or by a person acting as a director, alternate
director or member of a committee are, notwithstanding that
it is afterwards discovered that there was a defect in the
appointment of a person or persons acting, or that they or
any of them were or was disqualified from holding office or
not entitled to vote, or had in any way vacated their or his
office, as valid as if every such person had been duly
appointed, and was duly qualified and had continued to be a
director, alternate director or member of a committee and
entitled to vote.
SECRETARY AND AUTHENTICATION OF DOCUMENTS
115. Secretary
(A) Subject to the Acts, the board shall appoint a secretary or
joint secretaries and may appoint one or more persons to be
an assistant or deputy secretary on such terms and
conditions (including, without limitation, remuneration) as
it thinks fit. The board may remove a person appointed
pursuant to this article from office and appoint another or
others in his place.
(B) Any provision of the Acts or of the articles requiring or
authorising a thing to be done by or to a director and the
secretary is not satisfied by its being done by or to the
same person acting both as director and as, or in the place
of, the secretary.
116. Authentication of documents
A director or the secretary or another person appointed by
the board for the purpose may authenticate documents
affecting the constitution of the Company (including,
without limitation, the memorandum of association and the
articles) and resolutions passed by the Company or holders
of a class of shares or the board or a committee of the
board and books, records, documents and accounts relating to
the business of the Company, and to certify copies or
extracts as true copies or extracts.
SEALS
117. Safe custody
The board shall provide for the safe custody of every seal.
118. Application of seals
A seal may be used only by the authority of a resolution of
the board or of a committee of the board. The board may
decide who will sign an instrument to which a seal is
affixed (or, in the case of a share certificate, on which
the seal may be printed) either generally or in relation to
a particular instrument or type of instrument. The board
may also decide, either generally or in a particular case,
that a signature may be dispensed with or affixed by
mechanical means. Unless otherwise decided by the board:
(i) share certificates and certificates issued in
respect of debentures or other securities (subject to
the provisions of the relevant instrument) need not be
signed or, if signed, a signature may be applied by
mechanical or other means or may be printed; and
(ii) every other instrument to which a seal is affixed
shall be signed by one director and by the secretary or
a second director.
119. Official seal for use abroad
The Company may exercise the powers conferred by the Acts
with regard to having an official seal for use abroad, and
those powers shall be vested in the board.
DIVIDENDS AND OTHER PAYMENTS
120. Declaration of dividends
Subject to the Acts and the articles, the Company may by
ordinary resolution declare a dividend to be paid to the
members according to their respective rights and interests,
but no dividend may exceed the amount recommended by the
board.
121. Interim dividends
Subject to the Acts, the board may declare and pay such
interim dividends (including, without limitation, a dividend
payable at a fixed rate) as appear to it to be justified by
the profits of the Company available for distribution. If
the share capital is divided into different classes, the
board may pay interim dividends on shares which rank after
shares conferring preferred rights with regard to dividend
as well as on shares with preferred rights, unless at the
time of payment a preferential dividend is in arrear. If
the board acts in good faith, it does not incur any
liability to the holders of shares conferring preferred
rights for a loss they may suffer by the lawful payment of
an interim dividend on shares ranking after those with
preferred rights.
122. Entitlement to dividends
Except as otherwise provided by the rights attached to
shares, a dividend shall be declared and paid according to
the amounts paid up on the shares in respect of which the
dividend is declared and paid, but no amount paid up on a
share in advance of a call may be treated for the purpose of
this article as paid up on the share. Except as otherwise
provided by the rights attached to shares, dividends shall
be apportioned and paid proportionately to the amounts paid
up on the shares during any portion or portions of the
period in respect of which the dividend is paid.
123. Method of payment
(A) The Company may pay any dividend, interest or other amount
payable in respect of a share:
(i) in cash;
(ii) by cheque, warrant or money order made payable to
or to the order of the person entitled to the payment
(and may, at the Company's option, be crossed "account
payee" where appropriate);
(iii) by a bank or other funds transfer system to
an account designated in writing by the person entitled
to the payment;
(iv) by means of a relevant system in respect of an
uncertificated share if the board decides and the
person entitled to payment has in writing authorised
the payment to be made by means of that system; or
(v) by such other method as the person entitled to the
payment may in writing direct.
(B) The Company may send a cheque, warrant or money order by
post (i) in the case of a sole holder, to his registered
address, (ii) in the case of joint holders, to the
registered address of the person whose name stands first in
the register, (iii) in the case of a person or persons
entitled by transmission to a share, as if it were a notice
given in accordance with article 139, or (iv) in any case,
to a person and address that the person or persons entitled
to the payment may in writing direct.
(C) Where a share is held jointly or two or more persons are
jointly entitled by transmission to a share, (i) the Company
may pay any dividend, interest or other amount payable in
respect of that share to any one joint holder, or any one
person entitled by transmission to the share, and in either
case that holder or person may give an effective receipt for
the payment, and (ii) for any of the purposes of this
article 123, the Company may rely in relation to a share on
the written direction or designation of any one joint holder
of the share, or any one person entitled by transmission to
the share.
(D) Every cheque, warrant or money order sent by post is sent at
the risk of the person entitled to the payment. If payment
is made by bank or other funds transfer, by means of a
relevant system or by another method at the direction of the
person entitled to payment, the Company is not responsible
for amounts lost or delayed in the course of making that
payment.
(E) Without prejudice to article 68, the board may withhold
payment of a dividend (or part of a dividend) payable to a
person entitled by transmission to a share until he has
provided any evidence of his right that the board may
reasonably require.
124. Dividends not to bear interest
No dividend or other amount payable by the Company in
respect of a share bears interest as against the Company
unless otherwise provided by the rights attached to the
share.
125. Calls or debts may be deducted from dividends etc.
The board may deduct from a dividend or other amounts
payable to a person in respect of a share amounts due from
him to the Company on account of a call or otherwise in
relation to a share.
126. Unclaimed dividends etc.
Any unclaimed dividend, interest or other amount payable by
the Company in respect of a share may be invested or
otherwise made use of by the board for the benefit of the
Company until claimed. A dividend unclaimed for a period of
12 years from the date it was declared or became due for
payment is forfeited and ceases to remain owing by the
Company. The payment of an unclaimed dividend, interest or
other amount payable by the Company in respect of a share
into a separate account does not constitute the Company a
trustee in respect of it.
127. Uncashed dividends
If, in respect of a dividend or other amount payable in
respect of a share, on any one occasion:
(i) a cheque, warrant or money order is returned
undelivered or left uncashed, or
(ii) a transfer made by a bank or other funds transfer
system is not accepted,
and reasonable enquiries have failed to establish another
address or account of the person entitled to the payment,
the Company is not obliged to send or transfer a dividend or
other amount payable in respect of that share to that person
until he notifies the Company of an address or account to be
used for that purpose. If the cheque, warrant or money
order is returned undelivered or left uncashed or transfer
not accepted on two consecutive occasions, the Company may
exercise this power without making any such enquiries.
128. Payment of dividends in specie
Without prejudice to article 68, the board may, with the
prior authority of an ordinary resolution of the Company,
direct that payment of a dividend may be satisfied wholly or
in part by the distribution of specific assets and in
particular of paid-up shares or debentures of another
company. Where a difficulty arises in connection with the
distribution, the board may settle it as it thinks fit and
in particular, without limitation, may: (i) issue
fractional certificates (or ignore fractions), (ii) fix the
value for distribution of the specific assets (or any part
of them), (iii) decide that a cash payment be made to a
member on the basis of the value so fixed, in order to
secure equality of distribution, and (iv) vest assets in
trustees on trust for the persons entitled to the dividend
as seems expedient to the board.
129. Payment of scrip dividends
(A) Subject to the Acts, but without prejudice to article 68,
the board may, with the prior authority of an ordinary
resolution of the Company, allot to those holders of a
particular class of shares who have elected to receive them
further shares of that class or shares in either case
credited as fully paid ("new shares") instead of cash in
respect of all or part of a dividend or dividends specified
by the resolution, subject to any exclusions, restrictions
or other arrangements the board may in its absolute
discretion deem necessary or expedient to deal with legal or
practical problems under the laws of, or the requirements of
a recognised regulatory body or a stock exchange in, any
territory.
(B) Where a resolution under article 129(A) is to be proposed at
a general meeting and the resolution relates in whole or in
part to a dividend to be declared at that meeting, then the
resolution declaring the dividend is deemed to take effect
at the end of that meeting.
(C) A resolution under article 129(A) may relate to a particular
dividend or to all or any dividends declared or paid within
a specified period.
(D) The board shall determine the basis of allotment of new
shares so that, as nearly as may be considered convenient
without involving rounding up of fractions, the value of the
new shares (including a fractional entitlement) to be
allotted (calculated by reference to the average quotation,
or the nominal value of the new shares, if greater) equals
(disregarding an associated tax credit) the amount of the
dividend which would otherwise have been received by the
holder (the "relevant dividend"). For this purpose the
"average quotation" of each of the new shares is the average
of the middle-market quotations for a fully-paid share of
the Company of that class derived from the Daily Official
List of the London Stock Exchange on the business day on
which the relevant class of shares is first quoted "ex" the
relevant dividend (or such other date as the board may deem
appropriate to take account of any subsequent issue of
shares by the Company) and the four subsequent business days
or shall be as determined by or in accordance with the
resolution under article 129(A).
(E) The board may make any provision it considers appropriate in
relation to an allotment made or to be made pursuant to this
article (whether before or after the passing of the
resolution under article 129(A)), including, without
limitation:
(i) the giving of notice to holders of the right of
election offered to them;
(ii) the provision of forms of election (whether in
respect of a particular dividend or dividends
generally);
(iii) determination of the procedure for making and
revoking elections;
(iv) the place at which, and the latest time by which,
forms of election and other relevant documents must be
lodged in order to be effective; and
(v) the disregarding or rounding up or down or
carrying forward of fractional entitlements, in whole
or in part, or the accrual of the benefit of fractional
entitlements to the Company (rather than to the holders
concerned).
(F) The dividend (or that part of the dividend in respect of
which a right of election has been offered) is not declared
or payable on shares in respect of which an election has
been duly made (the "elected shares"); instead new shares
are allotted to the holders of the elected shares on the
basis of allotment calculated as in paragraph (D). For that
purpose, the board may resolve to capitalise out of amounts
standing to the credit of reserves (including a share
premium account, capital redemption reserve and profit and
loss account), whether or not available for distribution, a
sum equal to the aggregate nominal amount of the new shares
to be allotted and apply it in paying up in full the
appropriate number of new shares for allotment and
distribution to the holders of the elected shares. A
resolution of the board capitalising part of the reserves
has the same effect as if the capitalisation had been
declared by ordinary resolution of the Company pursuant to
article 130. In relation to the capitalisation the board
may exercise all the powers conferred on it by article 130
without an ordinary resolution of the Company.
(G) The new shares rank pari passu in all respects with each
other and with the fully-paid shares of the same class in
issue on the record date for the dividend in respect of
which the right of election has been offered, but they will
not rank for a dividend or other distribution or entitlement
which has been declared or paid by reference to that record
date.
CAPITALISATION OF PROFITS
130. Subject to the Acts, the board may, with the authority of an
ordinary resolution of the Company:
(i) resolve to capitalise an amount standing to the
credit of reserves (including a share premium account,
capital redemption reserve and profit and loss
account), whether or not available for distribution;
(ii) appropriate the sum resolved to be capitalised to
the members in proportion to the nominal amount of
shares (whether or not fully paid) held by them
respectively and apply that sum on their behalf in or
towards:
(a) paying up the amounts (if any) for the
time being unpaid on shares held by them
respectively, or
(b) paying up in full unissued shares or
debentures of a nominal amount equal to that sum,
and allot the shares or debentures, credited as
fully paid, to the members (or as they may direct) in
those proportions, or partly in one way and partly in
the other, but the share premium account, the capital
redemption reserve and profits which are not available
for distribution may, for the purposes of this article,
only be applied in paying up unissued shares to be
allotted to members credited as fully paid;
(iii) make any arrangements it thinks fit to
resolve a difficulty arising in the distribution of a
capitalised reserve and in particular, without
limitation, where shares or debentures become
distributable in fractions the board may deal with the
fractions as it thinks fit, including issuing
fractional certificates, disregarding fractions or
selling shares or debentures representing the fractions
to a person for the best price reasonably obtainable
and distributing the net proceeds of the sale in due
proportion amongst the members (except that if the
amount due to a member is less than pounds 3, or such other
sum as the board may decide, the sum may be retained
for the benefit of the Company);
(iv) authorise a person to enter (on behalf of all the
members concerned) an agreement with the Company
providing for either:
(a) the allotment to the members
respectively, credited as fully paid, of shares or
debentures to which they may be entitled on the
capitalisation, or
(b) the payment by the Company on behalf of
the members (by the application of their
respective proportions of the reserves resolved to
be capitalised) of the amounts or part of the
amounts remaining unpaid on their existing shares,
an agreement made under the authority being
effective and binding on all those members; and
(v) generally do all acts and things required to give
effect to the resolution.
RECORD DATES
131. Notwithstanding any other provision of the articles, but
subject to the Acts and rights attached to shares, the
Company or the board may fix any date as the record date for
a dividend, distribution, allotment or issue. The record
date may be on or at any time before or after a date on
which the dividend, distribution, allotment or issue is
declared, made or paid.
ACCOUNTS
132. Keeping and inspection of accounts
(A) The board shall ensure that accounting records are kept in
accordance with the Acts.
(B) The accounting records shall be kept at the office or,
subject to the Acts, at another place decided by the board
and shall be available during business hours for the
inspection of the directors and other officers. No member
(other than a director or other officer) has the right to
inspect an accounting record or other document except if
that right is conferred by the Acts or he is authorised by
the board.
133. Accounts to be sent to members etc.
(A) In respect of each financial year, a copy of the Company's
annual accounts, directors' report and auditors' report on
those accounts shall be sent by post or delivered to:
(i) every member (whether or not entitled to receive
notices of general meetings),
(ii) every holder of debentures (whether or not
entitled to receive notices of general meetings), and
(iii) every other person who is entitled to receive
notices of general meetings,
not less than 21 clear days before the date of the meeting
at which copies of those documents are to be laid in
accordance with the Acts. This article does not require
copies of the documents to which it applies to be sent or
delivered to:
(a) a member or holder of debentures of whose address
the Company is unaware, or
(b) more than one of the joint holders of shares or
debentures.
(B) Where permitted by the Acts, a summary financial statement
derived from the Company's annual accounts and the
directors' report and auditors' report in the form and
containing the information prescribed by the Acts may be
sent or delivered to a person in place of the documents
required to be sent or delivered by article 133(A).
NOTICES
134. Notices to be in writing
A notice to be given to or by a person pursuant to the
articles shall be in writing except that a notice convening
a meeting of the board or of a committee of the board need
not be in writing.
135. Service of notices and other documents on members
(A) A notice or other document may be given to a member by the
Company either personally or by sending it by post in a pre-
paid envelope addressed to the member at his registered
address, or by leaving it at that address (or at another
address notified for the purpose) in an envelope addressed
to the member.
(B) In the case of joint holders of a share, a notice or other
document shall be given to whichever of them is named first
in the register in respect of the joint holding and notice
given in this way is sufficient notice to all joint holders.
(C) If a member (or, in the case of joint holders, the person
first named in the register) has a registered address
outside the United Kingdom but has notified the Company of
an address in the United Kingdom at which notices or other
documents may be given to him, he is entitled to have
notices given to him at that address, but otherwise no such
member or person is entitled to receive a notice or other
document from the Company.
136. Notice by advertisement
If by reason of the suspension or curtailment of postal
services in the United Kingdom the Company is unable
effectively to convene a general meeting by notices sent by
post, the board may, in its absolute discretion and as an
alternative to any other method of service permitted by the
articles, resolve to convene a general meeting by a notice
advertised in at least one United Kingdom national
newspaper. In this case the Company shall send confirmatory
copies of the notice by post if at least seven clear days
before the meeting the posting of notices to addresses
throughout the United Kingdom again becomes practicable.
137. Evidence of service
(A) A notice or other document addressed to a member at his
registered address or address for service in the United
Kingdom is, if sent by post, deemed to be given within 24
hours if pre-paid as first class post and within 48 hours if
pre-paid as second class post after it has been posted, and
in proving service it is sufficient to prove that the
envelope containing the notice or document was properly
addressed, pre-paid and posted.
(B) A notice or document not sent by post but left at a
registered address or address for service in the United
Kingdom is deemed to be given on the day it is left.
(C) Where notice is given by newspaper advertisement, the notice
is deemed to be given to all members and other persons
entitled to receive it at noon on the day when the
advertisement appears or, where notice is given by more than
one advertisement and the advertisements appear on different
days, at noon on the last of the days when the
advertisements appear.
(D) A member present in person or by proxy at a meeting or of
the holders of a class of shares is deemed to have received
due notice of the meeting and, where required, of the
purposes for which it was called.
138. Notice binding on transferees etc.
A person who becomes entitled to a share by transmission,
transfer or otherwise is bound by a notice in respect of
that share (other than a notice served by the Company under
section 212 of the Act) which, before his name is entered in
the register, has been properly served on a person from whom
he derives his title.
139. Notice in case of entitlement by transmission
Where a person is entitled by transmission to a share, the
Company may give a notice or other document to that person
as if he were the holder of a share by addressing it to him
by name or by the title of representative of the deceased or
trustee of the bankrupt member (or by similar designation)
at an address in the United Kingdom supplied for that
purpose by the person claiming to be entitled by
transmission. Until an address has been supplied, a notice
or other document may be given in any manner in which it
might have been given if the death or bankruptcy or other
event had not occurred. The giving of notice in accordance
with this article is sufficient notice to any other person
interested in the share.
DESTRUCTION OF DOCUMENTS
140.
(A) The Company may destroy:
(i) a share certificate which has been cancelled at
any time after one year from the date of cancellation;
(ii) a mandate for the payment of dividends or other
amounts or a variation or cancellation of a mandate or
a notification of change of name or address at any time
after two years from the date the mandate, variation,
cancellation or notification was recorded by the
Company;
(iii) an instrument of transfer of shares
(including a document constituting the renunciation of
an allotment of shares) which has been registered at
any time after six years from the date of registration;
and
(iv) any other document on the basis of which any entry
in the register is made at any time after six years
from the date an entry in the register was first made
in respect of it.
(B) It is presumed conclusively in favour of the Company that
every share certificate destroyed was a valid certificate
validly cancelled, that every instrument of transfer
destroyed was a valid and effective instrument duly and
properly registered and that every other document destroyed
was a valid and effective document in accordance with the
recorded particulars in the books or records of the Company,
but:
(i) the provisions of this article apply only to the
destruction of a document in good faith and without
express notice to the Company that the preservation of
the document is relevant to a claim;
(ii) nothing contained in this article imposes on the
Company liability in respect of the destruction of a
document earlier than provided for in this article or
in any case where the conditions of this article are
not fulfilled; and
(iii) references in this article to the destruction
of a document include reference to its disposal in any
manner.
WINDING UP
141. On a voluntary winding up of the Company the liquidator may,
on obtaining any sanction required by law, divide among the
members in kind the whole or any part of the assets of the
Company, whether or not the assets consist of property of
one kind or of different kinds. For this purpose the
liquidator may set the value he deems fair on a class or
classes of property, and may determine on the basis of that
valuation and in accordance with the then existing rights of
members how the division is to be carried out between
members or classes of members. The liquidator may not,
however, distribute to a member without his consent an asset
to which there is attached a liability or potential
liability for the owner.
INDEMNITY
142.
(A) Subject to the Acts, but 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:
(a) defending proceedings (whether civil or criminal)
in which judgment is given in his favour 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
(b) 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.
(B) The board may exercise all the powers of the Company to
purchase and maintain insurance for the benefit of a person
who is or was:
(a) a director, alternate director, secretary or
auditor of the Company or of a 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
(b) trustee of a retirement benefits scheme or other
trust in which a person referred to in article
142(B)(a) 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.
<PAGE>
_________________________________________________________________
NAMES AND ADDRESSES OF SUBSCRIBERS
_________________________________________________________________
CHANTAL ELIZABETH BRACKENBURY
For and on behalf of
Legibus Nominees Limited
200 Aldersgate Street
London EC1A 4JJ
ANGELA ORBAN
For and on behalf of
Legibus Secretaries Limited
200 Aldersgate Street
London EC1A 4JJ
_________________________________________________________________
DATED this day of , 199 .
WITNESS to the above signatures:
DENISE WARD
200 Aldersgate Street
London EC1A 4JJ
_______________________________
* Pursuant to a special resolution passed on 12 December 1996
the name of the Company was changed to Entergy Power UK plc.
** As amended by a special resolution passed on 12 December
1996.
<PAGE>
THE COMPANIES ACT 1985
Public Limited Company
Written Resolution of Entergy Power UK plc ("the Company")
Date of the Resolution: 1997
The following resolution was agreed to as a written resolution of
the Company in accordance with Article 66 of the Company's
Articles of Association:
SPECIAL RESOLUTION
THAT the name of the Company be changed to "Entergy London
Investments plc"
_____________________________
Secretary
Company Number 3261188
<PAGE>
ENTERGY POWER UK plc
Members' Written Resolution
Pursuant to Article 66 of the Articles of Association of Entergy
Power UK plc (the "Company"), we being all the members entitled
to vote upon a resolution at a general meeting of the Company
hereby approve as a resolution executed in writing the following
resolution as a Special Resolution:
SPECIAL RESOLUTION
THAT the name of the Company be changed to "Entergy London
Investments plc"
Signed by ________________________ Signed by _____________________
for and on behalf of Michael G. Thompson
ENTERGY POWER UK HOLDINGS
LIMITED
Dated ___________________________ Dated __________________________
<PAGE>
Exhibit 4.03
CERTIFICATE OF LIMITED PARTNERSHIP
OF
ENTERGY LONDON CAPITAL, L.P.
THIS Certificate of Limited Partnership of Entergy
London Capital, L.P. (the "Partnership"), dated as of August 4,
1997, is being duly executed and filed by Entergy Power UK plc,
a public limited company organized under the laws of England
and Wales, as general partner, to form a limited partnership
under the Delaware Revised Uniform Limited Partnership Act (6
Del.C. 17-101, et seq.) (the "Act").
1. Name. The name of the limited partnership
formed hereby is Entergy London Capital, L.P.
2. Registered Office. The address of the
registered office of the Partnership in the State of Delaware
is c/o The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, New Castle County, Delaware
19801.
3. Registered Agent. The name and address of the
registered agent for service of process on the Partnership in
the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801.
4. General Partner. The name and the mailing
address of the sole general partner of the Partnership is:
Entergy Power UK plc, Templar House, 81-87 High, Holborn,
London WC1V 6NU England.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Limited Partnership as of the date first-above
written.
ENTERGY POWER UK PLC, as general partner
By: /s/ Michael G. Thompson
Name: Michael G. Thompson
Title: Senior Vice President and
Secretary
Exhibit 4.04
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERGY LONDON CAPITAL, L.P.
This Agreement of Limited Partnership of Entergy
London Capital, L.P. (this "Agreement"), is entered into by
and between Entergy Power UK plc, a public limited company
organized under the laws of England and Wales, as general
partner (the "General Partner"), and William J. Regan, Jr.,
as limited partner (the "Initial Limited Partner").
The General Partner and the Initial Limited Partner
hereby form a limited partnership pursuant to and in
accordance with the Delaware Revised Uniform Limited
Partnership Act (6 Del.C. 17-101, et seq.), as amended from
time to time (the "Act"), and hereby agree as follows:
1. Name. The name of the limited partnership
formed hereby is Entergy London Capital, L.P. (the
"Partnership").
2. Purpose. The Partnership is formed for the
object and purpose of, and the nature of the business to be
conducted and promoted by the Partnership is, engaging in any
lawful act or activity for which limited partnerships may be
formed under the Act and engaging in any and all activities
necessary or incidental to the foregoing.
3. Registered Office. The registered office of
the Partnership in the State of Delaware is c/o The
Corporation Trust Company, 1209 Orange Street, Wilmington,
New Castle County, Delaware 19801.
4. Registered Agent. The name and address of the
registered agent of the Partnership for service of process on
the Partnership in the State of Delaware is The Corporation
Trust Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801.
5. Partners. The names and the business,
residence or mailing addresses of the General Partner and the
Initial Limited Partner are as follows:
General Partner:
Entergy Power UK plc
Templar House
81-87 High Holborn
London WC1V 6NU England
Initial Limited Partner:
William J. Regan, Jr.
639 Loyola Avenue
New Orleans, Louisiana 70113
6. Powers. The powers of the General Partner
include all powers, statutory and otherwise, possessed by
general partners under the laws of the State of Delaware.
7. Dissolution. The Partnership shall dissolve,
and its affairs shall be wound up or at such time as (a) all
of the partners of the Partnership approve in writing, (b) an
event of withdrawal of a general partner has occurred under
the Act, or (c) an entry of a decree of judicial dissolution
has occurred under 17-802 of the Act; provided, however, the
Partnership shall not be dissolved or required to be wound up
upon an event of withdrawal of a general partner described in
Section 7(b) if (i) at the time of such event of withdrawal,
there is at least one (1) other general partner of the
Partnership who carries on the business of the Partnership
(any remaining general partner being hereby authorized to
carry on the business of the Partnership), or (ii) within
ninety (90) days after the occurrence of such event of
withdrawal, all remaining partners agree in writing to
continue the business of the Partnership and to the
appointment, effective as of the date of the event of
withdrawal, of one (1) or more additional general partners of
the Partnership.
8. Capital Contributions. The partners of the
Partnership have contributed the following amounts, in cash,
and no other property, to the Partnership:
General Partner:
Entergy Power UK plc U.S. $90.00
Initial Limited Partner:
William J. Regan, Jr. U.S. $10.00
9. Additional Contributions. No partner of the
Partnership is required to make any additional capital
contribution to the Partnership.
10. Allocation of Profits and Losses. The
Partnership's profits and losses shall be allocated in
proportion to the capital contributions of the partners of
the Partnership.
11. Distributions. Distributions shall be made to
the partners of the Partnership at the times and in the
aggregate amounts determined by the General Partner. Such
distributions shall be allocated among the partners of the
Partnership in the same proportion as their then capital
account balances.
12. Assignments.
(a) The Initial Limited Partner may assign
all or any part of its partnership interest in the
Partnership and may withdraw from the Partnership only with
the consent of the General Partner.
(b) The General Partner may assign all or any
part of its partnership interest in the Partnership and may
withdraw from the Partnership without the consent of the
Initial Limited Partner.
13. Withdrawal. Except to the extent set forth in
Section 12, no right is given to any partner of the
Partnership to withdraw from the Partnership.
14. Admission of Additional or Substitute
Partners.
(a) One (1) or more additional or substitute
limited partners of the Partnership may be admitted to the
Partnership with only the consent of the General Partner.
(b) One (1) or more additional or substitute
general partners of the Partnership may be admitted to the
Partnership with only the consent of the General Partner.
15. Liability of Initial Limited Partner. The
Initial Limited Partner shall not have any liability for the
obligations or liabilities of the Partnership except to the
extent provided in the Act.
16. Governing Law. This Agreement shall be
governed by, and construed under, the laws of the State of
Delaware, all rights and remedies being governed by said
laws.
[SIGNATURE PAGE FOLLOWS:]
IN WITNESS WHEREOF, the undersigned, intending to
be legally bound hereby, have duly executed this Agreement of
Limited Partnership as of the 4th day of August, 1997.
GENERAL PARTNER:
ENTERGY POWER UK PLC, in its
individual capacity and not as
representative of any
other person or entity
By: /s/ Michael G. Thompson
Name: Michael G. Thompson
Title: Senior Vice President and
Secretary
INITIAL LIMITED PARTNER:
WILLIAM J. REGAN, JR., in his individual
capacity and not as representative of any
other person or entity
/s/ WILLIAM J. REGAN, JR.
Exhibit 4.05
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF LIMITED
PARTNERSHIP
OF
ENTERGY LONDON CAPITAL, L.P.
This Certificate of Amendment to Certificate of
Limited Partnership of Entergy London Capital, L.P. (the
"Partnership"), dated as of September __, 1997, is being
duly executed and filed by Entergy London Investments, plc,
a public limited company organized under the laws of England
and Wales, as general partner, in accordance with the
provisions of 6 Del. C. 17-202 and 17-204, to amend the
original Certificate of Limited Partnership of the
Partnership, which was filed on August 4, 1997 (the
"Certificate"), to form a limited partnership under the
Delaware Revised Uniform Limited Partnership Act (6 Del.C.
17-101, et seq.).
1. Name. The name of the limited partnership is
Entergy London Capital, L.P.
2. Amendment. The Certificate is amended by
changing name of the general partner of the Partnership from
"Entergy Power UK plc" to "Entergy London Investments plc".
The mailing address of the sole general partner of the
Partnership is: Entergy London Investments plc, Templar
House, 81-87 High, Holborn, London WC1V 6NU England.
IN WITNESS WHEREOF, the undersigned has executed
this Certificate of Amendment to Certificate of Limited
Partnership as of the date first-above written.
ENTERGY LONDON INVESTMENTS plc,
as general partner
By: _____________________________
Name:
Title:
Exhibit 4.06
AMENDMENT NO. 1 TO AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERGY LONDON CAPITAL, L.P.
This Amendment No. 1 to Agreement of Limited
Partnership of Entergy London Capital, L.P. (this
"Amendment"), is entered into by and between Entergy London
Investments plc, a public limited company incorporated under
the laws of England and Wales, as general partner (the
"General Partner"), and William J. Regan, Jr., as limited
partner (the "Initial Limited Partner").
WHEREAS, the General Partner and the Initial
Limited Partner heretofore formed a limited partnership known
as Entergy London Capital, L.P. (the "Partnership") pursuant
to and in accordance with the Delaware Revised Uniform
Limited Partnership Act (6 Del.C. 17-101, et seq.), as
amended from time to time, and an Agreement of Limited
Partnership, dated as of August 4, 1997 (the "Original
Agreement").
WHEREAS, the General Partner has changed its name
from "Entergy Power UK plc" to "Entergy London Investments
plc"; and
WHEREAS, the parties hereto desire to amend the
Original Agreement to reflect such name change.
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. Name of General Partner. The Original
Agreement is hereby amended by deleting any and all
references to the name "Entergy Power UK plc" and
substituting therefor the name "Entergy London Investments
plc." The General Partner is hereby authorized to and shall
file an appropriate amendment to the Certificate of Limited
Partnership of the Partnership with the Secretary of State of
the State of Delaware.
2. Successors and Assigns. This Amendment shall
be binding upon, and shall enure to the benefit of, the
parties hereto and their respective successors and assigns.
3. Full Force and Effect. Except to the extent
modified hereby, the Original Agreement shall remain in full
force and effect.
4. Counterparts. This Amendment may be executed
in counterparts, all of which together shall constitute one
agreement binding on all parties hereto, notwithstanding that
all such parties are not signatories to the original or same
counterpart.
5. Governing Law. This Amendment shall be
governed by, and construed under, the laws of the State of
Delaware, all rights and remedies being governed by said
laws.
IN WITNESS WHEREOF, the undersigned, intending
to be legally bound hereby, have duly executed this Amendment
as of the ____ day of September, 1997.
GENERAL PARTNER:
ENTERGY LONDON INVESTMENTS plc
By: __________________________
Name: Louis E. Buck
Title: Audit Controller
INITIAL LIMITED PARTNER:
WILLIAM J. REGAN, JR.
_____________________________
Exhibit 10.01
PUBLIC ELECTRICITY SUPPLY LICENSE
- for
London Electricity plc
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 CONTENT
PAGE
PART 1:TERMS OF THE LlCENCE
PART Ilk:THE CONDITIONS
1. Interpretation 2
2. Separate accounts for Separate Businesses 16
3. Charge restriction conditions: definitions 22
3A Restriction of distribution charges 31
3B Restriction of supply charges 37
3C [No longer used] 44
3D Restriction of distribution charges and of supply
charges: adjustments 45
3E Information to be provided to the Director in
connection with the charge restriction conditions 47
3F Allowances in respect of security costs 53
3G Duration of charge restriction conditions 57
4 Prohibition of cross-subsidies and of
discrimination 59
5 Obligation on economic purchasing 61
6 Restriction on own-generation capacity64
7 Tariffs 71
8 Basis of charges for top-up and standby supplies or sales
of electicity, use of system and connection to the system:
requirements for transparency 72
8A Non-discrimination in the provision of top-up or
standby supplies or sales of electricity use of system
and connection to the system 78
8B Requirement to offer terms 80
8C Functions fo the Director 85
9 Distibution system planning standard and qualify
of service 87
10 Generation security standard 88
11 Distribution Code 92
12 Restriction on use of certain information 96
13 Compliance with the Grid Code 100
14 Security arrangements 101
15 Pooling and Settlement Agreement 102
16 Conditions of supply affecting tariff customers'
statutory rights 103
17 Licensee's apparantus on tariff customers'
side of meter 105
18 Code of practic eon payment of bills 106
19 Methods for dealing with tariff customers in default 108
20 Provision of services for persons who are of pensionable
age or disabled 110
21 Standards of performance 112
22 Efficient use of electricity 113
23 Complaint handling procedure 115
24 Relations with relevant consumers' committee 117
25 Health and safety of employees 118
26 Requirement to enter certain agreements 119
27 Disposal of relevant assets 120
28 Provision of information to the Director 123
29 Payment of fees 125
SCHEDULE 1: Description of authorised area 128
SCHEDULE 2: Terms as to revocation 142
SCHEDULE 3: Supplementary provisions of the
charge restriction conditions 145
PART A Principles for attribution of the fossil
fuel levy and of payments in lieu thereof,
transmission connection point charges,
remote transmission asset rentals and
distribution losses 145
PART B EHV premises 149
PARC C Excluded services 150
PART D Regulated distribution unit categories 154
PART E Calculation of factor in respect of
distribution losses 157
PART F Electricity purchase costs 161
<PAGE>
PART 1: TERMS OF THE LICENCE
l.The Secretary of State, in exercise of the power conferred
by Section 6(1)(c), and Section 6(6) and Section 7 of the Electricity
Act 1989 (hereinafter referred to as the "Act") hereby licenses London
Electricity plc (registered in England and Wales under number 2366852)
as public electricity supplier to supply electricity to any
premises in the authorised area designated in Schedule I below
during the period specified in paragraph 3 below, subject to the
Conditions set out in Part II and Schedule 3 below (hereinafter referred
to as the "Conditions").
2.The Conditions are subject to modification or amendment in
accordance with their terms or with Sections I 1, 14 or 15 of the Act.
This licence is further subject to the terms as to revocation specified
in Schedule 2.
3.This licence shall come into force on the transfer date
appointed under Section 65 of the Act 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 Secretary of
State to the licensee, such notice not to be served earlier than a date
being 10 years after the licence comes into force.
26th March 1990
JOHN WAKEHAM
Secretary of State for Energy
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 licence 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 means any holding
company or subsidiary of the
licensee or any subsidiary of a
holding company of the licensee,
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.
"Auditors" means the
licensee's auditors for the time
being holding office in
accordance with the requirements
of the Companies Act 1985.
"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 area" means the
area from time to time comprised
in Schedule I to this licence.
"authorised electricity
operator" means any person
(other than the licensee) who is
authorised to generate, transmit
or supply electricity and for
the purposes of Conditions 8A to
8C inclusive 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.
"connection charges" means
charges made or levied or to be
made or levied for the carrying
out (whether before or after the
date on which the licence comes
into force) of works and
provision and installation of
electrical plant, electric lines
and ancillary meters in
constructing or modifying entry
and exit points on the
licensee's distribution 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 and in respect of
disconnection and the removal of
electrical plant, electric lines
and ancillary meters following
disconnection, all as more fully
described in paragraphs 4 and 7
of Condition 8, whether or not
such charges are annualised.
"customer" means any person
supplied or entitled to be
supplied with electricity by the
licensee or, as the case may be,
by any affiliate or related
undertaking of the licensee but
shall not include any authorised
electricity operator in its
capacity as such.
"declared net capacity" means
in relation to generation plant,
the highest generation of
electricity, at the main
alternator terminals, which can
be maintained for an indefinite
period of time without causing
damage to the plant less so much
of that capacity as is consumed
by the plant.
"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 Business"
means the business of the
licensee or any affiliate or
related undertaking in or
ancillary to the distribution
(whether for its own account or
that of third parties) of
electricity through the
licensee's distribution system
and shall include any business
in providing connections to the
licensee's distribution system.
"Distribution Code' means the
Distribution Code required to be
drawn up pursuant to Condition
11, as from time to time revised
with the approval of the
Director.
"electricity purchase
contract" shall include any
contract or arrangement under
which provision is made for the
making or receipt of payments by
reference to the difference
between
(a) an amount
specified or ascertainable under
the terms of such contract or
arrangement; and
(b) the price at
which electricity is sold or
purchased under the Pooling and
Settlement Agreement or any
component of either of such
prices;
and
"electricity sale
contract" shall be
construed accordingly.
"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.
"financial year" bears the
meaning given to it at paragraph
I of Condition 2.
"Fuel Security Code" means
the document of that title
designated as such by the
Secretary of State as from time
to time amended.
"Generation Business" means
the business (if any) in the
generation of electricity being
a business involving own
generation sets or in which
there is an accountable interest
in generation sets, as defined
for the purposes of Condition 6.
"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
distribution system 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 and Wales under number
2366852) and (where the context
so requires) shall include any
Area Board in respect of which
the licensee is the successor
company.
"licensee's distribution
system" means the system of
electric lines situated wholly
or partly within the authorised
area owned or operated by the
licensee for distribution of
electricity between the grid
supply points or generation sets
or other entry points and the
points where it is delivered to
customers or authorised
electricity operators, and
includes any remote transmission
assets owned by the Transmission
Company operated by the licensee
and any electrical plant and
meters owned or operated by the
licensee in connection with the
distribution of electricity and
references to the distribution
system of any authorised
electricity operator shall be
construed accordingly.
"megawatt" or"MW" includes an
equivalent megawatt.
"0.1 MW customer" means any
customer other than an over 0.1
MW customer in its capacity as
such.
"0.1 MW premises" means any
premises other than over 0.1 MW
premises.
"over 0.1 MW
customer" means a customer
supplied at over 0.1 MW
premises, but shall not include
such customer in sofar as
supplied at 0.1 MW premises.
"over 0.1 MW
premises" means premises
supplied by the licensee at
which the average of the maximum
monthly demands in the three
months of highest maximum demand
in any period of twelve
consecutive months commencing on
or after January 1993 exceeds
one tenth of a megawatt.
"Pooling and
Settlement Agreement" means
the agreement of that 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 with the consent of the
Secretary of State).
"related undertaking" in
relation to the licensee means
any undertaking in which the
licensee 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.
"relevant consumers'
committee" means the
committee appointed by the
Director under Section 2 of the
Act for the area for which the
licensee is the public
electricity supplier.
"relevant premises" means any
premises of or occupied by the
licensee open to customers in
the normal course of the
licensee's business.
"remote transmission
assets" means any electric
lines, electrical plant or
meters owned by the Transmission
Company which (a) are embedded
in the distribution system of
the licensee or 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
sub-station owned by the
Transmission Company and (b) are
by agreement between the
Transmission Company and the
licensee or such authorised
electricity operator operated
under the direction and control
of the licensee or such
authorised electricity operator.
"Retail Price Index" means
the general index of retail
prices published by the
Department of 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.
"Second-Tier Supply
Business" means the
authorised business (if any) of
the licensee or any affiliate or
related undertaking as a private
electricity supplier.
"Separate Business" means each
of the Distribution, Supply,
Second-Tier Supply and
Generation Businesses taken
separately from one another and
from any other business of the
licensee, but so that where all
or any part of such business is
carried on by an affiliate or
related undertaking of the
licensee such part of the
business as is carried on by
that affiliate or related
undertaking shall be
consolidated with any other such
business of the licensee (and of
any other affiliate or related
undertaking) so as to form a
single Separate Business.
"standby" means the periodic or
intermittent supply or sale of
electricity:
(a) to an authorised
electricity operator to make
good any shortfall in the
availability of electricity to
that operator for the purposes
of its supply of electricity to
persons seeking such supply; or
(b) to a customer of the
licensee to make good any
shortfall between the customer's
total supply requirements and
that met either by its own
generation or by electricity
supplied by an authorised
electricity operator other than
the licensee such standby supply
or sale being provided at such
entry or exit point on the
licensee's distribution system
as the operator or customer may
request.
"Supply Business" means the
authorised business of the
licensee as public electricity
supplier in the authorised area,
but shall not include any
activities forming part of the
Distribution Business.
"top-up" means the supply or
sale of electricity on a
continuing or regular basis:
(a) to an authorised
electricity operator to make
good any shortfall in the
availability of electricity
(including, where that operator
is using the licensee's
distribution system, to make
good any distribution losses on
that system) to that operator
for the purposes of its supply
of electricity to persons
seeking such supply; or
(b)to a customer of the licensee
to make good any shortfall
between the customer's total
supply requirements and that met
either by its own generation or
by electricity supplied by an
authorised electricity operator
other than the licensee such
top-up supply or sale being
provided at such entry or exit
point on the licensee's
distribution system as the
operator or customer may
request.
"transfer date" means such
date as may be appointed by the
Secretary of State by order
under Section 65 of the Act.
"Transmission
Company" means The
National Grid Company pie 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 sub-stations 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.
"use of system" means use of
the licensee's distribution
system for the transport of
electricity by the licensee or
any authorised electricity
operator.
"use of system charges" means
charges made or levied or to be
made or levied by the licensee
for the provision of services as
part of the Distribution
Business to any authorised
electricity operator or to the
licensee for the purposes of its
Supply Business or Second-Tier
Supply Business as more fully
described at paragraph 3 of
Condition 8 and at paragraph C2
of Part C of Schedule 3 of this
licence; but shall not include
connection charges.
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 prefix or a suffix letter) is a reference to the
paragraph bearing that number (with or without a prefix or a
suffix letter) 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: Separate accounts for Separate Businesses
I.The first financial year of the licensee shall run from Ist
April 1990 to 31st March 1991, and thereafter each financial year
of the licensee shall run from Ist April to the following 31st March.
2. The remaining paragraphs of this Condition apply for the
purpose of ensuring that the licensee (and any affiliate or
related undertaking) maintains accounting and reporting
arrangements which enable separate accounts to be prepared for
each Separate Business and showing the financial affairs of each
such Separate Business.
3. The licensee shall in respect of each Separate Business:
(a) keep or cause to be kept for the period referred to in
Section 222(5)(b) of the Companies Act 1 9B5 and in the manner
referred to in that section such accounting records in respect of
each Separate Business as would by Section 221 of the Companies Act
1985 be required to be kept in respect of each such business if it
were carried on by a separate company, so that the revenues, costs,
assets, liabilities, reserves and provisions of, or reasonably
attributable to, each Separate Business are separately
identifiable in the books of the licensee (and any affiliate or
related undertaking) from those of any other business; and
(b) prepare on a consistent basis from such accounting
records in respect of:
(i)the financial year commencing on I st April
1990 and each subsequent financial year, accounting statements comprising
a profit and loss account, a balance sheet and a statement of source and
application of funds, together with notes thereto, and showing
separately in respect of each Separate Business and in
appropriate detail the amounts of any revenue, cost, asset, liability,
reserve or provision which has been either:
(A) charged from or to any other business (whether or not a
Separate Business) together with a description of the basis
of that charge; or
(B) determined by apportionment or allocation between any
Separate Business and any other business (whether or not a
Separate Business) together with a description of the basis
of the apportionment or allocation; and
(ii)the first six months of the financial year
commencing on Ist April 1990 and of each subsequent financial year,
an interim profit and loss account; and
(c) procure, in respect of the accounting statements
prepared in accordance with this Condition in respect of a
financial year, a report by the Auditors and addressed to the
Director stating whether in their opinion those statements have
been properly prepared in accordance with this Condition and give
a true and fair view of the revenues, costs, assets, liabilities,
reserves and provisions of, or reasonably attributable to, the
Separate Business to which the statements relate; and
(d) deliver to the Director a copy of the account referred
to in sub-paragraph (b)(ii) above, the Auditors' report referred
to in sub-paragraph (c) above and the accounting statements referred
to in sub-paragraph (b)(i) above as soon as reasonably practicable,
and in any event not later than three months after the end of the
period to which it relates in the case of the account referred to
in sub-paragraph (b)(ii) and six months after the end of the
financial year to which they relate in the case of the accounting
statements and Auditors' report referred to in sub-paragraphs (b)(i)
and (c) above.
4. (a)Unless the Director so specifies in directions issued for the
purposes of this Condition or with his prior written approval the licensee
shall not in relation to the accounting statements in respect of a financial
year change the bases of charge or apportionment or allocation referred to
in sub-paragraph (b)(i) of paragraph 3 from those applied in respect of the
previous financial year.
(b)Where, in relation to the accounting statements in
respect of a financial year, the licensee has changed such bases of charge
or apportionment or allocation from those adopted for the immediately preceding
financial year, the licensee shall, if so directed in directions issued by the
Director, in addition to preparing accounting statements on those bases which
it has adopted, prepare such accounting statements on the bases which
applied in respect of the immediately preceding financial year.
5.Accounting statements in respect of a financial year
prepared under sub-paragraph (b)(i) of paragraph 3 shall, so far as reasonably
practicable and unless otherwise approved by the Director having regard to
the purposes of this Condition:
(a)have the same content and format (in relation to
each Separate Business) as the annual accounts of the licensee prepared under
Section 226 and, where appropriate, Section 227 of the Companies Act 1985
and conform to the best commercial accounting practices including Statements
of Accounting Practice issued by the member bodies of the Consultative
Committee of Accounting Bodies currently in force; and
(b)state the accounting policies adopted; and
(c)(with the exception of the part of such statement
which shows separately the amounts charged, apportioned or allocated
and describes the bases of charge or apportionment or allocation
respectively and with the exception of the accounting statements
relating to the Second-Tier Supply Business), be published with the
annual accounts of the licensee.
6. Unless the accounting statements prepared under sub-paragraph
(b)(i) of paragraph 3 are prepared on the current cost basis as
provided by the alternative accounting rules. the licensee shall,
unless otherwise agreed by the Director, in addition to preparing
those accounting statements under that paragraph, prepare accounting
statements for each Separate Business covering the same period, which
shall comprise and show separately:
(a) a profit and loss account, a balance sheet and a
statement of source and application of funds, together with
notes thereto, which shall:
(i)include in respect of current cost assets
amounts determined on the current cost basis as provided by the
alternative accounting rules; and
(ii)show or disclose the information and other
matters required by the alternative accounting rules to be shown
or disclosed in accounts where the amounts included in respect of
assets covered by any items shown in those accounts have been
determined on any basis mentioned in paragraph 31 of Section C
of Part II of Schedule 4 to the Companies Act 1985;
(b) in respect of each Separate Business the adjusted
amount of any such provision for depreciation as is referred to
in paragraph 32(2) of Section C of Part II of Schedule 4 to the
Companies Act 1985 and the items shown in the profit and loss
account of the Separate Business for the relevant period which
are affected by the determination of amounts on the current cost
basis as provided by the alternative accounting rules, including
the profit (or loss) before taxation; and
(c) such other current cost information as is referred to
in the Handbook as the Director may reasonably require
and shall deliver the same, together with an Auditors' report
prepared in relation to the current cost basis accounting
statements in the form referred to in sub-paragraph
(c) of paragraph 3, to the Director within the time limit
referred to in sub-paragraph (d) of paragraph 3, and shall (with
the exception of the part of such statement which shows
separately the amounts charged, apportioned or allocated and
describes the bases of charge or apportionment or allocation
respectively and with the exception of the accounting statements
relating to the Second-Tier Supply Business) publish the same
with the annual accounts of the licensee.
7. References in this Condition to costs or liabilities
of, or reasonably attributable to, any Separate Business shall be
construed as excluding taxation, capital liabilities which do not
relate principally to a particular Separate Business, and interest
thereon; and references to any profit and loss account shall be
construed accordingly.
8. Without prejudice to paragraph I of Condition 1,
references in this Condition to sections of the Companies Act 1985
are references to those provisions as amended, substituted or inserted
by the relevant provisions of the Companies Act 1989 and if such provisions
of the Companies Act 1989 are not in force at the date of grant of
this licence shall be construed as if such provisions were in
force at such date.
9. For the purposes of paragraph 6:
"altemative accounting
rules'l means the rules set
out in Section C of Part II of
Schedule 4 to the Companies Act
1985.
"current cost assets!' means
assets of any description
mentioned in paragraph 31 of
Section C of Part II of Schedule
4 to the Companies Act 1985.
"the Handbook" means the
handbook issued by the
Accounting Standards Committee
of the Consultative Committee of
Accounting Bodies (CCAB Limited)
or any successor body entitled
"Accounting for the effects of
If/ changing prices: a Handbook"
in its current edition for the
time being or in the event that
no such handbook shall be in
issue such guidance or
publication as may be issued in
replacement or substitution
therefor.
Condition 3: Charge restriction conditions: definitions
1.In this Condition and in C
onditions 3A to 3G and Schedule
3 to this licence:
"attributed" means when used
in relation to the fossil fuel
levy or payments in lieu thereof
or transmission connection point
charges or remote transmission
asset rentals or distribution
losses or transmission costs or
allowed distribution costs, or
in relation to attributing
electricity purchase or sale
contracts and electricity
purchase costs to regulated
customers and other customers,
attributed in accordance with
the principles set out in Part A
of Schedule 3 and attribute,
attributed, attributable and
attribution shall be construed
accordingly.
"average charge per
unit distributed" means
the distribution revenue in the
relevant year divided by the
regulated quantity distributed
in that year.
"average charge per
unit supplied" means the supply
revenue in the year divided by
the quantity supplied in that
year.
"average charge per
regulated unit supplied"
means the regulated supply
revenue in the relevant year
divided by the regulated
quantity supplied in that year.
"average specified rate" means
the average of the daily base
rates of Barclays Bank plc
current from time to time during
the period in respect of which
the calculation falls to be
made.
"charge restriction
conditions" means Conditions
3 to 3G inclusive together with
Schedule 3 to this licence, as
from time to time modified or
replaced in accordance therewith
or pursuant to Sections 11, 14
or 15 of the Act.
"distribution losses" means
units unaccounted for on the
licensee's distribution system,
measured as being the difference
between the units metered on
entry into the system and the
units metered on leaving the
system.
"distribution revenue" means
the revenue (measured on an
accruals basis) derived by the
licensee from the provision of
distribution services in the
relevant year, after deduction
of:
(i) an amount equal to
such part of the total amount
payable in that relevant year to
the Transmission Company
(measured on an accruals basis)
in respect of transmission
connection point charges and
remote transmission asset
rentals and which would
otherwise be included in
distribution revenue by reason
of being recovered in that
relevant year by the licensee in
its use of system charges, as
falls to be attributed to the
regulated quantity distributed
in that relevant year; and
(ii) value added
tax (if any) and any other taxes
based directly on the amounts so
derived.
"distribution services" means
all services provided by the
licensee as part of its
Distribution Business other than
excluded services.
"EHV premises" means those
premises to which units are
delivered by the licensee which
fall to be treated as EHV
premises in accordance with Part
B of Schedule 3.
"EHV units" means units
distributed by the licensee
which are delivered or deemed to
be delivered to EHV premises.
"electricity purchase
costs means the licensee's
purchase costs of electricity
calculated in accordance with
the principles in Part F of
Schedule 3.
"excluded services" means those
services provided by the
licensee which in accordance
with the principles set out in
Part C of Schedule 3 fall to be
treated as excluded services.
"fifth relevant year" means
the relevant year commencing I
st April 1994.
"HV units" means units
(other than EHV units)
distributed by the licensee
which are delivered to premises
connected to the licensee's
distribution system at a voltage
at or higher than 1000 volts.
" interconnector
charges" means charges levied
by the Interconnectors Business
of the Transmission Company and
payable by the Supply or
Second-Tier Supply Business of
the licensee in respect of use
of interconnector for the
transfer of electricity into
England and Wales.
"LV units" means units
distributed by the licensee
which are delivered to premises
connected to the licensee's
distribution system at a voltage
less than 1000 volts.
"LVI units" means LV units
which are distributed by the
licensee outside night-time
periods to domestic premises or
small non-domestic premises
where the appropriate use of
system charges apply different
rates in night-time periods as
opposed to other times of day,
for the avoidance of doubt
including the use of system
charges under the tariffs
specified in paragraph D2 of
Part D of Schedule 3.
"LV2 units" means LV units
which are distributed by the
licensee to domestic premises or
small nondomestic premises:
(a) during
night-time periods, where the
appropriate use of system
charges apply different rates in
night-time periods as opposed to
other times of the day; or
(b) where the
appropriate use of system
charges are incorporated into
tariffs which restrict
availability of supply to
specified off-peak periods,
for the avoidance of
doubt including the use of
system charges under the tariffs
specified in paragraph D3 of
Part D of Schedule 3.
"LV3 units" means LV units
other than LVI and LV2 units,
for the avoidance of doubt
including units distributed
under the tariffs specified in
paragraph D4 of Part D of
Schedule 3.
"maximum average
charge per unit
distributed" means the
charge calculated in accordance
with the formula in paragraph I
of Condition 3A.
"maximum average
charge per regulated
unit supplied" means the charge
calculated in accordance with
the formula in paragraph 1 of
Condition 3B
"metered' means, in
relation to any quantity
distributed or supplied, as
measured by a meter installed
for such purpose or (where no
such meter is installed or it is
not reasonably practicable to
measure the quantity by such
meter) as otherwise reasonably
calculated.
"quantity supplied" means the
aggregate quantity of units
supplied by the licensee in the
relevant year metered at the
points of supply (whether or not
in the authorised area of the
licensee).
"regulated customer" means a
person other than the licensee
who in the calendar year ending
in relevant year tI was supplied
at 0.1 MW premises.
"regulated distribution
unit category" means as the case
may be HV units or LVI units or
LV2 units or LV3 units.
"regulated quantity
distributed" means the
aggregate quantity of units
distributed (both for the Supply
Business of the licensee and on
behalf of third parties under
use of system) by the licensee
through the licensee's
distribution system in relevant
year t metered at exit points on
leaving the licensee's
distribution system but
excluding for this purpose:
(a) units distributed for
the purpose of supply to
premises outside the licensee's
authorised area; and
(b) EHV units.
Regulated quantity
supplied" means the aggregate
quantity of units supplied by
the licensee to regulated
customers in the relevant year
metered at the points of supply.
"regulated supply
revenue" means that part
of the supply revenue (measured
on an accruals basis) derived by
the licensee from supplies to
regulated customers.
"regulated unit
supplied" means a unit supplied
by the licensee to a regulated
customer.
"relevant year" means a
financial year commencing on or
after I st April 1990.
"relevant year t" means that
relevant year for the purposes
of which any calculation falls
to be made; "relevant year t-l"
means the relevant year
preceding relevant year t or, in
respect of the period prior to
Ist April 1990, the period of 12
calendar months commencing on I
st April 1989; and similar
expressions shall be construed
accordingly.
"remote transmission
asset rental" means any rent or
other periodic payment payable
by the Distribution Business of
the licensee to the Transmission
Company in respect of remote
transmission assets forming part
of the licensee's distribution
system.
"sixth relevant year" means
the relevant year commencing I
st April 1995.
"supply" includes supply
outside the authorised area,
standby and top-up supply and
sale and any other sales of
electricity by the licensee to
persons other than customers;
and "supplied" and similar
expressions shall be construed
accordingly.
"supply charges" means all
charges (including charges for
the provision of distribution
services and standing charges)
made by the licensee in respect
of electricity supplied by the
licensee other than charges for
the provision of excluded
services by the licensee.
"supply revenue" means the
revenue (measured on an accruals
basis) derived by the licensee
from supply charges after
deduction of value added tax (if
any) and any other taxes based
directly on the amounts so
derived.
"transmission charges" means
charges levied by the
Transmission Company payable by
the Supply or the Second-Tier
Supply Business of the licensee
in respect of the transmission
of electricity, but for the
avoidance of doubt shall exclude
transmission connection point
charges and remote transmission
asset rentals.
"transmission connec-
tion point charges" means
charges levied by the
Transmission Company as
connection charges by direct
reference to the number or
nature of the connections
between the licensee's
distribution system and the
transmission system and payable
by the Distribution Business of
the licensee.
"unit" means a kilowatt
hour.
Condition 3A: Restriction of distribution charges
Basic Formula
1. Without prejudice to Condition 3F the licensee shall in setting
its charges for the provision of distribution services use its best
endeavours to ensure that in any relevant year the average charge per
unit distributed shall not exceed the maximum average charge per unit
distributed calculated in accordance with the following formula:
M(dt), = P(dt), - K(dt),
where:
M(dt) means the maximum average charge
per unit distributed in relevant
year t.
P(dt) is derived from the following
formula:
P(dt)=( (PU+PM). GR(t).PID(t)) + (PL.(AI(t)-L(t)).PIL(t))
- ----------------------------------------------------------
D(t)
where:
PU means an amount equal to
260,90O,OOO
PM means an amount equal to
31,000,000
GR(t) is derived from the following
formula:
GR(t)= 0 5 (EP(ot)D(it) + C(dt))
------------ ------
(EP(ot)D(it) + C(dt)) GR(t-1)
where, for the relevant year beginning 1st April 1995,
GR(t-1). equals I.
S means the summation
across all regulated
distribution unit categories i.
P(oi) means in respect
of each regulated distribution
unit category i set out below in
column I the value equal to that
amount set opposite that
category in column 2.
regulated distribution
unit category I value (p)
HV 0.5932
LVI 2.2073
LV 20.4057
LV 31.5912
D(it) means that number of
units in each regulated
distribution unit category i
distributed in relevant year
t.
D(it-l) means that number of
units in each regulated
distribution unit category i
distributed in relevant year
tel.
Ct means a notional figure
representing the number of
customers in the authorised area
defined (for the purpose of this
term Cd' only) for each relevant
year, as the figure in the table
below.
relevant year beginning:
I st April 1994 1,955,000
I st April 1995 1,974,000
I st April 1996 1,986,000
I st April 1997 1,998,000
I st April 1998 2,010,000
I st April 1999 2,022,000
provided that: for any relevant year t beginning on or
after I st April 200O, Cd' shall
equal 2,022,OOO.
CdI-l means the number equal
to Cd' in relevant year t- I.
PID' is derived from the
following formula:
PID, = (I + RPI, - Xd') PID
----------
100
where, for the relevant year beginning I st April 1995,
PID' ~ equals I .
RPI, means the percentage change
(whether of a positive or a
negative value) in the
arithmetic average of the Retail
Price Index numbers published or
determined with respect to each
of the six months July to
December (inclusive) in relevant
year t- I and the arithmetic
average of the Retail Price
Index numbers published or
determined with respect to the
same months in relevant year
t-2.
Xd' means for each relevant year
in column I below the figure set
opposite in column 2 below:
Relevant year beginning -
1ST April 1995 2
1st April 1996 11
provided that:
for any relevant year t
beginning on or after 1'~ April
1997 Xd' shall equal 3.
PL means an amount equal to 3.0656
p.
AL(t) means an amount (in units)
representing allowed
distribution losses in relevant
year t, being the allowed
percentage of the adjusted units
distributed (calculated as
provided in paragraph E5 of Part
E of Schedule 3) where in
respect of each relevant year t,
the allowed percentage shall
equal that percentage which the
aggregate of adjusted
distribution losses (calculated
as provided in paragraphs E2 to
E5 of Part E of Schedule 3) over
the preceding relevant years
(commencing with the
twelve-month period from Ist
April 1989, or, if the number of
preceding relevant years exceeds
nine, relevant year t-10) bears
to the aggregate of adjusted
units distributed (calculated as
aforesaid) over the
corresponding relevant years:
save that for this purpose
adjusted distribution losses in
respect of the twelve month
period from 1st April 1989 shall
be derived by applying the
initial relevant loss percentage
(calculated as provided in
paragraphs E6 to E8 of Part E of
Schedule 3) to the adjusted
units distributed in that
period.
L' means in respect of
relevant year t, adjusted grid
supply point purchases less
adjusted units distributed
(calculated as provided in
paragraphs E2 to E5 of Part E of
Schedule 3).
PIL. is derived from the
following formula:
PIL, = (I +RPI ) PIL(t-l)
----
100
where, for the relevant year beginning 1 st April 1995,
PIL', equals 1.
D' means the regulated quantity
distributed in relevant year t.
Kd' means the correction factor
per unit (whether of a positive
or a negative value) to be
applied to the average charge
per unit distributed in relevant
year t which (subject to
paragraph 4 of Condition 3D) is
derived from the formula in
paragraph 2 of this Condition.
and any term defined for the purposes of this paragraph I
shall have the same meaning in each paragraph of this
Condition.
Formula for Kd, as used in ParagraDh 1
2. For the purposes of paragraph 1, the term Kd' shall
be calculated in accordance with the following
formula:
K.6 = R(dt-1) - (D(t-1) . M(dt-1) (1+Idt)'
-------------------------- -----
Dt (100)
provided that: notwithstanding the above, the
value of Kd' for the sixth r
elevant year shall be that value
required by Condition 3A in the
licence in the form in force on
31st March 1995.
Where:
Rd' l means the distribution
revenue in relevant year t- I .
D'., means the regulated
quantity distributed in relevant
year t- I .
Md' l means maximum average
charge per unit distributed in
relevant year I- I .
Id' means that interest rate in
relevant year t which is equal
to, where Kd. (taking no account
of Id for this purpose) has a
positive value, the average
specified rate plus 4, or where
Kd' (taking no account of Id for
this purpose) has a negative
value, the average specified
rate.
Condition 3B: Restriction of suppiv charges
Basic Formula
1. Without prejudice to Condition 3F the licensee
shall in setting its supply charges use its best
endeavours to ensure that in any relevant year the
average charge per regulated unit supplied shall not
exceed the maximum average charge per regulated unit
supplied calculated in accordance with the following
formula:
Mst = Pst + Yt. - Kst
where:
Mst means the maximum average
charge per regulated unit
supplied in relevant year I.
Pst means that amount in
relevant year t which is derived
from the following formula.
Pst = (PF+PC.Ct+PQ.Qt)PIt
-------------------
Qt
Where:
PF means pounds 1 6,774,722
PC means pounds 16.61
C, means a notional figure
representing the number of
regulated customers (for the
purpose of this defined term C,
only) defined, for each relevant
year, as the figure in the table
below.
Relevant year beginning:
1st April 1994 1,959,971
1st April 1995 1,976,590
1st April 1996 1,987,303
1 st April 1997 1,996,386
PQ means 0.0969p
Q' means the regulated quantity
supplied in relevant year t.
Pl, is derived from the
following formula:
P I' =(l + RPIt-Xs )Pit-1
--------
100
where, for the relevant year beginning I st April 1994,
Pl, t-1 equals I .
RPI, means the percentage change
(whether of a positive or a
negative value) in the
arithmetic average of the Retail
Price Index numbers published or
determined with respect to each
of the six months July to
December (inclusive) in relevant
year t-l and the arithmetic
average of the Retail Price
Index numbers published or
determined with respect to the
same months in relevant year
t-2.
Xs means 2.
Y. means the allowed cost, in
pence per regulated unit
supplied in relevant year I, as
calculated in accordance with
the formula at paragraph 2 of
this Condition.
Kst means the correction factor
per regulated unit (whether of a
positive or negative value) to
be applied to the average charge
per regulated unit supplied in
relevant year t which (subject
to paragraph 4 of Condition 3D)
is derived from the following
formula.
Kst = Rst - (Qt./ . Mst-l) (l+ It )
------------------- ----
Qt 100
Provided that:
(a)notwithstanding the above,
the value for Ks' for the fifth
relevant year shall, subject to
sub-paragraph (b) below, be the
value notified by the licensee
to the irector no later than
three months aRer the
commencement of the fifth
relevant year. Such notification
shall be accompanied by a
statement showing how the value
for Ks' is derived, together
with its reasons for the basis
adopted in calculating such
value; and
(b)unless the Director objects
in writing to the licensee to
such value within 3 months of
receipt of the aforementioned
notification (giving reasons for
such objection) such value shall
be the value as notified to the
Director. Where the Director has
served a notice of objection on
the licensee, the licensee
shall, no later than 14 days
after receipt of such notice,
notify the Director, by a
further statement served on the
Director in accordance with
sub-paragraph (a), of the
proposed value for Ks' for the
fifth relevant year.40
Where:
Rst. means the regulated supply
revenue in relevant year t- I.
Qt-1 means the regulated
quantity supplied in relevant
year tel.
Qt means the regulated
quantity supplied in relevant
year t.
Mst-1 means the maximum
average charge per regulated
unit supplied in relevant year
t- I.
1t means that interest rate in
relevant year t which is equal
to, where Ks' (taking no account
of I for this purpose) has a
positive value, the average
specified rate plus 2 or where K
(taking no account of I for this
purpose) has a negative value
the average specified rate.
Formula for Y. as used in paragraph I
For the purpose of paragraph 1, the term Yt (being the
allowed cost, in pence per regulated unit supplied in
relevant year t) shall be calculated in accordance with
the following formula:
Yt = Et + Ft + Tt + Ut
Where:
Et means the licensee's average
electricity purchase costs in
pence per regulated unit
supplied in relevant year t, as
calculated in accordance with
the principles set out in Part F
of Schedule 3 and attributed to
regulated customers.
Ft means the fossil fuel levy or
an amount in lieu thereof per
regulated unit supplied in
relevant year t, being an amount
in pence per regulated unit
supplied derived by:
(a) aggregating the
amounts payable (measured on an
accruals basis) by the licensee:
(i) in respect of the fossil
fuel levy pursuant to
Regulations made under Section
33 of the Act in respect of
relevant year t; and
(ii) in lieu of the fossil
fuel levy on purchases of
electricity other than leviable
electricity, as calculated in
accordance with paragraph A3 of
Schedule 3 in respect of
relevant year t; and
(b) attributing a share of
those amounts to quantities
supplied in relevant year t to
such regulated customers in
accordance with the principles
set out in Part A of Schedule 3;
and
(c) dividing the resulting
amount by the regulated quantity
supplied in relevant year t.
Tt means the allowed transmission
cost per regulated unit supplied
in relevant year t, derived by:
(a) aggregating those charges:
(i) paid by the licensee to the
Transmission Company as
transmission charges attributed
to regulated customers in
relevant year t after adding any
amounts paid or deducting any
amounts received in relevant
year t in respect of any under
or over payment in the preceding
relevant year t- 1; and
(ii) payable (measured on
an accruals basis) by the
licensee to the Interconnectors
Business of the Transmission
Company as interconnector
charges attributed to regulated
customers in relevant year t;
and
(b) dividing the resulting
amount by the regulated quantity
supplied in relevant year t.
Ut means the allowed distribution
cost per regulated unit supplied
in relevant year t, derived by:
(a) aggregating the amounts
payable (measured on an accruals
basis) in relevant year t by the
licensee in respect of
distribution services attributed
to regulated customers to the
Distribution Business of the
licensee and (in respect of
similar services, whether or not
the same are excluded services
for the purposes of any licence
held by the relevant third
party) to the distribution
business of any third party; and
(b) dividing the resulting
amount by the regulated quantity
supplied in relevant year t.
but so that no amount may be
taken into account more than
once for the purpose of any
calculation of the component
parts of the formula.
Condition 3C: INo longer usedl
Condition 3D: Restriction of distribution charges and of supply
charges:
ad adjustments
1The following paragraphs shall have effect separately in
relation to distribution charges regulated under Condition 3A
and supply charges regulated under Condition 3B.
2. If, in respect of any relevant year, the average charge per
unit exceeds the maximum average charge per unit by more than the
permitted one-year percentage, the licensee shall furnish an
explanation to the Director and in the next following relevant
year the licensee shall not effect any increase in charges unless
it has demonstrated to the reasonable satisfaction of the
Director that the average charge per unit would not be likely to
exceed the maximum average charge per unit in that next following
relevant year.
3.If, in respect of any two successive relevant years, the
sum of the amounts by which the average charge per unit has exceeded
the maximum average charge per unit is more than the permitted
two-year percentage, then in the next following relevant
year the licensee shall, if required by the Director, adjust its
charges such that the average charge per unit would not be likely,
in the judgment of the Director, to exceed the maximum average
charge per unit in that next following relevant year.
4. If, in respect of two successive relevant years, the average
charge per unit is less than 90 per cent of the maximum average
charge per unit, the Director, after consultation with the
licensee, may direct that:
(a) in calculating Kd' for the purposes of paragraph I of
Condition 3A in respect of the next following relevant year,
there shall be substituted for R(dt), in the formula at paragraph
I of Condition 3A such figure as the Director may specify being not
less than Rd., and not more than 0.90 (D(t-1) ,.M(dt)); or
(b)in calculating Ks' for the purposes of paragraph I of
Condition 3B in respect of the next following relevant year,
there shall be substituted for R(st-1) in the formula at paragraph I
of Condition 3B such figure as the Director may specify being not
less than Rs'.` and not more than 0.90(Qt-1 Mst-1 ,).
5. In this Condition:
"per unit " means per unit
distributed in a relevant year
or per regulated unit supplied
in the fifth relevant year or
any subsequent year, as the
context requires.
"permitted one-
year percentage" means 3 per
cent of the maximum average
charge per unit distributed or 4
per cent of the maximum average
charge per regulated unit
supplied, as the context
requires.
"permitted two-
year percentage" means 4 per
cent of the maximum average
charge per unit distributed in
the second of the relevant years
or 5 per cent of the maximum
average charge per regulated
unit supplied in the second of
the relevant years, as the
context requires.
Provided that, in respect of each of the above
definitions, where the relevant year referred to is one
of the first four relevant years it shall have effect as
if the word "regulated" was omitted and shall be
construed in accordance with the charge restrictions
conditions in force during that year.
Condition 3E: Information to be provided to the Director in
connection with the charge restriction conditions
I. Where the licensee is intending to make any change in:
(a) charges for provision of distribution services
regulated under Condition 3A;
or
(b)tariff supply charges regulated under Condition 3B
the licensee shall (unless otherwise agreed by the Director) not
later than the date of publication of such changes provide the
Director with:
(i)a written forecast of the maximum average charge per
unit distributed or the maximum average charge per regulated unit
supplied, together in each case with its components, in respect of
the relevant year t in which such change is to take effect and in
respect of the next following relevant year t+l; and
(ii)a written estimate of the maximum average charge
per unit distributed or the maximum average charge per regulated
unit supplied, together in each case with its components, in
respect of the relevant year t-l immediately preceding the relevant
year in which the change is to take effect unless a statement complying
with paragraph 8 in respect of relevant year t-1 has been furnished to
the Director before the publication of the proposed change.
2. (a)No later than 1st April in each relevant year, the
licensee shall send to the Director a statement of principles in accordance
with which the licensee intends to attribute, together with a statement of
the licensee's provisional attribution of. electricity purchase or sale
contracts to regulated customers and to other customers.
(b)Where, at any time during a relevant year, the
licensee intends to change the principles of attribution or any provisional
attribution specified in the statement under sub-paragraph (a) or a previous
statement under this sub paragraph (b) or to purchase or sell an electricity
purchase or sale contract, the change or the provisional attribution in
relation to the purchase or sale shall be specified in a written statement
signed by a person authorised to sign a statement by the Directors of the
licensee which statement shall not provide for a retrospective change of
principles or for any re-attribution of payments already made or any payment
where the event giving rise to that payment has already occurred (whether
or not it is then due).
3. If within three months of the commencement of any relevant
year t the licensee has not made any such change in charges as is
referred to in paragraph 1, the licensee shall provide the
Director with a written forecast of the maximum average charge
per unit distributed or of the maximum average charge per
regulated unit supplied in respect of relevant year t.
4. The Director may issue directions providing that any
forecast or estimate provided in accordance with paragraphs I or
3 shall be accompanied by such information as regards the
assumptions underlying the forecast or estimate as may be
necessary to enable the Director to
be satisfied that the forecast or estimate has been properly
prepared on a consistent basis.
5. Not later than 31st January in each relevant year t the
licensee shall send to the Director a written estimate of the
average electricity purchase costs in pence per unit supplied and
the quantity supplied calculated as provided under paragraph 2 of
Condition 3B (but as if in that paragraph the words "regulated"
and "and attributed to regulated customers" were omitted) in
respect of the relevant year and the next following year t+ I .
6. [No longer used]
7. Subject as provided in (b) below, not later than six weeks
after the commencement of any relevant year t, the licensee shall
send to the Director a statement as to:
(a) whether or not the provisions of Condition 3D are
likely to be applicable in consequence of the average charge per
unit distributed or regulated unit supplied (as the case may be)
in the preceding relevant year t-l or the two preceding relevant
years t-l and t-2; and
(b)its best estimate as to the relevant correction
factor Kd' or (other than in the fifth relevant year) Kit (as the
case may be) to be applied in calculating the maximum average charge
per unit distributed or regulated unit supplied (as the case may be)
in respect of relevant year t.
8.Not later than three months after the end of a relevant
year the licensee shall send the Director a statement, in respect of
that relevant year, showing the specified items referred to in paragraph 10.
9.The statement referred to in the preceding paragraph shall
be:
(a)accompanied by a report from the Auditors that in
their opinion (i) such statement fairly presents each of the specified
items referred to in paragraph
10 in accordance with the requirements of the charge restriction
conditions and (ii) the amounts shown in respect of each of those specified
items are in accordance with the licensee's accounting records which have
been maintained in respect of each of the relevant Separate Businesses in
accordance with Condition 2; and
(b)certified by a director of the licensee on behalf of
the licensee that to the best of his knowledge, information and belief
having made all reasonable enquiries:
(i)there is no amount included in its calculations under Condition 3A
and Schedule 3 which represents other than:
(aa) bona fide consideration for the provision of
distribution services in the course of its Distribution Business;
or
(bb) an amount permitted under the charge restriction
conditions to be so included;
(ii)there is no amount included in its calculations under
Condition 3B and Schedule 3 which represents other than:
(aa) bona fide consideration for electricity supplied to
regulated customers; or
(bb) an amount permitted under the charge restriction
conditions to be so included;
(iii) there is no amount included in its calculations of allowed
security costs under Condition 3F which represents other
than an amount permitted under the charge restriction
conditions to be so included;
(iv)no service has been treated as an excluded service which was
not properly so treated and no amount included in the
revenues in respect thereof, represents other than bona fide
consideration for the provision of the excluded service to
which it relates;
(v)all amounts which should properly be taken into account for the
purposes of the charge restriction conditions have been taken into
account; and
(vi) there is no amount included in its calculations under
Condition 3B and Schedule 3 in respect of electricity
purchase or sale costs which
does not result from an attribution or method of
attribution contained in the statement under either paragraph
2 (a) or (b).
10. The specified items to be contained in the statement referred to in
paragraph 8 shall be the following:
(a) the regulated quantity distributed;
(b) the quantity distributed in each regulated
distribution unit category;
.
(c) the average charge per unit distributed;
(d) the quantity supplied;
(e) the average charge per unit supplied;
(f) the average charge per regulated unit supplied;
(g) the regulated quantity supplied;
(h) the amount in respect of the terms AL' and L'
in paragraph I of Condition 3A calculated as
therein provided;
(i) the licensee's average electricity purchase
costs per regulated unit supplied calculated as
provided under paragraph 2 of Condition 3B;
(j) the fossil fuel levy per regulated unit
supplied, calculated as provided under paragraph 2
of Condition 3B;
(k) the allowed transmission cost per regulated
unit supplied, calculated as provided under
paragraph 2 of Condition 3B;
(l) the allowed distribution cost per regulated
unit supplied, calculated as provided under
paragraph 2 of Condition 3B;
(m) the statements and information referred to in
paragraphs A6, B2, C8, Dl, E10 and F7 of Schedule 3:
(n) the information referred to at paragraph 8 of
Condition 3F;
(o) the licensee's average electricity purchase
costs in pence per unit supplied calculated as provided
under paragraph 2 of Condition 3B but as if in that
paragraph the words "regulated" and "and attributed to
regulated customers" were omitted.
Provided that the statement to be provided in the
fifth relevant year in respect of the immediately
preceding relevant year shall contain the
information required by Paragraph 10 of Condition 3E
in the Licence in the form in force on 31~ March 1
994.
11. Where the Director issues directions in accordance
with paragraph 9 of Condition 3F or paragraphs A7 or
B3 or C9 or D5 or El I or F8 of Schedule 3 then such
directions shall not have effect from a date earlier
than the commencement of the relevant year to which
the statement last furnished to the Director pursuant to
paragraph 8 prior to the issue of the directions
related, unless such statement (or the accompanying
report or certificate under paragraph 9) or any
statement, report or certificate in respect of an
earlier relevant year was incorrect or was misleading in
any material respect.
12. Where the Director issues such directions as are
referred to in the preceding paragraph the Director may
require the licensee to provide a revised statement in
respect of such of the specified items as may be
affected by the directions, and the
licensee shall comply with such request.
Condition 3F: Allowances in respect of security costs
1.At any time during a security period. the licensee may give
notice in writing to the Director suspending, with effect from the
date of receipt of the notice by the Director, application of such
of the charge restriction conditions as may be specified in the
notice for the unexpired term of the security period.
2. At any time during a security period, the Director may
(having regard to his duties under the Act) by means of
directions:
(a) suspend or modify for the unexpired term of the
security period the charge restriction conditions or any
part or parts thereof; or
(b) introduce for the unexpired term of the security period
new charge restriction conditions
in either case, so as to make such provision as in the opinion or
estimation of the Director is requisite or appropriate:
(I) to enable the licensee to recover by means of increased
charges an amount estimated as being equal to the licensee's
allowed security costs during such period;
(ii)to ensure that such part of the amount referred to
in sub-paragraph (i) above as is estimated as being equal to the
allowed security costs incurred by the licensee as costs in its
Distribution Business are recovered by means of appropriate equitable
increases on the charges made by the licensee in its Distribution
Business; and
(iii)to ensure that such part of the amount referred to in
sub-paragraph (i) above as is estimated as being equal to the
allowed security costs incurred by the licensee as costs in its
Supply Business and its Second-Tier Supply
Business respectively are recovered by appropriate equitable
increases in the charges made by the licensee in those Businesses
and the licensee shall comply with the terms of any directions so
issued.
3. At any time following a security period, the Director may
(following such consultation with the licensee and others as the
Director may consider appropriate) issue directions suspending or
modifying the charge restriction conditions or any part or parts
thereof or replacing such directions as may have been made during
the security period and introducing such new charge restriction
conditions as in the opinion of the Director are appropriate in
all the circumstances (including at the Director's discretion an
appropriate adjustment having regard to any profit gained or
foregone by the licensee during the security period), and the
licensee shall comply with any directions so issued.
4.At any time within three months after the issue of d
irections by the Director under paragraph 3, the licensee may serve
on the Director a disapplication request in respect of such of the
charge restriction conditions or any part or parts thereof as are
specified in the request.
5. If within three months of the receipt by the Director of the
disapplication request referred to in paragraph 4, the Director
has either not agreed in writing to such disapplication request
or has not made a reference to the Monopolies Commission under
Section 12 of the Act relating to the modification of the charge
restriction conditions, the licensee may deliver one month's
written notice to the Director terminating the application of the
charge restriction conditions (or any part or parts thereof) as
were specified in the disapplication request.
6.Subject to paragraphs 7 and 9, the licensee shall in any
relevant year be entitled to recover an aggregate amount equal to
its allowed security costs in that year or (insofar as not
previously recovered) any previous year, by means of appropriate
equitable increases on the charges made by the licensee in each
of its Distribution,
Supply and Second-Tier Supply Businesses.
7.Paragraph 6 shall not apply in so far as such allowed
security costs:
(a) were otherwise recovered by the licensee; or
(b) were taken into account by the Director in setting
charge restriction
conditions by means of directions issued under paragraph 3 above.
8. The licensee shall following the end of each relevant year
provide to the Director, as being one of the specified items to
be contained in the statement referred to at paragraph 8 of
Condition 3E, details in respect of that relevant year of:
(a) the amount of the licensee's allowed security costs;
and
(b)the aggregate amounts charged under paragraph 6 on
account of the licensee's allowed security costs; and
(c)the bases and calculations underlying the increases in
charges made by the licensee in its Distribution, Supply and
Second-Tier Supply Businesses under paragraph 6.
9.Where the Director is satisfied that the licensee has
recovered amounts in excess of the allowed security costs, the
Director may issue directions requiring the licensee to take such
steps as may be specified to reimburse customers of or purchasers from
the Distribution, Supply and Second-Tier Supply Business (as the
case may be) for the excess amounts charged to them, and the licensee
shall comply with any directions so issued provided that if
the excess amounts relate to allowed security costs paid to any
authorised electricity operator, the licensee shall not be obliged to
make any such reimbursement unless and until it has recovered
such costs from the relevant authorised electricity operator.
10.No amounts charged by the licensee under this Condition
(whether or not subsequently required to be reimbursed) shall be
taken into account for the purpose of applying the
charge restriction provisions of Conditions 3A and 3B.
11. In this Condition:
"allowed security cost" shall have the meaning ascribed to
that term in the Fuel Security
Code
"security period" means a period commencing on the date on
which any direction issued by
the Secretary of State under
Section 34(4)(b) of the Act
enters effect and terminating on
the date (being not earlier than
the date such direction, as
varied, is revoked or expires)
as the Director, aRer
consultation with such persons
(including without limitation,
licence holders liable to be
principally affected) as he
shall consider appropriate, may
with the consent of the
Secretary of State by notice to
all licence holders determine
after having regard to the views
of such persons.
Condition 3G: Duration of charges restriction conditions
1. The charge restriction conditions shall apply so long as
this licence continues in force but shall cease to have effect
(in whole or in part, as the case may be) if the licensee
delivers to the Director a disapplication request made in
accordance with paragraph 2 and:
(a) the Director agrees in writing to the disapplication
request; or
(b) their application (in whole or in part) is terminated
by notice given by the licensee in accordance with either
paragraph 4 or paragraph 5.
2. A disapplication request pursuant to this Condition 3G shall
(a) be in writing addressed to the Director, (b) specify the
charge restriction conditions (or any part or parts thereof) to
which the request relates and (c) state the date from which the
licensee wishes the Director to agree that the specified charge
restriction conditions shall cease to have effect.
3. Save where the Director otherwise agrees, no disapplication
following delivery of a disapplication request pursuant to this
Condition 3G shall have effect earlier than that date which is
the later of:
(a) a date being not less than 18 months after delivery of
the disapplication request; and either
(b)in the case of distribution charges regulated under
Condition 3A, 31st March 2000; or
(c)in the case of supply charges regulated under
Condition 3B, 31st March
1998.
4. If the Director has not made a reference to the Monopolies
Commission under Section 12 of the Act relating to the
modification of the charge restriction conditions before the
beginning of the period of 12 months which will end with the
disapplication date, the licensee may deliver written notice to
the Director terminating the application of such of the charge
restriction conditions (or any part or parts thereof) as are
specified in the disapplication request with effect from the
disapplication date or a later date.
5. If the Monopolies Commission makes a report on a reference
made by the Director relating to the modification of the charge
restriction conditions (or any part or parts thereof) specified
in the disapplication request and such report does not include a
conclusion that the cessation of such charge restriction
conditions, in whole or in part, operates or may be expected to
operate against the public interest, the licensee may within 30
days after the publication of the report by the Director in
accordance with Section 13 of the Act deliver to him written
notice terminating the application of such charge restriction
conditions with effect from the disapplication date or later.
6.A disapplication request or notice served under this
Condition may be served in respect of a specified geographic area.
Condition .1: Prohibition of cross-subsidies and of
discrimination
1.The licensee shall procure that no Separate Business gives
any cross-subsidy to, or receives any cross-subsidy from, any other
business of the licensee or an affiliate related undertaking of the
licensee (whether or not a Separate Business). For the purpose of this
paragraph, those parts of the Supply Business and of the Second
Tier Supply Business consisting in the supply of electricity to
over 0.1 MW customers and in the supply of electricity to 0.1 MW customers
shall each be treated as a Separate Business.
2.The licensee shall not, and shall procure that any a
ffiliate or related undertaking of the licensee shall not, supply or
offer to supply electricity to any 0.1 MW customer or group of 0.1 MW
customers at prices or on other terms affecting the financial
value of the supply which differ from those on which it supplies or
offers to supply electricity to any other 0.1 MW customer or group of
0.1 MW customers except in so far as such differences reasonably reflect
differences in the costs associated with such supply.
3. The licensee shall not, and shall procure that any affiliate
or related undertaking of the licensee shall not, supply or sell or
offer to supply or sell electricity (including under any electricity
sale contract) to any one relevant purchaser or person seeking
to become a relevant purchaser on terms as to price which are
materially more or less favourable than those on which it supplies or
sells or offers to supply or sell electricity (including under any
electricity sale contract) to comparable relevant purchasers. For these
purposes, due regard shall be had to the circumstances of supply or sale
to such purchasers including (without limitation) volumes, load factors,
conditions of interruptibility, location of premises being supplied and date
and duration of the agreement.
4. For the purposes of paragraph 3:
"relevant purchaser" means any purchaser of electricity
from the licensee or any
affiliate or related undertaking
of the licensee other than a 0.1
MW customer.
Condition 5: Obligation on economic purchasing
1.Subject to paragraph 6, the provisions of paragraph 2 shall
apply separately in relation to purchases of electricity from the
following sources:
(a) qualifying renewable generation
(b) qualifying non-fossil generation; and
(c) generation from any source other than as referred to in
sub-paragraphs (a) and (b) above.
2. In respect of each category referred to in paragraph I
above, and subject to paragraph 4 below, the licensee shall:
(a) itself purchase;
(b) procure any affiliate of the licensee to purchase; and
(c) in so far as it is able through the exercise of voting
rights or otherwise to do so, procure any related
undertaking of the licensee or any defined undertaking to
purchase
electricity at the best effective price reasonably obtainable
having regard to the sources available.
3. In determining the effective price at which electricity is
purchased by the licensee or any affiliate or related undertaking
of the licensee or any defined undertaking, regard shall be had
to any payments made or received or to be made or received for
the grant of or pursuant to any electricity purchase contract.
4. In the discharge of its obligations under paragraph 2 above,
the licensee may additionally have regard to any considerations
liable to effect its ability and that of any affiliate of the
licensee to discharge its obligations under this Condition in the
future. including the future security. reliability and diversity
of sources of electricity available for purchase.
5. In this- Condition (and subject to 6) references to
qualifying renewable generation and to qualifying non-fossil
generation shall refer to generation from capacity of that
description which:
(i) has been contracted by the licensee or any defined
undertaking under an arrangement certified by the Secretary of State
under Section 32(7) of the Act which was entered into prior to the
date this licence enters force; or
(ii)is available to be contracted under arrangements to
be produced to the Director in satisfaction of an obligation
imposed on the licensee by Order made under Section 32 of the Act
after this licence enters force.
6.Notwithstanding that generation may previously have been
contracted as being qualifying renewable generation or qualifying
non-fossil generation (as the case may be), it shall cease to be
so treated to the extent that:
(a)the licensee (or any affiliate or related
undertaking of the licensee or any defined undertaking) enjoys
contractual freedom to vary or discontinue its
obligation to purchase such generation; and
(b)capacity from which qualifying renewable or
non-fossil generation (as the case may be) is otherwise contracted
by the licensee or any affiliate or related undertaking of the
licensee or any defined undertaking is equal to or exceeds the
aggregate capacity specified in any Orders previously made
under Section 32 of the Act and continuing in force, as being
required to be available to the licensee at that time or in respect of any
future period covered by such Orders.
7. Paragraphs 2, 3 and 4 of this Condition shall apply mutatis
mutandis where the licensee exercises a discretion or (by
agreement or otherwise) varies the terms of an existing contract
(whether or not entered into prior to the date of entry into
force of this licence) in such a manner as to alter the effective price
under such contract.
8.In this Condition:
"defined undertaking" means Non-Fossil Purchasing Agency
Limited or other entity through which the
licensee enters into qualifying arrangements
within the meaning of Section 33 of the Act.
"purchase" includes the acquisition of electricity from
sources falling to be treated as own
generation for the purpose of Condition 6,
and the purchase of electricity under
electricity purchase contracts.
"qualifying non-fossil
generation" shall include generation from renewable
sources which for the time being has not
been contracted as being qualifying renewable
generation.
Condition 6: Restriction on own-generation capacity
1. The licensee shall procure that, with effect from the transfer date, the
Generation Business of the licensee is held as a Separate Business by or
through a wholly owned subsidiary of the licensee.
2. Save with the prior written consent of the Director or in the
circumstances described in paragraph 3 below, the licensee shall at all
times ensure that the sum of the amounts in megawatts (calculated as
provided under paragraphs 4 and 5 below) represented by the declared net
capacity of the licensee's own-generation sets and the appropriate share
of the declared net capacity of generation sets in which the
licensee has an accountable interest shall not exceed 700 megawatts.
3. Where the licensee is in breach of paragraph 2 by reason of
the acquisition of own-generation sets or an accountable interest
in other generation sets in consequence of the occurrence of a
specified event affecting the operator or any third party, the
licensee shall forthwith notify the Director for the purpose of
obtaining such consent as is specified in paragraph 2.
4. For the purposes of calculating the limit under paragraph 2
and subject to paragraph 5, there shall be attributed to the
licensee:
(a) the whole of the declared net capacity represented by
own-generation sets;
and
(b) the appropriate share (namely the share representing
the licensee's economic interest therein) of the declared net
capacity of generation sets in which it has an accountable interest,
ascertained in such manner as the licensee with the approval of the
Director may determine.
5. Where the Director is satisfied that by virtue of the licensee's
economic interest (ascertained in such manner as the Director
may determine) therein:
(a)generation sets in which the licensee has only an
accountable interest should more properly be treated as own-generation
sets; or
(b)own-generation sets should more properly be treated
as sets in which the licensee only has an accountable interest; or
(c)own-generation sets, or generation sets in which the
licensee has an accountable interest, should not be treated as falling
in either category; or
(d)generation sets not declared as sets in which the licensee
has an accountable interest, should be treated as generation sets in
which the licensee has an accountable interest
the Director may issue directions to that effect.
6.For the purposes of this Condition and subject to pa
ragraphs 5 and 9, the licensee shall have an accountable interest in
a generation set in circumstances where (such generation set not
being an own-generation set of the licensee):
(a)the operator is a related undertaking of the
licensee or any affiliate of the licensee; or
(b)the licensee or any affiliate of the licensee is in
partnership with or is party to any arrangement for sharing profits
or cost-savings or any joint venture with the operator or with any
third party with regard to the operator; or
(c) the licensee or any affiliate of the licensee has
(directly or indirectly):
(i) any beneficial shareholding interest in the
operator; or
(ii)any beneficial underlying interest in the
generation set; or
(iii)provided or agreed to provide finance to the
operator otherwise than on arm's length terms; or
(iv) provided or agreed to provide, or has determined or is
responsible for determining the price (or other terms affecting
the financial value) of, the fuel used in the generation sets
and is entitled under a contract of not less than 5 years'
duration:
(aa) to a share of the declared net capacity of the
generation set; or
(bb) to a share of the declared net capacity of a generation
set being the own-generation set of another authorised
electricity operator or in which such authorised electricity
operator has an accountable interest, under arrangements for the
exchange of capacity entitlement or supplies of electricity
representing such entitlement between the licensee or its
affiliate and such authorised electricity operator.
7.Paragraph 6 shall be applied in relation to the calculation
of an accountable interest in generation sets of any other authorised
electricity operator as if the references therein to the licensee
were replaced by references to such authorised electricity operator.
8.References in paragraph 6 to contracts giving entitlements
to a share of declared net capacity shall include electricity sale or
purchase contracts where rights under such contract are exercisable by
reference to an identified generation set or to amounts generated at
such set.
9. The licensee shall not be deemed to have an accountable
interest in a generation set where:
(a) such generation set is owned and operated by the
National Grid Company plc a wholly-owned subsidiary thereof under a
licence granted pursuant to Section 6 of the Act; or
(b) the licensee's interest arises wholly under the terms of
the Pooling and Settlement Agreement or (other than as provided in
paragraph 8) under any electricity purchase or sale contract; or
(c)the licensee's interest arises solely by virtue of
arrangements for the sharing with the operator of any generation set
of the risks associated with changes in the price of fuel used by the
generation set during the term of any such contract as is referred to
in paragraph 6 or 8 above.
10. The licensee shall, on each such occasion as it provides to
the Director separate accounts for the Generation Business
pursuant to paragraph 3(b)(i) of Condition 2 and at any other
time upon request of the Director, provide to the Director a
statement:
(a) confirming compliance with paragraphs 1, 2 and 3 above
as at the date of the statement and throughout the period since the
last such statement; and
(b) identifying (in such detail and with such supporting documents or
information as the Director may require) the amount of capacity in
megawatts represented by the declared net capacity of own-generation sets
attributable to the licensee and the appropriate share of the licensee in
the declared net capacity of generation sets in which the licensee has an
accountable interest, as at the date of the statement.
11. Where the.Director is satisfied that the basis of
calculation used by the licensee is not in
conformity with paragraphs 4 and 5 above, the
Director may issue directions specifying an
alternative of calculation. and the basis of
calculation by the licensee shall be adjusted
accordingly with effect from the date of issue of
the directions or such other date as may be
specified in the directions.
12. In this Condition:
"operator" means, in
relation to any generation set,
the authorised electricity
operator or any person for the
time being responsible (under
contract or otherwise) for the
generation or sale of
electricity from such plant.
"own-generation set" means
any generation set the majority
beneficial ownership of which is
vested in the licensee or an
affiliate of the licensee or in
respect of which the licensee or
an affiliate of the licensee is
the operator and references to
own-generation sets of another
authorised electricity operator
shall be construed as if the
references herein to the
licensee were replaced by
references to that authorised
electricity operator.
"specified event" means any
such event as is described in
paragraph (I)(f) of Schedule 2
to this licence but for this
purpose as if references to the
licensee were replaced by
references to the operator or
third party in question.
"underlying interest"
interest arising by reason of
the licensee or affiliate or any
related undertaking of the
licensee or affiliate (whether
alone or with others):
(a) holding or being entitled to
acquire an interest in the land
on which the generation set, or
any part thereof, built;
(b) being in partnership with or
party to any arrangement for
sharing of profits or
cost-savings or any joint
venture with any person holding
or entitled to acquire an
interest in the land on which
the generation set, or any part
thereof, is built;
(c) owning any electrical plant
situated on or operated as a
unit with the generation set
(and for such purpose, any
electrical plant or equipment to
the possession of which the
licensee, affiliate or related
undertaking is entitled under
any agreement for hire, hire
purchase, conditional sale or
loan shall be deemed to be owned
by such person) provided always
that such electrical plant shall
not be deemed to be operated as
a unit with any generation set
by reason only of connections with
any other system for the transmission
or distribution of electricity; or
(d) having obtained any consent under
Section 36 of the Act required for the
construction or extension of the generation
set or any part thereof.71
Condition 7: Tariffs
1.The licensee shall ensure that any tariffs fixed under
Section 18 of the Act shall be so framed as separately to identify:
(a) the use of system element in the licensee's charges;
and
(b) the charges in respect of the supply of electricity to
tariff customers.
2. The licensee shall provide to the Director copies of the
tariffs from time to time fixed by the licensee pursuant to
Section 18 of the Act no later than publication thereof.
3.Where the Director considers that by reason of the c
omplexity of any such tariffs fixed by the licensee, simplified
explanatory statements are required or expedient for the
understanding of tariff customers, the Director may direct the
licensee to draw up such explanatory statements and thereafter
to publish them with the tariffs to which they relate.
Condition 8: Basis of charges for top-up and standby supplies or
sales of electricity, use of system and connection to the system:
requirements for transparency
1.The licensee shall as soon as practicable and in any event
within 28 days after this licence has come into force prepare
statements in a form approved by the Director setting out the basis
upon which the charges for the provision of top-up and standby
supplies or sales of electricity (as part of the Supply or Second-Tier
Supply Business), for use of system and for connection to the licensee's
distribution system (in each case, as part of the Distribution Business)
will be made, in all cases in such form and with such detail as shall be
necessary to enable any person to make a reasonable estimate of the
charges to which he would become liable for the provision of such
services, and (without prejudice to the foregoing) including the
information set out in paragraphs 2 to 4 below.
2. The statement referred to in paragraph I shall in respect of
the provision of top-up and standby supplies or sales of
electricity set out the methods by which and the principles on
which the charges for the provision of each of top-up supplies or
sales and standby supplies or sales will be made.
3. The statement referred to in paragraph I shall in respect of
use of system include:
(a) a schedule of charges for transport of electricity
under use of system;
(b) a schedule of adjustment factors to be made in respect
of distribution losses,
in the form of additional supplies required to cover those
distribution losses;
(c) the methods by which and the principles on which
the charges (if any) for availability of distribution capacity
on the licensee's distribution system will be made;
(d)a schedule of charges in respect of meter reading,
accounting and administrative services; and
(e)a schedule of the charges (if any) which may be made
for the provision and installation of any meters or electrical plant
at entry or exit points, the provision and installation of which is
ancillary to the grant of use of system, and for the maintenance of
meters or electrical plant.
4.The statement referred to in paragraph I shall in respect
of connections to the licensee's distribution system include:
(a) a schedule listing those items (including the carrying
out of works and the provision and installation of electric lines
or electrical plant or meters) of significant cost liable to be
required for the purpose of connection (at entry or exit points)
to the licensee's distribution system for which connection
charges may be made or levied and including (where practicable)
indicative charges for each such item and (in other cases) an
explanation of the methods by which and the principles on which
such charges will be calculated;
(b) the methods by which and the principles on which any
charges will be made in respect of extension or reinforcement of
the licensee's distribution system rendered (in the licensee's
discretion) necessary or appropriate by virtue of providing connection
to or use of system to any person seeking connection;
(c) the methods by which and the principles on which connection
charges will be made in circumstances where the electric lines or electrical
plant to be installed are (at the licensee's discretion) of greater size or
capacity than that required for use of system by the person seeking
connection;
(d)the methods by which and the principles on which any
charges (including any capitalised charge) will be made for maintenance
repair, and replacement required of electric lines, electrical plant or
meters provided and installed for making a connection to the licensee's
distribution system;
(e) the methods by which and principles on which any charges will be
made for disconnection from the licensee's distribution system
and the removal of electrical plant, electric lines and ancillary
meters following disconnection.
5.The basis on which charges for the provision of top-up and
standby supplies or sales of electricity shall be set shall reflect the
costs directly incurred in the provision thereof, together with a
reasonable rate of return on the capital represented by such costs.
6.Use of system charges for those items referred to in
paragraph 3 shall be determined on the same basis as is applied by the
licensee when determining the use of system element of tariffs fixed
pursuant to Section 18 of the Act and Condition 7.
7.Connection charges for those items referred to in paragraph
4 shall be set at a level which will enable the licensee to recover:
(a) the appropriate proportion of the costs directly or
indirectly incurred in carrying out any works, the extension or
reinforcement of the licensee's distribution system or the
provision and installation, maintenance repair, and replacement
or (as the case may be) removal following disconnection of any
electric lines, electrical plant or meters; and
(b) a reasonable rate of return on the capital represented
by such costs.
8. If so requested and subject to paragraphs 9 and 14 below.
the licensee shall, as soon as practicable and in any event
within 28 days (or where the Director so approves such longer
period as the licensee may reasonably require having regard to
the nature and complexity of the request) after the date referred
to in paragraph 15 below give or send to any person making such
request a statement showing present and future circuit capacity,
forecast power flows and loading on the part or parts of the
licensee's distribution system specified in the request and fault
levels for each distribution node covered by the request and
containing:
(a) such further information as shall be reasonably
necessary to enable such person to identify and evaluate the
opportunities available when connecting to and making use of
the part or parts of the licensee's distribution system
specified in the request; and
(b)if so requested, a commentary prepared by the
licensee indicating the licensee's views as to the suitability
of the part or parts of the licensee's distribution system specified
in the request for new connections and transport of further
quantities of electricity.
9.The licensee shall include in every statement given or sent
under paragraph 8 above the information required by that paragraph
except that the licensee may:
(a)with the prior consent of the Director omit from any
such statement any details as to circuit capacity, power flows,
loading or other information, disclosure of which would, in the view
of the Director, seriously and prejudicially affect the commercial
interests of the licensee or any third party; and
(b)omit information the disclosure of which would place
the licensee in breach of Condition 12.
10.The licensee may periodically revise the information set
out in and, with the approval of the Director, alter the form of
the statements prepared in accordance with paragraph I and shall,
at least once in every year this licence is in force, revise
such statements in order that the information set out in the
statements shall continue to be accurate in all material respects.
11.The licensee shall send a copy of the statements prepared
in accordance with paragraph 1, and of each revision of such statements in
accordance with paragraph 10, to the Director.
12.The licensee shall give or send a copy of the statements
prepared in accordance with paragraph I, or (as the case may be) of the
latest revision of such statements in accordance with paragraph 10, to
any person who requests a copy of such statement or statements.
13.The licensee may make a charge for any statement given or
sent pursuant to paragraph 12 of an amount which shall not exceed the
amount specified in directions issued by the Director for the purposes
of this Condition based on the Director's estimate of the licensee's
reasonable costs of providing such a statement.
14.The licensee may within 10 days after receipt of the
request provide an estimate of its reasonable costs in the preparation
of any statement referred to in paragraph 8, and its obligation to
provide such statement shall be conditional on the person requesting
such statement agreeing to pay the amount estimated or such other
amount as the Director may, upon application of the licensee or
the person requesting such statement, direct.
15.For the purposes of paragraph 8 above, the date referred
to shall be the latest of:
(a)the date of receipt of the request referred to in
paragraph 8; or
(b)the date on which the licensee receives agreement
from the person making the request to pay the amount estimated
or such other amount as is determined by the Director (as the case
may be) under paragraph 14 above.
Condition 8A: Non-discrimination in the provision of top-up or
standby supplies or sales of electricity, use of system and connection to
the system
1.In the provision of top-up or standby supplies or sales of
electricity or in the carrying out of works for the purpose of connection
to the licensee's distribution system. the licensee shall not discriminate:
(a) between any persons or class or classes of persons; or
(b) as between the licensee (in the provision of
connections by the licensee as part of its Distribution
Business to itself for the purpose of its Supply or
Second-Tier Supply Business) and any person or class or
classes of persons.
2.In the provision of use of system the licensee shall not
discriminate:
(a)between any authorised electricity operators or
class or classes thereof; or
(b)as between the licensee (in the provision of use of
system by the licensee as part of its Distribution Business to itself for
the purpose of its Supply or Second-Tier Supply Business) and any authorised
electricity operator or class or classes thereof.
3.Without prejudice to paragraphs I or 2, the licensee shall
not:
(a)make charges for the provision of top-up or standby
supplies or sales of electricity to any person or class or classes of
persons; or
(b)make charges for use of system to any authorised
electricity operator or class or classes thereof which differ from the
charges for such provision:
(i)(in the case of top-up or standby supplies or
sales of electricity) to any other person or class or classes of person; or
(ii)(in the case of use of system):
(aa) to any other authorised electricity operator
or to any class or classes thereof; or
(bb) to the licensee (in the provision of use of
system by the licensee as part of its Distribution Business to
itself for the purposes of its Supply or Second-Tier Supply
Business)
except in so far as such differences reasonably reflect
differences in the costs associated with such provision.
4. The licensee shall not in setting its charges for provision of
top-up or standby supplies or sales of electricity or
charges for use of system restrict, distort or prevent
competition in the generation, distribution or supply of
electricity.
Condition 8B: Requirement to offer terms
1. On application made by any authorised electricity operator
the licensee shall (subject to paragraph 6) offer to enter into
an agreement for use of system:
(a) to accept into the licensee's distribution system at
such entry point or points and in such quantities as may be specified
in the application, electricity to be provided by or on behalf of such
authorised electricity operator; and/or
(b)to distribute such quantities of electricity as are
referred to in sub-paragraph (a) above (less any distribution losses)
at such exit point or points on the licensee's distribution system and
to such person or persons as the authorised electricity operator may
specify; and
(c) specifying the use of system charges to be paid by the
authorised electricity operator, such charges (unless manifestly
inappropriate) to be referable to the statement referred to at
paragraphs I and 3 of Condition 8 or any revision thereof, and to
be in conformity with the requirements of paragraph 6 of
Condition 8; and
(d) containing such further terms as are or may be
appropriate for the purposes
of the agreement.
2. On application made by any person, the licensee shall
(subject to paragraph 6) offer to enter into an agreement for
connection to the licensee's distribution system or for
modification to an existing connection and such offer shall make
detailed provision regarding:
(a) the carrying out of works (if any) required to connect
the licensee's distribution system to any other system for the
transmission or distribution of electricity, and for the obtaining
of any consents necessary for such purpose;
(b)the carrying out of works (if any) in connection
with the extension or reinforcement of the licensee's distribution
system rendered (in the licensee's discretion) appropriate or necessary
by reason of making the connection or modification to an existing connection
and for the obtaining of any consents necessary for such purpose;
(c) the installation of appropriate meters (if any)
required to enable the licensee to measure electricity being
accepted into the licensee's distribution system at the specified
entry point or points or leaving such system at the specified
exit point or points;
(d)the installation of such switchgear or other
apparatus (if any) as may be required for the interruption of
supply where the person seeking connection or modification of an
existing connection does not require the provision by
the licensee of top-up or standby supplies or sales of
electricity;
(e)the installation of special metering, telemetry or
data processing (if any) for the purpose of enabling any person which
is party to the Pooling and Settlement Agreement to comply with its
obligations in respect to metering or the performance by the licensee
of any service in relation to such metering thereunder;
(f)the date by which any works required to permit
access to the licensee's distribution system (including for
this purpose any works to reinforce or extend the licensee's
distribution system) shall be completed (time being of
the essence unless otherwise agreed by the person seeking
connection);
(g)the connection charges to be paid to the licensee,
such charges (unless manifestly inappropriate):
(I) to be presented in such a way as to be referable
to the statement referred to in paragraphs I and 4 of Condition 8 or
any revision thereof. and
(ii)to be set in conformity with the requirements
of paragraph 7 of Condition 8 and (where relevant) of paragraph 4; and
(h)containing such further terms as are or may be
appropriate for the purpose of the agreement.
3. The licensee shall (subject to paragraph 6) offer to enter
into an agreement with any person who requests the same to
provide top-up or standby supplies or sales of electricity, such
offer to make provision for the charges to be made in respect of
top-up or standby supplies or sales of electricity, such charges:
(a) to be presented in such a way as to be referable to the
statement referred to in paragraph 2 of Condition 8 or any
revision thereof; and
(b)to be set in conformity with the requirements of
paragraph 5 of Condition 8.
4. For the purpose of determining an appropriate proportion of the costs
directly or indirectly incurred in carrying out works under an agreement for
making a connection or modification to an existing connection, 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 person as a
result of the carrying out of such works whether by reason of the
reinforcement or extension of the licensee's distribution system
or the provision of additional entry or exit points on such
system or otherwise;
(b)the ability or likely future ability of the licensee
to recoup a proportion of such costs from third parties; and
(c) the principles that:
(i) no charge will normally be made for reinforcement
of the existing distribution system if the new or increased load
requirement does not exceed 25 per cent of the existing effective
capacity at the relevant points on the system; and
(ii)charges will not generally take into account
system reinforcement carried out at more than one voltage level above
the voltage of connection.
5.The licensee shall offer terms for agreements in accordance
with paragraphs I to 3 above as soon as practicable and (save where
the Director consents to a longer period) in any event not more than
the period specified in paragraph 7 below after receipt by the licensee
from:
(a) in the case of paragraph 1, an authorised electricity
operator; and
(b) in the case of paragraphs 2 and 3, any person
of an application containing all such information as the licensee
may reasonably require for the purpose of formulating the terms
of the offer.
6.The licensee shall not be obliged pursuant to this C
ondition to offer to enter or to
enter into any agreement if:
(a) to do so would be likely to involve the licensee:
(i) in breach of its duties under Section 9 of the
Act;
(ii)in breach of the Electricity Supply Regulations 1988 or
of any regulations made under Section 29 of the Act or of any other
enactment relating to safety or standards applicable in respect
to the Distribution Business;
(iii)in breach of the Grid Code or the Distribution
Code; or
(iv) in breach of the Conditions; of
(b) the person making the application does not undertake to
be bound, in so far as applicable, by the terms of the Distribution
Code or the Grid Code from time to time in force; or
(c) in the case of persons making application for use of
system under paragraph 1, such person ceases to be an authorised
electricity operator.
7. For the purpose of paragraph 5, the period specified
shall be:
(a) in the case of persons seeking use of system or top-up
or standby supplies or sales of electricity only, 28 days; and
(b) in the case of persons seeking connection or a
modification to an existing connection or use of system or top-up
or standby supplies or sales of electricity in conjunction with
connection, three months.
8.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 for the purpose
of completing paragraph 8 of Part I 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 made pursuant to Sections 6(3), 60 and
64(1 ) of the Act.
Condition 8C: Functions of the Director
I.If. after a period which appears to the Director to be reasonable for
the purpose, the licensee has failed to enter into an agreement with (as the
case may be) any authorised electricity operator or any person entitled or
claiming to be entitled thereto pursuant to a request under Condition 8B,
the Director may, pursuant to Section 7(3)(c) of the Act and on the application
of such authorised electricity operator or such person or the licensee, settle
any terms of the agreement in dispute between the licensee and that authorised
electricity operator or that 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 such authorised electricity operator or such
person should pay to the licensee:
(i) in the case of the provision of top-up or standby
supplies or sales of electricity, such sum as is determined in accordance
with Paragraph 5 of Condition 8;
(ii)in the case of provision of use of system, the
use of system charges determined in accordance with paragraph 6 of
Condition 8; and
(iii) in the case of provision of a connection or a
modification to an existing connection to the system, the whole
or an appropriate proportion (as determined in accordance with
paragraph 4 of Condition 8B) of the costs referred to in
sub-paragraph (a) of paragraph 7 of Condition 8, together with a
reasonable rate of return on the capital represented by such
costs;
(b)that the performance by the licensee of its
obligations under the agreement should not cause it to be in breach of
those provisions referred to at paragraph 6 of Condition 8B;
(c) that any methods by which the licensee's distribution
system is connected to any other system for the transmission or
distribution of electricity accord (in so far as applicable to the
licensee) with the Distribution Code and with the Grid Code; and
(d) that the terms and conditions of the agreement so
settled by the Director and of any other agreements entered into by
the licensee pursuant to a request under Condition 8B should be, so
far as circumstances allow, in as similar a form as is practicable.
2.In so far as any authorised electricity operator or any
person entitled or claiming to be entitled to an offer under Condition
8B 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.
3. If the licensee proposes to vary the contractual terms of
any agreement for connection to the licensee's distribution
system or for use of system entered into pursuant to Condition 8B
or this Condition in any manner provided for under such
agreement, the Director may, at the request of the licensee or
other party to such agreement, settle any dispute relating to
such variation in such manner as appears to the Director to be
reasonable.
Condition 9: Distribution system planning standard and quality of
service
1. The licensee shall plan and develop the licensee's
distribution system in accordant with a standard not less than
that set out in Engineering Recommendation P.215 (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 (where appropriate)
with the Transmission Company and any other authorised
electricity operator liable to be materially affected thereby and
with the approval of the Director, adopt from time to time.
2. The licensee shall within 3 months after this licence enters
into force draw up arm submit to the Director for his approval a
statement setting out criteria by which the quality of
performance of the licensee in maintaining distribution system
security and availability and quality of service may be measured.
3. The licensee shall within 2 months after the end of each
financial year submit to the Director a report providing details of
the performance of the licensee during the previous financial year
against the criteria referred to in paragraph 2.
4. The Director may (following consultation with the licensee and,
where appropriate, with the Transmission Company and any other authorised
electricity operator liable to be materially affected thereby) issue
directions relieving the licensee of its obligation under paragraph I
in respect of such parts of the licensee's distribution system and to
such extent as may be specified in the directions.
Condition 10: Generation security standard
1.The licensee shall make arrangements sufficient to meet the
generation security standard.
2. The duty imposed by paragraph I 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 I
by:
(a)for so long as the 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 distribution
system or in circumstances of force majeure affecting either the licensee's
distribution 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 the 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
standard" means such standard of generation
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
"Pool Purchase Price" shall
each have the meaning from time
to time ascribed to them in
Schedule 9 to the Pooling and
Settlement Agreement
and"Pool Selling Price"
"qualifying customer" means
any purchaser from the licensee
entitled and requiring at any
time to be supplied by the
licensee at premises within the
authorised area of 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 tariff customer on special
tariffs 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 Load" means
in respect of the first
financial year, the sum of pounds 2
per kWh and, in respect of each
succeeding financial year, the
sum which corresponds to pounds 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 11: Distribution Code
1.The licensee shall in consultation with authorised electricity
operators liable to be materially affected thereby prepare and at all
times have in force and shall implement and (subject to paragraph 10
of this Condition) comply with a Distribution Code:
(a)covering all material technical aspects relating to
connections to and the operation and use of the licensee's distribution
system or (in so far as relevant to the operation and use of the
licensee's distribution system) the operation of electric lines and
electrical plant connected to the licensee's distribution system or the
distribution system of any authorised electricity operator and (without
prejudice to the foregoing) making express provision as to the matters
referred to in paragraph 5 below; and
(b) which is designed so as:
(i) to permit the development, maintenance and
operation of an efficient, co-ordinated and economical system for
the distribution of electricity; and
(ii) to facilitate competition in the generation and
supply of electricity.
2. The Distribution Code in force at the date this licence
enters force shall be sent to the Director for his approval.
Thereafter the licensee shall (in consultation with authorised
electricity operators liable to be materially affected thereby)
periodically review (including upon the request of the Director)
the Distribution Code and its implementation. Following any such
review, the licensee shall send to the Director:
(a) a report on the outcome of such review; and
(b) any proposed revisions to the Distribution Code
from time to time as the licensee (having regard to the outcome of such
review) reasonably thinks fit for the achievement of the objectives
referred to in sub-paragraph (b) of paragraph 1; and
(c) any written representations or objections from
authorised electricity, operators (including any proposals by such
operators for revisions to the Distribution Code not accepted by the
licensee in the course of the review) arising during the consultation
process and subsequently maintained.
3.Revisions to the Distribution Code proposed by the licensee
and sent to the Director pursuant to paragraph 2 shall require to be
approved by the Director.
4. Having regard to any written representations or objections
referred to in subparagraph (c) of paragraph 2, and following
such further consultation (if any) as the Director may consider
appropriate, the Director may issue directions requiring the
licensee to revise the Distribution Code in such manner as may be
specified in the directions, and the licensee shall forthwith
comply with any such directions.
5.The Distribution Code shall include:
(a) a distribution planning and connection code
containing:
(i)connection conditions specifying the technical,
design and operational criteria to be complied with by any person connected
or seeking connection with the licensee's distribution system; and
(ii)planning conditions specifying the technical
and design criteria and procedures to be applied by the licensee in
the planning and development of the licensee's distribution system
and to be taken into account by persons connected or seeking connection
with the licensee's distribution system in the planning and development
of their own plant and systems; and
(b) a distribution operating code specifying the
conditions under which the licensee shall operate the licensee's distribution
system and under which persons shall operate their plant and/or distribution
systems in relation to the licensee's distribution system. in so far as
necessary to protect the security and quality of supply and safe operation
of the licensee's distribution system under both normal and abnormal
operating conditions.
6. The licensee shall give or send a copy of the Distribution
Code (as from time to time revised) to the Director.
7. The licensee shall (subject to paragraph 8) give or send a
copy of the Distribution Code (as from time to time revised) to
any person requesting the same.
8.The licensee may make a charge for any copy of the Distribution
Code (as from time to time revised) given or sent pursuant to paragraph
7 of an amount which will not exceed any amount specified for the time
being for the purposes of this Condition in directions issued by the
Director.
9. In preparing, implementing and complying with the
Distribution Code (including in respect of the scheduling of
maintenance of the licensee's distribution system), the licensee
shall not unduly discriminate against or unduly prefer:
(a) any one or any group of persons; or
(b) the licensee in the conduct of any business other than
the Distribution Business
in favour of or as against any one other or any other group of
persons.
10. The Director may (following consultation with the licensee)
issue directions relieving the licensee of its obligations under
the Distribution Code in respect of such parts of the licensee's
distribution system and to such extent as may be specified in the
directions.
11. Compliance with this Condition shall not require the
licensee to impose any contractual obligation on tariff customers
to comply with the Distribution Code (as from time to time
revised).
Condition 12: Restriction on use of certain information
1.Where any person is required. pursuant to the provisions of the
Distribution Code to provide information to the licensee or any
affiliate or related undertaking of the licensee for the purposes
of the Distribution Business such person providing the information
may. by notice in writing given to the licensee or such affiliate or
related undertaking not later than the time at which such information
is provided or by the endorsement on the information of words indicating
the confidential nature of such information, specify such information
as confidential information for the purposes of this Condition and the
provisions of this Condition shall apply to that information.
2.Where the licensee or any affiliate or related undertaking of the licensee
receives confidential information in accordance with paragraph 1, the
licensee shall (and shall procure that such affiliate or related
undertaking shall):
(a)not use the confidential information for any purpose
other than that for which it was provided;
(b)without prejudice to sub-paragraph (a), not use the
confidential information in a manner which may obtain for the licensee
or any affiliate or related undertaking of the licensee any commercial
advantage in the operation of the Supply Business or of the Second-Tier
Supply Business;
(c)not authorise access to nor disclose any confidential
information other than:
(i) to such of the employees of the licensee or any
affiliate or related undertaking of the licensee (as the case may be)
as require to be informed thereof for the effective operation of the
Distribution Business;
(ii) to such agents. consultants and contractors as
require to be informed thereof for the effective operation of the
Distribution Business;
(iii) to the Director;
(iv) (with the prior approval of the person
providing the confidential information) to the Transmission
Company; or
(v) information which the licensee or any affiliate or
related undertaking of the licensee (as the case may be) is
required or permitted to make disclosure of:
(aa) in compliance with the duties of the licensee
or any affiliate or related undertaking of the licensee (as the
case may be) under the Act or any other requirement of a
Competent Authority;
(bb) in compliance with the conditions of any
licence issued under the Act or any document referred to in any
such licence with which the licensee or any affiliate or related
undertaking of the licensee (as the case may be) is required by
virtue of the Act or such licence to comply;
(cc) in compliance with any other requirement of
law;
(dd) in response to a requirement of any Stock
Exchange or regulatory authority or the Panel on Take-overs and
Mergers; or
(ee) pursuant to the arbitration rules for the
Electricity Supply Industry Arbitration Association or pursuant
to any judicial or other arbitral process or tribunal of
competent jurisdiction; and
(d)take all reasonable steps to ensure that any such
person as is referred to in sub-paragraph (c)(i) and (c)(ii) above
to whom the licensee or any affiliate or related undertaking of the
licensee (as the case may be) discloses confidential information
does not use that confidential information for any purpose other
than that for which it was provided and does not disclose that
confidential information otherwise than in accordance with the
provisions of this Condition.
3.In this Condition:
"Competent Authority" means 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 means all information provided by any
information" person pursuant to the provisions of the
Distribution Code which is specified as
confidential by such person as provided in
paragraph 1, but shall exclude all information
that is in or enters into the public domain
otherwise than as a consequence of
unauthorised disclosure by the licensee or
any affiliate or related undertaking of the
licensee (or by any person to whom the same
is disclosed or suffered to be disclosed by the
licensee or such affiliate or related
undertaking).
"Electricity Supply
Industry Arbitration
Association" means the unincorporated members' club of
that name formed inter alia to promote the
efficient and economic operation of the
procedure for the resolution of disputes
within the electricity supply industry by
means of arbitration or otherwise in
accordance with its arbitration rules.
Condition 13: 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 I in respect of such parts of the
Grid Code and to such extent as may be specified in those
directions.
Condition 14: 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 15: Pooling and Settlement Agreement
1.The licensee shall be a pool member under and comply with
the provisions of, the Pooling and Settlement Agreement.
Condition 16: Conditions of supply affecting tariff customers'
statutory rights
1The licensee shall not include in or send with any notice
given under Section 16(3) of the Act. or any form provided to
tariff customers or prospective tariff customers for use in giving
notice under Section 16(2) of the Act. or any notice sent
subsequently. an invitation to agree to anything which, by virtue
of the Act, may only be done or (as the case may be) not done:
(a) with the agreement of that person; or
(b) in any case where that person withholds his agreement
or makes that agreement subject to terms and conditions to which
the licensee objects, with the approval or consent or by order of
the Secretary of State
unless the form and terms of such invitation have first been
submitted to and approved by the Director.
2. Nothing in paragraph I shall prevent the licensee from:
(a) requiring a customer or prospective customer to enter
into a special agreement where this is permitted under Section 22 of the
Act;
(b)including in any such notice any provision or
condition which the licensee is required or permitted to include in such
notice by virtue of Section 16(4) of the Act; or
(c)including in any such notice concerning the provision
of a supply to premises:
(i)not previously supplied by the licensee; or
(ii) where any change is required in the location of
any electric line, electrical plant or electric meter
an invitation to any customer or prospective customer to agree to
any provision or condition concerning the installation or
location of any or all of an electric line, electrical plant or
an electric meter
in any such case without having submitted the form and terms of
such agreement or notice to the Director.
3. The licensee shall include in any form provided to tariff
customers or prospective tariff customers for use in giving notice under
Section 16(2) of the Act a prominent statement of the right of such
customer to apply to the Director for the determination of any dispute
arising out of the proposed terms of supply.
Condition 17: Licensee's apparatus on tariff customers' side of
meter
1. This Condition applies where the licensee installs a second
meter or other apparatus for the purpose of ascertaining or
regulating the amount of electricity supplied, the period of
supply, or any other quantity or time connected with the supply
on the customer's side of the meter or meters registering the
quantity of the supply to a tariff customer.
2. Any second meter or other apparatus installed by the
licensee in the position and for a purpose described in paragraph
I shall be such that the power consumed by it, when aggregated
with the power consumed by any other meter or apparatus installed
by the licensee in the like position and for a like purpose in
relation to the tariff customer, does not exceed 10 watts except
where otherwise agreed with the tariff customer.
Condition 18: Code of practice on payment of bills
1.The licensee shall within three months after this licence
has come into force prepare and submit to the Director for his approval
a Code of Practice concerning the payment of electricity bills by
customers occupying domestic premises, and including appropriate
guidance for the assistance of such customers who may have
difficulty in paying such bills.
2. The licensee shall, whenever requested to do so by the
Director, review the Code prepared in accordance with paragraph
1, and the manner in which it has been operated, with a view to
determining whether any modification should be made to it or to
the manner of its operation.
3. In preparing the Code, and in carrying out any review
(including in accordance with paragraph 2), the licensee shall
consult the relevant consumers' committee and shall have regard to
any representations made by it about the Code or the manner in
which it is likely to be or (as the case may be) has been
operated.
4. The licensee shall submit any revision of the Code which,
after consulting the relevant consumers' committee in accordance
with paragraph 3, it wishes to make to the Director for his
approval.
5. The licensee shall:
(a) send a copy of the Code and of any revision of it
(in each case, in the form approved by the Director) to the Director
and the relevant consumers' committee;
(b) draw to the attention of customers occupying
domestic premises the existence of the Code and each substantive
revision of it and how they may inspect or obtain a copy of the Code
in its latest form;
(c) make a copy of the Code (as from time to time revised)
available for inspection by members of the public at each of the relevant
premises during normal working hours; and
(d) give or send free of charge a copy of the Code (as from
time to time revised) to any person who requests it.
Condition 19: Methods for dealing tariff customers in default
1. The licensee shall within three months after this licence
has come into force, after consultation with the relevant
consumers' committee, prepare and submit to the Director for his
approval methods for dealing with tariff customers who, through
misfortune or inability to cope with electricity supplied for
domestic use on credit terms, incur obligations to pay for
electricity so supplied which they find difficulty in discharging
including, in particular, methods for:
(a) distinguishing such tariff customers from others in
default;
(b) detecting failures by such tariff customers to comply
with arrangements
entered into for paying by installments charges for electricity
supplied;
(c) making such arrangements so as to take into account the
tariff customer's ability to comply with them;
(d) ascertaining, with the assistance of other persons or
organizations, the ability of tariff customers to comply with
such arrangements
(e) providing for such a tariff customer who has failed to
comply with such arrangements a prepayment meter where safe and
practical to do so; and
(f) calibrating any prepayment meter so provided so as to
take into account the tariff customer's ability to pay any of the
charges due from the customer under such arrangements in addition
to the other charges lawfully being recovered through the
prepayment meter.
2.The licensee shall not make any substantial change in the
methods adopted under this Condition without the consent of the Director.
3.The licensee shall furnish the Director with such in
formation as to such methods as he may from time to time direct.
Condition 20: Provision of services for persons who are of
pensionable age or disabled
1.The licensee shall make arrangements for persons occupying
domestic premises who are of State pensionable age or disabled by
which special services in the following respects can be made available
where appropriate:
(a) providing where practicable special controls and
adaptors for electrical appliances and meters (including
pre-payment meters) and repositioning meters;
(b) providing special means of identifying officers
authorised by the licensee;
and
(c)giving advice on the use of electricity.
2.The licensee shall within three months after the date on
which this licence has come into force prepare and submit to the
Director for his approval a Code of Practice describing the special
services available and any charges made or to be made.
3.The licensee shall whenever requested to do so by the
Director review the Code prepared in accordance with paragraph 2, and
the manner in which it has been operated, with a view to determining
whether any modification should be made to it or to the manner of its
operation.
4. In preparing the Code, and in carrying out any review
(including in accordance with paragraph 3), the licensee shall
consult the relevant consumers' committee and shall have regard
to any representations made by it about the Code or the manner in
which it is likely to be or (as the case may be) has been
operated.
5.The licensee shall submit any revision of the Code which,
after consulting the relevant consumers' committee in accordance with
paragraph 4, it wishes to make to the Director for his approval.
6.The licensee shall:
(a) send a copy of the Code and of any revision of it (in
each case, in the form approved by the Director) to the Director and
the relevant consumers' committee;
(b) make a copy of the Code (as from time to time revised)
available for inspection by members of the public at each of the relevant
premises during normal working hours; and
(c) give or send free of charge a copy of the Code (as from
time to time revised) to any person who requests it.
Condition 21: Standards of performance
1.The licensee shall conduct its Supply and Distribution
Businesses in the manner which it reasonably considers to be
best calculated to achieve any standards of overall performance
or standards of performance in connection with the promotion
of the efficient use of electricity by customers, as may be
determined by the Director pursuant to Sections 40 and 41
respectively of the Act.
Condition 22: Efficient use of electricity'.
1.The licensee shall within three months after this licence
has come into force, after consultation with the relevant consumers'
committee. prepare and submit to the Director for his approval a Code
of Practice setting out the ways in which the licensee will make
available to customers such guidance on the efficient use of
electricity as will, in the opinion of the licensee, enable them
to make informed judgments on measures to improve the efficiency
with which they use the electricity supplied to them. Such Code
of Practice shall include, but shall not be limited to:
(a) the preparation and making available free of charge to
any customer who requests it of a statement, in a form approved
by the Director, setting out information and advice for the guidance
of customers in the efficient use of electricity supplied to them;
(b) the creation and maintenance within the licensee's
organization of sources from which customers may obtain further
information about the efficient use of electricity supplied to them,
including the maintenance of a telephone information service;
(c) the preparation and making available free of charge to
any customer who requests it of a statement or statements of sources
(to the extent that the licensee is aware of the same) outside the
licensee's organization from which customers may obtain additional
information or assistance about measures to improve the efficiency
with which they use the electricity supplied to them, such statement
or statements to include basic information which is publicly available
on financial assistance towards the costs of such measures available
from Central or Local Government or through bodies in receipt of
financial support from Government in connection with measures
to promote the efficiency of energy use.
2. Where the Director (who may have regard to the need for
economy, efficiency and effectiveness before giving directions
under this paragraph) gives directions to do so' the licensee
shall:
(a) review and prepare a revision of the Code of Practice;
(b) take steps to bring to the attention of customers
information on the efficient
use of electricity supplied to them; and
(c) send to each customer a copy of any information
published by the Director pursuant to Section 48 of the Act
in such manner and at such times as will comply with those
directions.
3. The licensee shall:
(a) send a copy of any Code of Practice prepared in
accordance with paragraph 1, and of any revision of such Code prepared
in accordance with paragraph 2 (in each case, in the form approved by
the Director) to the Director and the relevant consumers' committee;
(b) make a copy of such Code (as from time to time revised)
available for inspection by members of the public at each of the relevant
premises during normal working hours; and
(c) give or send free of charge a copy of such Code (as
from time to time revised) to any person who requests it.
Condition 23: Complaint handling procedure
1.The licensee shall within three months after this licence has come
into force establish a procedure for handling complaints from customers
about the manner in which the licensee conducts its Supply and Distribution
Businesses.
2. The licensee shall, whenever requested to do so by the
Director, review the procedure established in accordance with
paragraph 1, and the manner in which that procedure has been
operated, with a view to determining whether any modification
should be made to it or to the manner of its operation.
3. In establishing a procedure in accordance with paragraph 1,
and in carrying out any review (including in accordance with
paragraph 2), the licensee shall consult the relevant consumers'
committee and shall have regard to any representations made
by it about the procedure or the manner in which it is likely to
be or (as the case may be) has been operated.
4. Any procedure established in accordance with this Condition
shall specify the periods within which it is intended that
different descriptions of complaint should be processed and
resolved.
5. The licensee shall submit the procedure established in
accordance with paragraph 1, and any revision of it which (after
consultation with the relevant consumers' committee in accordance
with paragraph 3) is proposed to be made, to the Director for his
approval.
6. The licensee shall:
(a) send a copy of the procedure and any revision of it
(in each case, after it has been approved by the Director) to the
Director and the relevant consumers' committee;
(b) make a copy of the procedure (as from time to time
revised) available for inspection by members of the public at each
of the relevant premises during normal working hours; and
(c) give or send free of charge a copy of the procedure (as
from time to time revised) to any person who requests it.
Condition 25: 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 26: Requirement to enter certain agreements
1.If any proposed agreement relating to the generation,
transmission or supply of electricity has (following consultation
with the licensee) been designated by the Secretary of State for
the purposes of this Condition, the Secretary of State may at
any time prior to I st October 1990, require the licensee:
(a) to offer to enter into such proposed agreement; and
(b) upon that offer being accepted, forthwith to enter into
such agreement.
2. In this Condition, "agreement" shall include any arrangement
whether or not in writing and whether or not intended to be
legally enforceable, and "proposed agreement" shall be construed
accordingly.
Condition 27: Disposal of relevant assets
I.The licensee shall not dispose of or relinquish operational
control over any relevant asset otherwise than in accordance with
the following paragraphs of this Condition.
2. Save as provided in paragraph 3, the licensee shall give to
the Director not less than two months' prior written notice of
its intention to dispose of or relinquish operational control
over any relevant asset, together with such further information
as the Director may request relating to such asset or the
circumstances of such intended disposal or relinquishment of
control or to the intentions in regard thereto of the person
proposing to acquire such asset or operational control over such
asset.
3.Notwithstanding paragraphs I and 2, the licensee may
dispose of or relinquish operational control over any relevant asset:
(a) where:
(i) the Director has issued directions for the
purposes of this Condition containing a general consent (whether or not
subject to conditions) to:
(aa) transactions of a specified description; or
(bb) the disposal of or relinquishment of
operational control over relevant assets of a specified description; and
(ii)the transaction or the relevant assets are of a
description to which such directions apply and the disposal or
relinquishment is in accordance with any conditions to which the consent
is subject;
(b) under such contracts or agreements. or contracts or
agreements of such a description, as may have been designated by the
Secretary of State for the purposes of this Condition before the coming
into force of this licence and to the extent so designated;
(c) where the disposal or relinquishment of operational
control in question is required by or under any enactment or subordinate
legislation.
4.Notwithstanding paragraph 1, the licensee may dispose of or
relinquish operational control over any relevant asset as is specified
in any notice given under paragraph 2 in circumstances where:
(a) the Director confirms in writing that he consents to
such disposal or relinquishment (which consent may be made subject to the
acceptance by the licensee or any third party in of whom the relevant
asset is proposed to be disposed or operational control is proposed to be
relinquished of such conditions as the Director may specify); or
(b) the Director does not inform the licensee in writing of any
objection to such disposal or relinquishment of control within the
notice period referred to in paragraph 2.
5.In this Condition:
"disposal" includes any sale, gift, lease, licence, loan,
mortgage, charge or the grant of any other
encumbrance or the permitting of any encumbrance
to subsist or any other disposition to a third
party, and "dispose" shall be construed
accordingly.
"relevant asset" means any asset for the time being forming part
of the licensee's distribution system, any
control centre for use in conjunction therewith
and any legal or beneficial interest in land
upon which any of the foregoing is situate.
Condition 28: Provision of information to the Director
1.Subject to paragraphs 3 and 4, 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.Without prejudice to the generality of paragraph 1, the
Director may call for the furnishing of accounting information which
is more extensive than or differs from that required to be prepared
and supplied to the Director under Condition 2.
3. No longer used]
4.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.
5.The licensee may not be required by the Director to furnish
him under this Condition with any information in relation to an enforcement
matter which the licensee could not be compelled to produce or give under
Section 28(3) of the Act.
6.The power of the Director to call for information under
paragraph I is in addition to the power of the Director to call for
information under or pursuant to any other Condition.
7. In paragraphs I to 6 "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.
8.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 the Supply and Distribution Businesses)
which the Director proposes to publish pursuant to Section 48 of the Act.
9.No longer used]
Condition 29: Pa' merit of fees
1. The licensee shall, at the times stated hereunder, pay to
the Secretary of State fees of the amount specified in, or
determined under, the following paragraphs of this Condition.
2.Within 30 days after the grant of this licence but, in any
event, before Ist May 1990, the licensee shall pay to the Secretary of
State an initial fee of 240,000.
3.In respect of the year beginning Ist April 1990 the
licensee shall pay to the Secretary of State a further fee which is the
aggregate of the following amounts:
(a) 475,000; and
(b) the difference, if any, between:
(i) the initial fee referred to in paragraph 2 above;
and
(ii) the proportion of the Director's total costs in
the period prior to Ist April 1990 which the Director determines
that the licensee should pay in accordance with a method which has
been previously disclosed in writing to the licensee
and the fee shall be paid by the licensee to the Secretary of
State within one month of the Director giving notice to the
licensee of its amount if that notice is given within six months
of I st April 1990.
4. In respect of the year beginning on Ist April in 1991 and in
each subsequent year, the licensee shall pay to the Secretary of
State 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 licences granted by the Secretary of State
under Section 6(1 ) and 6(2) of the Act;
(b) the amount (or, where the consumers' committee in
question is the relevant consumers' committee for more than one
public electricity supplier, the amount which is a proportion as
determined by the Director, according to a method which has previously
been disclosed in writing to the licensee, of such amount) estimated by
the Director (having regard to any statement under paragraph 8(2)
of Schedule 2 to the Act) as being likely to be the costs during the
coming year of the relevant consumers' committee in the exercise of
the functions assigned to it by or under the Act and any other
such functions as it has been or may be required to exercise by
the Director;
(c) an amount which 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 Ist April in question by the Monopolies Commission
in correction with references made to it under Section 12 of the Act
with respect to this licence or any other licence issued under Section
6(1)(c) of the Act; and
(d) 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 I st April in
question; and
(ii) the amount which that fee would have been in
respect of that year had the amounts comprised therein been calculated
by reference to:
(aa) in the case of sub-paragraph (a) above (or,
where that year commenced on Ist April 1990 the amount
attributable to the matters referred to in that sub-paragraph)'
the total costs of the Director and the proportion thereof
actually attributable to the licensee; and
(bb) in the case of sub-paragraph (b) above (or,
where that year commenced on I st April 1990 the amount
attributable to the matters referred to in that sub-paragraph),
the total costs of the consumers' committee and where
appropriate, the proportion thereof actually attributable to the
licensee
such total costs being apportioned in each case 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 Secretary of
State 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.
<PAGE>
SCHEDULE1
Description of authorized area
The authorized area shall comprise that area which is
outlined on the attached map and shall additionally include those
premises listed in List A (the Additional Premises ) but shall
not include those premises listed in List B (the "Excluded
Premises").
A: ADDITIONAL PREMISES
ADDRESS GRID REF
Cedar House TQ 2195 7812
Chiswick Mall
London W4 2QH
1-4 Popham Gardens TQ 194 758
Richmond
Surrey
TW9 4 W
5-18 Popham Gardens TQ 194 757
Richmond
Surrey
TV9 4 W
148 Manor Grove TQ 1932 7555
Richmond
Surrey TW9 4DG
Cemetery Lodge TQ 1928 7492
East Sheen Cemetery
Kings Ride Gate
Richmond
Surrey
TW10 5BL
Cemetery Chapel TQ 1927 7464
East Sheen Cemetery
Rings Ride Gate
Richmond
Surrey TW10 5BL
Office TQ 1920 7462
East Sheen Cemetery
Kings Ride Gate
Richmond
Surrey TW10 5BL
4 Coombe Lane West TQ 1975 6962
Kingston
Surrey KT2 7BX
2 & 4 Orme Road TQ 197 693
Kingston
Surrey KT1 3SA
Odd Nos. 1S - 21 Kenley Road TQ 197 693
Kingston
Surrey KT1 3RP
1-16 Chester House TQ 197 692
Porchester Road
Kingston
Surrey KT1 3PP
22 Porchester Road TQ 197 692
Kingston
Surrey KT1 3PS
37, 39 & 41 Porchester Road TQ 197 692
Kingston
Surrey KT1 3PW
1, 3 & 5 Douglas Road TQ 197 691
Kingston
Surrey KT1 3PX
Even NOS. 188-200 Central Road TQ 222 661
Worcester Park
Surrey KT4 8HG
1-16 Pembury Avenue TQ 224 664
Worcester Park
Surrey KT4 8BU
Even NOS. 2-30 Caverleigh Way TQ 224 664
Worcester Park
Surrey KT4 8DG
Evon Nos. 32-52 TQ 224 665
Caverleigh Way
Worcestor Park
Surrey KT4 8DG
Even Nos. 54-76 TQ 22S 665
Caverleigh Way
Worcester Park
Surrey KT4 8DG
Even NOS. 78-100 TQ 225 666
Caverleigh Way
Worcester Park
Surrey KT4 8DQ
Even Nos. 102-132 Caverleigh TQ 226 666
Way
Worcester Park
Surrey KTL BDQ
Primary School TQ 2275 6681
Green Lane
Worcester Park
Surrey KT4 BAD
School Sports Pavilion TQ 2288 6685
Green Lane
Worcester Park
Surrey KT4 BAD
School House TQ 2292 6687
Green Lane
Worcester Park
Surrey KT4 8AD
231 Galpins Road TQ 3042 6793
Thornton Heath
Surrey CR4 6EY
286 Northborough Road TQ 3008 6901
London SW16 4TT
Church Hall TQ 4362 6703
Laburnum Way
Bromley
Kent BR2 8BY
Odd Nos. 1-11 The Green TQ 467 703
Orpington
Kent BR5 3DP
Crag Valley Technical School TQ 468 702
Sevenoaks Way
Sidcup
Kent DA14 5AA
Even Nos. 10-14 The Avenue TQ 466 704
Orpington
Kent BR5 3DJ
Even Nos. 16-20 The Avenue TQ 466 703
Orpington
Kent BR5 3DJ
2A, 25 & 27 Harefield Road TQ 477 724
Sidcup
Kent DA14 4RJ
69 & 71 Goodwin Drive TQ 477 725
Sidcup
Kent DA14 4NX
Units 4, 5 & 6 & Albion Works TQ 550 728
Green Road
Dartford
Kent DA2 8DP
Odd Nos. 17-25 Lingfield Avenue TQ 558 737
Dartford .
Kent DA2 6AP
Odd Nos. 13-39 Brent Close TQ 557 739
Dartford
Kent DA2 6DD
Odd Nos. 41-55 Brent Close TQ 557 740
Dartford
Kent DA2 6DD
Odd Nos. 57-83 Brent Close TQ S57 740
Dartford
Kent DA2 6DH
Odd Nos. 85-91 Brent Close TQ 556 740
Dartford
Kent DA2 6DH
Even Nos. 10-20 Brent Close TQ 557 739
Dartford
Kent DA2 6DB
Even Nos. 22-48 Brent Close TQ 557 740
Dartford
Kent DA2 6DB
Even Nos. 50-54 Brent Close TQ 556 740
Dartford
Kent DA2 6DB
4, 6 & 8 Fairway Drive TQ 558 738
Dartford
Kent DA2 6AR
35, 37 & 39 Bow Arrow Lane TQ 557 743
Dartford
Kent DA2 6PG
36, 38 & 40 Bow Arrow Lane TQ 5S7 743
Dartford
Kent DA2 6PA
Pavilion on Sports Ground TQ 4666 9148
Forest Road
I1ford
Essex
8A Chadwell Heath Lane TQ 4772 8799
Romford
Essex RM6 4LS
Lakeside and Play Area A TQ 3168 8734
Attendants Room
Finsbury Park
N4 lDY
Lakeside and Play Area B TQ 3168 8734
Attendants Room
Finsbury Park
N4 1DY
Feeder Pillar opposite Paddllng TQ 3187 8739
Pool
Finsbury Park
N 4 1DY
Football Pitch TQ 3181 8720
1 Finsbury Park
N4 1DY
Spring Lodge TQ 3194 8767
327A Green Lanes
London N4 1BZ
New Restaurant TQ 3156 8737
Near Pond
Finsbury Park
N4 1DY
Lakeside and Play Area TQ 3158 8739
Old Toilet Block
5 Finsbury Park
N4 1DY
Manor Gate Lodge TQ 3180 8746
6 Finsbury Park
London N4 1DY
Training School TQ 3190 8752
8 Finsbury Park
London N4 1DY
Staff Yard and Nursery TQ 3120 8754
9 Finsbury Park
London N4 1DY
Reservoir Garage TQ 3181 B740
10 Finsbury Park
London N4 1dy
Open Air Theatre TQ 3156 8730
11 Finsbury Park
London N4 1dy
The Spaniards Inn TQ 266S 8724
Spaniards Road
London NW3 7JJ
2 Spaniards End TQ 2660 8724
London NW3 7JG
4 Spaniards End TQ 2661 8725
London NW3 7JG
High Beach TQ 2661 8726
Spaniards End
London NW3 7JG
Firwood Cottage TQ 2660 8728
Spaniards End
London NW3 7JG
B: EXCLUDED PREMISES
(a) TO BE SUPPLIED BY SOUTHERN ELECTRIC PLC
ADDRESS GRID REF
CAV LTD TQ 2138 7975
Larden Road
London W12
CAV LTD TQ 2130 7975
Warple Way
London W12
1 Abbey Terrace TQ 1866 8303
London NW10
2 Abbey Terrace TQ 1866 8303
London NW10
25 Waverley Gardens TQ 1868 8298
London NW10
26 Waverley Gardens TQ 1868 8298
London NW10
(b) TO BE SUPPLIED BY SEEBOARD PL
ADDRESS GRID REF
Thatched House Lodge TQ 1933 7122
Richmond Park
Richmond
TW10 5HP
The Flat TQ 1933 7122
Thatched House Lodge
Richmond Park
Richmond
TW10 5HP
The Cottage TQ 1936 7117
Thatched House Lodge
Richmond
TW10 5HX
Richmond Park Gate TQ 1936 7117
Lodge Richmond Park
Richmond
TW10 5HU
Coombe Wood Tennis Club TQ 1972 6999
Galsworthy Road
Kingston
Surrey KT2 28S
40, 42 & 44 Douglas Road TQ 197 690
Kingston
Surrey KT1 3PR
Even Nos. 38-46 Waters Road TQ -196 690
Kingston
Surrey
KT1 3LP
Kingston Crematorium TQ 1918 6859
Banner Hill Road
Kingston
Surrey
KT1 SHE
101 & 103 Cambridge Road TQ 1960 6892
Kingston
Surrey
KT1 3NY
Hogsmill Pumping Station TQ 1940 6826
Lower Marsh Lane
Kingston
Surrey KT1 3BW
Nos. 1, 2 & 3 Cottages TQ 192 682
Lower Marsh Lane
Kingston
Surrey KT1 3BN
Even Nos. 54-68 Stonecot Hill TQ 244 666
Sutton
SM3 9HE
Catering Annex TQ 2589 6690
Chaucer Middle School
Canterbury Road
Morden
Surrey
SM4 6PX
43, 45 & 47 Fox Hill TQ 337 702
Upper Norwood
London SE19 2XA
1-5 Palace Grove TQ 337 702
Upper Norwood
London SE19 2XD
Pump House TQ 351 682
South Norwood Sewage Works
Long Lane
Croydon
CR8 1DG
Digestion Plant TQ 3S2 682
South Norwood Sewage Works
Long Lane
Croydon
CR8 1DG
Even Nos. 8-18 High Broom TQ 377 667
Crescent
West Wickham
Kent
BR4 ORG
1 & 2 Barnfield Wood Close TQ 388 673
Beckenham
Rent
BR3 2SY
313 Pickhurst Lane TQ 3930 6768
West Wickham
Kent
BR4 OHW
Football Club TQ 4067 6762
Hayes Lane
Bromley
Rent
BR2 9EF
Cricket Club TQ 4080 6769
Hayes Lane
Bromley
Kent
BR2 9EF
30B Hayes Lane TQ 4054 6792
Bromley
Kent
BR2 9EB
Silkwood Lodge TQ 415 651
168 Croydon Road
Keston
Kent
BR2 8HN
Little Thicket TQ 416 651
168 Croydon Road
Keston
Kent BR2 8HN
5A Maybury Close TQ 4384 6768
Petts Wood
Bromley
Kent BR5 1BL
Alcara TQ 4408 6898
Hawkwood Farm
Botany Bay Lane
Chistlehurst
BR7 5PT
Goodland Cottage TQ 4412 6895
Hawkwood Farm
Botany Bay Lane
Chistlehurst
BR7 5PT
The Bungalow TQ 4414 6894
Hawkwood Farm
Botany Bay Lane
Chistlehurst
BR7 5PT
Stonehill Green Farm TQ 504 706
Birchwood Road
Wilmington
Kent
DA2 7HJ
2 Brackendene TQ 511 719
Wilmington
Kent DA2 7NB
Football Ground TQ S17 723
Leyton Cross Road
Wilmington
Kent DA2 7AN
(c) TO BE SUPPLIED BY EASTERN ELECTRICITY PLC
ADDRESS GRID REF
The Chase TQ 4583 9634
Abridge Road
Chigwell
IG7 5EY
Maryada Cottage TQ 4579 9617
Abridge Road
Chigwell
IG7 6DH
1 Shaw Cottage TQ 4632 9504
Gravel Lane
Chigwell IG7 6DQ
The Shaws TQ 4629 9502
Gravel Lane
Chigwell IG7 6DQ
1 Little London Cottages TQ 4583 9594
Gravel Lane
Chigwell IG7 6DQ
2 Little London Cottages TQ 4582 9595
Gravel Lane
Chigwell IG7 6DQ
Little Londons TQ 4580 9591
Gravel Lane
Chigwell
IG7 6DQ
Brandons TQ 4582 9600
Gravel Lane
Chigwell IG7 6DQ
The Farmhouse TQ 4599 9566
Gravel Lane
Chigwell IG7 6DQ
Holly Cottage TQ 4630 9514
Gravel Lane
Chigwell IG7 6DQ
Jasmine Cottage TQ 4630 9513
Gravel Lane
Chigwell IG7 6DQ
2 Radley Cottage TQ 4632 9511
Gravel Lane
Chigwell IG7 6DQ
Marchings TQ 4634 9550
Gravel Lane
Chigwell IG7 6DQ
Marchings Farm TQ 4638 9545
Gravel Lane
Chigwell IG7 6DQ
The Studio TQ 4S98 9569
Gravel Lane
Chigwell IG7 6DQ
Turnours Hall TQ 4598 9571
Gravel Lane
Chigwell IG7 6DQ
1 Taylors Cottages TQ 4637 9492
Gravel Lane
Chigwell IG7 6DQ
3 Taylors Cottages TQ 4638 9490
Gravel Lane
Chigwell
IG7 6DQ
Taylors Farm TQ 4628 9494
Gravel Lone
Chigwell
IG7 6DQ
Brookside TQ 4636 9493
Gravel Lane
Chigwell
IG7 6DQ
Brookside TQ 4637 9492
Gravel Lane
ChigwelI
IG7 6DQ
Brownings Farm TQ 4642 9433
Gravel Lane
Chigwell
IG7 6DQ
Highfields TQ 4651 9472
Gravel Lane
Chigwell
IG7 6DQ
Manor House TQ 46S2 9463
Manor Farm
Gravel Lane
Chigwell IG7 6DQ
Manor Farm Buildings TQ 4651 9466
Gravel Lane
Chigwell
IG7 6DQ
Pamaden Kennels TQ 466S 9436
Gravel Lane
Chigwell IG7 6DG
Rest Harrow TQ 4660 9437
Millers Lane
Chigwell IG7 6DG
Thrift House TQ 46S2 9458
Gravel Lane
Chigwell IG7 6DQ
Willow Park Farm TQ 4662 9433
Gravel Lane
Chigwell IG7 6DG
Factory Unit TQ 4819 8276
Choats Road
Off Chequers Lane
Dagenham RM9 6RJ
Factory Unlt TQ 4820 8279
Choats Road
Off Chequers Lane
Dagenham RM9 6RJ
Factory Unit TQ 4820 8281
Choats Road
Dagenham RM9 6RJ
Portacabin TQ 4821 8286
Choats Road
Of f Chequers Lane
Dagenham RM9 6RJ
Lauderdale House TQ 2877 8724
Highgate High Street
London N6 5HG
Caen Wood Towers TQ 2773 874S
Hampstead Lane
London N6 4RU
"Based upon the ordance survey map with the permission of
the Controller of Her Majesty's Stationery Office. Crown
Copyright."
<PAGE>
SCHEDULE 2
Terms as to revocation
1.The Secretary of State 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 Secretary of
State that this licence should be revoked;
(b) if any amount payable under Condition 29 is unpaid 30
days after it has become due and remains unpaid for a period of 14
days after the Secretary of State 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 became due;
(c) if the licensee fails 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 Secretary of State within 3 months after the
Secretary of State has given notice of such failure to the licensee.
Provided that no such notice shall be given by the Secretary
of State 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 proceedings relating to any such
application are finally determined;
(d) if the licensee fails to comply with any order made by the Secretary
of State under Section 56, 73, 74 or 89 of the Fair Trading Act 1973 or under
Section 1 0(2)(a) of the Competition Act 1980;
(e) if the licensee ceases to carry on its business as a
public electricity supplier;
(f) if the licensee:
(i) is unable to pay its debts (within the meaning of
Section 123(1) or (2) of the Insolvency Act 1986, but subject to
paragraph 2 of this Schedule) or has any voluntary arrangement
proposed in relation to it under Section I of that Act or 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 Secretary
of State);
(ii) has 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 appointed;
(iii)has an administration order under Section 8 of the
Insolvency Act 1986 made in relation to it;
(iv) passes any resolution for winding-up other than a
resolution previously approved in writing by the Secretary of
State; or
(v) becomes subject to an order by the High Court for
winding-up; or
(g) if the licensee is convicted of having committed an offense under
Section 59 of the Act in making its application for this licence.
2. (a)For the purposes of paragraph l(f)(i) of this Schedule Section
123(1)(a) of the Insolvency Act 1986 shall have effect as if for "pounds 750"
there was substituted "pounds 250,000" or such higher figure as the Director
may from time to time determine by notice in writing to the Secretary of State
and the licensee.
(b) The licensee shall not be deemed to be unable to pay its debts for
the purposes of paragraph l(~)(i) of this Schedule if any such demand as is
mentioned in Section 123(1)(a) of the Insolvency Act 1986 is being
contested in good faith by the licensee with recourse to all appropriate
measures and procedures or if any such demand is satisfied before the
expiration of such period as may be stated in any notice given by the
Secretary of State under paragraph I of this Schedule.
3.The provisions of Section 109 of the Act shall apply for
the purposes of the service of any notice under this Schedule.
SCHEDULE 3
Supplementary provisions of the charge restriction conditions
PART A
Principles for Attribution
General Principles
A I Where for the purposes of the charge restriction conditions,
a share of costs borne by the licensee requires to be attributed
to any part of the market, the licensee shall make that
attribution on a basis which ensures that no more than a fair
proportion of those costs, reflecting the costs incurred by the
licensee in supplying that part of the market' are so
attributed.
A2. The following paragraphs of this Part of Schedule 3 are
without prejudice to paragraph A 1.
Fossil Fuel Levy and payments in lieu thereof
A3. The fossil fuel levy requiring to be attributed to supplies
to regulated customers shall be attributed on the basis of the
amount of the levy incorporated in the prices actually charged or
to be charged by the licensee on supplies to such customers in
the relevant year in respect of which the attribution falls to be
made. Amounts in lieu of the fossil fuel levy in respect of
purchases of electricity other than leviable electricity
requiring to be calculated and then attributed to supplies to
regulated customers in any relevant year for the purposes of
Condition 3B shall:
(a) be calculated as being such amounts as correspond to
the lesser of:
(i) the premium actually payable (measured on an
accruals basis) by the licensee during the relevant year on
purchases of electricity other than leviable electricity as
representing the benefit to the licensee of being able to treat
such electricity as being other than leviable electricity for the
purposes of Section 33 of the Act and Regulations thereunder; and
(ii) the additional amount that would have been payable
(measured on an accruals basis) by the licensee in respect of the
fossil fuel levy pursuant to Regulations made under Section 33 of
the Act had such electricity been leviable electricity; and
(b) be attributed to supplies to regulated customers prorata to
the amount which the quantity supplied to regulated customers bears to the
total quantity supplied (in each case in the relevant year in respect
of which the attribution falls to be made) or on the basis of the amount
referred to in paragraph (a) incorporated in the prices actually charged or
to be charged by the licensee on supplies to such customers in the relevant
year in respect of which the attribution falls to be made or on such other
basis of attribution as the licensee shall previously have agreed with the
Director.
Transmission connection point charges and remote transmission
asset rentals
A4. The transmission connection point charges and remote
transmission asset rentals requiring to be attributed between the
regulated quantity distributed and other quantities distributed
shall be attributed in proportion to the transmission connection
point and remote transmission asset capacity required for the
purpose of distributing those quantities.
Distribution losses
A5. Where an amount (in units) in respect of distribution losses
requires to be calculated and attributed in respect of EHV units
and units distributed by the licensee for the purpose of supply
to premises outside the licensee's authorised area, such
calculation and attribution shall be made consistently with the
principles underlying the schedule of adjustment factors referred
to at sub-paragraph (b) of paragraph 3 of Condition 8.
Information to be provided by licensee
A6. The licensee shall following the end of each relevant year
furnish to the Director, as being one of the specified items to
be included in the statement referred to at paragraph 8 of
Condition 3E, a statement of the actual attribution of
electricity purchase costs between regulated and other customers
and reconciling the attribution with any statements made in
respect of the relevant year under paragraph 2 of Condition 3E,
and a statement confirming that the calculation of amounts in
lieu of the fossil fuel levy and the attribution of the fossil
fuel levy, amounts in lieu thereof, the transmission connection
point charges, the remote transmission asset rentals and of
distribution losses was made in accordance with the provisions of
this Part of Schedule 3, accompanied (where appropriate) by
(i) a statement of the total amounts attributed to
regulated and other customers;
and
(ii) an explanation of any changes in the principles of
attribution or their application (as the case may be) since the issue
of the statement under paragraph 9(a) of Condition 3E; and
(iii) copies of statements prepared under paragraph
2(b) of Condition 3E and an explanation of the basis therefore.
A7.Where the Director is satisfied that the basis of calculation or
attribution (as the case may be) used by the licensee is not in
conformity with paragraph Al, the Director may issue directions
specifying an alternative basis of calculation or attribution. and the
basis of calculation or attribution by the licensee (as the case
may be) shall be adjusted accordingly with effect from the
date of issue of the directions or (subject to paragraph 11 of
Condition 3E) such other date as may be specified in those directions.
PART B
EHV premises
B I.EHV premises shall comprise:
(a) in relation to premises connected to the licensee's
distribution system as at the date this licence enters into
force, those premises specified in the list of EHV premises
notified in writing to the Director by the licensee within
twenty-eight days after this licence enters into force; and
(b) in relation to premises connected to the licensee's
distribution system which are either first connected or (having
been previously connected) have had their connections materially
altered following the date this licence enters into force, means
premises connected to the licensee's distribution system at a
voltage at or higher than 22 kilovolts or at a sub-station with a
primary voltage of 66 kilovolts or above.
B2. The licensee shall following the end of each relevant year
furnish to the Director, as being one of the specified items to
be included in the statement referred to at paragraph 8 of
Condition 3E, a statement listing any changes in the premises
falling to be treated as EHV premises.
B3. Where the Director is satisfied that any premises treated by
the licensee as EHV premises should not in conformity with
sub-paragraph Bl(b) above be so treated, the Director may issue
directions to that effect, and such premises shall cease to be
treated as EHV premises from the date of issue of the directions
or (subject to paragraph 11 of Condition 3E) such other date as
may be specified in those directions.
PART C
Excluded services
Distribution Business
C I. There may be treated as excluded services provided by the
licensee in its Distribution Business such services in respect of
which charges are made which:
(a) do not fall within paragraph C2 of this Part; and
(b) may (subject to paragraph C9) be determined by the
licensee as falling under one of the principles set out in paragraphs C3
to C6 of this Part.
C2. No service provided by the licensee as part of its
Distribution Business shall be treated as an excluded service in
so far as it consists of the provision of services remunerated
under the use of system charges in accordance with paragraph 3 of
Condition 8 including (without prejudice to the foregoing):
(i) (subject to paragraph C3 of this Part) the transport of
electricity;
(ii) the carrying out of works for the installation of
electric lines or electrical plant (not otherwise payable in the
form of connection charges);
(iii) the carrying out of works or the provision
of maintenance or repair or other services for the purpose of
enabling the licensee to comply with Conditions 9' 11 and 13, the
Electricity Supply Regulations 1988 or any regulations made under
Section 29 of the Act or any other enactment relating to safety
or standards applicable in respect of the Distribution Business;
and
(ii ) (subject to paragraph C5 of this Part) the
provision, installation and maintenance of any meters. switchgear
or other electrical plant (not being part of connection charges).
C3. The licensee may treat as being an excluded service for the
purposes of its Distribution Business the transport of:
(a) units of electricity not consumed in the licensee's
authorised area; or
(b) EHV units.
C4 Charges of the type described in paragraph 4 of Condition 8
and home in accordance with the principles set out in paragraph 7
of Condition 8 by any person as connection charges, and charges
in respect of the statements referred to in paragraph 8 of
Condition 8, may each be treated as excluded services for the
purposes of the Distribution Business.
C5. A service provided by the licensee as part of its
Distribution Business may be treated as an excluded service in so
far as it consists in the provision of services (including
metering, electric lines or electrical plant) for the specific
benefit of any third party requesting the same and not made
available by the licensee as a normal part of its Distribution
Business remunerated by use of system charges including (without
prejudice to the foregoing):
(i) special metering (including "time of day"
metering) to facilitate energy
saving programmes for the benefit of customers requesting the
same;
(ii) charges for moving mains, services or meters
forming part of the licensee's distribution system to accommodate
extension, re-design or re-development
of any premises on which the same are located or to which they
are connected:
(iii ) the provision of electric lines and
electrical plant (a) insofar as the same are required for the
specific purpose of enabling the provision of top-up or standby
supplies or sales of electricity or (b) to provide a higher
degree of security than is required for the purposes of complying
with Condition 9;
(iv) the amount by which charges for the provision of
prepayment meters to customers exceed charges for the provision
of standard meters for such customers; and
(v) special metering or telemetry or data processing
equipment for the purposes of enabling any person which is a
party to the Pooling and Settlement Agreement to comply with its
obligations in respect of metering thereunder, or for the
performance by the licensee of any service in relation thereto.
C6. There may be treated as an excluded service for the purposes
of the Distribution Business, charges for the relocation of
electric lines or electrical plant and the carrying out of works
associated therewith pursuant to a statutory obligation (other
than under Section 9(1 ) or Section 16 of the Act) imposed on the
licensee.
Supply Business
C7. Subject to paragraph C9, a service provided by the licensee
as part of its Supply Business may be treated as an excluded
service in so far as it consists of the provision of services for
the specific benefit of customers requesting the same and not
made available by the licensee as a normal part of such Business.
For the avoidance of doubt, the provision of facilities for
prepayment may not be treated as an excluded service except the
provision of prepayment meters as an excluded service by the
distribution business.
Information to be provided to the Director
C8. The licensee shall following the end of each relevant year
furnish to the Director, as being one of the specified items to
be included in the statement referred to at paragraph 8 of
Condition 3E, details specifying separately the nature of all
services provided as part of its Distribution Business or Supply
Business by the licensee and treated as excluded services by the
licensee during the course of such year and stating the revenues
derived by the licensee in respect of each such service so
treated.
C9. Where the Director is satisfied that in light of the
principles set out in paragraphs C2 to C7 inclusive any service
treated by the licensee as an excluded service should not be so
treated, the Director shall issue directions to that effect, and
the service or services specified in the directions shall cease
to be treated as excluded services from the date of issue of the
directions or (subject to paragraph 11 of Condition 3E) such
other date as may be specified in the directions.
PART D
Regulated distribution unit categories
D I The licensee shall following the end of each relevant year
furnish to the Director, as being one of the specified items to
be included in the statement referred to at paragraph 8 of
Condition 3E, details specifying separately those use of system
charges in respect of which the licensee has during the course of
such year treated the units distributed as falling within the
definition of each of LVI units and LV2 units and LV3 units
respectively.
D2. The definition of LV I units includes units distributed
under the following tariffs:
Domestic
D7 Economy Seven Rate - day units
D2 White Meter Rate - day units
Commercial/industrial/Miscellaneous Purpose
Economy Seven Standard Rate 10 - day units
D3. The definition of LV2 units includes units distributed under
the following tariffs:
Domestic
D7 Economy Seven Rate - night units
D2 White Meter Rate - night units
D4 Off Peak Rate (units only available during any nine hours
between 22:00 and 08:00 from time to time specified by the licensee)
D5. Off Peak Rate (units only available during any nine hours
between 22;00 and 08:00 and any three hours between 1 1:00 and 16:30
from time to time specified by the licensee)
D6 Off Peak Rate (units only available during any twelve hours
between 19:00 and 08:00 and any three hours between 1 1:00 and 16:30
from time to time specified by the licensee)
Special terms to landlords for off peak storage heating
Commercial/industrial/Miscellaneous Purpose
Economy Seven Standard Rate 10 - night units
Off Peak Rate 7 (units only available during any nine hours
between 22:00 and 08:00 from time to time specified by the licensee)
Off Peak Rate 8 (units only available during any twelve hours
between 19:00 and 08:00 from time to time specified by the licensee
and between noon on any Saturday and 08:00 on the following Monday)
Off Peak Rate 9 (units only available during any twelve hours
between 19:00 and 08:00 and any three hours between 11:00 and 16:30
from time to time specified by the licensee and between noon on any
Saturday and 08:00 on the following Monday)
D4. The definition of LV3 units includes units distributed under
the following tariffs:
Domestic
Dl General Purpose Rate
Commercial/industrial/Miscellaneous Purpose
Standard Rate I
Evening and Weekend Rate 13 (2 rate quarterly tariff: units taken
between 07:30 and 20:00 on weekdays and units taken at other times)
Rate LV5M(monthly maximum demand rate)
Rate LV6M (monthly maximum demand day/night rate)' and allied special terms
Rate LVI] (monthly seasonal time of day rate)
Catering Rate 4 (electricity supplied for catering purposes)
Public lighting terms
Unmetered supplies for purposes other than public lighting
Units used on the licensee s premises
Non franchise variants of the above
D5. Notwithstanding the provisions of paragraphs D2 to D4 above,
where the Director is satisfied that a tariff tariffs in respect
of which the licensee has treated the units distributed as
falling within one of the categories in paragraphs D2 to D4 above
should not be so treated, the Director shall issue directions to
that effect and the tariff or tariffs specified in the directions
shall cease to be so treated from the date of issue of the
directions or (subject to paragraph 11 of Condition 3E) such
other date as may be specified in the directions and shall with
effect from such date be treated in such manner as may be
specified in the directions.
PART E
Calculation of factor in respect of distribution losses
El. For the purposes of calculation of the terms AL' and L, as
used in paragraph I of Condition 3A shall each be determined for
relevant years commencing on or after Ist April 1995 using the
consistent methodological basis set out in paragraphs E2 to E5
below.
Consistent methodological basis for determination of AL, and L,
E2. Adjusted distribution losses shall be determined as being
the difference between adjusted grid supply point purchases and
adjusted units distributed.
E3. Units metered on entry to the licensee's distribution
system shall be adjusted to obtain adjusted grid supply point purchases by:
(a) excluding that number of units which is equal to
the sum of:
(i) EHV units; and
(ii) units distributed by the licensee for the
purpose of supply to premises outside the licensee's authorised area; and
(iii) an amount in respect of distribution losses
between the grid supply point and the exit point attributable to
the units referred to in (i) and (ii) above. as determined in
accordance with paragraph AS in Part A of Schedule 3; and
(b) including an amount (in units) to represent the
effect of units entering the licensee's distribution system otherwise
than at grid supply points, being the difference between the number of
units so entering and the number of units that would have been required
to have entered at grid supply points in their absence (such latter
number of units being calculated consistently with the principles
underlying the schedule of adjustment factors in respect of distribution
losses referred to at sub-paragraph (b) of paragraph 3 of Condition 8).
E4. For so long as units are metered on entry to the licensee's
distribution system at bulk supply points instead of at grid supply
points, such units shall be calculated by:
(i) applying the procedures in paragraph E3 as if
all references to units metered at grid supply points were to
units metered at bulk supply points; and
(ii)grossing-up units metered at the bulk
supply points by the relevant grid supply point conversion factor
being either:
(a) 0.5 per cent of the units metered at the bulk supply
points; or
(b) such other factor to take account of losses occurring
between the grid supply points and the bulk supply points as the
licensee may with the prior approval of the Director determine to
be appropriate.
E5. Adjusted units distributed shall be obtained by:
(a) calculating all units distributed by the licensee
metered at exit points on leaving the licensee's distribution
system; and
(b) deducting therefrom EHV units and units distributed for
the purpose of supply to premises outside the licensee's
authorised area; and
(c) adding thereto an amount equal to the units consumed on
the licensee's premises in the authorised area (insofar as not
otherwise taken into account in determining units distributed
under sub-paragraph (a) above).
Initial relevant loss percentage in the term AL,
E6. In the first relevant year, the initial relevant loss
percentage in the term AL, shall (consistently with the
methodology set out in paragraphs E2 to E5 above) be determined
as being:
adjusted GSP purchase units less adjusted units distributed
adjusted units distributed
where adjusted GSP purchase units are calculated as provided in
paragraph E7 and adjusted units distributed are calculated as
provided in paragraph E8.
E7. Adjusted GSP purchase units shall be calculated in
accordance with the procedures successively described in the
following sub-paragraphs:
(a) the actual losses in each of relevant years t-l, t-2
and t-3 (the "historic losses") shall be calculated as the difference
in each of those years between units purchased at entry points to the
licensee's distribution system and units sold;
(b) the historic loss percentage shall be calculated as the
proportion (expressed as a percentage) which the aggregate historic
losses were of the aggregate units purchased at entry points to the
licensee's distribution system, in each case over the three relevant
years t-l to t-3;
(c) the total number of units sold in relevant year t- I
shall be grossed up by the historic loss percentage ("BSP purchase units");
and
(d) the figure for BSP purchase units resulting from
sub-paragraph (c) shall be adjusted to obtain adjusted GSP purchase units
in accordance with the provisions of paragraphs E3 and E4 above.
E8. Adjusted units distributed shall be calculated by applying
the methodology of paragraph E5 in respect of those units referred to in
sub-paragraphs (a) to (c) of paragraph E5 in relevant year I- 1.
Information to be provided to the Director
E9. The licensee shall within three months after the entry into
force of this licence furnish to the Director a statement showing
the initial relevant loss percentage and the underlying
calculations.
E 10. The licensee shall, following the end of each relevant
year, furnish to the Director, as being one of the specified
items to be included in the statement referred to at paragraph 8
of Condition 3E, a statement showing adjusted distribution losses
for that relevant year, accompanied by the underlying
calculations and (where appropriate) an explanation of any
changes in the basis of calculation or estimation thereof.
E I 1. Where the Director is satisfied that any statement or
underlying calculation provided has not been drawn up in
conformity with paragraphs E2 to E8 above, the Director may issue
directions, and the statement or underlying calculation shall be
adjusted with effect from the date of issue of the directions or
(subject to paragraph 11 of Condition 3E) such other date as may
be specified in the directions.
PART F
Electricity purchase costs
Fl. For the purposes of the term E, in paragraph 2 of Condition
3B, the licensee's electricity purchase costs shall, subject to
paragraph F8 of this Part of Schedule 3, comprise:
(a) costs payable (measured on an accruals basis) by
the licensee in respect of the establishment, management and
administration of Non-Fossil Purchasing Agency Limited pursuant to
the terms of a shareholders' or agency agreement dated 30th March 1990;
and
(b) amounts becoming payable (measured on an accruals
basis) by the licensee pursuant to qualifying arrangements (as
defined by Section 33 of the Act), together with finance costs
(if any) incurred by the licensee in funding the amounts so
becoming payable in the period prior to the receipt by the
licensee of the amounts referred to below, net of any amounts
receivable (measured on an accruals basis) by the licensee in
respect of:
(I) the re-sale by the licensee of any of the
electricity the subject of such qualifying arrangements; and
(ii) payments made to the licensee pursuant to
Regulations made under Section 33(1 ) of the Act, and
for this purpose "re-sale" shall be deemed to include delivery of
the electricity by the seller thereof to the pool established
pursuant to the Pooling and Settlement Agreement or to another
person at the direction of the licensee; and
(c) amounts becoming payable (measured on an accruals
basis) by the licensee under the terms of the Pooling and Settlement
Agreement in respect of the purchase by the licensee of electricity
under the terms of such agreement; and
(d) the net amount (whether being a positive or a negative
amount) payable or receivable (as the case may be, and in either case
measured on an accruals basis) by the licensee in respect of electricity
purchase or sale contracts, as determined in accordance with paragraphs
F2 to F6 below; and
(e) the net amount payable (measured on an accruals
basis) in respect of purchases of electricity otherwise than under the
terms of the Pooling and Settlement Agreement
but so that no amount may be taken into account more than once
for the purposes of sub-paragraphs (a) to (e).
F2. For the purposes of this Part of Schedule 3 (and save
as provided in paragraph F3), payments or receipts under any
electricity purchase or sale contract shall include all
amounts payable or receivable for the grant of or pursuant to the
terms of such contract.
F3. Notwithstanding paragraph F2, contracts or arrangements the
principal purpose of which is to enable the licensee to hedge
currency exchange risks shall not be treated as electricity purchase
or sale contracts.
F4. Subject to paragraph F6, any fixed or lump sum payments
payable or receivable under electricity purchase or sale contracts
which span two or more relevant years shall be time apportioned to
the periods of such contract falling within each relevant year.
F5. Subject to paragraph F6. on the sale or other disposition by
the licensee of any electricity purchase or sale contract or its rights and
obligations thereunder, amounts receivable in respect of such sale or
disposition shall (net of any amounts otherwise falling to be apportioned
to a subsequent relevant year in accordance with paragraph F4) be taken
into account as a receipt at the time it accrues due to the licensee.
F6. Insofar as either:
(a) the treatment of amounts payable or receivable under
electricity purchase or sale contracts does not fall to be specified in
the preceding paragraphs of this Part; or
(b) the treatment of such amounts is in the opinion of
the licensee and its Auditors contrary to best accounting practice,
the licensee shall notify the Director of the manner in which it
proposes to treat such amounts, such notification to be
accompanied by an opinion from the Auditors confirming that the
treatment proposed is in accordance with best accounting
practice, and (save where the Director issues directions that
such amounts should be treated in another manner specified in
those directions) the licensee shall thereafter treat such
amounts in the manner notified.
F7. The licensee shall following the end of each relevant
year furnish to the Director, as being one of the specified items to
be included in the statement referred to at paragraph 8 of Condition
3E, a statement:
(I) specifying the number and nature of contracts
falling to be treated by the licensee as electricity purchase or
sale contracts in that relevant year;
(ii) specifying the aggregate amounts payable and the
aggregate amounts receivable by the licensee under such contracts
during that relevant year;
(iii) confirming that the amounts treated as
payable or receivable in respect of such contracts in the
relevant year were computed in accordance with the preceding
paragraphs of this Part
and, where appropriate, accompanied by an explanation of any
changes in the treatment of any contract or arrangement as being
an electricity purchase or sale contract or in the treatment of
amounts payable or receivable under any electricity purchase or
sale contract.
F8. Where the Director is satisfied that:
(i) any contract or arrangement treated as an
electricity purchase or sale contract should not be so treated, or
any contract or arrangement not so treated should be so treated; or
(ii) the basis on which amounts payable or
receivable under an electricity purchase or sale contract are not
apportioned in conformity with the preceding paragraphs of this Part,
the Director may issue directions requiring an alternative basis
of treatment of such contract or arrangement or of the
apportionment of amounts payable or receivable under such
electricity purchase or sale contract (as the case may be), and
the basis of such treatment or apportionment by the licensee
shall be adjusted accordingly with effect from the date of issue
of such directions or (subject to paragraph 11 of Condition 3E)
such other date as may be specified in the directions.
Exhibit 10.04
DATED 30th March, 1990
THE GENERATORS
named herein
-and
THE SUPPLIERS
named herein
-and
- -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
-and
ENERGY POOL FUNDS
ADMINISTRATION LIMITED
as Pool Funds Administrator
-and
THE NATIONAL GRID COMPANY plc
as Grid Operator and Ancillary Services Provider
-and -
SCOTTISH POWER plc
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
-and
THE OTHER PARTIES
named herein
POOLING AND SETTLEMENT
AGREEMENT
for the Electricity Industry in
England and Wales
( as amended at 1 7th October, 1996 )
Main Text Schedules 1-8 and 10-22
<PAGE>
THIS AGREEMENT is made on 30th March, 1990
BETWEEN: -
(1)THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part I of Schedule 1;
(2)THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part II of Schedule 1;
(3)ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
(registered number 2444282) whose registered office is situate at Fairham
House, Green Lane, Clifton, Nottingham NG11 9LN as Settlement System
Administrator;
(4)ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered
number 2444187) whose registered office is situate at 185 Park Street,
London SE1 9DY as Pool Funds Administrator;
(5)THE NATIONAL GRID COMPANY pie (registered number 2366977)
whose registered office is situate at National Grid House, Kirby Corner
Road, Coventry CV4 8JY as Grid Operator and Ancillary Services Provider;
(6)SCOTTISH POWER plc [registered number 117120) whose
principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP, Scotland
as an Externally Interconnected Party;
(7)ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal
office is situate at 3 Rue de Messine, 75008 Paris, France as an Externally
Interconnected Party; and
(8)THE OTHER PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 2.
WHEREAS :
(A)it is a Condition of the NGC Transmission Licence that,
subject to its removal or resignation as Settlement System Administrator
hereunder, NGC shall implement, maintain and operate a settlement system
which will provide inter alia for the calculation of any payments which
become due to or owing by Authorised Electricity Operators in respect of
sales and purchases of electricity under the terms of this Agreement and
such Licence further provides that NGC may comply with its said obligations
by participation in this Agreement in the manner provided in such Licence;
(B)it is a Condition of the Generation Licence granted to
each of the Founder Generators in England and Wales requiring such a Licence
that the licensee shall be a party to and a pool member under, and shall
comply with the provisions of, this Agreement insofar as the same shall
apply to it in its capacity as a party to this Agreement and/or as a pool
member being a generator of electricity as the case may be;
(C)it is a Condition of the PES Licence granted to each of
the Founder Suppliers whose names are set out in Part A of Part II of
Schedule 1 that the licensee shall be a pool member under, and comply with
the provisions of, this Agreement;
(D)it is a Condition of the Second Tier Supply Licence
granted to each of the Founder Suppliers whose names are set out in Part B
of Part II of Schedule 1 that the licensee shall be a pool member under,
and comply with the provisions of, this Agreement insofar as the same
shall apply to it in its capacity as a private electricity supplier (as
that expression is defined in section 17(1) of the Act);
(E)this Agreement sets out, inter alla, the rules and
procedures for the operation of an electricity trading pool and for the
operation of a settlement system (including the calculation of payments
due) and in compliance with the conditions of their respective Licences
those parties subject to such conditions have agreed to become parties
hereto with the intent that this Agreement shall be and shall remain
approved by the Director;
(F)in relation to this Agreement each of the Secretary of
State and the Director enjoys the rights, powers and authorities
conferred upon him inter alla by the Act and the Licences; and
(G)without prejudice to the ability of Parties to agree in
the future to the terms of an incentive scheme, the Parties acknowledge
that the Transmission Services Scheme 2 is part of the long term
objective of the Parties that the Grid Operator is provided with an
incentive to reduce the cost of certain charges made to Suppliers which
arise as a result of the purchase of electricity under the terms
of this Agreement. The Transmission Services Scheme 2 is a
replacement of the Transmission Services Schemes, which previously applied.
NOW IT IS HEREBY AGREED as set out on the following pages of this
Agreement.
3
PART I
PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1Definitions: In this Agreement (including the Recitals and
the Schedules), except where the context otherwise requires:
"Accession Agreement" means an accession agreement in or
substantially in the form set out in Schedule 3 or in such other
form (to which the Settlement System Administrator has no
reasonable objection) as the Executive Committee may for the time
being and from time to time approve;
"Accountable Interest" has the meaning given to that term in
Schedule 20;
"Accounting Date" means, in relation to any Accounting Period,
the last day of such Accounting Period;
"Accounting Period" means each successive period of 12 months
beginning on 1st April in each year or of such other length
and/or beginning on such other date as may be determined in
accordance with the terms hereof, provided that the first such
period shall begin on and include 31st March, 1990 and shall end
on and include 31st March, 1991;
"Act" means the Electricity Act 1989;
"Active Energy means the electrical energy produced, flowing or
supplied by an electric circuit during a time interval, and being
the integral with respect to time of the instantaneous power,
measured in units of watt-hours or standard multiples thereof,
that is:
1000Wh = lkWh
1000kWh = lMWh
1000MWh = lGWh
1000GWh = lTWh;
"Active Power" means the product of voltage and the in-phase
component of alternating current measured in units of watts and
standard multiples thereof, that is:
1000 Watts = lkW
1000kW = lMW
1000MW = lGW
1000GW = lTW;
"Admission Application" means an application in or substantially
in the form set out in Schedule 5 or in such other form as the
Executive Committee may for the time being and from time to time
approve;
Agreed Procedure" means each of the agreed procedures specified
in the Agreed Procedures Index and which is agreed to be treated
as an Agreed Procedure for the purposes of this Agreement either:
(a)by the Executive Committee and the Settlement System
Administrator and (where the agreed procedure imposes obligations
on the Grid Operator) the Grid Operator; or
(b)where such agreed procedure concerns the dudes and
responsibilities of the Pool Funds Administrator, by the Executive
Committee and the Pool Funds Administrator
as the same
(i)may be amended or substituted from time to time by the Executive
Committee with the prior written consent of the Settlement System
Administrator and (where such Agreed Procedure imposes obligations
on the Grid Operator) the Grid Operator (in each case, such consent not
to be unreasonably withheld or delayed); or
(ii)shall be amended or substituted from time to time by the Executive
Committee at the request of the Settlement System Administrator and
with the prior written consent of the Executive Committee and (where
such Agreed Procedure imposes obligations on the Grid Operator) the
Grid Operator (in each case, such consent not to be unreasonably
withheld or delayed),
Provided that the reference to the Grid Operator in this
definition shall be construed as if it were a reference to such
term prior to the creation of Meter Operator Parties and the
associated amendments to this Agreement, but this shall be
without limitation to any right to agree any adoption, amendment
or substitution under this definition;
"Agreed Procedures Index" means an index of agreed procedures
agreed to be treated as Agreed Procedures in accordance with and
for the purposes of this Agreement;
Agreement" means this Agreement (including the Schedules), as
amended, varied, supplemented, modified or suspended from time to
time in accordance with the terms hereof;
"Ancillary Service" means a System Ancillary Service and/or a
Commercial Ancillary Service, as the case may be;
"Ancillary Services Agreement" means 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" means the business relating to
Ancillary Services carried on by the Ancillary Services Provider;
"Ancillary Services Provider" means the person who for the time
being and from time to time is required by the terms of a
Transmission Licence to contract for Ancillary Services;
"Apparatus" means all equipment in which electrical conductors
are used or supported or of which they may form a part;
"Approved Recommendation" has the meaning given to that term in
Clause 5.8;
"ASP Accounting Procedures means the accounting procedure set out
in Schedule 18, as amended, varied or substituted from time to
time in accordance with the terms hereof;
"Authorised Electricity Operator" means any person who is
authorised under the Act to generate, transmit or supply
electricity and shall include any person transferring electricity
to or from England and Wales across an interconnector (as such
term is used in the NGC Transmission Licence), other than the
Grid Operator in its capacity as operator of the NGC Transmission
System;
"Banking System" has the meaning given to that term in Section
1.1 of Schedule 11;
"Billing System" has the meaning given to that term in Section
1.1 of Schedule 1 1:
"BPS Goal" has the meaning given to that term in Appendix 2 to
Schedule 9;
"British Grid Systems Agreements means the agreement of that name
made or to be made between NGC, Scottish Hydro-Electric PLC and
Scottish Power plc inter alla regulating the relationship between
their respective grid systems;
Bulk Supply Points means any or (as the context may require) a
particular point of supply where Metering Equipment for the
purposes of the Bulk Supply Tariff is or would have been located
and, in the event of any dispute as to location, as determined in
accordance with Clause 83;
"Bulk Supply Tariff' means the basis of payment for Active Energy
as levied by the Generating Board prior to the Effective Date;
Central Despatch" means the process of Scheduling and issuing
direct instructions by the Grid Operator referred to in paragraph
1 of Condition 7 of the NGC Transmission Licence and Centrally
Despatched" shall be construed accordingly;
Change Management Policies" means the policies, procedures and
guidelines for the co-ordination by the Settlement System
Administrator of the implementation of changes to the Settlement
System entitled respectively Change Management Policy",
"Settlement Change Coordinator Operating Proceduresn and Change
Management Implementation Guidelines" in the form initialled for
the purposes of identification as at 29th November, 1991 by or on
behalf of the Executive Committee and the Settlement System
Administrator, as the same have been or may be amended from time
to time in accordance with the terms of the Initial Settlement
Agreement or this Agreement;
Charging Procedure" means the charging procedure set out in the
Appendix to Schedule 4, as amended, varied or substituted from
time to time in accordance with the terms hereof;
"Chief Executives has the meaning given to that term in Clause
17.1.1;
Chief Executive's Office" means the Chief Executive, the Contract
Manager and the personnel referred to in Clause 17.2.1;
"Code of Practices means each of the codes of practice in
relation to any Metering Equipment or any part or class thereof
which are specified in the Synopsis of Metering Codes, as the
same may be amended or substituted from time to time by the
Executive Committee with the agreement or approval of:
(i)in the case of any Code of Practice in respect of Metering
Equipment in respect of which it is the Operator, the Grid Operator;
(ii)in the case of any Code of Practice in respect of
Metering Equipment relating to Reactive Energy, the Ancillary Services
Provider; and
(iii) in the case of any change to any Code of Practice prior to
1st April, 1998 in respect of standards of accuracy of Metering
Equipment required for Second Tier Customers up to (and
including) 100kW or Non-Pooled Generators, the Suppliers in
separate general meeting,
(provided that, prior to the date on which the transitional
arrangements regarding metering of Reactive Power at Grid Supply
Points are brought into effect (the "RP Date") in the case of a
Code of Practice or part thereof which relates to Reactive Power
metering at Grid Entry Points, such Code or part thereof may only
be amended or substituted by agreement between the Ancillary
Services Provider and all Committee Members), and any other code
of practice which is agreed from time to time to be treated as a
Code of Practice for the purposes of this Agreement by the
Executive Committee (or, where appropriate, prior to the RP Date
all Committee Members) and, where appropriate, the Grid Operator
and/or the Ancillary Services Provider and/or the Suppliers;
"Commercial Ancillary Services" means Ancillary Services, other
than System Ancillary Services, utilised by the Grid Operator 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, under
any other agreement;
"Commissioned" means (i) in relation to any Plant or Apparatus
connected to the NGC Transmission System or to any External
Interconnection or any Distribution System, commissioned for the
purposes of the Connection Agreement relating to such Plant or
Apparatus; or (ii) in relation to any Metering System or Metering
Equipment, commissioned in accordance with the relevant Code of
Practice;
"Committee Member" means a member of the Executive Committee;
"Communications Equipment" means, at or relating to any Site, in
respect of any Metering Equipment (i) the terminating equipment
(which may include a modem) necessary to convert data from such
Metering Equipment into a state for transmission to the
Settlement System Administrator; and (ii) in the case of Sites
which are not 1993/l994 Tariff Qualifying Sites (as defined in
the Tariff which is entitled Tariff for 1993/1994 Sites) the
exchange link which is dedicated to that terminating equipment,
but (iii) it shall not include an Outstation;
"Competent Authority" means 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;
"Computer Systems means all and any computer systems used by the
Settlement System Administrator and required in connection with
the operation of the Settlement System;
"Connection Agreements" means the Master Connection and Use of
System Agreement, the Supplemental Agreements, the Supplier's
Connection Agreements, the Supplier's Use of System Agreements
and the Interconnection Agreements, and "Connection Agreement"
means any or (as the context may require) a particular one of
them;
"Connection Point" means a Grid Supply Point or Grid Entry Point,
as the case may be;
"Consumer Metered Demands has the meaning given to that term in
Part I of Appendix 1 to Schedule 9;
"Contract Management Rules" has the meaning given to that term in
subsection 1.1 of Schedule 4;
"Contract Manager" has the meaning given to that term in
sub-section 1.1 of Schedule 4;
"Contributory Shares means, in relation to any Pool Member, the
Contributory Share for the time being and from time to time of
such Pool Member calculated in accordance with Schedule 13;
"Control" has the meaning set out in section 840 of the Income
and Corporation Taxes Act 1988 and "Controlled" shall be
construed accordingly;
"Custodians" has the meaning given to that term in Clause 45.1;
Customer means a person to whom electrical power is provided
(whether or not he is the provider of such electrical power);
"De-energisation means 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 through the User's Plant or
Apparatus connected to such User System and, in relation to any
External Pool Member, the termination of such External Pool
Member's rights to use any relevant External Interconnection;
"Default Calling Creditor" means any Pool Creditor, the
Settlement System Administrator and the Pool Funds Administrator;
Default Interest Rates has the meaning given to that term in
Section 1.1 of Schedule 11;
"Defaulting Pool Member" has the meaning given to that term in
Clause 66.3.1;
"Despatch" means the issue by the Grid Operator of instructions
for Generating Plant and/or Generation Trading Blocks to achieve
specific Active Power (and, in relation to Generating Plant,
Reactive Power or target voltage) levels within their Generation
Scheduling and Despatch Parameters or Generation Trading Block
Scheduling and Despatch Parameters, as the case may be, and by
stated times;
"Development Policies" means the policies, procedures and
practices for the development of the Computer Systems in the
forms initialled for the purposes of identification as at 29th
November, 1991 by or on behalf of the Executive Committee and the
Settlement System Administrator, as the same have been or may be
amended from time to time in accordance with the terms of this
Agreement;
"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" means the Director General of Electricity Supply
appointed for the time being pursuant to section 1 of the Act;
Distribution Code" means the Distribution Code required to be
drawn up by each Public Electricity 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 a Public
Electricity Supplier 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 other Users and includes
any Remote Transmission Assets (as defined in the Grid Code)
operated by such Public Electricity Supplier and any Plant and
Apparatus and meters owned or operated by such Public Electricity
Supplier in connection with the distribution of electricity, but
does not include any part of the NGC Transmission System;
"EdF Documents" means any agreement for the time being and from
time to time made between NGC and Electricite de France, Service
National relating to the use or operation of the relevant
External Interconnection;
Effective Date means 2400 hours on 30th March, 1990;
"Electricity" means Active Energy and Reactive Energy;
EIectricity Arbitration Association" means the unincorporated
members' club of that name formed inter alia to promote the
efficient and economic operation of the procedure for the
resolution of disputes within the electricity supply industry by
means of arbitration or otherwise in accordance with its
arbitration rules;
Embedded means 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);
"Embedded Non-Franchise Site" means:
(i) a Site which is Embedded and which is at the point of
connection to a Second Tier Customer; or
(ii) a site which is Embedded where the customer to which that
site is at a point of connection is eligible to receive supplies
from a Second Tier Supplier in the period between 1st April, 1994
and 31st March, 1998;
"Equipment Owner" means, in relation to a Metering System, the
person which is the owner of that Metering System;
"Escrow Agreement" has the meaning given to that term in Clause
45.1;
"ESIS" means Energy Settlement and Information Systems Limited
(registered number 2444282) whose registered office is at Fairham
House, Green Lane, Clifton, Nottingham NG11 9LN;
Event of Default" means any event declared as such pursuant to
Clause 66.1.1 or 66.2.1, as the case may be;
Executive Committees means the committee established pursuant to
Clause 14;
Export" means, in respect of any Party, a flow of electricity
from the Plant or Apparatus of such Party to the Plant or
Apparatus of another Party and, in relation to any Party which is
an External Pool Member, the External Interconnection in respect
of which that Party has the right to deliver or take electricity
to or from the NGC Transmission System shall be treated as the
Plant or Apparatus of such Party and the verb Export" and its
respective tenses shall be construed accordingly;
External Interconnection means Apparatus for the transmission of
electricity to or from the NGC Transmission System into or out of
an External System;
"Externally Interconnected Party" means a person operating an
External System which is connected to the NGC Transmission System
by an External Interconnection (which person may or may not also
be an External Pool Member);
External Pool Member" means a Party supplying electricity to or
taking electricity from the NGC Transmission System through an
External Interconnection and which has been or (where
appropriate) is to be admitted as a Pool Member in the capacity
of a Generator and/or a Supplier;
"External System" means, 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;
"Final Metering Schemes means a national metering scheme to be
installed in accordance with the relevant Codes of Practice and
to come into effect on the FMS Date;
"First Quarters means, in respect of any year, the months of
January, February and March;
FMS Codes of Practice means the Codes of Practice B. C, E, J. K1
and K2 and, to the extent that they relate to Metering Equipment
the data derived from which was not used as Settlement Metering
Data immediately prior to the FMS Date, F and G. and Codes of
Practice 1, 2, 3, 4 and 5;
FMS Date" means 1st April, 1993;
FMS Metering Equipment" means Metering Equipment comprising a
Metering System at or in relation to the commercial boundary in
accordance with paragraph 7.1.2 of Schedule 21 in relation to the
requirements to be met from the FMS Date;
FMS Trading Date" means 10th January, 1994;
Following Quarter" means, in respect of any Quarter Day or
Quarter, the period of three months immediately following such
Quarter Day or Quarter;
"Force Majeure means, 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 or 35 of the Act) provided
that lack of funds shall not be interpreted as a cause beyond the
reasonable control of that Party. For the avoidance of doubt,
Force Majeure shall not apply in respect of the Settlement System
Administrator where and to the extent that the Settlement System
Administrator can perform its obligations under this Agreement by
using the back-up arrangements required by Service Line 6
(Off-Site Security) or by acting in accordance with Clause 52 or
Section 31 of Schedule 9;
"Founder Generators" means the parties to this Agreement of the
first part at 30th March, 1990;
"Founder Suppliers" means the parties to this Agreement of the
second part at 30th March, 1990;
Fourth Quarter" means, in respect of any year, the months of
October, November and December;
"Fuel Security Code" means the document of that title designated
as such by the Secretary of State, as from time to time amended;
Funds Transfer Agreement" has the meaning given to that term in
Section 1.1 of Schedule 11;
"Funds Transfer Business" has the meaning given to that term in
Section 1.1 of Schedule 11;
Funds Transfer Hardware" has the meaning given to that term in
Section 1.1 of Schedule 15;
"Funds Transfer Software has the meaning given to that term in
Section 1.1 of Schedule 15;
"Funds Transfer System" has the meaning given to that term in
Section 1.1 of Schedule 11;
The Generating Board" has the meaning given to that term in the
Act;
Generating Plants means a Power Station subject to Central
Despatch;
"Generating Unit" means any Apparatus which produces electricity
and, in respect of an External Pool Member, means a Generation
Trading Block;
"Generation Licence" means a licence granted or to be granted
under section 6(1)(a) of the Act;
"Generation Scheduling and Despatch Parameters" means those
parameters listed in Appendix A1 to SDC1;
"Generation Trading Block" means a notional Centrally Despatched
Generating Unit of an External Pool Member treated as such for
the purposes of the Grid Code;
"Generation Trading Block Scheduling and Despatch Parameters"
means those parameters listed in Appendix A1 to SDC1 relating to
Generation Trading Blocks:
"Generator" means:
(i) a person who generates electricity under licence or exemption
under the Act; or
(ii) a person who is an External Pool Member who delivers
electricity or on whose behalf electricity is delivered to the
NGC Transmission System; or
(iii) a person who is acting as the agent for any such person who
is referred to in paragraph (i) or (ii) above,
and, in any such case, for the time being party to this
Agreement, and:
(a) who is a Founder Generator; or
(b) who was admitted as a Party in the capacity of a Generator;
or
(c) who, in accordance with Clause 3.10, has changed
capacity(ies) such that it participates as a Party in the
capacity of a Generator,
and, where the expression is used in Part III or Part IV, who is
also or (where appropriate) is to become a Pool Member;
Generic Dispensation" shall have the meaning ascribed thereto in
paragraph 14.1(b) of Schedule 21;
"Genset Metered Generation" has the meaning given to that term in
Part I of Appendix 1 to Schedule 9;
"Gigawatt" means 1000MW;
"GOALPOST" has the meaning given to that term in the Pool Rules;
"Good Industry Practice" means, 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" means the Grid Code drawn up pursuant to the
Transmission Licence, as from time to time revised in accordance
with the Transmission Licence;
"Grid Code Review Panel" has the meaning given to that term in
the Grid Code;
Grid Entry Points means the point at which a Power Station which
is not Embedded connects to the NGC Transmission System;
"Grid Operator" means the person who for the time being and from
time to time is required by the terms of a Licence, inter alla,
to implement the Grid Code;
Grid Supply Point" means the point of supply from the NGC
Transmission System to Public Electricity Suppliers or to other
Users with User Systems with Customers connected to them or
Non-Embedded Customers;
"GW" means Gigawatt;
GWh means Gigawatt-hour;
"Hardware" means at any time the computer equipment and
accessories used by the Settlement System Administrator on or in
connection with which the Software functions or is intended to
function at such time (other than Second Tier Hardware) and for
the avoidance of doubt the Hardware at 1st April, 1996 is
specified in version 1.0 of the Contract Management Rules;
"Host PES" means, in respect of a Metering System, either:
(i)the Public Electricity Supplier to whose Distribution
System such Metering System is connected; or
(ii)where such Metering System is connected directly to the
NGC Transmission System, the Public Electricity Supplier whose
Consumer Metered Demand determined in accordance with the Pool Rules is
calculated by the Settlement System Administrator using data from
such Metering System;
Import" means, in respect of any Party, a flow of electricity to
the Plant or Apparatus of such Party from the Plant or Apparatus
of another Party and, in relation to any Party which is an
External Pool Member, the External Interconnection in respect of
which it has the right to deliver or take electricity to or from
the NGC Transmission System shall be treated as the Plant or
Apparatus of such Party and the verb "Imports and its respective
tenses shall be construed accordingly;
"Independent Generators" means Generators other than:
(i)the Founder Generators;
(ii)any Generator which is an External Pool Member; and
(iii)any Generator which is an affiliate or related
undertaking of (a) any person referred to in paragraph (i) or (ii)
above, (b) any person referred to in paragraph (i) of the definition
of Independent Suppliers, or (c) any Public Electricity Supplier;
"Independent Suppliers" means Suppliers other than:
(i)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,
National Power PLC, PowerGen plc, Nuclear Electric plc, British Nuclear
Fuels plc, Electricite de France, Service National, Scottish Power plc
and Scottish Hydro-Electric PLC;
(ii) Public Electricity Suppliers;
(iii) any Supplier which is an External Pool Member; and
(iv) any Supplier which is an affiliate or related undertaking of
any person referred to in paragraph (i), (ii) or (iii) above;
Information Systems" has the meaning given to that term in
Section 1.1 of Schedule 11;
Initial Settlement Agreement" means the agreement of even date
herewith made between the Parties as at such date modifying and
suspending the provisions of this Agreement for an initial period
and setting out inter alia the rules and procedures for the
operation of the electricity trading pool referred to in Recital
(E) and for the operation of a settlement system and the
procedures for the development of the phases and pool rules
during such initial period, as amended, varied, supplemented,
modified or suspended from time to time;
"Interconnection Agreement" means an agreement between NGC and an
Externally Interconnected Party and/or an External Pool Member
relating to an External Interconnection and/or an agreement under
which an External Pool Member can use an External
Interconnection;
kVAr" means kilovoltamperes reactive;
kW means kilowatt;
kWh" means kilowatt-hour;
Licences" means all Generation Licences, PES Licences, Second
Tier Supply Licences and Transmission Licences and Licence" means
any or (as the context may require) a particular one of them;
"lost opportunity costs" means, in relation to any Generator, the
profit foregone by such Generator in respect of a Generating Unit
during a period when it is out of service for the purposes of
maintenance, repair, modification, renewal or replacement needed
to comply with a proposal made by such Generator to restore :he
Generating Unit's Reactive Power capability to that required by
the Grid Code or, where relevant, the applicable Supplemental
Agreement, whichever capability is lower provided that:
(i) the period when it is taken out of service is:
(a) outside the period identified for the Generating Unit
concerned pursuant to Section OC2 of the Grid Code as at the time
when the failure to have Reactive Power capability was notified or
determined; and
(b)approved by the Grid Operator; and
(ii) the Generator gives credit for any savings in loss of profit
by carrying out other repair work at the same time as that
required for the purposes of Reactive Power;
"Main Site" means those sites specified in paragraphs (i), (ii)
and (v) of the definition of Site;
"Majority Default Calling Creditors" means:
(i)in respect of each calendar quarter other than the first,
any single or group of Default Calling Creditors to whom, in respect
of the aggregate of (a) all Notified Payments payable on the last
five Business Days of the immediately preceding calendar quarter and
(b) all sums due to the Settlement System Administrator, the Pool Funds
Administrator and the Ancillary Services Provider and outstanding under
this Agreement on the last Business Day of such immediately preceding
calendar quarter, more than 50 per cent. of the total amount of all such
Notified Payments and such other sums were due; and
(ii)in respect of the first calendar quarter, all Pool
Members other than the Defaulting Pool Member;
Master Connection and Use of System Agreement" means the
agreement envisaged in Condition 10B of the NGC Transmission
Licence;
"Meter" means a device for measuring Active Energy and/or
Reactive Energy;
"Meter Operator Party" means each person admitted in the capacity
as such and for the time being and from time to time party to
Schedule 21 in accordance with the provisions thereof, and shall
include any successor(s) in title to, or permitted assign(s) of,
such person;
Meter Operator Party Accession Agreement" means an accession
agreement in or substantially in the form set out in Annex 3 to
Schedule 21 or in such other form (to which the Settlement System
Administrator has no reasonable objection) as the Executive
Committee may for the time being, and from time to time approve;
"Meter Operator Party Admission Application" means an application
in or substantially in the form set out in Annex 1 to Schedule 21
or in such other form as the Executive Committee may for the time
being and from time to time approve;
Meter Operator Party Resignation Notice" means a resignation
notice in or substantially in the form set out in Annex 2 to
Schedule 21 or in such other form as the Executive Committee may
for the time being and from time to time
approve;
"Metering Equipment" means Meters, measurement transformers
(voltage, current or combination units), metering protection
equipment including alarms, circuitry, their associated
Communications Equipment and Outstations, and wiring which are
part of the Active Energy and/or Reactive Energy measuring and
transmitting equipment at or relating to a Site;
Metering System" means all or that part of the Commissioned
Metering Equipment at or relating to a Site linked to a single
Outstation at or relating to that Site and includes, for the
avoidance of doubt, such Outstation. Without prejudice to the
generality of the foregoing, a set of non-exhaustive diagrammatic
representations of Metering Systems is contained in Annex 5 to
Schedule 21;
MVAr" means megavar;
"MVArh" means megavar-hours;
"MOO" means megawatt;
"MWh" means megawatt-hours;
"NGC" means the National Grid Company pie (registered number
2366977) whose registered office is situate at National Grid
House, Kirby Corner Road, Coventry CV4 8JY;
"NGC Site" means a site owned (or occupied pursuant to a lease,
licence or other agreement) by NGC at which there is a Connection
Point and, for the avoidance of doubt, a site owned by a User but
occupied by NGC as aforesaid is an NGC Site;
"NGC Transmission Licence" means the Transmission Licence granted
or to be granted to NGC;
NGC Transmission System" means 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 (as defined in the
Grid Code);
"Non-Embedded Customer" means any Customer, other than a PES,
receiving electricity direct from the NGC Transmission System
irrespective of from whom it is supplied;
"Non-Pooled Generation" means generation from any site which is
directly connected to the Distribution System of a Public
Electricity Supplier where (i) the output is accounted for in
Settlement and (ii) the Generator owning such site:
"Non-Pooled Generation System" means any Metering System of a
Non-Pooled Generator which has been registered with the
Settlement System Administrator by a Second Tier Supplier and
from which the Settlement System Administrator or any Second Tier
Agent is required to collect, aggregate, adjust or transmit data
for the purposes of taking a supply of electricity;
"Non-Pooled Generator" means a Generator who produces Non-Pooled
Generation, provided that a Generator shall be a Non-Pooled
Generator only to the extent that it owns sites which produce
Non-Pooled Generation;
(a) is exempted from holding a Generation Licence; or
(b) would be exempted from holding a Generation Licence if such
site were the only site owned by that Generator;
"Notified Payment" has the meaning given to that term in Section
1.1 of Schedule 11;
"Operator" means, in relation to any Metering System:
(i)used to measure the supply to a Second Tier Customer or from a
Non-Pooled Generator, the Meter Operator Party who is appointed as
such by the Second Tier Customer, the Non-Pooled Generator~or by the
Registrant (with the consent of that Second Tier Customer or, as the
case may be, Non-Pooled Guarantor) and who agrees to act as Operator
in relation to such Metering System; or
(ii)not within (i) above or (id) to (v) below, the Meter Operator Party
who is appointed as such by the Registrant of such Metering System and who
agrees to act as Operator in relation to such Metering System; or
(iii)where new Metering Equipment is to be added to an existing Metering
System, the Operator of such existing Metering System; or
(iv)the Meter Operator Party which continues as the Operator in
accordance with the transitional arrangements set out in paragraph 23 of
Schedule 21; or
(v) the Party who is deemed to be the Operator and Meter Operator Party
in respect thereof in accordance with the terms of Clause 60.4.4;
"Outstation" means equipment which receives and stores data from
a Meter(s) for the purpose, inter aria, of transfer of that
metering data to the Settlement System Administrator and which
may perform some processing before such transfer. This equipment
may be in one or more separate units or may be integral with the
Meter;
"Party" means each person for the time being and from time to
time party to this Agreement acting in a capacity, or deemed to
be acting in a capacity, other than that of Operator or Meter
Operator Party, and shall include any successor(s) in title to,
or permitted assign(s) of, such person;
"Period Metered Demand" has the meaning given to that term in
Part l of Appendix 1 to Schedule 9;
"PES Licence" means a licence granted or to be granted under
section o(l)(c) of the Act;
"PEA Accounting Procedure" means the procedure for the recovery
of certain moneys set out in Section 20 of Schedule 15;
"Plant" means fixed and moveable items used in the generation
and/or supply and/or transmission of electricity, other than
Apparatus;
"Pool Auditor" means the firm of accountants appointed for the
time being and from time to time pursuant to Clause 47.1;
"Pool Banker" has the meaning given to that term in Section 1.1
of Schedule 11;
Pool Chairman" has the meaning given to that term in Clause 16.1;
"Pool Creditor" has the meaning given to that term in Section 1.1
of Schedule 11;
"Pool Funds Administrator" means the person for the time being
and from time to time appointed pursuant to Schedule 15 to act as
Pool Funds Administrator;
Pool 'Member" means each of the Founder Generators and Founder
Suppliers and any other person who is admitted to pool membership
in accordance with Clause 8.2, in each case until it shall have
resigned from pool membership or otherwise ceased to be a member
in accordance with this Agreement, and "Pool Membership" shall be
construed accordingly;
"Pool Membership Application" means an application in or
substantially in the form set out in Schedule 6 or in such other
form as the Executive Committee may for the time being and from
time to time approve;
Pool Rules" means the rules referred to in Clause 7.4 and set out
in Schedule 9, as amended, varied or substituted from time to
time in accordance with the terms hereof;
"PORTHOLE" means the database which allows the transfer of
operational information from the Grid Operator to the Settlement
System Administrator;
Potential Operator" means a Meter Operator Party which is
appointed as the operator pursuant to an agreement or arrangement
(i)in respect of a Metering System or Metering Equipment at a
Site or Sites but which is not yet registered as Operator in respect
of that Metering System; or
(ii)in respect of Metering Equipment where such Metering
Equipment has not been registered as comprising a Metering System;
Power Station" means an installation comprising one or more
Generating Units (even where sited separately), other than an
External Interconnection, owned and/or controlled by the same
Generator, which may reasonably be considered as being managed as
one Power Station;
"Public Electricity Supplier" or "PES" means a person for the
time being party to this Agreement who is a public electricity
supplier (as that expression is defined in the Act) and, in
relation to Clauses 15.4 and 15.5 and Schedules 14 and 22, means
a person for the time being party to this Agreement who is a
public electricity supplier in England and Wales;
"Qualifying Site" means an Embedded Non-Franchise Site qualifying
in accordance with the terms of the relevant Tariff for payments
to be made for the provision of installation and maintenance
services;
"Quarter means the period of three calendar months ending on a
Quarter Day;
"Quarter Day" means 31st March, 30th June, 30th September and
31st December;
"Reactive Energy" means the integral with respect to time of the
Reactive Power;
"Reactive Power" means 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, that is:
1000VAr = lkVAr
1000kVAr = lMVAr;
Register" means the register to be maintained by the Settlement
System Administrator pursuant to Clause 60.5;
"Registered Capacity" has the meaning given to that term in the
Grid Code;
"Registrant" means, in relation to a Metering System at or in
relation to any Site which is:
(i) a Grid Entry Point,
the Pool Member which operates Generating Plant at such Site; or
(ii) a Grid Supply Point or Bulk Supply Point,
the Pool Member whose System is directly connected to the NGC Transmission
System at or in relation to such Grid Supply Point or Bunk Supply
Point; or
(iii) the point of connection of a Customer of a Supplier and the
NGC Transmission System,
the Supplier which is the supplier to that Customer; or
(iv) 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,
the Party which is such Generator which is Embedded or such
Second Tier Supplier or the Second Tier Supplier in respect of
such Second Tier Customer, as the case may be; or
(v) the point of connection of a Non-Pooled Generator to a
Distribution System,
the party which is the Supplier or Second Tier Supplier, as the
case may be, in respect of such Metering System of such
Non-Pooled Generator; or
(vi) the point of connection of two or more Distribution Systems,
the Authorised Electricity Operator of one of such Distribution
Systems which is nominated in accordance with the provisions of
this Agreement; or
(vii) the point of connection of an External Interconnection to
the NGC Transmission System or a Distribution System,
the Externally Interconnected Party;
Resignation Notice" means a resignation notice in or
substantially in the form set out in Schedule 10;
RP Date" has the meaning given to that term in the definition of
Code of Practice;
"Schedule Day" has the meaning given to that term in Part I of
Appendix 1 to Schedule 9:
"Scheduling" means the process of compiling and issuing a
Generation Schedule (as that expression is defined in the Grid
Code), as set out in SDC;
"Scheduling and Despatch Code" or "SDC" means that portion of the
Grid Code which is identified as such in the Grid Code;
"Scheme" means the scheme set out in Clause 53 and, separately,
each further scheme implemented pursuant to Clause 56.2;
"Scheme Admission Application" means an application form setting
out the Scheme Admission Conditions and requiring such
information as the Executive Committee may consider necessary to
enable it to consider the application, in such form as the
Executive Committee may from time to time determine;
"Scheme Admission Conditions" means the conditions set out in
Clause 54;
"Scheme Genset" means a Centrally Despatched Generating Unit
which is admitted to a Scheme under Clause 53.3;
"Scheme Planned Availability" or "SPA" has the meaning given to
that term in Clause 55;
Scheme Year" means, in respect of each Scheme Genset, each
successive period of twelve months, the first such period
commencing on 1st April, 1990;
"Second Quarter" means, in respect of any year, the months of
April, May and June;
"Second Tier Agent" means an agent appointed pursuant to Clause
60.16.1;
"Second Tier Computer Systems" means all and any computer systems
used by any Second Tier Agent in connection with the operation of
the Second Tier Data Collection System operated by such Second
Tier Agent;
"Second Tier Customer" means a person who is supplied with or
sold electricity by a Second Tier Supplier;
"Second Tier Data Collection System" means those parts of the
Settlement System which relate to the obligations of the
Settlement System Administrator under this Agreement in relation to
collecting, estimating and aggregating data as may be required for
the proper functioning of Settlement from Metering Systems at the
point of connection between the Distribution System of a Public
Electricity Supplier and:
(i)a Second Tier Customer or Non-Pooled Generator;
(ii)the System of an Authorised Electricity Operator other
than the Public Electricity Supplier;
(iii)an Embedded Generator not subject to Central Despatch;
and
(iv)the Distribution System of another Public Electricity
Supplier,
and providing such data to the Settlement System Administrator;
Second Tier Hardware" means at any time the computer equipment
and accessories used by any Second Tier Agent on or in connection
with which the Second Tier Software functions or is intended to
function at such time;
"Second Tier Software" means at any time the computer programs
and codes and associated documents and materials which are used
by any Second Tier Agent in connection with the operation of the
Second Tier Data Collection System operated by such Second Tier
Agent;
"Second Tier Supplier" means a person for the time being party to
this Agreement who is the holder of a Second Tier Supply Licence;
"Second Tier Suppliers' Non-Pooled Generation System Charge"
means the amount determined by the Executive Committee for the
purposes of Clause 34A.3;
"Second Tier Suppliers' System Charge" means the amount
determined by the Executive Committee for the purposes of Clause
34A.2;
"Second Tier Supply Licence" means a licence granted or to be
granted under section 6(2)(a) of the Act;
"Second Tier System" means any Metering System from which the
Settlement System Administrator or any Second Tier Agent is
required to collect, aggregate, adjust or transmit data for the
purposes of a supply pursuant to a Second Tier Supply Licence;
Secretary" means the person for the time being and from time to
time holding office as secretary of the Executive Committee;
"Secretary of State" has the meaning given to that term in the
Act;
"Security Cover" has the meaning given to that term in Section
1.1 of Schedule 11;
"Security Period" has the meaning given to that term in the Fuel
Security Code;
"Service Line" has the meaning given to that term in Section 1.1
of Schedule 4;
"Settlement" means the operation of the Settlement System under
this Agreement;
Settlement Account" has the meaning given to that term in Section
1.1 of
Schedule 11;
"Settlement Day" has the meaning given to that term in Part I of
Appendix 1 to Schedule 9;
Settlement GOAL" has the meaning given to that term in Appendix 2
to Schedule 9;
"Settlement Metering Data" shall mean Metered Data as defined in,
and used in accordance with Section 3 of Schedule 9 and relevant
metered data in accordance with Appendix 6 to Schedule 9 of this
Agreement, which is used for the purposes of Settlement;
"Settlement Period" has the meaning given to that term in Part I
of Appendix 1 to Schedule 9;
"Settlement System" means 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" means ESIS in its capacity as
Settlement System Administrator or any replacement therefor as
Settlement System Administrator from time to time appointed
pursuant to this Agreement;
Settlements Business" means the business of the Settlement System
Administrator in operating the Settlement System under this
Agreement;
"Site" means:
(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, or the point of
connection of a Non-Pooled Generator to a Distribution 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;
"Small Generator" means any Independent Generator with Generating
Units the aggregate Registered Capacity of which does not exceed
100MW;
"Software" means at any time all the computer programs, codes and
associated documents and materials which are at such time used by
or on behalf of the Settlement System Administrator and required
in the operation of the Settlement System;
"Specification" means at any time the computer specification(s)
giving effect to the Pool Rules and such other matters as may be
agreed between the Executive Committee and the Settlement System
Administrator at the time;
"SSA Arrangements" means this Agreement, the Service Lines, the
Agreed Procedures and the Codes of Practice;
"SSA System" means all operating systems, compilers and other
software necessary to or used for the operation or testing of the
Hardware and the Settlement System (excluding, for the avoidance
of doubt, Developed Application Software and Licensed Application
Software, each as defined in sub-section 10.1 of Schedule 4);
"Supplemental Agreement" means any agreement entered or to be
entered into between NGC and any User party to the Master
Connection and Use of System Agreement and expressed to be
supplemental thereto;
Supplier" means a person for the time being party to this
Agreement:
(i) who is a Founder Supplier; or
(ii) who was admitted as a Party in the capacity of a Supplier;
or
(iii) who, in accordance with Clause 3.10, has changed
capacity(ies) such that it participates as a Party in the
capacity of a Supplier,
and, where the expression is used in Part III, Part IV or Part XI
or Schedule 14 or 18, who is also or (where appropriate) is to
become a Pool Member;
"Supplier's Connection Agreement" means the agreement for
connection to any User System envisaged in Condition 8B of a PES
Licence and Condition 3 of a Second Tier Supply Licence;
"Supplier's System Charge" means the amount determined by the
Executive Committee in accordance with the provisions of Clause
34A.3;
Supplier's Use of System Agreement" means the agreement for use
of system envisaged in Condition 8B of a PES Licence and
Condition 3 of a Second Tier Supply Licence;
Synopsis of Metering Codes" means a synopsis maintained and
updated as necessary by the Executive Committee listing each Code
of Practice approved as such from time to time in accordance with
this Agreement;
"System" means any User System or the NGC Transmission System, as
the case may be;
System Ancillary Services" means Ancillary Services which are
required for System reasons and which must be provided by Users
(but in some cases only if a User has agreed to provide the same
under a Supplemental Agreement);
Tariff" for any period of one year in respect of any Site (which
whenever used in this definition shall include all Qualifying
Sites) means the tariff approved by the Director and published by
the Executive Committee on or before that tariff becomes
effective and providing for amounts payable to Tariff Operators
of certain Sites in a class of which that Site is a member in
respect of the provision of installation and maintenance services
in respect of Communications Equipment; and the Relevant Tariff"
in respect of any Site (or Metering Equipment or Metering System
in respect of a Site) shall be the Tariff which is so expressed
by its terms to apply to that class of Sites to which such Site
so belongs;
Tariff Operator" means a Meter Operator Party which is an
Operator or which is appointed as the operator pursuant to an
agreement or an arrangement in respect of Metering Equipment at a
Qualifying Site;
"Third Quarter" means, in respect of any year, the months of
July, August and September;
Total Second Tier System Charges" means, in respect of any
Specified Accounting Period (as defined in Clause 34A.1), the
aggregate of the costs, expenses and charges incurred by all
Second Tier Agents in respect of the relevant Specified
Accounting Period and relating to the collection, aggregation,
adjustment and transmission of data from Second Tier Systems and
Non-Pooled Generation Systems or when the collection,
aggregation, adjustment and the transmission of data from Second
Tier Systems and NonPooled Generation Systems is performed by the
Settlement System Administrator the costs, expenses and charges
directly incurred by the Settlement System Administrator ~ the
deficit (if any) or (as the case may be) less the surplus (if
any) in the amount of Total Second Tier System Charges recovered
for the immediately preceding Specified Accounting Period carried
forward in accordance with the provisions of Clause 34A.5;
"Total System" means the NGC Transmission System and all User
Systems in England and Wales;
"Total Votes" means, in relation to a Pool Member, the number of
votes to which such Pool Member is entitled pursuant to Clause
11.7;
"Trading Site" shall be determined in accordance with Schedule
17;
"Transmission Licence" means a licence granted or to be granted
under section 6(1)(b) of the Act, the authorized area of which is
England and Wales or any part of either thereof;
TW means terrawatt;
"TWh" means terrawatt-hours;
Undertaking" has the meaning given to that term 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
the date of this Agreement, as if such latter section were in
force at such date;
User" means a term utilised in various sections of the Grid Code
to refer to a person using the NGC Transmission System and
includes an Externally Interconnected Party, all as more
particularly identified in each section of the Grid Code
concerned;
"User Site" means a site owned (or occupied pursuant to a lease,
licence or other agreement) by a User in which there is a
Connection Point;
"User System" means:
(i)other than in relation to an External Pool Member or an Externally
Interconnected Party, 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 (as defined in the
Grid Code) 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; and
(ii) in relation to an External Pool Member or an Externally
Interconnected Party, the External System connected to the
relevant External Interconnection:
"VAr" means voltamperes reactive;
"Votes Calculation Period" means:
(i)in relation to the First Quarter in any year, the Third
Quarter in the immediately preceding year;
(ii)in relation to the Second Quarter in any year, the Fourth
Quarter in the immediately preceding year;
(iii)in relation to the Third Quarter in any year, the First
Quarter of the same year; and
(iv)in relation to the Fourth Quarter in any year, the Second
Quarter in the same year;
"Weighted Votes" means, in relation to a Pool Member, the number
of votes to which such Pool Member is entitled pursuant to Clause
11.2;
"Wh" means watt-hours;
"Working day" has the meaning given to that term in the Act; and
"Works Programme Manager" has the meaning given to that term in
Clause 5.13.
1.2Construction of certain references: In this Agreement,
except where the context otherwise requires, any reference to:
1.2.1 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 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;
1.2.2 another agreement or any deed or other instrument shall be
construed as a reference to that other agreement, deed or other
instrument as the same may have been, or may from time to time
be, amended, varied, supplemented or novated;
1.2.3 an "affiliate" means, in relation to any person, any
holding company or subsidiary of such person or any subsidiary of
a holding company of 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 latter section is
not in force at the date of this Agreement, as if such latter section
were in force at such date;
1.2.4a "Business Day" means any week day (other than a Saturday)
on which banks are open for domestic business in the City of
London;
1.2.5 a A day" means a period of 24 hours (or such other number
of hours as may be relevant in the case of changes for daylight
saving) ending at 12.00 midnight;
1.2.6a holding company" means, in relation to any person, a
holding company of such person within the meaning given to that
term in Clause 1.2.3;
1.2.7 a "month" means a calendar month;
1.2.8 a Person" includes any individual, partnership, firm,
company, corporation, joint venture, trust, association,
organization or other entity, in each case whether or not having
separate legal personality;
1.2.9 a "related undertaking" means, in relation to any person,
any undertaking in which such person has a participating interest
as deemed 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;
1.2.10 a Subsidiary" means, in relation to any person, a
subsidiary of such person within the meaning given to that term
in Clause 1.2.3; and
1.2.11 a "year" means a calendar year.
For all purposes of this Agreement no Party shall be an associate
or a related undertaking of any other Party only by reason of all
or any of the share capital of any Party being owned directly or
indirectly by the Secretary of State.
1.3 Interpretation:
1.3.1 In this Agreement:
(a)references to the masculine shall include the feminine
and references in the singular shall include references in the
plural and vice versa;
(b) references to the word "include" or "including" are to be
construed without limitation;
(c) references to time are to London time;
(d) except where the context otherwise requires, references to a
particular Part, Clause, sub-clause, paragraph, sub-paragraph or
Schedule shall be a reference to that Part, Clause, sub-clause,
paragraph, sub-paragraph or Schedule in or to this Agreement;
(e) except where the context otherwise requires, references in a
Schedule to a particular Section, sub-section, Annex or Appendix
shall be a reference to that Section, sub-section, Annex or
Appendix in or to that Schedule; and
(f) the table of contents, the headings to each of the Parts,
Clauses, sub-clauses, paragraphs, sub-paragraphs, Schedules,
Sections, sub-sections, Annexes and Appendices are inserted for
convenience only and shall be ignored in construing this
Agreement.
1.3.2 With respect to Part XV of and Schedule 21 to this
Agreement (but not elsewhere or otherwise) :
(a) in the event that any person is required to give or is
entitled to withhold its consent or approval to terms and
conditions of this Agreement or an Agreed Procedure or Code of
Practice or to any
other act, matter or thing under or referred to in this Agreement
or has agreed to revise such terms and conditions or an Agreed
Procedure or Code of Practice or any dispensation therefrom,
such person shall act in good faith and be reasonable in giving
or withholding of such consent or approval or in imposing
conditions to such consent or approval or in agreeing revised
terms and conditions of Part XV of or Schedule 21 to this
Agreement or any Agreed Procedure or Code of Practice; and
(b) where any person is required to perform any act or give any
consent or notification or do any other thing, it shall, in the
absence of any specified time limit, perform, give or do or (as
the
case may be) notify its withholding of its consent or approval to
the same as soon as is reasonably practicable in all the
circumstances.
1.4Hierarchy: If the provisions of an Agreed Procedure, a
Code of Practice, a Service Line or the Development Policies are
inconsistent with the provisions of this Agreement, the provisions of
this Agreement shall prevail to the extent of such inconsistency. If the
provisions of a Service Line are inconsistent with the provisions of an
Agreed Procedure or a Code of Practice, the provisions of the
Service Line shall prevail to the extent of such inconsistency.
1.5(a)The Parties undertake to review the Agreed Procedures, the
Codes of Practice and the Service Lines by no later than the date
(the "Review End Date") falling 30 days after the date on which
this Clause 1.5 takes effect in accordance with a workplan in
form and content agreed by the Executive Committee and the
Settlement System Administrator as at the date on which this
Clause 1.5 takes effect, such workplan to include the principle
that ESIS will provide discussion drafts of the Service Lines to
the Executive Committee and that these redrafts will then be the
subject of the joint review by ESIS and the Executive Committee.
(b) In reviewing the Agreed Procedures, the Codes of Practice and
the Service Lines:
(i) the product of each Service Line shall remain unaltered and
if any Agreed Procedure or Code of Practice shall have a product
which is part of the current working practice of ESIS but which
is not currently in a Service Line, that product shall be
incorporated into the relevant Service Line;
(ii)subject to (i) above, each of the Agreed Procedures, the
Codes of Practice and the Service Lines shall be brought into
line with Parties' working practices current at the date on which
this Clause 1.5 takes effect and made consistent inter se.
(c) Each of the Parties undertakes to comply at all times with
its obligations under or pursuant to the Service Lines
notwithstanding that the same are being reviewed as provided in
this Clause 1.5.
(d)
(i) Each of the Parties undertakes to comply at all times with
the Agreed Procedures and the Codes of Practice insofar as
applicable to such Party provided that:
(A) subject to (B) below, pending completion of the review of
the Agreed Procedures and Codes of Practice pursuant to this
Clause 1.5, if Parties' working practices current at the
date on which this Clause 1.5 takes effect are inconsistent with
the terms of any Agreed Procedure or Code of Practice, such
working practices shall prevail (but without prejudice and
subject to the requirements of Clause 1.5(b)(i)); and
(B) if the review of a Service Line, Agreed Procedure or Code of
Practice pursuant to this Clause 1.5 is not completed by the
Review End Date then, until it is completed, the Parties shall
continue to comply with the Parties' working practices then
current.
(ii)The Executive Committee shall provide copies of the
Agreed Procedures and Codes of Practice to a Party upon request.
(e)Nothing in this Clause 1.5 shall affect Clause 1.4 or any
other review of Agreed Procedures, Codes of Practice or Service Lines
required or permitted elsewhere pursuant to this Agreement.
1.6Obligation on Generators with respect to Availability
Declarations: In respect of each of its Centrally Despatched Generating
Units a Generator shall submit an Availability Declaration or a re-declared
Availability Declaration to ensure that its Genset Offered Availability and
Genset Re-Offered Availability do not exceed at any time the maximum
Gross/Net generation which it, acting as a prudent operator using Good
Industry Practice, would reasonably expect to achieve if such Centrally
Despatched Generating Unit were to be despatched at that level.
In this Clause 1.6 capitalised terms not defined in Clause 1.1
shall have the respective meanings given to them in the Pool Rules.
1.71998: The provisions of Schedule 22 shall have effect.
1.81998 Framework Agreement: The Parties and the Meter
Operator parties agree that, to accommodate the removal of the franchise
limit generally contained in Condition 2 of the Second Tier Supply Licences
scheduled for 31st March, 1998 (the "1998 Programme"), changes may be needed
to this Agreement. The Parties and Meter Operator Parties therefore
authorise the Chief Executive to maintain a document (the "1998 Framework
Agreement") which shall contain points of principle and text relating to the
implementation of the 1998 Programme which have been approved in principle
by either the Executive Committee or Pool Members in general meeting. It is
the intention of Pool Members that the 1998 Framework Agreement will be
revised as further principles and/or text are agreed by the Executive
Committee or Pool Members in general meeting so that, in good time before
31st March, 1998, the 1998 Framework Agreement will contain all text
necessary to be included in this Agreement in order to implement the
1998 Programme. Notwithstanding the Agreement of Pool Members or the.
Executive Committee to the inclusion of such principles and/or text
in the 1998 Framework Agreement, it is agreed by the Parties and Meter
Operator Parties that no part of the 1998 Framework Agreement shall have
effect or shall alter, amend or replace any part of this Agreement until
included in this Agreement by way of a supplemental agreement hereto and
the process in this Clause 1.8 shall not bind or commit any Party or
Meter Operator Party or otherwise affect in any way the rights and
discretions of any Party or Meter Operator Party to withhold or
qualify its agreement to any supplemental agreement to this Agreement.
2.THE EFFECTIVE DATE
Commencement: The rights and obligations of each of the Parties
under this Agreement shall commence on the Effective Date.
3.ADDITIONAL PARTIES
3.1 General: Subject to the following provisions of this Clause
3, the Parties shall admit as an additional party to this Agreement
any person (the New Party") (not, for the avoidance of doubt, being
a successor Settlement System Administrator, Pool Funds Administrator,
Grid Operator or Ancillary Services Provider, to which the provisions of
Clause 3.11, 3.12, 3.13 or, as the case may be, 3.14 apply) who applies
to be admitted, in the capacity or, as the case may be, capacities requested
by the New Party.
3.2 Admission Application: A New Party wishing to be admitted as
an additional party to this Agreement shall complete an Admission Application
and shall deliver it to the Executive Committee together with the fee
(which shall be non refundable) and other documents (if any) therein
specified.
3.3Executive Committee response:
3.3.1 Upon receipt of any Admission Application duly completed
the Executive Committee shall notify (for information only) all
Parties and the Director of such receipt and of the name of the
New Party.
3.3.2 Within 60 days after receipt of a duly completed Admission
Application from a New Party the Executive Committee shall notify
the New Party and the Director either:
(a)that the New Party shall be admitted as a Party, in which
event the provisions of Clause 3.6 shall apply; or
(b) that the Executive Committee requires the New Party to
produce evidence satisfactory to the Executive Committee ("Additional
Evidence") demonstrating the New Party's fulfilment of the
admission conditions relevant to it set out in its Admission
Application, in which event the provisions of Clause 3.4 shall
apply.
if the Executive Committee shall fail so to notify the New Party
and the Director, the New Party may within 28 days after the
expiry of the said 60 day period refer the matter to the Director
pursuant to Clause 3.5, in which event the provisions of that
Clause shall apply.
3.4Additional Evidence: Within 28 days (or such longer period
as the Executive Committee in its absolute discretion may allow) after the
Executive Committee has given notice pursuant to Clause 3.3.2(b) the New
Party shall:
3.4.1 provide the Executive Committee with the Additional
Evidence, in which event the provisions of Clause 3.6 shall apply; or
3.4.2 refer the matter to the Director pursuant to Clause 3.5, in
which event the provisions of that Clause shall apply,
failing which the New Party's application for admission shall
lapse and be of no effect and the New Party shall not be, and
shall not be entitled to be, admitted as a Party consequent upon
such application (but without prejudice to any new application
for admission it may make thereafter).
3.5Reference to the Director:
3.5.1 If:
(a)any dispute shall arise between the Executive Committee
and a New Party over whether the New Party has fulfilled the
admission conditions relevant to it; or
(b)the Executive Committee shall have failed to notify the
New Party as provided in Clause 3.3 within the 60 day period therein
specified,
the issue of whether the New Party has fulfilled the admission
conditions relevant to it may be referred by way of written
application of the New Party, copied to the Executive Committee,
to the Director for determination. The determination of the
Director, which shall be made within 28 days after receipt of the
said written application and shall be to the effect set out in
paragraph (a) or (b) of Clause 3.5.2, shall be final and binding
for all purposes. The Director shall publish reasons supporting
his determination.
3.5.2
(a) If the determination is to the effect that the New Party has
fulfilled the said admission conditions, the New Party shall be
admitted and the provisions of Clause 3.6 shall apply.
(b) If the determination is to the effect that the New Party has
not fulfilled the said admission conditions, the New Party's
application for admission shall lapse and be of no effect and the
New Party shall not be, and shall not be entitled to be,
admitted as a Party consequent upon such application (but without
prejudice to any new application it may make thereafter).
3.6Admission: If:
3.6.1 the Executive Committee shall notify the New Party and the
Director as provided in Clause 3.3.2(a); or
3.6.2 following a request for Additional Information pursuant to
Clause 3.3.2(b), the New Party provides the same within the
period specified in Clause 3.4; or
3.6.3 the New Party is to be admitted as a Party pursuant to
Clause 3.5,
the Executive Committee shall forthwith prepare or cause to be
prepared an Accession Agreement. Subject to the Executive
Committee making all notifications and filings (if any) required
of it for regulatory purposes and obtaining all regulatory
consents and approvals (if any) required to be obtained by it,
the Executive Committee shall instruct the Chief Executive or
another person authorised by the Executive Committee for the
purpose to prepare an Accession Agreement and to sign and deliver
the Accession Agreement on behalf of all Parties other than the
New Party and the New Party shall also execute and deliver the
Accession Agreement and, on and subject to the terms and
conditions of the Accession Agreement, the New Party shall become
a Party for all purposes of this Agreement with effect from the
date specified in such Accession Agreement (and, if no such date
is so specified, the date of such Accession Agreement). The New
Party shall pay all costs and expenses associated with the
preparation, execution and delivery of its Accession Agreement.
Each Patty hereby authorizes and instructs the Chief Executive
and each person authorized for the purpose by the Executive
Committee to sign on its behalf Accession Agreements and
undertakes not to withdraw, qualify or revoke such authority and
instruction at any dime. The Executive Committee shall promptly
notify all Parties and the Director of the execution and delivery
of each Accession Agreement.
3.7 Additional Agreements: Upon and as a condition of admission
as a Party, a New Party shall execute and deliver such further
agreements and documents and shall do all such other acts,
matters and things as the Executive Committee may reasonably
require.
3.8Application fees: All fees received by the Executive
Committee in respect of any application by a New Party to become
a Party shall be used to defray the costs and expenses of the
Executive Committee and shall be paid to such account as the
Executive Committee may direct. The application fee shall be pounds 250
or such other amount as the Executive Committee may, with the
prior approval of the Director, from time to time prescribe.
3.9Compliance: Each Party shall procure that her so long as
it is a Party it shall at all times satisfy or otherwise comply
with the admission conditions set out in its Admission
Application applicable to it (and/or such further or other
conditions as the Executive Committee may from time to time
reasonably specify) and upon request from time to time shall
promptly provide the Executive Committee with evidence reasonably
satisfactory to the Executive Committee of such satisfaction and
compliance.
3.10Change of capacities:
3.10.1 Any Founder Generator, any Founder Supplier, any
Externally Interconnected Party and any Party admitted as an
additional party to this Agreement pursuant to this Clause 3 may,
upon application to the Executive Committee and satisfaction of
such conditions (if any) as the Executive Committee may reasonably
require, change the capacity(ies) in which it participates as a Party.
3.10.2 If upon receipt of any Admission Application the Executive
Committee shall consider that the New Party should either:
(a) not be admitted as a Party in the capacity in which it has
applied so to be admitted but should be admitted in another
capacity; or
(b) be admitted both in the capacity in which it has applied so
to be admitted and in another capacity,
then the Executive Committee shall within the period specified in
Clause 3.3.2 notify the New Party and the Director accordingly
and shall specify what, if any, additional evidence the Executive
Committee requires the New Party to produce to demonstrate its
fulfillment of the admission conditions relevant to its admission
in such other capacity(ies). The provisions of Clauses 3.4, 3.5
and 3.6 shall apply mutatis mutandis but as if the references
therein to Additional Evidence were read and construed as
references to the said additional evidence.
3.11 Successor Settlement System Administrator: Any successor
Settlement System Administrator requiring to be admitted as a
Party in that capacity shall, upon application to the Executive
Committee, be so admitted by way of Accession Agreement modified
insofar as is necessary to take account of the capacity in which
such successor is to be admitted. The provisions of Clause 3.6
shall apply mutatis mutandis to any such admission.
3.12 Successor Pool Funds Administrator: Any successor Pool
Funds Administrator appointed in accordance with the provisions
of Schedule 15 shall be admitted as a Party in that capacity at
such time and on such terms and conditions as the Executive
Committee may reasonably require.
3.13 Successor Grid Operator: Any successor Grid Operator
requiring to be admitted as a Party in that capacity shall, upon
application to the Executive Committee, be so admitted by way of
Accession Agreement modified insofar as is necessary to take
account of the capacity in which such successor is to be
admitted. The provisions of Clause 3.6 shall apply mutatis
mutandis to any such admission.
3.14 Successor Ancillary Services Provider: Any successor
Ancillary Services Provider requiring to be admitted as a Party
in that capacity shall, upon application to the Executive
Committee, be so admitted by way of Accession Agreement modified
insofar as is necessary to take account of the capacity in which
such successor is to be admitted. The provisions of Clause 3.6
shall apply mutatis mutandis to any such admission.
PART II
OBJECTS, REVIEW AND PRIORITY
4.OBJECTS AND PURPOSE OF THE AGREEMENT
4.1Principal objects and purpose: The principal objects and
purpose of this Agreement are:
4.1.1 to provide a set of rules which, when implemented, will
quantify:
(a)the financial obligations owed by certain Pool Members to
other Pool Members in respect of the former Pool Members' purchases
of electricity produced or delivered by such other Pool Members;
and
(b)the financial obligations owed by certain Pool Members to
the Ancillary Services Provider in respect of the purchase of
Ancillary Services;
4.1.2 to establish, maintain and operate efficiently computer and
other systems (whether or not computer related) which will
implement the rules referred to in Clause 4.1.1; and
4.1.3 by following the procedures for amending this Agreement set
out or referred to herein, to keep under review and promote the
implementation, administration and development of the systems
referred to in Clause 4.1.2 in a way which takes into account,
and balances, the respective interests of actual and potential
generators and suppliers of electricity and of consumers of
electricity and providers of Ancillary Services.
4.2 Interpretation: In the construction and interpretation of
this Agreement due regard shall be had to the principal objects and
purpose set out in Clause 4.1.
4.3 Exercise of rights: In exercising its rights under this
Agreement, each Party shall exercise and enforce such rights and
perform its obligations in good faith having due regard both to its
own legitimate commercial interests and the principal objects and purpose
set out in Clause 4.1.
TRANSITIONAL ARRANGEMENTS AND REVIEWS
5.1[Not used].
Transitional Arrangements
5.2 Transitional Arrangements: The Parties acknowledge and agree
that the arrangements described or referred to in the first column of
Schedule 12
("Transitional Arrangements") have been designed as transitional
arrangements only. The Parties undertake with each other to use
all reasonable endeavours (including, where appropriate, through
their representation on the Executive Committee) to give effect
to the principle (the New Principle") set opposite the relevant
Transitional Arrangement in the second column of Schedule 12 by
the date set opposite such Transitional Arrangement in the third
column of that Schedule. Clauses 5.9 to 5.14 (inclusive) shall
have effect in relation to all Transitional Arrangements.
Regular Reviews
5.3Conduct of reviews: Within a period (the "Review Period")
of six months beginning on each of the dates referred to in
Clause 5.5 (the Review Dates") the Executive Committee shall
review in consultation with the Settlement System Administrator
and the Pool Auditor the operation in practice of this Agreement
and the Settlement System to assess whether the principal objects
and purpose set out in Clause 4.1 are being or could be better
achieved. In carrying out each such review the Executive
Committee shall give due consideration to any matter referred to
it by any Party, the Pool Auditor, the Director or the Secretary
of State. Clauses 5.5 to 5.15 (inclusive) shall have effect in
relation to the reviews described in this Clause 5.3, and such
reviews shall be in addition to the reviews associated with the
Transitional Arrangements.
5.4[Not used].
5.5Review Dates: The Review Dates are:
5.5.1those dates falling 12 and 24 months after the Effective
Date;
5.5.2those dates falling on the last day of each successive
period of two years, the first such period beginning on 30th
March, 1992; and
5.5.3such other date(s) as the Pool Members in general meeting
may from time to time determine.
5.6 Reports: Promptly (and in any event within one month) after
the end of each Review Period the Executive Committee shall prepare
or cause to be prepared a written report of its review containing such
matters as are referred to in Clause
5.7 and a copy of such report shall be sent to each Party, the
Pool Auditor, the Director and the Secretary of State.
5.7 Content of reports: Each report referred to in Clause 5.6
shall set out:
5.7.1 the scope of the review conducted;
5.7.2the matters reviewed and the investigations and enquiries
made;
5.7.3 the findings of such review;
5.7.4the recommendations (if any) as to the changes to be made to
this Agreement and the Settlement System so as to achieve or
better to achieve the principal objects and purpose set out in
Clause 4.1;
5.7.5the effect which any such recommendation referred to in
Clause 5.7.4 would, if implemented, have on the role of the Pool
Auditor under this Agreement and any comments of the Pool Auditor
thereon;
5.7.6the financial effects (if any) which any such recommendation
referred to in Clause 5.7.4 would, if implemented, have on Pool
Members; and
5.7.7.such other matters as the Executive Committee shall
consider appropriate.
If any Committee Member shall disagree with any of the
recommendations made in any such report, such report shall set
out the reasons for such disagreement and any alternative
proposals of such Committee Member.
5.8 General Meeting approval: Within two months after the end of
each Review Period the Executive Committee shall convene an extraordinary
general meeting of Pool Members to consider and, if thought ft. approve
(in whole or in part) the recommendations (the "Recommendations") made in the
report referred to in Clause 5.6. If any Recommendation is so approved
(an "Approved Recommendation") then, subject to Clause 13.5, the
provisions of Clauses 5.9 to 5.14 (inclusive) shall have effect in relation
thereto. If any Recommendation is not so approved, no further action shall be
taken in respect thereof arising from such report.
Works Programme
5.9 Works Programme: In respect of each Transitional Arrangement
and each Approved Recommendation the Executive Committee shall:
5.9.1in the case of a Transitional Arrangement, by the date set
opposite such Transitional Arrangement in the fourth column of Schedule 12;
and
5.9.2in the case of an Approved Recommendation, by the date
stipulated by the Pool Members in general meeting or (if no date
is stipulated) within a reasonable time,
prepare (or cause to be prepared) in consultation with the Pool
Auditor a programme (the Works Programme", which expression shall
include any associated documentation hereinafter referred to in
this Clause 5.9) which programme shall (unless otherwise resolved
by the Executive Committee after consultation with those Parties
not being Pool Members who might reasonably be expected to be
affected by the Works Programme) include:
(a) a detailed timetable for the implementation of the New
Principle or (as the case may be) the Approved Recommendation,
including (where appropriate) a series of milestone and/or target
dates for the achievement of specified parts of such programme;
(b) a full explanation of how such New Principle or Approved
Recommendation is to be implemented, including a detailed
analysis of such New Principle or Approved Recommendation and the
objectives which it is intended to achieve, the work involved,
the resources required and the amendments likely to be required
to this Agreement, the Specification and to any other relevant
agreement or document and of any changes required to be made to
the Software or the Hardware; and
(c) an estimate of the cost of such implementation supported by a
breakdown of such cost and a detailed commentary on each element
thereof together with proposals for the recovery of such cost,
and (unless otherwise resolved by the Executive Committee after
consultation with those Parties not being Pool Members who might
reasonably be expected to be affected by the Works Programme)
shall be supported by:
(i)any draft legal documentation required to give effect to
the amendments referred to in paragraph (b) above; and
(ii)the outline form of agreement appointing the Works
Programme Manager as project manager for the implementation of the Works
Programme (which form shall, where the Settlement System
Administrator is or, in the Executive Committee's opinion, is
likely to be the Works Programme Manager or where the Works Programme
involves changes to the Specification or the Software, be
prepared in consultation with the Settlement System Administrator).
5.10 Review: The Executive Committee shall arrange for a copy of
each Works Programme to be sent to each Party, the Pool Auditor
and the Director for review under cover of a letter setting a
deadline for receipt of comments on such Works Programme (being
no earlier than one month and no later than two months after the
date of despatch of copies of the Works Programme for comment)
and indicating to whom such comments should be addressed. Within
such time as is reasonable after the deadline set for receipt of
comments but, in any event, within two months thereafter, the
Executive Committee shall revise (or cause to be revised) the
Works Programme to take into account (so far as it consider
desirable) the comments received from the Parties, the Pool
Auditor and the Director.
5.11 General Meeting referral: As soon as a Works Programme has
been revised as provided in Clause 5.10 (or, if the Executive
Committee considers no such revision desirable, within one month
after the deadline set under Clause 5.10 for receipt of comments
on such Works Programme), the Executive Committee shall convene an
extraordinary general meeting of Pool Members to consider and,
if thought fit, approve such Works Programme (with or without amendment).
5.12 Approval of the Works Programme:
5.12.1A Works Programme shall not be given effect to unless and
until approved by the Pool Members in general meeting.
Additionally, if a Works Programme or any part thereof shall
involve a matter requiring the approval of Generators or
Suppliers in separate general meeting under Clause 13.2 (a "Class
Issue"), then such Works Programme shall not be given effect to
unless and until approved by the relevant class of Pool Members.
If a Works Programme shall not be duly approved (with or without
amendment), then the Executive Committee shall revise (or cause
to be revised) the same to take account of the wishes of the Pool
Members in general meeting and/or (as the case may be) in
separate general meeting and thereafter such revised Works
Programme shall be re-submitted to the Pool Members in general
meeting and, if such revised Works Programme or any part thereof
shall involve a Class Issue, to the relevant Pool Members in
separate general meeting, in each case for approval (with or
without amendment). This revision and re-submission procedure
shall be repeated as often as may be required until such time as
the Pool Members in general meeting and, as necessary, in
separate general meetings approve the Works Programme.
5.12.2Notwithstanding the provisions of Clause 5.12.1, the
Executive Committee and each Party shall be entitled at any time
prior to the approval of a Works Programme by the Pool Members in
general meeting and (where required under Clause 5.12.1) by the
relevant class of Pool Members in separate general meeting to
apply to the Director requesting that the implementation of the
New Principle or (as the case may be) the Approved Recommendation
should not proceed or should not proceed in the manner set out by
such Works Programme and, in such event, effect shall not be
given to the Works Programme pending the determination of the
Director and then (subject as provided in Clause 5.14) only to
the extent (if at all) that the Director in his absolute
discretion shall approve.
5.13 Implementation: The implementation of all Works Programmes
shall be project managed by the Settlement System Administrator
or (if the Settlement System Administrator is unable or unwilling
so to project manage) such other person as the Executive
Committee shall nominate (the "Works Programme Manager") upon and
subject to such terms and conditions as are agreed by the
Executive Committee with the Works Programme Manager and the cost
thereof recovered in accordance with the terms of the relevant
Works Programme. Cost overruns, liquidated damages and all other
financing costs, incentives and penalties shall be financed,
levied and/or paid at the times and in the manner provided for in
such Works Programme. Costs incurred by the Settlement System
Administrator shall be recovered in accordance with the Charging
Procedure. The Executive Committee shall require the Works
Programme Manager to prepare and submit to the Executive
Committee no less frequently than quarterly a written report
giving a detailed commentary on the progress of implementing each
Works Programme, including a comparison of actual progress made
against the timetable set by such Works Programme and of actual
costs incurred against budgeted costs.
5.14 Pool Auditor's approval: At the completion of the work
required by each Works Programme but prior to effect being given
to the New Principle or (as the case may be) the Approved
Recommendation the Executive Committee shall request the Pool
Auditor to issue an opinion in form and content satisfactory to
the Executive Committee confirming to all Parties and the
Director that the Pool Auditor has inspected and tested the
arrangements giving effect to the New Principle or (as the case
may be) the Approved Recommendation and is satisfied (without
qualification or reservation) that such arrangements do give
effect to the New Principle or Approved Recommendation in the
manner required by the Works Programme. The Executive Committee
shall use all reasonable endeavours to make (or procure to be
made) such modifications to such arrangements as are necessary to
enable the Pool Auditor to give its opinion without qualification
or reservation, and the costs of any such modification shall be
recovered in accordance with the relevant Works Programme. If the
Pool Auditor's opinion can be given only with qualification or
reservation, the Executive Committee shall convene an
extraordinary general meeting of Pool Members and, where required
under Clause 5.12.1, a separate general meeting of Generators
and/or (as the case may be) Suppliers to consider and, if thought
fit, approve such arrangements in the knowledge that the Pool
Auditor's opinion can be given only with qualification or
reservation. Subject to the provisions of Clause 6, each of the
Parties undertakes with each of the other Parties promptly
following the issue of the Pool Auditor's opinion (but, where
such opinion has a qualification or reservation, only after
approval as aforesaid by the Pool Members in general meeting and,
where required under Clause 5.12.1, by the relevant class of Pool
Members in separate general meeting) to execute and deliver any
amending agreement or other documents and to take such other
action as may reasonably be required of it to give effect to such
arrangements, in any such case at its own cost and expense.
5.15 Secretary of State's approval: In respect of the Secretary
of State's decision as set out in his letter of 11th December,
1991 to the Chief Executive concerning the selling of the output
of plant by Generators with on-site demand under this Agreement:
- -
5.15.1each of the Parties undertakes with each of the other
Parties forthwith to take all such steps (including as to the
execution of any document) as may be required to give full force
and effect to the decision of the Secretary of State. Each of the
Parties shall take all such steps at its own cost and expense
except that the Settlement System Administrator, the Pool Funds
Administrator and the Ancillary Services Provider shall be entitled
to recover any such costs and expenses in accordance with the terms
of this Agreement; and
5.15.2each of the Parties acknowledges and agrees that damages
would not be an adequate remedy for any failure by it to give in
accordance with Clause 5.15.1 full force and effect to the
decision of the Secretary of State pursuant to this Clause 5.15
and that, accordingly, each of the other Parties and the Director
shall be entitled to the remedies of injunction, specific
performance and other equitable relief for any threatened or
actual such failure and that no proof of special damages shall be
necessary for enforcement.
5.16 Director's modifications:
5.16.1Where the Monopolies and Mergers Commission has issued a
report on a reference under section 12 of the Act which:
(a)includes conclusions to the effect that any of the matters
specified in the reference operate, or may be expected to
operate, against the public interest;
(b)specifies effects adverse to the public interest which
those matters have or may be expected to have;
(c)includes conclusions to the effect that those effects
could be remedied or prevented by modifications of the conditions of any
Licence and such modifications would require a change to the
Pooling and Settlement Agreement; and
(d)specifies modifications by which those effects could be
remedied or prevented,
the Director may, subject to the following provisions of this
Clause, require such modifications to this Agreement as are
requisite for the purpose of remedying or preventing the adverse
effect specified in the report.
5.16.2Before requiring modifications to be made pursuant to this
Clause, the Director shall have regard to the modifications
specified in the report. Further, the Director shall not, and
shall not be entitled to, require a modification to be made to
this Agreement which modification could not have been achieved
lawfully through a modification of one or more Licences
consequent upon the report (but as if, for this purpose, only
those Parties who are holders of Licences were parties to this
Agreement).
5.16.3Before requiring modifications to be made pursuant to this
Clause, the Director shall give notice:
(a)stating that he proposes to make the modifications and
setting out their effect;
(b)stating the reasons why he proposes to make the
modifications; and
(c)specifying the period (not being less than 28 days from
the date of publication of the notice) within which representations or
objections with respect to the proposed modifications may be
made,
and shall consider any representations or objections from any
person which are duly made and not withdrawn.
5.16.4A notice under Clause 5.16.3 shall be given:
(a)by publishing the notice in such manner as the Director
considers appropriate for the purpose of bringing the matters to which the
notice relates to the attention of persons likely to be affected
by the making of the modifications; and
(b)by serving a copy of the notice on each Party, the
Executive Committee and the Pool Auditor.
5.16.5After considering any representations or objections which
are duly made and not withdrawn pursuant to Clause 5.16.3, the
Director may by notice published as provided in Clause 5.16.4(a)
and served on those referred to in Clause 5.16.4(b) specify the
modifications to this Agreement which he requires to be made and
the date upon which such modifications are to take effect and
each of the Parties undertakes with each other of the Parties
promptly to take all such steps as may be necessary to give full
force and effect to the modifications so required. Any costs
incurred by the Settlement System Administrator in giving effect
to such modifications shall be recovered in accordance with the
Charging Procedure.
6. ENTRENCHED PROVISIONS, INCONSISTENCIES AND CONFLICTS
Entrenched Provisions
6.1Secretary of State's consent: The Parties acknowledge and
agree that, notwithstanding any other provision of this Agreement, no
amendment to or variation of any of the matters dealt with in any of the
following provisions of this Agreement shall take effect without the
prior written consent of the Secretary of State:
6.1.1 Clause 5.15, Part XIV and Section 28 of Schedule 9; and
6.1.2 this Clause 6.1.
6.2 Director's consent: The Parties acknowledge and agree that,
notwithstanding any other provision of this Agreement, no
amendment to or variation of any of the matters dealt with in any
of the following provisions of this Agreement shall take effect
without the prior written consent of the Director:
6.2.1(a)Clauses 3.5, 4, 5.12.2, 5.15, 5.16, 6.11, 11, 13, 15.6,
53.6, 67.3, 67.4, 83, 84 and 85 and Section 8 of Schedule 14 and Section 7
of Schedule 20;
(b) sub-section 19.1 of Schedule 14; and
(c) paragraphs 1.4, 2.2.3, 3.3, 3.4, 3.7, 4.4.1, 6.4, 6.5, 17.3
and 22.5 of Schedule 21;
6.2.2without prejudice to Clause 6.2.3, the Pool.Rules or any of
them, other than an amendment or variation which:
(a) involves only a change of a technical nature in the systems,
rules and procedures contemplated by this Agreement; and
(b)will not increase the liability or decrease the rights of
any Party under this Agreement beyond what may reasonably be regarded
as de minimis in relation to such Party,
but in any event including Section 22 thereof;
6.2.3 any provision of this Agreement which requires or permits
any matter to be referred to the Director for approval, consent,
direction or decision or confers any rights or benefits upon the
Director; and
6.2.4 this Clause 6.2.
6.3 Settlement System Administrator's consent: The Parties
acknowledge and agree that, notwithstanding any other provision of
this Agreement, insofar as directly affects in any material respect
the rights, benefits, duties, responsibilities, liabilities and/or
obligations of the Settlement System Administrator no amendment
to or variation of any of the matters dealt with in any of the
following provisions of this Agreement shall take effect:
6.3.1without the prior written consent of the Settlement System
Administrator: -
(a) the definitions in Clause 1.1 of "Agreed Procedure",
"Charging Procedure", "Code of Practice", force Majeure", "Good
Industry Practice", "Hardware", "SSA Arrangements" and "SSA
System";
(b) Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 34.1, 34.2,
35.3, 35.6, 36.2, 37, 66, 68, 69, 74 and 78.2;
(c) Schedule 4;
(d)Sections 1.6 (and its application to any other Section of
Schedule 9), 1.7 and 3 of Schedule 9; and
(e)this Clause 6.3;
6.3.2without the prior written consent of the Settlement System
Administrator (such consent not to be unreasonably withheld or
delayed) :
(a)Clauses 18.1.2, 18.1.4, 19.5, 41, 45, 47.1, 47.3, 48.1,
48.2, 48.9, 60, 70, 71.1, 71.4 and 71.5;
(b) Part XXII (other than Clauses 74 and 78.2);
(c) Section 30 of, and Appendix 4 to, Schedule 9;
(d) Section 2(b) of Part C to Schedule 17; and
(e) paragraphs 4 to 16 (inclusive), 18, 19, 21 and 22 of Schedule
21.
6.4 Pool Funds Administrator's consent: The prior written
consent of the Pool Funds Administrator may be needed to certain
amendments to or variations of this Agreement, as provided in Schedule 15.
6.5 Grid Operator's consent: The Parties acknowledge and agree that,
notwithstanding any other provision of this Agreement, insofar as directly
affects in any material respect the rights, benefits, duties, responsibilities,
liabilities and/or obligations of the Grid Operator, no amendment to or
variation of any of the matters dealt with in any of the following provisions
shall take effect:
6.5.1without the prior written consent of the Grid Operator:
(a) Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 25, 37.3, 47 to 50
(inclusive), 66, 68, 69, 72, 74 and 78.2;
(b) sub-section 3.1 of Appendix 2 to Schedule 9; and
(c) this Clause 6.5; and
6.5.2without the prior written consent of the Grid Operator (such
consent not to be unreasonably withheld or delayed), any other
provision of this Agreement,
Provided that the references to Parties and to the Grid Operator
in this Clause 6.5 shall be construed as if they were references
to such terms prior to the creation of Meter Operator Parties and
the associated amendments to this Agreement, but this shall be
without limitation to any right of the Grid Operator to consent
to any amendment or variation to this Agreement under this Clause
6.5.
6.6 Ancillary Services Provider's consent: The Parties acknowledge and
agree that, notwithstanding any other provision of this Agreement, insofar
as directly affects in any material respect the rights, benefits, duties,
responsibilities, liabilities and/or obligations of the Ancillary Services
Provider, no amendment to or variation of any of the following provisions
shall take effect:
6.6.1 without the prior written consent of the Ancillary Services
Provider:
(a) Clauses 6.9, 7.3, 7.6, 9.5,10.9, 10.10,19.4, 25, 52.3, 66,
68, 69, 72, 74 and 78.2;
(b) Part XI and the provisions expressly incorporated therein by
reference;
(c) Sections 1.8, 23, 24.8 and 28 of Schedule 9; and
(d) this Clause 6.6; and
6.6.2without the prior written consent of the Ancillary Services
Provider (such consent not to be unreasonably withheld or
delayed), any other provision of this Agreement.
6.7 Amendments generally:
6.7.1The following provisions of this Clause 6.7 are without
prejudice to the rights, powers and privileges of the Secretary
of State and the Director under the Act or any Licence or
otherwise howsoever.
6.7.2In relation to Schedule 4 (including its Appendix), and save
as provided in Clause 6.7.3, where that Schedule provides for an
amendment to the SSA Arrangements, the Menus of Prices or the
Variation Menus (or any or any part thereof) to be agreed between
certain designated persons and those persons agree in writing the
amendment to be made, then the SSA Arrangements, the Menu of Prices or,
as the case may be, the Variation Menus (or the relevant one or part
thereof) shall be so amended without the need for any other Party to
execute or deliver any amending or confirmatory document and each Party
hereby consents to such amendments being made in such a manner
and undertakes not to withdraw that consent.
6.7.3In the following cases the amendment procedure set out in
Clause 6.7.2 shall itself be modified as hereinafter provided:
(a)if Schedule 4 refers to "formal documentation" being
agreed to give effect to the amendment, an amending agreement executed
by all Parties shall be required;
(b)if the consent of a particular person is required to be
obtained under Clauses 6.1 to 6.6 (inclusive), the amendment shall not
take effect until that consent has been obtained.
6.7.4 Subject to:
(a) any consent of a particular person required to be obtained
under Clauses 6.1 to 6.6 (inclusive) being obtained;
(b) the requirements of Clauses 6.7.5 and 13.2,
and save as provided otherwise in this Agreement, any amendment
to or variation of this Agreement shall be effective if approved
by Pool Members in general meeting pursuant to Clause 13.1 or
13.2 and all Parties agree promptly to execute and deliver all
agreements and other documentation and to do all such other acts,
matters and things as may be necessary to give effect to such
amendment or variation.
6.7.5Where any change is proposed to be made to this Agreement
which, if made:
(a)would introduce provisions dealing with matters not then
dealt with in or expressly contemplated by this Agreement; and
(b)would in any material respect directly affect the rights,
benefits, duties, responsibilities, liabilities and/or obligations under
this Agreement of the Settlement System Administrator, the Grid
Operator, the Ancillary Services Provider and/or any Externally
Interconnected Party,
such change shall not be made without the prior written consent
of the relevant one of them (in each case not to be unreasonably
withheld or delayed) provided that the reference to the Grid
Operator in this Clause 6.7.5 shall be construed as if it was a
reference to such term prior to the creation of Meter Operator Parties
and the associated amendments to this Agreement, but this shall be without
limitation to any right to consent to any amendment or variation of this
Agreement under this Clause 6.7.5.
Inconsistencies and Conflicts
6.8 Internal inconsistencies and conflicts: In the event of any
inconsistency or conflict:
6.8.1the Pool Rules shall prevail over the other provisions of
this Agreement (except Clause 4);
6.8.2the provisions of this Agreement shall prevail over the
Specification; and
6.8.3the Specification shall prevail over the Software,
and the Parties shall use all reasonable endeavours promptly to
secure the elimination of such inconsistency or conflict.
6.9 External inconsistencies and conflicts:
6.9.1Each of the Parties hereby acknowledges and agrees the
desirability of achieving and maintaining consistency and absence
of conflict between the provisions of this Agreement and the Grid
Code but recognises that, due principally to the different
functions and objectives of this Agreement and the Grid Code, the
fact that there may be Parties who are not bound by the Grid Code
and the different procedures in this Agreement and the Grid Code
for review of their respective terms, it will not in all
circumstances be possible to avoid inconsistency or conflict.
6.9.2Where at the Effective Date there is an inconsistency or
conflict between the provisions of this Agreement and the Grid
Code the Executive Committee shall first consider the matter and
make recommendations and thereafter the Parties shall negotiate
in good faith to eliminate such inconsistency and/or conflict
having regard to the different functions and objectives of the
Grid Code and this Agreement.
6.9.3Each of the Parties shall use its reasonable endeavours to
ensure that where any change to this Agreement is proposed to be
made which may reasonably be expected to require a change to the-
Grid Code (or vice versa) such change is brought by the Executive
Committee to the attention of the Grid Code Review Panel in good
time to enable it to consider what corresponding change, if any,
should be made to the Grid Code or (as the case may be) this
Agreement. In any such consideration, the Parties acknowledge and
agree that it would be desirable in the event of any
inconsistency or conflict between the provisions of this Agreement and
the Grid Code if regard were had by the Grid Code Review Panel to the
principles set out in Clause 6.9.4.
6.9.4The principles referred to in Clause 6.9.3 are that:
(a)where by reason of any inconsistency or conflict the security,
quality of supply and/or safe operation of the NGC Transmission
System under both normal and/or abnormal operating conditions
would necessarily be compromised and/or the Grid Operator
would necessarily be in breach of its obligations under the Act or
its Transmission Licence, the provisions of this Agreement should
be made to conform (to the extent of such inconsistency or
conflict) to those of the Grid Code; and
(b)in any other case, where by reason of such inconsistency or
conflict there is or is Likely to be a material financial effect on any
class of Pool Members or on all or a significant number of Pool
Members, the provisions of the Grid Code should be made to
conform (to the extent of such inconsistency or conflict) to those
of this Agreement.
6.9.5The Parties acknowledge that changes to the Grid Code are
required to be approved by the Director.
6.9.6Where there is any conflict or inconsistency between the
Grid Code and the Pool Rules, no Party shall be liable hereunder
or under the Grid Code as a result of complying with its
obligations under this Agreement or under the Grid Code.
6.10 Breaches of the Pool Rules: If at any time any Party
believes that there has been a breach of the Pool Rules, such
Party shall promptly report the same in writing to the Executive
Committee.
6.11 Director's requests: The Executive Committee shall:
(i)give due and prompt consideration to any matter referred
to it in writing by the Director;
(ii)advise the Director in writing of any decision or action
of the Executive Committee in relation to such matter.
(iii)provide the Director in writing with an explanation in
reasonable detail of the reasons for such decision or action; and
(iv)if reasonably requested by the Director (having regard,
in particular, to the resources available to the Executive Committee),
in relation to any proposal by the Director for a change to any
provision of this Agreement provide or procure the provision of advice
and assistance to the Director as soon as reasonably practicable as to the
implications of the change and the actions necessary to implement it
(including any relevant feasibility study).
PART III
POOL MEMBERSHIP AND GENERAL MEETINGS
7. INTRODUCTION
7.1 Obligations contractually binding: Each Pool Member
acknowledges and agrees that it is bound to each other Pool
Member as a matter of contract and will comply with its
obligations under this Agreement.
7.2 Externally Interconnected Parties: Each Externally
Interconnected Party acknowledges and agrees that it is bound to
each Pool Member as a matter of contract and undertakes to comply
with the Pool Rules so far as they may be applicable to it and
each Pool Member acknowledges and agrees that it is bound to each
Externally Interconnected Party as a matter of contract and will
comply with its obligations under this Agreement.
7.3 Parties not Pool Members: The Settlement System
Administrator, the Pool Funds Administrator, the Grid Operator
and the Ancillary Services Provider shall not be Pool Members and
shall not be bound as against other Pool Members or the Executive
Committee except as expressly provided for in this Agreement, the
Escrow Agreement and the Funds Transfer Agreement in their
respective roles as Settlement System Administrator, Pool Funds
Administrator, Grid Operator and Ancillary Services Provider.
7.4 Pool Rules:
7.4.1The Pool Rules as at 1st April, 1996 are set out in Schedule
9. The Settlement System calculations shall be carried out on the
basis of the Settlement System and the Pool Rules.
7.4.2The Pool Rules shall be developed under the control of the
Executive Committee. Subject to Clause 6, the Executive Committee
may at any time and from time to time change all or any of the
Pool Rules upon notification to all Parties and Meter Operator
Parties, and any such change shall be binding on all Parties and
Meter Operator Parties without further action being required on
the part of any person.
7.5 Pool Member's obligations:
7.5.1 Save as otherwise expressly provided in this Agreement,
the obligations of each Pool Member under this Agreement are
several and a Pool Member shall not be responsible for the
obligations or liabilities of any other Pool Member. The failure
of any Pool Member to carry out all or any of its obligations
under this Agreement shall not relieve any other Pool Member of
all or any of its obligations hereunder.
7.5.2 In respect of those obligations of a Pool Member (the
"Indemnifying Pool Member") under this Agreement which are
expressed to be several, the Indemnifying Pool Member shall
indemnify and keep indemnified each other Pool Member from and
against all losses, costs (including legal costs) and expenses
which such other Pool Member may suffer or incur as a result of
being held liable by operation of law (or contesting any such
liability) for the performance or non-performance of all or any
of such obligations of the Indemnifying Pool Member.
7.6 Information: In respect of all data and other information
which a Pool Member or an Externally Interconnected Party (not
being a Pool Member) is required to notify to the Settlement
System Administrator under or pursuant to this Agreement (other
than (i) Metered Data (as defined in paragraph 3.1.2 of Schedule
9) and (ii) pursuant to paragraph 2.3.2 of Schedule 9, the
relevant Pool Member or (as the case may be) Externally
Interconnected Party shall use all reasonable endeavours to
ensure that all such data and other information is complete and
accurate in all material respects.
8. POOL MEMBERSHIP
8.1 Initial Pool Members: The initial Pool Members shall be the
Founder Generators and the Founder Suppliers.
8.2 Additional Pool Members:
8.2.1Subject to the following provisions of this Clause 8.2 and
Clause 8.13 and to the fulfilment by the Party concerned of the
conditions set out or referred to in Clause 8.3 (the "Pool
Membership Conditions"), any Party shall, upon application to the
Executive Committee, be admitted as a Pool Member.
8.2.2 For the purposes of this Clause 8, "Party" shall include
any person who is applying to be admitted as a Party pursuant to
Clause 3 contemporaneously with being admitted as a Pool Member
but shall exclude the Settlement System Administrator, the Pool
Funds Administrator, the Grid Operator and the Ancillary Services
Provider.
8.2.3 Subject to Clause 8.2.4, the admission of a Party as a Pool
Member shall take effect on the date (the "Admission Date")
specified by the Executive Committee (with the prior agreement of
the Settlement System Administrator) in a notice given by the
Executive Committee to the relevant Party no later than 28 days
after the Satisfaction Date, provided that the Admission Date
shall be a date falling no earlier than the Satisfaction Date and
(unless otherwise agreed by the Executive Committee, the
Settlement System Administrator and such Party) no later than 90
days after the Satisfaction Date. In default of such notification
being given by the Executive Committee within the said 28 days,
the admission shall take effect on the day falling 35 days after
the Satisfaction Date. For the purposes of this Clause, the
"Satisfaction D n shall be the day on which the last of the Pool
Membership Conditions required to be fulfilled by such Party
shall have been fulfilled by it.
8.2.4 No person shall be admitted as a Pool Member unless prior
to or contemporaneously with such admission it shall have been or
(as the case may be) shall be admitted as a Party.
8.2.5 Prior to a Party's admission as a Pool Member the Executive
Committee shall, where appropriate, determine and notify the
relevant Party of the amount of Security Cover (if any) to be
provided by such Party.
8.3 Pool Membership Conditions:
8.3.1 Where a person has been admitted as a Party pursuant to
Clause 3 otherwise than contemporaneously with being admitted as
a Pool Member pursuant to Clause 8, the Pool Membership
Conditions applicable to it shall (unless otherwise determined by
the Director upon the application of such person or the Executive
Committee) be those that would have been applicable to it if it
had applied to be admitted as a Pool Member at the date of its
admission as a Party and, subject as aforesaid, such person shall
not be required to fulfil any further or other Pool Membership
Conditions introduced after such date unless the applicant
notifies the Executive Committee in writing prior to or
contemporaneously with its application for admission as a Pool
Member that it wishes such further or other conditions to apply,
in which case the Pool Membership Conditions applicable to it
shall (subject as aforesaid) be those applicable on the date of
its application for admission as a Pool Member.
8.3.2 The Pool Membership Conditions required to be fulfilled by
a Party prior to its admission as a Pool Member are:
(a) the due completion by the Party and the delivery to the
Executive Committee of a Pool Membership Application;
(b) in respect of any Metering System required to be taken into
account for the purposes of Settlement and which relates to the
Party, the provision of evidence reasonably satisfactory to the
Executive Committee that:
(i) there is a Registrant and an Operator for such Metering
System;
(ii) such Registrant has provided to the Settlement System
Administrator the information required for standing data purposes
as required by this Agreement or the relevant Agreed Procedure;
and
(iii) such Metering System conforms with the requirements of Part
XV, all relevant Agreed Procedures and all Codes of Practice and
is compatible with the Settlement System;
(c) the Party has entered into and has in full force and effect
all appropriate Connection Agreements or, if the Party is
applying to be admitted as an External Pool Member, that all
appropriate Connection Agreements with the relevant Externally
Interconnected Party in relation to the relevant Interconnection
are in full force and effect;
(d) the provision of such information as the Executive Committee
may reasonably require to enable the Executive Committee to
ascertain whether any of the provisions of Clause 11.4 are
applicable to that Party, to determine whether that Party is an
Independent Generator, Small Generator and/or Independent
Supplier and to calculate the initial Weighted Votes and Points
of that Party as a Pool Member under Clause 11.3 and Schedule 13
respectively;
(e) the provision of such information as the Executive Committee
may reasonably require:
(i) to enable the Executive Committee to ascertain whether (and,
if so, on what basis) that Party is entitled to take the benefit
of any exception in Clause 8.5 claimed by it; and
(ii) to assist the Executive Committee in making any
determination under Clause 8.5 relevant to that Party;
(f) if the Party is a Generator (other than an External Pool
Member), the provision of evidence reasonably satisfactory to the
Executive Committee that the Party operates or has under its
control one or more Generating Units, which Generating Unit(s)
has (have) provided electricity to the Total System or will be
capable of so providing electricity within such period as the
Executive Committee .nay specify; and
(g) if the Party is an External Pool Member, the provision of
evidence reasonably satisfactory to the Executive Committee that
the Party has the right to use one or more Generation Trading
Blocks and/or the right to take electricity across an External
Interconnection under an Interconnection Agreement then in full
force and effect.
8.4 Compliance: Each Pool Member shall procure that for so long
as it is a Pool Member it shall at all times satisfy or otherwise
comply with those Pool Membership Conditions (whether set out in
this Agreement or in its Pool Membership Application) applicable
to it (and/or such further or other conditions as the Executive
Committee may from time to time reasonably specify). Each Pool
Member shall upon request from time to time promptly provide the
Executive Committee with such information as the Executive
Committee may reasonably require (i) to enable the Executive
Committee to ascertain whether (and, if so, on what basis) that
Pool Member is entitled to take the benefit of any exception in
Clause 8.5 claimed by it, and (ii) to assist the Executive
Committee in making any determination under Clause 8.5 relevant
to that Party, and further with evidence reasonably satisfactory
to the Executive Committee of such satisfaction and compliance.
8.5 Restrictions applicable to Pool Members:
8.5.1 At each of its Sites, or where any such Site forms part of
a Trading Site, such Trading Site, each Generator shall sell its
entire Exports of electricity to Pool Members pursuant to this
Agreement except:
(a) for its Exports of electricity from any generating station
in respect of which (but for other generating stations owned or
operated by it) it would not be required to hold a Generation
Licence, being Exports at any Site or, as the case may be,
Trading Site for which the Generator is not required to complete
a Supplemental Agreement to the Master Connection and Use of
System Agreement
Provided that the Generator has given the Executive Committee
either on the Effective Date or not less than 10 Business Days
before that Site or, as the case may be, Trading Site is
withdrawn from the requirements of this provision, written notice
that the circumstances described in sub paragraph (a) apply; or
(b) for the output of electricity from any of its Generating
Units in circumstances which the Executive Committee resolves by
a vote passed by 80 per cent. or more of the votes of all
Committee Members (after consultation with the Director) are
exceptional.
8.5.2 In respect of all its requirements for electricity which a
Supplier wishes to purchase from Pool Members, the Supplier shall
purchase the same pursuant to this Agreement, provided that
nothing in this Agreement shall prevent or restrict the purchase
by a Supplier otherwise than pursuant to this Agreement:
(a) in circumstances where the Supplier is acting otherwise than
in its capacity as a consumer, of all or part of that output of
electricity from any Generating Unit which is not required to be
sold to Pool Members pursuant to Clause 8.5.1 or of electricity
which has been purchased by an External Pool Member at its
associated External Interconnection as an export from the NGC
Transmission System pursuant to this Agreement; or
(b) in circumstances where the Supplier is acting in its
capacity as a consumer:
(i) of electricity from any Supplier which has purchased that
electricity pursuant to this Agreement; or
(ii) of such output of electricity as is referred to in paragraph
(a) above; or
(c) in circumstances where the Supplier is a Supplier holding a
PES Licence and is acting in its capacity as a PES, of
electricity from any Supplier which is a Supplier holding a PES
Licence, which operates a Distribution System directly connected
to the Distribution System operated by the Supplier first
mentioned in this paragraph (c) and which has purchased that
electricity pursuant to this Agreement; or
(d) in circumstances which the Executive Committee resolves by a
vote passed by 80 per cent. or more of the votes of all Committee
Members (after consultation with the Director) are exceptional,
from any person.
For the purposes of this Clause 8.5.2 a "consumer" means a person
who purchases electricity from a Supplier for its own consumption
at premises owned or occupied by that person.
8.6 Restrictions applicable to non-Pool Members: Save as
otherwise expressly provided, a Party which is not a Pool Member
shall not be entitled to any of the rights and benefits accorded
to Pool Members under this Agreement.
8.7 Resignation: Subject as provided in Clause 8.8:
8.7.1a Party (other than the Settlement System Administrator, the
Pool Funds Administrator, the Grid Operator, the Ancillary
Services Provider and each Externally Interconnected Party) shall
be entitled at any time to resign as a Party by delivering a
Resignation Notice to the Secretary; and
8.7.2 such resignation shall take effect 28 days after receipt of
the Resignation Notice by the Secretary.
Promptly after receipt of a duly completed Resignation Notice
from a Party, the Secretary shall notify (for information only)
all of the other Parties, the
Executive Committee and the Director of such receipt and of the
name of the Party wishing to resign.
8.8 Restrictions on resignation: A Party may not resign as a
Party (and any Resignation Notice delivered pursuant to Clause
8.7.1 shall lapse and be of no effect) unless:
8.8.1 as at the date its resignation would otherwise become
effective all sums due from such Party to the Executive Committee
or any other Party under (a) this Agreement, (b)the Funds
Transfer Agreement or (c) any agreement entered into pursuant to
this Agreement (whether by or on behalf of such Party) and
notified for the purposes of this Clause 8.8 by the Executive
Committee to such Party prior to the date of its resignation,
have been paid in full; and
8.8.2 it would not be a breach of any Licence condition
applicable to such Party so to resign.
8.9 Release as a Party: Without prejudice to Clause 66.7 and its
accrued rights and liabilities and its rights and liabilities
which may accrue in relation to the period during which it was a
Party under this Agreement, the Funds Transfer Agreement or any
agreement referred to in Clause 8.8.1(c), upon a Party's
resignation becoming effective in accordance with Clause 8.7:
8.9.1 such Party (if it is a Pool Member) shall cease
automatically to be a Pool Member;
8.9.2 such Party shall be automatically released and discharged
from all its obligations and liabilities under this Agreement,
the Funds Transfer Agreement and any agreement referred to in
Clause 8.8.1(c); and
8.9.3 each of the other Parties shall be automatically released
and discharged from its obligations and liabilities to such Party
under this Agreement, the Funds Transfer Agreement and any
agreement referred to in Clause 8.8.1 (c).
Each Party shall promptly at its own cost and expense execute and
deliver all agreements and other documentation and do all such
other acts, matters and things as may be necessary to confirm
such cessation, release and discharge.
8.10 Withdrawal as a Party: If a Party (the "Withdrawing Party")
shall apply on three occasions to be admitted as a Pool Member
pursuant to this Clause 8 and on each such occasion it is not so
admitted by reason of its failure to fulfil the relevant Pool
Membership Conditions then with effect from the date the
Withdrawing Party is deemed to receive notification from the
Executive Committee pursuant to Clause 75 that it has failed for
the third time to fulfil such conditions, without prejudice to
Clause 66.7 and its accrued rights and liabilities, and its
rights and liabilities which may accrue in relation to the period
during which it was a Party, under any agreement entered into
pursuant to this Agreement (whether by or on behalf of the
Withdrawing Party) and notified to it for the purposes of this
Clause 8.10 by the Executive Committee prior to the date of its
cessation as a Party:
8.10.1 the Withdrawing Party shall automatically cease to be a
Party and shall be automatically released and discharged from all
its obligations and liabilities under this Agreement and any such
agreement;
8.10.2 each of the other Parties shall be automatically released
and discharged from its obligations and liabilities to the
Withdrawing Party under this Agreement and any such agreement;
and
8.10.3 each Party shall promptly, at the cost and expense of the
Withdrawing Party, execute and deliver all agreements and other
documentation and do all such other acts, matters and things as
may be necessary to confirm such cessation, release and
discharge.
8.11 External Pool Members: A person who has been admitted as an
External Pool Member shall immediately cease to be a Pool Member
(such cessation to be without prejudice to Clause 66.7) upon
either:
8.11.1 all of its rights under an Interconnection Agreement to
use the relevant External Interconnection(s) for taking or
delivering electricity from or to the NGC Transmission System
having permanently ceased; or
8.11.2 the relevant External Interconnection(s) permanently
ceasing to be connected to the NGC Transmission System.
8.12 Change of capacities: Any Pool Member may, upon application
to the Executive Committee and satisfaction of those of the Pool
Membership conditions relevant to its new capacity and such other
conditions (if any) as the Executive Committee may reasonably
require, change the capacity(ies) in which it participates as a
Pool Member and any Pool Member who acquires an additional
capacity in which it participates as a Pool Member shall be
deemed to have been admitted as a new Pool Member pursuant to
Clause 8.2 in that additional capacity.
8.13 Saving: The Executive Committee shall have the right to
waive compliance by a Party with all or any of the Pool
Membership Conditions either absolutely or on terms if, in the
opinion of the Executive Committee, this is necessary to ensure
or help ensure that the Settlement process operates efficiently
or that the interests of other Pool Members are safeguarded.
9. GENERAL MEETINGS
9.1 Annual general meeting: Once in, and no later than 31st
March of, each year Pool Members shall hold a general meeting as
their annual general meeting in addition to any other meetings of
Pool Members in that year, and notices calling such general
meeting shall specify it as the annual general meeting. At each
annual general meeting the Pool Members shall be required to
consider and, where appropriate, resolve upon the following,
namely:
9.1.1 a report prepared by the Executive Committee on the
Settlement System and its operation during the immediately
preceding year, which report shall include:
(a) a review of the operation of the Settlement System, the
Charging Procedure, the PFA Accounting Procedure and the Funds
Transfer System during the immediately preceding year;
(b) a report on the progress of all Works Programmes then
current and of all changes to the operation of the Settlement
System, the Charging Procedure, the PFA Accounting Procedure, the
Funds Transfer System, all revisions to this Agreement and all
enhancements, improvements and modifications of or to the
Specification, the Hardware or the Software, in each case which
have been undertaken pursuant to this Agreement;
(c) a review of performance over the immediately preceding year
against the business plan referred to in Clause 9.1.6; and
(d) such other information or matters as the Executive Committee
shall consider appropriate (including any proposed revision to
this Agreement);
9.1.2 a report prepared by the Pool Auditor on the Settlement
System and its operation during the immediately preceding year,
which report shall include:
(a) a summary of the audits, reviews, tests and/or checks
referred to in Part IX carried out by the Pool Auditor during
such immediately preceding year;
(b) any recommendation which the Pool Auditor wishes to make
regarding the operation of the Settlement System, the Charging
Procedure, the PFA Accounting Procedure, the ASP Accounting
Procedure and the Funds Transfer System; and
(c) such other information or matters which the Executive
Committee may reasonably require or the Pool Auditor shall
consider appropriate;
9.1.3 [Not used].
9.1.4the appointment of Committee Members pursuant to Clause 15
(where appropriate, in separate class meetings of Pool Members);
9.1.5 such matters as any Pool Member present in person may wish
to raise at such meeting, notice of which has been given to the
Secretary no later than seven days before the date of such
meeting, it being acknowledged and agreed that failure by a Pool
Member so to notify shall not prejudice the right of any Pool
Member to ask questions at such meeting on any matter then before
such meeting;
9.1.6 a business plan prepared by the Executive Committee for the
then current year and the next following four years (or such
shorter period as the Pool Members in general meeting shall from
time to time determine) on the Settlement System and the Funds
Transfer System and their operation and in relation to all other
matters which are the subject of this Agreement;
9.1.7 the election of the Pool Chairman pursuant to Clause 16;
and
9.1.8 such other matters as the Executive Committee sees fit to
propose and of which notice has been given in accordance with
Clause 9.4.1.
9.2 General meetings: All general meetings of Pool Members other
than annual general meetings shall be extraordinary general
meetings.
9.3 Calling meetings: All general meetings of Pool Members shall
be called by 14 days' notice in writing at the least, provided
that a general meeting of Pool Members shall, notwithstanding
that it is called by shorter notice, be deemed to have been duly
called if it is so agreed by a majority in number of the Pool
Members having a right to attend and vote at such meeting, being
a majority in number together holding not less than 95 per cent.
of the Total Votes.
9.4 Convening meetings:
9.4.1 An annual general meeting shall be convened by the
Secretary on the instructions of the Executive Committee and any
notice convening such a meeting shall set out or append details
of any such matters as are referred to in Clause 9.1.8 and shall
be accompanied by a copy of the reports referred to in Clauses
9.1.1 and 9.1.2 and of the business plan referred to in Clause
9.1.6. The Secretary shall use its reasonable endeavours to
notify the Pool Chairman and Pool Members in advance of the
relevant annual general meeting of any such matters referred to
in Clause 9.1.8 of which the Secretary has received notice in
accordance with that Clause.
9.4.2 Extraordinary general meetings shall be convened:
(a) by the Secretary on the instructions of the Executive
Committee or of any one or more Committee Members pursuant to
Clause 13 4; or
(b) by the Executive Committee, forthwith upon receipt of a Pool
Members' requisition being a requisition of Pool Members holding
together at the date of the deposit of the requisition not less
than two per cent. of the Total Votes of all Pool Members; or
(c) by the Secretary on tile instructions of the Pool Chairman.
9.4.3 A Pool Members' requisition shall state the objects of the
meeting and must be signed by or on behalf of the requisitionists
and deposited at the office of the Secretary, and may consist of
several documents in like form each signed by one or more
requisitionists. If the Executive Committee does not within 21
days from the date of the deposit of the requisition proceed duly
to convene an extraordinary general meeting for a date not later
than two months after the said date of deposit, the
requisitionists may themselves convene a meeting, but any meeting
so convened shall not be held after the expiration of three
months from such date. A meeting convened under this Clause 9.4
by requisitionists shall be convened in the same manner, as
nearly as possible, as that in which meetings are to be convened
by the Executive Committee.
9.5 Notice of general meetings: Any notice convening any general
meeting of Pool Members shall be exclusive of the day on which it
is served or deemed to be served and of the day for which it is
given, and shall specify the place, the day and the hour of the
meeting and the general nature of the business of such meeting
and shall be given to all Parties, all Committee Members, the
Pool Chairman, the Chief Executive (if any), the Pool Auditor and
the Director. The accidental omission to give notice of a meeting
to, or the non-receipt of notice of a meeting by, any person
enticed to receive notice shall not invalidate the proceedings at
that meeting. In every such notice there shall appear with
reasonable prominence a statement that a Pool Member entitled to
attend and vote is entitled to appoint a proxy to attend, speak
and (subject to Clause 12.1) vote in its place and that a proxy
need not also be a Pool Member.
9.6 Quarterly meetings:
9.6.1 The Secretary shall, on the instructions of the Executive
Committee, convene meetings of Pool Members not less frequently
than once in each Quarter to discuss reports prepared by the
Executive Committee pursuant to Clause 24.2.14 and any other
matter of interest which is the subject of this Agreement. Unless
the Executive Committee otherwise determines, no such meeting
shall be convened for the Quarter in which any annual general
meeting is to take place.
9.6.2The provisions of Clauses 9.3 and 9.5 shall apply, mutatis
mutandis, for the purposes of the notice and the calling of
quarterly meetings pursuant to Clause 9.6.1 as if such meetings
were general meetings of Pool Members and the provisions of
Clause 10.9 shall also apply mutatis mutandis. Nothing in this
Agreement shall prevent a quarterly meeting being convened also
as an extraordinary general meeting.
10. PROCEEDINGS AT GENERAL MEETINGS
10.1 General: Save as provided in Clause 12.8 and Part IV, all
business of Pool Members shall be transacted at general meetings
of Pool Members, the proceedings for the conduct of which are set
out in this Clause 10.
10.2 Quorum: No business shall be transacted at any general
meeting of Pool Members unless a quorum of Pool Members is
present at the time when the meeting proceeds to business. Save
as herein otherwise provided, a quorum shall be Pool Members
present in person representing:
10.2.1 50 per cent. or more of the aggregate number of Weighted
Votes to which all Generators are entitled under Clause 11.2.1;
and
10.2.2 50 per cent. or more of the aggregate number of Weighted
Votes to which all Suppliers are entitled under Clause 11.2.2.
10.3 Lack of quorum: If within half an hour from the time
appointed for the general meeting a quorum is not present, the
meeting shall stand adjourned to the same day in the next week,
at the same time and place or to such other day and at such other
time and place as the Executive Committee may determine and, if
at the adjourned meeting a quorum is not present within half an
hour from the time appointed for the meeting, the Pool Member(s)
present shall be a quorum.
10.4 Chairman: The Pool Chairman shall preside as chairman at
every general meeting and separate general meeting of Pool
Members (other than one convened to consider his removal) or, if
there is no Pool Chairman or if he shall not be present within 15
minutes after the time appointed for the holding of the meeting
or is unwilling to act or if the relevant meeting has been
convened to consider the removal of the Pool Chairman, the Chief
Executive (if any) shall preside as chairman or, if the Chief
Executive shall not be present or is unwilling to act or if the
relevant meeting has been convened to consider the removal of the
Chief Executive, the Pool Members present shall choose one of
their number to be chairman of the meeting.
10.5 Adjournments: The chairman of the meeting may, with the
consent of any general meeting of Pool Members at which a quorum
is present (and shall if so directed by the meeting) adjourn the
meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than
the business left unfinished at the meeting from which the
adjournment took place. When a meeting is adjourned for 30 days
or more, notice of the adjourned meeting shall be given as in the
case of an original meeting. Save as aforesaid, it shall not be
necessary to give any notice of an adjournment or of the business
to be transacted at an adjourned meeting.
10.6 Demand for a poll: At any general meeting of Pool Members a
resolution put to the vote of the meeting shall be decided on a
show of hands unless a poll is (before or on the declaration of
the result of the show of hands) demanded:
10.6.1 by the chairman of the meeting; or
10.6.2 by at least two Pool Members present in person or by
proxy; or
10.6.3 by any Pool Member present in person or by proxy and
holding not less than two per cent. of the Total Votes of all
Pool Members.
Unless a poll be so demanded a declaration by the chairman of the
meeting that a resolution has on a show of hands been carried or
carried unanimously, or by a particular majority, or lost and an
entry to that effect in the book containing minutes of the
proceedings of general meetings shall be conclusive evidence of
the fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution. The demand for
a poll may be withdrawn.
10.7 Timing of poll: Except as hereinafter provided in this
Clause 10.7, if a poll is duly demanded it shall be taken in such
manner as the chairman of the meeting directs, and the result of
the poll shall be deemed to be the resolution of the meeting at
which the poll was demanded. A poll demanded on the election of
the chairman of the meeting or on a question of adjournment shall
be taken forthwith. A poll demanded on any other question shall
be taken at such time as the chairman of the meeting directs, and
any business other than that upon which a poll has been demanded
may be proceeded with pending the taking of the poll.
10.8 No casting vote: In the case of an equality of votes,
whether on a show of hands or on a poll, the chairman of the
meeting at which the show of hands takes place or at which the
poll is demanded, shall not be entitled to a second or casting
vote.
10.9 Representation of non-Pool Members: Each of the Chief
Executive (if any) or his duly appointed representative, the
Settlement System Administrator, the Pool Funds Administrator,
the Grid Operator and the Ancillary Services Provider shall be
obliged to attend, and each other Party, each Committee Member,
the Pool Auditor and the Director (or its or his duly appointed
representative) shall have the right to attend, at each general
meeting of Pool Members, and each of them shall have the right to
speak (but not to vote) thereat.
10.10 Minutes: The Secretary shall prepare minutes of all general
meetings of Pool Members and shall circulate copies thereof to
all Parties, each Committee Member, the Pool Chairman, the Chief
Executive (if any), the Pool Auditor and the Director as soon as
practicable (and in any event within ten working days) after the
relevant meeting has been held.
11 1.VOTING
11.1 Membership Votes: Each Pool Member shall be entitled to one
vote by reason of its Pool Membership (its "Membership Vote").
11.2 Weighted Votes: Subject as provided in Clauses 11.3 and
11.4, in respect of any Quarter: -
11.2.1 each Pool Member which is a Generator shall be entitled in
that capacity to one vote for each GWh of Genset Metered
Generation of all its Allocated Generating Units for all
Settlement Periods falling in the Votes Calculation Period
relative to such Quarter, as determined from the final run of
Settlement (as referred to in paragraph D(3) of the Preamble to
Schedule 9) for each such Settlement Period; and
11.2.2 each Pool Member which is a Supplier shall be entitled in
that capacity to such number of votes as is equal to the total
GWh of Consumer Metered Demand taken by that Pool Member in all
Settlement Periods falling in the Votes Calculation Period
relative to such Quarter, as determined from the final run of
Settlement (as referred to in paragraph D(3) of the Preamble to
Schedule 9) for each such Settlement Period,
each such vote a "Weighted Voter.
For the purposes of this Clause 11.2:
(A) a Generating Unit shall be an Allocated Generating Unit of a
Pool Member (in this Clause, the "Identified Pool Member") if it
belongs to the Identified Pool Member as of the date on which the
Executive Committee calculates the Weighted Votes of Pool Members
for the relevant Quarter pursuant to Clause 11.3.2. If at any
time during such Quarter an Allocated Generating Unit shall
belong to another Pool Member tin this Clause, the Transferee
Pool Member"), the Weighted Votes attributed to the Identified
Pool Member for such Quarter by reason of the Allocated
Generating Unit belonging to it shall be transferred to the
Transferee Pool Member as of the date on which such Allocated
Generating Unit first belongs to the Transferee Pool Member (and
the Identified Pool Member and the Transferee Pool Member shall
jointly notify the Executive Committee in writing of such date in
good time before its occurrence);
(B) a Generating Unit shall belong to a Pool Member if it is
owned by that Pool Member and not leased to another person or if
it is leased by that Pool Member from another person;
(C) a Pool Member shall notify the Executive Committee promptly
on request of its Allocated Generating Units and the Executive
Committee and each other Party may rely on the information in
that notification and in any notification under paragraph (A)
above without further enquiry or need to verify that information;
(D) in determining the meaning of "good time" for the purposes
of paragraph (A) above one factor to be taken into account is
that the Settlement System Administrator must be allowed
sufficient time to effect the necessary changes in Settlement
associated with the transfer of the relevant Allocated Generating
Unit; and
(E) the Executive Committee may, upon application of any Pool
Member involved in any transfer of assets between Pool Members
during any Quarter, adjust as between the Pool Members involved
in such transfer, the number of Points and/or Weighted Votes to
which they in their capacities as Suppliers are entitled in
respect of the remaining part of that Quarter and/or one or both
of the two immediately succeeding Quarters if, in the opinion of
the Executive Committee, such adjustment would help accommodate
the consequences of such a transfer and not prejudice the
interests of any other Pool Member in any material respect.
11.3 Calculation of Weighted Votes: Subject as provided in Clause
11.4:
11.3.1 New Pool Members:
(a) until the third Quarter Day next falling after the date of
its admission as a Pool Member, any Party who is admitted as a
Pool Member pursuant to Clause 8.2 shall have that number of
Weighted Votes as fall to be determined in accordance with the
following provisions of this Clause 11.3.1. Thereafter, such Pool
Member's Weighted Votes shall be calculated in accordance with
Clause 11.2;
(b) until the third Quarter Day next falling after the date of
admission of the relevant Pool Member as a Pool Member such Pool
Member shall have that number of Weighted Votes as are accorded
to it upon its admission as a Pool Member by the Executive
Committee (which the Executive Committee shall do prior to the
date of such admission) who. shall have regard to the factors
listed in paragraph (c), (d) and/or (as the case may be) (e)
below or as are determined by the Director in accordance with
Clause 11.5;
(c) the factors referred to in paragraph (b) shall in the case
of a Generator include:
(i) the Registered Capacity of all Generating Units of such
Generator;
(ii) the Executive Committee's assessment of the likely
availability of all such Generating Units for the period from the
date of admission of such Pool Member as a Pool Member to the
third Quarter Day next falling after such date, having regard to
the registered Generation Scheduling and Despatch Parameters or
(as the case may be) Generation Trading Block Scheduling and
Despatch Parameters for such Generating Units;
(iii) the Executive Committee's assessment of the likely output
of all such Generating Units during such period having regard to
the output of Generating Units which in the Executive Committee's
opinion most nearly correspond to such Generating Units;
(iv) the Executive Committee's assessment of the likely daily
station load associated with the Power Stations of which such
Generating Units form part during such period; and
(v) where a Generating Unit of an existing Pool Member is
transferred to, and then belongs to, such Generator at or soon
after the time of such Generator's admission as a Pool Member,
the Weighted Votes most recently attributed to that existing Pool
Member by reason of that Generating Unit shall be attributed to
such Generator as if such Generator were a Transferee Pool Member
under the provisions of paragraphs (A) and (B) of Clause 11.2;
(d) the factors referred to in paragraph (b) above shall in the
case of a Supplier be the total GWh which would be supplied by
the relevant Supplier in the period from the date of admission of
such Pool Member as a Pool Member to the third Quarter Day next
falling after such date on the basis of its Customers' metered
demand or, where such metered information is not available, the
load profiles of its Customers used for the purposes of
estimating the consumption of Second Tier Customers; and
(e) the factors referred to in paragraph (b) above shall in the
case of an External Pool Member be whichever one or more of those
factors referred to in paragraph (c) above and those referred to
in paragraph (d) above as the Executive Committee considers to be
most readily applicable to the Generating Units (if any) of such
Pool Member and to the level of demand for Active Energy of that
Pool Member across the relevant External Interconnection but as
if the references to Customers in paragraph (d) were references
to that Pool Member's own requirements;
11.3.2 Calculation: On or prior to each Quarter Day the Executive
Committee shall, on the basis of information to be supplied by
the Settlement System Administrator in accordance with Service
Line 10 (Service to CEO and Pool Members), calculate the number
of Weighted Votes to which each Pool Member whose Weighted Votes
are to be calculated in accordance with Clause 11.2 is entitled
in its capacity as a Generator or a Supplier for the Following
Quarter, and shall notify each Pool Member and the Director in
writing of the number of Weighted Votes of all Pool Members in
their respective capacities (whether calculated in accordance
with Clause 11.2 or 11.3.1). Subject to Clause 11.5, the
determination of the Executive Committee as to the number of
Weighted Votes of each Pool Member shall (in the absence of
manifest error) be final and binding for all purposes of this
Agreement;
11.3.3 Attribution: If a Pool Member shall receive one Weighted
Vote or no Weighted Votes by reason of the calculations under
Clause 11.2 or the foregoing provisions of this Clause 11.3, such
Pool Member shall nevertheless be accorded two Weighted Votes;
11.3.4 Rounding: In calculating Weighted Votes in accordance with
the provisions of Clause 11.2 and this Clause 11.3, the total GWh
for each Generator or (as the case may be) Supplier shall be
rounded up or down (0.5 being rounded upwards) to the nearest
whole number; and
11.3.5 Additional capacity: For the purposes of Clause 11 any
Pool Member who acquires an additional capacity in which it
participates as a Pool Member shall be deemed to have been
admitted as a new Pool Member pursuant to Clause 8.2 in that
additional capacity and until the third Quarter Day next falling
after the date such Pool Member's application to the Executive
Committee pursuant to Clause 8.12 is approved, it shall have that
number of Weighted Votes in that additional capacity as fall to
be determined in accordance with the provisions of Clause 11.3.1.
Thereafter, such Pool Member's Weighted Votes shall be calculated
in accordance with Clause 11.2.
11.4 Restrictions on Weighted Votes:
11.4.1 Generators: At no time shall the aggregate number of
Weighted Votes to which both Central Power Limited and
Peterborough Power Limited (together with their respective
affiliates and related undertakings) are entitled in their
capacity as Generators under the foregoing provisions of this
Clause 11 exceed 10 per cent. of the aggregate number of Weighted
Votes to which all Generators are entitled under the foregoing
provisions of this Clause 11 and the aggregate number of Weighted
Votes to which both such companies are entitled in that capacity
shall be limited accordingly and the number of Weighted Votes of
each such company in its capacity as a Generator shall be limited
accordingly and the number of Weighted Votes of each such company
in its capacity as a Generator shall, if necessary, be pro rata
reduced;
11.4.2 Suppliers: At no time shall the aggregate number of
Weighted Votes to which both National Power PLC and PowerGen pie
(together with their respective affiliates and related
undertakings) are entitled in their capacity as Suppliers under
the foregoing provisions of this Clause 11 exceed 10 per cent. of
the aggregate number of Weighted Votes to which all Suppliers are
entitled under the foregoing provisions of this Clause 11 and the
aggregate number of Weighted Votes to which both such companies
are entitled in that capacity shall be limited accordingly and
the number of Weighted Votes of each such company in its capacity
as a Supplier shall, if necessary, be pro rata reduced; and
11.4.3 Cap on Weighted Votes:
(a) At no time shall the aggregate number of Weighted Votes to
which a Generator and its affiliates and related undertakings
which are also Generators are entitled in their capacity as
Generation under the foregoing provisions of this Clause 11
exceed 44 per cent. of the aggregate number of Weighted Votes to
which all Generators are entitled under the foregoing provisions
of this Clause 11 (after taking account of any limitation
required under Clause 11.4.1) and the aggregate number of
Weighted Votes to which such Generator and all such affiliates
and related undertakings are entitled in that capacity shall be
limited accordingly and the number of Weighted Votes of such
Generator and all such affiliates and related undertakings in
their capacity as Generators shall, if necessary, be pro rata
reduced.
(b) At no time shall the aggregate number of Weighted Votes to
which a Supplier and its affiliates and related undertakings
which are also Suppliers are entitled in their capacity as
Suppliers under the foregoing provisions of this Clause 11 exceed
44 per cent. of the aggregate number of Weighted Votes to which
all Suppliers are entitled under the foregoing provisions of this
Clause 11 (after taking account of any limitation required under
Clause 11.4.2) and the aggregate number of Weighted Votes to
which such Supplier and all such affiliates and related
undertakings are entitled in that capacity shall be limited
accordingly and the number of Weighted Votes of each Supplier and
all such affiliates and related undertakings in their capacity as
Suppliers shall, if necessary, be pro rata reduced.
(c) If any limitation or reduction pursuant to paragraph (a) or
(b) above would otherwise result in a Generator or (as the case
may be) a Supplier being accorded other than a whole number of
Weighted Votes, the Weighted Votes actually accorded to such
person shall be rounded down to the nearest whole number.
11.4.4 Interim arrangement: The Parties acknowledge that the
application of Clauses 11.4.1 and 11.4.2 has been limited to
named companies pending resolution of how (if at all)
restrictions on Weighted Votes should apply to Generators with
second tier supply businesses and to Suppliers with an interest
in a generation business. The Parties agree to use all reasonable
endeavours to reach an agreed resolution to this issue and to
amend this Agreement to give effect thereto no later than 31st
March, 1994 (or such later date as the Executive Committee may
decide).
11.5 Reference to the Director: If any person as is referred to
in Clause 11.3.1(a) shall dispute the calculation of or the
number of Weighted Votes accorded to it in accordance with Clause
11.3.1, such person may refer such dispute to the Director for
determination, whose determination as to the calculation of or
the number of Weighted Votes to which such person shall be
entitled shall be final and binding for all purposes of this
Agreement.
11.6 Alteration of Weighted Votes: The Director may at any time
by notice to the Executive Committee alter the calculation of
Weighted Votes set out in Clauses 11.2.1 and 11.2.2 and/or the
restrictions on Weighted Votes set out in Clause 11.4 if in his
opinion such alteration is required to achieve fair
representation for all Pool Members.
11.7 Total Votes: Each Pool Member shall be entitled to that
number of votes ("Total Votes") calculated in accordance with the
following formulae:
TV = X + Y
where:
X = AxB
2 x C
Y = AxD
2 x E
and where:
TV = the number of Total Votes (rounded up or down, 0.5 being
rounded up) to which such Pool Member shall be entitled
A = the greater of C and E and, where C is equal to E, C
B = the number of Weighted Votes for the time being of such Pool
Member in its capacity as a Generator
C = the number of Weighted Votes for the time being of all Pool
Members which are Generators, in their capacity as such (ignoring
those Generators whose voting rights have been suspended pursuant
to this Agreement)
D = the number of Weighted Votes for the time being of such Pool
Member in its capacity as a Supplier
E = the number of Weighted Votes for the time being of all Pool
Members which are Suppliers, in their capacity as such (ignoring
those Suppliers whose voting rights have been suspended pursuant
to this Agreement).
11.8 Calculation of Total Votes: On or prior to:
11.8.1 each Quarter Day;
11.8.2 each date upon which a New Party is admitted as a Pool
Member;
11.8.3 each date upon which a Pool Member's voting rights have
been suspended or reinstated pursuant to this Agreement; and
11.8.4 each date upon which a Pool Member ceases to be a Party,
the Executive Committee shall calculate for the Following Quarter
or (as the case may be) the remainder of the then current Quarter
the number of Total Votes to which each Pool Member is for the
time being entitled, and shall notify each Pool Member and the
Director in writing of the number of Total Votes of each of the
Pool Members. The determination of the Executive Committee as to
the number of Total Votes of each Pool Member shall (in the
absence of manifest error) be final and binding for all purposes
of this Agreement.
11.9 Records: The Executive Committee shall maintain, and retain
for a period of not less than eight years, a register recording
the Weighted Votes (as a Generator and as a Supplier) and Total
Votes of each Pool Member, which register shall be open for
inspection by any Party at the office of the Secretary during
normal business hours.
11.10 Voting or: a show of hands: On a show of hands every Pool
Member present in person shall have only its Membership Vote.
11.11 Voting on a poll: On a poll every Pool Member shall have
only its Total Votes. On a poll votes may be given either
personally or by proxy.
11.12 Objections: No objection shall be raised to the
qualification of any voter except at the meeting or adjourned
meeting at which the vote objected to is given or tendered, and
every vote not disallowed at such meeting shall be valid for all
purposes. Any such objection made in due time shall be referred
to the chairman of the meeting whose decision shall be final and
conclusive.
12. PROXIES
12.1 Authority: Any Pool Member entitled to attend and vote at
any general meeting of Pool Members shall be entitled to appoint
another person (whether a Pool Member or not) as its proxy to
attend, speak and vote in its place, save that a proxy shall not
be entitled to vote except on a poll.
12.2 Authentication of proxy: The instrument appointing a proxy
shall be in writing either under seal or under the hand of an
officer or attorney duly authorized. proxy need not be a Pool
Member.
12.3 Deposit of proxy: The instrument appointing a proxy and the
power of attorney or other authority, if any, under which it is
signed or a certified copy of that power or authority shall be
deposited at the office of the Secretary or at such other place
within the United Kingdom as is specified for that purpose in the
notice convening the relevant general meeting of Pool Members,
not less than 48 hours before the time for holding the meeting or
adjourned meeting, at which the person named in the instrument
proposes to vote, or, in the case of a poll, not less than 24
hours before the time appointed for the taking of the poll, and
in default the instrument of proxy shall not be treated as valid.
12.4 Form of prosy (1): An instrument appointing a proxy shall be
in the following form or a form as near thereto as circumstances
admit:
"POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN
ENGLAND AND WALES dated 30th March, 1990
We, , of , being a Pool Member (as defined in the abovementioned
Agreement), hereby appoint of or, failing him, of , as our proxy
to vote for us on our behalf at the [annual or extraordinary, as
the case may be] general meeting of Pool Members, to be held on
the day of 19 , and at any adjournment thereof.
Signed this day of 19 ."
12.5 Form of proxy (2): Where it is desired to afford Pool
Members an opportunity of voting for or against a resolution the
instrument appointing a proxy shall be in the following form or a
form as near thereto as circumstances admit:
"POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN
ENGLAND AND WALES dated 30th March, 1990
We, , of , being a Pool Member (as defined in the abovementioned
Agreement), hereby appoint - of or, failing him, of , as our
proxy to vote for us on our behalf at the [annual or
extraordinary, as the case may be] general meeting of Pool
Members, to be held on the day of 19 , and at any adjournment
thereof.
Signed this day of 19
This form is to be used in favour of the resolution;
against
Unless otherwise instructed, the proxy will vote as he thinks
fit.
Strike out whichever is not desired."
12.6 Authority to demand a poll: The instrument appointing a
prosy shall be deemed to confer authority to demand or join in
demanding a poll.
12.7 Proxy valid: A vote given in accordance with the terms of an
instrument of proxy shall be valid notwithstanding the previous
revocation of the proxy or of the authority under which the proxy
was executed, provided that no intimation in writing of such
revocation shall have been received by the Secretary at his
office before the commencement of the meeting or adjourned
meeting at which the proxy is used.
12.8 Resolution in writing: A resolution in writing signed by all
the Pool Members for the time being entitled to receive notice of
and to attend and vote at general meetings of Pool Member" (or by
their duly authorised representatives) shall be as valid and
effective as if the same had been passed at a general meeting of
Pool Members duly convened and held and may consist of several
instruments in like form and executed by or on behalf of one or
more Pool Members.
12.9 Corporations acting by representatives at meetings: Any
company, corporation, partnership, firm, joint venture, trust,
association or other organization which is a Pool Member may by
resolution of its directors or other governing body authorise
such person as it thinks fit to act as its representative at any
general meeting of Pool Members, and references in this Agreement
to a Pool Member acting in person (howsoever expressed) shall be
deemed to include Pool Members acting by their duly authorised
representatives.
13. MATTERS RESERVED TO THE GENERAL MEETING: CLASS RIGHTS
13.1 Matters reserved generally:
13.1.1 As between the Pool Members each of the matters referred
to in Clause 13.1.2 shall require the prior approval of Pool
Members in general meeting before effect is given to the same,
such approval to be (subject as provided in Sections 15, 16 and
17 of Schedule 4) by resolution of Pool Members passed by not
less than 65 per cent. of the Membership Votes or (as the case
may be) Total Votes of such Pool Members as (being entitled to do
so) vote in person or by proxy at a general meeting of Pool
Members of which notice specifying the intention to propose the
resolution has been duly given.
13.1.2 The matters referred to in Clause 13.1.1 are:
(a) the removal of the Settlement System Administrator;
(b) the appointment and removal of the Pool Auditor;
(c) any amendment to or variation of this Agreement (other than
any amendment or variation referred to in Clause 13.2.1, 13.2.2
or 13.2.3 or any amendment of or variation to Schedule 9
(including any amendment thereto made pursuant to Clause 56.2) or
to Schedule 15);
(d) the approval pursuant to Clause 5.8 of any Recommendation
and pursuant to Clause 5.11 of any Works Programme and any
approval pursuant to Clause 5.14;
(e) the removal of the Pool Chairman; and
(f) such other matters (not being matters referred to in Clause
9.1.8) which are otherwise designated under this Agreement for
reference to the Pool Members in general meeting.
13.2 Matters reserved to particular classes of Pool Members:
13.2.1 As between the Pool Members any amendment to or variation
of this Clause 13.2 shall require the prior approval of the
Generators in separate general meeting.
13.2.2 As between the Pool Members each of the following matters
shall require the prior approval of the Suppliers in separate
general meeting:
(a) any change prior to 1st April, 1998 to the standards of
accuracy of Metering Equipment required for Second Tier Customers
up to (and including) 100kW or required for Non-Pooled
Generators;
(b) any amendment to or variation of Part Xl and/or Schedule 18;
and
(c) any amendment to or variation of this Clause 13.2.
13.2.3 As between the Pool Members any amendment to or variation
of Clause 10.2, 10.6, 13.4, 13.5, 15.2, 15.3, 15.4, 15.5, 15.8,
16.2, 19.2, 22 or 83, Schedule 14 or this Clause 13.2 shall
require the approval both of the Generators in separate general
meeting and of the Suppliers in separate general meeting.
13.2.4 To every separate general meeting referred to in this
Clause 13.2 the provisions of this Part III relating to general
meetings of Pool Members (other than Clause 10.9, save in respect
of the attendance by the Pool Auditor or the Director or its or
his duly appointed representative) shall apply mutatis mutandis
but so that:
(a) in the case of the Generators, the necessary quorum shall be
two Pool Members of that class;
(b) in the case of the Suppliers, the necessary quorum shall be
eight Pool Members of that class;
(c) the reference in Clause 10.6.3 to Total Votes shall be
substituted by a reference to Weighted Votes; and
(d) notice of any such separate general meeting need be given
only to those entitled to attend the same,
and any resolution put to any such separate general meeting
shall, to be passed, require (in the case of the Generators) 75
per cent. and (in the case of the Suppliers) a simple majority of
the total Membership Votes or (as the case may be) Weighted Votes
of such Pool Members as (being entitled to do so) vote in person
or by proxy at such separate general meeting of which notice
specifying the intention to propose the resolution has been duly
given.
13.2A As between the Pool Members any amendment to or variation
of Schedule 22 shall require the approval of the Public
Electricity Suppliers in separate general meeting in accordance
with the provisions of that Schedule.
13.3 Provisions cumulative: The provisions of Clauses 13.1 and
13.2 are cumulative and not exclusive one of the other.
13.4 Executive Committee's referral: In the event of receipt by
the Secretary from one or more of the Committee Members of a
request that any matter resolved upon on a poll by the Executive
Committee (or upon which it has been unable or has refused to
resolve other than where the taking of a vote has been deferred
pursuant to Clause 22.1) be remitted to the Pool Members in
general meeting, such request having been received no later than
five working days after the date on which the results of such
poll were notified to Committee Members (exclusive of the date on
which notice was given) (or, as the case may be, the date of its
failure or refusal so to resolver, the matter the subject of the
relevant resolution shall be remitted to the Pool Members in
general meeting and, pending the decision of Pool Members in
general meeting, such resolution shall not have effect. The
provisions of this Clause 13.4 are subject to the provisions of
Clause 61.9.
13.5 Dissentient Pool Member's right of appeal:
13.5.1 Any Pool Member who:
(a) voted against a resolution passed or in favour of a
resolution not passed by Pool Members in general meeting; or
(b) voted against a resolution passed or in favour of a
resolution not passed by Generators or (as the case may be)
Suppliers in separate general meeting; or
(c) is directly affected by Pool Creditors passing or failing to
pass a resolution of Pool Creditors (but only where such
resolution does not concern the enforcement or non-enforcement of
any payment obligation),
and each Externally Interconnected Party (not being a Pool
Member) (each such Pool Member a "Dissentient Pool Member", which
expression shall include each such Externally Interconnected
Party) shall be entitled within ten working days after the date
of such resolution to apply in writing to the Director seeking a
ruling that the relevant resolution shall or shall not have
effect on the grounds that either:
(i) the interests of a group of Pool Members (including the
Dissentient Pool Member) or of the Dissentient Pool Member under
this Agreement have been, are or will be unfairly prejudiced by
the passing of or the failure to pass such resolution; or
(ii) such resolution will breach, or will cause the Dissentient
Pool Member to be in breach of, one or more provisions of this
Agreement or of its Licence or of the Act.
Any such application shall give detailed reasons and evidence in
support and shall be copied to the Executive Committee. The
Dissentient Pool Member shall be entitled to mark al; or any part
of such application as confidential and the Executive Committee
shall give such weight as it sees fit to such marking in the
copying of such application to those persons to whom it is
obliged to copy such application. The Executive Committee shall
promptly notify all other Pool Members, each Externally
Interconnected Party (not being a Pool Member), the Pool
Chairman, the Settlement System Administrator and the Pool Funds
Administrator of receipt of such application. At the same time as
the Executive Committee shall notify all such other Pool Members,
each Externally Interconnected Party (not being a Pool Member),
the Pool Chairman, the Settlement System Administrator and the
Pool Funds Administrator of such receipt, the Executive Committee
shall send each of them a copy of the relevant application
(amended, if appropriate, to take account of any such marking
where the Executive Committee shall have seen fit so to do). The
Executive Committee, each Pool Member, each Externally
Interconnected Party (not being a Pool Member), the Pool
Chairman, the Settlement System Administrator and the Pool Funds
Administrator and (if invited by the Director) the Pool Auditor
shall each be entitled to make representations to the Director.
If the Pool Auditor shall be so invited to make any such
representations, the Executive Committee will provide it with a
copy of the relevant application (amended, if appropriate, as
aforesaid).
13.5.2 Any determination of the Director in respect of any such
application as is referred to in Clause 13.5.1 shall be final and
binding. Pending any determination of the Director in respect of
any such application, the relevant resolution (if passed) shall
not have effect provided that, if the Director shall decline to
accept a reference or to make a determination (in either case,
for whatsoever reason), such resolution shall take effect from
the date that the Director notifies the Executive Committee that
he declines to accept the reference or to make the determination.
13.5.3 The Parties acknowledge and agree that the satisfaction of
either of the grounds referred to in Clause 13.5.1(i) or (ii)
shall not of itself entitle the Dissentient Pool Member to a
determination by the Director in its favour.
PART IV
THE EXECUTIVE COMMITTEE
14. ESTABLISHMENT OF THE EXECUTIVE COMMITTEE
Establishment: The Pool Members hereby establish the Executive
Committee upon the terms and subject to the conditions of this
Agreement.
15. MEMBERSHIP OF THE EXECUTIVE COMMITTEE
15.1 Membership: Committee Members shall be appointed and removed
in accordance with the following provisions of this Clause 15.
15.2 Right to appoint (Generators):
15.2.1 Subject to Clauses 15.6, 15.7 and 15.8, Generators shall
together have the right to appoint not more than five Committee
Members, such appointments to be made in accordance with the
following provisions of this Clause 15.2.
15.2.2 No later than seven days before each annual general
meeting of Pool Members or, failing election at such meeting,
seven days before an extraordinary general meeting convened for
such purpose each Generator shall be entitled, by notice to the
Executive Committee, to propose one person (a "Nominee") to be a
Committee Member. Any such proposal to be valid shall be
accompanied by a written statement from the Nominee stating that
he is aware of the proposal and would be prepared to serve as a
Committee Member if elected. As soon as practicable after such
seventh day (and in any event before the date of the annual
general meeting or, as the case may be, extraordinary general
meeting) the Executive Committee shall circulate (or cause to be
circulated) to all Generators a list of all the names of the
Nominees and of the Generators who proposed them. Such list shall
also be circulated at the annual general meeting or, as the case
may be, extraordinary general meeting to all Generators present
in person or by proxy.
1 5.2.3The term of office of Committee Members appointed by
Generators shall be from 1st April in the year of appointment to
31st March in the next following year provided that, if the
meeting at which any such Committee Member is appointed is held
after 1st April, his term of office shall commence from the time
of his appointment. A Committee Member whose term of office has
expired or is to expire shall be eligible for reselection.
15.2.4 At each annual general meeting or extraordinary general
meeting of Pool Members resolutions shall be put to the
Generators for the election by them of Committee Members from the
list of Nominees referred to in Clause 15.2.2. The election shall
be conducted in such manner as shall give effect to the
following:
(a) on the first round of voting:
(i) each Generator (other than Central Power Limited or
Peterborough Power Limited) shall be entitled to vote;
(ii) each Generator shall have its Weighted Votes (disregarding
for this purpose the restrictions imposed by Clause 11.4.3(a));
and
(iii) the votes of a Generator and of all its affiliates and
related undertakings which are also Generators may only be cast
in favour of one Nominee,
and at the conclusion of the first round the three Nominees with
the highest number of Weighted Votes cast in their favour shall
be elected Committee Members;
(b) on the second round of voting:
(i) each Generator (not being (A) Central Power Limited or
Peterborough Power Limited, (B) a Generator which voted in favour
of one of the three Nominees referred to in paragraph (a) above
or (C) an affiliate or related undertaking of such Generator)
shall be entitled to vote; and
(ii) each Generator shall have its Weighted Votes (disregarding
for this purpose the restrictions imposed by Clause 11.4.3(a)),
and at the conclusion of the second round the Nominee with the
highest number of Weighted Votes cast in its favour shall be
elected a Committee Member;
(c) on the third round of voting, each Small Generator which did
not vote in the first or the second round of voting shall be
entitled to vote and at the conclusion of the third round the
Nominee with the highest number of votes cast in its favour shall
be elected a Committee Member; and
(d) if in any round of voting there is a tie between two or more
Nominees as to who should be elected a Committee Member, that
round of voting shall be reheld and, in the event of another tie,
the matter shall be resolved:
(i) in the case of a de at any reheld first or second round of
voting, by lot held in such manner as the chairman of the meeting
shall decide; and
(ii) in the case of a tie at any reheld third round of voting, by
the casting vote of the Small Generator holding the largest
number of Weighted Votes (disregarding for this purpose the
restrictions imposed by Clause 11.4.3(a)) and entitled to vote in
such third round.
15.3 Right to remove (Generators):
15.3.1 A Committee Member appointed by Generators or any class of
Generators may be removed at any time by written notice of
removal given to that Committee Member (copied to the Executive
Committee) by or on behalf of that number of those Generators
who:
(a) voted in favour of his appointment;
(b) are Pool Members at such time; and
(c) (disregarding for this purpose the restrictions imposed by
Clause 11.4.3(a)) hold more Weighted Votes than the difference
between:
(i) the number of Weighted Votes cast in favour of that
Committee Member; and
(ii) the number of Weighted Votes cast in favour of the
candidate, in that round of voting, who received the next highest
number of Weighted Votes after the Committee Member being removed
(or, if there was no such candidate, zero).
15.3.2 If a Committee Member appointed by Generators is removed
or his office is vacated pursuant to Clause 21, a separate
general meeting of Generators shall be convened for the purpose
of appointing a substitute Committee Member. To such separate
general meeting the provisions of Clause 15.2 shall apply mutatis
mutandis but so that only those Generators which:
(a) are within the class of Generators entitled to vote in
respect of the appointment of the first-mentioned Committee
Member; and
(b) did not (when that first-mentioned Committee Member was
appointed) by reason of exercising their rights under Clause 15.2
to vote for another candidate disenfranchise themselves from
voting in respect of the appointment of the first-mentioned
Committee Member (unless the candidate in whose favour those
votes were cast was not appointed),
shall be entitled to vote on the appointment of his successor
(and then in accordance with the relevant paragraph of Clause
15.2.4). Until such successor is appointed the remaining
Committee Members appointed (or deemed appointed) by Generators
shall be entitled to nominate a successor.
15.4 Right to appoint (Suppliers): Subject to Clauses 15.6, 15.7
and 15.8, Suppliers shall together have the right to appoint not
more than five Committee Members, such appointments to be made in
accordance with the provisions of Schedule 14.
15.5 Right to remove (Suppliers): A Committee Member appointed
(or deemed appointed) by Suppliers or any class of Suppliers may
be removed in accordance with the provisions of Schedule 14.
15.6 Director's right to appoint: If at any time there shall be
no Small Generators, the Parties acknowledge and agree that the
Director shall have the right to appoint one person to be a
Committee Member to represent the interests of all Small
Generators and to remove from office any person so appointed by
him. The foregoing provisions of this Clause 15.6 shall apply
mutatis mutandis if at any time there shall be no Independent
Suppliers.
15.7 Qualifications on right to appoint:
15.7.1 No person appointed a Committee Member by the Generators
(or any of them) may for the duration of his appointment be
appointed a Committee Member by the Suppliers (or any of them)
and vice versa.
15.7.2 No person other than an individual shall be appointed a
Committee Member or his alternate.
15.7.3 No person for the time being appointed as Pool Chairman
shall be appointed a Committee Member or his alternate and no
person for the time being appointed a Committee Member or his
alternate shall be appointed as Pool Chairman.
15.7.4 No person for the time being appointed as Chief Executive
shall be appointed a Committee Member or his alternate and no
person for the time being appointed a Committee Member or his
alternate shall be appointed as Chief Executive.
15.8 Number: The maximum number of Committee Members shall not at
any time exceed ten.
15.9 Alternates:
15.9.1 Each-Committee Member shall have the power to appoint any
person (who may be an existing Committee Member) to be his
alternate and may at his discretion remove an alternate Committee
Member so appointed. Any appointment or removal of an alternate
Committee Member shall be effected by notice in writing executed
by the appointor and delivered to the Secretary who shall
forthwith notify all other Committee Members of such appointment.
If his appointor so requests, an alternate Committee Member shall
be entitled to receive notice of all meetings of the Executive
Committee or of sub-committees or sub-groups of which his
appointor is a member and to receive a voting paper on a poll
instead of the appointor. He shall also be entitled to attend,
speak and vote as a Committee Member at any such meeting at which
the Committee Member appointing him is not personally present and
at the meeting to exercise and discharge all the functions,
powers and dudes of his appointor as a Committee Member and for
the purposes of The proceedings at The meeting the provisions of
this Part IV shall apply as if he were a Committee Member. He
shall also be entitled to demand a poll (whether at or after the
meeting) pursuant to Clause 22.3, to carry out consultations with
Pool Members contemplated by Clause 22.9 insofar as his appointor
shall be unable to do so, to act on the instructions of Pool
Members duly given to his appointor or to him on behalf of his
appointor and to complete his appointor's voting paper on a poll
on behalf of his appointor.
15.9.2Except on a poll, every person acting as an alternate
Committee Member shall have one vote for each Committee Member
for whom he acts as alternate, in addition to his own vote if he
is also a Committee Member. On a poll, an alternate Committee
Member shall be enticed (if his appointor is unable to do so) to
exercise (on behalf of his appointor and by completion of the
appointor's separate voting paper) all of the votes which his
appointor is entitled to cast, in addition to any votes which the
alternate is entitled to cast in his own capacity if he is also a
Committee Member. Execution by an alternate Committee Member of
any resolution in writing of the Executive Committee shall,
unless the notice of his appointment provides to The contrary, be
as effective as execution by his appointor.
15.9.3 An alternate Committee Member shall ipso facto cease to be
an alternate Committee Member if his appointor ceases for any
reason to be a Committee Member.
15.9.4 References in this Agreement to a Committee Member shall,
unless the context otherwise requires, include his duly appointed
alternate.
16. POOL CHAIRMAN
16.1 Pool Chairman: There shall at all times be a Chairman of the
pooling and settlement arrangements for the electricity industry
in England and Wales established by this Agreement (the "Pool
Chairman").
16.2 Appointment and Term:
16.2.1 The election of a Pool Chairman shall take place either:
(i) at the annual general meeting or (as the case may be) an
extraordinary general meeting of Pool Members convened for that
purpose (where practicable) held not less than three months
before the end of the term of the then current Pool Chairman; or
(ii) should the Executive Committee so decide, by a postal vote
in accordance with Clause 16.4, such postal vote to have a
closing date which (where practicable) is not less than three
months before the end of the term of the then current Pool
Chairman.
16.2.2 Subject to Clause 16.2.4, the term of office of the Pool
Chairman shall be from 1st April in the year of his election to
the 31st March falling two years thereafter provided that:
(i) where the Pool Chairman is to be elected at an annual
general meeting or (as the case may be) an extraordinary general
meeting of Pool Members, if the meeting at which he is elected is
held after 1st April, his term of office shall commence from such
date as the Pool Members in general meeting shall resolve (being
no earlier than the date of such meeting);
(ii) where the Pool Chairman is to be elected by postal vote, if
the closing date of such postal vote is after 1st April, his term
of office shall commence from such date as shall be set out in
the notice of postal vote which shall have been sent to all Pool
Members by the Chief Executive in accordance with Clause 16.4;
and
(iii) his term of office shall expire before 31st March if he
resigns or is unable for whatever reason to continue to act or if
a successor Pool Chairman is elected -with a term of office which
Pool Members either in general meeting or (as the case may be) by
the terms of a postal vote resolve is to commence before that
date.
16.2.3 The appointment of the Pool Chairman shall be on such
terms and conditions (including, but not limited to, terms and
conditions in relation to reimbursement, hours of work and
removal (subject to Clause 13.1.2)) as have been approved by Pool
Members in general meeting. Any amendment to those terms and
conditions shall require the prior approval of Pool Member in
general meeting.
16.2.4 Not later than three months prior to the end of the two
year term of the then current Pool Chairman, Pool Members may
either (i) call and hold a general meeting or (ii) call and hold
a postal vote and, if the Pool Chairman agrees, may resolve to
extend the term of appointment of the Pool Chairman by one year.
If the resolution is approved in accordance with the terms of
this Agreement then the term of appointment shall be so extended
provided that under no circumstances shall the term of
appointment exceed three years.
16.2.5 If at any time the Pool Chairman shall resign or be unable
for whatever reason to continue to act, an extraordinary general
meeting shall be called in accordance with Clause 9.4 or a postal
vote shall be called in accordance with Clause 16.4 for the
purposes of electing a successor Pool Chairman. Unless that
successor Pool Chairman himself is removed, resigns or is unable
for whatever reason to continue to act, he shall hold office
until the 31st March falling closest to the date two years after
the date of his election and his appointment may be extended in
accordance with Clause 16.2.4.
16.3 Transitional Provisions: The appointment of the Pool
Chairman whose two year term of office starts on 1st April, 1996
is hereby ratified and confirmed by all Pool Members. ~
16.4 Election procedure (postal vote): The Executive Committee
may (where practicable) resolve to call a postal vote to elect a
Pool Chairman. Where the Executive Committee so resolves, such
postal vote shall be held in accordance with the following
principles:
16.4.1 the Executive Committee shall instruct the Chief
Executive, who shall send a notice to Pool Members, stating that
a postal s ate has been called and inviting nominations to be
sent to the Chief Executive within a period of not less than 21
days from the date of such notice;
16.4.2 once such period for nomination has closed, the Chief
Executive shall send to all Pool Members a ballot paper
containing a list of all eligible nominees and a closing date for
the receipt by the Chief Executive of completed ballot papers,
such date being no less than 21 days from the date of such ballot
paper; and
16.4.3 each Pool Member shall have one vote and the successor
Pool Chairman shall be elected by single transferable vote in
accordance with the procedures approved by the Executive
Committee.
16.5 Election procedure (general meeting):
16.5.1 Where any successor Pool Chairman is to be elected at an
annual general meeting or (as the case may be) extraordinary
general meeting, nominations shall be delivered no later than 21
days prior to the relevant annual general meeting or (as the case
may be) extraordinary general meeting.
16.5.2 At the relevant annual general meeting or (as the case may
be) extraordinary general meeting, all eligible nominees shall be
proposed by the Pool Chairman (failing whom, the Chief
Executive). Each Pool Member shall have one vote and the
successor Pool Chairman shall be elected by single transferable
vote in accordance with the procedures approved by the Executive
Committee.
16.6 Nominations: Any Pool Member can nominate any one person,
whether or not an employee of a Pool Member, to be Pool Chairman.
Nominations made pursuant to this Clause 16.6 shall be delivered
in writing to the Chief Executive within any time period
specified pursuant to Clause 16.4 or (as the case may be) Clause
16.5. Any such nomination shall only be valid where accompanied
by a written statement from the nominee stating that he is aware
of the proposal and would be prepared to serve as Pool Chairman
in accordance with this Agreement and the relevant terms and
conditions if elected.
16.7 Functions: The Pool Chairman shall have and carry out only
such duties and responsibilities and exercise such powers as are
expressly provided in this Agreement and in his terms of
reference approved by the Executive Committee from time to time.
The Pool Chairman shall exercise impartially all such duties,
responsibilities and powers.
16.8 No voting rights: The Pool Chairman in his capacity as Pool
Chairman shall have no voting rights under this Agreement.
16.9 Indemnity: The Pool Chairman shall be indemnified and kept
indemnified jointly and severally by all Pool Members (and, as
between the Pool Members, rateably in the proportion which their
respective Contributory Shares bear one to the other at the time
of receipt of the request for indemnification) from and against
any and all costs (including legal costs), charges, expenses,
damages or other liabilities properly incurred or suffered by him
in relation to his office as Pool Chairman or the due exercise by
him of his powers, duties and responsibilities as Pool Chairman
and all claims, demands or proceedings arising out of or in
connection with the same except any such costs, charges,
expenses, damages or other liabilities which are suffered or
incurred or occasioned by the wilful default or bad faith of, or
breach of duty or trust by, the Pool Chairman. The Pool Members
shall, upon request, provide the Pool Chairman with a written
deed of indemnity to that effect.
17. CHIEF EXECUTIVE, SECRETARIAT AND SECRETARY
17.1 Chief Executive:
17.1.1Subject to Clause 15.7.4, a chief executive of the
Executive Committee (the "Chief Executive") shall be appointed
and be subject to removal and replacement by resolution of the
Executive Committee passed by 70 per cent or more of the votes of
all Committee Members (after consultation with the Pool
Chairman). The Chief Executive shall be appointed on such terms
and conditions as they see fit.
17.1.2 The Chief Executive shall undertake such dudes and
responsibilities and exercise such powers in relation to the
Executive Committee and its activities as the Executive Committee
may from time to time assign to or vest in him.
17.1.3 The Chief Executive shall have the right and shall be
obliged to attend all meetings of the Executive Committee and all
meetings of the Pool Members in general meeting. The Chief
Executive in his capacity as Chief Executive shall have no voting
rights under this Agreement. If for any reason. the Chief
Executive is unable to attend any such meeting, he shall nominate
a representative to attend in his place.
17.1.4 The Executive Committee shall make arrangements for the
remuneration of the Chief Executive and the payment of his costs
and expenses and the same shall be recovered in accordance with
the PEA Accounting Procedure or as otherwise directed by the
Executive Committee from time to time.
17.2 Secretariat:
17.2.1 The Executive Committee may from time to time appoint and
remove, or make arrangements for the appointment and removal of,
such personnel as the Executive Committee requires to assist the
Executive Committee, any sub-committee of the Executive
Committee, the chairman of the Executive Committee or any such
sub-committee, the Pool Chairman, the Chief Executive or the
Secretary in the proper performance of its or his duties and
responsibilities, in each such case upon such terms and
conditions as the Executive Committee sees fit.
17.2.2Any personnel referred to in Clause 17.2.1 shall undertake
such duties and responsibilities and exercise such powers as the
Executive Committee may from time to time assign to or vest in
him, it or them.
17.2.3 The Executive Committee shall make arrangements for the
remuneration of such personnel as are referred to in Clause
17.2.1 and the payment of their costs and expenses and the same
shall be recovered in accordance with the PFA Accounting
Procedure or as otherwise directed by the Executive Committee
from time to time.
17.3 Secretary:
17.3.1 The Executive Committee may from time to time appoint and
remove, or make arrangements for the appointment and removal of,
the Secretary on such terms and conditions as it sees fit.
17.3.2The Secretary in his capacity as Secretary shall have no
voting rights under this Agreement.
17.3.3 The Secretary shall have and carry out only such duties
and responsibilities as are expressly provided in this Agreement
and such other reasonable secretarial and administrative duties
and responsibilities as may from time to time be delegated to it
by the Executive Committee. If at any time there is no Secretary,
the responsibilities and duties of the Secretary under this
Agreement shall become those of the Chief Executive or, if there
shall be no Chief Executive, the Executive Committee until such
time as a Secretary is appointed pursuant to Clause 17.3.1 or a
Chief Executive is appointed pursuant to Clause 17.1.1 (and
notices to the Secretary under this Agreement shall be
re-addressed accordingly).
17.3.4 The Secretary shall be entitled to receive such
remuneration (if any) as the Executive Committee may from time to
time approve, such remuneration to be paid to it at such times
and in such manner as the Executive Committee shall from time to
time direct and to be recovered in accordance with the PFA
Accounting Procedure or as otherwise directed by the Executive
Committee from time to time. Further, the Secretary shall be paid
its reasonable travelling, hotel and incidental expenses of
attending and returning from meetings of the Executive Committee
or any sub-committee thereof and any general meetings and
separate general meetings of Pool Members and all costs and
expenses properly and reasonably incurred by it in the
performance of its duties and responsibilities under this
Agreement. All such costs and expenses shall be recovered in
accordance with the PFA Accounting Procedure or as otherwise
directed by the Executive Committee from time to time.
17.4 Indemnity:
17.4.1 All Pool Members shall jointly and severally indemnify and
keep indemnified the Chief Executive, the Contract Manager, the
personnel referred to in Clause 17.2.1, the Secretary and each
member of any sub-committee of the Executive Committee or of any
sub-group established by any such sub-committee (other than a
Committee Member, but without prejudice to Clause 23.3.4) (and,
as between the Pool Members, according to their respective
Contributory Shares at the time of receipt of the request for
indemnification) from and against any and all costs (including
legal costs), charges, expenses, damages or other liabilities
properly incurred or suffered by the Chief Executive in relation
to his office as Chief Executive or (as the case may be) the
Secretary in relation to its office as Secretary or the due
exercise by the Chief Executive, the Contract Manager, the said
personnel, the Secretary or (as the case may be) any such member
of his, their or its powers, duties and responsibilities under
this Agreement and all claims, demands or proceedings arising out
of or in connection with the same except any such costs, charges,
expenses, damages or other liabilities which are suffered or
incurred or occasioned by the wilful default or bad faith of, or
breach of obligation by, the Chief Executive, the Contract
Manager, such personnel, the Secretary or (as the case may be)
any such member.
17.4.2 The Pool Members undertake to enter into an indemnity in
favour of any employer of the Chief Executive, any personnel
referred to in Clause 17.2.1, the Secretary or (as the case may
be) any such member of any sub-committee of the Executive
Committee or of any sub-group established by any such
sub-committee as is referred to in Clause 17.4.1 under which they
shall jointly and severally indemnify and keep indemnified any
such employer in respect of all acts and omissions of the Chief
Executive, the Contract Manager, such personnel, the Secretary or
(as the case may be) any such member in the performance of his,
their or its rights, powers, dudes and responsibilities under
this Agreement (and, as between the Pool Members, according to
their respective Contributory Shares at the time of receipt of
the request for indemnification under the relevant indemnity).
18. PROCEEDINGS OF THE EXECUTIVE COMMITTEE
18.1 Meetings:
18.1.1 Meetings of the Executive Committee (other than special
meetings referred to in Clause 18.1.3) shall be held at least
quarterly (or at such shorter regular intervals as may be agreed
from time to time by the Executive Committee) at such time and
place in any jurisdiction in which any Pool Member is
incorporated or has its principal place of business as may be
agreed from time to time by the Executive Committee 'or, in
default of agreement, as stipulated by the Pool Chairman).
l8.1.2 Meetings of the Executive Committee shall be convened by
the Secretary upon giving to the Committee Members, the Pool
Chairman, the Chief Executive (if any), the Settlement System
Administrator, the Director and the Pool Auditor and (where
matters the subject of the agenda referred to in Clause 18.1.4
concern directly the functions, duties or responsibilities of any
Externally Interconnected Party (not being a Pool Member), the
Pool Funds Administrator, the Grid Operator and/or the Ancillary
Services Provider) the relevant one(s) of them at least five
working days' notice of the place, the day and the hour of the
relevant meeting.
18.1.3 Special meetings of the Executive Committee shall be
convened upon the request of any Committee Member, the Pool
Chairman or the Chief Executive. Such request shall be made in
writing to the Secretary and shall state the matters to be
considered at that special meeting. Upon receipt of such request
the Secretary shall convene in accordance with Clause 18.1.2
without delay such special meeting for a date occurring as soon
as practicable thereafter but not less than five nor more than
ten working days after receipt of such request. If the Secretary
shall fail so to convene a special meeting the Committee Member
which made such request, the Pool Chairman or (as the case may
be) the Chief Executive may himself convene a special meeting,
but any meeting so convened shall not be held after the
expiration of two months from the date of such request. A special
meeting convened under this Clause 18.1.3 by a Committee Member,
the Pool Chairman or the Chief Executive shall be convened in the
same manner, as nearly as possible, as that in which meetings of
the Executive Committee are to be convened by the Secretary
pursuant to Clause 18.1.2.
18.1.4Any notice given under Clause 18.1.2 shall be exclusive of
the day on which it is served or deemed to be served and of the
day for which it is given and shall be accompanied by an agenda
of the matters to be considered at the relevant meeting together
with any supporting documents or papers then available to the
Secretary. Any Committee Member may advise additional matters
which he wishes to be considered at such meeting by notice to all
other Committee Members, the Pool Chairman, the Chief Executive
(if any), the Secretary, the Settlement System Administrator, the
Director and the Pool Auditor and (where such additional matters
concern directly the functions, duties or responsibilities of any
Externally Interconnected Party (not being a Pool Member), the
Pool Funds Administrator, the Grid Operator and/or the Ancillary
Services Provider) the relevant one(s) of them given no later
than three working days before the date of such meeting. Only
matters identified in such agenda or so advised shall be
discussed or resolved upon at such meeting. The accidental
omission to give notice of a meeting or accompanying agenda or
supporting documents or papers to, or the non-receipt of notice
of a meeting or accompanying agenda or supporting documents or
papers by, any person entitled to receive notice shall not
invalidate the proceedings at that meeting.
18.1.5 For any meeting of the Executive Committee, the periods
and methods of notice referred to in the foregoing provisions of
this Clause 18 may be waived prospectively or retrospectively
with the consent in writing of all such persons as are entitled
to attend the relevant meeting.
18.1.6 The Secretary shall prepare minutes of all meetings of the
Executive Committee and shall provide copies thereof to all such
persons as were entitled to attend the relevant meeting as soon
as practicable (and in any event within ten working days) after
the relevant meeting has been held. Each person who attended such
meeting shall notify his approve} or disapproval of the minutes
thereof to the Secretary no later than ten working days after
receipt thereof and, if he fails to do so, he or it shall be
deemed to have approved the same. The Secretary shall record any
such disapproval in the minutes unless the same shall have been
withdrawn or the minutes amended with the agreement of the
Executive Committee. The Secretary shall provide copies of
minutes of meetings of the Executive Committee to any other Party
within a reasonable time after request therefor provided that the
said time for approving or disapproving the same has expired.
Further, the Secretary shall provide copies of such minutes to
such persons as the Executive Committee may from time to dine
direct within a reasonable time after receipt of such direction.
19. CONDUCT OF EXECUTIVE COMMITTEE MEETINGS
19.1 General: Chairman:
19.1.1 Subject as provided in Clauses 13, 18 and 22 and this
Clause 19, the Executive Committee may meet for the transaction
of business, and adjourn and otherwise regulate its meetings, as
it shall see fit.
19.1.2 The Pool Chairman shall preside as chairman at every
meeting of the Executive Committee provided that:
(a) if the Pool Chairman is unable to attend any meeting, he
shall nominate another individual to preside as chairman at that
meeting in his place. Such individual shall be a director or
senior executive of one of the Pool Members but shall not be a
Committee Member or an alternate for any Committee Member; and
(b) if there is no Pool Chairman or the Pool Chairman or his
duly appointed nominee shall not be present within 15 minutes
after the time appointed for the holding of the meeting or the
Pool Chairman is unwilling to act, the Committee Members present
may appoint one of their number to be chairman of the meeting.
19.1.3 The chairman of the meeting in his capacity as chairman
shall not have any vote at meetings of the Executive Committee.
19.2 Quorum: No business shall be transacted at a meeting of the
Executive Committee unless a quorum is present at the time the
meeting proceeds to business. Three Committee Members appointed
pursuant to Clause 15.2 and three Committee Members appointed
pursuant to Clause 15.4 present in person or by their respective
alternates shall constitute a quorum.
19.3 Lack of quorum: If, within half an hour from the time
appointed for holding any meeting of the Executive Committee, a
quorum is not present, the meeting shall be adjourned to the same
day in the next week at the same time and place and if at the
adjourned meeting a quorum is not present within half an hour
from the time appointed for holding the meeting, those present
shall constitute a quorum.
19.4 Representation of non-Committee Members: Each of the
Settlement System Administrator, the Pool Chairman, the Director
and the Pool Auditor (or its or his duly appointed
representative) shall have the right to attend and speak (but not
to vote) at meetings of the Executive Committee. Each Externally
Interconnected Party (not being a Pool Member) and each of the
Pool Funds Administrator, the Grid Operator and the Ancillary
Services Provider (or its duly appointed representative) shall be
entitled to attend and speak (but not vote) at meetings of the
Executive Committee only where matters directly concerning its
functions, duties or responsibilities have been identified or
advised as provided in Clause 18.1.4 or if so requested by the
Executive Committee. The Chief Executive (or his duly appointed
representative) shall have the right to attend and speak (but not
vote) at meetings of the Executive Committee and shall be obliged
so to attend. With the exception of attendances by the Pool
Chairman, the Chief Executive and the Pool Auditor, no payment
shall be made to any person who has the right by virtue of this
Clause 19.4 to attend Executive Committee meetings in respect of
any such attendance.
19.5 Written resolutions: A resolution in writing, executed by or
on behalf of each Committee Member, shall be as valid and
effectual as if it had been passed at a meeting of the Executive
Committee duly convened and held and may consist of several
instruments in like form and executed by or on behalf of one or
more of such Committee Members. Any proposed resolution in
writing shall be circulated to all those persons who would have
been entitled to attend a meeting of the Executive Committee at
which such resolution could properly have been passed.
19.6 Default in appointment: All acts done by any meeting of the
Committee Members or of a sub-committee of the Executive
Committee shall, notwithstanding that it be afterwards discovered
that there was some defect in the appointment of such Committee
Member, be as valid as if such person had been duly appointed.
20. DELEGATION
20.1 Sub-committees: The Executive Committee may establish
sub-committees. Each Sub-committee:
20.1.1 shall be composed of such persons (whether or not
Committee Members) and shall discharge such rights, powers, dudes
and responsibilities as from time to time the Executive Committee
considers desirable to delegate to it; and
20.1.2 in the exercise of its rights and powers and the
performance of its duties and responsibilities delegated to it by
the Executive Committee shall at all times conduct itself and its
affairs in a manner which it considers best designed to give
effect to the principal objects and purpose set out in Clause
4.1.2 and to promote, and not obstruct, the fair and efficient
operation of the procedures referred to in Clause 4.1.3 so that
the objectives set out in Clause 4.1.3 are thereby achieved; and
20.1.3 shall be given written terms of reference and, unless
otherwise varied by the Executive Committee, the provisions of
Clauses 18 and 19 shall apply mutates mutandis to meetings of
such sub-committee and the provisions of Clauses 19.4, 23.3.1,
23.3.2 and 23.3.3 shall apply mutatis mutandis in relation to any
such sub-committee and the members thereof; and
20.1.4 may establish sub-groups to assist in the discharge of the
rights, powers, duties and responsibilities of such
sub-committee, each of which sub-groups shall be given written
terms of reference and, unless otherwise varied by the Executive
Committee or any sub-committee acting on the authority of the
Executive Committee, the provisions of Clauses 18 and 19 shall
apply mutatis mutandis to meetings of such sub-groups and the
provisions of Clauses 23.3.1, 23.3.2, and 23.3.3 shall apply
mutatis mutandis in relation to each such sub-group and the
members thereof.
20.2 Nominees: Upon written request of the Executive Committee
or, in the case of the Settlement System Administrator, Order
issued by the Contract Manager under Schedule 4, each Pool Member
and the Settlement System Administrator shall:
20.2.1 nominate one or more persons knowledgeable in the matters
referred to, or the subject of consideration by, the relevant
sub-committee to attend at meetings of, and otherwise participate
as a member of, any sub-committee established by the Executive
Committee; and
20.2.2 procure that such nominee(s) shall so attend and
participate at such time or times as the Executive Committee or
such sub-committee may require,
provided that a Pool Member shall not be required in any period
of 12 months to make available nominees for more than 60 days in
aggregate. Save as provided by Clause 23.5 no payment shall be
made to Pool Members in respect of any such attendance or
participation.
20.3 Member's responsibilities: To the extent not inconsistent
with the provisions of Clauses 20.1.1, 20.1.2 and 20.1.3 a member
of any sub-committee established by the Executive Committee shall
be free to represent the interests of the person or persons which
nominated him to that sub-committee but each such person
acknowledges and agrees the subordination of those interests to
the responsibilities of such sub-committee under Clause 20.1.2.
20.4 Chief Executive: The Executive Committee may from time to
time delegate all or any of its rights, powers, duties and
responsibilities under this Agreement to the Chief Executive upon
such terms and conditions as the Executive Committee thinks fit.
20.5 Effect of decisions: Resolutions of sub-committees shall not
have binding effect (a) unless and then only to the extent that
the Executive Committee shall have delegated the relevant
decision-making powers to the sub-committee, or (b) unless
approved by resolution of the Executive Committee (and then
subject to Clause 13). Meetings of such sub-committees shall, so
far as possible, be arranged so that minutes of such meetings can
be circulated to each Committee Member in sufficient time for
consideration before the next following regular meeting of the
Executive Committee. Resolutions of sub-groups shall not have
binding effect. The Executive Committee shall remain at all times
responsible for the actions of all its sub-committees and
sub-groups.
20.6 Other delegation: Subject to any direction to the contrary
by Pool Members in general meeting but without prejudice to the
Executive Committee's rights under Clauses 20.1 and 20.4, the
Executive Committee may from time to time delegate in any
particular case all or any of its rights, powers, duties and
responsibilities under this Agreement, including any
decision-making powers and the conduct of any review or
consultation and the preparation and submission of any report
required of it under this Agreement, to such person or persons as
it thinks fit and on such terms and conditions as it thinks fit
and shall require that, in the performance of the delegated
duties, such person or persons shall conform to any regulations
that may be imposed on it or them by the Executive Committee.
21. VACATION OF OFFICE BY COMMITTEE MEMBERS
The office of a Committee Member shall be vacated if:
21.1 he resigns his office by notice delivered to the Secretary;
or
21.2 he becomes bankrupt or compounds with his creditors
generally; or
21.3 he becomes of unsound mind or a patient for any purpose of
any statute relating to mental health; or
21.4 he and his alternate fail to attend more than three
consecutive meetings of the Executive Committee; or
21.5 he is removed from office pursuant to Clause 15.3, 15.5 or
(as the case maybe) 15.6.
22. VOTING
22.1 Voting: The chairman of the relevant meeting of the
Executive Committee and any Committee Member may demand that any
question or matter arising at a meeting of the Executive
Committee be put to a vote of Committee Members. Any vote so
demanded shall be taken forthwith or at such other time as such
chairman directs not being later than the date of the next
meeting of the Executive Committee. Any demand for a vote may,
before the vote is taken, be withdrawn.
22.2 Simple majority: Subject as provided in Clauses 22.3 to
22.11, any question or matter arising at a meeting of the
Executive Committee shall be decided by a simple majority of the
votes cast at the meeting by Committee Members. On any such
question or matter each Committee Member shall be entitled to one
vote. In the event of an equality of votes on any resolution put
to the Executive Committee, the matter the subject of the
relevant resolution shall be remitted to the Committee Members
for decision on a poll. 5
22.3 Demand for a poll: In respect of any matter or question
which is put to a vote of Committee Members a poll may be
demanded (before or after the simple majority vote) either:
22.3.1 at the meeting at which the simple majority vote takes
place, by the chairman of the meeting or by any Committee Member;
or
22.3.2 by no later than five working days after such meeting, by
notice in writing to the Secretary by any Committee Member
(whether or not present at the relevant meeting).
22.4 Effect of decision: A decision duly made at a meeting of the
Executive Committee shall (unless otherwise determined by the
Executive Committee or otherwise provided by the terms of the
decision) have immediate effect, unless a poll be duly demanded
in accordance with Clause 22.3, in which case, pending the
outcome of the vote on a poll, the decision shall cease to or
shall not have effect.
22.5 Conduct of a poll: The Secretary shall without delay
following the demand for, or the remittance of a matter for
decision on, a poll despatch to each Committee Member a voting
paper in such form as shall be agreed by the chairman of the
Executive Committee meeting at which the matter in question was
considered or (failing him) the Chief Executive but which shall
in any event set out the full text of the resolution in respect
of which the poll is required (which shall be the same as the
resolution which was put to a simple majority vote), shall
provide for each Committee Member to cast votes for or against
the resolution and shall specify the date by which votes must be
lodged by Committee Members. The Secretary-shall at the same time
give notice to all Parties that a poll has been demanded and
shall specify in such notice the resolution on which the poll has
been called (if applicable), the identity of the person (or
persons) who has demanded the poll and the date by which votes
must be lodged by the Committee Members. The accidental omission
to issue a voting paper or to give notice of a poll, or the
non-receipt of a voting paper or such a notice by, any person
entitled to receive the voting paper or (as the case may be) the
notice shall not invalidate the conduct of the poll or the result
thereof.
22.6 Votes on a poll: On a vote on a poll:
22.6.1 the Committee Members shall in aggregate be entitled to a
number of votes equal to the number of votes which the Pool
Members would have been entitled to cast on a poll at a general
meeting if such meeting had taken place on the day of the
Executive Committee meeting at which the matter in question was
considered;
22.6.2 the Committee Members appointed (or deemed appointed) by
Generators shall be entitled to cast votes on the following
basis:
(a) each Committee Member nominated by a single Generator (which
for this purpose shall include affiliates and related
undertakings of a Generator which are also Generators) and
elected on the first round of voting shall cast the number of
votes respectively attributable to that Generator and to its
affiliates and related undertakings (in each case, whether as
Generators or Suppliers) in accordance with the written
instructions of that Generator and of each relevant affiliate and
related undertaking;
(b) the Committee Members not falling within (a) above shall
have the votes attributable to all other Generators (not being
those referred to in paragraph (a) above or their affiliates and
related undertakings) and shall cast such votes in accordance
with the individual written instructions of each such Generator,
but so that no Generator shall be entitled to instruct that the
votes attributable to it be cast more than once;
22.6.3 the Committee Members appointed by Suppliers shall be
entitled to cast votes on the following basis:
(a) the Committee Members appointed (or deemed appointed) by
Groups A, B. C and D shall each cast the votes attributable to
the members of the relevant Group in accordance with the written
instructions of the individual Suppliers which are members of
that Group;
(b) the Committee Member appointed on behalf of the Independent
Suppliers shall cast the votes attributable to the Independent
Suppliers in accordance with the individual written instructions
of each such Supplier;
22.6.4 in the absence of any written instructions from any
Generator or Supplier, a Committee Member shall not be entitled
to cast any votes on behalf of that Generator or Supplier;
22.6.5 a Generator or a Supplier may instruct the relevant
Committee Member to abstain from casting any or a specified
number of votes on its behalf;
22.6.6 the votes cast by a Committee Member shall not be valid
unless:
(a) the relevant voting paper shall have been received by the
Secretary on or before the date falling 10 working days after the
date on which the voting papers were despatched to Committee
Members and the votes cast in such voting paper accord with the
written instructions referred to in paragraph (b) below;
(b) accompanied by a copy of the written instructions given by
or on behalf of the Generator(s) or Supplier(s) whose votes the
Committee Member is entitled to cast;
(c) the Committee Member in other respects shall have complied
with the procedures for votes on a poll (if any) from time to
time established by the Executive Committee;
22.6.7 any Generator or Supplier on whose instructions a
Committee Member is required to act in accordance with the
foregoing provisions shall be entitled to make arrangements with
any other Generator or Supplier on whose instructions that same
Committee Member is required to act for the requisite written
instructions to be given on its behalf by that other Generator or
Supplier. Details of any such arrangement shall promptly be given
to the Secretary.
22.7 65 per cent. majority: A resolution on a poll shall be
decided by a majority of not less than 65 per cent. of the votes
duly cast. The Secretary shall as soon as reasonably practicable
after the expiry of the 10 working day period for return of
voting papers referred to in Clause 22.6.6(a) ascertain the
results of the poll in consultation with the Pool Chairman or
(failing him) the Chief Executive and the Chief Executive or
(failing him) the Secretary shall as soon as practicable
thereafter notify all Parties and all other persons entitled or
required to attend general meetings of Pool Members of the
outcome of the poll. The result of the poll shall be deemed to be
the resolution of the meeting at which or after which the poll
was demanded.
22.8 Withdrawal of demand: Any demand for a poll may be withdrawn
by the person who made it at any time provided that notice of
withdrawal is received by the Secretary by no later than the
seventh working day following the date of the Executive Committee
meeting at which the simple majority vote took place. The
Secretary shall as soon as reasonably practicable notify all
Parties and all other persons entitled or required to attend
general meetings of Pool Members of receipt of any such notice of
withdrawal.
22.9 Responsibilities of Committee Members: The Committee Members
shall consult the Pool Members whose votes they are entitled to
cast as soon as reasonably practicable following the demand for a
poll and shall be required to cast, or to refrain from casting,
the votes of such Pool Members in accordance with their
individual instructions. The provisions of Clauses 23.1 and 23.2
shall not apply in respect of any vote conducted on a poll.
22.10 Referral to general meetings: The provisions of this Clause
22 are subject to the requirements of referral to the Pool
Members in general meeting described in Clause 13.4.
22.11 Civil emergencies: The provisions of this Clause 22 are
subject to the provisions of Clause 61.9.
23. COMMITTEE MEMBERS' RESPONSIBILITIES AND PROTECTIONS
23.1 Executive Committee's responsibilities: In the exercise of
its powers and the performance of its duties and responsibilities
under this Agreement the Executive Committee shall at all times
conduct itself and its affairs in a manner which it considers
best designed to give effect to the principal objects and purpose
set out in Clause 4.1.2 and to promote, and not obstruct, the
fair and efficient operation of the procedures referred to in
Clause 4.1.3 so that the objectives set out in Clause 4.1.3 are
thereby achieved. To the extent not inconsistent with the
responsibilities of the Executive Committee under this Clause
23.1 a Committee Member shall be free to give effect to his
responsibilities under Clause 23.2 but each of the Pool Members
whom such Committee Member represents acknowledges and agrees the
subordination of such Committee Member's responsibilities under
Clause 23.2 to the responsibilities of the Executive Committee
under this Clause 23.1.
23.2 Committee Members' responsibilities: In the exercise of his
powers and the performance of his duties and responsibilities as
a Committee Member under this Agreement a Committee Member shall
represent:
23.2.1 where he is appointed on the first round of voting under
Clause 15.2.4, the interests of the Pool Member who cast the most
number of votes in favour of his appointment;
23.2.2 where he is appointed on the second or third round of
voting under Clause 15.2.4 or where he is appointed pursuant to
Section 6 of Schedule 14, the interests of all Pool Members who
were entitled to vote on his appointment (and, for the purposes
of this Clause, until the annual general meeting of Pool Members
in 1996 Central Power Limited and Peterborough Power Limited
shall be deemed to be Pool Members who were entitled to vote on
the appointment of the Committee Member appointed on the second
round of voting), but so that he shall not incur personal
liability as against one or more such Pool Members if, acting
bona fide, he acts in a way which gives effect to the interests
of one or more other such Pool Members; and
23.2.3 where he is appointed as a Committee Member for a Group
pursuant to Schedule 14, the interests of the PES Members of the
Group in respect of which he is appointed.
23.3 Protections:
23.3.1 The Executive Committee, each Committee Member, the Pool
Chairman, the Chief Executive, the Contract Manager and the
Secretary shall be entitled to rely upon any communication or
document reasonably believed by it or him to be genuine and
correct and to have been communicated or signed by the person by
whom it purports to be communicated or signed and shall not be
liable to any of the Parties for any of the consequences of such
reliance.
23.3.2 The Executive Committee, each Committee Member, the Pool
Chairman, the Chief Executive, the Contract Manager and the
Secretary, may in relation to any act, matter or thing
contemplated by this Agreement act on the opinion or advice of,
or any information from, any lawyer, banker, valuer, broker,
accountant or any other specialist or professional adviser given
within the field of expertise usually ascribed to persons of such
description or the specialist field of expertise for which he has
been retained and duly instructed so to act by the Executive
Committee, and shall not be liable for the consequences of so
acting. The appointment of any such adviser to the Executive
Committee shall be approved by the Executive Committee before any
such cost is charged to the PFA Accounting Procedure.
23.3.3 In the event of any conflict or inconsistency, any
directions and instructions of the Director (which the Director
is entitled under his statutory or regulatory powers to issue or
give) shall prevail over the duties and responsibilities of the
Executive Committee or the Secretary under this Agreement and no
liability whatsoever shall attach to the Executive Committee or
any Committee Member or the Pool Chairman or the Chief Executive
or the Contract Manager or the Secretary (as the case may be) as
a result of due compliance by it or him with any such directions
and instructions.
23.3.4 Each Committee Member shall be indemnified and kept
indemnified by that Pool Member or jointly and severally by those
Pool Members whom he represents as provided in Clause 23.2 (and,
if more than one, as between the relevant Pool Members rateably
in the proportion which their respective Contributory Shares bear
one to the other at the time of receipt of the request for
indemnification) from and against any and all costs (including
legal costs), charges, expenses, damages or other liabilities
properly incurred or suffered by him in relation to the Executive
Committee or his office as Committee Member or the due exercise
by him of his powers, duties and responsibilities as a Committee
Member and all claims, demands or proceedings arising out of or
in connection with the same except any such costs and expenses
referred to in Clause 23.4 which have been recovered in
accordance with the PFA Accounting Procedure and any such costs,
charges, expenses, damages or other liabilities which are
suffered or incurred or occasioned by the wilful default or bad
faith of, or breach of duty or trust by, such Committee Member.
The Pool Member or (as the case may be) Pool Members whom he
represents as aforesaid shall, upon request, provide the relevant
Committee Member with a written deed of indemnity to that effect.
23.4 Committee Members' costs and expenses: Each Committee Member
and each member of any sub-committee or sub-group of the
Executive Committee may be paid his reasonable travelling, hotel
and incidental expenses of attending and returning from meetings
of the Executive Committee or any such subcommittee or sub-group
and shall be paid all expenses properly and reasonably incurred
by him in the conduct of the business of the Executive Committee
or the relevant; sub-committee or sub-group or in the discharge
of his duties as a Committee Member or (as the case may be) a
member of the relevant subcommittee or sub-group. All such
expenses shall be recovered in accordance with the PFA Accounting
Procedure.
23.5 Committee's costs and expenses: The Executive Committee and
each of its subcommittees and sub-groups shall be entitled to
recover all its costs and expenses properly incurred in
accordance with the PFA Accounting Procedure.
For this purpose, the costs and expenses of the Executive
Committee shall include properly incurred costs, expenses and
liabilities of or associated with any business accommodation and
services required by the Executive Committee, the Chief
Executive, the Secretary or the personnel referred to in Clause
17.2.1 and the properly incurred costs and expenses of any
consultant or adviser retained by the Executive Committee or any
such person in the proper performance of its or his duties and
responsibilities.
24. POWERS OF THE EXECUTIVE COMMITTEE
24.1 General power: Subject as otherwise provided in this
Agreement, the Executive Committee shall, as between itself and
the Pool Members in general meeting, exercise overall supervision
of the Settlement System and its operations.
24.2 Specific powers: Subject as otherwise provided in this
Agreement, the powers, duties and responsibilities of the
Executive Committee shall, as between itself and the Pool Members
in general meeting, include:
24.2.1 the specific powers, duties and responsibilities set out
in the Pool Rules;
24.2.2 monitoring on a regular basis the Settlement System
Administrator in its operation of the Settlement System
(including deciding whether to propose to the Pool Members in
general meeting for their approval the removal of the Settlement
System Administrator);
24.2.3 the power to appoint and remove the Pool Funds
Administrator and to carry out the other functions ascribed to it
in Schedules 11 and 15 and to enter into on behalf of Pool
Members any agreement or arrangement with the Pool Funds
Administrator (or successor Pool Funds Administrator) in
substitution for that set out in Schedule 15;
24.2.4 monitoring on a regular basis each of the Grid Operator
and the Ancillary Services Provider in the performance of its
obligations under this Agreement;
24.2.5 considering applications by New Parties to be admitted as
parties to this Agreement under Clause 3 and of Parties to be
admitted as Pool Members under Clause 8;
24.2.6 considering, amending, substituting, approving and
disapproving all Agreed Procedures, Codes of Practice (including
commissioning reviews thereof by the Pool Auditor in accordance
with Clause 47.1.5 or by other technical experts) and Service
Lines;
24.2.7 the specific powers, duties and responsibilities set out
in Schedule 4;
24.2.8 the specific powers, duties and responsibilities set out
in Schedule 15;
24.2.9appointing and removing the Pool Auditor, and instructing
the Pool Auditor to conduct audits, reviews, tests and checks and
the monitoring and review thereof, all in accordance with Part
IX;
24.2.10opening, maintaining and closing bank accounts for its own
purposes and crediting and debiting sums thereto;
24.2.11controlling the development of the Pool Rules and
considering and approving or disapproving amendments to the Pool
Rules in accordance with Clause 7.4.2;
24.2.12commissioning independent reviews of the Scheme and its
operation in accordance with Part XIII;
24.2.13conducting reviews, preparing Works Programmes and
implementing Transitional Arrangements, all in accordance with
Clause 5;
24.2.14preparing the reports referred to in Clause 9.1.1 and the
business plan referred to in Clause 9.1.6 and preparing and
despatching regular quarterly reports to the Parties (with a copy
to the Director) in relation to all matters which are the subject
of this Agreement and in such reports reviewing performance over
the immediately preceding Quarter against the business plan
referred to in Clause 9.1.6;
24.2.15considering any representation from any Pool Member in
relation to any regular quarterly report prepared pursuant to
Clause 24.2.14 above or otherwise relating to any matter which is
the subject of this Agreement;
24.2.16overseeing the standards of Metering Equipment and the
Codes of Practice, agreeing in accordance with paragraph 14 of
Schedule 21 dispensations therefrom and reviewing the need for
new standards for Metering Equipment and, where it considers such
new standards are required, adopting such standards in accordance
with the requirements for adoption of Codes of Practice (as
contained in the definition of Code of Practice) and in
accordance with the provisions of Schedule 21;
24.2.17dealing promptly and efficiently with any dispute referred
to it concerning Settlement or its operation (including with
respect to data);
24.2.18convening in accordance with Clause 9.4 general meetings
of Pool Members or classes of Pool Members and convening in
accordance with Clause 9.6 quarterly meetings of Pool Members;
24.2.19appointing, remunerating and removing the Chief Executive
in accordance with Clause 17.1 and, where permitted by the terms
of this Agreement, giving directions and instructions to the Chief
Executive, the Contract Manager, the Settlement System
Administrator, the Pool Funds Administrator, the Grid Operator,
the Ancillary Services Provider, Externally Interconnected
Parties (not being Pool Members) and other persons to carry into
effect the decisions of the Executive Committee or Pool Members
in general meeting or separate general meeting;
24.2.20if requested by the Director, conveying any direction or
request of the Director to the Settlement System Administrator,
the Pool Funds Administrator, the Grid Operator, the Ancillary
Services Provider or any other Party or the Pool Auditor;
24.2.21appointing, remunerating and removing in accordance with
the Grid Code one or more persons to represent the Executive
Committee on the Grid Code Review Panel;
24.2.22appointing, remunerating and removing lawyers, bankers,
valuers, brokers, accountants and other professional and
specialist advisers to assist the Executive Committee or any of
its sub-committees in the performance of its duties and
responsibilities under this Agreement;
24.2.23subject to any applicable confidentiality provisions,
monitoring any litigation, arbitration or other proceedings
affecting or which may affect the Settlement System;
24.2.24subject to any applicable confidentiality provisions,
advising Pool Members, Externally Interconnected Parties (not
being Pool Members), the Settlement System Administrator, the
Pool Funds Administrator, the Grid Operator and the Ancillary
Services Provider of decisions of the Executive Committee
applicable to them or the relevant one(s) of them and liaising
with all such persons on an ongoing and regular basis;
24.2.25advising each of the Pool Auditor and the Director of
decisions of the Executive Committee and of Pool Members in
general meeting or separate general meeting and liaising with
each of the Pool Auditor and the Director on an ongoing and
regular basis;
24.2.26investigating any complaints made by any Pool Member
concerning the Settlement System, the Funds Transfer System (or
any part or aspect of any thereof), the Settlement System
Administrator, the Pool Funds Administrator, the Grid Operator,
the Ancillary Services Provider, the Pool Auditor, the Pool
Banker or the Custodian;
24.2.27approving the Pool Banker and giving instructions for, or
consenting to, the removal of the same;
24.2.28reviewing and approving or disapproving the Procedures
Manual in accordance with Clause 64;
24.2.29considering and dealing with any other matter relating to
the Settlement System, the Funds Transfer System (or any part or
aspect of any thereof) or its or their operation referred to the
Executive Committee by the Pool Members in general meeting or
separate general meeting, any Pool Member, the Pool Chairman, the
Pool Auditor or the Director and any other matter which is
otherwise designated under this Agreement for reference to it;
and
24.2.30determining the amount of the Second Tier Suppliers'
System Charge.
24.3 Exclusion of general meeting powers: Pool Members in general
meeting shall have no powers in relation to the matters expressly
reserved under this Agreement to the Executive Committee except
to the extent that such matters are remitted to the Pool Members
in general meeting under Clause 13.4.
PART V
LIMITATION OF LIABILITY
25.LIMITATION OF LLABILI1~'
25.1 Limitation of liability: Subject to Clause 25.2 and save
where any provision of this Agreement provides for an indemnity,
each Party agrees and acknowledges that no Party (excluding for
this purpose the Settlement System Administrator) (the "Party
Liable") or 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 of this Agreement was
reasonably foreseeable as not unlikely to occur in the ordinary
course of events from such breach in respect of:
25.1.1 physical damage to the property of any of the other
Parties or its or their respective officers, employees or agents;
and/or
25.1.2 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.
25.2 Death and personal injury: 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.
Exclusion of certain types of loss: Subject to Clause 25.2 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:
25.3.1 any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or
25.3.2 any indirect or consequential loss; or
25.3.3 loss resulting from the liability of any other Party to
any other person howsoever and whensoever arising save as
provided in Clauses 25.1.2 and 25.2.
25.4 Trust: Each Party acknowledges and agrees that each of the
other Parties holds the benefit of Clauses 25.1, 25.2 and 25.3
for itself and as trustee and agent for its officers, employees
and agents.
25.5Survival: Each of Clauses 25.1, 25.2, 25.3 and 25.4
shall:
25.5.1 be construed as a separate and severable contract term,
and if one or more of such Clauses is held to be invalid, unlawful
or otherwise unenforceable the other or others of such Clauses shall
remain in full force and effect and shall continue to bind the Parties; and
25.5.2 survive termination of this Agreement.
25.6 Saving: For the avoidance of doubt, nothing in this Part V
shall prevent or restrict any Party enforcing any obligation
(including suing for a debt) owed to it under or pursuant to this
Agreement.
25.7 Full negotiation: Each Party acknowledges and agrees that
the foregoing provisions of this Part V 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.
PART VI
THE SETTLEMENT SYSTEM ADMINISTRATOR
26.APPOINTMENT
ESIS is hereby appointed by each Pool Member and agrees to act as
the initial Settlement System Administrator on and subject to the
terms and conditions of the SSA Arrangements.
27.[Not used].
28.[Not used].
107
PART VII
THE SETTLEMENT SYSTEM ADMINISTRATOR'S RESPONSIBILITIES
29.RESPONSIBILITIES
Responsibilities: Without prejudice to the generality of the
duties, responsibilities and obligations of the Settlement System
Administrator provided elsewhere in the SSA Arrangements:
29.1 Provision of information: The Settlement System
Administrator shall provide each Pool Member and the Ancillary
Services Provider upon request with a certified copy of such
records, data and other information concerning amounts payable by
or to such Pool Member and the Ancillary Services Provider as
such Pool Member may reasonably request for the purpose of
establishing the amounts which are owed to or by such Pool Member
in accordance with this Agreement, and in any event such
information as any Pool Member may request from the Settlement
System Administrator in order to establish or prove a claim to
any amounts due or claimed to be due. The Settlement System
Administrator shall provide such information forthwith upon
request or (if so required by the Settlement System
Administrator) upon delivery of a certificate from the Pool
Member's counsel certifying that such information is required for
such purpose. Each of the Parties agrees to the release of all
such records, data and other information in the circumstances
described in this Clause 29.1.
29.2 Arrangements with the Grid Operator and Ancillary Services
Provider: Each of the Settlement System Administrator, the Grid
Operator and the Ancillary Services Provider shall make and
maintain arrangements with each other whereby such data and other
information as may be collected or received by any of them or
necessary for the purposes of the Settlement System, the
Ancillary Services Business or (as the case may be and subject to
Clause 69) the operation of the NGC Transmission System or the
performance by the Grid Operator of its obligations under the NGC
Transmission Licence shall be provided to such other(s) to the
extent necessary to enable such other(s) to perform its or their
respective obligations under this Agreement, the Grid Code, any
Ancillary Services Agreement and/or the NGC Transmission Licence.
Each of the Parties agrees to the release of all such data and
other information in the circumstances described in this Clause
29.2.
29.3 Arrangements with the Pool Funds Administrator: The
Settlement System Administrator and the Pool Funds Administrator
shall make and maintain arrangements with each other whereby:
(a) sufficient data and other information is provided by the
Settlement System Administrator to the Pool Funds Administrator as to enable
the Pool Funds Administrator to perform its obligations under this
Agreement and the Funds Transfer Agreement; and
(b) sufficient data and other information is provided by the
Pool Funds Administrator to the Settlement System Administrator
as to enable the Settlement System Administrator to perform its
obligations under this Agreement.
Each of the Parties agrees to the release of all such data and
other information in the circumstances described in this Clause
29.3.
30. [Not used].
31.[Not used].
32.[Not used].
33.[Not used].
34.COSTS, FEES AND EXPENSES
34.1 Schedule 4: The provisions of Schedule 4 shall have effect.
34.2 Fees:
34.2.1 Each Party which is not a Pool Member (other than the
Settlement System Administrator, the Pool Funds Administrator,
the Grid Operator and the Ancillary Services Provider) shall pay
the Settlement System Administrator a fee as provided in Section
8 of Part G of the Appendix to Schedule 4 in respect of the
provision to such Party of all data and other information which
is required by the terms and conditions of Service Line 10
(Service to CEO and Pool Members) to be made available to it by
the Settlement System Administrator.
34.2.2 A Party may at any time by notice in writing to the
Settlement System Administrator elect not to be provided with all
or some of the data and other information to which it is entitled
from the Settlement System Administrator under this Agreement and
may change such election at any time upon further written notice
to the Settlement System Administrator.
34.3 Charges: The Executive Committee shall be entitled to
require that a fee or other charge (not exceeding pounds 500 per
dispute or such other sum as the Pool Members in general meeting
may from ti ne to time approve) be levied On and paid by a Party
in respect of any dispute concerning Settlement or its operation
(including with respect to data) referred by such Party for
determination to the Executive Committee or any sub-committee
thereof. Such fee or other charge shall be levied, paid and
collected in such manner and at such time as the Executive
Committee shall direct and the relevant Party hereby undertakes
to pay any such fee or other charge so levied. Any such fee or
other charge shall at the option of the Executive Committee (i)
be refunded in whole or in part to the Party which paid the same,
or (id) be applied against the administration costs of whatsoever
nature of the Executive Committee or the relevant subcommittee.
34.4 Externally Interconnected Parries' costs:
34.4.1 An Externally Interconnected Party shall be entitled to
recover in accordance with this Clause 34.4 its costs and
expenses reasonably incurred in acting in accordance with this
Agreement as the Externally Interconnected Party for its
Corresponding External Pool Members (as defined in the Pool
Rules).
34.4.2 Not later than 30 days after the beginning of each
Accounting Period (commencing with the Accounting Period
beginning in 1992) each Externally Interconnected Party shall
submit in writing to the Executive Committee for approval (such
approval not to be unreasonably withheld) reasonable details of
the costs and expenses anticipated as likely to be incurred by it
in its capacity as an Externally Interconnected Party in that
Accounting Period and (commencing with the Accounting Period
beginning in 1993) of the actual costs and expenses so incurred
by it in the immediately preceding Accounting Period. If approved
by the Executive Committee, all such costs and expenses shall be
recovered by an Externally Interconnected Party from its
Corresponding External Pool Members in accordance with Clause
34.4.3. If not so approved, the Externally Interconnected Party
shall revise and resubmit to the Executive Committee the said
details as often as may be required in order to obtain such
approval.
34.4.3 Each Corresponding External Pool Member shall reimburse
its Externally Interconnected Party its due proportion of all its
Externally Interconnected Party's approved costs and expenses
within 28 days after receipt of an invoice from its Externally
Interconnected Party. The Externally Interconnected Party shall
issue invoices in respect of each Quarter on or after the Quarter
Day relating thereto. Invoices shall be based on approved
anticipated costs and expenses for the relevant Accounting Period
and the first invoice for each Accounting Period (commencing with
the Accounting Period beginning in 1993) shall include any
correction that may be necessary on account of the approved
actual costs and expenses being different from the approved
anticipated costs and expenses for the immediately preceding
Accounting Period.
34.4.4For the purposes of this Clause 34.4 a Corresponding
External Pool Member's due proportion of its Externally Interconnected
Party's approved costs and expenses for each Quarter shall be calculated
as follows: -
(a) the aggregate of the Externally Interconnected Party's
approved costs and expenses shall be divided by two;
(b) as to one half of such approved costs and expenses, the
Corresponding External Pool Member's due proportion shall be the
proportion which the sum of (i) the number of its Generation
Trading Blocks and (ii) one (representing the notional Consumer
referred to in paragraph 26.5.2(d) of the Pool Rules) bears to
the sum of (a) the total number of the Generation Trading Blocks
of all Corresponding External Pool Members the Externally
Interconnected Party of which is the same as that for the
Corresponding External Pool Member in question and (b) the number
of all such Corresponding External Pool Members, and each such
Corresponding External Pool Member shall for this purpose be
allocated at least one Generation Trading Block; and
(c) as to the other half of such approved costs and expenses,
the Corresponding External Pool Member's due proportion shall be
the proportion which its Gross Traded Energy for the Quarter in
question bears to the aggregate of the Gross Traded Energy for
that Quarter of all Corresponding External Pool Members the
Externally Interconnected Party of which is the same as that for
the Corresponding External Pool Member in question, and for this
purpose UGross Traded Energy" in respect of any Quarter and any
Corresponding External Pool Member shall be the aggregate amount
of Active Energy (measured in kWh) bought and sold pursuant to
this Agreement by such Corresponding External Pool Member in its
capacity as such in that Quarter.
34.4.5The foregoing provisions of this Clause may be amended or
varied in respect of an Externally Interconnected Party and its
Corresponding External Pool Members (or any of them) by prior
written agreement of that Externally Interconnected Party, all
its Corresponding External Pool Members and the Executive
Committee.
34A. SECOND TIER SYSTEM CHARGES
34A.1The following provisions of this Section 34A shall apply in
respect of each of the Accounting Periods beginning on 1st April,
1994, 1st April, 1995, 1st April, 1996 and 1st April, 1997 (each
a "Specified Accounting Period").
34A.2Subject to Section 34A.6, the Second Tier Suppliers' System
Charge for a Specified Accounting Period shall be determined by
the Executive Committee as the amount per annum to be charged to
each Second Tier Supplier in respect of each Second Tier System
supplied by such Supplier.
34A.3Subject to Section 34A.6, the Second Tier Suppliers'
Non-Pooled Generation System Charge for a Specified Accounting
Period shall be determined by the Executive Committee as the
amount per annum to be charged to each Second Tier Supplier in
respect of each Non-Pooled Generator for whose Metering System such
Second Tier Supplier is the Registrant.
34A.4Subject to Section 34A.6, the Suppliers' System Charge for a
Specified Accounting Period shall be determined by the Executive
Committee as the amount per annum to be charged to each Supplier
(other than a Second Tier Supplier) in respect of each Non-Second
Tier System in that Supplier's authorised area.
34A.5The second tier system charge payable by a Supplier in
respect of each calendar month in a Specified Accounting Period
shall be calculated as follows:
(a) in respect of each Second Tier Supplier, in accordance with
the following formula:
Second Tier SuPplierst System Charge x NOSP
12
where NOSP is the total number of Second Tier Systems supplied by
such Supplier at the beginning of the relevant calendar month;
(b) in respect of each Second Tier Supplier and in addition to
the charge in Section 34A.5(a), in accordance with the following
formula:
Second Tier Suppliers' Non - Pooled Generation System Charge NNPG
12
where NNPG is the total number of Metering Systems of Non-Pooled
Generators for which such Second Tier Supplier is the Registrant
at the beginning of the relevant calendar month;
(c)in respect of each Supplier (other than a Second Tier
Supplier), in accordance with the following formula:
Suppliers'System Charge x NMS
12
where NMS is the total number of Non-Second Tier Systems in that
Supplier's authorised area as at the beginning of that month;
(d)for these purposes, the numbers of Second Tier Systems and of Non
Second Tier Systems as at the beginning of each calendar month shall be
as notified to the Settlement System Administrator (who shall then
notify the Director) by the relevant Suppliers (and the Settlement
System Administrator being entitled, in the absence of any notification
to the contrary, to rely on the last such notification and other
information in its possession) and, in the event of any dispute
between the Parties, shall be as determined by the Director (whose
determination shall be final and binding); and
(e) only those Second Tier Systems in respect of which data
collection costs are incurred by Second Tier Agents or the
Settlement System Administrator shall be used in determining the
number of Second Tier Systems.
34A.6If in respect of any Specified Accounting Period (other than
the one beginning on 1st April, 1997) the aggregate of all second
tier system charges payable pursuant to Sections 34A.5(a),
34A.5(b) and 34A.5(c) and received by the Settlement System
Administrator is less than or (as the case may be) more than the
Total Second Tier System Charges for such Specified Accounting
Period the deficit or (as the case may be) the surplus shall be
carried forward to the immediately succeeding Specified
Accounting Period and shall be included in the calculation of the
Total Second Tier System Charges therefor.
34A.7The Executive Committee will use its reasonable endeavours
to ensure that the aggregate of all second tier system charges
payable pursuant to Sections 34A.5(a), 34A.5(b) and 34A.5(c) and
received by the Settlement System Administrator in respect of the
Accounting Period beginning on 1st April, 1997 meets the Total
Second Tier System Charges specified for that Accounting Period.
There shall be no carry forward of any such deficit or surplus
arising in respect of the Specified Accounting Period beginning
on 1st April, 1997.
PART VIII
THE SETTLEMENT SYSTEM AND COMPUTER OPERATIONS
35.DEVELOPMENT OF THE SETTLEMENT SYSTEM
35.1 Development: The Settlement System shall be developed under
the overall control of the Executive Committee. All developments
of and changes to the Computer Systems shall be made in
accordance with the terms of the Development Policies.
35.2 Delegation: Save as provided by the Development Policies,
the Executive Committee shall be entitled to delegate all or any
of its rights, powers and duties under Clause 35.1 and the
Development Policies to such person(s) and on such terms and
conditions as from time to time it may see fit.
35.3 Development Policies:
35.3.1
(a) The matters addressed by the Development Policies are set
out in the list of contents in the Development Policies. These
general headings define the scope of the Development Policies.
(b) The scope of the Development Policies may be amended at any
time and from time to time by written agreement of the Executive
Committee and the Settlement System Administrator.
(c) Any amendment to any of the matters addressed by the
Development Policies or any addition or substitution to the
Development Policies which does not extend or restrict (other
than in a way or to an extent which can reasonably be regarded as
de minimis) the scope of the Development Policies may be made at
any time and from time to time, and shall be effective if so
made, by the Executive Committee after consultation with the
Settlement System Administrator unless such matter is one covered
by the headings in Schedule 16 in which event such amendment,
addition or substitution may be made and shall be effective only
by written agreement of the Executive Committee and the
Settlement System Administrator.
35.3.2Without prejudice to Clause 35.3.1(c), Schedule 16 may be
changed at any time and from fi.T.e to time by written agreement
of the F.xecutive Committee and the Settlement System
Administrator.
35.3.3Each of the Parties undertakes to comply with (and the Pool
Members undertake to ensure that the Executive Committee complies
with) the Development Policies.
35.4.SSA's comments: The Executive Committee or the particular
sub-committee or sub-group in respect of any development of the
Settlement System shall take into account all reasonable comments
of the Settlement System Administrator in relation to the
specification, design, testing and implementation requirements of
any development of the Settlement System where such comments
relate to the operational compatibility or consistency with the
Settlement System or the ability of the Settlement System
Administrator to comply with this Agreement, the Act or NGC's
Transmission Licence.
35.5 Provision of data and information: Each Party shall ensure
that all data and information necessary to enable any testing of
the Settlement System or any development thereof or change
thereto required under the Development Policies and which is
permitted to be released by the Settlement System Administrator
under the Pool Rules or as otherwise expressly provided herein is
supplied to the Executive Committee or as it may direct and to
the Settlement System Administrator, and each Party shall use all
reasonable endeavours to cooperate with and support any such
testing.
35.6 Provision of data and information to authorized persons: The
Parties shall provide or ensure that the Settlement System
Administrator provides all data and information required under
Clause 35.5 to such persons as may from time to time be
authorised by the Executive Committee to receive the same
provided that such persons shall have executed a confidentiality
undertaking in such form as the Executive Committee may from time
to time determine. If the Settlement System Administrator is not
permitted or required to release any data and information by
reason only of the confidential nature of such data and
information it shall and may provide representative data to the
extent required for such testing.
35.7 Inconsistencies and conflicts: In the event of any
inconsistency or conflict between the provisions of this
Agreement and the provisions of the Development Policies, the
provisions of this Agreement shall prevail.
36.CHANGE MANAGEMENT
36.1 Change Management Policies: In order to ensure that
developments of and changes to the Settlement System are brought
into effect in an ordered and controlled manner, each of the
Parties undertakes to comply with the Change Management Policies.
36.2 Amendments: The Change Management Policies may be amended at
any time and from time to time by the Executive Committee after
consultation with the Settlement System Administrator.
SOFTWARE
37.1 [Not used].
37.2 Warranties: Without prejudice to Service Line 19 (System
Integration) and Section 9 of Schedule 4, nothing in this
Agreement shall imply or impose any requirement on the Settlement
System Administrator to give any warranty with respect to any
Software.
37.3 No Each Party acknowledges that neither NGC nor Energy
Settlements and Information Services Limited shall have any
liability in respect of any software developed before the
Effecdve Date.
38.[Not used].
39.[Not used].
40.[Not used].
41.NOTIFICATION OF DEFECTS BY POOL MEMBERS
Each Pool Member undertakes to the Settlement System
Administrator and each other Pool Member promptly to notify the
Settlement System Administrator and the Executive Committee in
writing of any defects of which it is or becomes aware in the
Software or its operation and to provide such further information
as may reasonably be required by the Settlement System
Administrator to identify, isolate and correct such defect.
42.[Not used].
43.[Not used].
44.[Not used].
45.ESCROW ARRANGEMENTS
45.1Escrow Agreement: On 17th March, 1992 the Settlement
System Administrator (for itself and on behalf of the Pool Members
acting through the Executive Committee) entered into an escrow
agreement (the "Escrow Agreements) in the form set out in schedule 7
with The National Computing Centre Limited (the "Custodian"). The
Settlement System Administrator has deposited or will
deposit as soon as it comes into existence:
45.1.1 copy of the source code and load (machine executable)
modules relating to all Developed Application Software (as
defined in Schedule 4) together with all job control language and
licensed software system tables, each in a machine readable form
and the source code and job control language in a hard copy form;
and
45.1.2 copy of all related manuals and other associated
documentation, including: -
(a) ny user requirement documents, together with all associated
authorised change requests;
(b) ny functional specification documents associated with those
documents described in paragraph (a) above, together with all
authorised change requests associated with the relevant
functional specification;
(c) to the extent available to the Settlement System
Administrator, any design specification documents associated with
those documents described in paragraphs (a) and (b) above,
together with all authorised change requests associated with the
relevant design specification;
(d) any program and/or user guides prepared to assist in the
day-today operation and future development of the computer
programs (including records of test cases together with the
associated test input and output data used for validation
purposes);
(e) any relevant test strategy schedules and acceptance test
schedules as specified for functional and operational end to end
testing;
(f) any relevant test acceptance certificates and reports for
all tests recording comments and observations made on the
appropriate tests where such tests are commissioned by the
Settlement System Administrator;
(g) any relevant client acceptance certificates and Pool
Auditor's reports, together with any reports recording such
clients' and the Pool Auditor's observations and comments on the
tests;
(h) any relevant compilation or detailed operating procedures
required in connection with any of the relevant paragraphs in
this Clause 45.1.2;
(I) all Software licences for Licensed Application Software (as
defir,ed in Schedule 4); and
(j) a list detailing all versions of Licensed Application
Software (including operating systems and compilers) used in
creating each version of the object code detailing the version
numbers used and any program temporary fixes or equivalent mode,
(together the "Material").
If, after consultation with the Settlement System Administrator,
the Executive Committee shall so request:
(A) the Settlement System Administrator shall use its reasonable
endeavours (which may include the payment of a fee or further fee
recoverable through the Charging Procedure) to procure that any
licence for any Licensed Application Software is on terms or
amended terms that permit the deposit of.such Licensed
Application Software with a reputable software escrow agent
approved by the Executive Committee on the terms of an escrow
agreement approved by the Executive Committee and the Settlement
System Administrator (in the case of the Settlement System
Administrator such approval not to be unreasonably withheld); and
(B)NGC shall use its reasonable endeavours to procure that
any licence for any Licensed Application Software licensed by it to the
Settlement System Administrator is on terms or amended terms that permit
the deposit of such Licensed Application Software with a reputable
software escrow agent approved by the Executive Committee on the
terms of an escrow agreement approved by the Executive Committee
and NGC (in the case of NGC such approval not to be unreasonably
withheld).
45.2 Updating: The Settlement System Administrator shall ensure
that the Material deposited with the Custodian is kept fully
up-to-date and reflects all Modifications (as defined in the
Escrow Agreement) and shall deposit a copy of all Modifications
with the Custodian as soon as the same are available, all in
accordance with the terms and subject to the conditions of the
Escrow Agreement.
45.3 Notification to Executive Committee: The Settlement System
Administrator shall notify the Executive Committee promptly of
the delivery of each Modification to the Custodian.
45.4 Amendments: Any amendment to or variation of the Escrow
Agreement shall be made in accordance with its terms provided
that the Settlement System Administrator shall not make or agree
to any such amendment or variation without the prior written
consent of the Executive Committee.
46.[Not used].
PART IX
THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS
47.THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS
47.1 Appointment and removal: The Executive Committee shall
(after consultation with the Settlement System Administrator)
from time to time appoint a firm of accountants of
internationally recognised standing to carry out:
47.1.1audits of the calculations and allocations performed by the
Settlement System, such audits to be carried out annually;
47.12audits of the Funds Transfer System, such audits to be
carried out annually;
47.1.3tests and/or checks on new items or versions of Software;
47.1.4reviews of Agreed Procedures and Codes of Practice, as
required from time to time by the Executive Committee; and
47.1.5audits, reviews, tests and/or checks of such other matters
as are otherwise designated under this Agreement for reference to
it and, where not so designated, such other audits, reviews,
tests and/or checks as the Executive Committee may from time to
time reasonably require (having regard, in particular, to the
disruptive effect of the same on the business and operations of
the Parties),
and to assist, upon request of the Executive Committee, in the
preparation of Works Programmes pursuant to Clause 5.9.
The Executive Committee shall have the right at any time and from
time to time (after consultation with the Settlement System
Administrator) to remove from office as Pool Auditor any firm of
accountants so appointed by it, but the Executive Committee shall
ensure that there shall at all times be a Pool Auditor.
47.2 Scheduling and Despatch Review:
47.2.1The Grid Operator shall (after consultation with the
Executive Committee) decide upon the appointment from time to
time of such firm of accountants of internationally recognised
standing as the Executive Committee shall approve (such approval
not to be unreasonably withheld or delayed) to carry out reviews
(UScheduling and Despatch Reviews") of the Scheduling and
Despatch processes under the Grid Code, such reviews to be
carried out, until the first anniversary of the Effective Date,
at such time or times as shall be agreed between the Grid
Operator and the Executive Committee and,
thereafter, annually. The objective and scope of each such review
is set out in Schedule 19.
47.2.2The Grid Operator shall have the right at any time and from
time to time (after consultation with the Executive Committee) to
decide upon the removal from office of the firm of accountants so
appointed by it with the consent of the Executive Committee (such
consent not to be unreasonably withheld or delayed).
47.2.3The auditor carrying out the Scheduling and Despatch Review
shall report to the Grid Operator.
47.3 Scope of work:
47.3.1The terms of engagement and scope of the work to be carried
out by the Pool Auditor shall be in accordance with the terms of
this Agreement and as determined from time to time by the
Executive Committee (after consultation with the Pool Auditor
and, where appropriate, the Settlement System Administrator or
the Pool Funds Administrator) and the Pool Auditor shall report
to the Executive Committee. The Executive Committee shall, upon
request, provide each Pool Member, the Director, any Party which
has applied pursuant to Clause 8.2 to become a Pool Member and
(as appropriate) the SenIement System Administrator or the Pool
Funds Administrator with a copy of such terms of engagement.
47.3.2Any opinion or report of the auditor carrying out the
Scheduling and Despatch Review shall be addressed to the Grid
Operator (for its own bereft) and a copy thereof shall be sent to
the Executive Committee and to each Pool Member, the Director,
the Settlement System Administrator and the Pool Funds
Administrator (each of whom shall be entitled to rely on it).
47.4 Notification of disputes: Upon written request of the Pool
Auditor or, where the dispute relates to Scheduling and Despatch,
the auditor carrying out the Scheduling and Despatch Review, a
Party shall promptly provide the Pool Auditor or (as the case may
be) the auditor carrying out the Scheduling and Despatch Review
with a written statement of all disputes under or in connection
with this Agreement or any Ancillary Services Agreement which are
then outstanding and which involve such Party or which the
relevant Party believes may arise and are likely to involve such
Party, and (subject to any supervening obligations of
confidentiality binding on such Party) such statement shall
include reasonable details of each such dispute.
48.AUDIT INSTRUCTIONS
48.1 Frequ ency:
48 1.1Audits, tests, reviews and checks pursuant to Clause
47.1 shall be carried out at such time or times as the Executive Committee
shall determine (after consultation with the Pool Auditor and, where
appropriate, the Settlement System Administrator or the Pool
Funds Administrator) and any such audit, test, review or check shall
relate to such period(s) as the Executive Committee and the Pool Auditor
shall agree.
48.1.2The review pursuant to Clause 47.2 shall be carried out at
such time or times as the Grid Operator shall determine and the Executive
Committee shall approve (such approval not to be unreasonably
withheld or delayed).
48.1.3In good time before each annual general meeting of Pool
Members:
(a) the Executive Committee shall instruct the Pool Auditor to
prepare the report referred to in Clause 9.1.2; and
(b) the Grid Operator shall instruct the auditor carrying out
the Scheduling and Despatch Review to prepare the report referred
to in Clause 47.2.3.
48.2 Opinions and reports: Any opinion or report of the Pool
Auditor required by the Executive Committee shall be addressed to
the Executive Committee for the benefit of all Pool Members and
to such other person(s) as the Executive Committee may direct and
a copy thereof shall be sent by the Executive Committee to each
Pool Member and the Director and, if requested and the Executive
Committee approves, the Settlement System Administrator and the
Pool Funds Administrator (and the Settlement System Administrator
and the Pool Funds Administrator shall be entitled to rely upon
the same in any legal proceedings (including arbitration)).
48.3 Concerns and recommendations:
48.3.1In instructing the Pool Auditor in respect of any of the
matters referred to in Clause 47.1 the Executive Committee shall
require the Pool Auditor: -
(a)forthwith to report any material concerns with respect to
matters the subject of the relevant audit, test, review and/or check; and
(b)to make such recommendations as to changes in the
procedures, controls and/or audit coverage as the Pool Auditor considers
appropriate.
Upon receipt of any such report or recommendation the Executive
Committee shall, after consultation with the Settlement System
Administrator or (in the case of the review referred to in Clause
47.1.2) the Pool Funds Administrator, prepare and send or cause
to be prepared and sent a report to Pool Members, the Pool
Auditor and the Director and the Settlement System Administrator
or (as the case may be) the Pool Funds Administrator enclosing a
copy of the Pool Auditor's report or recommendation. The
Executive Committee shall instruct the Settlement System
Administrator or (as the case may be) the Pool Funds
Administrator to carry out such corrective action as the Pool
Members in general meeting may approve or (where such approval is
not required by the terms of this Agreement) as the Executive
Committee may resolve consequent upon receipt of the Executive
Committee's report (which the Settlement System Administrator and
the Pool Funds Administrator undertake promptly to do).
48.3.2In instructing the auditor in respect of the Scheduling and
Despatch Review the Grid Operator shall require the auditor to
make the reports and recommendations referred to in Clauses
48.3.1(a) and (b). Upon receipt of a copy of any such report or
recommendation the Executive Committee shall, after consultation
with the Settlement System Administrator and the Grid Operator,
prepare or send or cause to be prepared and sent a report to Pool
Members, the auditor carrying out the Scheduling and Despatch
Review and the Settlement System Administrator enclosing a copy
of the report or recommendation. The Executive Committee may
instruct the Grid Operator to carry out such corrective action as
may be reasonable and practicable in all the circumstances and
which is consistent with the Grid Code which the Pool Members in
general meeting shall approve.
48.4 Access:
48.4.1To the extent that the Pool Auditor reasonably requires in
order to be satisfied that the Pool Funds Administrator is
complying with its obligations under this Agreement and the
Agreed Procedures, the Pool Funds Administrator shall permit the
Pool Auditor unrestricted access to its operation of the Funds
Transfer System, the Funds Transfer Hardware and the Funds
Transfer Software and all data used, information held and records
kept by the Pool Funds Administrator or its agents in the conduct
of that operation and shall make available members of its staff
to explain such operation and such other issues as the Pool
Auditor considers relevant.
48.4.2The Grid Operator shall permit the auditor carrying out the
Scheduling and Despatch Review unrestricted access to that part
of its business as relates to Scheduling and Despatch and the
operation of BPS GOAL and all data used, information held and
records kept by the Grid Operator in the conduct of such business
and shall make available members of its staff to explain such
operations and such other issues as the auditor considers relevant.
48.5 Costs:
48.5.1The costs of any corrective action on the part of the
Settlement System Administrator pursuant to Clause 48.3.1 shall
be as agreed between the Pool Auditor and the Executive Committee
(after consultation with the Settlement System Administrator) and
shall be borne in accordance with the PEA Accounting Procedure.
48.5.2The costs of any audit, test, review or check pursuant
to Clause 47.1.1 to 47.1.5 (inclusive) and any corrective action on
the part of the Pool Funds Administrator pursuant to Clause 48.3.1
shall be as agreed between the Pool Auditor and the Executive
Committee (after consultation with the Pool Funds Administrator in
the case of any such corrective action) and shall be borne by the
Pool Funds Administrator and recovered by it in accordance with
the PEA Accounting Procedure.
48.5.3The costs of any review pursuant to Clause 47.2 and
any corrective action on the part of the Grid Operator pursuant to
Clause 48.3.2 shall be borne by the Grid Operator.
48.6 Conflict: The Executive Committee shall require the Pool
Auditor and the auditor carrying out the Scheduling and Despatch
Review to disclose to the Executive Committee the existence and
nature of all audit assignments with any Party.
48.7 Own auditors' review: Each Pool Member may request of the
Executive Committee that its own external auditors be permitted
to liaise with the Pool Auditor and the auditor carrying out the
Scheduling and Despatch Review in accordance with normal
professional standards, including provision of access to working
papers. The Executive Committee shall take such steps as may
reasonably be required of it to ensure that each of the Pool
Auditor and the auditor carrying out the Scheduling and Despatch
Review co-operates accordingly (subject to Clause 48.9).
48.8 Pool Auditor's rights: The Pool Auditor shall be entitled to
attend and speak at meetings of the Executive Committee and at
general meetings and separate general mee:ir.gs of Pool Members.
The Pool Auditor shall be entitled to resign upon giving prior
notice to the Executive Committee (the period of such notice (if
any) to be as set out in the terms of its appointment). Should
the Pool Auditor resign, be removed from office or not be
reappointed the Pool Auditor shall have the right to communicate
directly with Pool Members if it believes there are matters which
should be brought to their attention.
48.9 Confidentiality:
48.9.1The Pool Auditor shall as a condition precedent to its
appointment execute a confidentiality undertaking in favour of
each of the Settlement System Administrator, the Pool Funds
Administrator, the Grid Operator and the Ancillary Services
Provider and the Executive Committee on behalf of all Pool
Members in such form as may be reasonably required from time to
time by the Executive Committee.
48.9.2The auditor carrying out the Scheduling and Despatch Review
shall as a condition precedent to its appointment execute a
confidentiality undertaking in such form as may be reasonably
required from time to time by the Grid Operator and which shall
be approved by the Executive Committee (such approval not to be
unreasonably withheld or delayed).
48.9.3If requested by the Settlement System Administrator, the
Pool Funds Administrator, the Grid Operator or the Ancillary
Services Provider, the auditor carrying out the Scheduling and
Despatch Review shall execute a confidentiality undertaking in
favour of the relevant one of them in such form as the Executive
Committee may from time to time approve (such approval not to be
unreasonably withheld or delayed).
48.10 Scheduling and Despatch Auditor: The auditor appointed to
carry out the Scheduling and Despatch Review shall be entitled to
attend and speak at meetings of the Executive Committee and at
general meetings and separate general meetings of Pool Members
where matters relating to Scheduling and Despatch are to be
discussed or considered. The auditor shall be entitled to resign
upon giving prior notice to the Grid Operator (who shall send a
copy forthwith to the Executive Committee) (the period of such
notice, if any, to be as set out in the terms of its
appointment). Should the auditor resign, be removed from office
or not be reappointed it shall have the right to communicate
directly with Pool Members if it believes that there are matters
which should be brought to their attention.
PART X
THE GRID OPERATOR'S RESPONSIBILITIES
49.RESPONSIBILITIES
-
The Grid Operator shall have the following duties,
responsibilities and obligations under this Agreement:
49.1 PORTHOLE: Ensuring that, insofar as relevant to the
operation of the Settlement System and the Pool Rules, PORTHOLE
will in its operation comply with its user and functional specifications.
49.2 Services Making available to any successor Settlement System
Administrator those services necessary for the proper functioning of
the Settlement System which the Grid Operator made available to the
incumbent Settlement System Administrator at any time in the twelve
month period prior to the resignation or removal of such incumbent
Settlement System Administrator, in any such case upon such terms as
may be agreed between the Grid Operator, such successor Settlement
System Administrator and the Executive Committee.
49.3 Generally: Such other duties, responsibilities and obligations as
are set out in this Agreement.
50. STANDARD OF CARE
50.1 Standard of care: In the exercise of its duties and
responsibilities under this Agreement the Grid Operator shall
exercise that degree of care, diligence, skill and judgment which
would ordinarily be expected of a reasonably prudent operator of
the NGC Transmission System taking into account the circumstances
actually known to the Grid Operator, its officers and employees
at the relevant time or which ought to have been known to it or
them had it or they made such enquiries as were reasonable in the
circumstances.
50.2 Miscellaneous:
50.2.1 (a)The Grid Operator shall be entitled to rely upon any direction
or instruction of the Executive Committee or the Chief Executive (if
any) if the same is signed by way of authority in accordance with
Clause 50.2.4 on behalf of two or more Committee Members or
on behalf of the Chief Executive and shall not be obliged to
comply with any direction or instruction of any sub-committee of
the Executive Committee or any delegate of the Executive
Committee other than the Chief Executive (unless such direction
or instruction is shown as having been ratified by the Executive
Committee).
(b)The Grid Operator shall be entitled to rely upon any
communication or document reasonably believed by it to be
genuine and correct and to have been communicated or signed
by the person by whom it purports to be communicated or signed
and shall not be liable to any of the Parties for any of the
consequences of such reliance.
50.2.2Compliance with the Director's directions: No liability
whatsoever shall attach to the Grid Operator as a result of due
compliance by it with any directions and instructions of the
Director, provided that in complying with such directions and
instructions the Grid Operator is at all times acting in good
faith.
50.2.3 Prior approval: Where by the terms of this Agreement the
Grid Operator is required to obtain the prior directions,
instructions, approval or consent of the Executive Committee or
the Chief Executive, the Grid Operator shall have no authority
to, and shall not, act unless the requisite directions,
instructions, approval or consent have first been obtained.
Notwithstanding the foregoing sentence, nothing in this Agreement
shall prevent the Executive Committee from ratifying any act of
the Grid Operator.
50.2.4Express authority: All directions and instructions of the
Executive Committee or the Chief Executive to the Grid Operator
shall, as between the Grid Operator and the Pool Members, be
deemed to have the express authority of, and shall be binding
without reservation upon, all Pool Members.
50.2.5Authority of Pool Members: The Grid Operator shall not be
bound to act in accordance with the directions or instructions of
the Pool Members unless the Pool Members act through the
Executive Committee.
50.2.6General Meetings: The Grid Operator shall not be obliged to
take any steps to ascertain whether any resolution of Pool
Members in general meeting or of any class of Pool Members in
separate general meeting which it is advised by the Executive
Committee or the Chief Executive as having been passed was in
fact passed or passed by the requisite majority and until the
Grid Operator shall have express written notice to the contrary
from the Executive Committee or the Chief Executive it shall be
entitled to assume that the relevant resolution was passed or (as
the case may be) the relevant requisite majority was obtained.
50.2.7Exceptions: Notwithstanding the foregoing provisions of
this sub-clause 50.2, in the performance of its duties and
responsibilities under this Agreement the Grid Operator shall not
be bound to act in accordance with the directions or instructions
of the Executive Committee or the Chief Executive if:
(a)to do so would cause the Grid Operator to breach any of
its obligations under the Act or its Transmission Licence; or
(b)the Grid Operator has reasonable grounds for believing
that it would so breach any of such obligations and has consulted the
Director and:
(i)the Director has not indicated that in his view it would
not involve any such breach; or
(ii)the Director has indicated that, notwithstanding any such
actual or potential breach, the Director would not be
minded to enforce compliance with those obligations and
the Grid Operator has received an indemnity reasonably
satisfactory to it in respect of its acting in accordance with
such directions and instructions.
In any such event the Grid Operator shall promptly notify the
Executive Committee.
50.2.8 Reference to the Director: If at any time the Grid
Operator has a concern which is properly and reasonably founded
that, in acting in accordance with any direction or instruction
of the Executive Committee or the Chief Executive, it will breach
one or more of its obligations under the Act or its Transmission
Licence, then, if having discussed the matter with the Executive
Committee the matter remains unresolved, the Grid Operator shall
either comply with such direction or instruction or by notice in
writing refer the same to the Director, such notice to set out in
full the directions or instructions given to the Grid Operator
and the grounds for such concern and to be copied to the
Executive Committee. Pending any guidance from the Director in
response to any such reference and, provided that the Director
shall not express any view that such reference is misconceived,
vexatious or in respect of an improperly or unreasonably founded
concern, the Grid Operator shall not be liable to any of the
other Parties for refusing to act in accordance with the relevant
direction or instruction. If the Director shall express such a
view, the Grid Operator shall be so liable.
PART XI
ANCILLARY SERVICES AND THE
ANCILLARY SERVICES PROVIDER
51.ANCILLARY SERVICES
51.1 Obligations: The obligations of the Ancillary Services
Provider and the Grid Operator pursuant to this Clause 51 shall
be owed to each and every Supplier.
51.2 Obligations of Ancillary Services Provider: The Ancillary
Services Provider shall: implement, maintain and operate all such
systems as are necessary to enable it properly to carry on the
Ancillary Services Business in accordance with the Transmission Licence;
51.2.2operate the Ancillary Services Business in an efficient and
economic manner;
51.2.3maintain such records, data and other information as the
Pool Auditor may from time to time by notice in reasonable detail
to the Ancillary Services Provider reasonably require for the
purposes of this Part XI or as may otherwise be reasonably
necessary to enable the Ancillary Services Provider to comply
promptly and fully with its obligations under this Agreement;
51.2.4retain in electronic or machine readable form for a period
of not less than eight years (or such longer period as the Pool
Auditor may from time to time reasonably require), copies of all
records, data and information referred to in Clause 51.2.3 in
respect of the Ancillary Services;
51.2.5provide to the Settlement System Administrator who shall
promptly provide the same to each Supplier monthly and annual
statements giving aggregate payment details separately in respect
of each of the following items:
(a) Reactive Energy;
(b) frequency control;
(c) Black Start Capability (as defined in the Grid Code);
(d) lost opportunity costs;
(e) supplies of Ancillary Services to Externally Interconnected
Parties;
(f) adjustments for disputes which have been settled or
otherwise determined; and
(g) the Ancillary Services Provider's business charges,
together with a statement of the sum of all such items, and each
of the Parties agrees to such information being so provided;
51.2.6not transfer or seek to transfer any of its duties or
responsibilities as Ancillary Services Provider save to NGC's
successor as Grid Operator where NGC is removed as Grid Operator
(but not further or otherwise);
51.2.7upon a successor Grid Operator being appointed (so far as
it is able), transfer to such successor all data, records, other
information, assets, equipment, facilities, rights and know-how
which it has (excluding freehold and leasehold real property) and
which are necessary to carry out the duties and responsibilities
of the Ancillary Services Provider and which are not otherwise
readily obtainable by such successor including all original and
copy material relating to the same and, in consideration for such
transfer, the Suppliers shall jointly and severally pay to the
Ancillary Services Provider a reasonable sum to reflect the costs
of, and the costs of transferring, such material, such sum to be
determined pursuant to Clause 83 in default of agreement between
the Suppliers and Ancillary Services Provider; and
51.2.8ensure that all agreements or arrangements for the
provision of Ancillary Services to Externally Interconnected
Parties are on the best commercial terms reasonably available.
51.3 Obligations of Suppliers: Each Supplier shall pay the
Ancillary Services Provider the amount allocated to such Supplier
for Ancillary Services in any Settlement Period for Ancillary
Services in accordance with this Agreement.
51.4 Obligation of Grid Operator: The GAd Operator shall enforce
the Master Connection and Use of System Agreement and each
Supplemental Agreement (insofar as it concerns the provision of
Ancillary Services) in accordance with their respective terms in
all circumstances in which it is reasonable to do so having
regard to its obligations under the Act, the Transmission Licence
and the Grid Code.
51.5 Audit of Ancillary Services:
51.5.1The Suppliers may require the Pool Auditor to carry out
audits, tests, checks or reviews in relation to the operation by
the Ancillary Services Provider of the Ancillary Services
Business as Suppliers may from time to time reasonably require
(having regard, in particular, to the disruptive effect of the
same on the business and operations of the Ancillary Services
Provider). The terms of engagement for any such audit, test, check
or review shall be made available to the Ancillary Services Provider.
51.5.2The Suppliers shall not require more than two audits,
tests, checks and reviews pursuant to Clause 51.5.1 in any
Accounting Period.
51.5.3On instructing the Pool Auditor pursuant to Clause
51.5.1, the Supplier(s) concerned may require the Pool Auditor:
(a) forthwith to report any material concerns with respect to
matters the subject of the relevant audit, test, check or review; and
(b) to make such recommendations as to changes in the
procedures, controls and/or audit coverage of the Ancillary
Services Business as the Pool Auditor considers appropriate.
51.5.4The Ancillary Services Provider shall permit the Pool
Auditor such access to its Ancillary Services' operations and all
records, documents, data and other information (other than
Excluded Information) held by the Ancillary Services Provider in
the conduct of such operations in each case as the Pool Auditor
may reasonably require and shall make available members of its
staff to explain such operations and such other issues as the
Pool Auditor considers relevant. The Pool Auditor shall not
disclose and shall not be obliged to disclose to any Supplier
details of prices paid to each Generator by the Ancillary
Services Provider.
In this Clause 51.5 "Excluded Information" means all records,
documents, data and other information provided in the course of
the discussions or negotiations with any person with whom the
Ancillary Services Provider contracts or considers contracting
for the provision of Ancillary Services other than as stated in
any Ancillary Services Agreement whether such discussions or
negotiations take place before contracting or as part of any
price review during the term of any Ancillary Services Agreement.
51.5.5The Pool Auditor shall report to the Suppliers and a copy
of any report by the Pool Auditor relating to an audit, test,
check or review pursuant to Clause 51.5.1 shall be provided to
the Ancillary Services Provider. The Pool Auditor shall owe a
duty of confidentiality to the Ancillary Services Provider save
to the extent necessary to carry out the particular audit, test,
check or review provided that any matter or thing set out in any
report to the Suppliers shall not be subject to any such
obligation and provided always that nothing in this Clause 51.5.5
shall prevent the disclosure of any information pursuant to
Clause 69. The Ancillary Services Provider shall be entitled to
rely on any such report in any legal proceedings (including
arbitration).
51.5.6If the Suppliers so resolve, the Ancillary Services
Provider shall promptly implement any recommendations made by the
Pool Auditor in a report relating to an audit, test, check or
review pursuant to Clause 51.5.1 and, in the event of any
dispute, such dispute shall be referred to arbitration in
accordance with Clause 83.
51.5.7The cost of any audit, test, check or review pursuant
to Clause 51.5.1 shall be borne by the requisitioning Supplier(s).
The costs of implementing any recommendations pursuant to Clause
51.5.6 may be recovered by the Ancillary Services Provider in
accordance with the ASP Accounting Procedure.
51 6 Basis of Payment: The Ancillary Services Provider shall
calculate the total amount payable under Ancillary Services
Agreements in respect of each Settlement Day together with any
amendments to calculations made for previous Settlement Days
based upon information derived from the Grid Operator and the
Settlement System Administrator. The charges to Suppliers for
Ancillary Services shall comprise the costs so calculated
together with the charges of the Ancillary Services Provider
calculated in accordance with Schedule 18. The Ancillary Services
Provider shall notify a provisional sum to the Settlement System
Administrator within three working days after receipt of such
information from the Grid Operator and the Settlement System
Administrator so as to be despatched by the Settlement System
Administrator to Suppliers in accordance with the relevant Agreed
Procedure to enable the Settlement System Administrator to
apportion this sum to the sale of Active Energy according to
the Pool Rules. The Ancillary Services Provider shall notify
a final sum to the Settlement System Administrator by such
time as will enable the Settlement System Administrator to take
into account the final Settlement Run for each Settlement Day.
Any unresolved amount shall be included in the final Settlement
Run on an interim basis pending resolution. Thereafter it may be
included (together with any errors or omissions subsequently arising)
in any appropriate Settlement Run.
51.7 Lost opportunity costs:
51.7.1Subject to Clause 51.6, where the Ancillary Services
Provider pays any Generator an amount in respect of lost opportunity
costs the Ancillary Services Provider shall use reasonable endeavours
to include any such amounts in its Ancillary Service charge to Suppliers
in the Settlement Day on which it arises or as soon as possible thereafter.
51.7.2As soon as the Ancillary Services Provider is notified by
any Generator that any obligation to pay any lost opportunity
costs may arise it shall consult the Suppliers and, without
prejudice to the Ancillary Services Provider's right to recover
such lost opportunity costs from Suppliers, if requested by the
Suppliers shall recover such lost opportunity costs over such a
period as may be agreed between the Ancillary Services Provider and the
Suppliers and, in default of agreement, over such period as the
Ancillary Services Provider considers to be reasonable.
51.8 Independent Contractor: The Ancillary Services Provider
shall act as an independent contractor in carrying out its duties
pursuant to this Agreement and (unless expressly authorised to
the contrary) shall neither act nor hold itself out nor be held
out as acting as agent for any of the Other Parties.
51.9 Standard of care: In the exercise of its dudes and
responsibilities under this Agreement the Ancillary Services
Provider shall exercise that degree of care, diligence, skill and
judgment which would ordinarily be expected of a reasonably
prudent operator of the Ancillary Services Business taking into
account the circumstances actually known to the Ancillary
Services Provider, its of fleers and employees at the relevant
time or which ought to have been known to it or them had it or
they made such enquiries as were reasonable in the circumstances.
51.10 Miscellaneous:
51.10.1
(a) The Ancillary Services Provider shall be entitled to rely
upon any direction or instruction of the Executive
Committee or the Chief Executive (if any) if the same is
signed by way of authority in accordance with Clause
51.10.4 on behalf of two or more Committee Members or
on behalf of the Chief Executive and shall not be obliged
to comply with any direction or instruction of any sub
committee of the Executive Committee or any delegate of
the Executive Committee other than the Chief Executive
(unless such direction or instruction is shown as having
been ratified by the Executive Committee);
(b) The Ancillary Services Provider shall be entitled to rely
upon any communication or document reasonably
believed by it to be genuine and correct and to have been
communicated or signed by the person by whom it
purports to be communicated or signed and shall not be
liable to any of the Parties for any of the consequences of
such reliance.
51.10.0Compliance with the Director's directions: No liability
whatsoever shall attach to the Ancillary Services Provider as a
result of due compliance by it with any directions and
instructions of the Director, provided that in complying with
such directions and instructions the Ancillary Services Provider
is at all times acting in good faith.
51.10.3Prior approval: Where by the terms of this Agreement the
Ancillary Services Provider is required to obtain the prior
directions, instructions, approval or consent of the Executive
Committee or the Chief Executive, the Ancillary Services Provider
shall have no authority to, and shall not, act unless the
requisite directions, instructions, approval or consent have
first been obtained. Notwithstanding the foregoing sentence,
nothing in this Agreement shall prevent the Executive Committee
from ratifying any act of the Ancillary Services Provider.
51.10.4Express authority: All directions and instructions of the
Executive Committee or the Chief Executive to the Ancillary
Services Provider shall, as between the Ancillary Services
Provider and the Pool Members, be deemed to have the express
authority of, and shall be binding without reservation upon, all
Pool Members.
51.10.5Authority of Pool Mummers: The Ancillary Services
Provider shall not be bound to act in accordance with the directions or
instructions of the Pool Members unless the Pool Members act 1B
through the Executive Committee.
51.10.6General Meetings: The Ancillary Services Provider shall
not be obliged to take any steps to ascertain whether any resolution of
Pool Members in general meeting or of any class of Pool 15
Members in separate general meeting which it is advised by the
Executive Committee or the Chief Executive as having been
passed was in fact passed or passed by the requisite majority and
until the Ancillary Services Provider shall have express written
notice to the contrary from the Executive Committee or the Chief
Executive it shall be entitled to assume that the relevant
resolution was passed or (as the case may be) the relevant
requisite majority was obtained.
51.10.7Exceptions: Notwithstanding the foregoing provisions
of this sub clause 51.10, in the performance of its duties and
responsibilities under this Agreement the Ancillary Services Provider
shall not be bound to act in accordance with the directions or
instructions of the Executive Committee or the Chief Executive if:
(a)to do so would cause the Ancillary Services Provider to
breach any of its obligations under the Act or its
Transmission Licence; or
(b)the Ancillary Services Provider has reasonable grounds for
believing that it would so breach any of such obligations
and has consulted the Director and:
(i) the Director has not indicated that in his view it
would not involve any such breach; or
(ii)the Director has indicated that, notwithstanding
any such actual or potential breach, the Director
would not be minded to enforce compliance with
those obligations and the Ancillary Services
Provider has received an indemnity reasonably
satisfactory to it in respect of its acting in
accordance with such directions and instructions.
In any such event the Ancillary Services Provider shall promptly
notify the Executive Committee.
51.10.8
Reference to the Director: If at any time the Ancillary Services
Provider has a concern which is properly and reasonably founded
that, in acting in accordance with any direction or instruction
of the Executive Committee or the Chief Executive, it will breach
one or more of its obligations under the Act or its Transmission
Licence, then, if having discussed the matter with the Executive
Committee the matter remains unresolved, the Ancillary Services
Provider shall either comply with such direction or instruction
or by notice in writing refer the same to the Director, such
notice to set out in full the directions or instructions given to
the Ancillary Services Provider and the grounds for such concern
and to be copied to the Executive Committee. Pending any guidance
from the Director in response to any such reference and, provided
that the Director shall not express any view that such reference
is misconceived, vexatious or in respect of an improperly or
unreasonably founded concern, the Ancillary Services Provider
shall not be liable to any of the other Parties for refusing to
act in accordance with the relevant direction or instruction. If
the Director shall express such a view, the Ancillary Services
Provider shall be so liable.
51.11
Suppliers'Resolu tions: Where any matter is reserved under this
Part XI or Schedule 18 for the Suppliers to resolve, that matter
shall be decided upon by the majority vote of the Suppliers'
representatives on the Executive Committee.
51A. TRANSMISSION SERVICES
It is expressly acknowledged by the Parties that neither (i) the
termination or expiry of the provisions of Clause 51A, 51B or 51C
of this Agreement as in force immediately prior to the coming
into effect of this Clause 51A, including the Transmission
Services Scheme ("TSS") (as therein defined) andfor any addition
to or amendment of any other provision of this Agreement effected
pursuant to those Clauses whilst in force nor (ii) the
termination or expiry of previous clauses in this Agreement which
related to UMIS2 (as was therein defined) shall prejudice any
Consumer's (as defined in the Pool Rules) or the Grid Operator's
(acting through its agent the Ancillary Services Provider)
accrued rights and liabilities under each of UMIS2 and/or TSS at
the date of such termination or expiry which accrued rights shall
include, for the avoidance of doubt, the ability to adjust sums
calculated under UMIS2 and/or TSS in respect of disputes arising
after such termination or expiry in respect of periods falling
before such termination or expiry.
51B. TRANSMISSION SERVICES SCHEME 2
General:
51B.1Notwithstanding any other provision of this Agreement, the
provisions of this Clause shall govern the rights and obligations
of the Parties in relation to the Transmission Services Scheme 2.
51B.2In Recital (G), this Clause SIB, Schedule 9 and Schedule 11,
for so long as amended by the provisions of Clause 51B.4, the
term "Transmission Services Scheme 2" means the scheme to provide
an incentive for the Grid Operator to minimise (taking into
account other associated costs) a proportion of the costs arising
under this Agreement and/or resulting from the operation of the
NGC Transmission System including those arising from the
acquisition of Ancillary Services, and more particularly:
(a)which provides for payments between the Grid Operator
(acting through its agent the Ancillary Services Provider) and Consumers
in relation to:
(I) the Transmission Services Uplift Payment, which comprises a
Reactive Power Daily Payment, a Transport Uplift Daily Payment
and an Energy Uplift Daily Payment; and
(ii)the Transmission Losses Daily Payment; and
(b) which provides for an adjustment in relation to out of merit
costs, in the form agreed pursuant to Clause 51B.6 as the same may be
amended from time to time in accordance with the terms of that
Clause.
51B.3 The Transmission Services Scheme 2:
(a)The Parties agree (and agree that they will procure that
the Executive Committee will so agree) that in the period from 00.00
hours on 1st April, 1996 to 24.00 hours on 31st March, 1997 the
Transmission Services Scheme 2, the amendments and/or additions to the
Pool Rules to implement the Transmission Services Scheme 2 and the
provisions of this Clause, shall apply. This Clause 51B.3(a) may not
be amended without the prior written consent of all Parties.
(b)As indicated in Clause 51B.3(a), the provisions of Clause
SIB, the Transmission Services Scheme 2 and any addition to or amendment
of any other provisions of this Agreement or the Pool Rules effected
pursuant to this Clause 51B shall terminate at 24.00 hours on
31st March, 1997, except for any provision, addition or amendment
which is required to continue beyond that date to give effect to
the operation of the Transmission Services Scheme 2 in respect of
any period before that date.
51B.4The Parties agree:
(a)to be bound by the terms, conditions and other provisions
of the Transmission Services Scheme 2;
(b)that the Grid Operator (acting through its agent the
Ancillary Services Provider) and each Consumer shall make such
payments as are required and determined by the provisions of the
amendments and/or additions to the Pool Rules to implement the
Transmission Services Scheme 2;
(c)that for the period during which this Clause 51.B applies,
the following changes shall be made to the provisions of this Agreement:
(i)in paragraphs 1, 5.4, 5.14,17.5 and 17.6 of Schedule 11
references to the Ancillary Services Provider shall be deemed to
be references to itself and as agent for the Grid Operator in
relation to the Transmission Services Scheme 2;
(ii)in paragraph 2.1 of Schedule 11 the words "and the
Transmission Services Scheme 2" shall be inserted after the
words "Ancillary Services";
(iii)in paragraph 5.14 of Schedule 11 the words "or in respect of
the Transmission Services Scheme 2" shall be inserted after the
first reference to "Ancillary Servicesn and the words "or in
respect of the Transmission Services Scheme 2 for the relevant
payment day" shall be inserted after the words "that same day"
and in paragraph 5.15 of Schedule 11 the words for the Ancillary
Services Provider" shall be inserted after the words "Pool
Member" wherever they occur in that paragraph; and
(iv) in Part 4 of Schedule 11, references to information in
respect of Ancillary Services shall be deemed to include
information in respect of the Transmission Services Scheme 2, in
paragraph 17.5 the information required shall include the total
amount payable by the Ancillary Services Provider (exclusive of
United Kingdom Value Added Tax) pursuant to the Transmission
Services Scheme 2 in respect of each Settlement Day, in paragraph
17.6 the Pool Funds Administrator shall include in its
verification the amount shown to be payable by the Ancillary
Services Provider pursuant to the Transmission Services Scheme 2
in respect of each Settlement Day and in paragraph 22.4 the Confirmation
Notices shall include the total amount payable by the Ancillary Services
Provider pursuant to the Transmission Services Scheme 2 in respect of
each Settlement Day.
51B.5The Suppliers and the Grid Operator may request the Parties
and the Executive Committee promptly (and in any event before the
date the Transmission Services Scheme 2 is to take effect) to
execute and do all such acts, matters and things (including
effecting amendments to the Pool Rules) as may be necessary to
give effect to the Transmission Services Scheme 2. The Parties
shall not refuse (and agree that they will procure that the
Executive Committee shall not refuse) any such request on the
grounds of any objections to any provisions of any of the Annexes
of Appendix 3 to the Pool Rules as agreed from time to time
between the Suppliers and the Grid Operator.
51B.6 Effectiveness:
Neither this Clause 51B (other than Clauses 51B.2, 51B.5 and this
Clause 51B.6), nor the Transmission Services Scheme 2, nor any
amendment, variation or replacement of either of them, nor any
amendment, variation or replacement to the Pool Rules relating to
the Transmission Services Scheme 2, may become effective except
with the prior agreement of the Suppliers (which agreement shall
be given by the passing of a resolution in a separate class
meeting) and the prior written agreement of the Grid Operator.
51B.7 Survival:
(a)Termination or expiry of the provisions of this Clause 51B, the
Transmission Services Scheme 2 and/or any addition to or amendment
of any other provision of this Agreement effected pursuant to this Clause
shall not prejudice any Consumer's or the Grid Operator's accrued rights
and liabilities under the Transmission Services Scheme 2 at the date of
such termination or expiry, which accrued rights shall, for the avoidance
of doubt, include the ability to adjust sums calculated under the
Transmission Services Scheme 2 in respect of disputes arising after such
termination or expiry in respect of periods falling before such
termination or expiry; and
(b)the provisions of this sub-Clause 51B.7 and Clause 51B.3(b) shall
survive the termination of the Transmission Services Scheme 2.
51B.8 Definitions:
In, and in relation to, this Clause 51B "Consumers shall bear the
meaning given to that term in the Pool Rules.
PART XII
SETTLEMENT RE-RUNS
52.SETTLEMENT RE-RUNS
52.1 Re-runs: The Parties acknowledge and agree that there may be
occasions following any final run of Settlement (as referred to
in paragraph D(3) of the Preamble to Schedule 9) when it is
necessary in respect of a Settlement Day (or part thereof) to
re-determine the trades of electricity pursuant to this Agreement
and the provision of Ancillary Services (whether to take account
of oversight or error, malfunction of the Settlement System
operation in accordance with Grid Operator Despatch instructions
issued under emergency circumstances, award of an arbitrator(s)
pursuant to Clause 83, court order or otherwise howsoever). The
Executive Committee, in consultation with the Settlement System
Administrator, the Pool Funds Administrator and the Pool Auditor
and, where appropriate, the Ancillary Services Provider, shall
decide how such re-determination is to be effected, the
re-allocation of moneys and the period of time over which any
such re-allocation is to take place, any such decision to take
account and give effect, as nearly as practicable, to the
principles and procedures set out in this Agreement (and, where
relevant, the award of the said arbitrator(s) or court order). In
particular, but without prejudice to the generality of the
foregoing, the Executive Committee may require following any
relevant final run of Settlement (and, shall take due notice of
any request from the Ancillary Services Provider to this effect)
the Settlement System Administrator to re-run, and the Settlement
System Administrator shall re-run, Settlement in respect of any
Settlement Day (or relevant part thereof) using the software and
data originally used in respect of such Settlement Day (or
relevant part thereof) but subject to such changes, amendments or
additional inputs as may be required by the Executive Committee,
the Ancillary Services Provider, such arbitrator(s) or court or
(as the case may be) any other relevant Party. Any such re-run
shall hereafter in this Clause 52 be referred to as a "Re-run".
52.2 Timing: The Settlement System Administrator shall arrange
for any Re-run to be carried out as soon as is reasonably
practicable following request by the Executive Committee subject
to the availability of computer time, compatible software,
appropriate data and other resources.
52.3 Ancillary Services Provider: The Ancillary Services Provider
shall have the right to incorporate any delayed or disputed
amount in respect of the provision of Ancillary Services into
Settlement without requiring a Re-run.
52.4 Notification: The Executive Committee shall promptly notify
each Party, the Pool Auditor and the Director of each occasion on
which it requires the Settlement System Administrator to carry
out any Re-run, the reasons for such requirement, the timing
thereof and the period to be covered thereby and shall provide
each Party with such information about any Re-run as is relevant
to such Party and shall provide the Pool Auditor and the Director
with full details of any Re-run.
52.5 Proviso: The foregoing provisions of this Clause 52 are
subject to the proviso that no Re-run shall be carried out, and
neither the Executive Committee nor any Party shall be entitled
to require that a Re-run be carried out, in respect of a
Settlement Day or any part thereof after the first anniversary of
such Settlement Day, but so that this proviso shall not restrict
the right of any Party to claim or recover any moneys properly
due and owing to it under this Agreement.
PART XIII
RISK MANAGEMENT SCHEME
53.APPLICATION
-
53.1Rcquest: The Executive Committee shall send any Pool
Member a Scheme Admission Application within 28 days after receipt of
a request for the same from that Pool Member.
53.2Scheme Admission Application: Any Pool Member may apply
to the Executive Committee to have any Centrally Despatched Generating Unit
admitted to the Scheme by completing and submitting to the Executive
Committee a duly completed Scheme Admission Application not less than
40 days before the proposed date of admission to the Scheme of that
Centrally Despatched Generating Unit.
53.3Admission: The Executive Committee shall admit any
Centrally Despatched Generating Unit to the Scheme in respect of which
all Scheme Admission Conditions are met.
53.4Notification (1): If the Executive Committee determines
that, in respect of any Centrally Despatched Generating Unit, the Scheme
Admission Conditions have been met it shall forthwith and in any event
within 40 days after receipt of the Scheme Admission Application notify
the relevant Pool Member and the Settlement System Administrator accordingly.
53.5Notification (2): If the Executive Committee determines
that, in respect of any Centrally Despatched Generating Unit, the Scheme
Admission Conditions have not been met it shall forthwith and in any event
within 40 days after receipt of the Scheme Admission Application notify the
relevant Pool Member of the reasons why the Scheme Admission Conditions have
not been met.
53.6deference to the Director: In the event of any dispute between the
Executive Committee and the relevant Pool Member over whether such Pool
Member has fulfilled the Scheme Admission Conditions the same may be
referred by the Executive Committee or the relevant Pool Member to the
Director for determination, whose determination shall be final and binding
for all purposes.
54.SCHEME ADMISSION CONDITIONS
The Scheme Admission Conditions are that:
54.1No person has an Accountable Interest in the Centrally
Despatched Generating Unit which is the subject of the Scheme Admission
Application which, when added to the Accountable Interests of
that person in other Generating Units (whether situate within England
and Wales or elsewhere), exceeds in aggregate 1500MW;
54.2 The Pool Member does not have an Accountable Interest (excluding
any Accountable Interest of less than 10MW) in more than four
Generating Units (whether situate within England and Wales or
elsewhere). For the avoidance of doubt a combined cycle module shall
be deemed for these purposes a single Generating Unit;
54.3 The Centrally Despatched Generating Unit which is the subject of the
Scheme Admission Application has not at the date of the Scheme
Admission Application been Commissioned;
54.4 The Centrally Despatched Generating Unit shall be admitted for seven
calendar years from the date of its admission to the Scheme specified
in the Scheme Admission Application; and
54.5The Pool Member shall specify in the Scheme Admission Application
the proposed Scheme Planned Availability for each Settlement Period
in the proposed first Scheme Year for the Centrally Despatched Generating
Unit.
55.RIGHTS AND OBLIGATIONS OF POOL MEMBERS
55.1 Notification of unavailability: In respect of each Scheme
Year for each Scheme Genset (other than the first) the Pool
Member shall not later than 28 days before the start of that
Scheme Year for each Scheme Genset notify the Executive Committee
of all Settlement Periods in that Scheme Year during which the
Scheme Genset is intended to be unavailable.
55.2 Scheme Planned Availability: All Settlement Periods in that
Scheme Year other than those notified under Clause 55.1 shall
together constitute the Scheme Planned Availability in respect of
that Scheme Genset for that Scheme Year.
55.3 Failure to notify: If the Pool Member fails to notify the
Executive Committee in accordance with Clause 55.1 of the Scheme
Planned Availability in respect of that Scheme Genset for the
following Scheme Year, the Scheme Planned Availability shall be
deemed to be the same as the Scheme Planned Availability for the
current Scheme Year.
55.4 No amendment: The Scheme Planned Availability for any Scheme
Year notified in accordance with Clause 55.1 or deemed in
accordance with Clause 55.3 may not be amended.
55.5 Payment rights: The Pool Member shall make or be entitled to
receive payments in respect of each Scheme Genset as determined
in accordance with Section 27 of Schedule 9 notwithstanding the
expiry of the period referred to in Clause 50.4.
55.6 No withdrawal: The Pool Member may not withdraw any Scheme
Genset from the Scheme during any period referred to in Clause
50.4 applicable to that Scheme Genset.
55.7 Actual planned availability: In respect of each Scheme
Genset, the Pool Member shall use all reasonable endeavours to
ensure that the Scheme Planned Availability for each Scheme Year
is the actual planned availability of such Scheme Genset.
56.REVIEW
56.1 Review: Within two months after the end of the third Scheme
Year in respect of which the first Scheme Genset has been
admitted to the Scheme and each subsequent anniversary of that
date the Executive Committee shall (with the consent of the
Director) appoint an independent firm of accountants of
internationally recognized standing to review the Scheme to
establish whether or not any element of the Scheme (or the Scheme
taken as a whole) gives rise to a systematic imbalance which is
likely to prevent the payments to the Scheme balancing payments
from the Scheme and to submit to the Executive Committee and the
Director a report setting out details of any such imbalance and
his findings and recommendations for amending the Scheme designed
to correct any such imbalance.
56.2 Amendments: The Executive Committee may make such amendments
to the provisions of Section 27 of Schedule 9 as are required to
implement the recommendations referred to in Clause 56.1. Any
such amendments shall apply in respect of any Scheme Admission
Application received after the date such amendments become
effective and shall constitute a new Scheme.
56.3 Existing rights and obligations continue: Any Pool Member
shall remain entitled to the benefits and subject to the
obligations of the Scheme with respect to any Scheme Genset in
effect at the time of admission of that Scheme Genset to the
Scheme.
PART XIV
FUEL SECUR1.IY
57.DEFINITIONS
Definitions: In this Part XIV:
"Fuel Security Interest" in relation to a particular Payment
Instruction, means the interest (if any) accruing on the Fuel
Security Payment or Fuel Security Reimbursement specified in that
Payment Instruction pursuant to sub-clause 2.08 of Part 5 of the
Fuel Security Code;
"Fuel Security Ledger" means any ledger required to be maintained
by the Pool Funds Administrator in accordance with Clause 59;
"Fuel Security Payment" means the amount specified in a Payment
Instruction which a Generator is entitled to recover from those
persons specified in that Payment Instruction (excluding Fuel
Security Interest, if any, in relation thereto);
"Fuel Security Reimbursement" means the amount specified in a
Payment Instruction which a Generator is liable to reimburse to
those persons specified in that Payment Instruction (excluding
Fuel Security Interest, if any, in relation thereto); and
"Payment Instruction" means an instruction which has been duly
authorised and delivered by a Generator to whom the Fuel Security
Code applies to the Pool Funds Administrator in the form, and in
the manner, specified in the Fuel Security Code.
58.PAYMENT INSTRUCTIONS
58.1 Effect of a Payment Instruction: Following delivery of a
Payment Instruction to the Pool Funds Administrator:
58.1.1any Fuel Security Payment specified in that Payment
Instruction (together with any Fuel Security Interest in relation
thereto) shall be treated as an amount which is due to that
Generator from those persons specified in that Payment
Instruction and which is payable on the basis provided in that
Payment Instruction; and
58.1.2any Fuel Security Reimbursement specified in that Payment
Instruction(together with any Fuel Security Interest in relation
thereto) shall be treated as an amount which is due from that
Generator to those persons specified in that Payment Instruction
and which is payable on the basis provided in that Payment
Instruction; and
58.1.3subject to Clauses 58.2 and 58.3, the Pool Funds Administrator shall
arrange for such Fuel Security Payment or such Fuel Security
Reimbursement (together with any Fuel Security Interest in relation
thereto) to be paid to or, as the case may be, paid by that Generator by
or, as the case may be, to those persons specified in that Payment
Instruction in accordance with the provisions of such Payment
Instruction; and
58.1.4such Payment Instruction (including any calculation,
determination or other matter stated or specified therein) shall,
save in the case of fraud, be conclusive and binding upon all
Parties.
58.2 Clarification: If the Pool Funds Administrator considers
either that the basis of payment of a Fuel Security Payment or a
Fuel Security Reimbursement provided for in a Payment Instruction
is unclear, contradictory or incomplete or that it is impossible
to implement in full the basis of payment provided for in a
Payment Instruction, then the Pool Funds Administrator must,
promptly on becoming aware of the same, notify the Director in
reasonable detail of the same and, until that matter is
clarified, the Pool Funds Administrator shall only be obliged to
implement the payment specified in that Payment Instruction to
the extent that without clarification such implementation is
possible.
58.3 Failure to specify or clarify: If a Payment Instruction
fails to specify the basis upon which the Fuel Security Payment
or a Fuel Security Reimbursement specified in that Payment
Instruction must be paid or if the Director fails to clarify any
maker notified to it in accordance with Clause 58.2 within ten
Business Days of such notification then the Pool Funds
Administrator shall arrange for the relevant payment to be made
on such basis as the Executive Committee shall, with the written
approval of the Director, determine to be appropriate.
59.RECORD KEEPING AND PAYMENTS
59.1 Fuel Security Ledgers:
59.1.1Following delivery of a Payment Instruction to the Pool
Funds Administrator, the Pools Funds Administrator shall, if he
has not already done so, open and thereafter maintain a Fuel
Security Ledger in the name of that Generator and shall record
therein all amounts (together with any Fuel Security Interest in
relation thereto) due to and from that Generator that are
specified in Payment Instructions and shall also record therein
all transactions arranged by the Pool Funds Administrator for
payments to be made to and from that Generator in accordance with
the provisions of Payment Instructions.
59.1.2The Pool Funds Administrator shall from the time that a Fuel Security
Ledger is opened until it records a nil balance provide to each
Generator and to each Supplier on the last Business Day of each
calendar month a statement reflecting all entries recorded in the
Fuel Security Ledger of that Generator over the course of the
previous month.
59.1.3The Fuel Security Ledger of a Generator shall, except as
required by Clause 59.2.2 or Part IX, be kept confidential in
accordance with Part XX.
59.1.4Each monthly statement provided under Clause 59.2.2
shall, save in the case of manifest error, be deemed prima facie
evidence of the contents of that part of the Fuel Security Ledger
to which it relates.
59.1.5Each Party shall promptly review each monthly statement
provided to it under Clause 59.2.2 and shall (without prejudice
to any of its rights under this Agreement) where practicable
within ten Business Days after receiving each such statement
notify the Pool Funds Administrator of any inaccuracies in such
statement of which it is aware.
59.1.6If the Pool Funds Administrator at any time receives from a
Generator or any Supplier a notice disputing the accuracy of the
Fuel Security Ledger of that Generator, the Pool Funds
Administrator shall consult with the Party giving the notice and
use all reasonable endeavours to rectify any inaccuracy. In the
event that any inaccuracy in a Fuel Security Ledger of a
Generator is rectified, the Pool Funds Administrator shall advise
that Generator and the Suppliers of the inaccuracy that was
rectified.
59.2 Fuel Security Payments: Following delivery to the Pool Funds
Administrator of a Payment Instruction specifying a Fuel Security
Payment, the Pool Funds Administrator shall enter in the Fuel
Security Ledger of that Generator as a credit (a) the amount of
the Fuel Security Payment, and (b) thereafter, any Fuel Security
Interest in relation thereto.
59.3 Fuel Security Reimbursements: Following delivery to the Pool
Funds Administrator of a Payment Instruction specifying a Fuel
Security Reimbursement, the Pool Funds Administrator shall enter
in the Fuel Security Ledger of that Generator as a debit (a) the
amount of the Fuel Security Reimbursement, and (b) thereafter,
any Fuel Security Interest in relation thereto.
59.4 Other Entries: Any amount paid to or, as the case may be,
paid by a Generator in accordance with the provisions of a
Payment Instruction shall be entered as a debit or, as the case
may be, a credit in the Fuel Security Ledger of that Generator.
59.5 Set off The Pool Funds Administrator shall, unless it
reasonably believes that it would be unlawful to do so, from time
to time where possible set off any amounts shown as credits in the
Fuel Security Ledger of a Generator against any amounts shown as
debits in the Fuel Security Ledger of that Generator in the order in
which they were entered. Any balance shown in the Fuel Security Ledger
of a Generator shall, if it is a credit, be paid to or, if it is a
debit, be paid by that Generator to the extent that it relates to
a Payment Instruction on the basis provided for in that Payment
Instruction. The entitlements and liabilities of a Generator (and
the corresponding liabilities and entitlements of the respective
debtors and creditors of that Generator) shall, to the extent
that they have been set off as aforesaid, be deemed satisfied and
extinguished.
59.6 Schedule 11: All payments made to or by any Generator in
accordance with the provisions of a Payment Instruction shall,
subject to any contrary instruction contained in the provisions
of a Payment Instruction, be effected by the Pool Funds
Administrator through the Banking System and the Billing System
established in accordance with Schedule 11.
PART XV
METERING
60.METERING
60.1 Introduction: The rights and obligations of each Party to
this Agreement which enable the accurate measurement of Energy
traded for the purposes of this Agreement by appropriate metering
installations are as set out in this Part XV and also in Schedule
21, and the provisions of Schedule 21 shall have effect and apply
in the same manner as the remaining provisions of this Agreement
apply with respect to each such Party.
60.2 General:
60.2.1For the purposes of this Agreement the quantities of Active
Energy and Reactive Energy Exported or Imported by Parties shall
be measured and recorded through Metering Equipment installed,
operated and maintained and otherwise provided for as set out in
this Part XV and in Schedule 21. Each Generating Unit (excluding
for this purpose Generation Trading Blocks) which is subject to
Central Despatch shall have separate Metering Equipment.
60.2.2Each Party is required to register or procure that there is
registered with the Settlement System Administrator the Metering
System at each Site where such Party Exports or Imports
electricity except where such electricity is not sold or
purchased in accordance with the Pool Rules.
60.3 Reg~strant:s:
60.3.1A Metering System shall have a Registrant and Operator (and
shall be commissioned in accordance with the relevant Code of
Practice) before the Settlement System Administrator is required
to take such Metering System and the data derived therefrom into
account for the purposes of Settlement.
60.3.2Each Metering System (and the identities of its respective
Registrant and Operator) which the Settlement System
Administrator shall take into account for the purposes of
Settlement shall be as set out, for the time being and from time
to time, in the Register.
60.3.3A Registrant's role in relation to a Metering System under
this Agreement shall continue until:
(I) such Registrant ceases to be a Party or another Party
complying with the definition of Registrant accepts such role as
Registrant in accordance with the provisions of this Agreement by
service of a duly completed notice in the form prescribed by the
relevant Agreed Procedure (but without prejudice to any accrued
liabilities of the previous Registrant); or
(ii) the Plant or Apparatus of the Registrant, in respect of such
Metering System, ceases to be connected at the relevant Site (as
indicated in the notification to the Settlement System
Administrator in the form prescribed by the relevant Agreed
Procedure); or
(iii)in the case of a Registrant of a Metering System which is at
the point of connection between a Public Electricity Supplier's
Distribution System and a Second Tier Customer, the Registrant
ceases to act as Second Tier Supplier in relation to the same at
such point of connection; or
(iv) in the case of a Registrant of a Metering System which is at
the point of connection between a Public Electricity Supplier's
Distribution System and a Non-Pooled Generator, the Registrant
ceases to act as Second Tier Supplier purchasing generation from
such Non-Pooled Generator in relation to the same at such point
of connection.
60.3.4The Settlement System Administrator shall inform the
relevant Host PES of:
(I) the identity of any new Registrant; and
(ii) any change in the identity of any existing Registrant,
of a Metering System in respect of which that Public Electricity
Supplier is Host PES, after such change is notified to the
Settlement System Administrator in accordance with the terms of
this Agreement.
60.3.5There must always be one and, at any point in time, no more
than one Registrant for each Metering System which is registered
with the Settlement System Administrator.
60.3.6Any notice of a new, or of a change in an existing,
Registrant, Equipment Owner Operator, Second Tier Customer,
Non-Pooled Generator or Host PES or any Form of Acknowledgement
required under this Part XV or Schedule 21 shall be in such form
and given to such person at such time(s) and accompanied by
payment of such fees (if any) as is prescribed by the relevant
Agreed Procedures.
60.3.7If a Metering System ceases to have a Registrant who is not
replaced as Registrant in relation to the relevant Metering
Equipment, the Settlement System Administrator shall not be
obliged to take the relevant Metering System into account for the
purposes of Settlement.
60.3.8A Registrant may not resign or retire as Registrant except
in accordance with Clause 60.3.3.
60.3.9The Registrant in respect of any Metering System shall
provide to the Settlement System Administrator such information
as may be required by the relevant Agreed Procedures.
60.3.10The Settlement System Administrator shall not enter on the
Register a Registrant in respect of which evidence of consent of
the Equipment Owner has not been provided in accordance with the
relevant Agreed Procedure.
60.3.11Where a Metering System at the point of connection of two
or more Distribution Systems is to be registered with the
Settlement System Administrator, all interested Parties shall
agree upon and nominate the Registrant by means of a duly
completed nomination to the Settlement System Administrator in
the form prescribed by the relevant Agreed Procedure.
60.3.12A Metering System for recording the output of a Non-Pooled
Generator must be capable of being identified separately for the
purposes of Settlement from any Metering System recording demand.
For the avoidance of doubt, it is acknowledged that one set of
Metering Equipment may comprise more than one
separately-identified Metering System.
60.4 Operators:
60.4.1There must always be one and, at any point in time, no more
than one Operator for each Metering System which is registered
with the Settlement System Administrator. A replacement Operator
of such Metering System may be appointed from time to time in
accordance with the provisions of this Part XV, Schedule 21 and
the relevant Agreed Procedure.
60.4.2All Metering Systems at the site of a Non-Pooled Generator,
which contain all or any part of the same Metering Equipment must
have the same Operator.
60.4.3Any notice of a new Operator or of a change in Operator
(including upon resignation, removal or cessation in accordance
with the provisions of Schedule 21) or any Form of
Acknowledgement required under this Part XV or Schedule 21 shall
be in such form and given to such person at such time(s) and
accompanied by payment of such fees (if any) as is prescribed by
the relevant Agreed Procedures. Where any Meter Operator Party
has not acknowledged its appointment as Operator the Settlement
System Administrator shall notify the Registrant in accordance
with the relevant Agreed Procedure.
60.4.4The Registrant in respect of a Metering System shall ensure
that there is appointed from time to time an Operator, which is a
Meter Operator Party, in accordance with, and for the purposes
of, Schedule 21 as Operator in respect of that Metering System.
60.4.5If a person which is an Operator in respect of any Metering
System ceases to be an Operator in respect thereof for whatever
reason (including upon removal or resignation) or ceases to be a
Meter Operator Party "including upon removal or resignation) and
there has not been appointed, at that time, a replacement
Operator in respect of the relevant Metering System(s) in
accordance with the provisions of this Part XV and Schedule 21,
such person's responsibilities as Operator of such Metering
Equipment shall upon such cessation be assumed by the Registrant
in respect of such Metering Equipment who shall be deemed to be
the Operator therefor (notwithstanding that it shall not be
registered as such by the Settlement System Administrator) in
accordance with the provisions of this Clause (the "deemed
Operator").
60.4.6If a person which is an Operator in respect of any Metering
System at the site of a Non-Pooled Generator ceases to be an
Operator in respect thereof for whatever reason (including upon
removal or resignation) or ceases to be a Meter Operator Party
(including upon removal or resignation) and there has not been
appointed, at that time, a replacement Operator in respect of the
relevant Metering System(s) in accordance with the provisions of
this Part XV and Schedule 21, such person's responsibilities as
Operator of the relevant Metering Equipment shall upon such
cessation be assumed by the Registrant of the Metering System
registered for supply with respect to such Metering Equipment.
Such Registrant shall be deemed to be the Operator therefor
(notwithstanding that it shall not be registered as such by the
Settlement System Administrator) in accordance with the
provisions of this Clause (the "Deemed Operator").
60.4.7As soon as any Registrant has reasonable grounds to believe
that an Operator of any Metering System in respect of which it is
the Registrant has ceased to act as Operator therefor in
accordance with substantially all of its responsibilities as set
out in Schedule 21 it shall remove such Operator in respect of
such Metering System in accordance with paragraph 6.1 of Schedule
21.
60.4.8If the Settlement System Administrator has reasonable
grounds to believe that an Operator of any Metering System has
ceased to act as Operator therefor in accordance with
substantially all of its responsibilities as set out in Schedule
21 the Settlement System Administrator shall notify the
Registrant in accordance with the relevant Agreed Procedure.
60.4.9Any Registrant which is deemed to be the Operator of a
Metering System pursuant to the provisions of Clause 60.4.5
shall, subject to Clauses 60.4.10 and 60.4.11, continue to act as
the Operator in respect of any Metering System to which that
Clause applies, or shall appoint an agent or contractor which
shall continue to act as the Operator in respect of such Metering
System, for a period of 10 Business Days (which shall commence at
the time of the cessation referred to in Clause 60.4.4) or, if a
new Operator is registered in respect of that Metering System
prior to the expiryof that period, for a period ending on the
date of such registration.
60.4.10If a Registrant to which Clause 60.4.9 applies does not
act as Operator in accordance with the provisions thereof or does
not appoint an agent or contractor who shall act as Operator, or
if the 10 Business Day period referred to in Clause 60.4.9 shall
expire without a replacement Operator being registered with the
Settlement System Administrator in respect of that Metering
System in accordance with paragraph 4 of Schedule 21, that
Registrant shall:
(I) undertake to cease forthwith to supply or to generate or to
take a supply of electricity for the purposes of the sale or
acquisition of electricity pursuant to this Agreement at the site
where such supply or generation is measured, recorded and
communicated to the Settlement System Administrator by that
Metering System; and
(ii) notify the Settlement System Administrator in accordance
with the relevant Agreed Procedure of that fact.
60.4.11 During the period in which a Registrant is the deemed
Operator in accordance with this Clause it shall be required
(save only as expressly provided to the contrary in this
Agreement) to comply with the requirements of this Part XV and
Schedule 21 as Operator provided that, but without prejudice to
any liability to pa, for Active or Reactive Energy traded by it,
such Registrant as deemed Operator:
(I) shall not be required to be registered as Operator with the
Settlement System Administrator nor to comply with the prescribed
conditions for registration as Operator from time to time in
accordance with the provisions of Schedule 21; and
(ii) shall not at any time when it is the deemed Operator be
required to incur significant capital expenditure in the
fulfillment of obligations contained in this Part XV or Schedule
21 where:
(a) the Metering Equipment shall have become defective,
inaccurate or in want of repair (the "defective Metering Equipment")
as a direct consequence of the act or omission of any previous Operator;
(b) the Registrant shall upon becoming aware of the same have
taken all steps to cease forthwith to supply or to generate
electricity for the purposes of the sale or acquisition of
electricity pursuant to this Agreement at or in relation to the
site where such supply or generation is measured, recorded and
communicated to the Settlement System Administrator by the
defective Metering Equipment; and
(c) the Registrant shall have notified the Settlement System
Administrator in accordance with the relevant Agreed Procedure of
the fact that the supply or generation has ceased.
Where (x) the Settlement System Administrator proposes to
exercise its right under paragraph 18 of Schedule 21 to replace,
renew or repair the defective Metering Equipment (the "remedial
work") (y) the exercise of such right would result in the
incurring of significant capital expenditure; and (z) the
Register indicates that such Registrant is acting as deemed
Operator, the Settlement System Administrator shall notify the
Registrant before undertaking such remedial work and shall give
such Registrant the opportunity to comply with (ii) (b) and (c)
above before commencing such remedial work.
60.5 Maintenance of Register and documents:
60.5.1 The Settlement System Administrator shall keep a register
recording:
(i) each Metering System which is accepted for the purposes of
the Settlement System;
(ii) the respective identities in respect of each such Metering
System of:
(a) the Registrant;
(b) the Operator;
(c) the Equipment Owner;
(d) the Host PES (where applicable);
(e) any Second Tier Customer or Non-Pooled Generator in respect
of a supply to which that Metering System is being used; and
(f) any agent which may be appointed from time to time by the
Settlement System Administrator for the purpose of data
collection or, where appropriate, of any Second Tier Agent in
respect of such Metering System or, where the Settlement System
Administrator does not appoint or have currently appointed such
agent or Second Tier Agent in respect of a Metering System, a
note to this effect;
(iii) loss adjustment details whether by meter biasing or by
software;
(iv) whether the Metering Equipment comprising a Metering System
is the subject of a dispensation agreed in accordance with
paragraph 14 of Schedule 21; and
(v) the relevant Code(s) of Practice in respect of such Metering
System.
60.5.2For the purposes of this Agreement, the Settlement System
Administrator shall refer only to the Register to identify the
Registrant, Operator, Equipment Owner, Host PES, Second Tier
Customer, Non-Pooled Generator agent or Second Tier Agent
referred to in Clause 60.5.1 relating to each Metering System and
shall not be obliged to acknowledge or be bound by any other
agreement or arrangement entered into by any Registrant,
Operator, Equipment Owner, Host PES, Second Tier Customer or
Non-Pooled Generator.
60.5.3 The Settlement System Administrator shall keep the
Register up to date, noting changes to Registrants, Operators,
Equipment Owners, Host PESs, Second Tier Customers, Non-Pooled
Generators' Metering Equipment, dispensations and any Site
disconnections as notified to it pursuant to this Agreement and
any changes to any agent or Second Tier Agent. The Settlement
System Administrator shall also record in the Register any other
information regarding each Metering System as may be reasonably
required by the Executive Committee.
60.6 Communication links and central collector stations:
60.6.1 The Settlement System Administrator shall collect (or
procure the collection of) and estimate data relating to
quantities of Active and Reactive Power Imported or Exported by
any Party as may be required for the proper functioning of
Settlement in accordance with the provisions of this Clause 60.6.
60.6.2 The Settlement System Administrator shall collect or
procure the collection of all such data referred to in Clause
60.6.1 as is available from Outstations either by means of remote
interrogation or by means of manual on-site interrogation.
60.6.3 (a) For the purposes of remote interrogation the
Settlement System Administrator shall enter into, manage and
monitor contracts or other arrangements to provide for the
maintenance of all communication links by which information is
passed from Outstations to the Settlement System Administrator or
its agent other than exchange links which form part of
Communications Equipment.
(b) In the event of any fault or failure of any
communication link or any error or omission in such data or all
necessary data not being available from Outstations the
Settlement System Administrator shall collect or procure the
collection of such data by manual on-site interrogation in
accordance with the relevant Agreed Procedures.
60.6.4 The Settlement System Administrator shall be responsible
for the installation and maintenance of central collector
stations.
60.6.5 The Settlement System Administrator shall collect or
procure the collection of data for the purposes of the Settlement
System from Embedded Generators, Second Tier Suppliers, Second
Tier Customers, Non-Pooled Generators and inter-Distribution
System connections in accordance with the relevant Agreed
Procedures.
60.6.6 The obligation to maintain communications links in respect
of Metering Equipment shall not apply where and with effect from
the date on which a person receiving a supply of or generating
electricity recorded by such Metering Equipment ceases to be a
Second Tier Customer, a Non-Pooled Generator, a Generator or a
PES.
60.7 Class rights:
60.7.1 The levels of accuracy for Metering Equipment at points of
connection of Second Tier Customers taking up to (and including)
100kW of demand and at new points of connection between two or
more Distribution Systems were not set as at 1st April, 1993 and
shall be as specified by the Executive Committee subject to the
consent of any relevant class of Pool Members.
60.7.2 The levels of accuracy for Metering Equipment at points of
connection of Non-Pooled Generators shall be as specified by the
Executive Committee subject to the consent of any relevant class
of Pool Members."
60.7.3 Any change to the standards of accuracy of Metering
Equipment required for Second Tier Customers up to (and
including) 100kW before 31st March, 1998 shall be a change to the
class rights of Suppliers.
60.7.4 Any change to the standards of accuracy of Metering
Equipment required for Non-Pooled Generators shall be a change to
the class rights of Suppliers.
60.8 Sealing: Metering Equipment shall be as secure as is
practicable in all the circumstances and her this purpose:
(a) all Metering Equipment shall comply with the relevant Agreed
Procedure; and
(b) the Executive Committee and the Settlement System
Administrator shall regularly review Agreed Procedures for
security arrangements in relation to Metering Equipment.
60.9 Discrepancies between meter advance and half hourly value
totals: The Parties acknowledge that, in transmitting metered
data, impulses representing quantities of electricity may be lost
between the relevant Meter and the Outstations giving rise to
inaccuracies in half hourly values notwithstanding that the
Metering Equipment is complying with the standards required by
this Agreement. In such circumstances any differences between
electricity flows recorded on Meters and the total of the half
hourly values recorded in the Settlement System will be noted at
the time that the Meter is inspected and read by the Settlement
System Administrator pursuant to paragraph 10 of Schedule 21 and
will be dealt with as provided in the relevant Agreed Procedure.
In any other circumstances where the Metering Equipment is not
complying with the standards required by this Agreement such
difference will be dealt with in accordance with paragraph 11 of
Schedule 21.
60.10 Meter Failure:
60.10.1 If at any time any Metering Equipment ceases to function
or is found to be outside the prescribed limits of accuracy
referred to in paragraph 7.3.1 of Schedule 21 for whatever reason
then, except in the circumstances referred to in Clause 60.10.2:
(a) in the case of Metering Equipment ceasing to function,
during the period from the date of such cessation; or
(b) in any other case, during the period from the time when such
inaccuracy first occurred or, if such time is unknown, from the
midnight preceding the day during which the disputed reading
occurred,
until, in either such case, the date of adjustment, replacement,
repair or renewal of such Metering Equipment under paragraph 8.4
of Schedule 21, the meter readings shall be deemed to be those
calculated pursuant to the relevant Agreed Procedure.
60.10.2 If at any time a voltage transformer fuse on a circuit
supplying a Meter fails with the result that the Metering
Equipment is outside the prescribed limits of accuracy referred
to in paragraph 7.3.1 of Schedule 21, the meter readings from the
time the failure is deemed to have occurred until the voltage
transformer circuit is again restored to the Meter shall be
deemed to be those calculated pursuant to the relevant Agreed
Procedure. A failure shall be deemed to have occurred at the
point in time provided for in the relevant Agreed Procedure.
60.11 Disputes:
60.11.1Any dispute regarding the accuracy of data recorded or
transmitted by Metering Equipment in respect of any Settlement
Day which is to be used for the purposes of Settlement and where
the purpose of the resolution of such dispute is solely to affect
payments arising from a Settlement Run shall, if there is a
relevant Agreed Procedure, be dealt with in accordance with such
Agreed Procedure. If, having exhausted such Agreed Procedure any
Party is not satisfied with the outcome, such Party may refer the
matter to the Executive Committee. If there shall be no relevant
Agreed Procedure, such dispute shall be referred to the Executive
Committee. If, in either case, any Party is not satisfied with
the decision of the Executive Committee, the matter may be
referred by such Party to arbitration in accordance with Clause
83.
60.11.2Any dispute regarding Metering Equipment (other than a
dispute referred to in Clause 60.11.1) shall be referred to the
Executive Committee. If any Party is not satisfied with the
decision of the Executive Committee, the matter may be referred
by such Party to arbitration in accordance with Clause 83.
60.11.3It is hereby expressly acknowledged and agreed by the
Parties that the resolution of any dispute referred to in Clause
60.11.1 or 60.11.2 shall in all cases be without prejudice to the
bringing or pursuing of any claim, by or against, or the
resolving of any issue between any one or more of such Parties or
any other Party arising out of the same facts or circumstances,
or facts or circumstances incidental to the facts and
circumstances giving rise to such dispute, or upon the basis of
which such dispute has been resolved, in favour of, or against, a
Meter Operator Party or Meter Operator Parties.
60.11.4Upon the request of any Party which is a party to a
dispute referred to in Clause 60.11.1 or 60.11.2 any relevant
data derived from Metering Equipment may be submitted by the
Settlement System Administrator to the body then having
jurisdiction in respect of the relevant dispute for the purposes
of resolving such dispute.
60.12 Information:
60.12.1If a Pool Member or Party intends to make or provide or
make a significant alteration to a connection to the NGC
Transmission System or to a Distribution System which connection
is of 100MW or more in capacity and which may require a new
Metering System to be registered into the Settlement System or a
significant change to a Metering System to be registered into the
Settlement System, the Pool Member or Party shall inform the
Settlement System Administrator as soon as possible and, in any
event, not later than three months prior to the date on which the
Pool Member or Party expects to make or provide the connection or
change. Such information will be regarded as confidential to the
Pool Member or Party providing it, and will be used by the
Settlement System Administrator only for the purpose of preparing
the Settlement System to take account of the Metering System when
it is registered.
60.12.2Any information regarding or data acquired by the
Settlement System Administrator or its agent from Metering
Equipment at any Site which is a point of connection to a
Distribution System shall, and may, be passed by the Settlement
System Administrator or its 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 the Distribution System and the calculation of
charges for use of and connection to the Distribution System.
60.13 Ownership of Metering Data, access, use and use of
Communications Equipment:
60.13.1The Registrant of any Metering System shall own the data
acquired therefrom provided that (and each Registrant hereby
expressly agrees and acknowledges that) a Second Tier Customer or
Non-Pooled Generator of that Registrant in respect of which such
data is generated shall be entitled at all times without charge
by the Registrant to access, obtain and use such data and
provided further that:
(i) such access, obtaining or use, or the method of such access,
obtaining or use, does not interfere with the operation of
Settlement;
(ii) nothing in this Clause 60.13.1 shall require the Registrant
actively to provide such data to such Second Tier Customer or
such Non-Pooled Generator or so to provide such data free of
charge; and
(iii) such access shall not be by using any communications link
used by the Settlement System Administrator for the purposes of
Clause 60.6 without the prior written consent of the Settlement
System Administrator.
60.13.2 The Settlement System Administrator and, for the purposes
of the performance by the Pool Auditor of its functions under
Part IX, the Pool Auditor are hereby authorised to use all data
which is owned by the Registrant pursuant to Clause 60.13.1 as
may be permitted pursuant to this Agreement, and the Settlement
System Administrator or, as the case may be, the Pool Auditor may
only release such data to others to the extent set out in this
Agreement. It is hereby expressly agreed that the Settlement
System Administrator is permitted to and shall against request
and payment of a reasonable charge therefor release to a Second
Tier Customer or Non-Pooled Generator such data relating to it as
is referred to in Clause 60.13.1.
60.13.3Communications Equipment need not be dedicated exclusively
to the provision of data to the Settlement System Administrator
for the purposes of Settlement provided that any other use shall
not interfere at any time with the operation of Settlement and
subject also to the relevant provisions (if any) in the Tariff.
60.14 Ancillary Services: Until the RP Date, the Ancillary
Services Provider shall be entitled at its own cost and expense
(which shall not be charged or recharged to Pool Members) to
prepare and submit to the Suppliers in separate class meeting a
works programme relating to the method of recovery from Pool
Members for the supply of Reactive Energy by reference to the
actual amount of Reactive Energy consumed by Pool Members as
measured by MVAr Metering Equipment at each relevant Site, and,
if approved by the Suppliers in separate class meeting, such
works programme shall be deemed to be an approved Works Programme
for all purposes of this Agreement and the provisions of Clauses
5.13 and 5.14 shall apply mutatis mutandis.
60.15 Appointment of Agents by Settlement System Administrator:
Notwithstanding the provisions of paragraph 7.2.2 of Schedule 4
the Settlement System Administrator may appoint one or more
agents to perform any or all of its obligations under this Part
XV and Schedule 21.
60.16 Appointment of Second Tier Agents by Settlement System
Administrator with effect from 31st March, 1994:
60.16.1If, for the purposes of Clause 60.15, the Settlement
System Administrator appoints one or more agents for the purpose
of carrying out the obligations of the Settlement System
Administrator under or in connection with this Part XV or
Schedule 21 in relation to Metering Systems at or referable to
points of connection relating to Second Tier Customers or
Non-Pooled Generators as the Settlement System Administrator may
direct, then the provisions of Clauses 60.16.1 to 60.16.5 and
Clause 60.1? shall, inter alia, apply to such arrangements.
60.16.2The Settlement System Administrator shall, prior to
appointing any Second Tier Agent pursuant to Clause 60.16.1,
consult with the Executive Committee as to the appropriateness of
the appointment of such Second Tier Agent and the terms upon
which, if appropriate, such agent is to be appointed and shall
have due regard to the wishes expressed pursuant to this Clause
60.16.2 by the Executive.
60.16.3The Settlement System Administrator shall use reasonable
endeavours to procure that each Second Tier Agent shall promptly
and properly input data and other information as it may receive
pursuant to the terms of its appointment into its Second Tier
Computer Systems and shall review and validate data and other
information in accordance with the relevant Agreed Procedures to
establish the completeness thereof and to identify any
inconsistencies therein.
60.16.4The Settlement System Administrator shall use reasonable
endeavours to procure that each Second Tier Agent shall keep
secure and confidential and not disclose, during the period of
its appointment or following its resignation or removal,
information, data and documentation obtained by the Second Tier
Agent in such capacity so as to cause a breach by the Settlement
System Administrator of its obligations pursuant to Clauses 68 or
69 of this Agreement.
60.16.5The Settlement System Administrator shall use reasonable
endeavours to procure that upon the reasonable request of the
Settlement System Administrator and in any event upon the removal
or resignation of any Second Tier Agent, such Second Tier Agent
shall make over to the Settlement System Administrator or its
nominee all such records, manuals and data and other information
in the ownership or under the control of the Second Tier Agent
and relating to the operation, and necessary for the proper
functioning, of the Second Tier Data Collection System.
60.17Review:
(a) As soon as practicable after the third anniversary of the
date of this Agreement the Executive Committee, in consultation
with the Settlement System Administrator and the Director, shall
carry out a full review of the Second Tier Data Collection System
and, in consultation with the Director, shall seek to agree with
the Settlement System Administrator (the agreement of the
Settlement System Administrator not to be unreasonably withheld
or delayed) the manner by which the costs of the Second Tier Data
Collection System should be recovered, in the Accounting Periods
commencing on or after 1st April, 1994.
(b) If, and to the extent, deemed necessary by the Executive
Committee in consultation with the Settlement System
Administrator and the Director, the Executive Committee shall
conduct a further review of the Second Tier Data Collection
System and, in consultation with the Director, shall seek to
agree with the Settlement System Administrator (the agreement of
the Settlement System Administrator not to be unreasonably
withheld or delayed), the manner by which the Second Tier Data
Collection System should operate, and by which the costs of the
same should be recovered, in the Accounting Periods commencing on
or after 1st April, 1996 such review to commence in due time to
enable implementation of any changes to the Second Tier Data
Collection System on that date.
(c) The Executive Committee, in consultation with the Settlement
System Administrator and the Director, shall carry out a further
full review of the Second Tier Data Collection System and, in
consultation with the Director, shall seek to agree with the
Settlement System Administrator (the agreement of the Settlement
System Administrator not to be unreasonably withheld or delayed),
the manner by which the Second Tier Data Collection System should
operate, and by which the costs of the same should be recovered,
in the Accounting Periods commencing on or after 1st April, 1998
such review to commence in due time to enable implementation of
any changes to the Second Tier Data Collection System on that
date.
(d) In the event of an agreement within (a), (b) or, as the case
may be, (c) above, the provisions of this Agreement relating to
the Second Tier Data Collection System shall be amended
accordingly and, in the event of any failure to agree, the matter
shall be referred to arbitration pursuant to the provisions of
Clause 83. If such agreement has not been reached or a
determination has not been made or a settlement not been reached
under any such arbitration prior to:
(i) in the case of (a) above, the fourth anniversary of the date
of this Agreement;
(ii) in the case of (b) above (where applicable) by 1st April,
1996; and
(iii) in the case of (c) above by 1st April, 1998,
the Settlement System Administrator shall, between such date and
the date on which agreement is reached or (if applicable) a
determination or settlement under such arbitration is made or
reached, recover the costs, expenses and charges of the Second
Tier Data Collection System in accordance with Clause 34A and
paragraph 3 of Part G of the Appendix to Schedule 4
60.18 Software for FMS: The Settlement System Administrator shall
develop and implement appropriate computer software for the
purposes of collecting and aggregating data following the FMS
Date.
60.19 Second Tier Unmetered Supplies:
60.19.1Notwithstanding any of the other provisions of this
Agreement, including Clause 60 (other than the provisions of this
Clause 60.19) and Schedule 21, the provisions of this Clause
60.19 and any Second Tier Unmetered Supplies Procedures shall, to
the extent they are supplemental to or conflict with any other
provisions of this Agreement, govern the rights and obligations
of the Parties (including each Operator and each Meter Operator
Party) in relation to Second Tier Unmetered Supplies.
60.19.2Neither this Clause 60.19 (save for the requirements set
out in this Clause 60.19.2 for the bringing into effect of this
Clause 60.19) nor the Second Tier Unmetered Supplies Procedures
nor any amendment, variation or replacement of either of them may
become effective:
(i) unless and until the Chief Executive shall have given each
Public Electricity Supplier, each Second Tier Supplier, the
Director (who may consult with such persons as he considers
appropriate) and the Settlement System Administrator not less
than 14 days' notice that this Clause 60.19 (or any amendment,
variation or replacement thereof) and/or the Second Tier
Unmetered Supplies Procedures are to become effective, stating
the date on which the same are proposed to become effective and
having attached thereto a copy of any proposed Second Tier
Unmetered Supplies Procedures; and
(ii) so long as none of the recipients of the notice referred to
in Clause 60.19.2(i) shall have given a counternotice to the
Chief Executive before the date on which this Clause 60.19 and/or
the Second Tier Unmetered Supplies Procedures are to become
effective stating, on reasonable grounds, an objection to this
Clause 60.19 or the Second Tier Unmetered Supplies Procedures
becoming effective on the proposed date or at all, in the event
that a counternotice shall have been given in accordance with
Clause 60.19.2(ii) the Chief Executive shall, as soon as is
reasonably practicable, notify the persons referred to in Clause
60.19(i) of that fact.
60.19.3Nothing in this Clause 60.19 shall permit the adoption, in
the Second Tier Unmetered Supplies Procedures or otherwise, of
standards of accuracy of data for Second Tier Unmetered Supplies
different from those which apply generally under this Agreement
other than during the transitional period expiring on 31st March,
1995.
60.19.4Except where the context otherwise requires, in this
Clause 60.19:
"Second Tier Unmetered Supplies" means Unmetered street lighting
and related supplies of a type which as at the date this Clause
60.19 becomes effective are permitted to be made by a Second Tier
Supplier;
"Second Tier Unmetered Supplies Procedures" means the procedures
in respect of Second Tier Unmetered Supplies in the form agreed
between all Public Electricity Suppliers and the Director (who
may consult with such persons as he considers appropriate) as the
same may be amended, varied or replaced from time to time with
the agreement of such persons.
60.19.5The Executive Committee may determine that Agreed
Procedures are necessary to implement this Clause 60.19 or the
Second Tier Unmetered Supplies Procedures and in such case
nothing in this Clause 60.19 or the Second Tier Unmetered
Supplies Procedures shall prejudice such determination or the
adoption or implementation of such Agreed Procedures, provided
that any such Agreed Procedure shall not include matters which
would occur on the Second Tier Customer's side of the outstation.
60.19.6The Parties accept that modifications to the Settlement
System Administrator's rights and obligations under this
Agreement may be required under the Second Tier Unmetered
Supplies Procedures or otherwise before this Clause 60.19 can
become effective.
PART XVI
POOL CIVIL EMERGENCIES
61.1 DEFINITIONS
Definitions: In this Part XVI:
"Civil Emergency Pool Credit Facility" shall mean a credit
facility to be arranged by and for the use of Suppliers upon
terms and conditions to be set out in Schedule 11 to this
Agreement;
"Pool Civil Emergency" shall have the meaning ascribed to it in
Clause 61.2.1;
"Pool Civil Emergency Event" shall mean an event or series of
events which satisfies the conditions set out in Clause 61.3.2;
"Pool Civil Emergency Period" shall mean a period initiated by
the Executive Committee after the occurrence of a Pool Civil
Emergency Event which shall commence, and terminate, in
accordance with this Part;
"Pool Rules Civil Emergency Condition" shall mean, in respect of
any Schedule Day, that both:
(i) UMT > 0.1 (as determined in accordance with paragraph
32.1(a) of Schedule 9); and
(ii) RAPT > 3 * CAPT (as determined in accordance with paragraph
32.1(b) of Schedule 9);
"Pool Rules Civil Emergency Period" shall mean a period which
commences, and terminates, and in which section 32.3 of Schedule
9 is in force, in accordance with this Part; and
"Relevant Time" in relation to any event, means the time which
falls two hours prior to the first time at which an Availability
Declaration must be submitted pursuant to section 6.1 of Schedule
9 on the first Settlement Day which commences at least 24 hours
after the occurrence of such event.
61.2 APPLICATION AND STATEMENT OF INTENT
61.2.1 General Statement of Intended Application: It is intended
that this Part shall apply where there is in existence an event,
or series of events which does or do not generally occur as part
of normal market operating conditions and which affect(s) the
operation of the market for the generation, transmission and/or
supply of electricity in England and Wales and which, as a
result, cause(s) or is or are likely to cause materially changed
pool prices to arise and continue (a "Pool Civil Emergency"). The
following conditions set out in this Part are intended to reflect
the circumstances in which it is envisaged that it would likely
be the case that such event or events shall have so occurred.
61.2.2Interrelationship with Act: The Act and the Energy Act 1976
contain legislation conferring wide powers upon the Secretary of
State to regulate the generation, transmission and/or supply of
electricity in an emergency. It is intended that the provisions
of this Part shall coexist in application with such legislation.
61.3 CONDITIONS FOR EXISTENCE OF A POOL CIVIL EMERGENCY
61.3.1 Determination of a Pool Civil Emergency: A Pool Civil
Emergency shall exist upon any resolution to that effect passed
by the Executive Committee in accordance with the provisions of
this Part "hereafter, subject to the following provisions of this
Part, a Pool Civil Emergency Period shall commence.
61.3.2 Conditions: The Executive Committee shall resolve that a
Pool Civil Emergency exists only if it has formed the opinion
that a Pool Civil Emergency Event has occurred. A Pool Civil
Emergency Event shall occur whenever:
(a) materially changed pool prices exist or are likely to exist
and, in either case, are likely to continue; and
(b) such materially changed pool prices are the direct result of
any one or more of the following:
(i) a major failure affecting the operation of the NGC
Transmission System;
(ii) a major operational failure of one or more Distribution
Systems; or
(iii) an inability of any Generator to generate or the loss of
generating plant availability of any Generator; and
(c) the event within (i), (ii), or as the case may be, (iii) of
(b) above has itself resulted from any one or more of the
following:
(i) any action taken by or on behalf of Her Majesty's Government
pursuant to and in accordance with the emergency provisions set
out in sections 1 to 4 of the Energy Act 1976 or section 96 of
the Act;
(ii) any act, order, regulation, direction or directive,
legislation or restraint of Parliament or any governmental
authority, or agent or instrument of the foregoing;
(iii) any act of public enemy or terrorist, act of war or
hostilities (whether declared or undeclared), threat of war or
hostilities, blockade, revolution, riot, insurrection, civil
commotion or unrest or demonstration;
(iv) any strike, lock-out or other industrial action;
(v) any act of sabotage or vandalism;
(vi) lightning, earthquake, hurricane, storm, fire, Hood,
drought, accumulation of snow or ice, or any other extreme
weather or environmental condition; or
(vii) any other event provided that in such a case any resolution
of the Executive Committee determining that a Pool Civil
Emergency exists must be carried by a majority of not less than
75 per cent. of the total votes of all Committee Members entitled
to vote at a meeting of the Executive Committee whether or not
present.
61.4 CONDITIONS FOR EXISTENCE OF A POOL RULES CIVIL EMERGENCY
PERIOD
Pool Rules Civil Emergency Period: A Pool Rules Civil Emergency
Period shall, subject to the following provisions of this Part,
commence as part of a Pool Civil Emergency Period whenever (i) a
Pool Civil Emergency Period is current and (ii) the Pool Rules
Civil Emergency Condition is satisfied and (iii) Section 28 of
Schedule 9 hereof is not in effect.
61.5 PROCEDURE FOR INITIATION OF A POOL CIVIL EMERGENCY PERIOD
AND COMMENCEMENT OF A POOL RULES CIVIL EMERGENCY PERIOD
61.5.1Right to requisition:
(a) Each Pool Member, the Settlement System Administrator, the
Grid Operator, the Director and the Secretary of State shall have
the several right to have convened a special meeting of the
Executive Committee for it to consider whether a Pool Civil
Emergency exists (and accordingly whether a Pool Civil Emergency
Period is to commence).
(b) To requisition a meeting of the Executive Committee the
relevant Party, the Director or, as the case may be, the
Secretary of State shall notify in writing:
(i) in the case of a Pool Member, its appointed Committee
Member, the Pool Chairman or the Chief Executive; and
(ii) in the case of the Settlement System Administrator, the Grid
Operator, the Director or the Secretary of State, the Pool
Chairman or the Chief Executive,
that it wishes such a meeting to be convened giving as full an
explanation as it is able of the event or events which it
believes constitute(s) the relevant Pool Civil Emergency Event.
(c) Upon receipt of a written requisition in accordance with
(b), the relevant Committee Member, the Pool Chairman or, as the
case may be, the Chief Executive shall convene a special meeting
of the Executive Committee in accordance with Clause 18 to take
place within 48 hours after receipt of such requisition, and the
provisions relating to notice periods in Clause 18 shall be
varied for the purposes of this Part accordingly.
61.5.2 Initiation by the Executive Committee:
Pool Civil Emergency Period: If the Executive Committee shall
resolve that a Pool Civil Emergency exists then, subject to the
right of veto in Clause 61.5.7 being exercised, a Pool Civil
Emergency Period shall commence upon the expiry of the time limit
for the exercise of such veto and shall continue until terminated
in accordance with Clause 61.7.
61.5.3 Pool Rules Civil Emergency Period:
(a) Commencement: A Pool Rules Civil Emergency Period shall,
subject to the right of veto in (b) below and in Clause 61.5.7
being exercised, commence in accordance with Clause 61.4 at the
expiry of the period for the exercise of the Executive
Committee's veto in (b) below and shall continue until terminated
in accordance with the provisions of Clause 61.7.
(b) Executive Committee's Right of Veto: The Executive Committee
shall have the right to veto the commencement of a Pool Rules
Civil Emergency Period by the passing of a resolution to that
effect carried by a majority of not less than 65 per cent. of the
total votes of all Committee Members entitled to vote at such
meeting whether or not present, provided that the Executive
Committee shall only be able to exercise such right of veto prior
to the Relevant Time relative to the time at which the Secretary
receives a notification given by the Settlement System
Administrator pursuant to Clause 61.5.4.
(c) Eject of Veto: Where the Executive Committee exercises its
right of veto in accordance with (b) above, the relevant Pool
Rules Civil Emergency Period shall not commence.
61.5.4 Settlement System Administrator's Notification: The
Settlement System Administrator shall notify forthwith by
telephone (and confirm in writing as soon as is practicable
thereafter to) the Chief Executive, Pool Chairman, Secretary,
Director and Secretary of State whenever it becomes aware that
the Pool Rules Civil Emergency Condition is satisfied.
61.5.5 Reasons: The Executive Committee shall give reasons for
the passing of any resolution pursuant to this Clause or the
exercising of any right of veto conferred on it by this Clause,
to be notified to the relevant parties by the Secretary in
accordance with Clause 61.5.6.
61.5.6 Notification (1): The Secretary shall notify in accordance
with Clause 75 all Parties, the Director and the Secretary of
State:
(a) of the result of any vote taken on a resolution of the
Executive Committee pursuant to this Part, giving reasons in
outline explaining such result, immediately following the
conclusion of the meeting at which the vote was taken; such
notification may be given by telephone or by facsimile
transmission. An outline statement of reasons shall be circulated
by the Secretary to the same persons as soon as is reasonably
practicable thereafter; and
(b) where there has been no exercise within the time limit
provided therefor of a right of veto pursuant to either Clause
61.5.3 by the Executive Committee or Clause 61.5.7 by the
Director or the Secretary of State, notify all Parties, the
Director and the Secretary of State immediately of the
commencement of a Pool Rules Civil Emergency Period.
61.5.7 Right of Veto:
(a) Right of Veto: The Director and the Secretary of State shall
each have a several right to veto the commencement of any Pool
Civil Emergency Period or, as the case may be, Pool Rules Civil
Emergency Period by giving written notice of an exercise of such
right of veto addressed to the Executive Committee, the Pool
Chairman and the Chief Executive within the time periods
specified below. To be validly given, such notice shall specify
in sufficient detail (in the case of a Pool Civil Emergency
Period) the relevant resolution of the Executive Committee or (in
the case of a Pool Rules Civil Emergency Period) the relevant
notification of the Settlement System Administrator, in respect
of which the right of veto is being exercised.
(b) Effect of Veto: Where the Director or the Secretary of State
exercises his veto in accordance with this Clause 61.5.7, the
relevant Pool Civil Emergency Period or, as the case may be, Pool
Rules Civil Emergency Period shall not commence.
(c) Time Limits: Any veto given by, or on behalf of, either of
the Director or Secretary of State must be received by or on
behalf of the Executive Committee:
(i) in respect of a resolution initiating a Pool Civil Emergency
Period, before the expiry of a period of 48 hours commencing upon
the receipt by the Director or, as appropriate, the Secretary of
State, of the notification of the result of the vote upon the
relevant resolution; or
(ii) in the case of a veto in respect of the commencement of a
Pool Rules Civil Emergency Period, before the expiry of the time
for the exercise of the Executive Committee's right of veto
pursuant to Clause 61.5.3.
For the avoidance of doubt, such veto may be given at any time
before the commencement of such period.
(d) Reasons: The Director shall upon exercising a right of veto
conferred by this Clause give reasons to the Executive Committee
supporting the exercise of that right and the Parties would
expect the Secretary of State also to give reasons upon any
exercise of his right of veto conferred by this Clause.
(e) Notification (2): Upon receipt by or on behalf of the
Executive Committee of a notice of exercise of veto pursuant to
this Clause, the Secretary, on behalf of the Executive Committee,
shall as soon as is possible thereafter give notice in accordance
with Clause 75 of the exercise of such veto.
61 6 EFFECT OF POOL AND POOL RULES CIVIL EMERGENCY PERIODS
61.6.1 Effect of a Pool Civil Emergency Period:
(a) Upon a determination that a Pool Civil Emergency exists in
accordance with Clause 61.2.1 above:
(i) Suppliers shall be entitled during the Pool Civil Emergency
Period, for the purposes of payments to be made by them pursuant
to this Agreement during such period, to utilise the Civil
Emergency Pool Credit Facility; and
(ii) Sections 32.1 and 32.2 of the Pool Rules shall enter into
force and effect.
(b) The Pool Members expressly acknowledge the fact that during
the currency of any Pool Civil Emergency Period Suppliers shall
be entitled to operate credit facilities in accordance with and
subject to any conditions of their respective Licences (where
relevant) .
61.6.2 Effect of a Pool Rules Civil Emergency Period: Upon the
commencement of a Pool Rules Civil Emergency Period in accordance
with Clause 61.5.3(a), the provisions of Section 32.3 of Schedule
9 shall enter into full force and effect and shall continue in
full force and effect until such time as that Pool Rules Civil
Emergency Period is terminated in accordance with Clause 61.7.
61.7 TERMINATION OF A POOL CIVIL EMERGENCY PERIOD
61.7.1 Director's determination of end of Pool Civil Emergeny
Period: A Pool Civil Emergency Period and, where applicable, any
concurrent Pool Rules Civil Emergency Period, shall terminate
upon any determination of the Director to that effect.
61.7.2 Consultation: The Director shall only determine that a
Pool Civil Emergency Period and, where applicable, any concurrent
Pool Rules Civil Emergency Period shall terminate after having
fully consulted and taken into consideration the views of all
relevant Parties and after having obtained the approval of the
Secretary of State.
61.7.3 Notification (3): The Director shall notify in writing
the Secretary, the Pool Chairman and the Chief Executive as soon
as is possible of any determination made pursuant to this Clause
61.7 giving reasons for any determination so made and the
Secretary shall immediately notify all Parties of such
determination upon receipt.
61.7.4 Confirmation: The Director shall confirm to the
Executive Committee upon any determination pursuant to this
Clause 61.7 that a Pool Civil Emergency Period shall terminate,
that he has taken full account of all relevant matters, the views
of such relevant Parties and has obtained the approval of the
Secretary of State.
61.7.5 Termination of a Pool Rules Civil Emergency Period
within a continuing Pool Civil Emergency Period:
(a) The Executive Committee may, by resolution carried by a
majority of not less than 65 per cent. of the total votes of all
Committee Members whether or not present, terminate any current
Pool Rules Civil Emergency Period whenever it considers, in its
absolute discretion, that the continued application of the
modified Pool Rules as set out in Section 32.3 of Schedule 9 to
be, in the circumstances, no longer appropriate.
(b) The relevant Pool Rules Civil Emergency Period shall
terminate following the passing of that resolution at the
Relevant Time relative to the time at which that resolution is
passed.
(c) The Secretary, on behalf of the Executive Committee, shall
as soon as is possible after the passing of such resolution give
notice to all Parties, the Director and the Secretary of State in
accordance with Clause 75 that the relevant Pool Rules Civil
Emergency Period is to so terminate.
(d) Whenever Section 28 of Schedule 9 enters into force and
effect, in accordance with this Agreement, any Pool Rules Civil
Emergency Period then current shall terminate at the time that
such section so enters into force and effect.
6 1.7.6 Effect of Termination:
(a) Pool Civil Emergeny Period: Upon the termination of any Pool
Civil Emergency Period the Civil Emergency Pool Credit Facility
shall forthwith cease to be utilised and, where there is a
concurrent Pool Rules Civil Emergency Period, the provisions of
Section 32 of Schedule 9, shall forthwith cease to be effective.
(b) Pool Rules Civil Emergeny Period within a current and
continuing Pool Civil Emergeny Period: Upon the termination of
any Pool Rules Civil Emergency Period within a current and
continuing Pool Civil Emergency Period the provisions of Section
32.3 of Schedule 9 shall forthwith cease to be effective.
61.8 REFERENCE TO DIRECTOR
61.8.1 Reference to the Director: If any dispute shall arise
between the Executive Committee and any Pool Member:
(a) as to whether the Executive Committee ought to have
concluded that the conditions for the initiation of a Pool Civil
Emergency Period in accordance with Clause 61.3.2 were satisfied
either as a matter of fact or such that there was a Pool Civil
Emergency within the spirit of the statement of intent set out at
Clause 61.2.1; or
(b) as to whether the Executive Committee ought or ought not to
have exercised its right of veto pursuant to Clause 61.5.3(b) in
(c) respect of the commencement of a Pool Rules Civil Emergency
Period; or as to whether a Pool Rules Civil Emergency Period
within a current and continuing Pool Civil Emergency Period ought
or ought not to have been terminated by the Executive Committee
in accordance with Clause 61.7.5 above,
the dispute may be referred by notice of the dispute given in
writing by the relevant Pool Member to the Director and as if
such Pool Member were exercising a Dissentient Pool Member's
right of appeal pursuant to Clause 13.5. The Director shall
determine the matter within 60 days of receipt of such referral.
Notice of any such referral shall be given to the Executive
Committee at the same time that the dispute is so referred.
61.8.2 Content and Effect of Determination:
(a) If the Director shall determine in accordance with Clause
61.8.1 that a Pool Civil Emergency Period or Pool Rules Civil
Emergency Period should commence, or as the case may be, resume,
then:
(i) in the case of a Pool Civil Emergency Period, upon such
determination having been notified to the Secretary in accordance
with Clause 61.8.3, a Pool Civil Emergency Period shall commence
or, as the case may be, resume; and
(ii) in the case of a Pool Rules Civil Emergency Period, such
period shall commence at the Relevant Time relative to the time
at which such determination has been notified to the Secretary in
accordance with Clause 61.8.3; or
(b) If the Director shall determine in accordance with Clause
61.8.1 that a continuing Pool Civil Emergency Period or Pool
Rules Civil Emergency Period should terminate, then:
(i) in the case of a Pool Civil Emergency Period, upon such
determination having been notified to the Secretary in accordance
with Clause 61.8.3, the then current Pool Civil Emergency Period
shall terminate; and
(ii) in the case of a Pool Rules Civil Emergency Period, the then
current such period shall terminate at the Relevant Time relative
to the time at which such determination has been notified to the
Secretary in accordance with Clause 6 1.8.3.
61.8.3 Notification (4): The Director shall notify in writing
the Secretary, the Pool Chairman and the Chief Executive as soon
as is possible of any determination made pursuant to this Clause
61.8 giving reasons for any determination so made and the
Secretary shall immediately notify all Parties of such
determination upon receipt.
61.9 MODIFICATION OF PROCEDURES
Modification of Procedures: Neither the procedures for a poll set
out in Clause 22 nor the provisions of Clause 13.4 shall apply to
any resolution of the Executive Committee referred to in this
Part XVI, and there shall be no right of referral of the matter
the subject of such resolution to the Pool Members in general
meeting.
PART XVII
TRADING SITE
62. TRADING SITE
Trading Site: The provisions of Schedule 17 shall have effect.
PART XVIII
THE POOL FUNDS ADMINISTRATOR, BILLING AND SETTLEMENT
63. THE POOL FUNDS ADMINISTRATOR
63.1 Responsibilities: The Pool Funds Administrator shall
have the following duties, responsibilities and obligations,
namely:
63.1.1 to comply with all the obligations set out in this
Agreement and the Agreed Procedures in respect of the
establishment, maintenance and operation of the Funds Transfer
System and to carry out its obligations under the Funds Transfer
Agreement;
63.1.2 to keep under review and to make recommendations to the
Executive Committee on its own initiative or whenever requested
by the Executive Committee concerning:
(a) any change to the Funds Transfer System (or any part or
aspect thereof);
(b) the appointment of a new Pool Banker;
(c) any change to Schedule 11 or 15; and
(d) any change to the Funds Transfer Agreement,
which the Pool Funds Administrator may consider desirable. In
making such recommendations, the Pool Funds Administrator shall
have regard to, and shall provide details of, the cost of
implementing such changes (which cost would be charged or
recharged to Pool Members) and shall recommend whether, in light
of those costs, certain parties or categories of party to the
Agreement should be exempted from such changes or whether special
provisions for such parties or categories of party should be
adopted;
63.1.3 (a) to maintain such records, data and other information
as the Pool Auditor may, after consultation with the Executive
Committee, from time to time by notice in writing and in
reasonable detail to the Pool Funds Administrator, require for
the purposes of Part IX, or as may otherwise be reasonably
necessary to enable the Pool Funds Administrator to comply
promptly and fully with all its obligations under this Agreement,
the Agreed Procedures or the Funds Transfer Agreement, in either
such case in such form as the Pool Auditor may from time to time
by notice to the Pool Funds Administrator require or (in the
absence of such notification) in such form as a reasonably
prudent operator of the Funds Transfer System would adopt; and
(b) to maintain such records, data and other information as H.M.
Customs and Excise may from time to time require of the Pool
Funds Administrator;
63.1.4 to retain in machine readable form or hard copy form for a
period of not less than eight years (or such longer period as any
applicable law may require) and in any event in hard copy form
(which for these purposes shall include microfiche) for a period
of not less than one year copies of the records, data and other
information received and processed by the Pool Funds
Administrator in connection with its performance of the Services
including:
(a) (to the extent relevant for the performance of the Services)
Settlement Runs and Settlement Re-runs;
(b) Advice Notes and Confirmation Notices;
(c) bank statements in respect of the Pool Accounts;
(d) Pool Ledger Accounts;
(e) Payments Calendars;
(f) a record of all Default Interest Rates and Reserve Interest
Rates calculated from time to time (including the period to which
each interest rate relates);
(g) details of Security Cover supplied and to be supplied by
each Supplier; and
(h) correspondence between the Pool Funds Administrator, on the
one hand, and the Executive Committee, the Pool Chairman, the
Chief Executive, any Pool Member, the Pool Banker, any Collection
Bank, the Settlement 'System Administrator, the Ancillary
Services Provider, the Director, the Pool Auditor, the Grid
Operator and any other relevant bank or institution, on the other
hand;
63.1.5 to provide to the Executive Committee and the Chief
Executive upon request records, data and other information
concerning the Funds Transfer System (and any part thereof)
(unless disclosure would breach any duty of confidentiality
imposed on the Pool Funds Administrator) and which the Pool Funds
Administrator is required to retain under paragraph 63.1.3 or
63.1.4 (and each of the Parties agrees to the release of all such
records, data and other information in the circumstances and
manner described in this paragraph 63.1.5);
63.1.6 to provide to the Pool Auditor upon request records, data
and other information concerning the Funds Transfer System (and
any part thereof) and which the Pool Funds Administrator is
required to maintain and retain under paragraph 63.1.3 or 63.1.4
(and each of the Parties agrees to the release of all such
records, data and other information in the circumstances and
manner described in this paragraph 63.1.6);
63.1.7 subject to the provisions of Part XX, to provide a
certified copy of such records, data and other information
concerning the Funds Transfer System (and any part thereof) and
amounts payable by or to any Pool Member or the Ancillary
Services Provider as the relevant Pool Member or (as the case may
be) the Ancillary Services Provider may reasonably request for
the purpose of establishing the amounts which are owed to or by
such Pool Member or the Ancillary Services Provider in accordance
with this Agreement, and in any event such information as any
Pool Member or the Ancillary Services Provider may request from
the Pool Funds Administrator in order to establish or prove a
claim to any amounts due or claimed to be due. The Pool Funds
Administrator shall forthwith upon such request provide such
information upon delivery (if so required by the Pool Funds
Administrator) of a certificate from the counsel of such Pool
Member or the Ancillary Services Provider certifying that, in
such counsel's opinion, such information is required for such
purpose;
63.1.8 to issue Advice Notes and Confirmation Notices within the
times and containing the details required by Schedule 11;
63.1.9 upon request, promptly to supply on its own behalf and on
behalf of Pool Members and the Ancillary Services Provider (with
a copy to the Pool Member concerned and the Ancillary Services
Provider) any information (including copies of documents) to H.M.
Customs and Excise, and to co-operate in any investigation by
H.M. Customs and Excise or H.M. Inspector of Taxes relating to
the Funds Transfer System (or any part or aspect thereof);
63.1.10 in respect of each calendar quarter, to issue to all Pool
Members, the Executive Committee, the Chief Executive, the
Settlement System Administrator and the Ancillary Services
Provider no later than the fifth Business Day after each calendar
quarter a statement enabling the identification of who may
constitute Majority Default Calling Creditors during that
calendar quarter (and the Parties hereby agree to such disclosure
being made);
63.1.11 except in respect of moneys received on account of the
PEA Operating Costs, the PEA Handling Charge, the Annual Fee or
Bank Charges in accordance with the accounting procedure set out
in Schedule 15 or the consideration received pursuant to
sub-section 5.1 or 5.2 of that Schedule, to pay all moneys
received by it from a Pool Member or the Ancillary Services
Provider in accordance with Schedule 11 into a Pool Account to be
held in trust in accordance with the provisions of Schedule 11;
and
63.1.12 to comply with all its other obligations under this
Agreement (including Schedules 11 and 15) and the Agreed
Procedures,
and expressions defined in Schedules 11 and 15 shall have the
same respective meanings when used in this Clause 63.1.
63.2 Standard of care: In the exercise of its duties and
responsibilities under this Agreement and the Agreed Procedures
the Pool Funds Administrator shall exercise that degree of care,
diligence, skill and judgment which would ordinarily be expected
of a reasonably prudent operator of the Funds Transfer System
taking into account the circumstances actually known to the Pool
Funds Administrator, its officers and employees at the relevant
time or which ought to have been known to it or them had it or
they made such enquiries as were reasonable in the circumstances.
In particular, but without prejudice to the generality of the
foregoing, in the absence of directions and instructions given to
it by the Executive Committee under this Agreement and having due
regard to the resources available to it, the Pool Funds
Administrator shall at all times conduct itself in a manner
calculated to achieve the principal objects and purpose of this
Agreement set out in Clauses 4.1.2 and 4.1.3.
63.3 UK value added tax indemnity:
63.3.1Indemnity (1): Without prejudice to paragraph 63.3.2 all
Pool Members shall jointly and severally indemnify and keep
indemnified the Pool Funds Administrator, its officers, employees
and agents (and, as between the Pool Members, according to their
respective Contributory Shares at the time of receipt of the
request for indemnification, calculated on the basis that the
points allocated to the Pool Member in default are disregarded)
against any liability which the Pool Funds Administrator may
incur as a result of the failure of any Pool Member or the
Ancillary Services Provider (as the case may be) properly to
account to H.M. Customs and Excise for all amounts of United
Kingdom Value Added Tax payable or receivable by it in respect of
any supplies of electricity or Ancillary Services.
63.3.2 Indemnity,' (a): If any Pool Member or the Ancillary
Services Provider shall fail properly to account for any amount
of United Kingdom Value Added Tax payable or receivable by it,
that person shall indemnify and keep indemnified each Pool Member
(on an after tax basis, but taking account of any tax relief
available to the relevant Pool Member) against any liability
which such Pool Member shall incur pursuant to paragraph 63.3.1.
63.4 Schedule 15:
63.4.1 Subject to the rights of each of the Parties under this
Agreement, all Parties hereby agree promptly to execute and
deliver all agreements and other documentation necessary to give
effect to any act, matter or thing done by the Executive
Committee in accordance with Schedule 15 (including the removal
of the incumbent Pool Funds Administrator and the appointment of
a successor in accordance with the terms thereof).
63.4.2 Schedule 15 provides that certain matters may be referred
by the Executive Committee to arbitration pursuant to Clause 83.
In making any such reference or in alleging that any such
reference is being made pursuant to Clause 83 the Executive
Committee shall act (and is hereby irrevocably authorised by each
of the Pool Members to act) as the sole and exclusive
representative of all the Pool Members and the Pool Funds
Administrator hereby agrees that the Executive Committee shall
have the authority so to act.
64. PROCEDURES MANUAL
64.1 Preparation: Within 28 days after the Effective Date (or
such longer period as the Executive Committee may approve) the
Pool Funds Administrator shall prepare, or cause to be prepared,
a Procedures Manual which it shall submit to the Executive
Committee for its review. The Executive Committee shall give its
comments on the Procedures Manual to the Pool Funds Administrator
within 28 days after receipt thereof and the Pool Funds
Administrator shall revise, or cause to be revised, the
Procedures Manual to the satisfaction of the Executive Committee
within 21 days after receipt of such comments (or such longer
period as the Executive Committee may approve). Promptly
thereafter the Pool Funds Administrator shall provide the
Executive Committee with sufficient copies of the revised
Procedures Manual for distribution by the Executive Committee to
all Parties, the Pool Auditor, the Pool Banker and the Director.
64.2 Amendments: Where from time to time any amendments to the
Procedures Manual are necessary to reflect changes in the systems
and/or procedures associated with the Funds Transfer System, the
procedure set out in Clause 64.1 shall apply mutatis mutandis.
64.3 Costs: The costs of producing, revising and amending the
Procedures Manual shall be borne by the Pool Funds Administrator
and recovered by it in accordance with the provisions of Schedule
11 as part of its charges.
65. BILLING AND SETTLEMENT
The provisions of Schedule 11 shall have effect.
PART XIX
DEFAULT TERM AND TERMINATION
66. DEFAULT
66.1 Default (1): At any time after the occurrence of any of the
events referred to in Clause 66.3.1, 66.3.2 or 66.3.3 and so long
as such event continues unremedied or unwaived by Majority
Default Calling Creditors:
66.1.1 Majority Default Calling Creditors may, upon reaching a
bona fide conclusion that the reason for the failure by the
Defaulting Pool Member under Clause 66.3.1, 66.3.2 or 66.3.3 is
other than administrative or banking error (having taken into
account the representations, if any, of the Defaulting Pool
Member made within 24 hours after request therefor is made to the
Defaulting Pool Member on behalf of the Majority Default Calling
Creditors, which request Majority Default Calling Creditors shall
be obliged to make), by notice to the Defaulting Pool Member
(copied to the Executive Committee and the Director) declare such
event an Event of Default;
66.1.2 at the same time as Majority Default Calling Creditors
declare such an Event of Default or at any time thereafter,
Majority Default Calling Creditors may by notice to the Executive
Committee (copied to the Defaulting Pool Member and the Director)
require the Executive Committee to suspend (which the Executive
Committee shall forthwith do) all voting rights of the Defaulting
Pool Member under this Agreement for a specified period (being
not more than 90 days) and, upon the Executive Committee giving
notice to such effect to the Defaulting Pool Member (copied to
the Director), such voting rights (but not any other rights or
any liabilities or obligations of the Defaulting Pool Member)
shall be suspended for such period; and
66.1.3 where:
(a) the Defaulting Pool Member is a Public Electricity Supplier,
no earlier than 28 days after the date of the notice referred to
in Clause 66.1.1; and
(b) in any other case, at the same time as Majority Default
Calling Creditors declare such an Event of Default or at any time
thereafter,
Majority Default Calling Creditors may by notice to the
Defaulting Pool Member (copied to the Executive Committee, the
Settlement System Administrator, the Grid Operator, the Pool
Funds Administrator, the Ancillary Services Provider and the
Director) require the Defaulting Pool Member to cease to be a
Party with effect from the date of its De-energisation and until
such date all voting rights of the Defaulting Pool Member under
this Agreement (but not any other rights or any liabilities or
obligations of the Defaulting Pool Member) shall be automatically
suspended.
For the avoidance of doubt, Majority Default Calling Creditors
shall be at liberty to give notice under Clause 66.1.2 and, upon
expiry of the specified period referred to therein and subject as
provided in the foregoing provisions of this Clause 66.1, to give
notice under Clause 66.1.3.
66.2 Default (2): At any time after the occurrence of any of the
events referred to in Clause 66.3 (other than (a) any of the
events referred to in Clause 66.3.1, 66.3.2 and 66.3.3 and (b) in
the case where the Defaulting Pool Member is unable to pay its
debts as referred to in Clause 66.3.6(a), unless any of the other
events referred to in Clause 66.3 has occurred and is continuing)
and so long as such event continues unremedied or unwaived by the
Pool Members in general meeting the Executive Committee may (and
shall if so directed by the Pool Members in general meeting):
66.2.1 by notice to the Defaulting Pool Member (copied to the
Director) declare such event an Event of Default and suspend all
voting rights of the Defaulting Pool Member under this Agreement
for a specified period (being not more than 90 days) whereupon
such voting rights (but not any other rights or any liabilities
or obligations of the Defaulting Pool Member) shall be suspended
for such period; and
66.2.2 upon the expiry of such period by notice to the Defaulting
Pool Member (copied to the Settlement System Administrator, the
Grid Operator, the Pool Funds Administrator, the Ancillary
Services Provider and the Director) require the Defaulting Pool
Member to cease to be a party to this Agreement with effect from
the date of its De-energisation and until such date all voting
rights of the Defaulting Pool Member under this Agreement (but
not any other rights or any liabilities or obligations of the
Defaulting Pool Member) shall be automatically suspended.
66.3 Events of Default: The events referred to in the foregoing
provisions of this Clause 66 are:
66.3.1 the Pool Member in question (the "Defaulting Pool Member")
shall fail to provide or maintain or renew in accordance with
Schedule 11 the requisite amount of Security Cover determined
pursuant to that Schedule; or
66.3.2 the Defaulting Pool Member shall fail to pay in the manner
provided in this Agreement any sum payable by it to any Pool
Creditor within three Business Days after its due date; or
66.3.3 the Defaulting Pool Member shall fail to pay in the manner
provided in this Agreement any sum payable by it hereunder to the
Settlement System Administrator or the Pool Funds Administrator
within 28 days after the Settlement System Administrator or (as
the case may be) the Pool Funds Administrator has given notice to
it (copied to the Executive Committee and the Director) that
payment has not been received and requiring such default to be
remedied; or
66.3.4 the Defaulting Pool Member shall fail to pay in the manner
provided in this Agreement any sum payable by it hereunder to the
Executive Committee within 28 days after the Executive Committee
has given notice to it (copied to the Director) that payment has
not been received and requiring such default to be remedied; or
66.3.5 the Defaulting Pool Member shall fail in any material
respect to perform or comply with any of its other obligations
under this Agreement and such default (if it is capable of
remedy) is not remedied within a reasonable period of time (not
exceeding 90 days) after the Executive Committee has given notice
to the Defaulting Pool Member (copied to the Director) of the
occurrence thereof and requiring the same to be remedied; or
66.3.6 the Defaulting Pool Member:
(a) is unable to pay its debts (within the meaning of section
123(1) or (2) of the Insolvency Act 1986, but subject as
hereinafter provided in this Clause 66.3.6) or if any voluntary
agreement is proposed in relation to it under section 1 of that
Act or 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 Executive Committee);
(b) has 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 appointed;
(c) has an administration order under section 8 of the
Insolvency Act 1986 made in relation to it;
(d) passes any resolution for winding-up other than a resolution
previously approved in writing by the Executive Committee; or
(e) becomes subject to an order by the High Court for
winding-up.
For the purposes of paragraph (a) above section 123(1)(a) of the
Insolvency Act 1986 shall have effect as if for "pounds 750" there was
substituted ,10,000 and, further, the Defaulting Pool Member
shall not - be deemed to be unable to pay its debts for the
purposes of paragraph (a) above if any such demand as is
mentioned in the said section is being contested in good faith by
the Defaulting Pool Member with recourse to all appropriate
measures and procedures; or
66.3.7 the Licence (if any) granted to the Defaulting Pool Member
is determined or revoked or otherwise ceases to be in force for
any reason whatsoever,
in any such case for whatever reason and whether or not within
the control of the Defaulting Pool Member.
66.4 De-energisation:
66.4.1 If the Majority Default Calling Creditors shall give
notice to a Defaulting Pool Member under Clause 66.1.3 or the
Executive Committee shall give notice to a Defaulting Pool Member
under Clause 66.2.2 the Defaulting Pool Member shall forthwith,
and in compliance with the instructions of the Grid Operator or
(in the case of any connection to a User System) the User whose
System it is (the "Relevant User"), take all such action as may
be necessary to give effect to the relevant De-energisation.
66.4.2 If the Defaulting Pool Member shall fail to take such
action as is referred to in Clause 66.4.1 within 48 hours after
the date of any such notice referred to therein, the Grid
Operator and/or, as the case may be, the Relevant User undertakes
to each of the other Parties and the Executive Committee to use
reasonable endeavours to effect or (as the case may be) give
instructions to effect such De-energisation as quickly as
practicable having regard to all the circumstances affecting such
Deenergisation (including any operational difficulties and
relevant Licence duties).
66.4.3 Each Pool Member hereby irrevocably and unconditionally
consents to its De-energisation by the Grid Operator and/or, as
the case may be, the Relevant User in the circumstances set out
in Clause 66.4.2.
66.5 Sharing of risk: Where an Event of Default is declared under
Clause 66.1.1 or 66.2.1 in respect of a Defaulting Pool Member
which is a Public Electricity Supplier, then for the period
beginning on the date of the notice declaring such Event of
Default until the earlier of:- ~
66.5.1 the date falling 28 days thereafter; and
66.5.2 the date on which the Event of Default has been remedied
or waived by Majority Default Calling Creditors or (as the case
may be) the Pool Members in general meeting, (but not further or
otherwise) each Pool Member (other than the Defaulting Pool
Member) shall be severally liable for its Contributory Share
(calculated on the basis that the Points allocated to the
Defaulting Pool Member are disregarded) of all sums (including
United Kingdom Value Added Tax) which such Defaulting Pool Member
is required under this Agreement to pay in respect of electricity
taken by the Defaulting Pool Member and Ancillary Services during
each complete Settlement Day falling within such period and which
are not paid on the due date therefor by the Defaulting Pool
Member. The Defaulting Pool Member shall indemnify and keep
indemnified each Pool Member on demand against all sums properly
paid by such Pool Member pursuant to this Clause 66.5 together
with interest thereon from the date of payment by such Pool
Member to the date of its reimbursement (as well after as before
judgment) at the Default Interest Rate.
66.6 Indemnity on De-energisation: Where under Clause 66.4 the
Grid Operator and/or the Relevant User is required to effect or
(as the case may be) give instructions to effect a
De-energisation the Defaulting Pool Member, failing which, each
Pool Member (but, in the case of each Pool Member, only in
respect of its Contributory Share at the time of receipt of the
request for indemnification, calculated on the basis that the
Points allocated to the Defaulting Pool Member are disregarded)
shall indemnify and keep indemnified the Grid Operator and/or the
Relevant User (as the case may be) on demand against any and all
liability, loss or damage which it may suffer or incur by reason
of effecting or giving instructions to effect such
De-energisation.
66.7 Accrued rights and liabilities:
66.7.1 The suspension of a person as a Pool Member and the
cessation of a person as a Pool Member and/or a Party for
whatever reason shall not prejudice its accrued rights and
liabilities under this Agreement as at the date of its suspension
or (as the case may be) cessation or its rights and liabilities
under this Agreement which may accrue in relation to the period
during which it was not so suspended or (as the case may be) it
was a Party or any of its obligations under this Agreement which
are expressed to continue notwithstanding such suspension or
cessation.
66.7.2Without prejudice to the generality of Clause 66.7.1, a
Defaulting Pool Member shall be liable for all sums (including
United Kingdom Value Added Tax) which it is required under this
Agreement to pay in respect of electricity taken by it and
Ancillary Services pending its Deenergisation pursuant to Clause
66.4.
67. TERM AND TERMINATION
67.1 Term: This Agreement shall have no fixed duration.
67.2 Suspension of Pool Member's voting rights: A Pool Member's
voting rights shall be suspended only in the circumstances and to
the extent specified in Clauses 66.1.2 and 66.2.1.
67.3 Termination as a Party: A Pool Member shall cease to be a
Party only:
67.3.1 in the circumstances and to the extent specified in
Clauses 8.7 to 8.10 (inclusive);
67.3.2 in the circumstances and to the extent specified in
Clauses 66.1.3 and 66.2.2; or
67.3.3 if, by unanimous resolution of all Committee Members, the
Executive Committee shall so reasonably determine and the prior
written consent of the Director shall have been obtained.
67.4 Termination of the Agreement:
67.4.1 This Agreement may be terminated if a resolution of Pool
Members in general meeting is unanimously carried by those Pool
Members present in person or by proxy at the relevant general
meeting and the prior written consent of the Director has been
obtained.
67.4.2 The termination shall take effect from whichever is the
later in time of the date of the resolution referred to in Clause
67.4.1 and the consent in writing of the Director referred to in
that Clause.
67.5 Clause exhaustive: The Pool Members agree that the foregoing
provisions of this Clause 67, when read with the Clauses referred
to herein and Clause 8.11, are exhaustive of the rights of
suspension of a Pool Member's voting rights, of termination of
Pool Membership, of cessation as a Party and of termination of
this Agreement.
PART XX
CONFIDENTIALITY
68. DEFINITIONS AND INTERPRETATION
68.1 Definitions: In this Part XX, except where the context
otherwise requires:
"Authorised Recipient" means, 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 69 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 Obligor or any nominee of the Obligor appointed
pursuant to paragraph 10 of Appendix 4 of Schedule 9 by another
Party under the provisions of this Agreement, and shall include
copies of the load modules referred to in Service Line 11
(Listings and Load Modules);
"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 an adviser to or performs work
in relation to or services for the Main Business;
"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 Effective Date 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;
Obligor" has the meaning given to that term in Clause 70.1;
"Permitted Activities" means activities carried on for the
purposes of the Main Business; and
"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.
68.2 Interpretation: 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.
69. CONFIDENTIALITY FOR NGC AND ITS SUBSIDIARIES
69.1 Protection of Protected Information: NGC and its
subsidiaries in each of their capacities in this Agreement shall
secure that Protected Information is not:
69.1.1 divulged by Business Personnel to any person unless that
person is an Authorised Recipient;
69.1.2 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
69.1.3 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.
69.2 Exceptions: Nothing in this Clause 69 shall apply:
69.2.1 to any Protected Information which, before it is furnished
to Business Personnel, is in the public domain; or
69.2.2 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 this Clause 69 does not apply; or
(b) is acquired by NGC or any subsidiary of NGC in circumstances
in which this Clause 69 does apply and thereafter ceases to be
subject to the restrictions imposed by this Clause 69; 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 obligations in this Clause
69 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
69.2.3 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 of
NGC 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 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
Arbitration Association or pursuant to any judicial or other
arbitral process or tribunal having jurisdiction in relation to
NGC or its subsidiaries; or
69.2.4 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; or
69.2.5 to any Protected Information but only to the extent that
it has been properly provided to NGC or any subsidiary of NGC by
the Settlement System Administrator pursuant to any provision of
the Pool Rules.
69.3 Use of information by NGC: 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:
69.3.1 the operation and planning of the NGC Transmission System;
69.3.2 the calculation of charges and preparation of offers of
terms for connection to or use of the NGC Transmission System;
69.3.3 the operation and planning of the Ancillary Services
Business and the calculation of charges therefor;
69.3.4 the operation of the Settlements Business;
69.3.5 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 agree to provide all information to
NGC and its subsidiaries for such purposes.
69.4 Restrictions on Business Personnel: 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:
69.4.1 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 who is known to be engaged in the
writing of electricity purchase contracts (as hereinbefore
defined); or
(c) known to be retained as a consultant to any such person who
is referred to in paragraph (a) or (b) above; or
69.4.2 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.
69.5 Identification of Protected Information: Without prejudice
to the other provisions of this Clause 69, NGC shall procure that
any additional copies made of the Protected Information, whether
in hard copy or computerized form, will clearly identify the
Protected Information as protected.
69.6 Corporate Functions Person: 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.
69.7 Charge restriction condition variable: Without prejudice to
Clause 69.3, 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).
69.8 Ancillary Services: NGC shall secure that Protected
Information which is subject to the provisions of Clause 69.1 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.
69.9 Metering data - Distribution System: Any information
regarding, or data acquired by the Settlement System
Administrator or its agent from, 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 use the
same only for the purposes of the operation of such Distribution
System and the calculation of charges for use of and connection
to such Distribution System.
69.10 Metering data - Qualifying Arrangements: The Settlement
System Administrator and the Grid Operator shall and may pass any
relevant information and data relating to the Genset Metered
Generation (including, for the avoidance of doubt, all relevant
Metered Data, as defined in paragraph 3.1.2 of Schedule 9) of any
of the Generating Units which are the subject of qualifying
arrangements (as defined in section 33 of the Act) to such person
as may be specified from time to time pursuant to such qualifying
arrangements.
70. CONFIDENTIALITY OTHER THAN FOR NGC AND ITS SUBSIDIARIES
70.1 General obligation: Each Party (other than NGC and its
subsidiaries) (the "Obligor") hereby undertakes with each other
Party (including 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:
70.1.1 in the circumstances set out in Clause 70.2; Or
70.1.2 to the extent otherwise expressly permitted by this
Agreement
70.1.3 with the prior consent in writing of the Party to whose
affairs such Confidential information relates; or
70.1.4 to the extent that it has been properly provided to the
Obligor by the Settlement System Administrator pursuant to any
provision of the Pool Rules.
70.2 Exceptions: The circumstances referred to in Clause 70.1.1
are:
70.2.1where the Confidential Information, before it is furnished
to the Obligor, is in the public domain; or
70.2.2 where the Confidential Information, after it is furnished
to the Obligor:
(a) is acquired by the Obligor in circumstances in which this
Clause 70 does not apply; or
(b) is acquired by the Obligor in circumstances in which this
Clause 70 does apply and thereafter ceases to be subject to the
restrictions imposed by this Clause 70; or
(c) enters the public domain,
and in any such case otherwise than as a result of (i) a
breach.by the Obligor of its obligations in this Clause 70 or
(ii) a breach by the person who disclosed that Confidential
Information of that person's confidentiality obligation and the
Obligor is aware of such breach; or
70.2.3 if the Obligor is required or permitted to make disclosure
of the Confidential Information to any person:
(a) in compliance with the dudes of the Obligor 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 Obligor 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
Arbitration Association or pursuant to any judicial or other
arbitral process or tribunal having jurisdiction in relation to
the Obligor; or
70.2.4 to the employees, directors, agents, consultants and
professional advisers of the Obligor, in each case on the basis
set out in Clause 70.3.
70.3 Internal procedures: With effect from the date of this
Agreement the Obligor shall adopt procedures within its
organisation for ensuring the confidentiality of all Confidential
Information which it is obliged to preserve as confidential under
Clause 70.1. These procedures are:
70.3.1 the Confidential Information will be disseminated within
the Obligor only on a "need to know" basis;
70.3.2 employees, directors, agents, consultants and professional
advisers of the Obligor in receipt of Confidential Information
will be made fully aware of the Obligor's obligations of
confidence in relation thereto; and
70.3.3 any copies of the Confidential Information, whether in
hard copy or computerised form, will clearly identify the
Confidential Information as confidential.
71. RELEASE OF INFORMATION
71.1 Notwithstanding any foregoing provisions of this Part XX,
the Parties agree that each of them shall be at liberty to
provide copies of this Agreement and any supplemental agreement
to both or either thereof to any third party, and each of the
Parties consents to disclosure by any other Party of the fact
that it is a party to this Agreement and, where such is the case,
a Pool Member.
71.1.1 The following provisions of this Clause are designed to
facilitate the release of certain data and other information to
persons who are not Parties. Such provisions are without
prejudice to any Party's rights to disclose or use data or
information pursuant to the other provisions of this Agreement or
otherwise.
71.1.2 At the request of the Executive Committee or any person
who is not a Party and against payment by or on behalf of the
person to whom the data or other information is to be released of
a fee or charge therefor calculated mutates mutants on the basis
set out in Clause 34.2, the Settlement System Administrator shall
provide to such person(s) as the Executive Committee may nominate
or (as the case may be) to the person requesting the same, data
and other information received by the Settlement System
Administrator in or derived from the operation of the Settlement
System provided that:
(a) the Pool Rules specify that such data or other information
may be so released; or
(b) the Party to whose affairs such data or other information
relates has given its prior consent in writing to such
disclosure.
71.1.3 Upon request by the Executive Committee, the Settlement
System Administrator shall notify the Executive Committee in
writing of any request received by it from any person under
Clause 71.1.2 and of the name of such person and shall give
details of the data and other information provided.
71.1.4 Each of the Parties agrees to the release of data and
other information in the circumstances described in Clause
71.1.2.
71.2 The Parties acknowledge that, for the Executive Committee
and each of its subcommittees properly to carry out its duties
and responsibilities under this Agreement, the Executive
Committee may decide or be obliged to keep confidential to it
(and may instruct its sub-committees to keep confidential)
matters, reports, data and other information produced by or for,
made available to or held by, the Executive Committee or the
relevant sub-committee and, in any such case, Committee Members
shall neither disclose the same to the Pool Member(s) which they
represent nor be required by such Pool Member(s) so to disclose.
Each of the Parties agrees to respect the position of the
Executive Committee, its sub-committees and the Committee Members
accordingly.
71.3 Each of the Parties other than the Settlement System
Administrator, the Grid Operator, the Ancillary Services Provider
and the Pool Funds Administrator agrees, subject to any relevant
confidentiality restriction binding on it, to provide the
Executive Committee, the Chief Executive and the personnel
referred to in Clause 17.2.1 with all data and other information
reasonably requested by the Executive Committee and necessary for
the Executive Committee, the Chief Executive or (as the case may
be) such personnel properly to carry out its or his duties and
responsibilities under this Agreement. The Grid Operator and the
Ancillary Services Provider each agree, subject to any relevant
confidentiality restriction binding on it, to provide the
Executive Committee, the Chief Executive and the personnel
referred to in Clause 17.2.1 with such data and other information
relating to its duties, responsibilities or obligations under
this Agreement which the Executive Committee shall reasonably
request and which is necessary for the Executive Committee, the
Chief Executive or (as the case may be) such personnel to carry
out its or his duties and responsibilities under this Agreement.
71.4 Each Party acknowledges and agrees that no Party shall be in
breach of any obligation of confidentiality owed by it pursuant
to this Agreement in reporting under Clause 6.10 any breach of
the Pool Rules or its belief that any such breach has occurred.
71.5 Notwithstanding any other provision of this Agreement, the
provisions of this Part XX shall continue to bind a person after
its cessation as a Party for whatever reason.
PART XXI
THE PARTICIPATION OF NGC
72. THE PARTICIPATION OF NGC
72.1 As Grid Operator: For so long as NGC is the Grid Operator,
references in this Agreement to the Grid Operator shall be read
and construed as references to NGC acting in its capacity as Grid
Operator, and all rights, benefits, duties, responsibilities,
liabilities and obligations under this Agreement with regard to
the Grid Operator shall be those of NGC acting in that capacity.
72.2 As Ancillary Services Provider: For so long as NGC is the
Ancillary Services Provider, references in this Agreement to the
Ancillary Services Provider shall be read and construed as
references to NGC acting in its capacity as Ancillary Services
Provider, and all rights, benefits, duties, responsibilities,
liabilities and obligations under this Agreement with regard to
the Ancillary Services Provider shall be those of NGC acting in
that capacity. The Ancillary Services Provider shall have the
benefit of the obligations and undertakings entered into by the
Settlement System Administrator and Pool Funds Administrator in
this Agreement.
72.3 As Pool Member: The Parties acknowledge that NGC is not in
any of its capacities under this Agreement a Pool Member.
72.4 Wholly-owned subsidiary: NGC shall procure that so long as
Energy Settlements and Information Services Limited is appointed
Settlement System Administrator it shall at all times remain a
wholly-owned subsidiary of, and wholly controlled by, NGC.
73. [Not used].
PART XXII
MISCELLANEOUS
74. FORCE MAJEURE
74.1 Force Majeure: Where the Settlement System Administrator,
the Grid Operator, the Pool Funds Administrator or the Ancillary
Services Provider (the "NonPerforming Party") is unable to carry
out all or any of its obligations under the SSA Arrangements by
reason of Force Majeure (but subject, in the case of the
Settlement System Administrator, to Section 33 of Schedule 4):
74.1.1 the SSA Arrangements shall remain in effect; but
74.1.2 (a) the Non-Performing Party's relevant obligations;
(b) the obligations of each of the other Parties owed to the Non
Performing Party under the SSA Arrangements; and
(c) any other obligations (not being payment obligations) of
such other Parties under the SSA Arrangements owed inter se 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 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 are excused as a result of the
Force Majeure; and
(iii) in respect of the suspension of the Non-Performing Party's
obligations:
(A) the Non-Performing Party gives the Executive Committee
(which shall promptly inform the other Parties, the Pool Auditor
and the Director) prompt notice describing the circumstance of
Force Majeure, including the nature of the occurrence and its
expected duration, and continues to furnish daily reports with
respect thereto during the period of Force Majoure; and
(B) the Non-Performing Party uses all reasonable efforts to
remedy its inability to perform.
74.2 Discussions: As soon as practicable after the occurrence of
the Force Majeure the Non-Performing Party shall discuss with the
Executive Committee how best to continue its operations and give
effect to its obligations so far as possible in accordance with
this Agreement.
75. NOTICES
75.1 Addresses: Save as otherwise expressly provided in the SSA
Arrangements, any notice or other communication to be given by
one Party to another under, or in connection with the matters
contemplated by, the SSA Arrangements shall be addressed to the
recipient and sent to the address, telex number or facsimile
number of such other Party given in the SSA Arrangements 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 75
to the Party giving the relevant notice or other communication to
it.
75.2 Executive Committee: Any notice or other communication to be
given to the Executive Committee under, or in connection with the
matters contemplated by, the SSA Arrangements shall be sent to
the Secretary at the address, telex number or facsimile number
given in the SSA Arrangements for the purpose or to such other
address, telex number or facsimile number as the Secretary may
from time to time specify by notice given in accordance with this
Clause 75 to the Parties.
75.3 Deemed receipt: Save as otherwise expressly provided in the
SSA Arrangements, any notice or other communication to be given
by any Party to any other Party under, or in connection with the
matters contemplated by, the SSA Arrangements 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:
75.3.1 in the case of delivery by hand, when delivered; or
75.3.2 in the case of first class prepaid post, on the second day
following the day of posting or (if sent airmail overseas or from
overseas) on the fifth day following the day of posting; or
75.3.3 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
base on the day following the day of transmission; or
75.3.4 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.
76. ASSIGNMENT
A Party shall not assign and/or transfer and shall not purport to
assign and/or transfer any of its rights and/or obligations under
the SSA Arrangements provided that any Party may assign by way of
security only all or any of its rights over receivables arising
under the SSA Arrangements.
77. 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.
78. WAIVERS; REMEDIES NOT CUMULATIVE
78.1 Waivers: No delay by or omission of any Party in exercising
any right, power, privilege or remedy under the SSA Arrangements
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.
78.2 Remedies not cumulative: The rights and remedies provided by
the SSA Arrangements 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 the SSA Arrangements (other than any such rights or
remedies provided under section 58 of the Act or any directions
(if any) issued thereunder), 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.
78.3 Director's and Secretary of State's rights: For the
avoidance of doubt, the Parties acknowledge and agree that
nothing in the SSA Arrangements 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 or any Licence or otherwise
howsoever.
79. SEVERANCE OF TERM S
If for any reason whatever any provision of the SSA Arrangements
is or becomes invalid, illegal or unenforceable, or is declared
by any court of competent jurisdiction or any other Competent
Authority to be invalid, illegal or unenforceable or if such
Competent Authority:
(a) refuses, or formally indicates an intention to refuse,
authorization of, or exemption to, any of the provisions of or
arrangements contained in the SSA Arrangements (in the case of a
refusal either by way of outright refusal or by way of requiring
the amendment or deletion of any provision of the SSA
Arrangements and/or the inclusion of any provision in the SSA
Arrangements and/or the giving of undertakings or the acceptance
of conditions as to future conduct before such authorisation or
exemption can be granted); or
(b) formally indicates that to continue to operate any provision
of the SSA Arrangements may expose the Parties to sanctions under
any law, order, enactment or regulation, or requests any Party to
give undertakings or to accept conditions as to future conduct in
order that such Party may not be subject to such sanctions
and, in all cases, whether initially or at the end of any earlier
period or periods of exemption then, in any such case, the
Parties will negotiate in good faith with a view to agreeing one
or more provisions which may be substituted for such invalid,
unenforceable or illegal provision which substitute provision(s)
is(are) satisfactory to the Competent Authority(ies) and
produce(s) as nearly as is practicable in all the circumstances
the appropriate balance of the commercial interests of the
Parties.
80. ENTIRE AGREEMENT
The SSA Arrangements contain or expressly refer to the entire
agreement between the Parties with respect to the subject matter
hereof and expressly exclude 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 the SSA Arrangements.
8 1. LANGUAGE
Each notice, instrument, certificate or other document to be
given by one Party to another hereunder shall be in the English
language.
82. RESTRICTIVE TRADE PRACTICES ACT 1976
If after the commencement of section 100 of the Act (the "RTP
Section") this Agreement is subject to registration under the
Restrictive Trade Practices Act 1976 then NGC undertakes, no
earlier than five months but no later than six months after the
commencement of the RTP Section, to furnish to the Director
General of Fair Trading particulars of this Agreement and of any
agreement of which it forms part. Before furnishing such
particulars NGC will consult with the Founder Generators and the
Founder Suppliers as to the nature of the particulars to be so
furnished and will consult with the Founder Generators and
Founder Suppliers regularly regarding the progress of discussions
with the Director General of Fair Trading in regard to the
agreement(s) so furnished.
83. ARBITRATION
83.1 Referral to arbitration: 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 the SSA Arrangements between any one or more
Parties shall be and is hereby referred to arbitration pursuant
to the arbitration rules of the Electricity Arbitration
Association in force from time to time.
83.2 Proper law: 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 shall apply to any such
arbitration wherever the same or any part of it shall be
conducted.
83.3 Third Party Claims fl): Subject always to Clause 83.6, 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 Clause
83.5) against any other Party (a "Contracting Party") which would
but for this Clause 83.3 have been a dispute or difference
referred to arbitration by virtue of Clause 83.1 then,
notwithstanding the provisions of Clause 83.] 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 any 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.
83.4 Third Party Claims (2): Where a Defendant Contracting Party
makes a Third Party Claim against any Contracting Party and such
Contracting Party wishes to make a Third Party Claim against a
further Contracting Party the provisions of Clause 83.3 shall
apply mutatis mutandis as if such Contracting Party had been the
Defendant Contracting Party and similarly in relation to any such
further Contracting Party.
83.5 Third Party Claims (3): For the purposes of this Clause 83
"Third Party Claim" shall mean:
83.5.1 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
83.5.2 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
83.5.3 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).
83.6 Limitation: Clause 83.3 shall apply only if at the time the
legal proceedings are commenced no arbitration has been commenced
between the Defendant Contracting Party and another 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.
84. JURISDICTION
84.1 Submission to jurisdiction: Subject and without prejudice to
Clauses 83 and 84.4, 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 the SSA
Arrangements and that accordingly any suit, action or proceeding
(together in this Clause 84 referred to as "Proceedings") arising
out of or in connection with the SSA Arrangements may be brought
in such courts.
84.2 Waiver: 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
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.
84.3 Agent for service of process: Each Party which is not
incorporated in any part of England or Wales agrees that if it
does not have, or shall cease to have, a place of business in
England or Wales it will promptly and hereby does appoint the
Settlement System Administrator (or such other person as shall be
acceptable to the Executive Committee) irrevocably to accept
service of process on its behalf in any Proceedings in England.
84.4 Arbitration: For the avoidance of doubt nothing contained in
the foregoing provisions of this Clause 84 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.
85. GOVERNING LAW
The SSA Arrangements shall be governed by, and construed in all
respects in accordance with, English law.
IN WITNESS whereof this Agreement has been duly executed the day
and year first above written
<PAGE>
SCHEDULE 1
This Schedule reflects parties as at 30th March, 1990
The Founder Generators
Name Registered Registered or
Number Principal Office
National Power PLC 2366963 Sudbury House
15 Newgate Street
London EC1A 7AU
PowerGen pie 2366970 53 New Broad Street
London EC2M 1JJ
Nuclear Electric pie 2264251 Barnett Way
Barnwood
Gloucester GL4 7RS
The National Grid 2366977 National Grid House
Company plc Sumner Street
(Pumped Storage London SE1 9JU
Business
Division)
Electricite de - 3 Rue de Messine
France, Service 75008 Paris
National France
Scottish Power pie 117120 Cathcart House
Spean Street
Glasgow G44 4BE
Scotland
Scottish 117119 16 Rothesay Terrace
Hydro-Electric PLC Edinburgh EH3 7SE
Scotland
British Nuclear 1002607 Risley
Fuels plc Warrington
Cheshire WAS 6AS
The United Kingdom - 11 Charles II Street
Atomic Energy London SW1 4QT
Authority
Central Power 2251099 Mucklow Hill
Limited Halesowen
West Midlands B62
8BP
<PAGE>
SCHEDULE 2
This Schedule reflects the parties as at 30th March, 1990
The Founder Suppliers
Part A
Public Electricity Suppliers
Name Registered Registered or
Number Principal Office
Eastern Electricity 2366906 Wherstead Park
pie Wherstead
Ipswich
Suffolk
IP9 2AQ
East Midlands 2366923 398 Coppice Road
Electricity pie Arnold
Nottingham
NG5 7HX
London Electricity 2366852 Templar House
pie 81-87 High Holborn
London WC1V 6NU
Manweb plc 2366937 Sealand Road
Chester
CH1 4LR
Midlands Electricity 2366928 Mucklow Hill
pie Halesowen
West Midlands
B62 8BP
Northern Electric 2366942 Carliol House
pie Market Street
Newcastle upon Tyne
NE1 ONE
NORWEB pie 2366949 Talbot Road
Manchester M 16 ONE
SEEBOARD pie 2366867 Grand Avenue
Hove
East Sussex
BN3 2LS
Southern Electric 2366879 Littlewick Green
pie Maidenhead
Berkshire
SL6 3QB
South Wales 2366985 Newport Road
Electricity pie St Mellons
Cardiff
CF3 9XW
South Western 2366894 800 Park Avenue
Electricity pie Aztec West
Almondsbury
Bristol
BS 12 4SE
Yorkshire 2366995 Wetherby Road
Electricity Group Scarcroft
pie Leeds
LS14 3HS
<PAGE>
Part B
Second Tier Suppliers
Name Registered Registered or
Number Principal Office
National Power PLC 2366963 Sudbury House
15 Newgate Street
London
EC1A 7AU
PowerGen plc 2366970 53 New Broad Street
London
EC2M 1JJ
Nuclear Electric plc 2264251 Barnett Way
Barnwood
Gloucester
GL4 7RS
SEEBOARD plc 2366867 Grand Avenue
Hove
East Sussex
BN3 2LS
British Nuclear 1002607 Risley
Fuels pie Warrington
Cheshire
WAS 6AS
<PAGE>
Part C
Others
Name Registered Registered or
Number Principal Office
Electricite de - 3 Rue de Messine
France, Service 75008
National Paris
France
Scottish Power pie 117120 Cathcart House
Spean Street
Glasgow G44 4BE
Scotland
Scottish 117119 16 Rothesay Terrace
Hydro-Electric PLC Edinburgh EH3 7SE
Scotland
<PAGE>
SCHEDULE 3
Form of Accession Agreement
THIS SUPPLEMENTAL AGREEMENT is made on [ ] BETWEEN:
(1) [ ], a company incorporated [with limited liability] under
the laws of [ ] [(registered number [ ])] and having its
[registered] [principal] office at [ ] (the "New Party"); and
(2) [ ] (the "Nominees) on behalf of all the parties to the
Pooling and Settlement Agreement referred to below.
WHEREAS :
(A) by an agreement dated 30th March, 1990 made between the
Founder Generators named therein (1), the Founder Suppliers named
therein (2), NGC Settlements Limited now known as Energy
Settlements and Information Services Limited as Settlement System
Administrator (3), Energy Pool Funds Administration Limited as
Pool Funds Administrator (4), The National Grid Company pie as
Grid Operator and Ancillary Services Provider (5), and Scottish
Power pie and Electricite de France, Service National as
Externally Interconnected Parties (6) (as amended, varied,
supplemented, modified or suspended, the "Pooling and Settlement
Agreement") the parties thereto agreed to give effect to and be
bound by certain rules and procedures for the operation of an
electricity trading pool and the operation of a settlement
system; and
(B) the New Party has requested that it be admitted as a Party
pursuant to Clause 3 of the Pooling and Settlement Agreement and
each of the Parties hereby agrees to such admission.
NOW IT IS HEREBY AGREED as follows:
1. Unless the context otherwise requires, words and expressions
deemed in the Pooling and Settlement Agreement shall bear the
same meanings respectively when used herein.
2. The Nominee (acting on behalf of each of the Parties) hereby
admits the New Party as an additional Party under the Pooling and
Settlement Agreement on the terms and conditions hereof and with
effect from [insert effective date of admission! .
3. The New Party hereby accepts its admission as a Party and
undertakes with the Nominee (acting on behalf of each of the
Parties) to perform and to be bound by the terms and conditions
of the Pooling and Settlement Agreement as a Party as from the
[insert effective date of admission].
4. For all purposes in connection with the Pooling and
Settlement Agreement the New Party shall as from the [insert
effective date of admission] be treated as if it had been a
signatory of the Pooling and Settlement Agreement as a
[[Generator]/[Supplier]/[Externally Interconnected Party]]*, and
as if this Agreement were part of the Pooling and Settlement
Agreement, and the rights and obligations of the Parties shall be
construed accordingly.
5. This Agreement and the Pooling and Settlement Agreement
shall be read and construed as one document and references in the
Pooling and Settlement Agreement to the Pooling and Settlement
Agreement (howsoever expressed) shall be read and construed as
references to the Pooling and Settlement 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
Clauses 83 and 84 of the Pooling and Settlement Agreement shall
apply hereto mutate mutants.
AS WITNESS the hands of the duly authorised representatives of
the parties hereto the day and year first above written
[New Party]
By:
Notice details (Clause 75 of the Pooling and Settlement
Agreement)
Address:
Telex number:
Facsimile number:
Attention:
"Nominee]
(for and on behalf of each of the parties to the Pooling and
Settlement Agreement)
By:
* Delete/complete as appropriate.
Note: this form will require adaptation in the circumstances
described in Clauses 3.11 to 3.14 inclusive.
<PAGE>
SCHEDULE 4
Terms of Engagement of the Settlement System Administrator
Contents
1. DEFINITIONS
1.1 Definitions
1.2 Executive Committee's and Contract Manager's - obligations
2. ORDERING AND PROVISION OF SERVICES
3. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES
4. STANDARD OF CARE, LIMITATION OF LIABILITY AND INDEMNITY
4.1 Standard of care
4.2 Service Line
4.3 Limitation of liability
4.4 Death and personal injury
4.5 Exclusion of certain types of loss
4.6 Trust
4.7 Survival
4.8 Saving
4.9 Full negotiation
4.10 Indemnity
5. PERSONNEL
5.1 Standard of Personnel
5.2 Account Manager
5.3 Contract Manager
5.4 Restriction on recruiting Personnel
6. DUTIES AND RESPONSIBILITIES OF THE
SETTLEMENT SYSTEM ADMINISTRATOR
6.1 The Settlement System
6.2 Back-up arrangements
6.3 Metering
6.4 Works Programmes
6.5 Recommendations
6.6 Records
6.7 Provision of information (1 )
6.8 Provision of information (2)
6.9 Provision of information (3)
6.10 Pool Rules
6.11 Arrangements with the Grid Operator and Ancillary Services
Provider
6.12 Arrangements with the Pool Funds Administrator
6.13 Notification of arrangements
6.14 Estimates
6.15 Advisory obligations
6.16 Quality management system and procedures
6.17 Documentation
6.18 Long term forecasting procedures
6.19 Provision of Hardware
6.20 Performance Improvement Programme
6.21 Data input,and validation
7. PERFORMANCE OF DUTIES
7.1 Independent contractor
7.2 Delegation
8. RESPONSIBILITIES FOR THE SSA SYSTEM
8.1 The SSA System
8.2. Developed software
8.3 Licensed software
8.4 Third party maintenance
8.5 SSA System changes
8.6 Maintenance of the SSA System Software
8.7 Notification of commercial use
9. SOFTWARE
9.1 Definitions
9.2 Representations and Warranties
10. MAINTENANCE ARRANGEMENTS
11. AUDIT ACCESS
12. INSURANCE RESPONSIBILITIES
12.1 Insurance requirements
12.2 Application of proceeds
12.3 Information requirements
12.4 Default
12.5 Change in insurance requirements
13. TERMINATION OF THE APPOINTMENT OF ESIS
13.1 Termination
13.2 Termination pursuant to Clause 67.4
14. RESIGNATION BY ESIS
15. REMOVAL OF ESIS AFTER 31ST MARCH, 1999
16. REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999
17. REMOVAL OF ESIS
17.1 Breach of obligations capable of remedy
17.2 Breach of obligations incapable of remedy
17.3 Insolvency
17.4 Change of Status
17.5 Removal Procedure
18. POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION AND REMOVAL
19. APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM ADMINISTRATOR
19.1 Approval of the Director
19.2 Discharge
20. CONTINUATION OF SERVICES
20.1 Continuation of Services
20.2 Post-Termination Services
20.3 Extension Period Charges
20.4 Post-Termination Period Charges
20.5 Two year limit
20.6 Full force and effect
21. TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS
21.1 Transfer of services, responsibilities and assets
21.2 Asset Transfer Costs
21.3 Transition services
21.4 Disputes
22. ALLOCATION OF COSTS ON RESIGNATION
23. ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999
24. ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH,
1999
25. ALLOCATION OF COSTS ON REMOVAL
26. REIMBURSEMENT BY POOL MEMBERS
27. DIRECTOR'S INVOLVEMENT
28. POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES
29. VARIATION OF SERVICE LINES
30. EXTENSION OF TIME
31. CONTRACT MANAGEMENT RULES
31.1 Contract Management Rules
31.2 Amendments to the Contract Management Rules
32. GROSS MARGIN
32.1 Auditor's Report
32.2 Negotiations
33. FORCE MAJEURE
34. CONFIDENTIAILITY
35. NOTICES
APPENDIX
1. DEFINITIONS
1.1. Definitions: In this Schedule and the Appendix hereto,
except where the context otherwise requires:
"Account Manager" means the person or his alternate who has been
nominated as such by the Settlement System Administrator in
accordance with sub-section 5.2;
"Anticipated Fixed Standing Charges" has the meaning given to
that term in the Appendix hereto;
"Committed Additional Services Charges" has the meaning given to
that term in the Appendix hereto;
"Compensation" means the aggregate of:
(a) 75 per cent. of the Profit Element attributable to the
Anticipated Fixed
Standing Charges; and
(b) the Profit Element attributable to the Committed Additional
Services Charge;
"Contract Management Rules" means the procedures of that name in
the agreed form as amended, modified or varied in accordance with
sub-section 31.2;
"Contract Manager" means the person or his alternate who has been
nominated as such by the Executive Committee in accordance with
sub-section 5.3;
"Deferred Settlement Project Expenditure" has the meaning given
to that term in the Appendix hereto;
"Extension Notice" has the meaning given to that term in
sub-section 20.1;
"Extension Period" has the meaning given to that term in
sub-section 20.1;
"Gross Margin"' means, in respect of each SSA Accounting Period,
the aggregate of all Total Sums Due invoiced in respect of such
SSA Accounting Period less those costs which can be directly
related to the provision of Services hereunder (but disregarding
for the purposes of such costs, tax, interest charges and
Infrastructure Costs);
"Infrastructure" means those assets and resources which are not
dedicated to or directly attributable to the provision of part or
parts of the Services. For the avoidance of doubt, Infrastructure
includes the general manager, finance staff, personnel staff and
procurement staff and the buildings (or parts thereof)
attributable to such staff;
"Infrastructure Costs" means those costs incurred by the
Settlement System Administrator in the provision of
Infrastructure. For the avoidance of doubt, Infrastructure Costs
include the following costs to the extent that they are not
directly attributable to a part or parts of the Services:
(a) legal except where (i) such costs are agreed to be treated
as Third Party Costs, or (ii) such costs relate to the third (or
more) Supplemental Agreement in an SSA Accounting Period, in
which case they shall not be treated as Infrastructure Costs;
(b) training;
(c) audit;
(d) insurance;
(e) travelling;
(f) public relations;
(g) general depreciation; and
(h) group charges,
but do not include professional indemnity insurance costs or
costs related to Deferred Settlement Project Expenditure;
"in the agreed form" means in a form which is agreed on the one
hand by either the Account Manager or the Settlement System
Administrator and on the other hand by either the Contract
Manager or the Executive Committee;
"Irremediable Removal Notice" means a notice given by the
Executive Committee to the Settlement System Administrator
pursuant to sub-section 17.2, 17.3 or (as the context may
require) 17.4;
"Menus of Prices" has the meaning given to that term in the
Appendix hereto;
"Order" has the meaning given to that term in the Appendix
hereto;
"Outstanding Liabilities" means all liabilities incurred by the
Settlement System Administrator in providing the Services or to
enable it to provide the Services and which as at the Termination
Date remain to be discharged in whole or in part, other than the
Pool Agreed Liabilities;
"Performance Improvement Programme" means a programme agreed
between the Executive Committee and the Settlement System
Administrator in accordance with Section 10 of Part B of the
Appendix hereto to improve the cost-effectiveness of Services;
"Pool Agreed Liabilities" means all liabilities (including
Deferred Settlement Project Expenditure) incurred by the
Settlement System Administrator under any contract or arrangement
entered into or renewed by the Settlement System Administrator at
the express written request or with the express written approval
of the Executive Committee or the Contract Manager and which as
at the Termination Date remain to be discharged in whole or in
part;
"Pool Apportioned Outstanding Liabilities" means all Outstanding
Liabilities which as at the Termination Date and according to
their terms at such date fall to be discharged on or before 31st
March, 1999 provided that no such Outstanding Liability may be
treated as a Pool Apportioned Outstanding Liability:
(a) where the Settlement System Administrator accounts for such
Outstanding Liability during the period following the giving of a
Removal Notice on a different basis from that used to account for
such Outstanding Liability on the date which is 12 months prior
to such Removal Notice, unless the Executive Committee or the
Contract Manager has consented to such different basis (such
consent not to be unreasonably withheld) or such different basis
of accounting is required by law or applicable accounting
standard; or
(b) to the extent that the amount of the Outstanding Liability
increases in a non-immaterial respect after the giving of a
Removal Notice except where such increase is necessary for the
Settlement System Administrator to provide Services under an
Order;
"Post-Termination Period" means a period of up to twelve months
after the Termination Date;
"Profit Element" means the Gross Margin for the twelve month
period ending on the date of the Removal Notice as reported by
the Settlement System Administrator's auditor pursuant to
sub-section 32.1, reduced by 9.4 per cent. on account of overhead
costs;
"Remediable Removal Notice" means a notice given by the Executive
Committee to the Settlement System Administrator pursuant to
sub-section 17.1;
"Removal Notice" means a notice given by the Executive Committee
to the Settlement System Administrator pursuant to Section 15 or
16 or (as the case may be) sub-section 17.5;
"Resignation Notice" means a notice given by ESIS to the
Executive Committee and the Director pursuant to Section 14;
"Service Line" means a legally binding operating document which
is agreed for the time being and from time to time by the
Settlement System Administrator and the Executive Committee to be
a Service Line in respect of a particular Service;
"Services" has the meaning given to that term in the Appendix
hereto;
"Sole Supplier Index" has the meaning given to that term in the
Appendix hereto;
"SSA Accounting Period" means each successive period of 12 months
beginning on 1st April in each year or of such other length
and/or beginning on such other date as may be agreed between the
Settlement System Administrator and the Executive Committee. The
first SSA Accounting Period shall begin on 1st April, 1994;
"SSA Apportioned Outstanding Liabilities" means all Outstanding
Liabilities other than the Pool Apportioned Outstanding
Liabilities;
"Termination Date" means the date upon which the appointment of
ESIS as Settlement System Administrator is terminated pursuant to
Section 13.2, 14, 15, 16 or (as the contest may require) 17, as
the same may be postponed pursuant to Section 20;
"Third Party Costs" has the meaning given to that term in the
Appendix hereto;
"Total Sums Due" has the meaning given to that term in the
Appendix hereto; and
"Transition Costs" means:
(a) the costs incurred by the Settlement System Administrator
during the period from the date of the Removal Notice or the
Resignation Notice to the Termination Date in providing
reasonable training for the person who becomes the successor
Settlement System Administrator, such training to be a single
programme delivered once and to be to the same standards and to
use the same practices and procedures as are then set out in the
Service Lines at the date on which the consultation procedure
prior to serving a Removal Notice or a Resignation Notice
commences;
(b) reasonable costs incurred by the Settlement System
Administrator in supporting The commissioning and proving of the
successor Settlement System such that the successor Settlement
System Administrator is capable of operating on the same basis
and to The same frequencies as are set out in the Service Lines
at the date on which the consultation procedure prior to serving
a Removal Notice or a Resignation Notice commences;
(c) the costs incurred by the Settlement System Administrator in
physically moving, relocating or handing over to the successor
Settlement System Administrator The property required to be made
available by ESIS (but not, for the avoidance of doubt, The
consideration payable therefor);
(d) the costs incurred by the Settlement System Administrator in
preparing and supplying to The successor Settlement System
Administrator procedural or practice documentation not already
recorded in writing; and
(e) the travelling and accommodation costs of the Settlement
System Administrator's employees in attending upon the successor
Settlement System Administrator for all or any of the purposes in
paragraph (a), (b) or (c) above.
1.2 Executive Committee's and Contract Manager's obligations:
Where in this Schedule and the Appendix hereto an obligation is
expressed to be undertaken by the Executive Committee or the
Contract Manager, The Pool Members shall procure that the
Executive Committee or, as the case may be, the Contract Manager
performs that obligation and any breach, failure or action on the
part of the Executive Committee or the Contract Manager shall be
deemed to be a breach, failure or action on The part of all Pool
Members.
2. ORDERING AND PROVISION OF SERVICES
Ordering and provision of Services: Services shall be Ordered and
provided in accordance with and pursuant to The Appendix hereto
and The provisions of chat Appendix shall have effect.
3. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES
Payment for Services: The Settlement System Administrator shall
be entitled to recover from the Pool Members and Parties charges
in accordance with and pursuant to the Appendix hereto.
4. STANDARD OF CARE, LIMITATION OF LIABILITY AND INDEMNITY
4.1 Standard of care: Subject to sub-section 4.2, in the
exercise of its duties and responsibilities under the SSA
Arrangements the Settlement System Administrator shall exercise
that degree of care, diligence, skill and judgment which would
ordinarily be expected of a reasonably prudent operator of the
Settlement System taking into account the circumstances actually
known to the Settlement System Administrator, its officers and
employees at the relevant time or which ought to have been known
to it or them had it or they made such enquiries as were
reasonable in the circumstances. In particular, but without
prejudice to the generality of the foregoing, in the absence of
directions and instructions given to it by the Executive
Committee or the Contract Manager under the SSA Arrangements and
having due regard to the constraints imposed on the Settlement
System Administrator by the Charging Procedure and the resources
available to it, the Settlement System Administrator shall at all
times conduct itself in a manner calculated to achieve the
principal objects and purpose of the Agreement set out in Clauses
4.1.2 and 4.1.3.
4.2 Service Line: If the standard required of the Settlement
System Administrator for the performance of a Service is included
in the Service Line for that Service, such standard shall be
deemed to be the standard to which the Settlement System
Administrator will be required to perform to discharge its duty
of care under sub-section 4.1 in respect of that Service.
4.3 Limitation of liability: Subject to sub-section 4.4 and save
where any provision of this Agreement provides for an indemnity,
each Party agrees and acknowledges that neither the Settlement
System Administrator nor any of its officers, employees or agents
shall be liable to any of the other Parties for loss arising from
any breach of the SSA Arrangements 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:
(i) physical damage to the property of any of the other Parties
or its or their respective officers, employees or agents; and/or
(ii) 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.
4.4 Death and personal injury: Nothing in the SSA Arrangements
shall exclude or limit the liability of the Settlement System
Administrator for death or personal injury resulting from the
negligence of the Settlement System Administrator or any of its
officers, employees or agents and the Settlement System
Administrator shall indemnify and keep indemnified each of the
other Parties, its officers, employees and 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
Settlement System Administrator or any of its officers, employees
or agents.
4.5 Exclusion of certain types of loss: Subject to sub-section
4.4 and save where any provision of this Agreement provides for
an indemnity, neither the Settlement System Administrator nor any
of its officers, employees or agents shall in any circumstances
whatsoever be liable to any of the other Parties for:
(i) any loss of profit, loss of revenue, loss of use, loss of
contract or loss of goodwill; or
(ii) any indirect or consequential loss; or
(iii) loss resulting from the liability of any other Party to any
other person howsoever and whensoever arising save as provided in
paragraph 4.3(ii) and sub-section 4.4.
4.6 Trust: Each Party acknowledges and agrees that each of the
other Parties holds the benefit of sub-sections 4.3, 4.4 and 4.5
for itself and as trustee and agent for its officers, employees
and agents.
4.7 Survival: Each of sub-sections 4.3, 4.4, 4.5 and 4.6 shall:
(i) be construed as a separate and severable contract term, and
if one or more of such sub-sections is held to be invalid,
unlawful or otherwise unenforceable the other or others of such
sub-sections shall remain in full force and effect and shall
continue to bind the Parties; and
(ii) survive termination of the appointment of ESIS as Settlement
System Administrator.
4.8 Saving: For the avoidance of doubt, nothing in this Section 4
shall prevent or restrict any Party enforcing any obligation
(including suing for a debt) owed to it under or pursuant to this
Agreement.
4.9 Full negotiation: Each Party acknowledges and agrees that
the foregoing provisions of this Section 4 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.
4.10 Indemnity:
(a) In this sub-section 4.10 "Losses" means all losses, costs,
damages, expenses, liabilities and claims suffered or reasonably
incurred by the Settlement System Administrator, its officers,
employees or agents.
(b) Each Pool Member (or, in the case of any agreement entered
into for or on behalf of any class of Pool Members, each Pool
Member of that class) shall (but only in respect of its
Contributory Share at the time of receipt of the request for
indemnification) severally indemnify and keel; indemnified the
Settlement System Administrator, its officers, employees and
agents against all Losses arising directly or indirectly out of a
third party claim made against the Settlement System
Administrator, its officers, employees or agents under or
pursuant to any agreement which the Settlement System
Administrator, against an Order or a request of the Executive
Committee issued or made as permitted by Part E of the Appendix
hereto, has entered into as agent for, or otherwise on behalf of,
the Pool Members and/or any class of Pool Members and/or the
Executive Committee (other than any Losses recoverable under the
Charging Procedure or arising from the wilful default, bad faith
or negligence of, or breach of its obligations under the SSA
Arrangements by, the Settlement System Administrator, its
officers, employees or agents). For the purposes of this
sub-section 4.10 the Pool Members in general meeting shall be
deemed to have approved the Escrow Agreement and each Accession
Agreement executed prior to 1st October, 1991 and the relevant
class of Pool Members which are parties thereto shall be deemed
to have approved each deed of indemnity entered into in favour of
a Pool Chairman where his period of appointment began on or
before 1st April, 1993.
5. PERSONNEL
5.1 Standard of Personnel: In and for the performance of the
Services the Settlement System Administrator shall engage only
persons who are to the Settlement System Administrator's
knowledge suitably qualified, skilled and honest and shall (where
appropriate) provide such persons with the requisite training her
the work which they are to perform.
5.2 Account Manager: The Settlement System Administrator:
(a) shall from time to time, after consultation with the Chief
Executive, nominate a person with responsibility for liaison with
the Contract Manager regarding the provision of the Services;
(b) may also from time to time nominate up to two alternates for
that person; and
(c) shall have the right to remove the Account Manager at any
time provided that the Settlement System Administrator shall
ensure that there shall at all times be an Account Manager.
The Settlement System Administrator shall notify the Executive
Committee forthwith in writing of each nomination and removal of
an Account Manager and shall procure that the Account Manager
shall be available to be contacted by the Contract Manager at all
reasonable times during the provision of the Services.
5.3 Contract Manager: The Executive Committee:
(a) shall from time to time, after consultation with the
Settlement System Administrator, nominate a person with
responsibility for liaison with the Account Manager regarding the
provision of the Services;
(b) may also from time to time nominate up to two alternates for
that person; and
(c) shall have the right to remove the Contract Manager at any
time provided that the Executive Committee shall ensure that
there shall at all tines be a Contract Manager.
The Executive Committee shall notify the Settlement System
Administrator forthwith in writing of each nomination and removal
of a Contract Manager and shall procure that the Contract Manager
shall be available to be contacted by the Account Manager at all
reasonable times.
5.4 Restriction on recruiting Personnel:
5.4.1 From 1st April, 1994 until the date falling twelve months
(or such other period as the Settlement System Administrator and
the Executive Committee may agree) after the Termination Date or,
if there is a PostTermination Period, the last day of the
Post-Termination Period:
(a) ESIS shall not without the prior written consent of the
Chief Executive employ, solicit or entice or endeavour to solicit
or entice away from the Chief Executive's Office any person who
at that time is, or was within the previous six months, an
employee or member of staff of the Chief Executive's Of lice or
of another person seconded to the Chief Executive's Office; and
(b) Pool Members shall procure that neither the Chief Executive
nor any member of the Chief Executive's Office nor any Committee
Member shall without the prior written consent of ESIS employ,
solicit or entice or endeavour to solicit or entice away from
ESIS any person who at that time is, or was within the previous
six months, an employee or member of staff of ESIS.
Each undertaking contained in this paragraph 5.4.1 shall be
construed as a separate undertaking and if one or more of the
undertakings is held to be against the public interest or
unlawful or in any way an unlawful restraint of trade, the
remaining undertakings shall continue to bind the relevant Party.
5.4.2 Breach by ESIS of its obligations under paragraph 5.4.1 (a)
above shall not entitle the Executive Committee to terminate the
appointment of ESIS as Settlement System Administrator under this
Agreement and breach by a Pool Member of its obligations under
paragraph 5.4.1 (b) above shall not constitute a breach by a Pool
Member of its obligations for the purposes of Section 28, but in
each case shall only entitle such other party to claim damages or
to bring proceedings for an injunction.
6. DUTIES AND RESPONSIBILITIES OF THE SETTLEMENT SYSTEM
ADMINISTRATOR
Responsibilities: Without prejudice to the generality of the
duties, responsibilities and obligations of the Settlement System
Administrator provided elsewhere in the SSA Arrangements, the
Settlement System Administrator shall:
6.1 The Settlement System: Comply with its obligations under the
SSA Arrangements in respect of the day-to-day operation of the
Settlement System;
6.2 Back-up arrangements: In accordance with Service Line 7
(Disaster Recovery), maintain back-up arrangements for the
day-to-day operation of the Settlement System;
6.3 Metering: Comply with its obligations under Part XV of and
Schedule 21 to this Agreement;
6.4 Works Programmes: Subject to the availability of resources,
co-operate in the preparation, finalisation and implementation of
all Works Programmes in respect of which the Settlement System
Administrator is not appointed Works Programme Manager;
6.5 Recommendations: At the invitation of the Executive
Committee or of its own initiative, recommend to the Executive
Committee changes to the Settlement System and the SSA
Arrangements;
6.6 Records: In accordance with Service Line 6 (Off-site
Security), on the instruction of the Executive Committee maintain
such records, data and other information as the Pool Auditor may
from time to time by notice in reasonable detail to the Executive
Committee require for the purposes of Part BY of this Agreement
provided that this obligation shall cease to apply to the
Settlement System Administrator following its resignation or
removal;
6.7 Provision of information (1): Subject to any statutory or
Licence obligations, provide the Executive Committee upon request
with reports, data and other information concerning the
Settlement System (other than information which is exclusively
confidential to and the property of the Settlement System
Administrator) required by the Executive Committee and which the
Settlement System Administrator is required to retain under
sub-section 6.6. Each of the Parties agrees to the release of all
such reports, data and other information in the circumstances
described in this sub-section 6.7;
6.8 Provision of information (2): Provide the Pool Auditor upon
request with reports, data and other information concerning the
Settlement System required by the Pool Auditor and which the
Settlement System Administrator is required to retain under
sub-section 6.6. Each of the Parties agrees to the release of all
such reports, data and other information in the circumstances
described in this sub-section 6.8;
6.9 Provision of information (3): Provide each Pool Member and
the Ancillary Services Provider upon request with a certified
copy of such records, data and other information concerning
amounts payable by or to such Pool Member and the Ancillary
Services Provider in accordance with Service Line 10 (Service to
CEO and Pool Members). Each of the Parties agrees to the release
of all such records, data and other information in the
circumstances described in this sub-section 6.9;
6.10 Pool Rules: Perform those specific duties and
responsibilities ascribed to it in the Pool Rules;
6.11 Arrangements with the Grid Operator and Ancillary Services
Provider: Make and maintain arrangements with the Grid Operator
and the Ancillary Services Provider in accordance with Clause
29.2;
6.12 Arrangements with the Pool Funds Administrator: Make and
maintain arrangements with the Pool Funds Administrator in
accordance with Clause 29.3;
6.13 Notification of arrangements: Provide, upon request, the
Executive Committee with details of its arrangements for the time
being in effect with each of the Grid Operator, the Ancillary
Services Provider and the Pool Funds Administrator referred to in
sub-section 6.11 or (as the case may be) 6.12;
6.14 Estimates: Without prejudice to its obligations under
Section 17.8 of Schedule 11, where the Settlement System
Administrator is unable for whatever reason to provide the Pool
Funds Administrator with the actual information required in
respect of each Settlement Day for each Pool Member and the
Ancillary Services Provider, provide the Pool Funds Administrator
in accordance with Service Line 2 (Settlement Process) with its
best estimates of that information by the same time as it is
required to provide the actual information;
6.15 Advisory obligations:
6.15.1 Report to the Executive Committee and/or the Contract
Manager on those matters set out or referred to in the Service
Lines in the manner and within the timescales prescribed thereby;
6.15.2 Report promptly in writing to the Executive Committee:
(a) any problem with the Settlement System or its then current
operation that is putting pressure on the due and punctual
performance by the Settlement System Administrator of any
Service; and
(b) any problem of which the Settlement System Administrator is
or becomes aware about the likely future operation of the
Settlement System arising out of the way in which the Settlement
System is then currently being operated;
6.16 Quality management system and procedures:
6.16.1 Establish and keep under review a quality management
system that is designed to enable the Settlement System
Administrator to meet the standards set out or referred to in
sub-sections 4.1 and 4.2 and under that system prepare and keep
under review procedures to meet such standards;
6.16.2 Provide the Executive Committee on request with copies of
such procedures and notify the Executive Committee of any changes
made thereto or, where such changes require contribution or input
from all or any of the Pardes, any proposed changes thereto; and
6.16.3 Consider any comments or any proposed changes on or to
such procedures made by or on behalf of the Executive Committee
from time to time;
6.17 Documentation: Maintain up-to-date manuals, specifications
and similar documentation for the provision of the Services and
provide the Executive Committee on request with copies of such
manuals, specifications and similar documentation;
6.18 Long-term forecasting procedures: Having regard to its
knowledge of the requirements of the Executive Committee and the
Pool Members:
(a) consult the Contract Manager in respect of the Settlement
System Administrator's long term planning for the use and
allocation of resource cover;
(b) following consultation with the Contract Manager pursuant to
paragraph (a) above, plan for anticipated future requirements of
the Executive Committee and Pool Members;
(c) maintain internal financial controls to ensure that the
objectives of this Schedule and the Appendix hereto are met; and
(d) provide the Executive Committee as appropriate or on request
with a report of the results and/or impact of the matters arising
from the consultation referred to in paragraph (a) above;
6.19 Provision of Hardware:
6.19.1 Provide Hardware subject to compliance by the Settlement
System Administrator with its obligations under the remainder of
this sub-section;
6.19.2 Be entitled to change the Hardware provided that:
(a) the Settlement System Administrator has given to the
Executive Committee reasonable prior notice of the intention to
change the Hardware;
(b) the Settlement System Administrator has given to the
Executive Committee reasonable details of the proposed change,
together with a timetable for implementation, at the time notice
is given under paragraph (a) above;
(c) the impact (if any) on the Settlement Software is detailed
in the notice given under paragraph (a) above and, if there shall
be any such impact, the proposed change to the Settlement
Software shall proceed in accordance with the Change Management
Policies;
(d) any such change will not materially affect the operation or
function of the Settlement System; and
(e) all costs associated with any such change shall be met by
the Settlement System Administrator (and shall not be recharged
to Pool Members);
6.19.3 Make changes to the Hardware required by Pool Members,
acting through the Executive Committee, provided that the
Settlement System Administrator shall notify Pool Members in
accordance with the Change Management Policies and appropriate
changes to the Service Lines and/or the Menus of Prices shall be
agreed in accordance with the Appendix hereto;
6.20 Performance Improvement Programme: Seek to identify and give
support to initiatives which may form the basis of Performance
Improvement Programmes;
6.21 Data input and validation:
6.21.1 Promptly and properly input such data and other
information as it may receive pursuant to the terms of this
Agreement;
6.21.2 Review and validate data and other information in
accordance with the Agreed Procedures to establish the
completeness thereof and to identify any inconsistencies therein.
7. PERFORMANCE OF DUTIES
7.1 Independent contractor: In carrying out its dudes and
responsibilities under the SSA Arrangements, the Settlement
System Administrator shall act as an independent contractor and
(unless expressly authorised to the contrary) shall neither act
nor hold itself out nor be held out as acting as agent for any of
the other Parties.
7.2 Delegation:
7.2.1 Subject as provided in paragraphs 7.2.2 and 7.2.3, the
Settlement System Administrator may delegate the performance of
all or any of its duties and responsibilities under the SSA
Arrangements to agents or contractors.
7.2.2 The Settlement System Administrator shall be entitle I to
delegate the performance of all or any of its dudes and
responsibilities under the SSA Arrangements provided that they
are not dudes or responsibilities which are in respect of any
significant matter (unless the prior written approval of the
Executive Committee under paragraph 7.2.3 has been given).
7.2.3In giving any such approval as is referred to in paragraph
7.2.2 the Executive Committee shall specify the particular duties
and responsibilities which may be delegated and to whom and for
what period. On receipt of such approval the Settlement System
Administrator may delegate its duties and responsibilities only
to the extent of the terms of such approval.
7.2.4 As between the Settlement System Administrator and the
other Parties, no delegation pursuant to this sub-section 7.2 or
pursuant to Clause 60.15 nor the terms or conditions of any
contract pursuant to which any such delegation is effected shall
relieve the Settlement System Administrator of any of its duties
or responsibilities under the SSA Arrangements. The Settlement
System Administrator shall at all times properly supervise the
performance of all such delegates.
7.2.5 For the avoidance of doubt, the term "delegation" as used
in this sub-section 7.2 includes sub-contracting.
8. RESPONSIBILITY FOR THE SSA SYSTEM
8.1 The SSA System: The Settlement System Administrator shall
have control of the running and development of the SSA System,
subject to the restrictions set out in this Section 8.
8.2 Developed software:
(a) In relation to any Software developed by the Settlement
System Administrator, the Settlement System Administrator shall
procure that all intellectual property rights shall vest in the
Settlement System Administrator absolutely. In the case of
Software commissioned from third parties or where rights in
Software are purchased, the Settlement System Administrator shall
procure that all intellectual property rights are transferred to
the Settlement System Administrator. Where the Settlement System
Administrator customises, or commissions the customization of,
any Software licensed from any third parties, the Settlement
System Administrator shall procure that all intellectual property
rights shall vest in the Settlement System Administrator.
(b) Pool Members confirm and agree (i) that they have no
objection to the intellectual property rights referred to in
paragraph (a) above being held in this way and (ii) that the
Settlement System Administrator shall have the right of use of
such intellectual property rights as an absolute owner.
8.3 Licensed software: In respect of any Software not developed
internally, purchased or commissioned, the Settlement System
Administrator shall ensure that it has a fully transferable
licence to use the Software, together with (unless the Executive
Committee otherwise notifies the Settlement System Administrator)
suitable escrow arrangements for any Software for which the
source code and full documentation has not been provided or which
is not freely available. No further fees shall be payable in
respect of any transfer of the licence to any nominated
representative of the Executive Committee under Section 21,
except to the extent that the licenser may continue to charge the
same licence fees to the transferee.
8.4 Third party maintenance: Except in circumstances beyond the
Settlement System Administrator's control, the SSA System shall
be fully maintained, by third party maintenance organizations to
the extent that the Software is not developed internally, and the
SSA System shall be fully documented so that it can be operated
by any successor to the Settlement System Administrator. The
Settlement System Administrator shall promptly notify the
Executive Committee upon the Settlement System Administrator
becoming aware that the SSA System will cease to be maintained by
such a third party maintenance organization.
8.5 SSA System changes: The Settlement System Administrator shall
be free to make any changes to the SSA System, except to the
extent that (a) the modification necessitates any change to the
Developed Application Software or Licensed Application Software,
or (b) it detrimentally affects the operation of the Settlement
System.
8.6 Maintenance of the SSA System Software: Without prejudice to
Section 10, in respect of any Software related to the SSA System
which is written, commissioned or customized by the Settlement
System Administrator, the Settlement System Administrator shall
maintain support for, and where necessary fix any bugs in, such
Software from the Termination Date until the expiry of the
Post-Termination Period, if any, and the costs of maintaining
that support and fixing the bugs shall be as agreed between the
Settlement System Administrator and the Contract Manager and
shall be recovered in accordance with the Charging Procedure.
8.7 Notification of commercial use: The Settlement System
Administrator shall promptly notify the Executive Committee if it
uses the Software for a purpose other than that envisaged under
the SSA Arrangements, including its sale, licence, development or
otherwise being made available howsoever to any other person with
such details as the Executive Committee may reasonably request.
9. SOFTWARE
9.1 Definitions: In this Section 9:
"Developed Application Software" means those computer programs
and codes described in the Contract Management Rules from time to
time and all copyright and other intellectual property rights
therein and all documents and materials forming part thereof or
relating thereto; and
"Licensed Application Software" means those computer programs and
codes described in the Contract Management Rules from time to
time.
9.2 Representations and Warranties:
9.2.1 The Settlement System Administrator represents, warrants
and undertakes to the other Parties as a continuing obligation
and the other Parties acknowledge that:
(a) the Settlement System Administrator has, and for so long as
it remains the Settlement System Administrator will have,
unencumbered and freely transferable title to Developed
Application Software;
(b) the Licensed Application Software is, and for so long as the
Settlement System Administrator remains as such will remain, the
subject of a non-exclusive licence in favour of the Settlement
System Administrator transferable to its successor Settlement
System Administrator; and
(c) the Settlement System Administrator undertakes to use all
reasonable endeavours to:
(i) assign or novate, or procure the assignment or novation, of
any licence for Licensed Application Software to the successor
Settlement System Administrator as soon as is reasonably
practicable and to obtain any consent necessary for that purpose;
or
(ii) procure the grant by the relevant licenser to the successor
Settlement System Administrator of a licence in respect of
Licensed Application Software as soon as is reasonably
practicable,
so that the licence held by the successor Settlement System
Administrator is on terms no less favourable to it than the terms
of the licence held by the Settlement System Administrator and
without payment of a fee by Pool Members or the successor
Settlement System Administrator (except to the extent that the
licenser may continue to charge the same licence fee to the
transferee).
9.2.2 Pool Members confirm and agree (i) that they have no
objection to the intellectual property rights referred to in
paragraph 8.2(a) above being held in this way and (ii) that, as
between the Settlement System Administrator and Pool Members, the
Settlement System Administrator shall have the right of use of
such intellectual property rights as an absolute owner.
10. MAINTENANCE ARRANGEMENTS
Maintenance arrangements: The Settlement System Administrator
shall:
(a) ensure that at all times it has in kill force and effect
proper arrangements for the maintenance of (and the prompt
rectification of defects in) the Hardware and Software provided
that in relation to Developed Application Software such
maintenance shall not be required to extend beyond the
implementation of a corrective procedure or a remedy to such
Software to allow for the continued running of such Software in
accordance with its specification;
(b) upon reasonable request of the Executive Committee, confirm
to the Executive Committee in writing the existence of such
maintenance arrangements in respect of the Hardware and the SSA
System; and
(c) upon reasonable request of the Executive Committee, supply
evidence reasonably satisfactory to the Executive Committee of
the existence and nature of such maintenance arrangements in
respect of the Developed Application Software and the Licensed
Application Software.
AUDIT ACCESS
Access:
11.1 The Settlement System Administrator shall:
(a) permit the Pool Auditor unrestricted access to the
Settlement System, the Hardware and the Software and all data
used, information held and records kept by the Settlement System
Administrator or its agent or sub-contractors in operating the
Settlement System;
(b) use reasonable endeavours to procure that each Second Tier
Agent, each Second Tier Agent's agent (if any) and each Second
Tier Agent's sub-contractor (if any) permits the Pool Auditor
unrestricted access to the Second Tier Hardware and Second Tier
Software, to its agency or sub-contracting operations and to all
data used, information held and records kept by each such Second
Tier Agent, Second Tier Agent's agent and/or Second Tier Agent's
sub-contractor;
(c) make available members of its staff to explain the operation
of the Settlement System and such other issues as the Pool
Auditor considers relevant; and
(d) use reasonable endeavours to procure that each Second Tier
Agent, each Second Tier Agent's agent (if any) and each Second
Tier Agent's sub-contractor (if any) makes available members of
its staff to explain its operation of its agency or
sub-contracting operations, the Second Tier Hardware and the
Second Tier Software and such other issues as the Pool Auditor
considers relevant.
11.2 ESIS in its capacity as Settlement System Administrator
shall procure that, in addition to ESIS's auditor auditing the
annual accounts of ESIS for a particular financial year, that
auditor shall report in writing to the Executive Committee the
Gross Margin for that financial year and shall deliver that
report to the Executive Committee no later than the date upon
which such annual accounts are laid before ESIS in general
meeting or otherwise published or issued (if earlier).
11.3 The Settlement System Administrator shall permit an auditor
appointed by the Executive Committee access to the operations and
business of the Settlement System Administrator to confirm that
the quality management procedures and billing practices applied
by the Settlement System Administrator under the terms of the SSA
Arrangements are being complied with. The terms of reference for
each such audit will be agreed by the auditor with ESIS, such
agreement not to be unreasonably withheld.
12. INSURANCE RESPONSIBILITIES
12.1 Insurance requirements: Subject to the availability in the
insurance market of such insurances, the Settlement System
Administrator shall effect and maintain in full force and effect
with first class insurers the following insurances: -
12.1.1 insurance with respect to (a) physical loss or damage to
each of the Hardware (including Second Tier Hardware) and
Software (including Second Tier Software) and (b) corruption of
the Software (including Second Tier Software) and related
computer data, in each case in an amount equivalent to its
replacement cost, except, with effect from 1st April, 1994,
insofar as concerns any Second Tier Hardware and Second Tier
Software owned and/or operated by any particular Second Tier
Agent where such Second Tier Agent has agreed with the Settlement
System Administrator substantially to the effect, inter alla,
that:
(a) the Second Tier Agent will effect and maintain in full force
and effect with first class insurers insurance with respect to
(i) physical loss or damage to each of such Second Tier Hardware
and Second Tier Software and (ii) corruption of such Second Tier
Software and related computer data, in each case in an amount
equivalent to its correction cost;
(b) the Second Tier Agent shall promptly on request provide to
the Settlement System Administrator an insurance broker's
certificate having a form and content as specified in sub-section
12.3 and evidence that the Second Tier Agent has paid the
relevant premiums; and
(c) if the Second Tier Agent has not so insured and paid the
relevant premiums the Settlement System Administrator-shall, on
behalf of the Second Tier Agent, take out such insurance and pay
such premiums and recover the cost of the same from the Second
Tier Agent; and
provided that, in the case of (c) above, where:
(i) the Settlement System Administrator is aware that the Second
Tier Agent has not so insured in accordance with (a) above; and
(ii) a period of fourteen days since the Settlement System
Administrator first became aware that the Second Tier Agent had
not insured in accordance with (a) above has elapsed, during
which period the Second Tier Agent has not so insured in
accordance with (a) above,
the Settlement System Administrator shall so take out such
insurance in the name of such Second Tier Agent unless, after
having sought, to the extent that it is able, such information
from the Second Tier Agent as is necessary for the purposes of
obtaining such insurance, it has failed to obtain such
information; and
12.1.2 professional indemnity insurance as Settlement System
Administrator in an amount of not less than pounds 20,000,000 any one
claim and pounds 20,000,000 all claims in any one year (or such greater
amount as may from time to time be reasonably required by the
Executive Committee after consultation with the Settlement System
Administrator or such lesser amount as may from time to time be
agreed between the Executive Committee and the Settlement System
Administrator).
12.2 Application of proceeds: The Settlement System Administrator
shall use all reasonable endeavours:
(a) in the case of insurance referred to above where it is the
insured to make and collect claims promptly; and
(b) in the case of insurance where its Second Tier Agent is the
insured, to procure that such Second Tier Agent makes and
collects claims promptly,
and shall apply and, as appropriate; shall procure that its
Second Tier Agent applies, all moneys so received by it in
respect of the insurance referred to in this Section 12 in or
towards making good the loss and fully repairing the damage or
(as the case may be) satisfying the relevant liability in respect
of which such moneys were receivable or reimbursing the cost of
the same.
12.3 Information requirements: The Settlement System
Administrator shall promptly supply the Executive Committee upon
request from time to time with an insurance broker's certificate
in form and content reasonably satisfactory to the Executive
Committee confirming that cover has been effected, whether by it
or its Second Tier Agent, in respect of the insurance referred to
in subsection 12.1 and giving reasonable details of the terms and
conditions of such insurance.
12.4 Default: If the Settlement System Administrator shall
default in the performance of its obligations under this Section
12, the Executive Committee shall have the right (but shall not
be obliged) to make the appropriate insurance arrangements and
shall have the right to recover from the Settlement System
Administrator any costs incurred (including any handling fee).
12.5 Change in insurance requirements:
12.5.1If at the request of the Executive Committee the sums
insured under the Settlement System Administrator's professional
indemnity insurance are increased, the amount of any resultant
increase in the insurance premium shall be recovered by the
Settlement System Administrator (assuming that it has borne the
same) in accordance with the Charging Procedure.
12.5.2 If at the request of the Executive Committee the amount of the
excess or deductible under the Settlement System Administrator's professional
indemnity insurance is increased and there is a resultant
decrease in the insurance premium payable, the amount of such
decrease shall be reimbursed by the Settlement System
Administrator to Pool Members under the Charging Procedure
(assuming that Pool Members have already paid the Settlement
System Administrator on the basis of a higher premium) provided
that in the event of a claim against the Settlement System
Administrator in respect of which a payment is or (but for such
increase in the excess or deductible) would have been made to the
Settlement System Administrator under its professional indemnity
insurance Pool Members shall be required themselves to bear in
aggregate the first part of any such claim up to the amount of
such increased excess or deductible and in satisfaction of that
obligation shall reimburse the same to the Settlement System
Administrator in accordance with the Charging Procedure.
12.5.3 If in any other case the sums insured under the Settlement System
Administrator's professional indemnity insurance are changed from
the amounts referred to in paragraph 12.5.1 or the amount of the
excess or deductible thereunder is changed from the amount
referred to in paragraph 12.5.2, any resultant increase in the
insurance premium payable shall be for the Settlement System
Administrator's own account and shall not be recoverable by it
from the other Parties.
13. TERMINATION OF THE APPOINTMENT OF ESIS
13.1 Termination: The appointment of ESIS as Settlement System
Administrator may be terminated either by the resignation of ESIS
in accordance with Section 14 or by the removal of ESIS in
accordance with Section 15, 16 or 17.
13.2 Termination pursuant to Clause 67.4: If this Agreement is
terminated pursuant to Clause 67.4 then:
(a) if the effective date of termination of this Agreement is
after 31st March, 1999, the Termination Date shall be deemed for
the purposes of allocating costs between ESIS and Pool Members to
be 31st March, 1999 and the provisions of Section 23 shall apply;
and
(b) if the effective date of termination of this Agreement is on
or before 31st March, 1999, the Termination Date shall be deemed
for the purposes of allocating costs between ESIS and Pool
Members to be 31st March, 1999 and the provisions of Section 24
shall apply.
14. RESIGNATION BY ESIS
Resignation procedure: After consultation between the Settlement
System Administrator and the Executive Committee and the Director
having given his prior written consent ESIS may give 12 months'
notice in writing (the "Resignation Notice") to the Executive
Committee (which shall forthwith notify all Pool Members) and the
Director of its intention to resign as Settlement System
Administrator on a date (in this Section 14, the "Termination
Date") not earlier than 1st April, 1999 and, subject to Section
20, the appointment of ESIS as Settlement System Administrator
shall terminate on the Termination Date.
15. REMOVAL OF ESIS AFTER 31ST MARCH, 1999
Removal procedure: After consultation between the Settlement
System Administrator and the Executive Committee ESIS may be
removed as Settlement System Administrator at any time after 31st
March, 1999 where:
(a) a resolution of the Pool Members in general meeting
resolving to remove ESIS as Settlement System Administrator has
been passed by either:
(i) Pool Members holding not less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members or deemed effective
pursuant to Clause 13.5; or
(ii) Pool Members holding less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members, but only where there
is no more than one dissentient Pool Member;
(b) the Director has given his prior written consent in the
light of the resolution passed in accordance with paragraph (a)
above; and
(c) the Executive Committee has given the Settlement System
Administrator after such resolution has been passed or deemed
effective (which the Executive Committee shall promptly do) 12
months' notice in writing (in this Section 15, the "Removal
Notice") of such removal (or such longer period of notice as the
Director may determine in response to the application made to him
for the purposes of paragraph (b) above) to take effect on the
date being no earlier than 1st April, 1999 specified in the
Removal Notice (in this Section 15, the "Termination Date") and,
subject to Section 20, the appointment of ESIS as Settlement
System Administrator shall terminate on the Termination Date.
16. REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999
Removal procedure: After consultation between the Settlement
System Administrator and the Executive Committee ESIS may be
removed as Settlement System Administrator at any time on or
before 31st March, 1999 where:
(a) a resolution of the Pool Members in general meeting
resolving to remove ESIS as Settlement System Administrator has
been passed by either:
(i) Pool Members holding not less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members or deemed effective
pursuant to Clause 13.5; or
(ii) Pool Members holding less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members, but only where there
is no more than one dissentient Pool Member;
(b) the Director has given his prior written consent in the
light of the resolution passed in accordance with sub-paragraph
(a) above; and
(c) the Executive Committee has given the Settlement System
Administrator after such resolution has been passed or deemed
effective (which the Executive Committee shall promptly do) 12
months' notice in writing (in this Section 16, the Removal
Notice") of such removal (or such longer period of notice as the
Director may determine in response to the application made to him
for the purposes of paragraph (b) above) to take effect on the
date falling before 1st April, 1999 specified in the Removal
Notice (in this Section 16, the "Termination Date") and, subject
to Section 20, the appointment of ESIS as Settlement System
Administrator shall terminate on the Termination Date.
17. REMOVAL OF ESIS
17.1 Breach of obligations capable of remedy: If the Settlement
System Administrator fails in any persistent, material respect or
in any single, major respect to perform or comply with any of the
obligations expressed to be assumed by it under the SSA
Arrangements and such failure, in the reasonable opinion of the
Executive Committee, is capable of remedy, the Executive
Committee shall have the right to give notice in writing (the
"Remediable Removal Notice") to the Settlement System
Administrator giving details of the relevant failure and
requiring that such failure be remedied within 30 days (or such
longer period as may be necessary but in any event within 90 days
or any longer period as may be reasonable and agreed between the
Settlement System Administrator and the Executive Committee) from
the date of receipt by the Settlement System Administrator of the
Remediable Removal Notice and, if a longer period is reasonable,
that within 30 days from the said date of receipt the Settlement
System Administrator agree a timetable with the Executive
Committee for the remedy of such failure (such agreement not to
be unreasonably withheld).
17.2 Breach of obligations incapable of remedy: If the Settlement
System Administrator fails in any persistent, material respect or
in any single, major respect to perform or comply with any of the
obligations expressed to be assumed by it under the SSA
Arrangements and such failure, in the reasonable opinion of the
Executive Committee, is incapable of remedy, the Executive
Committee shall have the right to give notice in writing (in this
sub-section 17.2, the "Irremediable Removal Notice") to the
Settlement System Administrator giving details of the relevant
failure and stating that, in the reasonable opinion of the
Executive Committee, the Settlement System Administrator is in
breach of the terms of the SSA Arrangements and such breach is
incapable of remedy.
17.3 Insolvency: If the Settlement System Administrator:
(a) is unable to pay its debts (within the meaning of section
123(1) or (2) of the Insolvency Act 1986, but subject as
hereinafter provided in this sub-section 17.3) or if any
voluntary agreement is proposed in relation to it under section 1
of that Act or if the Settlement System Administrator 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 Executive
Committee); or
(b) has 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 appointed; or
(c) has an administration order under section 8 of the
Insolvency Act 1986 made in relation to it; or
(d) passes any resolution for winding-up other than a resolution
previously approved in writing by the Executive Committee; or
(e) becomes subject to an order by the High Court for
winding-up,
the Executive Committee shall have the right to give notice in
writing (in this sub-section 17.3, the "Irremediable Removal
Notice") to the Settlement System Administrator referring to such
event.
For the purposes of paragraph (a) above section 123(1)(a) of the
Insolvency Act 1986 shall have effect as if for "pounds 750" there were
substituted "pounds 250,000" and, further, the Settlement System
Administrator shall not be deemed to be unable to pay its debts
for the purposes of paragraph (a) above if any such demand as is
mentioned in the said section is being contested in good faith by
the Settlement System Administrator with recourse to all
appropriate measures and procedures.
17.4 Change of Status: If ESIS ceases to be a wholly-owned
subsidiary of NGC then, subject to the prior written consent of
the Director having been obtained, the Executive Committee shall
have the right to give notice in writing (in this subsection
17.4, the "irremediable Removal Notice") to the Settlement System
Administrator referring to such event.
17.5 Removal Procedure: Subject to:
(a) the Executive Committee having given the Settlement System
Administrator a Remediable Removal Notice, and either the
Settlement System Administrator having been unwilling or unable
to remedy the failure within 30 days from the date of receipt of
the Remediable Removal Notice (or such longer period as may be
permitted under subsection 17.1) or, as the case may be, within
the period provided in the timetable agreed with the Executive
Committee for the remedy of such failure; or
(b) the Executive Committee having given the Settlement System
Administrator an Irremediable Removal Notice,
ESIS may be removed as Settlement System Administrator where:
(i) a resolution of the Pool Members in general meeting
resolving to remove ESIS as Settlement System Administrator has
been passed by either:
(a) Pool Members holding not less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members or deemed effective
pursuant to Clause 13.5; or
(b) Pool Members holding less than 80 per cent. of the Total
Votes of Pool Members who are entitled to vote in person or by
proxy at a general meeting of Pool Members, but only where there
is no more than one dissentient Pool Member;
(ii) the Director has given his prior written consent in the
light of the resolution passed in accordance with sub-paragraph
(i) above; and
(iii) the Executive Committee has given the Settlement System
Administrator after such resolution has been passed or deemed
effective (which the Executive Committee shall promptly do) 12
months' notice in writing (in this Section 17, the "Removal
Notice") of such removal to take effect on the date specified in
the Removal Notice (in this Section 17, the "Termination Date")
and, subject to Section 20, the appointment of ESIS as Settlement
System Administrator shall terminate on the Termination Date.
18. POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION AND REMOVAL
Executive Committee Powers: At any time and from time to time on
or after a Resignation Notice or a Removal Notice has been given
by or on behalf of the Executive Committee to the Settlement
System Administrator, the Executive Committee shall have the
right:
(a) subject to all security, safety and operational constraints
of the Settlement System Administrator current at the time the
Resignation Notice or (as the case may be) the Removal Notice is
given, to enter (and any third party reasonably nominated by the
Executive Committee shall have the right to enter) upon
reasonable notice any premises where the Settlement System
Administrator performs any of its functions relating to the
Settlement System to inspect any aspect of the Settlement System,
to ensure maintenance of service levels and to facilitate the
transfer of service, responsibilities and assets pursuant to
Section 21; and
(b) on such reasonable basis as may be agreed with the
Settlement System Administrator (such agreement not to be
unreasonably withheld), to communicate with and consult such of
the Settlement System Administrator's staff as are available as
the Executive Committee reasonably considers to be essential to
the Settlement System for a period up to 12 months following the
Termination Date.
19. APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM ADMINISTRATOR
19.1 Approval of the Director: The Parties undertake with each
other that no successor Settlement System Administrator shall be
appointed without the written approval of the Director first
having been obtained.
19.2 Discharge: With effect from the Termination Date ESIS in its
capacity as Settlement System Administrator shall (save as
provided in sub-sections 5.4, 8.6, 12.2, 20.2 and Section 21 and
save as regards any rights and liabilities accrued as at the date
of its retirement or removal) be discharged from any further
obligation and shall have no further rights under the SSA
Arrangements but shall remain entitled to the benefit of the
provisions of subsections 4.3 to 4.9 (inclusive) and any other
provision of this Agreement providing for an indemnity or the
payment of other costs or charges in favour of the Settlement
System Administrator, and its successor and (save as provided in
this sub-section 19.2) each of the other Parties shall have the
same rights and obligations amongst themselves as they would have
had if such successor had been a party to this Agreement in place
of ESIS as Settlement System Administrator.
20. CONTINUATION OF SERVICES
20.1 Continuation of Services: Subject to sub-section 20.5, the
Executive Committee shall have the right to postpone the
Termination Date beyond its original date on a maximum of four
occasions and, on each occasion, for a period of three months
(each an Extension Period") and ESIS agrees to continue to act as
Settlement System Administrator for the duration of each
Extension Period. The Executive Committee shall exercise such
right by written notice to the Settlement System Administrator
specifying the duration of each Extension Period (each an
"Extension Notice"), and the Termination Date shall thereupon be
postponed to the last day of the then proposed Extension Period.
20.2 Post-Termination Services: The Contract Manager may, by
placing an Order, request the Settlement System Administrator to
provide such training and support services as are set out in the
Menu of Consultancy Services Prices and the Menu of Development
Services Prices (each as defined in the Appendix hereto) as the
Executive Committee may reasonably require for the Post
Termination Period. Any such Order shall specify the length of
time for which such services are required. Subject to sub-section
20.4, the Settlement System Administrator shall be entitled to
charge for such services in accordance with the Menu of Prices
current immediately prior to the Termination Date (subject to
indexation in accordance with the terms of the Appendix hereto)
but shall only be required to provide such services to the extent
that the resources are at the time employed by ESIS or were
formerly employed by ESIS and are at the time employed within the
NGC group of companies.
20.3 Extension Period Charges: The Settlement System A
dministrator shall have the right to charge for Services rendered
during the Extension Period in accordance with Section 1 of Part
H of the Appendix hereto.
20.4 Post-Termination Period Charges: The Settlement System
Administrator shall charge only a nominal sum (being not more
than pounds 100 in the aggregate) for such training and support
services rendered in accordance with sub-section 20.2 where the
Termination Date is referable to a Resignation Notice given by
ESIS pursuant to Section 14 or a Removal Notice given by the
Executive Committee pursuant to Section 17.
20.5 Two year limit: Notwithstanding any other provision of this
Agreement, the Executive Committee shall not be entitled to
require ESIS to remain appointed as Settlement System
Administrator after the date falling 24 months after the date on
which:
(a) the Settlement System Administrator gives the Executive
Committee a Resignation Notice; or (as the case may be)
(b) the Executive Committee gives the Settlement System
Administrator a Removal Notice.
20.6 Fullforce and effect: All the provisions of this Schedule
and the Appendix hereto shall remain in full force and effect for
the duration of the Extension Period (if any) and the
Post-Termination Period (if any) to the extent necessary to give
effect to the terms of this Section 20.
21. TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS
21.1 Transfer of services, responsibilities and assets: Upon a
successor Settlement System Administrator being appointed under
Section 19 and accepting such appointment ESIS in its capacity as
outgoing Settlement System Administrator shall:
(a) grant to a nominee of the Pool Members (who may be the
successor Settlement System Administrator) an unrestricted,
non-exclusive, perpetual and transferable licence of all
Software, all related documentation and other similar
intellectual property belonging to the outgoing Settlement System
Administrator free of charge, to use, copy, adapt and translate
such Software and other property for any purpose related to the
operation of the Settlement System;
(b) use all reasonable endeavours to novate, or procure the
novadon of, any licence or other agreement to use and/or maintain
the Software to such successor;
(c) transfer to such successor all Hardware belonging to the
outgoing Settlement System Administrator and essential to such
successor to carry out such successor's duties and
responsibilities under the SSA Arrangements and which is not
otherwise readily obtainable by such successor;
(d) make over to such successor copies of all such records,
manuals and data and other information not referred to in
paragraph 21.1(a) and in the ownership or under the control of
the outgoing Settlement System Administrator and relating to the
operation, and necessary for the proper functioning of the
Settlement System; and
(e) without prejudice to the foregoing provisions of this
Section 21, transfer or otherwise make available to such
successor all assets (excluding freehold and leasehold property),
equipment, facilities, rights, know-how and transitional
assistance which it possesses and which is necessary for such
successor to have to operate the Settlement System in accordance
with the SSA Arrangements and which is not otherwise readily
obtainable by such successor,
in each case on such reasonable terms (other than as to
consideration) as may be agreed between ESIS, such successor and
the Executive Committee (and, in default of agreement, the
dispute shall be referred to arbitration in accordance with
Clause 83) and in consideration of the payment of such sums as
are referred to in sub-section 21.2. ESIS further agrees, in
consideration of the payment of such sums as are referred to in
sub-section 21.2, to co-operate with any such successor and the
Executive Committee so that the transfer of duties, services,
responsibilities, assets and know-how to such successor is
carried out causing as little disruption to the operation of the
Settlement System and inconvenience to the Parties as is
practical in all the circumstances.
21.2 Asset Transfer Costs:
21.2.1 The consideration referred to in sub-section 21.1 is:
(a) in respect of:
(i) the right to use all Software, related documentation and
other similar intellectual property referred to in paragraph
21.1(a), a peppercorn rental;
(ii) all Hardware referred to in paragraph 21.1 (c), the fair
market value of the same as at the date of transfer; and
(iii) the copies referred to in paragraph 21.1(d), the cost to
the outgoing Settlement System Administrator of making such
copies;
(b) in respect of:
(i) charges to Pool Members which the Executive Committee has
expressly requested ESIS in its capacity as Settlement System
Administrator to defer and the Deferred Settlement Project
Expenditure, the principal amount deferred and any interest due
and outstanding on that principal amount and all other amounts
payable in discharging any financing arrangements undertaken in
relation to such deferred expenditure provided that in the case
of Deferred Settlement Project Expenditure the consideration
shall be the net book value of the Software at that date; and
(ii) the co-operation referred to in the last sentence of sub
section 21.1 and such other matters as are within subsection 21.1
(other than those in paragraph 21.1 (b) for which there shall be
no charge made) but not paragraphs (a) or (b)(i) or (ii) above, a
nominal amount only in respect of the co-operation (with no
additional charge for matters such as management time expended)
and otherwise at fair market value.
21.2.2 Any payment made by all or any of the Pool Members to ESIS
in its capacity as outgoing Settlement System Administrator under
this Section 21 shall be without prejudice to any rights and
remedies which the Pool Members (or any of them) may have against
ESIS as Settlement System Administrator arising under the SSA
Arrangements.
21.3 Transition services: During the period from the date of the
Removal Notice or, as the case may be, the Resignation Notice to
the Termination Date or, as the case may be, the last day of the
Post-Termination Period, the Contract Manager may give the
outgoing Settlement System Administrator an Order requesting the
outgoing Settlement System Administrator to:
(a) provide training and systems support for the successor
Settlement System Administrator;
(b) provide parallel running with the successor Settlement
System Administrator;
(c) move, relocate or hand over to the successor Settlement
System Administrator the property it is required to transfer
pursuant to paragraphs 21.1(a) to 21.1(e) (inclusive);
(d) supply to the successor Settlement System Administrator
procedural or practice documentation not already recorded in
writing; and
(e) provide employees to attend upon the successor Settlement
System Administrator for all or any of the purposes referred to
in paragraphs (a), (b) or (c) above.
21.4 Disputes: Any dispute arising under or in connection with
this Section 21 shall be referred to arbitration in accordance
with Clause 83.
22. ALLOCATION OF COSTS ON RESIGNATION
Allocation of costs on resignation: Subject to Section 28(b), if
the appointment of ESIS as Settlement System Administrator shall
be terminated by the resignation of ESIS in accordance with
Section 14:
(a) the Pool Members shall reimburse ESIS the Pool Agreed
Liabilities; and
(b) ESIS shall be responsible for, and shall not have recourse
to any Pool Member for all or any part of:
(i) the Transition Costs (and shall refund to Pool Members in
accordance with sub-section 2.7 of Part J of the Appendix hereto
any sums already received by ESIS on that account); and
(ii) the Outstanding Liabilities; and
(c) the liability of Pool Members for the payment of charges for
the provision of Services up to the Termination Date and during
the PostTermination Period shall be as set out elsewhere in this
Schedule and the Appendix hereto.
23. ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999
Allocation of costs on removal: Subject to Section 28(b), if the
appointment of ESIS as Settlement System Administrator shall be
terminated by the removal of ESIS in accordance with Section 15:
(a) the Pool Members shall reimburse ESIS the Pool Agreed
Liabilities;
(b) ESIS shall be responsible for, and shall not have recourse
to any Pool Member for all or any part of, the Outstanding
Liabilities; and
(c) the liability of Pool Members for the payment of charges for
the provision of Services up to the Termination Date and during
the PostTermination Period shall be as set out elsewhere in this
Schedule and the Appendix hereto.
24. ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH, 1999
Allocation of costs on removal: If the appointment of ESIS as
Settlement System Administrator shall be terminated by the
removal of ESIS in accordance with Section 16:
(a) the Pool Members shall reimburse ESIS:
(i) the Pool Agreed Liabilities;
(ii) the Pool Apportioned Outstanding Liabilities; and
(iii) the Compensation;
(b) ESIS shall be responsible for, and shall not have recourse
to any Pool Member for all or any part of, the SSA Apportioned
Outstanding Liabilities; and
(c) the liability of Pool Members for the payment of charges for
the provision of Services up to the Termination Date and during
the PostTermination Period shall be as set out elsewhere in this
Schedule and the Appendix hereto.
ESIS shall take all reasonable steps and shall otherwise use all
reasonable endeavours to mitigate the Pool Apportioned
Outstanding Liabilities.
25. ALLOCATION OF COSTS ON REMOVAL
Allocation of costs on removal: Subject to Section 28(b), if the
appointment of ESIS as Settlement System Administrator shall be
terminated by the removal of ESIS in accordance with Section 17:
(a) the Pool Members shall reimburse ESIS the Pool Agreed
Liabilities; and
(b) ESIS shall be responsible for, and shall not have recourse
to any Pool Member for all or any part of:
(i) the Transition Costs (and shall refund to Pool Members in
accordance with sub-section 2.7 of Part J of the Appendix hereto
any sums already received by ESIS on that account);
(ii) the Outstanding Liabilities;
(c) the liability of Pool Members for the payment of charges for
the provision of Services up to the Termination Date and during
the PostTermination Period shall be as set out elsewhere in this
Schedule and the Appendix hereto.
26 REIMBURSEMENT BY POOL MEMBERS
Reimbursement by Pool Members: In respect of any sum to be
reimbursed by Pool Members to the Settlement System Administrator
pursuant to Section 22, 23, 24 or 25:
(a) ESIS may recover such sum in accordance with sub-paragraph
2.3 of Part J of the Appendix hereto;
(b) Pool Members shall be liable on a several basis according to
their respective Contributory Shares as at the Termination Date
provided that, if a Pool Member shall fail to pay its
Contributory Share of such sum within 45 days after the due date
for payment therefor, the other Pool Members shall be jointly and
severally liable to pay such unpaid sum (and liable as between
themselves according to their respective Contributory Shares,
calculated on the basis that the Points allocated to the
defaulting Pool Member are disregarded); and
(c) any Pool Member (a "non-paying Pool Member") which fails to
pay its Contributory Share in the circumstances of Section 26(b)
shall indemnify and keep indemnified each Pool Member on demand
against all sums properly paid by such Pool Member in relation to
that nonpaying Pool Member's Contributory Share pursuant to
Section 26(b).
27. DIRECTOR'S INVOLVEMENT
Director's involvement: If, in giving written consent pursuant to
Section 14, 15(b), 16(b) or 17.5(ii) the Director shall impose
conditions or qualifications which render it impracticable to
give effect to the terms of any of Sections 19 to 26 (inclusive)
as written, ESIS and the Executive Committee shall promptly
negotiate in good faith to agree amendments to the SSA
Arrangements (including, if appropriate, to the charging
principles) to give effect to the Director's conditions or
qualifications and, in default of agreement as to such amendments
within six months after the commencement of such negotiations,
the Settlement System Administrator or the Executive Committee or
any Pool Member shall be entitled to refer the dispute to
arbitration in accordance with Clause 83. In the conduct of such
negotiations, ESIS and the Executive Committee shall have regard
both to the Menus of Prices and to the costs which will be
incurred by ESIS in continuing to provide Services to satisfy the
Director's conditions or qualifications, it being understood
that, where such costs are properly incurred, it is the parties'
intention that ESIS should be entitled to recover the same from
Pool Members.
28. POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES
Breach by Pool Members and/or Executive Committee: Without
prejudice to Clause 66 if the Pool Members acting collectively,
the Executive Committee, the Contract Manager or the Chief
Execubve's Office fail, or any of the same is -deemed pursuant to
Section 1.2 or Section 29 to have failed, in any persistent,
material respect or in any single, major respect to perform or
comply with any of its or their obligations under the SSA
Arrangements and, if such failure is not capable of remedy or is
capable of remedy, but is not remedied within 30 days from the
date of receipt by the Executive Committee of notice from the.
Settlement System Administrator giving details of the relevant
failure and requiring its remedy (or such longer period as may be
necessary but in any event within 90 days or any longer period as
may be reasonable and agreed between the Settlement System
Administrator and the Executive Committee) and, where such
reasonable period is longer than 30 days, a timetable for the
remedy of such failure is not agreed by the Executive Committee
with the Settlement System Administrator (such agreement not to
be unreasonably withheld) within 30 days from the said date of
receipt, then ESIS may(the prior written consent of the Director
having been obtained) :
(a) give not less than 12 months' notice in writing to the
Executive Committee (which shall forthwith notify all Pool
Members) and the Director of its resignation specifying the date
thereof, and the appointment of ESIS as Settlement System
Administrator shall terminate on that date and the provisions of
Section 24 shall apply as if the appointment of ESIS as
Settlement System Administrator shall have been terminated by its
removal in accordance with Section 16 (but disregarding for this
purpose any requirement to pay Compensation if the appointment of
ESIS as Settlement System Administrator in fact terminates after
31st March, 1999); or
(b) give notice to all Pool Members, the Executive Committee and
the Chief Executive's Office identifying such irremediable breach
or failure to remedy or agree a timetable for remedy of a
remediable breach and, if at any time after the service of such
notice and while such breach is continuing, the Settlement System
Administrator resigns or is removed pursuant to Section 14, 15,
16 or 17 then, notwithstanding Sections 22, 23 and 25, the
provisions of Section 24 shall apply as if the appointment of
ESIS as Settlement System Administrator shall have been
terminated by its removal in accordance with Section 16 (but
disregarding for this purpose any requirement to pay Compensation
if the appointment of ESIS as Settlement System Administrator in
fact terminates after 31st March, 1999).
29. VARIATION OF SERVICE LINES
If the Executive Committee engages a person other than the
Settlement System Administrator to perform a Service contained in
a Service Line or part thereof which is listed in the Sole
Supplier Index there shall be deemed to be a failure by the
Executive Committee in a single, major respect to comply with its
obligations under the SSA Arrangements or the Settlement System
Administrator shall be entitled to insist upon due and proper
performance of the SSA Arrangements provided that the mere
variation of any Service Line to a state where no Service is to
be provided or can be Ordered thereunder shall not be deemed to
be such a failure.
30. EXTENSION OF TIME
If performance of the terms of the SSA Arrangements by the
Settlement System Administrator is delayed by reason of the act
or default of a Party or a Meter Operator Party, the Settlement
System Administrator shall be entitled to a reasonable extension
of time for performance and to any reasonable additional costs
which it can demonstrate to the Executive Committee were directly
incurred as a result of such delay provided always and on
condition that the Settlement System Administrator shall notify
the Executive Committee in writing within a reasonable time of
the circumstances giving rise to the delay in performance.
31. CONTRACT MANAGEMENT RULES
31.1 Contract Management Rules: The Parties agree that, whilst
the Contract Management Rules do not constitute or evidence
legally binding obligations, they are indicative of best practice
with respect to certain aspects of the dayto-day operation of the
SSA Arrangements and include practices and procedures which
either have been proven or are expected to facilitate that
day-to-day operation. The Parties agree that a failure by a Party
to comply with the Contract Management Rules shall not of itself
constitute a breach of the SSA Arrangements nor give rise to any
sanction against that Party.
31.2 Amendments to the Contract Management Rules: The Contract
Management Rules may be amended, modified or varied by agreement
between the Account Manager and the Contract Manager in
accordance with procedures to be agreed between themselves from
time to time.
32. GROSS MARGIN
32.1 Auditor's Report: The Settlement System Administrator shall
procure that its auditor reports to the Executive Committee
within one month after (a) the signature of the Settlement System
Administrator's annual accounts and (b) a Removal Notice being
given pursuant to Section 16 the figure that represents the Gross
Margin for the financial year in respect of which such annual
accounts have been prepared or (as the case may be) the twelve
month period ending on the date of the Removal Notice.
32.2 Negotiations:
32.2.1 If, in respect of the SSA Accounting Period to which the
annual accounts referred to in sub-section 32.1 relate, the Gross
Margin expressed as a percentage of the aggregate of the Total
Sums Due for that period is more than 25 per cent. or less than
15 per cent., Pool Members (acting through the Executive
Committee) or the Settlement System Administrator may by notice
to the other request that the Menus of Prices be reviewed.
32.2.2 If notice is given as provided in paragraph 32.2.1 above,
the Executive Committee and the Settlement System Administrator
may (but shall not be obliged to) agree to conduct such a review
of the Menus of Prices but if they do so agree and reach
agreement as to the changes in prices, any such price change
shall be effective from the beginning of the SSA Accounting
Period immediately following the SSA Accounting Period referred
to in paragraph 32.2.1 above.
32.2.3 The provisions of this sub-section 32.2 are without
prejudice to any other review or revision of the Menus of Prices
required or permitted pursuant to other provisions of this
Schedule or the Appendix hereto.
33. FORCE M~JEURE
If by reason of Force Majoure the Settlement System Administrator
shall be unable to carry out all or any of its obligations under
this Agreement, the provisions of Clause 74 shall have effect
provided that the Settlement System Administrator shall have the
right to recover in respect of any period of Force Majoure (to
the extent that it would not otherwise have been able to recover
by reason of the Force Majoure):
(a) the standing charge for Consultancy Services referred to in
sub-section 4.1 of Part G of the Appendix hereto time-apportioned
for that period;
(b) the standing charge for Development Services referred to in
sub-section 5.1 of Part G of the Appendix hereto time-apportioned
for that period;
(c) the Monthly Minimum Manpower Charge Commitment referred to
in sub-section 10.1 of Part G of the Appendix hereto (less the
sum of (a) and (b) above) time-apportioned for that period;
(d) to the extent that the sum of (aj, (b) and (c) above falls
short of the Minimum Contract Price time-apportioned to that
period, the amount of that shortfall;
(e) Deferred Settlement Project Expenditure;
(f) Third Party Costs invoiced to the Settlement System
Administrator in that period; and
(g) the Suppliers Second Tier Charge time-apportioned for that
period together with any under-recovery and less any
over-recovery on the STSSC Account.
34. CONFIDENTIALLY
Pool Members shall jointly and severally procure that the
Executive Committee, the Chief Executive's Office and the
Contract Manager shall use all reasonable endeavours to preserve
the confidentiality of, and not directly or indirectly reveal,
report, publish, disclose or transfer the Menus of Prices or the
Gross Margin, or any part of or any information contained in or
relating to the Menus of Prices or the Gross Margin (the
"Relevant Information") except:
(a) where the Relevant Information is in the public domain
otherwise than by breach by a Pool Member, the Executive
Committee, the Chief Executive's Office or the Contract Manager
of this Agreement;
(b) to the extent that the Settlement System Administrator gives
its prior consent in writing, it being acknowledged that such
consent has been given for disclosure of the Relevant Information
relating to the Accounting Period beginning on 1st April, 1994;
(c) to the extent required by law, any Act of Parliament or any
Competent Authority;
(d) to comply with the conditions of any Licence or any document
referred to in the Licence with which the party is required to
comply;
(e) to the Executive Committee's consultants or professional
advisers or to the Pool Auditor; or
(f) to the extent required by any judicial or arbitral process
having jurisdiction over the Pool Members, the Executive
Committee, the Chief Executive's Office or the Contract Manager,
as the case may be,
provided that the Executive Committee and its staff shall be
entitled to keep on display and make available for inspection to
(but not copying by) Pool Members (and to notify Pool Members
that there is on display and available for inspection) at the
office of the staff of the Executive Committee all Relevant
Information.
35. NOTICES
Notices: For the purposes of this Schedule 4 and the Appendix
hereto, Clause 75 shall apply as if each of the Account Manager
and the Contract Manager is a Party with the following address
and facsimile number:
(a) Account Manager: Energy Settlements and Information Services
Limited,
Fairham House,
Green Lane,
Clifton,
Nottingham NG11 9LN
Facsimile number: 0115-945 6807;
(b) Contract Manager: The Electricity Pool of England
and Wales,
2nd Floor,
15 Bloomsbury Square,
London WC1A 2LP
Facsimile number: 0171-831 4813
<PAGE>
APPENDIX TO SCHEDULE 4
THE SERVICES
CONTENTS
PART A - PRELlMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
1.2 Interpretation
PART B - THE SERVICES
1. CATEGORIES OF SERVICES
2. PRODUCTION SERVICES
2.1 Production Services
2.2 Types of Production Services
2.3 Continuous Production Services
2.4 Ad Hoc Production Services
2.5 Limits on Production Services
3. CONSULTANCY SERVICES
4. DEVELOPMENT SERVICES
5. NON-MENU SERVICES
6. PRICE ON REQUEST ITEMS
7. SOLE SUPPLIER SERVICES
7.1 Sole Supplier Services
7.2 Status of Sole Supplier Services
7.3 Variations of Sole Supplier Services
7.4 Review of Sole Supplier Index
8. MANAGEMENT OF RESOURCES
9. MARKET TESTS
9.1 Market Tests
9.2 Timing
9.3 Settlement System Administrator's involvement
10. PERFORMANCE IMPROVEMENT PROGRAMMES
10.1 Performance Improvement Programmes
10.2 Close Co-operation
10.3 Cost-benefit Sharing
10.4 Procedure
10.5 Costs of PlPs
10.6 Division of Cost Savings
10.7 Cost Savings by Pool Members
10.8 Non-PIP Modifications
11. CONTRACT REPORTING
PART C - NEW REQUIREMENTS
1. CHANGES TO SERVICES
1.1 Changes to Services
1.2 Negotiation
1.3 Agreed Changes to Services
1.4 Formal documentation
1.5 Addition to Sole Supplier Index
2. PRICE ON REQUEST
2.1 Request for a price
2.2 Basis of the price
2.3 Price on Request
2.4 Amendment Procedure
PART D - VARLATION MECHANICS
1. INDEXATION
1.1 Indexation
1.2 Mechanics
2. VARIATION MENUS
2.1 Variation Menus
2.2 Mechanics
3. RENT COSTS
3.1 Changes in rent
3.2 Mechanics
4. VOLUME CHANGES
4.1 Units of Variation
4.2 Limits
5. STANDING CHARGES
6. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT
6.1 Monthly Minimum Manpower Charge Commitment
6.2 Reconciliation
7. MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES
8. INCONSISTENCIES IN THE SSA ARRANGEMENTS
PART E - ORDERING SERVICES: GENERAL PROVISIONS
1. GENERAL REQUIREMENT FOR ORDERS
2. EXCEPTIONS TO THE REQUIREMENT FOR ORDERS
3. ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS
3.1 Entitlement to issue Orders and requests
3.2 Compliance with Orders and requests
3.3 Signature of requests
3.4 Signature of Orders
3.5 Limited delegation
3.6 Criteria for Orders
3.7 Authority of Pool Members, the Executive Committee and the
Chief Executive
4. SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS
4.1 Recovery of charges
4.2 Compliance with the Director's directions
4.3 Ratification
4.4 Express authority
4.5 Reliance on documents believed genuine
4.6 General meetings
4.7 Exceptions
4.8 Reference to the Director
5. JOB NUMBERS
5.1 Job Numbers
5.2 Extensions to Orders
6. SUPPLEMENTAL PROVISIONS
6.1 Changing resources
6.2 Ordering ethos
6.3 Resource records
6.4 Dedication of resource
6.5 Failure to supply resource
PART F - ORDERING SERVICES: SPECIFIC PROVISIONS
1. ORDERING PRODUCTION SERVICES
1.1 Continuous Production Services
1.2 Volume changes
1.3 Ad Hoc Production Services
2. ORDERING CONSULTANCY SERVICES
2.1 Minimum manpower periods
2.2 Extensions of manpower
2.3 Short Notice Ordering
3. ORDERING DEVELOPMENT SERVICES
3.1 Project Template
3.2 M inimum manpower periods
3.3 Extensions of manpower
3.4 Short Notice Ordering
3.5 Fixed Price
4. ORDERING NON-MENU SERVICES
5. REQUESTS BY DIRECTOR
6. INDIVIDUAL POOL MEMBER REQUESTS
7. THIRD PARTY PROCUREMENT
7.1 Third Party Contract
7.2 Exceptional circumstances
PART G - CHARGES FOR SERVICES: GENERAL PRINCIPLES
1. GENERAL
2. CHARGES FOR PRODUCTION SERVICES
2.1 Continuous Production Services
2.2 Ad Hoc Production Services
3. CHARGES FOR SECOND TIER METERING
3.1 Charges
3.2 Separate Account
3.3 Debits against Account
3.4 Interest
3.5 Over-recovery
4. CHARGES FOR CONSULTANCY SERVICES
4.1 Standing Charge
4.2 Manpower Charges
4.3 Revisions to charges
5. CHARGES FOR DEVELOPMENT SERVICES
5.1 Standing Charge
5.2 Template Charging
5.3 M anpower Charges
5.4 Revisions to Charges
5.5 Fixed Charges
6. CHARGES FOR NON-MENU SERVICES
7. THIRD PARTY PROCUREMENT COSTS
8. POOL DATA CATALOGUE FEES
8.1 Amount of Pool Data Catalogue Fees
8.2 Payment of Pool Data Catalogue Fees
8.3 Disputes
8.4 Interest on non-payment
8.5 Absence of Order
9. SUMMARY OF CHARGES RECOVERABLE
10. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT
10.1 Monthly recovery
10.2 Reconciliation procedure
11. MINIMUM CONTRACT PRICE
11.1 Annual recovery
11.2 Monthly recovery
11.3 Minimum Contract Price
PART H - CHARGES FOR SERVICES: EXCEPTIONAL ITEMS
1. EXTENSION PERIOD CHARGES
2. BAD DEBTS
3. NEW TAXES OR NEW LEGISLATION
3.1 New Taxes
3.2 New Legislation
4. EXCEPTIONAL ITEMS
5. MARKET TEST COSTS
6. PIP REBATES
PART I - DEFERRED SETTLEMENT PROJECT EXPENDITURE
1. SOFTWARE EXPENDITURE ALREADY CAPITALISED
2. EXISTING WORK IN PROGRESS AS AT APRIL, 1994
3. NEW PROJECTS SLNCE APRIL, 1994
PART J - COST RECOVERY
1. CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR
2. INVOICING
2.1 Invoice Statement for Prior Charges
2.2 Content of Invoice Statement
2.3 Invoice Statement for Post Charges
2.4 Content of Invoice Statement
2.5 Disputes
2.6 Invoices to Pool Members
2.7 Resignation or removal of the Settlement System
Administrator
3. PAYMENTS
3.1 Payments by Pool Members
3.2 Disputes
3.3 Interest on non-payment
3.4 Payment of charges
4. ALLOCATION OF CHARGES
4.1 Allocation
4.2 New and former Pool Members
PART K - ALLOCATION OF CHARGES
1. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES
1.1 Payment of Total Sum Due
1.2 Allocation of Total Sum Due
1.3 Prima facie evidence
1.4 Contributory Shares
<PAGE>
PART A
PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Appendix, except where the context
otherwise requires:
"Ad Hoc Production Services" means those Production Services
described in sub-secdon 2.4 of Part B;
"AEI" means, in respect of any SSA Accounting Period, the
underlying percentage increase in earnings over the previous 12
months ending in the October immediately prior to the start of
such SSA Accounting Period determined by reference to the Service
industries - Divisions 6-9" indicator in the "Average earnings
index: all employees: main industrial sectors" published by HMSO
in the Employment Gazette or, if such index is no longer
published in such form or by HMSO, any replacement or alternative
index therefor which is agreed between the Settlement System
Administrator and the Executive Committee to be appropriate in
the circumstances or, if the Settlement System Administrator and
the Executive Committee cannot reach agreement within a
reasonable period of time, the replacement or alternative index
determined by arbitration pursuant to Clause 83 to be
appropriate;
"Anticipated Fixed Standing Charges" means (without double
counting) the aggregate of:
(a) the sum of all charges for (i) all Production Services
Ordered and (ii) all Consultancy Services and Development
Services Ordered at FSC Rates, as at the date of the Removal
Notice; and
(b) the sum of all charges for (i) all Production Services and
(ii) all Consultancy Services and Development Services at FSC
Rates which, taking into account the business plan referred to in
Clause 9.1.6 current at the date of the Removal Notice, would
have been Ordered for delivery in the period from the Termination
Date to 31st March, 1999;
"ASC Rate" means the price for manpower provided in connection
with Consultancy Services and Development Services as set out in
the Menu of Manpower Prices under the title ASC (Additional
Standing Charge);
"Average RPI" means, in respect of any SSA Accounting Period, the
percentage increase in retail prices over the previous 12 months
ending in the October immediately prior to the start of such SSA
Accounting Period determined by reference to the "AII items"
index (excluding, except in relation to the indexation of the
Menu of Second Tier Metering Prices, mortgage interest) in the
Retail Prices Index published by the Central Statistical Office
or, if such index is no longer published in such form or by the
Central Statistical Office, any replacement or alternative index
therefor which is agreed between the Settlement System
Administrator and the Executive Committee to be appropriate in
the circumstances or, if the Settlement System Administrator and
the Executive Committee cannot reach agreement within a
reasonable period of time, the replacement or alternative index
determined by arbitration pursuant to Clause 83 to be
appropriate;
"Committed Additional Services Charges" means the sum of all
charges for all Consultancy Services and Development Services
Ordered at ASC Rates as at the date of the Removal Nodce;
"Consultancy Services" means the Services described as
Consultancy Services in Section 3 of Part B;
"Continuous Production Services" means those Production Services
described in sub-section 2.3 of Part B;
"Deferred Settlement Project Expenditure" means an amount of that
name which is to be recovered by the Settlement System
Administrator as charges on a deferred basis pursuant to Part 1;
"Development Services" means the Services described as
Development Services in Section 4 of Part B;
"FSC Rate" means the price for manpower provided in connection
with Consultancy Services and Development Services as set out in
the Menu of Manpower Prices under the title FSC (Fixed Standing
Charge);
"Handling Charges means, in respect of any item, such amount as
when added to the cost of such item is equal to ten per cent. of
the sum of such amount and such cost;
"Job Number" means a series of alpha-numeric digits relating to
an Order;
"Menu of Consultancy Services Prices" means the most recent
document with that title setting out prices for certain
Consultancy services which is in the agreed form or which has
been revised pursuant to Part D;
"Menu of Development Services Prices" means the most recent
document with that title setting out prices for certain
development services which is in the agreed form or which has
been revised pursuant to Part D;
"Menu of Manpower Prices" means the most recent document with
that title setting out prices for manpower which is in the agreed
form or which has been revised pursuant to Part D;
"Menu of Production Services Prices" means the most recent
document Wit.. that title setting out prices for certain
production services which is in the agreed form or which has been
revised pursuant to Part D;
"Menus of Prices" means all of:
(a) the Menu of Consultancy Services Prices;
(b) the Menu of Development Services Prices;
(c) the Menu of Manpower Prices;
(d) the Menu of Production Services Prices (including as an
annex thereto the Menu of Second Tier Metering Prices); and
(e) any other menu of prices in the agreed form;
"Minimum Contract Price" has the meaning given to that expression
in subsection 11.3 of Part G;
"Monthly Minimum Manpower Charge Commitment" has the meaning
given to that expression in sub-section 6.1 of Part D;
"Non-Menu Services" means the Services referred to in Section 5
of Part B;
"Order" means a request in the agreed form for Services given by
the Contract Manager to the Account Manager, and "Orderedn and
UOrdering" shall be construed accordingly;
"Post Charges" means those charges in respect of which an invoice
statement is issued pursuant to sub-section 2.3 of Part J;
"Price on Request Items" means the items described as Price on
Request Items in Section 6 of Part B;
"Prior Charges" means those charges in respect of which an
invoice statement is issued pursuant to sub-section 2.1 of Part
J;
"Production Services" means the Services described as Production
Services in sub-section 2.1 of Part B;
"Project Template" means a modelling tool in the agreed form
which is used to Order Development Services and which assists in
the estimating and profiling of manpower commitment;
"Rate of Inflation" in respect of any SSA Accounting Period,
means:
(a) in relation to the Menu of Manpower Prices, the AEI; and
(b) in relation to all other Menus of Prices (other than charges
for general depreciation, rent and Deferred Settlement Project
Expenditure to which the Rate of Inflation shall not apply), the
Average RPI (it being acknowledged that, in relation to Service
Line 14 (Second Tier Metering), mortgage interest will be
included in the calculation of Average RPI);
"SCR Rate" means the price for manpower provided in connection
with Consultancy Services and Development Services and set Out in
the Menu of Manpower Prices under the title SCR (Standard
Contract Rate);
"Services" means the services to be provided by the Settlement
System Administrator pursuant to the SSA Arrangements, the
categories of which are set out in Section 1 of Part B;
"Sole Supplier Index" means the index with that title in the form
agreed by the Settlement System Administrator and the Executive
Committee setting out those Services or parts thereof which are
designated as having sole supplier status, as such index may be
amended or substituted from time to time by written agreement of
the Settlement System Administrator and the Executive Committee;
"Sole Supplier Services" means the Services referred to in
sub-section 7.1 of Part B;
"Third Party Contract" has the meaning given to that expression
in Section 7 of Part F;
"Third Party Costs" means costs under a Third Party Contract
which are invoiced to the Settlement System Administrator by the
third party and passed directly through to Pool Members, and
shall include those costs which are expressly stated in this
Schedule to be treated as Third Party Costs;
"Total Sum Due" has the meaning given to that expression in
Section 1 of Part J; and
"Variation Menus" means the most recent set of documents of that
title setting out changes in prices for Services which is in the
agreed form, that set comprising as at the date this Schedule
takes effect:
(a) a Continuous Production Services Variation Menu; and
(b) a Manpower Variation Menu.
1.2 Interpretation: In this Appendix:
(a) except where the context otherwise requires, references to a
particular Part, Section, sub-section or paragraph shall be a
reference to that Part of this Appendix or, as the case may be,
that Section, sub-secdon or paragraph of the relevant Part; and
(b) where a notice period in relation to the provision of a
Service begins upon receipt of an Order therefor, such notice
period shall exclude the day upon which the Service is required
to be provided and (if received after 12:00 hours on any day) the
day upon which notice is deemed to be served.
PART B
THE SERVICES
1. CATEGORIES OF SERVICES
Categories of Services: There are four categories of Services,
being:
(a) Production Services;
(b) Consultancy Services;
(c) Development Services; and
(d) Non-Menu Services.
2. PRODUCTION SERVICES
2.1 Production Services: Production Services are those Services
described as Production Services in the Service Lines set out in
the Menu of Production Services Prices.
2.2 Types of Production Services: Produedon Services are either
Continuous Production Services or Ad Hoc Production Services.
2.3 Continuous Production Services: Continuous Production
Services are those Production Services which the Settlement
System Administrator is to provide on a regular basis as
described in the relevant Service Line.
2.4 Ad Hoc Production Services: Ad Hoc Production Services are
those Production Services which the Settlement System
Administrator is to provide on an ad hoc basis as described in
the relevant Service Line.
2.5 Limits on Production Services: There are physical
constraints on the Settlement System which are recognised through
the maxima set out in the Menu of Production Services Prices.
This Appendix provides in sub-secdon 4.2 of Part D how Services
are to be Ordered and paced outside certain maxima and minima
limits.
3. CONSULTANCY SERVICES
Consultancy Services are those Services described as Consultancy
Services in the Service Lines set out in the Menu of Consultancy
Services Prices.
4. DEVELOPMENT SERVICES
Development Services are those Services described as Development
Services in the Service Lines set out in the Menu of Development
Services Prices.
5. NON-MENU SERVICES
Non-Menu Services are those Services which (a) are requested by
the Executive Committee or the Contract Manager, or are Ordered,
to be provided by the Settlement System Administrator in its
capacity as Settlement System Administrator, (b) are not included
in a Service Line, and (c) if agreed to be provided, will not be
included in a Service Line or a Menu of Prices but will be
provided on stand-alone terms and conditions and, for the
avoidance of doubt, any service or obligation of the Settlement
System Administrator pursuant to the SSA Arrangements which is
not described in a Service Line is a Non-Menu Service.
6. PRICE ON REQUEST ITEMS
Price on Request Items are those Services designated as Price on
Request in the Service Lines, being services for which there is a
general description in one or more of the Service Lines but for
which there is no corresponding price stated or referred to in
any Menu of Prices and for which the Settlement System
Administrator will quote a price in accordance with Section 2 of
Part C and which may or may not be added to the relevant Menu of
Prices.
7. SOLE SUPPLIER SERVICES
7.1 Sole Supplier Services: Those Services or parts thereof
which for the time being and from time to time are listed in the
Sole Supplier Index are known as Sole Supplier Services.
7.2 Status of Sole Supplier Services: Subject to sub-section 7.2
of Schedule 4, SoleSupplier Services may only be provided by the
Settlement System Administrator. If the Executive Committee shall
engage a person other than the Settlement System Administrator to
perform a Sole Supplier Service, there shall be deemed to be a
failure by the Executive Committee in a single, major respect to
comply with its obligations under the SSA Arrangements for the
purposes of Section 28 of Schedule 4 or the Settlement System
Administrator shall be entitled to insist upon due and proper
performance by the Executive Committee of its obligations under
the SSA Arrangements.
7.3 Variations of Sole Supplier Services: The Executive
Committee shall have the right to vary the volume of Service
under any Sole Supplier Service to a level where no Service under
the relevant Service Line is capable of being provided or can be
Ordered. Exercise of this right will not constitute a failure or
deemed failure by the Executive Committee to comply with its
obligations under the SSA Arrangements.
7.4 Review of Sole Supplier Index: Within a period of six months
after 31st March, 1999 the Settlement System Administrator shall
review the Sole Supplier Index in consultation with the Executive
Committee to assess whether it is appropriate to amend the list
of Services which are designated as Sole Supplier Services. If as
a result of that review or at any other time the Settlement
System Administrator and the Executive Committee shall agree to
amend or substitute the list of Services in whole or in part, the
Sole Supplier Index shall be revised accordingly.
8. MANAGEMENT OF RESOURCES
The Settlement System Administrator shall manage and schedule its
resources and the resources available to it as it sees fit.
Neither the Contract Manager nor Pool Members shall be entitled
to specify that particular individuals be provided in relation to
Services other than named project managers pursuant to Service
Line 16 (Management Services), but the Contract Manager and Pool
Members shall have the right to specify skill categories.
9. MARKET TESTS
9.1 Market Tests: The Executive Committee shall have the right
to carry out market tests of the price of Services in accordance
with the following provisions of this Section.
9.2 Timing: Market tests shall be carried out at the request of
the Executive Committee from time to time and shall be conducted
by or on behalf of the Executive Committee.
9.3 Settlement System Administrator's involvement:
(a) If the Executive Committee wishes the Settlement System
Administrator to take account of a market test, then the
Executive Committee shall use its reasonable endeavours to
commission a market test on a "like for like" basis for the
provision of the Service in question (including as to quality,
timeliness and flexibility) from a supplier of equal standing to
the Settlement System Administrator agreed between the Executive
Committee and the Settlement System Administrator (such agreement
not to be unreasonably withheld) and shall permit the Settlement
System Administrator to appraise the method and results of the
market test and to request clarification of the method and
clarification and correction of the results.
(b) If the market test shall result in an indication that the
Service in question may be obtained at a lower comparable price
from another supplier, the Settlement System Administrator shall
either demonstrate within a reasonable time why it is unable to
adopt the lower comparable price or accept the results of the
market test and forthwith adopt the lower comparable price.
(c) If the Settlement System Administrator shall seek to
demonstrate why it is unable to adopt the lower comparable price
rather than accept the results of the market test but the
Executive Committee disputes that the Settlement System
Administrator either has done so within a reasonable time as
required by paragraph (b) above or has adequately demonstrated
why it is unable to adopt the lower comparable price, and in
either case should therefore accept the results of the market
test and adopt the lower comparable price, the Executive
Committee may refer the dispute to arbitration in accordance with
Clause 83.
10. PERFORMANCE IMPROVEMENT PROGRAMMES
10.1 Performance Improvement Programmes: The Executive Committee
and the Settlement System Administrator may from time to time
agree to conduct programmes designed to improve the
cost-effectiveness of the Services. All such programmer shall be
conducted in accordance with the principles set out in the
following provisions of this Seaion and the Settlement System
Administrator shall be obliged to participate in all such
programmes.
10.2 Close Co-operation: Performance Improvement Programmes shall
require close co-operation and an exchange of information between
the Executive Committee and the Settlement System Administrator
to a greater degree than is contemplated elsewhere by the terms
of this Agreement.
10.3 Cost-benefit Sharing: The purpose of a Performance
Improvement Programme is to yield cost-benefit sharing and any
such programme will involve an analysis of actual costs rather
than the prices that are contained in the Menus of Prices.
10.4 Procedure: The procedure for conducting a Performance
Improvement Programme is set out in the Contract Management
Rules.
10.5 Costs of PlPs: The costs of all Performance Improvement
Programmes shall be borne by Pool Members according to their
respective Contributory Shares and shall be recovered in
accordance with the Charging Procedure.
10.6 Division of Cost Savings: If a Performance Improvement
Programme shall demonstrate a saving in all or any of the costs
that are incurred by the Settlement System Administrator in
providing the Services, then that saving shall be shared equally
between the Settlement System Administrator on the one hand and
Pool Members on the other hand at that time and in the manner
agreed between the Account Manager and the Contract Manager from
time to time provided that the Pool Members shall have the right
to receive the entire benefit of that saving until such time as
they have received in full through that saving an amount equal to
the costs incurred by them referred to in subsection 10.5 above.
10.7 Cost Savings by Pool Members: If a Performance Improvement
Programme shall demonstrate a saving in all or any of the costs
that are incurred by Pool Members (other than costs payable to
the Settlement System Administrator under the SSA Arrangements),
the relevant Pool Members shall have the right to the entire
benefit of that saving and shall not be required to share all or
any part of that benefit.
10.8 Non-PIP Modifications: The following actions with regard to
any Service provided by the Settlement System Administrator shall
not be the subject of a Performance Improvement Programme and any
cost savings caused by such action shall not be dealt with in
accordance with the principles of the Performance Improvement
Programmes:
(a) a change in the volume and/or frequencies of any Service
under a Service Line within the maximum and minimum limits stated
for that Service in the relevant Menu of Prices;
(b) a change in the level of quality, fault tolerance or
security for a particular Service where the commercial objectives
(as stated in the relevant Service Lines) are not amended in
respect of that change;
(c) replacement of any Hardware or Software in the normal course
of business;
(d) where a Performance Improvement Programme is undertaken in
respect of one or more particular Service Lines, an;- concomitant
modification to a Service Line which is not the subject of that
particular Performance Improvement Programmer and
(e) where the Settlement System Administrator discovers that,
through its own efforts, it has performed Services in a more
efficient manner than it originally planned.
11. CONTRACT REPORTING
Reports: The Settlement System Administrator shall provide the
Contract Manager with reports in accordance with Senice Line 10
(Service to CEO and Pool Members).
PART C
NEW REQUIREMENTS
1. CHANGES TO SERVICES
1.1 Changes to Services: Without prejudice to Parties' rights
generally to amend this Agreement, the Contract Manager may from
time to time request the Settlement System Administrator:
(a) to provide a new Service; or
(b) to amend a Service currently included in a Service Line or
to amend a Non-Menu Service; or
(c) to delete a Service currently included in a Service Line.
1.2 Negotiation: Upon receipt of any such request the Account
Manager will negotiate in good faith with the Contract Manager to
amend in accordance with the Change Management Procedure referred
to in Service Line 12 (Management of Settlement Change) the
applicable Service Lirle, Menu of Prices and Variation Menu (or,
if the Service is a Non-Menu Service, to agree or amend
documentation recording the terms and conditions on which the
Non-Menu Service is to be provided) and, if necessary, to amend
other elements of the SSA Arrangements to give effect to such
request provided that:
(a) neither the Settlement System Administrator nor the
Executive Committee nor Pool Members shall be obliged to agree
any such amendment or documentation; and
(b) there shall be no obligation on the Account Manager or the
Contract Manager to continue such negotiations if it is or
becomes evident that there is no agreement to provide the Service
or make the change referred to in sub-section 1.1 above or as to
the amendments required to give effect to such new Service or
change.
As part of the negotiations for the provision of a new or amended
Service, the Account Manager shall provide the Contract Manager
with (in the case of a new Service) a price for the Service
together with a statement of the incremental (but not necessarily
pro rata) resource requirement and an accompanying written
explanation, and (in the case of an amended Service) a revised
price for that Service justified by reference to the prices in
the relevant Menu of Prices and accompanied by a written
explanation.
1.3 Agreed Changes to Services: The SSA Arrangements, applicable
Service Lines, Menus of Prices and Variation Menus (or, if a
Non-Menu Service is affected, the documentation recording the
terms and conditions on which the NonMenu Service is to be
provided) shall be amended as required to reflect any agreement
between the Pool Members and the Settlement System Administrator
to:
(a) vary the SSA Arrangements, the Settlement System or the
Development Policies; or
(b) include an Ad Hoc Production Service as a Continuous
Production Service,
in accordance, where appropriate, with the Contract Management
Ruler.
1.4 Formal documentation: Any new Service or change to Service
referred to in sub-section 1.1 above shall take effect as from
the date specified in the formal documentation giving effect to
such new Service or change and in accordance with the terms of
such documentation.
1.5 Addition to Sole Supplier Index: Where a new Service Line is
created as part of the formal documentation giving effect to a
new Service or change to a Service the Settlement System
Administrator and the Executive Committee shall consider whether
such new Service Line should be added to the Sole Supplier Index
and, if they so agree, it shall be so added.
2. PRICE ON REQUEST
2.1 Requestfor a price: The Contract Manager may from time to
time request the Account Manager on behalf of the Settlement
System Administrator to quote a price for any Price on Request
Item and the Settlement System Administrator will within a
reasonable time quote such a price.
2.2 Basis of the price: The price quoted by the Settlement
System Administrator shall be calculated by taking account of the
Menu of Prices for the category of Services which most closely
corresponds to the relevant Price on Request Item and, if
applicable, to the price payable for any third party resources
for which the Settlement System Administrator will need to
contract to provide such Price on Request Item.
2.3 Price on Request: The request and quotation procedure in
sub-sections 2.1 and 2.2 above is known as the Price on Request
procedure.
2.4 Amendment Procedure: Upon receipt of the Settlement System
Administrator's price the Contract Manager may (but shall not be
obliged to) agree the price quoted. If the Contract Manager shall
notify the Account Manager that he agrees the price, the Account
Manager and the Contract Manager shall ordinarily amend the
applicable Menu of Prices to include the quoted price and the
applicable Variation Menu and, if necessary, the applicable
Service Line to include more detail as to the Service to be
provided, unless the Contract Manager and the Account Manager
agree that the price of a Price on Request Item shall not be
added to the applicable Menu of Prices in which case such Price
on Request Item shall remain a Price on Request Item. Upon such
amendment(s) being made the relevant Price on Request Item shall
cease to be a Price on Request Item and shall become a Production
Service, a Development Service or a Consultancy Service (as
appropriate) which may then be Ordered.
PART D
VARIATION MECHANICS
1. INDEXATION
1.1 Indexation: With effect from the first day of each SSA
Accounting Period, beginning with the SSA Accounting Period
starting in 1995:
(a) the Variation Menus shall be automatically adjusted by the
applicable Rate of Inflation; and
(b) the Menus of Prices shall be automatically adjusted by the
applicable Rate of Inflation,
but in each case only where and to the extent expressly provided
in the relevant Menu.
1.2 Mechanics: No later than two months before the first day of
each SSA Accounting Period, beginning with the SSA Accounting
Period starting in 1995, the Settlement System Administrator
shall prepare and deliver to the Contract Manager revised Menus
of Prices and Variation Menus adjusted in accordance with
sub-section 1.1 above and in the case of Menus of Prices sub
section 2.1 below together with a report from the Settlement
System Administrator's auditor confirming that it has reviewed
the revised Menus of Prices and Variation Menus and that they
have been correctly adjusted in accordance with such
sub-sections.
2. VARIATION MENUS
2.1 Variation Menus: With effect from the first day of each SSA
Accounting Period, beginning with the SSA Accounting Period
starting in 1995, and/or at such other times as may be prescribed
in the relevant Variation Menu, the Menus of Prices shall be
automatically adjusted as provided in the Variation Menus, as
such Variation Menus have themselves first been adjusted as
appropriate by the applicable Rate of Inflation pursuant to
sub-section 2.1 above.
2.2 Mechanics:
(a) In the preparation of revised Menus of Prices in accordance
with subsection 1.2 above, the Settlement System Administrator
shall ensure that the adjustments to the Menus of Prices
prescribed by the Variation Menus as referred to in sub-section
2.1 above are taken fully into account.
(b) If an adjustment to a Menu of Prices is prescribed pursuant
to subsection 2.1 above otherwise than with effect from the first
day of an SSA Accounting Period, the Settlement System
Administrator shall prepare and deliver to the Contract Manager
no later than two months before the adjustment is to take effect
a revised Menu of Prices.
3. RENT COSTS
3.1 Changes in rent: If there shall be a change (whether an
increase or a decrease) in the aggregate amount of rent payable
by the Settlement System Administrator for such premises occupied
by the Settlement System Administrator as may be agreed from time
to time between the Settlement System Administrator and the
Executive Committee (being in any event premises occupied by the
Settlement System Administrator for the performance of the
Services), the Menu of Production Services Prices shall be
automatically adjusted with effect from the date on which such
change takes effect by the fair allocation of the amount of such
change across the prices for all Continuous Production Services
provided that in the calculation of the change in the aggregate
amount of rent payable by the Settlement System Administrator any
increase in the amount of rent payable in respect of any premises
occupied by the Settlement System Administrator shall be taken
into account only to the extent that the Settlement System
Administrator is able to demonstrate to the reasonable
satisfaction of the Executive Committee that the rent for the
relevant premises as so increased is no more than the open market
rack rent for those premises as at the date of such increase.
3.2 Mechanics: If there shall be a change in rent as described in
sub-section 3.1 above, the Settlement System Administrator shall
prepare and deliver to the Contract Manager a revised Menu of
Production Services Prices adjusted in accordance with
sub-section 3.1 above together with a report from the Settlement
System Administrator's auditor confirming that it has reviewed
the revised Menu of Production Services Prices and that it has
been fairly adjusted in accordance with sub-section 3.1 above.
4. VOLUME CHANGES
4.1 Units of Variation: Menus of Prices may provide for units of
variation and prices per unit of variation to Services in which
case the units of variation can be Ordered at the price per unit
stated upon the requisite period of notice of variation (if any)
being given.
4.2 Limits: Menus of Prices may provide maximum and minimum
limits of a particular Service. Services required in excess of
any such maximum shall be treated as new Services and Services
required below any such minimum shall, at the request of the
Contract Manager, be provided at a revised lower price where
determined in accordance with a Performance Improvement
Programme.
5. STANDING CHARGES
The standing charges referred to in sub-sections 4.1 and 5.1 of
Part G shall be varied automatically at the times and in the
manner provided in the relevant Service Line.
6. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT
6.1 Monthly Minimum Manpower Charge Commitment: For each Service
Line, the Monthly Minimum Manpower Charge Commitment for any
month shall be determined in accordance with the following
formula:
MMMCC = C
12
where:
MMMCC is the Monthly Minimum Manpower Charge Commitment for
the month in question (expressed in pounds sterling);
A is the minimum number of man-days per annum for each
skill category as shown in the minimum manpower column
in the current Menu of Consultancy Services Prices and
the current Menu of Development Services Prices;
B is the price at current FSC Rates for the same skill
category as shown in the Menu of Manpower Prices; and
C is the aggregate of the sum of (A x B) for all skill
categories as so shown.
6.2 Reconciliation: Within 15 working days after (x) the first
six month period in an SSA Accounting Period and (y) the end of
an SSA Accounting Period (each an "MMMCC Calculation Period") the
Settlement System Administrator shall for each Service Line
calculate and notify the Contract Manager of:
(a) the aggregate Monthly Minimum Manpower Charge Commitment for
the six months falling in the MMMCC Calculation Period ("Sum A");
(b) the aggregate charges for manpower Ordered for the six
months falling in the MMMCC Calculation Period in connection with
Consultancy Services and Development Services ("Sum B"); and
(c) the aggregate amount invoiced to Pool Members in the MMMCC
Calculation Period being for each month the greater of the
Monthly Minimum Manpower Charge Commitment or the charge for
manpower Ordered (USum C").
The relevant adjustment for the purposes of sub-section 10.2 of
Part G shall always be zero or a credit to Pool Members, shall
arise either:
(i) where Sum A is greater than or equal to Sum B in which event
the credit shall be such amount as is equal to the amount by
which Sum C exceeds Sum A; or
(ii) where Sum A is less than Sum B in which event the credit
shall be such amount as is equal to the amount by which Sum C
exceeds Sum B.
7. MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES
The Menus of Prices shall be further adjusted following a market
test or the implementation of a Performance Improvement Programme
in accordance with the agreement (if any) reached between the
Settlement System Administrator and the Executive Committee.
8. INCONSISTENCIES IN THE SSA ARRANGEMENTS
If there is a change or variation to any part of the SSA
Arrangements which creates an inconsistency in the obligations to
be discharged by the Settlement System Administrator under the
SSA Arrangements, the Settlement System Administrator may request
the Contract Manager (in the case of a Service Line) or Pool
Members, through the Executive Committee (in the case of any
other part of the SSA Arrangements) to make such amendments to
the SSA Arrangements as it considers necessary to remove such
inconsistency and the Contract Manager or, as the case may be,
the Executive Committee shall act accordingly to make such
amendments as soon as reasonably possible.
PART E
ORDERING SERVICES: GENERAL PROVISIONS
1. GENERAL REQUIREMENT FOR ORDERS
Save as provided in Section 2 below, an Order shall be required
to be given to the Settlement System Administrator for each and
every Service. Save as so provided, the Settlement System
Administrator shall not, and shall not be required to, provide
any Service, carry out or comply with any request or enter into
any contract or other arrangement or do any other thing under or
pursuant to the SSA Arrangements unless an Order is given to and
received by the Settlement System Administrator in accordance
with this Part and (if applicable) Part F.
2. EXCEPTIONS TO THE REQUIREMENT FOR ORDERS
No Order is required to be received by the Settlement System
Administrator in respect of:
(a) Services provided under Service Line 14 (Second Tier
Metering) unless and until an ordering procedure is agreed
between the Settlement System Administrator and the Executive
Committee;
(b) Services provided to an individual Pool Member under Service
Line 10 (Service to CEO and Pool Members) or Service Line 11
(Listing and Load Modules) for which a request is received by the
Settlement System Administrator directly from that Pool Member
and where the Pool Member is charged directly for those Services;
(c) Services provided to the Director or his staff in response
to a request therefrom under Service Line 9 (Service to the
Director General of Electricity Supply);
(d) requests of the description in sub-section 3.1(a) below;
(e) Services provided or acts carried out where, in the
reasonable opinion of the Settlement System Administrator, there
will be a breach of NGC's obligations under the Act or NGC's
Transmission Licence unless such Services are provided or such
acts are carried out by the Settlement System Administrator;
(f) Services provided or acts carried out by the Settlement
System Administrator in good faith where the Contract Manager or
his alternate was unavailable to give an Order and, in the
reasonable opinion of the Settlement System Administrator, it was
necessary to act without an Order having been received from the
Contract Manager in order to ensure the continued of the Services
under the SSA Arrangements provided that, for the Settlement
System Administrator to have the right to charge for such
Services or acts, an Order shall be required to be issued after
the event and, unless the Settlement System Administrator has not
acted in good faith, the Contract Manager shall issue such an
Order; and
(g) requests from Pool Members, the Executive Committee, the
Chief Executive's Office or the Contract Manager for access to
persons involved in the provision of Production Services and no
charge shall be made where such requests do not exceed the limits
set out in the Contract Management Rules.
3. ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS
3.1 Entitlement to issue Orders and requests: The only persons
entitled to issue Orders to or to make requests of the Settlement
System Administrator under the SSA Arrangements are:
(a) if the request has no material cost consequence for the
Settlement System Administrator, the Executive Committee (either
actUng by itself or through the Chief Executive) or the Contract
Manager;
(b) if the request has such a material cost consequence, the
Contract Manager by means of an Order;
(c) individual Pool Members by request under Service Line 10
(Service to CEO and Pool Members) or Service Line 11 (Listing and
Load Modules); and
(d) the Director or his staff by request under Service Line 9
(Service to the Director General of Electricity Supply).
3.2 Compliance with Orders and requests: Subject to the other
provisions of this Section 3, the Settlement System Administrator
shall at all times observe and comply with all requests made by
(a) the Executive Committee or the Contract Manager, or (b)
individual Pool Members under Service Line 10 (Service to CEO and
Pool Members) or Service Line 11 (Listing and Load Modules), or
(c) the Director or his staff under Service Line 9 (Service to
the Director General of Electricity Supply), and all Orders which
fulfil the criteria set out in subsection 3.6 given by the
Contract Manager.
3.3 Signature of requests: The Settlement System Administrator
shall be entitled to rely upon any request of the Executive
Committee if the same is signed by or on behalf of two or more
Committee Members or by or on behalf of the Chief Executive.
3.4 Signature of Orders: The Settlement System Administrator
shall be entitled to rely upon an Order if the same is signed by
the Contract Manager.
3.5 Limited delegation: The Settlement System Administrator
shall not act on the directions or instructions of any
sub-committee of the Executive Committee or any delegate of the
Executive Committee other than the Chief Executive or (in the
case of Orders) the Contract Manager.
3.6 Criteria for Orders: An Order shall:
(a) be in writing and be clear and unequivocal (and an Order
shall be deemed such until such time as the Settlement System
Administrator requests any necessary clarification);
(b) have due regard to the resources of the Settlement System
Administrator available to give effect to such Order;
(c) not increase the liabilities of the Settlement System
Administrator beyond those contemplated under the SSA
Arrangements without proper compensation. For this purpose,
without limitation, compensation for increased liabilities shall
be proper if an indemnity is given to the Settlement System
Administrator which is reasonably satisfactory to it or other
compensation reasonably satisfactory to the Settlement System
Administrator is provided to it;
(d) not conflict with the terms of the SSA Arrangements; and
(e) not cause the Settlement System Administrator to breach any
of NGC's obligations under the NGC Transmission Licence.
3.7 Authority of Pool Members, the Executive Committee and the
Chief Executive: Save as provided in sub-section 3.1 (a) and in
respect of Services under Service Line 10 (Service to CEO and
Pool Members) or Service Line 11 (Listing and Load Modules):
(a) none of the Pool Members, the Executive Committee and the
Chief Executive may issue requests or Orders to the Settlement
System Administrator; and
(b) the Settlement System Administrator shall not act in
accordance with any request of the Pool Members, Chief Executive
or Executive Committee unless the Pool Members, the Executive
Committee or the Chief Executive act through the Contract
Manager.
4. SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS
4.1 Recovery of charges: Nothing in this Part E and no omission
on the part of the Contract Manager to issue an Order or to issue
an Order for sufficient Services to cover the Monthly Minimum
Manpower Charge Commitment and Minimum Contract Price shall
prevent the Settlement System Administrator from invoicing and
recovering from Pool Members in accordance with Parts G and J the
Monthly Minimum Manpower Charge Commitment, the Minimum Contract
Price and the standing charges referred to in sub-sections 4.1
and 5.1 of Part G.
4.2 Compliance with the Director's directions: No liability
whatsoever shall attach to the Settlement System Administrator as
a result of due compliance by it with any directions and
instructions of the Director, provided that in complying with
such directions and instructions the Settlement System
Administrator is at all times acting in good faith.
4.3 Ratification: Nothing in the SSA Arrangements shall prevent
the Executive Committee or the Contract Manager from ratifying
any act of the Settlement System Administrator such ratification
to be, where applicable, by way of an Order.
4.4 Express authority: All requests of the Executive Committee
and Orders or requests of the Contract Manager to the Settlement
System Administrator shall, as between the Settlement System
Administrator and the Pool Members, be deemed to have the express
authority of and shall be binding without reservation upon all
Pool Members.
4.5 Reliance on documents believed genuine: The Settlement
System Administrator shall be entitled to rely upon any
communication or document reasonably believed by it to be genuine
and correct and to have been communicated or signed by the person
by whom it purports to be communicated or signed and shall not be
liable to any of the Parties for any of the consequences of such
reliance.
4.6 General meetings: The Settlement System Administrator shall
not be obliged to take any steps to ascertain whether any
resolution of Pool Members in general meeting or of any class of
Pool Members in separate general meeting which it is advised by
the Executive Committee or the Chief Executive as having been
passed was in fact passed or passed by the requisite majority and
until the Settlement System Administrator shall have express
written notice to the contrary from the Executive Committee or
the Chief Executive it shall be entitled to assume that the
relevant resolution was passed or (as the case may be) the
relevant requisite majority was obtained.
4.7 Exceptions: Notwithstanding the foregoing provisions of
Section 3, in the performance of its duties and responsibilities
under the SSA Arrangements the Settlement System Administrator
shall not be bound to act in accordance with any request of the
Executive Committee or the Contract Manager or any individual
Pool Member under Service Line 10 (Service to CEO and Pool
Members) or Service Line 11 (Listing and Load Modules), or an
Order if:
(a) to do so would cause the Settlement System Administrator to
breach any of NGC's obligations under the Act or NGC's
Transmission Licence; or
(b) the Settlement System Administrator has reasonable grounds
for believing that it would so breach any of such obligations and
has consulted the Director and:
(i) the Director has not indicated that in his view it would not
involve any such breach; or
(ii) the Director has indicated that, notwithstanding any such
actual or potential breach, the Director would not be minded to
enforce compliance with those obligations and the Settlement
System Administrator has received an indemnity reasonably
satisfactory to it in respect of its acting in accordance with
such requests or Orders.
In any such event the Settlement System Administrator shall
promptly notify the Executive Committee.
4.8 Reference to the Director: If at any time the Settlement
System Administrator has a concern which is properly and
reasonably founded that, in acting in accordance with any
requests of the Executive Committee or the Contract Manager or an
individual Pool Member or any Order, it will breach one or more
of NGC's obligations under the Act or NGC's Transmission Licence,
then, if having discussed the matter with the Executive Committee
the matter remains unresolved, the Settlement System
Administrator shall either comply with such request or Order or
by notice in writing refer the same to the Director, such notice
to set out in full the request or be accompanied by a copy of the
Order (as the case may be) given to the Settlement System
Administrator and the grounds for such concern and to be copied
to the Executive Committee and (if applicable) the individual
Pool Member. Pending any guidance from the Director in response
to any such reference and, provided that the Director shall not
express any view that such reference is misconceived, vexatious
or in respect of an improperly or unreasonably founded concern,
the Settlement System Administrator shall not be liable to any of
the other Parties for refusing to act in accordance with the
relevant request or Order. If the Director shall express such a
view, the Settlement System Administrator shall be so liable.
5. JOB NUMBERS
5.1 Job Numbers: The Contract Manager shall ensure that each
Order that he issues shall have a Job Number and a stated
objective. Where Orders issued by the Contract Manager have a
common stated objective they will bear a related Job Number.
5.2 Extensions to Orders: Extensions to Orders may be made only
if the Order in respect of such extension bears the same stated
objective as the earlier Order.
6. SUPPLEMENTAL PROVISIONS
6.1 Changing resources: Once the Contract Manager has become
aware of the identity of a particular person to be allocated to a
particular Order whose responsibilities include direct
communication with the Executive Committee or the Contract
Manager (as the case may be) in connection with that Order, that
person shall not be changed without prior consultation with and
the agreement of the Executive Committee or the Contract Manager.
6.2 Ordering ethos: The Executive Committee shall endeavour to
place Orders that month on month maintain a steady level of
resource requirement but shall have the right to place Orders at
any level that varies reasonably from one month to the next
provided that nothing in this sub-section shall prevent a Service
Line being varied to a state where no Service is to be provided
or can be Ordered thereunder.
6.3 Resource records: The Settlement System Administrator shall
maintain a record showing by Job Number where a Service has been
Ordered but no work delivered or (as the case may be) no added
value provided in the provision of that Service.
6.4 Dedication of resource: The resource represented by an Order
shall be dedicated wholly and exclusively to the provision of the
Service Ordered and shall not be made available to any third
party or for any other purpose without the prior written consent
of the Contract Manager.
6.5 Failure to supply resource: Where a resource has been
Ordered but is not delivered in accordance with the terms of that
Order, that resource shall be delivered at no further cost to
Pool Members at such time or times as may be reasonably required
by the Contract Manager and subject to such limits as may be
agreed from time to time by the Account Manager and the Contract
Manager.
PART F
ORDERING SERVICES: SPECIFIC PROVISIONS
1. ORDERING PRODUCTION SERVICES
1.1 Continuous Production Services: The minimum period for which
a Condnuous Production Service can be Ordered is one month.
1.2 Volume changes: If there shall be a change in the volume of
Continuous Production Services for which no Order has been given,
the Settlement System Administrator shall promptly notify the
Contract Manager who shall promptly issue an Order with
retrospective effect for such change.
1.3 Ad Hoc Production Services: The Contract Manager shall have
the right to Order Ad Hoc Production Services in accordance with
the Menu of Production Services Prices.
2. ORDERING CONSULTANCY SERVICES
2.1 Minimum manpower periods: The minimum periods for which
manpower can be Ordered for Consultancy Services are:
(a) if charged at the FSC Rate, one month;
(b) if charged at the ASC Rate, four months; and
(c) if charged at the SCR Rate, one day.
2.2 Extensions of manpower: If manpower of a particular skill
category has been Ordered for Consultancy Services and the
Contract Manager requires further manpower of that skill category
for Consultancy Services with the same stated objective as the
earlier Order, the Contract Manager may Order the extension of
such manpower requirement:
(a) where the earlier Order is charged at the ASC Rate, for one
or more whole months at the same rate upon giving at least one
month's prior notice to the Settlement System Administrator; and
(b) where the earlier Order is charged at the SCR Rate, for one
or more periods of five days at the same rate upon giving at
least five working days' prior notice to the Settlement System
Administrator.
Once the stated objective of a Consultancy Service has been
achieved or otherwise satisfied, there shall be no extension of
manpower under this subsection 2.2 in relation to that stated
objective.
2.3 Short Notice Ordering: If the Order for Consultancy Services
is received by the Settlement System Administrator less than
three working days before the date on which the Consultancy
Service is required, the Settlement System Administrator shall
use all reasonable endeavours to provide the necessary manpower
but shall have no absolute obligation so to do. The Charge for
Consultancy Services Ordered on such notice shall be the SCR Rate
as referred to in sub-section 4.2(c) of Part G.
3. ORDERING DEVELOPMENT SERVICES
3.1 Project Template: Subject to sub-section 3.5 below,
Development Services shall be Ordered to a Project Template and
the provisions of sub-secdons 3.2 to 3.4 (inclusive) shall apply
to any such Order. The Settlement System Administrator shall
supply the Contract Manager with copies of Project Templates to
the values agreed from time to time between the Account Manager
and the Contract Manager.
3.2 Minimum manpower periods: The minimum periods for which
manpower can be Ordered for Development Services are:
(a) if charged at the FSC Rate, one month;
(b) if charged at the ASC Rate, four months; and
(c) if charged at the SCR Rate, one day.
3.3 Extensions of manpower: If manpower of a particular skill
category has been Ordered for Development Services and the
Contract Manager requires further manpower of that skill category
for Development Services with the same stated objective as the
earlier Order, the Contract Manager may Order the extension of
such manpower requirement:
(a) where the earlier Order is charged at the ASC Rate, for one
or more whole months at the same rate upon giving at least one
month's prior notice to the Settlement System Administrator; and
(b) where the earlier Order is charged at the SCR Rate, for one
or more periods of five days at the same rate upon giving at
least five working dayst prior notice to the Settlement System
Administrator.
Once the stated objective of a Development Service has been
achieved or otherwise satisfied, there shall be no extension of
manpower under this subsection 3.3 in relation to that stated
objective.
3.4 Short Notice Ordering: If the Order for Development Services
is received by the Settlement System Administrator less than
three working days before the date on which the Development
Service is required, the Settlement System Administrator shall
use all reasonable endeavours to provide the necessary manpower
but shall have no absolute obligation so to do. The Charge for
Development Services Ordered on such notice shall be the SCR Rate
as referred to in sub-section 5.3(c) of Part G.
3.5 Fixed Price: Notwithstanding the foregoing provisions of
this Section 3, the Contract Manager and the Settlement System
Administrator may agree from time to time that Development
Services shall be Ordered on a fixed price basis and, if so
agreed, shall record the terms of that fixed price agreement
(including payment terms) in writing.
4. ORDERING NON-MENU SERVICES
A Non-Menu Service may not be Ordered unless and until
documentation recording the terns and conditions on which it is
to be provided has been agreed as provided in Section 1 of Part
C.
5. REQUESTS BY DIRECTOR
The Director or his staff may make requests for Services under
and in accordance with Service Line 9 (Service to the Director
General of Electricity Supply).
6. INDIVIDUAL POOL MEMBER REQUESTS
Individual Pool Members may make requests for Services under and
in accordance with Service Line 10 (Service to CEO and Pool
Members) or Service Line 11 (Listing and Load Modules).
7. THIRD PARTY PROCUREMENT
7.1 Third Party Contract: Subject to sub-section 7.2 below, upon
receipt of an Order and on and subject to the terms and
conditions thereof, the Settlement System Administrator shall
enter into or (as the case may be) amend, vary or modify (or
agree to an amendment, variation or modification of) a contract
or other arrangement with a third party for the provision of a
resource to or for the benefit of the Settlement System
Administrator to enable it to provide a Service the costs of
which are to be passed directly to Pool Members (a "Third Party
Contracts), but shall not do any of the foregoing in the absence
of such an Order.
7.2 Exceptional circumstances: If by reason of:
(a) a term in any licence of Licensed Software (as defined in
Section 9 of Schedule 4); or
(b) the Service requiring the provision of skill sets outside
the defined scope of the Manpower Menu of Prices; or
(c) the Service requiring product knowledge outside the defined
scope of the SSA Arrangements,
the Settlement System Administrator has no option but to contract
with a third party for the provision of a resource to or for the
benefit of the Settlement System Administrator to enable it to
provide a Service, it shall request the Contract Manager to issue
an Order to that effect and shall give a written explanation in
support of that request and allow the Contract Manager sufficient
time to consult the Executive Committee provided that the
Contract Manager shall have no obligation to issue any such Order
and, if no such Order is issued, the Settlement System
Administrator shall not enter into any such contract.
PART G
CHARGES FOR SERVICES: GENERAL PRINCIPLES
1. GENERAL
The Settlement System Administrator shall have the right to
charge Pool Members for Services it has provided or is to provide
and to recover from them the charges set out in this Part G and
in Part H upon and subject to the terms and conditions set out in
such Parts. A summary of the charges recoverable by the
Settlement System Administrator in respect of any month is set
out in Section 9 below.
2. CHARGES FOR PRODUCTION SERVICES
2.1 Continuous Production Services: The charge for each
Continuous Production Service shall be the corresponding price
set out in the Menu of Production Services Prices.
2.2 Ad Hoc Production Services: The charge for each Ad Hoc
Production Service shall be the corresponding price set out in
the Menu of Production Services Prices.
3. CHARGES FOR SECOND TIER METERING
3.1 Charges: The Settlement System Administrator shall have the
right to charge for the provision of Services in Service Line 14
(Second Tier Metering) in accordance with the Menu of Second Tier
Metering Prices (being an annex to the Menu of Production
Services Prices).
3.2 Separate Account: The Settlement System Administrator shall
open and maintain a separate account (the "STSSC Account") to
which it shall credit monthly the Second Tier Suppliers System
Charge received for that month.
3.3 Debits againstAccount: The Settlement System Administrator
shall debit the STSSC Account each month with the amount that it
is entitled to charge in accordance with sub-section 3.1 above
for the provision of Services in Service Line 14 (Second Tier
Metering).
3.4 Interest: Interest shall accrue and be chargeable on credit
and debit balances on the STSSC Account as follows:
(a) the Settlement System Administrator shall have the right to
charge interest on any debit balance on the STSSC Account; and
(b) the Settlement System Administrator shall be liable to pay
interest on any credit balance on the STSSC Account.
The rate of interest shall be agreed from time to time between
the Executive Committee and the Settlement System Administrator
and shall accrue from day to day on the basis of a 365-day year
on the credit or debit balances outstanding.
3.5 Over-recovery: If at the end of an Accounting Period there
shall be a credit balance on the STSSC Account the Settlement
System Administrator shall account for that balance to such
persons as the Executive Committee shall direct.
4. CHARGES FOR CONSULTANCY SERVICES
4.1 Standing Charge: The Settlement System Administrator shall
have the right to recover in respect of each month the standing
charge for Consultancy Services set out in the Menu of
Consultancy Services Prices, whether or not Consultancy Services
are Ordered or the volume of service under the relevant Service
Line has been reduced to zero or the relevant Service Line
cancelled. It is agreed that standing charges for Consultancy
Services are applicable only to Service Lines 8 (Service to Pool
Auditor), 10 (Service to CEO and Pool Members), 12 (Management of
Settlement Change) and 13 (Consultancy, Committee Support and
Training Services).
4.2 Manpower Charges: The Settlement System Administrator shall
have the right to charge for manpower provided or to be provided
for Consultancy Services at the following rates, subject as
provided in sub-section 4.3 below:
(a) if the Order for Consultancy Services is received by the
Settlement System Administrator 12 months or more before the date
on which the Consultancy Service is required, the FSC Rate;
(b) if the Order for Consultancy Services is received by the
Settlement System Administrator two or more months but less than
12 months before the date on which the Consultancy Service is
required, the ASC Rate;
(c) if the Order for Consultancy Services is received by the
Settlement System Administrator less than two months before the
date on which the Consultancy Service is required, the SCR Rate;
and
(d) if the Order for Consultancy Services is an extension of an
existing manpower commitment in accordance with sub-section 2.2
of Part F. at the relevant rate provided in that sub-section.
4.3 Revisions to charges: If in connection with Orders for
Consultancy Services with the same stated objective the total
period (being the original period and all extensions pursuant to
sub-section 2.2 of Part F) for which manpower in a particular
skill category charged by reference to:
(a) the ASC Rate is provided equals or exceeds 12 months then,
from the date which is two months after receipt of the Order
which extends the total aggregate period for the provision of
such manpower up to or beyond 12 months, the Settlement System
Administrator shall charge for the provision of such manpower at
the FSC Rate provided that in no event shall the FSC Rate apply
within the minimum four month period referred to in sub-section
2.1 of Part F; and
(b) the SCR Rate is provided equals or exceeds two months then,
from the date which is one month after receipt of the Order which
extends the total aggregate period for the provision of such
manpower up to or beyond two months, the Settlement System
Administrator shall charge for the provision of such manpower at
the ASC Rate provided that in no event shall the SCR Rate apply
within the two month period following the date such manpower was
first provided.
5. CHARGES FOR DEVELOPMENT SERVICES
5.1 Standing Charge: The Settlement System Administrator shall
have the right to recover in respect of each month the standing
charge for Development Services set out in the Menu of
Development Services Prices, whether or not Development Services
are Ordered or the volume of service under the relevant Service
Line has been reduced to zero or the relevant Service Line
cancelled. It is agreed that standing charges for Development
Services are applicable only to Service Lines 15 (Design
Authority), 18 (System Development) and 19 (System Integration).
5.2 Template Charging: Subject as provided in the following
sub-sections of this Section 5, the Settlement System
Administrator shall charge for Development Services Ordered to a
Project Template in accordance with the terms of that Project
Template.
5.3 Manpower Charges: The Settlement System Administrator shall
have the right to charge for manpower provided or to be provided
for Development Services at the following rates, subject as
provided in sub-section 5.4 below:
(a) if the Order for Development Services is received by the
Settlement System Administrator 12 months or more before the date
on which the Development Services is required, the FSC Rate;
(b) if the Order for Development Services is received by the
Settlement System Administrator two or more months but less than
12 months before the date on which the Development Service is
required, the ASC Rate;
(c) if the Order for Development Services is received by the
Settlement System Administrator less than two months before the
date on which the Development Services is required, the SCR Rate;
and
(d) if the Order for Development Services is an extension of an
existing manpower commitment in accordance with sub-section 3.2
of Part F. at the relevant rate provided in that sub-section.
5.4 Revisions to Charges: If in connection with Orders for
Development Services with the same stated objective the total
period (being the original period and all extensions pursuant to
sub-section 3.2 of Part F) for which manpower in a particular
skill category charged by reference to:
(a) the ASC Rate is provided equals or exceeds 12 months then,
from the date which is two months after receipt of the Order
which extends the total aggregate period for the provision of
such manpower up to or beyond 12 months, the.Settlement System
Administrator shall charge for the provision of such manpower at
the FSC Rate provided that in no event shall the FSC Rate apply
within the minimum four month period referred to in sub-section
3.1 of Part F; and
(b) the SCR Rate is provided equals or exceeds two months then,
from the date which is one month after receipt of the Order which
extends the total aggregate period for the provisions of such
manpower up to or beyond two months, the Settlement System
Administrator shall charge for the provision of such manpower at
the ASC Rate provided that in no event shall the SCR Rate apply
within the two month period following the date such manpower was
first provided.
5.5 Fixed Charges: Notwithstanding the provisions of
sub-sections 5.2, 5.3 and 5.4 above, if Development Services have
been Ordered on a fixed price basis in accordance with
sub-section 3.5 of Part F. the Settlement System Administrator
shall charge for such Development Services on the terms of the
written fixed price agreement referred to in that sub-section and
not on the terms of sub-sections 5.2, 5.3 and 5.4 above (but
without prejudice to the Settlement System Administrator's right
to recover the standing charge referred to in sub-section 5.1
above).
6. CHARGES FOR NON-MENU SERVICES
The charge for each Non-Menu Service shall be the price set out
in the agreed documentation for the provision of such Non-Menu
Service.
7. THIRD PARTY PROCUREMENT COSTS
In respect of any Third Party Contract where in accordance with
the terms of the Order relating thereto the Third Party Costs are
to be invoiced to the Settlement System Administrator and passed
directly through to Pool Members, the Setdement System
Administrator shall have the right to recover the Handling Charge
in respect of such Third Party Costs.
8. POOL DATA CATALOGUE FEES
8.1 Amount of Pool Data Catalogue Fees: The fee payable by a
Party pursuant to Clause 34.2.1 (the "Pool Data Catalogue Fee")
shall be determined from time to time by the Executive Committee
and confirmed by Order, but shall not be less than the aggregate
of (a) the cost to the Settlement System Administrator of
providing all such data and other information or (as the case may
be) such of it as is requested by such Party, and (b) the
Handling Charge, provided that the Executive Committee may, in
its discretion, determine that such fee shall be less than the
aggregate of (a) and (b) but, in such event, such Order shall
also specify that the difference between such fee and such
aggregate amount shall be charged to all Pool Members as if it
were a Third Party Cost.
8.2 Payment of Pool Data Catalogue Fees: The Pool Data Catalogue
Fee shall be payable in arrears within 15 days after the issue by
the Settlement System Administrator of an invoice therefor or
within such other period as may be agreed from time to time by
the relevant Party and-the Settlement System Administrator. All
such payments shall be made in sterling in cleared funds in full
without set-off or counter-claim, withholding or deduedon of any
kind whatsoever but without prejudice to any other remedy.
8.3 Disputes: In the event of any dispute regarding payment of
the Pool Data Catalogue Fee, a Party may not withhold payment of
any invoiced amount therefor but may refer such dispute to
arbitration in accordance with Clause 83 following payment.
8.4 Interest on non-payment: The provisions of sub-section 3.3 of
Part J shall apply motatis mutant to any amount due to the
Settlement System Administrator pursuant to sub-section 8.2 above
which is not received on the due date.
8.5 Absence of Order: In the absence of an Order confirming the
Pool Data Catalogue Fee, the Settlement System Administrator may
charge Parties a fee pursuant to Clause 34.2.1 equal to the
aggregate of (a) the cost to the Settlement System Administrator
of providing all such data and other information or (as the case
may be) such of it as is requested by the relevant Party and (b)
the Handling Charge.
9. SUMMARY OF CHARGES RECOVERABLE
In respect of any month the Settlement System Administrator shall
have the right to recover from all Pool Members the following
amounts in respect of Services provided or to be provided during
that month:
(a) charges for all Continuous Production Services provided or
to be provided during such month, determined as provided in
sub-section 2.1 above;
(b) charges for all Ad Hoc Production Services provided or to be
provided during such month, determined as provided in sub-section
2.3 above;
(c) charges for the provision of Services in Service Line 14
(Second Tier Metering) provided or to be provided during such
month, determined as provided in sub-section 3.1 above;
(d) the monthly standing charge for Consultancy Services,
determined as provided in sub-section 4.1 above;
(e) charges for all Consultancy Services provided or to be
provided during each month, determined as provided in sub-section
4.2 above;
(f) the monthly standing charge for Development Services,
determined as provided in sub-section 5.1 above;
(g) charges for all Development Services provided or to be
provided during such month, determined as provided in sub-section
5.2 or 5.5 above;
(h) charges for Services provided or to be provided during such
month requested by the Director or his staff pursuant to Service
Line 9 (Service to the Director General of Electricity Supply)
(or a substitute Service Line in agreed form);
(i) charges for all Non-Menu Services, determined as provided in
Section 6 above:
(j) Third Party Costs that have been invoiced to the Settlement
System Administrator during such month, and the Handling Charge
in respect thereof;
(k) the shortfall (if any) in the Minimum Manpower Charge
Commitment, determined as provided in Section 10 below; and
(l) any charges which are expressed in this Agreement as
recoverable "in accordance with the Charging Procedure"
provided that with the exception of:
(i) the recovery of the standing charges for Consultancy
Services and Development Services;
(ii) until such time as an ordering procedure is agreed between
the Settlement System Administrator and the Executive Committee,
the recovery of charges for Services referred to in paragraph (c)
above;
(iii) the recovery of charges for Services referred to in
paragraph (h) above;
(iv) the recovery of the Monthly Minimum Manpower Charge
Commitment;
(v) the recovery of the Minimum Contract Price; and
(vi) the recovery of charges for Services referred to in Sections
(2)(b) and 2(e) of Part E,
the Settlement System Administrator shall not have the right to
recover charges in respect of Services provided or to be provided
unless an Order in respect of those Services has been received by
the Settlement System Administrator.
10. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT
10.1 Monthly recovery: If in respect of any month the aggregate
of the charges referred to in paragraphs (e) and (g) of Section 9
above shall be less than the Monthly Minimum Manpower Charge
Commitment, the Settlement System Administrator shall have the
right to recover the amount of such shortfall without an Order.
10.2 Reconciliation procedure: A reconciliation of the Services
provided against the amounts received on account of the Monthly
Minimum Manpower Charge Commitment shall be carried out at the
times and in the manner provided in sub-section 6.2 of Part D,
and any resultant adjustment shall be taken into account in the
next invoice for Post Charges to be issued under Part J.
11. MINIMUM CONTRACT PRICE
11.1 Annual recovery: If in respect of any SSA Accounting Period
the aggregate of the charges referred to in paragraphs (a), (b),
(d), (e), (f), (g) and (k) of Section 9 above (but excluding any
such charges under paragraphs (a), (b), (e) and (g) of Section 9
referable to Services provided under Service Lines 9, 11, 14, 16,
17, 18 and 21) recovered for all months in such SSA Accounting
Period shall be less than the Minimum Contract Price, the
Settlement System Administrator shall have the right to recover
the amount of such shortfall without an Order in the first
monthly invoice to be issued under Part J after the end of such
SSA Accounting Period.
11.2 Monthly recover: If in any SSA Accounting Period it appears
to the Account Manager (acting reasonably) after consultation
with the Contract Manager and by reference to Orders received
that the sum of the charges referred to in sub-section 11.1 above
for the remainder of such SSA Accounting Period when aggregated
with the sum of such charges already recovered in such SSA
Accounting Period will be less than the Minimum Contract Price,
the amount of such shortfall may be recovered without an Order in
monthly instalments over the remaining months of such SSA
Accounting Period, the amount of such instalments being agreed in
advance by the Contract Manager and the Account Manager, such
agreement not to be unreasonably withheld.
11.3 Minimum Contract Price: The Minimum Contract Price in
respect of any SSA Accounting Period shall be the amount set out
against such SSA Accounting Period in the document entitled
Minimum Contract Price Menu in the agreed form.
PART H
CHARGES FOR SERVICES: EXCEPTIONAL ITEMS
1.EXTENSION PERIOD CHARGES
The Settlement System Administrator shall be entitled to charge
in accordance with the Charging Procedure for all and any
Services provided during the Extension Period by the Settlement
System Administrator as follows:
(a)where the first Extension Notice is served on the
Settlement System
Administrator at least six months before the Termination Date:
(i)for the first three months of all Extension Periods (taken
together), the Settlement System Administrator shall be entitled
to charge for Services in accordance with the appropriate rates
for those Services in the relevant Menu of Prices multiplied by
1.0; and
(ii)for the second three months of all Extension Periods
(taken - together), the Settlement System Administrator shall be
entitled to charge for Services in accordance with the appropriate
rates for those Services in the relevant Menu of Prices multiplied by
1.1; and
(iii) for any period thereafter, the Settlement System
Administrator shall be entitled to charge for Services in
accordance with the appropriate rates for those Services in the
relevant Menu of Prices multiplied by 1.2;
(b)where the first Extension Notice is served on the
Settlement System
Administrator less than six months but more than three months
before the Termination Date:
(i)for the first three months of all Extension Periods (taken
together), the Settlement System Administrator shall be entitled
to charge for Services in accordance with the appropriate rates
for those Services in the relevant Menu of Prices multiplied by
1.1; and
(ii)for any period thereafter, the Settlement System
Administrator
shall be entitled to charge for Services in accordance with the
appropriate rates for those Services in the relevant Menu of
Prices multiplied by 1.2; and
(c)where the first Extension Notice is served on the
Settlement System Administrator less than three months before the
Termination Date, the Settlement System Administrator shall be
entitled to charge for Services in the Extension Period in accordance
with the appropriate rates for those Services in the relevant Menu of
Prices multiplied by 1.2.
If the aggregate of any additional or consequential costs (other
than manpower costs) properly incurred in any Extension Period
and reported on by the auditor of the Settlement System
Administrator exceeds the aggregate . of the incremental rates
charged in any such Extension Period in accordance with
paragraphs (a) to (c) above the amount of such cost shall be
recoverable by the Settlement System Administrator.
2. BAD DEBTS
The total cost of any bad debts (including interest thereon) of
the Settlement System Administrator in providing the Services and
arising in any SSA Accounting Period may be recovered by the
Settlement System Administrator in any subsequent SSA Accounting
Period as if it were a Third Party Cost (but the Settlement
System Administrator shall not have the right to recover the
Handling Charge in respect thereof).
3. NEW TAXES OR NEW LEGISLATION
3.1New taxes: If by reason of the introduction of a new tax
(other than a tax on overall net income) the cost to the Settlement
System Administrator of providing the Services is increased or the
amount of any payment received or receivable by the Settlement System
Administrator under the SSA Arrangements for providing the Services
is reduced, then:
(a)forthwith upon becoming aware of the happening of such
event the Settlement System Administrator shall notify the Executive
Committee who shall thereupon notify the Pool Members;
(b)the Settlement System Administrator shall, as soon as is
reasonably practicable, give the Executive Committee (who shall
thereupon notify the Pool Members) a certificate giving details of the
new tax and the amount of such additional cost or reduction and the
calculation thereof and the period to which it applies together with a
report from its auditors confirming that they have reviewed the basis
of the calculation of the additional cost or reduction and confirming
the accuracy of the calculation; and
(c) subject to the Settlement System Administrator complying
with its obligations under paragraphs (a) and (b) above, the
Settlement System Administrator shall have the right to recover
from Pool Members the amount of such additional cost or reduction
through an adjustment to the Menus of Prices or in such other
manner as may be agreed with the Executive Committee as will in
either case ensure that the Settlement System Administrator is
kept whole in respect of such additional cost or reduction.
3.2New legislation: If at any time the Settlement System
Administrator becomes
subject to either a new statute passed by the government of the
United
Kingdom or a new European Union regulation which is directly
applicable, in
either case under which the Settlement System Administrator is
obliged to act
in a manner which materially increases the cost to it of
providing the Services
then it shall notify the Executive Committee of such a change and
if the
Executive Committee is satisfied, in its sole discretion, that:
(a)the Settlement System Administrator is obliged to act in
accordance with the new legislation; and
(b)the cost to the Settlement System Administrator of
providing the Services as a whole will be materially increased as a
result of complying with such legislation,
the Executive Committee shall enter into good faith negotiations
with the Settlement System Administrator to agree(but with no absolute
obligation on the Executive Committee or the Settlement System
Administrator to agree) amendments to the Menus of Prices to reflect
such increased costs.
4. EXCEPTIONAL ITEMS
If, where Service Line 21 (Emergency Services) is invoked by the
Executive Committee, the Settlement System Administrator shall
necessarily incur additional costs in running the Settlement
Business during a Security Period, those costs shall be regarded
as beyond the control of the Settlement System Administrator and
the Settlement System Administrator may recover the same,
together with an administration charge of 2.5 per cent., as if
they were Third Party Costs (but shall not have the right to
recover the Handling Charge in respect thereof) provided that
such costs have been verified as additional costs by the
Settlement System Administrator's auditors. Pool Members shall be
obliged to pay the actual amount of such costs and all reasonable
costs of the Settlement System Administrator's auditors in
verifying the same.
5. MARKET TEST COSTS
Where any market test is commissioned by the Executive Committee,
Pool Members shall be liable according to their Contributory
Shares for:
(a) all Third Party Costs (if any) incurred in contracting for
the market test
services; and
(b)all costs (if any) directly and properly incurred by ESIS
in appraising the result of a market test of which the Settlement
System Administrator has been asked to take account pursuant to
sub-section 9.3 of Part B and in requesting clarification of the
method and clarification and correction of the results thereof.
6. PIP REBATES
If as a result of the implementation of a Performance Improvement
Programme there shall be any rebate due to Pool Members in
respect of the charges of the Settlement System Administrator for
the provision of Services, Pool Members will be credited a
proportionate sum of such rebate according to their Contributory
Shares in the next invoice issued by the Settlement System
Administrator under Part J.
<PAGE>
PART I
DEFERRED SETTLEMENT PROJECT EXPENDITURE
1. SOFTWARE EXPENDITURE ALREADY CAPITALISED
The Settlement System Administrator shall have the right to
recover Software expenditure capitalised in its books at 1st
April, 1994 at the aggregate of (a) its net book value at that
date, (b) a margin of 6 per cent. per annum on the reducing
balance of such value and (c) a financing interest charge on such
reducing balance at a rate per annum equal to the base rate from
time to time of Barclays Bank PLC plus 2 per cent.. Such recovery
shall be made monthly as Deferred Settlement Project Expenditure
from 1st April, 1994 through the charges for Continuous
Production Services spread evenly over the remainder of the
agreed depreciation period relating to the relevant item of
Software expenditure.
2. EXISTING WORK IN PROGRESS AS AT APRIL, 1994
The Settlement System Administrator shall have the right to
recover Software development work in progress recorded in its
books at 1st April, 1994 on a monthly basis as Deferred
Settlement Project Expenditure through the charges for Continuous
Production Services spread evenly over 60 months starting with
the month following commissioning of the Software. The aggregate
amount to be recovered shall be:
(a) the net book value of all such Software development work
in progress at lstApril, 1994;
(b) the cost of the Settlement System Administrator's manpower
used since 1st April, 1994 in developing such Software, calculated on
the basis of the then current Menu of Manpower Prices;
(c) Third Party Costs (if any) since 1st April, 1994 in
developing such Software;
(d) a margin of 6 per cent. per annum on the reducing balance
of the value referred to in (a) above starting from 1st April, 1994;
and
(e) a financing interest charge as agreed from time to time by
the Executive Committee and the Settlement System Administrator on
such reducing balance, and over such periods as may be agreed by the
Executive Committee and the Settlement System Administrator,
through an appropriate amendment to the Menu of Prices for
Continuous Production Services.
3.NEW PROJECTS SINCE APRIL, 1994
In respect of Software development projects Ordered on or after
1st April, 1994, the Settlement System Administrator shall have
the right to recover the price for any such project as revenue
charges when incurred unless in Ordering the project the Contract
Manager agrees with the Settlement System Administrator that the
price should be recovered on a deferred basis as Deferred
Settlement Project Expenditure in which event it shall be
recovered (together with an interest charge and arrangement fee,
if agreed) over such period as may be so agreed through the
charges for Continuous Production Services by an appropriate
amendment to the Menu of Production Services Prices.
<PAGE>
PART J
COST RECOVERY
1. CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR
The Settlement System Administrator shall have the right to
recover from all Pool Members all sums due to it from them under
the SSA Arrangements provided that such sums are invoiced in
accordance with this Part. All sums to be recovered must be
included in an invoice for Prior Charges or an invoice for Post
Charges. In respect of any month, the amounts invoiced on an
invoice for Prior Charges and on an invoice for Post Charges
shall together be known as the Total Sum Due in respect of that
month.
2. INVOICING
2.1 Invoice Statementfor Prior Charges: The Settlement System
Administrator shall send the Contract Manager an invoice
statement for Prior Charges in the agreed form in respect of each
month no later than 45 days prior to the commencement of such
month.
2.2 Content of Invoice Statement: Each invoice statement for
Prior Charges shall specify the amount due in respect of Services to
be provided during the relevant month as follows:
(a) the charge for Continuous Production Services;
(b) the monthly standing charge for Consultancy Services;
(c) the monthly standing charge for Development Services;
(d) the greater of (i) the Monthly Minimum Manpower Charge
Commitment and (ii) the charges for manpower Ordered for that
month in connection with Consultancy Services and Development
Services at the FSC and ASC Rates; and
(e) (i) to one-twelfth of the Suppliers Second Tier Charge for
that Accounting Period; and
(ii)the anticipated under-recovery (if any) in the Accounting
Period to date of charges for the provision of Services in Service
Line 14 (Second Tier Metering), plus or minus the interest accrued
on the debit or credit balance (as the case may be) on the
STSSC Account.
2.3 Invoice Statementfor Post Charges. The Settlement System
Administrator shall send the Contract Manager an invoice statement for
Post Charges in the agreed form in respect of each month no later than
ten days after the end of such month.
2.4 Content of Invoice Statement: Each invoice statement for Post
Charges shall specify the amount due in respect of Services provided
during the relevant month and not contained in the invoice statement
for Prior Charges for such month as follows:
(a) the charge for Continuous Production Services not charged
under sub section 2.2(a) above;
(b) the charge for Ad Hoc Production Services;
(c) the charge for Consultancy Services and Development Services
not charged under sub-section 2.2(d) above;
(d) the charge for Non-Menu Services;
(e) any Third Parq Costs together with the associated Handling
Charge;
(f) any charges for Services provided during such month
requested by the Director or his staff under Service Line 9
(Service to the Director General of Electricity Supply); and
(g) any charges for items expressly stated to be otherwise
recoverable "in accordance with the Charging Procedure".
2.5 Disputes: The Contract Manager shall raise, in writing, any
concerns in relation to any such invoice statements as are referred to
in sub-section 2.1 or 2.3 above within five working days of receipt of
the same, but shall not be precluded from raising any such concerns at
any later stage. If any concerns are not settled by the date the
invoices are required to be despatched to Pool
Members, such invoices may be despatched by the Settlement System
Administrator on the basis it reasonably believes to be correct
insofar as they relate to Prior Charges or Post Charges which are not
disputed by the Contract Manager. Any Prior Charges or Post Charges
which are believed in good faith to be wrong by the Contract Manager
and continue to be disputed in good faith may not be included in any
invoice until the amount outstanding has been settled between the
Settlement System Administrator and the Contract
Manager. Where, after investigation, it is agreed between the
Contract Manager and the Settlement System Administrator that the
amount disputed has in fact been correctly calculated by the Settlement
System Administrator, the Settlement System Administrator shall have
the right to charge interest on such Prior Charges or Post Charges in
accordance with and on the basis set out in sub-section 3.3 below from
the date upon which they would have been due for
payment if undisputed. Any adjustment following settlement of
outstanding concerns will be made through the next invoice issued
under this Part.
2.6 Invoices to Pool Members: The Settlement System Administrator
shall send each Pool Member an invoice:
(a) in respect of an invoice for Prior Charges, no later than the
first day of the month prior to the month in respect of which the
relevant charges are to be recovered; and
(b) in respect of an invoice for Post Charges, no later than ten
days after such statement is sent to the Contract Manager,
in each case for an amount determined in accordance with Part K.
2.7 Resignation or removal of the Settlement System
Administrator: Where the Settlement System Administrator resigns
in accordance with Section 14 of Schedule 4 or is removed in
accordance with Section 17 of Schedule 4, the Settlement System
Administrator shall be responsible for all Transition Costs.
Accordingly:
(a) Orders placed by Pool Members cannot be used to defray
Transition Costs; and
(b) the Settlement System Administrator shall not include any
Transition Costs in any future invoice statements.
3. PAYMENTS
3.1 Payments by Pool Members: Pool Members shall settle any
invoices delivered to them pursuant to Section 2 above on, and the due
date for payment shall be:
(a) in the case of an invoice for Prior Charges, the last working
day of the month prior to the month in respect of which the
charges relate; and
(b) in the case of an invoice for Post Charges, the last working
day of the month in which the invoice is delivered to Pool
Members.
All amounts shall be paid in sterling in cleared funds and in
full without set-off or counter claim, withholding or deduction
of any kind whatsoever but without prejudice to any other remedy.
All charges are exclusive of United Kingdom Value Added Tax which
shall be added to such charges, if applicable.
3.2 Disputes: If there is any dispute regarding charges in any
month, a Pool Member may not withhold payment of any invoiced amount
but, for the avoidance of doubt, may refer such dispute to arbitration
in accordance with Clause 83 following payment.
3.3 Interest on non-payment: If any amount due to the
Settlement System Administrator is not received on the due date the
Pool Member is required to pay such amount, such Pool Member shall pay
interest to the Settlement System Administrator on such amount from
and including the date of default up to but excluding the date of
actual payment (after as well as before judgment) at the rate which is
4 per cent. per annum above the base rate from time to time during each
period of default of National Westminster Bank plc.
3.4 Payment of charges: Each Pool Member shall pay its due
proportion of the Settlement System Administrator's charges for each
SSA Accounting Period determined in accordance with Part K.
4. ALLOCATION OF CHARGES
4.1 Allocation: The Settlement System Administrator shall
allocate its charges amongst Pool Members in accordance with Part K.
4.2 New and former Pool Members: Any Pool Member which is a Pool
Member for part only of any month shall pay charges on an interim basis
of such amount apportioned on a daily basis for each day that it was
a Pool Member during that month on the basis of the allocation of
charges set out in Part K. Adjustments to charges on all Pool Members
as a result of existing Pool Members leaving or new Pool Members
joining will be set out in the invoice published for the Post Charges
for the relevant month whereupon the Pool Members and/or former Pool
Members shall be required to pay such additional amount or shall be
entitled to such reimbursement.
<PAGE>
PART K
ALLOCATION OF CHARGES
1. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES
1.1 Payment of Total Sum Due: Each Pool Member shall be
obliged to pay the amount allocated to it in accordance with this
Part K. The total aggregate amount allocated to all Pool Members in
respect of any month shall equal the Total Sum Due in respect of such
month.
1.2 Allocation of Total Sum Due: The Total Sum Due in respect
of each month shall be allocated amongst Pool Members as follows:
(a) first, each Pool Member:
(i) shall pay the costs (if any), as detailed in the relevant
invoice, associated with any change to the Software necessitated by
such Pool Member's request for:
(A) data from Settlement additional to that which is
generally provided to other Pool Members of the same
class; or
(B) for reporting of data in a format different from that in
which data are generally provided to other Pool
Members of the same class
(which costs shall, in the first SSA Accounting Period that they
are charged to such Pool Member, have added to them a single lump
sum payment for maintenance equal to 40 per cent. of the costs of
such charge, as reasonably determined by the Settlement System
Administrator);
(ii) shall pay the costs (if any and as far as the same are
directly referable to such Pool Member) for the use by such Pool
Member of electronic mail, the provision and maintenance of
telecommunication circuits from data collector outstations and
any other services procured or provided by the Settlement
System Administrator which.are directly referable to such Pool
Member; and
(iii) if it is a Supplier, shall pay its Supplier's Second Tier
Charge for that month;
(b)secondly:
(I) each Generator shall pay pounds 500 (or such other amount as the
Executive Committee and the Settlement System Administrator may
agree) for each of its Generating Units in respect of which
standing data have been submitted; and
(ii) each Pool Member shall pay pounds 750 (or such other amount as
the Executive Committee and the Settlement System Administrator
may agree) for each Metering System in respect of which it is
the Registrant;
(c) thirdly, but only in respect of the first month in an SSA
Accounting Period in which a Generator or Supplier is a Pool Member:
(i) subject as provided in paragraphs (ii) to (vii) inclusive
below, each Pool Member shall pay an annual membership fee as
follows: -
Category Fee
(A) Small
(1) A Supplier with a maximum demand pounds 9,000
at any time during such year
(as reasonably determined by the
Executive Committee) of less
than 200MW or a Generator with an
aggregate Registered Capacity
of less than 50MW (other than a
Supplier or Generator referred to in
(2) below)
(2) A Supplier with a maximum demand pounds 2,500
at any time during such year
(as reasonably determined by
Executive Committee) of less than
200MW or a Generator with aggregate
Registered Capacity of less than 50MW,
in either case which requires to
have delivered to it only its own
trading information
(B) Intermediate A Supplier with a maximum demand at pounds 20,000
any time during such year (as reasonably
determined by the Executive Committee)
of 200MW or more up to (but excluding)
2000MW or a Generator with aggregate
Registered Capacity of 50MW or more up
to (but excluding) 1000MW
(C) Large A Supplier with a maximum demand at any
time during such year (as reasonably
determined by the Executive Committee)
of 2000MW or more or a Generator with
aggregate Registered Capacity of lOOOMW
or more pounds 45,000
(ii) any Pool Member which is both a Generator and a Supplier
shall pay only one membership fee, being that fee which is the
greater of its annual membership fee as a Generator and its
annual membership fee as a Supplier (and, if both are the same
amount, such Pool Member shall pay only its membership fee as
a Generator): such fee shall continue to be payable regardless of
any change during the relevant year in the capacity(ies) in
which such Pool Member participates as a Pool Member;
(iii) unless otherwise resolved by the Executive Committee with
respect to the relevant Pool Member, a Pool Member with no demand
or generation shall not pay any membership fee and, if the
Executive Committee shall so resolve, shall pay only that
membership fee referable to a Pool Member falling within the
relevant sub-category of paragraph (i) (A) above;
(iv) if, in its reasonable opinion, the Executive Committee
considers:
(A) any Pool Member (not being a Pool Member referred to in
paragraph (iii) above) to be insignificant in terms of generation
or demand, it may waive the membership fee for such Pool Member
until further notice; and
(B) if inequitable or otherwise inappropriate to levy the full
amount of the membership fee that would otherwise be
payable by any Pool Member, it may waive all or part of
such fee on such terms and for such period(s) as it
reasonably sees fit;
(v) (A) any Pool Member falling within sub-category (2) of
paragraph (i) (A) above which wishes to receive data by
electronic mail shall be required to pay an additional
monthly membership fee of one-twelfth of pounds 800; and
(B) any Pool Member which wishes to receive data by
courier shall be required to pay an additional monthly
membership fee of one-twelfth of pounds 1,000;
(vi) the Executive Committee may from time to time amend the
categories of membership and the fees (with the consent of the
Settlement System Administrator, such consent not to be
unreasonably withheld or delayed);
(vii) the charges referred to in paragraph (b) above and in this
paragraph (c) shall be adjusted in relation to each Pool Member,
Generator or Supplier, as the case may be, by reference to the
number of days during each year for which such Party was a Pool
Member and (where appropriate) the number of Generating Units or
Metering Systems allocated to it during such period;
(d) fourthly, 100 per cent. of the balance of the Total Sum
Due during any month not recovered pursuant to paragraphs (a) to (c)
(inclusive) above shall be allocated amongst all Pool Members during
such month by reference to the Contributory Shares of each Pool
Member.
For this purpose, each Pool Member's due proportion of the
charges shall be assessed first by reference to the then latest
Contributory Shares of all Pool Members calculated by the
Executive Committee for the period and each part thereof to which
such charges relate (or, if and to the extent that the charges
relate to a period for which no such calculation has yet been
made, by reference to the then most recently calculated current
Contributory Shares of all Pool Members) and shall thereafter be
readjusted from time to time for each day within the relevant
period following changes to the Contributory Shares of Poo
Members for all or any part of such period or (as the case may
be) following the calculation of the Contributory Shares for such
period.
Provided that, in calculating the balance of the Total Sum Due
payable by each Pool Member in any month, the annual membership
fee payable by each Pool Member in accordance with paragraph (c)
above shall be divided by the number of complete months in the
SSA Accounting Period remaining after the date of payment of such
annual membership fee and the resultant figure (after rounding to
the nearest pounds 1) shall be credited to the relevant Pool Member for
offset against its proportionate share of the Total Sum Due for
each such remaining month.
1.3 Prima facie evidence: The Settlement System Ad
ministrator's determination of the allocation of all costs during any
month shall, in the absence of manifest error, be prima facie evidence
thereof.
1.4 Contributory Shares: The Settlement System Administrator
shall advise each Pool Member of its Contributory Share and how such
Contributory Share is calculated.
<PAGE>
SCHEDULE 5
Form of Admission Application
The Executive Committee for the
Pooling and Settlement System in England and Wales
Dear Sir,
[Date]
1. We tinsert full legal name and address of
registered/principal office of applicant] refer to the Pooling
and Settlement Agreement for the electricity industry in England
and Wales dated 30th March, 1990 (as amended, varied,
supplemented, modified or suspended, the "Pooling and Settlement
Agreement").
2. Unless the context otherwise requires, words and expressions
defined in the Pooling and Settlement Agreement shall bear the
same meanings respectively when used herein.
3. We hereby apply to be admitted as an additional party to the
Pooling and Settlement Agreement pursuant to Clause 3 thereof. We
wish to participate as a [ [Generator]/ [Supplier]/ [Externally
Interconnected Party] ] .
4.We confirm that:
(A)(i) we have been granted and have in full force and
effect a Generation Licence or we have made and have current an
application for such a licence; or
(ii) we are exempted from the obligation to hold a Generation
Licence by reason of an exemption under section 5 of the Act; or
(iii) we have entered into an Interconnection Agreement under
which we will, subject to becoming a Pool Member, have the right
(whether alone or together with others) then or at any time in
the future to use all or any part of an External Interconnection
for the delivery of electricity to the NGC Transmission System;
or
(iv) we are acting as the agent for a person generating or
proposing to generate electricity on terms whereby we have the
exclusive right to all the output of those Generating Unit(s) of
such person and in respect of which we have been appointed agent;
(B) (i) we have been granted and have in full force and effect a
PES Licence or a Second Tier Supply Licence or we have made and
have current an application for such a licence; or
(ii) we are exempted from the obligation to hold a PES Licence or
(as the case may be) a Second Tier Supply Licence by reason of an
exemption under section 5 of the Act; or
(iii) we have entered into an Interconnection Agreement under
which we will, subject to becoming a Pool Member, have the right
(whether alone or together with others) then or at any time in
the future to use all or any part of an External Interconnection
for the taking of electricity from the NGC Transmission System;
(C) (I) we are [or [ ] (being our agent and a person which the
Executive Committee has confirmed in writing to us is acceptable
to the Executive Committee, a copy of which confirmation is
enclosed) is] registered for United Kingdom Value Added Tax
purposes;
(ii) we have [or our agent has] so arranged matters that any
payment receivable by us under or pursuant to the Pooling and
Settlement Agreement will constitute for United Kingdom Value
Added Tax purposes the consideration for a taxable supply made in
the United Kingdom by us [or our agent] as a taxable person in
the United Kingdom in the course of furtherance of a business;
(iii) we have [or our agent has]* so arranged matters that any
payment required to be made by us under or pursuant to the
Pooling and Settlement Agreement will constitute for United
Kingdom Value Added Tax purposes the consideration for a taxable
supply made in the United Kingdom to us [or our agent]*; and
(iv) in any case where any electricity has been or will be
generated or produced by us outside the United Kingdom, we have
[or our agent has]* so arranged matters that any import thereof
for the purposes of or otherwise in connection with the Pooling
and Settlement Agreement will constitute for United Kingdom Value
Added Tax purposes an importation or acquisition of goods solely
by us [or our agent] * and so not by any other Party.
5. We hereby represent and warrant to the Executive (for itself
and on behalf of all the Parties) that:
(A) we are duly organised and validly existing under the laws of
the jurisdiedon of our organization or incorporation;
(B) we have the power to execute and deliver our Accession
Agreement and any other documentation relating to that Agreement or
the Pooling and Settlement Agreement and such other agreements as are
required thereby and to perform our obligations hereunder or
thereunder and we have taken all necessary action to authorise
such execution, delivery and performance; and
(C) such execution, delivery and performance do not violate or
conflict with any law applicable to us, any provision of our
constitutional documents, any order or judgment of any court or other
agency of government applicable to us or any of our assets or any
contractual restriction on or affecting us or any of our assets.
We confirm that these representations and warranties will
also be true an' correct in all material respects at the date of
our admission as a New Party.
6. We enclose the application fee of pounds [ ].
7. We accept and agree to be bound by the terms of Clause 3 of
the Pooling and Settlement Agreement.
Yours faithfully,
duly authorised for and on behalf of
[insert full legal name of the New Party]
Complete/delete as appropriate. Include paragraph (A) if applying
to be admitted as a Generator. Include paragraph (B) if applying
to be admitted as a Supplier. Insert current application fee
prescribed by the Executive Committee.
<PAGE>
SCHEDULE 6
Form of Pool Membership Application
The Executive for the Pooling and Settlement System in England
and Wales.
Dear Sir,
Date
1. We [insert full legal name and address of
registered/principal office of applicant] refer to the Pooling
and Settlement Agreement for the electricity industry in England
and Wales dated 30th March, 1990 (as amended, varied,
supplemented, modified or suspended, the "Pooling and Settlement
Agreement").
2. Unless the context otherwise requires, words and expressions
defined in the Pooling and Settlement Agreement shall bear the
same meanings respectively when used herein.
3. We hereby apply to be admitted as a Pool Member pursuant to
Clause 8.2 of the Pooling and Settlement Agreement. We wish to
participate as a [[Generator]/[Supplier]/[and an External Pool
Member]]*.
4. We confirm that:
(A)(i) we have been granted and have in full force and
effect a Generation Licence; or
(ii) we are exempted from the obligation to hold a Generation
Licence by reason of an exemption under section 5 of the Act; or
(iii) we have entered into an Interconnection Agreement under
which we will, subject to becoming a Pool Member, have the right
(whether alone or together with others) then or at any time in
the future to use all or any part of an External Interconnection
for the delivery of electricity to the NGC Transmission System;
or
(iv) we are acting as the agent for a person generating or
proposing to generate electricity on terms whereby we have the
exclusive right to all the output of those Generating Unit(s) of
such person and in respect of which we have been appointed agent;
(B)(i) we have been granted and have in full force and effect a PES
Licence or a Second Tier Supply Licence; or
(ii) we are exempted from the obligation to hold a PES Licence or
(as the case may be) a Second Tier Supply Licence by reason of an
exemption under section 5 of the Act; or
(iii) we have entered into an Interconnection Agreement under
which we will, subject to becoming a Pool Member, have the right
(whether alone or together with others) then or at any time in
the future to use all or-any part of an External Interconnection
for the taking of electricity from the NGC Transmission System;
(C) with effect from the date of our admission as a Pool Member,
we will accede as a party to the Funds Transfer Agreement and to the
Deed of Indemnity in favour (inter alla) of the Chief Executive in
accordance with their respective terms;
(D) on or before our admission as a Pool Member, we will open a
Settlement Account and comply with all other applicable
requirements of Schedule 11 to the Pooling and Settlement
Agreement;
(E) (i) we are [or [ ] (being our agent and a person which the
Executive Committee has confirmed in writing to us is
acceptable to the Executive Committee, a copy of which
confirmation is enclosed) is] registered for United Kingdom
Value Added Tax purposes;
(ii) we have [or our agent has] so arranged matters that any
payment receivable by us under or pursuant to the Pooling and
Settlement Agreement will constitute for United Kingdom Value
Added Tax purposes the consideration for a taxable supply made in
the United Kingdom by us for our agent] as a taxable person in
the United Kingdom in the course of furtherance of a business;
(iii) we have [or our agent has] so arranged matters that any
payment required to be made by us under or pursuant to the
Pooling and Settlement Agreement will constitute for United
Kingdom Value Added Tax purposes the consideration for a taxable
supply made in the United Kingdom to us [or our agent]; and
(iv) in any case where any electricity been or will be generated
or produced by us outside the United Kingdom, we have [or our
agent has] so arranged matters that any import thereof for the
purposes of or otherwise in connection with the Pooling and
Settlement Agreement will constitute for United Kingdom Value
Added Tax purposes an importation or acquisition of goods solely
by us [or our agent] and so not by any other Party; and
(F)***
Option 1
we have entered into and have in full force and effect (or, prior
to our admission as a Pool Member, will enter into and have in
full force and effect) all appropriate Connection Agreements;
- - or -
Option 2
all appropriate Connection Agreements with [ ], being the
relevant Externally Interconnected Party, in relation to [ ],
being the relevant External Interconnection, are in full force
and effect.
5. We enclose:
[insert details of evidence in support of fulfilment of the other
Pool Membership Conditions set out in Clause 8.3 of the Pooling
and Settlement Agreement].
Yours faithfully,
duly authorised for and on behalf of
[insert full legal name of the applicant]
* Complete/delete as appropriate.
** Include paragraph (A) if applying to be admitted as a
Generator.
*** Include paragraph (B) if applying to be admitted as a
Supplier.
****Include Option 2 if applying to be admitted as an Externa!
Pool Member.
Otherwise include Option 1.
<PAGE>
SCHEDULE 7
Form of Escrow Agreement
THIS AGREEMENT is made on
[ BETWEEN :]
(1)NGC SETTLEMENTS LIMITED (registered number 2444282) whose
registered office is situate at National Grid House, Sumner Street,
London SE1 9JU for itself and on behalf of the Pool Members (as
defined in the Pooling and Settlement Agreement hereinafter referred
to) acting through the Executive Committee (as hereinafter defined)
(the "Settlement System Administrator", which expression shall include
the Settlement System Administrator's successors in title); and
(2)THE NATIONAL COMPUTING CENTRE LIMITED (registered number
881195) whose registered office is situate at Oxford Road, Manchester
M1 TED (the "Custodian").
WHEREAS :
(A) by various agreements (the "Pooling and Settlement
Arrangements") details of which are set out in Schedule A NGC
Settlements Limited has agreed to act as Settlement System Administrat
or and operate a settlements system requiring
the use of certain computer package(s) comprising computer
programs and related systems;
(B) certain technical information and documentation describing
or otherwise relating to the said computer programs and related
systems is required for the understanding, maintaining, modifying and
correcting of the said computer programs and related systems; and
(C) the Settlement System Administrator acknowledges that in
certain circumstances a successor Settlement System Administrator may
require possession of the said technical information and documentation
up-to-date and in good order,
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"Director" means the Director General of Electricity Supply;
"Executive Committee" means the Executive Committee established
under the Pooling and Settlement Arrangements and "Committee
Member" means a member of the Executive Committee;
"Material" means the source code and load (machine executable)
modules and the technical information, manuals and other
documentation described in Schedule B;
"Modifications"" means the source code and load (machine
executable) modules and the technical information, manuals and
other documentation relating to all modifications, updates and
changes to the Material as accepted from time to time by the
Executive Committee for use in the settlement process; and
"Receptacle" means the receptacle to contain a copy of the
Material pursuant to Clause 2.2 and copies of all Modifications
delivered pursuant to Clause 3.1.
1.2 Unless the context otherwise requires, words and
expressions defined in the
Pooling and Settlement Arrangements shall bear the same meanings
respectively when used herein.
DEPOSIT
2.1 Forthwith upon execution and delivery of this Agreement, the
Settlement System Administrator will deposit and the Custodian
will accept as custodian for the Pool Members (acting through the
Executive Committee) a copy of the Material.
2.2 The Custodian will place the copy of the Material in the
Receptacle.
2.3 The Custodian shall bear no obligation or responsibility to
any person to determine the existence, relevance, completeness,
accuracy or any other aspect of the Material and/or
Modifications. The Custodian shall have no responsibility to
determine that whatever is deposited or accepted by it for
deposit is or is not Material and/or Modifications.
3. MODIFICATIONS
3.1 Subject to and in accordance with the Pooling and
Settlement Arrangements, the Settlement System Administrator will
deposit a copy of all Modifications with the Custodian within 28 days
of such Modifications being accepted by the Executive Committee.
3.2 The Custodian shall as soon as possible confirm receipt of
all Modifications in writing to the Executive Committee and the
Settlement System Administrator.
3.3 The Custodian will place a copy of all Modifications in the
Receptacle.
4.RELEASE
4.1 The Custodian shall forthwith release to any successor
Settlement System Administrator appointed pursuant to and in
accordance with the Pooling and Settlement Arrangements the
copy(ies) of the Material and/or all the Modifications upon the
written request of the Executive Committee provided
that the Settlement System Administrator has resigned or has been
removed as Settlement System Administrator under the Pooling and
Settlement Arrangements and has not complied with its obligations
relevant to the Material under Clauses 28.1.1 and 28.1.4 of the
Pooling and Settlement Agreement for the Electricity Industry in
England and Wales dated 30th March, 1990 (as amended, varied,
Supplemented, modified or suspended from time to dme, the Spooling and
Settlement Agreement").
4.2 Any written request of the Executive Committee referred to
in Clause 4.1 shall be in the form of a statutory declaration by one
or more Committee Members setting out the grounds on which release is
sought and exhibiting such documentation in support thereof as the
Custodian shall reasonably require.
4.3 Where any dispute shall arise as to the occurrence of the
event set out in Clause 4.1, such dispute will be referred at the
instance of either the Settlement System Administrator, the Custodian
or the Executive Committee to the Director whose decision shall be
final and binding.
5. CONFIDENTIALITY
The Custodian agrees to maintain all information and/or
documentation coming into its possession or to its knowledge
under this Agreement in strictest confidence and secrecy, not to
make use thereof other than for the purposes of this Agreement
and not to disclose or release it other than in accordance with
the terms hereof.
6. FEES
The Settlement System Administrator will pay the Custodian's fees
as detailed in Schedule C as a needed from time to time by
written agreement between the parties. Such fees shall be
invoiced monthly and paid within one month of the date of the
invoice.
7. TERMINATION
7.1 This Agreement shall terminate upon the release of the copy
of the Material and copies of all Modifications in accordance
with Clause 4.1.
7.2 This Agreement may be terminated by the Custodian by giving
not less than 90 days' written notice to both the Executive and the
Settlement System Administrator.
7.3 This Agreement may be terminated by the Settlement System
Administrator giving not less than 90 dayst written notice to the
Custodian provided that it may not terminate this Agreement without the
consent of the Executive Committee first being given in writing unless
it has been removed or has resigned as Settlement System Administrator
and has complied with its obligations relevant to the Material under
Clauses 28.1.1 and 28.1.4 of the Pooling and Settlement Agreement.
7.4 Upon termination under the provisions of Clause 7.2 or 7.3
the Custodian will deliver the copy(ies) of the Material and all the
Modifications to the Settlement System Administrator (unless jointly
instructed to the contrary by the Settlement System Administrator and
the Executive Committee).
7.5 Termination of this Agreement for whatever reason will not
relieve the Custodian from the obligations of confidentiality
contained in Clause 5.
8. TESTS
The Executive Committee shall be entitled to require the
Custodian to carry out such tests in the presence of the
Settlement System Administrator which in the reasonable opinion
of the Custodian would reasonably establish that the Material and
Modifications contain true and accurate versions of the source
codes and load (machine executable) modules in use at the time of
testing in the settlement process. Any reasonable charges and
expenses incurred by the Custodian in carrying out such tests
will be paid by the Settlement System Administrator.
9. OBSOLETE MATERIAL AND MODIFICATIONS
9.1 The Executive Committee shall be entitled to review from time
to time the Material and Modifications on deposit with the Custodian.
Where the Execute Committee is satisfied that any part of the Material
or Modifications on deposit has ceased to be used in the settlement
process and will be of no further use, whether directly or indirectly,
it may request the Custodian to release any such part to the then
current Settlement System Administrator. Such request shall be in
writing and identify the part or parts of the Material
or Modifications to be released by the Custodian and state that
the reason for such release is that such part or parts is or are no
longer of use. The Custodian shall release such part or parts to the
then current Settlement System Administrator as soon as conveniently
possible after receipt of any such written request from the Executive
Committee.
9.2 Notwithstanding the release of any part or parts of the
Material or Modifications to the Settlement System Administrator
pursuant to Clause 9.1, in the event that any such released Material
or Modifications or copies thereof are subsequently used in the
settlement process such Material or Modifications shall be placed on
deposit and held in escrow pursuant to this Agreement on
the same terms and conditions as any Modification.
10. NOTICES
10.1 Any notice or other communication to be given by one person
to another person 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 or such other person given in this Agreement for the
purpose and marked for the attention so given or to such other
address, telex number and/or facsimile number and/or marked for
such other attention as such other person may from time to time
specify by notice given in accordance with this Clause to the
person giving the relevant notice or other communication to it.
10.2 Any notice or other communication to be given to the
Settlement System Administrator shall be given to:
Address: Fairham House,
Green Lane,
Clifton,
Nottingham NG11 9LN
Telex No: N/A
Facsimile No: 0602 456728
Attention: General Manager
Any notice or other communication to be given to the Custodian
shall be given to:
Address: Oxford House,
Oxford Road,
M anchester M 1 7ED
Telex No: 66 8962
Facsimile No.: 061-228 2579
Attention: Legal Department
Any notice or other communication to be given to the Executive
Committee shall be given to:
Address: Chief Executive (Pooling and Settlement)
30 Millbank,
London SW1P 4RD
Telex No: N/A
Facsimile No: 071-233-8254
Attention: Chief Executive
10.3 Any notice or other communication to be given by one person
to another person 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:
10.3.1in the case of delivery by hand, when delivered; or
10.3.2in the case of first class prepaid post, on the second day
following the day of posting or (if sent airmail overseas or from
overseas) on the fifth day following the day of posting; or
10.3.3in 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
10.3.4 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.
1 1.COUNTERPARTS
This Agreement may be executed in counterpart by the parties on
separate counterparts each of which when executed and delivered
shall constitute an original but which shall together constitute
one and the same instrument.
12. DISPUTE RESOLUTION
12.1 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 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 connectdon with this
Agreement between the parties shall be and is hereby referred to
arbitration pursuant to the arbitration rules of the Electricity
Arbitration Association in force from time to
time.
12.2 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.
13. GOVERNING LAW
This Agreement shall be governed by, and construed in all
respects in accordance with, English law.
<PAGE>
SCHEDULE A
Details of the Pooling and Settlement Arrangements
(A) Pooling and Settlement Agreement for the Electricity Industry
in England and Wales dated 30th March, 1990 and made between the
Founder Generators named therein (1), the Founder Suppliers named
therein (2), NGC Settlements Limited as Settlement System
Administrator (3), Energy Pool Funds Administration Limited as Pool
Funds Administrator (4), The National Grid Company pie as Grid
Operator and Ancillary Services Provider (5) and
Scottish Power plc and Electricite de France, Service National as
Externally Interconnected Parties(6).
(B) Initial Settlement Agreement for the Electricity Industry in
England and Wales dated 30th March, 1990 and made between the Founder
Generators named therein (1), the Founder Suppliers named therein (2),
NGC Settlements Limited as Settlement System Administrator (3), Energy
Pool Funds Administration Limited as Pool Funds Administrator (4), The
National Grid Company plc as Grid Operator and Ancillary Services
Provider (5) and Scottish Power pie and Electricite de France, Service
National as Externally Interconnected Parties (6).
(C) Two Supplemental Agreements relating to the Initial
Settlement Agreement and the Pooling and Settlement Agreement for the
Electricity Industry in England and Wales, each dated as of 30th
June, 1990 and made between the Founder Generators named therein (1),
the Founder Suppliers named therein (2), NGC Settlements Limited as
Settlement System Administrator (3), Energy Pool Funds Administration
Limited as Pool Funds Administrator (4), The National Grid Company pie
as Grid Operator and Ancillary Services Provider (5) and Scottish Power
pie and Electricite de France, Service National as Externally
Interconnected Parties (6).
(D) Third Supplemental Agreement relating to the Initial
Settlement Agreement and the Pooling and Settlement Agreement for the
Electicily Industry in England and Wales dated as of 15th October,
1990 and made between the Founder Generators named therein (1), the
Suppliers named therein (2), NGC Settlements Limited as Settlement
System Administrator (3), Energy Pool Funds Administration Limited as
Pool Funds Administrator (4), The National Grid Company pie as Grid
Operator and Ancillary Services Provider (5) and Scottish Power pie
and Electricite de France, Service National as Externally
Interconnected Parties (6).
(E) Fourth Supplemental Agreement relating to the Initial
Settlement Agreement and the Pooling Settlement Agreement for the
Electricity Industry in England and Wales dated as of 15th October,
1990 and made between the Founder Generators named therein (1), the
Suppliers named therein (2), NGC Settlements Limited as Settlement
System Administrator (3), Energy Pool Funds Administration Limited as
Pool Funds Administrator (4), The National Grid Company pie as Grid
Operator and Ancillary Services Provider (5) and Scottish Power pie
and Electricite de France, Service National as Externally
Interconnected Parties (6).
<PAGE>
SCHEDULE B
The Material
SYSTEM REF ITEM
SMP 101 Source Code - Hardcopy
102 Source Code - Tape
103 Executable Code - Tape
104 DCL - Hardcopy
105 DCL- Tape
106 User Requirement Specification
107 Design Specification
108 Test Plan
109 Program Upgrades Test Specification
110 Acceptance Test Schedule
111 Test Schedule(s)
112 Test Specification
113 User Guide
114 Quality Assurance
115 Licensed software list
116 Licensed software licences
117 Licensed software system tables
118 Acceptance certificates
CDCS 201 Source Code - Tape: GRID02
202 Source Code - Hardcopy
203 Executes clists
204 DB2 Database Request Modules
205 Declaration Libraries
206 Compilation JCL
207 Compilation JCL - Hardcopy
208 Load Modules
209 Menu Library
210 Skeleton Execution JCL
SYSTEM REF ITEM
211 Skeleton Execution JCL - Hardcopy
212 Backup JCL and clists
213 System Test Specification
214 User Acceptance Test Specification
215 User Requirement Specification
216 Logical Design Specification
217 User Guide
218 First Line Support Procedures
219 Licensed software list
220 Licensed software certificates
221 Compilation Instructions
222 Special Fixes List
223 Licensed software system tables
224 Acceptance certificates
L&G 301 Source Code - Hardcopy
302 Source Code - 3.5. Diskette
303 DOS Batch Files - Hardcopy
304 DOS Batch Files - 3.5 " Diskette
305 Executables 3 5 n Diskette
306 System Documentation
307 Documentation Source Files (VMS Backup save
set)
308 Acceptance Test Specification
309 Guide for 2nd-line Maintenance
310 CEGB(NGD) Power Station Collectors Manual
311 Licensed software list
312 Licensed software certificates
313 Compilation Instructions
314 Licensed software system tables
315 Acceptance certificates
LOLP 401 Source Code - Hardcopy
402 Source Code - Disk
403 Object Code - Disk
404 Batch Files - Hardcopy
405 Batch Files - Disk
406 Test Plan and Specification
407 Acceptance Test Data Phl
408 Test Schedule FAT Phl
409 Test Schedule SAT Phl
410 Test Schedule SAT Overview Phl
411 Format Spec. LOLP to Sys Ops.
412 User Guide
413 User Requirements Spec.
414 Functional Spec.
415 Basic Info. Flow
416 Statement of Principles
417 Project Report
418 Op. Procedures Manual
419 Test Plan LOLP 5.0
420 System Test Execution Vol. 1-4
421 LOLP PEC site Ace. Test Review
422 Regression Test Matrix
423 Model Parameters - Vesting Day Vals
424 Promod Vol. 1-2 18
425 Software Release 4.7
426 S/W Install and Update Guidelines
427 Software Releases 4.0 to 4.8
428 Licensed software list
429 Licensed software licences
430 Acceptance certificates
SD-SCICON
S2/SC1 501 Source Code Fortran, ProFortran, SQL Forms: HCPY
502 Source Code Fortran, ProFortran, SQL Forms: TPE
503 Executable Fortran, ProFortran, SQL Forms: TPE
504 Executable DCL, SQL-PLUS, SQL-APT: (inc *.MMS)
505 Acceptance Test Specification
506 Test Schedules
507 Test Schedule SAT
508 Op Subsystem Design Specification
509 CR Subsystem Design Specification
510 SY Subsystem Design Specification
511 DT Subsystem Design Specification
512 Level 1 Design Specification
513 CSM Team Guide
514 Process Leader User Guide
515 Training Course - Input Clerks
516 Training Course - Process Leader
517 Training Course - Team Leader
518 Training Course - Data Trans Clerk
519 Input Clerk User Guide
520 Team Leader User Guide
521 Data Trans Clerk User Guide
522 Auditor User Guide
523 Work Breakdown Structure
524 Functional Specification
525 Performance Scoping Study
526 Regression Testing Matrix
527 Migration From SID to 2.21
528 Review of Initial Pool Rules vs Func. Spec.
529 PMW Project Standards
530 Implementation Guide
531 System Build Instructions
532 User Requirements Specification
533 Acceptance Cert: Functional Spec.
534 Acceptance Cert: Acceptance Test Spec.
535 Acceptance Cert: Test Schedules and Data
536 Licensed software list
537 Licensed software certificates
GOALPOST 601 Source Code - Hardcopy
602 Source Code - Tape
603 Executable - Tape
604 Application File (JCL) - Tape
605 Test Document
606 Module Design Specification
607 User Manual
608 Quality Assurance Plan
609 User Requirements Specification
610 Licensed software list
611 Licensed software certificates
612 Compiladon Instructions
613 Licensed software system tables
614 Acceptance certificates
GOAL 701 Source Code - Hardcopy
702 Source Code - Tape
703 Executable Code - Tape
704 JCL - Hardcopy
705 JCL - Tape
<PAGE>
SCHEDULE C
The Custodian's fees
1. Initial fee - pounds 2,000
2. Annual fee - pounds 500
3 Release fee - pounds 500 plus reasonable expenses
4. Storage fee - pounds 20 per cubic foot per annum (reduced
proportionately for part of any year)
5. Update fee - pounds 100 per update
6. Additional work (testing, etc.) - normal senior consultancy
rates from time to time published by the Custodian.
All such fees are exclusive of VAT and are to be specified in
reasonable detail in each invoice by the Custodian.
IN WITNESS whereof this Agreement has been duly executed the day
and year first above written
As Settlement System Administrator
(for itself and on behalf of the Pool
Members acting through the Executive
Committee)
THE COMMON SEAL of )
NGC SETTLEMENTS LIMITED )
was hereunto affixed in the )
presence of:
Director
Director/Secretary
<PAGE>
As Custodian .
THE COMMON SEAL of )
THE NATIONAL COMPUTING )
CENTRE LIMITED was hereunto )
affixed in the presence of:- )
Director
Director/S ecretary
<PAGE>
SCHEDULE 8
[Not used].
<PAGE>
SCHEDULE 9
The Pool Rules
The sequential page numbering is suspended for Schedule 9
and resumes at Schedule 10
<PAGE>
SCHEDULE 10
Form of Resignation Notice
The Secretary of the Executive Committee for the
Pooling and Settlement System in England and Wales
(copied to:
(A) the Settlement System Administrator; and
(B) the Pool Funds Administrator).
Dear Sir,
[Date]
We [insert full legal name and address of registeret/principal
office of applicant] refer to the Pooling and Settlement
Agreement for the electricity industry in England and Wales dated
30th March, 1990 as amended, varied, supplemented, modified or
suspended (the "Pooling and Settlement Agreement").
Unless the context otherwise requires, words and expressions
defined in the Pooling and Settlement Agreement shall bear the
same meanings respectively when used herein.
We hereby give nodee pursuant to Clause 8.7 of the Pooling and
Settlement Agreement that we are resigning as a Party with effect
from the date falling 28 days after receipt by you of this
Resignation Notice.
We confirm that, in giving this notice of resignation, we are not
and will not be in breach of any of the restrictions on
resignation set out in Clause 8.8 of the Pooling and Settlement
Agreement.
We [enclose]/[confirm that we have already provided]* such
notices (if any) as are required to be given by us pursuant to
the provisions of Part XV of the Pooling and Settlement
Agreement.
We acknowledge that our resignation as a Party is without
prejudice to our accrued rights and liabilities and any rights
and liabilities which may accrue to us in relation to the period
during which we were a Party under the Pooling and Settlement
Agreement, the Funds Transfer Agreement or any agreement referred
to in Clause 8.8.1(c) of the Pooling and Settlement Agreement.
Yours faithfully,
duly authorized for and on behalf of
[insert full legal name of Party]
Complete/delete as appropriate
<PAGE>
SCHEDULE 11
Billing and Settlement
PART 1: PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
1.2 Interpretation
PART 2: ESTABLISHMENT OF SYSTEMS
2. PAYMENTS CALENDAR
2.1 Preparation
2.2 Principles
2.3 Form
2.4 Default
2.5 Distribution
3. INFORMATION SYSTEMS
3.1 Provision of information
3.2 Communications Equipment
3.3 Authorised persons
4. BANKING SYSTEM
4.1 Funds Transfer Agreement
4.2 Establishment of Accounts
4.3 Rights and obligations under Funds Transfer Agreement
4.4 Settlement Account
4.5 Further information
4.6 Change of Settlement Account
4.7 Maintenance of Settlement Account and Settlement Bank
Mandate
4.8 Details of Accounts
5. ESTABLISHMENT OF TRUSTS
5.1 Trusts
5.2 Trusts in respect of the Credit Facility
5.3 Rights of Pool Creditors other than the Ancillary Services
Provider
5.4 Rights of Ancillary Services Provider
5.5 Trusts in respect of Pool Reserve Assets
5.6 Overdue amounts
5.7 Shortfall
5.8 Providing Members' rights to funds
5.9 Funds not to be withdrawn
5.10 Providing Members' rights to withdraw funds
5.11 Waiver of Providing Members' rights
5.12 Pool Reserve Assets
5.13 Providing Members' rights and interests in the Pool
Reserve Account
5.14 Overpayments to be held on trust
5.15 Reimbursement of overpayments
5.16 Repayment of loans
5.17 No claim for breach of trust
6. POOL LEDGER ACCOUNTS
6.1 Maintenance of Pool Ledger Accounts
6.2 Ledger extracts
6.3 Certified copy extracts
6.4 Confidentiality
6.5 Information
6.6 Review of exacts
6.7 Dispute of accuracy
[Sections 7 to 14 (inclusive) not used]
PART 3: SECURITY COVER AND CREDIT MONITORING
15.SECURITY COVER
15.1 Provision of Security Cover
15.2 Letters of Credit
15.3 Cash deposit
15.4 Maintenance of Security Cover
15.5 Failure to supply Security Cover
15.6 Substitute Letter of Credit
16.CREDIT MONITORING
16.1 Determination of Security Cover
16.2 Criteria for provision of Security Cover
16.3 Six monthly variation
16.4 Review of Security Cover
16.5 Increase or Decrease of Security Cover
16.6 Notification in respect of Security Cover
16.7 Release from Security Cover Obligations
16.8 No liability for amount of Security Cover
PART 4: BILLING AND PAYMENT PROCEDURES
17.RECEIPT AND VERIFICATION OF INFORMATION
17.1 Receipt of Information from Settlement System
Administrator
17.2 Information for each Settlement Day
17.3 Information - taking of electricity
17.4 Information - provision of electricity
17.5 Information - Ancillary Services Provider
17.6 Verification of Information
17.7 Deemed Verification
17.8 Rectification of Errors
17.9 Amounts in Advice Notes; Adjustments
17.10 Postponed Payment Date
17.11 Further notification
17.12 Payment by Pool Debtor
17.13 Liability several
18.ADVICE NOTES
18.1 Despatch of Advice Notes
18.2 Method of despatch
18.3 Content of Advice Notes
18.4 Interest
19.PAYMENT PROCEDURE
19.1 Instructions for payment
19.2 Pool Funds Administrator's responsibilities
19.3 Non-payment by Pool Member
19.4 Excess payments
19.5 Payment to Pool Creditors
19.6 Making good the Pool Reserve Account
19.7 Prohibition on transfers
19.8 Application of payments
19.9 Bank contacts
20.ALTERNATIVE PAYMENT PROCEDURE
20.1 Alternative Payment procedure
20.2 Pool Debtor to effect remittance
20.3 Receipt of remittance
20.4 Method of remittance
20.5 Notification of non-payment
20.6 Payment default
20.7 Late payment
20.8 Payments to Pool Creditors
20.9 Construction
21.PAYMENT DEFAULT
21.1 Payment default
21.2 Amount in default likely to be remedied
21.3 Loans part of Pool Reserve Assets
21.4 Repayment of loans
21.5 Reduction of payments to Pool Creditors
21.6 Obligation to make calls
21.7 Indemnification by non-paying Pool Debtor
21.8 NoUficadon to Pool Creditors
21.9 Default Interest
21.10 Application of payments
21.11 Clearing of Pool Clearing Account
21.12 Credit Facility
22.CONFIRMATION NOTICES
22.1 Despatch of Confirmation Notices
22.2 Information - taking of electricity
22.3 Information - supplies of electricity
22.4 Information - Ancillary Services Provider
22.5 Interest
23. PAYMENT ERRORS
23.1 Overpayments
23.2 Repayment of overpayment (1)
23.3 Repayment of overpayment (2)
23.4 Underpayments
24. ENFORCEMENT OF CLAIMS
24.1 Notification of amount in default
24.2 Dudes of Pool Funds Administrator
24.3 Notice before action
24.4 Proceedings to Recover Overdue Amounts
25.CREDIT PACILE1.Y: PAYMENT DEFAULTS
25.1 Purpose of Credit Facility
25.2 Modification of other provisions of this Schedule
25.3 Payment default
25.4 Amounts in default
25.5 Application of payments
25.6 Payments to Facility Bank
25.7 Reduction in payments to Pool Creditors
25.8 Enforcement of Claims and other provisions
25.9 Unavailability of Credit Facility
25.10 Interpretation
26.CREDIT FACILITY: GENERAL
26.1 NoUf~cations to the Executive Committee
26.2 Notifications to Providing Members
26.3 Amendment and Cancellation
26.4 Extension and Renewal
26.5 Fees not attributable to a particular Providing Member
26.6 No additional charge
Annex 1 Form of Advice Note
Annex 2 Form of Confirmation Notice
Annex 3 Part 1 - Form of Settlement Account Designation
Part 2 - Form of Change of Settlement Account
Annex 4 Form of Letter of Credit
<PAGE>
SCHEDULE 11
Billing and Settlement
PART 1
PRELIMINARY
1. DEFINITIONS INTERPRETATION
1.1 Definitions: In this Schedule, except where the context
otherwise requires:
"Advice Note" means a statement substantially in the form and
containing the information set out in Annex 1 (or in such other
form or containing such further information as may from time to
time be specified by the Executive Committee) issued in the name
of the Pool Funds Administrator to a Pool Member or the Ancillary
Services Provider;
"Approved Credit Rating" means, in relation to a Pool Member, a
short-term debt rating of not less than At by Standard and Poor's
Corporation or a rating of not less than PI by Moody's Investors
Service or an equivalent rating from any other reputable credit
rating agency approved by the Executive Committee;
"Banking System" means the banking system described in Section 4,
for the transfer of hinds from Pool Debtors to Pool Creditors in
accordance with this Schedule, as amended or replaced from time
to time in accordance with the provisions of the Agreement;
"Billing System" means the systems and procedures described in
Sections 18 and 22 for the issuing of Advice Notes and
Confirmation Notices by the Pool Funds Administrator to Pool
Members and the Ancillary Services Provider, as amended or
replaced from time to time in accordance with the provisions of
the Agreement;
"CHAPS" means the Clearing House Automated Payments System;
"Collection Account" means an account denominated in sterling
maintained by the
Pool Funds Administrator at a branch of a Settlement Bank, and
designated from time to time as a Collection Account in
accordance with Section 4;
"ConRrmation Notice" means a statement substantially in the form
and containing the information set out in Annex 2 (or in such
other form or containing such further information as may from
time to time be specified by the Executive Committee) issued in
the name of the Pool Funds Administrator to a Pool Member or the
Ancillary Services Provider;
"Credit Facility" means the credit facility in a principal amount
of up to pounds 20,000,000 provided to the Pool Funds Administrator by
Barclays Bank PLC (acting through its branch at 54 Lombard Street,
London EC3 9EX) with effect from 1st January, 1993 as from time to
time extended, renewed or modified and any other facility provided to
the Pool Funds Administrator by Barclays Bank PLC or any other bank
(approved by the Executive Committee) whether in substitution for or
in addition to the same in any such case on terms approved by the
Executive Committee;
"Default Interest Rate" means:
(I) a rate per annum determined by the Pool Funds Administrator
to be equal to the aggregate of:
(a) 4 per cent. per annum; and
(b) the Pool Banker's base lending rate from time to dme; or
(ii) such other rate as the Executive Committee may from time to
time determine;
"Facility Bank" means Barclays Bank PLC (acting through its
branch at 54 Lombard Street, London EC3 9EX) or such other bank
as may from time to time provide a Credit Facility;
"Funds Transfer Agreement" means the agreement of that name dated
30th March, 1990 and made between Energy Pool Funds
Administration Limited, Barclays Bank PLC, the Pool Members named
therein and The National Grid Company pie as Ancillary Services
Provider, as amended, varied, supplemented, modified or suspended
from time to time in accordance with the terms hereof and
thereof;
"Funds Transfer Business" means the business of the Pool Funds
Administrator in operating the Funds Transfer System and
providing the Services;
"Funds Transfer Hardware" has the meaning ascribed to it in
Schedule 15;
"Funds Transfer Software" has the meaning ascribed to it in
Schedule 15;
"Funds Transfer System" means the Banking System, the Billing
System and the Information Systems;
"Information Systems" means the information systems described in
Section 3 for the transfer of information to be given by or to
the Pool Funds Administrator in connection with the Funds
Transfer Business, as amended or replaced from time to time in
accordance with the provisions of the Agreement;
"Letter of Credit" means an unconditional irrevocable standby
letter of credit substantially in the form set out in Annex 4 (or
such other form as the Executive Committee may approve) issued
for the account of a Providing Member in sterling in
favour of the Pool Funds Administrator as trustee on the trusts
set out in Secdon 5 by any United Kingdom clearing bank or any
other bank which has a long term debt rating of not less than
single A by Standard and Poor's Corporation or by Moody's
Investors Service, or such other bank as the Executive may
approve, and which shall be available for payment at a branch of
the issuing bank;
"Notification Date" means, in respect of any Settlement Day, the
day specified in the Payments Calendar as the day on which the
Settlement Run shall be required to be delivered by the
Settlement System Administrator to the Pool Funds Administrator
for that Settlement Day;
"Notified Payment" means a payment notified in accordance with
Section 18 by the Pool Funds Administrator to a Pool Member or
the Ancillary Services Provider as being a payment required to be
cleared through the Pool Clearing Account;
"Notified Payments System" means the system to be established by
Secdon 19 for the settling of Notified Payments, as amended or
replaced from time to time in accordance with the provisions of
the Agreement;
"Payment Date" means, in relation to any Settlement Day, the date
fixed in accordance with Section 2 upon which Notified Payments
in respect of supplies of electricity and the provision of
Ancillary Services must be settled in accordance with this
Schedule;
"Payments CalendarP means the calendar prepared and issued in
accordance with Secdon 2 showing a Notification Date and a
Payment Date in respect of each Settlement Day;
"Pool Accounts" means the Pool Clearing Account, the Pool
Borrowing Account, the Pool Reserve Account and the Collection
Accounts and such other accounts as may be established in
accordance with sub-section 4.2;
"Pool Banked means Barclays Bank PLC or such other person
nominated from time to time by the Executive Committee as Pool
Banker and appointed as Pool Banker;
"Pool Borrowing Account" means the account of that title in the
name of the Pool Funds Administrator with the Facility Bank which
may from time to time be opened in respect of the Credit
Facility;
"Pool Clearing Account" means the account in the name of the Pool
Funds Administrator (holding as trustee on the trusts set out in
Section 5) with the Pool Banker to which Notified Payments are
required to be transferred for allocation to Pool Creditors in
accordance with their respective entitlements;
"Pool Creditor" means each Pool Member and the Ancillary Services
Provider to whom moneys are payable pursuant to the terms of this
Schedule other than a Providing Member in respect of (i) amounts
standing to the credit of its account with
the Pool Reserve Account or (ii) amounts owing to it by another
Providing Member pursuant to the operation of sub-section 21.1;
"Pool Debt" means, in respect of a Pool Member or the Ancillary
Services Provider, the aggregate amount payable by such Pool
Member or the Ancillary Services Provider pursuant to the terms
of this Schedule;
"Pool Debtor" means each Pool Member and the Ancillary Services
Provider, but in either case only where it is required to make
payment under this Schedule;
"Pool Ledger Accounts" means the accounting records required to
be maintained by the Pool Funds Administrator in accordance with
Section 6 for the recording of transactions settled in accordance
with this Schedule;
"Pool Reserve Account" means the account established pursuant to
sub-secdon 4.2 for the purpose of holding a cash deposit which
may be used in or towards clearing the Pool Clearing Account in
accordance with Section 21;
"Pool Reserve Assets" has the meaning given to that term in
sub-secdon 5.12;
"Providing Member" means each Pool Member who may, under the
terms of this Schedule, become at any time a Pool Debtor;
"Reserve Interest Rate" means the rate of interest payable from
time to time by the Pool Banker on amounts standing to the credit
of the Pool Reserve Account;
"Security Amount" means, in respect of a Providing Member, the
aggregate of available amounts of each outstanding Letter of
Credit plus the principal amount (if any) of cash that such
Providing Member has paid to the credit of the Pool Reserve
Account (and which has not been repaid to such Providing Member)
and less the amount of all outstanding loans deemed to be made
under paragraphs 21.1.3 or 21.1.5 of this Schedule to such
Providing Member; for the purposes of this definition, in
relation to a Letter of Credit, Available amount" means the face
amount thereof less (i) payments already made thereunder end (ii)
claims made thereunder but not yet paid;
"Security Cover" means, in respect of each Providing Member, the
aggregate amount for the time being which it shall be required by
the Executive Committee to provide and maintain by way of
security in accordance with Part 3;
"Services" means the services and responsibilities to be supplied
or discharged by the Pool Funds Administrator pursuant to the
Agreement;
"Settlement Account" means, in relation to a Pool Member or the
Ancillary Services Provider, an account maintained at a
Settlement Bank and designated in accordance with sub-section
4.4;
"Settlement Account Designation" means a notice substantially in
the form set out in Part 1 of Annex 3 or in such other form as
may be specified by the Executive Committee, completed and signed
by a Pool Member or the Ancillary Services Provider designating a
Settlement Account for the purposes of this Schedule;
"Settlement Bank" means a bank which:
(a) has its head office or a branch situated in the United
Kingdom and which holds sterling denominated accounts at such
office or branch;
(b) is a settlement member of the Clearing House Automated
Payment System (UCHAPS") or is a CHAPS participant by virtue of
an agency agreement with a settlement member; and
(c) is either:
(i) a European insHtudon under the Banking Coordination (Second
Council Directive) Regulations 1992; or
(ii) an authorised institution under the Banking Act 1987;
"Settlement Bank Mandate" means any mandate referred to in
sub-secdon 4.7 to be given by the Pool Funds Administrator in
favour of a Settlement Bank or, as the context may require, a
particular one of them in such form(s) as the Executive Committee
may approve, such approval not to be unreasonably withheld, such
mandate being given for the purpose of establishing and
maintaining a Collection Account;
"Settlement Re-run" means any re-run of Settlement in accordance
with Part XII of the Agreement;
"Settlement Run" means, in respect of transactions occurring on
the relevant Settlement Day for which payments are to be settled
pursuant to this Schedule, the data which the Settlement System
Administrator is required to deliver from time to time to the
Pool Funds Administrator pursuant to Section 17 in respect of
such transacdons; and
"Shortfall" has the meaning given to that term in sub-secdon 5.7.
1.2 interpretation: In this Schedule, except where the context
otherwise requires, references to a particular Annex, Part, Section,
sub-secdon, paragraph or sub paragraph shall be a reference to that
Annex to or Part of this Schedule or, as the case may be, that Section
sub-secdon, paragraph or sub-paragraph in this Schedule
and references to any amount being exclusive or inclusive of
United Kingdom Value Added Tax shall mean that that amount is exclusive
or inclusive (as the case may be) of a sum equal to such amount, if
any, of United Kingdom Value Added Tax as is
properly chargeable on the supply to which the first-mentioned
amount is attributable as being all or part of the consideration
for that supply.
PART 2
ESTABLISHMENT OF SYSTEMS
2. PAYMENTS CALENDAR
2.1 Preparation: No later than 31st January in each year
the Pool Funds Administratorand the Settlement System
Administrator shall agree on a Payments Calendar
showing for the period from 1st April in that year to
31st March in the next succeeding year (both dates
inclusive) the Payment Dates on which payments pursuant
to the Agreement in respect of supplies of electricity
and the provision of Ancillary Services on each
Settlement Day are required to be settled and showing
the Notification Dates on which the Settlement Run in
respect of such supplies shall be delivered by the
Settlement System Administrator to the Pool Funds
Administrator.
2.2 Principles: Each Payments Calendar shall give effect to the
following principles:
2.2.1 the Settlement Run shall be required to be delive
red by the Settlement System Administrator to the Pool
Funds Administrator no later than the 24th day after
the Settlement Day to which the Settlement Run relates
(or, if such day is not a Business Day, the next
succeeding day which is a Business Day);
2.2.2 the Payment Date shall not fall earlier than two
clear Business Days after the day on which the
Settlement Run is required to be delivered by the
Settlement System Administrator to the Pool Funds
Administrator;
2.2.3 expressed as an average over the entire period co
vered by the Payments Calendar, the Payment Date shall
fall, as near as practicable, 28 days after the
Settlement Day to which it relates; and
2.2.4 each Payment Date shall fall as close as is
reasonably practicable to the 28th day after the
Settlement Day to which it relates,
and shall be prepared in accordance with the relevant
Agreed Procedure.
2.3 Form: The Payments Calendar shall be in such form
as the Executive Committee shall
from time to time prescribe.
2.4 Default: If the Pool Funds Administrator and the
Settlement System Administrator shall fail to agree a
Payments Calendar for any period by the date stated in
sub-section 2.1 or the Payments Calendar prepared by
them does not give effect to the principles set out in
sub-section 2.2, the Executive Committee shall prepare
or cause to be prepared a Payments Calendar for that
period giving effect to the said principles and that
shall be the Payments Calendar for use for that period.
2.5 Distribution: Any Payments Calendar prepared
pursuant to this Section 2 shall be
distributed promptly to each Pool Member, the Ancillary
Services Provider, the Pool
Banker, the Pool Auditor and the Director and (if
prepared by the Pool Funds Administrator and the
Settlement System Administrator) the Executive
Committee and (if prepared by or for the Executive the
Pool Funds Administrator and the Settlement System
Administrator.
3. INFORMATION SYSTEMS
3.1 Provision of information: Unless otherwise
required by the Executive Committee, all written
information to be given by or to the Pool Funds
Administrator in connection with the Banking System and
the Billing System shall be provided in the following
manner:
3.1.1 for information flowing between the Pool Funds A
dministrator, the Settlement System Administrator and
the Ancillary Services Provider by electronic mail as
designated from time to time by the recipient in a
written notice to the sender of the information or if
such electronic mail systems are not operational by the
Effective Date, then until such systems are
operational, by such means as such parties shall agree;
3.1.2 for information flowing between the Pool Funds
Administrator and the Pool Banker, in the manner
prescribed in the Funds Transfer Agreement or in such
other manner as may be agreed between the Pool Funds
Administrator and the Pool Banker;
3.1.3 for information flowing between the Pool Funds A
dministrator and a Settlement Bank, in the manner
prescribed in the relevant Settlement Bank Mandate or
in such manner as may be agreed between the Pool Funds
Administrator and the Settlement Bank;
3.1.4 for information flowing between the Pool Funds A
dministrator and any Pool Member who has installed an
electronic mail transfer system compatible with the
Pool Funds Administrator's electronic mail transfer
system, by electronic mail as designated from time to
time by the recipient in a written notice to the sender
of the information;
3.1.5 for information flowing between the Pool Funds A
dministrator and any other Pool Member, by facsimile
transmission and addressed for the attention of the
Authorised Person (as defined in sub-section 3.3) for
such Pool Member and sent to the then latest facsimile
number of such Authorised Person notified to the Pool
Funds Administrator pursuant to sub-section 3.3
provided that, if at the relevant time there is no
Authorised Person for such Pool Member, such
information shall be sent by facsimile transmission and
addressed for the attention of the company secretary of
such Pool Member and sent to the facsimile number of
its registered or principal office.
3.2 Communications Equipment: Each Party undertakes to
exercise reasonable skill and care to ensure that its
communications equipment at all times is adequate to transmit
and receive information in connection with the Banking
System and the Billing System. In the case of any
breakdown, failure or non-availability of the
communications or other equipment, each Party affected
shall use all reasonable efforts to agree promptly on
the use and implementation alternative, effective and
secure means of communication (and, in default of
agreement, notices or other communications shall be by
letter delivered or sent in accordance with Clause 75).
3.3 Authorised persons: Upon written request of the
Pool Funds Administrator each Pool Member shall (and
may of its own accord) provide the Pool Funds
Administrator in writing with the name of, and
communication details for, one or more individuals
("Authorised Persons") who are authorized (and, until
it receives written notice to the contrary, the Pool
Funds Administrator shall be entitled to assume that
they are authorized) to take action on behalf of such
Pool Member in respect of all communications and other
dealings under this Schedule between the Pool Funds
Administrator and such Pool Member. Each Pool Member
shall promptly advise the Pool Funds Administrator in
writing of any change of any such individual or his
communication details. The Pool Funds Administrator
shall notify all Pool Members and the Executive
Committee of the names and communication details of all
Authorised Persons and of any change in any such
individual or his communication details.
4.BANKING SYSTEM
4.1 Funds Transfer Agreement: On the Effective Date the Pool Funds
Administrator, the Pool Banker, each Pool Member and the Ancillary
Services Provider (in each case as at such date) entered into the
Funds Transfer Agreement.
4.2 Establishment of Accounts: The Pool Funds
Administrator shall establish and operate in accordance
with the Agreement and the Funds Transfer Agreement a
Pool Clearing Account to and from which all payments
calculated in accordance with this Schedule are to be
made, a Pool Reserve Account from which any debit
balances on the Pool Clearing Account at the close of
banking business on each Business Day shall be settled
or reduced in accordance with this Schedule, a
Collection Account at each bank at which, from time to
time, any Pool Member or the Ancillary Services
Provider maintains a Settlement Account and such other
accounts (including a Pool Borrowing Account on which
the Pool Funds Administrator may make drawings under
the Credit Facility) as the Pool Funds Administrator
(with the prior written consent of the Executive
Committee) considers desirable to enable it efficiently
to perform any obligations imposed on it pursuant to
the Agreement. Each Pool Account shall be in the name
of the Pool Funds Administrator and (save for the Pool
Borrowing Account) shall be designated as being held in
trust in accordance with the provisions of Section 5.
The Pool Funds Administrator shall not commingle any
funds standing to the credit of any Pool Account with
its own personal funds.
4.3 Rights and obligations under Funds Transfer Agreement:
The Pool Funds Administrator is authorized by the Pool
Members and the Ancillary Services Provider to exercise the
rights granted to it under, and shall perform its
obligations pursuant to, the Funds 4.6 Transfer Agreement
except that it shall not remove the Pool Banker without the
prior written consent of the Executive and that at the request
of the Executive Committee it shall remove the Pool Banker in
accordance with the Funds Transfer Agreement. Subject to the
agreement of the Pool Banker, the Parties agree
promptly to give effect to any amendment to the Funds
Transfer Agreement as may be required by the Executive
Committee.
4.4 Settlement Account: Each Pool Member and the Ancillary Services Provider
shall deliver to the Pool Funds Administrator, in the case of a Pool Member,
not later than the later of the Effective Date and 10 Business Days (or such
lesser number of Business Days as the Executive Committee may, in respect of
any Pool Member, by notice to such Pool Member and the Pool Funds Administrator
specify) before it is admitted as a Pool Member and, in the case of the
Ancillary Services Provider, not later than the later of the Effective Date and
the date of its admission as a Party a duly completed and signed Settlement
Account Designation providing details of the Settlement Account to which the
Pool Funds Administrator is instructed to make payments to such person and, if
such person wishes to designate a second account as its Settlement Account from
which payments due from such person are to be transferred in accordance with
this Schedule, providing details of such other account.
4.5 Further information: Each Pool Member and the Anc
illary Services Provider shall also
supply to the Pool Funds Administrator and the
Executive Committee such information or (as the case
may be) further information concerning its Settlement
Account as shall be reasonably requested by the
Executive Committee or the Pool Funds Administrator.
4.6 Change of Settlement Account: Each Pool Member and
the Ancillary Services Provider
may, in consultation with the Pool Funds Administrator
and the Pool Banker, change its Settlement Account at
any time by delivering to the Pool Funds Administrator
and the Pool Banker a duly completed and signed notice
substantially in the form set out in Part 2 of Annex 3
(or in such other form as may from time to time be
specified by the Executive Committee) specifying the
effective date of the change (which shall be no less
than 10 Business Days after the notice is received by
the Pool Funds Administrator).
4.7 Maintenance of Settlement Account and Settlement
Bank Mandate: Each Pool Member
and the Ancillary Services Provider shall, unless
otherwise agreed by the Executive Committee, at all
times maintain a Settlement Account and the Pool Funds
Administrator shall enter into and maintain a
Settlement Bank Mandate with each of the relevant
Settlement Banks.
4.8 Details of Accounts: The Pool F unds Administrator
shall supply full details to each Pool Member and the
Ancillary Services Provider of the Pool Clearing
Account, the Pool Reserve Account and any relevant
Collection Account and, for so long as it is
maintained, the Pool Borrowing Account and shall supply
the Executive Committee with full details of all Pool
Accounts and Settlement Accounts.
5. ESTABLISHMENT OF TRUSTS
5.1 Trusts: The Pool Funds Administrator shall hold
all moneys deposited with or paid to it (other than
Pool Reserve Assets) and such rights as may from time
to time be vested in it with regard to payment by Pool
Members (apart from fees owed or paid to it for its
services in accordance with Schedule 15 and any amounts
payable to it pursuant to that Schedule upon its
removal as Pool Funds Administrator or the expiry or
termination of its appointment as such) by and from
each Pool Debtor or with regard to the provision of
Security Cover by each Pool Member, including:
5.1.1 subject as provided in sub-section 5.2, all mone
ys from time to time standing to the credit of each
Pool Account other than the Pool Reserve Account and
the Pool Borrowing Account;
5.1.2 all rights of the Pool Funds Administrator to call
for payment or Security Cover;
5.1.3 the Letters of Credit and all rights to, and (sub
ject to sub-section 15.5) moneys representing, any
proceeds therefrom other than proceeds repayable by
loan in accordance with paragraphs 5.12.5 and 5.16; and
5.1.4 any interest received or receivable in respect of
a Pool Debt or a Pool Account (other than interest on the
Pool Reserve Account),
on trust for Pool Creditors in accordance with their
respective individual entitlements as they arise in
accordance with the Agreement. Upon termination of the
said trust any residual balance after satisfaction of
the entitlement of all Pool Creditors shall be held for
Providing Members in accordance with their respective
individual entitlements as they arise in accordance
with the Agreement.
5.2 Trusts in respect of the Credit Facility: The Pool
Funds Administrator shall hold all moneys from time to
time standing to the credit of the Pool Clearing
Account on trust first for the Facility Bank to the
extent that there is an aggregate amount outstanding
under the Credit Facility but on terms that no funds
shall be withdrawn in favour of the Facility Bank
except in satisfaction of a payment due to the Facility
Bank under the terms of the Credit Facility or in
accordance with this Schedule and on terms that the
Pool Funds Administrator will be entitled to make
payments out of the account to
Pool Members and other Parties in accordance with the
other provisions of this Schedule.
5.3 Rights of Pool Creditors other than the Ancillary
Services Provider: The respective rights of Pool
Creditors other than the Ancillary Services Provider to
the assets held by the Pool Funds Administrator on the
trusts set out in sub-section 5.1 shall be determined
in accordance with the Agreement and in accordance with
the following principles:
5.3.1 the extent of each Pool Creditor's individual rig
hts shall be deemed to consist of the aggregate of the
claims (to the extent not paid or otherwise satisfied)
of such Pool Creditor in respect of each Settlement
Period; and
5.3.2 the assets referred to in sub-section 5.1 shall be
deemed to consist of a series of funds, each fund
representing the rights or moneys owed, paid, held or
otherwise attributable to each Settlement Period. The
Pool Funds Administrator shall not be obliged to
segregate moneys into separate funds.
5.4 Rights of Ancillary Services Provider: The rights
of the Ancillary Services Provider to
assets held on trust shall be determined in accordance
with Section 23 of Schedule 9.
5.5 Trusts in respect of Pool Reserve Assets: The Pool
Funds Administrator shall stand
possessed of the Pool Reserve Assets on the following
trusts, that is to say:
5.5.1 at any time when no amounts owed by Pool Debtors
are overdue, on trust to repay (subject to and in
accordance with the provisions of sub-sections 5.8 and
5.9) to each Providing Member such Providing Member's
respective share (determined in accordance with
sub-section 5.13) of the Pool Reserve Assets; and
5.5.2 with automatic effect as soon as any amount owed
by a Pool Debtor becomes overdue, to hold an amount of
the moneys credited from time to time to the Pool
Reserve Account equal to the Shortfall or the amount
held in the Pool Reserve Account attributable to such
Pool Debtor (whichever is less) on the trusts set out
in sub-section 5.1 and the balance (if any) shall be
held on the trusts set out in paragraph 5.5.1.
5.6 Overdue amounts: In respect of a Pool Debtor and
for the purposes of sub-section 5.5,
an amount shall be deemed to become overdue at the time
at which the Pool Funds Administrator becomes aware
that such Pool Debtor has not made or will not make by
12.30 hours payment in full to the credit of the
Collection Account of such Pool Debtor of such an
amount as it is required on such day to make and, for
as long as the Credit Facility remains unconditionally
available, the Pool Funds Administrator considers in
good faith that the amount in default is not likely to
be remedied on the
next Business Day and the amount overdue shall be the
amount of the Shortfall.
5.7 Shortfall: The term "Shortfall", as used in this
Section 5, means the amount from time to time of
Notified Payments which have become overdue by
application of the rule set out in sub-section 5.6 and
which have not subsequently been paid (whether by
remittance from a Pool Debtor, payment out of the Pool
Reserve Account or a call under a Letter of Credit). To
the extent that the Pool Funds Administrator is unable
to determine the precise amount of a Shortfall, it
shall be deemed to be such amount as the Pool Funds
Administrator and the Pool Banker shall agree, or
failing agreement, the entire amount of the Notified
Payment.
5.8 Providing Members' rights to funds: Each Providing
Member remitting funds for credit to the Pool Reserve
Account agrees that the following terms shall apply.
None of the remittances shall be repayable until a
Providing Member has ceased to be a Pool Member and has
paid in full all amounts actually or continentally owed
by it to any Pool Creditor, the Settlement System
Administrator or the Pool Funds Administrator.
Furthermore, if and to the extent that, at any time
when an amount would be repayable to a Providing Member
pursuant to this sub-section 5.8, all or any part of
the Providing Member's interest in the Pool Reserve
Assets is represented by a loan to a Pool Member deemed
to be made in accordance with paragraph 21.1.3 or
21.1.5 the Providing Member's rights as against the
Pool Funds Administrator to receive a payment of its
share in the Pool Reserve Assets (or the relevant
portion of such share) shall be conditional on
repayment in full of the relevant loan.
5.9 Funds not to be withdrawn: Each Providing Member
undertakes not to seek withdrawal of any funds to which
it may be entitled except in the circumstances
permitted by sub-section 5.10 or 16.7. The Pool Funds
Administrator shall be entitled to disregard any
purported notice of withdrawal not complying with this
sub section 5.9.
5.10 Providing Members rights to withdraw funds: Notwithstanding
sub-sections 5.8 and 5.9, if a Providing Member is not in default
in respect of any amount owed to a Pool Creditor:
5.10.1 the Pool Funds Administrator shall transfer to
the relevant Providing Member quarterly its share of
interest credited to the Pool Reserve Account; and
5.10.2 the Pool Funds Administrator shall transfer to s
uch Providing Member within a reasonable time after
such Providing Member's written request therefor any
amount of cash which exceeds the amount which such
Providing Member is required to maintain in the Pool
Reserve Account from time to time in accordance with
Section 16.
5.11 Waiver of Providing Members' rights: Each
Providing Member waives any right it might otherwise
have to set off against any obligation owed to the Pool
Funds Administrator, the Pool Banker, any Pool Member
or the Ancillary Services Provider any claims such
Providing Member may have to or in respect of the Pool
Reserve Assets.
5.12 Pool Reserve Assets: "pool Reserve Assets" means
the aggregate of:
5.12.1 amounts from time to time credited to the Pool
Reserve Account;
5.12.2 amounts which any Providing Member is from time
to time obliged to pay toFit.the Pool Funds
Administrator for credit to the Pool Reserve Account
and claims in respect of such amounts;
5.12.3 interest accrued and accruing on the Pool Reserve
Account;
5.12.4 any amounts credited to the Pool Reserve Account
pursuant to paragraph 15.4.3; and
5.12.5 any loans deemed to be made from any amounts
credited to the Pool Reserve Account pursuant to
paragraph 21.1.3 or 21.1.5.
5.13 Providing Members' rights and interests in the
Pool Reserve Account: At any time when it is necessary
to determine the respective rights and interests of
Providing Members in and to funds standing to the
credit of the Pool Reserve Account, such rights shall
be determined in accordance with the following rules:
5.13.1 any amount withdrawn from the Pool Reserve Acco
unt following the occurrence of a Shortfall which the
Pool Funds Administrator has determined to be
attributable to a particular Providing Member (the
"Relevant Providing Member") (irrespective of the
existence or otherwise of actual fault on the part of
the Relevant Providing Member) shall in the first
instance reduce pro tanto the Relevant Providing
Member's interest in the Pool Reserve Assets;
5.13.2 if, in any circumstances described in paragraph
5.13.1, the Shortfall exceeds the Relevant Providing
Member's interest in the Pool Reserve Account, then any
excess required to be withdrawn from the Pool Reserve
Account shall reduce the respective interests of
Providing Members other than the Relevant Providing
Member in proportion to their respective interests in
the Pool Reserve Account prior to the withdrawal;
5.13.3 any proceeds of a Letter of Credit which are to
be credited to the Pool Reserve Account pursuant to
sub-section 5.16, and any amounts paid by a Relevant
Providing Member to make up a payment out of the Pool
Reserve Account, shall be applied in priority in or
towards reinstating (rateably among themselves) the
respective interests of Providing Members other than
the Relevant Providing Member in the Pool Reserve
Account;
5.13.4 subject to the rules set out in paragraphs 5.13.1
to 5.13.3 (inclusive), the respective rights of each
Providing Member in and to funds standing to the credit
of the Pool Reserve Account shall be to receive
(subject to sub sections 5.8 and 5.9) an amount equal
to the aggregate amounts remitted by
the Providing Member to the Pool Reserve Account and
not subsequently withdrawn together with a
proportionate share of any interest from time to time
credited to the Pool Reserve Account; and
5.13.5 in the absence of a Shortfall, any amounts cred
ited to the Pool Reserve Account following a call under
a Letter of Credit pursuant to subsection 15.5 shall be
considered as an interest in the Pool Reserve Assets of
the Relevant Providing Member in respect of the
relevant Letter of Credit.
5.14 Overpayments to be held on trust: If and to the
extent that payments under this Schedule actually made
on any day by the Pool Funds Administrator to Pool
Members or the Ancillary Services Provider in respect
of supplies of electricity under the Agreement or the
provision of Ancillary Services do not correspond
exactly with their respective payment entitlements
established in accordance with the Agreement in
relation to supplies of electricity or the provision of
Ancillary Services in respect of that same day, then
the person receiving any overpayment shall receive and
be deemed to hold the amount of such overpayment on
trust for the Pool Member or rateably for the Pool
Members or, as the case may be, for the Ancillary
Services Provider which, in respect of that same day
was (were) underpaid and, on the written instruction of
the Pool Funds Administrator, shall account in
accordance with sub-section 23.2 to the Pool Funds
Administrator accordingly for redistribution of the
moneys.
5.15 Reimbursement of overpayments: Subject to
sub-sections 5.8 and 5.14, all payments under this
Schedule shall be made on the basis that a Pool Member
shall only be entitled to claim reimbursement of an
overpayment made by it (whether to the Pool Funds
Administrator or (through the Pool Funds Administrator)
to another Pool Member or the Ancillary Services
Provider) if, and then only to the extent that:
(a) the aggregate amounts paid by the Pool Member in
respect of the relevant Payment Date
exceed
(b) the total amounts payable by that Pool Member to
Pool Creditors in respect of that Payment Date together
with all amounts (if any) overdue by that Pool Member
in respect of periods prior to the relevant Payment
Date.
5.16 Repayment of loans: Notwithstanding their rights
pursuant to sub-section 5.1 in and to Letters of Credit
and the proceeds thereof, Pool Creditors agree that if:
5.16.1 a payment is received under a Letter of Credit
after a sum has been withdrawn from the Pool Reserve
Account to make good (in whole or in part) a
discrepancy between amounts owed and amounts received
by the due time on a particular Payment Date; and
5.16.2 the aggregate of the amounts paid out of the Pool
Reserve Account and paid under the Letter of Credit
exceeds the amounts owed in respect of the relevant
Payment Date,
then any excess paid under the Letter of Credit over
the amount then remaining unpaid in respect of the
relevant Payment Date shall be credited to the Pool
Reserve Account. Where appropriate, any such credit
shall pro tanto constitute repayment of any loans
deemed to be made pursuant to paragraphs 21.1.3 or
21.1.5.
5.17 No claim for breach of trust: Provided that the
Pool Funds Administrator carries out its duties under
the Agreement, no Pool Member shall have any claim
against the Pool Funds Administrator for breach of
trust or fiduciary duty arising solely out of any
discrepancy between payments actually made in respect
of any day and the entitlement of Pool Members to
receive payments in respect of that same day.
6. POOL LEDGER ACCOUNTS
6.1 Maintenance of Pool Ledger Accounts: The Pool Funds
Administrator shall maintain ledger accounts showing
all amounts payable and receivable by each Pool Member
and the Ancillary Services Provider according to
calculations made and notifications issued by the Pool
Funds Administrator pursuant to this Schedule.
6.2 Ledger extracts: Each Pool Member and the Ancillary
Services Provider shall be entitled to receive a
quarterly extract of the ledger account which is
relevant to it showing all amounts debited and credited
to its account provided that, if a Pool Member or the
Ancillary Services Provider so requests of the Pool
Funds Administrator, it shall be entitled to receive a
monthly extract of such ledger account.
6.3 Certified copy extracts: Without prejudice to the
generality of the general duties and responsibilities
of the Pool Funds Administrator set out in Schedule 15,
in the event of any enforcement proceedings being
brought by a Pool Creditor against a non paying Pool
Member, the Pool Funds Administrator shall forthwith
upon request being made to it at the cost of the
requesting Pool Creditor provide a certified copy of an
extract of the ledger accounts sufficient to establish
the details of each transaction in respect of which the
Pool Creditor has a claim against the non-paying Pool
Member.
6.4 Confidentiality: The ledger accounts maintained by
the Pool Funds Administrator shall be kept confidential
in accordance with Part XVIII of the Agreement from
Committee Members and from all Pool Members (except as
required pursuant to Clause 63.1.5 or 63.1.6 or
sub-section 6.2 or 6.3) but the Pool Funds
Administrator shall disclose such ledger accounts to
the Pool Auditor for the purpose of any audit requested
to be conducted pursuant to Part IX of the Agreement.
6.5 Information: Any extract of a ledger account of a
ny other records, data or information provided pursuant
to Clause 63.1.5 or 63.1.6 or sub-section 6.2
(collectively referred to in this Section 6 as the
"information") shall, save in the case of manifest
error, be deemed prima facie evidence of its contents.
6.6 Review of extracts: Each Pool Member and the Anci
llary Services Provider shall promptly review all
extracts of ledger accounts sent to it and shall
(without prejudice to any of its rights under the
Agreement) where practicable within 10 Business Days
after receiving such information notify the Pool Funds
Administrator of any errors in such account of which it
is aware.
6.7 Dispute of accuracy: If the Pool Funds
Administrator at any time receives a notice disputing
the accuracy of any ledger account, records, data or
information, it shall consult with the Pool Member who
gave the notice or (as the case may be) the Ancillary
Services Provider and both shall use all reasonable
endeavours to agree the information. Promptly after
agreement is reached, the Pool Funds Administrator
shall, if necessary, issue corrected information and
notifications under the provisions of sub-section 17.8.
[Sections 7 to 14 (inclusive) not used].
<PAGE>
PART 3
Security' COVER AND CREDIT MONITORING
15. SECURITY COVER
15.1 Provision of Security Cover: Each Providing Member
shall provide Security Cover from time to time in
accordance with the following provisions:
15.1.1 each Providing Member (with the exception of any
entity of or whollyowned or Controlled by the United
Kingdom Government) shall:
(a) deliver to the Pool Funds Administrator evidence
reasonably satisfactory to the Executive Committee
that:
(i) it presently holds an Approved Credit Rating; or
(ii) it has provided and is not in default under
alternative or additional security as may be approved
from time to time by unanimous decision of all
Committee Members (Committee Members being under no
obligation to approve any such security), or
(b) comply with the provisions of paragraph 15.1.3;
15.1.2 in addition to the provisions of paragraph 15.1.1
but subject as provided in Sections 21.12 and 25:
(a) each Supplier (including any Supplier which is an
entity of or whollyowned or Controlled by the United
Kingdom Government) shall, not later than the date of
its admission as a Pool Member, deliver to the Pool
Funds Administrator:
(I) a Letter of Credit (available for an initial
period of not less than 12 months); and
(ii) cash for credit to the Pool Reserve Account,
in both cases in such amount as shall be notified by
the Executive Committee in accordance with Section 16;
and
(b) each Providing Member, not being a Supplier,
(including any entity of or wholly-owned or Controlled
by the United Kingdom Government and not referred to in
paragraph 15.1.2(a) above) shall, not later than the
date of its admission as a Pool Member or 31st March,
1995 (whichever is the later), deliver to the Pool
Funds Administrator:
(I) a Letter of Credit (available for an initial
period of not less than 12 months); and
(ii) cash for credit to the Pool Reserve Account,
in both cases in such amount as shall be notified by
the Executive Committee in accordance with Section 16;
15.1.3 each Providing Member mentioned in paragraph
15.1.1 to which paragraph (b) of paragraph 15.1.1
applies shall immediately be required (in addition to
its obligations, if any, under paragraph 15.1.2) to
deliver to the Pool Funds Administrator a Letter of
Credit (available for an initial period of not less
than 12 months) or cash for credit to the Pool Reserve
Account in such amount and in such proportions as shall
be notified by the Executive Committee in accordance
with Section 16.
15.2 Letters of Credit: For the avoidance of doubt
nothing in sub-section 15.1 or 15.6 shall prevent any
Providing Member from delivering a single Letter of
Credit in respect of its obligations under paragraphs
15.1.2 and 15.1.3.
15.3 Cash deposit: Any cash amount delivered to the
Pool Funds Administrator for credit to the Pool Reserve
Account shall be held on the terms set out in Section
5. Amounts standing to the credit of the Pool Reserve
Account shall bear interest at the Reserve Interest
Rate.
15.4 Maintenance of Security Cover: Each Providing
Member shall be required to provide and at all times
thereafter maintain a Security Amount equal to or more
than the Security Cover applicable to it in such
aggregate amount as shall be set from time to time in
accordance with this Part 3. Immediately upon any
reduction occurring in the Security Amount provided by
any Providing Member or any Letter of Credit being for
any reason drawn down (and including the deemed making
of any loan to that Providing Member under the
provisions of paragraph 21.1.3 or 21.1.5) the Providing
Member will procure that new Letters of Credit are
issued or existing Letters of Credit are reinstated (to
the satisfaction of the Pool Funds Administrator) to
their full value or cash is placed to the credit of the
Pool Reserve Account in an amount required to restore
the Security Amount to an amount at least equal to the
Security Cover applicable to the Providing Member, and
in such proportions of Letters of Credit and cash as
this Part 3 requires. Not later than 10 Business Days
before any outstanding Letter of Credit is due to
expire, the Providing Member providing such Letter of
Credit shall procure to the satisfaction of the Pool
Funds Administrator that its required Security Amount
will be available for a further period of not less than
12 months which may be done in one of the following
ways:
15.4.1 (subject to the issuing bank continuing to have
the credit rating referred to in sub-section 15.6)
provide the Pool Funds Administrator with confirmation
from the issuing bank that the validity of the Letter
of Credit has been extended for a period of not less than
12 months on the same terms and otherwise for such amount
as is required by this Part 3; or
15.4.2 provide the Pool Funds Administrator with a new
Letter of Credit issued by an issuing bank with the
credit rating required by this Schedule for an amount
at least equal to the required Security Amount
applicable to it (less its balance on the Pool Reserve
Account) which Letter of Credit shall be available for
a period of not less than 12 months; or
15.4.3 procure such transfer to the Pool Funds Adminis
trator for credit to the Pool Reserve Account as shall
ensure that the credit balance applicable to it
standing to the credit of the Pool Reserve Account
shall be at least equal to the required Security
Amount.
15.5 Failure to supply Security Cover: If a Providing
Member fails at any time to provide Security Cover to
the satisfaction of the Pool Funds Administrator in
accordance with the provisions of this Section 15, the
Pool Funds Administrator may at any time while such
default continues, and if at such time any Letter of
Credit forming part of the Security Cover is due to
expire within nine Business Days it shall immediately,
and without notice to such Providing Member, demand
payment of the entire amount of any outstanding Letter
of Credit and shall credit the proceeds of the Letter
of Credit to the Pool Reserve Account to be held on the
terms and on the trusts set out in Section 5.
15.6 Substitute Letter of Credit: If the bank issuing
any Providing Member's Letter of Credit ceases to have
the credit rating as is set out in sub-section 1.1
under "Letter of Credit", such Providing Member shall
forthwith procure the issue of a substitute Letter of
Credit by a bank that has such credit rating.
16. CREDIT MONITORING
16.1 Determination of Security Cover: The amount of
Security Cover which each Providing Member shall be
required to maintain and, in respect of the amounts of
Security Cover to be provided under paragraph 15.1.2
(so long as applicable) and paragraph 15.1.3 the
proportions as between cash and Letter of Credit that
may be permitted, shall be determined from time to time
by the Executive Committee in consultation with the
Pool Funds Administrator in accordance with this
Section 16 and on the basis of the criteria set out in
sub-section 16.2, and shall be notified to such
Providing Member and to the Pool Funds Administrator.
16.2 Criteria for provision of Security Cover:
16.2.1In respect of each Providing Member to which pa
ragraph (b) of paragraph 15.1.1 applies, the amount of
Security Cover required to be provided by such
Providing Member in addition to the amounts referred to
in paragraph 15.1.2 (so long as applicable) shall be
provided by Letter of Credit in an amount to be
assessed by the Executive Committee in
consultation with the Pool Funds Administrator as the
aggregate amounts payable pursuant to the Agreement by
the relevant Providing Member in respect of purchases
of, or as the case may be, prospective purchases of
electricity (including Ancillary Services) made by the
relevant Providing Member over a 28 day period, as
determined by the Executive Committee provided that
with the approval of the Executive Committee, all or
part of the required Security Cover may be provided in
cash credited to the Pool Reserve Account; and
16.2.2 In respect of all Providing Members, the amounts
required to be provided by each Providing Member which
are referred to in paragraph 15.1.2 (so long as
applicable) shall (subject as provided in sub-section
21.12 and Section 25) be initially as to a minimum of
20 per cent. in cash and the remainder by way of Letter
of Credit, and thereafter as revised by the Executive
Committee. Such amounts shall be assessed by the
Executive Committee in consultation with the Pool Funds
Administrator to cover banking error and to minimise
reductions of payments to Pool Creditors.
16.3 Six monthly variation: In respect of paragraphs
16.2.1 and 16.2.2, the Executive Committee shall
calculate two amounts for the two six-month periods
commencing 1st April and 1st October in each year and
shall advise the Pool Funds Administrator and the
relevant Providing Members accordingly. Such six
monthly variation shall not apply to paragraph 16.2.2
where Section 25 is applicable.
16.4 Review of Security Cover: The Pool Funds
Administrator shall keep under review the Security
Amounts relating to each Providing Member and shall
promptly advise the Executive Committee and the
relevant Providing Member whenever the Security Cover
maintained by such Providing Member is significantly
more or less than the amount required to be maintained
pursuant to this Part 3.
16.5 Increase or Decrease of Security Cover: If, after
considering the recommendations of the Pool Funds
Administrator and any representations which may be made
by the relevant Providing Member, the Executive
Committee determines that a Providing Member's Security
Cover should be increased or decreased, it shall so
notify the Providing Member, the Pool Funds
Administrator and the Director. If the Executive
Committee determines that such Security Cover should be
decreased, the Providing Member consents and the
Director so approves, that reduction shall take place.
The Pool Funds Administrator shall consent to an
appropriate reduction in the available amount of any
outstanding Letter of Credit and/or shall repay to the
Providing Member such part of the deposit held in the
Pool Reserve Account for the account of such Providing
Member (together with all accrued interest on the part
to be repaid) sufficient to reduce the Providing
Member's Security Amount to the level of Security Cover
applicable to it. If the Executive Committee determines
that the Providing Member's Security Cover should be
increased, the relevant Providing Member shall, within
five Business Days of notice as aforesaid, procure an
additional or replacement Letter of Credit or transfer
to the Pool Funds Administrator a cash deposit for
credit to the Pool Reserve Account in an amount sufficient to
increase its Security Amount so as to be at least equal
to the level of Security Cover applicable to it.
16.6 Notification in respect of Security Cover: The
Pool Funds Administrator shall notify the Executive
Committee, the Settlement System Administrator and the
Director promptly if:
16.6.1 a Providing Member fails to provide, extend or
renew a Letter of Credit which it is required to
maintain pursuant to Section 15; or
16.6.2 the Pool Funds Administrator shall make a call
under any such Letter of Credit; or
16.6.3 the Pool Funds Administrator becomes aware that a
Providing Member (a) shall cease to retain an Approved
Credit Rating, or (b) shall be placed on credit watch
by the relevant credit rating agency (or becomes
subject to an equivalent procedure) which in any case
casts doubt on the Providing Member retaining an
Approved Credit Rating, or (c) shall be in default
under the additional or alternative security referred
to in paragraph 15.1.1; or
16.6.4 the Security Amount in relation to any Providing
Member is at any time less than the level of its
required Security Cover for the time being; or
16.6.5 the Pool Funds Administrator becomes aware that
any bank that has issued a Letter of Credit which has
not expired ceases to have the credit rating required
by this Schedule.
16.7 Release from Security Cover Obligations: Upon a
Providing Member ceasing to be a Pool Member and
provided that all amounts owed by the Providing Member
have been duly and finally paid and that it is not
otherwise in default in any respect under the
Agreement, the Providing Member shall be released from
the obligation to maintain Security Cover and the Pool
Funds Administrator shall consent to the revocation of
any outstanding Letter of Credit.
16.8 No liability for amount of Security Cover: Any
recommendations made by the Pool Funds Administrator
pursuant to this Section 16 shall be given in good
faith. Any instructions given by the Executive
Committee in respect of the amount of Security Cover to
be maintained by a Providing Member, if given in good
faith, shall insofar as applicable in terms of this
Schedule be binding on all Pool Members and the
Ancillary Services Provider and neither the Pool Funds
Administrator nor any Committee Member shall incur any
liability by reason of a Providing Member's Security
Cover proving to be inadequate or excessive.
<PAGE>
PART 4
BILLING AND PAYMENT PROCEDURES
17. RECEIPT AND VERIFICATION OF INFORMATION
17.1 Receipt of Information from Settlement System Administrator: Not later
than 12.00 hours on the Notification Date the Pool Funds Administrator
shall require of, and take all steps available to it to procure from, the
Settlement System Administrator, and the Settlement System Administrator
shall use its best endeavours to provide to the Pool Funds Administrator,
the information referred to in sub-sections 17.2 to 17.5 (inclusive)
concerning supplies of electricity and the provision of Ancillary Services
in respect of each Settlement Day.
17.2 Information for each Settlement Day: The
information required in respect of each Settlement Day
is as follows:
17.2.1the Settlement Day;
17.2.2the corresponding Payment Date;
17.2.3the Settlement Run identification number;
17.2.4 the total amount owing in accordance with the
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity supplied and Ancillary
Services provided during each Settlement Day; and
17.2.5 the total amount owing (exclusive of United K
ingdom Value Added Tax) in respect of Ancillary
Services provided during each Settlement Day.
17.3 Information - taking of electricity: The
information required in respect of each Pool Member
taking electricity in each Settlement Day is as
follows:
17.3.1the Pool Member's identification number:
17.3.2the Pool Member's name; and
17.3.3the total amount owing in accordance with the
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity taken by such Pool Member
during each Settlement Day including the amount owing
in respect of Ancillary Services attributable to the
amount of electricity purchased by such Pool Member.
17.4 Information - provision of electricity: The
information required in respect of each Pool
Member providing electricity during each Settlement Day
is as follows:
17:4.1the Pool Member's identification number;
17.4.2the Pool Member's name; and
17.4.3the total amount owing in accordance with this
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity provided by such Pool Member
during each Settlement Day.
17.5 Information - Ancillary Services Provider: The
information required in relation to the Ancillary
Services Provider in respect of each Settlement Day is
the total amount receivable in accordance with the
Agreement by the Ancillary Services Provider (exclusive
of United Kingdom Value Added Tax) for the provision of
Ancillary Services during each Settlement.
17.6 Verification of Information: Upon receipt of the
information supplied by the Settlement System
Administrator, the Pool Funds Administrator shall
verify whether, on the basis of such information, the
sum of the amounts shown to be receivable by each Pool
Member in respect of its sales of electricity plus the
amount shown to be payable to the Ancillary Services
Provider in respect of its provision of Ancillary
Services on the relevant Settlement Day is equal to the
sum of the amounts shown to be payable by each Pool
Member in respect of its purchases of electricity on
the same Settlement Day.
17.7 Deemed Verification: Unless the Pool Funds
Administrator shall, by close of business on the
Notification Date, otherwise inform the Settlement
System Administrator, each Pool Member and the
Ancillary Services Provider to the contrary before the
Payment Date, the information provided by the
Settlement System Administrator shall be deemed to be
verified.
17.8 Rectification of Errors: If the Pool Funds
Administrator determines chat the information provided
by the Settlement System Administrator cannot be
verified in accordance with sub-section
17.6 it shall as soon as possible notify the Settlement
System Administrator, each Pool Member and the
Ancillary Services Provider accordingly and require the
Settlement System Administrator to correct any errors
and obtain the Pool Funds Administrator's verification
of the corrected information as quickly as possible. As
soon as the Pool Funds Administrator verifies that the
information provided by the Settlement System
Administrator can be verified in accordance with
sub-section 17.6, the Pool Funds Administrator shall
notify the Settlement System Administrator, each Pool
Member and the Ancillary Services Provider of the
verified information required to be given pursuant to
subsection 17.6. The Settlement System Administrator
shall use its best endeavours to provide such corrected
information as may be necessary for the Pool Funds
Administrator to issue verification.
17.9 Amounts in Advice Notes; Adjustments:
17.9.1 The amounts to be incorporated in the Advice No
tes in accordance with subsection 18.1 (and in all
cases together with United Kingdom Value Added Tax
thereon) shall be:
(a) if verification has been made in accordance with
sub-section 17.6, the full amounts so verified;
(b) to the extent verification can reasonably be made
in circumstances where all the information cannot be
fully verified as described in subsection 17.6, those
amounts which are shown against the name of each Pool
Debtor in such information as is received under the
provisions of sub-section 17.1 (whether or not such
information is an estimate only) and such amounts will
be shared amongst the relevant Pool Creditors in the
proportion which the amount shown as due to each of
them in such information as aforesaid bears to the
amounts which are so shown as due to all of them; and
(c) to the extent that for any reason whatever the
amounts to be paid cannot be verified at all
(including, but not limited to, application of Force
Majeure and failure to provide information on the part
of the Settlement System Administrator) or the
appropriate calculations to permit payment in
accordance with sub-paragraph (b) above cannot properly
be made, the same as the amounts calculated as being
payable by and to Pool Members and to the Ancillary
Services Provider in respect of the last same day of
the week in respect of which payments were verified
under sub-section 17.6 (provided that any Pool Member
who was not at that earlier time a Pool Member, or vice
versa, shall be ignored and such adjustment made as the
Pool Funds Administrator considers appropriate).
17.9.2 In the event that payments are made in the circu
mstances set out in paragraph 17.9.1(b) or (c), the
Settlement System Administrator in conjunction with the
Pool Funds Administrator shall, as soon as actual
verification can thereafter be made, make such
adjustments as may be necessary (and, where relevant,
apply interest at the Reserve Interest Rate or at such
rate as shall be set from time to time by the Executive
Committee) to account for any differences between
payments made and actual verified payment information.
17.10 Postponed Payment Date: If for any reason beyond the
reasonable control of the Pool Funds Administrator it is not
possible, after application of sub-section 17.9, for the Pool
Funds Administrator to determine by the close
of business on the Notification Date the amounts to be
incorporated in the Advice Notes, the Pool Funds Administrator
shall inform the Settlement System Administrator, each Pool Member
and the Ancillary Services Provider that the Payment Date
shall be postponed so that it falls on the second Business Day
after the day on which the Pool Funds Administrator verifies the
information provided by the Settlement System Administrator
pursuant to sub-section 17.6 (any such Payment Date being the
"Postponed Payment Date" and a reference to a Payment Date in
this Schedule shall where applicable include a reference to a
Postponed Payment Date). On the Postponed Payment Date, each
Pool Member who took electricity on the Settlement
Day to which the Postponed Payment Date applies shall
pay interest on all such amounts for each day from and
including the originally scheduled Payment Date to (but
excluding) the Postponed Payment Date at such rate as
shall be set from time to time by the Executive
Committee or, in the absence of such rate, at the
Reserve Interest Rate and all Pool Members who supplied
electricity and the Ancillary Services Provider on such
Settlement Day shall be entitled to receive in addition
to the amounts that they are entitled to receive in
respect of such supplies, interest on such amounts for
each day during the same period and at the same rate.
Interest shall accrue from day to day and shall be
calculated by the Pool Funds Administrator on a 365 day
year basis.
17.11 Further notification: Where instructed by the Executive
Committee, or where there is an award by a Court of competent
jurisdiction or an arbitrator, or a decision of the Pool Auditor or
where rendered appropriate by Clause 52, the Pool Funds
Administrator shall issue further or other notification to the
Pool Members and the Ancillary Services Provider in accordance with
the provisions of this Section 17; and the Business Day which
falls five Business Days after the date of such notification or
earlier if practicable shall be a Payment Date.
17.12 Payment by Pool Debtor: Without prejudice to its
obligations in respect of supplies of electricity in
accordance with the provisions of the Agreement, each
Pool Debtor shall without defence, set-off or
counterclaim (but without prejudice to any other rights
or remedies available to such Pool Debtor) make payment
on the relevant Payment Date of the full amount
(including United Kingdom Value Added Tax) so notified
as being payable by it for the account of those Pool
Members and, as the case may be, the Ancillary Services
Provider so notified as being entitled to receive
payments. Payment shall be made in accordance with the
terms of this Schedule. For the avoidance of doubt no
payment made shall be treated as being paid on account
or subject to any condition or reservation,
notwithstanding the provisions for the making of
subsequent adjusting payments provided in this
Schedule. The provisions of sub-section 5.14 shall
apply to any payment insofar as it is or may constitute
an overpayment.
17.13 Liability several: Save as otherwise expressly provided,
the liability of each Pool Member for amounts payable by it
pursuant to this Schedule is several and no Pool Member shall
be liable for the default of any other Pool Member.
18. ADVICE NOTES
18.1 Despatch of Advice Notes: Not later than 17.00
hours on the relevant Notification Date (and, if this
is not practicable, in good time (as that expression is
explained in more detail in the relevant Agreed
Procedure) to enable Pool Members and the Ancillary
Services Provider to give all necessary instructions
for payments to be effected on the relevant Payment
Date) the Pool Funds Administrator shall:
18.1.1 despatch to Pool Members and the Ancillary Serv
ices Provider Advice Notes showing amounts (inclusive
of United Kingdom Value Added Tax) which,
according to its calculations, are to be paid by or to
each Pool Member and the Ancillary Services Provider on
each Payment Date in respect of supplies of electricity
and the provision of Ancillary Services during each
Settlement Day to which that Notification Date relates;
18.1.2 notify each Settlement Bank of amounts payable by
the Pool Members or the Ancillary Services Provider
maintaining a Settlement Account at the relevant
Settlement Bank; and
18.1.3 notify the Pool Banker of the amount to be remit
ted to the Pool Clearing Account by each Settlement
Bank.
18.2 Method of despatch: All Advice Notes shall be
despatched by the means established in accordance with
paragraphs 3.1.1 and 3.1.5, or by such other means as
the Executive Committee may reasonably direct.
18.3 Content of Advice Notes: All Advice Notes will
include an appropriate indication if payment is being
made under the provisions of paragraph 17.9.1 (b),
17.9.1 (c) or 17.9.2.
18.4 Interest: Where interest is payable by or to any
Pool Member or the Ancillary Services Provider pursuant
to this Schedule, the Pool Funds Administrator shall,
at the same time as it despatches the Advice Notes,
despatch to each Pool Member and the Ancillary Services
Provider who is required to pay interest and to each
Pool Member and the Ancillary Services Provider who is
entitled to receive interest a statement showing the
amount of interest payable or receivable by it, the
rate of interest applicable thereto and the amount (if
any) of tax to be withheld.
19. PAYMENT PROCEDURE
19.1 Instructions for payment: Each Pool Member and the
Ancillary Services Provider shall, in respect of each
Payment Date on which it is under an obligation to make
a payment under this Schedule, make such arrangements
as will ensure that such payment is credited to the
relevant Collection Account in sufficient time to allow
such Settlement Bank to make irrevocable arrangements
to remit to the Pool Clearing Account by 12.30 hours
the amount payable by that Pool Member or (as the case
may be) the Ancillary Services Provider in respect of
that Payment Date. Each Pool Member and the Ancillary
Services Provider shall ensure all remittances by its
bank to the relevant Collection Account shall be
remittances for value on the relevant Payment Date.
19.2 Pool Funds Administrator's responsibilities:
19.2.1 As soon as practicable and in any event not later
than 13.00 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that all amounts required to be credited to each
Collection Account on such Payment Date have been so
credited (or if not so credited, the reason therefor
established).
19.2.2 As soon as practicable and in any event not later
than 13.30 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that all amounts credited to each Collection
Account on such Payment Date in accordance with
sub-section 19.1 have been remitted to the Pool
Clearing Account.
19.2.3 As soon as practicable and in any event not later
than 14.30 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that it verifies the actual amounts credited to
each Collection Account and remitted to the Pool
Clearing Account on or before
13.30 hours on that Payment Date and the aggregate of
such amounts.
19.3 Non-payment by Pool Member: If a Pool Member
becomes aware that a payment for which it is
responsible will not be credited to the relevant
Collection Account by 12.30 hours on the relevant
Payment Date, it will immediately notify the Pool Funds
Administrator, giving all details available to the Pool
Member. The Pool Funds Administrator shall, as soon as
it becomes aware that a payment will not be remitted,
use its best endeavours to establish the cause of
non-payment.
19.4 Excess payments: If by 12.30 hours on any Payment
Date the Pool Funds Administrator is advised by a
Settlement Bank that the Settlement Bank will be making
a payment in excess of the amount notified to the Pool
Member pursuant to sub-section 18.1 in respect of that
Payment Date, or if the Pool Banker notifies the Pool
Funds Administrator by 13.30 hours that amounts greater
than the amounts notified to the Pool Banker pursuant
to paragraph 18.1.3 have been credited to the Pool
Clearing Account, the Pool Funds Administrator shall
use its best endeavours to ascertain the nature of the
excess payment, to calculate the entitlement to such
payment and to instruct the Pool Banker by 14.30 hours
that day to credit the appropriate Settlement
Account(s) with the amount determined by the Pool Funds
Administrator as falling due to each Pool Creditor in
accordance with this Schedule
provided that, where an External Pool Member makes a
payment in excess of the amount owing by it on any
Payment Date and the reason for such overpayment is the
difficulty in remitting funds on a future Payment Date
because of the mismatch of bank and public holidays
between countries, the Pool Funds Administrator shall
instruct the Pool Banker to credit the Pool Reserve
Account with the amount of the excess. Any Pool Member
who instructs its bank to make a payment in excess of
the amount owing by that Pool Member on any Payment
Date shall simultaneously with giving such instructions
advise the Pool Funds Administrator in writing of the
amount of the excess payment providing a description of
what the Pool Member considers the excess payment
relates to.
19.5 Payment to Pool Creditors: The Pool Funds
Administrator shall, prior to 14.30 hours on each day,
calculate the amounts available for distribution to
Pool Creditors on that day. As soon as practicable and
not later than 14.30 hours on that day the Pool
Funds Administrator shall give irrevocable instructions
to the Pool Banker to remit from the Pool Clearing
Account to the relevant Settlement Accounts maintained
by the Pool Creditors the aggregate of amounts
determined by the Pool Funds Administrator to be
available for payment to Pool Creditors and, if
required, to transfer amounts from the Pool Reserve
Account or the Pool Borrowing Account to the Pool
Clearing Account or vice versa.
19.6 Making good the Pool Reserve Account: If the Pool
Reserve Account is debited or credited in or towards
clearing the Pool Clearing Account, the Pool Funds
Administrator shall as soon as possible thereafter take
the necessary steps, including making any calculations
or taking any action in accordance with Section 21, to
reverse the debit or credit to the Pool Reserve Account
and/or to make a call under a Letter of Credit.
19.7 Prohibition on transfers: The Pool Funds
Administrator shall not at any time instruct the Pool
Banker to transfer any sum from a Pool Account to
another account (not being a Pool Account) unless that
account is a Settlement Account.
19.8 Application of payments: Where payments in respect
of more than one Settlement Day are required to be
settled on a Payment Date, payments in respect of the
longest outstanding Settlement Day shall be, and be
deemed to be, settled first.
19.9 Bank contacts: Upon written request of the Pool
Funds Administrator each Pool Member and the Ancillary
Services Provider shall provide the Pool Funds
Administrator in writing with the name of, and
communication details for, one or more individuals at
the branch of its Settlement Bank from which payments
or payment instructions required to be made or given by
it pursuant to this Schedule originate (the "Local
Branch") who is (are) familiar with the payment
procedures set out in this Section 19 applicable to
such Pool Member or (as the case may be) the Ancillary
Services Provider, and shall promptly advise the Pool
Funds Administrator in writing of any change of any
such individual or his communication details. Each Pool
Member and the Ancillary Services Provider hereby
authorises the Pool Funds Administrator to contact any
such individual to enquire in respect of any Payment
Date whether and in respect of what amount instructions
have been given for the remittance of any payment
required to be made by such Pool Member or (as the case
may be) the Ancillary Services Provider under this
Schedule and/or whether such payment has been remitted
or otherwise made as provided for in this Schedule, and
undertakes not to withdraw, qualify or revoke such
authority at any time. Each Pool Member and the
Ancillary Services Provider shall instruct its Local
Branch to cooperate with the Pool Funds Administrator
accordingly and to provide the Pool Funds Administrator
with all such information as is necessary to answer
such enquiries. The Pool Funds Administrator shall
comply with all reasonable security arrangements
imposed by the relevant Pool Member or the Ancillary
Services Provider or any Local Branch.
20. ALTERNATIVE PAYMENT PROCEDURE
20.1 Alternative Payment procedure: Without prejudice
to other obligations in the Agreement not substituted
by the provisions of this Section 20, the provisions
set out in this Section 20 shall apply:
20.1.1if, on the Effective Date, it has not been po
ssible to establish the Notified Payments System (in
which case they shall continue to apply until the
Notified Payments System is established, or until such
other time as the Executive Committee may determine);
or
20.1.2 if, for any reason, it is not possible to apply
the procedures contemplated by the Notified Payments
System and for so long as it is not possible to apply
such procedures.
20.2 Pool Debtor to effect remittance: Each Pool Debtor
shall, in respect of each Payment Date on which it is
under an obligation to make a payment under the
Agreement, give instructions to its bank, which it
undertakes not to qualify, withdraw or revoke, to
effect remittance to the Pool Clearing Account of the
amount payable by that Pool Member to be received on
that Payment Date.
20.3 Receipt of remittance: Any remittance must be
received by the Pool Banker in the Pool Clearing
Account no later than 12.30 hours on the Payment Date
unless arrangements have been made between the Pool
Banker and the relevant Pool Member which shall be
notified to the Pool Funds Administrator and which are
satisfactory to the Pool Banker such that funds will be
received for value on that Payment Date. The Pool
Members shall ensure that instructions are given to
their banks in sufficient time to ensure that their
respective banks comply with this time limit.
20.4 Method of remittance: The Parties acknowledge and
agree that when practicable to give effect to
sub-section 20.3 a Pool Debtor shall cause remittances
to be effected through CHAPS but, where not practicable
or where the amount payable is less than the minimum
individual amount then processed through CHAPS, the
Pool Member shall ensure by whatever means at its
disposal that remittance for value on the relevant
Payment Date is made for credit to the Pool Clearing
Account not later than 12.30 hours.
20.5 Notification of non-payment: The Parties
acknowledge and agree that if a Pool Debtor becomes
aware that a payment for which it is responsible will
not be remitted to the Pool Banker by 12.30 hours on
the relevant day, and where satisfactory arrangements,
as referred to in sub-section 20.3 have not been made,
it shall immediately notify the Pool Funds
Administrator, giving all details available to that
Pool Debtor.
20.6 Payment default: If the Pool Funds Administrator determines
at any time after 12.30 hours on any day that a remittance which
should have been credited on that day to
the Pool Clearing Account has not been made (or that
the credit has not been received) (in whole or in part)
and where satisfactory arrangements, as referred to in
sub-section 20.3, have not been made, the provisions of
Section 21 shall apply mutatis mutandis.
20.7 Late payment: If, after the Pool Funds
Administrator has either debited the Pool Reserve
Account or made a call under a Letter of Credit, the
Pool Banker receives the remittance which had not been
credited to the Pool Clearing Account by 12.30 hours,
then such remittance shall be credited to the Pool
Reserve Account.
20.8 Payments to Pool Creditors: The Pool Funds
Administrator shall, prior to 14.30 hourson each day,
calculate the amounts available for distribution to
Pool Creditors on that day (including amounts resulting
from the application of sub-section 20.6). Not later
than 14.30 hours on that day the Pool Funds
Administrator shall give instructions to the Pool
Banker, which it undertakes not to qualify, withdraw or
revoke, to make same day value remittances to the Pool
Creditors.
20.9 Construction: Where the provisions of this Section
20 apply references in Sections 5 and 18 and
sub-section 21.1 to "Settlement Bank" and "Collection
Account" shall be construed as references to "bank" and
"Pool Clearing Account" respectively.
21. PAYMENT DEFAULT
21.1 Payment default: Subject as provided by
sub-section 21.12, if, by 12.30 hours on a Payment
Date, the Pool Funds Administrator has been notified by
a Settlement Bank or it otherwise has reason to believe
that a Settlement Bank will not remit to the Pool
Clearing Account all or any part (the "amount in
default") of any amount which has been notified by the
Pool Funds Administrator as being payable by a Pool
Debtor (the Non-paying Pool Debtor") on the relevant
Payment Date in sufficient time to ensure that such
amount can be cleared through the Pool Clearing Account
not later than the close of banking business on such Payment
Date, the Pool Funds Administrator shall act in accordance with
the following provisions (or whichever of them shall
apply) in the order in which they appear until the Pool
Funds Administrator is satisfied that the Pool Clearing
Account will clear not later than the close of business
on the relevant Payment Date:
21.1.1 if the Pool Funds Administrator has been able to
identify the non-paying Pool Debtor in sufficient time
to apply this paragraph 21.1.1 and to the extent that
the non-paying Pool Debtor is entitled to receive
payment from any Pool Debtor pursuant to this Schedule
on the relevant Payment Date, then the Pool Funds
Administrator shall (unless it reasonably believes that
such set-off shall be unlawful) set off the amount of
such entitlement against the amount in default;
21.1.2 if the Pool Funds Administrator has been able to
identify the non-paying Pool Debtor in sufficient time
to apply this paragraph 21.1.2, the Pool Funds
Administrator shall debit the Pool Reserve Account and
credit the Pool Clearing Account with a sum not exceeding
the amount of funds standing to the credit of the non-paying
Pool Debtor in the Pool Reserve Account;
21.1.3 subject to sub-section 21.2, the Pool Funds
Administrator shall debit the Pool Reserve Account and
credit the Pool Clearing Account with a sum not
exceeding the amount of funds then standing to the
credit of the Pool Reserve Account to the extent that
they represent Security Cover provided in
accordance with paragraph 15.1.2, the transfer of such
amount as is not attributable to the funds standing to
the credit of the non-paying Pool Debtor being deemed
to give rise to a series of loans to the non-paying
Pool Debtor by each Providing Member rateably according
to its share of the funds
standing to the credit of the Pool Reserve Account to
the extent that they represent Security Cover provided
in accordance with paragraph 15.1.2, at the time
immediately prior to the transfer, such loans to be
repayable on demand and to carry interest at the
Reserve Interest Rate and in any case repayable not
later than two Business Days after they arise after
which, to the extent that any such loans remain
outstanding, such loans shall carry interest at the
Default Interest Rate (which interest shall be credited
to the relevant Providing Member's Pool Ledger
Account). Each Providing Member hereby irrevocably
authorises the Pool Funds Administrator to advance,
collect in and enforce payment of such loans for its
account and on its behalf and each Pool Member hereby
irrevocably consents to the making of such
loans to the extent that such Pool Member has a share
in the Pool Reserve Account;
21.1.4 if the Pool Funds Administrator has been able to
identify the non-paying Pool Debtor in sufficient time
to apply this paragraph 21.1.4 and provided that the
Pool Funds Administrator is satisfied that the proceeds
of a call under the Letter of Credit will be paid into
the Pool Clearing Account in sufficient time to ensure
that it will clear not later than the close of business
on the relevant Payment Date, the Pool Funds
Administrator shall make a call under the Letter of
Credit supplied by the non-paying Pool Debtor in a sum
not exceeding the available amount of all such Letters
of Credit, and the Pool Funds Administrator shall cause
the proceeds of such call or calls to be paid into the
Pool Clearing Account;
21.1.5 subject to sub-section 21.2 and provided
that the Pool Funds Administrator is satisfied that the
proceeds of a call under a Letter of Credit will be
paid into the Pool Clearing Account in sufficient time
to ensure that it will clear not later than the close
of business on the relevant Payment Date, the Pool
Funds Administrator shall make a call under one or more
Letters of Credit supplied by Pool Members (other than
the non-paying Pool Debtor) in a total sum not
exceeding the total available amount of all such
Letters of Credit to the extent that such amount
represents Security Cover provided in accordance with
paragraph 15.1.2, and the Pool Funds Administrator
shall cause the proceeds of such call or calls to be
paid into the Pool Clearing Account. The transfer of
such proceeds into the Pool Clearing Account shall
be deemed to give rise to a series of loans to the
non-paying Pool Debtor by each Providing Member whose
Letter of Credit was called rateably according to the
amounts called under their respective Letter of Credit,
such loans to be repayable on demand and to carry
interest at the Reserve Interest Rate and in any case
repayable not later than two Business Days after they
arise after which, to the extent that any such loans
remain outstanding, such loans shall carry interest at
the Default Interest Rate (which interest shall be
credited to the relevant Providing Member's Pool Ledger
Account). Each Providing Member hereby irrevocably
authorises the Pool Funds Administrator to advance,
collect in and enforce payment of such loans for its
account and on its behalf and each Pool Member hereby
irrevocably consents to the making of such loans to the
extent that such Pool Member has a share in the Pool
Reserve Account;
21.1.6 if and to the extent that, notwithstanding appl
ication of the foregoing measures, it is not possible
to clear the Pool Clearing Account by any of the
foregoing means, the Pool Funds Administrator shall
reduce payments to all Pool Creditors in proportion to
the amounts payable to them on the relevant Payment
Date by an aggregate amount equal to the amount
necessary to clear the Pool Clearing Account and shall
account for such reduction in the Pool Ledger Accounts
as amounts due and owing by the non-paying Pool Debtor
to each Pool Creditor whose payments were reduced.
21.2 Amount in default likely to be remedied: The Pool
Funds Administrator shall not apply paragraph 21.1.3 or
21.1.5 unless it considers in good faith that the
amount in default is likely to be remedied by the
non-paying Pool Debtor no later than the next Business
Day-and in such a case the Pool Funds Administrator
shall only apply paragraphs 21.1.2 and 21.1.4 to the
extent of any amounts provided by way of Security Cover
pursuant to paragraph 15.1.2.
21.3 Loans part of Pool Reserve Assets: Any loans
arising pursuant to paragraph 21.1.3 or 21.1.5 shall be
deemed to constitute part of the Pool Reserve Assets
and all repayments of such loans, together with
interest thereon, shall be paid into the Pool Reserve
Account for the account of each Providing Member who is
deemed to have made such loan.
21.4 Repayment of loans: If any loans to a non-paying
Pool Debtor arising pursuant to paragraph 21.1.3 or
21.1.5 shall not have been repaid in full (together
with interest at the rate or rates specified therein)
by 12.00 hours on the next Business Day after such loan
is deemed to have arisen, the Pool Funds Administrator
shall make a call under the Letter of Credit if any'
which shall have been supplied by the non-paying Pool
Debtor and which remains outstanding in an amount not
exceeding the amount necessary to repay such loans and
all accrued interest in full and, if the proceeds of
any Letter of Credit are insufficient to repay all
outstanding loans to the relevant non-paying Pool
Debtor, such proceeds shall be applied towards
repayment of each such outstanding loan rateably.
21.5 Reduction of payments to Pool Creditors: If, after
the date that any loans to a nonpaying Pool Debtor
arise pursuant to paragraph 21.1.3 or 21.1.5, the Pool
Funds Administrator shall reasonably be of the opinion
that the non-paying Pool Debtor will not repay
forthwith all of such loans and all accrued interest in
full or the loans have not been repaid with all
interest within two Business Days after they arose
(whichever occurs first), the Pool Funds Administrator
reduce payments to all Pool Creditors in proportion to
the amounts payable to them on the Payment Date to
which the default relates and any succeeding Payment
Dates as may be required by an aggregate amount
necessary to restore the balance in the Pool Reserve
Account to the sum for the time being required under
this Schedule to be deposited by the Pool Members other
than the non-paying Pool Debtor, to the intent that all
loans arising under paragraphs 21.1.3 and 21.1.5 and
remaining undischarged after application of the
non-paying Pool Debtor's Letter of Credit are
discharged in full together with interest thereon at
the Reserve Interest Rate.
21.6 Obligation to make calls: If and whenever the Pool
Funds Administrator has not applied the provisions of
paragraph 21.1.4, and has reduced payments to Pool
Creditors in accordance with paragraph 21.1.6, it
shall, on the relevant Payment Date or so soon
thereafter as the non-paying Pool Debtor has been
identified (but, in any event, not later than the close
of business on the Business Day following such Payment
Date) make a call under the Letter of Credit supplied
by the non-paying Pool Debtor in a sum sufficient to
cover the reduction made under paragraph 21.1.6 (but
not exceeding the available amount of all such Letters
of Credit) and the Pool Funds Administrator shall cause
the proceeds of such call to be paid forthwith into the
Pool Reserve Account. On the next Business Day
following receipt of such proceeds, the Pool Funds
Administrator shall pay such amounts as have been
credited to the Pool Reserve Account to the Pool
Creditors whose payments were reduced in full or (as
the case may be) in proportion to their respective
entitlements including interest on such amounts at the
Reserve Interest Rate.
21.7 Indemnification by non-paying Pool Debtor: The
non-paying Pool Debtor shall indemnify and keep
indemnified each Pool Member whose Letter of Credit is
called under paragraph 21.1.5 and/or who is deemed to
have made loans under paragraph 21.1.3 or 21.1.5 on
demand against all costs, expenses and losses
(including the costs of management time) suffered or
incurred by such Pool Member arising from its Letter of
Credit being so called (including the costs of
reinstating the same) or such loans being deemed to
have been made to the extent that such Pool Member is
not compensated under this Section 21. This indemnity
shall be in addition to and without prejudice to the
liability of the non-paying Pool Debtor to repay the
loan, together with accrued interest, which arises
pursuant to paragraph 21.1.5. The Pool Creditors, in
proportion to the amounts payable to them on the
Payment Date to which a default relates in respect of
which the Pool Funds Administrator has operated
sub-section 21.5, and any succeeding Payment Dates as
may be required, shall indemnify and keep indemnified
each Pool Member as is referred to in the earlier
provisions of this sub-section 21.7 to the extent of
any failure by the non-paying Pool Debtor to fulfill
its obligations under this sub-section 21.7.
21.8 Notification to Pool Creditors: The Pool Funds
Administrator shall use all reasonable endeavours
promptly to notify the relevant Pool Creditors whenever
it makes any such reduction as is referred to in
paragraph 21.1.6.
21.9 Default Interest: Save as otherwise provided in
the Agreement (including where an express rate of
interest is provided), if any amount payable by any
Pool Debtor pursuant to this Schedule is not given
value for the due date by close of banking business on
the due date the Pool Debtor shall on written demand by
the Pool Funds Administrator pay to the Pool Funds
Administrator, for the account of the person or persons
entitled to receive the amount in default, interest on
such amount from the due date up to the day of actual
receipt by the Pool Funds Administrator (as well after
as before judgment) at the Default Interest Rate.
21.10 Application of payments: Any amount received by the Pool Funds
Administrator from a non-paying Pool Debtor for the credit of any Pool
Account shall be applied by the Pool Funds Administrator in or towards
payment of amounts payable by the nonpaying Pool Debtor to Pool
Creditors on each successive Payment Date in respect of which there
is an outstanding default (with the longest outstanding default
being settled first).
21.11 Clearing of Pool Clearing Account: All amounts standing to the
credit of the Pool Clearing Account at the close of business on any
Payment Date shall be transferred to the Pool Reserve Account so that
the balance in the Pool Clearing Account shall at the end of such
day be nil.
21.12 Credit Facility: If and for so long as the Credit Facility
remains unconditionally available, the provisions of this Section 21
shall apply with the modifications provided by Section 25.
22: CONFIRMATION NOTICES
22.1 Despatch of Confirmation Notices: Within two
Business Days after each Payment Date the Pool Funds
Administrator shall issue a Confirmation Notice to each
Pool Member and the Ancillary Services Provider in
respect of the corresponding Payment Date setting out
the information required in sub-sections 22.2, 22.3 and
22.4.
22.2 Information - taking of electricity: The
information required on a Confirmation Notice in
respect of each Pool Member taking electricity on each
Settlement Day is as follows:
22.2.1 the Pool Member's identification number;
22.2.2 the Pool Member's name;
22.2.3 the total amount (inclusive of United Kingdom Va
lue Added Tax) received in the Pool Clearing Account on
the relevant Payment Date by the Pool Funds
Administrator in respect of electricity taken by such
Pool Member during the Settlement Day and Ancillary
Services attributable thereto;
22.2.4 the amount received in the Pool Clearing Account
on the relevant Payment Date by the Pool Funds
Administrator in respect of electricity taken by such
Pool Member during the Settlement Day and Ancillary
Services attributable thereto, exclusive of United
Kingdom Value Added Tax; and
22.2.5 the amount of United Kingdom Value Added Tax re
ceived in the Pool Clearing Account on the Payment Day
by the Pool Funds Administrator in respect of
electricity taken by such Pool Member during the
Settlement Day and Ancillary Services attributable
thereto.
22.3 Information - supplies of electricity: The
information required on a Confirmation Notice in
respect of each Pool Member supplying electricity on
each Settlement Day shall include:
22.3.1 the Pool Member's identification number;
22.3.2 the Pool Member's name;
22.3.3 the Settlement Run identification number;
22.3.4 the total amount (inclusive of United Kingdom V
alue Added Tax) paid out of the Pool Clearing Account
on the relevant Payment Date by the Pool Funds
Administrator in respect of electricity supplied by
such Pool Member during the Settlement Day;
22.3.5 the amount paid out and the date on which such
amount is paid out of the Pool Clearing Account on the
relevant Payment Date by the Pool Funds Administrator
in respect of electricity supplied by such Pool Member
during the Settlement Day exclusive of United Kingdom
Value Added Tax and the Settlement Run identification
number; and
22.3.6 the amount of United Kingdom Value Added Tax paid
out of the Pool Clearing Account on the relevant
Payment Date by the Pool Funds Administrator in respect
of electricity supplied by such Pool Member during the
Settlement Day.
22.4 Information - Ancillary Services Provider The
information required on a Confirmation Notice in
respect of the Ancillary Services Provider is as
follows:
22.4.1 the total amount receivable by the Ancillary Se
rvices Provider (exclusive of United Kingdom Value
Added Tax) for the provision of Ancillary Services
during the Settlement Day;
22.4.2 the total amount receivable by the Ancillary S
ervices Provider (inclusive of United Kingdom Value
Added Tax) for the provision of Ancillary Services
during the Settlement Day; and
22.4.3 the total amount of United Kingdom Value Added
Tax receivable by the Ancillary Services Provider for
the provision of Ancillary Services during the
Settlement Day.
22.5 Interest: Where interest has been paid to any Pool
Member or the Ancillary Services Provider, the Pool
Funds Administrator shall promptly after such payment
provide to each Pool Member and the Ancillary Services
Provider a statement showing the amount of interest
paid or received, the rate of interest applicable
thereto and the amount (if any) of tax withheld. If
applicable, the Pool Funds Administrator shall provide
to the relevant Pool Member or the Ancillary Services
Provider an appropriate tax deduction certificate in
respect of any withholding tax.
23. PAYMENT ERRORS
23.1 Overpayments: If for any reason whatsoever
(including the negligence of the Pool Banker or the
Pool Funds Administrator) a Pool Creditor receives on
any Payment Date a payment in excess of the amount
disclosed in the Pool Ledger Account as calculated as
being payable to it (an "overpayment") (including but
not limited to proceeds of any loan made or deemed to
be made in accordance with Section 21 or Section 25 to
any non-paying Pool Debtor which becomes insolvent
before such advance is repaid) the provisions of
sub-section 5.15 apply, and the Pool Creditor shall
forthwith notify the Pool Funds Administrator of the
amount of the overpayment and shall forthwith pay the
overpayment into a Pool Account specified by the Pool
Funds Administrator.
23.2 Repayment of overpayment (1): If prior to a Pool
Creditor notifying the Pool Funds Administrator of the
overpayment, the Pool Funds Administrator receives
notice (from the Pool Banker or otherwise) of the
overpayment, the Pool Funds Administrator shall
forthwith require (by written notice) that the
recipient of the overpayment pay the overpayment to a
Pool Account specified by the Pool Funds Administrator
and any Pool Creditor who receives such notice shall
forthwith pay the amount to an account specified by the
Pool Funds Administrator. If the overpayment is repaid
within two Business Days of receiving the notice, the
overpayment (or any part not paid) shall bear interest
at the Reserve Interest Rate or at such rate as shall
be set from time to time by the Executive Committee
from the date the overpayment was received up to the
date that value is given in a Pool Account by the Pool
Funds Administrator- (as well after as before
judgment). Any overpayment (or part thereof) not repaid
within two Business Days after demand therefor in
accordance with this Section 23 shall bear interest at
the Default Interest Rate from the expiry of that
period and shall be recoverable in accordance with
Section 24. The Pool Funds Administrator shall account
to those entitled to payment by reason of an
overpayment.
23.3 Repayment of overpayment (2): Upon receipt of the
overpayment (including any interest) the Pool Funds
Administrator shall (forthwith upon entitlement to it
being ascertained) pay the amount received to the Pool
Member or the Ancillary Services Provider who should
have received the payment on the Payment Date.
23.4 Underpayments: If for any reason whatsoever
(including the negligence of the Pool Banker or the
Pool Funds Administrator) a Pool Creditor does not
receive on the relevant Payment Date the full amount
disclosed as owing to it pursuant to the Pool Ledger
Account (an ~underpayment") that Pool Creditor shall
forthwith notify the Pool Funds Administrator of the
amount of the underpayment, and the Pool Funds
Administrator after consultation with the Pool Banker
shall use all reasonable endeavours to identify such
person as shall have received any corresponding
overpayment and promptly to correct the underpayment.
If, by reason of negligence, the Pool Funds
Administrator holds or has under its control amounts
which it ought properly to have paid to Pool Members,
such Pool Members shall be enticed to interest on such
amounts at the Default Interest Rate and for such
period as the Pool Funds Administrator improperly holds
or has such amounts under its control.
24. ENFORCEMENT OF CLAIMS
24.1 Notification of amount in default: Without
prejudice to the provisions of Section 21, if a Pool
Member shall fail to pay any amount payable pursuant to
this Schedule on the due date, the Pool Funds
Administrator shall notify the Director, the Executive
Committee and each Pool Creditor to whom the amount in
default is owed pursuant to this Agreement of the name
of the non-paying Pool Debtor, the aggregate amount in
default and the amount owed to each Pool Creditor.
24.2 Duties of Pool Funds Administrator: Except as
otherwise expressly provided in this Schedule, the Pool
Funds Administrator shall not be required to ascertain
or enquire as to the performance or observance by any
Pool Member or the Ancillary Services Provider of its
obligations under the Agreement and shall have no duty
to inform the Executive Committee or any Pool Member or
the Ancillary Services Provider of any default, other
than a failure to pay as may come to its attention.
24.3 Notice before action: Each Pool Creditor shall
give notice to the Pool Funds Administrator before
instituting any action or proceedings in any court to
enforce payments due to it pursuant to this Schedule.
Upon receipt of any notice under this sub-section 24.3,
the Pool Funds Administrator will as soon as
practicable notify the Executive Committee, all Pool
Members, the Settlement System Administrator, the
Ancillary Services Provider and the Director.
24.4 Proceedings to Recover Overdue Amounts: Without
prejudice to the right of any Pool Member to bring such
proceedings as it sees fit in connection with matters
related to the Agreement, the Pool Funds Administrator
shall, if instructed to do so by the -Executive
Committee, bring proceedings against a Pool Member (on
behalf of those Pool Members who have indicated their
willingness to the Executive Committee for the Pool
Funds Administrator first so to act) for the recovery
of any amounts due by that Pool Member pursuant to this
Schedule so long as the Pool Funds Administrator has first
reached agreement with the Executive Committee and the Pool
Members as to appropriate remuneration, is indemnified
to its reasonable satisfaction or, if it so requires,
provided that it shall have received such security as
it may reasonably request against all costs, claims,
expenses (including legal fees) and liabilities which
it will or may sustain or incur in complying with such
instructions. Save as provided in the foregoing
provisions of this sub-section 24.4, the Pool Funds
Administrator shall not be obliged to bring any such
proceedings.
25. CREDIT FACILITY: PAYMENT DEFAULTS
25.1 Purpose of Credit Facility: It is acknowledged
that the Credit Facility provides an alternative to the
Security Cover referred to in paragraph 15.1.2 and the
Pool Funds Administrator will use the Credit Facility
to cover banking error and payment error and to
minimise reductions of payments to Pool Creditors
unless it considers in good faith that an amount in
default is not likely to be remedied by the non-paying
Pool Debtor no later than the next Business Day.
25.2 Modification of other provisions of this Schedule:
If and so long as the Credit Facility is
unconditionally available to the Pool Funds
Administrator (whether or not there remains any amount
undrawn), paragraphs 15.1.2, 21.1.3 and 21.1.5 shall be
of no effect and the remaining provisions of this
Schedule shall be implemented on the basis that the
following sub-sections apply.
25.3 Payment default: The Pool Funds Administrator
shall operate the Credit Facility on the following
basis:
25.3.1 the Credit Facility may be drawn down by the Pool
Funds Administrator if, by 12.30 hours on any Payment
Date, there is an amount in default unless the Pool
Funds Administrator considers in good faith that the
amount in default is not likely to be remedied by the
non-paying Pool Debtor no later than the next Business
Day;
25.3.2 if paragraph 25.3.1 applies such that the Credit Facility may be
drawn down, the Pool Funds Administrator will first act in accordance with
paragraph 21.1.1, will then draw on the Credit Facility for an amount not
exceeding the available amount under the Credit Facility (after allowing
for any repayment to be made to the Facility Bank under sub-section 25.6)
and, if it is not possible to clear the Pool Clearing Account by either or
both of those means, it will then act in accordance with paragraph 21.1.6;
and
25.3.3 if paragraph 25.3.1 does not apply, then the Pool
Funds Administrator will act in accordance first with
paragraph 21.1.1, then with paragraph 21.1.2, then with
paragraph 21.1.4 and only then with paragraph 21.1.6.
25.4 Amounts in default: Each non-paying Pool Debtor
will be responsible in relation to any amount in
default in accordance with the following paragraphs:
25.4.1 each non-paying Pool Debtor will be responsible
for the repayment of all amounts of principal drawn
down under the Credit Facility in respect of any amount
in default relating to that Pool Debtor as if the Pool
Funds Administrator had made a loan to such Pool Debtor
of the relevant amount and the amounts so payable are
to be paid to, or otherwise made available for credit
to, the Pool Clearing Account as soon as possible, but
in any event no later than two Business Days after the
relevant Payment Date;
25.4.2 each non-paying Pool Debtor will be responsible
also for interest (determined in accordance with
paragraph 25.4.4) on all amounts of principal drawn
down under the Credit Facility in respect of any amount
in default relating to that Pool Debtor as if the Pool
Funds Administrator had made a loan to such Pool Debtor
of the relevant amount and the amount so payable by way
of interest is to be paid to, or otherwise made
available for credit to, the Pool Clearing Account by
no later than the day notified by the Pool Funds
Administrator to such Pool Debtor for payment thereof
(being the date which is 2 Business Days prior to the
date on which interest is payable under the Credit
Facility by the Pool Funds Administrator to the
Facility Bank for the month in which the principal
amount in question was outstanding);
25.4.3 each non-paying Pool Debtor will further be res
ponsible for its proportionate share (determined in
accordance with paragraph 25.4.5) of any additional sum
payable to the Facility Bank pursuant to the terms of
the Credit Facility as if the Pool Funds Administrator
had made a loan to such Pool Debtor of the relevant
amount and the amount so payable is to be paid to, or
otherwise made available for credit to, the Pool
Clearing Account forthwith on notification thereof by
the Pool Funds Administrator to the Pool Debtor in
question;
25.4.4 for the purposes of paragraph 25.4.2, int
erest is to be calculated using the effective daily
rate of interest reasonably determined by the Pool
Funds Administrator on the basis of the aggregate
interest (including any compound interest) payable
under the Credit Facility in .-relation to any
particular day;
25.4.5 for the purposes of paragraph 25.4.3, the propor
tionate share for a particular non-paying Pool Debtor
is the amount (if any) which the Pool Funds
Administrator reasonably determines (after consultation
with the Facility Bank) as being the amount of any
additional sum payable in accordance with the terms of
the Credit Facility attributable to drawings under the
Credit Facility made in respect of that Pool Debtor.
25.5 Application of payments: On the Relevant Date the
Pool Funds Administrator shall, if the amount
in.question has not been received in full from the
non-paying Pool Debtor:
25.5.1 first debit the Pool Reserve Account and credit
the Pool Clearing Account with a sum not exceeding the
amount of funds (if any) standing to the credit of the
non-paying Pool Debtor in the Pool Reserve Account;
25.5.2 if that sum is insufficient to repay in full the
amount in question, the Pool Funds Administrator shall
call the Letter of Credit (if any) provided by the
non-paying Pool Debtor (for an amount not exceeding the
available amount) and pay or cause the proceeds thereof
to be paid into the Pool Clearing Account; and
25.5.3 if the amount credited to the Pool Clearing Acco
unt after following the foregoing procedure is
insufficient, reduce payments to all Pool Creditors in
proportion to the amounts payable to them on the
Payment Date to which the default relates,
so that, in any case, the Pool Funds Administrator has
available to it on the Pool Clearing Account sufficient
funds to comply with paragraph 25.6. For the purposes
of this paragraph, the "Relevant Date" is whichever of
the following is applicable:
(a) in relation to any principal amount for which a
non-paying Pool Debtor is responsible under paragraph
25.4.1, the last date specified for payment under
paragraph 25.4.1;
(b) in relation to any principal amount as referred to
in sub-paragraph (a), the first date (if earlier than
the date referred to in sub-paragraph (a)) on which the
Pool Funds Administrator is reasonably of the opinion
that the nonpaying Pool Debtor will not repay forthwith
all of the amounts of principal in question;
(c) in relation to payment of interest under paragraph
25.4.2, the last date for payment thereof; and
(d) in relation to an additional amount under
paragraph 25.4.3 the last date for payment of this
amount.
25.6 Payments to Facility Bank: To the extent of any
payment by the non-paying Pool Debtor and/or if any of
the circumstances described in sub-section 25.5 occur,
the Pool Funds Administrator will forthwith repay to
the Facility Bank by credit to the Pool Borrowing
Account, if applicable, an amount equal, in the former
case, to the amount so paid and, in the latter case, to
the amount which should have been paid by the
non-paying POQI Debtor.
25.7 Reduction in payments to Pool Creditors: A
reduction in payments as contemplated by paragraph
25.5.3 will also apply in the event of any amounts
drawn down under the Credit Facility being required to
be repaid in accordance with the terms of the Credit
Facility and the Pool Funds Administrator shall account
for such reduction in the Pool Ledger Accounts as amounts
due and owing by the non-paying Pool Debtor to each Pool
Creditor whose payments were reduced.
25.8 Enforcement of Claims and other provisions:
Sub-sections 21.7, 21.8, 21.9, 21.10 and
Section 24 shall have effect in relation to amounts due
from a non-paying Pool Debtor which arise under the
foregoing sub-sections.
25.9 Unavailability of Credit Facility: If at any time
the Credit Facility ceases to be unconditionally
available and paragraph 15.1.2 shall thereupon have
become effective, the whole or any part of the Security
Cover thereby required to be provided by each Providing
Member may be provided by a credit to the Pool Reserve
Account, unless otherwise determined by the Executive
Committee. The Executive Committee shall from time to
time assess (in consultation with the Pool Funds
Administrator) and determine the amount of Security
Cover which would be required pursuant to
paragraph 15.1.2 as if that paragraph were in effect
and such assessment and determination shall apply for
the purposes of paragraph 16.2.2 if paragraph 15.1.2
becomes applicable, pending any revised assessment by
the Executive Committee.
25.10Interpretation: Terms and expressions used in this Section 25 shall,
unless the context otherwise requires, have the same meanings as are given to
them for the purposes of Clause 21.
26. CREDIT FACILITY: GENERAL
26.1 Notifications to the Executive Committee: The Pool
Funds Administrator shall notify the Executive
Committee forthwith:
26.1.1 on it becoming aware of any circumstances which
might lead to an event under the Credit Facility as a
result of which the Credit Facility might cease to be
available; and
26.1.2 upon receipt of a written demand from the Faci
lity Bank pursuant to the terms of the Credit Facility
as a result of which the Facility ceases to be
available; and
26.1.3 in the event that the Facility Bank requires any
additional amount to be paid under the Credit Facility
by reason of any increased costs to the Facility Bank
or any changes in circumstances.
26.2 Notifications to Providing Members: The Pool Funds
Administrator shall notify the Providing Members as
soon as reasonably practicable after receipt by it of a
notice from the Facility Bank that an additional amount
will or may be payable by the Pool Funds Administrator
to the Facility Bank under the terms of the Credit
Facility.
26.3 Amendment and Cancellation:
26.3.1The Pool Funds Administrator shall not:
(a) amend or supplement, or agree to any amendment or
supplement to, the terms of the Credit Facility without
the approval of the Executive Committee; or
(b) cancel the Credit Facility unless either the
approval of the Executive Committee has been obtained
or paragraph 26.3.2 applies.
26.3.2 The Pool Funds Administrator shall cancel the Cr
edit Facility in full at any time if a resolution to
that effect is passed (on a simple majority vote) by
the Providing Members in separate general meeting or if
all Providing Members have requested such cancellation.
26.4 Extension and Renewal: The Pool Funds
Administrator shall negotiate with the Facility Bank an
extension or renewal of the Credit Facility on the
instructions of the Executive Committee and, in the
absence of such instructions, shall begin negotiations
with the Facility Bank no later than ten weeks before
the Credit Facility is due to terminate in accordance
with its terms, with a view to the extension or renewal
of the Credit Facility on substantially the same terms
for a further year and, in any event, to keep the
Executive Committee informed on a timely basis of the
progress of any such negotiations. The Pool Funds
Administrator shall, however, act only with the
approval and consent of the Executive Committee in
agreeing any extension or renewal of the Credit
Facility and the Executive Committee shall be
responsible for deciding whether or not to renew or
extend the Credit Facility and, if so, on what terms
and for what period.
26.5 Fees not attributable to a particular Providing
Member: Any fees (and any additional amounts payable
under the terms of the Credit Facility which are not
the responsibility of any particular Providing Member)
charged under the Credit Facility to the Pool Funds
Administrator shall be recharged to the Providing
Members, in accordance with their respective Providing
Member Contributory Shares (to be calculated on the
basis of those current on the date on which the
relevant fee (or the relevant portion thereof) or
additional amount is payable by the Pool Funds
Administrator under the Credit Facility).
26.6 No additional charge: The Pool Funds Administrator
shall not make any additional charge for arranging,
participating in or administering the Credit Facility.
<PAGE>
ANNEX 1
Form of Advice Note
ADVICE NOTE
DATE: Energy Pool Funds Administration Ltd
Room 157.2
185 Park Street
London SE1 9DY
TELEPHONE: (0171) 620 9456
FAX NO: (0171) 4012799
NAME:
ADDRESS:
ADVICE NOTE:
PAYMENT DATE:
FAX NO:
THIS IS NOT A TAX INVOICE
Advice Note issued in accordance with the Pooling and Settlement
Agreement for the Electricity Industry in England and Wales dated
30th March 1990 as amended, varied or supplemented from time to
time.
SETTLEMENT RUN/ DESCRIPTION AMOUNT AMOUNT
DATE TYPE PAYABLE PAYABLE
EXC VAT INC VAT
DO NOT NET YOUR PAYABLES TO YOUR RECEIVABLES
A wholly owned subsidiary of The National Grid Company plc. Regd.
in England No. 2444187 VAT No 547 8630 11
<PAGE>
ANNEX 2
Form of Confirmation Notice
CONFIRMATION NOTICE
DATE: Energy Pool Funds
Administration Limited
Room 157.2
185 Park Street
London SE1 9DY
TELEPHONE:
FAX NO:
TELEX:
NAME:
ADDRESS:
CONFIRMATION NO:
PAYMENT DATE:
FAX NO :
Confirmation notice issued in accordance with the Pooling and
Settlement Agreement for the Electricity Industry in England and
Wales dated 30th March 1990 as amended, varied or supplemented
from time to time.
THIS IS A TAX INVOICE
PAYMENT SETTLEMENT DESCRI AMT. PD VAT VAT AMT PD
DATE DATE P-TION EXC VAT RATE PAID INC VAT
A wholly owned subsidiary of The National Grid Company plc. Regd.
in England No 2444187 VAT No 547 8630 11
<PAGE>
ANNEX 3
Part 1
Form of Settlement Account Designation
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
and
Barclays Bank PLC
54 Lombard Street Branch
as Pool Banker
Settlement Account Designation
Date:
1. [Insert name of Pool Member/Ancillary Service Provider]
hereby designates the
following account as its Settlement Account to which you are
instructed to remit all
amounts which are payable to us through the Pool Clearing Account
in accordance
with Schedule 11 to the Pooling and Settlement Agreement for the
Electricity
Industry in England and Wales dated 30th March, 1990, as amended,
varied or
supplemented from time to time (the "Agreement").
Name of Bank Branch Address Sorting Code Name
of Account Account No.
2. We hereby designate the following account as our Settlement
Account from which all payments due from us in accordance with
Schedule 11 to the Agreement will be remitted.
Name of Bank Branch Address Sorting Code Name
of Account Account No.
Signed by ....................................................
Position........................................................
For and on behalf of
[Name of Pool Member/Ancillary Services Provider]
<PAGE>
ANNEX 3
Part 2
Form of Change of Settlement Account
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
and
Barclays Bank PLC
54 Lombard Street Branch
as Pool Banker
In accordance with sub-section 4.6 of Schedule 11 to the Pooling
and Settlement Agreement [insert name] hereby gives you notice
that, with effect from [insert date] (or 10 Business Days after
you receive this notice, whichever is later), our new Settlement
Account from which payments due from the undersigned/to which
payments due to the undersigned]* will be paid shall be:
Name of Bank Branch Address Sorting Code Name
of Account Account No.
Yours sincerely,
[ ] for and on behalf of
[Name of Pool Member/Ancillary Services Provider]
please complete as appropriate
<PAGE>
ANNEX 4
Form of Letter of Credit
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
At the request of [Providing Member] we have
opened in your favour our irrevocable Letter
of Credit Number ( ) for pounds [ ] (amount in
words).
This Letter of Credit is available against
your sight drafts accompanied by a signed
statement either that the applicant has
failed to pay to you the amount you are
claiming under the terms of the Pooling and
Settlement Agreement for the electricity
industry in England and Wales dated 30th
March, 1990 (the "Agreement") or that the
claim is being made under subsection 15.5 or
Section 21 of Schedule 11 to the Agreement.
Payments under this Letter of Credit shall be
effected immediately to [insert relevant
account details].
Partial drawings are allowed hereunder.
Claims under this Letter of Credit shall be
made at the counters of [insert details of
the branch of the issuing bank].
This Letter of Credit expires on [ ].
We waive any right to set off against any
amount payable hereunder any claims we may
have against you.
Any demand hereunder must comply with all the
above requirements [and signatures thereon
must be confirmed by your Bankers].
This Letter of Credit is subject to Uniform
customs and practice for Documentary Credits
(1983 Revision) International Chamber of
Commerce.
We undertake that drafts and documents drawn
under and in strict conformity with the terms
of this credit will be honoured upon
presentation.
This Letter of Credit shall be governed by
and construed in accordance with English law.
For and on behalf of [] Bank [Plc]
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 12
Transitional Arrangements
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
GOAL
(1) Use of GOAL programme for (i) An auditable April 1997 April 1993 (GOAL
Scheduling and Settlement calculation route for Replacement Phase 1)
purposes scheduling
(ii) Assess need for April 1997 April 1993 (GOAL
development or Replacement Phase 1)
replacement of GOAL
(2) [Not used]
(3) [Not used]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
(4) Ancillary Service costs (i) Review the Reactive Power: Reactive Power:
charged by NGC as a lump arrangements for the April 1994 December 1993
sum per day payment to generators
for ancillary services. Other Services: Other Services:
Where appropriate, April 1996 December 1995
recommend and, if
agreed, implement
changes to the level of
aggregation by
payment type and by time
period, and the method
of calculating payment.
Review the require-
ment for the Ancillary
Services Provider to
contract for particular
ancillary services.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
(ii) Review the arrangements Reactive Power: Reactive Power:
for charging consumers for April 1995 December 1994
ancillary services and, in
particular, whether individual Other services: Other services:
consumers can be charged for April 1996 December 1995
the impact of their demands
on reactive power requirements.
(5) Scheduling, Despatch Review arrangements to
and Settlement cater for:
No special treatment (i) energy constrained January 1998 April 1996 (GOAL
plant; Replacement Phase 2)
(ii) plans with cost January 1998 April 1996 (GOAL
structures that cannot Replacement Phase 2)
adequately be
expressed as a Willans
line
(6)[Not used]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission
implementation Works Programme
(7) Dynamic Parameters Treatment of changes April 1998 April 1996
generator dynamic
parameters during the day
(8 Offer Prices submitted Review frequency at which
daily revised offer process can be
used in Scheduling, Despatch
and Settlement e.g.:
(i) submitted for each April 1997 August 1995
scheduling period
(control phase);
(ii) submitted at any time April 1997 August 1995
for opportunity trading
on despatch timescales
(9)Out-of-merit costs shared Review demand forecasts
entered by NGC into
Settlement, based on
information supplied by
customers, against actual
demand figures. Review and,
agreed, implement changes in the:
(i) [Not used];
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
(ii) allocation of out-of- July 1995 July 1994
merit costs associated
with deviations from
forecast; and
(iii) incentives and July 1995 July 1994
penalties associated
with demand forecast
accuracy
(10) Three stage settlement process Introduction of additional October 1995 October 1994
(unconstrained schedule, stage(s), in particular, the
despatch and out-turn) transmission constrained
schedule, to allow further
disaggregation of difference
between unconstrained
schedule costs and out-turn
costs. (Could be a phased
implementation)
(11) Sharing cost across all demand
for:
(A) Transmission constraints Cost of out-of-merit April 1995 October 1994
generation required only to
support stability of a local
network to be charged to the
owner of such network
</TABLE)
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
<S> <C> <C> <C> <C>
(B) Transmission losses Review and, if agreed July 1996 October 1994
implement changes in the
arrangements for allocating
the costs of transmission
losses on the supergrid, e.g.
to reflect:
(I) electrical location of
generation and demand;
and/or
(ii) contractual
arrangements between
Generators, Suppliers
and NGC; and/or
(iii) incentives for
investment in
supergrid facilities
(12) Metering data collection by (I) [Not used] December 1999 December 1997
Settlement Day (0000 hours to
2400 hours) (ii) Review change to
collecting metering
data by variable
scheduling day [see
(13)(A)] and
implement if agreed
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transitional Arrangement New Principle Date for Date for submission of
implementation Works Programme
(13) Schedule Day parameters
(A) Schedule Day start and finish Review the introduction of December 1999 December 1997
(0500 hours to 0500 hours) varying length Schedule Days
based upon the shape of the
demand curve or other
factors and implement if and
as agreed
(B) Settlement Period duration set at Review the use of shorter December 1999 December 1997
0.5 hours scheduling periods and
implement if agreed
</TABLE>
SCHEDULE 13
Contributory Shares
1. Contributory Share: The Contributory Share of a Pool Member
shall be calculated in accordance with the following provisions
of this Schedule.
2. Points: Subject as provided in Section 3, in respect of each
Quarter:
2.1 each Pool Member which is a Generator shall receive in
that capacity one point (a "Point") for each MWh of Genset
Metered Generation of all Allocated Generating Units for all
Settlement Periods falling in the Votes Calculation Period
relative to such Quarter, as determined from the final run of
Settlement (as referred to in paragraph D(3) of the Preamble to
Schedule 9) for each such Settlement Period; and
2.2 each Pool Member which is a Supplier shall receive in that
capacity such number of points (each a "Point") as is equal to
the total MWh of Consumer Metered Demand taken by that Pool
Member in all Settlement Periods falling in the Votes Calculation
Period relative to such Quarter, as determined from the final run
of Settlement (as referred to in paragraph D(3) of the Preamble
to Schedule 9) for each such Settlement Period.
For the purposes of this paragraph 2:
(A) a Generating Unit shall be an Allocated Generating Unit of
a Pool Member (in this paragraph, the "Identified Pool Member")
if it belongs to the Identified Pool Member as of the date on
which the Executive Committee calculates the Contributory Shares
of Pool Members for the relevant Quarter pursuant to paragraph 6.
If at any time during such Quarter an Allocated Generating Unit
shall belong to another Pool Member (in this paragraph, the
"Transferee Pool Member"), the Contributory Shares attributed to
the Identified Pool Member for such Quarter by reason of the
Allocated Generating Unit belonging to it shall be transferred to
the Transferee Pool Member as of the date on which such Allocated
Generating Unit first belongs to the Transferee Pool Member (and
the Identified Pool Member and the Transferee Pool Member shall
jointly notify the Executive Committee in writing of such date in
good time before its occurrence);
(B) a Generating Unit shall belong to a Pool Member if it is
owned by that Pool Member and not leased to another person or if
it is leased by that Pool Member from another person;
(C) a Pool Member shall notify the Executive Committee promptly
on request of its Allocated Generating Units and the Executive
Committee and each other Party may rely on the information in
that notification and in any notification under paragraph (A)
above without further enquiry or need to verify that information;
(D) in determining the meaning of "good time" for the purposes of
paragraph (A) above one factor to be taken into account is that
the Settlement System Administrator must be allowed sufficient
time to effect the necessary changes in Settlement associated
with the transfer of the relevant Allocated Generating Unit; and
(E) the Executive Committee may, upon application of any Pool
Member involved in any transfer of assets between Pool Members
during any Quarter, adjust as between the Pool Members involved
in such transfer, the number of Points and/or Weighted Votes to
which they in their capacities as Suppliers are entitled in
respect of the remaining part of that Quarter and/or one or both
of the two immediately succeeding Quarters if, in the opinion of
the Executive Committee, such adjustment would help accommodate
the consequences of such a transfer and not prejudice the
interests of any other Pool Member in any material respect.
3. New Pool Members: Until the third Quarter Day next falling
after the date of its admission as a Pool Member, any Party which
is admitted as a Pool Member pursuant to Clause 8.2 shall receive
that number of Points as is equal to one thousand times the
number of Weighted Votes to which such Pool Member would have
been entitled under Clause 11.3.1(b) had the provisions of Clause
11.3.3 been ignored; and
3.1 the provisions of Clause 11.23.3 been ignored; and
3.2 any applicable restrictions under Clause 11.4 been ignored,
as determined by the Executive Committee. Thereafter, such Pool
Member's Points shall be calculated in accordance with paragraph
2.
4. Calculation of Points: On or prior to each Quarter Day the
Executive Committee shall, on the basis of information to be
supplied by the Settlement System Administrator as referred to in
Clause 11.3.2, calculate for the Following Quarter the number of
Points which each Pool Member whose Points are to be calculated
in accordance with paragraph 2 shall receive, and shall notify
each Pool Member and the Director in writing of the number of
Points received by all Pool Members (whether calculated in
accordance with paragraph 2 or 3). The determination of the
Executive Committee as to the number of Points of each Pool
Member shall (in the absence of manifest error) be final and
binding for all purposes of this Agreement.
5. Contributory Shares: The Contributory Share of a Pool Member
shall be calculated in accordance with the following formula:
CS = X + Y
Where:
X = A
-----
2 x B
Y = C
------
2 x D
and where:
CS = the Contributory Share of such Pool Member, expressed
as percentage
A = the number of Points for the time being of such Pool
Member in its capacity as a Generator
B = the number of Points for the time being of such Pool Members
which are Generators, in their capacity as such
C = the number of Points for the time being of such Pool
Member in its capacity as a Supplier
D = the number of Points for the time being of all Pool Members
which are Suppliers, in their capacity as such.
6. Calculation of Contributory Shares: On or prior to:
6.1 each Quarter Day;
6.2 each date upon which a New Party is admitted as a Pool
Member; and
6.3 each date upon which a Pool Member ceases to be a Party,
the Executive Committee shall calculate for the Following Quarter
or (as the case may be) the remainder of the then current Quarter
the Contributory Share for the time being of each Pool Member,
and shall notify each Pool Member and the Director in writing of
the Contributory Share of each of the Pool Members. The
determination of the Executive Committee as to the Contributory
Share of each Pool Member shall (in the absence of manifest
error) be final and binding for all purposes of this Agreement.
7. Records: The provisions of Clause 11.9 shall apply mutatis
mutandis in respect of each Pool Member's Points and Contributory
Share.
8. Additional Capacity: For the purposes of Section 3, any Pool
Member who acquires an additional capacity in which it
participates as a Pool Member shall be deemed to have been
admitted as a new Pool Member pursuant to Clause 8.2 in that
additional capacity and until the third Quarter Day next falling after
the date such Pool Member's application to the Executive Committee
pursuant to Clause 8.12 is approved, it shall receive that number
of Points as is equal to one thousand times the number of
Weighted Votes to which such Pool Member would have been entitled
under Clause 11.3.1(b) had:
8.1 the provisions of Clause 11.3.3 been ignored; and
8.2 any applicable restrictions under Clause 11.4 been ignored,
as determined by the Executive Committee. Thereafter, such Pool
Member's Points shall be calculated in accordance with paragraph
2.
<PAGE>
SCHEDULE 14
Membership of the Executive Committee:
Public Electricity Suppliers and Independent Suppliers
1. Definitions: In this Schedule the following expressions
have the following meanings:
"Appointment Date" means the first day in any Appointment Period;
"Appointment Period" means either a Preliminary Period or a
period of four years, as the case may require;
"Appointor" means a PES having for the time being a right to
appoint a PES Committee Member;
"Group" means Group A, B. C or D, as the case may be;
"PES Member" means any Pool Member which is a Public Electricity
Supplier; and
"Preliminary Period" means the period commencing on the Effective
Date and ending on the following dates:
(a) in the case of the Appointor in Group A, 31st March, 1991;
(b) in the case of the Appointor in Group B. 31st March, 1992;
(c) in the case of the Appointor in Group C, 31st March, 1993; and
(d) in the case of the Appointor in Group D, 31st March, 1994.
2. and Appointment - Public Electricity Suppliers:
2.1 Subject to Sections 2 to 5 and Section 8, the PES Members
shall together have the right to appoint not more than four
members of the Executive Committee (the "PES Committee
Members").
2.2 The PES Members shall for the purposes of Sections 2 to 5
and Section 8 be arranged into Groups as follows:
Group A:
1 SEEBOARD plc
2 Southern Electric plc
3 London Electricity plc
Group B:
1 Midlands Electricity plc
2 South Wales Electricity plc
3 Eastern Group plc
Group C:
1 Yorkshire Electricity Group plc
2 Northern Electric plc
3 NORWEB plc
Group D:
1 South Western Electricity plc
2 East Midlands Electricity plc
3 Manweb plc
2.3 In respect of the Preliminary Period appropriate to each
Group, the first-named PES Member shall be entitled to appoint a
PES Committee Member and in respect of each subsequent
Appointment Period the entitlement to appoint shall pass to the
second named PES Member and so on through each Group, in constant
rotation.
2.4 No later than seven days before the end of an Appointment
Period, the Appointor of each Group next entitled to appoint a
PES Committee Member shall give notice in accordance with Section
2.7 of its intention to appoint a PES Committee Member for the
next Appointment Period.
2.5 If a notice is given pursuant to Section 2.4, the person
specified in the notice shall hold office as a PES Committee
Member commencing on the Appointment Date in place of the person
previously appointed.
2.6 If no notice is given pursuant to Section 2.4, the PES
Member next following in the relevant Group shall be entitled to
make an appointment for the relevant Appointment Period.
2.7 Any notice required to be given pursuant to Sections 2 to
5 shall specify the name of the person to be appointed and shall
be given to the Secretary of the Executive Committee and to all
PES Members.
3. Removal and Replacement - Public Electricly Suppliers:
3.1 A PES Committee Member shall cease to hold offfice if:
(a) the office is vacated pursuant to Clause 21; or
(b) he is removed from office by his Appointor at any time
during the Appointment Period; or
(c) his Appointor ceases to be a Pool Member or Party for
whatever reason; or
(d) another person is appointed as the PES Committee
Member pursuant to
Section 2.4; or
(e) if the office is required to be vacated pursuant to
Section 5.2.
3.2 If at any time there are less than four PES Committee
Members then the following persons shall have the right to
appoint a PES Committee Member by giving notice in accordance
with Section 2.7:
(a) the Appointor in the appropriate Group which is not for the
time being represented;
(b) if an appointment is not made within three days of the right
becoming exercisable, the PES Member next following in the
relevant Group shall be entitled to appoint a PES Committee
Member, and so on; and
(c) if by the end of nine days after the right to appoint under
paragraph (a) above has become exercisable no such appointment
has been made, then any PES Member shall have the right to call a
meeting of PES Members for the purpose of making the appointment.
To any meeting of PES Members called pursuant to Section 3.2(c)
the provisions of Clauses 10.3 to 10.5, 10.8, 11.12 and 12 shall
apply mutates mutants but so that:
(i) the required notice period shall be seven days and shall be
given to all PES Members;
(ii) a meeting called by shorter notice shall be deemed to have
been duly called if it is agreed by at least two-thirds in number
of the PES Members having a right to attend and vote at such
meeting;
(iii) the necessary quorum shall be two;
(iv) each PES Member shall have one vote;
(v) any PES Member shall be entitled at the meeting to nominate
any person to be appointed;
(vi) an appointment shall be duly made by resolution of a simple
majority of PES Members present and voting at such meeting;
(vii) any such resolution shall be decided on a show of hands
and proxies shall be entitled to vote on a show of hands; and
(viii) in the event of a tie, the matter shall be decided by the
PES Member present (in person or by proxy) with the highest
number of Weighted Votes.
Any person appointed pursuant to Section 3.2(c) shall be subject
to removal and replacement by a meeting of PES Members called for
that purpose, and the provisions of Section 3.2(c) shall apply
mutatis mutandis to any such meeting.
3.3 If at any time there are less than four PES Committee
Members, then until such time as the appropriate appointment has
been made in accordance with Section 3.2, any PES Member shall be
entitled to make an emergency appointment by notice given in
accordance with Section 2.7, and the person so appointed shall
hold office as a PES Committee Member until such time as an
appointment is made pursuant to Section 3.2 or until the next
Appointment Date (whichever is the earlier). In the event that
more than one PES Member exercises its right to make an emergency
appointment pursuant to this Section 3.3, the person duly
appointed as the PES Committee Member pursuant to this Section
3.3 shall be the person named in the first notice received by the
Secretary and for this purpose the decision of the Secretary as
to which notice was received first shall be conclusive and
binding on the PES Members.
3.4 Subject to Section 3.1 any person appointed as a PES
Committee Member pursuant to Section 3.2 shall hold office until
the next Appointment Date.
3.5 Any notice duly given pursuant to Sections 3.2(a) or (b)
or 3.3 shall be effective to appoint the PES Committee Member
with effect at the beginning of the relevant Appointment Period.
4. New PES Members:
4.1 Any New Party who is or becomes a PES Member (the UNew PES
Member") shall, subject to Section 4.2 below, on such admission
be allotted to a Group as follows:
(a) if one Group has less PES Members than any other Group, to
that Group; or
(b) if all Groups have the same number of PES Members, to Group
A; or
(c) (in any other case), as the New PES Member shall by notice
to all PES Members elect.
4.2 A New PES Member shall be entitled to appoint a PES
Committee Member on the Appointment Date falling 10 years after
the date of admission as a PES Member or such other Appointment
Date as the PES Members in the appropriate Group may agree, in
either case in preference to any other PES Member entitled as at
that date to appoint the PES Committee Member, in which case the
rights of other PES
Members in that Group to appoint shall accordingly be delayed by
one Appointment Period.
5. Limitations on the Right to Appoint - Public Electricity
Suppliers:
5.1 The right to appoint a PES Committee Member shall at all
times be limited to the appointment one PES Committee Member in
each Appointment Period.
5.2 If, at any time, two or more Appointors are affiliated
with each other then such Appointors shall procure that the
aggregate number of PES Committee Members appointed by them shall
be reduced accordingly, by removing such PES Member or Members
from Groups A to D in descending order starting with Group A,
until only one such PES Member remains out of all those which are
affiliated to each other.
6. Right to Appoint - Independent Suppliers:
6.1 Independent Suppliers shall together have the right to
appoint one Committee Member.
6.2 No later than seven days before each annual general meeting
of Pool Members or, failing election at such meeting, seven days
before an extraordinary general meeting convened for such purpose
each Independent Supplier shall be entitled, by notice to the
Executive Committee, to propose one person (a "Nominee") to be a
Committee Member. Any such proposal to be valid shall be
accompanied by a written statement from the Nominee stating that
he is aware of the proposal and would be prepared to serve as a
Committee Member if elected. As soon as practicable after such
seventh day (and in any event before the date of the annual
general meeting or, as the case may be, extraordinary general
meeting) the Executive Committee shall circulate (or cause to be
circulated) to all Independent Suppliers a list of all the names
of the Nominees and of the Independent Suppliers who proposed
them. Such list shall also be circulated at the annual general
meeting or, as the case may be, extraordinary general meeting to
all Independent Suppliers present in person or by proxy.
6.3 The term of office of Committee Members appointed by
Independent Suppliers shall be from 1st April in the year of
appointment to 31st March in the next following year provided
that, if the meeting at which such Committee Member is appointed
is held after 1st April, his term of office shall commence from
the time of his appointment. A Committee Member whose term of of
flee has expired or is to expire shall be eligible for
reselection.
6.4 In the event that there is more than one Nominee, at each
annual general meeting of Pool Members or (as the case may be)
extraordinary general meeting convened for the purpose a
resolution shall be put to the Independent Suppliers for the
election by them of one Committee Member from the list of
Nominees referred to in Section 6.2. The Nominee with the highest
number of Weighted Votes cast in his favour shall be elected as a
Committee Member.
Right to Remove - Independent Suppliers:
7.1 A Committee Member appointed by the Independent Suppliers
may be removed at any time by resolution of the Independent
Suppliers who are Pool Members at such time.
7.2 If a Committee Member appointed by the Independent S
uppliers is removed or his office is vacated pursuant to Clause
21, a separate general meeting of Independent Suppliers shall be
convened for the purpose of appointing a substitute Committee
Member. To such separate general meeting the provisions of
Section 6.2 shall apply mutatis mutandis.
7.3 To any meeting of Independent Suppliers called pursuant to
this Section 7, the provisions of Clauses 9.3, 9.5, 10.2 to 10.5,
10.8, 11.12 and 12 shall apply mutatis mutandis but so that:
(a) the necessary quorum shall be fifty per cent in number of
all Independent Suppliers;
(b) a meeting called by shorter notice shall be deemed to
have been duly called if it is agreed by at least two-thirds in
number of Independent Suppliers having a right to attend and vote
at such meeting;
(c) appointments and removals shall be decided by the highest
number of Weighted Votes cast in favour; and
(d) each Independent Supplier shall be entitled at the
meeting to nominate any person to be appointed.
7.4 In the event that there is only one Independent Supplier,
that Independent Supplier shall have the right to appoint and
remove the Committee Member.
8. Disputes - Public Electricity Suppliers and Independent
Suppliers: Any dispute as to whether a person has been duly
appointed or removed as a Committee Member under this Schedule
and any dispute as to entitlement to appoint a Committee Member
hereunder shall be decided upon by the Director, whose decision
shall be final, conclusive and binding upon all Public
Electricity Suppliers and Independent Suppliers who have the
right to appoint Committee Members under this Schedule.
<PAGE>
SCHEDULE 15
The Pool Funds Administrator's Contract Contents
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
1.2 Incorporation by reference
1.3 Interpretation
1.4 Pool Funds Administrator's consent
2. APPOINTMENT
2.1 Continuation of Appointment
2.2 Term
2.3 Extension of term
2.4 Wholly-owned subsidiary
2.5 Independent Contractor
2.6 Restriction on business
3. EXPIRY OF TERM AND REMOVAL
3.2 Removal by Executive Committee
3.3 Acknowledgement
3.4 Removal as a Party
4. APPOINTMENT OF A SUCCESSOR
4.1 Right to appoint
4.2 Appointment following removal
4.3 Tender process
5.TRANSFER OF RESPONSIBILITIES AND ASSETS
5.1 Transfer of responsibilities and assets
5.2 Co-operation
5.3 PFA Unwinding Costs
5.4 Without prejudice to rights
5.5 Reference to Arbitration
6.SPECIFIC DUTIES AND RESPONSIBILITIES
6.1 Tests of the Funds Transfer Hardware and Software
6.2 Insurance
6.3 Instructions
6.4 Changes
6.5 General
7. FUNDS TRANSFER SOFTWARE
7.1 Representations and warranties
7.2 Future Funds Transfer Software
7.3 Notification
7.4 Infringement
7.5 Restrictions
7.6 Indemnity
7.7 Maintenance
7.8 Escrow arrangements
8. ANNUAL FEE
8.1 General
8.2 Calculation of fee
8.3 Review of fee
9. PFA BUDGETS AND NOTICES OF ANNUAL FEE
9.1 PFA Budgets
9.2 Contents of PFA Budgets
9.3 Form of PFA Budgets
9.4 Notice of Annual Fee
10.STATEMENT OF COSTS AND FEES
10.1 Statement of Costs and Fees
10.2 Form of Statement of Costs and Fees
10.3
10.4
10.5
10.6
10.7 Statement of Charges
11. QUALIFY OF SERVICE REVIEW
11.1 Complaints
11.2 Report
11.3 Quality of Service Review
11.4 Consultants
11.5 Terms of engagement
11.6 Review Report
11.7 Implementation
11.8 Arbitration
11.9 Access
11.10 Confidentiality
11.11 Additional rights
12. AUDITORS' OPINION
13. PFA ACCOUNTIN& PERIOD
14. THE POOL FUNDS ADMINISTRATOR'S CHARGES
15. AMOUNT
15.1 Annual Charges
15.2 Recovery of Charges
5.3 Interest on non-payment
15.4 Payment of Charges
15.5 Amount of Charges
15.6 New and Former Pool Members
16. BANK CHARGES
17. ALLOCATION OF CHARGES
17.1 Total Sum Due
17.2 Payment of Total Sum Due
17.3 Allocation of Total Sum Due
17.4 Prima facie evidence
18. ADJUSTMENT
19. ADDITIONAL COMPENSATION
19.1 General
19.2 Compensation
19.3 Reservation
20. RECOVERY OF POOL ADMINISTRATION COSTS
20.1 Applicability
20.2 Approval
20.3 Payment
20.4 Recovery
20.5 Collection procedure
20.6 Proportionate Share
20.7 Bad Debts
Annex 1:PEA Budget for the 1992 PEA Accounting Period
Annex 2:Pro-for~na Statement of Charges
Annex 3:Pro-forma Statement of Costs and Fees
Annex 4:Existing Funds Transfer Software
Annex 5: Escrow Arrangements
<PAGE>
1.DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule, except where the context
otherwise requires:
"Active Trading Pool Member" means a Pool Member which buys
and/or sells electricity pursuant to this Agreement on a regular
basis or which is an Externally Interconnected Party;
"Active Trading Pool Member Identities" means at any time the sum
of:
(I) one; and
(ii) the aggregate number of Pool Member identities which at
that time have been accorded to all Active Trading Pool Members
by the Settlement System Administrator for the purposes of its
operation of the Settlement System provided that (unless EPFAL
and the Executive Committee shall otherwise agree in writing) for
the purposes of this definition a Pool Member shall have no more
than one Pool Member identity in each of the following categories
applicable to it, namely:
(a) category 1: a Pool Member which generates electricity;
(b) category 2: a Pool Member which generates electricity and
which is also a Consumer (as defined in the Pool Rules);
(c) category 3: a Pool Member which supplies electricity within
the meaning of section 4 of the Act; and
(d) category 4: an Externally Interconnected Party;
and accordingly may not have more than four Pool Member
identities;
"Annual Fee" has the meaning given to it in Section 8;
"Bank Charges" has the meaning given to it in Section 16;
"Base Sum" has the meaning given to it in paragraph 8.2.1;
"Consultants" means an independent firm of chartered accountants
or management consultants of international repute selected by the
Executive Committee in consultation with EPFAL;
"EPFAL" means Energy Pool Funds Administration Limited
(registered number 2444187) whose registered office is situate at
185 Park Street, London SE1 9DY;
"Funds Transfer Hardwaren means all the computer equipment and
accessories whether existing or coming into existence in the
future which are used at any time by EPFAL in connection with the
Funds Transfer Business;
"Funds Transfer Software" means all the computer programs and
codes (both source code and object code) and all documents and
materials relating thereto or developed therefrom (including
those documents and materials on which the programs and codes are
embodied and all user documentation) and whether existing or
coming into existence in the future which are used at any time by
EPFAL in connection with the Funds Transfer Business, including
(as at the date hereof) the software listed in Annex 4;
"Notice of Annual Fee" means any notice of the Annual Fee
prepared by EPFAL pursuant to Section 9;
"PFA Accounting Period" means each successive period of 12 months
beginning on 1st April in each year or of such other length
and/or beginning on such other date as may be agreed in writing
between EPFAL and the Executive Committee;
"PFA Budget" means any budget prepared by EPFAL pursuant to
Section 9 and, in the case of the PFA Accounting Period beginning
in 1992, the budget set out in Annex 1;
"PFA Commencement Date" means 1st April, 1992;
"PFA Handling Charge" means, in respect of any amount, five per
cent. of such amount;
"PFA Operating Costs" means, in respect of any PFA Accounting
Period or part thereof, the total expenditure properly incurred
or accrued by EPFAL in such PFA Accounting Period or (as the case
may be) the relevant part thereof in respect of:
(i)the costs of effecting and maintaining insurance in accordance
with the requirements of sub-section 6.2;
(ii)the costs of any tests of the Funds Transfer Hardware
and Funds Transfer
Software under sub-section 6.1;
(iii)audit fees for the Funds Transfer Business and the
costs and expenses of the
Pool Auditor under sub-section 6.1;
(iv) bank administration charges levied by the Pool Banker on
EPFAL in respect of the operation of the Pool Banker Accounts (as
defined in the Funds Transfer Agreement) (and excluding, for the
avoidance of doubt, Bank Charges and any interest charges);
(v) the fees and expenses of the PFA Custodian (as defined in
Annex 5) incurred in respect of the updating of all historical
data referred to in paragraph 1.1.3 of Annex 5; and
(vi) the costs of the maintenance arrangements referred to in
sub-section 7.7; together with the total amount of EPFAL's bad
debts recognised in such PFA Accounting Period and arising from a
Pool Member's failure to pay its due proportion of EPFAL's
charges determined in accordance with Section 17; as conclusively
certified in the event of any dispute by the auditors for the
time being of EPFAL, at the cost and expense of EPFAL;
Quality of Service Review" means a review of the manner and
standard of performance (both overall and on a day-to-day basis)
by EPFAL of those of its obligations under the Agreement
(including this Schedule) and the Agreed Procedures, the
performance of which is called into question by reason of the
notification received by the Executive Committee under
sub-section 11.1;
"Retail Price Index" means the general index of retail prices
published by the Central Statistical Office each month in respect
of all items provided that if:
(i) 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; or
(ii) there is a material change in the basis of the index, the
Executive Committee and EPFAL shall agree a substitute index for
such month or (as the case may be) a substitute index (and, in
default of agreement, the matter shall be referred to arbitration
pursuant to Clause 33);
"Statement of Charges" means the statement of charges required to
be submitted by EPFAL pursuant to sub-section 10.7 substantially
in the form set out in Annex 2 (or in such other form as EPFAL
and the Executive Committee may from time to time agree in
writing) showing the total charges to be made by EPFAL on all
Pool Members in accordance with Sections 15 and 16;
"Statement of Costs and Fees" means any statement of costs and
fees required to be submitted by EPFAL pursuant to Section 10
which shall be substantially in the form set out in Annex 3 or in
such other form as EPFAL and the Executive Committee may from
time to time agree in writing; and
"Total Sum Due" means, in respect of any PFA Accounting Period,
the total aggregate amount chargeable by EPFAL for that PFA
Accounting Period in accordance with Sections 15 and 16.
1.2 Incorporation by reference: In this Schedule, the
following definitions, namely:
"Funds Transfer Agreement";
"Funds Transfer Business";
"Funds Transfer System";
Letter of Credit";
"Pool Account"; and
"Pool Banker"
shall have the meanings respectively ascribed to them in Schedule
11.
1.3 Interpretation: In this Schedule, except where the context
otherwise requires, references to a particular Annex, Section,
sub-section, paragraph or sub-paragraph shall be a reference to
that Annex to this Schedule or, as the case may be, that Section,
sub-section, paragraph or sub-paragraph in this Schedule.
Pool Funds Administrator's consent: The Parties acknowledge and
agree that, notwithstanding any other provision of the Agreement,
insofar as directly affects in any material respect the rights,
benefits, duties, responsibilities, liabilities and/or
obligations of the Pool Funds Administrator, no amendment to or
variation of any of the matters dealt with in any of the
following provisions of the Agreement shall take effect: -
without the prior written consent of EPFAL (but only for so long
as it is the Pool Funds Administrator):
(a) Clauses 7.3, 9.5, 10.9, 19.4, 25, 66, 68, 69, 74 and 78.2 of
the Agreement; and
(b) this sub-section 1.4; and
1.4.2 without the prior written consent of EPFAL (but only for
so long as it is the Pool Funds Administrator), such consent not
to be unreasonably withheld or delayed:
(a) Clauses 18.1.2, 70, 71.5 and 71.6 of the Agreement; and
(b) Part XVI (other than Clause 63.1), Part XX (other than
Clauses 74 and 78.2) of and Schedule 11 to the Agreement; and
(c) this Schedule.
<PAGE>
APPOINTMENT
2.1 Continuation of Appointment: On 30th March, 1990 EPFAL was
appointed by each Pool Member and the Ancillary Services Provider
and agreed to act as the Pool Funds Administrator. This Schedule
sets out the terms and conditions on and subject to which EPFAL
shall continue and agrees to continue to act as the Pool Funds
Administrator for the period referred to in sub-section 2.2 (as
such period may be extended or further extended in accordance
with the terms of this Schedule).
2.2 Term: EPFAL's appointment as the Pool Funds Administrator
on and subject to the terms and conditions set out in this
Schedule shall be deemed to have commenced on the PEA Comme
ncement Date and, subject as hereinafter provided in this
Schedule, shall end on 31st March, 1995 (the period from the PEA
Commencement Date to 31st March, 1995 being the "Current Term").
2.3 Extension of term: EPFAL's appointment as the Pool Funds
Administrator may be extended beyond the expiry of the Current
Term or (as the case may be) any extended or further extended
term either:
2.3.1 if it successfully tenders pursuant to sub-section 4.3 for
continuation of its appointment and then on and subject to the
terms and conditions of the tender; or
2.3.2 if at any time prior to that expiry EPFAL and the Executive
Committee so agree in writing and then on and subject to such
terms and conditions as are so agreed.
Wholly-owned subsidiary: NGC shall procure that, so long as EPFAL
acts or is obliged to act as the Pool Funds Administrator, EPFAL
at all times remains a-wholly-owned subsidiary of NGC.
Independent Contractor: In carrying out its duties and
responsibilities and otherwise in acting as the Pool Funds
Administrator under the Agreement, EPFAL shall act as an
independent contractor and (unless expressly authorised to the
contrary) shall neither act nor hold itself out nor be held out
as acting as agent for any of the other Parties.
2.6 Restriction on business: For so long as EPFAL is the Pool
Funds Administrator EPFAL undertakes to each Party and the Executive
Committee that it shall not render to any other Party any billing
service or any other service of any nature whatsoever which is likely
to give rise to a conflict of interest in the performance by EPFAL of
its duties and responsibilities as the Pool Funds Administrator under
the Agreement. EPFAL further undertakes that if it carries on any
business other than that of Pool Funds Administrator it shall
maintain separate accounts and records in respect of any other
business. EPFAL acknowledges and agrees that this undertaking has
been the subject of discussion and negotiation and is fair and
reasonable having regard to the revision of the terms and
conditions of EPFAL's appointment as the Pool Funds Administrator
with effect from the PEA Commencement Date.
EXPIRY OF TERM AND REMOVAL
3.1 Expiry of term: If on expiry of the Current Term (or, if
EPFAL's term of appointment has been extended or further extended
in accordance with paragraph 2.3.1 or 2.3.2, expiry of that
extended or further extended term) the term of EPFAL's
appointment as the Pool Funds Administrator has not been or will
not be extended or (as the case may be) further extended in
accordance with paragraph 2.3.1 or 2.3.2, EPFAL shall,
at the request of the Executive Committee, continue to serve as
the Pool Funds Administrator for such additional period not
exceeding one year from the date of expiry of the Current Term)
(or, if EPFAL's term of appointment has been extended or further
extended in accordance with paragraph 2.3.1 or 2.3.2, expiry of
that extended or further extended term) as the Executive
Committee may request in order to provide an opportunity for a
successor to be appointed. The Executive Committee shall make
such a request as soon as possible after becoming aware of the
above circumstances but in any event later than three months (or
such other period as EPFAL and the Executive Committee may from
time to time agree in writing) before the date of expiry of the
Current Term or (as the case may be) the extended or further
extended term.
3.2 Removal by Executive Committee: The Executive Committee may
at any time remove EPFAL as the Pool Funds Administrator
forthwith or after such period of notice as it thinks fit if:
3.2.1 EPFAL shall have committed a material breach of any of its
obligations as the Pool Funds Administrator under the Agreement
or the Agreed Procedures (other than a technical breach of trust
covered by the provisions contained in Section 5.16 of Schedule
11) and, if such breach is capable of remedy, shall have failed
to remedy such breach within:
(a) three Business Days (in the case of a failure to make payment
(other than where any Pool Member or the Ancillary Services
Provider is in default which results in EPFAL's inability to make
such payment) or a failure to call a Letter of Credit when
required);
(b) 14 days (in the case of any breach of its undertaking in
sub-section 2.6); or
(c) 15 Business Days (in the case of any other default), in any
such case after it shall have received written notice from the
Executive Committee specifying the breach and requiring it to be
remedied; or
3.2.2EPFAL:
(i) is unable to pay its debts (within the meaning of section
123(1) or (2 of the Insolvency Act 1986, but subject as
hereinafter provided in this paragraph 3.2.2) or if any voluntary
agreement is proposed in relation to it under section 1 of that
Act or enters into any scheme of arrangement (other than for the
purpose of reconstruction or amalgamation upon terms and within
such period as may previous;, have been approved in writing by
the Executive Committee); or
(ii) has 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 appointed; or
(iii) has an administration order under section 8 of the
Insolvency Act 1986 made in relation to it; or
(iv) passes any resolution for winding-up other than a resolution
previously approved in writing by the Executive Committee; or
(v) becomes subject to an order by the High Court for winding-up.
For the purposes of sub-paragraph (i) above section 123(1) of the
Insolvency Act 1986 shall have effect as if for "pounds 750" there was
substituted "pounds 150,000" and, further, EPFAL shall not be deemed to
be unable to pay its debts for the purposes of sub-paragraph (i)
above if any such demand as is mentioned in the said section is
being contested in good faith by EPFAL with recourse to all
appropriate measures and procedures.
3.3Acknowledgement: EPFAL acknowledges and agrees that, for
the purposes of paragraph 3.2.1, any breach by it of its
undertaking in sub-section 2.6 shall be deemed to be a material
breach of its obligations under the Agreement.
Removal as a Party:
3.4.1 Upon the expiry or termination for whatever reason of EPFAL
as the Pool Funds Administrator each of the Parties shall
promptly at its own cost and expense execute and deliver all
agreements and other documentation and do all such other acts,
matters and things as may be necessary to effect (without
prejudice to paragraph 3.4.2) EPFAL's release as the Pool Funds
Administrator and (if appropriate) as a Party.
3.4.2 The expiry or termination for whatever reason of EPFAL's
appointment as the Pool Funds Administrator shall be without
prejudice to any accrued rights and liabilities of the Parties
(including EPFAL as the Pool Funds Administrator) under the
Agreement.
APPOINTMENT OF A SUCCESSOR
4.1 Right to appoint: The Executive Committee shall have the
right to appoint any successor Pool Funds Administrator. In
making any such appointment the Executive Committee shall take
account of the views (if any) expressed by any Pool Member or the
Ancillary Services Provider. The appointment of a successor Pool
Funds Administrator shall take effect upon the removal or, as the
case may be, expiry of the term of appointment of EPFAL as the
Pool Funds Administrator.
4.2 Appointrnentfollowing removal: If EPFAL is removed
pursuant to sub-section 3.2 the Executive Committee may appoint a
successor without being obliged to carry out or complete the
process set out in sub-section 4.3, such appointment to be on and
subject to such terms and conditions as the Executive Committee
sees fit.
Tender process:
4.3.1 The Executive Committee shall invite tenders for
appointment as successor Pool Funds Administrator:
(a) not later than one year before the expiry of the Current Term
(or, if EPFAL's term of appointment has been extended or further
extended in accordance with paragraph 2.3.2, not later than a
date agreed between EPFAL and the Executive Committee and falling
before the expiry of that extended or further extended term); and
(b) if EPFAL's term of appointment has been extended or further
extended in accordance with paragraph 2.3.1 or EPFAL has been
requested to continue to serve as the Pool Funds Administrator
pursuant to subsection 3.1, not later than six months (or such
other period as EPFAL and the Executive Committee may agree in
writing) before the expiry of that extended or further extended
term.
4.3.2 The persons invited to tender and the terms and conditions
of that invitation, of the tender procedure and of the
appointment shall be determined by the Executive Committee
provided that the tender process shall be completed and the
Executive Committee shall have made its decision as to the
successor (or shall have decided not to appoint a successor from
those persons who submitted tenders) no later than the date
falling three months before the expiry of the Current Term or (as
the case may be) the extended or further extended term. The
Executive Committee shall not be bound to appoint the successor
Pool Funds Administrator from any of those persons who have
submitted tenders. The Executive Committee shall use its
reasonable endeavours to ensure that in the tender process the
Executive Committee does not discriminate unfairly between those
eligible to tender or the tenders received.
<PAGE>
5. TRANSFER OF RESPONSIBILITIES AND ASSETS
5.1 Transfer of responsibilities and assets: Upon a successor
Pool Funds Administrator being appointed under Section 4 and
accepting such appointment, EPFAL shall, at the request of such
successor:
5.1.1 (a) at EPFAL's option:
(I) fully and effectively assign, transfer and deliver to such
successor all Funds Transfer Software (and copies thereof)
beneficially owned by EPFAL together with all rights, title and
interest therein or thereunder vested in EPFAL; or
(ii) irrevocably license such successor to use all Funds
Transfer Software beneficially owned by EPFAL, which licence
shall be on terms enabling such successor to grant sub-licences
and permitting the benefit of such licence to be assigned to any
further successor Pool Funds Administrator and shall include an
undertaking by EPFAL promptly to provide such access to source
and object codes and other documents and materials thereto
relating to the operation of the Funds Transfer System as each
such successor may reasonably require for the purpose of
maintaining and enhancing all Funds Transfer Software; and
(b) use its best endeavours to assign or novate or procure the
assignment or novation of any licence or other agreement to use
any Funds Transfer Software which is not beneficially owned by
EPFAL or to such successor and/or to maintain any Funds Transfer
Software;
(c) deliver to the successor Pool Funds Administrator two copies of
the Funds Transfer Software and any associated documentation at the
request of the Executive Committee for use by the successor Pool Funds
Administrator;
5.1.2 make over to such successor all such records, manuals, data
and other information which EPFAL is required to retain pursuant
to Clause 63.1.3 of the Agreement provided that EPFAL shall be
entitled to retain copies of such of those manuals as have been
prepared by EPFAL at its own cost and expense (and not recharged
to Pool Members pursuant to the Agreement);
5.1.3 use all reasonable endeavours to novate or procure the
novation of the Funds Transfer Agreement and any banking facility
or financial accommodation made available to EPFAL as Pool Funds
Administrator by the Pool Banker and to transfer all Letters of
Credit to such successor and cause to be transferred to such
successor to hold in its capacity as Pool Funds Administrator all
balances standing to the credit of any Pool Account;
5.1.4 provide such training, assistance and systems support as
such successor may reasonably require and for such period as such
successor may reasonably require (not exceeding three months from
the date of its removal or expiry of its term as the Pool Funds
Administrator) to enable such successor to carry out its duties
and responsibilities as successor Pool Funds Administrator;
5.1.5 use all reasonable endeavours to transfer or otherwise
make available to such successor such of the freehold and
leasehold property as is owned or occupied by EPFAL and is used
by it in its capacity as the Pool Funds Administrator; and
5.1.6 transfer or otherwise make available to such successor all
other assets, equipment (excluding computer hardware),
facilities, rights, know-how and transitional assistance which it
possesses and which is necessary or desirable for such successor
to have in order to enable such successor efficiently to operate
the Funds Transfer System in accordance with the Agreement and
the Agreed Procedures with effect on and from the time of the
removal of EPFAL or expiry of EPFAL's term as the Pool Funds
Administrator (unless such removal is without notice in which
case so soon thereafter as is reasonably practicable), and in any
such case on such reasonable terms as may be agreed between EPFAL
and its successor as Pool Funds Administrator (but only, in the
case of such successor, after it has itself obtained the written
consent of the Executive Committee to such terms) within one
month after the commencement of negotiations (or such longer
period as EPFAL, such successor and the Executive Committee may
agree in writing) and, in default of agreement of terms, the
dispute shall be referred to arbitration in accordance with
Clause 83.
5.2 Co-operation: EPFAL further agrees, in consideration of
the payment of such amount as may be agreed between EPFAL and its
successor as Pool Funds Administrator (but only, in the case of
such successor, after it has itself obtained the written consent
of the Executive Committee to such terms) within the period
referred to in the final paragraph of sub-section 5.1 (and, in
default of agreement of terms, the dispute shall be referred to
arbitration in accordance with Clause 83), to co-operate with any
such successor and the Executive Committee so that the transfer
of duties, responsibilities, assets and know-how to such
successor is carried out causing as little disruption to the
operation of the Funds Transfer System and as little
inconvenience to the Parties as is practicable in all the
circumstances.
5.3 PEA Unwinding Costs: Without prejudice to Section 18,
EPFAL's costs and expenses of, or directly associated with, its
removal or the expiry or termination for whatever reason of its
appointment as the Pool Funds Administrator (including any
redundancy or relocation costs or expenses and any costs and
expenses arising from the vacation or surrender of any premises
or disposal or its own re-deployment of any plant or equipment used
in the Funds Transfer Business) shall be borne exclusively by EPFAL
(and shall not be recharged to Pool Members).
5.4 Withoutprejudice to rights: Any payment made by all or any
of the Pool Members to EPFAL under this Section 5 shall be
without prejudice to any rights and remedies which the Pool
Members (or any of them) may have against EPFAL in its capacity
as the Pool Funds Administrator arising under the Agreement.
5.5 Reference to Arbitration: If any matter is referred to
arbitration pursuant to this Section 5, EPFAL shall not by virtue
of the reference to such arbitration be entitled to delay in the
handing over of the Funds Transfer Software and any records,
manuals, data or other information referred to in sub-section 5.1
and EPFAL shall not be entitled to withhold any training,
assistance and system support but shall continue to co-operate
with the Executive Committee and the successor Pool Funds
Administrator including carrying out its obligations set out in
sub-sections 5.1 and 5.2 and accordingly EPFAL shall not be
entitled to withhold or delay the carrying out of its
obligations.
6.SPECIFIC DUTIES AND RESPONSIBILITIES
6.1 Tests of the Funds Transfer Hardware and Software:
6.1.1 EPFAL shall, upon receipt of not less than ten working
days' notice from the Pool Auditor and subject to availability of
computer time, arrange for such tests of the Funds Transfer
Hardware and the Funds Transfer Software as are from time to time
reasonably required by the Pool Auditor (either on its own
initiative or on the instructions of the Executive Committee) for
the performance of its functions under Part LO of the Agreement.
EPFAL shall, if so required by the Pool Auditor, permit the Pool
Auditor to carry out such tests provided that the person or
persons allocated to carry out such tests by the Pool Auditor is
or are suitably qualified in the operation of computers and
computer systems to carry out such tests and, in any other case,
EPFAL shall carry out such tests.
6.1.2 EPFAL shall give the Pool Auditor, reasonable access to
the Funds Transfer Hardware and the Funds Transfer Software for
the purpose of carrying out and monitoring any test under
paragraph 6.1.1.
6.1.3 The costs of any test under paragraph 6.1.1 shall be borne
by EPFAL and recovered by it as part of the PEA Operating Costs
in accordance with this Schedule.
6.2 Insurance:
6.2.1 Subject to the availability in the insurance market of
such insurances, EPFAL shall effect and maintain in full force
and effect with first class insurers the following insurances:
(a) professional indemnity insurance as Pool Funds Administrator
in an amount of not less than pounds 60,000,000 any one claim and
pounds 60,000,000 all claims in any one year (or such other amount as
may from time to time be reasonably required by the Executive
Committee after consultation with EPFAL); and
(b) employee fidelity insurance in an amount of pounds 60,000,000.
6.2.2 All premia and other sums of money payable in respect of
all insurances effected or to be effected pursuant to paragraph
6.2.1 shall be borne by EPFAL and recovered by it as part of the
PEA Operating Costs in accordance with this Schedule.
6.2.3 EPFAL shall use all reasonable endeavours to make and
collect claims promptly and shall apply all moneys received by it
in respect of the insurances referred to in paragraph 6.2.1 in or
towards making good the loss and fully repairing the damage or
(as the case may be) satisfying the relevant liability in respect
of which such moneys were receivable or reimbursing the cost of
the same.
6.2.4 EPFAL shall promptly supply the Executive Committee upon
request from time to time with an insurance broker's certificate
in form and content reasonably satisfactory to the Executive
Committee confirming that cover has been effected in respect of
the insurances referred to in paragraph 6.2.1 and giving
reasonable details of the terms and conditions of such
insurances.
6.3 Instructions: Without prejudice to Section 19, EPFAL shall
comply with all instructions and directions issued by the
Executive Committee to EPFAL in its capacity as the Pool Funds
Administrator unless such compliance would cause EPFAL to be in
breach of any of its other obligations as the Pool Funds
Administrator under the Agreement or the Agreed Procedures.
6.4 Changes: EPFAL in its capacity as the Pool Funds Adm
inistrator shall not make any change in its operation of the
Funds Transfer System (or any part or aspect thereof) which in
its reasonable opinion is or may (either alone or together with
any other change(s)) be material without the prior written
consent of the Executive Committee. If EPFAL wishes to make any
such change, it shall promptly notify the Executive Committee in
writing giving reasonable details of the proposed change.
6.5 General: EPFAL shall have such other duties, r
esponsibilities, obligations and liabilities as are attributed to
it in the Agreement and the Agreed Procedures.
7.FUNDS TRANSFER SOFTWARE
Representations and warranties: EPFAL hereby represents and
warrants to each of the Pool Members and the Executive Committee
that:
7.1.1 the Funds Transfer Software referred to in Annex 4 (in
this Section, "Existing Funds Transfer Software") is all the
Funds Transfer Software used by EPFAL in connection with the
Funds Transfer Business as at 31st March, 1992;
7.1.2 it is the sole beneficial owner of the Existing Funds
Transfer Software referred to in Part A of Annex 4;
7.1.3 it is the licensee of the Existing Funds Transfer Software
referred to in Part B of Annex 4 and that the details of the
licences set out in Part B of Annex 4 are correct;
7.1.4 the Existing Funds Transfer Software is freely
transferable to any successor Pool Funds Administrator pursuant
to Section 5;
7.1.5 the use of the Existing Funds Transfer Software in
connection with the Funds Transfer Business does not infringe the
rights of any other person and EPFAL is not in breach of any of
the terms of the licences referred to in Part B of Annex 4; and
7.1.6 it has not received any claim or notice challenging its
title to, or its right to use, the Existing Funds Transfer
Software.
7.2 Future Funds Transfer Software: As from the PEA Comm
encement Date EPFAL shall use its best endeavours to ensure it
shall be the sole beneficial owner of all Funds Transfer Software
used or to be used in the Funds Transfer Business after 31st
March, 1992 (in this Section, UFuture Funds Transfer Software").
In the event that EPFAL is unable to ensure that it will be sole
beneficial owner of such Future Funds Transfer Software it shall
use its best endeavours to ensure that it shall be the exclusive
licensee thereof in relation to the Funds Transfer Business or
any similar or related businesses on terms which enable it to
grant sub-licences and the benefit of such licence to be assigned
to any successor Pool Funds Administrator.
7.3 Notification: EPFAL undertakes to notify the Executive
Committee forthwith in writing in the event that:
7.3.1 it is unable to ensure that it is the owner of, or
licensee on the terms set out in sub-section 7.2 under, Future
Funds Transfer Software; or
7.3.2 it receives any claim or notice of any alleged infringement
of the rights of any other person by its use of any Funds Transfer
Software or challenging its title to, or its right to use, any
Funds Transfer Software; or if;`
7.3.3 it is or becomes aware of any infringement by any third
party of its rights in any Funds Transfer Software, and to
consult with the Executive Committee as to any steps to be taken
in respect of any such situation.
7.4 Infringement: EPFAL hereby further represents and warrants
to and undertakes with each of the Pool Members and the Executive
Committee that the use of any Future Funds Transfer Software in
connection with the Funds Transfer Business will not infringe the
rights of any other person and that it shall not breach any of
the terms of any licences under Future Funds Transfer Software.
7.5 Restrictions: EPFAL shall not, without the prior written
consent of the Executive Committee (not be to unreasonably
withheld or delayed), grant to any person (other than a successor
Pool Funds Administrator) any right, title or interest to, in or
under any Funds Transfer Software or give to such person a copy
of, or permit such person to use, Funds Transfer Software or
otherwise derive any benefit or profit therefrom (other than by
itself using such Funds Transfer Software for the purpose of the
Funds Transfer Business).
7.6 Indemnity: EPFAL hereby agrees fully and effectively to
indemnify and keep indemnified each of the Pool Members and the
Executive Committee from and against any and all loss, liability,
damages, costs and expenses which it may suffer or incur arising
out of or resulting from any breach by the Pool Funds
Administrator of any of the terms, representations, warranties
and undertakings contained in this Section 7 and Annex 5.
7.7 Maintenance: EPFAL shall ensure that at all times it has
in full force and effect proper arrangements for the maintenance
of (and the prompt rectification of defects in) the Funds
Transfer Hardware and the Funds Transfer Software and, upon the
reasonable request of the Executive Committee, shall supply
evidence reasonably satisfactory to the Executive Committee of
the existence and nature of such arrangements. The costs of all
such maintenance arrangements shall be borne by EPFAL and
recovered by it as part of the PEA Operating Costs in accordance
with this Schedule.
7.8 Escrow arrangements: EPFAL shall comply with the pro
visions of Annex 5 which relate to escrow arrangements for the
Funds Transfer Software and gives the warranties therein stated.
8.ANNUAL FEE
8.1 General: In consideration of the carrying out by EPFAL of
its duties and responsibilities as the Pool Funds Administrator
as set out in the Agreement and the Agreed Procedures (other than
in respect of those matters for which EPFAL is or will be
compensated through the recovery of the PEA Operating Costs in
accordance with this Schedule) EPFAL shall be paid an annual fee
as the Pool Funds Administrator (the "Annual Fee") calculated in
accordance with the following provisions of this Section 8.
8.2 Calculation offee:
8.2.1 In respect of the PFA Accounting Period beginning on the
PFA Commencement Date the Annual Fee for that PFA Accounting
Period shall be pounds 1,250,000 (the "Base Sum").
8.2.2 In respect of each PFA Accounting Period beginning on an
anniversary of the PFA Commencement Date the Annual Fee
[expressed in pounds sterling) for that PFA Accounting Period
shall be calculated in accordance with the following formulae:
(a) ABS = Base Sum * (1+(RPIp/100))
where RPlp = the percentage change (whether of a positive or
negative value) in the Retail Price Index between that published
in, or (as the case may be) the substitute index for, the third
month before the PFA Commencement Date and that published in, or
the substitute index for, the third month before the anniversary
from which the adjusted Annual Fee is to take effect;
(b) ATPM = Base Sum ~ (I/100)
where I = the value set out in column 2 below opposite the number
of Active Trading Pool Member Identities set out in column 1
below as at the beginning of the third month before the
anniversary from which the adjusted Annual Fee is to take effect:
Column 1 Coloumn 2
Number of Active Trading Value
Pool Member Identitites
0 to 60 0
61 to 70 5
71 to 80 10
81 to 90 20
91 to 100 25
101 to 110 30
111 to 120 35
121 to 130 45
131 to 140 50
141 to 150 55
(c) Annual Fee = ABS + ATPM.
8.2.3 If during any PFA Accounting Period beginning on an
anniversary of the PFA Commencement Date the number of Active
Trading Pool Member Identities shall change such that, were the
Annual Fee for that PFA Accounting Period to be recalculated, it
would yield a different result from that originally calculated
for that PFA Accounting Period (or, as the case may be, from that
most recently recalculated for that PFA Accounting Period
pursuant to this paragraph 8.2.3) EPFAL shall promptly
recalculate the Annual Fee and notify the Executive Committee in
writing of the amount thereof. Such notification shall be
accompanied by a statement showing in reasonable detail the
calculation of such amount. Subject to paragraph 8.3.2(b), such
recalculated Annual Fee shall take effect for the period from the
date falling one month after the receipt by the Executive
Committee of such notification
until the end of the then current PFA Accounting Period (or until
further recalculated under this paragraph 8.2.3).
8.3 Review offee:
8.3.1 If at any time the total number of Active Trading Pool
Member Identities
shall exceed 150 EPFAL may request the Executive Committee to
review the
basis of calculation and/or the amount of the Annual Fee. Upon
receipt of such request the Executive Committee and EPFAL shall
negotiate in good faith for a period not exceeding three months
(or such longer period as EPFAL and the Executive Committee may
agree in writing) with a view to agreeing a revised basis of
calculation and/or amount of the Annual Fee.
8.3.2 (a) If EPFAL and the Executive Committee shall agree a revised
basis of calculation and/or amount of the Annual Fee, such revisions
shall take effect in accordance with the terms of that agreement.
(b) If at the end of the negotiation period referred to in
paragraph 8.3.1 EPFAL and the Executive Committee shall not have
agreed a revised basis of calculation and/or amount of the Annual
Fee or if the Executive Committee shall dispute any calculation
of the Annual Fee made by EPFAL and notified to the Executive
Committee pursuant to sub-section 9.4 or paragraph 8.2.3, EPFAL
or the Executive Committee may refer the dispute to arbitration
pursuant to Clause 83. Pending the award of the arbitrator(s) the
Annual Fee current as at the date of EPFAL's calculation or
recalculation shall continue in force.
9.PFA BUDGETS AND NOTICES OF ANNUAL FEE
9.1 PFA Budgets: Not earlier than three nor later than two
months prior to the first day of each PFA Accounting Period EPFAL
shall prepare and submit to the Executive Committee a PFA Budget
for such PFA Accounting Period. Such PFA Budget shall be
indicative only but shall be prepared on a best estimates basis.
The PFA Budget for the PFA Accounting Period beginning in 1992 is
set out in Annex 1.
9.2 Contents of PFA Budgets: Each PFA Budget (other than the
PFA Budget for the PFA Accounting Period beginning in 1992) shall
compare each item or category of budgeted expenditure shown
therein with the forecast expenditure in-respect of such item or
category for the remainder of the then current PFA Accounting
Period and report any salient differences between any such
forecast expenditure and the budgeted expenditure in respect of
each such item or category in the immediately preceding PFA
Budget.
9.3 Form of PFA Budgets: Each PFA Budget shall be substantially
in the form of that set out in Annex 1 (or in such other form as
EPFAL and the Executive Committee may from time to time agree in
writing).
9.4 Notice of Annual Fee: Each PFA Budget (other than the PFA
Budget for the PFA Accounting Period beginning in 1992) shall be
accompanied by a Notice of Annual Fee prepared by EPFAL stating
the Annual Fee for the PFA Accounting Period to which such PFA
Budget relates and setting out in reasonable detail the
calculation of the Annual Fee. Subject to paragraphs 8.2.3 and
8.3.2, the Annual Fee so stated shall take effect for such PFA
Accounting Period.
10.STATEMENT OF COSTS AND FEES
10.1 Statement of Costs and Fees: No later than one month
following the date in any PFA Accounting Period of the
publication of the audited accounts for the Funds Transfer
Business for the previous PFA Accounting Period, EPFAL shall
prepare and submit to the Executive Committee and all Pool
Members a Statement of Costs and Fees for such previous PFA
Accounting Period. The audited accounts of EPFAL, the instruction
letter from EPFAL to its auditors giving instructions for the
auditing of those accounts and the auditors' management letter
(to the extent that it relates to the economy, efficiency,
effectiveness and quality of service of EPFAL in carrying out its
duties and responsibilities as the Pool Funds Administrator)
shall accompany each Statement of Costs and Fees for each entire
PFA Accounting Period.
10.2 Form of Statement of Costs and Fees: The Statement of Costs
and Fees for any PFA Accounting Period:
10.2.1 in relation to the PFA Operating Costs, shall attribute
actual and accrued expenditure for such period against, inter
alla, each of the categories and sub-categories set out in the
corresponding PFA Budget for such PFA Accounting Period; and
10.2.2 in relation to the Annual Fee, shall state the Annual
Fee and any revisions thereto for such PFA Accounting Period and
shall set out in reasonable detail the calculation thereof.
10.3 Accompanying Report: Each PFA Budget and Statement of
Costs and Fees for an entire PFA Accounting Period submitted to
the Executive Committee and, in the case of the Statement of
Costs and Fees, Pool Members pursuant to sub-section 9.1 or 10.1
shall be supported by a written report of EPFAL commenting in
reasonable detail upon the matters comprised in the categories of
expenditure included in such PFA Budget or Statement of Costs and
Fees.
10.4 Tender Costs:
10.4.1 If, during any PFA Accounting Period, the Pool Funds
Administrator reasonably believes that any of the category of
services within the definition of PFA Operating Costs are likely
to exceed the amount of that expenditure for that category or
sub-category or other items of cost provided for in the PFA
Budget by more than 5 per cent., the Pool Funds Administrator
shall notify the Executive Committee accordingly and explain the
reasons for the increase. The Executive Committee may require the
Pool Funds Administrator to invite tenders for any of the
categories or sub-categories or items of cost which are so
exceeded, in accordance with sub-section 10.4.3.
10.4.2 If the Executive Committee considers that the amount
budgeted for any category or sub-category or other item of cost
in the PFA Budget is unreasonable then the Executive Committee
may require the Pool Funds Administrator to invite tenders for
any of the categories or sub-categories or other items of cost in
the PFA Budget in accordance with sub-section 10.4.3.
10.4.3 Within seven Business Days after receipt of a notice
given pursuant to paragraph 10.4.1 the Executive Committee shall
notify the Pool Funds Administrator in writing whether it wishes
the Pool Funds Administrator to seek a further tender for the
senice in question. If the Executive Committee so notifies the
Pool Funds Administrator that it requires a further tender to be
sought, the Pool Funds Administrator shall obtain a further
tender and shall give the Executive Committee reasonable details
of that further tender and at the same time shall notify the
Executive Committee of which tender it has chosen to accept
together (if applicable) with reasons as to why it has not chosen
the lowest price tender.
10.4.4 If the Executive Committee fails to notify the Pool
Funds Administrator within the time period referred to in
paragraph 10.4.2 or notifies the Pool
Funds Administrator that it does not wish it to seek a further
tender, the Pool Funds Administrator may accept the original
tender.
10.5 Basis of preparation: All Statements of Costs and Fees
other than a Statement of Costs and Fees in respect of an entire
PFA Accounting Period shall be unaudited but prepared on a best
estimates basis. The Statement of Costs and Fees in respect of an
entire PFA Accounting Period shall be audited by EPFAL's
auditors.
10.6 Accounting Practices: Each PFA Budget and Statement of
Costs and Fees shall be prepared on the basis of the accounting
principles and practices used to draw up the most recent audited
accounts of EPFAL and consistently applied. If any Statement of
Costs and Fees for an entire PFA Accounting Period is not
prepared on such basis, EPFAL shall prepare and submit to the
Executive Committee and all Pool Members a pro-forma set of its
audited accounts for such entire PFA Accounting Period which is
prepared on the basis of the accounting principles and practices
used to prepare the relevant Statement of Costs and Fees. Any
changes in the accounting principles and practices or their
method of application used to prepare EPFAL's audited accounts
shall be noted in the next following PFA Budget or Statement of
Costs and Fees, as the case may be.
10.7 Statement of Charges: A Statement of Charges shall
accompany each Statement of Costs and Fees.
11.QUALITY OF SERVICE REVIEW
11.1 Complaints: If the Executive Committee shall receive from
any Pool Member written notification of a breach or an alleged
breach of the Agreement or an Agreed Procedure involving EPFAL in
its capacity as the Pool Funds Administrator it shall promptly
notify EPFAL of receipt and shall send a copy of such
notification to EPFAL.
11.2 Report: Within one month after receipt from the Executive
Committee of any such notification as is referred to in
sub-section 11.1 EPFAL shall prepare and submit to the Executive
Committee a written report explaining in reasonable detail the
circumstances which gave rise to, and the causes of, the breach
(or, if it asserts that there has not been a breach, the reasons
in support of that assertion), any remedial action taken by it
and the consequences of such action.
11.3 Quality of Service Review: Promptly after receipt of
EPFAL's written report referred to in sub-section 11.2 (or, if
EPFAL shall fail to submit a report within the period referred to
in that sub-section, promptly after expiry of that period) the
Executive Committee shall determine whether it wishes to
commission a Quality of Service Review. In making such
determination the Executive Committee shall take into account the
nature and seriousness of the notified breach (or alleged breach)
and the said written report (if any). The Executive Committee
shall notify EPFAL in writing of any such determination.
11.4 Consultants: If the Executive Committee shall determine to
commission a Quality of Service Review, it shall instruct the
Consultants to conduct such review and to report in writing (a
"Review Reports) to the Executive Committee and EPFAL.
11.5 Terms of engagement: The terms of engagement of the
Consultants (*ncluding the objectives ant scope of the work to be
performed and the form of report to be issued) in respect of any
Quality of Senice Review shall (subject to sub-section 11.10) be
determined by the Executive Committee in consultation with EPFAL.
11.6 Review Report: EPFAL shall be given the opportunity to
examine and comment on any factual details contained in any
Review Report before it is submitted in final form. Such final
form shall, if the Consultants commissioned to carry out the
Quality of Senice Review shall think fit, take into consideration
the comments of EPFAL on any factual details conta* ed in the
Review Report and include an indication of the response and
proposed action of EPFAL. A copy of the final form of the Review
Report shall be sent to EPFAL and may be distributed by the
Executive Committee to Pool Members and the Director.
11.7 Implementation: Upon receipt of a Review Report, EPFAL shall
(if so required by and in consultation with the Executive
Committee) give effect to such recommendations, if any, as are
set out in such report as soon as is reasonably practicable
following the date of receipt by EPFAL of such report.
11.8 Arbitration: If EPFAL shall *n good faith consider the
recommendations in any Review Report to be *mpractical or
inappropriate, the same shall be referred for resolution to
arbitration in accordance with Clause 83.
11.9 Access: For the purposes of any Review Report, EPFAL shall
permit the Consultants access to the Funds Transfer Hardware, the
Funds Transfer Software and all data used by EPFAL in the
operation of the Funds Transfer System and to such of its company
books, accounts and vouchers as relate to any of the items or
categories of expenditure which make up the PEA Operating Costs
and as are necessary for the performance of the Quality of Senice
Review. The Consultants shall also be entitled to require from
EPFAL's officers, employees or agents such information and
explanations as are necessary for the performance of the Quality
of Service Review (but, for the avoidance of doubt, the
Consultants shall not have access to any data used, * formation
held or records kept in relation to any Pool Member without such
Pool Member's prior written consent).
11.10 Confidentiality: The terms of engagement of the Consultants
commissioned to carry out the Quality of Senice Review shall
include a written obligation of the Consultants and signed on
their behalf in favour of EPFAL to keep confidential information
made available by EPFAL to the Consultants or to which the
Consultants have access for the purposes of the Quality of Senice
Review save that the Consultants shall be entitled to disclose
any such information:
11.10.1 in the Review Report to the extent that the Consultants
reasonably consider appropriate (after consultation with EPFAL)
for the purposes of that report; or
11.10.2 with the prior written consent of EPFAL; or
11.10.3 in compliance with any requirement of law or pursuant to
the arbitration rules of the Electricity Arbitration Association
or pursuant to any judicial or other arbitral process or tribunal
having jurisdiction.
11.11 Additional rights: The provisions of this Section 11 are in
addition to (and not in substitution for) and shall not prejudice
any other rights which the Executive Committee or any Pool Member
may have in respect of any such breach as is referred to in
sub-section 11.1.
12.AUDITORS' OPINION
The Statement of Costs and Fees in respect of an entire PFA
Accounting Period to be sent to the Executive Committee and all
Pool Members pursuant to sub-section 10.1 shall be accompanied by
a report from EPFAL's auditors considering whether in such
auditors' opinion:
(a) the Statement of Costs and Fees is in agreement with EPFAL's
underlying books and records;
(b) PFA Operating Costs have been properly extracted from
EPFAL's audited financial statements; and
(c) the calculations in respect of the Annual Fee are in
accordance with the formulae set out in sub-section 8.2, and are
correct and in agreement with EPFAL's underlying books and
records.
13.PFA ACCOUNTING PERIOD
Each PFA Accounting Period shall be for a period of 12 months
unless otherwise agreed in writing by EPFAL and the Executive
Committee. If EPFAL wishes to change its accounting reference
date it shall give due notice thereof to the Executive Committee
which shall agree to enter into an amending agreement to the
Agreement in order to give effect to the same at EPFAL's cost and
expense.
14.THE POOL FUNDS ADMINISTRATOR'S CHARGES
EPFAL shall be entitled to recover from all Pool Members the
charges set out in Sections 15 and 16 in respect of its operation
of the Funds Transfer Business but, subject to Section 19, shall
not be entitled to recover any other charges.
15.AMOUNT
15.1 Annual Charges: In respect of each PFA Accounting Period,
EPFAL shall be entitled to recover from Pool Members annual
charges equal to the aggregate of the following amounts:
15.1.1 PFA Operating Costs for the relevant PFA Accounting Period
(as identified by the Statement of Costs and Fees for such period
submitted pursuant to Section 10);
15.1.2 the PFA Handling Charge, calculated on the total amount of
the PFA Operating Costs;
15.1.3 the Annual Fee for such PFA Accounting Period; and
15.1.4 the Bank Charges.
15.2 Recovery of Charges:
15.2.1 The due proportion (determined in accordance with
sub-section 15.4) of EPFAL's annual charges referred to in
sub-section 15.1 payable by each Pool Member for each PFA
Accounting Period shall be recovered by monthly payments in
advance from each Pool Member or, where EPFAL and the Pool Member
otherwise agree, semi-annually in advance (calculated on a best
estimates and reasonable basis to be one twelfd~ or, as the case
may be, one half of the annual charges payable by such Pool
Member by reference to the most recent PFA Budget).
15.2.2 EPFAL shall advise each Pool Member of such amount by
invoice despatched to each Pool Member approximately 15 days
prior to the first day of each month or, as the case may be,
other period. Such invoice shall be paid no later than the first
day of such month or such other period. Each Pool Member shall
pay the amount advised in the relevant invoice within 15 days
after the invoice date.
15.2.3 Each Pool Member shall pay all amounts due hereunder in
sterling in cleared hinds in full without set off or
counterclaim, withholding or deduction of any kind whatsoever but
without prejudice to any other remedy. All charges are exclusive
of United Kingdom Value Added Tax which shall be added to such
charges, if applicable.
15.2.4 In the event of any dispute regarding charges in any
month or period, no Pool Member may withhold payment of any
invoiced amount but may refer such dispute to arbitration in
accordance with Clause 83.
15.3 Interest on non-payment: If any amount due to EPFAL in its
capacity as the Pool Funds Administrator is not received on the
due date the Pool Member required to pay such
amount shall pay interest to EPFAL on such amount from and
including the date of default to the date of actual payment (as
well after as before judgment) at the rate which is 4 per cent.
per annum above the Base Rate from time to time of National
Westminster Bank PLC during each period of default.
15.4 Payment of Charges: Each Pool Member shall pay its due
proportion of EPFAL's charges for each PFA Accounting Period
determined in accordance with Section 17.
15.5 Amount of Charges: The amount of each such payment shall
be estimated initially by reference to the PFA Budget. EPFAL
shall adjust the amount of each such payment by reference to the
most recent Statement of Costs and Fees and so as to take into
account PFA Operating Costs, the PFA Handling Charge, the Annual
Fee and the Bank Charges during the previous PFA Accounting
Period and anticipated costs in respect of the same during the
current PFA Accounting Period and shall recover from or, as
appropriate, credit to each Pool Member its due proportion of the
difference between actual and anticipated PFA Operating Costs,
the PFA Handling Charge, the Annual Fee and the Bank Charges and
payments received in respect of such costs, fees and charges in
each case for the previous and the current PFA Accounting Period.
Such recovery or credit shall take place by reference to an
adjustment to each Pool Member's charges for the current PFA
Accounting Period.
15.6 New and Former Pool Members: Any Pool Member which is a
Pool Member for part only of any PFA Accounting Period shall pay
charges on an interim basis of such amount as the Executive
Committee estimates to be reasonable for such PFA Accounting
Period on the basis of the allocation of charges set out in
Section 17. Adjustments to charges on all Pool Members as a
result of existing Pool Members leaving or new Pool Members
joining will be made following, and shall be set out in, the
Statement of Charges submitted for the relevant PFA Accounting
Period pursuant to sub-section 10.7 whereupon the Pool Members
and/or former Pool Members shall be required to pay such
additional amount or be entitled to such reimbursement as may be
determined in accordance with the Agreement by an adjustment to
charges in the then current PFA Accounting Period.
16.BANK CHARGES
Bank Charges: EPFAL in its capacity as the Pool Funds
Administrator shall collect from Pool Members the amounts they
are obliged to pay by way of bank transaction charges towards the
costs of the Pool Banker and all Settlement Banks ("Bank
Charges") and shall account for the same to the Pool Banker and
such Settlement Banks.
17.ALLOCATION OF CHARGES
17.1 Total Sum Due: In respect of each PFA Accounting Period, the
Total Sum Due shall be allocated amongst Pool Members in
accordance with the following provisions of this Section
17.2 Payment of Total Sum Due: Each Pool Member shall be
obliged to pay the amount allocated to it in accordance with this
sub-section. The total aggregate amount allocated to all Pool
Members in respect of any PFA Accounting Period shall equal the
Total Sum Due in respect of such PFA Accounting Period.
17.3 Allocation of Total Sum Due: The Total Sum Due in
respect of each PFA Accounting Period shall be allocated amongst
Pool Members in the following manner:
17.3.1 first, in order to recover the discrete costs referable
to each Pool Member during any PFA Accounting Period, the costs
incurred by EPFAL in its capacity as the Pool Funds Administrator
in complying with a request of such Pool Member made pursuant to
Clause 63.1.7 or sub-section 6.3 of Schedule 11 which are
directly referable to such Pool Member shall, as far as possible,
be allocated to such Pool Member; and
17.3.2 secondly, 100 per cent. of the balance of the Total Sum
Due during any PFA Accounting Period not recovered pursuant to
paragraph 17.3.1 shall be allocated amongst all Pool Members
during such PFA Accounting Period according to their respective
Contributory Shares for such PFA Accounting Period. For this
purpose, each Pool Member's due proportion of the charges shall
be assessed first by reference to the then latest Contributory
Shares of all Pool Members calculated by the Executive Committee
for the period and each part thereof to which such charges relate
(or, if and to the extent that the charges relate to a period for
which no such calculation has yet been made, by reference to the
then most recently calculated current Contributory Shares of all
Pool Members) and shall thereafter be readjusted from time to
time for each day within the relevant period following changes to
the Contributory Shares of Pool Members for all or any part of
such period or tas the case may be) following the calculation of
the Contributory Shares for such period.
17.4 Prima facie evidence: EPFAL's determination of the
allocation of all costs during any PFA Accounting Period shall,
in the absence of manifest error, be prima facie evidence
thereof.
18.ADJUSTMENT
If the Executive Committee requests EPFAL to continue to serve as
the Pool Funds Administrator pursuant to sub-section 3.1 to allow
a successor to be appointed, EPFAL and the Executive Committee
shall negotiate in good faith for a period not exceeding six
weeks (or such longer period as EPFAL and the Executive Committee
may agree in writing) with a view to agreeing a revision in the
amount of the Base Sum to be used in the calculation of the
Annual Fee for the duration of the additional period referred to
in sub-section 3.1. If EPFAL and the Executive Committee shall
agree to revise the amount of the Base Sum, such revision (and
any consequential revision in the Annual Fee) shall take effect
in accordance with the terms of that agreement. If no agreement
is reached within the said negotiation period the Executive
Committee or EPFAL may refer the dispute to arbitration pursuant
to
Clause 83. Pending any such agreement being reached or any such
dispute being resolved by arbitration, EPFAL shall continue to
serve as the Pool Funds Administrator for the additional period
referred to in sub-section 3.1.
19.ADDITIONAL COMPENSATION
19.1 General: A direction or instruction of the Executive
Committee to EPFAL in its capacity as the Pool Funds
Administrator shall not materially increase the duties,
responsibilities or liabilities of EPFAL as the Pool Funds
Administrator beyond those detailed in the Agreement as at the
PEA Commencement Date and as detailed in the Agreed Procedures
without proper compensation.
19.2 Compensation: If the Executive Committee gives a direction
or instruction to EPFAL in its capacity as the Pool Funds
Administrator which materially increases the duties,
responsibilities or liabilities of EPFAL as the Pool Funds
Administrator beyond those detailed in the Agreement as at the
PEA Commencement Date and as detailed in the Agreed Procedures,
then (subject to sub-section 19.3):
19.2.1 EPFAL shall carry out that direction or instruction
unless it has reasonable grounds for refusing so to do in which
event it shall forthwith notify the Executive Committee in
writing of its refusal and its reasons therefor (and, for this
purpose, an increase in the duties, responsibilities or
liabilities of EPFAL in its capacity as the Pool Funds
Administrator shall not of itself constitute reasonable
grounds);
19.2.2 EPFAL and the Executive Committee shall negotiate in good
faith for a period not exceeding one month (or such longer
period as EPFAL and the Executive Committee may agree in
writing) with a view to agreeing an appropriate increase in the
Base Sum to reflect such increase in EPFAL's duties,
responsibilities and liabilities as the Pool Funds
Administrator;
19.2.3 If EPFAL and the Executive Committee shall agree an
increase in the Base Sum, such increase shall take effect in
accordance with the terms of that agreement; and
19.2.4 if there shall be any dispute as to whether that
direction or instruction does or did materially increase the
duties, responsibilities or liabilities of EPFAL as the Pool
Funds Administrator or whether EPFAL has reasonable grounds for
refusing to carry out that direction or instruction or if no
agreement is reached under paragraph 19.2.2, EPFAL or the
Executive Committee may refer the dispute to arbitration in
accordance with Clause 83.
19.3 Reservation: The performance by EPFAL of any direction or
instruction of the Executive Committee shall not prevent EPFAL
from later claiming that such direction or instruction
materially increased its duties, responsibilities or liabilities
as the Pool Funds Administrator provided always that EPFAL shall
not be entitled so to claim unless it gave written notice to the
Executive Committee promptly (and in any event
within seven days) after first becoming aware that such direction
or instruction materially increased or was likely materially to
increase such duties, responsibilities or liabilities, such
notice to contain detailed reasons in support of why there has
been or is likely to be such an increase.
20.RECOVERY OF POOL ADMINISTRATION COSTS
20.1 Applicability: The provisions of this Section 20 shall apply
to:
20.1.1 the costs and expenses (within the extended meaning of
that expression in Clause 23.5 of the Agreement) of the Executive
Committee, its subcommittees and sub-groups and the personnel
referred to in Clause 17.2.1 together with the liabilities (if
any) associated with the termination of any lease of any business
accommodation required by the Executive Committee, the Chief
Executive, the sub-committees, the sub-groups of such personnel;
20.1.2 the costs and expenses of Committee Members and members
of the subcommittees and sub-groups of the Executive Committee;
20.1.3 the costs and expenses of the Pool Chairman;
20.1.4 the remuneration, costs and expenses of the personnel
referred to in Clause 17.2.1 of the Agreement;
20.1.5 the remuneration, costs and expenses of the Secretary;
20.1.6 the costs and expenses of the Pool Auditor;
20.1.7 the overhead costs of the Electricity Arbitration
Association;
20.1.8 all such other costs, fees, expenses, liabilities,
losses and other amounts which are required by the Agreement (or
any other agreement, document or arrangement prepared, executed
or entered into pursuant to the Agreement and for this purpose
approved by the Executive Committee) to be dealt with "in
accordance with Section 20 of Schedule 15" or "in accordance with
the PEA Accounting Procedure"; and
20.1.9 any bad debts which are to be treated as Pool
Administration Costs pursuant to sub-section 20.7,
(together "Pool Administration Costs").
20.2 Approval: The Executive Committee (or its delegate) shall
approve all Pool
Administration Costs in advance of submitting the same to EPFAL
for payment.
20.3 Payment: Upon receipt of an invoice or other statement
relating to Pool Administration Costs which has been approved by
or on behalf of the Executive
Committee in accordance with sub-section 20.2, EPFAL shall pay
the amount stated in such invoice or other statement (together
with Value Added Tax thereon, if applicable) to such person or
persons as the Executive Committee (or its delegate) shall
direct.
20.4 Recovery:
20.4.1 EPFAL shall collect from Pool Members the amounts which
they are obliged to pay towards the Pool Administration Costs and
Pool Members shall be obliged to pay in accordance with
sub-section 20.6 their respective proportionate share of the Pool
Administration Costs (together with Value Added Tax thereon, if
applicable) against receipt of an invoice or other statement
therefor issued by EPFAL and otherwise in accordance with
paragraph 20.5.1;
20.4.2 EPFAL shall collect from the Grid Operator, and the Grid
Operator shall be obliged to pay against receipt of an invoice or
other statement therefor issued by EPFAL and otherwise in
accordance with paragraph 20.5.2, 10 per cent. of the annual
overhead costs of the Electricity Arbitration Association
(together with Value Added Tax thereon, if applicable).
20.5 Collection procedure:
20.5.1 EPFAL shall arrange for collection from Pool Members of
their respective proportionate share of the Pool Administration
Costs in such manner as may be agreed by EPFAL with the Executive
Committee from time to time (which may include collection in
advance) and Pool Members shall comply with such collection
procedures and, in particular, shall make payment within the time
period prescribed by such procedures. The provisions of
paragraphs 15.2.3, 15.2.4 and sub-section 15.3 shall in any event
apply mutatis mutandis in respect of all payments required to be
made by Pool Members pursuant to this Section 20.
20.5.2 The Grid Operator shall make payment of the amount
referred to in paragraph 20.4.2 within 15 days after receipt of
the invoice or other statement therefor.
20.6 Proportionate Share: Pool Members shall contribute towards
the Pool Administration Costs referable to a Quarter in the
proportions which their respective Contributory Shares bear to
each other during such Quarter.
20.7 Bad Debts: If in any PFA Accounting Period the Executive
Committee recognises bad debts arising from a Pool Member's
failure to pay its due proportion of Pool Administration Costs,
the aggregate amount of those bad debts shall be carried forward
to the immediately succeeding PFA Accounting Period and shall
form part of the Pool Administration Costs for that PFA
Accounting Period (spread evenly so far as practicable over the
four Quarters thereof).
ANNEX 1
PEA Budget for the 1992 PEA Accounting Period
Category/Item Budgeted Cost pounds 000
Insurance costs 200
Funds Transfer Hardware and 75
Funds Transfer Software testing
and maintenance costs
Audit fees 75
Bank administration charges 100
Bad debt allowance 0
Total Sum Due 450
<PAGE>
ANNEX 2
Pro-forma Statement of Charges
Name Contributory Share Period to which
charges relate Amount
<PAGE>
ANNEX 3
Pro-forma Statement of Costs and Fees
(A)
PFA Operating Costs
(B)
Annual Fee
Annual Fee (initial):the Annual Fee for the [19
] PFA Accounting Period was
pounds [ ].
Annual Fee (revisions):the Annual Fee for the
[19 ] PFA Accounting Period was
revised as from [ ] to pounds [ ] [and as from t
]
to pounds [ ]].
Calculation of Annual Fee (initial and revisions):
<PAGE>
ANNEX 4
Existing Funds Transfer Software
Part A
Beneficially Owned
Pool Funds Transfer System (PFTS) PHASE 1
System Administration - User Guide (2/5/90)
Clerical Procedures (3/5/90)
Self Study Training Module (4/7/90)
Billing Sub-Project - Test Specification v.1.0 (29/3/90), v.1.1
(3/4/90)
Test Plan - Issue 1.1 (3/4/90)
System Testing Log (4/4/90)
Quality Assurance Plan (16/5/90)
Test Data (2/4/90)
Test Schedules (3/4/90)
Implementation Paper - Security Controls (22/3/90)
Pool Funds Transfer System (PFTS) PHASE 1.1
Test Plan Issue 1.0 (18/6/90)
Summary Test Report (13/7/90)
Pool Funds Transfer System (PFTS) PHASE 2.0
Documentation EPFAL PFTS Phase II User Manual Version 1
Documentation EPFAL PFTS Phase II DBA Guide Version 1
Physical Design Documentation (volumes 1-4) (22/6/90)
Functional Specification - Appendices (April 1990)
Addendum to the Detailed Physical Design (May 1991)
<PAGE>
Part B
Licensed
(VMS, unless otherwise stated)
VAX System
VMS Sun Account 3.5.14 purchased 1/7/90. Licence No. 002505.
Documentation - Standard Reference/lnstallation/Getting started
and Tutorial manuals.
VMS v.5.4 issued 1/5/90. Licence pack LP594621 s/no. 01440169.
PCSA/Decnet v.4 End User Node issued 1/5/90. Licence pack
LP594624 s/no. 01440172.
Lotus 123 v.2.2 Server Version purchased 1/91 - upgraded to v.3.1
+ 18/9/91. Note a VMS version.
Oracle RDBMS v.6 purchased 16/5/91 with full set of delivered
documentation.
PC based Novell Network
Novell Advanced Network 286 v.2.15 Rec C purchased 3/90 via 3rd
party. Full set Netware documentation - Reference
Installation/Guides etc.
Sun Account v.3.5.3 purchased via 3rd party 3/90. Full set
documentation -Reference/lnstallation/Getting started and
Tutorials.
Lotus 123 v.3.1 Server purchased 18/9/91. Upgrade from v.2.2
purchased 1/91.
<PAGE>
ANNEX 5
Escrow Arrangements
1.1 EPFAL Escrow Agreement
No later than 1st February, 1993 (or such later date as EPFAL and
the Executive Committee may agree in writing) EPFAL in its
capacity as the Pool Funds Administrator (for itself and on
behalf of the Pool Members acting through the Executive
Committee) shall enter into and deliver an escrow agreement (the
"UPFA Escrow Agreement") in the form to be agreed between EPFAL
and the Executive Committee with a reputable escrow agent to be
agreed between EPFAL and the Executive Committee (the UPFA
Custodian"). Forthwith upon entering into the PEA Escrow
Agreement EPFAL shall deposit with the PEA Custodian to the
extent then in existence (and, if not in existence, as soon as
possible after it comes into existence):
1.1.1 a copy of the source code and load (machine executable)
modules relating to all Funds Transfer Software beneficially
owned by it together with all job control language and licensed
software system tables, each in a machine readable form and the
source code and job control language in a hard copy form;
1.1.2 a copy of all related manuals and other associated
documentation, including:
(a) any user requirement documents, together with all associated
authorized change requests;
(b) any functional specification documents associated with those
documents described in sub-paragraph (a) above, together with all
authorized change requests associated with the relevant
functional specification;
(c) to the extent available to EPFAL, any design specification
documents associated with those documents described in
sub-paragraphs (a) and (b) above, together with all authorized
change requests associated with the relevant design
specification;
(d) any program and/or user guides prepared to assist in the
day-to-day operation and future development of the computer
programs (including records of test cases together with the
associated test input and output data used for validation
purposes);
(e) any relevant test strategy schedules and acceptance test
schedules as specified for functional and operational end to end
testing;
(f) any relevant test acceptance certificates and reports for all
tests recording comments and observations made on the appropriate
tests where such tests commissioned by EPFAL;
(g) any relevant client acceptance certificates and Pool
Auditor's reports, together with any reports recording such
clients' and the Pool Auditor's observations and comments on the
tests;
(h) any relevant compilation or detailed operating procedures
required in connection with any of the relevant paragraphs in
this paragraph 1.1.2;
(i) all software licenses for Funds Transfer Software licensed to
EPFAL and
(j) a list detailing all versions of Funds Transfer Software
licensed to EPFAL (including operating systems and compilers)
used in creating such versions of the object code detailing the
version numbers used and any program temporary fixes or
equivalent modes;
1.1.3 a copy of all historical data (including all transaction,
reference and audit data and changes to standing data) relating
to the operations of EPFAL in its capacity as Pool Funds
Administrator;
1.1.4 all the material referred to in sub-clauses 1.1.1 to 1.1.3
above is hereafter together referred to in this Annex 5 as the
"PFA Material".
1.2 Licensed Funds Transfer Software
If, after consultation with EPFAL, the Executive Committee shall
so request, EPFAL shall use its reasonable endeavors to procure
that the owner of any Funds Transfer Software shall permit the
deposit of such Funds Transfer Software licensed to EPFAL with
the PFA Custodian or other reputable escrow agent on the terms of
the Escrow Agreement or similar agreement approved by the
Executive Committee.
1.3 Updating
EPFAL shall ensure that the PFA Material deposited with the PFA
Custodian is kept fully up-to-date and reflects all Modifications
(as defined in the PFA Escrow Agreement) and shall deposit a copy
of all Modifications with the PFA Custodian as soon as the same
are available, all in accordance with the terms of and subject to
the conditions of the PFA Escrow Agreement. EPFAL shall notify
the Executive Committee promptly of the delivery of each
Modification to the PFA Custodian.
<PAGE>
SCHEDULE 16
Matters requiring consent of
the Settlement System Administrator
The Settlement System Administrator's membership of, and the
procedures and powers of, the Project Board
Terms of reference of project managers
Approval of project documents
Quality standards (including design, coding, testing,
implementation and documentation)
Role of Pool Auditor in systems development
Components of project life cycle
Ownership and warranties on development
Housekeeping
The Settlement System Administrator's responsibilities and rights
Use of the Settlement System Administrator's resources
Implementability of systems: technical compatibility with existing system
use of the Settlement System Administrator's
facilities for testing
parallel operation
migration into production
configuration control
implementation planning
Operability of systems: operational feasibility
operational support requirements
operational testing
interface design
performance
security
auditability
reliability
Maintainability of systems design integrity
design documentation
adherence to design and coding standards
reliability
configuration control
<PAGE>
SCHEDULE 17
Trading Sites
Part A
General
1. Introduction: A site shall be identified as a Trading Site
for the purposes of this Agreement in accordance with the
following provisions of this Schedule.
2. Application: A Party may apply to the Executive Committee
for a site to be treated as a Trading Site by sending to the
Executive Committee a written application in the form prescribed
by the relevant Agreed Procedure (in this Schedule, a "Trading
Site Application") stating the class of application and
containing the other information and supported by the documents
and other matters referred to in Part C and signed by or on
behalf of the Generator concerned and the Supplier concerned
where there exists a Supplier in respect of that site (together
in this Schedule, the "Applicants").
3. Decision: Executive Committee shall consider any Trading
Site Application within 45 days after receipt in accordance with
the procedures set out in Part B and (subject to paragraph 5 of
Part B) shall within that period make a determination as to
whether the site the subject of such application (in this
Schedule, the "Nominated Site") shall be treated as a Trading
Site and shall promptly notify the Applicants and the Settlement
System Administrator of its determination.
Part B
Procedures
1. Classes: Every Trading Site Application shall state whether
it is a Class 1, Class 2, Class 3 or Class 4 application and the
Executive Committee shall consider a Trading Site Application by
reference to the provisions set out in this Part B for the stated
class (or, in the case of paragraph 5, as provided therein).
2. Class 1: If the Trading Site Application shall state that it
is a Class 1 application then the Executive Committee shall
determine from the Trading Site Application and supporting
documentation and other matters (and any further evidence
provided in accordance with paragraph 6) if the Nominated Site is
a Power Station which is or is to be electrically configured in
the same manner as is prescribed in one of the line diagrams
contained in the relevant Agreed Procedure and fulfills all the
conditions specified in such Agreed Procedure applicable to a
Class 1 application, in which event the Nominated Site shall be
treated as a Trading Site.
3. Class 2: If the Trading Site Application shall state that it
is a Class 2 application then the Executive Committee shall
determine from the Trading Site Application and supporting
documentation and other matters (and any further evidence
provided in accordance with paragraph 6) if the generation and
demand at the Nominated Site are electrically connected solely by
Dedicated Assets, in which event the Nominated Site shall be
treated as a Trading Site.
In this paragraph, "Dedicated Assets" means assets and equipment
which are used solely to connect electrically (a) the location at
which the generation originates with (b) the location at which
the demand is taken (and no other), and additionally satisfy one
of the diagrammatic representations of Dedicated Assets contained
in the relevant Agreed Procedure.
4. Class 3: If the Trading Site Application shall state that it
is a Class 3 application then the Executive Committee shall
determine from the Trading Site Application and supporting
documentation and other matters (and any further evidence
provided in accordance with paragraph 6) if the generation and
demand at the Nominated Site are electrically connected by
Contiguous Assets, in which event the Nominated Site shall be
treated as a Trading Site.
In this paragraph
(a) "Contiguous Assets" means those Specified Assets and
Equipment at a location which connect by one continuous
electrical connection the location at which the generation
originates with the location at which the demand is taken, which
Specified Assets and Equipment are all owned by the Applicants
and/or are Specified Assets and Equipment in respect of which a
contribution is or will be made by the Applicants to the
provision and installation or maintenance and repair costs
thereof or where such Specified Assets and Equipment are already
provided and installed, the maintenance and repair costs thereof;
and
(b) "Specified Assets and Equipment" means assets and equipment
identified and quoted in the Connection Agreement of either
Applicant where such assets and equipment include assets and
equipment identified and quoted in the Connection Agreements
relating to both Applicants which form part of the continuous
electrical connection for the purposes of (a) above.
5. Class 4:
5.1 If the Trading Site Application shall state that it is a
Class 4 application or if the Executive Committee shall determine
that the Nominated Site the subject of a Class 1, Class 2 or
Class 3 Trading Site Application does not satisfy the conditions
specified in paragraph 2, 3 or (as the case may be) 4, the
Executive Committee shall determine from the Trading Site
Application and supporting documentation and other matters (and
any further evidence provided in accordance with paragraph 6) if
the Nominated Site shall be treated as a Trading Site having
regard to the criteria set out in paragraph 5.2.
5.2 The criteria referred to in paragraph 5.1 are:
(a) whether special circumstances existed before 30th March,
1990 which demonstrate to the reasonable satisfaction of the
Executive that the generation and demand were treated as being on
a Trading Site;
(b) whether special circumstances existed before 11th December,
1991 which demonstrate to the reasonable satisfaction of the
Executive Committee that the generation and demand should have
been treated as on a Trading Site;
(c) whether, although not satisfying the conditions applicable
to a Class 1, Class 2 or Class 3 Trading Site Application, if, to
the reasonable satisfaction of the Executive Committee, the
Trading Site Application demonstrates sufficient similarities
with sites which would satisfy those conditions such that it
would be unreasonable not to treat the Nominated Site as a
Trading Site;
(d) whether there are any other facts or evidence in support of
the Trading Site Application which in the reasonable opinion of
the Executive Committee demonstrate that the Nominated Site ought
to be treated as a Trading Site.
6. Further evidence: The Executive Committee may request an
Applicant to produce such further evidence as the Executive
Committee may reasonably require in support of its Trading Site
Application before the Executive Committee makes any
determination as to whether the Nominated Site is to be treated
as a Trading Site, and the Executive Committee shall not be bound
to make any determination on the issue of whether the Nominated
Site is a Trading Site pending receipt of such further evidence.
7. Majorities: Any determination of the Executive Committee in
favor of treating a Nominated Site as a Trading Site shall
require a simple majority of the votes cast by Committee Members
at the relevant meeting provided that in the case of a Trading
Site Application which falls to be considered under paragraph 5
the necessary majority shall be 75 per cent. of all the votes
cast by Committee Members.
8. Effect of determination: If the Executive Committee shall
determine pursuant to paragraph 2, 3, 4 or (as the case may be) 5
that a Nominated Site is a Trading Site all metered values of all
meters associated with the Nominated Site and identified in the
Trading Site Application shall be aggregated in accordance with
the provisions of sub-section 3.3 of, and paragraph 2F of
Appendix 6 to, Schedule 9.
Part C
Trading Site Applications
1. Every Trading Site Application shall contain the following
information:
(a) the name and address of the Applicants;
(b) a full description of the Nominated Site;
(c) a full description of the Metering Systems (if any) located
or to be located at the Nominated Site and of their location
together with a full description of the points at which all
electricity flows relative to the Nominated Site are to be
measured;
(d) such other information as may be specified in the relevant
Agreed Procedure; and
(e) such other information as the Applicants shall consider
relevant to their application.
Every Trading Site Application shall be accompanied by the
following documents and other matters:
(a) line diagrams showing the electrical connections and energy
flows at the Nominated Site and the location of Metering Systems
(if any) and evidence demonstrating that the assets and equipment
electrically connecting the generation and demand are capable of
transmitting or distributing the quantity of electricity to be
transmitted or distributed to the Nominated Site;
(b) confirmation from the Settlement System Administrator, having
duly notified the Grid Operator, that it is satisfied that the
metering arrangements at the Nominated Site are compatible with
the operation of Settlement;
(c) in the case of a Class 2 or Class 3 Trading Site
Application, other evidence demonstrating the existence of
Dedicated Assets or (as the case may be) Contiguous Assets
(including any Connection Agreements or relevant parts thereof).
Part D
Additional Provisions
1. (a) The Settlement System Administrator, the Grid Operator
and each Public Electricity Supplier shall co-operate with the
Applicants (insofar as is reasonable) to enable them to prepare
and deliver a Trading Site Application by making available (upon
reasonable notice) line diagrams relevant to the Nominated Site.
(b) The Settlement System Administrator and the Grid Operator
shall review the Metering Systems relative to the Nominated Site
for the purposes of issuing confirmations required by the
Executive Committee and, where such confirmations are considered
appropriate by the Settlement System Administrator and the Grid
Operator, shall issue the requisite confirmations.
(c) In relation to (a) and (b), the reasonable costs and
expenses of the Settlement System Administrator, the Grid
Operator and each relevant Public Electricity Supplier shall be
borne by the Applicants.
2. A Nominated Site which the Executive Committee resolves
should be treated as a Trading Site (or is otherwise to be so
treated) shall cease to be treated as a Trading Site if the
Executive Committee reasonably determines that the site no longer
fulfills the conditions upon which the approval for it being so
treated was based. The Generator Applicant shall forthwith notify
the Executive Committee if the site no longer fulfills such
conditions.
SCHEDULE 18
The Ancillary Services Accounting Procedure
DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule, unless the context otherwise
requires, the words and expressions set out in this Section 1.1
shall bear the meanings respectively set out herein:
"ASP Budget" means any budget prepared by the Ancillary Services
Provider pursuant to Section 2.1;
"Audit Adjustments" means the aggregate value of all changes in
the Cost Base required to be taken into account by the Ancillary
Services Provider during any Accounting Period in order to give
effect to the conclusions resulting from an audit commissioned
pursuant to Clause 51.5;
"Capital Expenditure" means, in respect of any Accounting Period,
expenditure by the Ancillary Services Provider on fixed assets
required for the purposes of the Ancillary Services Business
including assets acquired on lease which are required by
generally accepted accounting principles to be capitalized;
"Cost Base" means, in respect of any Accounting Period, Total
Operating Costs for such period less Depreciation during such
period;
"Depreciation" means, in respect of any Accounting Period, the
aggregate value of all depreciation on assets owned or employed
by the Ancillary Services Provider in the Ancillary Services
Business, such assets being depreciated in accordance with the
accounting policies of the Ancillary Services Provider for such
period as stated in the audited accounts of the Ancillary
Services Provider for such period and treated as depreciation in
accordance with the terms of the Agreement;
"Efficiencies" means, in respect of any Accounting Period, the
amount (if any) by which the Cost Base in such Accounting Period
is less than the Cost Base in the immediately preceding
Accounting Period (the "First Period") after adjustments on a
pound for pound basis to any difference between such two Cost
Bases to offset movements from the Cost Base in the First Period
due to the Rate of Inflation, Audit Adjustments and any other
matters beyond the control of the Ancillary Services Provider and
changes in the accounting principles or practices of the
Ancillary Services Provider made during the Accounting Period in
question;
"Executive" means those members of the Executive Committee
representing Suppliers;
"Individual Limit" means, in respect of Capital Expenditure in
any Accounting Period, pounds 25,000, as the same may be increased from
the Effective Date by the Rate of Inflation;
"Margin" means:
(i) in respect of each of the first three Accounting Periods,
such amount as when added to the Total Operating Costs (excluding
for this purpose any payments made by the Ancillary Services
Provider for Ancillary Services, and the price of any goods and
services referred to in Section 6.2 if the price exceeds the
aggregate cost of supplying such goods and services actually
incurred by the relevant affiliate of, or other division of, the
company of which the Ancillary Services Provider is a division)
in the relevant Accounting Period is equal to 10 per cent. of the
sum of such amount and such Total Operating Costs; and
(ii) thereafter, such margin as may be agreed between the
Executive and the Ancillary Services Provider (or, in default of
agreement, such margin as is reasonable in all the circumstances
as determined pursuant to Clause 83);
"Overall Limit" means, in respect of Capital Expenditure in any
Accounting Period, pounds 100,000, as the same may be increased from
the Effective Date by the Rate of Inflation;
"Statement of Charges" means the statement of charges required to
be submitted by the Ancillary Services Provider pursuant to
Section 2.8 in the form or substantially in the form set out in
Part 3 of the Annex or such other form as the Executive and the
Ancillary Services Provider may agree showing the total charges
to be made by the Ancillary Services Provider on all Suppliers in
accordance with this Schedule;
"Statement of Costs" means the statement of costs required to be
submitted by the Ancillary Services Provider pursuant to Section
2.4 setting out the actual and accrued expenditure incurred by
the Ancillary Services Provider in any period which shall be
substantially in the form set out in Part 2 of the Annex or such
other form as the Executive and the Ancillary Services Provider
may agree; and
"Total Operating Costs" means, in respect of any Accounting
Period or part thereof:
(i) the total expenditure properly incurred or accrued by or on
behalf of the Ancillary Services Provider in operating the
Ancillary Services Business in such period or part thereof (other
than that referred to in (ii) and (iii) below); plus
(ii) all Depreciation in such period on all assets owned and
employed by the Ancillary Services Provider in the Ancillary
Services Business; plus
(iii)all other expenditure properly incurred or accrued during
such period which, under this Schedule, is permitted to be
included in any Statement of Costs; plus
(iv) Efficiencies which are permitted to be included in any
Statement of Costs pursuant to Section 5.4.
1.2 Interpretation:
1.2.1 In this Schedule, except where the context otherwise
requires, reference a particular Section, sub-section or
paragraph or to the Annex shall be a reference to that Section,
sub-section or paragraph of, or the Annex to, this Schedule.
1.2.2 In this Schedule the expression "Rate of Inflation" shall
have the meaning assigned to it in Schedule 4.
2. ASP BUDGETS, STATEMENTS OF COSTS AND STATEMENTS OF CHARGES
Budgets
2.1 ASP Budgets: Not earlier than six nor later than three
months prior to the first day of each Accounting Period (other
than the first) the Ancillary Services Provider shall prepare and
submit to the Suppliers an ASP Budget for such Accounting Period.
Such ASP Budget shall be indicative only but prepared on a best
estimates basis. The ASP Budget for the first Accounting Period
shall be that set out in Part 1 of the Annex.
2.2 Contents of ASP Budgets: Each ASP Budget (other than the
first) shall compare each item or category of budgeted
expenditure shown therein with the forecast expenditure in
respect of such item or category for the remainder of the then
current Accounting Period and report any salient differences
between any such forecast expenditure and the budgeted
expenditure in respect of each such item or category in the
immediately preceding ASP Budget.
2.3 Form of ASP Budgets: Each ASP Budget shall be substantially
in the form of that set out in Part 1 of the Annex (or in such
other form as the Ancillary Services Provider and the Executive
may from time to time agree).
Statement of Costs
2.4 Statement of Costs: No later than one month following the
date in any Accounting Period of the publication of the audited
accounts for the Ancillary Services Business for the previous
Accounting Period, the Ancillary Services Provider shall prepare
and submit to each Supplier a Statement of Costs for such
previous Accounting Period. The audited accounts of the Ancillary
Services Provider and the auditors' management letter, to the
extent it relates to the economy, efficiency and effectiveness of
the Ancillary Services Provider in carrying out its dudes, shall
accompany each Statement of Costs for each entire Accounting
Period.
2.5 Form of Statement of Costs: The Statement of Costs for any
Accounting Period shall attribute actual expenditure for such
period against, inter alia, each of the categories and
sub-categories set out in the corresponding ASP Budget for such
Accounting Period.
2.6 Accompanying Report: Each ASP Budget and Statement of Costs
for an entire Accounting Period submitted to the Suppliers
pursuant to Section 2.1 or 2.4 shall be supported by a written
report of the Ancillary Services Provider commenting in
reasonable detail upon the matters comprised in the categories of
expenditure included in such ASP Budget or Statement of Costs
drawing attention to and giving reasons for any unusual
commitment or item of expenditure proposed to be incurred or
which has been incurred and, in the case of a Statement of Costs,
explaining the difference (if material) between:
2.6.1 the amount set against each item or category therein; and
2.6.2 the amount set against each corresponding item or category
in the immediately preceding ASP Budget.
2.7 Accounting Practices: Each ASP Budget and Statement of Costs
shall be prepared on the basis of the accounting principles and
practices used to draw up-the most recent audited accounts of the
Ancillary Services Provider and consistently applied. If any
Statement of Costs for an entire Accounting Period is not
prepared on such basis, the Ancillary Services Provider shall
prepare and submit to the Suppliers a pro-forma set of audited
accounts of the Ancillary Services Provider for such entire
Accounting Period which is prepared on the basis of the
accounting principles and practices used to prepare the relevant
Statement of Costs. Any changes in the accounting principles and
practices or their method of application used to prepare audited
accounts of the Ancillary Services Provider shall be noted in the
next following ASP Budget or Statement of Costs, as the case may
be.
2.8 Statement of Charges: A Statement of Charges shall accompany
each Statement of Costs.
2.9 Bad debts: The total cost of any bad debts of the Ancillary
Services Provider arising in any Accounting Period may be taken
into account by the Ancillary Services Provider in its Statement
of Costs for such Accounting Period or any subsequent Accounting
Period and accordingly recovered as part of Total Operating Costs
for any such Accounting Period.
3. AUDITORS' OPINION
The Statement of Costs to be sent to the Suppliers pursuant to
Section 2.4 shall be accompanied by a report from the auditors of
the Ancillary Services Provider considering whether in such
auditors" opinion:
3.1 the Statement of Costs is in agreement with the underlying
books and records of the Ancillary Services Provider; and
3.2 Total Operating Costs and Depreciation have been properly
extracted from the audited financial statements.
Such auditors' report shall also contain such other matters as
the Executive may agree with the auditors of the Ancillary
Services Provider.
4. ACCOUNTING PERIOD
The first Accounting Period shall run from (and including) 31st
March, 1990 to (and including) 31st March, 1991. Thereafter,
unless agreed by the Ancillary Services Provider and the
Executive each Accounting Period shall be for a period of twelve
months. In the event that the Ancillary Services Provider wishes
to change its accounting reference date it shall give due notice
thereof to the Executive which shall agree to enter into an
amending agreement to give effect to the same at the cost and
expense of the Ancillary Services Provider.
5. ANCILLARY SERVICES PROVIDER'S CHARGES
5.1 Ancillary Services Provider's charges: In respect of each
Accounting Period, the Ancillary Services Provider shall be
entitled to recover from Suppliers in addition to the cost of
Ancillary Services the aggregate of:
5.1.1 Total Operating Costs for the relevant Accounting Period
(as identified by the Statement of Costs for such Accounting
Period to be submitted pursuant to Section 2.4); and
5.1.2 the Margin.
5.2 Recovery of Charges: The Ancillary Services Provider's
charges in respect of any Accounting Period shall be recovered
from the Suppliers on a daily basis in accordance with the Pool
Rules and by reference to the allocation provided therein by:
5.2.1 estimating a daily amount necessary to recover the charge
by reference to the ASP Budget and, where appropriate, any under-
or over-recovery in respect of any previous Accounting Period;
and
5.2.2 adjusting that amount by reference to any subsequent
Statement of Costs.
5.3 Revision of Estimates: If the Ancillary Services Provider
reasonably believes that the amount which will be recovered under
Section 5.2 is likely to be 10 per cent. more or less than the
amount to which it is entitled under Section 5.1 it shall, with
the consent of the Executive (such consent not to be unreasonably
withheld or delayed), revise as appropriate the estimate made in
accordance with Section.2.
5.4 Sharing of Efficiency: The Ancillary Services Provider shall
be entitled to the benefit of all Efficiencies and, accordingly,
to charge Suppliers the amount of all Efficiencies by including
them in ASP Budgets and Statements of Cost in the following
manner. The amount of any Efficiency arising in any Accounting
Period shall be identified in the Statement of Costs for such
Accounting Period submitted pursuant to Section 2.4 and shall be
taken into account in the Statement of Costs for the two
successive Accounting Periods thereafter. Accordingly, the amount
of any Efficiency may be included in any Statement of Costs for
the two Accounting Periods following that in which the Efficiency
is identified. In the Statement of Costs for the third
consecutive Accounting Period and all following Accounting
Periods thereafter the amount of such Efficiency shall be
eliminated.
6. CORPORATE OVERHEAD CHARGES AND PURCHASES
6.1 Corporate Overhead Charges: The Ancillary Services Business
may take into account in any ASP Budget or Statement of Costs
(and consequently its charges to Suppliers) all corporate
overhead charges payable by the Ancillary Services Provider to
its immediate holding company or any other division of the
company of which it is a division provided such corporate
overhead charges are reasonable and in due proportion to the
corporate overhead charges payable by other affiliates of the
Ancillary Services Provider or divisions of the company of which
the Ancillary Services Provider is a division as reported upon by
the auditors of the Ancillary Services Provider.
6.2 Goods or services: Purchases of goods or services from
affiliates of the Ancillary Services Provider shall be on arm's
length terms.
7. FUEL SECURITY
Except to the extent recoverable under any other provision of
this Schedule, any additional costs necessarily incurred by the
Ancillary Services Provider in running the Ancillary Services
Business during a Security Period shall be regarded as beyond the
control of the Ancillary Services Provider, which may recover the
same in full from Suppliers provided such costs have been
verified as additional costs by the auditors of the Ancillary
Services Provider. Suppliers shall be obliged to pay the actual
amount of such costs and expenses.
8. CAPITAL EXPENDITURE
8.1 Capital Expenditure (1): The following provisions apply to
Capital Expenditure by the
Ancillary Services Provider in respect of the Ancillary Services
Business:
8.1.1 save as provided below, Capital Expenditure by the
Ancillary Services Provider which may be recovered by
Depreciation charged to Suppliers shall require the prior
approval of the Executive in writing, such approval to take into
account an appropriate sharing of the Efficiencies arising from
such Capital Expenditure;
8.1.2 Capital Expenditure which may be recovered by Depreciation
charged to Suppliers specified in any ASP Budget shall be
regarded as approved by the Executive unless the Executive
notifies the Ancillary Services Provider to the contrary within
one month after receipt of such ASP Budget;
8.1.3 in any Accounting Period the Ancillary Services
Provider may incur Capital Expenditure which may be recovered by
Depreciation charged to Suppliers without the need to consult or
obtain the approval of the Suppliers up to a maximum of the
Individual Limit for each item of Capital Expenditure and a
maximum of the Overall Limit for all items of Capital Expenditure
and, in the event of the Ancillary Services Provider incurring
such Capital Expenditure, it shall notify the Executive as soon
as practicable thereafter; and
8.1.4 the Ancillary Services Provider shall be entitled to incur
Capital Expenditure which may be recovered by Depreciation
charged to Suppliers of any amount without the need to obtain the
approval of the Executive in circumstances where:
(a) the Ancillary Services Provider would be in breach of its
duties under the NGC Transmission License unless such Capital
Expenditure were incurred; and
(b) it has not reached agreement with the Executive on such
Capital Expenditure within a reasonable period of time.
8.2 Capital Expenditure (2): Capital Expenditure not falling
within Section 8.1 may not be charged as Depreciation to
Suppliers.
ANNEX
Part 1
ASP Budget for the First Accounting Period
pounds
Purchase of Ancillary Services 85.00
Local Overheads 0.81
NGC Corporate Management Charge 0.48
NGC System Operations Charge 0.25
MGC Settlement Systems Charge 0.25
86.79
Part 2
Pro-forma Statement of Costs
Purchases of Ancillary Services
Local Overheads
NGC Corporate Management Charge
NGC System Operations Charge
NGC Settlement Systems Charge
Part 3
Pro-forma Statement of Charges
Name Contributory Share Period to which charges relate Amount
SCHEDULE 19
Objective and Scope of
the Scheduling and Dispatch Review
1. Objective: The objective of the Scheduling and Dispatch
Review will be to establish
that:
1.1 scheduling and dispatch is carried out in accordance with
the Scheduling and Dispatch Code; and
1.2 information is entered into PORTHOLE in accordance with the
Pool Rules.
2. Scope: The scope of the review will be to
2.1 review internal scheduling and dispatch operating procedures
for consistency with the Scheduling and Dispatch Code;
2.2 review the internal checks that the Grid Operator has
established to ensure that the operation of scheduling and
dispatch has been carried out in accordance with the procedures
referred to in Section 2.1;
2.3 perform compliance testing of the operation of the internal
checks referred to in Section 2.2;
2.4 the operating procedures in relation to the use of the BPS
GOAL program, including:
(a) controls over the input of data and the output of data to
establish that they are appropriate to ensure an adequate level
of control; and
(b) procedures for the retention of records of the nature and
extent of and reasons for any manual adjustments to BPS GOAL
output or where BPS GOAL is run using non-standard parameters,
for consistency with the Scheduling and Dispatch Code; perform
compliance testing of the operating procedures referred to in
Section 2.4;
2.6 review the operating procedures referred to in Sections 2.1,
2.2 and 2.4 to establish that there is no bias in favor of or
against any particular Pool Member on the part of the Grid
Operator;
2.7 review the operating procedures relating to the recording of
dispatch instructions, availability declarations, generation
offer prices and the application of reason codes and the entry of
data into PORTHOLE for consistency with the Pool Rules;
2.8 perform compliance testing of the operating procedures
referred to in Section 2.7;
2.9 review the operating procedures referred to in Section 2.1
to establish that in the call for the delivery of Ancillary
Services by the Grid Operator there is no bias in favor of or
against any particular Pool Member on the part of the Grid
Operator; review the call for the delivery of Ancillary Services;
compare the generation schedule forecast demand with actual
demand; and
2.10 review the call for the delivery of Ancillary Services;
2.11 compare the generation schedule forecast demand with actual
demand; and
2.12 review the generation schedule forecast demand for
consistency with Section OC1 of the Grid Code.
SCHEDULE 20
Accountable Interest
1. Definitions: In this Schedule:
"Generating Unit" means any Generating Unit whether or not
situate in England or W ales;
"Operator" means, in relation to any Generating Unit, the
Authorized Electricity Operator or any other person for the time
being responsible (under contract or otherwise) for the
generation or sale of electricity from such unit;
"Own Generating Unit" means any Generating Unit the majority
beneficial ownership of which is vested in the person or an
affiliate of the person or in respect of which the person or an
affiliate of the person is the Operator; and
"Underlying Interest" means, in relation to any Generating Unit,
any interest arising by reason of the person or affiliate or any
related undertaking of the person or affiliate (whether alone or
with others):
(a) holding or being entitled to acquire an interest in the land
on which the Generating Unit, or any part thereof, is built;
(b) being in partnership with or party to any arrangement for
sharing of profits or cost-savings or any joint venture with any
person holding or entitled to acquire an interest in the land on
which the Generating Unit, or any part thereof, is built;
(c) owning any electrical plant situated on or operated as a
unit with the Generating Unit (and for such purpose, any
electrical plant or equipment to the possession of which the
person, affiliate or related undertaking is entitled under any
agreement for hire, hire purchase, conditional sale or loan shall
be deemed to be owned by such person) provided always that such
electrical plant shall not be deemed to be operated as a unit
with any Generating Unit by reason only of connections with any
other system for the transmission or distribution of electricity;
or
(d) having obtained any consent under section 36 of the Act
required for the construction or extension of the Generating Unit
or any part thereof.
2. Accountable Interests: The rules for determining whether or
not any person has an Accountable Interest in any Generating Unit
and, if so, the MW in respect of which that person shall be
treated as having such an Accountable Interest shall, subject to
the following sections of this Schedule, be ascertained in such
manner as the Executive Committee with the approval of the
Director may determine being the appropriate share (namely the
share representing that person's economic interest therein) in
the declared net capacity of any Generating Unit.
3. Net capacity: There shall be attributed to the person the
whole of the declared net
capacity represented by any Own Generating Unit.
4. Determination of Accountable Interest: For the purposes of
this Schedule and subject to Section 5, the person shall have an
Accountable Interest in a Generating Unit (not being an Own
Generating Unit) in circumstances where:
4.1 the Operator is a related undertaking of the person or any
affiliate of the person; or
4.2 the person or any affiliate of the person is in partnership
with or is party to any arrangement for sharing profits or
cost-savings or any joint venture with the Operator or with any
third party with regard to the Operator; or
4.3 the person or any affiliate of the person has (directly or
indirectly):
(a) any beneficial shareholding interest in the Operator; or
(b) any beneficial Underlying Interest in the Generating Unit; or
(c) provided or agreed to provide finance to the Operator
otherwise than on arm's length terms; or
(d) provided or agreed to provide, or has determined or is
responsible for determining the price (or other terms affecting
the financial value) of, the fuel used in the Generating Unit.
5. No Accountable Interest: The person shall not be deemed to
have an Accountable Interest in a Generating Unit where:
5.1 such Generating Unit is owned and operated by NGC under a
license granted pursuant to section 6 of the Act; or
5.2 the person's interest arises wholly under the terms of the
Agreement or under any electricity purchase or sale contract; or
5.3 the person's interest arises solely by virtue of
arrangements for the sharing with the Operator of any Generating
Unit of the risks associated with changes in the price of fuel
used by the Generating Unit during the term of any contract for
the provision of electricity from the Generating Unit to the
person.
6. Amount of Capacity: The Pool Member submitting an Admission
Application shall
provide to the Executive Committee and the Director a statement
identifying (in such detail and with such supporting documents or
information as the Executive Committee or the Director may
require) the amount of capacity in MW represented by the
Registered Capacity of Generating Units in which any person who
has an Accountable Interest in the Generating Unit which is the
subject of the Admission Application, including the Pool Member,
has an Accountable Interest, as at the date of the statement.
7. Alternative Basis of Calculations: Where the Executive
Committee or the Director is satisfied that the basis of
calculation used by the Pool Member is not in conformity with
this Schedule, the Executive Committee or the Director may issue
directions specifying an alternative basis of calculation, and
the basis of calculation provided by the Pool Member shall be
adjusted accordingly with effect from the date of issue of the
directions or such other date as may be specified in the
directions.
SCHEDULE 21
METER OPERATOR SCHEDULE
PART 1
PRELIM INARY
1. INTRODUCTION
1.1 Definitions and constructions: The Parties and Meter
Operator Parties expressly agree and acknowledge that the words
and expressions listed below, and which are used for the purposes
of this Schedule, shall not be capable of amendment without the
consent of Meter Operator Parties, but that any word or
expression which is not so listed in this Schedule but is a
definition for the purposes of this Agreement and is used
primarily for parts of this Agreement other than this Schedule
shall, subject to paragraph 2.2.3 and without prejudice to
paragraph 2.5, be capable of being amended without such consent
notwithstanding that it may also be used in this Schedule:
Active Energy;
Active Power;
Agreed Procedure;
Agreed Procedures Index;
Code of Practice;
Communications Equipment;
Embedded Non-Franchise Site;
Equipment Owner;
Exports;
FMS Codes of Practice;
FMS Date;
FMS Metering Equipment;
FMS Trading Date;
Force Majeure;
Generic Dispensations;
Good Industry Practice;
Host PES;
Imports;
Invitee;
License Restricted Party;
Meter;
Metering Equipment;
Metering System;
Meter Operator Admission Application;
Meter Operator Party;
Meter Operator Party Accession Agreement;
Meter Operator Party Resignation Notice;
MVAr Metering Equipment;
New Meter Operator Party;
Non-Pooled Generator Operator;
Outstation;
Potential Operator;
Reactive Energy;
Reactive Power;
Register;
Registrant;
Second Tier Customer;
Substantial Part;
Synopsis of Metering Codes;
Tariff or relevant Tariff;
Tariff Operator; and
Third Parties.
1.2 Interpretation: Wherever a reference is made in this Schedule
to a Meter Operator
Party or to an Operator, such reference shall be to a Meter
Operator Party in its capacity as such Meter Operator Party or,
where the context so requires, to an Operator in its capacity as
Operator, but shall not refer to the person which is that Meter
Operator Party or Operator in, and shall be in all cases without
prejudice to, any other capacity in which such person may be
party to this Agreement.
1.3 Agreed Procedures and Codes of Practice:
1.3.1Each of the Parties and each of the Meter Operator Parties
undertakes to comply with the Agreed Procedures and the Codes of
Practice insofar as applicable to it.
1.3.2The Settlement System Administrator shall retain copies of
all Agreed Procedures and Codes of Practice and of any other
documentation referred to in such Agreed Procedures or Codes of
Practice and shall provide a copy of all or any thereof to any
Party or Meter Operator Party on request and may make a
reasonable charge for such provision.
1.3.3 Notwithstanding the absence from time to time of its
express consent, each Meter Operator Party hereby expressly
acknowledges and agrees to be bound by the provisions contained
in this Agreement which govern the method by which all Agreed
Procedures and Codes of Practice may be, from time to time,
changed or substituted and which determine the meaning in any
given context of the terms the "relevant Agreed Procedure" and
the "relevant Code of Practice".
1.4 Agreed Procedures and Codes of Practice: Referral to the
Director:
1.4.1 Without prejudice to paragraph 1.3.3, where any Meter
Operator Party considers that any change proposed to be made to
any Agreed Procedure or to any Code of Practice would have a
material adverse effect on its rights and liabilities as a
registered Operator, a Potential Operator or Tariff Operator as
set out in this Schedule (the "proposed change"), it shall have
the right in the prescribed time limits to refer the matter in
writing to the Director (such referral to be copied to the
Executive Committee) who shall determine, taking into account the
views expressed by the Executive Committee and any Parties
referred to below in this paragraph, whether such proposed change
has such a material adverse effect. The Director's determination
shall be final and binding for all purposes.
1.4.2For the purposes of enabling any Meter Operator Party to
appeal to the Director against a proposed change to any Agreed
Procedure or Code of Practice in accordance with paragraph 1.4.1,
the Executive Committee shall give all Parties, Meter Operator
Parties and the Director notice of the proposed changes at least
fourteen clear days prior to the implementation of such proposed
change in accordance with the provisions of this Agreement.
1.4.3If an appeal to the Director against a proposed change to
any Agreed Procedure or Code of Practice is made within 14 days
after notification by the Executive Committee pursuant to
paragraph 1.4.2, the change shall not come into effect until the
determination of the Director has been made and then subject to
paragraph 1.4.4. If no appeal is made within the said 14 days,
the change shall come into effect on the expiration of that
period (or such later date as the Executive Committee may
determine).
1.4.4The Director shall within 28 days of receipt of a referral
(or within such extended period as the Director shall have
notified to the Executive Committee within that 28 day period as
being necessary to enable him to reach a considered
determination) pursuant to paragraph 1.4.1 make the determination
referred to therein giving supporting reasons and:
(i) if the determination of the Director is that the proposed
change does not have a material adverse effect upon the rights
and liabilities as set out in Schedule 21 of the appellant Meter
Operator Party as registered Operator, as Potential Operator or
as Tariff Operator then the proposed change shall come into
effect in accordance with the provisions of this Agreement; and
(ii) if the determination of the Director is that the proposed
change does have a material adverse effect upon the rights and
liabilities as set out in Schedule 21 of the appellant Meter
Operator Party as registered Operator, as Potential Operator or
as Tariff Operator, the Director may require that the proposed
change not come into effect (in which case such proposed change
shall not come into effect) or require that modifications be made
to the proposed change to obviate or mitigate such material
adverse effect. In the latter case the Executive Committee and
each Party whose consent is required to the relevant amendment to
that Agreed Procedure or, as the case may be, Code of practice,
shall take all reasonable steps to implement any decision of the
Director (for which reasons shall be given) requiring changes to
be made to such Agreed Procedure or Code of Practice with the
purposes of obviating or, where the Director considers
appropriate, mitigating such material adverse effect on such
Meter Operator Party.
2. AMENDMENTS AND MODIFICATIONS
2.1 Obligations: The Parties and Meter Operator Parties
expressly acknowledge and agree that each Meter Operator Party is
bound only to the extent of the obligations which are expressly
set out or referred to in this Schedule (including those
provisions incorporated herein by reference in paragraph 24) and
not by any other provision of this Agreement. Each Meter Operator
Party agrees to comply with the provisions of this Schedule
(including those provisions of this Agreement incorporated herein
by reference in paragraph 24). The Parties and Meter Operator
Parties further expressly agree that any Meter Operator Party (in
its capacity as such) shall be conferred only with such rights in
respect of this Agreement as are expressed to be conferred on it
as Operator or Meter Operator Party pursuant to provisions which
are expressly set out in this Schedule (including those
provisions incorporated herein by reference in paragraph 24) or
are definitions listed in paragraph 1.1.
2.2 Consent:
2.2.1The consent or agreement of any Meter Operator Party shall
not be required to any modification, abrogation, amendment or
suspension of any provision of this Agreement which is not
expressly set out in this Schedule (and for this purpose the
provisions of this Agreement incorporated herein by reference in
paragraph 24 shall be deemed to be not set out in this Schedule)
or which is not a definition listed in paragraph 1.1. Each Meter
Operator Party hereby irrevocably waives any rights which it
might be considered or held to have to consent or agree to any
such modification, abrogation, amendment or suspension.
2.2.2 Where under paragraph 2.2.1 a Meter Operator Party would
otherwise have a right to consent or agree to a modification,
abrogation, amendment or suspension of a provision of this
Agreement then that consent or agreement shall not be required in
circumstances where the consent or agreement of any Party (not
being the Settlement System Administrator, the Grid Operator, the
Ancillary Services Provider or the Pool Funds Administrator) is
also not required under this Agreement to such modification,
abrogation, amendment or suspension.
2.2.3 A Meter Operator Party whose consent or approval need not
by virtue of this paragraph 2 be sought or obtained to any
modification, abrogation, amendment or suspension of any
provision of this Agreement may refer the matter to the Director
as if it were a referral under and in accordance with paragraph
1.4 (and such that the provisions of that paragraph shall apply
mutatis mutandis to such referral) provided that in reaching any
determination as to -whether the proposed change shall come into
effect the Director shall consider the nature of the changes upon
Meter Operator Parties as a class and shall not have locus stand)
to consider any perceived or actual prejudice as an individual
Meter Operator Party.
2.3 Authorization to amend: Without prejudice to paragraphs 2.1
and 2.2, each Meter Operator Party hereby unconditionally and
irrevocably authorizes and instructs the Chief Executive and each
person authorized for the purpose by the Executive Committee to
sign on its behalf amending agreements to this Agreement, to
execute any agreement which modifies, abrogates, amends or
suspends any provision of this Agreement in circumstances where
such Meter Operator Party's consent or approval is not required,
and undertakes not to withdraw, qualify or revoke such authority
and instruction at any time.
2.4 Notification: The Executive Committee shall notify each Meter
Operator Party of all amendments, modifications, abrogations and
suspensions which are made to this Agreement for which the
consent or agreement of such Meter Operator Party is not
required.
2.5 Further rights: The Executive Committee shall from time to
time consider any representations which Meter Operator Parties
may make to the effect that there are provisions set out in the
Agreement but not in this Schedule 21 and, accordingly, in
respect of which Meter Operator Parties are not conferred with
rights by virtue of this paragraph 2, which are operating in a
manner which is having a material effect on the rights and
liabilities of such Meter Operator Parties as set out herein. The
Executive Committee shall consider whether, and the extent to
which (if at all), such provisions should be recommended for
incorporation into this Schedule 21.
PART 2
ADMISSION, RESIGNATION AND REMOVAL
3. ADMISSION
3.1 General: Subject to the following provisions of this
paragraph 3, the Parties and the Meter Operator Parties shall
admit as an additional party for the purposes of this Schedule
only, on the terms set out in paragraph 2, any person (the "New
Meter Operator Party") who applies to be admitted in the capacity
of Meter Operator Party.
3.2 Procedure for admission: Admission Application: A New Meter
Operator Party wishing to be admitted as an additional party for
the purposes only of this Schedule, on the terms set out in
paragraph 2 hereof, shall complete a Meter Operator Party
Admission Application and shall deliver it to the Executive
Committee together with the fee (which shall be non-refundable).
3.3 Procedure for admission as Meter Operator Party: Executive
Committee response:
3.3.1Upon receipt of any Meter Operator Party Admission
Application duly completed the Executive Committee shall notify
all Parties, Meter Operator Parties and the Director of such
receipt and of the name of the New Meter Operator Party.
3.3.2 Any Pool Member may by written notice to the Executive
Committee, stating the grounds for the objection, object to the
admission of any person in respect of which a Meter Operator
Party Admission Application has been received by the Executive
Committee and where any such notice of objection is received the
Executive Committee:
(i) in the case of an application which the Executive Committee
considers, taking into account any objection made pursuant to
this paragraph, to be frivolous or vexatious, may reject such
application and such rejection shall on that application be final
and binding and there shall not be conferred upon the relevant
New Meter Operator Party, by virtue of such rejection, any
further right of appeal to the Director in respect thereof; or
(ii) in the case of an application which the Executive Committee
does not consider, taking into account any objection made
pursuant to this paragraph, to be frivolous or vexatious, shall
refer the matter to the Director for determination and the
provisions of paragraph 3.4 shall apply to such determination.
Any objection to be effective must be received by the Executive
Committee within 7 days of notification by the Executive
Committee of the relevant Meter Operator Party Admission
Application in accordance with paragraph 3.3.1 (the "objection
period"), and the Executive Committee shall disregard any notice
of objection which is received outside the prescribed period. Any
notice of objection shall be copied by the Executive Committee
upon its receipt to all Parties, Meter Operator Parties and the
Director.
3.3.3 Within 7 days of the expiration of the objection period
(the "consideration period") the Executive Committee shall notify
the New Meter Operator Party and the Director either:
(a) that the New Meter Operator Party shall be admitted as a
Meter Operator Party, in which event the provisions of paragraph
3.5 shall apply; or
(b) that the Executive Committee has received an objection, or
objections, to the admission of that New Meter Operator Party
and, on the basis thereof, considers the application to be
frivolous or vexatious and for that reason is rejecting the
application without further right of appeal; or
(c) that the Executive Committee has received an objection, or
objections, to the admission of that New Meter Operator Party in
accordance with paragraph 3.3.2 and has referred the matter to
the Director in accordance with paragraph 3.4.
If the Executive Committee shall fail so to notify the New Meter
Operator Party and the Director, the New Meter Operator Party may
within 7 days after the expiration of the consideration period
refer the matter to the Director pursuant to paragraph 3.4, in
which event the provisions of that paragraph shall apply.
3.4 Procedure for application: Reference to the Director:
3.4.1 If:
(a) a notice of objection or notices of objection to the
admission of the New Meter Operator Party as a Meter Operator
Party within the objection period has (or have) been received and
the Executive Committee has not notified the New Meter Operator
Party that it is rejecting its application on the basis that
those objections demonstrate that the relevant application is
frivolous or vexatious; or
(b) the Executive Committee shall have failed to notify the New
Meter Operator Party as provided in paragraph 3.3.3 within the
consideration period, the matter may be referred by way of
written application of the New Meter Operator Party, copied to
the Executive Committee, to the Director for determination. The
determination of the Director, which shall be made within 28 days
after receipt of the said written application and shall be to the
effect that the New Meter Operator Party should or should not be
admitted as a Meter Operator Party for the purposes of this
Schedule, shall be final and binding for all purposes. The
Director shall publish reasons supporting his determination.
3.4.2
(a) If the determination is to the effect that the New Meter
Operator Party should be admitted as a Meter Operator Party, the
New Meter Operator Party shall be admitted and the provisions of
paragraph 3.5 shall apply.
(b) If the determination is to the effect that the New Meter
Operator Party should not be admitted as a Meter Operator Party,
the New Meter Operator Party's application for admission shall
lapse and be of no effect and the New Meter Operator Party shall
not be, and shall not be entitled to be, admitted as a Meter
Operator Party consequent upon such application (but without
prejudice to any new application it may make thereafter).
3.5 Admission: If:
3.5.1 the Executive Committee shall notify the New Meter Operator
Party and the Director as provided in paragraph 3.3.3(a); or
3.5.2 the New Meter Operator Party is to be admitted as a Meter
Operator Party pursuant to paragraph 3.4,
the Executive Committee shall forthwith prepare or cause to be
prepared a Meter Operator Party Accession Agreement. Subject to
the Executive Committee making all notifications and filings (if
any) required of it for regulatory purposes and obtaining all
regulatory consents and approvals (if any) required to be
obtained by it, the Executive Committee shall instruct the Chief
Executive or another person authorized by the Executive Committee
for the purpose to prepare a Meter Operator Party Accession
Agreement and to sign and deliver the Meter Operator Party
Accession Agreement on behalf of all Parties and Meter Operator
Parties other than the New Meter Operator Party and the New Meter
Operator Party shall also execute and deliver the Meter Operator
Party Accession Agreement and, on and subject to the terms and
conditions of the Meter Operator Party Accession Agreement, the
New Meter Operator Party shall become a Meter Operator Party on
the terms set out in paragraph 2, for the purposes of this
Schedule, with effect from the date specified in such Meter
Operator Party Accession Agreement (and, if no such date is so
specified, the date of such Meter Operator Party Accession
Agreement). The New Meter Operator Party shall pay all costs and
expenses associated with the preparation, execution and delivery
of its Meter Operator Party Accession Agreement. Each Party and
Meter Operator Party hereby authorizes and instructs the Chief
Executive and each person authorized for the purpose by the
Executive Committee to sign on its behalf Meter Operator Party
Accession Agreements and undertakes not to withdraw, qualify or
revoke such authority and instruction at any time. The Executive
Committee shall promptly notify all Parties and Meter Operator
Parties and the Director of the execution and delivery of each
Meter Operator Party Accession Agreement.
3.6 Additional Agreements: Upon and as a condition of admission
as a Meter Operator Party, a New Meter Operator Party shall
execute and deliver such further agreement and documents and
shall do all such other acts, matters and things as the Executive
Committee may reasonably require.
3.7 Application fees. All fees received by the Executive
Committee in respect of any application by a New Meter Operator
Party to become a Meter Operator Party shall be used to defray
the costs and expenses of the Executive Committee and shall be
paid to such account as the Executive Committee may direct. The
application fee shall be pounds 250 or such other amount as the
Executive Committee may, with the prior approval of the Director,
from time to time prescribe.
3.8 Acknowledgment that provisions not exhaustive of being
Operator: The compliance by any person with the provisions of
this paragraph 3 with regard to its admission as a Meter Operator
Party shall not of itself mean that all things have been done and
agreements or arrangements have been entered into with other
Parties and persons such that the duly admitted Meter Operator
Party is entitled or enabled to comply as an operational,
physical or legal matter with its obligations, or to enjoy its
rights, as an Operator under this Schedule and the provisions of
this Schedule shall always be without prejudice to the rights and
obligations of such Meter Operator Party under any other
agreement or arrangement with such other Parties or persons.
3.9 Compliance: Each Meter Operator Party shall procure that for
so long as it is a Meter Operator Party it shall at all times
satisfy or otherwise comply with the admission conditions set out
in its Meter Operator Party Admission Application applicable to
it (and/or such further or other conditions as the Executive
Committee may from time to time reasonably specify) and upon
request from time to time shall promptly provide the Executive
Committee with evidence reasonably satisfactory to the Executive
Committee of such satisfaction and compliance.
3.10 Change of capacities:
3.10.1 Any Meter Operator Party admitted as an additional party
pursuant to this paragraph 3 may apply, whether in substitution
for or in addition to being a Meter Operator Party, to become a
Party to this Agreement in accordance with Clause 3 of this
Agreement and, if appropriate, a Pool Member in accordance with
Clause 8 of this Agreement. Such Meter Operator Party shall only
be entitled to become a Party and, as the case may be, Pool
Member in accordance with those provisions of this Agreement.
3.10.2 Subject to the transitional arrangements set out in
paragraph 23, any Party to this Agreement may, upon application
to the Executive Committee and satisfaction of such conditions
(if any) as the Executive Committee may reasonably require,
whether in substitution for or in addition to being a Party,
become a Meter Operator Party for the purposes of and on the
terms set out in this Schedule.
4. REGISTRATION OF OPERATORS
4.1 Registration: Subject to Clause 60.4, the identity of the
Operator for each Metering System which the Settlement System
Administrator shall take into account for the purposes of
Settlement and which shall be the Operator for all purposes of
this Schedule shall be as notified to the Settlement System
Administrator in accordance with this Schedule and as recorded by
it, for the time being and from time to time, in the Register.
4.2 Who can be Operator: The operator of any Metering System
proposed to be registered with the Settlement System
Administrator or the new operator of any Metering System already
so registered shall be either:
4.2.1 the Meter Operator Party specified as such in a notice
served by it upon the Settlement System Administrator in
accordance with the relevant Agreed Procedure and which has
acknowledged its appointment therein; or
4.2.2 where no Meter Operator Party is specified pursuant to
paragraph 4.2.1 or such Meter Operator Party has not acknowledged
its appointment, the Registrant deemed to be Operator pursuant to
Clause 60.4.4 in accordance with the provisions thereof.
4.3 Consents: Subject to Clause 60.4.9, no person shall be the
Operator of a Metering System without the prior written consent
of:
(i) the person (if not the Operator or Registrant in respect
thereof) which is at that time the Equipment Owner;
(ii) in the case of a Metering System to be operated in respect
of supplies to a Second Tier Customer, and if different from the
Equipment Owner, that Second Tier Customer; and
(iii)in the case of a Metering System to be operated in respect
of supplies from a Non-Pooled Generator, and if different from
the Equipment Owner, that Non-Pooled Generator.
The Registrant in respect of that Metering System shall provide
evidence of such consent to the Executive Committee and to the
Settlement System Administrator at the time of the registration
of that Meter Operator Party as Operator in respect of such
Metering System. The Settlement System Administrator shall not
register as an Operator in respect of such Metering System any
person in respect of which evidence of consent of the Equipment
Owner, and where applicable and where different, the relevant
Second Tier Customer or Non-Pooled Generator, is required but has
not been so provided. Where no such evidence or insufficient
evidence is provided the Settlement System Administrator shall
notify the relevant Meter Operator Party accordingly.
4.4 Power to prescribe new registration
4.4.1 The Executive Committee shall have the power to prescribe,
from time to time, such further conditions to be imposed upon the
registration of any Meter Operator Party as an Operator under
this Schedule as it shall consider appropriate with the consent
of the Meter Operator Parties. In the case of a Meter Operator
Party, such consent shall not be unreasonably withheld or delayed
and notification of such consent or reheal to consent shall be
made to the Executive Committee within 7 days of its consent
being requested. If any Meter Operator Party refuses to consent
or does not consent within the prescribed 7 day period, the
Director shall determine whether such consent was unreasonably
withheld.
4.4.2 The conditions to be imposed pursuant to paragraph 4.4.1
shall be as specified from time to time in an Agreed Procedure
and each Operator shall be required, upon the bringing into
effect of new or revised conditions, to demonstrate to the
satisfaction of the Executive Committee in accordance with the
provisions of such Agreed Procedure, the ability to comply with
the standards laid down therein.
4.4.3 Any Operator which is not able to demonstrate compliance
with such revised standards in accordance with paragraph 4.4.2
shall at the time specified in that Agreed Procedure cease to be
a Meter Operator Party for the purposes hereof, but such
cessation shall be without prejudice to any right to make a
future application to become a Meter Operator Party or Operator
in accordance with the provisions of this Schedule.
5. RESIGNATION
5.1 Resignation as Meter Operator Party: Subject as provided in
paragraph 5.2:
5.1.1a Meter Operator Party shall be entitled at any time to
resign as a Meter Operator Party by delivering a Meter Operator
Party Resignation Notice to the Secretary; and
5.1.2 such resignation shall take effect 28 days after receipt of
the Meter Operator Party Resignation Notice by the Secretary.
Promptly after receipt of a duly completed Meter Operator Party
Resignation Notice from a Meter Operator Party, the Secretary
shall notify (for information only) all of the other Parties,
Meter Operator Parties, the Executive Committee and the Director
of such receipt and of the name of the Meter Operator Party
wishing to resign.
5.2 Restrictions on resignation: A Meter Operator Party may not
resign as a Meter Operator Party (and any Meter Operator Party
Resignation Notice delivered pursuant to paragraph 5.1.1 shall
lapse and be of no effect) unless:
(i) as at the date its resignation would otherwise become
effective all sums due from such Meter Operator Party to the
Executive Committee or any other Party or Meter Operator Party
under this Agreement or any agreement entered into pursuant to
and in accordance with this Agreement (whether by or on behalf of
such Meter Operator Party) and notified for the purposes of this
paragraph 5.2 by the Executive Committee to such Meter Operator
Party prior to the date of its resignation have been paid in
full; and
(ii) the Meter Operator Party is not registered as the Operator
in respect of any Metering System.
5.3 Resignation as an Operator:
5.3.1 An Operator shall be entitled at any time to resign as
Operator of a Metering System by service of a duly completed
notice in the form prescribed by the relevant Agreed Procedure
upon the Settlement System Administrator.
5.3.2 Such resignation shall take effect (unless otherwise agreed
with the Settlement System Administrator) on the date specified
therein which shall be no earlier than the date specified in the
relevant Agreed Procedure.
5.3.3 The Settlement System Administrator shall notify the
relevant Registrant and, where applicable, Host PES of receipt by
it of a notice pursuant to this paragraph 5.3 within one working
day following such receipt.
5.4 Release as a Meter Operator Party: Without prejudice to
Clause 66.7 as incorporated into this Schedule by paragraph 24
hereof and its accrued rights and liabilities and its rights and
liabilities which may accrue in relation to the period during
which it was a Meter Operator Party under this Schedule pursuant
to paragraph 2 hereof or to any agreement referred to in
paragraph 5.2, upon a Meter Operator Party's resignation becoming
effective in accordance with paragraph 5.1:
5.4.1 such Meter Operator Party shall be automatically released
and discharged from all its obligations and liabilities in its
capacity as Meter Operator Party under this Schedule and any
agreement referred to in paragraph 5.2; and
5.4.2 each of the other Parties and Meter Operator Parties shall
be automatically released and discharged from its obligations and
liabilities to such Meter Operator Party in its capacity as Meter
Operator Party under this Schedule and any agreement referred to
in paragraph 5.2.
Each Meter Operator Party shall promptly at its own cost and
expense execute and deliver all agreements and other
documentation and do all such other acts, matters and things as
may be necessary to confirm such cessation, release and
discharge.
6. REMOVAL AND CESSATION
6.1 Removal as Operator by Registrant: Without prejudice to any
rights under any other agreement between any Operator and any
other person (which the Settlement System Administrator shall not
be obliged to take into account or acknowledge for the purposes
of this Agreement) and without prejudice to its accrued rights
and liabilities and its rights and liabilities which may accrue
in relation to the period during which it was Operator pursuant
to this Schedule, the Registrant of any Metering System may
remove the Operator of such Metering System upon service of a
duly completed notice in the form prescribed by the relevant
Agreed Procedure to be served upon the Settlement System
Administrator (with a copy to be served upon the relevant Second
Tier Customer (if any) or Non-Pooled Generator (if any)) and such
notice to take effect (unless otherwise agreed with the
Settlement System Administrator) on the date specified therein
which shall be no earlier than the date specified in the relevant
Agreed Procedure. The Settlement System Administrator shall
notify the relevant Operator and, where applicable, Host PES of
the receipt by it of a notice pursuant to this paragraph 6.1
following such receipt.
6.2 Removal as Operator or Meter Operator Party for cause:
Subject:
6.2.1 to good cause for the removal of a Meter Operator Party as
(i) Operator in respect of one or more, but not all, Metering
Systems in respect of which it is the Operator, or (ii) as Meter
Operator Party in respect of all, but not some, Metering Systems
in respect of which it is the Operator, having been demonstrated
to the satisfaction of the Executive Committee; and
6.2.2 as provided in paragraphs 6.3 and 6.4,
an Operator (where removal is in respect of one or more, but not
all, such Metering Systems) or, as the case may be, a Meter
Operator Party (where removal is in respect of all such Metering
Systems), may at any time be removed by:
(a) resolution of the Executive Committee passed by a majority
of not less than 75% of the total votes of all Committee Members
which may be exercised whether or not any such Committee Member
is present in accordance with the provisions of this Agreement;
and
(b) the giving by the Executive Committee to the Operator or, as
the case may be, Meter Operator Party after such resolution has
been passed or deemed effective (which the Executive Committee
shall promptly do) of not less than 28 days' notice in writing of
such removal.
6.3 Good cause for removal: Good cause for the purposes of
paragraph 6.2.1 may include the following:
6.3.1the failure by the Operator or Meter Operator Party as
Operator in any persistent, material respect or in any single,
major respect to perform or comply with any of the obligations
expressed to be assumed by it under this Schedule and such
default (if capable of remedy) is not remedied within a
reasonable period of time after the Executive Committee has given
notice to that Operator or, as the case may be, Meter Operator
Party of the occurrence thereof and requiring the same to be
remedied; and
6.3.2 in the case of removal as a Meter Operator Party, where a
Meter Operator Party:
(a) is unable to pay its debts (within the meaning of section
123(1) or (2) of the Insolvency Act 1986) or has any voluntary
agreement proposed in relation to it under section 1 of that Act
or 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 Executive Committee);
(b) has 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 appointed;
(c) has an administration order under section 8 of the
Insolvency Act 1986 made in relation to it;
(d) passes any resolution for winding-up other than a resolution
previously approved in writing by the Executive Committee; or
(e) becomes subject to an order by the High Court for
winding-up.
For the purposes of paragraph (a) above the Meter Operator Party
shall not be deemed to be unable to pay its debts if any such
demand as is mentioned in the said section is being contested in
good faith by the Meter Operator Party with recourse to all
appropriate measures and procedures.
For the avoidance of doubt, the Parties and Meter Operator
Parties hereby acknowledge and agree that a resolution of the
Executive Committee to remove the Operator as Operator or a Meter
Operator Party as Meter Operator Party shall not, of itself,
constitute good cause.
6.4 Referral to the Director: An Operator or, as the case may
be, a Meter Operator Party may in writing within the 28 day
period referred to in paragraph 6.2(b) refer a decision of the
Executive Committee to remove it for cause pursuant to paragraph
6.2 to the Director. Where such referral is made in accordance
with this paragraph 6.4, the removal of such Meter Operator Party
as Operator or, as the case may be, Meter Operator Party for
cause shall not become effective until such time as the Director
determines, in accordance with paragraph 6.5, that good cause
exists for such removal.
6.5 Determination by Director: The Director, upon any referral
being made pursuant to paragraph 6.4, shall determine whether
there is good cause within the meaning of this paragraph 6 for
the removal of such Meter Operator Party as Operator or, as the
case may be, as Meter Operator Party, within 28 days of the
receipt of the written referral of the decision of the Executive
Committee. Any decision of the Director that there is, or is not,
good cause for removal shall be final and binding on the Parties
and Meter Operator Parties. Where the Director determines that
there is not good cause for the removal of a Meter Operator
Party, the relevant decision of the Executive Committee shall
lapse and cease to be effective and such Meter Operator Party
shall not be removed as Operator or, as the case may be, Meter
Operator Party by virtue of the passing of that resolution.
6.6 Notification of removal: Within 7 days of any Operator or
Meter Operator Party being removed for cause in accordance with
the provisions of this paragraph 6, the Secretary shall notify
all Parties, Meter Operator Parties, relevant Second Tier
Customers, relevant Non-Pooled Generators and the Director in
accordance with the provisions of this Agreement of the identity
of the relevant Operator or, as the case may be, Meter Operator
Party and of the fact of its removal.
6.7 Right to representation: Any Party or Meter Operator Party
against whom the Executive Committee is considering exercising
powers pursuant to this paragraph 6 shall have the right to
representation at any meeting of the Executive Committee which
considers the exercise of such powers.
6.8 Cessation as Operator: An Operator of any Metering System
shall cease to be the Operator therefor when the Plant or
Apparatus in respect of such Metering Equipment ceases to be
connected at the relevant Site.
6.9 Cessation as Meter Operator Party: Without prejudice to any
rights under any other agreement between an Operator and any
other person (which the Settlement System Administrator shall not
be obliged to take into account or acknowledge for the purposes
of this Agreement) and without prejudice to its accrued rights
and liabilities and its rights and liabilities which may accrue
in relation to the period during which it was a Meter Operator
Party under this Schedule, an Operator shall cease to be a Meter
Operator Party where it has not been registered by the Settlement
System Administrator (save in the case of manifest error or bad
faith on the part of the Settlement System Administrator) as an
Operator in respect of any Metering System registered with the
Settlement System Administrator for any consecutive period of
fifteen months.
6.10 Termination of Rights and Obligations under this Agreement:
A Meter Operator Party shall only cease to be party to this
Agreement in the capacity as a Meter Operator Party in the
circumstances and to the extent specified in either paragraph 4,
5 or 6.
6.11 Rights and liabilities as Party: Where any Party which is
also a Meter Operator Party resigns as, is removed as, or ceases
to be, a Meter Operator Party for the purposes of, and in
accordance with, this Schedule, such resignation, removal or
cessation shall be without prejudice to all past, present and
future accrued and accruing rights and liabilities of that Party
as Party in any capacity whatsoever other than as Meter Operator
Party.
6.12 Paragraph exhaustive: The Parties and Meter Operator Parties
agree that the foregoing provisions of this paragraph 6, when
read with the provisions referred to in this paragraph, are
exhaustive of cessation as a Meter Operator Party and of
cessation of rights and liabilities as a Meter Operator Party.
PART 3
METER OPERATOR'S RESPONSIBILITIES
7. OBLIGATION TO ENSURE COMPLIANT METERING EQUIPMENT
7.1 General Obligation and Commercial Boundary:
7.1.1 There must always be one and, at any point in time, no more
than one Operator for each Metering System which is registered
with the Settlement System Administrator.
7.1.2 All Metering Systems at the site of a Non-Pooled
Generator, which are part of the same Metering Equipment, must
have the same Operator.
7.1.3 Each Operator shall ensure there is installed a Metering
System complying with the provisions of this Schedule and Part XV
of this Agreement which meets the required levels of accuracy at
the commercial boundary at each Site for which it is the Operator
and which is as close as reasonably practicable to that
commercial boundary taking into account relevant financial
considerations. The Parties and Meter Operator Parties
acknowledge and agree that Metering Equipment at Power Stations
either existing or under construction at the Effective Date might
not be situated at the commercial boundary. In such cases, loss
adjustment factors may be applied after the Effective Date
subject to it being demonstrated to the reasonable satisfaction
of the Settlement System Administrator that such loss adjustment
factors have been correctly derived.
7.1.4 To the extent that the required levels of accuracy referred
to in paragraph 7.1.3 depend upon associated current and voltage
transformers which are not in the ownership or control of the
relevant Operator, the relevant Equipment Owner agrees to take
reasonable steps to assist the Operator in complying with its
obligations under paragraph 7.1.3 by the maintenance and repair
of such current and voltage transformers in accordance with the
provisions of this Schedule provided that this paragraph 7.1.4
shall be without prejudice to any right to charge for the same
and provided further that an Equipment Owner shall not be
required by this paragraph 7.1.4 to take steps which would cause
it to be in breach of its obligations under its License, its
Nuclear Site License (as defined in paragraph 21.9(a)), the Grid
Code or any Distribution Code.
7.2 Description of Metering Equipment:
7.2.1 Metering Equipment and its component parts shall comply, as
a minimum, with the requirements referred to or set out in any
relevant Code of Practice or shall be the subject of, and comply
with, a dispensation agreed in accordance with paragraph 14.
7.2.2 Metering Equipment comprising a Metering System shall use
such communication protocols selected, with the approval of the
Settlement System Administrator, as appropriate for that Metering
Equipment from a list of communication protocols approved and
maintained from time to time by the Settlement System
Administrator.
7.3 Accuracy of Metering Equipment:
7.3.1 The Metering Equipment comprising any Metering System shall
be accurate within the prescribed limits for such Metering
Equipment referred to or set out in the relevant Code of Practice
except only in the case where such Metering Equipment is the
subject of, and complies with, a dispensation relevant to those
prescribed limits agreed in accordance with paragraph 14.
7.3.2The accuracy limits referred to in the relevant Code of
Practice shall be applied after adjustments have been made to
Metering Equipment to compensate for any errors due to measuring
transformers and connections thereto. Beyond the ranges specified
in the relevant Code of Practice and power factors other than
unity or zero (as the case may be) limits of accuracy will depend
on the characteristics of the individual meters and measuring
transformers specified for the Metering Equipment. Such levels of
accuracy will, in the event of any uncertainty or dispute, be
specified by the Executive Committee.
7.4 Calibration of Metering Equipment: Each Operator shall ensure
that all Metering Equipment which is registered with the
Settlement System Administrator pursuant to this Agreement and
for which it is Operator pursuant to this Schedule shall be
calibrated in order to meet the accuracy requirements referred to
in paragraph 7.3.1 and otherwise in accordance with the relevant
Code of Practice or, where appropriate, any relevant dispensation
agreed in accordance with paragraph 14. Subject to paragraph 21,
the Settlement System Administrator and the Pool Auditor shall be
granted access to all such Metering Equipment and any other Plant
or Apparatus on any Site in order to inspect the basis of any
adjustments made to Metering Equipment.
8. MAINTENANCE OF METERING EQUIPMENT
8.1 Proper order: Each Operator shall at its own cost and
expense (but without prejudice to its right to charge any other
person for such service pursuant to another agreement or
arrangement) keep in good working order, repair and condition all
Metering Equipment in respect of which it is the Operator to the
extent necessary to allow the correct registration, recording and
transmission of the requisite details of the quantity of Active
Energy and/or Reactive Energy measured by the relevant Meter.
8.2 Inspection and Testing:
8.2.1No less frequently than such period as may be specified in
the relevant Code of Practice each Operator shall carry out a
routine test of the accuracy of all Metering Equipment in respect
of which it is the Operator. The Operator shall also carry out a
test of the accuracy of all Metering Equipment in respect of
which it is the Operator and which replaces defective or
inaccurate Metering Equipment as soon as is reasonably
practicable after its installation. Such Operator will give the
Settlement System Administrator and the Registrant at least 15
days' prior written notice of the date, time, place and nature of
every such test and the Settlement System Administrator and Host
PES and the Registrant shall have the right to attend such test
should it so require. Any such test as envisaged in this
paragraph 8.2.1 shall comply with the relevant Code of Practice.
8.2.2 If either:
(a) the Settlement System Administrator has reason to believe
that the Metering Equipment which an Operator is required to
maintain for the purposes of this Schedule is not performing
within the prescribed limits of accuracy referred to in paragraph
7.3.1; or
(b) such Operator or any other Party or Meter Operator Party has
reason to believe there is any such failure to so perform,
then, in the case of (b), such Operator, such other Party or such
Meter Operator Party shall notify the Settlement System
Administrator, the Registrant of the relevant Metering System and
the Host PES (if any) and, in any case, the Settlement System
Administrator:
(i) shall (if so requested by any Party or Meter Operator Party)
and (in any other case) may, without giving notice to the
relevant Operator or Registrant, inspect such Metering Equipment
and make such tests as the Settlement System Administrator shall
deem necessary to determine its accuracy; or
(ii) in any other circumstances require the relevant Operator
promptly to test the accuracy of the same but in any event within
24 hours of receiving notification of such requirement pursuant
to this paragraph 8.2.2, whereupon the relevant Operator shall
carry out such test. Such test shall comply with the relevant
Code of Practice and shall take place in the presence of the
Settlement System Administrator, if it so requires.
Further, if an Operator has reason to believe that the Metering
Equipment in respect of which it is the Operator is incorrectly
recording data for any reason, it shall notify the Settlement
System Administrator, the Registrant in respect of the relevant
Metering System and the Host PES (if any).
8.2.3Recovery of costs for non-routine testing (1): Subject to
paragraph 8.2.4, the costs of any such test referred to in this
paragraph 8.2 shall be home by the Operator responsible Or the
maintenance of the relevant Metering Equipment (but without
prejudice to its right to charge any other person for such
service pursuant to another agreement or arrangement), save that
the Settlement System Administrator shall bear the costs of its
nominee's attendance thereat (subject to its right to recover the
same through its charges).
8.2.4Recovery of costs for non-routine testing (2): Where any
Metering Equipment passes all inspections and tests required
pursuant to paragraph 8.2.2 or the test is in respect of Metering
Equipment where the Operator is the deemed Operator pursuant to
Clause 60.4.4, the costs of such inspections and tests shall, in
the case of paragraph (a) of that paragraph, be home by the
Settlement System Administrator (subject to its right to recover
the same through its charges) and, in the case of paragraph
8.2.2(i) where a test is required by another Party or Meter
Operator Party, be borne by such other Party or Meter Operator
Party which shall reimburse the relevant Operator its costs on
demand.
8.3 Sealing: Metering Equipment shall be as secure as is
practicable in all the circumstances and for this purpose:
(a) all Metering Equipment shall comply with the relevant Agreed
Procedure; and
(b) the Executive Committee and the Settlement System
Administrator shall
regularly review Agreed Procedures for security arrangements in
relation to Metering Equipment.
8.4 Defective Metering Equipment: If at any time any Metering
Equipment or any part thereof is destroyed or damaged or
otherwise ceases to function, or is found to be outside the
prescribed limits of accuracy referred to in paragraph 7.3.1, the
Operator therefor shall, subject to compliance with its
obligations under paragraph 8.3, promptly adjust, renew or repair
the same or replace any defective component so as to ensure that
the relevant Metering Equipment is back in service and operating
within the prescribed limits of accuracy as quickly as is
reasonably practicable in all the circumstances.
9. MAINTENANCE OF RECORDS AND PROVISION OF INFORMATION
9.1 Information:
9.1.1 An Operator shall inform the Settlement System A
dministrator of all relevant information relating to the Metering
Equipment in respect of which it is the Operator, including any
new or substituted Metering Equipment, and as may be required by
the relevant Agreed Procedure.
9.1.2 All Meter Operator Parties shall give to the Settlement
System Administrator all such information regarding Metering
Equipment as the Settlement System Administrator shall reasonably
require for the proper functioning of the Settlement System
including information regarding the dates and time periods for
installation of new Metering Equipment and the dates and periods
when Metering Equipment is out of service.
9.1.3 All Meter Operator Parties shall give to the Pool Auditor
all such information regarding Metering Equipment as the Pool
Auditor shall reasonably require for the purposes of carrying out
its functions under Part IX of this Agreement including
information regarding the dates and time periods for installation
of new Metering Equipment and the dates and periods when Metering
Equipment is out of service and a copy of any record maintained
in accordance with paragraph 9.2.
9.2 Records: Each Operator shall maintain a record in relation to
each Metering System for which it is the Operator detailing all
relevant matters as may be required by the relevant Code of
Practice relating to the calibration of the Metering Equipment
comprising each such Metering System including the dates and
results of any tests, readings, adjustments or inspections
carried out and the dates on which any seal was applied or
broken, the reason for any seal being broken and the persons
attending any such tests, readings, inspections or scalings. Such
records shall also include any other details as may be reasonably
required by the Settlement System Administrator. Each Operator
shall pass such records or copies of the same to its successor as
Operator in relation to any Metering Equipment. Any such records
shall be complete and accurate and retained for the life of the
relevant item of Metering Equipment. The Registrant in respect
of any Metering Equipment shall be entitled to receive copies of
all such records free of charge.
9.3 A Meter Operator Party shall permit the Pool Auditor
unrestricted access to Metering Equipment forming part of any
Metering System in respect of which it is Operator and all data
used, information held and records kept by it or its agents in
operating that Metering Equipment and shall make available
members of its staff to explain the operation of that Metering
Equipment and such other issues as the Pool Auditor considers
relevant.
PART 4
RIGHTS AND RESPONSIBILITIES RELATING TO THE SETTLEMENT SYSTEM
ADMINISTRATOR
10. INSPECTIONS AND READINGS
10.1 Inspections: The Settlement System Administrator shall
procure that all Metering Equipment comprising any Metering
System which is registered with it for the purposes of the
Settlement System is inspected and read by it or on its behalf
not less than once in every three months for general and
reconciliation purposes and shall give the Registrant and
Operator notice thereof in accordance with the relevant Agreed
Procedure.
10.2 Written reports: The Settlement System Administrator and the
Operator shall keep written reports of all such inspections and
readings as are referred to in paragraph 10.1 in accordance with
sub-section 6.6 of Schedule 4 and the Settlement System
Administrator shall provide copies in accordance with the
relevant Agreed Procedure of such written reports to each
Registrant whose Consumer Metered Demand determined in accordance
with the Pool Rules is calculated by the Settlement System
Administrator using data from such Metering System.
11. DATA COLLECTION
11.1 Collection, Retrieval, Validation and Estimation of Data:
The Settlement System Administrator will notify the relevant
Registrant, Operator and Host PES where, as determined by the
relevant Agreed Procedure, it has reasonable grounds to believe
or has established that data required from any Metering Equipment
for the functioning of the Settlement System in accordance with
this Agreement is incomplete, inaccurate or has not been
received, such notice to include details of the relevant Metering
Equipment and data which the Settlement System Administrator
believes or has established is incomplete, inaccurate or has not
been received. The Settlement System Administrator shall
investigate and remedy the defect in accordance with the relevant
Agreed Procedure taking into account the following priorities in
the following order:
(a) the need to obtain accurate data;
(b) the need to apply verification procedures;
(c) the need to produce edited or substitute data where it is
incorrect or unavailable.
11.2 Corrected, completed or received data: Once the Settlement
System Administrator has remedied the defect identified in
accordance with paragraph 11.1, it will notify the relevant
Registrant, Operator and Host PES :
(a) in the case of data which it has established was inaccurate,
of the validated data; and
(b) in the case of data which it has established is incomplete or
which has not been received, of the edited or substitute data, in
each case established according to the relevant Agreed Procedure.
12. POLICING BY THE SETTLEMENT SYSTEM ADMINISTRATOR
Policing: The Settlement System Administrator shall make or shall
procure arrangements for spot visits to metering sites by
suitably qualified inspectors in order to monitor compliance by
Registrants and Operators of their obligations under Part XV of
this Agreement and this Schedule, the appropriate Code of
Practice and the Agreed Procedures. The sites chosen for, and the
conduct of, such policing shall be determined by the Settlement
System Administrator. The extent of policing shall be in
accordance with instructions given to the Settlement System
Administrator from time to tune by the Executive Committee in
accordance with the SSA Arrangements.
499
PART 5
CODES OF PRACTICE AND DISPENSATIONS
13. CODES OF PRACTICE
13.1 Relevant Code of Practice: Subject to paragraph
13.2 and subject to the transitional arrangements
described in paragraph 13.4, the relevant Code of
Practice in respect of Metering Equipment shall be
determined by reference to the version of the Code of
Practice which is expressed to be applicable to that
Metering Equipment at the time that the Metering System
comprised therein is registered with the Settlement
System Administrator for the first time, and such
Metering Equipment shall only be required, save as
provided in paragraph 13.2, to comply with such Code of
Practice, and not with any Code of Practice which in
any respect later amends, modifies or supersedes such
Code of Practice, and references to the relevant Code
of Practice in Part XV of this Agreement and this
Schedule shall be construed accordingly.
13.2 Saving: Notwithstanding the provisions of
paragraph 13.1:
(a) without prejudice to sub-paragraphs (b) and (c)
below, FMS Metering Equipment which is installed, or in
the course of being installed, on the FMS Date, shall
only be required to comply with the applicable FMS Code
of Practice with which it would have been required to
comply were this paragraph 13 not in effect;
(b) where any material change is made to the Metering
Equipment comprising a Metering System, details of the
changes made shall be given immediately by the Operator
in respect of that Metering System to the Settlement
System Administrator (with a copy to the Registrant of
that Metering System) who shall note the same on the
Register pursuant to Clause 60.5. The noting of that
change on the Register shall be deemed (but no other
entry made on the Register shall be deemed) to
constitute a registration of that Metering System
comprised in that Metering Equipment for the purposes
of paragraph 13.1, and the Code of Practice current at
the time of that deemed new registration shall, from
that time, be the relevant Code of Practice in respect
of that Metering Equipment;
(c) in sub-paragraph (b) above, the term "material
change" shall mean a change to the Metering Equipment
other than: -
(i) a change by way of repair, modification or
replacement of any component which is not in the
judgment of the Operator, acting as a reasonable
Operator in all the circumstances, a substantial part
of the Metering Equipment (a "Substantial Parts); and
(ii) a change to another part or other parts of the
Metering Equipment, each of which is not of itself (and
where taken together with other
such changes, these changes together are not) a Substantial
Part (determined as in (i) above) of the Metering Equipment,
necessitated in the judgment of the Operator, acting as a
reasonable Operator in all the circumstances, by any change
under (i) above,
in each case even where an enhanced or equivalent component
is used for the repair, modification or replacement rather
than an identical component; and
(d) Metering Equipment shall at all times comply with the
latest version of the Code(s) of Practice which contains the
requirements for the calibration, testing and commissioning
of Metering Equipment.
13.3 Record of Codes of Practice: The Executive Committee
shall record in the Synopsis of Metering Codes each Code of
Practice and the date at which that Code becomes effective
as the relevant Code of Practice in respect of Metering
Equipment comprising a Metering System registered or, in
accordance with paragraph 13.2(b), re-registered at that
date or thereafter.
13.4 FMS Codes of Practice: On or after the FMS Trading Date
and in relation to any period on or after this date any
relevant Code of Practice for the purposes of this Agreement
shall be an FMS Code of Practice.
14. DISPENSATIONS
14.1 Dispensations:
(a) If for financial reasons or reasons of practicality a
Metering System or
Metering Equipment does not comply with some or all of the
requirements of the relevant Code of Practice or the
requirements in relation to the commercial boundary of
paragraph 7.1.Z, the Registrant or potential Registrant of
such Metering System or, as the case may be, Operator or
Potential Operator of such Metering Equipment with the
consent of such Registrant or, in the case of Potential
Operators only, such potential Registrant, may make an
application to the Executive Committee for a dispensation
from such requirements. The Executive Committee shall
consider and agree, on such conditions (if any) as it shall
deem fit, or dismiss such application in accordance with the
relevant Agreed Procedure and this paragraph 14.
(b) The Executive Committee shall have the right to agree
from time to time,
in accordance with the relevant Agreed Procedure,
dispensations from the requirements referred to in
sub-paragraph (a), on such conditions (if any) as it shall
deem fit, attaching generally to any item of Metering
Equipment ("Generic Dispensations"). Generic Dispensations
may be agreed upon the application of a Party or Meter
Operator Party or be initiated by the Executive Committee at
its discretion.
(c) Before agreeing any dispensation (including any
Generic Dispensation), the
Executive Committee shall be obliged to seek and to obtain:
(i) in the case of a dispensation from a Code of Practice,
the approval and agreement of those Parties whose approval
and agreement is required in accordance with the definition
of Code of Practice in respect of an amendment to or
substitution of the Code(s) of Practice from which a
dispensation is sought;
(ii) the prior written consent (not to be unreasonably
withheld or delayed) of the Settlement System Administrator
where applicable in accordance with Clause 6.3;
(iii) in the case of a dispensation from the
requirements of paragraph 7.1.2 relating to the commercial
boundary, the prior written consent (not to be unreasonably
withheld or delayed) of the Grid Operator where applicable
in accordance with Clause 6.5; and
(iv) in the case of a dispensation from the requirements of
paragraph 7.1.2 relating to the commercial boundary, the
prior written consent (not to be unreasonably withheld or
delayed) of the Ancillary Services Provider where
applicable in accordance with Clause 6.6.
Where, in accordance with (i) above, the amendment of the
relevant Code of Practice would require the approval of the
Suppliers in separate general meeting such approval shall
be deemed to be given by a resolution of the Executive
Committee to agree the relevant dispensation, save where
any representative of any Supplier elects, upon that
resolution, to refer the matter to a separate general
meeting of Suppliers in which case, such meeting shall be
convened and held in accordance with the provisions of
Clause 13.2, and shall determine by resolution whether or
not the approval and agreement of Suppliers to that
dispensation be given in accordance with this paragraph
14.1.
14.2 Record of dispensations: The Executive Committee shall
maintain, in accordance with the relevant Agreed Procedure,
an up-to-date record of all dispensations agreed pursuant
to this paragraph 14. The Executive Committee shall provide
a duplicate copy of any such record to the Settlement
System Administrator and shall provide the Settlement
System Administrator with details of all amendments made to
such record as soon as reasonably possible after the making
of such amendment.
14.3 Existing dispensations: The Parties acknowledge that,
prior to 1st April, 1993, dispensations (within the meaning
of this paragraph 14) were agreed by the Executive
Committee as if this paragraph 14 were at such time in full
force and effect and agree that the record identified as
such as at 1st April, 1993 is the definitive list of such
dispensations. The Parties further agree that such
dispensations shall be deemed, with effect from the date at
which they were agreed, to have been
effectively agreed in accordance with the provisions of
this paragraph 14 (as formerly incorporated into this
Agreement as Clause 60.10) as in force as at 1st April,
1993. This paragraph 14 shall be without prejudice to any
claim an Operator or person acting as Operator:-
(i) may have as at 31st March, 1993 against a Supplier
arising out of any agreement between such Operator (or such
person acting as Operator) and such Supplier or out of any
representation; or
(ii) may have against a Supplier arising out of facts and
circumstances in existence prior to or as at 31st March,
1993, which relates to the installation by such Operator or
such person acting as Operator of any Metering System
installed or being installed as at the EMS Date or the
installation of which was commenced prior to the EMS Date,
and which relates to a Metering System which, by virtue of
a dispensation granted pursuant to this paragraph 14, is
not required by that Supplier.
14.4 Appeals: Any dispensation from the requirements of a
Code of Practice or from the requirements relating to the
commercial boundary of paragraph 7.1.2 agreed in accordance
with this paragraph 14 shall be capable of being appealed
in accordance with the provisions of paragraph 19.1,
provided that no dispensation shall be considered to be
agreed in accordance with this paragraph upon any appeal
being granted where the approval and agreement of the
relevant Parties as referred to in paragraph 14.1(c) has
not been obtained.
<PAGE>
PART 6
FURTHER RIGHTS OF OPERATORS
15. OWNERSHIP AND USE OF DATA
15.1 Ownership of data: The Registrant of any Metering
System shall own the data acquired therefrom provided that
(and each Registrant hereby expressly agrees and
acknowledges that) a Second Tier Customer or Non-Pooled
Generator of that Registrant in respect of which such data
is generated shall be entitled at all times without charge
by the Registrant to access, obtain and use such data and
provided further that:-
(i) such access, obtaining or use, or the method of such
access, obtaining or does not interfere with the operation
of Settlement;
(ii) nothing in this paragraph 15.1 shall require the
Registrant actively to provide such data to such Second Tier
Customer or Non-Pooled Generator or so to provide such data
free of charge; and
(iii) such access shall not be by using any
communications link used by the Settlement System
Administrator for the purposes of Clause 60.6 without the
prior written consent of the Settlement System
Administrator.
15.2 Use of data: The Settlement System Administrator and
the Pool Auditor for the purposes of the performance by the
Pool Auditor of its functions under Part IX of this
Agreement are hereby authorized to use all data which is
owned by the Registrant pursuant to paragraph 15.1 as may be
permitted pursuant to this Agreement, and the Settlement
System Administrator or, as the case may be, the Pool
Auditor may only release such data to others to the extent
set out in this Agreement. It is hereby expressly agreed
that the Settlement System Administrator is permitted to and
shall against request and payment of a reasonable charge
therefor release to a Second Tier Customer or Non-Pooled
Generator such data relating to it as is referred to in
paragraph 15.1.
15.3 Communications Equipment use: Communications Equipment
need not be dedicated exclusively to the provision of data
to the Settlement System Administrator for the purposes of
Settlement provided that any other use shall not interfere
at any time with the operation of Settlement and subject
also to the relevant provisions (if any) in the relevant
Tariff.
16. CHANGES OF SUPPLIERS
Change of Supplier: Where notice is served on the Settlement
System Administrator in the form prescribed by the relevant
Agreed Procedure by a proposed Registrant of an existing
Site which is the point of supply of a Second Tier Supplier
or Second Tier Customer or Non-Pooled Generator, the
proposed Registrant and the Operator or
proposed Operator (where the existing Operator is to be
replaced) shall confirm that the Metering System required
for the purposes of this Schedule and Part XV of this
Agreement will be installed and Commissioned at the Site by
the date required by the relevant Agreed Procedure.
17. ATTENDANCE AT MEETINGS AND RIGHTS OF REPRESENTATION
17.1 Attendance at Pool Members meetings:
17.1.1 Any notice convening any general meeting of Pool
Members including any adjournment thereof in accordance with
Clause 9.5 shall be additionally given to all Meter Operator
Parties and be given in accordance with the provisions of
that Clause. The accidental omission to give notice of a
meeting to any Meter Operator Party entitled to receive
notice shall not invalidate the proceedings at that meeting.
17.1.2 Each Meter Operator Party (or its duly appointed
representative) shall have the right to attend at each
general meeting of Pool Members and shall have the right to
speak (but not to vote) thereat.
17.1.3 The Secretary shall circulate any minutes
circulated in accordance with Clause 10.10 additionally to
Meter Operator Parties in accordance with the provisions
thereof.
17.2 Attendance at meetings of the Executive Committee, and
sub-committees and sub-groups of the Executive Committee:
17.2.1 One representative for all Meter Operator Parties
selected in accordance with paragraph 17.3 (a "Meter
Operator Party Representative") shall be entitled to attend
and speak (but not to vote) at meetings of the Executive
Committee or at meetings of any sub-committee or sub-group
of the Executive Committee on behalf of all Meter Operator
Parties and shall be entitled to appoint from time to time
alternates and delegates to assist him in those functions,
where matters directly concerning the functions, duties or
responsibilities of Operators, individually or
collectively, have been identified or advised in the agenda
for that meeting to be circulated pursuant to Clause 18.1.4
or, as the case may be, Clause 20.1.
17.2.2 Notice of meetings of the Executive Committee or
meetings of any sub-committees or sub-group at which the
relevant Meter Operator Party Representative is entitled to
attend shall be given to him, together with all prescribed
accompanying documentation and agendas, in accordance with
Clause 18.1 or, as the case may be, Clause 20.1. The Meter
Operator Party Representative shall as soon as is
reasonably practicable copy such notice together with such
accompanying documentation to all Meter Operator Parties.
17.2.3 The relevant Meter Operator Party Representative
shall be entitled to receive copies of all minutes of
meetings which he was enticed to attend and which the
Secretary is required to circulate in accordance with Clause
18.1.6 or, as the case may be, Clause 20.1 in accordance
with the provisions thereof. Such Meter Operator Party
Representative, if he attended the relevant meeting, shall
notify his approval or disapproval of the minutes to the
Secretary no later than ten working days after receipt
thereof and, if he fails to do so, he shall be deemed to
have approved the same.
17.3 Appointment of representative for Meter Operator
Parties: The Director shall nominate from time to time a
representative who shall represent the collective and
individual interests of Meter Operator Parties under this
Agreement. Such representative shall be drawn from those
Meter Operator Parties which are not represented at the
Executive Committee in any other capacity pursuant to the
provisions of this Agreement.
17.4 Class representation: The Executive Committee or
any sub-committee or sub-group thereof shall be entitled to
assume that any Meter Operator Party Representative
represents the interests of Meter Operator Parties as a
class and, where appropriate, represents any affected
specific individual interests and, in considering matters or
exercising its powers or discretions under this Agreement,
the Executive Committee or any sub-committee or sub-group
Thereof shall not be obliged to seek, nor to take account
of, the views, comments or consent or otherwise of any ocher
Meter Operator Party.
<PAGE>
PART 7
FAILURE TO COMPLY AND DISPUTES
18. FAILURE TO COMPLY WITH OBLIGATIONS
Defective Metering Equipment: Subject to the provisions of
Clause 60.4.9, in the event that an Operator cannot or does
not comply with its obligations to repair, adjust or replace
or renew any defective component pursuant to paragraph 8.4,
the Settlement System Administrator shall have the right to
carry out or procure there is carried out such repair,
adjustment, replacement or renewal and to recover its own
costs, expenses and profit thereon from such Operator
forthwith on demand or, where the Settlement System
Administrator, having taken reasonable steps to recover such
costs, expenses and profit from the relevant Operator is
unable so to recover within a reasonable period of time,
from the Registrant in respect of that Operator subject
thereto forthwith on demand (such profit to be equivalent to
the Handling Charge on such costs and expenses, as defined
in sub-section 1.1 of the Appendix to Schedule 4).
19. DISPUTES
19.1 Disputes which may involve a Meter Operator Party: Any
dispute regarding Metering Equipment (other than a dispute
referred to in Clause 60.11.1 or one arising out of any
decision made pursuant to paragraph 6.2, which in the latter
case shall be determined in accordance with the provisions
of that paragraph) shall be referred to the Executive
Committee. If any Party or Meter Operator Party is not
satisfied with the decision of the Executive Committee, the
matter may be referred by such Party or Meter Operator Party
to arbitration in accordance with Clause 83 of this
Agreement as incorporated into this Schedule by paragraph
24.
19.2 Tests to determine disputes: Any testing of Metering
Equipment required to settle any dispute (including a
dispute under Clause 60.11.1) will, prima-facie, be carried
out by the relevant Operator on the relevant Metering
Equipment mounted in its operational position in the
presence of the Settlement System Administrator acting on
behalf of the Executive Committee and in the presence of the
Host PES. All testing will be carried out in accordance with
the relevant Code of Practice or, where applicable, any
relevant dispensation agreed in accordance with this
Schedule. The test performance of any Metering Equipment
shall be compared with calibrated test equipment by one of
the following methods:
(a) injecting into the measuring circuits (i.e. excluding
the primary current and voltage transformers) and comparing
the readings or records over such period as may be required
by the relevant Code of Practice or, where applicable, any
relevant dispensation agreed in accordance with this
Schedule to ensure a reliable comparison; or
(b) where practicable, operating the calibrated test
equipment from the same primary current and voltage
transformers as the Metering Equipment under operating
conditions. The readings or recordings of the Metering
Equipment and the calibrated test equipment shall be
compared over such period as may be required by the relevant
Code of Practice or, where applicable, any relevant
dispensation agreed in accordance with this Schedule; or
(c) in exceptional circumstances, such other method as may
be specified by the Settlement System Administrator.
19.3 Laboratory tests: Metering Equipment which fails any
test whilst in its operational position shall be tested
under laboratory conditions in accordance with the relevant
Code of Practice.
19.4 Witnesses: No more than two persons representing all
interested Parties or Meter Operator Parties nominated by
the Executive Committee (including the Host PES) in addition
to the Settlement System Administrator will be entitled to
witness tests taken as a result of a dispute, including
tests confirming the calibration of test equipment, or
inspect evidence of valid calibration, or valid calibration
certificates, as appropriate.
19.5 Saving: It is hereby expressly acknowledged and agreed
by the Parties that the resolution of any dispute referred
to in Clause 60.11.1 shall in all cases be without prejudice
to the bringing or pursuing of any claim, by or against, or
the resolving of any issue between any one or more of such
Parties or any other Party arising out of the same facts or
circumstances, or facts or circumstances incidental to the
facts and circumstances giving rise to such dispute or upon
the basis of which such dispute has been resolved, in favour
of, or against, a Meter Operator Party or Meter Operator
Parties.
19.6 Release of data: Upon the request of any Party or
Meter Operator Party which is a party to a dispute referred
to in paragraph 19.1 any relevant data derived from any
Metering System may be submitted by the Settlement System
Administrator to the body then having jurisdiction in
respect of the relevant dispute for the purposes of
resolving such dispute.
<PAGE>
PART 8
LIMITATION OF LIABILITY
20. LIMITATION OF LIABILITY
20.1 Limitation of liability: Subject to paragraph 20.2 and
save where any provision of this Agreement provides for an
indemnity, each Party and each Meter Operator Party agrees
and acknowledges that no Party nor Meter Operator Party
(excluding for this purpose the Settlement System
Administrator) (in this paragraph 20, the "Party Liable") or
any of its officers, employees or agents shall be liable to
any of the other Parties or Meter Operator Parties for loss
arising from any breach of this Schedule or 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:-
20.1.1 physical damage to the property of any of the
other Parties or Meter Operator Parties or its or their
respective officers, employees or agents; and/or
20.1.2 the liability of any such other Party or Meter
Operator Party to any other person for loss in respect of
physical damage to the property of any other person.
20.2 Death and personal injury: Nothing in this Schedule or
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 or Meter Operator
Parties, its officers, employees or agents from and against
all such and any loss or liability which any such other
Party or Meter Operator 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.
20.3 Exclusion of certain types of loss: Subject to
paragraph 20.2 and save where any provision of this
Agreement provides for an indemnity, neither the Party
Liable nor any of its of ricers, employees or agents shall
in any circumstances whatsoever be liable to any of the
other Parties or Meter Operator Parties for:-
20.3.1 any loss of profit, loss of revenue, loss of use,
loss of contract or loss of goodwill; or
20.3.2 any indirect or consequential loss; or
20.3.3 loss resulting from the liability of any other
Party or Meter Operator Party to any other person howsoever
and whensoever arising save as provided in paragraphs 20.1.2
and 20.2.
20.4 Trust: Each Party and each Meter Operator Party
acknowledges and agrees that each of the other Parties and
Meter Operator Parties holds the benefit of Clauses 20.1,
20.2 and 20.3 of this Schedule for itself and as trustee and
agent for its officers, employees and agents.
20.5 Survival: Each of paragraphs 20.1, 20.2, 20.3 and
20.4 shall:
20.5.1 be construed as a separate and severable contract
term, and if one or more of such paragraphs is held to be
invalid, unlawful or otherwise unenforceable the other or
others of such paragraphs shall remain in full force and
effect and shall continue to bind the Parties and the Meter
Operator Parties; and
20.5.2 survive termination of this Agreement.
20.6 Saving: For the avoidance of doubt, nothing in this
Part 8 shall prevent or restrict any Party or Meter Operator
Party enforcing any obligation (including suing for a debt)
owed to it under or pursuant to this Schedule or this
Agreement.
20.7 Full negotiation: Each Party and each Meter Operator
Party acknowledges and agrees that the foregoing provisions
of this Part 8 have been the subject of discussion and
negotiation and are fair and reasonable having regard to the
circumstances as at the date this Schedule came into effect.
<PAGE>
PART 9
ACCESS
2 1. ACCESS
21.1 Access to Party's and Meter Operator Party's property:
Each Party and Meter Operator Party hereby agrees to grant
to any Invitee and, in the case of a Meter Operator Party,
the Registrant of the Metering System in respect of the
Metering System of which it is Operator, and, in the case of
a Registrant of a Metering System, the Meter Operator Party
which is the Operator in respect of that Metering System:
(a) full right during the currency of this Agreement to
enter upon and through and remain upon, or do any other act
contemplated by this Schedule 21 which would otherwise
constitute a trespass upon, any part of such Party's or, as
the case may be, Meter Operator Party's, property;
(b) in the case of the Operator or the Settlement System
Administrator, full right to remove any part of Metering
Equipment forming part of such property to a laboratory or
test house in accordance with the provisions of this
Schedule; and
(c) in the case of the Pool Auditor, full right to perform
such tasks and to do all such acts and things as are
necessary for the purpose of performing audits, tests,
reviews and checks under the SSA Arrangements, including
full right to carry out such tests on Metering Equipment
provided that the person or persons allocated to carry out
such tests by the Pool Auditor is or are suitably qualified
in the operation of Metering Equipment, provided always that
such access rights conferred by or pursuant to this
paragraph shall be granted only to the extent necessary for
the purposes of this Schedule and shall be subject to the
other provisions of this paragraph 21.
21.2 Invitees: An Invitee for the purposes of this
paragraph 21 shall comprise any one or more of the
following:-
(i) the Settlement System Administrator acting through any
reasonably nominated employees, agents or contractors;
(ii) the Executive Committee acting through any reasonably
nominated persons;
(iii) the Equipment Owner for the purposes only of
fulfilling its obligations under paragraph 7.1.3;
(iv) the Pool Auditor acting through any partner or
employee;
(v) the auditor carrying out the Scheduling and Dispatch
Review acting through any partner or employee; and
(vi) the Ancillary Services Provider acting through any
reasonably nominated employees, agents or contractors.
21.3 Access to property of Second Tier Customers
Non-Pooled Generators and Third Parties: The Registrant of
a Metering System and the Meter Operator Party which is the
Operator or Potential Operator of that Metering System
hereby jointly and severally agree to use all reasonable
endeavors to, and to co-operate with each other for the
purpose of procuring for the benefit of each Invitee and
for each other:-
(a) full right to enter upon and through and remain upon,
or do any other act contemplated by this Schedule which
would otherwise constitute a trespass upon, any part of the
property:
(i) of the Second Tier Customer in respect of which that
Registrant is the Supplier;
(ii) of the Non-Pooled Generator from which that
Registrant receives supply; and
(iii) of any other person which is not a party to this
Agreement (the "Third Party") but the exercise of whose
rights would prevent, in relation to such Second Tier
Customer, Non-Pooled Generator, the Registrant, the Meter
Operator Party or any Invitee from performing its
obligations under this Schedule or this Agreement and the
existence of whose rights is known to, or ought reasonably
be known to, the Registrant or, as the case may be, the
Meter Operator Party;
(b) in the case of the Operator or the Settlement System
Administrator, full right to remove all or any part of
Metering Equipment forming part of such property to a
laboratory or test house in accordance with the provisions
of this Schedule; and
(c) in the case of the Pool Auditor, full right to
perform such tasks and to do all such acts and things as
are necessary for the purpose of performing audits, tests,
reviews and checks under the SSA Arrangements, including
full right to carry out such tests on Metering Equipment
provided that the person or persons allocated to carry out
such tests by the Pool Auditor is or are suitably qualified
in the operation of Metering Equipment,
provided always that such access rights conferred by or
pursuant to this paragraph shall be granted only to the
extent necessary for the purposes of this Schedule and
shall be subject to the other provisions of this paragraph
21.
21.4 Failure to procure access: If, after having used all
such reasonable endeavors to procure access rights in
accordance with this paragraph 21 in respect of a Second Tier
Customer, a Non-Pooled Generator or Third Party referred to
in paragraph 21.3, a Registrant and/or Meter Operator Party
have been unable to procure any such rights the Registrant:
(i) hereby undertakes not to make any future supplies to
such Second Tier Customer at the Site in respect of which
such access rights are required until such access rights
have been obtained and if supplying such Second Tier Customer
at such Site to cease forthwith to supply such Second Tier
Customer at that Site;
(ii) hereby undertakes not to take any future supply of
electricity from such NonPooled Generator at the Site in
respect of which such access rights are required until such
access rights have been obtained and if taking a supply of
electricity from such Non-Pooled Generator at such Site to
cease forthwith to take a supply of electricity from such
Non-Pooled Generator at that Site; and
(iii)shall notify the Settlement System Administrator in
accordance with the relevant Agreed Procedure of that fact.
The Settlement System Administrator shall be entitled to
assume that the consents of any Third Parties shall have been
obtained in accordance with the provisions of this paragraph
until such time as it is fixed with notice to the contrary.
21.5 Right of access: The right of access provided for in
paragraphs 21.1 and 21.3 shall include the right to bring on
to such Meter Operator Party's, Party's, Second Tier
Customer's, Non-Pooled Generator's or Third Party's property
such vehicles, plant, machinery and maintenance or other
materials as shall be reasonably necessary for
he purposes of this Schedule.
21.6 Authorization: Each Meter Operator Party or, as the
case may be, Party shall ensure that any particular
authorization or clearance which is required to be given to
ensure access to any Invitee, Registrant or Meter Operator
Party in accordance with this paragraph is available on
arrival.
21.7 Safely: Subject to the right of the Settlement System
Administrator to inspect without notice pursuant to paragraph
8.2.2, each Meter Operator Party or, as the case may be,
Party 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 granted pursuant to paragraph 21.1 or
21.3 with the minimum of disruption, disturbance and
inconvenience. Such arrangements and provisions may, to the
extent that the same are reasonable, limit or restrict the
exercise of such right of access and/or provide for any Meter
Operator Party or 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 provisions include:
(i) the identification of any relevant Metering Equipment;
(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 the right
of access;
(iv) any requirements as to prior notification and as to
authorization or security clearance of individuals
exercising such right of access and procedures for
obtaining the same;
(v) the means of communication to the Meter Operator Party
or, as the case may be, Party (and all employees and/or
contractors who may be authorized from time to time to
exercise such right of access) of any relevant directions
or regulations made by the Meter Operator Party or, as the
case may be, Party; and
(vi) the identification of and arrangements applicable to
personnel exercising the right of access granted by
paragraphs 21.1 or 21.3.
Each Party or Meter Operator Party shall (and shall procure
that all persons exercising any right of access on behalf
of such Party or Meter Operator Party) observe and perform
any such arrangements and all provisions (or directions or
regulations issued pursuant thereto) made from time to
time.
21.8 Damage: Each Party or Meter Operator Party shall
procure that all reasonable steps are taken in the exercise
of any right of access by or on behalf of such Party or
Meter Operator Party to:
(a) avoid or minimize damage in relation to any Meter
Operator Party's, Party's, Second Tier Customer's,
Non-Pooled Generator's or other Third Party's property; and
(b) cause as little disturbance and inconvenience as
possible to any Meter Operator Party, Party, Second Tier
Customer, Non-Pooled Generator or other Third Party or
other occupier of such Meter Operator Party's, Party's,
Second Tier Customer's, Non-Pooled Generator's or other
Third Party's property, and shall make good any damage
caused to such property in the course of exercise of such
rights as soon as may be practicable. Subject to this, all
such rights of access shall be exercisable free of any
charge or payment of any kind.
21.9 Licence Restricted Parties:
(a) This paragraph 21.9 shall apply to any area owned or
occupied by any Party, Meter Operator Party or any
subsidiary of such Party or Meter Operator Party, Second
Tier Customer, Non-Pooled Generator or Third Party (each a
"Licence Restricted Party") which is the holder of or
subject to a licence granted under the Nuclear Installations
Act 1965 (a "Nuclear Site Licence") or subject to
restrictions in relation to a Nuclear Site Licence, where
such area is subject to that Nuclear Site Licence but, in
respect of Energy Settlements and Information Services
Limited, this paragraph 21.9 shall apply subject to the
provisions of any other agreement between the Licence
Restricted Party and NGC (or any of its subsidiaries)
imposing restrictions on NGC's (or any of its subsidiaries')
right of access to any area owned by the Licence Restricted
Party subject to (or subject to restrictions in relation to)
a Nuclear Site Licence.
(b) This paragraph 21.9 shall take precedence over any
contrary provisions of this Schedule.
(c) No Party or Meter Operator Party shall enter or attempt
to enter or permit or suffer any person to enter or attempt
to enter any area owned or occupied by the Licence
Restricted Party to which a Nuclear Site Licence applies
except strictly in accordance with the provisions,
restrictions and conditions of the Nuclear Site Licence.
(d) The Licence Restricted Party shall be entitled to take
reasonable action of any kind whatsoever relating to or
affecting access to its property as it considers on
reasonable rounds to be necessary in order to enable the
Licence Restricted Party to comply with the provisions,
restrictions and conditions of a Nuclear Site Licence or
avert or minimize any reasonably anticipated breaches
thereof.
21.10 Denial of access: The Settlement System Administrator
shall not incur any liability under this Schedule or this
Agreement in the event it cannot perform any of its duties
hereunder due to access to Metering Equipment being denied
to it save that the Settlement System Administrator shall
inform the Executive Committee thereafter.
<PAGE>
PART 10
COMMUNICATIONS EQUIPMENT
22. COMMUNICATIONS EQUIPMENT
22.1 Compatibility: Communications Equipment at or relating
to any Site (which whenever used in this paragraph 22 shall
include all Qualifying Sites) must be compatible with the
communications links provided by the Settlement System
Administrator pursuant to Clause 60.6.3(a) in respect of
that Site. Prior to the installation of Communications
Equipment at or relating to any Site the Tariff Operator
shall consult with the Settlement System Administrator to
ensure that such Communications Equipment will be compatible
with such communication links. Where a Tariff Operator
becomes aware that Communications Equipment at or relating
to a Site is used for purposes other than in connection with
Settlement, it shall notify the Settlement System
Administrator of any such use or purposes to which that
Communications Equipment is put.
22.2 Settlement System Administrator's responsibility in
respect of communications links: Subject to the requirement
of the Settlement System Administrator to collect data in
accordance with Clause 60.6.1 and subject to the provisions
of paragraph 22.1, the Settlement System Administrator shall
use all reasonable endeavors to ensure that the
communications link provided by it (but which, for the
avoidance of doubt, does not form part of Communications
Equipment) to any Site pursuant to Clause 60.6.3(a) is of
the type requested by the Tariff Operator.
22.3 Tariff payments:
(a) The Settlement System Administrator shall pay from time
to time to each Tariff Operator in respect of a Site for
which it is the Tariff Operator, an amount (if any)
determined in accordance with the relevant Tariff and
payable in respect of Communications Equipment installed and
maintained at or relating to such Site by such Tariff
Operator for the purposes of this Agreement.
(b) The Settlement System Administrator shall recover from
time to time (for credit to Pool Members as the Executive
Committee shall from time to time direct) from a Tariff
Operator and a Tariff Operator shall pay from time to time
(for credit to Pool Members as the Executive Committee shall
from time to time direct) to the Settlement System
Administrator in respect of the costs of manual on-site
interrogation or data estimation costs incurred by it in
respect of each Site at which there is not installed and
maintained Communications Equipment in accordance with the
requirements of this Schedule, such amounts (if any)
determined in accordance with the relevant Tariff. Where the
Settlement System Administrator has received any such
payment pursuant to this sub-paragraph 22.3(b) it shall be
set off in full against amounts which may be recovered by the
Settlement System Administrator pursuant to paragraph 22.6 or 22.7.
(c) The Settlement System Administrator may, and at the
direction of the Executive Committee shall, without notice
to the relevant Tariff Operator set off amounts payable to
it by that Tariff Operator under the relevant Tariff against
amounts payable by the Settlement System Administrator to
that Tariff Operator, under the relevant Tariff. Any amounts
so set off by the Settlement System Administrator under this
paragraph 22.3 shall be deemed to have been received by the
Settlement System Administrator for the purposes of
paragraph 22.3(b).
(d) Notwithstanding the terms of any Tariff, a Tariff
Operator shall not be entitled to receive payment of or
otherwise recover any sums for or relating to goods or
services delivered or provided by it under or for the
purposes of this Agreement and invoiced or claimed by the
Tariff Operator to or from the Settlement System
Administrator or Pool Members more than 90 days after the
end of the month in which such goods or services were
delivered or provided.
22.4 Refunds: Where a Tariff Operator is removed, resigns
or otherwise ceases to be Tariff Operator at or relating to
any Site it shall pay to the Settlement System Administrator
such amount (if any) as is set out in the relevant Tariff by
way of reimbursement of amounts paid to it pursuant to
paragraph 22.3.
22.5 Additional payments: If a Tariff Operator can
demonstrate to the reasonable satisfaction of the Settlement
System Administrator that any relevant payment to be made
pursuant to this paragraph 22 and in accordance with the
relevant Tariff in respect of any particular Site as is
described in the relevant Tariff does not reflect the cost
to such Tariff Operator of providing in respect of
Communications Equipment at or relating to such Site
installation and maintenance services in an efficient and
economic manner then the Settlement System Administrator may
negotiate an additional payment to such Tariff Operator in
respect of Communications Equipment at or relating to such
Site provided that the Tariff Operator shall be entitled to
receive such additional payment only if and to the extent
that the economic and efficient provision of installation
and maintenance services in respect of the Communications
Equipment at or relating to that Site is in fact effected.
If the Tariff Operator and the Settlement System
Administrator fail to agree on the amount of an additional
payment, the Tariff Operator may refer the matter to the
Executive Committee which shall determine the same. The
relevant Meter Operator Party may refer any such decision of
the Executive Committee to the Director and for the purposes
thereof shall be deemed to be exercising a Dissentient Pool
Member's right of appeal pursuant to and in accordance with
Clause 13.5. The Settlement System Administrator shall send
the Executive Committee on request a written report giving
reasonable details of any such additional payments made or
proposed to be made.
22.6 Costs beyond SSA' s control: Payments which are made
to Tariff Operators in respect of the provision of
installation and maintenance services in respect of
Communications Equipment (whether or not pursuant to or in
addition to the relevant Tariff) and payments for
communications links shall be a cost beyond the control of
the Settlement System Administrator.
22.7 Recovery of costs: All costs and expenses relating to
the payment arrangements referred to in this Schedule for
the installation and maintenance of Communications
Equipment, the relevant Tariff or otherwise, including
payments which are made to Tariff Operators for the
provision of installation and maintenance services in
respect of Communications Equipment, payments for
communications links, management time and expenses of the
Settlement System Administrator and the cost of funds
borrowed to finance such costs, expenses and payments, may
be recovered in full by the Settlement System Administrator
in accordance with the Charging Procedure.
22.8 No agency: No agency relationship (whether express or
implied) shall be, or be deemed to be, created between any
Tariff Operator and the Settlement System Administrator or
any other person as a result of the payments to be made
pursuant to this paragraph 22.
22.9 Tariff Operators:
(a) There shall at any point in time be no more than one
Tariff Operator in respect of each Metering System or
Metering Equipment.
(b) Each Tariff Operator shall, for so long as it is
entitled to receive payments in respect of Communications
Equipment at or relating to a Site which is not a 1993/1994
Tariff Qualifying Site (as defined in the Tariff which is
entitled the Tariff for 1993/1994 Sites), in respect of that
Communications Equipment (but not in respect of any other
Metering Equipment which is not Communications Equipment):
(i) ensure there is installed Communications Equipment
(including its component parts) which complies with the
provisions of this Schedule, Part XV of this Agreement and
the relevant Code of Practice or shall be the subject of,
and comply with, a dispensation agreed in accordance with
paragraph 14, and which uses such communications protocols
as may be selected in accordance with paragraph 7.2.2 of
this Schedule;
(ii) at its own cost and expense (but without prejudice to
its right to charge any other person for such service
pursuant to another agreement or arrangement) keep
installed, in good working order, repair and condition that
Communications Equipment (including its component parts) to
allow for the correct transmission of data in accordance
with this Agreement (whether or not such data are actually
required to be transmitted for the purposes of this
Agreement); and
(iii) provide to the Settlement System Administrator
such information in respect of that Communications
Equipment as it would be required to provide pursuant to
this Schedule, Part XV of this Agreement and the relevant
Agreed Procedure, were it, in respect of that Qualifying
Site at or in relation to which that Communications
Equipment is installed, an Operator in respect of a Site
at the point of connection to a Second Tier Customer for
the purposes of the Settlement System Administrator
recording and keeping up-to-date details of that
Communications Equipment on the Register.
22.10 Transitional Arrangements: It is hereby expressly
acknowledged and agreed by the Parties and Meter Operator
Parties that, with effect from the date this provision
comes into effect, references in the Tariff, which on 22nd
April, 1994 became effective as at 1st January, 1994 (if
not then superseded), to "Potential Operator" shall be
read, with respect to any obligation then unperformed, or
right then unenjoyed, as if that reference were a
reference to a Tariff Operator.
<PAGE>
PART 11
TRANSITIONAL ARRANGEMENTS
23. TRANSITIONAL ARRANGEMENTS
23.1 Transitional Arrangements: With effect from the date
this Schedule came into effect (the "NSD Date") each Party
which is at that date an Operator or a Potential Operator
shall be deemed to be a Meter Operator Party (in addition to
continuing as a Party in any other capacity) and to have
complied with all the requirements of or referred to in this
Schedule 21 relating to admission as a Meter Operator Party
and as an Operator. Such Parties are more particularly
described in Annex 4 hereto. The Parties acknowledge and
confirm that the deemed admission of an existing Party as a
Meter Operator Party shall not affect that Party's rights
and obligations under any agreement or arrangement relating
to being an Operator entered into or existing between the
Parties or any of them prior to such deemed admission, and
that accordingly such agreement or arrangement shall
continue notwithstanding the change and any reference to
that Party being an Operator under this Agreement shall be
construed as being an Operator as a Meter Operator Party.
23.2 Saving: Notwithstanding paragraph 23.1, each Party to
which this Part 11 applies expressly acknowledges and agrees
that, notwithstanding any deemed satisfaction of the
conditions which are required to be fulfilled as at the NSD
Date in accordance with this Schedule for the purposes of
admission as a Meter Operator Party and as Operator, it
shall be subject (but only with prospective effect; that is
to say to the effect that any conditions which apply as at
the NED Date are deemed to be fulfilled and need not then be
fulfilled as a continuing obligation) to the continuing and
further conditions for registration as an Operator from time
to time and to the provisions of paragraph 4.4, and that it
shall be subject to the provisions for the resignation,
removal and cessation as Operator in respect of any Metering
System, or as Meter Operator Party, as the case may be, in
accordance with the provisions of this Schedule as at the
date hereof and from time to time, and after any such
resignation, removal or cessation as a Meter Operator Party,
it shall be subject in full to the procedures for admission
as a Meter Operator Party and Operator as may be set out
from time to time in this Schedule.
<PAGE>
PART 12
INCORPORATION OF OTHER PROVISIONS OF THIS AGREEMENT
24. INCORPORATION BY REFERENCE
Incorporation by reference: The provisions of Clauses
1.2, 1.3, 8.6, 34.1, 34.2, 34.3, 37.3, 66.7, 68, 69,
70, 71, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84 and
85 of the Pooling and Settlement Agreement, Sections 4
and 7 of Schedule 4 thereto and Sections 3 and 4 of
Part E of the Appendix to that Schedule shall be deemed
to be incorporated into this Schedule 21 mutatis
mutandis as if each reference therein to the word
"Party" were a reference to the words "Party and Meter
Operator Party" and to the word "Parties" were to the
words "Parties and Meter Operator Parties.
<PAGE>
PART 13
SECOND TIER UNMETERED SUPPLIES
25. SECOND TIER UNMETERED SUPPLIES
Notwithstanding any of the other provisions of this
Schedule, the provisions of Clause 60.19 and any Second
Tier Unmetered Supplies Procedures shall, to the extent
they are supplemental to or conflict with any other
provisions of this Schedule, govern the rights and
obligations of the Parties (including each Operator and
each Meter Operator Party) in relation to Second Tier
Unmetered Supplies.
<PAGE>
ANNEX 1
Form of Meter Operator Party Admission Application
The Executive Committee for the
Pooling and Settlement System in England and Wales
[copy to: the Settlement System Administrator]
Dear Sir,
[Date]
1. We [insert full legal name and address of
registered/principal office of applicant] refer to Schedule
21 to the Pooling and Settlement Agreement for the
electricity industry in England and Wales dated 30th March,
1990 (as amended, varied, supplemented, modified or
suspended, the "Pooling and Settlement Agreement").
2. Unless the context otherwise requires, words and
expressions defined in the Pooling and Settlement Agreement
for the purposes of Schedule 21 to the Pooling and
Settlement Agreement shall bear the same meanings
respectively when used herein.
3. We hereby apply to be admitted as an additional party in
accordance with, and for the purposes only of, Schedule 21
to the Pooling and Settlement Agreement pursuant to
paragraph 3 and subject to the terms set out in paragraph 2
thereof. We wish to participate thereunder in the capacity
of a Meter Operator Party.
4. We hereby represent and warrant to the Executive
Committee (for itself and on behalf of all the Parties and
Meter Operator Parties) that:
(A) we are duly organized and validly existing under the
laws of the jurisdiction of our organization or
incorporation;
(B) we have the power to execute and deliver our Meter
Operator Party Accession Agreement and any other
documentation relating to that Agreement or the Pooling and
Settlement Agreement and such other agreements as are
required thereby and to perform our obligations hereunder
or thereunder and we have taken all necessary action to
authorize such execution, delivery and performance; and
(C) such execution, delivery and performance do not
violate or conflict with any
law applicable to us, any provision of our constitutional
documents, any order or judgment of any court or other
agency of government applicable to us or any of our assets
or any contractual restriction on or affecting us or any of
our assets.
We confirm that these representations and warranties
will also be true and correct in all material respects at
the date of our admission as a New Meter Operator Party.
5. We enclose the application fee of pounds [ ]*.
6. We accept and agree to be bound by the terms of
paragraph 3 of Schedule 21 to the Pooling and Settlement
Agreement.
Yours faithfully,
duly authorized for and on behalf of
insert full legal name of the New Meter Operator Party]
* Insert current application fee prescribed by the
Executive Committee.
<PAGE>
ANNEX 2
Form of Meter Operator Party Resignation Notice
The Secretary of the Executive Committee for the Pooling and
Settlement System in England and Wales
[copied to: the Settlement System Administrator]
Dear Sir,
1. We [insert full legal name and address of
registered/principal office of applicant] refer to Schedule
21 to the Pooling and Settlement Agreement for the
electricity industry in England and Wales dated 30th March,
1990 (as amended, varied, supplemented, modified or
suspended, the "Pooling and Settlement Agreement").
2. Unless the context otherwise requires, words and
expressions defined in the Pooling and Settlement Agreement
for the purposes of Schedule 21 to the Pooling and
Settlement Agreement shall bear the same meanings
respectively when used herein.
3. We hereby give notice pursuant to paragraph 5.1 of
Schedule 21 to the Pooling and Settlement Agreement that we
are resigning as a Meter Operator Party with effect from the
date falling 28 days after receipt by you of this Meter
Operator Party Resignation Notice.
4. We confirm that in giving this notice of resignation, we
are not and will not be in breach of the restriction on
resignation set out in paragraph 5.2 of Schedule 21 to the
Pooling and Settlement Agreement.
5. We acknowledge that our resignation as a Meter Operator
Party is without prejudice to our accrued rights and
liabilities and any rights and liabilities which may accrue
to us in relation to the period during which we were a Meter
Operator Party under Schedule 21 to the Pooling and
Settlement Agreement or any agreement referred to in
paragraph 5.2 of Schedule 21 to the Pooling and Settlement
Agreement.
6. We further expressly acknowledge and confirm that our
resignation as a Meter Operator Party pursuant to Schedule
21 to the Pooling and Settlement Agreement is without
prejudice to our past, present and future accrued or
accruing rights and liabilities as a Party
to the Pooling and Settlement Agreement in any capacity
whatsoever other than that of Meter Operator Party.
Yours faithfully,
duly authorized for and on behalf of
[insert full legal name of Meter Operator Party]
<PAGE>
ANNEX 3
Form of Meter Operator Party Accession Agreement
THIS SUPPLEMENTAL AGREEMENT is made on [ ] BETWEEN:
(1) [
], a company incorporated [with limited liability] under the
laws of [ ] [(registered number [
])] and having its [registered] [principal] office at [
] (the "New Meter Operator Party"); and
(2) [ ] (the "Nominee") on
behalf of all the parties to the Pooling and Settlement
Agreement referred to below.
WHEREAS
(A) by an agreement dated 30th March, 1990 made
between the Founder Generators
named therein (1), the Founder Suppliers named therein (2),
Energy Settlements and Information Services Limited
(formerly NGC Settlements Limited) as Settlement System
Administrator (3), Energy Pool Funds Administration Limited
as Pool Funds Administrator (4), The National Grid Company
pie as Grid Operator and Ancillary Services Provider (5),
and Scottish Power pie and Electricite de France, Service
National as Externally Interconnected Parties (6) (as
amended, varied, supplemented, modified or suspended, the
"Pooling and Settlement Agreements) the parties thereto
agreed to give effect to and be bound by certain rules and
procedures for the operation of an electricity trading pool
and the operation of a settlement system;
(B) by paragraph 2 of Schedule 21 to the Pooling and
Settlement Agreement additional parties may be admitted to
that Agreement for the purposes of, and only to be bound by
and conferred rights in accordance with, Schedule 21 thereto
in the capacity of Meter Operator Party; and
(C) the New Meter Operator Party has requested that it
be admitted as a Meter Operator Party pursuant to paragraph
3 of Schedule 21 to the Pooling and Settlement Agreement and
each of the Parties and Meter Operator Parties hereby agrees
to such admission.
NOW IT IS HEREBY AGREED as follows:
1. Unless the context otherwise requires, words and
expressions defined in the Pooling and Settlement Agreement
used for the purposes of Schedule 21 to the Pooling and
Settlement Agreement shall bear the same meanings
respectively when used herein.
2. The Nominee (acting on behalf of each of the Parties
and Meter Operator Parties) hereby admits the New Meter
Operator Party as an additional Meter Operator Party under
Schedule 21 to the Pooling and Settlement Agreement on the
terms and conditions hereof and with effect from [insert
effective date of admission].
3. The New Meter Operator Party hereby accepts its
admission as a Meter Operator Party and undertakes with the
Nominee (acting on behalf of each of the Parties and Meter
Operator Parties) to perform and to be bound by the terms
and conditions of Schedule 21 to the Pooling and Settlement
Agreement as a Meter Operator Party as from the [insert
effective date of admission].
4. For all purposes in connection with the Pooling and
Settlement Agreement the New Meter Operator Party shall as
from the [insert effective date of admission] be treated
including for the purposes of paragraph 2 of Schedule 21 to
the Pooling and Settlement Agreement as if it had been a
signatory of the Pooling and Settlement Agreement as a Meter
Operator Party and as if this Agreement were part of the
Pooling and Settlement Agreement, and the rights and
obligations of the Parties and Meter Operator Parties shall
be construed accordingly.
5. The New Meter Operator Party, the Parties and the Meter
Operator Parties expressly acknowledge and confirm that,
pursuant to paragraph 2.1 of Schedule 21 to the Pooling and
Settlement Agreement with effect from [insert effective date
of admission] the New Meter Operator Party shall only be
bound by, and conferred rights in accordance with, Schedule
21 to the Pooling and Settlement Agreement in the sole
capacity of Meter Operator Party.
6. The New Meter Operator Party expressly consents to be
bound by the provisions of paragraphs 2.2 and 2.3 of
Schedule 21 to the Pooling and Settlement Agreement.
7. This Agreement and the Pooling and Settlement Agreement
shall be read and construed as one document and references
in the Pooling and Settlement Agreement to the Pooling and
Settlement Agreement (howsoever expressed) shall be read and
construed as references to the Pooling and Settlement
Agreement and this Agreement.
8. This Agreement shall be governed by and construed in
all respects in accordance with
English law and the provisions of Clauses 83 and 84 of the
Pooling and Settlement Agreement as incorporated into
Schedule 21 thereto by paragraph 24 thereof shall apply
hereto mutate mutandis.
AS WITNESS the hands of the duly authorized representatives
of the parties hereto the date and year first above written.
[New Meter Operator Party]
By:
Notice details (Clause 75 of the Pooling and Settlement
Agreement as incorporated into Schedule 21 thereto by
paragraph 24 thereof)
Address:
Telex number:
Facsimile number:
Attention:
[Nominee]
(for and on behalf of each of the parties (including Meter
Operator Parties) to the Pooling and Settlement Agreement)
<PAGE>
ANNEX 4
List of Existing Meter Operator Parties
Qualifying under the Transitional Arrangements
Derwent Cogeneration Limited
Eastern Group plc
East Midlands Electricity plc
Elm Energy & Recycling (UK) Limited
Humber Power Limited
Joseph Crosfeld & Sons, Limited
London Electricity plc
Manweb plc
Marc Rich & Co. AG
Medway Power Limited
Meter Operators Limited
Midlands Electricity plc
The National Grid Company plc
National Power PLC
Northern Electric plc
NORWEB plc
Nuclear Electric plc
PowerGen plc
Schlumberger Industries Limited
Scottish Hydro-Electric PLC
SEEBOARD plc
Southern Electric plc
South Wales Electricity plc
South Western Electricity plc
Teesside Power Limited
Yorkshire Electricity Group plc
<PAGE>
ANNEX 5
Non-Exhaustive Diagrammatic Representations of Metering
Systems
Examples of the configuration of Metering Systems for
the purposes of this Agreement are set out as I to 7
(b).
<PAGE>
ANNEX 6
List of Existing Meter Operator Parties
Control Devices and Services Limited
Derwent Cogeneration Limited
E Squared Limited
Eastern Group plc
East Midlands Electricity plc
Elm Energy & Recycling (UK) Limited
Humber Power Limited
Joseph Crosfield & Sons, Limited
Keadby Generation Limited
London Electricity plc
Manweb plc
Marc Rich & Co. AG
Medway Power Limited
Meter Operators Limited
Midlands Electricity plc
Mission Energy Services Limited
The National Grid Company plc
National Power PLC
Northern Electric plc
Northern Energy Services Limited
NORWEB plc
Nuclear Electric plc
PowerGen plc
Powermet Limited
Schlumberger Industries Limited
Scottish Hydro-Electric PLC
Scottish Power plc
SEEBOARD plc
Slough Electricity Supplies Limited
Southern Electric plc
South Wales Electricity plc
South Western Electricity plc
Teesside Power Limited
Yorkshire Electricity Group plc
<PAGE>
SCHEDULE 22
1998 PROGRAMME FUNDING AND COST RECOVERY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule, except where the
context otherwise requires:
"1998 Programme Costs" means the development and
implementation costs of the 1998 Programme comprising
the following:
(a) the costs and expenses of implementing Approved
Funding Tranches approved in the period until the
Implementation Date; and
(b) Accrued Costs,
in so far as such costs relate to the 1998 Programme;
"1998 Programme" means the programme of work undertaken
by the Pool to establish the systems and processes to
support the trading and settlement system to facilitate
the full introduction of a competitive supply market on
1st April, 1998, as described in the Operational
Framework;
"1998 Sub-Committees" means the sub-committees, the
Programme Board and project boards established to
develop and implement the 1998 Programmer
"Accrued Costs" means the costs accrued in relation to
the 1998 Programme prior to 1st April, 1996, which Pool
Members agree amount to pounds 2,878,000 at 1st April, 1996,
together with interest calculated at the base rate of
Barclays Bank PLC from time to time compounded, with
monthly rests, until the date of payment, which costs
are repayable in accordance with sub-section 2.4;
"Aggregate Charging Limit" or "ACL" means the aggregate
amount of 1998 Programme Costs recoverable by the
Public Electricity Suppliers pursuant to Section 8;
"Approved Funding Tranches" means the Funding Tranches
approved by the Steering Group in accordance with
sub-section 3.4 or by Public Electricity Suppliers in
accordance with sub-section 7.2;
"EPFAL" means Energy Pool Funds Administration Limited
(registered number 2444187) whose registered office is
situate at 185 Park Street, London SE1 9DY or such
other person as may be appointed as its successor from
time to time as Pool Funds Administrator pursuant to
Schedule 15;
"Financing Costs" or "FC" means the amount of costs to
be incurred and recovered by the Public Electricity
Suppliers in respect of their financing of 1998
Programme Costs, such amount being equal to interest upon
1998 Programme Costs at the base rate of Barclays Bank PLC from
time to time compounded, with monthly rents, accruing from
the date of payment by the Public Electricity Suppliers
of such 1998 Programme Costs, until the date the Public
Electricity Suppliers are reimbursed in accordance with
Section 8;
"Funding Tranches" means individual and groups of work
packages submitted for approval by the Steering Group
or Public Electricity Suppliers in accordance with sub
section 3.4 or, as the case may be, Section 7;
"lmplementation Date" means the date on which the first
of the following occurs:
(a) a competitive supply market begins to operate in
respect of customers below
100kW;
(b) the Executive Committee requires work on the 1998
Programme to cease as agreed or sanctioned by the
Secretary of State or the Director; and
(c) the systems and processes developed by the Pool
required to facilitate the beginning of the competitive
supply market in respect of customers below 100kW would
be able to operate, as determined by an independent
expert jointly appointed by the Public Electricity
Suppliers, the Chief Executive and the Director, but
are not capable of operating because of other
circumstances or, if later, 1st April, 1998;
"Operational Framework" means the 1998 Operational
Framework of the Pool (Release 4.2) submitted to the
Director as of 31st March, 1996;
"PES Votes" means, in relation to a Public Electricity
Supplier, the number of votes to which such Public
Electricity Supplier is entitled from time to time,
determined in accordance with Section 6;
"Pool" means The Electricity Pool of England and Wales;
"Programme Board" means the 1998 Programme Management
Board established by the Executive Committee to
monitor, review and oversee implementation of the 1998
Programmer
"Programme Budget" means an estimate of the overall
cost of implementing the 1998 Programme, including
detailed cost estimates for each element of the 1998
Programme required to be incurred, each element to be
broken down into all identified Funding Tranches with
each Funding Tranche to contain the details of the
timing of the work, the scope of work and the likely
costs and expenses to be. incurred in its performance,
approved in accordance with Section 5;
"Programme Share" means, in relation to a Public
Electricity Supplier, the share of 1998 Programme Costs
of such Public Electricity Supplier, determined in
accordance with Section 6;
"Requisite Proportion" means, in the case of the
approval by Public Electricity Suppliers in writing or
in separate meeting of the matters referred to:
(a) in paragraphs 7.2(a) and 7.2(c), 65 per cent.; and
(b) in paragraph 7.2(b), 50 per cent.,
in the case of written consent, of the total PES Votes
of all Public Electricity Suppliers and, in the case of
a separate general meeting, of the total PES Votes of
those Public Electricity Suppliers as (being entitled
to do so) vote in person or by proxy at the relevant
separate general meeting of which notice specifying the
intention to propose the resolution has been duly
given; and
"Steering Group" means the 1998 Programme Steering
Group established pursuant to Section 3, save that if
the Executive Committee so determines, such Steering
Group may be disbanded, in which case the Executive
Committee shall act as and have the same rights and
obligations as the Steering Group for the purposes of
this Schedule, as such rights and obligations are set
out in Section 3, and in that event references in this
Schedule to a member of the Steering Group appointed by
a member of the Executive Committee appointed by Public
Electricity Suppliers shall be read as references to
any member of the Executive Committee appointed by
Public Electricity Suppliers.
1.2 Interpretation: In the event of any inconsistency
or conflict between the provisions of this Schedule and
the other provisions of the Agreement in relation to
the 1998 Programme Costs or the Operational Framework,
the provisions of this Schedule shall, unless otherwise
expressly provided, prevail.
2. PROGRAMME FUNDING
2.1 Programme Costs: All 1998 Programme Costs shall be
paid or reimbursed by Public Electricity Suppliers or
by a person or persons on their behalf in accordance
with this Schedule.
2.2 Allocation of 1998 Programme Costs after lst
April, 1996: In respect of each month after 1st April,
1996, the 1998 Programme Costs incurred in such month
shall be allocated amongst Public Electricity Suppliers
according to their respective Programme Shares.
2.3 Payment and collection:
2.3.1 EPFAL shall collect from Public Electricity
Suppliers the amounts which they are obliged to pay
towards the 1998 Programme Costs and each Public
Electricity Supplier will be obliged to pay its
proportionate share of the 1998 Programme Costs
(together with Value Added Tax thereon, if applicable)
against receipt of any invoice therefor issued by
EPFAL.
2.3.2 EPFAL shall arrange for collection from each
Public Electricity Supplier of its proportionate share
of the 1998 Programme Costs in such manner as may be
agreed by EPFAL with the Public Electricity Suppliers
from time to time which may include collection in
advance) and Public Electricity Suppliers shall comply
with such collection procedures and, in particular,
shall make payment within the time period prescribed by
such procedures. In the event of a failure to agree
such procedures by 31st August, 1996, the Steering
Group shall prescribe the interim procedures to be
followed.
2.3.3 If any Public Electricity Supplier fails to pay
an amount due under this Schedule within fifteen (15)
days of the due date for such payment (such Public
Electricity Supplier being a Non-paying PES") each Pool
Member (other than the Non-paying PES) shall be
severally liable for its Contributory Share (calculated
on the basis that the Points allocated to the
defaulting Nonpaying PES are disregarded) and EPFAL
shall accordingly be entitled to recover the due
proportion of that amount from each Pool Member (other
than the Non-paying PES). In that event, EPFAL shall
advise each Pool Member of the amount payable by
invoice dispatched to each Pool Member and each Pool
Member shall pay the amount advised in the relevant
invoice within fifteen (15) days after the invoice
date.
2.3.4 A Non-paying PES shall indemnify and keep
indemnified each Pool Member on demand against all sums
properly paid by such Pool Member pursuant to this
sub-section 2.3.
2.3.5 Each Pool Member shall give notice to the Pool
Funds Administrator before instituting any action or
proceedings in any court to enforce payments due to it
pursuant to this Schedule. Upon receipt of any notice
under this paragraph 2.3.5, the Pool Funds
Administrator will as soon as practicable notify the
Executive Committee, all Pool Members and the Director.
The provisions of sub-section 24.4 of Schedule 11 shall
apply mutatis mutandrs in respect of any payment due
from a Non-paying PES pursuant to this Schedule.
2.3.6 Upon EPFAL becoming aware of a Public Electricity
Supplier becoming a Non-paying PES, it shall notify the
Executive Committee, the remaining Pool Members and the
Director, and the Executive Committee shall convene and
cause to be convened a general meeting of Pool Members
as soon as possible thereafter, which meeting will
determine whether any further 1998 Programme Costs
shall be incurred.
2.3.7 The provisions of paragraphs 15.2.3,15.2.4 and
sub-section 15.3 of Schedule 15 shall in any event
apply mutatis mutants in respect of all payments
required to be made pursuant to this Section 2.
2.4 Accrued Costs: As soon as reasonably practicable, but in
any event no later than 30th September, 1996, Pool Members
will pay each other such sums as will ensure that all Accrued
Costs have effectively been paid for or reimbursed only by
Public Electricity Suppliers and, as between Public
Electricity Suppliers, according to their respective
Programme Shares.
3. PROGRAMME EXPENDITURE AND THE STEERING GROUP
3.1 Authority to incur expenditure: No 1998 Programme Costs
shall be incurred by 1998 Sub-Committees other than pursuant
to Approved Funding Tranches.
3.2 Establishment: Pool Members hereby establish the
Steering Group as a sub-committee of the Executive Committee
upon the terms and subject to the conditions of this Schedule
22.
3.3 Steering Group Members: Each member of the Executive
Committee shall have the right to appoint a member of the
Steering Group.
3.4 Approval of programme expenditure:
3.4.1 The Steering Group will notify each 1998
Sub-Committee and such persons as may be nominated by each
Public Electricity Supplier in writing to the Steering Group
from time to time ("PES Nominees"), no later than 10 working
days prior to holding any meeting of the date that meeting
will be held, save that, if at least 5 members of the
Steering Group (including at least 3 appointed by members of
the Executive Committee appointed by Public Electricity
Suppliers) consent, a meeting of the Steering Group may be
held on 48 hours' notice.
3.4.2 Prior to approving any further work packages after
15th July, 1996, undertaking or commissioning any work in
respect of the 1998 Programme, the Programme Board or any
member of the Steering Group shall submit one or more Funding
Tranches to the Steering Group (with a copy to all PES
Nominees) at least 5 working days in advance of any meeting
of the Steering Group, for approval. Each Funding Tranche
shall contain details of the scope of the work proposed to be
undertaken and a budget of all costs associated with it,
comparison of all its elements against the Programme Budget
(or, if the Programme Budget shall not then have been agreed,
against the planned budget). Any amount to be reimbursed in
respect of costs incurred in relation to work packages
approved in the period between 31st March, 1996 and 15th
July, 1996 shall also be the subject of a Funding Tranche or
Funding Tranches to be submitted to the Steering Group (with
a copy to all PES Nominees) by the Programme Board or any
member of the Steering Group at least five working days in
advance of a meeting of the Steering Group. Each such Funding
Tranche shall contain details of the scope of the work
undertaken and details of the costs associated with it.
3.4.3At each meeting of the Steering Group, the Steering
Group shall resolve whether to approve Funding Tranches duly
submitted to it in accordance with paragraph 3.4.2, and,
subject to any appeal to Public Electricity Suppliers, any
Funding Tranche so approved will become an Approved Funding
Tranche. Notwithstanding the decision taken, any Public
Electricity Supplier or any member of the Steering Group
appointed by a member of the Executive Committee appointed
by Public Electricity Suppliers may, within 5 working days
of the resolution of the Steering Group, by notice in
writing to the Steering Group, appeal the matter to be
considered by Public Electricity Suppliers under sub-section
7.2. If the Public Electricity Suppliers then resolve to
approve the Funding Tranche, it shall become an Approved
Funding Tranche. If the matter has been appealed and Public
Electricity Suppliers do not so approve it, the Funding
Tranche shall not be an Approved Funding Tranche.
3.4.4As soon as the Programme Board becomes aware that the
cost of any work carried out pursuant to any Approved
Funding Tranche is likely to exceed the budget considered by
the Steering Group in paragraph 3.4.2 above, it shall
forthwith prepare a revised budget and deliver it to the
Steering Group, at which point the Steering Group and, if
necessary, the Public Electricity Suppliers, will follow the
procedure set out in paragraphs 3.4.2 and 3.4.3 in
considering whether to authorize the continuation of work
under the Approved Funding Tranche, in accordance with such
revised budget. If (a) the Steering Group does not resolve
to approve the revised budget, in accordance with paragraph
3.4.2 or (b) after referral to Public Electricity Suppliers
in accordance with sub-section 7.2 they resolve not to
approve the revised budget, then the relevant 1998
Sub-Committee shall undertake no work to implement the
Approved Funding Tranche which would lead to the cost of
implementing the Approved Funding Tranche exceeding the
original budget. If the revised budget is approved in
accordance with paragraph 4.3.2 or, as the case may be,
sub-section 7.2, the cost of that Approved Funding Tranche
will be adjusted accordingly.
3.4.5Any Steering Group member may by reasonable notice
request such information of the Chief Executive or the
Programme Board as may be reasonably required to assess the
performance of the 1998 Programme against the Programme
Budget and Approved Funding Tranches, it being understood
that the Chief Executive and the Programme Board shall not
be required to comply with any such information request
unless it is made by 3 or more members of the Steering
Group.
3.5 Voting: Any question or matter considered by the
Steering Group shall be resolved by a simple majority of
votes of members of the Steering Group.
4. THE OPERATIONAL FRAMEWORK
4.1 Changes to Operational Framework: Subject to
sub-section 4.2, any addition to, deletion from or other
change to the Operational Framework by or on behalf of Pool
Members shall be made only with the prior approval of Pool
Members in general meeting.
4.2 Effect on 1998 Programme Costs: If any addition to,
deletion from or other change to the Operational Framework
may lead to an increase in the 1998 Programme Costs then,
unless such addition, deletion or other change has been
approved by the Public Electricity Suppliers in writing or
in separate general meeting, the proposed addition, deletion
or other change shall not take effect unless Pool Members so
resolve (in which case any costs incurred as a result of the
addition, deletion or other change in question shall not be
1998 Programme Costs).
5. PROGRAMME BOARD AND PROGRAMME BUDGET
5.1 Constitution of the Programme Board: At all times, the
Programme Board shall comprise three senior users, one
senior technical user (together the "Senior Users") and the
Chief Executive. One of the Senior Users shall be an
appointee of all Pool Members other than Public Electricity
Suppliers, and the other three shall be appointees of the
Public Electricity Suppliers.
5.2 Voting: It is the intention of Pool Members that the
Programme Board shall resolve matters by way of consensus.
5.3 Preparation of the Programme Budget: The Programme
Board shall prepare and submit a draft programme budget by
no later than 15th July, 1996 for approval by the Steering
Group. The procedure for approval of the draft programme
budget shall follow that for approval of Funding Tranches in
paragraphs 3.4.2 and 3.4.3, save that if either the Steering
Group or Public Electricity Suppliers do not approve the
draft programme budget, they shall notify the Programme
Board of any areas requiring revision and the Programme
Board shall, as soon as reasonably practicable after such
notification, re-submit the draft programme budget to the
Steering Group. Once the draft programme budget is approved
it shall be the Programme Budget.
6. PROGRAMME SHARES AND PES VOTES
6.1 Programme Shares and PES Votes: The Programme Share and
PES Vote of each Public
Electricity Supplier shall be that set opposite its name in
column 2 of the table in sub
section 6.2.
6.2 Table:
Column 1 Column 2
Name of PES Programme Shares and PES
Votes
Eastern Group plc 13.82%
East Midlands Electricity plc 9.61%
London Electricity plc 8.50%
Manweb plc 5.71%
Midlands Electricity plc 9.64%
Northern Electric plc 5.44%
NORWEB Plc 8.99%
SEEBOARD PLC 8.91%
Southern Electric plc 11.75%
South Wales Electricity plc 3.64%
South Western Electricity plc 6.21%
Yorkshire Electricity Group 7.78%
plc
6.3 In the event of any merger between one or more Public
Electricity Suppliers any successor company shall have the
aggregate Programme Shares and PES Votes of its
predecessors. Any successor to part only of the authorized
area (as such term is defined in its PES Licence) of a
Public Electricity Supplier and the Public Electricity
Supplier retaining the other part shall have such PES Votes
and Programme Shares as the Director shall determine.
7 PES MEETINGS
7.1 PES Meetings: The following provisions of this Section
7 shall apply to separate general meetings of Public
Electricity Suppliers.
7.2 Requirements for PES Approval: The following matters
shall require Public Electricity Suppliers to give their
approval by the Requisite Proportion in separate general
meeting, or by the Requisite Proportion of Public
Electricity Suppliers giving their approval in writing to
take effect:
(a) the approval of Funding Tranches by way of appeal
under sub-section 3.4;
(b) the approval of any addition to, deletion from or
other change to the Operational Framework which may
lead to an increase in the 1998 Programme Costs; and
(c) any addition to, deletion from or other charge to
this Schedule 22 (other than, for the avoidance of
doubt, the adoption of detailed drafting of the
provisions relating to the recovery of 1998 Programme
Costs in accordance with paragraph 8.2.3).
7.3 General Provisions: The provisions of Part III of
the Agreement relating to general meetings of Pool
Members shall apply mutatis mutandis to separate
general meetings of Public Electricity Suppliers, but
so that:
(a) the necessary requirement for notice in writing to
be given of any such separate general meeting shall be
5 working days rather than the period in Clause 9.3;
(b) Clause 10.9 shall not apply although the Pool
Auditor and the Director or its
or his duly authorized representative shall have the
right to attend and speak (but not vote) at such
separate general meetings;
(c) such separate general meetings shall be convened
by the Secretary upon receipt of a request from a
Public Electricity Supplier or a member of the Steering
Group appointed by an Executive Committee Member
appointed by Public Electricity Suppliers;
(d) the necessary quorum shall be 6 or more Public
Electricity Suppliers present in person together
representing 50 per cent. or more of the aggregate
number of PES Votes of all Public Electricity Suppliers
and if no quorum is present within half an hour from
the time appointed for the separate general meeting,
the separate general meeting shall be adjourned until
the following working day;
(e) references to Total Votes shall be substituted by
references to PES Votes; and
(f) notice of any such separate general meeting need
to be given only to those entitled to attend the same,
and any resolution put to any such separate general
meeting shall, to be passed, require the Requisite
Proportion of votes in favour.
RECOVERY OF 1998 PROGRAMME COSTS
8.1 - Calculation of Aggregate Charging Limit: The
Aggregate Charging Limit shall be calculated in the
following manner
8.1.1 if Total 1998 Programme Costs are less than
the Lower Limit then:
ACL = LL - LL- T1998 PC +FC
------------
2
8.1.2 if Total 1998 Programme Costs are equal to or
greater than the Lower Limit and less than or equal to
the Upper Limit then:
ACL = T1998 PC + FC; and
8.1.3 if Total 1998 Programme Costs are greater
than the Upper Limit then:
ACL = UL+ T1998 PC - UL + FC
-------------
2
in each case, where, subject to the provisions set out
below:
the Lower Limit ("LL") = pounds 48,000,000;
the Upper Limit ("UL") = pounds 58,000,000; and
the Total 1998 Programme Costs ("T1998 PC") = the
aggregate amount of 1998 Programme Costs,
save that if, as a result of any addition to, deletion
from or other change to the Operational Framework
and/or the adoption of Approved Funding Tranches
pursuant to sub-section 3.4 or Section 7 outside the
scope of the Operational Framework, the Total 1998
Programme Costs are changed by any amount in excess of
pounds 50,000 then, subject to prior approval by the
Director, both the Lower Limit and the Upper Limit
shall be adjusted by the amount of such change.
8.2 Recovery from under 100kw customers:
8.2.1The ACL is to be recovered, with allowance being
made for Financing Costs, over a maximum period of 5
years from the Implementation Date from all suppliers
of customers below 100kW on the basis of a charge per
megawatt hour supplied. The Public Electricity
Suppliers shall be entitled to recover the ACL in
proportion to the 1998 Programme Costs contributed by
them. If, for reasons other than force majeure (as
defined in paragraph 8.2.2 below), the Implementation
Date is later than 1st April, 1998, the Public
Electricity Suppliers or their agents will be able to
recover a proportionately lesser amount.
8.2.2 If, by reason of force majeure (which for
these purposes means any delay as a result of the
requirements of the Director or the Secretary of State
or any exceptional circumstances outside the control of
the Pool), the 1998 Programme is delayed or not implemented,
full cost recovery of the ACL shall be made.
8.2.3 The principles for recovery set out in this
sub-section 8.2 require further detailed drafting. Pool
Members undertake to use their reasonable endeavors to
agree the detailed drafting by 1st October, 1996.
9. SCHEDULE 22 CEASING TO HAVE EFFECT
Without prejudice to any accrued rights or liabilities,
the provisions of this Schedule 22 shall cease to have
effect on the date following that on which the final
payment has been made to the last Public Electricity
Supplier to be reimbursed its due proportion in respect
of 1998 Programme Costs and Financing Costs pursuant to
Section 8.
10. ARRANGEMENTS WITH SCOTTISH PUBLIC ELECTRICIAN
SUPPLIERS
Pool Members envisage that the effect upon the
arrangements in respect of any contributions towards
the 1998 Programme Costs from Scottish Power plc and
Scottish Hydro-Electric plc shall be incorporated into
amendments to this Agreement once agreed. These may
include adjustments, if appropriate, to the Lower Limit
and the Upper Limit.
DATED 17 October, 1996
THE GENERATORS
named herein
- and -
THE SUPPLIERS
named herein
- and -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
- and -
ENERGY POOL FUNDS ADMINISTRATION LIMITED
as Pool Funds Administrator
- and -
THE NATIONAL GRID COMPANY plc
as Grid Operator and Ancillary Services Provider
- and -
SCOTTISH POWER plc
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
- and -
THE OTHER PARTIES
named herein
- and -
THE METER OPERATOR PARTIES
named herein
FIFTEENTH SUPPLEMENTAL DEED
relating to the Pooling and Settlement Agreement
for the Electricity Industry
in England and Wales
CONTENTS
<PAGE>
Page
1. INTERPRETATION 2
2. RESTATEMENT 2
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT 2
4. MISCELLANEOUS 2
5. ENTIRE AGREEMENT 3
6. GOVERNING LAW 3
SCHEDULE 1: Part I: The Generators 4
Part II: The Suppliers 8
SCHEDULE 2: The Other Parties 12
SCHEDULE 3: The Meter Operator Parties who are
not Parties 14
SIGNATORIES
<PAGE>
THIS SUPPLEMENTAL DEED is made on , 1996
BETWEEN: -
(1) THE PERSONS whose names, registered numbers and registered or
principal offices are set out in Part I of Schedule 1;
(2) THE PERSONS whose names, registered numbers and registered or
principal offices are set out in Part II of Schedule 1;
(3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered
number 2444282) whose registered office is situate at Fairham House,
Green Lane, Clifton, Nottingham NG11 9LN as Settlement System
Administrator;
(4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number
2444187) whose registered office is situate at 185 Park Street,
London SE1 9DY as Pool Funds Adm inistrator;
(5) THE NATIONAL GRID COMPANY pie (registered number 2366977) whose
registered office is situate at National Grid House, Kirby Corner
Road, Coventry CV4 8JY as Grid Operator and Ancillary Services
Provider;
(6) SCOTTISH POWER plc (registered number 117120) whose principal
office is situate at 1 Atlantic Quay, Glasgow G2 8SP, Scotland as an
Externally Interconnected Party;
(7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office
is situate at Departement Relations avec l'Etranger, Echanges
d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08,
France as an Externally Interconnected Party;
(8) THE OTHER PARTIES whose names, registered numbers and registered
or principal offices are set out in Schedule 2; and
(9) THE METER OPERATOR PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 3.
WHEREAS :
(A) by a Pooling and Settlement Agreement for the Electricity
Industry in England and Wales dated 30th March, 1990 (the Spooling
and Settlement Agreement") the parties thereto agreed to give effect
to and be bound by certain rules and procedures for the operation of
an electricity trading pool and the operation of a settlement system;
(B) the Pooling and Settlement Agreement has been amended by
supplemental agreements dated as of 30th June, 1990, as of 15th
October, 1990, 30th September, 1991, 29th November, 1991,16th
November, 1992, 31st March, 1993, 1st January, 1994, 22nd April,
1994, 15th March, 1995, 7th April, 1995,16th April, 1996 and 16
October, 1996 and hereinafter references to the Pooling and
Settlement Agreement are to that agreement as so amended; and
(C) the parties to this Deed (being (i) all the Parties at the date
hereof and (ii) all the Meter Operator Parties at the date hereof)
have agreed to amend and restate the Pooling and Settlement Agreement
on the terms and subject to the conditions set out below,
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 Except where defined herein or where the context otherwise
requires, words and expressions defined in the Pooling and Settlement
Agreement shall have the same respective meanings when used in this
Deed and references to a document being uin the agreed form" are to
that document which shall have endorsed thereon the words "in the
agreed form" and which shall have been initialled by or on behalf of
the Chief Executive.
1.2 The table of contents and the headings to each of the Clauses
are inserted for convenience only and shall be ignored in construing
this Deed.
2. RESTATEMENT
The parties hereby agree that with effect on and from the date of
this Deed the Pooling and Settlement Agreement shall be amended and
restated in the agree" form.
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT
The Pooling and Settlement Agreement shall remain in full force and
effect and this Deed and the Pooling and Settlement Agreement shall
be treated as one document so that, upon the Pooling and Settlement
Agreement being amended and restated pursuant to Clause 2, all
references to the Pooling and Settlement Agreement shall be treated
as references to that agreement as amended by this Deed.
4. MISCELLANEOUS
The provisions of Clauses 75 to 79 (inclusive) and 81 to 84
(inclusive) of the Pooling and Settlement Agreement shall be deemed
to be incorporated herein mutatis mutandis.
5. ENTIRE AGREEMENT
5.1 Each party acknowledges that in entering into this Deed on the
terms set out herein it is not relying upon any representation,
warranty, promise or assurance made or given by any other party or
any other person, whether or not in writing, at any time prior to the
execution of this Deed which is not expressly set out herein.
5.2 None of the parties shall have any right of action against any
other party arising out of or in connection with any representation,
warranty, promise or assurance referred to in sub-clause 5.1 (except
in the case of fraud).
GOVERNING LAW
This Deed shall be governed by, and construed in all respects in
accordance with, English law.
IN WITNESS whereof this document has been duly executed and delivered
as a deed the day and year first above written
<PAGE>
SCHEDULE 1:
Part I: The Generators
Name Registered Number Registered or Principal
Office
Anglian Power Generators 2488955 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Barking Power Limited 2354681 Devonshire House
M ayfair House
London W1X 5FH
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire
WA3 6AS
Celtpower Limited 2656561 13 Charles II Street
London
SW1Y 4QT
Citigen (London) Limited 2427823 152 Grosvenor Road
Rivermill House
London
SW1V 3JL
Corby Power Limited 2329494 Mitchell Road
Phoenix Parkway
Corby
Northamptonshire
NN17 1QT
Derwent Cogeneration 2703635 Landsdowne House
Limited Berkeley Square
London W1X 5DH
Eastern Merchant 3116225 Wherstead Park
Generation Limited Wherstead
Ipswich
S uffolk
IP9 2AQ
Electricite de France, - Department Relations avec
Service National I'Etranger
Exchanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
Elm Energy & Recycling 2516685 Elm Energy House
(UK) Limited Ettingshall Road
Wolverhampton
West Midlands WV2 2LA
Fellside Heat and Power 2614535 Fellside Lodge
Limited Seascale
Cumbria CA20 1PG
Fibrogen Limited 2547498 38 Clarendon Road
London W 11 SAD
Fibropower Limited 2234141 38 Clarendon Road
London W 11 SAD
First Hydro Company 2444277 Bala House
Lakeside Business Village
St. David's Park
Deeside
Clwyd CH5 3XJ
Independent Energy UK 3033406 3rd Floor
Limited 33 Queen Street
Maidenhead
Berkshire
SL6 1NB
Keadby Generation Limited 2729513 Talbot Road
Manchester M 16 OH Q
Lakeland Power Limited 2355290 Roosecote Power Station
Roosecote Marsh
Barrow-in-Furness
Cumbria LA13 OPR
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13 9PB
Medway Power Limited 2537903 Boston House
The Little Green
Richmond TW9 1QE
Midlands Power (UK) 2251099 Mucklow Hill
Limited Halesowen
West Midlands B62 8BP
National Power plc 2366963 Windmill Hill Business
Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
Peterborough Power 2353599 Storeys Bar Road
Limited Peterborough PE1 5NT
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Regional Power Generators 2352390 Wetherby Road
Limited Scarcroft,
Leeds LS14 3HS
Scottish Hydro-Electric 117119 10 Dunkeld Road
plc Perth PH 1 5WA
Scottish Power plc 117120 1 Atlantic Q u ay
Glasgow G2 8SP
Slough Energy Supplies 2474514 342 Edinburgh Avenue
Limited Slough
SL1 4TU
South East London 2489384 37-41 Old Queen Street
Combined Heat and Power London SW1H 9UA
Limited
Teesside Power Limited 2464040 34 Park Street
London W1Y 3LE
Winterton Power Limited 3001798 800 Park Avenue
Aztec West
Almondsbury
Bristol BS12 4SE
<PAGE>
Part II: The Suppliers
Name Registered Number Registered or Principal
Office
British Gas Trading Ltd 3078711 Rivermill House
152 Grosvenor Road
London SW 1 V 3JL
British Nuclear Fuels pie 1002607 Risley
Warrington
Cheshire WAS 6AS
Candecca Resources 953066 Welton Gathering Centre
Limited Barefield Lane
Off Wragby Road
Sudbrooke
Lincoln LN2 2QY
Citigen (London) Limited 2427823 152 Grosvenor Road
Rivermill House
London SW 1V 3JL
Crosfield Limited 48745 Bank Quay
P.O. Box 26
Warrington
Cheshire WAS JAB
Eastern Group pie 2366906 Wherstead Park
P.O. box 40
Wherstead
Ipswich
Suffolk IP9 2AQ
East Midlands Electricity 2366923 P.O. Box 444
pie Woodyard Lane
Wollaton
Nottingham NG8 lEZ
Electricite de France, - Department Relations avec
Service National l'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
Energy Supply Contracts 172268 The Havens
Limited Ransomes Europark
Ipswich
Suffolk IP3 9SJ
Enron Capital and Trade 2463988 Four Millbank
Resources Limited London SW1P 3ET
Impkemix Energy Limited 2076043 The Heath
Runcorn
Cheshire WA7 4QF
Independent Energy UK 3033406 3rd Floor
Limited 33 Queen Street
M aidenhead
Berkshire
SL6 1NB
London Electricity plc 2366852 Templar House
81-87 High Holborn
London WC1V 6NU
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13 9PB
Manweb plc 2366937 Sealand Road
Chester CH 1 4LR
Midlands Electricity plc 2366928 Mucklow Hill
Halesowen
West Midlands B62 8BP
National Power plc 2366963 Windmill Hill Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Norsk Hydro (UK) Limited 841421 Bridge House
69 London Road
Twickenham
Middlesex TQ 1 3RH
Northern Electric plc 2366942 Carliol House
Market Street
Newcastle upon Tyne
NE1 ONE
NORWEB plc 2366949 Talbot Road
Manchester M16 OHQ
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
PowerState Limited 2859586 Douglas Bank House
Wigan Lane
Wigan WN1 2TB
Scottish Hydro-Electric 117119 10 Dunkeld Road
plc Perth PHI SWA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
SEEBOARD plc 2366867 Forest Gate
Brighton Road
Crawley
West Sussex RH11 9BH
Shell Power Limited 2559630 Rowlands Way
Withenshawe
Manchester M22 5SB
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Southern Electric pie 2366879 Westacott Way
Littlewick Green
M aidenhead
Berkshire SL6 3QB
South Wales Electricity 2366985 Newport Road
pie St. Mellons
Cardiff CF3 9XW
South Western Electricity 2366894 800 Park Avenue
plc Aztec West
Almondsbury
Bristol BS12 4SE
The Renewable Energy 3043412 21 St. Thomas Street
Company Limited Bristol BS 1 6US
UK Electric Power Limited 2844010 Stroud House
Russell Street
Stroud
Gloucestershire GL5 BAN
UML Limited 661900 PO Box 115
Port Sunlight
Wirral
Merseyside
L62 4ZG
Yorkshire Electricity 2366995 Wetherby Road
Group plc Scarcroft
Leeds LS14 3HS
<PAGE>
SCHEDULE 2:
The Other Parties
Name Registered Number Registered or Principal
Office
Accord Energy Limited 2877398 Rivermill House
152 Grosvenor Road
London SW1V 3JL
AES Barry Limited 3135522 Burleigh House
17-19 Worple Way
Richmond
Surrey TW 10 6AG
Alcan Aluminium UK 750143 Chalfont Park
Limited Gerrards Cross
Buckinghamshire
SL9 OQB
British Gas plc 2006000 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Cabah Energy Limited 2759706 190 Strand
London WC2R 1JN
Eastern Generation 2529347 Wherstead Park
Services Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Enfield Energy Centre 2796628 Concorde House
Limited Concorde Way
Stockton on Tees
Cleveland
TS18 3RB
Fibrowatt Thetford 3057688 38 Clarendon Road
Limited London W 11 3AD
Humber Power Limited 2571241 18 S avile Row
London W1X 1AE
Hydra Electric Energy 2487475 Royex House
Limited Aldermanbury Square
London EC2V 7LD
Indian Queens Power 2928100 1 Northumberland Avenue
Company Limited London WC2N 5BW
Keadby Power Limited 2548042 Talbot Road
M anchester
M16 OHQ
Kingsnorth Power Limited 2656343 190 Strand
London WC2R 1JN
Meter Operators Limited 2841018 Lynton House
7-12 Tavistock Square
London WC1H 9BQ
Pentex (East Midlands) 2275006 20 St. James Street
Limited London SWIG 4UJ
Rocksavage Power Company 18868 152 Grosvenor Road
Limited London SW1V 3JL
Seabank Power Limited 2591188 Union Buildings
15 Union Street
Aberdeen AS 1 2BU
<PAGE>
SCHEDULE 3:
The Meter Operator Parties who are not Parties
Name Registered Number Registered or Principal
Office
Control Devices and 1242585 P.O. Box 56
Systems Limited 101 Mill Lane
Newbury
Berkshire
RG14 5RE
DrakMarn O&M Ltd 3124701 53 New Broad Street
London EC2M 1JJ
E. Squared Limited 2674129 Almac House
Church Lane
Bisley
Surrey
GU24 9DR
Northern Energy Services 2868141 5 Derwent Place
Limited Spotborough
Doncaster
DN5 7PN
PowerMet Limited 2877912 3 Park Place
London SW1A lLP
Scotcomms Partnership Slotline House
Largo Road
St. Andrews
Fife
FY16 8NJ
Schlumberger Industries 534821 1 Kingsway
Limited London WC2B 6XH
The Challenge Group 22 Tally Road
Oxted
Surrev RHO OTG
<PAGE>
SIGNATORIES
THE GENERATORS
Anglian Power Generators Limited
Address: Kings Lynn Power Station, Willows Business Park,
Saddlebow, Kings Lynn, Norfolk PE34 3RD
Facsimile no: 01553 667166
Attention: R. Rigg
By:
Barking Power Limited
Address: Barking Power Station, Chequers Lane, Dagenham, Essex
RM9 6PF
Facsimile no: 0181 984 5174
Attention: Dr S.J. Mancey
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
CeltPower Limited
Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no: 01686 629887
Attention: M. Johnson
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171253 9319
Attention: Ms A. Dunleavy
By:
Corby Power Limited
Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire
NN17 5QT
Facsimile no: 01536 402619
Attention: General Manager
By:
Derwent Cogeneration Limited
Address: P.O. Box 5, Spondon, Derby DE21 7BP
Facsimile no: 01332 669829
Attention: R. Hemmings
By:
Eastern Merchant Generation Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 552966
Attention: Coral Woodward
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme
etage, 75384, Paris Cedex 08
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181944 0750
Attention: P. Clubb)
By:
Elm Energy & Recycling (UK) Limited
Address: Elm Energy House, Eltingshall Road, Wolverhampton, West
Midlands WV14 9NN
Facsimile no: 01902 408517
Attention: M.D. Wyckoff
By:
Fellside Heat and Power Limited
Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no: 01946 721130
Attention: J.A. Bartlett
By:
Fibrogen Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 2218671
Attention: R. Fraser
By:
Fibropower Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 221 8671
Attention: R. Fraser
By:
First Hydro Company
Address: Bala House, Lakeside Business Village, St. Davids Park,
Deeside, Clwyd CH5 3XJ
Facsimile no: -
Attention: B. Stalker
By:
Independent Energy UK Limited
Address: St John's Court, 70 St John's Close, Knowle, Solihull,
West Midlands B93 ONN
Facsimile no: 01564 770010
Attention: J Sully
By:
Keadby Generation Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolashire
DN17 3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Lakeland Power Limited
Address: Roosecote Power Station, Roosecote Marsh,
Barrow-in-Furness, Cumbria LA13 OPR
Facsimile no: 01229 870919
Attention: Jackie Mahon
By:
Magnox Electric pie
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 813770
Attention: Company Secretary
By:
Medway Power Limited
Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3
OAG
Facsimile no: 01634 271666
Attention: P. Stinson
By:
Midlands Power (UK) Limited
Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no: 0121 423 0261
Attention: Company Secretary
By:
National Power pie
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: H.H. Clements
By:
Peterborough Power Limited
Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no: 01733 894622
Attention: W. Burrough
By:
PowerGen pie
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: G. Thomas
By:
Regional Power Generators Limited
Address: Glanford Brigg Generating Station, Scawby Brook, Brigg,
North Lincolnshire DN20 SILT
Facsimile no: 01482 495916
Attention: A.L. Biggins
By:
Scottish Hydro-Electric pie
Address: Port Na Craig House, Pitlochry, Perthshire PH16
Facsimile no: 01796 472793
Attention: I. Moyes
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141 636 4706
Attention: D.R. Booth
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: S. Garrett
By:
South East London Combined Heat and Power Limited
Address: Landmann Way, Off Surrey Road, London SE14 SRS
Facsimile no: 0171 252 2986
Attention: P. Gerstrom
By:
Teesside Power Limited
Address: Four Millbank, London SW1P SET
Facsimile no: 0171 316 5454
Attention: D. Lewis
By:
Winterton Power Limited
Address: 800 Park Avenue, Aztec West, Bristol BS
Facsimile no: 01454 201101
Attention: T. Masood
By:
THE SUPPLIERS
British Gas Trading Ltd
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645404
Attention: D. Meachem
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
Candecca Resources Limited
Address: Welton Gathering Centre, Barfield Land, off Wragby Road,
Sudbrooke, Lincoln LN2 2QU
Facsimile no: 01522 754255
Attention: D. Wood
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: Ms A Dunleavy
By:
Crosfield Limited
Address: Bank Quay, PO Box 26, Warrington, Cheshire WAS JAB
Facsimile no: 01925 59828
Attention: K. Sowley
By:
Eastern Group ply
Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk
IP9 2AQ
Facsimile no: 01473 554393
Attention: J. Whelan
By:
East Midlands Electricity plc
Address: 398 Coppice Road, PO Box 4, North PDO Arnold, Nottingham
NGs 7HX
Facsimile no: 01159 358190
Attention: A. Musto
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme
etage, 75384, Paris, Cedex 08
Facsimile no: (010 331) 40 42 6341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Energy Supply Contracts Limited
Address: The Havens, Ransomes Europak, Ipswich, Suffolk IP3 9SJ
Facsimile no: 01473 273871
Attention: E.C. Cumberland
By:
Enron Capital and Trade Resources
Address: Four Millbank, London SW1P 3ET
Facsimile no: 0171 316 5316
Attention: Mr P. Russell
By:
Impkemix Energy Limited
Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland
TS90 8JE
Facsimile no: 01642 437838
Attention: K.J. Green
By:
Independent Energy UK Limited
Address: St. John's Court, St. John's Close, Knowle,
West Midlands
B93 ONN
Facsimile no: 0156 770010
Attention: John Sully
By:
London Electricity pie
Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no: 0171 430 2903
Attention: M. Holmes
By:
Magnox Electric pie
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PBB
Facsimile no: 01453 813770
Attention: Company Secretary
By:
Manweb pie
Address: Sealand Road, Chester CH1 4LR
Facsimile no: 01244 652187
Attention: T. Morley
By:
Midlands Electricity plc
Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no: 0121 423 2777
Attention: R. Murray
By:
PowerGen pie
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: G. Thomas
By:
Powerstate Limited
Address: The Genesis Centre, Garrett Field, Science Park South,
Birchwood, Warrington WAS 7BH
Facsimile no: 01925 830277
Attention: R. Henshaw
By:
ScoKish Hydro-Electric pie
Address: Port Na Craig House, Pitlochry, Perthshire PH16 SND
Facsimile no: 01796 472793
Attention: 1. Moyes
By:
ScoKish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: D.R. Booth
By:
SEEBOARD plc
Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no: 01293 428321
Attention: C. Daniels
By:
Shell Power Limited
Address: Rowlands Way, Withenshawe, Manchester M22 5SB
Facsimile no: 0161 499 8387
Attention: John Tucker
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: S. Garrett
By:
Southern Electric plc
Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire
SL6 3QB
Facsimile no: 01628 584410
Attention: J. Sykes
By:
South Wales Electricity plc
Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no: 01222 790971
Attention: M. Mackey
By:
South Western Electricity plc
Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12 4SE
Facsimile no: 01454 616675
Attention: D.G. Harris
By:
The Renewable Energy Company Limited
Address: Stroud House, Russell Street, Stroud, Gloucestershire GL5
3AN
Facsimile no: 01453 756222
Attention: M. Alder
By:
UK Electric Power Limited
Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 ORE
Facsimile no: 01492 592077
Attention: N.Bryson
By:
UML Limited
Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no: 0151643 6299
Attention: R. Ashton
By:
Yorkshire Electricity Group pie
Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no: 01132 895926
Attention: Company Secretary
By:
THE OTHER PARTIES
Accord Energy Ltd
Address: Heron House, 322 High Holborn, London WC1V 7PW
Facsimile no: 0171 269 4010
Attention: Eldon Pethybridge
By:
AES Barry Limited
Address: Burleigh House, 17-19 Worple Way, Richmond, Surrey TWIG 6AG
Facsimile no: 0181332 1849
Attention: M. Armstrong
By:
Alcan Aluminium UK Limited
Address: Lynemouth Power Station, Ashington, Northumberland NE63 9YH
Facsimile no: 01670 393970
Attention: A. Brooks
By:
British Gas pie
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645453
Attention: D. Meachem
By:
Cabah Energy Limited
Address: c/o Forstar, Tilford House, Farnham Business Park, Weydon
Lane, Farnham, Surrey GU9 8QT
Facsimile no: 01252 732110
Attention: R. Scowcroft
By:
Eastern Generation Services Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 601036
Attention: Mr. G. Hurst
By:
Infield Energy Centre Limited
Address: Concorde House, Concorde Way, Stockton on Tees, Cleveland
TS18 3RB
Facsimile no: 01642 678123
Attention: K. Clarke
By:
Fibrowatt Thetford Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 01712218671
Attention: Rupert Fraser
By:
Humber Power Limited
Address: South Humber Bank Power Station, Hobson Way,
Stallingborough, Grimsby N37 8JJ
Facsimile no: 01469 573030
Attention: Paul Evans
By:
Hydro Electric Energy Limited
Address: c/o Scottish Hydro Electric PLC,10 Dunkeld Road, Perth PHI
5WA
Facsimile no: 01738 455281
Attention: Company Secretary
By:
Indian Queens Power Company Limited
Address: 1 Northumberland Avenue, London WC2N 5BW
Facsimile no: 0171872 5539
Attention: G. Long
By:
Keadby Power Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolashire DN17
3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Kingsnorth Power Limited
Address: c/o Budd Martin & Co, Industrial House, Red Houses, St.
Brelade, Jersey
Facsimile no: 01534 44777
Attention: R. Martin
By:
Meter Operators Limited
Address: Ryden Lane, Charton, Nr. Pershore, Worcestershire WR10 3LQ
Facsimile no: 01386 861113
Attention: R. Edmed
By:
Pentex (East Midlands) Limited
Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no: 01244 211444
Attention: H. Jamieson
By:
Rocksavage Power Company Limited
Address: 20 St. James Street, London SW10 4UJ
Facsimile no: 0171 839 0905
Attention: G. Grant
By:
Seabank Power Limited
Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no: 0117 982 0351
Attention: General M anager
By:
THE METER OPERATOR PARTIES WHO ARE NOT PARTIES
Control Devices and Systems Limited
Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 SR:
Telex no: 849811
Facsimile no: 01635 528224
Attention: J.W. Dowse
By:
DrakMarn O&M Ltd
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425431
Contact: Company Secretary
By:
E. Squared Limited
Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no: 0171 378 0012
Attention: Graham Nicholls
By:
Northern Energy Services Limited
Address: 5 Derwent Place, Spotborough, Doncaster DN5 7PN
Facsimile no: 01302 885574
Attention: W. Tuczemzkyi
By:
PowerMet Limited
Address: 3 Park Place, London SW1A lLP
Facsimile no: 0171493 7151
Attention: M. Rugman
By:
Scotcomms Partnership
Address: SlotlineHouse, Largo Road, St. Andrews, Fife FY16 8NJ
Facsimile no: 03134 476504
Attention: R. McLister
By:
Schlumberger Industries Limited
Address: Langer Road, Felixstowe, Suffolk IP11 HER
Facsimile no: 01394 276030
Attention: A.P. Mahoney, Managing Director
By:
The Challenge Group
Address: 22 Tally Road, Oxted, Surrey RHO OTG
Facsimile no: 01883 730543
Attention: J. Glover
By:
EXTERNAL POOL MEMBERS
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neil, Business Manager, Electricity Generation
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme
etage, 75384 Paris, Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
ScoKish Hydro-Electric plc
Address: Port Na Craig House, Pitlochry, Perthshire PH16 5ND
Facsimile no: 01796 472793
Attention: I. Moyes
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: D.R. Booth
By:
SETTLEMENT SYSTEM ADMINISTRATOR
Energy Settlements and Information Services Limited
Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no: 0115 945 6728
Attention: G.K. James, General Manager
By:
POOL FUNDS ADMINISTRATOR
Energy Pool Funds Administration Limited
Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no: 01203 423558
Attention: A. Marks, Director (National Grid House, 2nd Floor,
Kirby Corner Road, Coventry CV4 8JY)
By:
GRID OPERATOR
EXECUTED AS A DEED by )
The National Grid )
Company pie by the )
affixing of its )
common seal in the )
presence of: )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no: -
Facsimile no: 01203 423577
Attention: Company Secretary (copy to: S. Riddington, c/o A.G.
Ferens, The National Grid Company plc, St. Catherine's
Lodge, Bearwood Road, Sindlesham, Nr. Wokingham, Berkshire
RG11 5BN)
<PAGE>
ANCILLARY SERVICES PROVIDER
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of: )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no: 25815
Facsimile no: 01203 423577
Attention: Company Secretary (copy to Mr. Winser)
<PAGE>
EXTERNALLY INTERCONNECTED PARTIES
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:
Facsimile No: 0141 636 4706
Attention: D.R. Booth
By:
Electricite de France, Service National
Address: EDF Department Transport, Departement Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme
etage, 75384 Paris, Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00331)40426341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no: -
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
<PAGE>
DATED 19 May, 1997
THE GENERATORS
named herein
- and -
THE SUPPLIERS
named herein
- and -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
- and -
ENERGY POOL FUNDS
ADMINISTRATION LIMITED
as Pool Funds Administrator
- and -
THE NATIONAL GRID COMPANY plc
as Grid Operator and Ancillary Services Provider
- and -
SCOTTISH POWER pie
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
- and -
THE OTHER PARTIES
named herein
- and -
THE METER OPERATOR PARTIES
named herein
SIXTEENTH SUPPLEMENTAL DEED
relating to the Pooling and Settlement Agreement
for the Electricity Industry
in England and Wales
<PAGE>
CONTENTS
Page
1. INTERPRETATION 2
2. AMENDMENTS 2
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT 2
4. MISCELLANEOUS 2
5. ENTIRE AGREEMENT 2
6. GOVERNING LAW 3
SCHEDULE 1: Part I: The Generators 4
Part 11: The Suppliers 8
SCHEDULE 2 The Other Parties 12
SCHEDULE 3 The Meter Operator Parties who are not
Parties 14
SCHEDULE 4 Amendments to the Pooling and Settlement
Agreement 15
SIGNATORIES 76
<PAGE>
THIS SUPPLEMENTAL DEED is made on 19 May, 1997
BETWEEN:
(1) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part I of Schedule 1;
(2) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part II of Schedule 1;
(3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
(registered number 2444282) whose registered office is situate at
Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as Settlement
System Administrator;
(4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number
2444187) whose registered office is situate at 185 Park Street,
London SE1 9DY as Pool Funds Adm inistrator;
(5) THE NATIONAL GRID COMPANY plc (registered number 2366977)
whose registered office is situate at National Grid House, Kirby
Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary Services
Provider;
(6) SCOTTISH POWER pie (registered number 117120) whose
principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP,
Scotland as an Externally Interconnected Party;
(7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal
office is situate at Departement Relations avec l'Etranger, Echanges
d'Energie, 2 Rue Louis Murat, Seme etage, 75384 Paris, Cedex 08,
France as an Externally Interconnected Party;
(8) THE OTHER PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 2; and
(9) THE METER OPERATOR PARTIES whose names, registered numbers
and registered or principal offices are set out in Schedule 3.
WHEREAS:
(A) by a Pooling and Settlement Agreement for the Electricity
Industry in England and Wales dated 30th March, 1990 (the "Pooling
and Settlement Agreement") the parties thereto agreed to give effect
to and be bound by certain rules and procedures for the operation of
an electricity trading pool and the operation of a settlement system;
(B) the Pooling and Settlement Agreement has been amended
and/or restated by fifteen supplemental agreements, the most recent
of which is dated 17th October, 1996 and hereinafter references LO
the Pooling and Settlement Agreement are to that agreement as most
recently amended and recrated; and
(C) the parties to this Deed (being (i) all the Parties at the
date hereof and (ii) all the Meter Operator Parties at the date
hereof) have agreed to amend the Pooling and Settlement Agreement on
the terms and subject to the conditions set out below.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 Except where defined herein or where the context otherwise
requires, words and expressions defined in the Pooling and Settlement
Agreement shall have the same respective meanings when used in this
Deed.
1.2 The table of contents and the headings to each of the
Clauses are inserted for convenience only and shall be ignored in
construing this Deed.
2. AMENDMENTS
The parties hereby agree that with effect on and from midnight on 3rd
February, 1997 the Pooling and Settlement Agreement shall be amended
as set out in Schedule 4.
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT
The Pooling and Settlement Agreement shall remain in full force and
effect and this Deed and the Pooling and Settlement Agreement shall
be treated as one document so that, upon the Pooling and Settlement
Agreement being amended pursuant to Clause 2, all references to the
Pooling and Settlement Agreement shall be treated as references to
that agreement as amended by this Deed.
4. MISCELLANEOUS
The provisions of Clauses 75 to 79 (inclusive) and 81 to 84
(inclusive) of the Pooling and Settlement Agreement shall be deemed
to be incorporated herein mutates mutandis.
5. ENTIRE AGREEMENT
5.1 Each party acknowledges that in entering into this Deed on
the terms set out herein it is not relying upon any representation,
warranty, promise or assurance made or given by any other party or
any other person, whether or not in writing, at any time prior to the
execution of this Deed which is not expressly set out herein.
5.2 None of the parties shall have any right of action against
any other party arising out of or in connection with any
representation, warranty, promise or assurance referred to in
sub-clause 5.1 (except in the case of fraud).
6. GOVERNING LAW
This Deed shall be governed by, and construed in all respects in
accordance with, English law.
IN WITNESS whereof this document has been duly executed and delivered
as a deed the day and year first above written
<PAGE>
SCHEDULE 1:
Part I: The Generators
Registered Registered or
Name Number Principal Office
Anglian Power Generators 2488955 Wherstead Park
Limited Wherstead
Ipewich
Suffolk
IP9 2AQ
Barking Power Limited 2354681 Devonshire House
Mayfair House
London W1X 5FH
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire
WA3 6AS
Celtpower Limited 2656561 13 Charles 11
Street
London
SW1Y 4QT
Citigen (London) Limited 2427823 152 Grosvenor Road
Rivermill House
London
SW1V 3JL
Corby Power Limited 2329494 Mitchell Road
Phoenix Parkway
Corby
N orth am pton sh
ire
NN17 1QT
Derwent Cogeneration Limited 2703635 Landsdowne House
Berkeley Square
London W1X 5DH
Eastern Merchant Generation 3116225 Wherstead Park
Limited W herstead
Ipswich
Suffolk
IP9 2AQ
Electricite de France, - Department
Service National Relations avec
l'Etranger
Exchanges
d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
France
Elm Energy & Recycling (UK) 2516685 Elm Energy House
Limited Ettingshall Road
Wolverhampton
West Midlands WV2
2LA
Fellside Heat and Power 2614535 Fellside Lodge
Limited Seascale
Cumbria CA20 1PG
Fibrogen Limited 2547498 Astley House
33 Notting Hill
Gate
London W 11 3JQ
Fibropower Limited 2234141 Astley House
33 Notting Hill
Gate
London W 11 3JQ
First Hydro Company 2444277 Bala House
Lakeside Business
Village
St. David's Park
Deeside
Clwyd
CH5 3XJ
Humber Power Limited 2571241 18 Savile Row
London
W1X 1AE
Indian Queens Power Company 2928100 1 Northumberland
Limited Avenue
London
WC2N SBW
Independent Energy UK 3033406 2nd Floor, Park
Limited House
Park Street
Maidenhead
Berkshire
SL6 1SL
Keadby Generation Limited 2729513 P O Box 89, Keadby
Scunthorpe, North
Lincolnshire DN17
3AZ
Lakeland Power Limited 2355290 Roosecote Power
Station
Roosecote Marsh
Barrow-in-Furness
Cumbria LA13 OPQ
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire
GL13 9PB
Medway Power Limited 2537903 Boston House
The Little Green
Richmond TW9 1QE
Midlands Power (UK) Limited 2251099 Mucklow Hill
Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
Peterborough Power Limited 2353599 Storeys Bar Road
Peterborough PE1
SNT
PowerGen plc 2366970 53 New Broad
Street
London EC2M 1JJ
Regional Power Generators 2352390 Wetherby Road
Limited Scarcroft,
Leeds LS14 3HS
Scottish Hydro-Electric pie 117119 10 Dunkeld Road
Perth PH 1 SWA
Scottish Power pie 117120 1 Atlantic Quay
Glasgow G2 8SP
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Teesside Power Limited 2464040 4 M illbank
London SW1P SET
Winterton Power Limited 3001798 800 Park Avenue
Aztec West
Almondsbury
Bristol BS12 4SE
<PAGE>
Part II: The Suppliers
Registered Registered or
Name Number Principal Office
British Gas Trading Ltd 3078711 Rivermill House
152 Grosvenor Road
London SW1V 3JL
British Nuclear Fuels pie 1002607 Risley
Warrington
Cheshire WAS 6AS
Candecca Resources Limited 953066 Welton Gathering
Centre
Barfield Lane
Off Wragby Road
Sudbrooke
Lincoln LN2 2QU
Citigen (London) Limited 2427823 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Crosfield Limited 48745 Bank Quay
PO Box 26
Warrington
Cheshire WAS 1AB
Eastern Electricity plc 2366906 Wherstead Park
PO Box 40
W herstead
Ipswich
Suffolk IP9 2AQ
East Midlands Electricity 2366923 PO Box 444
pie Woodyard Lane
Wollaton
Nottingham NG8 lEZ
Electricite de France, - Department
Service National Relations avec
l'Etranger
Echanges d'Energie
2 Bale Louis Mural
5eme etage
75384 Paris
Cedex 08
Energy Supply Contracts 172268 The Havens
Limited Ransomes Europark
Ipswich
Suffolk IP3 9SJ
Enron Capital and Trade 3003823 4 Millbank
Resources Limited London SW1P SET
Impkemix Energy Limited 2076043 The Heath
Runcorn
Cheshire WA7 4QF
Independent Energy UK 3033406 2nd Floor Park
Limited House
Park Street M
aidenhead
Berkshire SL6 1SL
London Electricity pie 2366852 Templar House
81-87 High Holborn
London WC1V 6NU
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire
GL13 9PB
Manweb plc 2366937 Manweb House
Chester Business
Park
Chester CH4 9RF
Midlands Electricity plc 2366928 Mucklow Hill
Halesowen
West Midlands B62
8BP
National Power pie 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Norsk Hydro (UK) Limited 841421 Bridge House
69 London Road
Twickenham
MiddlesexTW1 3RH
Northern Electric plc 2366942 Carliol House
Market Street
Newcastle upon
Tyne
NE1 ONE
NORWEB pie 2366949 PO Box 14
410 Birchwood
Boulevard
Birchwood
Warrington WAS 7GA
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
PowerGen plc 2366970 53 New Broad
Street
London EC2M 1JJ
Scottish Hydro-Electric plc 117119 10 Dunkeld Road
Perth PHI 5WA
Scottish Power pie 117120 1 Atlantic Quay
Glasgow G2 8SP
SEEBOARD plc 2366867 Forest Gate
Brighton Road
Crawley
West Sussex RH11
9BH
Shell Power Limited 2559630 Rowlands Way
W ithenshawe
Manchester M22 5SB
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Southern Electric pie 2366879 Westacott Way
Littlewick Green
Maidenhead
Berkshire SL6 3QB
South Wales Electricity plc 2366985 Newport Road
St. Mellons
Cardiff CF3 9XW
South Western Electricity 2366894 800 Park Avenue
pie Aztec West
Almondsbury
Bristol BS 12 4SE
The Renewable Energy Company 3043412 Stroud House
Limited Russell Street
Stroud
G. lo u ce ste rs
h ire
GL5 BAN
UK Electric Power Limited 2844010 21 St. Thomas
Street
Bristol BS 1 BUS
UML Limited 661900 PO Box 115
Port Sunlight
Wirral
Merseyside
L62 4ZL
Yorkshire Electricity Group 2366995 Wetherby Road
pie Scarcroft
Leeds LS14 3HS
<PAGE>
SCHEDULE 2:
The Other Parties
Registered Registered or
Name Number Principal Office
Accord Energy Limited 2877398 Rivermill House
152 Grosvenor Road
London SW1V 3JL
AES Barry Limited 3135522 Burleigh House
17-19 Worpe Way
Richmond
Surrey TWIG 6AG
Alcan Aluminium UK Limited 750143 Chalfont Park
Gerrards Cross
Buckinghamshire
SL9 OQB
British Gas pie 2006000 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Cabah Energy Limited 2759706 190 Strand
London WC2R 1JN
Eastern Generation Services 2529347 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Enfield Energy Centre 2796628 Concorde House
Limited Concorde Way
Stockton on Tees
Cleveland
TS18 3RB
Fibrowatt Thetford Limited 3057688 Astley House
33 Notting Hill
Gate
London W11 3JQ
Hydra Electric Energy 2487475 Royex House
Limited Aldermanbury
Square
London EC2V 7LD
Keadby Power Limited 2548042 PO Box 89 Keadby
Scunthorpe North
Lincolnshire DN17
3AZ
Kingsnorth Power Limited 2656343 190 Strand
London WC2R 1JN
Meter Operators Limited 2841018 Lynton House
7-12 Tavistock
Square
London WC1H 9BQ
Pentex (East M idlands) 2275006 Union Buildings
Limited 15 Union Street
Aberdeen AB1 2BU
Rocksavage Power Company 18868 20 St. James's
Limited Street
London SW10 4UJ
Seabank Power Limited 2591188 Severn Road Hallen
Bristol BS10 7SP
Spalding Energy Company 19668 20 St. James's
Limited Street
London SW 1A 1 ES
<PAGE>
SCHEDULE 3:
The Meter Operator Parties who are not Parties
Registered Registered or
Name Number Principal Office
Control Devices and Systems 1242585 PO Box 56
Limited 101 Mill Lane
Newbury
Berkshire
RG14 5RE
DrakMarn O&M Ltd 3124701 53 New Broad
Street
London EC2M 1JJ
E. Squared Limited 2674129 Almac House
Church Lane
Bisley
Surrey
GU24 9DR
Northern Energy Services 2868141 5 Derwent Place
Limited Spotborough
Doncaster
DN5 7PN
PowerMet Limited 2877912 3 Park Place
London SW1A lLP
Schlumberger Industries 534821 1 Kingsway
Limited London WC2B 6XH
Stanor National Contracts 2769170 7-12 Tavistock
Limited Square
London WClH 9BQ
The Challenge Group - 22 Tally Road
Oxted
Surrey RHO OTG
SCHEDULE 4:
Amendments to the Pooling and Settlement Agreement
The Pooling and Settlement Agreement shall be amended as follows:
1. Operative Provisions
(a) By the insertion of the following new definitions in the correct
alphabetical order in Clause 1. 1:
""Allocated Generating Unit" has the meaning given to that
term in Clause 11.2.2(a); ";
""Annual Conference" has the meaning given to that
term in Clause 9.6.1;";
""Constituent" has the meaning given to that
term in Clause 23.6.5;";
""Generator Weighted Vote" has the meaning given to that
term in Clause 11.2.1;";
""Identified Pool Member" has the meaning given to that
term in Clause 11.2.2(a) or, as
the context may require,
paragraph 2(A) of Schedule 13;",
""IS Committee Member" means an RS Committee Member
elected in order to represent the
interests of Independent
Suppliers on the Executive
Committee;";
""lS Nominee" has the meaning given to that
term in Clause 15.6.4(c) ;";
""IS Preference List" has the meaning given to that
term in Clause 15.6.4(i) ;";
""IS Pool Member" means an Independent Supplier:
(i) which is not a Public
Electricity Supplier;
(ii) which is not in the
same Pool Member's Group as an MP
Pool Member; and
(iii) whose Weighted
Votes constitute one per cent. or
less of the Total Weighted
Votes;";
""Membership Vote" has the meaning given to that
term in Clause 11.1;";
""Moderator" means a person nominated for the
time being and from time to time
by the Pool Chairman (failing
whom, by the Chief Executive) to
perform certain obligations
pursuant to Clause 15;";
""MP Committee Member" has the meaning given to that
term in Clause 15.5;";
""MP Nominee" has the meaning given to that
term in Clause 15.5.1;;
""MP Nominee List" has the meaning given to that
term in Clause 15.5.2;";
""MP Pool Member" means a Pool Member which is
neither an Independent Supplier
nor a Small Generator but shall
include:
(i) a Pool Member which is
an Independent Supplier if:
(a) it is a Public
Electricity Supplier; or
(b) its Weighted Votes
constitute more than one per
cent. of the Total Weighted
Votes; and
(ii) a Pool Member which is
an Independent Supplier or Small
Generator which is a member of a
Pool Member's Group in which
there is at least one other Pool
Member which is neither:
(a) an Independent Supplier
(not being a Public Electricity
Supplier) with Weighted Votes
constituting one per cent. or
less of the Total Weighted Votes;
or
(b) a Small Generator;";
""MP Preference List" has the meaning given to that
term in Clause 15.5.3(f);";
''"Outgoing Committee Member has the meaning given to that
term in Clause 15.12;;
""Pool Auditor's Report" has the meaning given to that
term in Clause 9.7.1;";
""Pool Member's Group" in relation to any Pool Member
means that Pool Member and any
affiliate (as defined in Clause
1.2.3) of that Pool Member;";
""Preferred IS Nominee" has the meaning given to that
term in Clause 15.6.4(e);";
""Preferred MP Nominee" has the meaning given to that
term in Clause 15.5.3(b);n;
""Preferred RS Nominees" has the meaning given to that
term in Clause 15.6.4(e);n;
""Preferred SG Nominee" has the meaning given to that
term in Clause 15.6.4(d);";
""Redistributed Votes" has the meaning given to that
term in Clause 11.4.3(a);";
""RS Committee Member" means a member of the Executive
Committee elected by RS Pool
Members in accordance with
provisions of Clause 15.6;";
""RS Nominee" has the meaning given to that
term in Clause 15.6.1;";
""RS Nominee List" has the meaning given to that
term in Clause ] 5.6.2 ;";
""RS Pool Member" means an IS Pool Member or a SG
Pool Member, as the context may
require;";
""SG Committee Member" means an RS Committee Member
elected in order to represent the
interests of Small Generators on
the Executive Committee;";
''"SG Nominee" has the meaning given to that
term in Clause 15.6.4(b);";
""SG Pool Member" means a Small Generator which is
not in the same Pool Member's
Group as an MP Pool Member;";
""SG Preference List" has the meaning given to that
term in Clause 15.6.4(h);n;
""Supplier Weighted Vote" has the meaning given to that
term in Clause 11.2.2;n;
""Total Weighted Votes" means at any time the aggregate
number of Weighted Votes to which
all Pool Members (in whatever
capacity) are entitled at such
time before the application of
Clause 11.4;";
""Transferee Pool Member" has the meaning given to that
term in Clause 11.2.2(a) or, as
the context may require,
paragraph 2(A) of Schedule 13;"
''"Voting Paper" has the meaning given to that
term in Clause 15.5.3(a) or (as
the context may require) Clause
15.6.4(a);"; and
""Weighted Vote" means a Generator Weighted Vote
or a Supplier Weighted Vote or
the sum of the two for each Pool
Member, as the context may
require;"
(b) By the deletion from Clause 1.1 of the existing definition of
"Committee Member" and the substitution therefor of the following:
''''Committee Member" means a member of the Executive
Committee appointed in accordance
with the provisions of Part IV;".
(c) (i) By the deletion of the current definition of "Total Votes"
from Clause 1.1.
(ii) By the deletion of all remaining references to "Total
Votes" (including (but not limited to) those references in Clauses
9.3, 9.4.2(b), 10.6.3, 61.3.2(c)(vii), 61.5.3(b), 61.7.5 and
paragraph 7 of Schedule 22) throughout the Pooling and Settlement
Agreement and the substitution therefor of "Total Weighted Votes".
(d) By the deletion of Clauses 9 to 24 and the substitution therefor
of the following:
"9. GENE"L MEETINGS
9.1 Annual general meeting: Once in, and no later than 31st March
of, each year Pool Members shall hold a general meeting as their
annual general meeting in addition to any other meetings of Pool
Members in that year, and notices calling such general meeting shall
specify it as the annual general meeting. At each annual general
meeting the Pool Members shall be required to consider and, where
appropriate, resolve upon the following, namely:
9.1.1 a business plan prepared by the Executive Committee for the
next following Accounting Period and the four Accounting Periods
thereafter (or for such shorter period as the Pool Members in general
meeting shall from time to time determine) in relation to the
operation of the Settlement System and the Funds Transfer System and
all other matters which are the subject of this Agreement;
9.1.2 a report prepared by the Executive Committee, which report
shall include:
(a) a review against the business plan prepared by the
Executive Committee for the current Accounting Period including a
reconciliation based on the then latest available figures against
budget for all items within such business plan for that Accounting
Period;
(b) a review of the operation of the Settlement System and the
Funds Transfer System during that Accounting Period;
(c) a report on the performance by the Settlement System
Administrator of its obligations under Schedule 4 and the related
Service Lines during that Accounting Period;
(d) a report on the performance by the Pool Funds Administrator
of its obligations under Schedules 11 and 15 during that Accounting
Period;
(e) a report on the performance of the Chief Executive's Office
(taken as a whole) during that Accounting Period; and
(f) such other information or matters as the Executive
Committee shall consider appropriate (including any proposed revision
to this Agreement);
9.1.3 the appointment of Committee Members pursuant to Clause 15;
9.1.4 the election of the Pool Chairman pursuant to Clause 16;
9.1.5 such matters as any Pool Member present in person may wish to
raise at such meeting, notice of which has been given to the
Secretary no later than seven days before the date of such meeting,
it being acknowledged and agreed that failure by a Pool Member so to
notify shall not prejudice the right of any Pool Member to ask
questions at such meeting on any matter then before such meeting; and
9.1.6 such other matters as the Executive Committee sees fit to
propose and of which notice has been given in accordance with Clause
9.4.1.
9.2 General meetings: All general meetings of Pool Members other
than annual general meetings shall be extraordinary general meetings.
9.3 Calling meetings: All general meetings of Pool Members shall be
called by 14 days' notice in writing at the least, provided that a
general meeting of Pool Members shall, notwithstanding that it is
called by shorter notice, be deemed to have been duly called if it is
so agreed by a majority in number of the Pool Members having a right
to attend and vote at such meeting, being a majority in number
together holding not less than 95 per cent. of the Total Votes.
9.4 Convening meetings:
9.4.1 An annual general meeting shall be convened by the Secretary on
the instructions of the Executive Committee and any notice convening
such a meeting shall set out or append details of any such matters as
are referred to in Clause 9.1.6 and shall be accompanied by a copy of
the business plan referred to in Clause 9.1.1 and of the report
referred to in Clause 9.1.2. The Secretary shall use its reasonable
endeavours to notify the Pool Chairman and Pool Members in advance of
the relevant annual general meeting of any such matters referred to
in Clause 9.1.6 of which the Secretary has received notice in
accordance with that Clause.
9.4.2 Extraordinary general meetings shall be convened:
(a) by the Secretary on the instructions of the Executive
Committee or of any one or more Committee Members pursuant to Clause
13.4; or
(b) by the Executive Committee, forthwith upon receipt of a
Pool Members' requisition being a requisition of Pool Members holding
together at the date of the deposit of the requisition not less than
two per cent. of the Total Votes of all Pool Members; or
(c) by the Secretary on the instructions of the Pool Chairman.
9.4.3 A Pool Members' requisition shall state the objects of the
meeting and must be signed by or on behalf of the requisitionists and
deposited at the office of the Secretary, and may consist of several
documents in like form each signed by one or more requisitionists. If
the Executive Committee does not within 21 days from the date of the
deposit of the requisition proceed duly to convene an extraordinary
general meeting for a date not later than two months after the said
date of deposit, the requisitionists may themselves convene a
meeting, but any meeting so convened shall not be held after the
expiration of three months from such date. A meeting convened under
this Clause 9.4 by requisitionists shall be convened in the same
manner, as nearly as possible, as that in which meetings are to be
convened by the Executive Committee.
9.5 Notice of general meetings: Any notice convening any general
meeting of Pool Members shall be exclusive of the day on which it is
served or deemed to be served and of the day for which it is given,
and shall specify the place, the day and the hour of the meeting and
the general nature of the business of such meeting and shall be given
to all Parties, all Committee Members, the Pool Chairman, the Chief
Executive (if any), the Pool Auditor and the Director. The accidental
omission to give notice of a meeting to, or the non-receipt of notice
of a meeting by, any person entitled to receive notice shall not
invalidate the proceedings at that meeting. In every such notice
there shall appear with reasonable prominence a statement that a Pool
Member entitled to attend and vote is entitled to appoint a proxy to
attend, speak and (subject to Clause 12.1) vote in its place and that
a proxy need not also be a Pool Member.
9.6 Annu al conference:
9.6.1 In each year, on a date falling as near as practicable to, but
in any event not later than, eight months after the immediately
preceding annual genera meeting, a meeting of Pool Members shall be
convened and held which shall not be the annual general meeting but
which may (but need not) be convened as an extraordinary general
meeting (the "Annual Conference").
9.6.2 At the Annual Conference a report shall be presented by the
Executive Committee on the matters referred to in Clause 9.1.2, such
report to cover the period commencing on the day after the
immediately preceding annual general meeting and ending on the day
falling one calendar month before the date for which the Annual
Conference has been convened. In addition, the Executive Committee
shall arrange for such other matters to be discussed, presentations
to be made and Pool Member activities to be organised at the Annual
Conference as it may resolve to be appropriate.
9.7 Pool Auditor's Report:
9.7.1 The Secretary shall provide to all Pool Members annually by the
last day of the first Quarter following the end of the then most
recent Accounting Period a copy of a report prepared by the Pool
Auditor on the Settlement System and its operation during such
Accounting Period (the spool Auditor's Report").
9.7.2 The Pool Auditor's Report shall include:
(i) a summary of the audits, reviews, tests and/or checks
referred to in Part IX carried out by the Pool Auditor during that
Accounting Period;
(ii) any recommendation which the Pool Auditor wishes to make
regarding the operation of the Settlement System, the Charging
Procedure, the PEA Accounting Procedure, the ASP Accounting Procedure
and/or the Funds Transfer System; and
(iii) such other information or matters which the Executive
Committee may reasonably require or the Pool Auditor shall consider
appropriate.
9.7.3 If the Executive Committee so resolves, the Secretary shall
convene a meeting of all Pool Members in order to discuss the Pool
Auditor's Report.
10. PROCEEDINGS AT GENERAL MEETINGS
10.1 General: Save as provided in Clause 12.8 and Part IV, all
business of Pool Members shall be transacted at general meetings of
Pool Members, the proceedings for the conduct of which are set out in
this Clause 10.
10.2 Quorum: No business shall be transacted at any general meeting
of Pool Members unless a quorum of Pool Members is present at the
time when the meeting proceeds to business. Save as herein otherwise
provided, a quorum shall be Pool Members present in person
representing:
10.2.1 50 per cent. or more of the aggregate number of Weighted Votes
to which all Generators are entitled under Clause 11.2.1; and
10.2.2 50 per cent. or more of the aggregate number of Weighted Votes
to which all Suppliers are entitled under Clause 11.2.2.
10.3 Lack of quorum: If within half an hour from the time appointed
for the general meeting a quorum is not present, the meeting shall
stand adjourned to the same day in the next week, at the same time
and place or to such other day and at such other time and place as
the Executive Committee may determine and, if at the adjourned
meeting a quorum is not present within half an hour from the time
appointed for the meeting, the Pool Member(s) present shall be a
quorum.
10.4 Chairman: The Pool Chairman shall preside as chairman at every
general meeting and separate general meeting of Poo! Members (other
than one convened to consider his removal) or, if there is no Pool
Chairman or if he shall not be present within 15 minutes after the
time appointed for the holding of the meeting or is unwilling to act
or if the relevant meeting has been convened to consider the removal
of the Pool Chairman, the Chief Executive (if any) shall preside as
chairman or, if the Chief Executive shall not be present or is
unwilling to act or if the relevant meeting has been convened to
consider the removal of the Chief Executive, the Pool Members present
shall choose one of their number to be chairman of the meeting.
10.5 Adjournments: The chairman of the meeting may, with the consent
of any general meeting of Pool Members at which a quorum is present
(and shall if so directed by the meeting) adjourn the meeting from
time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place. When
a meeting is adjourned for 30 days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting. Save as
aforesaid, it shall not be necessary to give any notice of an
adjournment or of the business to be transacted at an adjourned
meeting.
10.6 Demand for a poll. At any general meeting of Pool Members a
resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is (before or on the declaration of the result
of the show of hands) demanded:
10.6.1 by the chairman of the meeting; or
10.6.2 by at least two Pool Members present in person or by proxy; or
10.6.3 by any Pool Member present in person or by proxy and holding
not less than two per cent. of the Total Votes of all Pool Members.
Unless a poll be so demanded a declaration by the chairman of the
meeting that a resolution has on a show of hands been carried or
carried unanimously, or by a particular majority, or lost and an
entry to that effect in the book containing minutes of the
proceedings of general meetings shall be conclusive evidence of the
fact without proof of the number or proportion of the votes recorded
in favour of or against such resolution. The demand for a poll may be
withdrawn.
10.7 Timing of poll: Except as hereinafter provided in this Clause
10.7, if a poll is duly demanded it shall be taken in such manner as
the chairman of the meeting directs, and the result of the poll shall
be deemed to be the resolution of the meeting at which the poll was
demanded. A poll demanded on the election of the chairman of the
meeting or on a question of adjournment shall be taken forthwith. A
poll demanded on any other question shall be taken at such time as
the chairman of the meeting directs, and any business other than that
upon which a poll has been demanded may be proceeded with pending the
taking of the poll.
10.8 No casting vote: In the case of an equality of votes, whether on
a show of hands or on a poll, the chairman of the meeting at which
the show of hands takes place or at which the poll is demanded, shall
not be entitled to a second or casting vote.
10.9 Representation of non-Pool Members: Each of the Chief Executive
(if any) or his duly appointed representative, the Settlement System
Administrator, the Pool Funds Administrator, the Grid Operator and
the Ancillary Services Provider shall be obliged to attend, and each
other Party, each Committee Member, the Pool Auditor and the Director
(or its or his duly appointed representative) shall have the right to
attend, at each general meeting of Pool Members, and each of them
shall have the right to speak (but not to vote) thereat.
10.10 Minutes: The Secretary shall prepare minutes of all general
meetings of Pool Members and shall circulate copies thereof to all
Parties, each Committee Member, the Pool Chairman, the Chief
Executive (if any), the Pool Auditor and the Director as soon as
practicable (and in any event within ten working days) after the
relevant meeting has been held.
11. VOTING
11.1 Membership Votes: Each Pool Member shall be entitled to one vote
by reason of its Pool Membership (its "Membership Vote").
11.2 Weighted Votes: Subject as provided in the following provisions
of this -Clause 11, in respect of any Quarter:
11.2.1 each Pool Member which is a Generator shall be entitled in
that capacity to one vote (each such vote a "Generator Weighted
Vote") for each GWh of Genset Metered Generation of all its Allocated
Generating Units for all Settlement Periods falling in the Votes
Calculation Period relative to such Quarter, as determined from the
final run of Settlement for each such Settlement Period and with the
number of GWh being rounded up or down (0.5 being rounded upwards) to
the nearest whole number;
11.2.2 the number of votes (each a "Supplier Weighted Vote") to which
a Pool Member which is a Supplier shall be entitled in that capacity
shall be calculated in accordance with the following formula:
GWV x SV
SV
where:
SV is equal to the total GWh of Consumer Metered Demand
taken by the relevant Pool Member in all Settlement Periods
falling in the Votes Calculation Period relative to the
relevant Quarter, as determined from the final run of
Settlement for each such Settlement Period and with the
number of GWh being rounded up or down (0.5 being rounded
upwards) to the nearest whole number;
GWV is the total number of Generator Weighted Votes of all
Pool Members for the relevant Quarter; and
E means summed over the total SV of all Pool Members
for the relevant Quarter,
provided that the total number of Supplier Weighted Votes shall at
all times equal the total number of Generator Weighted Votes and if,
as a result of the foregoing, such would not be the case, the Pool
Member with the greatest number of Generator Weighted Votes or of
Supplier Weighted Votes calculated as aforesaid shall have deducted
that number of Weighted Votes of the relevant class as will ensure
that the total number of Supplier Weighted Votes equals the total
number of Generator Weighted Votes.
For the purposes of this Clause 11.2:
(a) a Generating Unit shall be an Allocated Generating Unit of
a Pool Member (in this Clause, the "Identified Pool Member") if it
belongs to the Identified Pool Member as of the date on which the
Executive Committee calculates the Weighted Votes of Pool Members for
the relevant Quarter pursuant to Clause 11.3.2. If at any time during
such Quarter an Allocated Generating Unit shall belong to another
Pool Member (in this Clause, the "Transferee Pool Member"), the
Weighted Votes attributed to the Identified Pool Member for such
Quarter by reason of the Allocated Generating Unit belonging to it
shall (subject to Clause 11.4) be transferred to the Transferee Pool
Member as of the date on which such Allocated Generating Unit first
belongs to the Transferee Pool Member (and the Identified Pool Member
and the Transferee Pool Member shall jointly notify the Executive
Committee in writing of such date in good time before its
occurrence);
(b) a Generating Unit shall belong to a Pool Member if it is
owned by that Pool Member and not leased to another person or if it
is leased by that Pool Member from another person;
(c) a Pool Member shall notify the Executive Committee promptly
on request of its Allocated Generating Units and the Executive
Committee and each other Party may rely on the information in that
notification and in any notification under paragraph (a) above
without further enquiry or need to verify that information;
(d) in determining the meaning of Good time" for the purposes
of paragraph (a) above one factor to be taken into account is that
the Settlement System Administrator must be allowed sufficient time
to effect the necessary changes in Settlement associated with the
transfer of the relevant Allocated Generating Unit; and
(e) the Executive Committee may, upon application of any Pool
Member involved in any transfer of assets between Pool Members during
any Quarter, adjust as between the Pool Members involved in such
transfer, the number of Points and/or Weighted Votes to which they in
their capacities as Suppliers are entitled in respect of the
remaining part of that Quarter and/or one or both of the two
immediately succeeding Quarters if, in the opinion of the Executive
Committee, such adjustment would help accommodate the consequences of
such a transfer and not prejudice the interests of any other Pool
Member in any material respect.
11.3 Calculation of Weighted Votes: Subject as provided in the
following provisions of this Clause 11:
11.3.1 New Pool Members:
(a) until the third Quarter Day next falling after the date of
its admission as a Pool Member, any Party who is admitted as a Pool
Member pursuant to Clause 8.2 shall have that number of Weighted
Votes as fall to be determined in accordance with the following
provisions of this Clause 11.3.1. Thereafter, such Pool Member's
Weighted Votes shall be calculated in accordance with Clause 11.2;
(b) until the third Quarter Day next falling after the date of
admission of the relevant Pool Member as a Pool Member, such Pool
Member shall have that number of Generator Weighted Votes and/or
Supplier Weighted Votes as are accorded to it upon its admission as a
Pool Member by the Executive Committee (which the Executive Committee
shall do prior to the date of such admission) who shall have regard
to the factors listed in paragraphs (c), (d) and/or (as the case may
be) (e) below or as are determined by the Director in accordance with
Clause 11.5;
(c) the factors referred to in paragraph (b) shall in the case
of a Generator include:
(i) the Registered Capacity of all Generating Units of such
Generator;
(ii) the Executive Corr.mittee's assessment of the likely
availability of all such Generating Units for the period from the
date of admission of such Pool Member as a Pool Member to the third
Quarter Day next falling after such date, having regard to the
registered Generation Scheduling and Despatch Parameters or (as the
case may be) Generation Trading Block Scheduling and Despatch
Parameters for such Generating Units;
(iii) the Executive Committee's assessment of the likely
output of al! such Generating Units during such period having regard
to the output of Generating Units which in the Executive Committee's
opinion most nearly correspond to such Generating Units;
(iv) the Executive Committee's assessment of the likely daily
station load associated with the Power Stations of which such
Generating Units form part during such period; and
(v) where a Generating Unit of an existing Pool Member is
transferred to, and then belongs to, such Generator at or soon after
the time of such Generator's admission as a Pool Member, the
Generator Weighted Votes most recently attributed to that existing
Pool Member by reason of that Generating Unit shall be attributed to
such Generator as if such Generator were a Transferee Pool Member
under the provisions of paragraph (a) of Clause 11.2;
(d) the factors referred to in paragraph (b) above shall in the
case of a Supplier be the total GWh which would be supplied by the
relevant Supplier in the period from the date of admission of such
Pool Member as a Pool Member to the third Quarter Day next falling
after such date on the basis of its Customers' metered demand or,
where such metered information is not available, the load profiles of
its Customers used for the purposes of estimating the consumption of
Second Tier Customers; and
(e) the factors referred to in paragraph (b) above shall in the
case of an External Pool Member be whichever one or more of those
factors referred to in paragraph (c) above and those referred to in
paragraph (d) above as the Executive Committee considers to be most
readily applicable to the Generating Units (if any) of such Pool
Member and to the level of demand for Active Energy of that Pool
Member across the relevant External Interconnection but as if the
references to Customers in paragraph (d) were references to that Pool
Member's own requirements;
11.3.2 Calculation: on or prior to each Quarter Day and on each
admission, resignation or removal of a Party as a Pool Member or
change in the capacity in which it participates as a Pool Member the
Executive Committee shall, on the basis of information to be supplied
by the Settlement System Administrator in accordance with Service
Line 10 (Service to CEO and Pool Members), calculate the number of
Weighted Votes to which each Pool Member whose Weighted Votes are to
be calculated in accordance Wit' Clause 11.2 is entitled in its
capacity as a Generator or a Supplier for the Following Quarter (or,
in the case of an admission, resignation or removal of a Party as a
Pool Member or a change in the capacity in which it participates as a
Pool Member, for the remainder of the then current Quarter), and
shall notify each Pool Member and the Director in writing of the
number of Generator Weighted Votes and Supplier Weighted Votes of all
Pool Members (whether calculated in accordance with Clause 11.2 or
11.3.1). Subject to Clauses 11.5 and 11.6, the determination of the
Executive Committee as to the number of Generator Weighted Votes and
Supplier Weighted Votes of each Pool Member shall (in the absence of
manifest error) be final and binding for all purposes of this
Agreement;
11.3.3 Attribution: if a Pool Member shall not receive any Weighted
Vote by reason of the calculations under Clause 11.2 or the foregoing
provisions of this Clause 11.3, such Pool Member shall nevertheless
be accorded one Generator Weighted Vote and/or one Supplier Weighted
Vote, depending on the capacity(ies) in which it is participating as
a Pool Member; and
11.3.4 Additional capacity: for the purposes of this Clause 11 any
Pool Member who acquires an additional capacity in which it
participates as a Pool Member shall be deemed to have been admitted
as a new Pool Member pursuant to Clause 8.2 in that additional
capacity and until the third Quarter Day next falling after the date
such Pool Member's application to the Executive Committee pursuant to
Clause 8.12 is approved, it shall have that number of Weighted Votes
in that additional capacity as fall to be determined in accordance
with the provisions of Clause 11.3.1. Thereafter, such Pool Member's
Weighted Votes shall be calculated in accordance with Clause 11.2.
11.4 Cap on Weighted Votes:
11.4.1 The aggregate number of Weighted Votes to which a Pool Member
shall be entitled (in whatever capacity) under Clauses 11.2 and 11.3
shall not at any time exceed 15 per cent. of the Total Weighted
Votes.
11.4.2 The aggregate number of Weighted Votes to which all Pool
Members which are members of the same Pool Member's Group are
entitled (in whatever capacity) under Clauses 11.2 and 11.3 shall not
at any time exceed 15 per cent. of the Total Weighted Votes.
11.4.3 If, by virtue of the number of Weighted Votes accorded to a
Pool Member or to Pool Members which are members of the same Pool
Membe`'s Group pursuant to Clauses 11.2 and/or 11.3, a Pool Member or
Pool Members would in the absence of this Clause 11.4.3 be in breach
of Clause 11.4.1 or 11.4.2, the number of Weighted Votes to which
that Pool Member or (as the case may be) those Pool Members which are
members of the same Pool Member's Group shall be entitled shall be
determined as follows:
(a) in the case of a Pool Member which would otherwise be in
breach of Clause 11.4.1, the aggregate number of Weighted Votes to
which that Pool Member shall be entitled shall be reduced by such
number (in this paragraph (a) the "Redistributed Votes") as will
ensure that, after redistribution of its Weighted Votes in accordance
with Clause 11.4.5, such Pool Member shall have as nearly as
practicable (but not in excess of) 15 per cent. of the Total Weighted
Votes. The Redistributed Votes shall:
(i) consist of that number of Weighted Votes in excess of 15
per cent. of the Total Weighted Votes to which the relevant Pool
Member is entitled; and
(ii) comprise Generator Weighted Votes and Supplier Weighted
Votes in the same proportion (as nearly as practicable) as the total
number of Generator Weighted Votes and Supplier Weighted Votes of
that Pool Member (before such redistribution) bear one to the other;
(b) in the case of Pool Members which are members of the same
Pool Member's Group and which would otherwise be in breach of Clause
11.4.2, the aggregate number of Weighted Votes to which those Pool
Members shall be entitled shall be reduced by such number (in this
paragraph (b), the "Redistributed Votes") as will ensure that, after
redistribution of their Weighted Votes in accordance with Clause
11.4.6, such Pool Members shall together have as nearly as
practicable (but not in excess of) 15 per cent. of the Total Weighted
Votes. The Redistributed Votes shall:
(i) consist of that number of Weighted Votes in excess of 15
per cent. of the Total Weighted Votes to which all Pool Members which
are members of that Pool Member's Group are, in aggregate, entitled;
(ii) comprise Generator Weighted Votes and Supplier Weighted
Votes in the same proportion (as nearly as practicable) as the total
number of Generator Weighted Votes and Supplier Weighted Votes of all
Pool Members which are members of that Pool Member's Group (before
such redistribution) bear one to the other; and
(iii) be taken from each Pool Member which is a member of that
Pool Member's Group (in the case of Redistributed Votes which are
Generator Weighted Votes) in the proportion (as nearly as
practicable) which that Pool Member's Generator Weighted Votes (if
any) bear to the total number of Generator Weighted Votes of all Pool
Members which are members of that Pool Member's Group and (in the
case of Redistributed Votes which are Supplier Weighted Votes) in the
proportion (as nearly as practicable) which that Pool Member's
Supplier Weighted Votes (if any) bear to the total number of Supplier
Weighted Votes of all Pool Members which are members of that Pool
Member's Group; and
(c) in the case where both paragraphs (a) and (b) above apply in
respect of a Pool Member, the provisions of paragraph (a) above shall
be applied before those of paragraph (b) above.
11.4.4 Subject to Clause 11.4.7, where more than one Pool Member or
Pool Member's Group would, in the absence of Clause 11.4.3, be in
breach of Clause 11.4.1 or (as the case may be) 11.4.2, the
redistribution of Weighted Votes pursuant to Clause 11.4.5 or (as the
case may be) 11.4.6 shall commence with the Pool Member or Pool
Member's Group that has the greatest percentage of Total Weighted
Votes, shall continue with the Pool Member or Pool Member's Group
with the next greatest percentage and so on, and the process of
redistributing Weighted Votes in accordance with such Clauses shall
continue until such time as no Pool Member or Pool Member's Group is
in breach of Clause 11.4.1 or 1 1.4.2.
11.4.5 Where Clause 11.4.3(a) applies, the Redistributed Votes shall
(subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as
follows:
(a) the Redistributed Votes which are Generator Weighted Votes
shall be allocated across all other Pool Members in the proportions
(as nearly as practicable) which their respective Generator Weighted
Votes bear to each other (such proportions to be calculated before
any redistribution of Weighted Votes pursuant to this Clause 11.4);
and
(b) the Redistributed Votes which are Supplier Weighted Votes
shall be allocated across all other Pool Members in the proportions
(as nearly as practicable) which their respective Supplier Weighted
Votes bear to each other (such proportions to be calculated before
any redistribution of Weighted Votes pursuant to this Clause 1 1.4).
11.4.6 Where Clause 11.4.3(b) applies, the Redistributed Votes shall
(subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as
follows:
(a) the Redistributed Votes which are Generator Weighted Votes
shall be allocated across all other Pool Members which are not
members of the relevant Pool Member's Group in the proportions (as
nearly as practicable) which their respective Generator Weighted
Votes bear to each other (such proportions to be calculated before
any
redistribution of Weighted Votes pursuant to this Clause 11.4); and
(b) the Redistributed Votes which are Supplier Weighted Votes
shall be allocated across all other Pool Members which are not
members of the relevant Pool Member's Group in the proportions (as
nearly as practicable) which their respective Supplier Weighted Votes
bear to each other (such proportions to be calculated before any
redistribution of Weighted Votes pursuant to this Clause 1 1.4).
11.4.7 Redistributed Votes shall not be allocated pursuant to Clause
11.4.5 or 11.4.6 to any Pool Member which before such allocation is
or, but for Clause 11.4.3, would be in breach of Clause 11.4.1 or
11.4.2.
11.4.8 Any allocation of Redistributed Votes in accordance with the
foregoing provisions of this Clause 11.4 shall rot be effected in the
case of votes amounting to fractions of whole numbers and any
Redistributed Votes which are incapable of allocation as a result of
this or any other provision of this Clause 11.4 ("Fractional
Redistributed Votes") shall, in the case of Generator Weighted Votes,
be allocated automatically to the largest Generator in terms of
Genset Metered Generation for the relevant Quarter or, in the case of
Supplier Weighted Votes, to the largest Supplier in terms of Consumer
Metered Demand for the relevant Quarter, to the extent that this does
not cause a breach of Clause 11.4.1 or Clause 11.4.2. Thereafter, any
unallocated Fractional Redistributed Votes shall be allocated in
accordance with this Clause 11.4.8 to the next such largest Generator
and/or Supplier and the process shall continue until all Fractional
Redistributed Votes have been so allocated.
11.5 New Pool Member's reference to the Director: If any Pool Member
referred to in Clause 11.3.1(a) shall dispute the calculation of or
the number of Weighted Votes accorded to it in accordance with Clause
11.3.1, such Pool Member may refer such dispute to the Director for
determination, whose determination as to the calculation of or the
number of Weighted Votes to which such person shall be entitled shall
be final and binding for all purposes of this Agreement.
11.6 Alteration of Weighted Votes: The Director may at any time by
notice to the Executive Committee alter the calculation of Weighted
Votes set out in Clauses 11.2.1 and 11.2.2 and/or the caps on
Weighted Votes set out in Clauses 11.4.1 and 11.4.2 if, in his
opinion, such alteration is required to achieve fair representation
for all Pool Members.
11.7 Pool Member Group Information: Each Pool Member shall provide
the Executive Committee with such details of its Pool Member Group as
the Executive Committee may at any time and from time to time
reasonably require for the purposes of this Clause 11 and such Pool
Member shall be deemed to warrant to all other Pool Members that all
such details are true and accurate in all material respects as at the
date they are provided to the Executive Committee. The Executive
Committee may rely on such details without further enquiry or need to
verify them.
11.8 [Not used]
11.9 Records: The Executive Committee shall maintain, and retain for
a period of not less than eight years, a register recording the
Generator Weighted Votes and Supplier Weighted Votes of each Pool
Member, which register shall be open for inspection by any Party at
the office of the Secretary during normal business hours.
11.10 Voting on a show of hands: On a show of hands every Pool Member
present in person shall have only its Membership Vote (that is, one
vote).
11.11 Voting on a poll: On a poll every Pool Member shall have only
its Weighted Votes. On a poll votes may be given either personally or
by proxy.
11.12 Objections: No objection shall be raised to the qualification
of any voter except at the meeting or adjourned meeting at which the
vote objected to is given or tendered, and every vote not disallowed
at such meeting shall be valid for all purposes. Any such objection
made in due time shall be referred to the chairman of the meeting
whose decision shall be final and conclusive.
11.13 Scrutiny: At each meeting at which a Pool Member casts a vote,
the Secretary or another person specifically appointed for the
purpose by the Secretary shall ensure that proper scrutiny of all
such votes takes place, such that he is entirely satisfied that every
vote cast was so cast properly and in accordance with all relevant
provisions of this Agreement and any other applicable agreement
between all Pool Members or rules or regulations governing such
votes.
12.PROXIES
12.1 Authority: Any Pool Member entitled to attend and vote at any
general meeting of Pool Members shall be entitled to appoint another
person (whether a Pool Member or not) as its proxy to attend, speak
and vote in its place, save that a proxy shall not be entitled to
vote except on a poll.
12.2 Authentication of proxy: The instrument appointing a proxy shall
be in writing either under seal or under the hand of an officer or
attorney duly authorised. A proxy need not be a Pool Member.
12.3 Deposit of proxy: The instrument appointing a proxy and the
power of attorney or other authority, if any, under which it is
signed or a certified copy of that power or authority shall be
deposited at the office of the Secretary or at such other place
within the United Kingdom as is specified for that purpose in the
notice convening the relevant general meeting of Pool Members, not
less than 48 hours before the time for holding the meeting or
adjourned meeting, at which the person named in the instrument
proposes to vote, or, in the case of a poll, not less than 24 hours
before the time appointed for the taking of the poll, and in default
the instrument of proxy shall not be treated as valid.
12.4 Form of proxy (1): An instrument appointing a proxy shall be in
the following form or a form as near thereto as circumstances admit:
"POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY TN
ENGLAND AND WALES dated 30th March, 1990
we, , of , being a Pool Member (as
defined in the above-mentioned Agreement), hereby appoint of or,
failing him, of , as our proxy to vote for us on ur behalf at the
[annual or extraordinary, as the case may be] general meeting of Pool
Members, to be held on the day of 19
,and at any adjournment thereof.
Signed this day of 19 ."
12.5 Form of proxy (2): Where it is desired to afford Pool Members an
opportunity of voting for or against a resolution the instrument
appointing a proxy shall be in the following form or a form as near
thereto as circumstances admit:
"POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN
ENGLAND AND WALES dated 30th March, 1990
We, , of , being a
Pool Member (as defined in the above-mentioned Agreement), hereby
appoint of or, failing
him, of , as our proxy
to vote for us on our behalf at the [annual or extraordinary, as the
case may be] general meeting of Pool Members, to be held on the
day of 19 and
at any adjournment thereof.
Signed this day of 19 ."
This form is to be used in favour of the resolution.
against
Unless otherwise instructed, the proxy will vote as he thinks fit.
Strike out whichever is not desired."
12.6 Authority to demand a poll: The instrument appointing a proxy
shall be deemed to confer authority to demand or join in demanding a
poll.
12.7 Proxy valid: A vote given in accordance with the terms of an
instrument of proxy shall be valid notwithstanding the previous
revocation of the proxy or of the authority under which the proxy was
executed, provided that no intimation in writing of such revocation
shall have been received by the Secretary at his office before the
commencement of the meeting or adjourned meeting at which the proxy
is used.
12.8 Resolution in writing: A resolution in writing signed by all the
Pool Members for the time being entitled to receive notice of and to
attend and vote at general meetings of Pool Members (or by their duly
authorised representatives) shall be as valid and effective as if the
same had been passed at a general meeting of Pool Members duly
convened and held and may consist of several instruments in like form
and executed by or on behalf of one or more Pool Members.
12.9 Corporations acting by representatives at meetings: Any company,
corporation, partnership, firm, joint venture, trust, association or
other organization which is a Pool Member may by resolution of its
directors or other governing body autl-orise such person as it thinks
fit to act as its representative at any general meeting of Pool
Members, and references in this Agreement to a Pool Member acting in
person (howsoever expressed) shall be deemed to include Pool Members
acting by their duly authorised representatives.
13. MATTERS RESERVED TO THE GENERAL MEETING: CI^SS RIGHTS
13.1 Matters reserved generally:
13.1.1 As between the Pool Members each of the matters referred to in
Clause 13.1.2 shall require the prior approval of Pool Members in
general meeting before effect is given to the same, such approval to
be (subject as provided in Sections 15, 16 and 17 of Schedule 4) by
resolution of Pool Members passed by not less than 65 per cent. of
the Membership Votes or (as the case may be) Weighted Votes of such
Pool Members as (being entitled to do so) vote in person or by proxy
at a general meeting of Pool Members of which notice specifying the
intention to propose the resolution has been duly given.
13.1.2 The matters referred to in Clause 13.1.1 are:
(a) the removal of the Settlement System Administrator;
(b) the appointment and removal of the Pool Auditor;
(c) any amendment to or variation of this Agreement (other than
any amendment or variation referred to in Clause 13.2.1, 13.2.2 or
13.2.3 or any amendment of or variation to Schedule 9 (including any
amendment
thereto made pursuant to Clause 56.2) or to Schedule 15);
(d) the approval pursuant to Clause 5.8 of any Recommendation
and pursuant to Clause 5.11 of any Works Programme and any approval
pursuant to Clause 5.14;
(e) the removal of the Pool Chairman; and
(f) such other matters (not being matters referred to in Clause
9 1 8) which are otherwise designated under this Agreement for
reference to the Pool Members in general neeting
13.2 Matters reserved to particular classed of Pool Members:
13.2.1 As between the Pool Members any amendment to or variation of
this Clause 13.2 shall require the prior approval of the Generators
in separate general meeting.
13.2.2 As between the Pool Members each of the following matters
shall require the prior approval of the Suppliers in separate general
meeting:
(a) any change prior to 1st April, 1998 to the standards of
accuracy of Metering Equipment required for Second Tier Customers up
to (and including) lOOkW or required for Non-Pooled Generators;
(b) any amendment to or variation of Part Xl and/or Schedule
18; and
(c) any amendment to or variation of this Clause 13.2.
13.2.3 As between the Pool Members any amendment to or variation of
Clauses 10.2, 10.6, 13.4, 13.5, 15, 16.2, 19.2, 22 or 83, or this
Clause 13.2 shall, in addition to the applicable requirements of
Clauses 13.2.1 and 13.2.2, require the prior approval of Pool Members
in general meeting, such approval to be by resolution of Pool Members
passed by not less than 84 per cent. of the Membership Votes or (as
the case may be) Weighted Votes of such Pool Members as (being
entitled to do so) vote in person or by proxy at a general meeting of
Pool Members of which notice specifying the intention to propose the
resolution has been duly given.
13.2.4 To every separate general meeting referred to in this Clause
13.2 the provisions of this Part Ill relating to general meetings of
Pool Members (other than Clause 10.9, save in respect of the
attendance by the Pool Auditor or the Director or its or his duly
appointed representative) shall apply mutates mutand~s but so that:
(a) in the case of the Generators, the necessary quorum shall
be two Pool Members of that class;
(b) in the case of the Suppliers, the necessary quorum shall be
eight Pool Members of that class; and
(c) notice of any such separate general meeting need be given
only to those entitled to attend the same, and any resolution put to
any such separate general meeting shall, to be passed, require (in
the case of the Generators) 75 per cent. and (in the case of the
Suppliers) a simple majority of the Membership Votes or (as the case
may be) Weighted Votes of such Pool Members as (being entitled to do
so) vote in person or by proxy at such separate general meeting of
which notice specifying the intention to propose the resolution has
been duly given provided that any such resolution shall be deemed
passed if it would have been passed but for the resolution being
opposed by a single Pool Member or one or more Pool Members of a
single Pool Member's Group.
13.2A As between the Pool Members any amendment to or variation of
Schedule 22 shall require the approval of the Public Electricity
Suppliers in separate general meeting in accordance with the
provisions of that Schedule.
13.3 Provisions cumulative: The provisions of Clauses 13.1 and 13.2
are cumulative and not exclusive one of the other.
13.4 Executive Committee's referral: in the event of receipt by the
Secretary from one or more of the Committee Members of a request that
any matter resolved upon on a poll by the Executive Committee (or
upon which it has been unable or has refused to resolve other than
where the taking of a vote has been deferred pursuant to Clause 22.1)
be remitted to the Pool Members in general meeting, such request
having been received no later than five working days after the date
on which the results of such poll were notified to Committee Members
(exclusive of the date on which notice was given) (or, as the case
may be, the date of its failure or refusal so to resolve), the matter
the subject of the relevant resolution shall be remitted to the Pool
Members in general meeting and, pending the decision of Pool Members
in general meeting, such resolution shall not have effect. The
provisions of this Clause 13.4 are subject to the provisions of
Clause 61.9.
13.5 Dissentient Pool Member's right of appeal:
13.5.1 Any Pool Member who:
(a) voted against a resolution passed or in favour of a
resolution not passed by Pool Members in general meeting; or
(b) voted against a resolution passed or in favour of a
resolution not passed by Generators or (as the case may be) Suppliers
in separate general meeting; or
(c) is directly affected by Pool Creditors passing or failing to
pass a resolution of Pool Creditors (but only where such resolution
does not concern the enforcement or nonenforcement of any payment
obligation),
and each Externally Interconnected Party (not being a Pool Member)
(each such Pool Member a "Dissentient Pool Member", which expression
shall include each such Externally Interconnected Parq) shall be
entitled within ten working days after the date of such resolution to
apply in writing to the Director seeking a ruling that the relevant
resolution shall or shall not have effect on the grounds that either:
(i) the interests of a group of Pool Members (including the
Dissentient Pool Member) or of the Dissentient Pool Member under this
Agreement have been, are or will be unfairly prejudiced by the
passing of or the failure to pass such resolution; or
(ii) such resolution will breach, or will cause the Dissentient
Pool Member to be in breach of, one or more provisions of this
Agreement or of its Licence or of the Act.
Any such application shall give detailed reasons and evidence in
support and shall be copied to the Executive Committee. The
Dissentient Pool Member shall be entitled to mark all or any part of
such application as confidential and the Executive Committee shall
give such weight as it sees fit to such marking in the copying of
such application to those persons to whom it is obliged to copy such
application. The Executive Committee shall promptly notify all other
Pool Members, each Externally Interconnected Party (not being a Pool
Member), the Pool Chairman, the Settlement System Administrator and
the Pool Funds Administrator of receipt of such application. At the
same time as the Executive Committee shall notify all such other Pool
Members, each Externally Interconnected Party (not being a Pool
Member), the Pool Chairman, the Settlement System Administrator and
the Pool Funds Administrator of such receipt, the Executive Committee
shall send each of them a copy of the relevant application (amended,
if appropriate, to take account of any such marking where the
Executive Committee shall have seen fit so to do). The Executive
Committee, each Pool Member, each Externally Interconnected Party
(not being a Pool Member). the Pool Chairman, the Settlement System
Administrator and the Pool Funds Administrator and (if invited by the
Director) the Pool Auditor shall each be entitled to make
representations to the Director. If the Pool Auditor shall be so
invited to make any such representations, the Executive Committee
will provide it with a copy of the relevant application (amended, if
appropriate, as aforesaid).
13.5.2 Any determination of the Director in respect of any such
application as is referred to in Clause 13.5.1 shall be final and
binding. Pending any determination of the Director in respect of any
such application, the relevant resolution (if passed) shall not have
effect provided that, if the Director shall decline to accept a
reference or to make a determination (in either case, for whatsoever
reason), such resolution shall take effect from the date that the
Director notifies the Executive Committee that he declines to accept
the reference or to make the determination.
13.5.3 The Parties acknowledge and agree that the satisfaction of
either of the grounds referred to in Clause 13.5.1(i) or (ii) shall
not of itself entitle the Dissentient Pool Member to a determination
by the Director in its favour.
PART IV
THE EXECUTIVE COMMITTEE
14. ESTABLISHMENT OF THE EXECUTIVE COMMITTEE
Establishment: The Pool Members hereby establish the Executive
Committee upon the terms and subject to the conditions of this
Agreement.
15. MEMBERSHIP OF THE EXECUTIVE COMMITTEE
15 1 Number of the Committee Members: The maximum number of Committee
Members shall not at any time exceed twelve or such lesser number
(subject to a minimum of six) as Pool Members may decide in general
meeting not later than 90 days before each annual general meeting of
Pool Members. Any such lesser number so decided upon prior to an
annual general meeting of Pool Members shall be the maximum number of
Committee Members during the entire term of office (according to
Clause 15.4) of those Committee Members elected at that annual
general meeting (or, as the case may be, a subsequent extraordinary
general meeting). On the expiry of that term of office, the maximum
number of Committee Members shall be twelve unless a lesser number
shall have been decided upon in accordance with the procedures set
out in this Clause 15.1.
15.2 Maximum number of Committee Membersfewer than twelve: If Pool
Members decide on a maximum number of Committee Members fewer than
twelve in accordance with Clause 15.1, then:
15.2.1 The number of Committee Members to be appointed in accordance
with the provisions of Clause 15.5 shall be two fewer than the agreed
maximum number of Committee Members and the number of Committee
Members to be appointed in accordance with Clause 15.6 shall be two;
and
15.2.2 The references to "ten" and its derivatives in Clauses
15.5.3(g) and 15.5.3(i) shall be substituted by the number that is
two fewer than the maximum number of Committee Members agreed by Pool
Members and the references to "nine" and "eleven" (and their
respective derivatives) in Clause 15.5.3(i) shall be correspondingly
altered.
15.3 Appointment and Rcmoval: As from 1st April, 1997 and subject as
provided in Clauses 15.2 and 15.8, ten Committee Members shall be
appointed and removed in accordance with the provisions of Clauses
15.5 and 15.10 and two Committee Members shall be appointed and
removed in accordance with the provisions of Clauses 15.6 and 15.10.
15.4 Term of Office: Subject to Clause 15.11, the term of office of
Committee Members shall be from 1st April in the year of appointment
to 31st March in the next following year provided that, if the
meeting at which any Committee Member is appointed is held after 1st
April, his term of office shall commence from the time of his
appointment. A Committee Member whose term of office has expired or
is to expire shall be eligible for reselection.
15.5 MP Committee Member election procedure: The procedures set out
in this Clause 15.5 shall apply to the election of those Committee
Members who are not RS Committee Members ("MP Committee Members"):
15.5.1 Each MP Pool Member shall be entitled, by notice to the
Executive Committee given no earlier than 90 days and no later than
30 days before each annual general meeting of Pool Members or,
failing election of any MP Committee Members at such meeting, no
later than 15 days before an extraordinary general meeting convened
for such purpose to propose, one individual (an "MP Nominee") to be
an MP Committee Member. The MP Nominee need not be an officer or
employee of a Pool Member but shall not be the Chief Executive or
Pool Chairman or any then current nominee for the position of Chief
Executive or Pool Chairman. Any such proposal to be valid shall be
accompanied by a written statement from the MP Nominee stating that
he is aware of the proposal and would be prepared to serve as a
Committee Member if elected.
15.5.2 No later than 10 days before the date of the annual general
meeting (or, as the case may be, extraordinary general meeting) the
Executive Committee shall circulate (or cause to be circulated) to
all Pool Members and the Director a list of all the names of the MP
Nominees and of the Pool Members who proposed them (the UMP Nominee
List"). The MP Nominee List shall also be circulated at the annual
general meeting or, as the case may be, extraordinary general meeting
to all Pool Members present in person; and
15.5.3 At the annual general meeting or extraordinary general meeting
(as the case may be) of Pool Members held to appoint Committee
Members the following procedures shall be applied in sequence:
(a) each MP Pool Member shall be given a voting paper (in this
Clause 15.5, a "Voting Paper") with the name of every MP Nominee who
appears on the MP Nominee List;
(b) subject to paragraphs (c) and (d) below, an MP Pool Member
shall rank each MP Nominee on its Voting Paper in order of preference
by marking the MP Nominee which is its first choice for membership of
the Executive Committee (its "Preferred MP Nominee") with the number
"1" and continuing numbering sequentially in order of preference
until it is indifferent as to the preference it accords to any
remaining MP Nominees;
(c) if an MP Pool Member has proposed an MP Nominee in
accordance with Clause 15.5.1, then such MP Pool Member must choose
that MP Nominee as its Preferred MP Nominee:
(d) all MP Pool Members that are members of the same Pool
Member's Group shall be obliged to rank the same MP Nominees in the
same order of preference;
(e) the Moderator shall collect in all Voting Papers and for
each Preferred MP Nominee shall calculate the number of Weighted
Votes cast by those MP Pool Members in his favour and for this
purpose each MP Pool Member shall be deemed to have cast all its
Weighted Votes in favour of its Preferred MP Nominee;
(f) the Moderator shall prepare a list (the "MP Preference
List") ranking the Preferred MP Nominees in order according to the
number of Weighted Votes cast for each such Preferred MP Nominee,
with the Preferred MP Nominee with the most number of Weighted Votes
being at the head of the list;
(g) when there are more than ten MP Nominees on the MP
Preference List then, if the MP Nominee ranked tenth on the MP
Preference List has more Weighted Votes cast in his favour than the
sum of all Weighted Votes cast for all those MP Nominees ranked below
him on the MP Preference List, those MP Nominees ranked first to
tenth on the MP Preference List shall be elected as Committee Members
and the voting procedure in this Clause 15.5.3 shall terminate;
(h) if the condition in paragraph (g) above is not satisfied,
the MP Nominee whose name appears last on the MP Preference List
shall be removed from the MP Preference List and shall take no
further part in the election process for the MP Committee Members and
the Moderator shall transfer the Weighted Votes of all those MP Pool
Members who voted for that MP Nominee to the MP Nominee(s) who is
their respective second preference. The Moderator shall then prepare
a revised MP Preference List to which paragraph (g) above shall be
applied and the procedure set out in this paragraph (h) shall be
repeated as often as may be necessary until the condition in
paragraph (g) above is satisfied (on each occasion the MP Nominee
whose name appears last on the MP Preference List being removed from
it and the Moderator transferring the Weighted Votes of all those MP
Pool Members attributable to that MP Nominee to the MP Nominee(s) who
is their next respective preference); and
(i) if the provisions of paragraph (h) above have been followed
with the result that only eleven MP Nominees appear on the MP
Preference List, and if the MP Nominee ranked tenth has more Weighted
Votes cast in his favour than the MP Nominee ranked eleventh, then
those MP Nominees ranked first to tenth on the MP Preference List
shall be elected as Committee Members. If, however, the Weighted
Votes cast in favour of the MP Nominees ranked tenth and eleventh on
the MP Preference List are equal, then those MP Nominees ranked first
to ninth on the MP Preference List shal' be elected as Committee
Members and the selection of the tenth Committee Member from the
tenth and eleventh MP Nominee on the MP Preference List shall be
decided by the drawing of lots in a manner to be determined by the
Pool Chairman.
15.6 RS Committee Member election procedures: The procedures set out
in this Clause 15.6 shall apply to the election of the RS Committee
Members:
15.6.1 Each RS Pool Member shall be entitled, by notice to the
Executive Committee given no earlier than 90 days and no later than
30 days before each annual general meeting of Pool Members or,
failing election of either RS Committee Member at such meeting, no
later than 15 days before an extraordinary general meeting convened
for such purpose to propose one individual (a "RS Nominee") to be a
RS Committee Member. The RS Nominee need not be an officer or
employee of a Pool Member but shall not be the Chief Executive or
Pool Chairman or any then current nominee for the position of Chief
Executive or Pool Chairman. Any such proposal to be valid shall be
accompanied by a written statement from the RS Nominee stating that
he is aware of the proposal and would be prepared to serve as a
Committee Member if elected and identifying whether he is standing
for the position of SG Committee Member or IS Committee Member;
15.6.2 No later than 10 days before the annual general meeting (or,
as the case may be, the extraordinary general meeting) the Executive
Committee shall circulate (or cause to be circulated) to all Pool
Members and the Director a list of all the names of the RS Nominees
and of the Pool Members who nominated them (the "RS Nominee List").
The Director may object to any RS Nominee by notice to the Executive
Committee no later than 5 working days before the annual general
meeting on the grounds that such RS Nominee could not reasonably be
expected to represent the interests of Small Generators or (as the
case may be) Independent Suppliers on the Executive Committee. Any RS
Nominee to whom the Director so objects shall not be eligible for
election at the relevant meeting of Pool Members as an RS Committee
Member and his name shall be deleted from the RS Nominee List. The RS
Nominee List (amended, if necessary, to take account of the
Director's objections) shall be circulated at the annual general
meeting or, as the case may be, extraordinary general meeting to all
Pool Members present in person and (if practicable) to all Pool
Members in advance of such meeting;
15.6.3 If there is no RS Nominee or no RS Nominee eligible for
election as the SO Committee Member or (as the case may be) the IS
Committee Member, the Director shall be entitled to appoint and
remove an individual to serve in that capacity for the term of office
referred to in Clause 15.4 and the procedures in Clause 15.6.4 shall
not apply to the election of such RS Nominee;
15.6.4 At the annual general meeting or extraordinary general meeting
(as the case may be) of Pool Members the following procedures shall
be applied (subject to Clause 15.6.5) in sequence first for the
election of the SG Committee Member and, secondly, for the election
of the IS Committee Member immediately following the conclusion of
the election procedures for the MP Committee Members in Clause 15.5:
(a) each RS Pool Member shall be given a voting paper (in this
Clause 15.6, a "Voting Paper") with the name of every RS Nominee who
appears on the RS Nominee List (amended, if appropriate, in
accordance with Clause 15.6.2);
(b) SG Pool Members shall be entitled to vote only for RS
Nominees nominated by SG Pool Members and whose names appear on the
Voting Paper ("SG Nominees");
(c) IS Pool Members shall be entitled to vote only for RS
Nominees nominated by IS Pool Members and whose names appear on the
Voting Paper ("IS Nominees");
(d) in the case of the election of the SG Committee Member,
each SG Pool Member shall rank each SG Nominee on its Voting Paper in
order of preference by marking the SG Nominee which is its first
choice for membership of the Executive Committee (its "Preferred SG
Nominee") with the number"1" and continuing numbering sequentially in
order of preference until it is indifferent as to the preference it
accords to any remaining SG Nominees;
(e) in the case of the election of the IS Committee Member,
each IS Pool Member shall rank each IS Nominee on its Voting Paper in
order of preference by marking the IS Nominee which is its Rrst
choice for membership of the Executive Committee (its "Preferred IS
Nominee") with the number "1" and continuing numbering sequentially
in order of preference until it is indifferent as to the preference
it accords to any remaining IS Nominees. Preferred SG Nominees and
Preferred IS Nominees are, for the purposes of this Clause 15.6,
known as the ``Preferred RS Nominees';
(f) if a RS Pool Member has proposed a SG Nominee or an IS
Nominee in accordance with Clause 15.6.1, then such RS Pool Member
must choose that SG Nominee or (as the case may be) IS Nominee as its
Preferred RS Nominee;
(g) the Moderator shall collect in all Voting Papers and for
each SG Nominee and each IS Nominee shall calculate the number of
Weighted Votes cast by RS Pool Members in his favour and for this
purpose each RS Pool Member shall be deemed to have cast all its
Weighted Votes in favour of its Preferred RS Nominee;
(h) the Moderator shall prepare a list (the "SG Preference
List") ranking the Preferred SG Nominees in order according to the
number of Weighted Votes cast for each such Preferred SG Nominee,
with the Preferred SG Nominee with the most number of Weighted Votes
being at the head of the list;
(i) the Moderator shall prepare a list (the "IS Preference
List") ranking the Preferred IS Nominees in order according to the
number of Weighted Votes cast for each such Preferred IS Nominee,
with the Preferred IS Nominee with the most number of Weighted Votes
being at the head of the list;
(j) if the RS Nominee ranked first on the SG Preference List or
(as the case may be) IS Preference List has more Weighted Votes cast
in his favour than the sum of all Weighted Votes cast for all those
RS Nominees ranked below him on the same list, the RS Nominee ranked
first on the relevant list shall be elected as the SG Committee
Member or (as the case may be) IS Committee Member and the voting
procedure in this Clause 15.6.4 shall terminate; and
(k) if the condition in paragraph (I) above is not satisfied,
the RS Nominee whose name appears last on the SG Preference List or
(as the case may be) IS Preference List shall be removed from that
list and shall take no further part in the election process for the
relevant RS Committee Members and the Moderator shall transfer the
Weighted Votes of all those RS Pool Members who voted for that RS
Nominee to the RS Nominee(s) who is their respective second
preference. The Moderator shall then prepare a revised SG Preference
List or (as the case may be) IS Preference List in each case to which
paragraph (j) above shall b" applied and the procedure set out in
this paragraph (k) shall be repeated as often as may be necessary
until the condition in paragraph (I) above is satisfied in relation
to the relevant list (on each occasion the RS Nominee whose name
appears last on the SG Preference List or (as the case may be) IS
Preference List being removed from it and the Moderator transferring
the Weighted Votes of all those RS Pool Members attributable to that
RS Nominee to the RS Nominee(s) who is their next respective
preference); and
15.6.5 If a SG Pool Member is a member of a Pool Member's Group of
which an IS Pool Member is also a member (or vice versa) and there
are no MP Pool Members in that Pool Member's Group, the SG Pool
Member and the IS Pool Member shall jointly notify the Secretary upon
receipt of the RS Nominee List at the annual general meeting or, as
the case may be, extraordinary general meeting whether the SG Pool
Member will participate in the election of the SG Committee Member or
the IS Pool Member will participate in the election of the IS
Committee Member. In the former case, the IS Pool Member shall not
have the right to participate in the election of either RS Nominee
and, in the latter case, the SG Pool Member shall not have the right
to participate in the election of either RS Nominee. If no such
notification is received by the Secretary before the election
procedure for the RS Nominees begins, the votes of both the SG Pool
Member and the IS Pool Member shall be discounted and ignored.
15.7 Spoilt papers: If any Voting Paper is incorrectly completed or
otherwise spoilt, the Moderator shall take no account of it or of the
Weighted Votes purported to be cast by it in the conduct of the
procedures set out in Clause 15.5 and/or 15.6.
15.8 Default appointment: If the procedures set out in Clause 15.5 or
15.6 (other than Clause 15.6.3) shall result in less than the
prescribed or (as the case may be) agreed maximum number of Committee
Members permitted under Clause 15.1 being appointed (including where
there are insufficient nominees nominated to fill the seats), the
Director shall have the right to appoint and remove individuals to
the Executive Committee as Committee Members in such numbers as may
be necessary to provide for such maximum number of Committee Members
until such time as another election pursuant to Clause 15.5.3 or (as
the case may be) 15.6.4 takes place. Any Committee Member appointed
pursuant to this Clause 15.8 shall, for the purposes of Clause 23.6,
represent the interests of all Pool Members for the time being and
from time to time.
15.9 Notification of Committee Members: The Secretary shall promptly
notify all Pool Members and the Director of the appointment and
removal of any Committee Member
15.10 Removal of Committee Members:
15.10.1 A Committee Member may be removed by vote of all those Pool
Members whose Weighted Votes were cast in favour of that Committee
Member in his election pursuant to Clause 15.5 or Clause 15.6, such
vote to be passed requiring a majority of 65 per cent. of the total
number of Weighted Votes of all such Pool Members (after deduction of
any Weighted Votes of persons who were Pool Members at the time of
his election and who voted in favour of him but who are no longer
Pool Members). For the purposes of such vote, relevant Pool Members
may cast only that number of Weighted Votes which they cast in favour
of such Committee Member in his election pursuant to Clause 15.5 or
15.6.
15.102 A separate general meeting of those Pool Members entitled to
vote may be convened for the purpose of removing a Committee Member
and to every such separate general meeting the provisions of Part III
relating to general meetings of Pool Members (other than Clause 10.9,
save in respect of the attendance by the Pool Auditor or the Director
or its or his duly appointed representative) shall apply mutatis
mutandis but so that:
(a) the necessar,y quorum shall be one Pool Member entitled to
vote thereat; and
(b) notice of any such separate general meeting need be given
only to those entitled to attend the same.
15.11 Vacation of office by Committee Members: The office of a
Committee Member shall be vacated if:
15.11.1 He resigns his office by notice delivered to the Secretary;
or
15.1 1.2 He becomes bankrupt or compounds with his creditors
generally; or
15.11.3 He becomes of unsound mind or a patient for any purpose of
any statute relating to mental health; or
15.11.4 He and his alternate fail to attend more than three
consecutive meetings of the Executive Committee; or
15.11.5 He dies; or
15.11.6 He is removed from office pursuant to Clause 15.10.
15.12 Election of replacement Committee Members: At the time of the
vacation of office of a Committee Member (for the purposes of this
Clause 15.12 an "Outgoing Committee Member") or as soon as is
reasonably practicable thereafter, a replacement Committee Member
shall be elected following the procedures set out in, in the case of
an MP Committee Member, Clause 15.5 or, in the case of an RS
Committee Member, Clause 15.6, provided that :
(a) only Pool Members whose Weighted Votes were cast in favour
of the Outgoing Committee Member in an election pursuant to Clause
15.5 or 15.6 and who were, at the time of his vacation of office,
represented by him pursuant to Clause 23.6.1 or 23.6.2; and
(b) only those persons who have become Pool Members in the
period of the Outgoing Committee Member's term of office and who
were, at the time of his vacation of office, represented by him
pursuant to Clause 23.6.4
may take part in the election of a replacement Committee Member
pursuant to this Clause 15.12.
15.1 3 Alternates:
15.13.1 Each Committee Member shall have the power to appoint any
person (who may be an existing Committee Member) to be his alternate
and may at his discretion remove an alternate Committee Member so
appointed. Any appointment or removal of an alternate Committee
Member shall be effected by notice in writing executed by the
appointor and delivered to the Secretary who shall forthwith notify
all other Committee Members of such appointment. If his appointor so
requests, an alternate Committee Member shall be entitled to receive
notice of all meetings of the Executive Committee or of subcommittees
or sub-groups of which his appointor is a member and to receive a
voting paper on a poll instead of the appointor. He shall also be
entitled to attend, speak and vote as a Committee Member at any such
meeting at which the Committee Member appointing him is not
personally present and at the meeting to exercise and discharge all
the functions, powers and duties of his appointor as a Committee
Member and for the purposes of the proceedings at the meeting the
provisions of this Part IV shall apply as i'he were a Committee
Member. He shall also be entitled to demand a poll (whether at or
after the meeting) pursuant to Clause 22.3, to carry out
consultations with Pool Members contemplated by Clause 22.8 insofar
as his appointor shall be unable to do so, to act on the instructions
of Pool Members duly given to his Pintos or to him on behalf of his
appointor and to complete his appointor's voting paper on a poll on
behalf of his appointor.
15.13.2 Except on a poll, every person acting as an alternate
Committee Member shall have one vote for each Committee Member for
whom he acts as alternate, in addition to his own vote if he is also
a Committee Member. On a poll, an alternate Committee Member shall be
entitled (if his appointor is unable to do so) to exercise (on behalf
of his appointor and by completion of the appointor's separate voting
paper) all of the votes which his appointor is entitled to cast, in
addition to any votes which the alternate is entitled to cast in his
own capacity if he is also a Committee Member. Execution by an
alternate Committee Member of any resolution in writing of the
Executive Committee shall, unless the notice of his appointment
provides to the contrary, be as effective as execution by his
appointor.
15.13.3 An alternate Committee Member shall ipso facto cease to be an
alternate Committee Member if his appointor ceases for any reason to
be a Committee Member.
15.13.4 References in this Agreement to a Committee Member shall,
unless the context otherwise requires, include his duly appointed
alternate.
16. POOL CHAIRMAN
16.1 Pool Chairman: There shall at all times be a Chairman of the
pooling and settlement arrangements for the electricity industry in
England and Wales established by this Agreement (the "Pool
Chairman").
16.2 Appointment and Term:
16.2.1 The election of a Pool Chairman shall take place either:
(i) at the annual general meeting or (as the case may be) an
extraordinary general meeting of Pool Members convened for that
purpose (where practicable) held not less than three months before
the end of the term of the then current Pool Chairman; or
(ii) should the Executive Committee so decide, by a postal vote
in accordance with Clause 16.4, such postal vote to have a closing
date which (where practicable) is not less than three months before
the end of the term of the then current Pool Chairman.
16.2.2 Subject to Clause 16.2.4, the term of office of the Pool
Chairman shall be from 1st April in the year of his election to the
31st March falling two years thereafter provided that:
(i) where the Pool Chairman is to be elected at an annual
general meeting or (as the case may be) an extraordinary general
meeting of Pool Members, if the meeting at which he is elected is
held after 1st April, his term of office shall commence from such
date as the Pool Members in general meeting shall resolve (being no
earlier than the date of such meeting);
(ii) where the Pool Chairman is to be elected by postal vote, if
the closing date of such postal vote is after 1st April, his term of
office shall commence from such date as shall be set out in the
notice of postal vote which shall have been sent to all Pool Members
by the Chief Executive in accordance with Clause 16.4; and
(iii) his term of office shall expire before 31st March if
he resigns or is unable for whatever reason to continue to act or if
a successor Pool Chairman is elected with a term of office which Pool
Members either in general meeting or (as the case may be) by the
terms of a postal vote resolve is to commence before that date.
16.2.3 The appointment of the Pool Chairman shall be on such terms
and conditions (including, but not limited to, terms and conditions
in relation to reimbursement, hours of work and removal (subject to
Clause 13.1.2)) as have been approved by Pool Members in general
meeting. Any amendment to those terms and conditions shall require
the prior approval of Pool Members in general meeting.
16.2.4 Not later than three months prior to the end of the two year
term of the then current Pool Chairman, Pool Members may either (i)
call and hold a general meeting or (ii) call and hold a postal vote
and, if the Pool Chairman agrees, may resolve to extend the term of
appointment of the Pool Chairman by one year. If the resolution is
approved in accordance with the terms of this Agreement then the term
of appointment shall be so extended provided that under no
circumstances shall the term of appointment exceed three y ears.
16.2 5 If at any time the Pool Chairman shall resign or be unable for
whatever reason to continue to act, an extraordinary general meeting
shall be called in accordance with Clause 9.4 or a postal vote shall
be called in accordance with Clause 16.4 for the purposes of electing
a successor Pool Chairman. Unless that successor Pool Chairman
himself is removed, resigns or is unable for whatever reason to
continue to act, he shall hold omce until the 31st March falling
^losest to the date two years after the date of his election and his
appointment may be extended in accordance with Clause 16.2.4.
16.3 Transitional Provisions: The appointment of the Pool Chairman
whose two year term of office starts on 1st April, 1996 is hereby
ratified and confirmed by all Pool Members.
16.4 Election procedure fpostal vote): The Executive Committee may
(where practicable) resolve to call a postal vote to elect a Pool
Chairman. Where the Executive Committee so resolves, such postal vote
shall be held in accordance with the following principles:
16.4.1 The Executive Committee shall instruct the Chief Executive,
who shall send a notice to Pool Members, stating that a postal vote
has been called and inviting nominations to be sent to the Chief
Executive within a period of not less than 21 days from the date of
such notice;
16.4.2 Once such period for nomination has closed, the Chief
Executive shall send to all Pool Members a ballot paper containing a
list of all eligible nominees and a closing date for the receipt by
the Chief Executive of completed ballot papers, such date being no
less than 21 days from the date of such ballot paper; and
16.4.3 Each Pool Member shall have one vote and the successor Pool
Chairman shall be elected by single transferable vote in accordance
with the procedures approved by the Executive Committee.
16.5 Election procedure (general meeting):
16.5.1 Where any successor Pool Chairman is to be elected at an
annual general meeting or (as the case may be) extraordinary general
meeting, nominations shall be delivered no later than 21 days prior
to the relevant annual general meeting or (as the case may be)
extraordinary general meeting.
16.5.2 At the relevant annual general meeting or (as the case may be)
extraordinary general meeting, all eligible nominees shall be
proposed by the Pool Chairman (failing whom, the Chief Executive).
Each Pool Member shall have one vote and the successor Pool Chairman
shall be elected by single transferable vote in accordance with the
procedures approved by the Executive Comer. tee.
16.6 Nominations: Any Pool Member can nominate any one person,
whether or not an employee of a Pool Member, to be Pool Chairman.
Nominations made pursuant to this Clause 16.6 shall be delivered in
writing to the Chief Executive within any time period specified
pursuant to Clause 16.4 or (as the case may be) Clause 16.5. Any such
nomination shall only be valid where accompanied by a written
statement from the nominee stating that he is aware of the proposal
and would be prepared to serve as Pool Chairman in accordance with
this Agreement and the relevant terms and conditions if elected.
16.7 Functions: The Pool Chairman shall have and carry out only such
duties and responsibilities and exercise such powers as are expressly
provided in this Agreement and in his terms of reference approved by
the Executive Committee from time to time. The Pool Chairman shall
exercise impartially all such duties, responsibilities and powers.
16.8 No voting rights: The Pool Chairman in his capacity as Pool
Chairman shall have no voting rights under this Agreement.
16.9 Indemnity: The Pool Chairman shall be indemnified and kept
indemnified jointly and severally by all Pool Members (and, as
between the Pool Members, rateably in the proportion which their
respective Contributory Shares bear one to the other at the time of
receipt of the request for indemnification) from and against any and
all costs (including legal costs), charges, expenses, damages or
other liabilities properly incurred or suffered by him in relation to
his office as Pool Chairman or the due exercise by him of his powers,
duties and responsibilities as Pool Chairman and all claims, demands
or proceedings arising out of or in connection with the same except
any such costs, charges, expenses, damages or other liabilities which
are suffered or incurred or occasioned by the wilful default or bad
faith of, or breach of duty or trust by, the Pool Chairman. The Pool
Members shall, upon request, provide the Pool Chairman with a written
deed of indemnity to that effect.
<PAGE>
17. CHIEF EXECUTIVE, SECRETARIAT AND SECRETARY
17.1 Chief Executive:
17.1.1 Subject to Clause 15.7.4, a chief executive of the Executive
Committee (the UChief Executives) shall be appointed and be subject
to removal and replacement by resolution of the Executive Committee
passed by 70 per cent or more of the votes of all Committee Members
(after consultation with the Pool Chairman). The Chief Executive
shall be appointed on such terms and conditions as they see fit.
17.1.2 The Chief Executive shall undertake such duties and
responsibilities and exercise such powers in relation to the
Executive Committee and its activities as the Executive Committee may
from time to time assign to or vest in him.
17.1.3 The Chief Executive shall have the right and shall be obliged
to attend all meetings of the Executive Committee and all meetings of
the Pool Members in general meeting. The Chief Executive in his
capacity as Chief Executive shall have no voting rights under this
Agreement. If for any reason the Chief Executive is unable to attend
any such meeting, he shall nominate a representative to attend in his
place.
17.1.4 The Executive Committee shall make arrangements for the
remuneration of the Chief Executive and the payment of his costs and
expenses and the same shall be recovered in accordance with the PEA
Accounting Procedure or as otherwise directed by the Executive
Committee from time to time.
17.2 Secretariat:
17.2.1 The Executive Committee may from time to time appoint and
remove, or make arrangements for the appointment and removal of, such
personnel as the Executive Committee requires to assist the Executive
Committee, any sub-committee of the Executive Committee, the chairman
of the Executive Committee or any such sub-committee, the Pool
Chairman, the Chief Executive or the Secretary in the proper
performance of its or his duties and responsibilities, in each such
case upon such terms and conditions as the Executive Committee sees
fit.
17.2.2 Any personnel referred to in Clause 17.2.1 shall undertake
such duties and responsibilities and exercise such powers as the
Executive Committee may from time to time assign to or vest in him,
it or them.
17.2.3 The Executive Committee shall make arrangements for the
remuneration of such personnel as are referred to in Clause 17.2.1
and the payment of their costs and expenses and the same shall be
recovered in accordance with the PFA Accounting Procedure or as
otherwise directed by the Executive Committee from time to time.
17.3 Secretary:
17.3.1 The Executive Committee may from time to time appoint and
remove, or make arrangements for the appointment and removal of, the
Secretary on such terms and conditions as it sees fit.
17.3.2 The Secretary in his capacity as Secretary shall have no
voting rights under this Agreement.
17.3.3 The Secretary shall have and carry out only such duties and
responsibilities as are expressly provided in this Agreement and such
other reasonable secretarial and administrative duties and
responsibilities as may from time to time be delegated to it by the
Executive Committee. If at any time there is no Secretary, the
responsibilities and duties of the Secretary under this Agreement
shall become those of the Chief Executive or, if there shall be no
Chief Executive, the Executive Committee until such time as a
Secretary is appointed pursuant to Clause 17.3.1 or a Chief Executive
is appointed pursuant to Clause 17.1.1 (and notices to the Secretary
under this Agreement shall be readdressed accordingly).
17.3.4 The Secretary shall be entitled to receive such remuneration
(if any) as the Executive Committee may from time to time approve,
such remuneration to be paid to it at such times and in such manner
as the Executive Committee shall from time to time direct and to be
recovered in accordance with the PFA Accounting Procedure or as
otherwise directed by the Executive Committee from time to time.
Further, the Secretary shall be paid its reasonable travelling, hotel
and incidental expenses of attending and returning from meetings of
the Executive Committee or any sub-committee thereof and any general
meetings and separate general meetings of Pool Members and all costs
and expenses properly and reasonably incurred by it in the
performance of its duties and responsibilities under this Agreement.
All such costs and expenses shall be recovered in accordance with the
PFA Accounting Procedure or as otherwise directed by the Executive
Committee from time to time.
17.4 Indemnity:
17.4.1 All Pool Members shall jointly and severally indemnify and
keep indemnified the Chief Executive, the Contract Manager, the
personnel referred to in Clause 17.2.1, the Secretary and each member
of any sub-committee of the Executive Committee or of any sub-group
established by any such sub-committee (other than a Committee Member,
but without prejudice to Clause 23.3.4) (and, as between the Pool
Members, according to their respective Contributory Shares at the
time of receipt of the request for indemnification) from and against
any and all costs (including legal costs), charges, expenses, damages
or other liabilities properly incurred or suffered by the Chief
Executive in relation to his office as Chief Executive or (as the
case may be) the Secretary in relation to its office as Secretary or
the due exercise by the Chief Executive, the Contract Manager, the
said personnel, the Secretary or (as the case may be) any such member
of his, their or its powers, duties and responsibilities under this
Agreement and all claims, demands or proceedings arising out of or in
connection with the same except any such costs, charges, expenses,
damages or other liabilities which are suffered or incurred or
occasioned by the wilful default or bad faith of, or breach of
obligation by, the Chief Executive, the Contract Manager, such
personnel, the Secretary or (as the case may be) any such member.
17.4.2 The Pool Members undertake to enter into an indemnity in
favour of any employer of the Chief Executive, any personnel referred
to in Clause 17.2.1, the Secretary or (as the case may be) any such
member of any sub-committee of the Executive Committee or of any
sub-group established by any such subcommittee as is referred to in
Clause 17.4.1 under which they shall jointly and severally indemnify
and keep indemnified any such employer in respect of all acts and
omissions of the Chief Executive, the Contract Manager, such
personnel, the Secretary or (as the case may be) any such member in
the performance of his, their or its rights, powers, duties and
responsibilities under this Agreement (and, as between the Pool
Members, according to their respective Contributory Shares at the
time of receipt of the request for indemnification under the relevant
indemnity).
18. PROCEEDINGS OF THE EXECUTIVE COMMITTEE
18.1 Meetings:
18.1.1 Meetings of the Executive Committee (other than special
meetings referred to in Clause 18.1.3) shall be held at least
quarterly (or at such shorter regular intervals as may be agreed from
time to time by the Executive Committee) at such time and place in
any jurisdiction in which any Pool Member is incorporated or has its
principal place of business as may be agreed from time to time by the
Executive Committee (or, in default of agreement, as stipulated by
the Pool Chairman).
18.1.2 Meetings of the Executive Committee shall be convened by the
Secretary upon giving to the Committee Members, the Pool Chairman,
the Chief Executive (if any), the Settlement System Administrator,
the Director and the Pool Auditor and (where matters the subject of
the agenda referred to in Clause 18.1.4 concern directly the
functions, duties or responsibilities of any Externally
Interconnected Party (not being a Pool Member), the Pool Funds
Administrator, the Grid Operator and/or the Ancillary Services
Provider) the relevant one(s) of them at least five working days'
notice of the place, the day and the hour of the relevant meeting.
18.1.3 Special meetings of the Executive Committee shall be convened
upon the request of any Committee Member, the Pool Chairman or the
Chief Executive. Such request shall be made in writing to the
Secretary and shall state the matters to be considered at that
special meeting. Upon receipt of such request the Secretary shall
convene in accordance with Clause 18.1.2 without delay such special
meeting for a date occurring as soon as practicable thereafter but
not less than five nor more than ten working days after receipt of
such request. If the Secretary shall fail so to convene a special
meeting the Committee Member which made such request, the Pool
Chairman or (as the case may be) the Chief Executive may himself
convene a special meeting, but any meeting so convened shall not be
held after the expiration of two months from the date of such
request. A special meeting convened under this Clause 18.1.3 by a
Committee Member, the Pool Chairman or the Chief Executive shall be
convened in the same manner, as nearly as possible, as that in which
meetings of the Executive Committee are to be convened by the
Secretary pursuant to Clause 18.1.2.
18.1.4 Any notice given under Clause 18.1.2 shall be exclusive of the
day on which it is served or deemed to be served and of the day for
which it is given and shall be accompanied by an agenda of the
matters to be considered at the relevant meeting together with any
supporting documents C`r papers then available to the Secretary. Any
Committee Member may advise additional matters which he wishes to be
considered at such meeting by notice to all other Committee Members,
the Pool Chairman, the Chief Executive (if any), the Secretary, the
Settlement System Administrator, the Director and the Pool Auditor
"...i Where such additional matters concern directly the functions,
duties or responsibilities of any Externally Interconnected Party
(not being a Pool Member), the Pool Funds Administrator, the Grid
Operator and/or the Ancillary Services Provider) the relevant one(s)
of them given no later than three working days before the date of
such meeting. Only matters identified in such agenda or so advised
shall be discussed or resolved upon at such meeting. The accidental
omission to give notice of a meeting or accompanying agenda or
supporting documents or papers to, or the non-receipt of notice of a
meeting or accompanying agenda or supporting documents or papers by,
any person entitled to receive notice shall not invalidate the
proceedings at that meeting.
18.1.5 For any meeting of the Executive Committee, the periods and
methods of notice referred to in the foregoing provisions of this
Clause 18 may be waived prospectively or retrospectively with the
consent in writing of all such persons as are entitled to attend the
relevant meeting.
18.1.6 The Secretary shall prepare minutes of all meetings of the
Executive Committee and shall provide copies thereof to all such
persons as were entitled to attend the relevant meeting as soon as
practicable (and in any event within ten working days) after the
relevant meeting has been held. Each person who attended such meeting
shall notify his approval or disapproval of the minutes thereof to
the Secretary no later than ten working days after receipt thereof
and, if he fails to do so, he or it shall be deemed to have approved
the same. The Secretary shall record any such disapproval in the
minutes unless the same shall have been withdrawn or the minutes
amended with the agreement of the Executive Committee. The Secretary
shall provide copies of minutes of meetings of the Executive
Committee to any other Party within a reasonable time after request
therefor provided that the said time for approving or disapproving
the same has expired. Further, the Secretary shall provide copies of
such minutes to such persons as the Executive Committee may from time
to time direct within a reasonable time after receipt of such
direction.
19. CONDUCT OF EXECUTIVE COMMITTEE MEETINGS
19.1 General: Chairman:
19 1.1 Subject as provided in Clauses 13, 18 and 22 and this Clause
19, the Executive Committee may meet for the transaction of business,
and adjourn and otherwise regulate its meetings, as it shall see fit.
19.1.2 The Pool Chairman shall preside as chairman at every meeting
of the Executive Committee provided that:
(a) if the Pool Chairman is unable to attend any meeting, he
shall nominate another individual to preside as chairman at that
meeting in his place. Such individual shall be a director or senior
executive of one of the Pool Members but shall not be a Committee
Member or an alternate for any Committee Member; and
(b) if there is no Pool Chairman or the Pool Chairman or his
duly appointed nominee shall not be present within 15 minutes after
the time appointed for the holding of the meeting or the Pool
Chairman is unwilling to act, the Committee Members present may
appoint one of their number to be chairman of the meeting.
19.1.3 The chairman of the meeting in his capacity as chairman shall
not have any vote at meetings of the Executive Committee.
19.2 Lack of quorum: If, within half an hour from the time appointed
for holding any meeting of the Executive Committee, a quorum is not
present, the meeting shall be adjourned to the same day in the next
week at the same time and place and if at the adjourned meeting a
quorum is not present within half an hour from the time appointed for
holding the meeting, those present shall constitute a quorum.
19.3 Representation of non-Committee Members: Each of the Settlement
System Administrator, the Pool Chairman, the Director and the Pool
Auditor (or its or his duly appointed representative) shall have the
right to attend and speak (but not to vote) at meetings of the
Executive Committee. Each Externally Interconnected Party (not being
a Pool Member) and each of the Pool Funds Administrator, the Grid
Operator and the Ancillary Services Provider (or its duly appointed
representative) shall be entitled to attend and speak (but not vote)
at meetings of the Executive Committee only where matters directly
concerning its functions, duties or responsibilities have been
identified or advised as provided in Clause 18.1.4 or if so requested
by the Executive Committee. The Chief Executive (or his duly
appointed representative) shall have the right to attend and speak
(but not vote) at meetings of the Executive Committee and shall be
obliged so to attend. With the exception of attendances by the Pool
Chairman, the Chief Executive and the Pool Audito-, no payment shall
be made to any person who has the right by virtue of this Clause 19.4
to attend Executive Committee meetings in respect of any such
attendance.
19.4 Written resolutions: A resolution in writing, executed by or on
behalf of each Committee Member, shall be as valid and effectual as
if it had been passed at a meeting of the Executive Committee duly
convened and held and may consist of several instruments in like form
and executed by or on behalf of one or more of such Committee
Members. Any proposed resolution in writing shall be circulated to
all those persons who would have been entitled to attend a meeting of
the Executive Committee at which such resolution could properly have
been passed.
19.5 Default in appointment: All acts done by any meeting of the
Committee Members or of a sub-committee of the Executive Committee
shall, notwithstanding that it be afterwards discovered that there
was some defect in the appointment of such Committee Member, be as
valid as if such person had been duly appointed.
20. DELEGATION
20.1 Sub-committees: The Executive Committee may establish sub
committees. Each sub-committee:
20.1.1 Shall be composed of such persons (whether or not Committee
Members) and shall discharge such rights, powers, duties and
responsibilities as from time to time the Executive Committee
considers desirable to delegate to it; and
20.1.2 In the exercise of its rights and powers and the performance
of its duties and responsibilities delegated to it by the Executive
Committee shall at all times conduct itself and its affairs in a
manner which it considers best designed to She effect to the
principal objects and purpose set out in Clause 4.1.2 and to promote,
and not obstruct, the fair and efficient operation of the procedures
referred to in Clause 4.1.3 so that the objectives set out in Clause
4.1.3 are thereby achieved; and
20.1.3 Shall be given written terms of reference and, unless
otherwise varied by the Executive Committee, the provisions of
Clauses 18 and 19 shall apply mutatis mutandis to meetings of such
subcommittee and the provisions of Clauses 19.4, 23.3.1, 23.3.2 and
23.3.3 shall apply mutatis mutandis in relation to any such sub
committee and the members thereof; and
20.1.4 May establish sub-groups to assist in the discharge of the
rights, powers, duties and responsibilities of such sub-committee,
each of which sub-groups shall be given written terms of reference
and, unless otherwise varied by the Executive Committee or any
sub-committee acting on the authority of the Executive Committee, the
provisions of Clauses 18 and 19 shall apply mutates mr~tanctis to
meetings of such sub-groups and the provisions of Clauses 23.3.1,
23.3.2, and 23.3.3 shall apply mutatis mutandis in relation to each
such sub-group and the members thereof.
20.2 Nominees: Upon written request of the Executive Committee or, in
the. case of the Settlement System Administrator, Order issued by the
Contract Manager under Schedule 4, each Pool Member and the
Settlement System Administrator shall:
20.2.1 Nominate one or more persons knowledgeable in the matters
referred to, or the subject of consideration by, the relevant sub
committee to attend at meetings of, and otherwise participate as a
member of, any sub-committee established by the Executive Committee;
and
20.2.2 Procure that such nominee(s) shall so attend and participate
at such time or times as the Executive Committee or such subcommittee
may require,
provided that a Pool Member shall not be required in any period of 12
months to make available nominees for more than 60 days in aggregate.
Save as provided by Clause 23.5 no payment shall be made to Pool
Members in respect of any such attendance or participation.
20.3 Member's responsibilities: To the extent not inconsistent with
the provisions of Clauses 20.1.1, 20.1.2 and 20.1.3 a member of any
subcommittee established by the Executive Committee shall be free to
represent the interests of the person or persons which nominated him
to that sub-committee but each such person acknowledges and agrees
the subordination of those interests to the responsibilities of such
subcommittee under Clause 20.1.2.
20.4 Chief Executive: The Executive Committee may from time to time
delegate all or any of its rights, powers, duties and
responsibilities under this Agreement to the Chief Executive upon
such terms and conditions as the Executive Committee thinks fit.
20.5 Effect of decisions: Resolutions of sub-committees shall not
have binding effect (a) unless and then only to the extent that the
Executive Committee shall have delegated the relevant decision-making
powers to the sub-committee, or (b) unless approved by resolution of
the Executive Committee (and then subject to Clause 13). Meetings of
such sub-committees shall, so far as possible, be arranged so that
minutes of such meetings can be circulated to each Committee Member
in sufficient time for consideration before the next following
regular meeting of the Executive Committee. Resolutions of sub-groups
shall not have binding effect. The Executive Committee shall remain
at all times responsible for the actions of all its sub-committees
and sub-groups.
20.6 Other delegation: Subject to any direction to the contrary by
Pool Members in general meeting but without prejudice to the
Executive Committee's rights under Clauses 20.1 and 20.4, the
Executive Committee may from time to time delegate in any particular
case all or any of its rights, powers, duties and responsibilities
under this Agreement, including any decision-making powers and the
conduct of any review or consultation and the preparation and
submission of any report required of it under this Agreement, to such
person or persons as it thinks fit and on such terms and conditions
as it thinks fit and shall require that, in the performance of the
delegated duties, such person or persons shall conform to any
regulations that may be imposed on it or them by the Executive
Committee.
21. [Not used].
22. VOTING
22.1 Voting: The chairman of the relevant meeting of the Executive
Committee and any Committee Member may demand that any question or
matter arising at a meeting of the Executive Committee be put to a
vote of Committee Members. Any vote so demanded shall be taken
forthwith or at such other time as such chairman directs not being
later than the date of the next meeting of the Executive Committee.
Any demand for a vote may, before the vote is taken, be withdrawn.
22.2 Simple majority: Subject as provided in the following provisions
of this Clause 22, any question or matter arising at a meeting of the
Executive Committee shall be decided by a simple majority of the
votes cast at the meeting by Committee Members. On any such question
or matter each Committee Member shall be entitled to one vote. In the
event of an equality of votes on any resolution put to the Executive
Committee, the matter the subject of the relevant resolution shall be
remitted to the Committee Members for decision on a poll.
22.3 Demand for a poll: In respect of any matter or question which is
put to a vote of Committee Members a poll may be demanded (before or
after the simple majority vote) either:
22.3.1 At the meeting at which the simple majority vote takes place,
by the chairman of the meeting or by any Committee Member; or
22.3.2 By no later than five working days after such meeting, by
notice in writing to the Chief Executive by any Committee Member
(whether or nor present at the relevant meeting).
22.4 Effect of decision: A decision duly made at a meeting of the
Executive Committee shall (unless otherwise determined by the
Executive Committee or otherwise provided by the terms of the
decision) have immediate effect, unless a poll be duly demanded in
accordance with Clause 22.3, in which case, pending the outcome of
the vote on a poll, the decision shall cease to or shall not have
effect.
22.5 Withdrawal of demand: Any demand for a poll may be withdrawn by
the person who made it at any time provided that notice of withdrawal
is received by the Chief Executive by no later than the seventh
working day following the date of the Executive Committee meeting at
which the vote took place. The Chief Executive shall as soon as
reasonably practicable notify all Parties and all other persons
entitled or required to attend general meetings of Pool Members of
receipt of any such notice of withdrawal.
22.6 Conduct of a poll: The Secretary shall without delay following
the demand for, or the remittance of a matter for decision on, a poll
despatch to each Committee Member a voting paper in such form as
shall be agreed by the chairman of the Executive Committee meeting at
which the matter in question was considered or (failing him) the
Chief Executive but which shall in any event set out the full text of
the resolution in respect of which the poll is required (which shall
be the same as the resolution which was put to a simple majority
vote), shall provide for each Committee Member to cast votes for or
against the resolution and shall specify the date by which votes must
be lodged by Committee Members. The Secretary shall at the same time
give notice to all Parties that a poll has been demanded and shall
specify in such notice the resolution on which the poll has been
called (if applicable), the identity of the person (or persons) who
has demanded the poll and the date by which votes must be lodged by
the Committee Members. The accidental omission to issue a voting
paper or to give notice of a poll, or the non-receipt of a voting
paper or such a notice by, any person entitled to receive the voting
paper or (as the case may be) the notice shall not invalidate the
conduct of the poll or the result thereof.
22.7 Votes on a poll: on a vote on a poll:
22.7.1 The Committee Members shall in aggregate be entitled to a
number of votes equal to the number of votes which the Pool Members
would have been entitled to cast on a poll at a general meeting if
such meeting had taken place on the day of the Executive Committee
meeting at which the matter in question was considered;
22.7.2 Each Committee Member shall have the votes attributable to his
Constituents and shall cast such votes in accordance with the
individual written instructions of each such Constituent, but so that
no Constituent shall be entitled to instruct that the votes
attributable to it be cast more than once;
22.7.3 In the absence of any written instructions from any
Constituent, a Committee Member shall not be entitled to cast any
votes on behalf of that Constituent;
22.7.4 A Constituent may instruct the relevant Committee Member to
abstain from casting any or a specified number of votes on its
behalf;
22.7.5 The votes cast by a Committee Member shall not be valid
unless:
(a) the relevant voting paper shall have been received by the
Secretary on or before the date falling 10 working days after the
date on which the voting papers were despatched to Committee Members
and the votes cast in such voting paper accord with the written
instructions referred to in paragraph (b) below;
(b) accompanied by a copy of the written instructions given by
or on behalf of the Constituent(s) whose votes the Committee Member
is entitled to cast;
(c) the Committee Member in other respects shall have complied
with the procedures for votes on a poll (if any) from time to time
established by the Executive Committee;
22.7.6 Any Constituent on whose instructions a Committee Member is
required to act in accordance with the foregoing provisions shall be
entitled to make arrangements with any other Constituent on whose
instructions that same Committee Member is required to act for the
requisite written instructions to be given on its behalf by that
other Constituent. Details of any such arrangement shall promptly be
given to the Secretary.
22.8 65 per cent. majority: A resolution on a poll shall be decided
by a majority of not less than 65 per cent. of the votes duly cast.
The Secretary shall as soon as reasonably practicable after the
expiry of the 10 working day period for return of voting papers
referred to in Clause 22.7.5(a) ascertain the results of the poll in
consultation with the Pool Chairman or (failing him) the Chief
Executive and the Chief Executive or (failing him) the Secretary
shall as soon as practicable thereafter notify all Parties and all
other persons entitled or required to attend general meetings of Pool
Members of the outcome of the poll. The result of the poll shall be
deemed to be the resolution of the meeting at which or after which
the poll was demanded.
22.9 Responsibilities of Committee Members. The Committee Members
shall consult the Pool Members whose votes they are entitled to cast
as soon as reasonably practicable following the demand for a poll and
shall be required to cast, or to refrain from casting, the votes of
such Pool Members in accordance with their individual instructions.
The provisions of Clause 23.1 shall not apply in respect of any vote
conducted on a poll.
22.10 Referral to general meetings: The provisions of this Clause 22
are subject to the requirements of referral to the Pool Members in
general meeting described in Clause 13.4.
22.11 Civil emergencies: The provisions of this Clause 22 are subject
to the provisions of Clause 61.9.
23. COMMITTEE MEMBERS' RESPONSIBILITIES AND PROTECTIONS; POOL
MEMBER REPRESENTATION
23.1 Executive Committee's responsibilities: In the exercise of its
powers and the performance of its duties and responsibilities under
this Agreement the Executive Committee shall at all times conduct
itself and its affairs in a manner which it considers best designed
to give effect to the principal objects and purpose set out in Clause
4.1.2 and to promote, and not obstruct, the fair and efficient
operation of the procedures referred to in Clause 4.1.3 so that the
objectives set out in Clause 4.1.3 are thereby achieved. To the
extent not inconsistent with the responsibilities of the Executive
Committee under this Clause 23.1 a Committee Member shall be free to
give effect to his responsibilities under Clause 23.2 but each of the
Pool Members whom such Committee Member represents acknowledges and
agrees the subordination of such Committee Member's responsibilities
under Clause 23.2 to the responsibilities of the Executive Committee
under this Clause 23.1.
23.2 Committee Members' responsibilities: In the exercise of his
powers and the performance of his duties and responsibilities as a
Committee Member under this Agreement a Committee Member shall
represent those Pool Members which he is required to represent from
time to time in accordance with the provisions of Clause 23.6.
23.3 Protections:
23.3.1 The Executive Committee, each Committee Member, the Pool
Chairman, the Chief Executive, the Contract Manager and the Secretary
shall be entitled to rely upon any communication or document
reasonably believed by it or hirr to be genuine and correct and to
have been communicated or signed by the person by whom it purports to
be communicated or signed and shall nor be liable to any of the
Parties for any of the consequences of such reliance.
23.3.2 The Executive Committee, each Committee Member, the Pool
Chairman, the Chief Executive, the Contract Manager and the Secretary
may in relation to any act, matter or thing contemplated by this
Agreement act on the opinion or advice of, or any information from,
any lawyer, banker, valuer, broker, accountant or any other
specialist or professional adviser given within the held of expertise
usually ascribed to persons of such description or the specialist
field of expertise for which he has been retained and duly instructed
so to act by the Executive Committee, and shall not be liable for the
consequences of so acting. The appointment of any such adviser to the
Executive Committee shall be approved by the Executive Committee
before any such cost is charged to the PEA Accounting Procedure.
23.3.3 In the event of any conflict or inconsistency, any directions
and instructions of the Director (which the Director is entitled
under his statutory or regulatory powers to issue or give) shall
prevail over the duties and responsibilities of the Executive
Committee or the Secretary under this Agreement and no liability
whatsoever shall attach to the Executive Committee or any Committee
Member or the Pool Chairman or the Chief Executive or the Contract
Manager or the Secretary (as the case may be) as a result of due
compliance by it or him with any such directions and instructions.
23.3.4 Each Committee Member shall be indemnified and kept
indemnified jointly and severally by all Pool Members and, as between
all Pool Members, rateably in the proportion which their respective
Contributory Shares bear one to the other at the time of receipt of
the request for indemnification from and against any and all costs
(including legal costs), charges, expenses, damages or other
liabilities properly incurred or suffered by him in relation to the
Executive Committee or his office as Committee Member or the due
exercise by him of his powers, duties and responsibilities as a
Committee Member and all claims, demands or proceedings arising out
of or in connection with the same except any such costs and expenses
referred to in Clause 23.4 which have been recovered in accordance
with the PEA Accounting Procedure and any such costs, charges,
expenses, damages or other liabilities which are suffered or incurred
or occasioned by the wilful default or bad faith of, or breach of
duty or trust by, such Committee Member.
23.3.5 The Pool Funds Administrator acknowledges and agrees that it
holds the benefit of Clause 23.3.4 as trustee and agent for each
Committee Member.
23.3.6 Each Pool Member shall, upon request by any Committee Member,
provide that Committee Member with a written deed of indemnity in the
terms set out in Clause 23.3.4.
23.4 Committee Members'costs and expenses: Each Committee Member and
each member of any sub-committee or sub-group of the Executive
Committee may be paid his reasonable travelling, hotel and incidental
expenses of attending and returning from meetings of the Executive
Committee or any such sub-committee or sub-group and shall be paid
all expenses properly and reasonably incurred by him in the conduct
of the business of the Executive Committee or the relevant
sub-committee or sub-group or in the discharge of his duties as a
Committee Member or (as the case may be) a member of the relevant
sub-committee or subgroup. All such expenses shall be recovered in
accordance with the PEA Accounting Procedure.
23.5 Committec's costs and expenses: The Executive Committee and each
of its sub-committees and sub-groups shall be entitled to recover all
its costs and expenses properly incurred in accordance with the PEA
Accounting Procedure. For this purpose, the costs and expenses of the
Executive Committee shall include properly incurred costs, expenses
and liabilities of or associated with any business accommodation and
services required by the Executive Committee, the Chief Executive,
the Secretary or the personnel referred to in Clause 17.2.1 and the
properly incurred costs and expenses of any consultant or adviser
retained by the Executive Committee or any such person in the proper
performance of its or his duties and responsibilities.
23.6 Pool Member representation: Each Pool Member will be represented
on the Executive Committee as follows:
23.6.1 Subject as provided in Clause 23.6.3, if the first preferred
MP Nominee or RS Nominee of a Pool Member is elected to the Executive
Committee pursuant to Clause 15.5 or 15.6, that MP Nominee or RS
Nominee in its capacity as a Committee Member will represent the
interests of that Pool Member;
23.6.2 If the first preferred MP Nominee or RS Nominee of a Pool
Member is not elected to the Executive Committee pursuant to Clause
15.5 or 15.6, or if a Pool Member did not vote in any such election,
then that Pool Member shall within five working days after the
relevant meeting of Pool Members at which the Committee Members are
elected notify the Secretary of the identity of the Committee Member
whom it wishes to represent its interests on the Executive Committee
and, subject to Clause 23.6.3, such Committee Member will represent
those interests;
23.6.3 Subject to the prior written agreement of the Committee Member
concerned (such agreement not to be unreasonably withheld or delayed)
and to the relevant Pool Member having first consulted the Pool
Chairman, a Peal Member may by written notice to the Secretary elect,
on no more than two occasions during the Committee Members' term of
office, to have its interests on the Executive Committee represented
by a Committee Member other than the Committee Member referred to in
Clause 23.6.1 or 23.6.2 (as the case may be);
23.6.4 A person becoming a Pool Member during the Committee Members'
term of office shall be represented by the Committee Member of their
choice, such choice to be notified in writing to the Director and the
Secretary within five working days of that person becoming a Pool
Member. That person shall continue to be represented by his chosen
Committee Member (or his successor) until the expiry of that
Committee Member's term of office (or, if earlier, its ceasing to be
a Pool Member) and will not during that period be entitled to the
benefit of Clause 23.6.3; and
23.6.5 A Pool Member will be a Constituent of the Committee Member
representing its interests on the Executive Committee for the time
being and from time to time.
23.7 Notification: The Secretary shall notify all Pool Members and
the Director promptly after the meeting of Pool Members at which
Committee Members are elected of the Pool Members and their
respective Committee Member representatives and of any subsequent
nomination or change of representation during the term of office of
the Committee M embers.
24. POWERS OF THE EXECUTIVE COMMITTEE
24.1 General power: Subject as otherwise provided in this Agreement,
the Executive Committee shall, as between itself and the Pool Members
in general meeting, exercise overall supervision of the Settlement
System and its operations.
24.2 Specific powers: Subject as otherwise provided in this
Agreement, the powers, duties and responsibilities of the Executive
Committee shall, as between itself and the Pool Members in general
meeting, include:
24.2.1 The specific powers, duties and responsibilities set out in
the Pool Rules;
24 2.2 Monitoring on a regular basis the Settlement System
Administrator Hits operation of the Settlement System (including
deciding whether to propose to the Pool Members in general meeting
for their approval the removal of the Settlement System
Administrator);
24.2.3 The power to appoint and remove the Pool Funds Administrator
and to carry out the other functions ascribed to it in Schedules 11
and 15 and to enter into on behalf of Pool Members any agreement or
arrangement with the Pool Funds Administrator (or successor Pool
Funds Administrator) in substitution for that set out in Schedule 15;
24.2.4 Monitoring on a regular basis each of the Grid Operator and
the Ancillary Services Provider in the performance of its obligations
under this Agreement;
24.2.5 Considering applications by New Parties to be admitted as
parties to this Agreement under Clause 3 and of Parties to be
admitted as Pool Members under Clause 8;
24.2.6 Considering, amending, substituting, approving and
disapproving all Agreed Procedures, Codes of Practice (including
commissioning reviews thereof by the Pool Auditor in accordance with
Clause 47.1.5 or by other technical experts) and Service Lines;
24.2.7 The specific powers, duties and responsibilities set out in
Schedule 4;
24.2.8 The specific powers, duties and responsibilities set out in
Schedule 15;
24.2.9 Appointing and removing the Pool Auditor, and instructing the
Pool Auditor to conduct audits, reviews, tests and checks and the
monitoring and review thereof, all in accordance with Part IX;
24.2.10 Opening, maintaining and closing bank accounts for its own
purposes and crediting and debiting sums thereto;
24.2.11 Controlling the development of the Pool Rules and considering
and approving or disapproving amendments to the Pool Rules in
accordance with Clause 7.4.2;
24.2.12 Commissioning independent reviews of the Scheme and its
operation in accordance with Part XI11;
24.2.13 Conducting reviews, preparing Works Programmes and
implementing Transitional Arrangements, all in accordance with Clause
5;
24.2.14 Preparing the reports referred to in Clause 9.1.2 and the
business plan referred to in Clause 9.1.1 and preparing and
despatching regular quarterly reports to the Parties (with a copy to
the Director) in relation to all matters which are the subject of
this Agreement and in such reports reviewing performance over the
immediately preceding Quarter against the business plan referred to
in Clause 9.1.1;
24.2.15 Considering any representation from any Pool Member in
relation to any regular quarterly report prepared pursuant to Clause
24.2.14 above or otherwise relating to any matter which is the
subject of this Agreement;
24.2.16 Overseeing the standards of Metering Equipment and the Codes
of Practice, agreeing in accordance with paragraph 14 of Schedule 21
dispensations therefrom and reviewing the need for new standards for
Metering Equipment and, where it considers such new standards are
required, adopting such standards in accordance with the requirements
for adoption of Codes of Practice (as contained in the definition of
Code of Practice) and in accordance with the provisions of Schedule
21;
24.2.17 Dealing promptly and efficiently with any dispute referred to
it concerning Settlement or its operation (including with respect to
data);
24.2.18 Convening in accordance with Clause 9.4 general meetings of
Pool Members or classes of Pool Members;
24.2.19 Appointing, remunerating and removing the Chief Executive in
accordance with Clause 17.1 and, where permitted by the terms of this
Agreement, giving directions and instructions to the Chief Executive,
the Contract Manager, the Settlement System Administrator, the Pool
Funds Administrator, the Grid Operator, the Ancillary Services
Provider, Externally Interconnected Parties (not being Pool Members)
and other persons to carry into effect the decisions of the Executive
Committee cr Pool Members in genera' meeting or separate general
meeting;
24.2.20 If requested by the Director, conveying any direction or
request of the Director to the Settlement System Administrator, the
Pool Funds Administrator, the Grid Operator, the Ancillary Services
Provider or any other Party or the Pool Auditor;
24.2.21 Appointing, remunerating and removing in accordance with the
Grid Code one or more persons to represent the Executive Committee on
the Grid Code Review Panel;
24.2.22 Appointing, remunerating and removing lawyers, bankers,
valuers, brokers, accountants and other professional and specialist
advisers to assist the Executive Committee or any of its
sub-committees in the performance of its duties and responsibilities
under this Agreement;
24.2.23 Subject to any applicable confidentiality provisions,
monitoring any litigation, arbitration or other proceedings affecting
or which may affect the Settlement System;
24.2.24 Subject to any applicable confidentiality provisions,
advising Pool Members, Externally Interconnected Parties (not being
Pool Members), the Settlement System Administrator, the Pool Funds
Administrator, the Grid Operator and the Ancillary Services Provider
of decisions of the Executive Committee applicable to them or the
relevant one(s) of them and liaising with all such persons on an
ongoing and regular basis;
24.2.25 Advising each of the Pool Auditor and the Director of
decisions of the Executive Committee and of Pool Members in general
meeting or separate general meeting and liaising with each of the
Pool Auditor and the Director on an ongoing and regular basis;
24.2.26 Investigating any complaints made by any Pool Member
concerning the Settlement System, the Funds Transfer System (or any
part or aspect of any thereof), the Settlement System Administrator,
the Pool Funds Administrator, the Grid Operator, the Ancillary
Services Provider, the Pool Auditor, the Pool Banker or the
Custodian;
24.2.27 Approving the Pool Banker and giving instructions for, or
consenting to, the removal of the same;
24.2.28 Reviewing and approving or disapproving the Procedures Manual
in accordance with Clause 64;
24.2.29 Considering and dealing with any other matter relating to the
Settlement System, the Funds Transfer System (or any part or aspect
of any thereof) or its or their operation referred to the Executive
Committee by the Pool Members in general meeting or separate general
meeting, any Pool Member, the Pool Chairman, the Pool Auditor or the
Director and any other matter which is otherwise designated under
this Agreement for reference to it; and
24.2.30 Determining the amount of the Second Tier Suppliers' System
Charge.
24.3 Exclusion of general meeting powers: Pool Members in general
meeting shall have no powers in relation to the matters expressly
reserved under this Agreement to the Executive Committee except to
the extent that such matters are remitted to the Pool Members in
general meeting under Clause 13.4.".
2. Schedule 13
By the deletion of Schedule 13 and the substitution therefor of the
following:
"SCHEDULE 13
Contributory Shares
1. Contributory Share: The Contributory Share of a Pool Member
shall be calculated in accordance with the following provisions of
this Schedule.
2. Points: Subject as provided in Section 3, in respect of each
Quarter:
2.1 each Pool Member which is a Generator shall receive in that
capacity one point (a "Point") for each MWh of Genset Metered
Generation of all Allocated Generating Units for all Settlement
Periods falling in the Votes Calculation Period relative to such
Quarter, as determined from the final run of Settlement for each such
Settlement Period; and
2.2 each Pool Member which is a Supplier shall receive in that
capacity such number of points (each a UPoint") as is equal to the
total MWh of Consumer Metered Demand taken by that Pool Member in all
Settlement Periods falling in the Votes Calculation Period relative
to such Quarter, as determined from the final run of Settlement for
each such Settlement Period.
For the purposes of this paragraph 2:
(A) a Generating Unit shall be an Allocated Generatir,g Unit of
a Pool Member (in this paragraph, the "Identified Pool Member") if it
belongs to the Identified Pool Member as of the date on which the
Executive Committee calculates the Contributory Shares of Pool
Members for the relevant Quarter pursuant to paragraph 6. If at any
time during such Quarter an Allocated Generating Unit shall belong to
another Pool Member (in this paragraph, the Transferee Pool Member"),
the Contributory Shares attributed to the Identified Pool Member for
such Quarter by reason of the Allocated Generating Unit belonging to
it shall be transferred to the Transferee Pool Member as of the date
on which such Allocated Generating Unit first belongs to the
Transferee Pool Member (and the Identified Pool Member and the
Transferee Pool Member shall jointly notify the Executive Committee
in writing of such date in good time before its occurrence);
(B) a Generating Unit shall belong to a Pool Member if it is
owned by that Pool Member and not leased to another person or if it
is leased by that Pool Member from another person;
(C) a Pool Member shall notify the Executive Committee promptly
on request of its Allocated Generating Units and the Executive
Committee and each other Party may rely on the information in that
notification and in any notification under paragraph (A) above
without further enquiry or need to verify that information;
(D) in determining the meaning of Good time" for the purposes
of paragraph (A) above one factor to be taken into account is that
the Settlement System Administrator must be allowed sufficient time
to effect the necessary changes in Settlement associated with the
transfer of the relevant Allocated Generating Unit; and
(E) the Executive Committee may, upon application of any Pool
Member involved in any transfer of assets between Pool Members during
any Quarter, adjust as between the Pool Members involved in such
transfer, the number of Points and/or Weighted Votes to which they in
their capacities as Suppliers are entitled in respect of the
remaining part of that Quarter and/or one or both of the two
immediately succeeding Quarters if, in the opinion of the Executive
Committee, such adjustment would help accommodate the consequences of
such a transfer and not prejudice the interests of any other Pool
Member in any material respect.
3. New Pool Members: Until the third Quarter Day next falling after
the date of its admission as a Pool Member, any Party which is
admitted as a Pool Member pursuant to Clause 8.2 shall receive that
number of Points as is equal to one thousand times the number of
Weighted Votes to which such Pool Member would have been entitled
under Clause 11.3.1(b) had:
3.1 the provisions of Clause 11.3.3 been ignored; and
3.2 any applicable restrictions under Clause 11.4 been ignored, as
determined by the Executive Committee. Thereafter, such Pool Member's
Points shall be calculated in accordance with paragraph 2.
4. Cakulation of Points: On or prior to each Quarter Day and at
such other times as are referred to in paragraph 6 the Executive
Committee shall, on the basis of information to be supplied by the
Settlement System Administrator as referred to in Clause 11.3.2,
calculate for the Following Quarter or (as the case may be) the
remainder of the then current Quarter the number of Points which each
Pool Member whose Points are to be calculated in accordance with
paragraph 2 shall receive, and shall notify each Pool Member and the
Director in writing of the number of Points received by all Pool
Members (whether calculated in accordance with paragraph 2 or 3). The
determination of the Executive Committee as to the number of Points
of each Pool Member shall (in the absence of manifest error) be final
and binding for all purposes of this Agreement.
5. Contributory Shares: The Contributory Share of a Pool Member
shall be calculated in accordance with the following formula:
CS = X + Y
Where:
X= A
2 x B
Y= C
2 x D
and where:
CS = the Contributory Share of such Pool Member,
expressed as a percentage
A = the number of Points for the time being of
such Pool Member in its capacity as a Generator
B = the number of Points for the time being of
all Pool Members which are Generators, in their
capacity as such
C = the number of Points for the time being of
such Pool Member in its capacity as a Supplier
D = the number of Points for the time being of
all Pool Members which are Suppliers, in their
capacity as such.
6. Calculation of Contributory Shares: On or prior to:-
6.1 each Quarter Day;
6.2 each date upon which a New Party is admitted, resigns or is
removed as a Pool Member; and
6.3 each date upon which there is a change in the capacity in which
a Pool Member participates as a Pool Member,
the Executive Committee shall calculate for the Following Quarter or
(as the case may be) the remainder of the then current Quarter the
Contributory Share for the time being of each Pool Member, and shall
notify each Pool Member and the Director in writing of the
Contributory Share of each of the Pool Members. The determination of
the Executive Committee as to the Contributory Share of each Pool
Member shall (in the absence of manifest error) be final and binding
for all purposes of this Agreement.
7. Records: The provisions of Clause 11.9 shall apply mutatis
mutandis in respect of each Pool Member's Points and Contributory
Share.
8. Additional Capacity: For the purposes of Section 3, any Pool
Member who acquires an additional capacity in which it participates
as a Pool Member shall be deemed to have been admitted as a new Pool
Member pursuant to Clause 8.2 in that additional capacity and, until
the third Quarter Day next falling after the date such Pool Member's
application to the Executive Committee pursuant to Clause 8.12 is
approved, it shall receive that number of Points as is equal to one
thousand times the number of Weighted Votes to which such Pool Member
would have been entitled under Clause 11.3.1(b) had:
8.1 the provisions of Clause 11.3.3 been ignored; and
8.2 any applicable restrictions under Clause 11.4 been ignored,
as determined by the Executive Committee. Thereafter, such Pool
Member's Points shall be calculated in accordance with paragraph 2.".
3. Schedule 14
By the deletion of Schedule 14.
<PAGE>
SIGNATORIES
THE GENERATORS
AnglianPower Generators Limited
Address: Kings Lynn Power Station, Willows Business Park,
Saddlebow, Kings
Lynn, Norfolk PE34 3RD
Facsimile no: 01553 667166
Attention: R. Rigg
By:
Barking Power Limited
Address: Barking Power Station, Chequers Lane, Dagenham,
Essex RM9
6PF Facsimile no: 0181 984 5174
Attention: Dr S.J. Mancey
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
CeltPower Limited
Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no: 01686 629887
Attention: B. Holst
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: Mr. G. Caswell
By:
Corby Power Limited
Address: Mitchell Road, Phoenix Parkway, Corby,
Northamptonshire NN17 5QT
Facsimile no: 01536 402619
Attention: General Manager
By:
Derwent Cogeneration Limited
Address: P.O. Box 5, Spondon, Derby DE21 7BP
Facsimile no: 01332 669829
Attention: J. Unwin
By:
Eastern Merchant Generation Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 552966
Attention: Coral Woodard
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,75384
Paris Cedex 08
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Elm Energy & Recycling (UK) Limited
Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no: 01902 408517
Attention: M.D. Wyckoff
By
Fellside Heat and Power Limited
Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no: 01946 721130
Attention: J.A. Bartlett
By:
Fibrogen Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 221 8671
Attention: A. Macdonald
By:
Fibropower Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 01712218671
Attention: A. Macdonald
By:
First Hydro Company
Address: Bala House, Lakeside Business Village, St. Davids Park,
Deeside, Clwyd CH5 3XJ
Facsimile no: 01244 520697
Attention: B. Stalker
By:
Humber Power Limited
Address: South Humber Bank Power Station, South Marsh Road,
Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no: 01469 57S484
Attention: A. Murray
By:
Independent Energy UK Limited
Address: St John's Court, 70 St John's Close, Knowle, Solihull,
West Midlands B93 ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
Indian Queens Power Limited
Address: 1 Northumberland Avenue, Trafalgar Square,
London WC2N 5BW
Facsimile no: 0171872 5539
Attention: G. Long
Keadby Generation Limited
Address: P.O. Box 89, Keadby, Scunthorpe,
North Lincolnshire DN17 3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Lakeland Power Limited
Address: Roosecote Power Station, Roosecote Marsh,
Barrow-in-Furness, Cumbria LA13 0PQ
Facsimile no: 01229 870919
Attention: Jackie Mahon
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Medway Power Limited
Address: Medway Power Station, Isle of Grain, Rochester,
Kent ME3 OAG
Facsimile no: 01634 271666
Attention: P. Stinson
By:
Midlands Power (UK) Limited
Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no: 0121423 0261
Attention: Company Secretary
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
Peterborough Power Limited
Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no: 01733 894622
Attention: W. Burrough
By:
PowerGen pie
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: S. Skillings
By:
Regional Power Generators Limited
Address: Glanford Brigg Generating Station, Scawby Brook, Brigg,
South Humberside DN70 SILT
Facsimile no: 01482 495916
Attention: P. Knight
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power pie
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Teesside Power Limited
Address: Four Millbank, London SW1P SET
Facsimile no: 0171 316 5322
Attention: D. Lewis
By:
Winterton Power Limited
Address: 800 Parl< Avenue, Aztec West, Bristol BSl2 4S
Facsimile no: 01454 616675
Attention: T. Masood
By:
THE SUPPLIERS
British Gas Trading Ltd
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 413242
Attention: T. Brookshaw
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
Candecca Resources Limited
Address: Welton Gathering Centre, Barfield Lane,
off Wragby Road, Sudbrooke, Lincoln LN2 2QU
Facsimile no: 01522 754255
Attention: D. Wood
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171253 9319
Attention: G. Caswell
By:
Crosfield Limited
Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB
Facsimile no: 01925 59828
Attention: K. Sowley
By:
Eastern Electricity plc
Address: Wherstead Park, PO Box 40, Wherstead, Ipswich,
Suffolk IP9 2AQ
Facsimile no: 01473 554393
Attention: J. Whelan
By:
East Midlands Electricity plc
Address: 398 Coppice Road, PO Box 4, North PDO Arnold,
Nottingham NG5 7HX
Facsimile no: 01159 358190
Attention: A. Musto
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat,
5eme etage, 75384, Paris, Cedex 08
Facsimile no: (010 331) 40 42 6341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Energy Supply Contracts Limited
Address: The Havens, Ransomes Europak, Ipswich, Suffolk IP3 9SJ
Facsimile no: 01473 273871
Attention: E.C. Cumberland
By:
Enron Capital and Trade Resources
Address: Fou- Millbank, London SW1P 3ET
Facsimile no: 0171 873 0140
Attention: D. Gosling
By:
Impkemix Energy Limited
Address: PO Box 90, Wilton Centre, Middlesborough,
Cleveland TS90 8JE
Facsimile no: 01642 437838
Attention: K.J. Green
By:
Independent Energy UK Limited
Address: St. John's Court, St. John's Close, Knowle,
West Midlands B93 ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
London Electricity pie
Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no: 0171430 2903
Attention: M. Holmes
By:
Magnox Electric pie
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Manweb plc
Address: Manweb House, Kingsfield Court, Chester Business Park,
Chester CH4 9QH
Facsimile no: 0141568 3393
Attention: P. Brown, Energy Supply, Cathcart Business Park, Spean
Street, Glasgow G44 4BE
By:
Midlands Electricity plc
Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no: 0121423 2777
Attention: R. Murray
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Norsk Hydro (UK) Limited
Address: Bridge House, 69 London Road, Twickenham,
Middlesex TW1 3RH
Facsimile no: 0181892 1686
Attention: J. Hamilton
By:
Northern Electric pie
Address: Carliol House, Market Street, Newcastle upon Tyne
NE1 ONE
Facsimile no: 0191235 2295
Attention: M. Chandler
By:
NORWEB pie
Address: Talbot Road, Manchester M16 OHQ
Facsimile no: 0161875 7089
Attention: K. Lee
By:
Nuclear Electric Limited
Address: Barnett Way, Ba nwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: S. Skillings
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SEEBOARD plc
Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no: 01273 428404
Attention: R.A. Page
By:
Shell Power Limited
Address: Rowlands Way, Withenshawe, Manchester M22 5SB
Facsimile no: 0161499 8387
Attention: John Tucker
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenu., Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Southern Electric pie
Address: Westacott Way, Littlewick Green, Maidenhead,
Berkshire SL6 3QB
Facsimile no: 01628 584410
Attention: J. Sykes
By:
South Wales Electricity plc
Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no: 01222 790971
Attention: M. Mackey
By:
South Western Electricity plc
Address: 800 Park Avenue, Aztec West, Almondsbury,
Bristol BS12 4SE
Facsimile no: 01454 616675
Attention: D.G. Harris
By:
The Renewable Energy Company Limited
Address: Stroud House, Russell Street, Stroud, Glos GL5 BAN
Facsimile no: 01453 756222
Attention: M. Alder
By:
UK Electric Power Limited
Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 ORE
Facsimile no: 01492 592077
Attention: N.Bryson
By:
UML Limited
Address: PO Box 115, Port Sunlight, Corral, Merseyside L62 4ZL
Facsimile no: 0151 643 6299
Attention: R. Ashton
By:
Yorkshire Electricity Group pie
Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no: 01132 895926
Attention: Company Secretary
By:
THE OTHER PARTIES
Accord Energy Ltd
Address: Heron House, 322 High Holborn, London WC1V 7PW
Facsimile no: 0171269 4010
Attention: B. King
By:
AES Barry Limited
Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU
Facsimile no: 01446 722587
Attention: P. Norgeot
By:
Alcan Aluminium UK Limited
Address: Lynemouth Power Station, Ashington, Northumberland
NE63 9YH
Facsimile no: 01670 393970
Attention: D. Alderton
By:
British Gas plc
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645453
Attention: D. Meachem
By:
Cabah Energy Limited
Address: c/o ABB ForStar Developments Limited, Tilford House,
Farnham Business Park, Weydon Lane, Farnham,
Surrey GU9 8QT
Facsimile no: 01252 732110
Attention: Paul Abbott
By:
Eastern Generation Services Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 601036
Attention: Ms. C. Woodard
By:
Enfield Energy Centre Limited
Address: Concorde House, Concorde Way, Stockton on Tees,
Cleveland TS18 3RB
Facsimile no: 01642 678123
Attention: K. Clarke
By:
Fibrowan Thefford Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 01712218671
Attention: Rupert Fraser
By:
Hydro Electric Energy Limited
Address: c/o Scottish Hydro Electric PLC, Inveralmond House,
200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 455281
Attention: Company Secretary
By:
Keadby Power Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire
DN17 3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Kingsnorth Power Limited
Address: c/o Budd Martin & Co, Industria House, Red Houses, St.
Brelade, Jersey JE3 OLD
Facsimile no: 01534 44777
Attention: R. Martin
By:
Meter Operators Limited
Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no: 01386 861113
Attention: R. Edmed
By:
Pentex (East Midlands) Limited
Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no: 01244 211444
Attention: H. Jamieson
By:
Rocksavage Power Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171839 0905
Attention: G. Grant
By:
Seabank Power Limited
Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no: 0117 982 0351
Attention: J.P. Baldry, General Manager
By:
Spalding Energy Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171 839 d905
Attention: G. Grant
THE METER OPERATOR PARTIES WHO ARE NOT PARTIES
Control Devices and Systems Limited
Address: PO. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 SRE
Telex no: 849811
Facsimile no: 01635 528224
Attention: J.W. Dowse
By:
DrakMarn O&M Ltd
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425431
Contact: Company Secretary
By:
E. Squared Limited
Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no: 0171 378 0012
Attention: Graham Nicholls
By:
Northern Energy Services Limited
Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no: 01302 820790
Attention: W. Tuczemzkyi
By:
PowerMet Limited
Address: 13 Wimpole Street, London W1M 7AB
Facsimile no: 0171493 7151
Attention: M. Rugman
By:
Schlumberger Industries Limited
Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no: 01394 276030
Attention: A.P. Mahoney, Managing Director
By:
Stanor National Contracts
Address: 66/68 Kingsland Road, London E2 8DP
Facsimile no: 0171739 6135
Attention: A. Yardley
By:
The Challenge Group
Address: 22 Tally Road, Oxted, Surrey RHO OTG
Facsimile no: 01883 730543
Attention: J. Glover
By:
EXTERNAL POOL MEMBERS
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neil, Business Manager, Electricity Generation
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat,
5eme etage, 75384 Paris, Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW 19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SETTLEMENT SYSTEM ADMINISTRATOR
Energy Settlements and Information Services Limited
Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no: 0115 945 6728
Attention: G. K. James, General Manager
By:
POOL FUNDS ADMINISTRATOR
Energy Pool Funds Administration Limited
Address: 3rd Floor, 185 Park Street, London SE1 9DY
Fascimile no: 01203 423558
Attention: A Marks, Director (National Grid House, 2nd Floor,
Kirby Corner Road, Coventry CV4 8JY)
By:
GRID OPERATOR
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of:- )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no: -
Facsimile no: 01203 423577
Attention: Company Secretary (copy to: J. Irgin, c/o A. G.
Ferens, The National Grid Company plc., St. Catherine's
Lodge, Bearwood Road, Sindlesham, Nr. Wokingham,
Berkshire RG11 5BN)
<PAGE>
ANCILLARY SERVICES PROVIDER
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of:- )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no.: 25815
Facsimile no: 01203 423577
Attention: Company Secretary (copy to: Mr. Carlton)
<PAGE>
EXTERNALLY INTERCONNECTED PARTIES
Scottish Power plc.
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex no: -
Facsimile no: 0141 636 4706
Attention: B.J.H. Paget
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger, Echanges d'Energie, 2 Rue Louis Murat,
5eme etage, 75384 Paris, Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW 19 4EA
Telex no.: -
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
<PAGE>
DATED 20 May, 1997
THE GENERATORS
named herein
- and -
THE SUPPLIERS
named herein
- and -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
- and -
ENERGY POOL FUNDS
ADMINISTRATION LIMITED
as Pool Funds Administrator
- and -
THE NATIONAL GRID COMPANY PLC
as Grid Operator and Ancillary Services Provider
- and -
SCOTTISH POWER PLC
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
- and -
THE OTHER PARTIES
named herein
- and
THE METER OPERATOR PARTIES
named herein
SEVENTEENTH SUPPLEMENTAL DEED
relating to the Pooling and Settlement Agreement
for the Electricity Industry
in England and Wales
<PAGE>
CONTENTS
Page
1. INTERPRETATION 2
2. AMENDMENTS 2
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT 2
4. MISCELLANEOUS 2
5. ENTIRE AGREEMENT 2
6. GOVERNING LAW 3
SCHEDULE 1: Part I: The Generators 4
Part II: The Suppliers 8
SCHEDULE 2: The Other Parties 12
SCHEDULE 3: The Meter Operator Parties who are not
Parties 14
SCHEDULE 4: Amendments to the Pooling and Settlement
Agreement 15
SIGNATORIES 84
<PAGE>
THIS SUPPLEMENTAL DEED is made on May 20, 1997
BETWEEN:-
(1) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part I of Schedule 1;
(2) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part II of Schedule 1;
(3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
(registered number 2444282) whose registered office is
situate at Fairham House, Green Lane, Clifton, Nottingham
NG11 9LN as Settlement System Administrator;
(4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number
2444187) whose registered office is situate at 185 Park
Street, London SE1 9DY as Pool Funds Administrator;
(5) THE NATIONAL GRID COMPANY PLC (registered number 2366977)
whose registered office is situate at National Grid House,
Kirby Corner Road, Coventry CV4 8JY as Grid Operator and
Ancillary Services Provider;
(6) SCOTTISH POWER PLC (registered number 117120) whose
principal office is situate at 1 Atlantic Quay, Glasgow G2
8SP, Scotland as an Externally Interconnected Party;
(7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal
office is situate at Departement Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384
Paris, Cedex 08, France as an Externally Interconnected
Party;
(8) THE OTHER PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 2;
and
(9) THE METER OPERATOR PARTIES whose names, registered numbers
and registered or principal offices are set out in Schedule
3.
WHEREAS:-
(A) by a Pooling and Settlement Agreement for the Electricity
Industry in England and Wales dated 30th March, 1990 (the
"Pooling and Settlement Agreement") the parties thereto
agreed to give effect to and be bound by certain rules and
procedures for the operation of an electricity trading pool
and the operation of a settlement system;
(B) the Pooling and Settlement Agreement has been amended and/or
restated by sixteen supplemental agreements, and hereinafter
references to the Pooling and Settlement Agreement are to
that agreement as most recently amended and restated; and
(C) the parties to this Deed (being (i) all the Parties at the
date hereof and (ii) all the Meter Operator Parties at the
date hereof) have agreed to amend the Pooling and Settlement
Agreement on the terms and subject to the conditions set out
below.
NOW THIS DEED WITNESSES as follows:-
1. INTERPRETATION
1.1 Except where defined herein or where the context
otherwise requires, words and expressions defined in
the Pooling and Settlement Agreement shall have the
same respective meanings when used in this Deed.
1.2 The table of contents and the headings to each of the
Clauses are inserted for convenience only and shall be
ignored in construing this Deed.
2. AMENDMENTS
The parties hereby agree that with effect on and from
midnight on 31st March, 1997, the Pooling and Settlement
Agreement shall be amended as set out in Schedule 4.
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT
The Pooling and Settlement Agreement shall remain in full
force and effect and this Deed and the Pooling and
Settlement Agreement shall be treated as one document so
that, upon the Pooling and Settlement Agreement being
amended pursuant to Clause 2, all references to the Pooling
and Settlement Agreement shall be treated as references to
that agreement as amended by this Deed.
4. MISCELLANEOUS
The provisions of Clauses 75 to 79 (inclusive) and 81 to 84
(inclusive) of the Pooling and Settlement Agreement shall be
deemed to be incorporated herein mutatis mutandis.
5. ENTIRE AGREEMENT
5.1 Each party acknowledges that in entering into this Deed
on the terms set out herein it is not relying upon any
representation, warranty, promise or assurance made or
given by any other party or any other person, whether
or not in writing, at any time prior to the execution
of this Deed which is not expressly set out herein.
5.2 None of the parties shall have any right of action
against any other party arising out of or in connection
with any representation, warranty, promise or assurance
referred to in sub-clause 5.1 (except in the case of
fraud).
6. GOVERNING LAW
This Deed shall be governed by, and construed in all
respects in accordance with, English law.
IN WITNESS whereof this document has been duly executed and
delivered as a deed the day and year first above written.
<PAGE>
SCHEDULE 1:
Part I: The Generators
Name Registered Registered or
Number Principal Office
Anglian Power 2488955 Wherstead Park
Generators Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Barking Power 2354681 Devonshire House
Limited Mayfair House
London W1X 5FH
British Nuclear 1002607 Risley
Fuels plc Warrington
Cheshire
WA3 6AS
Celtpower Limited 2656561 13 Charles II Street
London
SW1Y 4QT
Citigen (London) 2427823 152 Grosvenor Road
Limited Rivermill House
London
SW1V 3JL
Corby Power Limited 2329494 Mitchell Road
Phoenix Parkway
Corby
Northamptonshire
NN17 1QT
Derwent Cogeneration 2329494 Landsdowne House
Limited Berkeley Square
London W1X 5DH
Eastern Merchant 3116225 Wherstead Park
Generation Wherstead
Limited Ipswich
Suffolk
IP9 2AQ
Electricite de Department Relations
France, Service avec
National I'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
France
Elm Energy & 2516685 Elm Energy House
Recycling (UK) Ettingshall Road
Limited Wolverhampton
West Midlands WV2
2LA
Fellside Heat and 2614535 Fellside Lodge
Power Seascale
Limited Cumbria CA20 1PG
Fibrogen Limited 2547498 Astley House
33 Notting Hill Gate
London W 11 3JQ
Fibropower Limited 2234141 Astley House
33 Notting Hill Gate
London W11 3JQ
First Hydro Company 2444277 Bala House
Lakeside Business
Village
St. David's Park
Deeside
Clwyd
CH5 3XJ
Humber Power Limited 2571241 18 Savile Row
London
W1X 1AE
Indian Queens Power 2928100 1 Northumberland
Company Limited Avenue
London
WC2N 5BW
Independent Energy 3033406 2nd Floor, Park
UK House
Limited Park Street
Maidenhead
Berkshire
SL6 1SL
Keadby Generation 2729513 P O Box 89, Keadby
Limited Scunthorpe, North
Lincolnshire DN17
3AZ
Lakeland Power 2355290 Roosecote Power
Limited Station
Roosecote Marsh
Barrow-in-Furness
Cumbria LA13 OPQ
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Medway Power Limited 2537903 Boston House
The Little Green
Richmond TW9 1QE
Midlands Power (UK) 2251099 Mucklow Hill
Limited Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Nuclear Electric 3076445 Barnett Way
Limited Barnwood
Gloucester
GL4 3RS
Peterborough Power 2353599 Storeys Bar Road
Limited Peterborough PE1 5NT
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Regional Power 2352390 Wetherby Road
Generators Scarcroft,
Limited Leeds LS14 3HS
Scottish 117119 10 Dunkeld Road
Hydro-Electric plc Perth PH1 5WA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
Slough Energy 2474514 234 Bath Road
Supplies Slough SL1 4EE
Limited
Teesside Power 2464040 4 Millbank
Limited London SW1P 3ET
Winterton Power 3001798 800 Park Avenue
Limited Aztec West
Almondsbury
Bristol BS12 4SE
<PAGE>
Part II: The Suppliers
Name Registered Registered or
Number Principal Office
British Gas Trading 3078711 Rivermill House
Ltd 152 Grosvenor Road
London SW1V 3JL
British Nuclear 1002607 Risley
Fuels plc Warrington
Cheshire WA3 6AS
Candecca Resources 953066 Welton Gathering
Limited Centre
Barfield Lane
Off Wragby Road
Sudbrooke
Lincoln LN2 2QU
Citigen (London) 2427823 Rivermill House
Limited 152 Grosvenor Road
London SW1V 3JL
Crosfield Limited 48745 Bank Quay
PO Box 26
Warrington
Cheshire WA5 1AB
Eastern Electricity 2366906 Wherstead Park
plc PO Box 40
Wherstead
Ipswich
Suffolk IP9 2AQ
East Midlands 2366923 PO Box 444
Electricity plc Woodyard Lane
Wollaton
Nottingham NG8 lEZ
Electricite de Department Relations
France, Service avec
National l'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
Energy Supply 172268 The Havens
Contracts Ransomes Europark
Limited Ipswich
Suffolk IP3 9SJ
Enron Capital and 3003823 4 Millbank
Trade London SW1P 3ET
Resources Limited
Impkemix Energy 2076043 The Heath
Limited Runcorn
Cheshire WA7 4QF
Independent Energy 3033406 2nd Floor Park House
UK Park Street
Limited Maidenhead
Berkshire SL6 1SL
London Electricity 2366852 Templar House
plc 81-87 High Holborn
London WC1V 6NU
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Manweb plc 2366937 Manweb House
Chester Business
Park
Chester CH4 9RF
Midlands Electricity 2366928 Mucklow Hill
plc Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Norsk Hydro (UK) 841421 Bridge House
Limited 69 London Road
Twickenham
Middlesex TW1 3RH
Northern Electric 2366942 Carliol House
plc Market Street
Newcastle upon Tyne
NE1 6NE
NORWEB plc 2366949 PO Box 14
410 Birchwood
Boulevard
Birchwood
Warrington WA3 7GA
Nuclear Electric 3076445 Barnett Way
Limited Barnwood
Gloucester
GL4 3RS
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Scottish 117119 10 Dunkeld Road
Hydro-Electric plc Perth PH1 5WA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
SEEBOARD plc 2366867 Forest Gate
Brighton Road
Crawley
West Sussex RH11 9BH
Shell Power Limited 2559630 Rowlands Way
Withenshawe
Manchester M22 5SB
Slough Energy 2474514 234 Bath Road
Supplies Slough SL1 4EE
Limited
Southern Electric 2366879 Westacott Way
plc Littlewick Green
Maidenhead
Berkshire SL6 3QB
South Wales 2366985 Newport Road
Electricity plc St. Mellons
Cardiff CF3 9XW
South Western 2366894 800 Park Avenue
Electricity plc Aztec West
Almondsbury
Bristol BS12 4SE
The Renewable Energy 3043412 Stroud House
Company Limited Russell Street
Stroud
Gloucestershire
GL5 3AN
UK Electric Power 2844010 21 St. Thomas Street
Limited Bristol BS1 6US
UML Limited 661900 PO Box 115
Port Sunlight
Wirral
Merseyside
L62 4ZL
Yorkshire 2366995 Wetherby Road
Electricity Group Scarcroft
plc Leeds LS14 3HS
<PAGE>
SCHEDULE 2:
The Other Parties
Name Registered Registered or
Number Principal Office
Accord Energy 2877398 Rivermill House
Limited 152 Grosvenor Road
London SW1V 3JL
AES Barry Limited 3135522 Burleigh House
17-19 Worpe Way
Richmond
Surrey TW10 6AG
Alcan Aluminium UK 750143 Chalfone Park
Limited Gerrards Cross
Buckinghamshire
SL9 0QB
British Gas plc 2006000 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Cabah Energy Limited 2759706 190 Strand
London WC2R 1JN
Eastern Generation 2529347 Wherstead Park
Services Wherstead
Limited Ipswich
Suffolk
IP9 2AQ
Enfield Energy 2796628 Concorde House
Centre Concorde Way
Limited Stockton on Tees
Cleveland
TS18 3RB
Fibrowatt Thetford 3057688 Astley House
Limited 33 Notting Hill Gate
London W11 3JQ
Hydro Electric 2487475 Royex House
Energy Aldermanbury Square
Limited London EC2V 7LD
Keadby Power Limited 2548042 PO Box 89 Keadby
Scunthorpe North
Lincolnshire DN17
3AZ
Kingsnorth Power 2656343 190 Strand
Limited London WC2R 1JN
Meter Operators 2841018 Lynton House
Limited 7-12 Tavistock
Square
London WC1H 9BQ
Pentex (East 2275006 Union Buildings
Midlands) 15 Union Street
Limited Aberdeen AB1 2BU
Rocksavage Power 18868 20 St. James's
Company Street
Limited London SW10 4UJ
Seabank Power 2591188 Severn Road Hallen
Limited Bristol BS10 7SP
Spalding Energy 19668 20 St. James's
Company Street
Limited London SW1A lES
<PAGE>
SCHEDULE 3:
The Meter Operator Parties who are not Parties
Name Registered Registered or
Number Principal Office
Control Devices and 1242585 PO Box 56
Systems 101 Mill Lane
Limited Newbury
Berkshire
RG14 5RE
DrakMarn O&M Ltd 3124701 53 New Broad Street
London EC2M 1JJ
E. Squared Limited 2674129 Almac House
Church Lane
Bisley
Surrey
GU24 9DR
Northern Energy 2868141 5 Derwent Place
Services Spotborough
Limited Doncaster
DN5 7PN
PowerMet Limited 2877912 3 Park Place
London SW1A lLP
Schlumberger 534821 1 Kingsway
Industries London WC2B 6XH
Limited
Stanor National 2769170 7-12 Tavistock
Contracts Square
Limited London WC1H 9BQ
The Challenge Group 22 Tally Road
Oxted
Surrey RH8 0TG
<PAGE>
SCHEDULE 4:
Amendments to the Pooling and Settlement Agreement
The Pooling and Settlement Agreement shall be amended as follows:-
1. Recitals
(a) By the deletion of Recital (G) and the relettering of
Recital (F) as Recital (G), and by the deletion of the
semi-colon and the word "and" from the end of Recital
(F) and the substitution therefor of a full stop.
(b) By the insertion of the following new Recital (F)
immediately after Recital (E):-
"(F) in addition to the rules and procedures set out herein,
payments to the Grid Operator connected with the
Transmission Services Activity (as that term is defined
in the Transmission License) are dealt with pursuant to
specific arrangements between the Grid Operator and
certain parties to this Agreement; and".
2. Operative Provisions
(a) By the insertion of the word "Transmission" before the
word "License" in the definition of "Grid Operator" in
Clause 1.1 and by the insertion, in such Clause 1.1, of
the following definition immediately after the
definition of "Transmission License":-
""Transport Uplift" has the meaning given to that term in
Appendix 1 to Schedule 9;".
(b) By the deletion of Clause 4.1.1 and the substitution
therefor of the following:-
"4.1.1 to provide a set of rules which, when implemented,
will quantify:-
(a) the financial obligations owed by certain Pool
Members to other Pool Members in respect of the
former Pool Members' purchases of electricity
produced or delivered by such other Pool Members;
(b) the financial obligations owed by the Grid
Operator to the Ancillary Services Provider in
respect of the purchase of Ancillary Services; and
(c) the financial obligations owed by the Grid
Operator to certain Pool Members in respect of
Transport Uplift (exclusive of any element thereof
relating to Ancillary Services);".
(c) By the deletion of Clause 29.1 and the substitution
therefor of the following:-
"29.1 "Provision of information: The Settlement System
Administrator shall upon request provide each Pool
Member, the Ancillary Services Provider and the Grid
Operator with a certified copy of such records, data
and other information concerning amounts payable by or
to such Pool Member, the Ancillary Services Provider
and the Grid Operator as such Pool Member, the
Ancillary Services Provider or the Grid Operator may
reasonably request for the purpose of establishing the
amounts which are owed to or by such Pool Member, the
Ancillary Services Provider or the Grid Operator in
accordance with this Agreement, and in any event with
such information as any Pool Member, the Ancillary
Services Provider or the Grid Operator may request from
the Settlement System Administrator in order to
establish or prove a claim to any amounts due or
claimed to be due. The Settlement System Administrator
shall provide such information forthwith upon request
or (if so required by the Settlement System
Administrator) upon delivery of a certificate from the
Pool Member's, the Ancillary Service Provider's or the
Grid Operator's counsel certifying that such
information is required for such purpose. Each of the
Parties agrees to the release of all such records, data
and other information in the circumstances described in
this Clause 29.1.".
(d) By the deletion of Clause 49 and the substitution
therefor of the following:-
"49. RESPONSIBILITIES
49.1 The Grid Operator shall have the following duties,
responsibilities and obligations under this Agreement:
49.1.1 PORTHOLE: Ensuring that, insofar as relevant
to the operation of the Settlement System and the
Pool Rules, PORTHOLE will in its operation comply
with its user and functional specifications.
49.1.2 Services: Making available to any successor
Settlement System Administrator those services
necessary for the proper functioning of the
Settlement System which the Grid Operator made
available to the incumbent Settlement System
Administrator at any time in the twelve month
period prior to the resignation or removal of such
incumbent Settlement System Administrator, in any
such case upon such terms as may be agreed between
the Grid Operator, such successor Settlement
System Administrator and the Executive Committee.
49.1.3 Transport Uplift: Making payments in relation
to Transport Uplift.
49.1.4 Generally: Such other duties,
responsibilities and obligations as are set out in
this Agreement
49.2No amendment, variation or replacement of any
provision of this Agreement (which, for the
avoidance of doubt, includes the Pool Rules) which
is reasonably likely to affect in any material
respect Transport Uplift or any constituent
element thereof or the obligations of the Grid
Operator related thereto, shall become effective
except with the prior written agreement of the
Grid Operator (such consent not to be unreasonably
withheld or delayed).".
(e) By the deletion of Clause 51.3 and the substitution
therefor of the following:-
"51.3 Obligations of Grid Operator: The Grid Operator
shall:-
51.3.1 pay the Ancillary Services Provider for
Ancillary Services in accordance with this
Agreement; and
51.3.2 enforce the Master Connection and Use of
System Agreement and each Supplemental Agreement
(insofar as it concerns the provision of
Ancillary Services) in accordance with their
respective terms in all circumstances in which it
is reasonable to do so having regard to its
obligations under the Act, the Transmission.
License and the Grid Code.".
(f) By the deletion of Clause 51.4 and the substitution
therefor of the following:-
"51.4 [Not used] ".
(g) By the deletion of the word "Suppliers" from Clause
51.6 and the substitution therefor of the words "the
Grid Operator" wherever it appears.
(h) By the deletion of Clause 51.7 and the substitution
therefor of the following:-
"51.7 Lost opportunity costs:
51.7.1 Subject to Clause 51.6, where the Ancillary
Services Provider pays any Generator an amount in
respect of lost opportunity costs, the Ancillary
Services Provider shall use reasonable endeavours
to include any such amount in its Ancillary
Service charge to the Grid Operator in the
Settlement Day on which it arises or as soon as
possible thereafter.
51.7.2 As soon as the Ancillary Services Provider is
notified by any Generator that any obligation to
pay any lost opportunity costs may arise, it shall
consult the Suppliers and the Grid Operator and,
without prejudice to the Ancillary Services
Provider's right to recover such lost opportunity
costs from the Grid Operator in accordance with
Clause 51.6 or Clause 51.7.1, the Ancillary
Services Provider shall, if requested by the
Suppliers or Grid Operator, collect payment from
the Grid Operator on account of or by way of
recovery of such costs over such period as may be
agreed between the Ancillary Services Provider,
the Suppliers and the Grid Operator and, in
default of agreement, over such period as the
Ancillary Services Provider considers to be
reasonable.".
(i) By the deletion of Clauses 51A and 51B and the
substitution therefor of the following:-
"51A TRANSMISSION SERVICES
It is expressly acknowledged by the Parties that
neither (i) the termination or expiry of the provisions
of Clauses 51A (Transmission Services) and 51B
(Transmission Services Scheme 2) of this Agreement as
in force immediately prior to the coming into effect of
this Clause 51A including the Transmission Services
Scheme and the Transmission Services Scheme 2 (as
therein respectively defined) and/or any addition to or
amendment of any other provision of this Agreement
effected pursuant to those Clauses whilst in force, nor
(ii) the termination or expiry of previous Clauses in
this Agreement which related to UMIS and/or UMIS 2 (as
were therein defined) shall prejudice the accrued
rights and liabilities of any Consumer (as defined in
the Pool Rules) or the Grid Operator (in whatever
capacity) under each of the Transmission Services
Scheme and/or the Transmission Services Scheme 2 at the
date of such termination or expiry which accrued rights
shall include, for the avoidance of doubt, the ability
to adjust sums calculated under UMIS, UMIS 2, the
Transmission Services Scheme and/or the Transmission
Services Scheme 2 in respect of disputes arising before
or after such termination or expiry in respect of
periods falling before such termination or expiry.
51B ENERGY UPLIFT AND TRANSMISSION LOSSES SCHEME
General:
51B.1 Notwithstanding any other provision of this
Agreement, the provisions of this Clause shall govern
the rights and obligations of the Parties in relation
to the Energy Uplift and Transmission Losses Scheme.
51B.2 In this Clause SIB, in Schedule 9 and in Schedule
11, the term "Energy Uplift and Transmission Losses
Scheme" means the scheme to provide an incentive for
the Grid Operator to minimize (taking into account
other associated costs) a proportion of the costs
arising under this Agreement and which provides for
payments between the Grid Operator (acting through its
agent the Ancillary Services Provider) and Consumers in
relation to an Energy Uplift Daily Payment and a
Transmission Losses Daily Payment in the form agreed
pursuant to Clause 51B.6 as the same may be amended,
varied or replaced from time to time in accordance with
the terms of that Clause.
51B.3 (a) The Parties agree (and agree that they will
procure that the Executive Committee will so
agree) that in the period from 00.00 hours on 1st
April, 1997 to 24.00 hours on 31st March, 1998 the
Energy Uplift and Transmission Losses Scheme, the
amendments and/or additions to the Pool Rules to
implement the Energy Uplift and Transmission
Losses Scheme and the provisions of this Clause,
shall apply. This Clause 51B.3(a) may not be
amended without the prior written consent of all
Parties.
(b) The provisions of this Clause SIB, the Energy
Uplift and Transmission Losses Scheme and any
addition to or amendment of any other provisions
of this Agreement or the Pool Rules effected
pursuant to this Clause 51B shall terminate at
24.00 hours on 31st March, 1998, except for any
provision, addition or amendment which is required
to continue beyond that day to give effect to the
operation of the Energy Uplift and Transmission
Losses Scheme in respect of any period before that
date.
51B.4 Obligations: The Parties agree:-
(a) to be bound by the terms, conditions and other
provisions of the Energy Uplift and Transmission
Losses Scheme;
(b) that the Grid Operator (acting through its agent
the Ancillary Services Provider) and each Consumer
shall make such payments as are required and
determined by the provisions of the amendments
and/or additions to the Pool Rules to implement
the Energy Uplift and Transmission Losses Scheme;
and
(c) that for the period during which this Clause 51B
applies, the following changes shall be made to
the provisions of this Agreement:-
(i) in paragraphs 1, 5.4, 5.14,17.5 and 17.6 of
Schedule 11, references to the Ancillary
Services Provider shall be deemed to be
references to itself and as agent for the
Grid Operator in relation to the Energy
Uplift and Transmission Losses Scheme;
(ii) in paragraph 2.1 of Schedule 11, the words
"and the Energy Uplift and Transmission
Losses Scheme" shall be inserted after the
words "Ancillary Services";
(iii) in paragraph 5.14 of Schedule 11, the
words "or in respect of the Energy Uplift and
Transmission Losses Scheme" shall be inserted
after the expression "Ancillary Services"
where it first appears and the words "or in
respect of the Energy Uplift and Transmission
Losses Scheme" shall be inserted after the
words "that same day", and in paragraph 5.15
of Schedule 1 1 the words "or the Ancillary
Services Provider" shall (except where they
already appear) be inserted after the
expression spool Member" wherever it occurs
in that paragraph; and
(iv) in Part 4 of Schedule 11, references to
information in respect of Ancillary Services
shall be deemed to include information in
respect of the Energy Uplift and Transmission
Losses Scheme, in paragraph 17.5 the
information required shall include the total
amount payable by the Ancillary Services
Provider (exclusive of United Kingdom Value
Added Tax) pursuant to the Energy Uplift and
Transmission Losses Scheme in respect of each
Settlement Day, in paragraph 17.6 the Pool
Funds Administrator shall include in its
verification the amount shown to be payable
by the Ancillary Services Provider pursuant
to the Energy Uplift and Transmission Losses
Scheme in respect of each Settlement Day, and
in paragraph 22.4 the Confirmation Statements
shall include the total amount payable by the
Ancillary Services Provider pursuant to the
Energy Uplift and Transmission Losses Scheme
in respect of each Settlement Day.
51B.5 The Suppliers and the Grid Operator may request
the Parties and the Executive Committee promptly (and
in any event before the date the Energy Uplift and
Transmission Losses Scheme is to take effect) to
execute and do all such acts, matters and things
(including effecting amendments to the Pool Rules) as
may be necessary to give effect to the Energy Uplift
and Transmission Losses Scheme. The Parties shall not
refuse (and agree that they will procure that the
Executive Committee shall not refuse) any such request
on the grounds of any objections to any provisions of
any of the Annexes of Appendix 3 to the Pool Rules as
agreed from time to time between the Suppliers and the
Grid Operator.
51B.6 Effectiveness: Neither this Clause 51B (other than
Clauses 51B.2, 51B.5 and this Clause 51B.6), nor the
Energy Uplift and Transmission Losses Scheme, nor any
amendment, variation or replacement of either of them,
nor any amendment, variation or replacement to the Pool
Rules relating to the Energy Uplift and Transmission
Losses Scheme, shall become effective except with the
prior agreement of the Suppliers (which agreement shall
be given by the passing of a resolution in a separate
class meeting) and the prior written agreement of the
Grid Operator.
51B.7 Survival:
(a) Termination or expiry of the provisions of this
Clause SIB' the Energy Uplift and Transmission
Losses Scheme and/or any addition to or amendment
of any other provision of this Agreement effected
pursuant to this Clause shall not prejudice the
accrued rights and liabilities of any Consumer or
the Grid Operator under the Energy Uplift and
transmission Losses Scheme at the date of such
termination or expiry, which accrued rights shall,
for the avoidance of doubt, include the ability to
adjust sums calculated under the Energy Uplift and
Transmission Losses Scheme in respect of disputes
arising after such termination or expiry in
respect of periods falling before such termination
or expiry.
(b) The provisions of this Clause 51B.7 and Clause
51B.3(b) shall survive the termination of the
Energy Uplift and Transmission Losses Scheme.
51B.8 Definitions: In, and in relation to, this Clause
51B the term "Consumer" shall bear the meaning given to
that term in the Pool Rules.".
(j) By the insertion of the words "and the Grid
Operator" after the words "the Ancillary Services
Provider" in the second sentence of Clause 52.1,
and by the deletion of the third sentence of such
Clause 52.1 and the substitution therefor of the
following:-
"In particular, but without prejudice to the
generality of the foregoing, the Executive
Committee may require following any relevant final
run of Settlement (and shall take due notice of
any request from the Ancillary Services Provider
or the Grid Operator to this effect) the
Settlement System Administrator to re-run, and the
Settlement System Administrator shall re-run,
Settlement in respect of any Settlement Day for
relevant part thereof) using the software and data
originally used in respect of such Settlement Day
(or relevant part thereof) but subject to such
changes, amendments or additional inputs as may be
required by the Executive Committee (in
consultation with the Ancillary Services Provider,
the Grid Operator or any other relevant party) or
by (as the case may be) such arbitrator(s) or
court.".
(k) By the deletion of paragraph (g) from Clause
63.1.4 and the substitution therefor of the
following:-
(g) details of Security Cover supplied and to be
supplied by each Providing Member (as defined
in Schedule 11) or the Grid Operator, as the
case may be; and".
(l) By the deletion of Clause 63.1.7 and the
substitution therefor of the following:-
"63.1.7 subject to the provisions of Part XX, to provide a
certified copy of such records, data and other
information concerning the Funds Transfer System (and
any part thereof! and amounts payable by or to any Pool
Member, the Ancillary Services Provider or the Grid
Operator as the relevant Pool Member, the Ancillary
Services Provider or (as the case may be) the Grid
Operator may reasonably request for the purpose of
establishing the amounts which are owed to or by such
Pool Member, the Ancillary Services Provider or the
Grid Operator in accordance with this Agreement, and in
any event such information as any Pool Member, the
Ancillary Services Provider or the Grid Operator may
request from the Pool Funds Administrator in order to
establish or prove a claim to any amounts due or
claimed to be due. The Pool Funds Administrator shall
forthwith upon such request provide such information
upon delivery (if so required by the Pool Funds
Administrator) of a certificate from the counsel of
such Pool Member, the Ancillary Services Provider or
the Grid Operator certifying that, in such counsel's
opinion, such information is required for such
purpose;".
(m) By the deletion from Clause 63.1.9 of the word
"and" after the words "Pool Members" and "Pool
Member concerned and the substitution therefor of
a comma, and by the insertion, in such Clause
63.1.9, of the words "and the Grid Operator"
immediately after the expression "Ancillary
Services Provider", wherever it occurs in that
Clause.
(n) By the deletion from Clause 63.1.10 of the word
"and" after the words "Settlement System
Administrator" and the substitution therefor of a
comma, and by the insertion, in such Clause
63.1.10, of the words "and the Grid Operator"
immediately after the expression "Ancillary
Services Provider".
(o) By the deletion from Clause 63.1.11 of the word
"or" after the words Spool Member" and the
substitution therefor of a comma, and by the
insertion, in such Clause 63.1.11, of the words
"or the Grid Operator" immediately after the
expression "Ancillary Services Provider".
(p) By the deletion of Clause 63.3 and the
substitution therefor of the following:-
"63.3 UK value added tax indemnity:
63.3.1 Indemnity (1): Without prejudice to paragraph
63.3.2 all Pool Members and the Grid Operator
shall jointly and severally indemnify and keep
indemnified the Pool Funds Administrator, its
officers, employees and agents (but so that, as
between Pool Members and the Grid Operator, their
liability shall be apportioned so that the Grid
Operator is liable for 5 per cent. of the
indemnified amount and the Pool Members are liable
for the balance of such indemnified amount in
proportion to their respective Contributory Shares
at the time of receipt of the request for
indemnification calculated on the basis that the
points allocated to the Pool Member in default are
disregarded) against any liability which the Pool
Funds Administrator may incur as a result of the
failure of any Pool Member, the Grid Operator or
the Ancillary Services Provider (as the case may
be) properly to account to H.M. Customs and Excise
for all amounts of United Kingdom Value Added Tax
payable or receivable by it in respect of any
supplies of Electricity, Ancillary Services or
Transport Uplift.
63.3.2 Indemnity (2): If any Pool Member, the
Ancillary Services Provider or the Grid Operator
shall fail properly to account for any amount of
United Kingdom Value Added Tax payable or
receivable by it, that person shall indemnify and
keep indemnified each non-defaulting Pool Member
and (if it is not in default) the Grid Operator
(on an after tax basis, but taking account of any
tax relief available to the relevant Pool Member
or the Grid Operator, as the case may be) against
any liability which such non-defaulting Pool
Member and (if it is not in default) the Grid
Operator shall incur pursuant to paragraph
63.3.1.".
3. Schedule 4
By the deletion from sub-sections 6.9 and 6.14 of
Schedule 4 of the word Sand" when it appears after the
expression "Pool Member" and the substitution therefor
of a comma, and by the insertion, in such sub-sections
6.9 and 6.14, of the words "and the Grid Operator"
immediately after the expression 'ancillary Services
Provider", wherever it occurs in those sub-sections.
4. Schedule 11
By the deletion of Schedule 11 and the substitution
therefor of the following:-
<PAGE>
"SCHEDULE 11
Billing and Settlement
PART 1: PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
1.2 Interpretation
PART 2: ESTABLISHMENT OF SYSTEMS
2. PAYMENTS CALENDAR
2.1 Preparation
2.2 Principles
2.3 Form
2.4 Default
2.5 Distribution
3. INFORMATION SYSTEMS
3.1 Provision of information
3.2 Communications Equipment
3.3 Authorized persons
4. BANKING SYSTEM
4.1 Funds Transfer Agreement
4.2 Establishment of Accounts
4.3 Rights and obligations under Funds Transfer Agreement
4.4 Settlement Account
4.5 Further information
4.6 Change of Settlement Account
4.7 Maintenance of Settlement Account and Settlement Bank
Mandate
4.8 Details of Accounts
5. ESTABLISHMENT OF TRUSTS
5.1 Trusts
5.2 Trusts in respect of the Credit Facility
5.3 Rights of Pool Creditors other than the Ancillary
Services Provider
5.4 Rights of Ancillary Services Provider
5.5 Trusts in respect of Pool Reserve Assets
5.6 Overdue amounts
5.7 Shortfall
5.8 Providing Members' rights to funds
5.9 Funds not to be withdrawn
5.10 Providing Members' rights to withdraw funds
5.11 Waiver of Providing Members' rights
5.12 Pool Reserve Assets
5.13 Providing Members' rights and interests in the Pool
Reserve Account
5.14 Overpayments to be held on trust
5.15 Reimbursement of overpayments
5.16 Repayment of loans
5.17 No claim for breach of trust
6. POOL LEDGER ACCOUNTS
6.1 Maintenance of Pool Ledger Accounts
6.2 Ledger extracts
6.3 Certified copy extracts
6.4 Confidentiality
6.5 Information
6.6 Review of extracts
6.7 Dispute of accuracy
[Sections 7 to 14 (inclusive) not used]
PART 3: SECURITY COVER AND CREDIT MONITORING
15. SECURITY COVER
15.1 Provision of Security Cover
15.2 Letters of Credit
15.3 Cash deposit
15.4 Maintenance of Security Cover
15.5 Failure to supply Security Cover
15.6 Substitute Letter of Credit
16. CREDIT MONITORING
16.1 Determination of Security Cover
16.2 Criteria for provision of Security Cover
16.3 Six monthly variation
16.4 Review of Security Cover
16.5 Increase or Decrease of Security Cover
16.6 Notification in respect of Security Cover
16.7 Release from Security Cover Obligations
16.8 No liability for amount of Security Cover
PART 4: BILLING AND PAYMENT PROCEDURES
17. RECEIPT AND VERIFICATION OF INFORMATION
17.1 Receipt of Information from Settlement System
Administrator
17.2 Information for each Settlement Day
17.3 Information - taking of electricity
17.4 Information - provision of electricity
17.5 Information - Ancillary Services Provider
17.6 Verification of Information
17.7 Deemed Verification
17.8 Rectification of Errors
17.9 Amounts in Advice Notes; Adjustments
17.10 Postponed Payment Date
17.11 Further notification
17.12 Payment by Pool Debtor
17.13 Liability several
18. ADVICE NOTES
18.1 Despatch of Advice Notes
18.2 Method of despatch
18.3 Content of Advice Notes
18.4 Interest
19. PAYMENT PROCEDURE
19.1 Instructions for payment
19.2 Pool Funds Administrator's responsibilities
19.3 Non-payment by Pool Member
19.4 Excess payments
19.5 Payment to Pool Creditors
19.6 Making good the Pool Reserve Account
19.7 Prohibition on transfers
19.8 Application of payments
19.9 Bank contacts
20. ALTERNATIVE PAYMENT PROCEDURE
20.1 Alternative Payment procedure
20.2 Pool Debtor to effect remittance
20.3 Receipt of remittance
20.4 Method of remittance
20.5 Notification of non-payment
20.6 Payment default
20.7 Late payment
20.8 Payments to Pool Creditors
20.9 Construction
21. PAYMENT DEFAULT
21.1 Payment default
21.2 Amount in default likely to be remedied
21.3 Loans part of Pool Reserve Assets
21.4 Repayment of loans
21.5 Reduction of payments to Pool Creditors
21.6 Obligation to mace calls
21.7 Indemnification by non-paying Pool Debtor
21.8 Notification to Pool Creditors
21.9 Default Interest
21.10 Application of payments
21.11 Clearing of Pool Clearing Account
21.12 Credit Facility
22. CONFIRMATION NOTICES
22.1 Despatch of Confirmation Notices
22.2 Information - taking of electricity
22.3 Information - supplies of electricity
22.4 Information - Ancillary Services Provider
22.5 Interest
23. PAYMENT ERRORS
23.1 Overpayments
23.2 Repayment of overpayment (1)
23.3 Repayment of overpayment (2)
23.4 Underpayments
24. ENFORCEMENT OF CLAIMS
24.1 Notification of amount in default
24.2 Duties of Pool Funds Administrator
24.3 Notice before action
24.4 Proceedings to Recover Overdue Amounts
25. CREDIT FACILITY: PAYMENT DEFAULTS
25.1 Purpose of Credit Facility
25.2 Modification of other provisions of this Schedule
25.3 Payment default
25.4 Amounts in default
25.5 Application of payments
25.6 Payments to Facility Bank
25.7 Reduction in payments to Pool Creditors
25.8 Enforcement of Claims and other provisions
25.9 Unavailability of Credit Facility
25.10 Interpretation
26. CREDIT FACILITY: GENERAL
26.1 Notifications to the Executive Committee
26.2 Notifications to Providing Members
26.3 Amendment and Cancellation
26.4 Extension and Renewal
26.5 Fees not attributable to a particular Providing Member
26.6 No additional charge
Annex 1: Form of Advice Note
Annex 2: Form of Confirmation Notice
Annex 3: Part 1 - Form of Settlement Account Designation
Part 2 - Form of Change of Settlement Account
Annex 4: Form of Letter of Credit
<PAGE>
SCHEDULE 11
Billing and Settlement
PART 1
PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule, except where the context
otherwise requires:-
"Advice Note" means a statement substantially in the form
and containing the information set out in Annex 1 (or in
such other form or containing such further information as
may from time to time be specified by the Executive
Committee) issued in the name of the Pool Funds
Administrator to a Pool Member, the Ancillary Services
Provider or the Grid Operator;
"Approved Credit Rating" means, in relation to a Pool Member
or the Grid Operator a short-term debt rating of not less
than A1 by Standard and Poor's Corporation or a rating of
not less than P1 by Moody's Investors Service or an
equivalent rating from any other reputable credit rating
agency approved by the Executive Committee;
"Banking System" means the banking system described in
Section 4, for the transfer of funds from Pool Debtors to
Pool Creditors in accordance with this Schedule, as amended
or replaced from time to time in accordance with the
provisions of the Agreement;
"Billing System" means the systems and procedures described
in Sections 18 and 22 for the issuing of Advice Notes and
Confirmation Notices by the Pool Funds Administrator to Pool
Members, the Ancillary Services Provider and the Grid
Operator, as amended or replaced from time to time in
accordance with the provisions of the Agreement;
"CHAPS" means the Clearing House Automated Payments System;
"Collection Account" means an account denominated in
sterling maintained by the Pool Funds Administrator at a
branch of a Settlement Bank, and designated from time to
time as a Collection Account in accordance with Section 4;
"Confirmation Notice" means a statement substantially in the
form and containing the information set out in Annex 2 (or
in such other form or containing such further information as
may from time to time be specified by the Executive
Committee) issued in the name of the Pool Funds
Administrator to a Pool Member, the Ancillary Services
Provider or the Grid Operator;
"Credit Facility" means the credit facility in a principal
amount of up to pounds 20,000,000 provided to the Pool Funds
Administrator by Barclays Bank PLC (acting through its
branch at 54 Lombard Street, London EC3 9EX) with effect
from 1st January, 1993 as from time to time extended,
renewed or modified and any other facility provided to the
Pool Funds Administrator by Barclays Bank PLC or any other
bank (approved by the Executive Committee) whether in
substitution for or in addition to the same in any such case
on terms approved by the Executive Committee;
"Credit Facility Contribution" means a sum equal to 5 per
cent. of the fees (and any additional amounts payable under
the terms of the Credit Facility which are not the
responsibility of any particular Providing Member or the
Grid Operator) charged under the Credit Facility to the Pool
Funds Administrator;
"Default Interest Rate" means:
(i) a rate per annum determined by the Pool Funds
Administrator to be equal to the aggregate of:
(a) 4 per cent. per annum; and
(b) the Pool Banker's base lending rate from time to
time; or
(ii) such other rate as the Executive Committee may from
time to time determine;
"Facility Bank" means Barclays Bank PLC (acting through its
branch at 54 Lombard Street, London EC3 9EX) or such other
bank as may from time to time provide a Credit Facility;
"Funds Transfer Agreement" means the agreement of that name
dated 30th March, 1990 and made between Energy Pool Funds
Administration Limited, Barclays Bank PLC, the Pool Members
named therein and The National Grid Company plc, as amended,
varied, supplemented, modified or suspended from time to
time in accordance with the terms hereof and thereof;
"Funds Transfer Business" means the business of the Pool
Funds Administrator in operating the Funds Transfer System
and providing the Services;
"Funds Transfer Hardware" has the meaning ascribed to it in
Schedule 15;
"Funds Transfer Software" has the meaning ascribed to it in
Schedule 15;
"Funds Transfer System" means the Banking System, the
Billing System and the Information Systems;
"Information Systems" means the information systems
described in Section 3 for the transfer of information to be
given by or to the Pool Funds Administrator in connection
with the Funds Transfer Business, as amended or replaced
from time to time in accordance with the provisions of the
Agreement;
"Letter of Credit" means an unconditional irrevocable
standby letter of credit substantially in the form set out
in Annex 4 (or such other form as the Executive Committee
may approve) issued for the account of a Providing Member or
the Grid Operator in sterling in favour of the Pool Funds
Administrator as trustee on the trusts set out in Section 5
by any United Kingdom clearing bank or any other bank which
has a long term debt rating of not less than single A by
Standard and Poor's Corporation or by Moody's Investors
Service, or such other bank as the Executive Committee may
approve, and which shall be available for payment at a
branch of the issuing bank;
"Notification Date" means, in respect of any Settlement Day,
the day specified in the Payments Calendar as the day on
which the Settlement Run shall be required to be delivered
by the Settlement System Administrator to the Pool Funds
Administrator for that Settlement Day;
"Notified Payment" means a payment notified in accordance
with Section 18 by the Pool Funds Administrator to a Pool
Member, the Ancillary Services Provider or the Grid Operator
as being a payment required to be cleared through the Pool
Clearing Account;
"Notified Payments System" means the system to be
established by Section 19 for the settling of Notified
Payments, as amended or replaced from time to time in
accordance with the provisions of the Agreement;
"Payment Date" means, in relation to any Settlement Day, the
date fixed in accordance with Section 2 upon which Notified
Payments in respect of supplies of electricity, the
provision of Ancillary Services and payments due in
accordance with the provisions of Clause 49 of the Agreement
must be settled in accordance with this Schedule;
"Payments Calendar" means the calendar prepared and issued
in accordance with Section 2 showing a Notification Date and
a Payment Date in respect of each Settlement Day;
"Pool Accounts" means the Pool Clearing Account, the Pool
Borrowing Account, the Pool Reserve Account and the
Collection Accounts and such other accounts as may be
established in accordance with sub-section 4.2;
"Pool Banker" means Barclays Bank PLC or such o her person
nominated from time to time by the Executive Committee as
Pool Banker and appointed as Pool Banker;
"Pool Borrowing Account" means the account of that title in
the name of the Pool Funds Administrator with the Facility
Bank which may from time to time be opened in respect of the
Credit Facility;
"Pool Clearing Account" means the account in the name of the
Pool Funds Administrator (holding as trustee on the trusts
set out in Section 5) with the Pool Banker to which Notified
Payments are required to be transferred for allocation to
Pool Creditors in accordance with their respective
entitlements;
"Pool Creditor" means each Pool Member, the Ancillary
Services Provider and the Grid Operator to whom moneys are
payable pursuant to the terms of this Schedule, other than a
Providing Member or the Grid Operator, in respect of (i)
amounts standing to the credit of its account with the Pool
Reserve Account or (ii) amounts owing to it by another
Providing Member or (as the case may be) the Grid Operator
pursuant to the operation of sub-section 21.1;
"Pool Debt" means, in respect of a Pool Member, the
Ancillary Services Provider or the Grid Operator, the
aggregate amount payable by such Pool Member, the Ancillary
Services Provider or (as the case may be) the Grid Operator
pursuant to the terms of this Schedule;
"Pool Debtor" means each Pool Member, the Ancillary Services
Provider and the Grid Operator, but in any such case only
where it is required to make payment under this Schedule;
"Pool Ledger Accounts" means the accounting records required
to be maintained by the Pool Funds Administrator in
accordance with Section 6 for the recording of transactions
settled in accordance with this Schedule;
"Pool Reserve Account" means the account established
pursuant to subsection 4.2 for the purpose of holding a cash
deposit which may be used in or towards clearing the Pool
Clearing Account in accordance with Section 21;
"Pool Reserve Assets" has the meaning given to that
expression in subsection 5.12;
"Providing Member" means each Pool Member who may, under the
terms of this Schedule, become at any time a Pool Debtor;
"Reserve Interest Rate" means the rate of interest payable
from time to time by the Pool Banker on amounts standing to
the credit of the Pool Reserve Account;
"Security Amount" means, in respect of a Providing Member or
the Grid Operator (as the case may be), the aggregate of
available amounts of each outstanding Letter of Credit plus
the principal amount (if any) of cash that such Providing
Member or the Grid Operator has paid to the credit of the
Pool Reserve Account (and which has not been repaid to such
Providing Member or the Grid Operator) and less the amount
of all outstanding loans deemed to be made under paragraphs
21.1.3 or 21.1.5 of this Schedule to such Providing Member
or the Grid Operator. For the purposes of this definition,
in relation to a Letter of Credit, "available amount" means
the face amount thereof less (i) payments already made
thereunder and (ii) claims made thereunder but not yet paid;
"Security Cover" means, in respect of each Providing Member
and the Grid Operator, the aggregate amount for the time
being which it shall be required by the Executive Committee
to provide and maintain by way of security in accordance
with Part 3;
"Services" means the services and responsibilities to be
supplied or discharged by the Pool Funds Administrator
pursuant to the Agreement;
"Settlement Account" means, in relation to a Pool Member,
the Ancillary Services Provider or the Grid Operator, an
account maintained at a Settlement Bank and designated in
accordance with sub-section 4.4;
"Settlement Account Designation" means a notice
substantially in the form set out in Part 1 of Annex 3 or in
such other form as may be specified by the Executive
Committee, completed and signed by a Pool Member, the
Ancillary Services Provider or the Grid Operator designating
a Settlement Account for the purposes of this Schedule;
"Settlement Bank" means a bank which:
(a) has its head office or a branch situated in the United
Kingdom and which holds sterling denominated accounts
at such office or branch;
(b) is a settlement member of the Clearing House Automated
Payment System ("CHAPS") or is a CHAPS participant by
virtue of an agency agreement with a settlement member;
and
(c) is either:-
(i) a European institution under the Banking
Coordination (Second Council Directive)
Regulations 1992; or
(ii) an authorized institution under the Banking Act
1987;
"Settlement Bank Mandate" means any mandate referred to in
sub-section 4.7 to be given by the Pool Funds Administrator
in favour of a Settlement Bank or, as the context may
require, a particular one of them in such form(s) as the
Executive Committee may approve, such approval not to be
unreasonably withheld, such mandate being given for the
purpose of establishing and maintaining a Collection
Account;
"Settlement Re-run" means any re-run of Settlement in
accordance with Part XII of the Agreement;
"Settlement Run" means, in respect of transactions occurring
on the relevant Settlement Day for which payments are to be
settled pursuant to this Schedule, the data which the
Settlement System Administrator is required to deliver from
time to time to the Pool Funds Administrator pursuant to
Section 17 in respect of such transactions; and
"Shortfall" has the meaning given to that expression in
sub-section 5.7.
1.2 Interpretation: In this Schedule, except where the context
otherwise requires, references to a particular Annex, Part,
Section, sub-section, paragraph or subparagraph shall be a
reference to that Annex to or Part of this Schedule or, as
the case may be, that Section, sub-section, paragraph or
sub-paragraph in this Schedule and references to any amount
being exclusive or inclusive of United Kingdom Value Added
Tax shall mean that that amount is exclusive or inclusive
(as the case may be) of a sum equal to such amount, if any,
of United Kingdom Value Added Tax as is properly chargeable
on the supply to which the firstmentioned amount is
attributable as being all or part of the consideration for
that supply.
<PAGE>
PART 2
ESTABLISHMENT OF SYSTEMS
2. PAYMENTS CALENDAR
2.1 Preparation: No later than 31st January in each year the
Pool Funds Administrator and the Settlement System
Administrator shall agree on a Payments Calendar showing for
the period from 1st April in that year to 31st March in the
next succeeding year (both dates inclusive) the Payment
Dates on which payments pursuant to the Agreement in respect
of supplies of electricity, the provision of Ancillary
Services and in respect of sums payable by the Grid Operator
in relation to Transport Uplift on each Settlement Day are
required to be settled and showing the Notification Dates on
which the Settlement Run in respect of such supplies shall
be delivered by the Settlement System Administrator to the
Pool Funds Administrator.
2.2 Principles: Each Payments Calendar shall give effect to the
following principles:
2.2.1 the Settlement Run shall be required to be
delivered by the Settlement System Administrator to the
Pool Funds Administrator no later than the 24th day
after the Settlement Day to which the Settlement Run
relates (or, if such day is not a Business Day, the
next succeeding day which is a Business Day);
2.2.2 the Payment Date shall not fall earlier than two
clear Business Days after the day on which the
Settlement Run is required to be delivered by the
Settlement System Administrator to the Pool Funds
Administrator;
2.2.3 expressed as an average over the entire period
covered by the Payments Calendar, the Payment Date
shall fall, as near as practicable, 28 days after the
Settlement Day to which it relates; and
2.2.4 each Payment Date shall fall as close as is
reasonably practicable to the 28th day after the
Settlement Day to which it relates,
and shall be prepared in accordance with the relevant Agreed
Procedure.
2.3 Form: The Payments Calendar shall be in such form as the
Executive Committee shall from time to time prescribe.
2.4 Default: If the Pool Funds Administrator and the Settlement
System Administrator shall fail to agree a Payments Calendar
for any period by the date stated in sub-section 2.1 or the
Payments Calendar prepared by them does not give effect to
the principles set out in sub-section 2.2, the Executive
Committee shall prepare or cause to be prepared a Payments
Calendar for that period giving effect to the said
principles and that shall be the Payments Calendar for use
for that period.
2.5 Distribution: Any Payments Calendar prepared pursuant to
this Section 2 shall be distributed promptly to each Pool
Member, the Ancillary Services Provider, the Grid Operator,
the Pool Banker, the Pool Auditor and the Director and (if
prepared by the Pool Funds Administrator and the Settlement
System Administrator) the Executive Committee and (if
prepared by or for the Executive Committee) the Pool Funds
Administrator and the Settlement System Administrator.
3. INFORMATION SYSTEMS
3.1 Provision of information: Unless otherwise required by the
Executive Committee, all written information to be given by
or to the Pool Funds Administrator in connection with the
Banking System and the Billing System shall be provided in
the following manner:-
3.1.1 for information flowing between the Pool Funds
Administrator, the Settlement System Administrator, the
Ancillary Services Provider and the Grid Operator by
electronic mail as designated from time to time by the
recipient in a written notice to the sender of the
information or if such electronic mail systems are not
operational by the Effective Date then, until such
systems are operational, by such means as such parties
shall agree;
3.1.2 for information flowing between the Pool Funds
Administrator and the Pool Banker, in the manner
prescribed in the Funds Transfer Agreement or in such
other manner as may be agreed between the Pool Funds
Administrator and the Pool Banker;
3.1.3 for information flowing between the Pool Funds
Administrator and a Settlement Bank, in the manner
prescribed in the relevant Settlement Bank Mandate or
in such manner as may be agreed between the Pool Funds
Administrator and the Settlement Bank;
3.1.4 for information flowing between the Pool Funds
Administrator and any Pool Member who has installed an
electronic mail transfer system compatible with the
Pool Funds Administrator's electronic mail transfer
system, by electronic mail as designated from time to
time by the recipient in a written notice to the sender
of the information; and
3.1.5 for information flowing between the Pool Funds
Administrator and any other Pool Member, by facsimile
transmission and addressed for the attention of the
Authorized Person (as defined in sub-section 3.3) for
such Pool Member and sent to the then latest facsimile
number of such Authorized Person noticed to the Pool
Funds Administrator pursuant to sub-section 3.3
provided that, if at the relevant time there is no
Authorized Person for such Pool Member, such
information shall be sent by facsimile transmission and
addressed for the attention of the company secretary of
such Pool Member and sent to the facsimile number of
its registered or principal office.
3.2 Communications Equipment: Each Party undertakes to exercise
reasonable skill and care to ensure that its communications
equipment at all tunes is adequate to transmit and receive
information in connection with the Banking System and the
Billing System. In the case of any breakdown, failure or
non-availability of the communications or other equipment,
each Party affected shall use all reasonable efforts to
agree promptly on the use and implementation of alternative,
effective and secure means of communication (and; in default
of agreement, notices or other communications shall be by
letter delivered or sent in accordance with Clause 75).
3.3 Authorized persons: Upon written request of the Pool Funds
Administrator each Pool Member shall (and may of its own
accord) provide the Pool Funds Administrator in writing with
the name of, and communication details for, one or more
individuals ("Authorized Persons") who are authorized (and,
until it receives written notice to the contrary, the Pool
Funds Administrator shall be entitled to assume that they
are authorized) to take action on behalf of such Pool Member
in respect of all communications and other dealings under
this Schedule between the Pool Funds Administrator and such
Pool Member. Each Pool Member shall promptly advise the Pool
Funds Administrator in writing of any change of any such
individual or his communication details. The Pool Funds
Administrator shall notify all Pool Members and the
Executive Committee of the names and communication details
of all Authorized Persons and of any change in any such
individual or his communication details.
4. BANKING SYSTEM
4.1 Funds Transfer Agreement: On the Effective Date the Pool
Funds Administrator, the Pool Banker, each Pool Member and
NGC (in each case as at such date) entered into the Funds
Transfer Agreement.
4.2 Establishment of Accounts: The Pool Funds Administrator
shall establish and operate in accordance with the Agreement
and the Funds Transfer Agreement a Pool Clearing Account to
and from which all payments calculated in accordance with
this Schedule are to be made, a Pool Reserve Account from
which any debit balances on the Pool Clearing Account at the
close of banking business on each Business Day shall be
settled or reduced in accordance with this Schedule, a
Collection Account at each bank at which, from time to time,
any Pool Member, the Ancillary Services Provider or the Grid
Operator maintains a Settlement Account and such other
accounts (including a Pool Borrowing Account on which the
Pool Funds Administrator may make drawings under the Credit
Facility) as the Pool Funds Administrator (with the prior
written consent of the Executive Committee) considers
desirable to enable it efficiently to perform any
obligations imposed on it pursuant to the Agreement. Each
Pool Account shall be in the name of the Pool Funds
Administrator and (save for the Pool Borrowing Account)
shall be designated as being held in trust in accordance
with the provisions of Section 5. The Pool Funds
Administrator shall not commingle any funds standing to the
credit of any Pool Account with its own personal funds.
4.3 Rights and obligations under Funds Transfer Agreement: The
Pool Funds Administrator is authorized by the Pool Members,
the Ancillary Services Provider and the Grid Operator to
exercise the rights granted to it under, and shall perform
its obligations pursuant to, the Funds Transfer Agreement
except that it shall not remove the Pool Banker without the
prior written consent of the Executive Committee; and that
at the request of the Executive Committee it shall remove
the Pool Banker in accordance with the Funds Transfer
Agreement. Subject to the agreement of the Pool Banker, the
Parties agree promptly to give effect to any amendment to
the Funds Transfer Agreement as may be required by the
Executive Committee.
4.4 Settlement Account: Each Pool Member, the Ancillary Services
Provider and the Grid Operator shall deliver to the Pool
Funds Administrator, in the case of a Pool Member, not later
than the later of the Effective Date and 10 Business Days
(or such lesser number of Business Days as the Executive
Committee may, in respect of any Pool Member, by notice to
such Pool Member and the Pool Funds Administrator specify)
before it is admitted as a Pool Member, in the case of the
Ancillary Services Provider, not later than the later of the
Effective Date and the date of its admission as a Party and,
in the case of the Grid Operator, not later than the date on
which the Grid Operator first becomes a Pool Debtor, a duly
completed and signed Settlement Account Designation
providing details of the Settlement Account to which the
Pool Funds Administrator is instructed to make payments to
such person and, if such person wishes to designate a second
account as its Settlement Account from which payments due
from such person are to be transferred in accordance with
this Schedule, providing details of such other account.
4.5 Further information: Each Pool Member, the Ancillary
Services Provider and the Grid Operator shall also supply to
the Pool Funds Administrator and the Executive Committee
such information or (as the case may be) further information
concerning its Settlement Account as shall be reasonably
requested by the Executive Committee or the Pool Funds
Administrator.
4.6 Change of Settlement Account: Each Pool Member, the
Ancillary Services Provider and the Grid Operator may, in
consultation with the Pool Funds Administrator and the Pool
Banker, change its Settlement Account at any time by
delivering to the Pool Funds Administrator and the Pool
Banker a duly completed and signed notice substantially in
the form set out in Part 2 of Annex 3 (or in such other form
as may from time to time be specified by the Executive
Committee) specifying the effective date of the change
(which shall be no less than 10 Business Days after the
notice is received by the Pool Funds Administrator).
4.7 Maintenance of Settlement Account and Settlement Bank
Mandate: Each Pool Member, the Ancillary Services Provider
and the Grid Operator shall, unless otherwise agreed by the
Executive Committee, at all times maintain a Settlement
Account and the Pool Funds Administrator shall enter into
and maintain a Settlement Bank Mandate with each of the
relevant Settlement Banks.
4.8 Details of Accounts: The Pool Funds Administrator shall
supply full details to each Pool Member, the Ancillary
Services Provider and the Grid Operator of the Pool Clearing
Account, the Pool Reserve Account and any relevant
Collection Account and, for so long as it is maintained, the
Pool Borrowing Account and shall supply the Executive
Committee with full details of all Pool Accounts and
Settlement Accounts.
5. ESTABLISHMENT OF TRUSTS
5.1 Trusts: The Pool Funds Administrator shall hold all moneys
deposited with or paid to it (other than Pool Reserve
Assets) and such rights as may from time to time be vested
in it with regard to payment by Pool Members (apart from
fees owed or paid to it for its services in accordance with
Schedule 15 and any amounts payable to it pursuant to that
Schedule upon its removal as Pool Funds Administrator or the
expiry or termination of its appointment as such), by and
from each Pool Debtor or with regard to the provision of
Security Cover by each Pool Member or the Grid Operator
including:-
5.1.1 subject as provided in sub-section 5.2, all moneys
from time to time standing to the credit of each Pool
Account other than the Pool Reserve Account and the
Pool Borrowing Account;
5.1.2 all rights of the Pool Funds Administrator to call
for payment or Security Cover;
5.1.3 the Letters of Credit and all rights to, and
(subject to sub-section 15.5) moneys representing, any
proceeds therefrom other than proceeds repayable by
loan in accordance with paragraphs 5.12.5 and 5.16; and
5.1.4 any interest received or receivable in respect of
a Pool Debt or a Pool Account (other than interest on
the Pool Reserve Account),
on trust for Pool Creditors in accordance with their
respective individual entitlements as they arise in
accordance with the Agreement. Upon termination of the said
trust any residual balance after satisfaction of the
entitlement of all Pool Creditors shall be held for
Providing Members, the Ancillary Services Provider and the
Grid Operator in accordance with their respective individual
entitlements as they arise in accordance with the Agreement.
5.2 Trusts in respect of the Credit Facility: The Pool Funds
Administrator shall hold all moneys from time to time
standing to the credit of the Pool Clearing Account on trust
first for the Facility Bank to the extent that there is an
aggregate amount outstanding under the Credit Facility but
on terms that no funds shall be withdrawn in favour of the
Facility Bank except in satisfaction of a payment due to the
Facility Bank under the terms of the Credit Facility or in
accordance with this Schedule and on terms that the Pool
Funds Administrator will be entitled to make payments out of
the account to Pool Members and other Parties in accordance
with the other provisions of this Schedule.
5.3 Rights of Pool Creditors other than the Ancillary Services
Provider: The respective rights of Pool Creditors other than
the Ancillary Services Provider to the assets held by the
Pool Funds Administrator on the trusts set out in
sub-section 5.1 shall be determined in accordance with the
Agreement and in accordance with the following principles:
5.3.1 the extent of each Pool Creditor's individual
rights shall be deemed to consist of the aggregate of
the claims (to the extent not paid or otherwise
satisfied) of such Pool Creditor in respect of each
Settlement Period; and
5.3.2 the assets referred to in sub-section 5.1 shall be
deemed to consist of a series of funds, each fund
representing the rights or moneys owed, paid, held or
otherwise attributable to each Settlement Period. The
Pool Funds Administrator shall not be obliged to
segregate moneys into separate funds.
5.4 Rights of Ancillary Services Provider: The rights of the
Ancillary Services Provider to assets held on trust shall be
determined in accordance with Section 23 of Schedule 9.
5.5 Trusts in respect of Pool Reserve Assets: The Pool Funds
Administrator shall stand possessed of the Pool Reserve
Assets on the following trusts, that is to say:-
5.5.1 at any time when no amounts owed by Pool Debtors
are overdue, on trust to repay (subject to and in
accordance with the provisions of sub-sections 5.8 and
5.9) to each Providing Member and the Grid Operator the
respective share of such Providing Member or (as the
case may be) the Grid Operator (determined in
accordance with sub-section 5.13) of the Pool Reserve
Assets; and
5.5.2 with automatic effect as soon as any amount owed
by a Pool Debtor becomes overdue, to hold an amount of
the moneys credited from time to time to the Pool
Reserve Account equal to the Shortfall or the amount
held in the Pool Reserve Account attributable to such
Pool Debtor (whichever is less) on the trusts set out
in sub-section 5 1 and the balance (if any) shall be
held on the trusts set out in paragraph 5.5.1.
5.6 Overdue amounts: In respect of a Pool Debtor and for the
purposes of sub-section 5.5, an amount shall be deemed to
become overdue at the time at which the Pool Funds
Administrator becomes aware that such Pool Debtor has not
made or will not make by 12:30 hours payment in full to the
credit of the Collection Account of such Pool Debtor of such
an amount as it is required on such day to make and, for as
long as the Credit Facility remains unconditionally
available, the Pool Funds Administrator considers in good
faith that the amount in default is not likely to be
remedied on the next Business Day and the amount overdue
shall be the amount of the Shortfall.
5.7 Shortfall: The term "Shortfall", as used in this Section 5,
means the amount from time to time of Notified Payments
which have become overdue by application of the rule set out
in sub-section 5.6 and which have not subsequently been paid
(whether by remittance from a Pool Debtor, payment out of
the Reserve Account or a call under a Letter of Credit). To
the extent that the Pool Funds Administrator is unable to
determine the precise amount of a Shortfall, it shall be
deemed to be such amount as the Pool Funds Administrator and
the Pool Banker shall agree, or failing agreement, the
entire amount of the Notified Payment.
5.8 Providing Members' and the Grid Operator's rights to funds:
Each Providing Member and the Grid Operator remitting funds
for credit to the Pool Reserve Account agrees that the
following terms shall apply. None of the remittances shall
be repayable until a Providing Member has ceased to be a
Pool Member or (as the case may be) the Grid Operator has
ceased to be a Party and has paid in full all amounts
actually or contingently owed by it to any Pool Creditor,
the Settlement System Administrator or the Pool Funds
Administrator. Furthermore, if and to the extent that, at
any time when an amount would be repayable to a Providing
Member or the Grid Operator pursuant to this sub-section
5.8, all or any part of the Providing Member's or the Grid
Operator's interest in the Pool Reserve Assets is
represented by a loan to a Pool Member or the Grid Operator
deemed to be made in accordance with paragraph 21.1.3 or
21.1.5 the rights of a Providing Member or (as the case may
be) the Grid Operator as against the Pool Funds
Administrator to receive a payment of its share in the Pool
Reserve Assets (or the relevant portion of such share) shall
be conditional on repayment in full of the relevant loan.
5.9 Funds not to be withdrawn: Each Providing Member and the
Grid Operator undertakes not to seek withdrawal of any funds
to which it may be entitled except in the circumstances
permitted by sub-section 5.10 or 16.7. The Pool Funds
Administrator shall be entitled to disregard any purported
notice of withdrawal not complying with this sub-section
5.9.
5.10 Providing Members' and Grid Operator's rights to withdraw
funds: Notwithstanding the sub-sections 5.8 and 5.9, if a
Providing Member or (as the case may be) the Grid Operator
is not in default in respect of any amount owed to a Pool
Creditor:-
5.10.1 the Pool Funds Administrator shall transfer to the
relevant Providing Member or the Grid Operator
quarterly its share of interest credited to the Pool
Reserve Account; and
5.10.2 the Pool Funds Administrator shall transfer to
such Providing Member or the Grid Operator within a
reasonable time after a written request of such
Providing Member or (as the case may be) the Grid
Operator therefor any amount of cash which exceeds the
amount which such Providing Member or the Grid Operator
is required to maintain in the Pool Reserve Account
from time to time in accordance with Section 16.
5.11 Waiver of Providing Members' and Grid Operator's rights:
Each Providing Member and the Grid Operator waives any right
it might otherwise have to set off against any obligation
owed to the Pool Funds Administrator, the Pool Banker, any
Pool Member, the Ancillary Services Provider or the Grid
Operator any claims such Providing Member or the Grid
Operator may have to or in respect of the Pool Reserve
Assets.
5.12 Pool Reserve Assets: "Pool Reserve Assets" means the
aggregate of:-
5.12.1 amounts from time to time credited to the Pool
Reserve Account;
5.12.2 amounts which any Providing Member or the Grid
Operator is from time to time obligated to pay tot he
Pool Funds Administrator for credit to the Pool Resrve
Account and claims in respect of such amounts;
5.12.3 interest accrued and accruing on the Pool Reserve
Account;
5.12.4 any amounts credited to the Pool Reserve Account
pursuant to paragraph 15.4.3; and
5.12.5 any loans deemed to be made from any amounts
credited to the Pool Reserve Account pursuant to
paragraph 21.1.3 or 21.1.5.
5.13 Providing Members' and Grid Operator's rights and interests
in the Pool Reserve Account: At any time when it is
necessary to determine the respective rights and interests
of Providing Members and the Grid Operator in and to funds
standing to the credit of the Pool Reserve Account, such
rights shall be determined in accordance with the following
rules:-
5.13.1 any amount withdrawn from the Pool Reserve Account
following the occurrence of a Shortfall which the Pool
Funds Administrator has determined to be attributable
to a particular Providing Member or (as the case may
be) the Grid Operator (the "Relevant Provider")
(irrespective of the existence or otherwise of actual
fault on the part of the Relevant Provider) shall in
the first instance reduce pro tanto the Relevant
Provider's interest in the Pool Reserve Assets;
5.13.2 if, in any circumstances described in paragraph
5.13.1, the Shortfall exceeds the Relevant Provider's
interest in the Pool Reserve Account, then any excess
required to be withdrawn from the Pool Reserve Account
shall reduce the respective interests of Providing
Members and the Grid Operator, other than the Relevant
Provider, in proportion to their respective interests
in the Pool Reserve Account prior to the withdrawal;
5.13.3 any proceeds of a Letter of Credit which are to be
credited to the Pool Reserve Account pursuant to sub-
section 5.16, and any amounts paid by a Relevant
Provider to make up a payment out of the Pool Reserve
Account, shall be applied in priority in or towards
reinstating (rateably among themselves) the respective
interests of Providing Members and the Grid Operator
other than the Relevant Provider in the Pool Reserve
Account;
5.13.4 subject to the rules set out in paragraphs 5.13.1
to 5.13.3 (inclusive), the respective rights of each
Providing Member and the Grid Operator in and to funds
standing to the credit of the Pool Reserve Account
shall be to receive (subject to sub-sections 5.8 and
5.9) an amount equal to the aggregate amounts remitted
by the Providing Member and the Grid Operator to the
Pool Reserve Account and not subsequently withdrawn,
together with a proportionate share of any interest
from time to time credited to the Pool Reserve Account;
and
5.13.5 in the absence of a Shortfall, any amounts
credited to the Pool Reserve Account following a call
under a Letter of Credit pursuant to sub-section 15.5
shall be considered as an interest in the Pool Reserve
Assets of the Relevant Provider in respect of the
relevant Letter of Credit.
5.14 Overpayments to be held on trust: If and to the extent that
payments under this Schedule actually made on any day by the
Pool Funds Administrator to Pool Members or the Ancillary
Services Provider in respect of supplies of electricity
under the Agreement or the provision of Ancillary Services
do not correspond exactly with their respective payment
entitlements established in accordance with the Agreement in
relation to supplies of electricity or the provision of
Ancillary Services in respect of that same day, then the
person receiving any overpayment shall receive and be deemed
to hold the amount of such overpayment on trust for the Pool
Member or rateably for the Pool Members, the Ancillary
Services Provider or (as the case may be) for the Grid
Operator which, in respect of that same day was (were)
underpaid and, on the written instruction of the Pool Funds
Administrator, shall account in accordance with sub-section
23.2 to the Pool Funds Administrator accordingly for
redistribution of the moneys.
5.15 Reimbursement of overpayments: Subject to sub-sections 5.8
and 5.14, all payments under this Schedule shall be made on
the basis that a Pool Member or the Grid Operator shall only
be entitled to claim reimbursement of an overpayment made by
it (whether to the Pool Funds Administrator or (through the
Pool Funds Administrator) to another Pool Member, the
Ancillary Services Provider or the Grid Operator) if, and
then only to the extent that:-
(a) the aggregate amounts paid by the Pool Member or (as
the case may be) the Grid Operator in respect of the
relevant Payment Date
exceed
(b) the total amounts payable by that Pool member or (as
the case may be) the Grid Operator to Pool Creditors in
respect of that Payment Date together with all amounts
(if any) overdue by that Pool Member or (as the case
may be) the Grid Operator in respect of periods prior
to the relevant Payment Date.
5.16 Repayment of Loans: Notwithstanding their rights pursuant to
sub-section 5.1 in and to Letters of Credit and the proceeds
thereof, Pool Creditors agree that if:-
5.16.1 a payment is received under a Letter of Credit
after a sum has been withdrawn from the Pool Reserve
Account to make good (in whole or in part) a
discrepancy between amounts owed and amounts received
by the due time on a particular Payment Date; and
5.16.2 the aggregate of the amounts paid out of the Pool
Reserve Account and paid under the Letter of Credit
exceeds the amounts owed in respect of the relevant
Payment Date,
then any excess paid under the Letter of Credit over the
amount then remaining unpaid in respect of the relevant
Payment Date shall be credited to the Pool Reserve Account.
Where appropriate, any such credit shall pro tanto
constitute repayment of any loans deemed to be made pursuant
to paragraphs 21.1.3 or 21.1.5.
5.17 No claim for breach of trust: Provided that the Pool Funds
Administrator carries out its duties under the Agreement,
none of the Pool Members, Ancillary Services Provider nor
the Grid Operator shall have any claim against the Pool
Funds Administrator for breach of trust or fiduciary duty
arising solely out of any discrepancy between payments
actually made in respect of any day and the entitlement of
Pool Members, Ancillary Services Provider or the Grid
Operator to receive payments in respect of that same day.
6. POOL LEDGER ACCOUNTS
6.1 Maintenance of Pool Ledger Accounts: The Pool Funds
Administrator shall maintain ledger accounts showing
all amounts payable and receivable by each Pool Member,
the Ancillary Services Provider and the Grid Operator
according to calculations made and notifications issued
by the Pool Funds Administrator pursuant to this
Schedule.
6.2 Ledger extracts: Each Pool Member, the Ancillary
Services Provider and the Grid Operator shall be
entitled to receive a quarterly extract of the ledger
account which is relevant to it showing all amounts
debited and credited to its account provided that, if a
Pool Member, the Ancillary Services Provider or the
Grid Operator so requests of the Pool Funds
Administrator, it shall be entitled to receive a
monthly extract of such ledger account.
6.3 Certified copy extracts: Without prejudice to the
generality of the general duties and responsibilities
of the Pool Funds Administrator set out in Schedule 15,
in the event of any enforcement proceedings being
brought by a Pool Creditor against a non-paying Pool
Member or the Grid Operator, the Pool Funds
Administrator shall forthwith upon request being made
to it at the cost of the requesting Pool Creditor
provide a certified copy of an extract of the ledger
accounts sufficient to establish the details of each
transaction in respect of which the Pool Creditor has a
claim against the non-paying Pool Member or the Grid
Operator.
6.4 Confidentiality: The ledger accounts maintained by the
Pool Funds Administrator shall be kept confidential in
accordance with Part XVIII of the Agreement from
Committee Members and from all Pool Members and the
Grid Operator (except as required pursuant to Clause
63.1.5 or 63.1.6 or sub-section 6.2 or 6.3) but the
Pool Funds Administrator shall disclose such ledger
accounts to the Pool Auditor for the purpose of any
audit requested to be conducted pursuant to Part IX of
the Agreement.
6.5 Information: Any extract of a ledger account of any
other records, data or information provided pursuant to
Clause 63.1.5 or 63.1.6 or sub-section 6.2
(collectively referred to in this Section 6 as the
"information") shall, save in the case of manifest
error, be deemed prima facie evidence of its contents.
6.6 Review of extracts: Each Pool Member, the Ancillary
Services Provider and the Grid Operator shall promptly
review all extracts of ledger accounts sent to it and
shall (without prejudice to any of its rights under the
Agreement) where practicable within 10 Business Days
after receiving such information notify the Pool Funds
Administrator of any errors in such account of which it
is aware.
6.7 Dispute of accuracy: If the Pool Funds Administrator at
any time receives a notice disputing the accuracy of
any ledger account, records, data or information, it
shall consult with the Pool Member who gave the notice,
the Ancillary Services Provider or (as the case may be)
the Grid Operator and each shall use all reasonable
endeavours to agree the information. Promptly after
agreement is reached, the Pool Funds Administrator
shall, if necessary, issue corrected information and
notifications under the provisions of sub-section 17.8.
[Section 7 to 14 (inclusive) not used].
<PAGE>
PART 3
SECURITY COVER AND CREDIT MONITORING
15. SECURITY COVER
15.1 Provision of Security Cover: Each Providing Member and the
Grid Operator shall provide Security Cover from time to time
in accordance with the following provisions:-
15.1.1 each Providing Member and the Grid Operator (with
the exception of any entity of or wholly-owned or
Controlled by the United Kingdom Government) shall:-
(a) deliver to the Pool Funds Administrator evidence
reasonably satisfactory to the Executive Committee
that:
(i) it presently holds an Approved Credit Rating;
or
(ii) it has provided and is not in default under
alternative or additional security as may be
approved from time to time by unanimous
decision of all Committee Members (Committee
Members being under no obligation to approve
any such security); or
(b) comply with the provisions of paragraph 15.1.3;
15.1.2 in addition to the provisions of paragraph 15.1.1
but subject as provided in Sections 21.12 and 25:-
(a) each Supplier (including any Supplier which is an
entity of or wholly-owned or Controlled by the
United Kingdom Government) shall, not later than
the date of its admission as a Pool Member,
deliver to the Pool Funds Administrator:
(i) a Letter of Credit (available for an initial
period of not less than 12 months); and
(ii) cash for credit to the Pool Reserve Account,
in both cases in such amount as shall be notified
by the Executive Committee in accordance with
Section 16; and
(b) each Providing Member, not being a Supplier,
(including any entity of or wholly-owned or
Controlled by the United Kingdom Government and
not referred to in paragraph 15.1.2(a) above)
shall, not later than the date of its admission as
a Pool Member or 31st March, 1995 (whichever is
the later) and the Grid Operator shall, not later
than 1st April, 1997, deliver to the Pool Funds
Administrator:
(i) a Letter of Credit (available for an initial
period of not less than 12 months); and
(ii) cash for credit to the Pool Reserve Account,
in both cases in such amount as shall be notified
by the Executive Committee in accordance with
Section 16;
15.1.3 each Providing Member and the Grid Operator
mentioned in paragraph 15.1.1 to which paragraph (b) of
paragraph 15.1.1 applies and (if paragraph (b) of
paragraph 15.1.1 applies to it) the Grid Operator shall
immediately be required (in addition to its
obligations, if any, under paragraph 15.1.2) to deliver
to the Pool Funds Administrator a Letter of Credit
(available for an initial period of not less than 12
months) or cash for credit to the Pool Reserve Account
in such amount and in such proportions as shall be
notified by the Executive Committee in accordance with
Section 16.
15.2 Letters of Credit: For the avoidance of doubt nothing in
sub-section 15.1 or 15.6 shall prevent any Providing Member
or the Grid Operator from delivering a single Letter of
Credit in respect of its obligations under paragraphs 15.1.2
and 1 5.1 .3.
15.3 Cash deposit: Any cash amount delivered to the Pool Funds
Administrator for credit to the Pool Reserve Account shall
be held on the terms set out in Section 5. Amounts standing
to the credit of the Pool Reserve Account shall bear
interest at the Reserve Interest Rate.
15.4 Maintenance of Security Cover: Each Providing Member and the
Grid Operator shall be required to provide and at all times
thereafter maintain a Security Amount equal to or more than
the Security Cover applicable to it in such aggregate amount
as shall be set from time to time in accordance with this
Part 3. Immediately upon any reduction occurring in the
Security Amount provided by any Providing Member or the Grid
Operator or any Letter of Credit being for any reason drawn
down (and including the deemed making of any loan to that
Providing Member or the Grid Operator under the provisions
of paragraph 21.1.3 or 21.1.5) the Providing Member or as
the case may be) the Grid Operator will procure that new
Letters of Credit are issued or existing Letters of Credit
are reinstated (to the satisfaction of the Pool Funds
Administrator) to their full value or that cash is placed to
the credit of the Pool Reserve Account in an amount required
to restore the Security Amount to an amount at least equal
to the Security Cover applicable to the Providing Member or
(as the case may be) the Grid Operator and in such
proportions of Letters of Credit and cash as this Part 3
requires. Not later than 10 Business Days before any
outstanding Letter of Credit is due to expire, the Providing
Member or the Grid Operator providing such Letter of Credit
shall procure to the satisfaction of the Pool Funds
Administrator that its required Security Amount will be
available for a further period of not less than 12 months
which may be done in one of the following ways:
15.4.1 (subject to the issuing bank continuing to have
the credit rating referred to in sub-section 15.6)
provide the Pool Funds Administrator with confirmation
from the issuing bank that the validity of the Letter
of Credit has been extended for a period of not less
than 12 months on the same terms and otherwise for such
amount as is required by this Part 3; or
15.4.2 provide the Pool Funds Administrator with a new
Letter of Credit issued by an issuing bank with the
credit rating required by this Schedule for an amount
at least equal to the required Security Amount
applicable to it (less its balance on the Pool Reserve
Account) which Letter of Credit shall be available for
a period of not less than 12 months; or
15.4.3 procure such transfer to the Pool Funds
Administrator for credit to the Pool Reserve Account as
shall ensure that the credit balance applicable to it
standing to the credit of the Pool Reserve Account
shall be at least equal to the required Security
Amount.
15.5 Failure to supply Security Cover: If a Providing Member or
the Grid Operator fails at any time to provide Security
Cover to the satisfaction of the Pool Funds Administrator in
accordance with the provisions of this Section 15, the Pool
Funds Administrator may at any time while such default
continues, and if at such time any Letter of Credit forming
part of the Security Cover is due to expire within nine
Business Days it shall immediately, and without notice to
such Providing Member or (as the case may be) the Grid
Operator, demand payment of the entire amount of any
outstanding Letter of Credit and shall credit the proceeds
of the Letter of Credit to the Pool Reserve Account to be
held on the terms and on the trusts set out in Section 5.
15.6 Substitute Letter of Credit: If the bank issuing the Letter
of Credit of any Providing Member or the Grid Operator
ceases to have the credit rating as is set out in
sub-section 1.1 under "Letter of Credit", such Providing
Member or (as the case may be) the Grid Operator shall
forthwith procure the issue of a substitute Letter of Credit
by a bank that has such credit rating.
16. CREDIT MONITORING
16.1 Determination of Security Cover: The amount of Security
Cover which each Providing Member and the Grid Operator
shall be required to maintain and, in respect of the amounts
of Security Cover to be provided under paragraph 15.1.2 (so
long as applicable) and paragraph 15.1.3 the proportions as
between cash and Letter of Credit that may be permitted,
shall be determined from time to time by the Executive
Committee in consultation with the Pool Funds Administrator
in accordance with this Section 16 and on the basis of the
criteria set out in sub-section 16.2, and shall be notified
to such Providing Member or (as the case may be) the Grid
Operator, and to the Pool Funds Administrator.
16.2 Criteria for provision of Security Cover:
16.2.1 If paragraph (b) of paragraph 15.1.1 applies to a
Providing Member or the Grid Operator, the amount of
Security Cover required to be provided by such
Providing Member or (as the case may be) the Grid
Operator in addition to the amounts referred to in
paragraph 15.1.2 (so long as applicable) shall be
provided by Letter of Credit in an amount to be
assessed by the Executive Committee in consultation
with the Pool Funds Administrator as the aggregate
amounts payable pursuant to the Agreement by the
relevant Providing Member or (as the case may be) the
Grid Operator in respect of purchases of, or as the
case may be, prospective purchases of electricity
(including Ancillary Services) made by the relevant
Providing Member or in respect of sums payable in
accordance with Clause 49 of the Agreement by the Grid
Operator over a 28 day period, as determined by the
Executive Committee provided that with the approval of
the Executive Committee, all or part of the required
Security Cover may be provided in cash credited to the
Pool Reserve Account.
16.2.2 In respect of all Providing Members and the Grid
Operator, the amounts required to be provided by each
of them which are referred to in paragraph 15.1.2 (so
long as applicable) shall (subject as provided in
sub-section 21.12 and Section 25) be initially as to a
minimum of 20 per cent. in cash and the remainder by
way of Letter of Credit, and thereafter as revised by
the Executive Committee. Such amounts shall be assessed
by the Executive Committee in consultation with the
Pool Funds Administrator to cover banking error and to
minimize reductions of payments to Pool Creditors.
16.3 Six monthly variation: In respect of paragraphs 16.2.1 and
16.2.2, the Executive Committee shall calculate two amounts
for the two six-month periods commencing 1st April and 1st
October in each year and shall advise the Pool Funds
Administrator and the relevant Providing Members or (as the
case may be) the Grid Operator accordingly. Such six monthly
variation shall not apply to paragraph 16.2.2 where Section
25 is applicable.
16.4 Review of Security Cover: The Pool Funds Administrator shall
keep under review the Security Amounts relating to each
Providing Member and the uric Operator and shall promptly
advise the Executive Committee, the relevant Providing
Member or (as the case may be) the Grid Operator whenever
the Security Cover maintained by such Providing Member or
(as the case may be) the Grid Operator is significantly more
or less than the amount required to be maintained pursuant
to this Part 3.
16.5 Increase or Decrease of Security Cover: If, after
considering the recommendations of the Pool Funds
Administrator and any representations which may be made by
the relevant Providing Member or (as the case may be) the
Grid Operator, the Executive Committee determines that the
Security Cover of a Providing Member or the Grid Operator
should be increased or decreased, it shall so notify the
Providing Member or the Grid Operator (as the case may be),
the Pool Funds Administrator and the Director. If the
Executive Committee determines that such Security Cover
should be decreased, the Providing Member or (as the case
may be) the Grid Operator consents and the Director so
approves, that reduction shall take place. The Pool Funds
Administrator shall consent to an appropriate reduction in
the available amount of any outstanding Letter of Credit
and/or shall repay to the Providing Member or (as the case
may be) the Grid Operator such part of the deposit held in
the Pool Reserve Account for the account of such Providing
Member or the Grid Operator (together with all accrued
interest on the part to be repaid) sufficient to reduce the
Providing Member's or Grid Operator's Security Amount to the
level of Security Cover applicable to it. If the Executive
Committee determines that the Providing Member's or the Grid
Operator's Security Cover should be increased, the relevant
Providing Member or (as the case may be) the Grid Operator
shall, within five Business Days of notice as aforesaid,
procure an additional or replacement Letter of Credit or
transfer to the Pool Funds Administrator a cash deposit for
credit to the Pool Reserve Account in an amount sufficient
to increase its Security Amount so as to be at least equal
to the level of Security Cover applicable to it.
16.6 Notification in respect of Security Cover: The Pool Funds
Administrator shall notify the Executive Committee, the
Settlement System Administrator and the Director promptly
if:
16.6.1 a Providing Member or the Grid Operator fails to
provide, extend or renew a Letter of Credit which it is
required to maintain pursuant to Section 15; or
16.6.2 the Pool Funds Administrator shall make a call
under any such Letter of Credit; or
16.6.3 the Pool Funds Administrator becomes aware that a
Providing Member or the Grid Operator (a) shall cease
to retain an Approved Credit Rating, or (b) shall be
placed on credit watch by the relevant credit rating
agency (or becomes subject to an equivalent procedure)
which in any case casts doubt on the Providing Member
or the Grid Operator retaining an Approved Credit
Rating, or (c) shall be in default under the additional
or alternative security referred to in paragraph
15.1.1; or
16.6.4 the Security Amount in relation to any Providing
Member or the Grid Operator is at any time less than
the level of its required Security Cover for the time
being; or
16.6.5 the Pool Funds Administrator becomes aware that
any bank that has issued a Letter of Credit which has
not expired ceases to have the credit rating required
by this Schedule.
16.7 Release from Security Cover Obligations: Upon a Providing
Member ceasing to be a Pool Member or the Grid Operator
ceasing to be a Party to the Agreement (as the case may be)
and provided that all amounts owed by the Providing Member
or the Grid Operator have been duly and Annually paid and
that it is not otherwise in default in any respect under the
Agreement, the Providing Member or the Grid Operator shall
be released from the obligation to maintain Security Cover
and the Pool Funds Administrator shall consent to the
revocation of any outstanding Letter of Credit.
16.8 No liability for amount of Security Cover: Any
recommendations made by the Pool Funds Administrator
pursuant to this Section 16 shall be given in good faith.
Any instructions given by the Executive Committee in respect
of the amount of Security Cover to be maintained by a
Providing Member or the Grid Operator if given in good faith
shall, insofar as applicable in terms of this Schedule, be
binding on all Pool Members, the Ancillary Services Provider
and the Grid Operator and neither the Pool Funds
Administrator nor any Committee Member shall incur any
liability by reason of the Security Cover of a Providing
Member or the Grid Operator proving to be inadequate or
excessive.
<PAGE>
PART 4
BILLING AND PAYMENT PROCEDURES
17. RECEIPT AND VERIFICATION OF INFORMATION
17.1 Receipt of Information from Settlement System Administrator:
Not later than 12.00 hours on the Notification Date the Pool
Funds Administrator shall require of, and take all steps
available to it to procure from, the Settlement System
Administrator, and the Settlement System Administrator shall
use its best endeavours to provide to the Pool Funds
Administrator, the information referred to in sub-sections
17.2 to 17.5 (inclusive) concerning supplies of electricity,
the provision of Ancillary Services and the sums payable in
relation to Transport Uplift in respect of each Settlement
Day.
17.2 Information for each Settlement Day: The information
required in respect of each Settlement Day is as follows:
17.2.1 the Settlement Day;
17.2.2 the corresponding Payment Date;
17.2.3 the Settlement Run identification number;
17.2.4 the total amount owing in accordance with the
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity supplied and Ancillary
Services provided and Transport Uplift due during each
Settlement Day; and
17.2.5 the total amount owing (exclusive of United
Kingdom Value Added Tax) in respect of Ancillary
Services provided during each Settlement Day.
17.3 Information - taking of electricity: The information
required in respect of each Pool Member taking electricity
in each Settlement Day is as follows:
17.3.1 the Pool Member's identification number;
17.3.2 the Pool Member's name; and
17.3.3 the total amount owing in accordance with the
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity taken by such Pool Member
during each Settlement Day.
17.4 Information - provision of electricity: The information
required in respect of each Pool Member providing
electricity during each Settlement Day is as follows:
17.4.1 the Pool Member's identification number;
17.4.2 the Pool Member's name; and
17.4.3 the total amount owing in accordance with this
Agreement (exclusive of United Kingdom Value Added Tax)
in respect of electricity provided by such Pool Member
during each Settlement Day.
17.5 Information - Ancillary Services Provider and Grid Operator:
The information required in relation to the Ancillary
Services Provider and the Grid Operator in respect of each
Settlement Day is the total amount receivable in accordance
with the Agreement by the Ancillary Services Provider
(exclusive of United Kingdom Value Added Tax) for the
provision of Ancillary Services during each Settlement Day
and the total amount (exclusive of United Kingdom Value
:Added Tax) payable by the Grid Operator in relation to
Transport Uplift (including in relation to Ancillary
Services) during each Settlement Day.
17.6 Verification of Information: Upon receipt of the information
supplied by the Settlement System Administrator, the Pool
Funds Administrator shall verify whether, on the basis of
such information, the sum of the amounts shown to be
receivable by each Pool Member in respect of its sales of
electricity plus the amount shown to be payable to the
Ancillary Services Provider in respect of its provision of
Ancillary Services on the relevant Settlement Day is equal
to the sum of the amounts shown to be payable by each Pool
Member in respect of its purchases of electricity on the
same Settlement Day and by the Grid Operator in relation to
Transport Uplift.
17.7 Deemed Verification: Unless the Pool Funds Administrator
shall, by close of business on the Notification Date,
otherwise inform the Settlement System Administrator, each
Pool Member, the Ancillary Services Provider and the Grid
Operator to the contrary before the Payment Date, the
information provided by the Settlement System Administrator
shall be deemed to be verified.
17.8 Rectification of Errors: If the Pool Funds Administrator
determines that the information provided by the Settlement
System Administrator cannot be verified in accordance with
sub-section 17.6, it shall as soon as possible notify the
Settlement System Administrator, each Pool Member, the
Ancillary Services Provider and the Grid Operator
accordingly and require the Settlement System Administrator
to correct any errors and obtain the Pool Funds
Administrator's verification of the corrected information as
quickly as possible. As soon as the Pool Funds Administrator
verifies that the information provided by the Settlement
System Administrator can be verified in accordance with sub
section 17.6, the Pool Funds Administrator shall notify the
Settlement System Administrator, each Pool Member, the
Ancillary Services Provider and the Grid Operator of the
verified information required to be given pursuant to sub
section 17.6. The Settlement System Administrator shall use
its best endeavours to provide such corrected information as
may be necessary for the Pool Funds Administrator to issue
verification.
17.9 Amounts in Advice Notes; Adjustments:
17.9.1 The amounts to be incorporated in the Advice Notes
in accordance with sub-section 18.1 (and in all cases
together with United Kingdom Value Added Tax thereon)
shall be:
(a) if verification has been made in accordance with
subsection 17.6, the full relevant amounts so
verified;
(b) to the extent verification can reasonably be made
in circumstances where all the information cannot
be fully verified as described in sub-section
17.6, those amounts which are shown against the
name of each Pool Debtor in such information as is
received under the provisions of sub-section 17.1
(whether or not such information is an estimate
only) and such amounts will be shared amongst the
relevant Pool Creditors in the proportion which
the amount shown as due to each of them in such
information as aforesaid bears to the amounts
which are so shown as due to all of them; and
(c) to the extent that for any reason whatever the
amounts to be paid cannot be verified at all
(including, but not limited to, application of
Force Majoure and failure to provide information
on the part of the Settlement System
Administrator) or the appropriate calculations to
permit payment in accordance with sub-paragraph
(b) above cannot properly be made, the same as the
amounts calculated as being payable by and to Pool
Members, to the Ancillary Services Provider and by
the Grid Operator in respect of the last same day
of the week in respect of which payments were
verified under sub-section 17.6 (provided that any
Pool Member who was not at that earlier time a
Pool Member, or vice versa, shall be ignored and
such adjustment made as the Pool Funds
Administrator considers appropriate).
17.9.2 In the event that payments are made in the
circumstances set out in paragraph 17.9.1(b) or (c),
the Settlement System Administrator in conjunction with
the Pool Funds Administrator shall, as soon as actual
verification can thereafter be made, make such
adjustments as may be necessary (and, where relevant,
apply interest at the Reserve Interest Rate or at such
rate as shall be set from time to time by the Executive
Committee) to account for any differences between
payments made and actual verified payment information.
17.10 Postponed Payment Date: If for any reason beyond the
reasonable control of the Pool Funds Administrator it is not
possible, after application of sub-section 17.9, for the
Pool Funds Administrator to determine by the close of
business on the Notification Date the amounts to be
incorporated in the Advice Notes, the Pool Funds
Administrator shall inform the Settlement System
Administrator, each Pool Member, the Ancillary Services
Provider and the Grid Operator that the Payment Date shall
be postponed so that it falls on the second Business Day
after the day on which the Pool Funds Administrator verifies
the information provided by the Settlement System
Administrator pursuant to sub-section 17.6 (any such Payment
Date being the "Postponed Payment Date" and a reference to a
Payment Date in this Schedule shall where applicable include
a reference to a Postponed Payment Date). On the Postponed
Payment Date, each Pool Member who took electricity on the
Settlement Day to which the Postponed Payment Date applies
and the Grid Operator shall pay interest on all such amounts
for each day from and including the originally scheduled
Payment Date to (but excluding) the Postponed Payment Date
at such rate as shall be set from time to time by the
Executive Committee or, in the absence of such rate, at the
Reserve Interest Rate and all Pool Members who supplied
electricity and the Ancillary Services Provider on such
Settlement Day shall be entitled to receive in addition to
the amounts that they are entitled to receive in respect of
such supplies, interest on such amounts for each day during
the same period and at the same rate. Interest shall accrue
from day to day and shall be calculated by the Pool Funds
Administrator on a 365 day year basis.
17.11 Further notification: Where instructed by the Executive
Committee, or where there is an award by a Court of
competent jurisdiction or an arbitrator, or a decision of
the Pool Auditor or where rendered appropriate by Clause 52,
the Pool Funds Administrator shall issue further or other
notification to the Pool Members, the Ancillary Services
Provider and the Grid Operator in accordance with the
provisions of this Section 17; and the Business Day which
falls five Business Days after the date of such notification
or earlier if practicable shall be a Payment Date.
17.12 Payment by Pool Debtor: Without prejudice to its
obligations in respect of supplies of electricity in
accordance with the provisions of the Agreement, each Pool
Debtor shall without defense, set-off or counterclaim (but
without prejudice to any other rights or remedies available
to such Pool Debtor) make payment on the relevant Payment
Date of the full amount (including United Kingdom Value
Added Tax) so notified as being payable by it for the
account of those Pool Members and, as the case may be, the
Ancillary Services Provider so notified as being entitled to
receive payments. Payment shall be made in accordance with
the terms of this Schedule. For the avoidance of doubt no
payment made shall be treated as being paid on account or
subject to any condition or reservation, notwithstanding the
provisions for the making of subsequent adjusting payments
provided in this Schedule. The provisions of sub-section
5.14 shall apply to any payment insofar as it is or may
constitute an overpayment.
17.13 Liability several: Save as otherwise expressly
provided, the liability of each Pool Member and the Grid
Operator for amounts payable by it pursuant to this Schedule
is several and no Pool Member shall be liable for the
default of any other Pool Member or the Grid Operator and
the Grid Operator shall not be liable for the default of any
Pool Member.
18. ADVICE NOTES
18.1 Despatch of Advice Notes: Not later than 17.00 hours on the
relevant Notification Date (and, if this is not practicable,
in good time (as that expression is explained in more detail
in the relevant Agreed Procedure) to enable Pool Members,
the Ancillary Services Provider and the Grid Operator to
give all necessary instructions for payments to be effected
on the relevant Payment Date) the Pool Funds Administrator
shall:
18.1.1 despatch to Pool Members, the Ancillary Services
Provider and the Grid Operator Advice Notes showing
amounts (inclusive of United Kingdom Value Added Tax)
which, according to its calculations, are to be paid by
or to each Pool Member, the Ancillary Services Provider
and the Grid Operator on each Payment Date in respect
of supplies of electricity, the provision of Ancillary
Services and sums to be paid in relation to Transport
Uplift during each Settlement Day to which that
Notification Date relates;
18.1.2 notify each Settlement Bank of amounts payable by
the Pool Members, the Ancillary Services Provider or
the Grid Operator maintaining a Settlement Account at
the relevant Settlement Bank; and
18.1.3 notify the Pool Banker of the amount to be
remitted to the Pool Clearing Account by each
Settlement Bank.
18.2Method of despatch: All Advice Notes shall be despatched by
the means established in accordance with paragraphs 3.1.1
and 3.1.5, or by such other means as the Executive Committee
may reasonably direct.
18.3Content of Advice Notes: All Advice Notes will include an
appropriate indication if payment is being made under the
provisions of paragraph 17.9.1(b), 17.9.1(c) or 17.9.2.
18.4Interest: Where interest is payable by or to any Pool
Member, the Ancillary Services Provider or the Grid Operator
pursuant to this Schedule, the Pool Funds Administrator
shall, at the same time as it despatches the Advice Notes,
despatch to each Pool Member and the Ancillary Services
Provider who is required to pay interest and to each Pool
Member, the Ancillary Services Provider and the Grid
Operator who is entitled to receive interest a statement
showing the amount of interest payable or receivable by it,
the rate of interest applicable thereto and the amount (if
any) of tax to be withheld.
19. PAYMENT PROCEDURE
19.1Instructions for payment: Each Pool Member, the Ancillary
Services Provider and the Grid Operator shall, in respect of
each Payment Date on which it is under an obligation to make
a payment under this Schedule, make such arrangements as
will ensure that such payment is credited to the relevant
Collection Account in sufficient time to allow such
Settlement Bank to make irrevocable arrangements to remit to
the Pool Clearing Account by 12.30 hours the amount payable
by that Pool Member, the Ancillary Services Provider or (as
the case may be) the Grid Operator in respect of that
Payment Date. Each Pool Member, the Ancillary Services
Provider and the Grid Operator shall ensure all remittances
by its bank to the relevant Collection Account shall be
remittances for value on the relevant Payment Date.
19.2Pool Funds Administrator's responsibilities:
19.2.1 As soon as practicable and in any event not later
than 13.00 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that all amounts required to be credited to each
Collection Account on such Payment Date have been so
credited (or if not so credited, the reason therefor
established).
19.2.2 As soon as practicable and in any event not later
than 13.30 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that all amounts credited to each Collection
Account on such Payment Date in accordance with
sub-section 19.1 have been remitted to the Pool
Clearing Account.
19.2.3 As soon as practicable and in any event not later
than 14.30 hours on each Payment Date the Pool Funds
Administrator shall take such action as is required to
ensure that it verifies the actual amounts credited to
each Collection Account and remitted to the Pool
Clearing Account on or before 13.30 hours on that
Payment Date and the aggregate of such amounts.
19.3 Non-payment: If a Pool Member or the Grid Operator becomes
aware that a payment for which it is responsible will not be
credited to the relevant Collection Account by 12.30 hours
on the relevant Payment Date, it will immediately notify the
Pool Funds Administrator, giving all details available to
the Pool Member or (as the case may be) the Grid Operator.
The Pool Funds Administrator shall, as soon as it becomes
aware that a payment will not be remitted, use its best
endeavours to establish the cause of non-payment.
19.4 Excess payments: If by 12.30 hours on any Payment Date the
Pool Funds Administrator is advised by a Settlement Bank
that the Settlement Bank will be making a payment in excess
of the amount notified to the Pool Member or the Grid
Operator pursuant to sub-section 18.1 in respect of that
Payment Date, or if the Pool Banker notifies the Pool Funds
Administrator by 13.30 hours that amounts greater than the
amounts notified to the Pool Banker pursuant to paragraph
18.1.3 have been credited to the Pool Clearing Account, the
Pool Funds Administrator shall use its best endeavours to
ascertain the nature of the excess payment, to calculate the
entitlement to such payment and to instruct the Pool Banker.
by 14.30 hours that day to credit the appropriate Settlement
Account(s) with the amount determined by the Pool Funds
Administrator as falling due to each Pool Creditor in
accordance with this Schedule provided that, where an
External Pool Member makes a payment in excess of the amount
owing by it on any Payment Date and the reason for such
overpayment is the difficulty in remitting funds on a future
Payment Date because of the mismatch of bank and public
holidays between countries, the Pool Funds Administrator
shall instruct the Pool Banker to credit the Pool Reserve
Account with the amount of the excess. Any Pool Member or
the Grid Operator who instructs its bank to make a payment
in excess of the amount owing by that Pool Member or (as the
case may be) the Grid Operator on any Payment Date shall
simultaneously with giving such instructions advise the Pool
Funds Administrator in writing of the amount of the excess
payment providing a description of what the Pool Member or
the Grid Operator considers the excess payment relates to.
19.5 Payment to Pool Creditors: The Pool Funds Administrator
shall, prior to 14.30 hours on each day, calculate the
amounts available for distribution to Pool Creditors on that
day. As soon as practicable and not later than 14.30 hours
on that day the Pool Funds Administrator shall give
irrevocable instructions to the Pool Banker to remit from
the Pool Clearing Account to the relevant Settlement
Accounts maintained by the Pool Creditors the aggregate of
amounts determined by the Pool Funds Administrator to be
available for payment to Pool Creditors and, if required, to
transfer amounts from the Pool Reserve Account or the Pool
Borrowing Account to the Pool Clearing Account or vice
versa.
19.6 Making good the Pool Reserve Account: If the Pool Reserve
Account is debited or credited in or towards clearing the
Pool Clearing Account, the Pool Funds Administrator shall as
soon as possible thereafter take the necessary steps,
including making any calculations or taking any action in
accordance with Section 21, to reverse the debit or credit
to the Pool Reserve Account and/or to make a call under a
Letter of Credit.
19.7 Prohibition on transfers: The Pool Funds Administrator shall
not at any time instruct the Pool Banker to transfer any sum
from a Pool Account to another account (not being a Pool
Account) unless that account is a Settlement Account.
19.8 Application of payments: Where payments in respect of more
than one Settlement Day are required to be settled on a
Payment Date, payments in respect of the longest outstanding
Settlement Day shall be, and be deemed to be, settled first.
19.9 Bank contacts: Upon written request of the Pool Funds
Administrator each Pool Member, the Ancillary Services
Provider and the Grid Operator shall provide the Pool Funds
Administrator in writing with the name of, and communication
details for, one or more individuals at the branch of its
Settlement Bank from which payments or payment instructions
required to be made or given by it pursuant to this Schedule
originate (the "Local Branch") who is (are) familiar with
the payment procedures set out in this Section 19 applicable
to such Pool Member, the Ancillary Services Provider or (as
the case may be) the Grid Operator, and shall promptly
advise the Pool Funds Administrator in writing of any change
of any such individual or his communication details. Each
Pool Member, the Ancillary Services Provider and the Grid
Operator hereby authorizes the Pool Funds Administrator to
contact any such individual to enquire in respect of any
Payment Date whether and in respect of what amount
instructions have been given for the remittance of any
payment required to be made by such Pool Member, the
Ancillary Services Provider or (as the case may be) the Grid
Operator under this Schedule and/or whether such payment has
been remitted or otherwise made as provided for in this
Schedule, and undertakes not to withdraw, qualify or revoke
such authority at any time. Each Pool Member, the Ancillary
Services Provider and the Grid Operator shall instruct its
Local Branch to co-operate with the Pool Funds Administrator
accordingly and to provide the Pool Funds Administrator with
all such information as is necessary to answer such
enquiries. The Pool Funds Administrator shall comply with
all reasonable security arrangements imposed by the relevant
Pool Member, the Ancillary Services Provider or the Grid
Operator or any Local Branch.
20. ALTERNATIVE PAYMENT PROCEDURE
20.1 Alternative Payment procedure: Without prejudice to other
obligations in the Agreement not substituted by the
provisions of this Section 20, the provisions set out in
this Section 20 shall apply:
20.1.1 if, on the Effective Date, it has not been
possible to establish the Notified Payments System (in
which case they shall continue to apply until the
Notified Payments System is established, or until such
other time as the Executive Committee may determine);
or
20.1.2 if, for any reason, it is not possible to apply
the procedures contemplated by the Notified Payments
System and for so long as it is not possible to apply
such procedures.
20.2 Pool Debtor to effect remittance: Each Pool Debtor shall, in
respect of each Payment Date on which it is under an
obligation to make a payment under the Agreement, give
instructions to its bank, which it undertakes not to
qualify, withdraw or revoke, to effect remittance to the
Pool Clearing Account of the amount payable by that Pool
Debtor to be received on that Payment Date.
20.3 Receipt of remittance: Any remittance must be received by
the Pool Banker in the Pool Clearing Account no later than
12.30 hours on the Payment Date unless arrangements have
been made between the Pool Banker and the relevant Pool
Member or the Grid Operator (as the case may be) which shall
be notified to the Pool Funds Administrator and which are
satisfactory to the Pool Banker such that funds will be
received for value on that Payment Date. The Pool Members
and the Grid Operator shall ensure that instructions are
giver to their banks in sufficient time to ensure that their
respective banks comply with this time limit.
20.4Method of remittance: The Parties acknowledge and agree that
when practicable to give effect to sub-section 20.3 a Pool
Debtor shall cause remittances to be effected through CHAPS
but, where not practicable or where the amount payable is
less than the minimum individual amount then processed
through CHAPS, the Pool Member and the Grid Operator shall
ensure by whatever means at their disposal that remittance
for value on the relevant Payment Date is made for credit to
the Pool Clearing Account not later than 12.30 hours.
20.5Notification of non-payment: The Parties acknowledge and
agree that if a Pool Debtor becomes aware that a payment for
which it is responsible will not be remitted to the Pool
Banker by 12.30 hours on the relevant day, and where
satisfactory arrangements, as referred to in sub-section
20.3 have not been made, it shall immediately notify the
Pool Funds Administrator, giving all details available to
that Pool Debtor.
20.6Payment default: If the Pool Funds Administrator determines
at any time after 12.30 hours on any day that a remittance
which should have been credited on that day to the Pool
Clearing Account has not been made (or that the credit has
not been received) (in whole or in part) and where
satisfactory arrangements, as referred to in sub-section
20.3, have not been made, the provisions of Section 21 shall
apply mutatis mutandis.
20.7Late payment: If, after the Pool Funds Administrator has
either debited the Pool Reserve Account or made a call under
a Letter of Credit, the Pool Banker receives the remittance
which had not been credited to the Pool Clearing Account by
12.30 hours, then such remittance shall be credited to the
Pool Reserve Account.
20.8Payments to Pool Creditors: The Pool Funds Administrator
shall, prior to 14.30 hours on each day, calculate the
amounts available for distribution to Pool Creditors on that
day (including amounts resulting from the application of sub
section 20.6). Not later than 14.30 hours on that day the
Pool Funds Administrator shall give instructions to the Pool
Banker, which it undertakes not to qualify, withdraw or
revoke, to make same day value remittances to the Pool
Creditors.
20.9Construction: Where the provisions of this Section 20 apply
references in Sections 5 and 18 and sub-section 21.1 to
"Settlement Bank" and "Collection Account" shall be
construed as references to "bank" and "Pool Clearing
Account" respectively.
21. PAYMENT DEFAULT
21.1 Payment default: Subject as provided by sub-section 21.12,
if, by 12.30 hours on a Payment Date, the Pool Funds
Administrator has been notified by a Settlement Bank or it
otherwise has reason to believe that a Settlement Bank will
not remit to the Pool Clearing Account all or any part (the
Amount in default") of any amount which has been notified by
the Pool Funds Administrator as being payable by a Pool
Debtor (the "non-paying Pool Debtor") on the relevant
Payment Date in sufficient time to ensure that such amount
can be cleared through the Pool Clearing Account not later
than the close of banking business on such Payment Date, the
Pool Funds Administrator shall act in accordance with the
following provisions (or whichever of them shall apply) in
the order in which they appear until the Pool Funds
Administrator is satisfied that the Pool Clearing Account
will clear not later than the close of business on the
relevant Payment Date:
21.1.1 if the Pool Funds Administrator has been able to
identify the nonpaying Pool Debtor in sufficient time
to apply this paragraph 21.1.1 and to the extent that
the non-paying Pool Debtor is entitled to receive
payment from any Pool Debtor pursuant to this Schedule
on the relevant Payment Date, then the Pool Funds
Administrator shall (unless it reasonably believes that
such set-off shall be unlawful) set off the amount of
such entitlement against the amount in default;
21.1.2 if the Pool Funds Administrator has been able to
identify the nonpaying Pool Debtor in sufficient time
to apply this paragraph 21.1.2, the Pool Funds
Administrator shall debit the Pool Reserve Account and
credit the Pool Clearing Account with a sum not
exceeding the amount of funds standing to the credit of
the non-paying Pool Debtor in the Pool Reserve Account;
21.1.3 subject to sub-section 21.2, the Pool Funds
Administrator shall debit the Pool Reserve Account and
credit the Pool Clearing Account with a sum not
exceeding the amount of funds then standing to the
credit of the Pool Reserve Account to the extent that
they represent Security Cover provided in accordance
with paragraph 15.1.2, the transfer of such amount as
is not attributable to the funds standing to the credit
of the non-paying Pool Debtor being deemed to give rise
to a series of loans to the non-paying Pool Debtor by
each Providing Member and the Grid Operator rateably
according to its share of the funds standing to the
credit of the Pool Reserve Account to the extent that
they represent Security Cover provided in accordance
with paragraph 15.1.2, at the time immediately prior to
the transfer, such loans to be repayable on demand and
to carry interest at the Reserve Interest Rate and in
any case repayable not later than two Business Days
after they arise after which, to the extent that any
such loans remain outstanding, such loans shall carry
interest at the Default Interest Rate (which interest
shall be credited to the Pool Ledger Account of the
relevant Providing Member and (where applicable) the
Grid Operator). Each Providing Member and the Grid
Operator hereby irrevocably authorizes the Pool Funds
Administrator to advance, collect in and enforce
payment of such loans for its account and on its behalf
and each Pool Member and the Grid Operator hereby
irrevocably consents to the making of such loans to the
extent that such Pool Member or (as the case may be)
the Grid Operator has a share in the Pool Reserve
Account;
21.1.4 if the Pool Funds Administrator has been able to
identify the nonpaying Pool Debtor in sufficient time
to apply this paragraph 21.1.4 and provided that the
Pool Funds Administrator is satisfied that the proceeds
of a call under the Letter of Credit will be paid into
the Pool Clearing Account in sufficient time to ensure
that it will clear not later than the close of business
on the relevant Payment Date, the Pool Funds
Administrator shall make a call under the Letter of
Credit supplied by the non-paying Pool Debtor in a sum
not exceeding the available amount of such Letter of
Credit, and the Pool Funds Administrator shall cause
the proceeds of such call to be paid into the Pool
Clearing Account;
21.1.5 subject to sub-section 21.2 and provided that the
Pool Funds Administrator is satisfied that the proceeds
of a call under a Letter of Credit will be paid into
the Pool Clearing Account in sufficient time to ensure
that it will clear not later than the close of business
on the relevant Payment Date, the Pool Funds
Administrator shall make a call under one or more
Letters of Credit supplied by Pool Members or the Grid
Operator (other than the non-paying Pool Debtor) in a
total sum not exceeding the total available amount of
all such Letters of Credit to the extent that such
amount represents Security Cover provided in accordance
with paragraph 15.1.2, and the Pool Funds Administrator
shall cause the proceeds of such call or calls to be
paid into the Pool Clearing Account. The transfer of
such proceeds into the Pool Clearing Account shall be
deemed to give rise to a series of loans to the non
paying Pool Debtor by each Providing Member or the Grid
Operator whose Letter of Credit was called rateably
according to the amounts called under their respective
Letter of Credit, such loans to be repayable on demand
and to carry interest at the Reserve Interest Rate and
in any case repayable not later than two Business Days
after they arise after which, to the extent that any
such loans remain outstanding, such loans shall carry
interest at the Default Interest Rate (which interest
shall be credited to the Pool Ledger Account of the
relevant Providing Member and (where applicable) the
Grid Operator). Each Providing Member and the Grid
Operator hereby irrevocably authorises the Pool Funds
Administrator to advance, collect in and enforce
payment of such loans for its account and on its behalf
and each Pool Member and the Grid Operator hereby
irrevocably consents to the making of such loans to the
extent that such Pool Member or (as the case may be)
the Grid Operator has a share in the Pool Reserve
Account; and
21.1.6 if and to the extent that, notwithstanding
application of the foregoing measures, it is not
possible to clear the Pool Clearing Account by any of
the foregoing means, the Pool Funds Administrator shall
reduce payments to all Pool Creditors in proportion to
the amounts payable to them on the relevant Payment
Date by an aggregate amount equal to the amount
necessary to clear the Pool Clearing Account and shall
account for such reduction in the Pool Ledger Accounts
as amounts due and owing by the non-paying Pool Debtor
to each Pool Creditor whose payments were reduced.
21.2 Amount in default likely to be remedied: The Pool Funds
Administrator shall not apply paragraph 21.1.3 or 21.1.5
unless it considers in good faith that the amount in default
is likely to be remedied by the non-paying Pool Debtor no
later than the next Business Day and in such a case the Pool
Funds Administrator shall only apply paragraphs 21.1.2 and
21.1.4 to the extent of any amounts provided by way of
Security Cover pursuant to paragraph 15.1.2.
21.3 Loans part of Pool Reserve Assets: Any loans arising
pursuant to paragraph 21.1.3 or 21.1.5 shall be deemed to
constitute part of the Pool Reserve Assets and all
repayments of such loans, together with interest thereon,
shall be paid into the Pool Reserve Account for the account
of each Providing Member or the Grid Operator who is deemed
to have made such loan.
21.4 Repayment of loans: If any loans to a non-paying Pool Debtor
arising pursuant to paragraph 21.1.3 or 21.1.5 shall not
have been repaid in full (together with interest at the rate
or rates specified therein) by 12.00 hours on the next
Business Day after such loan is deemed to have arisen, the
Pool Funds Administrator shall make a call under the Letter
of Credit (if any) which shall have been supplied by the
non-paying Pool Debtor and which remains outstanding in an
amount not exceeding the amount necessary to repay such
loans and all accrued interest in full and, if the proceeds
of any Letter of Credit are insufficient to repay all
outstanding loans to the relevant non-paying Pool Debtor,
such proceeds shall be applied towards repayment of each
such outstanding loan rateably.
21.5 Reduction of payments to Pool Creditors: If, after the date
that any loans to a nonpaying Pool Debtor arise pursuant to
paragraph 21.1.3 or 21.1.5, the Pool Funds Administrator
shall reasonably be of the opinion that the non-paying -Pool
Debtor will not repay forthwith all of such loans and all
accrued interest in full or the loans have not been repaid
with all interest within two Business Days after they arose
(whichever occurs first), the Pool Funds Administrator shall
reduce payments to all Pool Creditors in proportion to the
amounts payable to them on the Payment Date to which the
default relates and any succeeding Payment Dates as may be
required by an aggregate amount necessary to restore the
balance in the Pool Reserve Account to the sum for the time
being required under this Schedule to be deposited by the
Pool Members and the Grid Operator other than the non-paying
Pool Debtor, to the intent that all loans arising under
paragraphs 21.1.3 and 21.1.5 and remaining undischarged
after application of the non-paying Pool Debtor's Letter of
Credit are discharged in full together with interest thereon
at the Reserve Interest Rate.
21.6 Obligation to make calls: If and whenever the Pool Funds
Administrator has not applied the provisions of paragraph
21.1.4, and has reduced payments to Pool Creditors in
accordance with paragraph 21.1.6, it shall, on the relevant
Payment Date or so soon thereafter as the non-paying Pool
Debtor has been identified (but, in any event, not later
than the close of business on the Business Day following
such Payment Date) make a call under the Letter of Credit
supplied by the non-paying Pool Debtor in a sum sufficient
to cover the reduction made under paragraph 21.1.6 (but not
exceeding the available amount of all such Letters of
Credit) and the Pool Funds Administrator shall cause the
proceeds of such call to be paid forthwith into the Pool
Reserve Account. On the next Business Day following receipt
of such proceeds, the Pool Funds Administrator shall pay
such amounts as have been credited to the Pool Reserve
Account to the Pool Creditors whose payments were reduced in
full or (as the case may be) in proportion to their
respective entitlements including interest on such amounts
at the Reserve Interest Rate.
21.7 Indemnification by non-paying Pool Debtor: The non-paying
Pool Debtor shall indemnify and keep indemnified each Pool
Member and the Grid Operator whose Letter of Credit is
called under paragraph 21.1.5 and/or who is deemed to have
made loans under paragraph 21.1.3 or 21.1.5 on demand
against all costs, expenses and losses (including the costs
of management time) suffered or incurred by such Pool Member
or (as the case may be) the Grid Operator arising from its
Letter of Credit being so called (including the costs of
reinstating the same) or such loans being deemed to have
been made to the extent that such Pool Member or (as the
case may be) the Grid Operator is not compensated under this
Section 21. This indemnity shall be in addition to and
without prejudice to the liability of the non-paying Pool
Debtor to repay the loan, together with accrued interest,
which arises pursuant to paragraph 21.1.5. The Pool
Creditors, in proportion to the amounts payable to them on
the Payment Date to which a default relates in respect of
which the Pool Funds Administrator has operated sub-section
21.5, and any succeeding Payment Dates as may be required,
shall indemnify and keep indemnified each Pool Member as is
referred to in the earlier provisions of this sub-section
21.7 and the Grid Operator to the extent of any failure by
the non-paying Pool Debtor to fulfill its obligations under
this sub-section 21.7.
21.8 Notification to Pool Creditors: The Pool Funds Administrator
shall use all reasonable endeavours promptly to notify the
relevant Pool Creditors whenever it makes any such reduction
as is referred to in paragraph 21.1.6.
21.9 Default Interest: Save as otherwise provided in the
Agreement (including where an express rate of interest is
provided), if any amount payable by any Pool Debtor pursuant
to this Schedule is not given value for the due date by
close of banking business on the due date the Pool Debtor
shall on written demand by the Pool Funds Administrator pay
to the Pool Funds Administrator, for the account of the
person or persons entitled to receive the amount in default,
interest on such amount from the due date up to the day of
actual receipt by the Pool Funds Administrator (after as
well as before judgment) at the Default Interest Rate.
21.10 Application of payments: Any amount received by the
Pool Funds Administrator from a non-paying Pool Debtor for
the credit of any Pool Account shall be applied by the Pool
Funds Administrator in or towards payment of amounts payable
by the non-paying Pool Debtor to Pool Creditors on each
successive Payment Date in respect of which there is an
outstanding default (with the longest outstanding default
being settled first).
21.11 Clearing of Pool Clearing Account: All amounts standing
to the credit of the Pool Clearing Account at the close of
business on any Payment Date shall be transferred to the
Pool Reserve Account so that the balance in the Pool
Clearing Account shall at the end of such day be nil.
21.12 Credit Facility: If and for so long as the Credit
Facility remains unconditionally available, the provisions
of this Section 21 shall apply with the modifications
provided by Section 25.
22. CONFIRMATION NOTICES
22.1 Despatch of Confirmation Notices: Within two Business Days
after each Payment Date the Pool Funds Administrator shall
issue a Confirmation Notice to each Pool Member, the
Ancillary Services Provider and the Grid Operator in respect
of the corresponding Payment Date setting out the
information required in subsections 22.2, 22.3 and 22.4.
22.2 Information - taking of electricity: The information
required on a Confirmation Notice in respect of each Pool
Member taking electricity on each Settlement Day is as
follows:-
22.2.1 the Pool Member's identification number;
22.2.2 the Pool Member's name;
22.2.3 the total amount (inclusive of United Kingdom
Value Added Tax) received in the Pool Clearing Account
on the relevant Payment Date by the Pool Funds
Administrator in respect of electricity taken by such
Pool Member during the Settlement Day and Ancillary
Services attributable thereto;
22.2.4 the amount received in the Pool Clearing Account
on the relevant Payment Date by the Pool Funds
Administrator in respect of electricity taken by such
Pool Member during the Settlement Day and Ancillary
Services attributable thereto, exclusive of United
Kingdom Value Added Tax; and
22.2.5 the amount of United Kingdom Value Added Tax
received in the Pool Clearing Account on the Payment
Day by the Pool Funds Administrator in respect of
electricity taken by such Pool Member during the
Settlement Day and Ancillary Services attributable
thereto.
22.3 Information - supplies of electricity: The information
required on a Confirmation Notice in respect of each Pool
Member supplying electricity on each Settlement Day shall
include:
22.3.1 the Pool Member's identification number;
22.3.2 the Pool Member's name;
22.3.3 the Settlement Run identification number;
22.3.4 the total amount (inclusive of United Kingdom
Value Added Tax) paid out of the Pool Clearing Account
on the relevant Payment Date by the Pool Funds
Administrator in respect of electricity supplied by
such Pool Member during the Settlement Day;
22.3.5 the amount paid out and the date on which such
amount is paid out of the Pool Clearing Account on the
relevant Payment Date by the Pool Funds Administrator
in respect of electricity supplied by such Pool Member
during the Settlement Day exclusive of United Kingdom
Value Added Tax and the Settlement Run identification
number; and
22.3.6 the amount of United Kingdom Value Added Tax paid
out of the Pool Clearing Account on the relevant
Payment Date by the Pool Funds Administrator in respect
of electricity supplied by such Pool Member during the
Settlement Day.
22.4 Information - Ancillary Services Provider and Grid Operator:
The information required on a Confirmation Notice in respect
of the Ancillary Services Provider and the Grid Operator is
as follows:
22.4.1 the total amount receivable by the Ancillary
Services Provider for the provision of Ancillary
Services and the total amount payable by the Grid
Operator in relation to Transport Uplift (in each case
exclusive of United Kingdom Value Added Tax) during the
Settlement Day;
22.4.2 the total amount receivable by the Ancillary
Services Provider for the provision of Ancillary
Services and the total amount payable by the Grid
Operator in relation to Transport Uplift (in each case
inclusive of United Kingdom Value Added Tax) during the
Settlement Day; and
22.4.3 the total amount of United Kingdom Value Added Tax
receivable by the Ancillary Services Provider for the
provision of Ancillary Services and the total amount
payable by the Grid Operator in relation to Transport
Uplift during the Settlement Day.
22.5 Interest: Where interest has been paid to any Pool Member,
the Ancillary Services Provider or the Grid Operator, the
Pool Funds Administrator shall promptly after such payment
provide to each Pool Member, the Ancillary Services Provider
or the Grid Operator (as the case may be) a statement
showing the amount of interest paid or received, the rate of
interest applicable thereto and the amount (if any) of tax
withheld. If applicable, the Pool Funds Administrator shall
provide to the relevant Pool Member, the Ancillary Services
Provider or the Grid Operator an appropriate tax deduction
certificate in respect of any withholding tax.
23. PAYMENT ERRORS
23.1 Overpayments: If for any reason whatsoever (including the
negligence of the Pool Banker or the Pool Funds
Administrator) a Pool Creditor receives on any Payment Date
a payment in excess of the amount disclosed in the Pool
Ledger Account as calculated as being payable to it (an
"overpayment") (including but not limited to the proceeds of
any loan made or deemed to be made in accordance with
Section 21 or Section 25 to any non-paying Pool Debtor which
becomes insolvent before such advance is repaid) the
provisions of subsection 5.15 apply, and the Pool Creditor
shall forthwith notify the Pool Funds Administrator of the
amount of the overpayment and shall forthwith pay the
overpayment into a Pool Account specified by the Pool, Funds
Administrator
23.2 Repayment of overpayment (1): If prior to a Pool Creditor
notifying the Pool Funds Administrator of the overpayment,
the Pool Funds Administrator receives notice (from the Pool
Banker or otherwise) of the overpayment, the Pool Funds
Administrator shall forthwith require (by written notice)
that the recipient of the overpayment pay the overpayment to
a Pool Account specified by the Pool Funds Administrator and
any Pool Creditor who receives such notice shall forthwith
pay the amount to an account specified by the Pool Funds
Administrator. If the overpayment is repaid within two
Business Days of receiving the notice, the overpayment (or
any part not paid) shall bear interest at the Reserve
Interest Rate or at such rate as shall be set from time to
time by the Executive Committee from the date the
overpayment was received up to the date that value is given
in a Pool Account by the Pool Funds Administrator (after as
well as before judgment). Any overpayment (or part thereof)
not repaid within two Business Days after demand therefor in
accordance with this Section 23 shall bear interest at the
Default Interest Rate from the expiry of that period and
shall be recoverable in accordance with Section 24. The Pool
Funds Administrator shall account to those entitled to
payment by reason of an overpayment.
23.3 Repayment of overpayment (2): Upon receipt of the
overpayment (including any interest) the Pool Funds
Administrator shall (forthwith upon entitlement to it being
ascertained) pay the amount received to the Pool Member, the
Ancillary Services Provider or the Grid Operator who should
have received the payment on the Payment Date.
23.4 Underpayments: If for any reason whatsoever (including the
negligence of the Pool Banker or the Pool Funds
Administrator) a Pool Creditor does not receive on the
relevant Payment Date the full amount disclosed as owing to
it pursuant to the Pool Ledger Account (an "underpayment")
that Pool Creditor shall forthwith notify the Pool Funds
Administrator of the amount of the underpayment, and the
Pool Funds Administrator after consultation with the Pool
Banker shall use all reasonable endeavours to identify such
person as shall have received any corresponding overpayment
and promptly to correct the underpayment. If, by reason of
negligence, the Pool Funds Administrator holds . or has
under its control amounts which it ought properly to have
paid to Pool Members, the Ancillary Services Provider or the
Grid Operator, such Pool Members, the Ancillary Services
Provider or the Grid Operator shall be entitled to interest
on such amounts at the Default Interest Rate and for such
period as the Pool Funds Administrator improperly holds or
has such amounts under its control.
24. ENFORCEMENT OF CLAIMS
24.1 Notification of amount in default: Without prejudice to the
provisions of Section 21, if a Pool Member or the Grid
Operator shall fail to pay any amount payable pursuant to
this Schedule on the due date, the Pool Funds Administrator
shall notify the Director, the Executive Committee and each
Pool Creditor to whom the amount in default is owed pursuant
to this Agreement of the name of the non-paying Pool Debtor,
the aggregate amount in default and the amount owed to each
Pool Creditor.
24.2 Duties of Pool Funds Administrator: Except as otherwise
expressly provided in this Schedule, the Pool Funds
Administrator shall not be required to ascertain or enquire
as to the performance or observance by any Pool Member, the
Ancillary Services Provider or the Grid Operator of its
obligations under the Agreement and shall have no duty to
inform the Executive Committee or any Pool Member, the
Ancillary Services Provider or the Grid Operator of any
default, other than a failure to pay as may come to its
attention.
24.3 Notice before action: Each Pool Creditor shall give notice
to the Pool Funds Administrator before instituting any
action or proceedings in any court to enforce payments due
to it pursuant to this Schedule. Upon receipt of any notice
under this sub-section 24.3, the Pool Funds Administrator
will as soon as practicable notify the Executive Committee,
all Pool Members, the Settlement System Administrator, the
Ancillary Services Provider, the Grid Operator and the
Director.
24.4 Proceedings to Recover Overdue Amounts: Without prejudice to
the right of any Pool Member or the Grid Operator to bring
such proceedings as it sees fit in connection with matters
related to the Agreement, the Pool Funds Administrator
shall, if instructed to do so by the Executive Committee,
bring proceedings against a Pool Member or the Grid Operator
(on behalf of those Pool Members and/or (as the case may be)
the Grid Operator who have (has) indicated their (its)
willingness to the Executive Committee for the Pool Funds
Administrator first so to act) for the recovery of any
amounts due by that Pool Member or (as the case may be) the
Grid Operator pursuant to this Schedule so long as the Pool
Funds Administrator has first reached agreement with the
Executive Committee, those Pool Members and/or (as the case
may be) the Grid Operator as to appropriate remuneration, is
indemnified to its reasonable satisfaction or, if it so
requires, provided that it shall have received such security
as it may reasonably request against all costs, claims,
expenses (including legal fees) and liabilities which it
will or may sustain or incur in complying with such
instructions. Save as provided in the foregoing provisions
of this sub-section 24.4, the Pool Funds Administrator shall
not be obliged to bring any such proceedings.
25. CREDIT FACILITY: PAYMENT DEFAULTS
25.1 Purpose of Credit Facility: It is acknowledged that the
Credit Facility provides an alternative to the Security
Cover referred to in paragraph 15.1.2 and the Pool Funds
Administrator will use the Credit Facility to cover banking
error and payment error and to minimize reductions of
payments to Pool Creditors unless it considers in good faith
that an amount in default is not likely to be remedied by
the non-paying Pool Debtor no later than the next Business
Day.
25.2 Modification of other provisions of this Schedule: If and so
long as the Credit Facility is unconditionally available to
the Pool Funds Administrator (whether or not there remains
any amount undrawn), paragraphs 15.1.2, 21.1.3 and 21.1.5
shall be of no effect and the remaining provisions of this
Schedule shall be implemented on the basis that the
following sub-sections apply.
25.3 Payment default: The Pool Funds Administrator shall operate
the Credit Facility on the following basis:
25.3.1 the Credit Facility may be drawn down by the Pool
Funds Administrator if, by 12.30 hours on any Payment
Date, there is an amount in default unless the Pool
Funds Administrator considers in good faith that the
amount in default is not likely to be remedied by the
non-paying Pool Debtor no later than the next Business
Day;
25.3.2 if paragraph 25.3.1 applies such that the Credit
Facility may be drawn down, the Pool Funds
Administrator will first act in accordance with
paragraph 21.1.1, will then draw on the Credit Facility
for an amount not exceeding the available amount under
the Credit Facility (after allowing for any repayment
to be made to the Facility Bank under subsection 25 6)
and, if it is not possible to clear the Pool Clearing
Account by either or both of those means, it will then
act in accordance with paragraph 21.1.6; and
25.3.3 if paragraph 25.3.1 does not apply, then the Pool
Funds Administrator will act in accordance first with
paragraph 21.1.1, then with paragraph 21.1.2, then with
paragraph 21.1.4 and only then with paragraph 21.1.6.
25.4 Amounts in default: Each non-paying Pool Debtor will be
responsible in relation to any amount in default in
accordance with the following paragraphs:
25.4.1 each non-paying Pool Debtor will be responsible
for the repayment of all amounts of principal drawn
down under the Credit Facility in respect of any
amount in default relating to that Pool Debtor as if
the Pool Funds Administrator had made a loan to such
Pool Debtor of the relevant amount and the amounts so
payable are to be paid to, or otherwise made available
for credit to, the Pool Clearing Account as soon as
possible, but in any event no later than two Business
Days after the relevant Payment Date;
25.4.2 each non-paying Pool Debtor will be responsible
also for interest (determined in accordance with
paragraph 25.4.4) on all amounts of principal drawn
down under the Credit Facility in respect of any
amount in default relating to that Pool Debtor as if
the Pool Funds Administrator had made a loan to such
Pool Debtor of the relevant amount and the amount so
payable by way of interest is to be paid to, or
otherwise made available for credit to, the Pool
Clearing Account by no later than the day notified by
the Pool Funds Administrator to such Pool Debtor for
payment thereof (being the date which is 2 Business
Days prior to the date on which interest is payable
under the Credit Facility by the Pool Funds
Administrator to the Facility Bank for the month in
which the principal amount in question was
outstanding);
25.4.3 each non-paying Pool Debtor will further be
responsible for its proportionate share (determined in
accordance with paragraph 25.4.5) of any additional
sum payable to the Facility Bank pursuant to the terms
of the Credit Facility as if the Pool Funds
Administrator had made a loan to such Pool Debtor of
the relevant amount and the amount so payable is to be
paid to, or otherwise made available for credit to,
the Pool Clearing Account forthwith on notification
thereof by the Pool Funds Administrator to the Pool
Debtor in question;
25.4.4 for the purposes of paragraph 25.4.2, interest is
to be calculated using the effective daily rate of
interest reasonably determined by the Pool Funds
Administrator on the basis of the aggregate interest
(including any compound interest) payable under the
Credit Facility in relation to any particular day; and
25.4.5 for the purposes of paragraph 25.4.3, the
proportionate share for a particular non-paying Pool
Debtor is the amount (if any) which the Pool Funds
Administrator reasonably determines (after consultation
with the Facility Bank) as being the amount of any
additional sum payable in accordance with the terms of
the Credit Facility attributable to drawings under the
Credit Facility made in respect of that Pool Debtor.
25.5 Application of payments: On the Relevant Date the Pool Funds
Administrator shall, if the amount in question has not been
received in full from the nonpaying Pool Debtor:
25.5.1 first debit the Pool Reserve Account and credit
the Pool Clearing Account with a sum not exceeding the
amount of funds (if any) standing to the credit of the
non-paying Pool Debtor in the Pool Reserve Account;
25.5.2 if that sum is insufficient to repay in full the
amount in question, the Pool Funds Administrator shall
call the Letter of Credit (if any) provided by the
non-paying Pool Debtor (for an amount not exceeding the
available amount) and pay or cause the proceeds thereof
to be paid into the Pool Clearing Account; and
25.5.3 if the amount credited to the Pool Clearing
Account after following the foregoing procedure is
insufficient, reduce payments to all Pool Creditors in
proportion to the amounts payable to them on the
Payment Date to which the default relates,
so that, in any case, the Pool Funds Administrator has
available to it on the Pool Clearing Account sufficient
funds to comply with paragraph 25.6. For the purposes of
this paragraph, the "Relevant Date" is whichever of the
following is applicable:
(a) in relation to any principal amount for which a
non-paying Pool Debtor is responsible under paragraph
25.4.1, the last date specified for payment under
paragraph 25.4.1;
(b) in relation to any principal amount as referred to in
sub-paragraph (a), the first date (if earlier than the
date referred to in sub-paragraph (a)) on which the
Pool Funds Administrator is reasonably of the opinion
that the non-paying Pool Debtor will not repay
forthwith all of the amounts of principal in question;
(c) in relation to payment of interest under paragraph
25.4.2, the last date for payment thereof; and
(d) in relation to an additional amount under paragraph
25.4.3 the last date for payment of this amount.
25.6 Payments to Facility Bank: To the extent of any payment by
the non-paying Pool Debtor and/or if any of the
circumstances described in sub-section 25.5 occur, the Pool
Funds Administrator will forthwith repay to the Facility
Bank by credit to the Pool Borrowing Account, if applicable,
an amount equal, in the former case, to the amount so paid
and, in the latter case, to the amount which should have
been paid by the non-paying Pool Debtor.
25.7 Reduction in payments to Pool Creditors: A reduction in
payments as contemplated by paragraph 25.5.3 will also apply
in the event of any amounts drawn down under the Credit
Facility being required to be repaid in accordance with the
terms of the Credit Facility and the Pool Funds
Administrator shall account for such reduction in the Pool
Ledger Accounts as amounts due and owing by the non-paying
Pool Debtor to each Pool Creditor whose payments were
reduced.
25.8 Enforcement of Claims and other provisions: Sub-sections
21.7, 21.8, 21.9, 21.10 and Section 24 shall have effect in
relation to amounts due from a non-paying Pool Debtor which
arise under the foregoing sub-sections.
25.9 Unavailability of Credit Facility: If at any time the Credit
Facility ceases to be unconditionally available and
paragraph 15.1.2 shall thereupon have become effective, the
whole or any part of the Security Cover thereby required to
be provided by each Providing Member or the Grid Operator
may be provided by a credit to the Pool Reserve Account,
unless otherwise determined by the Executive Committee. The
Executive Committee shall from time to time assess (in
consultation with the Pool Funds Administrator) and
determine the amount of Security Cover which would be
required pursuant to paragraph 15.1.2 as if that paragraph
were in effect and such assessment and determination shall
apply for the purposes of paragraph 16.2.2 if paragraph
15.1.2 becomes applicable, pending any revised assessment by
the Executive Committee.
25.10 Interpretation: Terms and expressions used in this
Section 25 shall, unless the context otherwise requires,
have the same meanings as are given to them for the purposes
of Clause 21.
26. CREDIT FACILITY: GENERAL
26.1 Notifications to the Executive Committee: The Pool Funds
Administrator shall notify the Executive Committee
forthwith:
26.1.1 on it becoming aware of any circumstances which
might lead to an event under the Credit Facility as a
result of which the Credit Facility might cease to be
available; and
26.1.2 upon receipt of a written demand from the Facility
Bank pursuant to the terms of the Credit Facility as a
result of which the Facility ceases to be available;
and
26.1.3 in the event that the Facility Bank requires any
additional amount to be paid under the Credit Facility
by reason of any increased costs to the Facility Bank
or any changes in circumstances.
26.2 Notifications to Providing Members and the Grid Operator:
The Pool Funds Administrator shall notify the Providing
Members and the Grid Operator as soon as reasonably
practicable after receipt by it of a notice from the
Facility Bank that an additional amount will or may be
payable by the Pool Funds Administrator to the Facility Bank
under the terms of the Credit Facility.
26.3 Amendment and Cancellation:
26.3.1 The Pool Funds Administrator shall not:
(a) amend or supplement, or agree to any amendment or
supplement to, the terms of the Credit Facility
without the approval of the Executive Committee;
or
(b) cancel the Credit Facility unless either the
approval of the Executive Committee has been
obtained or paragraph 26.3.2 applies.
26.3.2 The Pool Funds Administrator shall cancel the
Credit Facility in full at any time if a resolution to
that effect is passed (on a simple majority vote) by
the Providing Members in separate general meeting and
the Grid Operator consents or if all Providing Members
and the Grid Operator have requested such cancellation.
26.4 Extension and Renewal: The Pool Funds Administrator shall
negotiate with the Facility Bank an extension or renewal of
the Credit Facility on the instructions of the Executive
Committee and, in the absence of such instructions, shall
begin negotiations with the Facility Bank no later than ten
weeks before the Credit Facility is due to terminate in
accordance with its terms, with a view to the extension or
renewal of the Credit Facility on substantially the same
terms for a further year and, in any event, to keep the
Executive Committee informed on a timely basis of the
progress of any such negotiations. The Pool Funds
Administrator shall, however, act only with the approval and
consent of the Executive Committee in agreeing any extension
or renewal of the Credit Facility and the Executive
Committee shall be responsible for deciding whether or not
to renew or extend the Credit Facility and, if so, on what
terms and for what period.
26.5 Fees not attributable to a particular Providing Member or
the Grid Operator: Any fees (and any additional amounts
payable under the terms of the Credit Facility which are not
the responsibility of any particular Providing Member or the
Grid Operator) charged under the Credit Facility to the Pool
Funds Administrator shall be recharged to the Providing
Members, in accordance with their respective Providing
Member Contributory Shares (to be calculated on the basis of
those current on the date on which the relevant fee (or the
relevant portion thereof) or additional amount is payable by
the Pool Funds Administrator under the Credit Facility and
having deducted the relevant Credit Facility Contribution).
26.6 Fees attributable to the Grid Operator: The Grid Operator
shall, from the date on which it first becomes a Pool Debtor
and for the period thereafter during which the Credit
Facility is in place, pay each year to the Pool Funds
Administrator the Credit Facility Contribution on a date
agreed from time to time by the Grid Operator and the Pool
Funds Administrator (and, failing such agreement, on 31st
January in each year). If the Credit Facility is available
for part of a year only, the Credit Facility Contribution
shall be adjusted accordingly on a pro rata basis.
26.7 No additional charge: The Pool Funds Administrator shall not
make any additional charge for arranging, participating in
or administering the Credit Facility.
<PAGE>
ANNEX 1
Form of Advice Note
ADVICE NOTE
DATE: Entergy Pool Funds
Administration Ltd
Room 157.2
185 Park Street
London SE1 9DY
TELEPHONE: (0171) 620-9456
FAX NO: (0171) 401 2799
NAME:
ADDRESS:
ADVICE NOTE:
PAYMENT DATE:
FAX NO:
THIS IS NOT A TAX INVOICE
Advice Note issued in accordance with the Pooling and Settlement
Agreement for the Electricity Industry in England and Wales dated
30th March 1990 as amended, varied or supplemented from time to
time.
SETTLEMENT RUN/ DESCRIPTION AMOUNT AMOUNT
DATE TYPE PAYABLE PAYABLE
EXC VAT INC VAT
DO NOT NET YOUR PAYABLES TO YOUR RECEIVABLES
A wholly owned subsidiary of The National Grid Company plc. Regd.
in England
No. 2444187 VAT No 547 8630 11
<PAGE>
ANNEX 2
Form of Confirmation Notice
CONFIRMATION NOTICE
DATE: Entergy Pool Funds
Administration Limited
Room 157.2
185 Park Street
London SE1 9DY
TELEPHONE:
FAX NO:
TELEX:
ADDRESS:
CONFIRMATION NO:
PAYMENT DATE:
FAX NO:
Confirmation Note issued in accordance with the Pooling and
Settlement Agreement for the Electricity Industry in England and
Wales dated 30th March 1990 as amended, varied or supplemented
from time to time.
THIS IS A TAX INVOICE
PAYMEN SETTLEMEN DESCRIPTI AMOUNT VAT VAT AMOUNT
T T ON PAID RATE PAID PAID
DATE DATE EXC VAT INC VAT
A wholly owned subsidiary of The National Grid Company plc. Regd.
in England No
2444187 VAT No 547 8630 11
<PAGE>
ANNEX 3
Part 1
Form of Settlement Account Designation
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
and
Barclays Bank PLC
54 Lombard Street Branch
as Pool Banker
Date:
Settlement Account Designation
1. [Insert name of Pool Member/Ancillary Service Provider/Grid
Operator] hereby designates the following account as its
Settlement Account to which you are instructed to remit all
amounts which are payable to us through the Pool Clearing
Account in accordance with Schedule 11 to the Pooling and
Settlement Agreement for the Electricity Industry in England
and Wales dated 30th March, 1990, as amended, varied or
supplemented from time to time (the "Agreement") .
Name of Branch Sorting Name of Account No.
Bank Address Code Account
2. We hereby designate the following account as our Settlement
Account from which all payments due from us in accordance
with Schedule 11 to the Agreement will be remitted.
Name of Branch Sorting Name of Account No.
Bank Address Code Account
Signed by ...................................................
Position .......................................................
For and on behalf of [Name of Pool Member/Ancillary Services
Provider/Grid Operator]
<PAGE>
ANNEX 3
Part 2
Form of Change of Settlement Account
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
and
Barclays Bank PLC
54 Lombard Street Branch
as Pool Banker
In accordance with sub-section 4.6 of Schedule 11 to the Pooling
and Settlement Agreement [insert name] hereby gives you notice
that, with effect from [insert date] (or 10 Business Days after
you receive this notice, whichever is later), our new Settlement
Account [from which payments due from the undersigned/to which
payments due to the undersigned]* will be paid shall be:
Name of Branch Sorting Name of Account No.
Bank Address Code Account
Yours sincerely,
[ ]
for and on behalf of
[Name of Pool Member/Ancillary Services Provider/Grid Operator]
*Please complete as appropriate
<PAGE>
ANNEX 4
Form of Letter of Credit
To: Energy Pool Funds Administration Limited
as Pool Funds Administrator
At the request of [Providing Member] [the Grid Operator] we have
opened in your favour our irrevocable Letter of Credit Number (
) for pounds [ ] (amount in words).
This Letter of Credit is available against your sight drafts
accompanied by a signed statement either that the applicant has
failed to pay to you the amount you are claiming under the terms
of the Pooling and Settlement Agreement for the electricity
industry in England and Wales dated 30th March, 1990 (the
"Agreement") or that the claim is being made under sub-section
15.5 or Section 21 of Schedule 11 to the Agreement. Payments
under this Letter of Credit shall be effected immediately to
[insert relevant account details].
Partial drawings are allowed hereunder.
Claims under this Letter of Credit shall be made at the counters
of [insert details of the branch of the issuing bank].
This Letter of Credit expires on [ ].
We waive any right to set off against any amount payable
hereunder any claims we may have against you.
Any demand hereunder must comply with all the above requirements
[and signatures thereon must be confirmed by your Bankers].
This Letter of Credit is subject to Uniform customs and practice
for Documentary Credits (1983 Revision) International Chamber of
Commerce.
We undertake that drafts and documents drawn under and in strict
conformity with the terms of this credit will be honoured upon
presentation.
This Letter of Credit shall be governed by and construed in
accordance with English law,
For and on behalf of [ ] Bank [Plc]".
5. Schedule 15
By the deletion from paragraph 3.2.1 and sub-section 4.1 of
Schedule 15 of the word "or" when it appears after the
expression "Pool Member" and the substitution therefor of a
comma, and by the insertion, in such paragraph 3.2.1 and
such sub-section 4.1 of Schedule 15, of the words "or the
Grid Operator" immediately after the expression "Ancillary
Services Provider", wherever it occurs in that paragraph and
that sub-section.
6. Schedule 18
By the deletion of the word "Suppliers" from Section 5 of
Schedule 18 and the substitution therefor of the word "Grid
Operator".
7. Schedule 21
(a) By the deletion of the second sentence of paragraph
17.3 of Schedule 21.
(b) By the deletion from paragraph 21.2 of Schedule 21 of
the word "and" after the semi-colon at the end of
sub-paragraph (v), by the deletion from such paragraph
21.2 of Schedule 21 of the full stop at the end of
sub-paragraph (vi) and the substitution therefor of a
semi-colon and the word "and", and by the insertion of
the following new sub-paragraph immediately after
sub-paragraph (vi) :
"(vii) the Grid Operator acting through any
reasonably nominated employees, agents or
contractors.".
<PAGE>
SIGNATORIES
THE GENERATORS
Anglian Power Generators Limited
Address: Kings Lynn Power Station, Willows Business Park,
Saddlebow, Kings Lynn, Norfolk PE34 3RD
Facsimile no: 01553 667166
Attention: R. Rigg
By:
Barking Power Limited
Address: Barking Power Station, Chequers Lane, Dagenham, Essex
RM9 6PF
Facsimile no: 0181984 5174
Attention: Dr S.J. Mancey
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity
Generation
By:
CeltPower Limited
Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no: 01686 629887
Attention: B. Holst
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: Mr. G. Caswell
By:
Corby Power Limited
Address: Mitchell Road, Phoenix Parkway, Corby,
Northamptonshire NN17 5QT
Facsimile no: 01535 402619
Attention: General Manager
By:
Derwent Cogeneration Limited
Address: P.O. Box 5, Spondon, Derby DE21 7BP
Facsimile no: 01332 669829
Attention: J. Unwin
By:
Eastern Merchant Generation Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 552966
Attention: Coral Woodard
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris Cedex
08
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Elm Energy & Recycling (UK) Limited
Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no: 01902 408517
Attention: M.D. Wyckoff
Fellside Heat and Power Limited
Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no: 01946 721130
Attention: J.A. Bartlett
Fibrogen Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 0171 221 8671
Attention: A. Macdonald
By:
Fibropower Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 01712218671
Attention: A. Macdonald
By:
First Hydra Company
Address: Bala House, Lakeside Business Village, St. Davids Park,
Deeside, Clwyd
CH5 3XJ
Facsimile no: 01244 520697
Attention: B. Stalker
By:
Humber Power Limited
Address: South Humber Bank Power Station, South Marsh Road,
Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no: 01469 578484
Attention: A. Murray
By:
Independent Energy UK Limited
Address: St John's Court, 70 St John's Close, Knowle, Solihull,
West Midlands B93
ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
Indian Queens Power Limited
Address: 1 Northumberland Avenue, Trafalgar Square,
London WC2N 5BW
Facsimile no: 0171872 5539
Attention: G. Long
Keadby Generation Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire
DN17 3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Lakeland Power Limited
Address: Roosecote Power Station, Roosecote Marsh,
Barrow-in-Furness, Cumbria
LA13 0PQ
Facsimile no: 01229 870919
Attention: Jackie Mahon
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Medway Power Limited
Address: Medway Power Station, Isle of Grain, Rochester, Kent
ME3 OAG
Facsimile no: 01634 271666
Attention: P. Stinson
By:
Midlands Power (UK) Limited
Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile No: 0121 423 0261
Attention: Company Secretary
By:
National Power, plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire
SN5 6PB
Facsimile No: 01793 893051
Attention: G. Brown
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile No: 01452 653375
Attention: Company Secretary
By:
Peterborough Power Limited
Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile No: 01733 894622
Attention: W. Burrough
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile No: 01203 425479
Attention: S. Skillings
By:
Regional Power Generators Limited
Address: Glanford Brigg Generating Station, Scawby Brook, Brigg,
South Humberside DN70 SILT
Facsimile no: 01482 495916
Attention: P. Knight
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Teesside Power Limited
Address: Four Millbank, London SW1P SET
Facsimile no: 0171 316 5322
Attention: D. Lewis
By:
Winterton Power Limited
Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE
Facsimile no: 01454 616675
Attention: T. Masood
<PAGE>
THE SUPPLIERS
British Gas Trading Ltd
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 413242
Attention: T. Brookshaw
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity
Generation
By:
Candecca Resources Limited
Address: Welton Gathering Centre, Barfield Lane, off Wragby
Road, Sudbrooke, Lincoln LN2 2QU
Facsimile no: 01522 754255
Attention: D. Wood
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: G. Caswell
By:
Crosfield Limited
Address: Banl; Quay, PO Box 26, Warrington, Cheshire WA5 1AB
Facsimile no: 01925 59823
Attention: K. Sowley
By:
Eastern Electricity plc
Address: Wherstead Park, PO Box 40, Wherstead, Ipswich,
Suffolk IP9 2AQ
Facsimile no: 01473 554393
Attention: J. Whelan
By:
East Midlands Electricity plc
Address: 398 Coppice Road, PO Box 4, North PDO Arnold,
Nottingham NG5 7HX
Facsimile no: 01159 358190
Attention: A. Musto
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris,
Cedex 08
Facsimile no: (010 331) 40 42 6341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Energy Supply Contracts Limited
Address: The Havens, Ransomes Europak, Ipswich, Suffolk IP3 9SJ
Facsimile no: 01473 273871
Attention: E.C. Cumberland
By:
Enron Capital and Trade Resources
Address: Four Millbank, London SW 1P 3ET
Facsimile no: 0171873 0140
Attention: D. Gosling
By:
Impkemix Energy Limited
Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland
TS90 8JE
Facsimile no: 01642 437838
Attention: K.J. Green
By:
Independent Energy UK Limited
Address: St. John's Court, St. John's Close, Knowle, I`'est
Midlands B93 ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
London Electricity plc
Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no: 0171 430 2903
Attention: M. Holmes
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Manweb plc
Address: Manweb House, Kingsfield Court, Chester Business Park,
Chester CH4 9QH
Facsimile no: 0141568 3393
Attention: P. Brown, Energy Supply, Cathcart Business Purls,
Spean Street, Glasgow G44 4BE
By:
Midlands Electricity plc
Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no: 0121423 2777
Attention: R. Murray
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Norsk Hydro (UK) Limited
Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1
3RH
Facsimile no: 0181892 1686
Attention: J. Hamilton
By:
Northern Electric plc
Address: Carliol House, Market Street, Newcastle upon Tyne NE1
ONE
Facsimile no: 0191 235 2295
Attention: M. Chandler
By:
NORWEB plc
Address: Talbot Road, Manchester M16 OHQ
Facsimile no: 0161875 7089
Attention: K. Lee
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: S. Skillings
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SEEBOARD plc
Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3
3SY
Facsimile no: 01273 428404
Attention: R.A. Page
By:
Shell Power Limited
Address: Rowlands Way, Withenshawe, Manchester M22 5SB
Facsimile no: 0161499 8387
Attention: John Tucker
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Southern Electric plc
Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire
SL6 3QB
Facsimile no: 01628 584410
Attention: J. Sykes
By:
South Wales Electricity plc
Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no: 01222 790971
Attention: M. Mackey
By:
South Western Electricity plc
Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12
4SE
Facsimile no: 01454 616675
Attention: D.G. Harris
By:
The Renewable Energy Company Limited
Address: Stroud House, Russell Street, Stroud, Glos GL5 BAN
Facsimile no: 01453 756222
Attention: M. Alder
By:
UK Electric Power Limited
Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 ORE
Facsimile no: 01492 592077
Attention: N.Bryson
By:
UML Limited
Address: PO Box 115, Part Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no: 0151 643 6299
Attention: R. Ashton
By:
Yorkshire Electricity Group plc
Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no: 01132 895926
Attention: Company Secretary
By:
THE OTHER PARTIES
Accord: Energy Ltd
Address: Heron House, 322 High Holborn, London WC1V 7PW
Facsimile no: 0171 269 4010
Attention: B. King
By:
AES Barry Limited
Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU
Facsimile no: 01446 722587
Attention: P. Norgeot
By:
Alcan Aluminium UK Limited
Address: Lynemouth Power Station, Ashington, Northumberland NE63
9YH
Facsimile no: 01670 393970
Attention: D. Alderton
By:
British Gas plc
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645453
Attention: D. Meachem
By:
Cabah Energy Limited
Address: c/o ABB ForStar Developments Limited, Tilfold House,
Farnham Business Park, Weydon Lane, Farnham,
Surrey GU9 8QT
Facsimile no: 01252 732110
Attention: Paul Abbott
By:
Eastern Generation Services Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 601036
Attention: Ms. C. Woodard
By:
Enfield Energy Centre Limited
Address: Concorde House, Concorde Way, Stockton on Tees,
Cleveland TS18 3RB
Facsimile no: 01642 678123
Attention: K. Clarke
By:
Fibrowatt Thetford Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 0171 221 8671
Attention: Rupert Fraser
By:
Hydro Electric Energy Limited
Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200
Dunkeld Road, Perth PH 1 3AQ
Facsimile no: 01738 455281
Attention: Company Secretary
By:
Keadby Power Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire
DN17 3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Kingsnorth Power Limited
Address: c/o Budd Martin & Co, Industria House, Red Houses, St.
Brelade, Jersey JE3 OLD
Facsimile no: 01534 44777
Attention: R. Martin
By:
Meter Operators Limited
Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no: 01386 861113
Attention: R. Edmed
By:
Pentex (East Midlands) Limited
Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no: 01244 211444
Attention: H. Jamieson
By:
Rocksavage Power Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171839 0905
Attention: G. Grant
By:
Seabank Power Limited
Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no: 0117 982 0351
Attention: J.P. Baldry, General Manager
By:
Spalding Energy Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171839 0905
Attention: G. Grant
THE METER OPERATOR PARTIES WHO ARE NOT PARTIES
Control Devices and Systems Limited
Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE
Telex no: 849B11
Facsimile no: 01635 528224
Attention: J.W. Dowse
By:
DrakMarn O&M Ltd
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425431
Contact: Company Secretary
By:
E. Squared Limited
Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no: 0171 378 0012
Attention: Graham Nicholls
By:
Northern Energy Services Limited
Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no: 01302 820790
Attention: W. Tuczemzkyi
By:
PowerMet Limited
Address: 13 Wimpole Street, London W1M 7AB
Facsimile no: 0171 493 7151
Attention: M. Rugman
By:
Schlumberger Industries Limited
Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no: 01394 276030
Attention: A.P. Mahoney, Managing Director
By:
Stanor National Contracts
Address: 66/68 Kingsland Road, London E2 8DP
Facsimile no: 0171 739 6135
Attention: A. Yardley
By:
The Challenge Group
Address: 22 Tally Road, Oxted, Surrey RHO OTG
Facsimile no: 01883 730543
Attention: J. Glover
By:
EXTERNAL POOL MEMBERS
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neil, Business Manager, Electricity
Generation
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384 Paris,
Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141 636 4706
Attention: B.J.H. Paget
By:
SETTLEMENT SYSTEM ADMINISTRATOR
Energy Settlements and Information Services Limited
Address: Fairham House, Green Lane, Clifton, Nottingham NG11 SLN
Facsimile no: 0115 945 6728
Attention: G.K. James, General Manager
By:
POOL FUNDS ADMINISTRATOR
Energy Pool Funds Administration Limited
Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no: 01203 423558
Attention: A. Marks, Director (National Grid House, 2nd
Floor, Kirby Corner Road, Coventry CV4 8JY)
By:
GRID OPERATOR
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of: )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4
8JY
Telex no:
Facsimile no: 01203 423577
Attention: Company Secretary (copy to:J. Irgin, c/o A.G.
Ferens,
The National Grid Company plc, St. Catherine's Lodge,
Bearwood Road,
Sindlesham, Nr. Wokingham, Berkshire RG11 5BN)
ANCILLARY SERVICES PROVIDER
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of:- )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4
8JY
Telex no: 25815
Facsimile no: 01203 423577
Attention: Company Secretary (copy to Mr. Carlton)
<PAGE>
EXTERNALLY INTERCONNECTED PARTIES
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:
Facsimile No: 0141636 4706
Attention: B.J.H. Paget
By:
Electricite de France, Service National
Address: EDF Department Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384 Paris, Cedex
08
280098 FRANCE
(00 331) 40 42 63 41
P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no:
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
<PAGE>
DATED 27 May, 1997
THE GENERATORS
named herein
- and -
THE SUPPLIERS
named herein
- and -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
- and -
ENERGY POOL FUNDS
ADMINISTRATION LIMITED
as Pool Funds Administrator
- and -
THE NATIONAL GRID COMPANY plc
as Grid Operator and Ancillary Services Provider
- and -
SCOTTISH POWER plc
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
- and -
THE OTHER PARTIES
named herein
- and -
THE METER OPERATOR PARTIES
named herein
EIGHTEENTH SUPPLEMENTAL DEED
relating to the Pooling and Settlement Agreement
for the Electricity Industry
in England and Wales
<PAGE>
CONTENTS
Page
1. INTERPRETATION 2
2. AMENDMENTS 2
3. CONTINUATION OF THE POOLING AND SETTLEMENT 2
AGREEMENT
4. MISCELLANEOUS 2
5. ENTIRE AGREEMENT 2
6. GOVERNING LAW 3
SCHEDULE 1: Part I: The Generators 4
Part II: The Suppliers 8
SCHEDULE 2: The Other Parties 12
SCHEDULE 3: The Meter Operator Parties who are not 14
Parties
SCHEDULE 4: Amendments to the Pooling and Settlement 15
Agreement
SIGNATORIES 21
<PAGE>
THIS SUPPLEMENTAL DEED is made on 27 May, 1997
BETWEEN:
(1) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part I of Schedule 1;
(2) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part II of Schedule 1;
(3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
(registered number 2444282) whose registered office is situate at
Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as
Settlement System Administrator;
(4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number
2444187) whose registered office is situate at 185 Park Street,
London SE1 9DY as Pool Funds Administrator;
(5) THE NATIONAL GRID COMPANY plc (registered number 2366977)
whose registered office is situate at National Grid House, Kirby
Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary
Services Provider;
(6) SCOTTISH POWER plc (registered number 117120) whose
principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP,
Scotland as an Externally Interconnected Party;
(7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal
office is situate at Departement Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris,
Cedex 08, France as an Externally Interconnected Party;
(8) THE OTHER PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 2; and
(9) THE METER OPERATOR PARTIES whose names, registered numbers
and registered or principal offices are set out in Schedule 3.
WHEREAS :
(A) by a Pooling and Settlement Agreement for the Electricity
Industry in England and Wales dated 30th March, 1990 (the
"Pooling and Settlement Agreement") the parties thereto agreed to
give effect to and be bound by certain rules and procedures for
the operation of an electricity trading pool and the operation of
a settlement system;
(B) the Pooling and Settlement Agreement has been amended and/or
restated by seventeen supplemental agreements, and hereinafter
references to the Pooling and Settlement Agreement are to that
agreement as most recently amended and restated; and
<PAGE>
(C) the parties to this Deed (being (I) all the Parties at the
date hereof and (ii) all the Meter Operator Parties at the date
hereof) have agreed to amend the Pooling and Settlement Agreement
on the terms and subject to the conditions set out below.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 Except where defined herein or where the context otherwise
requires, words and expressions defined in the Pooling and
Settlement Agreement shall have the same respective meanings when
used in this Deed.
1.2 The table of contents and the headings to each of the
Clauses are inserted for convenience only and shall be ignored in
construing this Deed.
2. AMENDMENTS
The parties hereby agree that with effect on and from midnight on
31st March, 1997, the Pooling and Settlement Agreement shall be
amended as set out in Schedule 4.
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT
The Pooling and Settlement Agreement shall remain in full force
and effect and this Deed and the Pooling and Settlement Agreement
shall be treated as one document so that, upon the Pooling and
Settlement Agreement being amended pursuant to Clause 2, all
references to the Pooling and Settlement Agreement shall be
treated as references to that agreement as amended by this Deed.
4. MISCELLANEOUS
The provisions of Clauses 75 to 79 (inclusive) and 81 to 84
(inclusive) of the Pooling and Settlement Agreement shall be
deemed to be incorporated herein mutatis mutandis.
5. ENTIRE AGREEMENT
5.1 Each party acknowledges that in entering into this Deed on
the terms set out herein it is not relying upon any
representation, warranty, promise or assurance made or given by
any other party or any other person, whether or not in writing,
at any time prior to the execution of this Deed which is not
expressly set out herein.
5.2 None of the parties shall have any right of action against
any ocher party arising out of or in connection with any
representation, warranty, promise or assurance referred to in
sub-clause 5.1 (except in the case of fraud)
6. GOVERNING LAW
This Deed shall be governed by, and construed in all respects in
accordance with, English law.
IN WITNESS whereof this document has been duly executed and
delivered as a deed the day and year first above written
<PAGE>
SCHEDULE 1:
Part I: The Generators
Name Registered Registered or
Number Principal Office
Anglian Power Generators 2488955 Wherstead Park
Limited Wherstead
Ipswich
Suffolk IP9 2AQ
Barking Power Limited 2354681 Devonshire House
Mayfair House
London W1X 5FH
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire WA3 6A5
Celtpower Limited 2656561 13 Charles II Street
London SW1Y 4QT
Citigen (London) Limited 2427823 152 Grosvenor Road
Rivermill House
London SW1V 3JL
Corby Power Limited 2329494 Mitchell Road
Phoenix Parkway
Corby
Northamptonshire
NN17 1QT
Derwent Cogeneration Limited 2703635 Landsdowne House
Berkley Square
London W1X 5DH
Eastern Merchant Generation 3116225 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
1P9 2AQ
Name Registered Registered or
Number Principal Office
Electricite de France, Department Relations
Service National avec
I'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
France
Elm Energy & Recycling (UK) 2516685 Elm Energy House
Limited Ettingshall Road
Wolverhampton
West Midlands WV2
2LA
Fellside Heat and Power 2614535 Fellside Lodge
Limited Seascale
Cumbria CA20 1PG
Fibrogen Limited 2547498 Astley House
33 Notting Hill Gate
London W 11 3JQ
Fibropower Limited 2234141 Astley House
33 Notting Hill Gate
London W 11 3JQ
First Hydro Company 2444277 Bala House
Lakeside Business
Village
St. David's Park
Deeside
Clwyd
CH5 3XJ
Humber Power Limited 2571241 18 Savile Row
London
W1X 1AE
Indian Queens Power 2928100 1 Northumberland
Company Limited Avenue
London
WC2N 5BW
Name Registered Registered or
Number Principal Office
Independent Energy UK 3033406 2nd Floor, Park
Limited House
Park Street
Maidenhead
Berkshire
SL6 1SL
Keadby Generation Limited 2729513 P O Box 89, Keadby
Scunthorpe, North
Lincolnshire DN17
3AZ
Lakeland Power Limited 2355290 Roosecote Power
Station
Roosecote Marsh
Barrow-in-Furness
Cumbria LA 13 OPQ
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Medway Power Limited 2537903 Boston House
The Little Green
Richmond TW9 1QE
Midlands Power (UK) Limited 2251099 Mucklow Hill
Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
Peterborough Power Limited 2353599 Storeys Bar Road
Peterborough PE1 5NT
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Name Registered Registered or
Number Principal Office
Regional Power Generators 2352390 Wetherby Road
Limited Scarcroft,
Leeds LS14 3HS
Scottish Hydro-Electric plc 117119 10 Dunkeld Road
Perth PH1 5WA
Scottish Power plc 117120 1 Atlanta Quay
Glasgow G2 8SP
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Teesside Power Limited 2464040 4 Millbank
London SW1P 3ET
Winterton Power Limited 3001798 800 Park Avenue
Aztec West
Almondsbury
Bristol BS12 4SE
<PAGE>
Part II: The Suppliers
Name Registered Registered or
Number Principal Office
British Gas Trading Ltd 3078711 Rivermill House
152 Grosvenor Road
London SW1V 3JL
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire WA3 6AS
Candecca Resources Limited 953066 Welton Gathering
Centre
Barfield Lane
Off Wragby Road
Sudbrooke
Lincoln LN2 2QU
Citigen (London) Limited 2427823 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Crosfield Limited 48745 Bank Quay
PO Box 26
Warrington
Cheshire WA5 1AB
Eastern Electricity plc 2366906 Wherstead Park
PO Box 40
Wherstead
Ipswich
Suffolk IP9 2AQ
East Midlands Electricity 2366923 PO Box 444
plc Woodyard Lane
Wollaton
Nottingham NG8 1EZ
Electricite de France, Department Relations
Service National avec
l'Estranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
Name Registered Registered or
Number Principal Office
Energy Supply Contracts 172268 The Havens
Limited Ransomes Europark
Ipswich
Suffolk IP3 9SJ
Enron Capital and Trade 3003823 4 Millbank
Resources London SW1P SET
Limited
Impkemix Energy Limited 2076043 The Heath
Runcorn
Cheshire WA7 4QF
Independent Energy UK 3033406 2nd Floor Park House
Limited Park Street
Maidenhead
Berkshire SL6 1SL
London Electricity plc 2366852 Templar House
81-87 High Holborn
London WC1V 6NU
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Manweb plc 2366937 Manweb House
Chester Business
Park
Chester CH4 9RF
Midlands Electricity plc 2366928 Mucklow Hill
Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Norsk Hydra (UK) Limited 841421 Bridge House
69 London Road
Twickenham
MiddlesexTW1 3RH
Name Registered Registered or
Number Principal Office
Northern Electric plc 2366942 Carliol House
Market Street
Newcastle upon Tyne
NE1 6NE
NORWEB plc 2366949 PO Box 14
410 Birchwood
Boulevard
Birchwood
Warrington WA3 7GA
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Scottish Hydro-Electric plc 117119 10 Dunkeld Road
Perth PH1 5WA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
SEEBOARD plc 2366867 Forest Gate
Brighton Road
Crawley
West Sussex RH11 9BH
Shell Power Limited 2559630 Rowlands Way
Withenshawe
Manchester M22 5SB
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Southern Electric plc 2366879 Westacott Way
Littlewick Green
Maidenhead
Berkshire SL6 3QB
South Wales Electricity plc 2366985 Newport Road
St. Mellons
Cardiff CF3 9XW
Name Registered Registered or
Number Principal Office
South Western Electricity 2366894 800 Park Avenue
plc Aztec West
Almondsbury
Bristol BS12 4SE
The Renewable Energy Company 3043412 Stroud House
Limited Russell Street
Stroud
Gloucestershire
GL5 BAN
UK Electric Power Limited 2844010 21 St. Thomas Street
Bristol BS1 6US
UML Limited 661900 PO Box 115
Port Sunlight
Wirral
Merseyside
L62 4ZL
Yorkshire Electricity Group 2366995 Wetherby Road
plc Scarcroft
Leeds LS14 3HS
<PAGE>
SCHEDULE 2:
The Other Parties
Name Registered Registered or
Number Principal Office
Accord Energy Limited 2877398 Rivermill House
152 Grosvenor Road
London SW1V 3JL
AES Barry Limited 3135522 Burleigh House
17-19 Worpe Way
Richmond
Surrey TW10 6AG
Alcan Aluminium UK Limited 750143 Chalfont Park
Gerrards Cross
Buckinghamshire
SL9 0QB
British Gas plc 2006000 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Cabah Energy Limited 2759706 190 Strand
London WC2R 1JN
Eastern Generation Services 2529347 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Enfield Energy Centre 2796628 Concorde House
Limited Concorde Way
Stockton on Tees
Cleveland
TS18 3RB
Fibrowatt Thetford Limited 3057688 Astley House
33 Notting Hill Gate
London W 11 3JQ
Hydro Electric Energy 2487475 Royex House
Limited Aldermanbury Square
London EC2V 7LD
Name Registered Registered or
Number Principal Office
Keadby Power Limited 2548042 PO Box 89 Keadby
Scunthorpe North
Lincolnshire DN17
3AZ
Kingsnorth Power Limited 2656343 Chancery House
53-64 Chancery Lane
London WC2A lQU
Meter Operators Limited 2841018 Lynton House
7-12 Tavistock
Square
London WC1H 9BQ
Pentex (East Midlands) 2275006 Union Buildings
Limited 15 Union Street
Aberdeen AB1 2BU
Rocksavage Power Company 18868 20 St. James's
Limited Street
London SW10 4UJ
Seabank Power Limited 2591188 Severn Road Hallen
Bristol BS10 7SP
Spalding Energy Company 19668 20 St. James's
Limited Street
London SWlA lES
<PAGE>
SCHEDULE 3:
The Meter Operator Parties who are not Parties
Name Registered Registered or
Number Principal Office
Control Devices and Systems 1242585 PO Box 56
Limited 101 M ill Lane
Newbury
Berkshire
RG14 5RE
DrakMarn O&M Ltd 3124701 53 New Broad Street
London EC2M 1JJ
E. Squared Limited 2674129 Almac House
Church Lane
Bisley
Surrey
GU24 9DR
Northern Energy Services 2868141 5 Derwent Place
Limited Spotborough
Doncaster
DN5 7PN
PowerMet Limited 2877912 3 Park Place
London SW1A lLP
Schlumberger Industries 534821 1 Kingsway
Limited London WC2B 6XH
Stanor National Contracts 2769170 7-12 Tavistock
Limited Square
London W C 1 H 9BQ
The Challenge Group 22 Tally Road
Oxted
Surrey RH8 0TG
<PAGE>
SCHEDULE 4:
Amendments to the Pooling and Settlement Agreement
The Pooling and Settlement Agreement shall be amended as follows:
Operative Provisions
(a) By the insertion of the following new definitions in the
correct alphabetical order in Clause 1.1:
""ERS" means the electronic registration system operated by the
Settlement System Administrator in accordance with Clause 60.5;";
""ERS First Tier Customer" means a Customer with a demand greater
than 100kW, other than a Second Tier Customer, of a Public
Electricity Supplier in respect of whom that Public Electricity
Supplier has registered in ERS the Metering System which is
associated with supplies to that Customer;"; and
""Non-Second Tier System" means a metering system at premises
eligible for supply under a Second Tier Supply Licence in the
authorised area of a Supplier holding a PES Licence but not being
a Metering System in respect of which a Second Tier Supplier is
the Registrant;".
(b) By the insertion of the following sub-paragraphs on a new
line after the semi colon in the definition of "Non-Pooled
Generation" in Clause 1.1:
"(a) is exempted from holding a Generation Licence; or
(b) would be exempted from holding a Generation Licence if such
site were the only site owned by that Generator;".
(c) By the insertion of the words "or Public Electricity
Supplier" immediately after the expression "Second Tier Supplier"
in the definition of "Non-Pooled Generation System" in Clause
1.1.
(d) By the deletion of sub-paragraphs (a) and (b) from the
definition of "Non-Pooled Generator" in Clause 1.1.
(e) By the deletion from paragraph (i) of the definition of
"Operator" in Clause 1.1 of the word "Guarantor" where it appears
after the words "Non-Pooled" and the substitution therefor of the
word "Generator".
(f) By the deletion of paragraph (iv) from the definition of
"Registrant" and the substitution therefor of the following:
(iv) the point of connection to a Distribution System of a
Generator which is Embedded or of a Second Tier Supplier or of a
Second Tier Customer or of an ERS First Tier Customer,
the Party which is such Generator which is Embedded or such
Second Tier Supplier or the Second Tier Supplier in respect of
such Second Tier Customer or the Public Electricity Supplier in
respect of such ERS First Tier Customer, as the case may be; or".
(g) By the deletion of paragraph (i) from the definition of
"Second Tier Data Collection System" in Clause 1.1 and the
substitution therefor of the following: -
"(i) a Second Tier Customer, an ERS First Tier Customer or a
Non-Pooled Generator;".
(h) By the deletion from the definition of "Supplier's System
Charge" in Clause 1.1 of the text "Clause 34A.3" and the
substitution therefor of the text "Clause 34A.4".
(i) By the deletion of paragraph (iii) from the definition of
"Site" in Clause 1.1 and the substitution therefor of the
following:
"(iii) the point of connection to a Distribution System or the
NGC Transmission System of a Generator which is Embedded or of a
Second Tier Supplier or of a Second Tier Customer or of an ERS
First Tier Customer, or the point of connection of a Non-Pooled
Generator to a Distribution System;".
(j) By the deletion of the definition of "Total Second Tier
System Charges" from Clause 1.1 and the substitution therefor of
the following:
""Total Second Tier System Charges" means, in respect of any
Specified Accounting Period (as defined in Clause 34A.1), the
aggregate of the costs, expenses and charges incurred by all
Second Tier Agents in respect of the relevant Specified
Accounting Period and relating to the collection, aggregation,
adjustment and transmission of data from Second Tier Systems,
Non-Pooled Generation Systems and any other Metering Systems
registered in ERS pursuant to any requirement of this Agreement,
or when the collection, aggregation, adjustment and the
transmission of data from Second Tier Systems, Non-Pooled
Generation Systems and any other Metering Systems registered in
ERS pursuant to any requirement of this Agreement is performed by
the Settlement System Administrator the costs, expenses and
charges directly incurred by the Settlement System Administrator
ED the deficit (if any) or (as the case may be) less the surplus
(if any) in the amount of Total Second Tier System Charges
recovered for the immediately preceding Specified Accounting
Period carried forward in accordance with the provisions of
Clause 34A.5;".
(k) By the deletion of Clause 34A.3 and the substitution therefor
of the following: -
'34A.3 Subject to Section 34A.6, the Second Tier Suppliers'
Non-Pooled Generation System Charge for a Specified Accounting
Period shall be determined by the Executive Committee as the
amount per annum to be charged to each Supplier in respect of
each Non-Pooled Generator for whose Metering System
such Supplier is the Registrant.".
(1) By the deletion of paragraph (b) of Clause 34A.5 and the
substitution therefor of the following:
"(b) in respect of each Supplier and in addition to the charge in
Section 34A.5(a), in accordance with the following formula:
Second Tier Suppliers' Non-Pooled Generation System Charge x NNPG
_________________________________________________________________
12
where NNPG is the total number of Metering Systems of Non-Pooled
Generators for which such Supplier is the Registrant at the
beginning of the relevant calendar month;".
(m) By the insertion, in Clause 60.3.3, of the following new
paragraph immediately after paragraph (iii):
"(iv) in the case of a Registrant of a Metering System which
is at the point of connection between a Public Electricity
Supplier's Distribution System and an ERS First Tier Customer,
the Registrant ceases to act as Supplier in relation to the same
at such point of connection; or".
(n) By the deletion from paragraph (iv) of Clause 60.3.3 of the
words "Second Tier" before the word "Supplier" and the
renumbering of that paragraph as paragraph (v).
(o) By the insertion, in Clauses 60.3.6, 60.5.1 and 60.5.2, of
the text a, ERS First Tier Customer" after the expression "Second
Tier Customer" wherever such expression appears in those Clauses.
(p) By the insertion, in Clause 60.5.2, of a comma after the
expression "Non-Pooled Generator" where such expression first
appears in that Clause.
(q) By the deletion from Clause 60.5.3 of the apostrophe after
the word "Generators" and the insertion of a comma immediately
after such word.
(r) By the insertion, in Clauses 60.5.3 and 60.6.5, of the text
"ERS First Tier Customers," after the comma immediately after the
expression "Second Tier Customers" wherever such expression
appears in those Clauses.
(s) By the insertion, in Clause 60.6.6, of the words "or an ERS
First Tier Customer" immediately after the expression "Second
Tier Customer".
(t) By the deletion of the inverted comma at the end of Clause
60.7.3.
(u) By the insertion, in Clause 60.13.1, of the text ", ERS
First Tier Customer" after the expression "Second Tier Customer"
in the first paragraph of that Clause, and by the insertion, in
paragraph (ii) of such Clause 60.13.1, of the text ", such ERS
First Tier Customer" after the expression "Second Tier Customer".
(v) By the insertion, in Clause 60.13.2, of the text, a, ERS
First Tier Customer" after the expression "Second Tier Customer".
(w) By the insertion, in Clause 60.16.1, of the text ", ERS
First Tier Customers" after the expression "Second Tier
Customers".
(x) By the deletion from the last line of Clause 60.16.4 of the
word "Clauses" and the substitution therefor of the word
"Clause".
(y) By the deletion from Clause 60.19 of the expression "Second
Tier Unmetered Supplies", wherever it appears in that Clause, and
the substitution therefor of the expression "Qualifying Unmetered
Supplies", and by the insertion, in Clause 60.19.5, of the words
"or ERS First Tier Customer's" after the words "Second Tier
Customer's".
(z) By the insertion of the following new Clause immediately
after Clause 60.19.6:
"60.20 Obligation on Suppliers to install half-hourly metering
and register above 100 kW customers: Each Supplier shall use all
reasonable endeavours to ensure that half-hourly metering and the
necessary communications links are installed in respect of all
Embedded Non-Franchise Sites in respect of which it is Supplier
by no later than 1st October, 1997 and that all Metering Systems
associated with such Embedded Non-Franchise Sites are registered
in ERS by no later than 31st December, 1997, in accordance with
the approach specified by the Executive Committee Provided that
there shall be no obligation to install metering and
communications links in respect of sites relating to Qualifying
Unmetered Supplies.".
2. Schedule 21
(a) By the insertion, in the list of words and expressions in
paragraph 1.1 of Schedule 21, of the words "ERS" and "ERS First
Tier Customer" in the correct alphabetical order, and by the
insertion of a semi colon after each of those words.
(b) By the insertion, in paragraph 6.1 of Schedule 21, of the
words "or ERS First Tier Customer (if any)" after the words "the
relevant Second Tier Customer (if any)".
(c) By the insertion, in paragraph 6.6 of Schedule 21, of the
text "relevant ERS First Tier Customers," after the comma
immediately after the words "Second Tier Customers".
(d) By the deletion of the word "and" from the end of paragraph
13.2(c)(ii), by the deletion of the full stop from the end of
paragraph 13.2(d) of Schedule 21 and the substitution therefor of
the text "; and", and by the insertion of the following new
paragraph 13.2(e) immediately after paragraph 13.2(d) of Schedule
21:
"(e) in relation to Metering Equipment which is associated with
supplies to an ERS First Tier Customer, the relevant Code of
Practice shall apply as amended by any modifications made (after
the time that the relevant Metering System is registered with the
Settlement System Administrator for the first time) solely in
connection with the inclusion of ERS First Tier Customers in the
definition of Site.".
(e) By the insertion, in paragraph 15 of Schedule 21, of the
text ", ERS First Tier Customer" after the expression "Second
Tier Customer", wherever such expression appears in that
paragraph.
(f) By the insertion, in paragraph 16 of Schedule 21, of the
words "or ERS First Tier Customer" after the words "Second Tier
Customer".
(g) By the insertion, in the first line of paragraph 21.3 of
Schedule 21, of the text ", ERS First Tier Customers," after the
expression "Second Tier Customers", by the insertion, in
paragraph 21.3(a)(i) of Schedule 21, of the words "or ERS First
Tier Customer" after the expression "Second Tier Customer", and
by the insertion, in paragraph 21.3(a)(iii) of Schedule 21, of
the text ", ERS First Tier Customer" after the expression "Second
Tier Customer".
(h) By the insertion, in the third line of paragraph 21.4 of
Schedule 21, of the text ", an ERS First Tier Customer" after the
expression "Second Tier Customer", and by the insertion, in
paragraph 21.4(i) of Schedule 21, of the words "or ERS First Tier
Customer" after the expression "Second Tier Customer", wherever
such expression appears in that paragraph.
(i) By the insertion, in paragraph 21.5 of Schedule 21, of the
text ", ERS First Tier Customer's" after the words "Second Tier
Customer's".
(j) By the insertion, in paragraph 21.8 of Schedule 21, of the
text ", ERS First Tier Customer's" after the text "Second Tier
Customer's", wherever such text appears in that paragraph, and by
the insertion, in the second line of paragraph 21.8(b) of
Schedule 21, of the text ", ERS First Tier Customer" after the
expression "Second Tier Customer".
(k) By the insertion, in paragraph 21.9(a) of Schedule 21, of
the text ", ERS First Tier Customer" after the expression "Second
Tier Customer".
(I) By the insertion, in paragraph 22.9(b)(iii) of Schedule 21,
of the words "or an ERS First Tier Customer" after the expression
"Second Tier Customer".
(m) By the deletion from paragraph 25 of Schedule 21 of the
expression "Second Tier Unmetered Supplies", wherever such
expression appears in that paragraph, and the substitution
therefor of the expression "Qualifying Unmetered Supplies".
<PAGE>
SIGNATORIES
THE GENERATORS
Anglian Power Generators Limited
Address: Kings Lynn Power Station, Willows Business Park,
Saddlebow, Kings Lynn, Norfolk PE34 3RD
Facsimile no: 01553 667166
Attention: R. Rigg
By:
Barking Power Limited
Address: Barking Power Station, Chequers Lane, Dagenham, Essex
RM9 6PF
Facsimile no: 0181 984 5174
Attention: Dr S.J. Mancey
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
CeltPower Limited
Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no: 01686 629887
Attention: B. Holst
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171253 9319
Attention: Mr. G. Caswell
By:
Corby Power Limited
Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire
NN17 5QT
Facsimile no: 01536 402619
Attention: General Manager
By:
Derwent Cogeneration Limited
Address: P.O. Box 5, Spondon, Derby DE21 7BP
Facsimile no: 01332 669829
Attention: J. Unwin
By:
Eastern Merchant Generation Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 552966
Attention: Coral Woodard
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris Cedex
08
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St George's Road, Wimbledon, London SW 19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Elm Energy & Recycling (UK) Limited
Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no: 01902 408517
Attention: M.D. Wyckoff
By:
Fellside Heat and Power Limited
Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no: 01946 721130
Attention: J.A. Bartlett
By:
Fibrogen Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 01712218671
Attention: A. Macdonald
By:
Fibropower Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 221 8671
Attention: A. Macdonald
By:
First Hydro Company
Address: Bala House, Lakeside Business Village, St. Davids Park,
Deeside, Clwyd
CH5 3XJ
Facsimile no: 01244 520697
Attention: B. Stalker
By:
Humber Power Limited
Address: South Humber Bank Power Station, South Marsh Road,
Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no: 01469 573030
Attention: P. Evans
By:
Independent Energy UK Limited
Address: St John's Court, 70 St John's Close, Knowle,
Solihull, West Midlands B93
ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
Indian Queens Power Limited
Address: 1 Northumberland Avenue, Trafalgar Square, London WC2N
5BW
Facsimile no: 0171872 5539
Attention: G. Long
Keadby Generation Limited
Address: PO Box 89, Keadby, Scunthorpe, North Lincolnshire DN17
3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Lakeland Power Limited
Address: Roosecote Power Station, Roosecote Marsh,
Barrow-in-Furness, Cumbria
LA13 0PQ
Facsimile no: 01229 870919
Attention: Jackie Mahon
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Medway Power Limited
Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3
0AG
Facsimile no: 01634 271666
Attention: P. Stinson
By:
Midlands Power (UK) Limited
Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no: 0121423 0261
Attention: Company Secretary
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire
SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
Peterborough Power Limited
Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no: 01733 894622
Attention: W. Burrough
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: S. Skillings
By:
Regional Power Generators Limited
Address: Glanford Brigg Generating Station, Scawby Brook, Brigg,
South Humberside DN70 SILT
Facsimile no: 01482 495916
Attention: P. Knight
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141 636 4706
Attention: B.J.H. Paget
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Teesside Power Limited
Address: Four Millbank, London SW1P SET
Facsimile no: 0171316 5322
Attention: D. Lewis
By:
Winterton Power Limited
Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE
Facsimile no: 01454 616675
Attention: T. Masood
By:
THE SUPPLIERS
British Gas Trading Ltd
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 413242
Attention: T. Brookshaw
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
Candecca Resources Limited
Address: Welton Gathering Centre, Barfield Lane, off Wragby Road,
Sudbrooke, Lincoln LN2 2QU
Facsimile no: 01522 754255
Attention: D. Wood
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: G. Caswell
By:
Crosfield Limited
Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB
Facsimile no: 01925 59828
Attention: K. Sowley
By:
Eastern Electricity plc
Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk
IP9 2AQ
Facsimile no: 01473 554393
Attention: J. Whelan
By:
East Midlands Electricity plc
Address: 398 Coppice Road, PO Box 4, North PDO Arnold, Nottingham
NG5 7HX
Facsimile no: 01159 358190
Attention: A. Musto
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris,
Cedex 08
Facsimile no: (010 331) 40 42 6341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Energy Supply Contracts Limited
Address: The Havens, Ransomes Europak, Ipswich, Suffolk IP3 9SJ
Facsimile no: 01473 273871
Attention: E.C. Cumberland
By:
Enron Capital and Trade Resources
Address: Four Millbank, London SW1P 3ET
Facsimile no: 0171873 0140
Attention: D. Gosling
By:
Impkemix Energy Limited
Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90
8JE
Facsimile no: 01642 437838
Attention: K.J. Green
By:
Independent Energy UK Limited
Address: St. John's Court, St. John's Close, Knowle, West
Midlands B93 0NN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
London Electricity plc
Address: Templar House, 81-87 High Holborn, London WC1V 6NU
Facsimile no: 0171430 2903
Attention: M. Holmes
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Manweb plc
Address: Manweb House, Kingsfield Court, Chester Business Park,
Chester CH4 9QH
Facsimile no: 0141568 3393
Attention: P. Brown, Energy Supply, Cathcart Business Park, Spean
Street, Glasgow G44 4BE
By:
Midlands Electricity plc
Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no: 0121423 2777
Attention: R. Murray
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893051
Attention: G. Brown
By:
Norsk Hydra (UK) Limited
Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1
3RH
Facsimile no: 0181892 1686
Attention: J. Hamilton
By:
Northern Electric plc
Address: Carliol House, Market Street, Newcastle upon Tyne NE1
ONE
Facsimile no: 0191 235 2295
Attention: M. Chandler
By:
NORWEB plc
Address: Talbot Road, Manchester M16 0HQ
Facsimile no: 0161 875 7089
Attention: K. Lee
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425479
Attention: S. Skillings
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SEEBOARD plc
Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no: 01273 428404
Attention: R.A. Page
By:
Shell Power Limited
Address: Rowlands Way, Withenshawe, Manchester M22 5SB
Facsimile no: 0161 499 8387
Attention: John Tucker
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Southern Electric ply
Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire
SL6 3QB
Facsimile no: 01628 584410
Attention: J. Sykes
By:
South Wales Electricity ply
Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no: 01222 790971
Attention: M. Mackey
By:
South Western Electricity plc
Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12
4SE
Facsimile no: 01454 616675
Attention: D.G. Harris
By:
The Renewable Energy Company Limited
Address: Stroud House, Russell Street, Stroud, Glos GL5 BAN
Facsimile no: 01453 756222
Attention: M. Alder
By:
UK Electric Power Limited
Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE
Facsimile no: 01492 592077
Attention: N.Bryson
By:
UML Limited
Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no: 0151 643 6299
Attention: R. Ashton
By:
Cabah Energy Limited
Address: c/o ABB ForStar Developments Limited, Tilford House,
Farnham
Business Park, Weydon Lane, Farnham, Surrey GU9 8QT
Facsimile no: 01252 732110
Attention: Paul Abbott
By:
Eastern Generation Services Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 601036
Attention: Ms. C. Woodard
By:
Enfield Energy Centre Limited
Address: Concorde House, Concorde Way, Stockton on Tees,
Cleveland TS18 3RB
Facsimile no: 01642 678123
Attention: K. Clarke
By:
Fibrowatt Thetford Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 01712218671
Attention: Rupert Fraser
By:
Hydro Electric Energy Limited
Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200
Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 455281
Attention: Company Secretary
By:
Yorkshire Electricity Group plc
Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no: 01132 895926
Attention: Company Secretary
By:
THE OTHER PARTIES
Accord Energy Ltd
Address: Heron House, 322 High Holborn, London WC1V 7PW
Facsimile no: 0171 269 4010
Attention: B. King
By:
AES Barry Limited
Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU
Facsimile no: 01446 722587
Attention: P. Norgeot
By:
Alcan Aluminium UK Limited
Address: Lynemouth Power Station, Ashington, Northumberland NE63
9YH
Facsimile no: 01670 393970
Attention: D. Alderton
By:
British Gas plc
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645453
Attention: D. Meachem
By:
Keadby Power Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17
3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Kingsnorth Power Limited
Address: c/o Budd Martin & Co, Industria House, Red Houses, St.
Brelade, Jersey JE3 8LD
Facsimile no: 01534 44777
Attention: R. Martin
By:
Meter Operators Limited
Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no: 01386 861113
Attention: R. Edmed
By:
Pentex (East Midlands) Limited
Address: Union Buildings, 15 Union Street, Aberdeen A81 2BU
Facsimile no: 01244 211444
Attention: H. Jamieson
By:
Rocksavage Power Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171 839 0905
Attention: G. Grant
By:
Seabank Power Limited
Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no: 0117 982 0351
Attention: J.P. Baldry, General Manager
By
Spalding Energy Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171 839 0905
Attention: G. Grant
THE METER OPERATOR PARTIES WHO ARE NOT PARTIES
Control Devices and Systems Limited
Address: PO. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE
Telex no: 849811
Facsimile no: 01635 528224
Attention: J.W. Dowse
By:
DrakMarn O&M Ltd
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425431
Contact: Company Secretary
By:
E. Squared Limited
Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no: 0171 378 0012
Attention: Graham Nicholls
By:
Northern Energy Services Limited
Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no: 01302 820790
Attention: W. Tuczemzkyi
By:
PowerMet Limited
Address: 13 Wimpole Street, London W1M 7AB
Facsimile no: 0171 493 7151
Attention: M. Rugman
By:
Schlumberger Industries Limited
Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no: 01394 276030
Attention: A.P. Mahoney, Managing Director
By:
Stanor National Contracts
Address: 66/68 Kingsland Road, London E2 8DP
Facsimile no: 0171 739 6135
Attention: A. Yardley
By:
The Challenge Group
Address: 22 Tally Road, Oxted, Surrey RH8 0TG
Facsimile no: 01883 730543
Attention: J. Glover
By:
EXTERNAL POOL MEMBERS
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neil, Business Manager, Electricity Generation
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384 Paris,
Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to:Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SETTLEMENT SYSTEM ADMINISTRATOR
Energy Settlements and Information Services Limited
Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no: 0115 945 6728
Attention: G.K. James, General Manager
By:
POOL FUNDS ADMINISTRATOR
Energy Pool Funds Administration Limited
Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no: 01203 423558
Attention:A. Marks, Director (National Grid House, 2nd Floor,
Kirby Corner Road,
Coventry CV4 8JY)
By:
GRID OPERATOR
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in )
the presence of: )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no:
Facsimile no: 01203 423577
Attention: Company Secretary (copy to: J. Irgin, c/o A.G. Ferens,
The National Grid Company plc, St. Catherine's Lodge,
Bearwood Road,
Sindlesham, Nr. Wokingham, Berkshire RG11 5BN)
ANCILLARY SERVICES PROVIDER
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of:- )
MEMBER OF BOARD SEALING COMMITTED
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no: 25815
Facsimile no: 01203 423577
Attention:Company Secretary (copy to Mr. Carlton)
EXTERNALLY INTERCONNECTED PARTIES
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:
Facsimile No: 0141636 4706
Attention: B.J.H. Paget
By:
Electricite de France, Service National
Address: EDF Department Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384 Paris, Cedex
08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to:Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no:
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
<PAGE>
DATED 28 July, 1997
THE GENERATORS
named herein
- and -
THE SUPPLIERS
named herein
- and -
ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
as Settlement System Administrator
- and -
ENERGY POOL FUNDS
ADMINISTRATION LIMITED
as Pool Funds Administrator
- and -
THE NATIONAL GRID COMPANY plc
as Grid Operator and Ancillary Services Provider
- and -
SCOTTISH POWER plc
and
ELECTRICITE DE FRANCE, SERVICE NATIONAL
as Externally
Interconnected Parties
- and -
THE OTHER PARTIES
named herein
- and -
THE METER OPERATOR PARTIES
named herein
NINETEENTH SUPPLEMENTAL DEED
relating to the Pooling and Settlement Agreement
for the Electricity Industry
in England and Wales
<PAGE>
CONTENTS
Page
1. INTERPRETATION 2
2. AMENDMENTS 2
3. CONTINUATION OF THE POOLING AND SETTLEMENT 2
AGREEMENT
4. MISCELLANEOUS 2
5. ENTIRE AGREEMENT 2
6. GOVERNING LAW 3
SCHEDULE 1: Part I: The Generators 4
Part II: The Suppliers 8
SCHEDULE 2: The Other Parties 12
SCHEDULE 3: The Meter Operator Parties who are not 14
Parties
SCHEDULE 4: Amendments to the Pooling and Settlement 15
Agreement
SIGNATORIES 50
<PAGE>
THIS SUPPLEMENTAL DEED is made on 28 JUL, 1997
BETWEEN:
(1) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part I of Schedule 1;
(2) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part II of Schedule 1;
(3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED
(registered number 2444282) whose registered office is situate at
Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as
Settlement System Administrator;
(4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number
2444187) whose registered office is situate at 185 Park Street,
London SE1 9DY as Pool Funds Administrator;
(5) THE NATIONAL GRID COMPANY plc (registered number 2366977)
whose registered office is situate at National Grid House, Kirby
Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary
Services Provider;
(6) SCOTTISH POWER plc (registered number 117120) whose
principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP,
Scotland as an Externally Interconnected Party;
(7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal
office is situate at Departement Relations avec l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris,
Cedex 08, France as an Externally Interconnected Party;
(8) THE OTHER PARTIES whose names, registered numbers and
registered or principal offices are set out in Schedule 2; and
(9) THE METER OPERATOR PARTIES whose names, registered numbers
and registered or principal offices are set out in Schedule 3.
WHEREAS :
(A) by a Pooling and Settlement Agreement for the Electricity
Industry in England and Wales dated 30th March, 1990 (the
"Pooling and Settlement Agreement") the parties thereto agreed to
give effect to and be bound by certain rules and procedures for
the operation of an electricity trading pool and the operation of
a settlement system;
(B) the Pooling and Settlement Agreement has been amended and/or
restated by eighteen supplemental agreements, and hereinafter
references to the Pooling and Settlement Agreement are to that
agreement as most recently amended and restated; and
<PAGE>
(C) the parties to this Deed (being (i) all the Parties at the
date hereof and (ii) all the Meter Operator Parties at the date
hereof) have agreed to amend the Pooling and Settlement Agreement
on the terms and subject to the conditions set out below.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 Except where defined herein or where the context otherwise
requires, words and expressions defined in the Pooling and
Settlement Agreement shall have the same respective meanings when
used in this Deed.
1.2 The table of contents and the headings to each of the
Clauses are inserted for convenience only and shall be ignored in
construing this Deed.
2. AMENDMENTS
The parties hereby agree that with effect on and from midnight on
3rd February, 1997, the Pooling and Settlement Agreement shall be
amended as set out in Schedule 4.
3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT
The Pooling and Settlement Agreement shall remain in full force
and effect and this Deed and the Pooling and Settlement Agreement
shall be treated as one document so that, upon the Pooling and
Settlement Agreement being amended pursuant to Clause 2, all
references to the Pooling and Settlement Agreement shall be
treated as references to that agreement as amended by this Deed.
4. MISCELLANEOUS
The provisions of Clauses 75 to 79 (inclusive) and 81 to 84
(inclusive) of the Pooling and Settlement Agreement shall be
deemed to be incorporated herein mutatis mutandis.
5. ENTIRE AGREEMENT
5.1 Each party acknowledges that in entering into this Deed on
the terms set out herein it is not relying upon any
representation, warranty, promise or assurance made or given by
any other party or any other person, whether or not in writing,
at any time prior to the execution of this Deed which is not
expressly set out herein.
5.2 None of the parties shall have any right of action against
any other party arising out of or in connection with any
representation, warranty, promise or assurance referred to in
sub-clause 5.1 (except in the case of fraud).
6. GOVERNING LAW
This Deed shall be governed by, and construed in all respects in
accordance with, English law.
IN WITNESS whereof this document has been duly executed and
delivered as a deed the day and year first above written
<PAGE>
4
SCHEDULE 1:
Part I: The Generators
Name Registered Registered or
Number Principal Office
Anglian Power Generators 2488955 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Barking Power Limited 2354681 Devonshire House
Mayfair House
London W 1X 5FH
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire
WA3 6AS
Celtpower Limited 2656561 13 Charles II Street
London
SW1Y 4QT
Citigen (London) Limited 2427823 100 Thames Valley
Park Drive
Reading
Berkshire
RG6 1PT
Corby Power Limited 2329494 Mitchell Road
Phoenix Parkway
Corby
Northamptonshire
NN17 1QT
Derwent Cogeneration 2703635 Landsdowne House
Limited Berkeley Square
London W1X 5DH
Eastern Merchant Generation 3116225 Wherstead Park
Limited Wherstead
Ipswich
Suffolk
IP9 2AQ
Name Registered Registered or
Number Principal Office
Electricite de France, Department Relations
Service National avec
I'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
France
Elm Energy & Recycling (UK) 2516685 Elm Energy House
Limited Ettingshall Road
Wolverhampton
West Midlands WV2
2LA
Fellside Heat and Power 2614535 Fellside Lodge
Limited Seascale
Cumbria CA20 1PG
Fibrogen Limited 2547498 Astley House
33 Notting Hill Gate
London W11 3JQ
Fibropower Limited 2234141 Astley House
33 Notting Hill Gate
London W11 3JQ
First Hydro Company 2444277 Bala House
Lakeside Business
Village
St. David's Park
Deeside
Clwyd
CH5 3XJ
Humber Power Limited 2571241 18 Savile Row
London
W1X 1AE
Indian Queens Power Company 2928100 1 Northumberland
Limited Avenue
London
WC2N 5BW
Name Registered Registered or
Number Principal Office
Independent Energy UK 3033406 2nd Floor, Park
Limited House
Park Street
Maidenhead
Berkshire
SL6 1SL
Keadby Generation Limited 2729513 P O Box 89, Keadby
Scunthorpe, North
Lincolnshire DN17
3AZ
Lakeland Power Limited 2355290 Roosecote Power
Station
Roosecote Marsh
Barrow-in-Furness
Cumbria LA13 OPQ
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Medway Power Limited 2537903 Boston House
The Little Green
Richmond TW9 1QE
Midlands Power (UK) Limited 2251099 Mucklow Hill
Halesowen
West Midlands B62
8BP
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
Peterborough Power Limited 2353599 Storeys Bar Road
Peterborough PE1 5NT
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Name Registered Registered or
Number Principal Office
Regional Power Generators 2352390 Wetherby Road
Limited Scarcroft,
Leeds LS14 3HS
Scottish Hydro-Electric plc 117119 10 Dunkeld Road
Perth PHI 5WA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Teesside Power Limited 2464040 4 Millbank
London SW1P 3ET
Winterton Power Limited 3001798 800 Park Avenue
Aztec West
Almondsbury
Bristol BS12 4SE
<PAGE>
Part II: The Suppliers
Name Registered Registered or
Number Principal Office
British Gas Trading Ltd 3078711 Charter Court
50 Windsor Road
Slough
Berkshire SL1 2HA
British Nuclear Fuels plc 1002607 Risley
Warrington
Cheshire WA3 6AS
Candecca Resources Limited 953066 Welton Gathering
Centre
Barfield Lane
Off Wragby Road
Sudbrooke
Lincoln LN2 2QU
Citigen (London) Limited 2427823 100 Thames Valley
Park Drive
Reading
Berkshire
RG6 1PT
Crosfield Limited 48745 Bank Quay
PO Box 26
Warrington
Cheshire WA5 1AB
Eastern Electricity plc 2366906 Wherstead Park
PO Box 40
Wherstead
Ipswich
Suffolk IP9 2AQ
East Midlands Electricity 2366923 PO Box 444
plc Woodyard Lane
Wollaton
Nottingham NG8 lEZ
Name Registered Registered or
Number Principal Office
Electricite de France, Department Relations
Service National avec
l'Etranger
Echanges d'Energie
2 Rue Louis Murat
5eme etage
75384 Paris
Cedex 08
Energy Supply Contracts 172268 The Havens
Limited Ransomes Europark
Ipswich
Suffolk IP3 9SJ
Enron Capital and Trade 3003823 4 Millbank
Resources Limited London SW1P 3ET
Impkemix Energy Limited 2076043 The Heath
Runcorn
Cheshire WA7 4QF
Independent Energy UK 3033406 2nd Floor Park House
Limited Park Street
Maidenhead
Berkshire SL6 1SL
London Electricity plc 2366852 Templar House
81-87 High Holborn
London WC1V 6NU
Magnox Electric plc 2264251 Berkeley Centre
Berkeley
Gloucestershire GL13
9PB
Manweb plc 2366937 Manweb House
Chester Business
Park
Chester CH4 9RF
Midlands Electricity plc Mucklow Hill
Halesowen
West Midlands B62
8BP
Name Registered Registered or
Number Principal Office
National Power plc 2366963 Windmill Hill
Business Park
Whitehill Way
Swindon
Wiltshire
SN5 6PB
Norsk Hydra (UK) Limited 841421 Bridge House
69 London Road
Twickenham
Middlesex TW1 3RH
Northern Electric plc 2366942 Carliol House
Market Street
Newcastle upon Tyne
NE1 6NE
NORWEB plc 2366949 PO Box 14
410 Birchwood
Boulevard
Birchwood
Warrington WA3 7GA
Nuclear Electric Limited 3076445 Barnett Way
Barnwood
Gloucester
GL4 3RS
PowerGen plc 2366970 53 New Broad Street
London EC2M 1JJ
Scottish Hydro-Electric plc 117119 10 Dunkeld Road
Perth PHI 5WA
Scottish Power plc 117120 1 Atlantic Quay
Glasgow G2 8SP
SEEBOARD plc 2366867 Forest Gate
Brighton Road
Crawley
West Sussex RH11 9BH
Shell Power Limited 2559630 Rowlands Way
Withenshawe
Manchester M 22 5SB
Name Registered Registered or
Number Principal Office
Slough Energy Supplies 2474514 234 Bath Road
Limited Slough SL1 4EE
Southern Electric plc 2366879 Westacott Way
Littlewick Green
Maidenhead
Berkshire SL6 3QB
South Wales Electricity plc 2366985 Newport Road
St. Mellons
Cardiff CF3 9XW
South Western Electricity 2366894 800 Park Avenue
plc Aztec West
Almondsbury
Bristol BS12 4SE
The Renewable Energy Company 3043412 Stroud House
Limited Russell Street
Stroud
Gloucestershire
GL5 3AN
UK Electric Power Limited 2844010 21 St. Thomas Street
Bristol BS 1 BUS
UML Limited 661900 PO Box 115
Port Sunlight
Wirral
Merseyside
L62 4ZL
Yorkshire Electricity Group 2366995 Wetherby Road
plc Scarcroft
Leeds LS14 3HS
SCHEDULE 2:
The Other Parties
Name Registered Registered or
Number Principal Office
Accord Energy Limited 2877398 Rivermill House
152 Grosvenor Road
London SW1V 3JL
AES Barry Limited 3135522 Burleigh House
17-19 Worpe Way
Richmond
Surrey TW10 6AG
Alcan Aluminium UK Limited 750143 Chalfont Park
Gerrards Cross
Buckinghamshire
SL9 0QB
British Gas plc 2006000 Rivermill House
152 Grosvenor Road
London SW1V 3JL
Cabah Energy Limited 2759706 190 Strand
London WC2R 1JN
Eastern Generation Services 2529347 Wherstead Park
Limited Wherstead
Ipswich
Suffolk IP9 2AQ
Enfield Energy Centre 2796628 Concorde House
Limited Concorde Way
Stockton on Tees
Cleveland
TS18 3RB
Fibrowatt Thetford Limited 3057688 Astley House
33 Notting Hill Gate
London W11 3JQ
Hydro Electric Energy 2487475 Royex House
Limited Aldermanbury Square
London EC2V 7LD
Name Registered Registered or
Number Principal Office
Keadby Power Limited 2548042 PO Box 89 Keadby
Scunthorpe North
Lincolnshire DN17
3AZ
Kingsnorth Power Limited 2656343 Chancery House
53-64 Chancery Lane
London WC2A lQU
Meter Operators Limited 2841018 Lynton House
7-12 Tavistock
Square
London WC1H 9BQ
Pentex (East Midlands) 2275006 Union Buildings
Limited 15 Union Street
Aberdeen AB1 2BU
Rocksavage Power Company 18868 20 St. James's
Limited Street
London SW10 4UJ
Seabank Power Limited 2591188 Severn Road Hallen
Bristol BS10 7SP
Spalding Energy Company 19668 20 St. James's
Limited Street
London SW1A lES
<PAGE>
SCHEDULE 3:
The Meter Operator Parties who are not Parties
Name Registered Registered or
Number Principal Office
Control Devices and Systems 1242585 PO Box 56
Limited 101 Mill Lane
Newbury
Berkshire
RG14 5RE
Datum Solutions Limited 2815238 185 Park Street
London
SE1 9DY
DrakMarn O&M Ltd 3124701 53 New Broad Street
London EC2M 1JJ
E. Squared Limited 2674129 Almac House
Church Lane
Bisley
Surrey
GU24 9DR
Northern Energy Services 2868141 5 Derwent Place
Limited Spotborough
Doncaster
DN5 7PN
PowerMet Limited 2877912 3 Park Place
London SW1A lLP
Schlumberger Industries 534821 1 Kingsway
Limited London WC2B 6XH
Stanor National Contracts 2769170 7-12 Tavistock
Limited Square
London WC1H 9BQ
The Challenge Group 22 Tally Road
Oxted
Surrey RH8 0TG
<PAGE>
SCHEDULE 4:
Amendments to the Pooling and Settlement Agreement
The Pooling and Settlement Agreement shall be amended as follows:
1. Operative Provisions
(a) By the restatement of Clause 1.7 as set out below:
"1.7 1998: The provisions of Schedule 22 and Schedule 23 shall
have effect.".
(b) By the restatement of Clause 19 as set out below:
"19 CONDUCT OF EXECUTIVE COMMITTEE MEETINGS
19.1General: Chairman:
19.1.1Subject as provided in Clauses 13,18 and 22 and this Clause
19, the Executive Committee may meet for the transaction of
business, and adjourn and otherwise regulate its meetings,
as it shall see fit.
19.1.2The Pool Chairman shall preside as chairman at every
meeting of the Executive Committee provided that:
(a)if the Pool Chairman is unable to attend any meeting, he
shall nominate another individual to preside as chairman at
that meeting in his place. Such individual shall be a
director or senior executive of one of the Pool Members but
shall not be a Committee Member or an alternate for any
Committee Member; and
(b)if there is no Pool Chairman or the Pool Chairman or his duly
appointed nominee shall not be present within 15 minutes
after the time appointed for the holding of the meeting or
the Pool Chairman is unwilling to act, the Committee Members
present may appoint one of their number to be chairman of the
meeting.
19.1.3The chairman of the meeting in his capacity as chairman
shall not have any vote at meetings of the Executive
Committee.
19.2Quorum: No business shall be transacted at a meeting of the
Executive Committee unless a quorum is present throughout
that meeting. Six Committee Members present in person or by
their respective alternates shall constitute a quorum.
19.3Lack of quorum: If, within half an hour from the time
appointed for holding any meeting of the Executive
Committee, a quorum is not
present, the meeting shall be adjourned to the same day in the
next week at the same time and place and if at the adjourned
meeting a quorum is not present within half an hour from the time
appointed for holding the meeting, those present shall constitute
a quorum.
19.4Representation of non-Committee Members: Each of the
Settlement System Administrator, the Pool Chairman, the
Director and the Pool Auditor (or its or his duly appointed
representative) shall have the right to attend and speak
(but not to vote) at meetings of the Executive Committee.
Each Externally Interconnected Party (not being a Pool
Member) and each of the Pool Funds Administrator, the Grid
Operator and the Ancillary Services Provider (or its duly
appointed representative) shall be entitled to attend and
speak (but not vote) at meetings of the Executive Committee
only where matters directly concerning its functions, duties
or responsibilities have been identified or advised as
provided in Clause 18.1.4 or if so requested by the
Executive Committee. The Chief Executive (or his duly
appointed representative) shall have the right to attend and
speak (but not vote) at meetings of the Executive Committee
and shall be obliged so to attend. With the exception of
attendances by the Pool Chairman, the Chief Executive and
the Pool Auditor, no payment shall be made to any person who
has the right by virtue of this Clause 19.4 to attend
Executive Committee meetings in respect of any such
attendance.
19.5Written resolutions: A resolution in writing, executed by or
on behalf of each Committee Member, shall be as valid and
effectual as if it had been passed at a meeting of the
Executive Committee duly convened and held and may consist
of several instruments in like form and executed by or on
behalf of one or more of such Committee Members. Any
proposed resolution in writing shall be circulated to all
those persons who would have been entitled to attend a
meeting of the Executive Committee at which such resolution
could properly have been passed.
19.6 Default in appointment: All acts done by any meeting of the
Committee Members or of a sub-committee of the Executive
Committee shall, notwithstanding that it be afterwards
discovered that there was some defect in the appointment of
such Committee Member, be as valid as if such person had
been duly appointed.".
<PAGE>
2. Schedule 22
By the deletion of Schedule 22 and the substitution therefor of
the following:
"SCHEDULE 22
1998 PROGRAMME FUNDING AND COST RECOVERY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule, except where the context
otherwise requires:
"1998 Programme" means the programme of work undertaken by the
Pool to establish the systems and processes (including the EAC/AA
System, the ISRA System and the NHH Data Aggregation System) to
support the trading and settlement system in England and Wales to
facilitate the full introduction of a competitive supply market
on 1st April, 1998, as described in the Operational Framework;
"1998 Programme Costs" means the development and implementation
costs of the 1998 Programme comprising the following (without
double-counting):
(a) the costs and expenses of implementing Approved Funding
Tranches approved in the period until the Implementation
Date; and
(b)Accrued Costs,
in so far as such costs relate to the 1998 Programme but, for the
avoidance of doubt, shall exclude those costs and charges to be
paid by the Scottish PESs or Scottish Settlements pursuant to
section 9 of Schedule 23;
"1998 Sub-Committees" means the sub-committees, the Programme
Board and project boards established to develop and implement the
1998 Programmer
"Accrued Costs" means the costs accrued in relation to the 1998
Programme prior to 1st April, 1996, which the Pool Members agree
amount to pounds 2,878,000 at 1st April, 1996, together with interest
calculated at the base rate of Barclays Bank PLC from time to
time compounded, with monthly rests, until the date of payment,
which costs are repayable in accordance with sub-section 2.4;
"Aggregate Charging Limit" or "ACL" means the aggregate amount of
1998 Programme Costs recoverable by the Public Electricity Suppliers
pursuant to Section 8;
"Approved Funding Tranches" means the Funding Tranches approved by
the Steering Group in accordance with sub-section 3.4 or by Public
Electricity Suppliers in accordance with sub-section 7.2;
"EAC/AA System" means the estimation of annual consumption and
annualised advance software and systems which are to be developed for
the benefit of Pool Members pursuant to the 1998 Programmer
"EPFAL" means Energy Pool Funds Administration Limited (registered
number 2444187) whose registered office is situate at 185 Park
Street, London SE1 9DY or such other person as may be appointed as
its successor from time to time as Pool Funds Administrator pursuant
to Schedule 15;
"Financing Costs" or "FC" means the amount of costs to be incurred and
recovered by the Public Electricity Suppliers in respect of their
financing of 1998 Programme Costs, such amount being equal to interest
upon 1998 Programme Costs at the base rate of Barclays Bank PLC from
time to time compounded, with monthly rests, accruing from the date of
payment by the Public Electricity Suppliers of such 1998 Programme
Costs, until the date the Public Electricity Suppliers are reimbursed
in accordance with Section 8;
"Funder" means a person for the time being being party to this
Agreement who is a Public Electricity Supplier or a Scottish PES;
"Funding Tranches" means individual and groups of work packages
submitted for approval by the Steering Group or Public Electricity
Suppliers in accordance with sub-section 3.4 or, as the case may be,
Section 7;
"Implementation Date" means the date on which the first of the
following occurs:
(a) a competitive supply market begins to operate in respect of
customers below 100kW;
(b) the Executive Committee requires work on the 1998 Programme to
cease as agreed or sanctioned by the Secretary of State or the
Director; and
(c) the systems and processes developed by the Pool required to
facilitate the beginning of the competitive supply market in
respect of customers below 100kW would be able to operate, as
determined by an independent expert jointly appointed by the
Public Electricity Suppliers, the Chief Executive and the
Director, but are not capable of operating because of other
circumstances,
but in any event no earlier than 1st April, 1998;
"ISRA System" means the initial settlement and reconciliation
software and systems for electricity trading in England and Wales
which are to be developed for the benefit of Pool Members
pursuant to the 1998 Programmer
"NHH Data Aggregation System" means the non half hour data
aggregation software and systems which are to be developed for
the benefit of Pool Members pursuant to the 1998 Programmer
"Non-paying Funder" has the meaning ascribed to that term in
paragraph 2.3.3;
"Operational Framework" means the 1998 Operational Framework of
the Pool (Release 4.2) submitted to the Director as of 31st
March, 1996;
"Other Pool Members" has the meaning ascribed to that term in
Schedule 23;
"PES Votes" means, in relation to a Public Electricity Supplier,
the number of votes to which such Public Electricity Supplier is
entitled from time to time, determined in accordance with Section
6;
"Pool" means the Electricity Pool of England and Wales;
"Programme Board" means the 1998 Programme Management Board
established by the Executive Committee to monitor, review and
oversee implementation of the 1998 Programmer
"Programme Budget" means an estimate of the overall cost of
implementing the 1998 Programme, including detailed cost
estimates for each element of the 1998 Programme required to be
incurred, each element to be broken down into all identified
Funding Tranches with each Funding Tranche to contain the details
of the timing of the work, the scope of work and the likely costs
and expenses to be incurred in its performance, approved in
accordance with Section 5;
"Programme Share" means, in relation to a Public Electricity
Supplier or a Scottish PES, the share of 1998 Programme Costs of
such Public Electricity Supplier or (as the case may be) such
Scottish PES, determined in accordance with Section 6;
"Requisite Proportion" means, in the case of the approval by
Public Electricity Suppliers in writing or in separate meeting of
the matters referred to:
(a) in paragraphs 7.2(a) and 7.2(c), 65 per cent.; and
(b) in paragraph 7.2(b), 50 per cent.,
in the case of written consent, of the total PES Votes of all
Public Electricity Suppliers and, in the case of a separate
general meeting, of the total PES Votes of those Public
Electricity Suppliers as (being entitled to do so) vote in person
or by proxy at the relevant separate general meeting of which
notice specifying the intention to propose the resolution has
been duly given;
"Scottish PES" means Scottish Hydro-Electric PLC and Scottish
Power plc;
"Scottish Settlements" means Scottish Electricity Settlements
Limited (registered in Scotland number SC169212);
"Steering Group" means the 1998 Programme Steering Group
established pursuant to Section 3, save that if the Executive
Committee so determines, such Steering Group may be disbanded, in
which case the Executive Committee shall act as and have the same
rights and obligations as the Steering Group for the purposes of
this Schedule, as such rights and obligations are set out in
Section 3, and in that event references in this Schedule to a
member of the Steering Group appointed by a member of the
Executive Committee appointed by Public Electricity Suppliers
shall be read as references to any member of the Executive
Committee appointed by Public Electricity Suppliers; and
"Total 1998 Programme Costs" has the meaning given to it in
Section 8.1.3.
1.2 Interpretation: In the event of any inconsistency or conflict
between the
provisions of this Schedule and the other provisions of the
Agreement in
relation to the 1998 Programme Costs or the Operational
Framework,
the provisions of this Schedule shall, unless otherwise expressly
provided, prevail.
2. PROGRAMME FUNDING
2.1 Programme Costs: All 1998 Programme Costs shall be paid or
reimbursed by Public Electricity Suppliers and the Scottish PESs
or by a person or persons on their behalf in accordance with this
Schedule.
2.2 Allocation of 1998 Programme Costs after 1st April, 1996: In
respect of each month from (and including) April 1996, the 1998
Programme Costs incurred in such month shall be allocated amongst
Public Electricity Suppliers and the Scottish PESs according to
their respective Programme Shares.
2.3 Payment and collection:
2.3.1 EPFAL shall collect from Public Electricity Suppliers and
the Scottish PESs the amounts which they are obliged to pay
towards the 1998 Programme Costs and each Public Electricity
Supplier and each Scottish PES will be obliged to pay its
proportionate share of the 1998 Programme Costs "together
with Value Added Tax thereon, if applicable) against receipt
of any invoice therefor issued by EPFAL.
2.3.2 EPFAL shall arrange for collection from each Public
Electricity Supplier and each Scottish PES of its
proportionate share of the 1998 Programme Costs in such
manner as may be agreed by EPFAL with the Public Electricity
Suppliers from time to time (which may include collection in
advance) and Public Electricity Suppliers and the Scottish
PESs shall comply with such collection procedures and, in
particular, shall make payment within the time period
prescribed by such procedures.
2.3.3 If any Public Electricity Supplier or Scottish PES fails to
pay an amount properly due under this Schedule within
fifteen (15) days of the due date for such payment (such
Public Electricity Supplier or Scottish PES being a "Non-
paying Funder") each Pool Member (other than the Non-paying
Funder) shall be severally liable for its Contributory Share
(calculated on the basis that the Points allocated to the
defaulting Non-paying Funder are disregarded) and EPFAL
shall accordingly be entitled to recover the due proportion
of that amount from each Pool Member (other than the
Non-paying Funder). In that event, EPFAL shall advise each
Pool Member of the amount payable by invoice despatched to
each Pool Member and each Pool Member shall pay the amount
advised in the relevant invoice within fifteen (15) days
after the invoice date.
2.3.4 A Non-paying Funder shall indemnify and keep indemnified
each Pool Member on demand against all sums properly paid by
such Pool Member pursuant to this sub-section 2.3.
2.3.5 Each Pool Member shall give notice to the Pool Funds
Administrator before instituting any action or proceedings
in any court to enforce payments due to it pursuant to this
Schedule. Upon receipt of any notice under this paragraph
2.3.5, the Pool
Funds Administrator will as soon as practicable notify the
Executive Committee, all Pool Members and the Director. The
provisions of sub-section 24.4 of Schedule 11 shall apply
mutatis mutandis in respect of any payment due from a Non-
paying Funder pursuant to this Schedule.
2.3.6 Upon EPFAL becoming aware of a Public Electricity Supplier
or a Scottish PES becoming a Non-paying Funder, it shall
notify the Executive Committee, the remaining Pool Members
and the Director, and the Executive Committee shall convene
and cause to be convened a general meeting of Pool Members
as soon as possible thereafter, which meeting will determine
whether any further 1998 Programme Costs shall be incurred.
2.3.7 The provisions of paragraphs 15.2.3, 15.2.4 and sub-section
15.3 of Schedule 15 shall in any event apply mutatis
mutandis in respect of all payments required to be made
pursuant to this Section 2.
2.4 Accrued Costs: As soon as reasonably practicable, but in any
event no later than 1st April, 1997, the Pool Members will
pay each other such sums as will ensure that all Accrued
Costs have effectively been paid for or reimbursed only by
Public Electricity Suppliers and Scottish PESs and, as
between Public Electricity Suppliers and Scottish PESs,
according to their respective Programme Shares.
3. PROGRAMME EXPENDITURE AND THE STEERING GROUP
3.1 Authority to incur expenditure: No 1998 Programme Costs
shall be incurred by 1998 Sub-Committees other than pursuant to
Approved Funding Tranches.
3.2 Establishment: Pool Members hereby establish the Steering
Group as a
sub-committee of the Executive Committee upon the terms and
subject
to the conditions of this Schedule 22.
3.3 Steering Group Members: Each member of the Executive
Committee shall
have the right to appoint a member of the Steering Group.
3.4 Approval of programme expenditure:
3.4.1 The Steering Group will notify each 1998 Sub-Committee
and such persons as may be nominated by each Public Electricity
Supplier in writing to the Steering Group from time to time ("PES
Nominees"), no later than 10 working days prior to holding any
meeting of the date that meeting will be held, save that, if at
least 5 members of the Steering Group (including at least 3
appointed by members of the Executive Committee appointed by
Public Electricity Suppliers) consent, a meeting of
the Steering Group may be held on 48 hours' notice.
3.4.2 Prior to approving any further work packages after 15th
July, 1996, undertaking or commissioning any work in respect of
the 1998 Programme, the Programme Board or any member of the
Steering Group shall submit one or more Funding Tranches to the
Steering Group (with a copy to all PES Nominees) at least 5
working days in advance of any meeting of the Steering Group, for
approval. Each Funding Tranche shall contain details of the scope
of the work proposed to be undertaken and a budget of all costs
associated with that work, together with a comparison of all its
elements against the Programme Budget (or, if the Programme
Budget shall not then have been agreed, against the planned
budget). Any amount to be reimbursed in respect of costs incurred
in relation to work packages approved in the period between 31st
March, 1996 and 15th July, 1996 shall also be the subject of a
Funding Tranche or Funding Tranches to be submitted to the
Steering Group (with a copy to all PES Nominees) by the Programme
Board or any member of the Steering Group at least five working
days in advance of a meeting of the Steering Group. Each such
Funding Tranche shall contain details of the scope of the work
undertaken and details of the costs associated with it.
3.4.3 At each meeting of the Steering Group, the Steering
Group shall resolve whether to approve Funding Tranches duly
submitted to it in accordance with paragraph 3.4.2, and, subject
to any appeal to Public Electricity Suppliers, any Funding
Tranche so approved will become an Approved Funding Tranche.
Notwithstanding the decision taken, any Public Electricity
Supplier or any member of the Steering Group appointed by a
member of the Executive Committee appointed by Public Electricity
Suppliers may, within 5 working days of the resolution of the
Steering Group, by notice in writing to the Steering Group,
appeal the matter to be considered by Public Electricity
Suppliers under sub-section 7.2. If the Public Electricity
Suppliers then resolve to approve the Funding Tranche, it shall
become an Approved Funding Tranche. If the matter has been
appealed and Public Electricity Suppliers do not so approve it,
the Funding Tranche shall not be an Approved Funding Tranche.
3.4.4 As soon as the Programme Board becomes aware that the
cost of any work carried out pursuant to any Approved Funding
Tranche is likely to exceed the budget considered by the Steering
Group in paragraph 3.4.2 above, it shall forthwith prepare a
revised budget and deliver it to the Steering Group, at which
point the Steering Group and, if necessary, the Public
Electricity Suppliers, will follow the procedure set out in
paragraphs 3.4.2 and 3.4.3 in considering whether to authorise
the continuation of work under the Approved Funding Tranche,
in accordance with such revised budget. If (a) the Steering
Group does not resolve to approve the revised budget, in accordance
with paragraph 3.4.2 or (b) after referral to Public Electricity
Suppliers in accordance with sub-section 7.2 they resolve not to
approve the revised budget, then the relevant 1998 Sub-Committee
shall undertake no work to implement the Approved Funding Tranche
which would lead to the cost of implementing the Approved Funding
Tranche exceeding the original budget. If the revised budget is
approved in accordance with paragraph 4.3.2 or, as the case may be,
sub-section 7.2, the cost of that Approved Funding Tranche will be
adjusted accordingly.
3.4.5 Any Steering Group member may by reasonable notice
request such information of the Chief Executive or the Programme
Board as may be reasonably required to assess the performance of
the 1998 Programme against the Programme Budget and Approved
Funding Tranches, it being understood that the Chief Executive
and the Programme Board shall not be required to comply with any
such information request unless it is made by 3 or more members
of the Steering Group.
3.5 Voting: Any question or matter considered by the Steering
Group shall be resolved by a simple majority of votes of members
of the Steering Group.
4. THE OPERATIONAL FRAMEWORK
4.1 Changes to Operational Framework: Subject to sub-section
4.2, any addition to, deletion from or other change to the
Operational Framework by or on behalf of Pool Members shall be
made only with the prior approval of Pool Members in general
meeting.
4.2 Effect on 1998 Programme Costs: If any addition to, deletion
from or other change to the Operational Framework may lead to an
increase in the 1998 Programme Costs then, unless such addition,
deletion or other change has been approved by the Public
Electricity Suppliers in writing or in separate general meeting,
the proposed addition, deletion or other change shall not take
effect unless Pool Members so resolve (in which case any costs
incurred as a result of the addition, deletion or other change in
question shall not be 1998 Programme Costs).
5.PROGRAMME BOARD AND PROGRAMME BUDGET
5.1 Constitution of the Programme Board: At all times, the
Programme Board shall comprise three senior users, one
senior technical user (together the
"Senior Users") and the Chief Executive. One of the Senior Users
shall be an appointee of all Pool Members other than Public
Electricity Suppliers, and the other three shall be appointees of
the Public Electricity Suppliers.
5.2 Voting: It is the intention of Pool Members that the
Programme Board shall resolve matters by way of consensus.
5.3 Preparation of the Programme Budget: The Programme Board
shall prepare and submit a draft programme budget by no later
than 15th July, 1996 for approval by the Steering Group. The
procedure for approval of the draft programme budget shall follow
that for approval of Funding Tranches in paragraphs 3.4.2 and
3.4.3, save that if either the Steering Group or Public
Electricity Suppliers do not approve the draft programme budget,
they shall notify the Programme Board of any areas requiring
revision and the Programme Board shall, as soon as reasonably
practicable after such notification, re-submit the draft
programme budget to the Steering Group. Once the draft programme
budget is approved it shall be the Programme Budget.
6. PROGRAMME SHARES AND PES VOTES
6.1 Programme Shares: The Programme Share of each Public
Electricity Supplier and each Scottish PES shall be that set
opposite its name in column 2 of the table in sub-section 6.3.
6.2 PES Votes: The PES Vote of each Public Electricity Supplier
shall be that
set opposite its name in column 3 of the table in sub-section
6.3.
6.3 Table:
Column 1 Column 2 Column 3
Name of Funder Programme PES Votes
Shares
Eastern Group plc 12.64% 13.82%
East Midlands Electricity plc 8.79% 9.61%
London Electricity plc 7.76% 8.50%
Manweb plc 5.19% 5.71%
Midlands Electricity plc 8.81% 9.64%
Northern Electric plc 4.97% 5.44%
NORWEB Plc 8.21% 8.99%
Scottish Hydro-Electric PLC 2.66% Not
Applicable
Scottish Power plc 5.97% Not
Applicable
SEEBOARD PLC 8.14% 8.91%
Southern Electric plc 10.74% 11.75%
South Wales Electricity plc 3.34% 3.64%
South Western Electricity plc 5.67% 6.21%
Yorkshire Electricity Group 7.11% 7.78%
plc
6.4 Reopener: If the aggregate amount of the 1998 Programme
Costs as projected under the 1998 Programme at 31st December,
1997 exceeds the budgeted figure for the 1998 Programme Costs as
at 1st January, 1997 (which is agreed only for these purposes to
be pounds 58,000,000), the Programme Shares of the Funders shall
promptly be recalculated by or on behalf of the Funders in
accordance with the principles set out in the document entitled
"Costing Estimates for Scottish Contribution to Pool Programme"
dated 13th December, 1996 (a copy of which has been initialled by
the Chief Executive for the purposes of identification only), and
column 2 of the table in sub-section 6.3 shall be amended
accordingly.
6.5 Merger and adjustment: In the event of any merger between
one or more Funders any successor company shall have the
aggregate Programme Shares and PES Votes of its predecessors. Any
successor to part only of the authorised area (as such term is
defined in its PES Licence) of a Public Electricity Supplier and
the Public Electricity Supplier retaining the other part shall
have such PES Votes and Programme Shares as the Director shall
determine. Any successor to part only of the authorised supply
area (as such term is defined in the PES Licence of the relevant
Scottish PES) of a Scottish PES and the Scottish PES retaining
the other part shall have such Programme Shares as the Director
shall determine.
7. PES MEETINGS
7.1 PES Meetings: The following provisions of this Section 7
shall apply to separate general meetings of Public Electricity
Suppliers.
7.2 Requirements for PES Approval: The following matters shall
require Public Electricity Suppliers to give their approval by
the Requisite Proportion in separate general meeting, or by the
Requisite Proportion of Public Electricity Suppliers giving their
approval in writing to take effect:
(a) the approval of Funding Tranches by way of appeal under sub-
section 3.4;
(b) the approval of any addition to, deletion from or other
change to the Operational Framework which may lead to an increase
in the 1998 Programme Costs; and
(c) any addition to, deletion from or other change to this
Schedule 22 (other than, for the avoidance of doubt, the adoption
of detailed drafting of the provisions relating to the recovery
of 1998 Programme Costs in accordance with paragraph 8.2.3).
7.3 General Provisions: The provisions of Part 111 of the
Agreement relating to general meetings of Pool Members shall
apply mutatis mutandis to separate general meetings of Public
Electricity Suppliers, but so that:
(a) the necessary requirement for notice in writing to be given
of any such separate general meeting shall be 5 working days
rather than the period in Clause 9.3;
(b) Clause 10.9 shall not apply although the Pool Auditor and
the Director or its or his duly authorised representative shall
have the right to attend and speak (but not vote) at such
separate general meetings;
(c) such separate general meetings shall be convened by the
Secretary upon receipt of a request from a Public Electricity
Supplier or a member of the Steering Group appointed by an
Executive Committee Member appointed by Public Electricity
Suppliers;
(d) the necessary quorum shall be 6 or more Public Electricity
Suppliers present in person together representing 50 per cent. or
more of the aggregate number of PES Votes of all Public
Electricity Suppliers and if no quorum is present within half an
hour from the time appointed for the separate general meeting,
the separate general meeting shall be adjourned until the
following working day;
(e) references to Total Votes shall be substituted by references
to PES Votes; and
(f) notice of any such separate general meeting need to be given
only to those entitled to attend the same,
and any resolution put to any such separate general meeting
shall, to be passed, require the Requisite Proportion of votes in
favour.
8. RECOVERY OF 1998 PROGRAMME COSTS
8.1 Calculation of Aggregate Charging Limit: The Aggregate
Charging Limit shall be calculated in the following manner:
8.1.1 if Total 1998 Programme Costs are less than the Lower
Limit then:
ACL = LL-LL - T1998 PC + FC
-------------
2
8.1.2 if Total 1998 Programme Costs are equal to or greater
than the Lower Limit and less than or equal to the Upper
Limit then:
ACL = T1998 PC + FC; and
8.1.3 if Total 1998 Programme Costs are greater than the
Upper Limit then:
ACL = UL + T1998 PC - UL + FC
-------------
2
in each case, where, subject to the provisions set out below:
the Lower Limit ("LL") = pounds 43,500,000;
the Upper Limit ("UL") = pounds 53,500,000; and
the Total 1998 Programme Costs ("T1998 PC") = the aggregate
amount of 1998 Programme Costs allocated to Public Electricity
Suppliers in England and Wales according to their respective
Programme Shares,
save that if, as a result of any addition to, deletion from or
other change to the Operational Framework and/or the adoption of
Approved Funding Tranches pursuant to sub-section 3.4 or Section
7 outside the scope of the Operational Framework, the Total 1998
Programme Costs are changed by any amount in excess of pounds 50,000
then, subject to prior approval by the Director, both the Lower
Limit and the Upper Limit shall be adjusted by the amount of such
change.
8.2 Recovery by Public Electricity Suppliers from under 100kW
customers:
8.2.1 The ACL is to be recovered, with allowance being made
for Financing Costs, over a maximum period of 5 years from the
Implementation Date from all suppliers of customers below 100kW
on the basis of a charge per megawatt hour supplied. The Public
Electricity Suppliers shall be entitled to recover the ACL in
proportion to the 1998 Programme Costs contributed by them (the
Public Electricity Suppliers' proportions being grossed up for
this purpose to aggregate 100 per cent.). If, for reasons other
than force majeure (as defined in paragraph 8.2.2 below), the
Implementation Date is later than 1st April, 1998, the Public
Electricity Suppliers or their agents will be able to recover a
proportionately lesser amount.
8.2.2 If, by reason of force majeure (which for these
purposes means any delay as a result of the requirements of the
Director or the Secretary of State or any exceptional
circumstances outside the control of the Pool), the 1998
Programme is delayed or not implemented, full cost recovery of
the ACL shall be made.
8.2.3 The principles for recovery set out in this sub-section
8.2 require further detailed drafting. Pool Members undertake to
use their reasonable endeavours to agree the detailed drafting by
1st June, 1997.
8.3 Recovery by Scottish PESs: Scottish PESs shall be entitled to
recover from third parties their respective contributions towards
the 1998 Programme Costs in accordance with the terms of their
agreement with the Director (if any).
9. SCHEDULE 22 CEASING TO HAVE EFFECT
Without prejudice to any accrued rights or liabilities, the
provisions of this Schedule 22 shall cease to have effect on the
date following that on which the final payment has been made to
the last Public Electricity Supplier to be reimbursed its due
proportion in respect of 1998 Programme Costs and Financing Costs
pursuant to Section 8.".
3. Schedule 23
By the insertion of the following new Schedule 23 :
"SCHEDULE 23
SCOTTISH SETTLEMENTS
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Schedule and the Scots Subsidiary
Documents, except where the context otherwise requires:
"1998 Contractor" means for the time being and from time to time
a contractor employed or retained by or on behalf of or on the
instructions of Pool Members to undertake work or to provide
services in relation to the design, development, testing,
implementation, operation or maintenance of the 1998 Systems (and
includes any sub-contractor of such a contractor);
"1998 Deliverables" means the work product of a 1998 Contractor
under its contract or arrangement with Pool Members (or their
agent) in relation to the 1998 Programmer
"1998 Documentation" means the documentation prepared for the
benefit of Pool Members in connection with the 1998 Programme
relating to the design, development, testing, implementation,
operation and/or maintenance of the Relevant 1998 Systems and for
the time being and from time to time listed or referred to in
Part B of Scots Subsidiary Document 1;
"1998 Programme" has the meaning given to that term in Schedule
22;
"1998 Systems" means the systems and processes (including the
ISRA System) supporting the central electricity trading and
settlement system in England and Wales which are to be developed
for the benefit of Pool Members pursuant to the 1998 Programmer
"Analysis" has the meaning given to that term in Scots Subsidiary
Document 3;
"Combined Members" means the members of the Chief Executive's
Office, the Executive Committee, the Committee Members and the
Other Pool Members;
"Developed Material" has the meaning given to that term in
paragraph 4.5(B);
"EAC/AA System" has the meaning given to that term in Schedule
22;
"Existing Pool Documentation" means the documentation relating to
the rules and procedures for the operation of the central
electricity trading and settlement system in England and Wales
and for the time being and from time to time listed or referred
to in Part A of Scots Subsidiary Document 1;
"JAR System" means the control system and processes that are
necessary to facilitate initial allocation to suppliers in the
authorised supply areas of the Scottish PESs (as defined in the
PES Licence of the relevant Scottish PES) and reconciliation of
all the electricity consumed in those authorised supply areas
within a bulk supply point group;
"ISRA Documentation" means the documentation prepared for the
benefit of Pool Members relating either to the engagement of a
1998 Contractor for the initial settlement and reconciliation
function contemplated by the 1998 Programme or to the design,
development, testing and trialing of the ISRA System, and in each
case for the time being and from time to time listed or referred
to in Part C of Scots Subsidiary Document 1;
"ISRA System" has the meaning given to that term in Schedule 22;
"Logica" means Logica UK Limited (registered number: 947968);
"Logica Contract" means the agreement dated 11th September, 1996
and made between Logica and Energy Pool Funds Administration
Limited;
"NHH Data Aggregation System" means the non half hour data
aggregation software and systems which are to be developed for
the benefit of Pool Members pursuant to the 1998 Programmer
"Other Pool Members" means all the Pool Members other than the
Scottish PESs (and, where the context so admits, includes any
person acting on their behalf for the purposes of this Schedule
and the Scots Subsidiary Documents);
"Pool 1998 Software" means the software for the Relevant 1998
Systems (excluding all operating system software for all of the
1998 Systems) for the time being and from time to time listed or
referred to in Scots Subsidiary Document 2;
"Programme Board" has the meaning given to that term in Schedule
22;
"Programme Liaison Officer" means the 1998 Programme's liaison
officer nominated for the time being and from time to time by or
on behalf of the Other Pool Members in accordance with Scots
Subsidiary Document 4;
"Relevant 1998 Systems" means the 1998 Systems other than the
EAC/AA System and the NHH Data Aggregation System and excluding
all Support Services and all hardware;
"Required Documentation" means the 1998 Documentation, the
Existing Pool Documentation, the ISRA Documentation and the
Support Documentation;
"Responsible Officers" has the meaning given to that term in
Scots Subsidiary Document 4;
"Scots 1998 Licence" has the meaning given to that term in sub-
section 4.2;
"Scots Contract" has the meaning given to that term in sub-
section 6.1;
"Scots Contractor" has the meaning given to that term in
paragraph 4.5(B);
"Scots Due Date" has the meaning given to that term in sub-
section 9.3;
"Scots Licence-Back" has the meaning given to that term in
paragraph 4.5 (H);
"Scots Licensee" has the meaning given to that term in sub-
section 4.2;
"Scots Subsidiary Documents" means each of the documents
identified and agreed to be treated as a Scots Subsidiary
Document for the purposes of this Schedule by the Scottish PESs
and the Executive Committee (or a nominated sub-committee of the
Executive Committee), as the same may be amended or substituted
from time to time with their prior written consent. Each Scots
Subsidiary Document shall be numbered and references in this
Schedule to "Scots Subsidiary Document 'n"' shall be to the
relevant numbered Scots Subsidiary Document;
"Scottish PESs" has the meaning given to that term in Schedule
22;
"Scottish Settlements" means Scottish Electricity Settlements
Limited, a private limited liability company incorporated in
Scotland with registered number SC169212 jointly owned by the
Scottish PESs for the purposes of managing and implementing the
Scottish Settlements Arrangements (and includes any successor
company);
"Scottish Settlements Arrangements" means the business of
developing, operating and maintaining systems, processes and
arrangements in the authorised supply areas (as defined in the
PES Licence of the relevant Scottish PES) of the Scottish PESs
pursuant to their obligations as holders of PES Licences, and
includes the Scottish Settlements Project;
"Scottish Settlements Project" means the project established and
managed by Scottish Settlements that will develop systems,
processes and arrangements within the scope and as part of the
Scottish Settlement Arrangements;
"SSP Liaison Officer" means the liaison officer of the Scottish
PESs (or, as the case may be, Scottish Settlements) nominated for
the time being and from time to time by them in accordance with
Scots Subsidiary Document 4;
"Support Documentation" means any documentation provided by the
Programme Liaison Officer as clarification to any of the 1998
Documentation, the Existing Pool Documentation or the ISRA
Documentation in response to a request from the SSP Liaison
Officer pursuant to Scots Subsidiary Document 4;
"Support Services" means:
(A) support services for systems tests, integration tests and
trialing;
(B) services for maintenance, error correction, change
implementation and new system releases; and
(C) training services;
"Systems Requirement Request" has the meaning given to that term
in Scots Subsidiary Document 3; and
"Systems Requirement Response" has the meaning given to that term
in Scots Subsidiary Document 3.
1.2 Interpretation: In the event of any inconsistency or
conflict between the provisions of this Schedule and the other
provisions of the Agreement (other than Schedule 22) insofar as
concerns the relationship of the Scottish Settlements
Arrangements to the 1998 Programme or the Operational Framework,
the provisions of this Schedule shall, unless otherwise expressly
stated, prevail. In the event of any other inconsistency or
conflict between the provisions of this Schedule and the other
provisions of the Agreement, such other provisions shall prevail.
1.3 Scots Subsidiary Documents: Each of the Parties undertakes
to comply with the Scots Subsidiary Documents insofar as
applicable to such Party.
The Executive Committee shall provide copies of the Scots
Subsidiary Documents to a Party upon request and at such Party's
cost.
1.4 Trusteeship: The Other Pool Members hold the benefit of this
Schedule for themselves and as trustee and agent for the
Executive Committee, the Committee Members and the members of the
Chief Executive's Office.
1.5 Other Pool Members: Subject to sub-section 5.3, the
provisions of Part III of the Agreement shall apply mutatis
mutandis to meetings of and decisions taken by the Other Pool
Members save that neither of the Scottish PESs nor Scottish
Settlements (if it is a Pool Member) shall be entitled to attend,
speak or vote at the relevant meeting or otherwise to participate
in the decision taking processes and the voting procedures shall
be adjusted in such manner as the Pool Chairman in his sole
discretion shall see fit to make allowance for the prohibition on
the Scottish PESs and Scottish Settlements from voting.
2. PURPOSE
2.1 Purpose: This Schedule, when read with Schedule 22 and the
Scots Subsidiary Documents, sets out the terms and conditions
upon and subject to which the Scottish PESs will be entitled to
have made available to them or Scottish Settlements for the
purposes of the Scottish Settlements Arrangements certain
documentation and systems written or developed for or provided to
Pool Members in connection with the 1998 Programme and to propose
changes thereto or undertake customization thereof solely for the
purposes of the Scottish Settlements Arrangements.
2.2 Scottish PESs as Pool Members: Save as varied or amended by
or pursuant to this Schedule, the Scottish PESs shall continue to
have their respective rights, responsibilities, obligations and
liabilities as Pool Members in addition to their rights,
responsibilities, obligations and liabilities under this
Schedule, Schedule 22 and the Scots Subsidiary Documents in their
capacity as Scottish PESs.
3. JOINT VENTURE AND GUARANTEE
3.1 Scottish Settlements: The Scottish PESs shall be entitled to
act for the purpose of the Scottish Settlements Arrangements and
this Schedule through Scottish Settlements. If required by the
Executive Committee, the Scottish PESs shall procure that
Scottish Settlements becomes a party to the Agreement, appoints
an agent for service of process in England and undertakes
directly in form and content reasonably satisfactory to the
Executive Committee the obligations on its part contained in this
Schedule and the Scots Subsidiary Documents.
3.2 Information on Scottish Settlements: Each of the Scottish
PESs and Scottish Settlements shall promptly give the Other Pool
Members such information about the shareholdings in and capital
structure of Scottish Settlements and its business, operations,
assets and financial condition as the Executive Committee may
from time to time reasonably require and the Other Pool Members
shall keep all such information confidential on and subject to
the terms and conditions of Clause 70 of the Agreement.
3.3 Guarantee: The Scottish PESs hereby jointly and severally
and irrevocably and unconditionally:
(A) guarantee to each of the Combined Members the due and
punctual observance and performance of all the terms, conditions
and covenants on the part of Scottish Settlements contained in
this Schedule and the Scots Subsidiary Documents and agree to pay
to each of the Combined Members from time to time on demand any
and every sum or sums of money which Scottish Settlements shall
at any time be liable to pay to such Combined Member under or
pursuant to this Schedule or any of the Scots Subsidiary
Documents and which shall not have been paid at the time such
demand is made; and
(B) agree as a primary obligation to indemnify each of the
Combined Members from time to time on demand by the relevant
Combined Member from and against any loss directly incurred by
such Combined Member as a result of any of the obligations of
Scottish Settlements under or pursuant to this Schedule or any of
the Scots Subsidiary Documents being or becoming void, voidable,
unenforceable or ineffective as against such Combined Member for
any reason whatsoever, whether or not known to such Combined
Member or any other person.
3.4 Preservation of Rights:
3.4.1 The obligations of the Scottish PESs contained in this
Section 3 shall be in addition to and independent of every other
security which any of the Combined Members may at any time hold
in respect of any obligations of Scottish Settlements under the
Agreement.
3.4.2 The obligations of the Scottish PESs contained in this
Section 3 shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or
thing whatsoever, and in particular but without limitation shall
not be considered satisfied by any intermediate payment or
satisfaction of all or any of the obligations of Scottish
Settlements under this Schedule or the Scots Subsidiary Documents
and shall continue in full force and effect until final payment in
full of all amounts owing by Scottish Settlements under this Schedule
and each of the Scots Subsidiary Documents and satisfaction of all
actual and contingent obligations of Scottish Settlements under this
Schedule and each of the Scots Subsidiary Documents.
3.4.3 Neither the obligations of the Scottish PESs herein
contained nor the rights, powers and remedies conferred in
respect of the Scottish PESs upon the Combined Members by this
Schedule or any of the Scots Subsidiary Documents or by law shall
be discharged, impaired or otherwise affected by:
(A) the winding-up, dissolution, administration or
reorganisation of Scottish Settlements or any other person or any
change in its status, function, control or ownership;
(B) any of the obligations of Scottish Settlements or any other
person hereunder or under any other security taken in respect of
any of its obligations under this Schedule or any of the Scots
Subsidiary Documents being or becoming illegal, invalid,
unenforceable or ineffective in any respect;
(C) time or other indulgence being granted to Scottish
Settlements in respect of its obligations under this Schedule or
any of the Scots Subsidiary Documents or under any such other
security;
(D) any amendment to, or any variation, waiver or release of,
any obligation of Scottish Settlements under this Schedule or any
of the Scots Subsidiary Documents or under any such other
security;
(E) any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in respect of
the obligations of Scottish Settlements under this Schedule or
any of the Scots Subsidiary Documents;
(F) any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any security
taken in respect of the obligations of Scottish Settlements under
this Schedule or any of the Scots Subsidiary Documents; or
(G) any other act, event or omission which, but for this
paragraph 3.4.3, might operate to discharge, impair or otherwise
affect any of the obligations of either of the Scottish PESs
herein contained or any of the rights, powers or
remedies conferred upon the Combined Members by this Schedule or
any of the Scots Subsidiary Documents or by law.
3.4.4 Any settlement or discharge between the Scottish PESs
and Scottish Settlements shall be conditional upon no security or
payment to the Combined Members or any of them by the Scottish
PESs or either of them or Scottish Settlements or any other
person on behalf of the Scottish PESs or, as the case may be,
Scottish Settlements being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time
being in force and, if any such security or payment is so avoided
or reduced, the Combined Members or the relevant one of them
shall be entitled to recover the value or amount of such security
or payment from the Scottish PESs subsequently as if such
settlement or discharge had not occurred.
3.4.5 None of the Combined Members shall be obliged before
exercising any of the rights, powers or remedies conferred upon
it in respect of the Scottish PESs by this Schedule or any of the
Scots Subsidiary Documents or by law:
(A) to make any demand of Scottish Settlements;
(B) to take any action or obtain judgment in any court against
Scottish Settlements;
(C) to make or file any claim or proof in a winding-up or
dissolution of Scottish Settlements; or
(D) to enforce or seek to enforce any other security taken in
respect of any of the obligations of Scottish Settlements under
this Schedule or any of the Scots Subsidiary Documents.
3.4.6 The Scottish PESs agree that, until all amounts which
may be or become payable by Scottish Settlements under or in
connection with this Schedule and the Scots Subsidiary Documents
have been irrevocably paid in full, neither of the Scottish PESs
shall, after a claim has been made or by virtue of any payment or
performance by it under this Clause 3:
(A) be subrogated to any rights, security or moneys held,
received or receivable by any of the Combined Members (or any
trustee or agent on its behalf) or be entitled to any right of
contribution or indemnity in respect of any payment made or
moneys received on account of the liability of such Scottish PES
under this Clause 3;
(B) claim, rank, prove or vote as a creditor of Scottish
Settlements or its estate in competition with any of the Combined
Members (or any trustee or agent on its behalf); or
(C) receive, claim or have the benefit of any payment,
distribution or security from or on account of Scottish
Settlements, or exercise any right of set-off as against Scottish
Settlements.
4. SCOTS 1998 LICENCE
4.1 Provision of Required Documentation: Subject to and
conditional upon payment and receipt of the sums set out or
referred to in sub-section 9.1(A) and to the terms and conditions
of the Scots 1998 Licence:
(A) the Scottish PESs and Scottish Settlements shall be entitled
to receive copies of the Required Documentation; and
(B) Pool Members shall procure that such copies are made
available to the Scottish PESs (or, as the case may be, Scottish
Settlements) promptly upon request.
4.2 Grant of Scots 1998 Licence:
(A) Subject to and conditional upon payment and receipt of the
sum(s) set out or referred to in sub-section 9.1(B) and to the
extent that Pool Members have the right so to do, Pool Members
grant the Scottish PESs and Scottish Settlements (in this Section
4, each a "Scots Licensee"), or shall procure the grant to the
Scots Licensee of, a perpetual, non-exclusive and non
transferable licence (the "Scots 1998 Licence") to use the
Required Documentation and the Pool 1998 Software on the terms
and conditions set out in the following provisions of this
Section 4.
(B) Pool Members confirm that they have full right to grant the
Scots Licensee or procure the grant to the Scots Licensee of a
perpetual, non-exclusive and non-transferable licence to use (i)
such of the Required Documentation and Pool 1998 Software as is
made available to Pool Members under the Logica Contract,
excluding any software notified by or on behalf of the Other Pool
Members to the Scots Licensee from time to time as being subject
to a requirement for a licence from a third party, and (ii) the
Existing Pool Documentation. Pool Members confirm that Logica
only has the right under the Logica Contract to incorporate such
third party software where the Pool Members have agreed the terms
upon which a licence will be available from the relevant third party.
In respect of any other Required Documentation or Pool 1998
Software, the Pool Members confirm that they shall use reasonable
endeavours (but without being obliged to incur any material
additional cost unless all such additional cost is paid or
reimbursed on demand by the Scottish PESs or Scottish
Settlements) to acquire in a timely manner ownership of, or a
right to grant a licence to the Scots Licensee in respect of, the
intellectual property rights thereto.
4.3 Term of Scots 1998 Licence: The Scots 1998 Licence will
commence as of 1st January, 1997 and will continue until
terminated in accordance with
sub-section 4.4.
4.4 Termination of Scots 1998 Licence:
(A) The Executive Committee shall have the right (without
prejudice to any other rights or remedies that the Executive
Committee or the Other Pool Members may have) to terminate the
Scots 1998 Licence immediately by notice in writing to the Scots
Licensee if:
(i) the Scots Licensee is in material breach of any of the
provisions of Clauses 4.2, 4.5, 4.6, 4.7 and 4.8 and either such
breach is incapable of remedy or the breach continues for
fourteen days after notice in writing specifying the breach and
requiring it to be remedied; or
(ii) an order is made or a resolution is passed for the
winding-up of the Scots Licensee, or if a provisional liquidator
is appointed in respect of the Scots Licensee, or if a receiver
(which expression includes an administrative receiver) is
appointed in respect of the Scots Licensee or all or any of its
assets or if the Scots Licensee is unable to pay its debts within
the meaning of section 123 of the Insolvency Act 1986, or if any
voluntary arrangement is proposed under section 1 of the
Insolvency Act 1986 in respect of the Scots Licensee; or
(iii) anything analogous to any of the events in paragraph
(ii) above occurs with respect to the Scots Licencee or its
assets in any jurisdiction.
(B) If the Scots 1998 Licence is terminated under this sub-
section 4.4:
(i) the Scots Licensees will cease to have the right to use the
Required Documentation and the Pool 1998 Software;
(ii) the Scots Licensees shall within 30 days of termination
deliver to the Executive Committee all the Required Documentation
and the Pool 1998 Software together with all copies of them in
the Scots Licensees' possession or control and (if any Scots
Licensee fails to do so) the Executive Committee or its agent
shall have the right to enter such Scots Licensee's premises and
repossess the Required Documentation and the Pool 1998 Software
and any copies of them; and
(iii) the Scots Licensees will destroy any programme or other
series of instructions contained in any memory device which is
derived from the Required Documentation and/or the Pool 1998
Software and is in their possession or control.
(C) Termination of the Scots 1998 Licence will not release any
of the Scots Licensees from any obligations arising prior to
termination or which expressly or by implication become effective
or continue to be effective on or after the termination of the
Scots 1998 Licence.
4.5 Scope of Scots 1998 Licence:
(A) The Scots Licensee shall have the right to use the Required
Documentation and the Pool 1998 Software only for the purposes of
the Scottish Settlements Arrangements and shall not use the
Required Documentation or the Pool 1998 Software in any other
way.
(B) The Scots Licensee is licensed to copy, develop, alter or
modify the whole or any part of the Required Documentation or
Pool 1998 Software or combine it with any other materials, in any
such case only for the purposes of the Scottish Settlements
Arrangements (the "Developed Material"), but will not permit any
other person to do so except for a person at any time under
contract to the Scots Licensee to do so (the "Scots Contractor").
The Scots Contractor will not have any more extensive right to
use the Required Documentation or the Pool 1998 Software than the
Scots Licensee has under this Section 4.
(C) The Scots Licensee shall ensure the proper use, supervision,
management and control of the Required Documentation and Pool
1998 Software and that the same are properly protected at all
times from unauthorised access or use by any person.
(D) The Scots Licensee shall keep the Required Documentation and
Pool 1998 Software confidential and shall only authorise access
or disclosure to those persons or categories of person for the
time being and from time to time listed or referred to in Scots
Subsidiary Document 6 and to whom access or disclosure is
strictly necessary to enable the Required Documentation or Pool
1998 Software to be used in accordance with this Section 4. The
Scots Licensee shall ensure that each such person is aware of the
confidential nature of the Required Documentation and Pool 1998
Software and keeps them confidential. This paragraph shall not
apply to any part of the Required Documentation and Pool 1998
Software which has entered the public domain other than as a
result of any breach of agreement or duty.
(E) The following obligations apply in relation to the use of
source code:
(i) all copies of any source code which is part of the Required
Documentation or Pool 1998 Software will be individually numbered
and the existence and location of each such copy shall be
notified by the Scots Licensee to the Executive Committee; and
(ii) the Scots Licensee shall notify the Executive Committee of
details of each of its employees and those of any Scots
Contractor who will have access to the source code and, unless
otherwise agreed by the Executive Committee, shall ensure that
each such employee will (before access) enter into an individual
confidentiality agreement in a form approved by the Executive
Committee. The Scots Licensee shall provide the Executive
Committee with an original copy of each such agreement and will
ensure that, unless otherwise agreed by the Executive Committee,
no employee of the Scots Licensee or any Scots Contractor has
access to the source code except for those employees whose
details have been notified to the Executive Committee and are
bound by such agreements.
(F) The Scots Licensee shall immediately bring to the attention
of the Executive Committee any infringement or suspected
infringement by any third party of any rights in the Required
Documentation or the Pool 1998 Software of which it becomes aware
and shall, at the Executive Committee's request and against
payment of its reasonable costs and expenses, take or join Pool
Members in taking such action as they may require for the purpose
of protecting such rights.
(G) Pool Members are not obliged under the Scots 1998 Licence to
develop, maintain or enhance the Required Documentation or the
Pool 1998 Software.
(H) The Scots Licensees agree to grant Pool Members a perpetual,
royalty-free, non-exclusive licence to use and exploit the
Developed Material mutatis mutandis on the same terms as the
Scots Licence (the "Scots Licence-Back") provided that:
(i) the Scots Licensees shall be entitled by notice to the
Executive Committee to designate particular parts of the
Developed Material as having commercial value where the Scots
Licensees decide reasonably and in good faith that a material
cost has been incurred in developing the same. In any such case
the Scots Licence-Back shall be subject to the agreement between
the Scottish Licensees on the one hand and the Other Pool Members
on the other hand of a reasonable royalty reflecting an
appropriate proportion of such cost (such agreement not to be
unreasonably withheld or delayed); and
(ii) the Scots Licensees shall not be obliged to license any part
of the Developed Material where the Scots Licensees believe
reasonably and in good faith that the same would confer a
significant competitive benefit on the Other Pool Members and for
that reason should not be licensed to them.
(I) The Scots Licensees shall notify the Executive Committee at
least once every six months of all Developed Material that has
been produced during the preceding six month period.
4.6 Reporting requirement: The Scots Licensee shall supply the
Executive Committee from time to time on request with a statement
signed by a director of the Scots Licensee which certifies that
the Required Documentation and Pool 1998 Software is being used
only in accordance with this Section 4.
4.7 Access: The Scots Licensee shall grant the Executive
Committee or its nominee access upon reasonable prior notice to
the Scots Licensee's premises in order to audit the use of the
Required Documentation and Pool 1998 Software.
4.8 Indemnity: The Scottish PESs and Scottish Settlements shall
jointly and severally indemnify and keep indemnified the Combined
Members and each of them on demand against all direct losses,
costs, damages, expenses, liabilities and claims suffered or
incurred by any of the Combined Members arising out of or in
relation to any Scots Licensee's breach of any of its obligations
under this Section 4.
4.9 Further licences: Pool Members agree that the Scottish PESs
and Scottish Settlements shall be entitled to a licence to use
the EAC/AA System and the NHH Data Aggregation System on terms
and conditions comparable to those on which a licence to use the
same is offered to Public Electricity Suppliers generally.
5. SCOTTISH REQUIREMENTS AND THE RELEVANT 1998 SYSTEMS
5.1 Change to the Operational Framework: The provisions of
Schedule 22 shall govern any addition to, deletion from or other
change to the Operational Framework.
5.2 Change control: Subject to sub-section 5.1, the provisions
of Scots Subsidiary Document 3 shall govern the control of a
change (which shall include any request by the Scottish PESs or
Scottish Settlements for an additional requirement) to the
Relevant 1998 Systems insofar as the change concerns a change to
the Relevant 1998 Systems requested by the Scottish PESs or
Scottish Settlements for the purposes of the Scottish Settlements
Project.
5.3 Disputes over change control: If pursuant to any Scots
Subsidiary Document this sub-section is stated to apply and the
relevant Systems Requirement Request relates to changes in the
functionality of the Relevant 1998 Systems then, notwithstanding
the provisions of Part III of the Agreement, the determination of
the Executive Committee in relation to the matter shall be final,
conclusive and binding and there shall be no right of referral to
Pool Members in general meeting nor any right of appeal to the
Director and each Party expressly, irrevocably and
unconditionally waives all such rights of referral and appeal.
5.4 Other changes to the 1998 Programme: Pool Members
acknowledge that, in respect of any change to the 1998 Programme
required by the Scottish PESs (or, as the case may be, Scottish
Settlements) for the purposes of the Scottish Settlements
Arrangements which does not fall to be dealt with by sub-section
5.1 or 5.2, the Scottish PESs (or, as the case may be, Scottish
Settlements) shall have the right, and shall be obliged, to use
the change control procedure established under the 1998 Programme
and the costs of any such change and the change control charges
shall be borne by the Scottish PESs (or, as the case may be,
Scottish Settlements) as if they were charges under sub-section
9.1 or, as the case may be, 9.2.
6. 1998 CONTRACTORS' SERVICES
6.1 Retaining 1998 Contractors:
(A) If the Scottish PESs (or either of them) or Scottish
Settlements wish to employ or retain any 1998 Contractor to
undertake work or provide services in relation to the Scottish
Settlements Project which is or are broadly equivalent to the
work or services which any 1998 Contractor is or are performing
in relation to the 1998 Programme for the benefit of all Pool
Members (including, for the avoidance of doubt, the development
of the EAC/AA System), the Scottish PESs or (as the case may be,
Scottish Settlements) shall procure that, before they or it enter
into a contract or arrangement with such 1998 Contractor for such
work or services (the "Scots Contract"), the 1998 Contractor (or,
where the 1998 Contractor is a sub-contractor, the principal 1998
Contractor) shall, unless the Executive Committee otherwise
resolves upon application made by the Scottish PESs (or, as the
case may be, Scottish Settlements), confirm in writing to Pool
Members (or a nominee on their behalf) in the terms set out in
paragraph 6.1(B).
(B) The terms referred to in paragraph 6.1(A) are that the entry
into and performance of the Scats Contract, either in itself or
in conjunction with the other contracts and arrangements of the
relevant 1998 Contractor (including any contacts or arrangements
relating to the 1998 Programme), will not affect adversely the
performance of such 1998 Contractor's obligations to Pool Members
under its contract or arrangement with them (or their nominee) or
cause or otherwise result in such 1998 Contractor being in breach
of any of its obligations to Pool Members under its contract or
arrangement with them (or their nominee), to the intent that such
confirmation shall constitute a legally binding obligation of
such 1998 Contractor under such contract or arrangement with Pool
Members (or their nominee).
6.2 List of 1998 Contractors: The Executive Committee shall
provide the Scottish PESs from time to time with an up-to-date
list of all the 1998 Contractors and a summary of the work or
services that they have been retained to perform.
6.3 No restriction: Nothing in this Section 6 shall preclude or
restrict the Scottish PESs or Scottish Settlements from employing
or retaining any person who is not a 1998 Contractor to perform
the work or services referred to in sub-section 6.1 or from
employing or retaining any person who is a 1998 Contractor to
perform work or services in the period after completion of the
1998 Programme.
6.4 Liaison: The Scottish PESs (or, as the case may be, Scottish
Settlements) and the Other Pool Members (in each case through
their appointed representatives) shall liaise on a regular basis
(usually monthly) on the planning and manpower requirements for
the work and services referred to in sub-section 6.1.
7. RELATIONSHIPS
7.1 Expert Groups: The Scottish PESs (or, as the case may be,
Scottish Settlements) shall have the right on the terms and
subject to the conditions set out in Scats Subsidiary Document 5
to attend meetings of those expert and systems delivery user
groups established under the 1998 Programme which are of direct
relevance to the Scottish Settlements Project.
7.2 1998 Contractor relationship:
(A) The Scottish PESs and Scottish Settlements shall not contact
or communicate directly with, or place any order with or give any
instruction to, any 1998 Contractor with respect to any matter
concerning the 1998 Programme, the 1998 Systems, the Required
Documentation or the Pool 1998 Software but shall address all
such communications to the Programme Liaison Officer (in the
form, where appropriate, of a Systems Requirement Request)
provided that the Scottish PESs and Scottish Settlements shall
have the right to contact or communicate directly with (and in
the case of (ii) and (iii) below, to place orders with or give
instructions to) a 1998 Contractor with respect to any such
matter (but subject to Section 4):
(i) in the case and for the purposes of an inspection approved
by the Programme Board (or otherwise determined to be made on
appeal from the decision of the Programme Board) in accordance
with paragraph (C) below:
(ii) in the circumstances and for the purposes described in
sub-section 6.1; and
(iii) in the case of a determination of the Executive
Committee that, in the reasonable opinion of the Scottish PESs,
is unfavourable to the Scottish PESs (or, as the case may be,
Scottish Settlements) in a significant respect where, pursuant to
sub-section 5.3, the determination of the Executive Committee is
final (but then only in relation to those matters which were the
subject of that determination and on the terms set out in
sub-section 6.1),
provided that nothing in this paragraph (A) shall prevent or
restrict either of the Scottish PESs or Scottish Settlements from
contacting or communicating directly with any 1998 Contractor
with respect to work or services required for the production of
Developed Material.
(B) The Scottish PESs and Scottish Settlements shall not
interfere with the performance by any 1998 Contractor of any of
its obligations in connection with the 1998 Programme.
(C) (i) If the Scottish PESs or Scottish Settlements have a
material concern that the progress of work on the 1998 Programme
is such as to cause the date for completion of the Scottish
Settlements Project to be delayed, the Scottish PESs and Scottish
Settlements shall have the right to request inspection of work on
the 1998 Programme in accordance with paragraphs (C) (ii) and
(iii) below.
(ii) An application for inspection by the Scottish PESs or
Scottish Settlements referred to in paragraph (C)(i) shall be
made to the Programme Board with reasons in support and details
of the form of inspection required (it being understood that any
such inspection will normally be conducted under the supervision
of the Programme Board). The Programme Board will give due
consideration to any such application and will notify the
Scottish PESs (or, as the case may be, Scottish Settlements) of
its determination whether the case for such an inspection has
been made and, if a case for an inspection has been made, the
form that such inspection is to take.
(iii) If the Programme Board determines that a case for an
inspection has been made, Pool Members shall use all reasonable
endeavours to facilitate the carrying out of such inspection in
accordance with the determination of the Programme Board.
(iv) If the Programme Board determines that a case for an
inspection has not been made, the Scottish PESs in their capacity
as Pool Members shall have the right to refer the matter to the
Executive Committee for determination and to appeal such
determination pursuant to the terms of this Agreement.
(D) The Pool Members shall arrange for the Scottish PESs (or, as
the case may be, Scottish Settlements) to receive copies of each
1998 Contractor's periodic progress reports to the Programme
Board or the 1998 Programme project boards on matters concerning
the 1998 Programme after deletion of any information in or
accompanying any such report which is reasonably considered by
those administering the 1998 Programme to be commercially
sensitive .
(E) The Scottish PESs (or, as the case may be, Scottish
Settlements) shall be entitled at their own cost and expense to
attend and witness acceptance testing of the ISRA System and to
receive copies of the related test logs as may be reasonably
required by the Scottish PESs (or, as the case may be, Scottish
Settlements).
8. NO REPRESENTATION OR LIABILITY
8.1 No representation or warranty: With the exception of the
confirmations given by the Pool Members in sub-section 4.2(B),
none of the Combined Members makes or gives any representation or
warranty as to the suitability or fitness of the Required
Documentation or the Pool 1998 Software for any particular
purpose and all conditions, warranties and representations
whether express or implied as to the Required Documentation or
the Pool 1998 Software (including as to its quality, fitness,
operation or use) are excluded to the fullest extent permitted by
law.
8.2 No reliance: Each of the Scottish PESs (for itself and on
behalf of Scottish Settlements) hereby acknowledges that it has
not been induced to enter into the arrangements set out in this
Schedule and the Scots Subsidiary Documents by, nor has it placed
reliance on any prior representation or statement (whether oral
or in writing) made by, any of the Combined Members or the 1998
Contractors.
8.3 Exclusion of certain types of loss: Each of the Scottish
PESs (for itself and on behalf of Scottish Settlements) hereby
acknowledges and agrees that, save as provided in sub-section
8.4, in no circumstances will any of the Combined Members be
liable to either of the Scottish PESs or Scottish Settlements
under this Schedule or the Scots Subsidiary Documents in
contract, tort (including negligence or breach of statutory duty)
or otherwise for loss (whether direct or indirect) of profit,
loss of revenue, loss of use, loss of contract or loss of
goodwill or for any indirect or consequential loss or damage
whatsoever.
8.4 No exclusion for death or personal injury: Nothing in this
Schedule shall exclude liability for death or personal injury
resulting from the negligence of a Party or any of its officers,
employees or agents.
8.5 Reasonableness of exclusion: Each of the Scottish PESs (for
itself and on behalf of Scottish Settlements) acknowledges that
it is aware of and understands the provisions in relation to
liability set out in this Section and in particular that, given
the level of charges made for the provision and use of the
Required Documentation and Pool 1998 Software, it is reasonable
for the Combined Members to exclude their liability as provided
for in this Section.
9. PAYMENTS
9.1 Charges: The Scottish PESs and Scottish Settlements shall be
jointly and severally liable to pay to the Other Pool Members in
accordance with sub-section 9.3:
(A) in respect of the provision of the Required Documentation
identified within Part A of Subsidiary Document 1, pounds 200,000;
(B) in respect of the grant of the Scots 1998 Licence, pounds 1
(receipt of which is hereby acknowledged);
(C) (without prejudice to paragraph 4.5(H)), in respect of any
maintenance, development or enhancement of the materials which
are the subject of the Scots 1998 Licence, such amount (if any)
as may be agreed from time to time by the Scottish PESs with the
Executive Committee; and
(D) against presentation of invoices or such other types of
supporting evidence as Pool Members generally receive in respect
of Pool costs: -
(i) the agreed costs (including legal costs and expenses) of the
working group in preparing and negotiating this Schedule;
(ii) all other costs incurred in relation to the 1998 Programme
in establishing and operating the arrangements set out or
referred to in this Schedule or the Scots Subsidiary Documents
which would not otherwise have been incurred by them including,
without prejudice to the generality of the foregoing, the costs
of any additional staffing for the 1998 Programme and the costs
of the Programme Liaison Officer and the Responsible Officers;
and
(iii) the costs of giving effect to any change to (which
shall include any additional requirement for) the Relevant 1998
Systems requested by the Scottish PESs or Scottish Settlements.
9.2 Change control charges: Without prejudice to paragraph
9.1(D):
(A) the Scottish PESs and Scottish Settlements shall be jointly
and severally liable to pay all sums incurred in the preparation
of a Systems Requirement Request.
(B) the Scottish PESs and Scottish Settlements shall be jointly
and severally liable to reimburse the Other Pool Members all sums
payable to the relevant 1998 Contractor in respect of the
preparation of any Analysis and all sums incurred in the
preparation of a Systems Requirement Response.
9.3 Due date for payment: Scottish PESs shall pay all sums
payable under sub-sections 9.1 and 9.2 within 30 days of
receiving an invoice for the same from the Other Pool Members or
from EPFAL or another nominated agent on their behalf (the "Scats
Due Date").
9.4 Charges exclusive of VAT: All sums payable under
sub-sections 9.1 and 9.2 are exclusive of Value Added Tax which
shall be paid by the Scottish PESs (or, as the case may be,
Scottish Settlements) at the rate and in the manner prescribed by
law from time to time.
9.5 Default Interest: If the Scottish PESs (or, as the case may
be, Scottish Settlements) fail to make payment of any sum payable
under sub section 9.1 or 9.2 by the Scats Due Date therefor,
interest shall accrue on the unpaid amount from the Scats Due
Date to (and including) the date of payment, at the rate (as well
after as before any judgement) of four per cent. above the Pool
Banker's base lending rate from time to time.
<PAGE>
SIGNATORIES
THE GENERATORS
Anglian Power Generators Limited
Address: Kings Lynn Power Station, Willows Business Park,
Saddlebow, Kings Lynn, Norfolk PE34 3RD
Facsimile no: 01733 894164
Attention: W. Burrough
By:
Barking Power Limited
Address: Barking Power Station, Chequers Lane, Dagenham, Essex
RM9 6PF
Facsimile no: 0181 984 5174
Attention: Dr S.J. Mancey
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
CeltPower Limited
Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA
Facsimile no: 01686 629887
Attention: J. Matthew
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: I. Obi
By:
Corby Power Limited
Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire
NN17 5QT
Facsimile no: 01536 402619
Attention: General Manager
By:
Derwent Cogeneration Limited
Address: P.O. Box 5, Spondon, Derby DE21 7BP
Facsimile no: 01332 669829
Attention: J. Unwin
By:
Eastern Merchant Generation Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 552966
Attention: Coral Woodard
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris Cedex 08
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Elm Energy & Recycling (UK) Limited
Address: Elm Energy House, Ettingshall Road, Wolverhampton, West
Midlands WV2 2LA
Facsimile no: 01902 408517
Attention: M.D. Wyckoff
By:
Fellside Heat and Power Limited
Address: Fellside Lodge, Seascale, Cumbria CA20 1PG
Facsimile no: 01946 721130
Attention: J.A. Bartlett
By:
Fibrogen Limited
Address: Astley House, 33 Notting Hill Gate, London W 11 3JQ
Facsimile no: 0171 221 8671
Attention: A. Macdonald
By:
Fibropower Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 221 8671
Attention: A. Macdonald
By:
First Hydro Company
Address: Bala House, Lakeside Business Village, St. Davids Park,
Deeside, Clwyd
CH5 3XJ
Facsimile no: 01244 520697
Attention: B. Stalker
By:
Humber Power Limited
Address: South Humber Bank Power Station, South Marsh Road,
Stallingborough N.E. Lincs. DN37 8BZ
Facsimile no: 01469 573030
Attention: P. Evans
By:
Independent Energy UK Limited
Address: St John's Court, 70 St John's Close, Knowle, Solihull,
West Midlands B93
ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
Indian Queens Power Limited
Address: 1 Northumberland Avenue, Trafalgar Square, London WC2N
5BW
Facsimile no: 0171 872 5539
Attention: G. Long
Keadby Generation Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17
3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Lakeland Power Limited
Address: Roosecote Power Station, Roosecote Marsh,
Barrow-in-Furness, Cumbria
LA13 0PQ
Facsimile no: 01229 870919
Attention: Jackie Mahon
By:
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Medway Power Limited
Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3
0AG
Facsimile no: 01634 271666
Attention: J. McLaren
By:
Midlands Power (UK) Limited
Address: Headquarters, Mucklow Hill, Halesowen, West Midlands
Facsimile no: 0121423 0261
Attention: Company Secretary
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire
SN5 6PB
Facsimile no: 01793 893061
Attention: M. Bowden
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
Peterborough Power Limited
Address: Storeys Bar Road, Peterborough PE1 5NT
Facsimile no: 01733 894622
Attention: W. Burrough
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425366
Attention: S. Skillings
By:
Regional Power Generators Limited
Address: Glanford Brigg Generating Station, Scawby Brook, Brigg,
South Humberside DN70 9LT
Facsimile no: 01482 495916
Attention: P. Knight
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PHI 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Teesside Power Limited
Address: Four Millbank, London SW1P SET
Facsimile no: 0171316 5322
Attention: D. Lewis
By:
Winterton Power Limited
Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE
Facsimile no: 01454 616675
Attention: T. Masood
By:
THE SUPPLIERS
British Gas Trading Ltd
Address: 1st Floor, 31 The Causeway, Staines, Middlesex TW18 3BL
Facsimile no: 01784 645453
Attention: T. Brookshaw
By:
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neill, Business Manager, Electricity Generation
By:
Candecca Resources Limited
Address: Welton Gathering Centre, Barfield Lane, off Wragby Road,
Sudbrooke, Lincoln LN2 2QU
Facsimile no: 01522 754255
Attention: D. Wood
By:
Citigen (London) Limited
Address: 47-53 Charterhouse Street, London EC1M 6HA
Facsimile no: 0171 253 9319
Attention: I. Obi
By:
Crosfield Limited
Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 IAB
Facsimile no: 01925 59828
Attention: K. Sowley
By:
Eastern Electricity plc
Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk
IP9 2AQ
Facsimile no: 01473 554393
Attention: J. Whelan
By:
East Midlands Electricity plc
Address: 398 Coppice Road, PO Box 4, North PDO Arnold, Nottingham
NG5 7HX
Facsimile no: 01159 358190
Attention: A. Musto
By:
Electricite de France, Service National
Address: EDF Production Transport, Department Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage,
75384, Paris,
Cedex 08
Facsimile no: (010 331) 40 42 6341
Attention: P. Gaillet
(copy to: Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Energy Supply Contracts Limited
Address: The Havens, Ransomes Europak, Ipswich, Suffolk IP3 9SJ
Facsimile no: 01473 273871
Attention: E.C. Cumberland
By:
Enron Capital and Trade Resources
Address: Four Millbank, London SW1P 3ET
Facsimile no: 0171873 0140
Attention: D. Gosling
By:
Impkemix Energy Limited
Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90
8JE
Facsimile no: 01642 437838
Attention: K.J. Green
By:
Independent Energy UK Limited
Address: St. John's Court, St. John's Close, Knowle, West
Midlands B93 ONN
Facsimile no: 01564 770010
Attention: J. Sulley
By:
London Electricity plc
By:
Address: Templar House, 81-87 High Holborn, London WClV 6NU
Facsimile no: 0171 430 2903
Attention: M. Holmes
Magnox Electric plc
Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB
Facsimile no: 01453 810451
Attention: Company Secretary
By:
Manweb plc
Address: Manweb House, Kingsfield Court, Chester Business Park,
Chester CH4 9QH
Facsimile no: 0141568 3393
Attention: P. Brown, Energy Supply, Cathcart Business Park, Spean
Street, Glasgow G44 4BE
By:
Midlands Electricity plc
Address: Mucklow Hill, Halesowen, West Midlands B62 8BP
Facsimile no: 0121423 2777
Attention: R. Murray
By:
National Power plc
Address: Windmill Hill Business Park, Whitehill Way, Swindon,
Wiltshire SN5 6PB
Facsimile no: 01793 893061
Attention: G. Brown
By:
Norsk Hydro (UK) Limited
Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1
3RH
Facsimile no: 0181892 1686
Attention: J. Hamilton
By:
Northern Electric plc
Address: Carliol House, Market Street, Newcastle upon Tyne NE1
6NE
Facsimile no: 0191 235 2295
Attention: M. Chandler
By:
NORWEB plc
Address: Talbot Road, Manchester M 16 0HQ
Facsimile no: 0161 875 7089
Attention: K. Lee
By:
Nuclear Electric Limited
Address: Barnett Way, Barnwood, Gloucester GL4 3RS
Facsimile no: 01452 653375
Attention: Company Secretary
By:
PowerGen plc
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425366
Attention: S. Skillings
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141 636 4706
Attention: B.J.H. Paget
By:
SEEBOARD plc
Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY
Facsimile no: 01273 428404
Attention: R.A. Page
By:
Shell Power Limited
Address: Rowlands Way, Withenshawe, Manchester M22 5SB
Facsimile no: 0161 499 8387
Attention: John Tucker
By:
Slough Energy Supplies Limited
Address: 342 Edinburgh Avenue, Slough SL1 4TU
Facsimile no: 01753 790038
Attention: P.N. Jackson
By:
Southern Electric plc
Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire
SL6 3QB
Facsimile no: 01628 584410
Attention: J. Sykes
By:
South Wales Electricity plc
Address: Newport Road, St. Mellons, Cardiff CF3 9XW
Facsimile no: 01222 790971
Attention: M. Mackey
By:
South Western Electricity plc
Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12
4SE
Facsimile no: 01454 616675
Attention: D.G. Harris
By:
The Renewable Energy Company Limited
Address: Stroud House, Russell Street, Stroud, Glos GL5 3AN
Facsimile no: 01453 756222
Attention: M. Alder
By:
UK Electric Power Limited
Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE
Facsimile no: 01492 592077
Attention: N.Bryson
By:
UML Limited
Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL
Facsimile no: 0151 643 6299
Attention: A.R. Stubbs
By:
Yorkshire Electricity Group plc
Address: Wetherby Road, Scarcroft, Leeds LS14 3HS
Facsimile no: 01132 895926
Attention: Company Secretary
By:
THE OTHER PARTIES
Accord Energy Ltd
Address: Heron House, 322 High Holborn, London WC1V 7PW
Facsimile no: 0171 269 4010
Attention: B. King
By:
AES Barry Limited
Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU
Facsimile no: 01446 722587
Attention: P. Norgeot
By:
Alcan Aluminium UK Limited
Address: Lynemouth Power Station, Ashington, Northumberland NE63
9YH
Facsimile no: 01670 393970
Attention: W.E. Jones
By:
British Gas plc
Address: 17 London Road, Staines, Middlesex TW18 4AE
Facsimile no: 01784 645453
Attention: D. Meachem
By:
Cabah Energy Limited
Address: c/o ABB ForStar Developments Limited, Tilford House,
Farnham
Business Park, Weydon Lane, Farnham, Surrey GU9 8QT
Facsimile no: 01252 732110
Attention: Paul Abbott
By:
Eastern Generation Services Limited
Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ
Facsimile no: 01473 601036
Attention: Ms. C. Woodard
By:
Enfield Energy Centre Limited
Address: Concorde House, Concorde Way, Stockton on Tees,
Cleveland TS18 3RB
Facsimile no: 01642 678123
Attention: K. Clarke
By:
Fibrowatt Thetford Limited
Address: Astley House, 33 Notting Hill Gate, London W11 3JQ
Facsimile no: 0171 221 8671
Attention: Rupert Fraser
By:
Hydra Electric Energy Limited
Address: c/o Scottish Hydra Electric PLC, Inveralmond House, 200
Dunkeld Road, Perth PH1 3AQ
Facsimile no: 01738 455281
Attention: Company Secretary
By:
Keadby Power Limited
Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17
3AZ
Facsimile no: 01724 784270
Attention: Dr. C.K. Stanley
By:
Kingsnorth Power Limited
Address: c/o Budd Martin & Co, Industria House, Red Houses, St.
Brelade, Jersey JE3 8LD
Facsimile no: 01534 44777
Attention: R. Martin
By:
Meter Operators Limited
Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ
Facsimile no: 01386 861113
Attention: R. Edmed
By:
Pentex (East Midlands) Limited
Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU
Facsimile no: 01244 211444
Attention: H. Jamieson
By:
Rocksavage Power Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171839 0905
Attention: G. Grant
By:
Seabank Power Limited
Address: Severn Road, Hallen, Bristol BS10 7SP
Facsimile no: 0117 982 0351
Attention: J.P. Baldry, General Manager
By:
Spalding Energy Company Limited
Address: 20 St. James's Street, London SW1A lES
Facsimile no: 0171 839 0905
Attention: G. Grant
THE METER OPERATOR PARTIES WHO ARE NOT PARTIES
Control Devices and Systems Limited
Address: HO. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE
Telex no: 849811
Facsimile no: 01635 528224
Attention: J.W. Dowse
By:
Datum Solutions Limited
Address: Littlebrook Business Centre, Littlebrook Manor Way,
Dartford, Kent DA1
5PS
Facsimile no: 01322 295178
Attention: G. Babbs
By:
DrakMarn O&M Ltd
Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG
Facsimile no: 01203 425431
Contact: Company Secretary
By:
E. Squared Limited
Address: 52-54 Southwark Street, London SE1 1UN
Facsimile no: 0171378 0012
Attention: Graham Nicholls
By:
Northern Energy Services Limited
Address: 208 Askern Road, Bentley, Doncaster DN5 OEU
Facsimile no: 01302 820790
Attention: W. Tuczemzkyi
By:
PowerMet Limited
Address: 13 Wimpole Street, London W1M 7AB
Facsimile no: 0171 493 7151
Attention: M. Rugman
By:
Schlumberger Industries Limited
Address: Langer Road, Felixstowe, Suffolk IP11 8ER
Facsimile no: 01394 276030
Attention: M. Jones, Marketing Manager
By:
Stanor National Contracts
Address: 71A Mafeking Avenue, Brentford, Middlesex TW8 0NL
Facsimile no: 0181560 4651
Attention: A. Yardley
By:
The Challenge Group
Address: 22 Tally Road, Oxted, Surrey RH8 0TG
Facsimile no: 01883 730543
Attention: J. Glover
By:
EXTERNAL POOL MEMBERS
British Nuclear Fuels plc
Address: F13, Sellafield, Seascale, Cumbria CA20 1PG
Facsimile no: 019467 27132
Attention: P.L. O'Neil, Business Manager, Electricity Generation
By:
Electricite de France, Service National
Address: EDF Production Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384
Paris,
Cedex 08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to:Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Scottish Hydro-Electric plc
Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ
Facsimile no: 01738 456190
Attention: R. Hackland
By:
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Facsimile no: 0141636 4706
Attention: B.J.H. Paget
By:
SETTLEMENT SYSTEM ADMINISTRATOR
Energy Settlements and Information Services Limited
Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN
Facsimile no: 0115 945 6728
Attention: G.K. James, General Manager
By:
POOL FUNDS ADMINISTRATOR
Energy Pool Funds Administration Limited
Address: 3rd Floor, 185 Park Street, London SE1 9DY
Facsimile no: 01203 423558
Attention: A. Marks, Director (National Grid House, 2nd Floor,
Kirby Corner Road, Coventry CV4 8JY)
By:
GRID OPERATOR
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of: )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no:
Facsimile no: 01203 423577
Attention: Company Secretary (copy to: J. Irgin, c/o A.G. Ferens,
The National Grid Company plc, St. Catherine's Lodge,
Bearwood Road,
Sindlesham, Nr. Wokingham, Berkshire RG11 5BN)
ANCILLARY SERVICES PROVIDER
EXECUTED AS A DEED by )
The National Grid )
Company plc by the )
affixing of its )
common seal in the )
presence of:- )
MEMBER OF BOARD SEALING COMMITTEE
Authorised Signatory
Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY
Telex no: 25815
Facsimile no: 01203 423577
Attention: Company Secretary (copy to Mr. Carlton)
<PAGE>
EXTERNALLY INTERCONNECTED PARTIES
Scottish Power plc
Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN
Telex No:
Facsimile No: 0141636 4706
Attention: B.J.H. Paget
By:
Electricite de France, Service National
Address: EDF Department Transport, Departement Relations avec
l'Etranger,
Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384
Paris, Cedex
08
Telex no: 280098 FRANCE
Facsimile no: (00 331) 40 42 63 41
Attention: P. Gaillet
(copy to:Associated Electricity Supplies Limited
Address: 53 St. George's Road, Wimbledon, London SW19 4EA
Telex no:
Facsimile no: 0181 944 0750
Attention: P. Clubb)
By:
Exhibit 10.08
AGREEMENT
DATED 17th December, 1996
1,250,000,000 Pounds
CREDIT FACILITY
FOR
ENTERGY POWER UK PLC
ARRANGED BY
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
UNION BANK OF SWITZERLAND
<PAGE>
THIS AGREEMENT is dated 17th December, 1996 between:-
(1) ENTERGY POWER UK PLC (Registered No. 3261188) (the
"Company");
(2) ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED
and UNION BANK OF SWITZERLAND as arrangers (in this
capacity the "Arrangers");
(3) ABN AMRO BANK N.V. as issuing bank (in this capacity the
"Issuing Bank");
(4) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks
(the "Banks"); and
(5) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Definitions
In this Agreement:-
"Accounting Date"
means the last day of each financial quarter of the
Company.
"Accounting Period"
means any period of approximately three months or one
year ending on an Accounting Date for which accounts are
required to be prepared for the purposes of this
Agreement.
"Acquisition"
means the acquisition by the Company of any Shares
pursuant to the Offer and/or pursuant to open market
purchases.
"Act"
means the Electricity Act 1989 and, unless the context
otherwise requires, all subordinate legislation made
pursuant to it.
"Adjusted Capital and Reserves"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Affiliate"
means a Subsidiary or a Holding Company of a person and
any other Subsidiary of that Holding Company.
"Applicable Accounting Principles"
means accounting principles and practices, which at the
date of this Agreement are generally accepted in the
United Kingdom and approved by the Institute of Chartered
Accountants of England and Wales and which are consistent
with the accounting principles and practices applied in
the preparation of the Base Financial Statements.
"Auditors"
means Coopers and Lybrand or any other "Big Six" firm of
accountants or any other firm (approved by the Agent) of
independent public accountants of international standing
recognised and authorised by the Institute of Chartered
Accountants of England and Wales which is appointed by
the Company to audit the consolidated annual accounts of
the Company.
"Available Surplus Cashflow"
means that part of any Surplus Cashflow which has,
pursuant to Clause 19.15(b) (Distributions), been paid
(whether by way of dividend, loan repayment, interest or
loan) to the Company by the Target.
"Base Financial Statements"
means the audited annual consolidated accounts of the
Target for and as at the end of the financial year of the
Target ended 31st March, 1996.
"Beneficiary"
means a holder of a Loan Note.
"Bond Issues"
means:
(a) the pounds 100,000,000 8 per cent. bonds due 2003; and
(b) the pounds 100,000,000 8-5/8 per cent. bonds due 2005,
issued by the Target.
"Borrower"
means the Company or, upon its becoming a Borrower in
accordance with Clause 28.4 (Target as Borrower), the
Target.
"Borrower Accession Agreement"
means a letter substantially in the form of Part II of
Schedule 5 with such amendments as the Agent may approve.
"Borrowing"
means Financial Indebtedness (without double counting)
adjusted as follows:
(a) any interest, dividends, commission, fees or other
like financing charges, and any item falling within
paragraph (g) of the definition of Financial
Indebtedness, shall be excluded, save in each case
to the extent capitalised or more than 15 days
overdue for payment;
(b) in respect of any bonds, notes, debentures, loan
stocks and/or other debt securities issued at a
discount or redeemable at a premium and constituting
a Borrowing, the issue price thereof, together with
any applicable discount or premium recognised or
required by the Applicable Accounting Principles to
be recognised at the time of calculation (other than
amounts required by the Applicable Accounting
Principles to be accounted for as interest) in the
accounts of the relevant person (were any then to be
prepared), shall be included;
(c) in respect of paragraphs (d) and (e) of the
definition of Financial Indebtedness (but in the
case of paragraph (d), only where no interest or
similar charge is charged), only the principal
amount thereof as determined by the Applicable
Accounting Principles or (in the case of paragraph
(e)) the capitalised value (as so determined) of any
items falling thereunder shall be included;
(d) any item falling within paragraph (f) of the
definition of Financial Indebtedness which is in
respect of any sum excluded by paragraph (a) or (c)
above shall be excluded; and
(e) any item falling within paragraph (f)(ii) of the
definition of Financial Indebtedness shall be
included only to the extent that the same has been
or (in accordance with the Applicable Accounting
Principles) ought to be given a value in the latest
or next Accounts, or in any notes to those Accounts.
"Business Day"
means a day (other than a Saturday or a Sunday) on which
banks are open for business in London.
"Cancellation Date"
means the date of withdrawal or lapse of the Offer in
accordance with its terms.
"Capitalisation Ratio"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Cashflow"
means, for any period for which it is being tested,
Consolidated EBITDA for that period, but adjusted so as
to:
(a) add back any taxes refunded during that period;
(b) deduct any increase or add any reduction in working
capital which occurs during that period;
(c) deduct any taxes accrued or paid during that period
(adjusted in the case of VAT for any VAT input);
(d) deduct outflows and add inflows of cash effect
resulting from any Extraordinary Items;
(e) deduct any capital expenditure or costs or expenses
of a capital nature paid during that period and any
other expenditure not already taken into account
which is required to be paid under the Licence, any
Licence Undertaking or any applicable law or
regulation during the following financial quarter;
and
(f) take no account of any book profits or losses
arising from the disposal of any assets.
"Certain Funds Period"
means the period beginning on the date of issue of the
Press Release and ending on the earlier of:
(a) the date which falls three months after the
Unconditional Acceptances Date;
(b) the date which falls seven months after the date of
issue of the Press Release; and
(c) the date which falls seven days after the
Cancellation Date;
or, if prior to that date the Company has given notice
under section 429 of the Companies Act 1985 to
shareholders who have not accepted the Offer, any longer
period as may be required to enable the Company to
acquire shares within the period it is permitted to do so
under Section 428 to 430 of the Companies Act 1985
following the announcement of the Offer.
"Clean-Up Date"
means the date falling 180 days after the Target becomes
a Subsidiary of the Company.
"Code"
means the City Code on Takeovers and Mergers.
"Commitment"
means, in respect of a Bank, its Facility A Commitment,
Facility B Commitment or Facility C Commitment, and
"Commitments" means the aggregate of its Facility A
Commitment, Facility B Commitment and Facility C
Commitment.
"Consolidated EBITDA"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Consolidated Net Interest Payable"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Consolidated Net Total Borrowings"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Consolidated Total Interest Payable"
has the meaning given to it in Clause 19.28 (Financial
covenants).
"Dangerous Substance"
means any radioactive emissions, noise, any natural or
artificial substance (whether in the form of a solid,
liquid, gas or vapour) the generation, transportation,
storage, treatment, use or disposal of which (whether
alone or in combination with any other substance)
including (without limitation) any controlled, special,
hazardous, toxic, radioactive or dangerous substance or
waste, gives rise to a risk of causing harm to man or any
other living organism or damaging the Environment or
public health or welfare.
"Debenture"
means a debenture executed by the Company in favour of
the Agent substantially in the form of Schedule 7.
"Default"
means an Event of Default or an event which, with the
giving of notice, expiry of any applicable grace period,
determination of materiality or fulfilment of any other
applicable condition specified (in any such case) in
Clause 20 (Default) (or any combination of the
foregoing), would constitute an Event of Default.
"Director General"
means the person appointed from time to time by the
Secretary of State to hold office as the Director General
of Electricity Supply for the purpose of the Act.
"Double Taxation Treaty"
means any convention between the government of the United
Kingdom and any other government for the avoidance of
double taxation and the prevention of fiscal evasion with
respect to taxes on income and capital gains.
"Drawdown Date"
means the date of the advance of a Loan.
"Environment"
means any of the following media, the air (including,
without limitation, the air within buildings and the air
within other natural or man-made structures above or
below ground), water (including, without limitation,
ground and surface water) and land (including, without
limitation, surface and sub-surface soil).
"Environmental Claim"
means any claim by any person:
(a) in respect of any loss or liability suffered or
incurred by that person as a result of or in
connection with any violation of Environmental Law;
or
(b) that arises as a result of or in connection with
Environmental Contamination and that could give rise
to any remedy or penalty (whether interim or final)
that may be enforced or assessed by private or
public legal action or administrative order or
proceedings, including, without limitation, any such
claim arising from injury to persons, property or
natural resources.
"Environmental Contamination"
means each of the following and their consequences:
(a) any release, emission, leakage or spillage of any
Dangerous Substance at or from any site owned,
occupied or used by any member of the Group into any
part of the Environment; or
(b) any accident, fire, explosion or sudden event at any
site owned, occupied or used by any member of the
Group which is directly or indirectly caused by or
attributable to any Dangerous Substance; or
(c) any other pollution of the Environment.
"Environmental Law"
means all applicable laws (including, without limitation,
common law), regulations, directing codes of practice,
circulars, guidance notices and the like having legal
effect (whether in the United Kingdom or elsewhere)
concerning pollution or the protection of human health,
the Environment, the conditions of the work place or the
generation, transportation, storage, treatment or
disposal of Dangerous Substances.
"Environmental Licence"
means any authorisation required by any Environmental
Law.
"Event of Default"
means an event specified as such in Clause 20.1 (Events
of Default).
"Exceptional Items"
has the meaning given to it in Clause 19.28 (Financial
Covenants).
"Expiry Date"
means the expiry date of the Guarantee, as specified in
the Guarantee.
"Extraordinary Items"
has the meaning given to it in Clause 19.28 (Financial
Covenants).
"Facility"
means Facility A, Facility B or Facility C.
"Facility A"
means the facility referred to as such in Clause 2.1(a)
(Facilities).
"Facility A Commitment"
means:
(a) in relation to a Bank which is a Bank on the date of
this Agreement, the amount in Sterling set out in
the Syndication Letter; and
(b) in relation to a Bank which becomes a Bank after the
date of this Agreement, the amount of a Facility A
Commitment acquired by it under Clause 28 (Changes
to the Parties),
to the extent not transferred, cancelled or reduced under
this Agreement.
"Facility A Final Repayment Date"
means the date which falls five years after the date of
this Agreement.
"Facility A Loan"
means a loan made by the Banks under Facility A or the
principal amount outstanding of that loan.
"Facility A Outstandings"
means, at any time, the aggregate of the Guarantee
Outstandings and the Facility A Loans at that time.
"Facility B"
means the facility referred to as such in Clause 2.1(b)
(Facilities).
"Facility B Commitment"
means:
(a) in relation to a Bank which is a Bank on the date of
this Agreement, the amount in Sterling set out in
the Syndication Letter; and
(b) in relation to a Bank which becomes a Bank after the
date of this Agreement, the amount of a Facility B
Commitment acquired by it under Clause 28 (Changes
to the Parties),
to the extent not transferred, cancelled or reduced under
this Agreement.
"Facility B Final Repayment Date"
means the date falling two years after the date of this
Agreement.
"Facility B Loan"
means, subject to Clause 10 (Interest Periods), a loan
made by the Banks under Facility B or the principal
amount outstanding of that loan.
"Facility B Repayment Date"
means each date for the payment of a Facility B Repayment
Instalment.
"Facility B Repayment Instalment"
means each instalment for the repayment of Facility B
Loans referred to in Clause 8 (Repayment).
"Facility B Term Date"
means the last day of the Certain Funds Period.
"Facility C"
means the facility referred to as such in Clause 2.1(c)
(Facilities).
"Facility C Commitment"
means:
(a) in relation to a Bank which is a Bank on the date of
this Agreement, the amount in Sterling set out in
the Syndication Letter; and
(b) in relation to a Bank which becomes a Bank after the
date of this Agreement, the amount of a Facility C
Commitment acquired by it under Clause 28 (Changes
to the Parties),
to the extent not transferred, cancelled or reduced under
this Agreement.
"Facility C Final Repayment Date"
means the date which falls five years after the date of
this Agreement.
"Facility C Loan"
means a loan made by the Banks under Facility C or the
principal amount outstanding of that loan.
"Facility Office"
means the office notified by a Bank to the Agent:-
(a) on or before the date it becomes a Bank; or
(b) by not less than 5 Business Days' notice,
as the office through which it will perform all or any of
its obligations under this Agreement.
"Fee Letter"
means the letter dated the date of this Agreement between
the Arrangers and the Company, or the letter dated the
date of this Agreement between the Company and the Agent,
setting out the amount of various fees referred to in
Clause 22 (Fees).
"Final Maturity Date"
means the later of the Facility A Final Repayment Date
and the Facility C Final Repayment Date.
"Final Repayment Date"
means the Facility A Final Repayment Date, the Facility B
Final Repayment Date or the Facility C Final Repayment
Date.
"Finance Document"
means:-
(a) this Agreement;
(b) a Fee Letter;
(c) the Debenture;
(d) a Novation Certificate;
(e) the Syndication Agreement;
(f) a Borrower Accession Agreement;
(g) a Subordination Agreement;
(h) a Swap Document; or
(i) any other document designated as such by the Agent
and the Company.
"Finance Party"
means an Arranger, a Bank, the Issuing Bank or the Agent.
"Financial Indebtedness"
means any indebtedness for, or for interest or other
charges relating to, or otherwise in respect of or
pursuant to:-
(a) moneys borrowed or raised, including, without
limitation:
(i) monies raised by the sale of receivables or
other financial assets on terms (and to the
extent) that recourse may be had to the vendor
in the event of non-payment of those
receivables or financial assets when due;
(ii) monies raised under acceptance credit
facilities; and
(iii)monies raised through the issue of bonds,
notes, debentures, bills, loan stocks and other
debt securities (including any debt security
convertible, but not at the relevant time
converted, into share capital);
but any Subordinated Debt or Project Finance
Indebtedness (other than indebtedness referred to in
paragraph (f)(iii) below) shall not constitute
Financial Indebtedness;
(b) the acquisition cost of assets or services to the
extent payable on deferred payment terms after the
time of acquisition or possession by the party
liable (whether or not evidenced by any bond, note,
debenture, bill, loan stock or other debt security),
excluding:
(i) retentions which are normal in the trade
concerned and not entered into primarily as a
means of raising finance;
(ii) any payment relating to construction works or
the acquisition of fixed assets which will
become payable only upon fulfilment of
conditions relating to or comprising completion
or commissioning of certain stages in such
works or in the supply programme or the
granting of any planning permission for such
works or fixed assets and which has not yet
become payable by reason of the non-fulfilment
of any such condition; and
(iii)any such cost payable on deferred payment
terms which are normal in the business
concerned and not entered into primarily as a
means of raising finance, and which do not
involve any deferral of payment of any sum for
more than six months;
(c) moneys received in consideration for the supply of
goods and/or services to the extent received more
than six months before the due date for their supply
(but excluding any liability in respect of bona fide
advance payments and deposits received from
customers in the ordinary course of trade);
(d) instalments under conditional sale agreements
entered into primarily as a method of raising
finance;
(e) payments under leases (whether in respect of land,
machinery, equipment or otherwise) and payments
under hire purchase agreements and similar
agreements and instruments, in each case where those
leases, agreements or instruments are treated as
finance leases in accordance with the Applicable
Accounting Principles;
(f) (i) any guarantee, indemnity, letter of credit or
other legally binding instrument to
assure payment of, or against loss in respect
of non-payment of, any of the indebtedness
specified in this definition and any counter-
indemnity in respect of any thereof; and/or
(ii) any legally binding agreement or other
instrument entered into in connection with any
of the indebtedness specified in this
definition requiring, or giving any person the
right (contingently or otherwise) to require,
that any other person invest in, make advances
to, purchase assets of or maintain the solvency
or financial condition of any other person;
and/or
(iii)any recourse under any form of assurance,
undertaking or support of a type referred to in
paragraph (b)(iii) of the definition of
"Project Finance Indebtedness";
(g) any interest rate and/or currency swap, and any
other interest or currency protection, hedging or
financial futures transaction or arrangement; or
(h) transactions which involve or have the commercial
effect of the borrowing of commodities as part of
an arrangement for or in substitution for the
raising of finance, the value of indebtedness
concerned for this purpose being the sum which must
be paid and/or the value in money terms of the
commodities which must be delivered by the
"borrower" to, or to the order of, the "lender"
"First Test Date"
means the first date on which a financial covenant in
Clause 19.28(c) (Financial covenants) is tested, being:
(a) in the case of Clause 19.28(c)(i) (Financial
covenants), 30th June, 1997; and
(b) in the case of Clause 19.28(c)(ii) (Financial
covenants):
(i) if the Target becomes a member of the Group
within 6 weeks of the end of the then current
quarterly Accounting Period, the last day of
the next quarterly Accounting Period; or
(ii) in all other cases, the last day of the
quarterly Accounting Period in which the Target
becomes a member of the Group.
"Group"
means at any time the Company and its Subsidiaries at
that time.
"Guarantee"
means the guarantee to be issued by the Issuing Bank in
favour of the Beneficiaries, substantially in the form of
Schedule 6.
"Guarantee Outstandings"
means, at any time, the amount of the maximum liability
(whether actual or contingent) of the Banks under the
Guarantee.
"Holding Company"
has the meaning given to it in Section 736 of the
Companies Act 1985.
"Information Memorandum"
means the Information Memorandum prepared by the Company
in connection with the Syndication.
"Initial Capital Injection"
means an amount (in a minimum aggregate amount as
specified in the Syndication Letter) of paid up equity
share capital or paid in capital contributions, or any
combination of the two, to be subscribed for in, or on
lent to, the Company by the Parent prior to any Request
being made.
"Interest Period"
means each period selected in accordance with Clause 10
(Interest Periods).
"Issue Date"
means the date of issue of the Guarantee.
"LIBOR"
means the arithmetic mean (rounded upward to the nearest
four decimal places) of the rates, as supplied to the
Agent at its request, quoted by the Reference Banks to
leading banks in the London interbank market at or about
11.00 a.m. on the first day of an Interest Period for the
offering of deposits in Sterling for a period comparable
to the Interest Period.
"Licence"
means a public electricity supply licence held by a
member of the Group and issued pursuant to Section 6(1)
of the Act, as modified or supplemented from time to
time.
"Licenceholder"
means at any time the member of the Group which then
holds a Licence.
"Licence Undertaking"
means any undertaking or assurance given in connection
with the Offer by any one or more of the Company, the
Target or any Affiliate of any of them to the Director
General or the Secretary of State concerning the
management and/or ownership of and/or other matters
concerning the Target once it has become a Subsidiary of
the Company.
"Loan"
means a Facility A Loan, a Facility B Loan or a
Facility C Loan.
"Loan Note"
means any loan note offered or issued by the Company to
shareholders of the Target in connection with the Offer.
"Major Default"
means an Event of Default arising as a result of an act
of, omission by, or circumstance affecting the Company
(other than one relating to the Target or its
Subsidiaries) and which is referred to in Clause 20.2
(Non-payment) or Clauses 20.6 (Insolvency) to 20.8
(Appointment of receivers and managers) inclusive or
20.10 (Analogous proceedings) to 20.12 (Unlawfulness)
inclusive.
"Majority Banks"
means, at any time, Banks:-
(a) whose participations in all Loans then outstanding
aggregate more than 662/3 per cent. of all Loans
then outstanding; or
(b) if there are no Loans then outstanding, whose
Commitments then aggregate more than 662/3 per cent.
of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced to zero, whose
Commitments aggregated more than 662/3 per cent. of
the Total Commitments immediately before the
reduction.
"Margin"
means, subject to Clause 11.1(b) (Interest Rate) and to
paragraph (d) below and with effect from each applicable
Margin Adjustment Date:
(a) in respect of a Facility A Loan, at any time when
the Capitalisation Ratio is:
(i) greater than 80 per cent., 1.50 per cent. per
annum;
(ii) equal to or less than 80 per cent., but greater
than 75 per cent., 1.15 per cent. per annum;
(iii)equal to or less than 75 per cent., but
greater than 70 per cent., 0.90 per cent. per
annum;
(iv) equal to or less than 70 per cent., but greater
than 65 per cent., 0.70 per cent. per annum;
(v) equal to or less than 65 per cent., but greater
than 60 per cent., 0.575 per cent. per annum;
(vi) equal to or less than 60 per cent., but greater
than 55 per cent., 0.45 per cent. per annum;
and
(vii)equal to or less than 55 per cent., 0.30
per cent. per annum,
subject to a maximum, until the date falling six
months after the date of this Agreement, of 1.25 per
cent. per annum;
(b) in respect of a Facility B Loan:
(i) for the period from the date of this Agreement
up to (and including) the date falling three
months after the date of this Agreement, 0.25
per cent. per annum; and
(ii) thereafter, the Margin which would be
applicable to a Facility A Loan, as set out in
paragraph (a) above;
(c) in respect of a Facility C Loan:
(i) at any time on or prior to the date on which
the Facility B Loans are prepaid or repaid in
full, the Margin which would be applicable to a
Facility A Loan, as set out in paragraph (a)
above; and
(ii) thereafter, 0.25 per cent. per annum; and
(d) if, on the first anniversary of the date of this
Agreement, the Facility B Loans have not been fully
repaid or prepaid, then either:-
(i) the Company will procure a guarantee of the
outstanding Facility B Loans on terms and from
an entity acceptable to all of the Banks in
their sole discretion in which case:-
(A) the Margin on the Facility B Loans shall
be the same Margin which would be
applicable to a Facility A Loan, as set
out in paragraph (a) above; and
(B) the provisions of paragraph (b) of Clause
8 (Repayment) shall not apply; or
(ii) if the Company has not procured a guarantee of
the outstanding Facility B Loans on terms and
from an entity acceptable to all of the Banks
in their sole discretion, then:-
(A) from the first anniversary of the date of
this Agreement up to the date falling 18
months after the date of this Agreement,
the Margin for Facility A Loans,
Facility B Loans and Facility C Loans
shall increase to 0.50 per cent. per annum
above the rate which otherwise would be
applicable under paragraph (a), (b) or (c)
above; and
(B) from the date falling 18 months after the
date of this Agreement up to and including
the Facility B Final Repayment Date, the
Margin on Facility A Loans, Facility B
Loans and Facility C Loans shall increase
to 1 per cent. per annum above the rate
which otherwise would be applicable under
paragraph (a), (b) or (c) above.
"Margin Adjustment Date"
means in respect of a Loan:
(a) the Business Day following any Subsequent Capital
Injection;
(b) the first day of the first Interest Period for that
Loan commencing after each determination of the
Capitalisation Ratio following delivery by the
Company of a certificate under Clause 19.2(c)(i) or
(ii) (Financial information); and
(c) if paragraph (d)(ii) of the definition of Margin is
applicable, the first anniversary of the date of
this Agreement and/or the date falling 18 months
after the date of this Agreement, as appropriate.
"Material Subsidiary"
means:
(a) the Target;
(b) any member of the Group (other than the Company and
any Project Finance Subsidiary):
(i) which is the Licenceholder; or
(ii) whose pre-tax profits represent at least ten
per cent. of the consolidated pre-tax profits
of the Group; or
(iii) the book value of whose gross assets
represents at least ten per cent. of the
consolidated gross assets of the Group,
and for this purpose:
(A) in the case of a company which itself has
Subsidiaries, the calculation shall be made by
using the consolidated pre-tax profits or gross
assets, as the case may be, of it and its
Subsidiaries;
(B) all calculations of consolidated pre-tax
profits or gross assets shall be made by
reference to:
(1) the latest accounts of the relevant
company (or, as the case may be, a
consolidation of the accounts of it and
its Subsidiaries) used for the purpose of
the then latest unaudited quarterly or
audited annual consolidated accounts of
the Group delivered to the Agent under
Clause 19.2 (Financial information); and
(2) those unaudited quarterly or, as the case
may be, audited annual consolidated
accounts of the Group;
and shall be made in accordance with the
Applicable Accounting Principles; or
(c) any member of the Group (other than the Company and
any Project Finance Subsidiary) which is not
otherwise a Material Subsidiary under this
definition but to which any Material Subsidiary
transfers in any annual Accounting Period all or
substantially all of its assets; the Material
Subsidiary from which the assets were transferred
shall cease to be a Material Subsidiary unless and
until it is shown to be a Material Subsidiary under
any other paragraph of this definition.
In the event of any dispute as to whether a Subsidiary is
or is not at any time a Material Subsidiary the question
shall be referred to the Auditors for determination
according to the provisions of this definition (acting as
experts at the cost of the Company) and their decision
shall be conclusive and binding on the Parties in the
absence of manifest error.
"Minimum Subsequent Capital Injection"
means the minimum aggregate amount (as specified in the
Syndication Letter) of Subsequent Capital Injections.
"MLA Cost"
means the cost imputed to the Banks of compliance with
the Mandatory Liquid Assets requirements of the Bank of
England during each Interest Period, determined in
accordance with Schedule 3.
"MMC Referral"
means a referral of the Offer by the Secretary of State
to the Monopolies and Mergers Commission.
"Novation Certificate"
has the meaning given to it in Clause 28.3 (Procedure for
novations).
"Offer"
means the offer made or proposed to be made for the
Shares by or on behalf of the Company to the shareholders
of the Target substantially on the terms referred to in
the Press Release, as such offer may be amended,
extended, varied and/or waived.
"Offer Costs"
means all costs, fees and expenses (including taxes or
similar charges thereon) and all stamp, documentary,
registration and similar taxes or charges incurred by or
on behalf of the Company in connection with the Offer,
including the preparation, negotiation and entry into of
the Finance Documents.
"Offer Documents"
means each of the documents issued or to be issued by the
Company to the shareholders of the Target (including the
forms of acceptance) in respect of the Offer.
"Offer Utilisation"
means any of the following Utilisations:-
(a) a Facility A Loan or Facility B Loan borrowed for
the purpose of financing or refinancing the costs of
the Acquisition or consideration payable to Share
Option Holders and Loan Note Holders in connection
with the Acquisition; or
(b) the Guarantee.
"Panel"
means The Panel on Takeovers and Mergers.
"Parent"
means Entergy Power UK Holding Limited (Registered No.
3261305).
"Party"
means a party to this Agreement.
"Permitted Transaction"
means:
(a) a reconstruction, amalgamation, reorganisation,
merger or consolidation of a Borrower or a Material
Subsidiary on terms approved by the Majority Banks;
(b) a disposal of assets permitted by the terms of this
Agreement; or
(c) a solvent liquidation, dissolution or winding-up of
a Material Subsidiary (other than the Target or the
Licenceholder) which does not have a Material
Adverse Effect.
"Pooling and Settlement Agreement"
means the agreement dated 30th March, 1990 made by the
Target with the National Grid Company plc and others
setting out the rules and procedures for the operation of
an electricity trading pool and of a settlement system.
"Press Release"
means the press release referred to in Part I of Schedule
2 to be made by or on behalf of the Company announcing
the terms of the Offer.
"Project Finance Indebtedness"
means any Borrowing which finances the acquisition,
development, ownership and/or operation of an asset:
(a) which is incurred by a Project Finance Subsidiary;
or
(b) in respect of which the person or persons to whom
the Borrowing is or may be owed by the relevant
debtor (whether or not a member of the Group) has or
have no recourse whatsoever to any member of the
Group (other than to a Project Finance Subsidiary)
for its repayment other than:
(i) recourse to the debtor for amounts limited to
the cash flow or net cash flow (other than
historic cash flow or historic net cash flow)
from the asset; and/or
(ii) recourse to the debtor for the purpose only of
enabling amounts to be claimed in respect of
that Borrowing in an enforcement of any
Security Interest given by the debtor over the
asset or the income, cash flow or other
proceeds deriving from the asset (or given by
any shareholder or the like in the debtor over
its shares or like interest in the capital of
the debtor) to secure the Borrowing but only
if:
(A) the extent of the recourse to the
debtor is limited solely to the amount of
any recoveries made on any such
enforcement; and
(B) that person or persons are not
entitled, by virtue of any right or claim
arising out of or in connection with that
Borrowing, to commence proceedings for the
winding up or dissolution of the debtor or
to appoint or procure the appointment of
any receiver, trustee or similar person or
officer in respect of the debtor or any of
its assets (other than the assets the
subject of that Security Interest); and/or
(iii) recourse to the debtor generally, or
directly or indirectly to a member of the
Group, under any form of assurance, undertaking
or support, which recourse is limited to a
claim for damages (other than liquidated
damages and damages required to be calculated
in a specified way) for breach of an obligation
(other than a payment obligation or an
obligation to procure payment by another or an
indemnity in respect thereof or any obligation
to comply or to procure compliance by another
with any financial ratios or other tests of
financial condition) by the person against whom
such recourse is available.
"Project Finance Subsidiary"
means any Subsidiary of the Company (other than the
Licenceholder):
(a) which is a company whose principal assets and
business are constituted by the ownership,
acquisition, development and/or operation of an
asset whether directly or indirectly;
(b) none of whose Borrowings in respect of the financing
of the ownership, acquisition, development and/or
operation of an asset benefits from any recourse
whatsoever to any member of the Group (other than
the Subsidiary itself or another Project Finance
Subsidiary) in respect of its repayment, except as
expressly referred to in paragraph (b)(iii) of the
definition of Project Finance Indebtedness in this
Clause 1.1 (Definitions); and
(c) which has been designated as such by the Company by
notice to the Agent. However, the Company may give
notice to the Agent at any time that any Project
Finance Subsidiary is no longer a Project Finance
Subsidiary, whereupon it shall cease to be a Project
Finance Subsidiary.
"Qualifying Bank"
means:-
(a) a bank as defined in Section 840A of the Income and
Corporation Taxes Act 1988 which, for the purposes
of Section 349 of the Income and Corporation Taxes
Act 1988, is within the charge to United Kingdom
corporation tax as regards any interest received by
it under this Agreement, except that, if that
Section is repealed, modified, extended or re-
enacted, the Agent may at any time and from time to
time (acting reasonably) amend this definition to
reflect such repeal, modification, extension or
enactment by giving notice of the amended definition
to the Company; or
(b) a person carrying on a bona fide banking business
who is resident (as such term is defined in the
appropriate Double Taxation Treaty) in a country
with which the United Kingdom has an appropriate
Double Taxation Treaty giving residents of that
country full exemption from United Kingdom taxation
on interest and does not carry on business in the
United Kingdom through a permanent establishment
with which the indebtedness under this Agreement in
respect of which the interest is paid is effectively
connected.
"Reduction Date"
means the date falling three years after the date of this
Agreement.
"Reference Banks"
means, subject to Clause 28.5 (Reference Banks), the
principal London offices of ABN AMRO Bank N.V., Bank of
America National Trust and Savings Association and Union
Bank of Switzerland.
"Relevant Percentage"
means, in relation to a Bank, the proportionate liability
of that Bank under the Guarantee, being the proportion
its Commitments bear to the Total Commitments, expressed
as a percentage.
"Repayment Date"
means a Facility B Repayment Date or the last day of the
Interest Period of a Facility A Loan or a Facility C
Loan.
"Request"
means a request made by a Borrower for a Loan or the
Guarantee, substantially in the form of Schedule 4.
"Rollover Loan"
means a Facility A Loan or a Facility C Loan, the
principal amount of which is less than or equal to an
outstanding Facility A Loan or Facility C Loan, as the
case may be, and whose Drawdown Date coincides with the
Repayment Date of that outstanding Facility A Loan or
Facility C Loan, as the case may be.
"Secretary of State"
means the Secretary of State as referred to in the Act.
"Security Account"
has the meaning given to it in the Debenture.
"Security Interest"
means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security.
"Share Option"
means an option to acquire shares in the Target.
"Share Option Holder"
means any holder of a Share Option.
"Shares"
means all the issued shares (and Share Options) in the
capital of the Target (including any shares of the Target
issued while the Offer remains open for acceptance).
"Sterling"
means the lawful currency for the time being of the
United Kingdom.
"Subordinated Debt"
means a separate unsecured loan to the Company from a
shareholder, or an Affiliate of a shareholder, of the
Company and/or any other person permitted under this
Agreement which:
(a) has a maturity date falling after the later of
Facility A Final Repayment Date and the Facility C
Final Repayment Date;
(b) is not capable of acceleration (other than in the
event of insolvency or an insolvency proceeding)
whilst any amount may be or become payable by any
Borrower under the Finance Documents or any of the
Commitments remain in effect; and
(c) is subordinated (as regards priority of payment,
ranking, rights of enforcement and all other rights)
as to principal, interest and all other amounts
payable on or in respect thereof and any and all
claims (including for damages) related thereto to
all amounts which may be or become payable by the
Borrowers under the Finance Documents,
all in accordance with a Subordination Agreement.
"Subordination Agreement"
means a subordination agreement entered, or to be
entered, into by the Agent, the Company and any other
person in respect of Subordinated Debt, substantially in
the form of Schedule 9.
"Subsequent Capital Injection"
means (following the Initial Capital Injection) either:
(a) another contribution of paid up equity capital in
the Company either by way of the issuing by the
Company of additional share capital or by way of
capital contribution; and/or
(b) another loan to the Company, constituting
Subordinated Debt,
where the aggregate of the proceeds of the equity capital
issued, transferred or contributed and/or the principal
amount of the Subordinated Debt are to be applied in
prepayment of the Loans to the extent required by
Clause 9.6 (Mandatory prepayment/cancellation).
"Subsidiary"
means:-
(a) a subsidiary within the meaning of Section 736 of
the Companies Act 1985, as amended by Section 144 of
the Companies Act 1989; and
(b) for the purposes of Clauses 19.28 (Financial
covenants) and any financial information relating to
the Group, a subsidiary undertaking within the
meaning of Section 21 of the Companies Act 1989.
"Surplus Cashflow"
means, for any period for which Cashflow is calculated,
Cashflow for that period less the obligations of the
Group in respect of Financial Indebtedness which are
actually paid during that period.
"Swap Document"
means any interest rate hedging agreement (substantially
in the form agreed by the Company and the Agent prior to
the date of this Agreement) entered into by the Company
with any of the Banks party to this Agreement as at the
date of this Agreement and any confirmation entered into
pursuant to any such agreement.
"Syndication"
means the primary syndication (including the initial
syndication to sub-underwriters and the subsequent
general syndication) by the Arrangers of the Facilities.
"Syndication Agreement"
means an agreement substantially in the form of Part III
of Schedule 5.
"Syndication Letter"
means a letter dated the date of this Agreement from the
Arrangers to the Company in respect of the Syndication
and other matters.
"Target"
means London Electricity plc (Registered no. 2366852).
"Total Commitments"
means the aggregate of the Total Facility A Commitments,
the Total Facility B Commitments and the Total Facility C
Commitments, being 1,250,000,000 pounds at the date of this
Agreement.
"Total Facility A Commitments"
means the aggregate for the time being of the Facility A
Commitments, being the amount agreed in the Syndication
Letter.
"Total Facility B Commitments"
means the aggregate for the time being of the Facility B
Commitments, being the amount agreed in the Syndication
Letter.
"Total Facility C Commitments"
means the aggregate for the time being of the Facility C
Commitments, being the amount agreed in the Syndication
Letter.
"Unconditional Acceptances Date"
means the date on which the Offer is declared or becomes
unconditional as to acceptances.
"Utilisation"
means a Loan or the Guarantee.
"Utilisation Date"
means a Drawdown Date or the Issue Date.
1.2 Construction
(a) In this Agreement, unless the contrary intention appears,
a reference to:
(i) "assets" includes properties, revenues and rights of
every description;
an "authorisation" includes an authorisation,
consent, approval, resolution, licence, exemption,
filing, registration and notarisation;
something having a "Material Adverse Effect" is to
its having, or being reasonably likely to have, a
material adverse effect on the ability of a Borrower
to perform and comply with:
(A) its payment obligations under any Finance
Document; or
(B) its obligations under Clause 19.28 (Financial
Covenants); or
(C) any other of its material obligations under the
Finance Documents;
a "month" is a reference to a period starting on one
day in a calendar month and ending on the
numerically corresponding day in the next calendar
month, except that:
(1) if there is no numerically corresponding day in
the month in which that period ends, that
period shall end on the last Business Day in
that calendar month; or
(2) if an Interest Period commences on the last
Business Day of a calendar month, that Interest
Period shall end on the last Business Day in
the calendar month in which it is to end; and
a "regulation" includes any regulation, rule,
official directive, request or guideline (whether or
not having the force of law, but if not having the
force of law being of a type with which the person
concerned is accustomed to comply) of any
governmental body, agency, department or regulatory,
self-regulatory or other authority or organisation;
(ii) a provision of a law is a reference to that
provision as amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a
clause of or a schedule to this Agreement;
(iv) a person includes its successors and permitted
assigns;
(v) a Finance Document or another document is a
reference to that Finance Document or that other
document as amended, novated, supplemented, replaced
or renewed; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any
other Finance Document or in any notice given under or in
connection with any Finance Document has the same meaning
in that Finance Document or notice as in this Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored in construing this
Agreement.
2. THE FACILITIES
2.1 Facilities
Subject to the terms of this Agreement, the Banks
irrevocably grant to the Borrowers the following
facilities:-
(a) Facility A - a committed guarantee and revolving
credit facility under which, when requested by the
Company:-
(i) the Issuing Bank shall issue the Guarantee in
an amount which, when aggregated with the
amount of any Facility A Loans outstanding at
that time, does not exceed the Total Facility A
Commitments at that time; or
(ii) the Banks shall make to the Company Loans up to
an aggregate amount which, when aggregated with
the Guarantee Outstandings at that time, does
not exceed the Total Facility A Commitments at
that time;
(b) Facility B - a committed term loan facility under
which the Banks shall, when requested by the
Company, make to the Company Loans up to an
aggregate amount not exceeding, at any time, the
Total Facility B Commitments at that time; and
(c) Facility C - a committed revolving credit facility
under which the Banks shall, when requested by the
Target, make to the Target Loans up to an aggregate
amount not exceeding, at any time, the Total
Facility C Commitments at that time.
No Bank is obliged to lend at any time more than its
Commitment(s).
2.2 Nature of a Finance Party's rights and obligations
(a) The obligations of a Finance Party under the Finance
Documents are several. Failure of a Finance Party to
carry out those obligations does not relieve any other
Party of its obligations under the Finance Documents. No
Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents
are divided rights. A Finance Party may, except as
otherwise stated in the Finance Documents, separately
enforce those rights.
2.3 Change of currency
(a) If more than one currency or currency unit are at the
same time recognised by the laws of any country as the
lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any
obligations arising under the Finance Documents in,
the currency of that country shall be translated
into, or paid in, the lawful currency or currency
unit of that country designated by the Agent; and
(ii) any translation from one currency or currency unit
to another shall be at the official rate of exchange
legally recognised by the central bank for the
conversion of that currency or currency unit into
the other, rounded up or down by the Agent acting
in accordance with any applicable law on rounding
or, if there is no such law, acting reasonably in
accordance with its market practice.
(b) If a change in any currency of a country occurs, this
Agreement will be amended to the extent the Agent (acting
reasonably) specifies to be necessary to reflect the
change in currency and to put the Banks (and, if possible
and practicable, the Borrowers) in the same position, so
far as possible, that they would have been in if no
change in currency had occurred.
3. PURPOSE AND AVAILABILITY
(a) (i) The Company shall apply each Facility A Loan
made to it towards:-
(A) financing or refinancing the cost of the
Acquisition and the fees, costs and expenses
associated with the Acquisition, including
under the procedures in Sections 428-430 of the
Companies Act 1985;
(B) financing or refinancing the consideration
payable to Share Option Holders and Loan Note
Holders in connection with the Acquisition; or
(C) its working capital or general corporate
purposes.
(ii) The Guarantee is to be issued for the purpose of
guaranteeing the obligations of the Company under
the Loan Notes.
(iii) Facility A Loans may be borrowed and the
Guarantee may be issued, subject to the terms of
this Agreement, at any time after the Unconditional
Acceptances Date and prior to the Facility A Final
Repayment Date.
(b) (i) The Company shall apply each Facility B Loan
made to it towards:-
(A) financing or refinancing the cost of the
Acquisition and the fees, costs and expenses
associated with the Acquisition, including
under the procedures in Sections 428-430 of the
Companies Act 1985;
(B) financing or refinancing the consideration
payable to Share Option Holders and Loan Note
Holders in connection with the Acquisition; or
(C) financing the purchase of Shares in the market
up to a maximum aggregate shareholding of 29.9
per cent. of the Shares.
(ii) Facility B Loans may be borrowed, subject to the
terms of this Agreement, at any time on or before
the Facility B Term Date.
(c) (i) Upon its becoming a Borrower, the Target shall
apply each Facility C Loan made to it towards:-
(A) refinancing any facilities of the Target
(excluding the refinancing of any Bond Issues)
outstanding at the date on which the Target
becomes a Subsidiary of the Company; or
(B) its working capital and general corporate
purposes.
(ii) Facility C Loans may be borrowed by the Target,
subject to the terms of this Agreement, at any time
after the Target becomes a Borrower and prior to the
Facility C Final Repayment Date.
(d) Without affecting the obligations of any Borrower in any
way, no Finance Party is bound to monitor or verify the
application of any Utilisation.
4. CONDITIONS PRECEDENT
4.1 Documentary conditions precedent
(a) The obligations of each Finance Party to the Borrowers
under this Agreement are subject to the condition
precedent that the Agent has notified the Company and the
Banks that it has received all of the documents set out
in Part I of Schedule 2.
(b) The documents referred to in paragraph (a) above must be
(except for those mentioned in paragraph 4 of Part I of
Schedule 2) in a form agreed by the Company and the Agent
prior to the date of this Agreement or in form and
substance satisfactory to the Agent. The Agent shall
promptly notify the Company and the Banks of receipt of
those documents.
4.2 Further conditions precedent
Subject to Clause 4.3 (Conditions precedent during the
Certain Funds Period), the obligations of each Bank to
participate in a Utilisation are subject to the further
conditions precedent that:-
(a) on both the date of the Request and the Utilisation
Date:-
(i) the representations and warranties in Clause 18
(Representations and warranties) to be repeated
on those dates are correct in all material
respects and will be correct in all material
respects immediately after the Utilisation is
made; and
(ii) no Default or (in the case of a Rollover Loan)
no Event of Default is outstanding or will
result from the Utilisation;
(b) it would not cause the Facility A Outstandings, the
Facility B Loans or the Facility C Loans to exceed
the Total Facility A Commitments, the Total
Facility B Commitments or the Total Facility C
Commitments, as the case may be; and
(c) it would not result in there being more than 15
Utilisations outstanding at any time.
4.3 Conditions precedent during the Certain Funds Period
Notwithstanding Clause 4.2 (Further conditions precedent)
but without prejudice to Clause 4.1 (Documentary
conditions precedent), the obligations of a Bank to
participate in an Offer Utilisation during the Certain
Funds Period is only subject to the conditions precedent
that:-
(a) on both the date of the Request and the Drawdown
Date for that Offer Utilisation:-
(i) the representations and warranties to be made
by the Company in respect of itself and set out
in Clauses 18.2(a) (Status), 18.3 (Power and
authority), 18.4 (Legal validity) and 18.5 (Non-
conflict) are correct in all material respects
and will be correct in all material respects
immediately after the Utilisation is made;
(ii) no Major Default is outstanding or will result
from the Utilisation; and
(iii) the Office of Fair Trading has indicated
in writing that there will be no MMC Referral
or, in the case of a Facility B Loan for the
purpose referred to in Clause 3(b)(i)(C)
(Purpose and Availability), there has been no
MMC Referral;
(b) in the case of the first Loan borrowed during the
Certain Funds Period, all of the Initial Capital
Injection has been, or together with the proceeds of
that Loan will on the Drawdown Date be, applied in
financing or refinancing the cost of the Acquisition
and the fees, costs and expenses associated with the
Acquisition;
(c) it would not cause the Facility A Outstandings to
exceed the Total Facility A Commitments or the
Facility B Loans to exceed the Total Facility B
Commitments; and
(d) it would not result in there being more than 15
Utilisations outstanding at any time.
4.4 Lapse of the Offer
If the Offer is withdrawn or lapsed, then, without
prejudice to the other terms of this Agreement, no
further Loans may be made on or after the Cancellation
Date.
5. UTILISATIONS
5.1 Receipt of Requests
(a) A Borrower may utilise a Facility by way of a Loan
if the Agent receives, not later than the relevant
time, a duly completed Request.
(b) The Company may utilise Facility A by way of the
Guarantee if the Agent receives, not later than the
relevant time, a duly completed Request.
(c) The relevant time for:
(i) a Loan to be made to finance purchases of
Shares in the market is 4.00 p.m. on the
Business Day before its Drawdown Date;
(ii) any other Loan is 9.00 a.m. on the Business Day
before its Drawdown Date; and
(iii) the Guarantee is 9.00 a.m. on the Business
Day before the Issue Date.
5.2 Completion of Requests for Loans
A Request for a Loan will not be regarded as having been
duly completed unless:-
(a) it specifies whether the Loan is a Facility A Loan,
a Facility B Loan or a Facility C Loan and the
purpose for which the Loan is to be used;
(b) the Drawdown Date is a Business Day falling:
(i) in the case of a Facility A Loan, on or after
the Unconditional Acceptances Date and before
the Facility A Final Repayment Date;
(ii) in the case of a Facility B Loan, after
the date of this Agreement and before the
Facility B Term Date; and
(iii) in the case of a Facility C Loan, on or
after the Unconditional Acceptances Date and
before the Facility C Final Repayment Date;
(c) the principal amount of the Loan is a minimum of
10,000,000 pounds and an integral multiple of 5,000,000
pounds;
(d) the Interest Period specified complies with
Clause 10 (Interest Periods); and
(e) the payment instructions comply with Clause 12
(Payments).
Each Request is irrevocable.
5.3 Completion of Request for the Guarantee
The Request for the Guarantee will not be regarded as
having been duly completed unless it specifies:
(a) the maximum amount of the Guarantee, which must be a
minimum amount of 10,000,000 pounds and an amount which
would not cause the Facility A Outstandings to
exceed the Total Facility A Commitments;
(b) the Issue Date, being a Business Day falling after
the Unconditional Acceptances Date and before the
Facility A Repayment Date;
(c) the Expiry Date, which shall be not later than
Facility A Repayment Date;
(d) the delivery instructions for the Guarantee; and
(e) the form of the Guarantee, which must be attached to
the Request and be substantially in the form of
Schedule 6.
Each Request is irrevocable.
5.4 Amount of each Bank's participation in the Utilisation
(a) The amount of a Bank's participation in a Loan will be
the proportion of the Loan which its Commitments bear to
the Total Commitments on the proposed Drawdown Date.
(b) The amount of a Bank's participation in the Guarantee
will be the proportion of the maximum amount of the
Guarantee which its Commitments bears to the Total
Commitments.
5.5 Notification of the Banks
(a) The Agent shall promptly notify each Bank of the details
of the requested Loan and the amount of its participation
in the Loan.
(b) The Agent shall notify the Issuing Bank and each Bank of
the details of the requested Guarantee, including, in the
case of each Bank, its Relevant Percentage in relation to
the Guarantee.
5.6 Payment of Proceeds
Subject to the terms of this Agreement, each relevant
Bank shall make its participation in a Loan available to
the Agent for the relevant Borrower on the relevant
Drawdown Date.
5.7 Delivery of Guarantee
Subject to the terms of this Agreement:
(a) the Issuing Bank will execute the Guarantee prior to
or on (but to be effective from) the date requested
in the Request as the Issue Date; and
(b) the Issuing Bank shall (through the Agent) issue the
Guarantee on the Issue Date.
If the Guarantee is executed by the Issuing Bank before
the Issue Date and/or the amount of the Guarantee is
known, then, subject to the terms of this Agreement, the
Agent is authorised to insert, on behalf of the Issuing
Bank, the Issue Date and/or the relevant amount in the
Guarantee on receipt of the relevant Request.
6. CLAIMS UNDER THE GUARANTEE
6.1 Notification of claim
If a Beneficiary makes a claim under the Guarantee in
accordance with its terms, the Issuing Bank shall
promptly notify the Agent of the claim. If a claim has
been made on the Issuing Bank and notified to the Agent,
the Agent shall promptly notify the Company and each Bank
specifying:-
(a) the latest date on which payment may be made in
respect of the claim (the "Payment Date");
(b) the amount of the claim (the "Claimed Amount") and
each Bank's Relevant Percentage of the Claimed
Amount; and
(c) the details of the Issuing Bank's account to which
payment is to be made.
6.2 Payment by the Company
The Company shall, not later than 9.30 a.m. on the
Business Day preceding the Payment Date, pay to the
Issuing Bank the Claimed Amount.
6.3 Payment by the Banks
(a) If the Issuing Bank has not received the Claimed Amount
from the Company by 9.30 a.m. on the Business Day
preceding the Payment Date, it shall notify the Agent by
not later than 10.30 a.m. on that day.
(b) The Agent shall, if notified under paragraph (a) above,
notify each Bank not later than 12.00 noon on the same
day.
(c) Each Bank shall, if notified under paragraph (b) above,
pay to the Issuing Bank, not later than 12.00 noon on the
Payment Date, that Bank's Relevant Percentage of the
unpaid amount of the Claimed Amount.
6.4 Default by Banks
(a) If any Bank (a "Defaulting Bank") fails to make any
payment due from it for the account of the Issuing Bank
under Clause 6.3 (Payment by the Banks), then until the
Issuing Bank has been reimbursed in respect thereof in
full (but without prejudice to the obligations of that
Defaulting Bank to make such payment):
(i) the Defaulting Bank shall hold on trust for the
Issuing Bank the benefit of any security now or
hereafter created to secure the obligations of the
Borrowers under this Agreement and to which that
Defaulting Bank would have been entitled had it made
such payment; and
(ii) for the purposes of determining the constitution of
the Majority Banks:
(A) the Issuing Bank shall be treated as having a
Facility A Commitment equal to that of the
Defaulting Bank (in addition to the Facility A
Commitment (if any) which the Issuing Bank
already had in its capacity as a Bank); and
(B) that Defaulting Bank shall be treated, for such
purpose only, as having no Facility A
Commitment.
(b) The rights conferred upon the Issuing Bank in this
Clause 6.4 are in addition to any other rights which it
may have against a Defaulting Bank.
6.5 Indemnity by the Banks
Without limiting the liability of the Company under this
Agreement, each Bank shall forthwith on demand indemnify
the Issuing Bank for its Relevant Percentage of any
liability or loss incurred by the Issuing Bank in any way
relating to or arising out of its acting as the Issuing
Bank, except to the extent that the liability or loss
arises directly from the Issuing Bank's gross negligence
or wilful misconduct.
7. COUNTER-INDEMNITY
7.1 Indemnity from the Company
(a) The Company agrees to pay to the Agent for the account of
each Bank on demand from the Agent an amount equal to and
in the same currency as each amount demanded in
accordance with paragraph (b) below of, or paid out by,
the Bank under Clause 6.3 (Payment by the Banks) in
respect of the Guarantee and undertakes to indemnify and
hold harmless each Finance Party from and against all
liabilities, costs, losses, damages and expenses (other
than those of the type dealt with by Clauses 13.1 (Gross-
up) and 15.1 (Increased costs)) which any Finance Party
may incur or sustain by reason of or arising in any way
whatsoever in connection with or by reference to the
issue of the Guarantee or its performance of the
obligations expressed to be assumed by it under the
Guarantee save to the extent that any such liability,
cost, loss, damage or expense:
(i) is caused by the wilful misconduct, default or gross
negligence of the Finance Party concerned; or
(ii) represents a day to day cost of the Finance Party
incurred by it in the ordinary course of its
business in connection with or by reference to the
issue of the Guarantee or the performance of the
obligations expressed to be assumed by it under or
related to the Guarantee.
(b) The Company and each Bank unconditionally and
irrevocably:
(i) authorises and directs the Issuing Bank to pay any
prima facie valid demand under and in accordance
with the Guarantee issued for its account without
requiring proof of the agreement of the Company or
any Bank that the amounts so demanded or paid are or
were due and notwithstanding that the Company may
dispute the validity of any such request, demand or
payment;
(ii) confirm that the Issuing Bank deals in documents
only and shall not be concerned with the legality of
the claim or any other underlying transaction or any
set off, counterclaim or defence as between the
Company and any Beneficiary of the Guarantee; and
(iii) agree that the Issuing Bank need not have
regard to the sufficiency, accuracy or genuineness
of any such demand or any certificate or statement
in connection therewith or any incapacity of or
limitation upon the powers of any person signing or
issuing such demand, certificate or statement which
appears on its face to be in order and agree that
the Issuing Bank shall not be obliged to enquire as
to any such matters and may assume that any such
demand, certificate or statement which appears on
its face to be in order is correct and properly
made.
7.2 Waiver of defences
The Company agrees that its obligations under this
Clause 7 shall not be affected by any act, omission,
matter or thing which but for this provision might
operate to release or otherwise exonerate the Company
from its obligations under this Clause 7 in whole or in
part, including without limitation and whether or not
known to the Company:-
(a) any time or waiver granted by or composition with
any Finance Party, a Beneficiary or any other
person;
(b) any taking, variation, compromise, renewal or
release of, or refusal or neglect to perfect or
enforce, any rights, remedies or securities
available to any Finance Party or any other person
arising under the Finance Documents; or
(c) any variation or replacement of any Finance Document
or any other document so that references to that
Finance Document or other document shall include
each such variation or replacement.
7.3 Continuing indemnity
(a) The obligations of the Company under this Clause 7 shall
be continuing obligations, shall extend to the ultimate
balance of all amounts expressed to be payable by each
Borrower under the Finance Documents and shall continue
in force notwithstanding any intermediate payment in
whole or in part of amounts payable under this Clause 7.
(b) A certificate in writing signed by one of the Agent's
officers and certifying the total amount due from the
Company shall be prima facie evidence of the matters so
certified.
7.4 Rights of subrogation
Until all amounts which are or may become payable by the
Borrowers under the Finance Documents have been
irrevocably paid in full, the Company shall not, by
virtue of any payment made by it under or in connection
with or referable to this Clause 7 or otherwise, be
subrogated to any rights, security or moneys held or
received by any Finance Party or be entitled at any time
to exercise, claim or have the benefit of any right of
contribution or subrogation or similar right against any
Finance Party.
7.5 Additional Security
The obligations of the Company under this Clause 7 shall
be in addition to and shall not be in any way prejudiced
by any collateral or other security now or hereafter held
by any Finance Party as security or any lien to which
that Finance Party may be entitled.
7.6 Preservation of Rights
No invalidity or unenforceability of all or any part of
this Clause 7 shall affect any rights of indemnity or
otherwise which any Finance Party would or may have in
the absence of or in addition to this Clause 7.
8. REPAYMENT
(a) Subject to paragraph (b) below, each Borrower shall repay
each Loan made to it in full on its Repayment Date to the
Agent for the Banks.
(b) (i) The Company shall, subject to sub-paragraph
(ii) below, repay each Facility B Loan on
the Facility B Final Repayment Date.
(ii) If, on the first anniversary of the date of this
Agreement:
(1) any amount is owing to the Banks under or in
respect of any Facility B Loan; and
(2) the Company has not procured an effective
guarantee of such amount on terms and from an
entity acceptable to all the Banks in their
sole discretion;
then Facility B Loans shall be repaid by the Company
on each date set out below in an amount equal to the
relevant percentage set opposite that date of the
then outstanding Facility B Loans:
Date Repayment Instalment
1st anniversary of the 20 per cent. of the
date Facility B Loans then
of this Agreement outstanding
15 months after the date 25 per cent. of the
of this Agreement Facility B Loans then
outstanding
18 months after the date 33 1/3 per cent. of the
of this Agreement Facility B Loans then
outstanding
21 months after the date 50 per cent. of the
of this Agreement Facility B Loans then
outstanding
2nd anniversary of the date 100 per cent. of the
of this Agreement Facility B Loans then
outstanding.
(c) Subject to the terms of this Agreement, amounts repaid
under Facility A or Facility C may subsequently be re-
borrowed.
9. PREPAYMENT AND CANCELLATION
9.1 Automatic cancellation of the Total Commitments
(a) The Facility A Commitment of each Bank shall be
automatically cancelled at close of business on the
Facility A Final Repayment Date.
(b) The Facility B Commitment of each Bank shall be
automatically cancelled at close of business on the
Facility B Term Date.
(c) The Facility C Commitment of each Bank shall be
automatically cancelled at close of business on the
Facility C Final Repayment Date.
9.2 Voluntary cancellation
(a) The Company may, by giving not less than 2 Business Days'
prior notice to the Agent, cancel the unutilised portion
of the Total Facility A Commitments or the Total
Facility B Commitments in whole or in part (but, if in
part, in a minimum amount of 10,000,000 pounds and an
integral multiple of 5,000,000 pounds). Any cancellation
in part shall be applied against the relevant Commitment
of each Bank pro rata.
(b) The Target may, by giving not less than 2 Business Days'
prior notice to the Agent, cancel the unutilised portion
of the Total Facility C Commitments in whole or in part
(but, if in part, in a minimum amount of 10,000,000 pounds
and an integral multiple of 5,000,000pounds). Any cancellation
in part shall be applied against the Facility C Commitment
of each Bank pro rata.
9.3 Voluntary prepayment
A Borrower may at any time, by giving not less than 5
Business Days' prior notice to the Agent, prepay a Loan
in whole or in part (but, if in part, in minimum amounts
of 10,000,000 pounds), subject to Clause 25 (Indemnities).
9.4 Additional right of prepayment and cancellation
If any Borrower is required to pay any amount to a Bank
under Clause 13 (Taxes) or Clause 15 (Increased Costs),
the Borrower may, whilst the circumstances giving rise to
the requirement continue, serve a notice of prepayment
and cancellation on that Bank through the Agent. In this
event:-
(a) on the date falling 5 Business Days after the date
of service of the notice:
(i) each Borrower shall prepay that Bank's
participation in any Loans made to it together
with all other amounts payable by it to that
Bank under this Agreement; and
(ii) the Company shall pay cash cover into a
Security Account in an amount equal to that
Bank's Relevant Percentage of the maximum
aggregate actual and contingent liability of
the Banks under the Guarantee; and
(b) the Bank's Commitments shall be cancelled on the
date of service of the notice.
9.5 Mitigation
If circumstances arise which would, or would on the
giving of notice, result in:
(a) any additional amounts becoming payable under
Clause 13.1 (Gross-up); or
(b) any amount becoming payable under Clause 15.1
(Increased costs); or
(c) any prepayment or cancellation under Clause 16
(Illegality),
then, without limiting the obligations of the Borrowers
under this Agreement and without prejudice to the terms
of Clauses 13.1 (Gross-up), 15.1 (Increased costs) and 16
(Illegality), each Bank shall, in consultation with the
Company, take such reasonable steps as may be open to it
to mitigate or remove the relevant circumstance,
including (without limitation) the transfer with the
Company's consent as specified in Clause 28.2 (Transfers
by Banks) of its rights and obligations under this
Agreement to another bank or financial institution,
unless to do so might (in the opinion of the Bank) have a
material adverse effect on its business, operations or
financial condition or be contrary to its banking
policies or be otherwise prejudicial to it.
9.6 Mandatory prepayment/cancellation
(a) (i) At any time when the Capitalisation Ratio is
stated (in a compliance certificate provided at the
end of each quarterly Accounting Period under
Clause 19.2(c)(ii) (Financial information)) to
exceed 65 per cent., the Company shall provide a
calculation of Available Surplus Cashflow, Surplus
Cashflow and Cashflow in that compliance
certificate.
(ii) At the same time as the Company delivers to the
Agent the compliance certificate referred to in
paragraph (a) above, it shall pay an amount equal
to:
(1) if, at that time, the Capitalisation
Ratio exceeds 70 per cent., 100 per cent. of
the Available Surplus Cashflow (or such lesser
amount as will, when applied by the Agent under
paragraph (c) below, reduce the Capitalisation
Ratio to 70 per cent.); and
(2) if, at that time, the Capitalisation
Ratio exceeds 65 per cent. but is equal to or
lower than 70 per cent., 50 per cent. of the
Available Surplus Cashflow at that time (or
such lesser amount as will, when applied by the
Agent under paragraph (c) below, reduce the
Capitalisation Ratio to 65 per cent.),
to the Agent to be placed in a Security Account.
(b) The Company shall, immediately upon receipt, pay an
amount equal to the net proceeds of any Subsequent
Capital Injection into a Security Account.
(c) (i) Subject to sub-paragraph (ii) below, the Agent
shall, on the last day of each Interest Period for a
Facility B Loan, apply the amount standing to the
credit of a Security Account and referred to in
paragraphs (a) and (b) above, together with any
interest accrued on that amount, in or towards
prepayment of the Facility B Loans.
(ii) The Company may require the Agent to apply the
net proceeds of a Subsequent Capital Injection at
any time prior to the date the Agent is required to
do so under sub-paragraph (i) above by giving 5
Business Days' notice to the Agent.
(d) Any amount in a Security Account in excess of the
Facility B Loans outstanding on the date of application
by the Agent under paragraph (c) above shall be applied
as follows:
(i) if applicable, an amount equal to the Minimum
Subsequent Capital Injection less the amount applied
in prepayment of the Facility B Loans will
(notwithstanding any other term of this Agreement)
be treated as Cashflow and, to the extent required
under paragraph (a) above, be applied in prepayment
of the Facility A Loans in accordance with this
Clause; and
(ii) if the net proceeds of any Subsequent Capital
Injection received by the Company exceed the Minimum
Subsequent Capital Injection, the amount of any
excess may, unless a Default is outstanding, be
distributed by the Company to the Parent.
The Total Facility B Commitments and the Total Facility A
Commitments shall be cancelled by the amount of any
prepayment of Facility B Loans or Facility A Loans, as
the case may be, on the date of the prepayment.
(e) If a MMC Referral occurs, then the unutilised portion of
the Total Commitments shall be automatically cancelled on
the following Business Day as though this was a voluntary
cancellation under Clause 9.2 (Voluntary cancellation).
The Company shall notify the Agent forthwith upon
becoming aware of a MMC Referral.
9.7 Mandatory reduction of Commitments
On the Reduction Date, the Total Facility A Commitments
and the Total Facility C Commitments shall be reduced by
the amount (if any) required to ensure that the
Capitalisation Ratio on that date does not exceed 65 per
cent.
9.8 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable. The Agent shall notify the
Banks promptly of receipt of any such notice.
(b) All prepayments under this Agreement shall be made
together with accrued interest on the amount prepaid.
(c) No prepayment or cancellation is permitted except in
accordance with the express terms of this Agreement.
(d) (i) Subject to the terms of this Agreement, amounts
prepaid under Facility A and Facility C pursuant to
Clause 9.3 (Voluntary prepayment) may subsequently
be re-borrowed.
(ii) No other amount prepaid may subsequently be re-
borrowed.
(iii) No amount of the Total Commitments
cancelled under this Agreement may subsequently be
reinstated.
10. INTEREST PERIODS
10.1 Interest Periods
(a) Each Facility B Loan will have successive Interest
Periods. The first Interest Period will commence on the
Drawdown Date for that Facility B Loan and subsequent
Interest Periods will commence on expiry of its preceding
Interest Period.
(b) Each Facility A Loan and each Facility C Loan will have
one Interest Period only.
(c) Interest Periods may, subject to the other provisions of
this Clause 10, be for an approved duration or an
optional duration and:-
(i) "approved duration" means a period of 1, 3 or 6
months; and
(ii) "optional duration" means any other period (other
than an approved duration) of up to 12 months.
10.2 Selection of Interest Periods
(a) The Company may select an Interest Period for a
Facility B Loan in its Request (in the case of the first
Interest Period) or in a notice received by the Agent not
later than 9.00 a.m. on the Business Day before the
commencement of that Interest Period (in the case of
subsequent Interest Periods).
(b) If a Borrower fails to select a subsequent Interest
Period for a Facility B Loan in accordance with the
notice specified in paragraph (a) above, the Interest
Period will, subject to the other provisions of this
Clause 10, be 3 months.
(c) The relevant Borrower may select an Interest Period for
each Facility A Loan or Facility C Loan, as the case may
be, in its Request.
10.3 Selection of an optional duration
(a) If a Borrower selects an Interest Period of an optional
duration, it may also select in the relevant Request or
notice an Interest Period of an approved duration to
apply if the selection of an Interest Period of an
optional duration becomes ineffective in accordance with
paragraph (b) below.
(b) If:-
(i) a Borrower requests an Interest Period of an
optional duration; and
(ii) the Agent receives notice from a Bank not later than
3.00 p.m. on the Business Day before the beginning
of that Interest Period that it does not agree to
the request,
the Interest Period for the proposed Loan shall be the
alternative period of an approved duration specified in
the relevant Request or notice or, in the absence of any
alternative selection, 3 months.
(c) If the Agent receives a notice from a Bank under
paragraph (b) above, it shall notify the relevant
Borrower and the Banks promptly of the new Interest
Period for the proposed Loan.
10.4 Repayment Dates and the Reduction Date
(a) If an Interest Period for a Facility B Loan would
otherwise overrun the Facility B Final Repayment Date,
that Interest Period shall be shortened so that it ends
on the Facility B Final Repayment Date. If Clause
8(b)(ii) (Repayment) is applicable, the Agent may also
shorten any Interest Period for a Facility B Loan (and
may redesignate any Facility B Loan as two Facility B
Loans) to ensure that the aggregate principal amount of
Facility B Loans with an Interest Period ending on a
Facility B Repayment Date is not less than the Facility B
Repayment Instalment due on that Facility B Repayment
Date.
(b) If an Interest Period for a Facility A Loan or a
Facility C Loan would otherwise overrun the Reduction
Date or (as appropriate) the Facility A Final Repayment
Date or the Facility C Final Repayment Date, it shall be
shortened so that it ends on the Reduction Date or the
relevant Repayment Date, as the case may be.
10.5 Consolidation
Notwithstanding Clause 10.2 (Selection of Interest
Periods), the first Interest Period of each Facility B
Loan shall end on the same day as the then current
Interest Period for any other Facility B Loan. On the
last day of those Interest Periods, those Facility B
Loans shall be consolidated and treated as one Facility B
Loan.
10.6 Splitting
(a) The Company may give notice to the Agent by not later
than 9.00 am on the Business Day before the commencement
of an Interest Period for a Facility B Loan that it
wishes that Facility B Loan to be split into two or more
Facility B Loans, each such part being a minimum of
10,000,000 pounds.
(b) Each such part of a Facility B Loan will be treated as a
separate Facility B Loan.
(c) The Company may not split any Facility B Loan if, as a
result, there would then be more than 15 Utilisations
outstanding at that time.
10.7 Other adjustments
The Agent and the Company may enter into such other
arrangements as they may agree for the adjustment of
Interest Periods and the consolidation and/or splitting
of Facility B Loans.
10.8 Notification
The Agent shall notify the relevant Borrower and the
Banks of the duration of each Interest Period promptly
after ascertaining its duration.
11. INTEREST
11.1 Interest rate
(a) The rate of interest on each Loan for each of its
Interest Periods is the rate per annum determined by the
Agent to be the aggregate of the applicable:-
(i) Margin;
(ii) LIBOR; and
(iii) MLA Cost.
(b) If, in respect of any Accounting Period, the Company does
not comply with its obligations under Clause 19.2 (a)(i),
(b)(i) or (c) (Financial information), the applicable
Margin in respect of each Loan from the date of the
Company's non-compliance until the date on which that non-
compliance is remedied, shall be adjusted so that:
(i) prior to the date on which the Facility B Loans are
repaid or prepaid in full, the applicable Margin for
each Loan shall be 1.50 per cent. per annum
(adjusted, if necessary, to take into account the
application of paragraph (d) of the definition of
"Margin" in Clause 1.1 (Definitions)) or (if the non-
compliance occurs prior to the date falling six
months after the date of this Agreement) 1.25 per
cent. per annum; and
(ii) subsequently, the Margin applicable to each Facility
A Loan or Facility C Loan shall be the next
Increment up from the applicable Margin for that
Loan in the previous quarterly Accounting Period.
(c) For the purposes of paragraph (b) above, an "Increment"
is the difference between each level of the Margin in sub-
paragraphs (i) to (vii) of paragraph (a) of the
definition of "Margin" in Clause 1.1 (Definitions).
11.2 Due dates
Except as otherwise provided in this Agreement, accrued
interest on each Loan is payable by the relevant Borrower
on the last day of each Interest Period and also, in the
case of a Loan with an Interest Period longer than six
months, on the date falling six months after the
commencement of the Interest Period.
11.3 Default interest
(a) (i) If a Borrower fails to pay any amount payable
by it under the Finance Documents, it shall
forthwith on demand by the Agent pay interest on the
overdue amount from the due date up to the date of
actual payment, as well after as before judgement,
at a rate (the "default rate") determined by the
Agent to be 1 per cent per annum (or, at any time
prior to the date on which the Facility B Loans are
repaid or prepaid in full, 2 per cent. per annum)
above, subject to sub-paragraph (ii) below, the rate
which would have been payable if the overdue amount
had, during the period of non-payment, constituted a
Sterling Loan for such successive Interest Periods
of such duration as the Agent may reasonably
determine having regard to the likely duration of
the default (each a "Designated Interest Period").
(ii) If the overdue amount is a principal amount of a
Loan and it becomes due and payable prior to the
last day of an Interest Period for that Loan, then:-
(1) the first Designated Interest Period for that
overdue sum will be the unexpired portion of
that Interest Period; and
(2) the rate of interest on the overdue amount for
that first Designated Interest Period will be 1
per cent per annum or (at any time prior to the
date on which the Facility B Loans are repaid
or prepaid in full) 2 per cent. per annum above
the rate on the overdue amount under
Clause 11.1 (Interest rate) immediately before
the due date.
After the expiry of the first Designated Interest
Period for that overdue amount, the rate on the
overdue amount will be calculated in accordance with
sub-paragraph (i) above.
(b) The default rate will be determined on each Business Day
or the first day of the relevant Designated Interest
Period, as appropriate.
(c) If the Agent determines that Sterling deposits are not at
the relevant time being made available by the Reference
Banks to leading banks in the London interbank market,
the default rate will be determined by reference to the
cost of funds to the Banks from whatever sources Banks
may reasonably select, having due regard to the likely
duration of the default.
(d) Default interest will be compounded at the end of each
Designated Interest Period.
11.4 Notification of rates of interest
The Agent shall promptly notify each relevant Party of
the determination of a rate of interest under this
Agreement.
12. PAYMENTS
12.1 Place
All payments by a Borrower or a Bank under the Finance
Documents shall be made to the Agent to its account at
such office or bank in the U.K. as it may notify to that
Borrower or Bank for this purpose.
12.2 Currency and Funds
Payments under the Finance Documents to the Agent shall
be made in Sterling for value on the due date at such
times as the Agent may specify to the Party concerned as
being customary at the time for the settlement of
transactions in Sterling.
12.3 Distribution
(a) Each payment received by the Agent under this Agreement
for another Party shall, subject to the paragraphs below,
be made available by the Agent to that Party by payment
to its account with such bank in the U.K. as it may
notify to the Agent for this purpose by not less than 5
Business Days' prior notice.
(b) Where the Repayment Date for an outstanding Facility A
Loan or Facility C Loan coincides with the Drawdown Date
for a new Facility A Loan or Facility C Loan, as the case
may be, the Agent shall apply the relevant new Loan in or
towards repayment of the relevant outstanding Loan so
that:-
(i) where the amount of the outstanding Loan exceeds the
amount of the new Loan, the relevant Borrower shall
only be required to repay the excess; and
(ii) where the amount of the outstanding Loan is exactly
the same as the amount of the new Loan, the relevant
Borrower shall not be required to make any payment.
(c) The Agent may apply any amount received by it for a
Borrower in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from a
Borrower under this Agreement or in or towards the
purchase of any amount of any currency to be so applied.
(d) Where a sum is to be paid under this Agreement to the
Agent for the account of another Party, the Agent is not
obliged to pay that sum to that Party until it has
established that it has actually received that sum. The
Agent may, however, assume that the sum has been paid to
it in accordance with this Agreement and, in reliance on
that assumption, make available to that Party a
corresponding amount. If the sum has not been made
available but the Agent has paid a corresponding amount
to another Party, that Party shall forthwith on demand
refund the corresponding amount to the Agent together
with interest on that amount from the date of payment to
the date of receipt, calculated at a rate determined by
the Agent to reflect its cost of funds.
12.4 Set-off and counterclaim
All payments made by a Borrower under the Finance
Documents shall be made without set-off or counterclaim.
12.5 Non-Business Days
(a) If a payment under the Finance Documents is due on a day
which is not a Business Day, the due date for that
payment shall instead be the next Business Day in the
same calendar month (if there is one) or the preceding
Business Day (if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement interest is payable on the
principal at the rate payable on the original due date.
12.6 Partial payments
(a) If the Agent receives a payment insufficient to discharge
all the amounts then due and payable by the Borrowers
under the Finance Documents, the Agent shall apply that
payment towards the obligations of the Borrowers under
the Finance Documents in the following order:-
(i) first, in or towards payment pro rata of any unpaid
fees, costs and expenses of the Agent and the
Issuing Bank under this Agreement;
(ii) secondly, in or towards payment pro rata of any
accrued fees due but unpaid under Clause 22.2
(Commitment fee);
(iii) thirdly, in or towards payment pro rata of any
accrued interest and guarantee fee due but unpaid
under this Agreement;
(iv) fourthly, in or towards payment pro rata of any
principal due but unpaid under this Agreement and
any amount payable under the Swap Documents; and
(v) fifthly, in or towards payment pro rata of any other
sum due but unpaid under this Agreement.
(b) The Agent shall, if so directed by all the Banks, vary
the order set out in sub-paragraphs (a)(ii) to (v) above.
(c) Paragraphs (a) and (b) above shall override any
appropriation made by a Borrower.
13. TAXES
13.1 Gross-up
All payments by a Borrower under the Finance Documents
shall be made without any deduction and free and clear of
and without deduction for or on account of any taxes,
except to the extent that the Borrower is required by law
to make payment subject to any taxes. If any tax or
amounts in respect of tax must be deducted, or any other
deductions must be made, from any amounts payable or paid
by a Borrower, or paid or payable by the Agent to a Bank,
under the Finance Documents, the Borrower shall pay such
additional amounts as may be necessary to ensure that the
relevant Bank receives a net amount equal to the full
amount which it would have received had payment not been
made subject to tax or other deduction.
13.2 Tax receipts
All taxes required by law to be deducted or withheld by a
Borrower from any amounts paid or payable under the
Finance Documents shall be paid by the relevant Borrower
when due and the Borrower shall, within 15 days of the
payment being made, deliver to the Agent for the relevant
Bank evidence satisfactory to that Bank (including all
relevant tax receipts) that the payment has been duly
remitted to the appropriate authority.
13.3 Refund of Tax Credits
If:-
(a) a Borrower makes a payment under Clause 13.1 (Gross-
up) (a "Tax Payment") in respect of a payment to a
Bank under the Finance Documents; and
(b) that Bank determines in good faith that it has
obtained a refund of tax or obtained and used a
credit against tax on its overall net income (a "Tax
Credit") which that Bank is able to identify in good
faith as attributable to that Tax Payment,
then, if it determines, acting in good faith, that it can
do so without any adverse consequences for the Bank, that
Bank shall forthwith reimburse that Borrower, such amount
as that Bank in its absolute discretion determines to be
such proportion of that Tax Credit as will leave that
Bank (after that reimbursement) in no better or worse
position in respect of its worldwide tax liabilities than
it would have been in if no Tax Payment had been
required. A Bank shall have an absolute discretion as to
whether to claim any Tax Credit (and, if it does claim,
the extent, order and manner in which it does so) and
whether any amount is due from it under this Clause 13.3)
(and, if so, what amount and when). No Bank shall be
obliged to disclose any information regarding its tax
affairs and computations.
13.4 Qualifying Bank
(a) Each Bank party to this Agreement on the date of this
Agreement represents that it is a Qualifying Bank on the
date of this Agreement. Any bank or financial
institution which becomes a Bank after the date of this
Agreement represents to the Company on the date it
becomes a Party that, as at that date, it is a Qualifying
Bank.
(b) If, otherwise than as a result of the introduction of,
change in, or any change in the interpretation,
administration or application of, any law or regulation,
any Double Taxation Treaty or any practice or concession
of the United Kingdom Inland Revenue occurring after the
date a Bank becomes a Party, the Bank is not or ceases to
be a Qualifying Bank, the Company will not be liable to
pay to that Bank under Clause 13.1 (Gross-up) any amount
in respect of taxes levied or imposed by the United
Kingdom or any taxing authority of or in the United
Kingdom in excess of the amount it would have been
obliged to pay if that Bank had been or had not ceased to
be a Qualifying Bank.
(c) Any Bank which falls within paragraph (b) of the
definition of Qualifying Bank shall deliver to the
Company, on the date it becomes a Bank, a duly completed
form from the tax authorities in the country in which it
is booking its participation in a Loan such that the
Company may apply to the Inland Revenue for a direction
to the Company under the Double Taxation Relief (Taxes on
Income) (General) Regulations 1970 that the Company
should not, on account of the relevant Double Taxation
Treaty, pay any interest due to the Bank under the
Finance Documents under deduction of United Kingdom tax.
The Bank concerned shall, upon the request of the
Company, promptly and duly (if it is able to do so)
execute and deliver any and all such further instruments
and documents which are required for the purpose of
obtaining such a direction.
(d) Each Bank shall notify the Company through the Agent as
soon as it is aware that it ceases to be a Qualifying
Bank.
14. MARKET DISRUPTION
(a) If a Reference Bank does not supply an offered rate by
11.30 a.m. on a Drawdown Date, the applicable LIBOR
shall, subject to paragraph (b) below, be determined on
the basis of the quotations of the remaining Reference
Banks.
(b) If, in relation to any proposed Loan:-
(i) no, or only one, Reference Bank supplies a rate for
the purposes of determining the applicable LIBOR or
the Agent otherwise determines that adequate and
fair means do not exist for ascertaining the
applicable LIBOR; or
(ii) the Agent receives notification from Banks whose
participations in a Loan exceed 50 per cent. of that
Loan that, in their opinion:-
(A) matching deposits may not be available to them
in the London interbank market in the ordinary
course of business to fund their participations
in that Loan for the relevant Interest Period;
or
(B) the cost to them of matching deposits in the
London interbank market would be in excess of
the relevant LIBOR,
the Agent shall promptly notify the Company and the
relevant Banks of the fact and that this Clause 14 is in
operation.
(c) After any notification under paragraph (b) above:-
(i) (A) in the case of a Loan which has not been
made, unless the relevant Borrower notifies the
Agent to the contrary before close of business
on the day it received the notification under
paragraph (b) above, the Loan shall still be
made but it shall have an Interest Period of
one month and the interest payable on that Loan
shall be determined in accordance with sub-
paragraphs (ii) to (vi) below; and
(B) in the case of a Facility B Loan after it has
been borrowed, that Facility B Loan shall
continue but it shall have an Interest Period
of one month and the interest payable on that
Loan shall be determined in accordance with sub-
paragraphs (ii) to (vi) below;
(ii) promptly after receipt of the notification, the
relevant Borrower and the Agent shall enter into
negotiations in good faith for a period of not more
than one month with a view to agreeing a substitute
basis for determining the rate of interest and/or
funding applicable to the Loan affected by the
notification;
(iii) any substitute basis agreed under sub-paragraph
(ii) above shall be, with the prior consent of all
the Banks, binding on all the Parties;
(iv) if no substitute basis is agreed under sub-
paragraph (ii) above, each Bank (through the Agent)
shall certify on or before the last day of the
Interest Period to which the notification relates an
alternative basis for maintaining its participation
in that Loan;
(v) any alternative basis referred to in sub-paragraph
(iv) above may include an alternative method of
fixing the interest rate, alternative Interest
Periods or alternative currencies but it must
reflect the cost to the Banks of funding their
participations in that Loan from whatever sources
each relevant Bank may reasonably select (each
Bank's cost of funding being certified by that Bank
with a copy to the Agent) plus the Margin and (if
applicable) any MLA Cost; and
(vi) each alternative basis so certified shall be binding
on the Borrowers and the certifying Bank and treated
as part of this Agreement.
15. INCREASED COSTS
15.1 Increased costs
(a) Subject to Clause 15.2 (Exceptions), the Company shall
forthwith on demand by a Finance Party pay that Finance
Party the amount of any increased cost incurred by it as
a result of:
(i) the introduction of, or any change in, or any change
in the interpretation or application of, any law or
regulation after the date of this Agreement; or
(ii) compliance with any regulation made after the date
of this Agreement,
including any law or regulation relating to taxation,
change in currency of a country or reserve asset, special
deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary
control.
(b) In this Agreement "increased cost" means:-
(i) an additional cost incurred by a Finance Party or
its Holding Company as a result of the Finance Party
having entered into, or performing, maintaining or
funding its obligations under, this Agreement; or
(ii) that portion of an additional cost incurred by a
Finance Party or its Holding Company in the Finance
Party making, funding or maintaining all or any
advances comprised in a class of advances formed by
or including the participations in the Loans made or
to be made under this Agreement as is attributable
to the Finance Party making, funding or maintaining
those participations; or
(iii) a reduction in any amount payable to a Finance
Party or its Holding Company or the effective return
to a Finance Party under this Agreement or on its
capital or that of its Holding Company; or
(iv) the amount of any payment made by a Finance Party or
its Holding Company, or the amount of interest or
other return foregone by a Finance Party or its
Holding Company, calculated by reference to any
amount received or receivable by a Finance Party
from any other Party under this Agreement.
15.2 Exceptions
Clause 15.1 (Increased costs) does not apply to any
increased cost:-
(a) compensated for by the payment of the MLA Cost;
(b) compensated for by the operation of Clause 13
(Taxes) or which would have been compensated for but
for the operation of Clause 13.4(b) (Qualifying
Bank);
(c) attributable to any change in the rate of tax on the
overall net income of a Bank or its Holding Company
(or the overall net income of a division or branch
of the Bank or its Holding Company) imposed in the
jurisdiction in which its principal office or
Facility Office is situate;
(d) attributable to the relevant Bank (or its Holding
Company) having entered into a commitment to lend to
a third party which is, at the time of that
commitment, in breach of the relevant law or
regulation; or
(e) incurred in consequence of the implementation, as
contemplated at the date of this Agreement, of the
matters set out in:
(i) the report of the Basle Committee on Bank
Regulation and Supervisory Practices dated July
1988 and entitled "International Convergence of
Capital Measurement and Capital Standards"
(including in particular but without limitation
any directive of the Bank of England
implementing that report in the United
Kingdom);
(ii) the Directive of the Council of the European
Communities on a Solvency Ratio for Credit
Institutions (89/647/EEC of 18 December 1989);
and/or
(iii) the Directive of the Council of the
European Communities on Own Funds of Credit
Institutions (89/299/EEC of 17 April 1989),
unless it results from any change after the date of
this Agreement in, or in the interpretation or
application of, those matters as contemplated on the
date of this Agreement.
16. ILLEGALITY
If it is or becomes unlawful or contrary to any
regulation in any jurisdiction for a Bank to give effect
to any of its obligations as contemplated by this
Agreement or to fund or maintain its participation in any
Loan, then:-
(a) the Bank shall promptly notify the Company through
the Agent accordingly; and
(b) (i) each Borrower shall, on the latest day
permitted by the relevant law or regulation,
prepay that Bank's participation in all Loans
made to it together with all other amounts
payable by it to that Bank under this
Agreement; and
(ii) the Bank's Commitments shall be cancelled;
(iii) if the Bank is the Issuing Bank and the
Guarantee has not yet been issued, the
Guarantee shall not be issued; and
(iv) if the Guarantee has been issued, demand that
the Company shall, on the latest date permitted
by the relevant law or regulation, provide cash
cover to it in a Security Account in an amount
equal to that Bank's Relevant Percentage of
(or, if the Bank is the Issuing Bank, an amount
equal to) the maximum aggregate actual and
contingent liability of the Banks under the
Guarantee. In this event, the Company shall
use reasonable endeavours to procure the
release of the Bank from its obligations under
the Finance Documents and, to the extent that
the Bank is released from its obligations under
the Finance Documents, the Bank shall repay to
the Company any amount provided to that Bank by
way of cash cover together with interest on the
amount which that Bank reasonably considers
that it has earned on the amount during the
period for which the cash cover was retained by
it.
17. GUARANTEE
17.1 Guarantee
The Company irrevocably and unconditionally:-
(a) as principal obligor guarantees to each Finance
Party prompt performance by the Target of all its
obligations under the Finance Documents;
(b) undertakes with each Finance Party that whenever the
Target does not pay any amount when due under or in
connection with any Finance Document, the Company
shall within two Business days of demand by the
Agent pay that amount as if the Company instead of
the Target were expressed to be the principal
obligor; and
(c) indemnifies each Finance Party on demand against any
loss or liability suffered by it if any obligation
so guaranteed by the Company is or becomes
unenforceable, invalid or illegal.
17.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend
to the ultimate balance of all sums payable by the Target
under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.
17.3 Reinstatement
(a) Where any discharge (whether in respect of the
obligations of the Target or any security for those
obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment,
security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without
limitation, the liability of the Company under this
Clause 17 (Guarantee) shall continue as if the discharge
or arrangement had not occurred.
(b) Each Finance Party may concede or compromise any claim
that any payment, security or other disposition is liable
to avoidance or restoration.
17.4 Waiver of defences
The obligations of the Company under this Clause 17
(Guarantee) will not be affected by an act, omission,
matter or thing which, but for this provision, would
reduce, release or prejudice any of its obligations under
this Clause 17 (Guarantee) or prejudice or diminish those
obligations in whole or in part, including (whether or
not known to it or any Finance Party):-
(a) any time or waiver granted to, or composition with,
the Target or other person;
(b) the taking, variation, compromise, exchange, renewal
or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security
over assets of, the Target or other person or any
non-presentation or non-observance of any formality
or other requirement in respect of any instrument or
any failure to realise the full value of any
security;
(c) any incapacity or lack of powers, authority or legal
personality of or dissolution or change in the
members or status of the Target or any other person;
(d) any variation (however fundamental) or replacement
of a Finance Document or any other document or
security so that references to that Finance Document
in this Clause 17 (Guarantee) shall include each
variation or replacement;
(e) any unenforceability, illegality or invalidity of
any obligation of any person under any Finance
Document or any other document or security, to the
intent that the obligations of the Company under
this Clause 17 (Guarantee) shall remain in full
force and its guarantee be construed accordingly, as
if there were no unenforceability, illegality or
invalidity; or
(f) any postponement, discharge, reduction, non-
provability or other similar circumstance affecting
any obligation of the Target under a Finance
Document resulting from any insolvency, liquidation
or dissolution proceedings or from any law,
regulation or order so that each such obligation
shall for the purposes of the obligations of the
Company under this Clause 17 (Guarantee) be
construed as if there were no such circumstance.
17.5 Immediate recourse
The Company waives any right it may have of first
requiring any Finance Party (or any trustee or agent on
its behalf) to proceed against or enforce any other
rights or security or claim payment from the Target
before claiming from the Company under this Clause 17
(Guarantee).
17.6 Appropriations
Until all amounts which may be or become payable by the
Target under or in connection with the Finance Documents
have been irrevocably paid in full, each Finance Party
(or any trustee or agent on its behalf) may:-
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance
Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the
same in such manner and order as it sees fit
(whether against those amounts or otherwise) and the
Target shall not be entitled to the benefit of the
same; and
(b) hold in an interest bearing suspense account any
moneys received from the Company or on account of
the liability of the Company under this Clause 17
(Guarantee).
17.7 Non-competition
Until all amounts which may be or become payable by the
Target under or in connection with the Finance Documents
have been irrevocably paid in full, the Company shall not
after a claim has been made or by virtue of any payment
or performance by it under this Clause 17 (Guarantee):-
(a) be subrogated to any rights, security or moneys
held, received or receivable by any Finance Party
(or any trustee or agent on its behalf) or be
entitled to any right of contribution or indemnity
in respect of any payment made or moneys received on
account of the Company's liability under this
Clause 17 (Guarantee);
(b) claim, rank, prove or vote as a creditor of the
Target or its estate in competition with any Finance
Party (or any trustee or agent on its behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of the
Target, or exercise any right of set-off as against
the Target.
The Company shall hold in trust for and forthwith pay or
transfer to the Agent for the Finance Parties any payment
or distribution or benefit of security received by it
contrary to this Clause 17.7.
17.8 Additional security
This guarantee is in addition to and is not in any way
prejudiced by any other security now or subsequently held
by any Finance Party.
18. REPRESENTATIONS AND WARRANTIES
18.1 Representations and warranties
(a) The Company makes the representations and warranties set
out in this Clause 18 (Representations and warranties) to
each Finance Party.
(b) The Target makes the representations and warranties
expressed to be made by it in this Clause 18
(Representations and warranties) in respect of itself and
its Subsidiaries only.
18.2 Status
(a) It is a limited liability company, duly incorporated and
validly existing under the Companies Act 1985;
(b) it has the power to own its assets and carry on its
business as it is being conducted; and
(c) as at the date of this Agreement, the Parent is the
beneficial owner of all the shares in the Company.
18.3 Powers and authority
It has the power to enter into and perform, and has taken
all necessary action to authorise the entry into,
performance and delivery of, the Finance Documents to
which it is or will be a party and the transactions
contemplated by those Finance Documents.
18.4 Legal validity
Each Finance Document to which it is or will be a party
constitutes, or when executed in accordance with its
terms will constitute, its legal, valid, binding and
enforceable obligation.
18.5 Non-conflict
The entry into and performance by it of, and the
transactions contemplated by, the Finance Documents do
not and will not:-
(a) conflict with any law or regulation, judicial or
official order or any Licence or Licence
Undertaking; or
(b) conflict with its constitutional documents; or
(c) conflict with any document which is binding upon any
member of the Group or any asset of any member of
the Group (other than a financing agreement to which
the Target or any Subsidiary of the Target is a
party, the Borrowing in respect of which is
refinanced prior to the Clean-Up Date) to an extent
or in a manner which has a Material Adverse Effect.
18.6 No default
(a) No Event of Default or (unless this representation is
being repeated or deemed to be repeated on the date of a
Request or a Drawdown Date in respect of a Rollover Loan)
other Default is outstanding or will result from any
Utilisation; and
(b) with effect from the Clean-Up Date, no other event is
outstanding which constitutes a default under any
document which is binding on any member of the Group or
any asset of any member of the Group to an extent or in a
manner which has a Material Adverse Effect.
18.7 Authorisations
Subject to due registration of the Debenture at Companies
House under section 395 of the Companies Act 1985, all
authorisations required by the laws of England or the
terms of any Licence or Licence Undertaking in connection
with the entry into, performance, validity and
enforceability of, and the transactions contemplated by,
the Finance Documents have been obtained or effected (as
appropriate) and are in full force and effect.
18.8 Accounts
(a) In the case of the Company, the audited consolidated
accounts of the Group most recently delivered to the
Agent under this Agreement:-
(i) have been prepared in accordance with Applicable
Accounting Principles; and
(ii) fairly represent the consolidated financial
condition of the Group as at the date to which they
were drawn up.
(b) In the case of the Target, its audited consolidated
accounts most recently delivered to the Agent:-
(i) have been prepared in accordance with Applicable
Accounting Principles; and
(ii) fairly represent its consolidated financial
condition as at the date to which they were drawn
up.
18.9 Litigation
No litigation, arbitration or administrative proceedings
are current or, to its knowledge, pending or threatened:
(a) to restrain the entry into, exercise of any of its
rights, and/or performance or enforcement of or
compliance with any of its obligations, under the
Finance Documents; or
(b) which have a Material Adverse Effect.
18.10 Information
(a) All material written factual information supplied by it
to the Finance Parties (including any such information
contained in any package of information provided or to be
provided by the Arrangers on behalf of the Company to
potential sub-underwriters) in connection with the
Finance Documents before, on or after the date of this
Agreement is true, complete and accurate in all material
respects as at its date;
(b) that information did not omit as at its date any
information which would make the information supplied
misleading in any material respect;
(c) any expressions of opinion or intention and any forecasts
and projections (including, without limitation, in
relation to the financial model referred to in
paragraph 9 of Schedule 2 Part I) contained in that
information were arrived at after careful consideration
and were based on reasonable assumptions;
(d) as at the date of this Agreement, nothing has occurred
(which has not been disclosed to the Arrangers prior to
the date of this Agreement) between the date the
information was provided and the date of this Agreement
which renders the information contained in it untrue or
misleading in any material respect; and
(e) the Press Release and the Offer Documents and any other
public documents relating to the Offer furnished to the
Agent contain all the material terms of the Offer and the
Offer Documents reflect the terms of the Press Release in
all material respects.
18.11 Information Memorandum
(a) All material factual information contained in the
Information Memorandum was true (or, in the case of
information provided by any person other than the Company
or its advisers, was true to the best of its knowledge
and belief) in all material respects at the date (if any)
ascribed to it in the Information Memorandum or (if none)
at the date of the relevant component of the Information
Memorandum;
(b) any expressions of opinion or intention and any forecasts
and projections contained in the Information Memorandum
were arrived at after careful consideration and were
based on reasonable assumptions;
(c) as at the date of the Syndication Agreement, the
Information Memorandum, taken as a whole, was not
misleading in any material respect and did not omit to
disclose any matter failure to disclose which would
result in any material information contained in the
Information Memorandum being misleading in any material
respect in the context of the Finance Documents.
18.12 Environmental Matters
With effect from the Clean-Up Date:
(a) each member of the Group has obtained all material
Environmental Licences required for the carrying on
of its business as then conducted and is in
compliance in all material respects with:
(i) the terms and conditions of those Environmental
Licences; and
(ii) all other applicable Environmental Law,
which, in each case, if not obtained or complied
with, has a Material Adverse Effect and there are,
to its knowledge, no circumstances which may
materially prevent or interfere with such compliance
in the future;
(b) so far as the Company is aware (after due enquiry),
no Dangerous Substance has been used, disposed of,
generated, stored, transported, dumped, released,
deposited, buried or emitted at, on from or under
any site or premises (whether or not owned, leased,
occupied or controlled by any member of the Group
and including any offsite waste management or
disposal location utilised by any member of the
Group) in circumstances where this has a Material
Adverse Effect; and
(c) so far as the Company is aware (after due enquiry),
there is no Environmental Claim (whether in respect
of any site previously or currently owned or
occupied by any member of the Group or otherwise)
pending or threatened, and there are no past or
present acts, omissions, events or circumstances
that would be likely to form the basis of any
Environmental Claim (whether in respect of any site
previously or currently owned or occupied by any
member of the Group or otherwise), against it which,
in each case, is reasonably likely to be determined
against it and which, if so determined, has a
Material Adverse Effect.
18.13 Assets
Each Borrower is the legal and/or beneficial owner of all
its assets free from any Security Interests (other than
any Security Interests permitted under Clause 19.9(b)
(Negative pledge)).
18.14 No Commitment
As at the first Utilisation Date, the Company does not
have any material commitments or Financial Indebtedness
other than those arising under the Finance Documents, the
Offer, any Offer Costs or in respect of the Licence or
any Licence Undertaking.
18.15 Licence
With effect from the Clean-Up Date:
(a) the Licence is in full force and effect;
(b) there exist no material breaches of the terms
of the Licence or Licence Undertakings; and
(c) there are no circumstances in existence which
would entitle the Director General or the Secretary
of State to seek to revoke the Licence.
18.16 Times for making representations and warranties
The representations and warranties set out in this
Clause 18 (Representations and warranties):-
(a) (i) in the case of the Company:
(A) are made by the Company, unless
it is expressly provided to the contrary,
on the date of this Agreement; or
(B) in the case of Clause 18.11
(Information Memorandum), is deemed to be
made by the Company on the date of the
Syndication Agreement (but only if this
date is no longer than 6 months after the
Unconditional Acceptances Date); and
(ii) in the case of the Target, will be deemed to be
made by it on the date it executes a Borrower
Accession Agreement; and
(b) (with the exception of Clauses 18.2(c) (Status)
and 18.11 (Information Memorandum)) are deemed to be
made by each Borrower on the date of each Request
and each Drawdown Date with reference to the facts
and circumstances then existing, except that, during
the Certain Funds Period for an Offer Utilisation,
only the representations and warranties of the
Company in Clauses 18.2(a) (Status), 18.3 (Powers
and authority), 18.4 (Legal validity) and 18.5 (Non-
conflict) will be deemed to be made by the Company
on the date of each Request and each Utilisation
Date for an Offer Utilisation with reference to the
facts and circumstances then existing.
18.17 Qualifications to representations
The representations and warranties contained in Clauses
18.4 (Legal validity) and 18.7 (Authorisations) shall
(where applicable) be subject, as to matters of law only,
to the qualifications in the legal opinions referred to
in paragraph 10 of Schedule 2 Part I and paragraph 9 of
Schedule 2 Part II.
19. UNDERTAKINGS
19.1 Duration
The undertakings in this Clause 19 (Undertakings) remain
in force from the date of this Agreement for so long as
any amount is or may be outstanding under this Agreement
or any Commitment is in force.
19.2 Financial information
The Company shall supply to the Agent in sufficient
copies for all the Banks:-
(a) as soon as the same are available (and in any event
within 120 days of the end of each of its financial
years):-
(i) the audited consolidated accounts of the Group
for that financial year; and
(ii) the audited consolidated accounts of the Target
and its Subsidiaries for that financial year;
(b) as soon as the same are available (and in any event
within 60 days of the end of the first half-year of
each of its financial years and within 45 days of
the end of each quarter of each of its financial
years):-
(i) the unaudited consolidated accounts of the
Group for that half-year or that quarter, as
the case may be; and
(ii) the unaudited consolidated accounts of the
Target and its Subsidiaries for that half-year
or that quarter, as the case may be; and
(c) (i) together with the accounts specified
in paragraph (a)(i) above, a certificate signed
by its auditors setting out in reasonable
detail computations establishing compliance or
non-compliance with Clause 19.28 (Financial
covenants) as at the date to which those
accounts were drawn-up;
(ii) together with the accounts specified in
paragraph (b)(i) above, a certificate signed by
two of its senior authorised officers on its
behalf setting out in reasonable detail
computations establishing compliance or non-
compliance with Clause 19.28 (Financial
covenants) as at the date to which those
accounts were drawn-up; and
(d) within 5 Business Days of them being delivered to
the Director General under Condition 2 of Part II of
the Licence, the accounting statements delivered to
the Director General by the Target.
19.3 Information - miscellaneous
Each Borrower shall supply to the Agent:-
(a) all documents despatched by it (in the case of the
Target) to its public shareholders (or any class of
them) or (in the case of either Borrower) its
creditors (or any class of them), other than any
creditors in respect of Subordinated Debt, at the
same time as they are despatched;
(b) promptly upon becoming aware of them, details of any
litigation, arbitration or administrative
proceedings which are current, threatened or
pending, and which:
(i) if adversely determined, have a Material
Adverse Effect; or
(ii) would involve liability or potential liability
of 10,000,000 pounds or more (or its equivalent
in other currencies); or
(iii) involves the Director-General, the
Secretary of State, the Licence or any Licence
Undertaking;
(c) during the period from the date of issue and
approval of the Information Memorandum by the
Company to the earlier of:
(i) the date six months after the Unconditional
Acceptances Date; and
(ii) the close of Syndication as determined and
confirmed to the Company by the Agent,
in reasonable detail notice of any matters of which
it is aware (whether occurring prior to, on or after
the date of approval and issue of the Information
Memorandum) which cause the Information Memorandum
when read without knowledge of such matters to be
inaccurate or misleading in any material respect;
(d) promptly upon becoming aware that any material
modifications to the Licence are being proposed by
the Director General or the Target and/or that any
Licence Undertaking is being requested by the
Director General or the Secretary of State,
reasonable details of those modifications and/or
that Licence Undertaking, to be updated from time to
time to reflect any changes;
(e) unless the Agent has already received them, copies
of any Licence Undertakings in force at the date the
Target becomes a Subsidiary of the Company and,
thereafter, promptly after the giving of any Licence
Undertaking; and
(f) promptly, such further information in the possession
or control of any member of the Group regarding its
financial condition and operations as any Finance
Party may reasonably request and which the Company
is able to provide without breaching any legal
obligation or regulation,
in sufficient copies for all of the Banks, if the Agent
so requests.
19.4 Notification of Default
Each Borrower shall notify the Agent of any Default (and
the steps, if any, being taken to remedy it) promptly
upon becoming aware of its occurrence.
19.5 Compliance certificates/accounting matters
(a) The Company shall supply to the Agent:-
(i) together with the accounts specified in
Clause 19.2(a)(i) and (b)(i) (Financial
Information); and
(ii) promptly at any other time, if the Agent so
requests,
a certificate signed by two of its senior officers on its
behalf certifying that no Default is outstanding or, if a
Default is outstanding, specifying the Default and the
steps, if any, being taken to remedy it.
(b) If, at any time after the date of this Agreement, any
material change is made to the Applicable Accounting
Principles, the Company shall notify the Agent of the
change and, in the absence of any agreement between the
Company and the Agent (acting on the instructions of the
Majority Banks) to the contrary, the Company shall ensure
that the Auditors provide a description of the change and
the adjustments which would be required to be made to the
latest accounts or financial statements so that those
accounts or financial statements reflect the Applicable
Accounting Principles, and any reference to any financial
statements or accounts delivered under this Agreement
shall be construed as a reference to those accounts or
financial statements as adjusted to reflect the
Applicable Accounting Principles.
(c) The Company shall ensure that each set of accounts to be
delivered by it under this Agreement are prepared and
audited (in the case of its annual accounts) by the
Auditors in accordance with the Applicable Accounting
Principles, subject to any variations which are not
material or, if material, have been agreed in writing by
the Majority Banks.
19.6 Authorisations
Each Borrower shall promptly:-
(a) obtain, maintain and comply with the terms of; and
(b) supply certified copies to the Agent of,
any authorisation required under any law or regulation to
enable it to perform its obligations under, or for the
validity or enforceability of, any Finance Document.
19.7 Environmental matters
The Company shall, and shall (after the Clean-Up Date)
procure that each member of the Group will:
(a) obtain all requisite Environmental Licences and
comply in all material respects with:
(i) the terms and conditions of all Environmental
Licences applicable to it; and
(ii) all other applicable Environmental Laws,
in each case where failure to do so has a Material
Adverse Effect; and
(b) promptly upon receipt of the same, notify the Agent
of any claim, notice or other communication served
on it in respect of any alleged breach of or
corrective or remedial obligation or liability under
any Environmental Law which would, if substantiated,
have a Material Adverse Effect.
19.8 Pari passu ranking
Each Borrower shall procure that its payment obligations
under the Finance Documents do and will rank at least
pari passu with all its other present and future
unsecured payment obligations, except for obligations
which are mandatorily preferred by law applying to
companies generally.
19.9 Negative pledge
(a) No Borrower shall, and the Company shall procure that no
other member of the Group will, create or permit to
subsist any Security Interest on any of its assets.
(b) Paragraph (a) does not apply to:
(i) any lien or right of set-off arising by operation of
law (or by an agreement having similar effect) in
the ordinary course of business; or
(ii) pledges of goods, the related documents of title
and/or other related documents arising or created in
the ordinary course of its business as security only
for Financial Indebtedness to a bank or financial
institution directly relating to the goods or
documents on or over which that pledge exists; or
(iii) any Security Interest arising out of title
retention or conditional sale provisions in a
supplier's standard conditions of supply of goods
acquired by any member of the Group in the ordinary
course of its business;
(iv) any Security Interest created under the Pooling and
Settlement Agreement;
(v) any Security Interest existing on an asset at the
time of the acquisition of the asset by any member
of the Group after the date of this Agreement, but
only if:
(A) the Security Interest was not created in
contemplation of the acquisition;
(B) the principal amount secured by the Security
Interest is not increased after the
acquisition; and
(C) the Security Interest is discharged within
180 days of the acquisition; or
(vi) any Security Interest existing on the assets of a
company at the time it becomes a member of the Group
after the date of this Agreement, but only if:
(A) the Security Interest was not created in
contemplation of the relevant company becoming
a member of the Group;
(B) the principal amount secured by the Security
Interest is not increased after the relevant
company becomes a member of the Group; and
(C) the Security Interest is discharged within
180 days of the relevant company becoming a
member of the Group; or
(vii) any Security Interest which:-
(A) constitutes a contractual right of any bank or
financial institution to apply any credit
balance maintained by any member of the Group
with that bank or financial institution against
any amount due and payable to such bank or
financial institution by that or any other
member of the Group; and
(B) arises in connection with the relevant Group
member's ordinary banking arrangements
(including a cash management scheme); or
(viii) any Security Interest created with the approval
of the Majority Banks; or
(ix) any Security Interest created by a Project Finance
Subsidiary, or over the shares of a Project Finance
Subsidiary, securing Project Finance Indebtedness;
or
(x) any other Security Interest not falling within any
of paragraphs (i) to (ix) above so long as the
aggregate principal amount of outstanding
indebtedness secured by all the Security Interests
permitted under this sub-paragraph (x) at any time,
together with the aggregate principal amount of all
outstanding indebtedness permitted under
Clause 19.10(b) (Transactions similar to security)
at that time, does not exceed (prior to the date on
which the Facility B Loans are repaid or prepaid in
full) 25,000,000 pounds or (subsequently)
50,000,000 pounds (or, in each case, its equivalent
in other currencies).
19.10 Transactions similar to security
(a) Subject to paragraph (b) below, no Borrower shall, and
the Company shall procure that no other member of the
Group will:-
(i) sell, transfer or otherwise dispose of any of its
assets on terms whereby it is or may be leased to or
re-acquired or acquired by a member of the Group or
any of its related entities; or
(ii) sell, transfer or otherwise dispose of any of its
receivables on recourse terms, except for the
discounting of bills or notes in the ordinary course
of trading,
in circumstances where the transaction is entered into
primarily as a method of raising finance or of financing
the acquisition of an asset.
(b) Any member of the Group may enter into transactions
otherwise prohibited by sub-paragraph (a)(i) above so
long as the aggregate principal amount of outstanding
indebtedness of the Group in respect of all such
transactions at any time, together with the aggregate
principal amount of all outstanding secured indebtedness
permitted under Clause 19.9(b)(x) (Negative pledge) at
that time, does not exceed (prior to the date on which
the Facility B Loans are repaid or prepaid in full)
25,000,000 pounds or (subsequently) 50,000,000 pounds (or,
in each case, its equivalent in other currencies).
19.11 Disposals
(a) The Company shall not sell, transfer or otherwise dispose
of or cease to exercise control over any of the Shares in
the Target acquired by it.
(b) No Borrower shall, and the Company shall procure that no
other member of the Group will, either in a single
transaction or in a series of transactions, whether
related or not and whether voluntarily or involuntarily,
sell, transfer, grant or lease or otherwise dispose of
all or any part of its assets (all such transactions
being "disposals" for the purpose of this Clause).
(c) Paragraph (b) does not apply to the following disposals
(if made on arm's length terms):-
(i) disposals made in the ordinary course of business of
the disposing entity; or
(ii) disposals of assets in exchange for other assets
comparable or superior as to type, value and
quality; or
(iii) disposals of obsolete or surplus assets no
longer required for the purpose of the relevant
person's business; or
(iv) the payment of cash as consideration for the
acquisition of any asset or services; or
(v) disposals by one member of the Group to another
member of the Group (other than a Project Finance
Subsidiary), but only if, in the case of a
Subsidiary of the Company to whom the assets are
transferred, the Company owns directly or indirectly
at least a corresponding percentage of the ownership
interest in the transferee Subsidiary as in the
transferor Subsidiary; or
(vi) other disposals of assets which are integral to the
distribution and supply of electricity activities of
the Group to the extent that the value of those
assets disposed of during any financial year of the
Company is less than 20,000,000 pounds (as determined
by reference to the audited consolidated balance sheet
of the Company as at the end of the relevant
financial year or, in the case of any such asset
which was not taken into account for the purposes of
that balance sheet, its book value at the date of
disposal); or
(vii) other disposals of assets not referred to in
paragraph (vi) above to the extent that the value of
those assets disposed of during any financial year
of the Company is less than 50,000,000 pounds (as
determined by reference to the audited consolidated
balance sheet of the Company as at the end of the
relevant financial year or, in the case of any such
asset which was not taken into account for the
purposes of that balance sheet, its book value at
the date of disposal); or
(viii) disposals of receivables on arm's length terms
up to a maximum value:
(1) of 20,000,000 pounds, at any time when the
Capitalisation Ratio is in excess of 65 per
cent.; or
(2) of 50,000,000 pounds at any time when the
Capitalisation Ratio is less than or equal to
65 per cent.; or
(3) in excess of the relevant limit of 20,000,000
pounds or 50,000,000 pound, as appropriate, but
only if the net proceeds of any such excess
disposals are applied in accordance with this
Agreement in or towards prepayment of the Facility
B Loans, with any excess being applied first
in or towards prepayment of the Facility A Loans
pro rata and secondly in or towards prepayment of
the Facility C Loans pro rata. The Total
Facility A Commitments, the Total Facility B
Commitments or the Total Facility C
Commitments, as the case may be, shall be
reduced by an amount equal to the relevant
prepayment; or
(ix) any other disposal approved by the Majority Banks.
19.12 Change of business
The Company shall procure that no substantial change is
made to the general nature or scope of the business of
the Company or the Group from that carried on at the date
of this Agreement or those which are usual for
electricity companies in the United Kingdom as at the
date of this Agreement, including, without limitation,
electricity distribution, supply and generation,
electrical contracting and business activities relating
to the gas, telecommunication and water industries.
19.13 Holding Company
The Company shall not carry on any business (other than
the holding of shares in, the making of loans to and the
provision of administrative services to members of the
Group) or acquire any assets other than cash, cash
equivalents or shares in (or loans to) members of the
Group.
19.14 Mergers and acquisitions
(a) No Borrower shall, and the Company shall procure that no
other member of the Group will, enter into any
amalgamation, demerger, merger or reconstruction, except
for any amalgamation, merger or reconstruction between a
member of the Group (other than a Borrower or the
Licenceholder) and any other member of the Group (other
than a Borrower or the Licenceholder).
(b) No Borrower shall, and the Company shall procure that no
other member of the Group will, acquire any assets or
business or make any investment if the assets, business
or investment is substantial in relation to the Group
(other than the Acquisition), except for:
(i) acquisitions or investments made in the ordinary
course of business;
(ii) acquisitions or investments which the Target or any
of its Subsidiaries is legally obliged to make at
the date the Target becomes a member of the Group;
(iii) capital expenditure and any other expenditure,
in either case required to be carried out under the
Licence, any Licence Undertaking or any other
applicable law or regulation; and
(iv) other acquisitions or investments, the consideration
for which does not exceed (on a cumulative basis)
from the Unconditional Acceptances Date:
(A) until the Facility B Loans are repaid or
prepaid in full, 10,000,000 pounds (or its equivalent
in other currencies); or
(B) at any other time, 20 per cent. of the Adjusted
Capital and Reserves at such time (or its
equivalent in other currencies),
but only if, in either case, no Default is then
outstanding or will result from the acquisition or
investment.
19.15 Distributions
(a) The Company shall not declare, recommend, make or pay any
dividend, distribution or payment (including by way of
redemption, repurchase, defeasance, retirement, return or
repayment) to any of its shareholders (other than any
payment due to its shareholders for goods and/or services
received or provided in the ordinary course of business)
or make any payment (including by way of redemption,
repurchase, defeasance, retirement, return or repayment
and including the payment of interest) in respect of any
Subordinated Debt, if:
(i) after the relevant dividend, payment or distribution
is made, the Company is not able to perform its
obligations under Clause 9.6 (Mandatory
prepayment/cancellation); or
(ii) a Default is outstanding or will result from the
relevant dividend, payment or distribution; or
(iii) the Capitalisation Ratio exceeds, or will as a
result of the relevant dividend, payment or
distribution exceed, 70 per cent.
(b) The Company shall procure that, with effect from the date
on which the Target becomes a Subsidiary of the Company
and on a quarterly basis, the Target either:
(i) pays dividends to its shareholders; or
(ii) provides funds by way of the making of a loan or the
payment of interest on a loan or the repayment of a
loan to the Company,
in each case in the maximum amount available to the
Target out of Surplus Cashflow. The Company's obligation
under paragraph (b) above does not extend to procuring
that the Target makes a payment or provides funds if it
would be contrary to any law or regulation or would
breach the Licence or any Licence Undertaking. Without
limiting the above, if the Target could make a payment or
provide funds by complying with Section 155 of the
Companies Act 1985 and the Target is able to do so, then
the Company shall procure that the Target takes the
necessary steps under Section 155-158 of the Companies
Act 1985 to enable the payment to be made or the relevant
funds to be provided.
19.16 Lending and borrowing
(a) The Company will procure that the aggregate Borrowings of
the Target and its Subsidiaries taken together on a
consolidated basis plus (to the extent not otherwise
included in Borrowings of the Target and/or its
Subsidiaries) the amount of any actual or contingent
liabilities of the Target and/or its Subsidiaries:
(i) for Borrowings at that time of any person in which
the Target or any of its Subsidiaries has an
ownership interest; or
(ii) to provide funds by loan, subscription for share
capital or otherwise to any person in which the
Target or any of its Subsidiaries has an ownership
interest,
will not exceed the aggregate of:
(A) the outstanding principal amount from time to time
of the Facility C Loans;
(B) the principal amount of all Borrowings of those
companies outstanding at the Unconditional
Acceptances Date save to the extent refinanced by a
Utilisation of Facility C;
(C) the outstanding principal amount from time to time
of all Borrowings of those companies for which the
only creditor is the Company;
(D) any Borrowing of the Target and/or its Subsidiaries
where there is recourse falling within paragraph
(b)(iii) of the definition of "Project Finance
Indebtedness" in Clause 1.1 (Definitions)
outstanding from time to time; and
(E) the amount which, when aggregated with the amounts
referred to in sub-paragraphs (A), (B) and (D)
above, equals 400,000,000 pounds.
(b) No Borrower will, and each Borrower will procure that no
member of the Group will, be the creditor in respect of
any Borrowings, other than:
(i) any Borrowing entered into with the prior consent of
the Majority Banks;
(ii) any Borrowing under paragraph (b) of the definition
of "Borrowings" where trade credit is extended by
any member of the Group on normal commercial terms
and in the ordinary course of its business on
substantially the same terms (or terms more
favourable to it) and in similar circumstances as
for trade credit extended prior to the date of this
Agreement by the Target or its Subsidiaries;
(iii) loans made by one member of the Group to
another member of the Group; or
(iv) Borrowings not otherwise permitted under to
paragraphs (i) to (iii) above in an aggregate amount
for the Group as a whole at any time outstanding not
exceeding 10,000,000 pounds.
(c) Without prejudice to paragraph (a) above and unless the
Majority Banks otherwise consent (such consent not to be
unreasonably withheld), the Company shall procure that
the Target does not repay or redeem the Bonds otherwise
than as may be required by the relevant bondholders in
accordance with the terms of the Bonds.
19.17 Hedging
(a) Subject to paragraph (b) below, no Borrower shall, and
the Company shall ensure that none of its Subsidiaries
will, enter into any interest rate swap, cap, ceiling,
collar or floor or any currency swap, futures, foreign
exchange or commodity contract or option (whether over
the counter or exchange traded) or any similar treasury
transaction, other than spot foreign exchange contracts
entered into in the ordinary course of business, and
transactions for the hedging of actual or projected
interest rate, currency and/or commodity and/or energy
price exposures arising in the ordinary course of the
business activities of that member of the Group.
(b) (i) It is the policy of the Company to ensure that
the interest rate on at least 50 per cent. of the
aggregate of the outstanding Facility A Loans and
the Facility C Loans is either fixed or subject to a
cap (the level of which must be acceptable to the
Arrangers (acting reasonably)), based on current
market rates at the time the relevant hedging
arrangement is put in place and for an average
period of not less than three years from the
Unconditional Acceptances Date.
(ii) The Company shall enter into such Swap Documents as
are necessary to implement the above policy within
three months of the Unconditional Acceptances Date.
19.18 Insurance
The Company shall, and (after the Clean-Up Date) shall
procure that each member of the Group will:
(a) maintain with underwriters or insurance companies of
repute the policies of insurance in relation to its
business and assets which a prudent person carrying
on a similar business might be expected to maintain
(including policies to cover public and third party
liability and insurance against business
interruption) and any such other insurance as may be
required pursuant to the terms of any Finance
Document; and
(b) from time to time upon request by the Agent, supply
the Agent with copies of all such insurance policies
or certificates of insurance or such other evidence
of the existence of such policies as may be
reasonably acceptable to the Agent.
19.19 Constitutional Documents
No Borrower will, and the Company will procure that no
other member of the Group will, without the prior consent
of the Majority Banks or as required by law, amend or
seek or agree to amend or replace the memorandum or
articles of association or other constitutional documents
or by-laws of any member of the Group in any way which
would be likely materially and adversely to affect the
interests of the Banks under the Finance Documents.
19.20 Arm's length terms
No Borrower will, and the Company will procure that no
other member of the Group will, enter into any material
transaction with any other person otherwise than on arm's
length terms, other than:
(a) transactions previously approved by the Majority
Banks;
(b) loans from or to, or disposals by, one member of the
Group to another which are permitted under the
Finance Documents;
(c) transactions entered into on terms more favourable
to a member of the Group than arm's length terms;
and
(d) other transactions (including the issue of
Subordinated Debt) expressly permitted under the
Finance Documents.
19.21 Share capital and security
The Company shall ensure that no member of the Group
whose shares are charged under the Debenture shall issue
any further shares or alter any rights attaching to its
issued shares in existence at the date of this Agreement
unless those further shares are contemporaneously
charged, by way of fixed charge, to the Agent on the
terms of the Debenture.
19.22 Security perfection
The Company shall take all action required to perfect the
Security Interests created by the Debenture over the
Security Assets (as defined in the Debenture) as soon as
reasonably practicable after the date of the Debenture,
including (without limitation) sending to the Agent in
form and substance satisfactory to it (acting
reasonably):
(a) unless already delivered to the Agent, all share
certificates and all other documents of title in
relation to shares, stocks or other securities
charged under the Debenture together with share
transfer forms executed in blank or other documents
required to enable the Agent or its nominees to
become registered as the owner of the same; and
(b) duly executed notices of charge and acknowledgements
in the form of the relevant schedules to the
Debenture respectively in relation to the relevant
agreements or accounts charged under the Debenture,
but the Company will only be obliged to use
reasonable endeavours to obtain the acknowledgements
referred to above.
19.23 Compliance with laws
Without prejudice to Clause 19.24 (Licences and
regulatory matters), each Borrower will, and the Company
will procure that each other member of the Group will,
comply in all material respects with all applicable laws
and regulations, whether domestic or foreign, having
jurisdiction over it or any of its assets, failure to
comply with which has a Material Adverse Effect.
19.24 Licences and regulatory matters
The Company shall:
(a) with effect from the Clean-Up Date, ensure that the
Target and any Licenceholder (or any other relevant
member of the Group) complies in all material
respects with the terms of its Licence where failure
to comply has a Material Adverse Effect; and
(b) notify the Agent promptly upon receipt by it or any
member of the Group of any notice from the
government, any court or any regulatory authority or
agency which is reasonably likely to give rise to
the revocation, termination, material adverse
amendment, suspension or withdrawal of any Licence
granted in its favour (unless, contemporaneously,
that Licence is to be replaced, substituted or
reissued on the same, substantially the same or
improved terms); and
(c) with effect from the Clean-Up Date, procure that
each other member of the Group will, comply with the
requirements of all rules, regulations, orders and
other requirements of the Secretary of State and the
Director General under the Act or any other law
applicable to the conduct of the business of the
supply or distribution of electricity, where failure
to comply has a Material Adverse Effect.
19.25 Licence Undertakings
The Company will consult with the Banks with regard to
the terms of any Licence Undertaking which it or any
Holding Company of it or the Target may be required to
give to the Director General or the Secretary of State in
connection with the Offer and will not give and will
procure that such Holding Company and (once it has become
a Subsidiary of the Company and under its control and in
any event no later than 30 days after the Target becomes
a Subsidiary of the Company) the Target will not give any
such Licence Undertaking without prior consultation with
the Banks.
19.26 Business Consents
Each Borrower will, and the Company will procure that
each other member of the Group will, obtain, promptly
renew from time to time, and maintain in full force and
effect, and if so requested promptly furnish certified
copies to the Agent of, all such material authorisations
as may be required under any applicable law or regulation
or under the Licence or any Licence Undertaking to carry
on its business as it is being conducted from time to
time, where failure to obtain, renew or maintain any such
authorisation or non-compliance with the terms of the
same has a Material Adverse Effect.
19.27 The Offer
The Company shall:
(a) issue the Press Release within 7 days of the date of
this Agreement;
(b) until the earlier of the date the Offer lapses or is
finally closed, comply in all material respects with
the Financial Services Act 1986 and the Companies
Act 1985 and all other applicable laws and
regulations relevant in the context of the Offer,
including (subject to any waivers by the Panel) the
Code;
(c) provide each of the Arrangers with such information
regarding the progress of the Offer as it may
reasonably request;
(d) unless required to do so by law or under the Code
(and if so required, having notified the Agent as
soon as possible after becoming aware of the
requirement) not issue any press release or make any
statement during the course of the Offer which
contains any information or statement concerning the
Finance Documents or the Finance Parties without
first obtaining the prior approval of the
information or statement from the Arrangers, in each
case such approval not to be unreasonably withheld
or delayed;
(e) not purchase any Shares if to do so would mean that
it must make a mandatory offer under Rule 9 of the
Code;
(f) promptly give notices under Section 429 of the
Companies Act 1985 in respect of the Shares upon the
conditions contained in the Companies Act 1985 for
the giving of those notices being satisfied; and
(g) ensure that no amendment is made or waiver given in
respect of any condition of the Offer which, if not
waived, would entitle the Company to lapse the
Offer, unless the Majority Banks have given their
prior consent (such consent not to be unreasonably
withheld or delayed); however, any such amendment or
waiver must relate to:-
(i) any increase in the purchase price for the
Shares above the level agreed between the
Company and the Banks from time to time; or
(ii) the provisions relating to a material adverse
change affecting the Target.
19.28 Financial covenants
(a) In this Clause 19.28:-
"Adjusted Capital and Reserves"
means the amount (including any share premium) for the
time being paid up or credited as paid up on the issued
share capital of the Company, adjusted as follows:
(i) plus the outstanding amount of any Subordinated
Debt;
(ii) plus the amount standing to the credit (or, as the
case may be, minus the amount standing to the debit)
of the capital and revenue reserves of the Group;
(iii) plus any amount standing to the credit or minus any
amount standing to the debit of the consolidated
profit and loss account of the Group;
(iv) minus any distribution declared or made by the
Company or any of its Subsidiaries (other than to
another member of the Group) out of profits included
within reserves to the extent that those reserves
have not already been reduced on account of it;
(v) minus amounts attributable to the interests (if any)
of outside holders of issued share capital in any
member of the Group other than the Company itself;
and, for the purposes of the foregoing;
(A) no item shall be effectively deducted or added more
than once, all items shall be calculated on a
consolidated basis and (subject only as may be
required in order to reflect the express inclusion
or exclusion of items as specified in this
definition) in accordance with the Applicable
Accounting Principles; and
(B) where the calculation is being made as at the end of
any Accounting Period it shall be determined from
the balance sheet forming part of the relevant
quarterly or annual accounts for that Accounting
Period and, where the calculation is being made on
the Business Day following a Subsequent Capital
Injection for the purposes of paragraph (a) of the
definition of "Margin Adjustment Date", it shall be
determined from a certificate of two senior
authorised officers of the Company delivered to the
Agent following that Subsequent Capital Injection.
"Capitalisation Ratio"
means, at any time, the ratio of Consolidated Net Total
Borrowings to the aggregate of Consolidated Net Total
Borrowings and Adjusted Capital and Reserves, expressed
as a percentage.
"Consolidated EBITDA"
for any period comprising an annual Accounting Period of
the Company or consecutive quarterly Accounting Periods
of the Company (taken together as one period) means the
profit of the Group for such period:
(i) before deducting all depreciation and other
amortisation (including, without limitation,
amortisation of goodwill arising from and upon the
acquisition of the Shares and amortisation of Offer
Costs in accordance with Financial Reporting
Standard 4 issued by the Accounting Standards
Board);
(ii) before taking into account all Extraordinary Items
(whether positive or negative) but after taking into
account all Exceptional Items (whether positive or
negative);
(iii) before deducting tax;
(iv) before taking into account Consolidated Net Interest
Payable for such period;
(v) before deducting any Offer Costs; and
(vi) after deducting any gain, or adding any loss, to
book value arising in favour of the Group on the
sale, lease or other disposal of any asset (other
than on the sale of trading stock) during such
period and deducting any gain, or adding any loss,
arising on revaluation of any asset during such
period, in each case to the extent that it would
otherwise be taken into account, whether as an
Exceptional Item or otherwise,
and, for the purposes of the foregoing, no item shall be
effectively deducted or credited more than once in this
calculation, all items shall be determined on a
consolidated basis and (subject only as may be required
in order to reflect the express inclusion or exclusion of
items as specified in this definition) in accordance with
the Applicable Accounting Principles and as determined
from the consolidated accounts of the Group for that
annual Accounting Period or for the relevant Accounting
Periods falling within that period.
"Consolidated Net Interest Payable"
means Consolidated Total Interest Payable less any
interest or amounts in the nature of interest receivable
during the relevant annual Accounting Period of the
Company or consecutive quarterly Accounting Periods of
the Company (taken together as one period), determined on
the same basis and manner as for Consolidated Total
Interest Payable.
"Consolidated Net Total Borrowings"
at any time means the aggregate at that time of the
Borrowings of the members of the Group from sources
external to the Group,
(i) plus (to the extent not otherwise included) the
amount of any actual or contingent liability of any
member of the Group:
(A) for Borrowings at that time of any person in
which any member of the Group has an ownership
interest; or
(B) to provide funds by loan, subscription for
share capital or otherwise to any person in
which any member of the Group has an ownership
interest;
(ii) less the cash in hand and cash equivalents of the
members of the Group at that time,
calculated on a consolidated basis and (subject only as
may be required in order to reflect the express inclusion
or exclusion of items as specified herein and/or in the
definition of Borrowings in this Clause) in accordance
with the Applicable Accounting Principles and, (1) where
the calculation is being made as at the end of any
Accounting Period for which a consolidated balance sheet
of the Group has been delivered to the Agent, as shown in
that balance sheet; and (2) where the calculation is
being made on any other day following a Subsequent
Capital Injection for the purposes of paragraph (a) of
the definition of "Margin Adjustment Date", it shall be
determined from a certificate of two senior authorised
officers of the Company delivered to the Agent following
that Subsequent Capital Injection.
"Consolidated Total Interest Payable"
for any period comprising an annual Accounting Period of
the Company or consecutive quarterly Accounting Periods
of the Company (taken together as one period) means the
interest (and all amounts required by the Applicable
Accounting Principles to be accounted for as interest)
accrued on Borrowings of the Group during such period as
an obligation of any member or members of the Group
(whether or not paid or capitalised during or deferred
for payment after such period) adjusted to take account
of any amount constituting interest receivable by any
members of the Group under interest rate and/or currency
hedging agreements or instruments under which all parties
are in compliance with their payment and other material
obligations, all determined on a consolidated basis and
(subject only as may be required in order to reflect the
express inclusion or exclusion of items as specified in
this definition) in accordance with the Applicable
Accounting Principles and as shown in the consolidated
accounts of the Group for such annual Accounting Period
or for the Accounting Periods falling within such period.
"Exceptional Items"
has the meaning given to it in Financial Reporting
Standard 3 issued by the Accounting Standards Board (as
in force at the date of this Agreement), but shall
exclude any items falling within the definition of
Extraordinary Items.
"Extraordinary Items"
has the meaning given to it in Financial Reporting
Standard 3 issued by the Accounting Standards Board (as
in force at the date of this Agreement) but in addition
shall include those items listed in paragraph 20 thereof.
(b) (i) All the terms used in paragraph (a) above are
to be calculated in accordance with the Applicable
Accounting Principles.
(ii) If there is a dispute as to any interpretation of or
computation for paragraph (a) above, the
interpretation or computation of the Auditors
prevails.
(c) The Company shall procure that:-
(i) as of each date on which it is tested under
paragraph (d) below, the ratio of Consolidated
EBITDA to Consolidated Net Interest Payable is no
less than:
(A) for the period from the date on which the
Target becomes a Subsidiary of the Company
until the date on which the Facility B Loans
are repaid or prepaid in full, 1.75:1; and
(B) thereafter, 2.0:1; and
(ii) the Capitalisation Ratio shall not, as of each date
on which it is tested under paragraph (e) below,
exceed:
(A) for the period from the date on which the
Target becomes a Subsidiary of the Company
until the date on which the Facility B Loans
are repaid or prepaid in full, 90 per cent.;
(B) for the period from the date on which the
Facility B Loans are repaid or prepaid in full
until the date falling three years after the
date of this Agreement, 75 per cent.; and
(C) thereafter, 65 per cent.
(d) (i) The first test of the covenant set out in
paragraph (c)(i) above shall be made in respect of
the period beginning on the date the Target becomes
a member of the Group and ending on its First Test
Date;
(ii) the next three tests of the covenant set out in
paragraph (c)(i) above shall be made on a cumulative
basis as of the expiry of each subsequent quarterly
Accounting Period; and
(iii)each test of the covenant set out in
paragraph (c)(i) above thereafter shall be made on a
quarterly basis and in respect of the annual
Accounting Period ending on the expiry of the
relevant quarterly Accounting Period.
(e) The tests of the covenant set out in paragraph (c)(ii)
above shall be made as of:
(i) its First Test Date;
(ii) the date of any Subsequent Capital Injection; and
(iii) the last day of each quarterly Accounting Period
after its First Test Date.
20. DEFAULT
20.1 Events of Default
Each of the events set out in Clauses 20.2 (Non-payment)
to 20.20 (Material adverse change) (inclusive) is an
Event of Default (whether or not caused by any reason
whatsoever outside the control of any Borrower or any
other person).
20.2 Non-payment
A Borrower does not pay on the due date any amount
payable by it under the Finance Documents at the place at
and in the currency in which it is expressed to be
payable and (if caused by technical or administrative
error) the non-payment continues unremedied for
3 Business Days from the receipt by it of notice of non-
payment from the Agent.
20.3 Breach of other obligations
(a) The Company fails to comply with any provision of Clauses
19.8 (Pari passu ranking) to 19.15 (Distributions)
inclusive, Clause 19.20 (Arm's length terms) and
Clause 19.28(c)(i) (Financial covenants);
(b) the Company fails to comply with Clause 19.28(c)(ii)
(Financial covenants) and, if that default is capable of
remedy, it is not remedied within 3 Business Days of the
default; or
(c) a Borrower does not comply with any provision of the
Finance Documents (other than those referred to in
Clause 20.2 (Non-payment) or paragraph (a) or (b) above)
and, if that default is capable of remedy, it is not
remedied within 28 days of the earlier of the relevant
Borrower becoming aware of the default and receipt by it
of a notice of default from the Agent.
20.4 Misrepresentation
A representation, warranty or statement made or repeated
in or in connection with any Finance Document or in any
document delivered by or on behalf of any Borrower under
or in connection with any Finance Document is incorrect
in any material respect when made or deemed to be made or
repeated by reference to the facts and circumstances then
subsisting and, if the circumstances causing the
misrepresentation are capable of remedy within that
period, that misrepresentation is not remedied within 28
days of the earlier of the relevant Borrower becoming
aware of the misrepresentation and receipt by it of
notice from the Agent requiring remedy.
20.5 Cross-default
(a) Any Financial Indebtedness of a member of the Group is
not paid when due or within any applicable grace period;
or
(b) an event of default howsoever described occurs under any
document relating to Financial Indebtedness of a member
of the Group; or
(c) any Financial Indebtedness of a member of the Group
becomes prematurely due and payable or is placed on
demand as a result of an event of default (howsoever
described) under the document relating to that Financial
Indebtedness; or
(d) any commitment for, or underwriting of, any Financial
Indebtedness of a member of the Group is cancelled or
suspended as a result of an event of default (howsoever
described) under the document relating to that Financial
Indebtedness; or
(e) any Security Interest securing Financial Indebtedness
over any asset of a member of the Group becomes
enforceable,
unless, in any such case or cases:-
(i) the aggregate amount of Financial Indebtedness is
less than 20,000,000 pounds (or its equivalent in other
currencies) and for this purpose, the amount of any
Financial Indebtedness specified in paragraph (b)
above will be determined after making the
adjustments specified in paragraphs (b) and (c) of
the definition of "Borrowings" contained in
Clause 1.1 (Definitions); or
(ii) the Financial Indebtedness is that of the Target or
a Subsidiary of the Target, the relevant event
occurs prior to the Clean-Up Date and the Financial
Indebtedness is to be refinanced by a Loan prior to
the Clean-Up Date.
20.6 Insolvency
(a) A Borrower or a Material Subsidiary is, or is deemed for
the purposes of any law to be, unable to pay its debts as
they fall due or to be insolvent, or admits inability to
pay its debts as they fall due; or
(b) a Borrower or a Material Subsidiary suspends making
payments on all or any class of its debts or announces an
intention to do so, or a moratorium is declared in
respect of all or any class of its indebtedness; or
(c) a Borrower or a Material Subsidiary by reason of
financial difficulties, begins negotiations with one or
more of its creditors with a view to the readjustment or
rescheduling of all or any class of its indebtedness.
20.7 Insolvency proceedings
(a) Any step (including petition, proposal or convening a
meeting) is taken with a view to a composition,
assignment or arrangement with any creditors of a
Borrower or a Material Subsidiary; or
(b) a meeting of a Borrower or a Material Subsidiary is
convened for the purpose of considering any resolution
for (or to petition for) its winding-up or its
administration or any such resolution is passed; or
(c) any person presents a petition for the winding-up or for
the administration of a Borrower or a Material
Subsidiary, and, in the case of a petition for winding-up
presented by a creditor, it is not withdrawn, discharged
or stayed within 21 days; or
(d) any order is made for the winding-up or administration of
a Borrower or a Material Subsidiary; or
(e) any other step (including petition, proposal or convening
a meeting) is taken with a view to the rehabilitation,
administration, custodianship, liquidation, winding-up or
dissolution of any Borrower or a Material Subsidiary or
any other insolvency proceedings involving Borrower or a
Material Subsidiary, and, in the case of any such step
taken by a creditor, it is not withdrawn, discharged or
stayed within 21 days,
except for any which arises from a Permitted Transaction.
20.8 Appointment of receivers and managers
(a) Any liquidator, trustee in bankruptcy, judicial
custodian, compulsory manager, receiver, administrative
receiver, administrator or the like is appointed in
respect of a Borrower or a Material Subsidiary or any
part of its assets, otherwise than in connection with a
Permitted Transaction; or
(b) the directors of a Borrower or a Material Subsidiary
requests the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator or the
like, otherwise than in connection with a Permitted
Transaction; or
(c) any other step is taken to enforce any Security Interest
over any part of the assets of a Borrower or a Material
Subsidiary and is not withdrawn, discharged or stayed
within 21 days.
20.9 Creditors' process
Any attachment, sequestration, distress or execution
affects any assets of a Borrower or a Material Subsidiary
having an aggregate value of 20,000,000 pounds (or its
equivalent in other currencies) and is not discharged
within 14 days, unless:
(a) it is being contested in good faith with due
diligence; and
(b) in the reasonable opinion of the Majority Banks, it
does not have a Material Adverse Effect.
20.10 Analogous proceedings
There occurs, in relation to a Borrower or Material
Subsidiary, any event anywhere which, in the opinion of
the Majority Banks, appears to correspond with any of
those mentioned in Clauses 20.6 (Insolvency) to 20.9
(Creditors' process) (inclusive).
20.11 Cessation of business
A Borrower or a Material Subsidiary ceases, or threatens
to cease, to carry on all or a substantial part of its
business, other than in connection with a Permitted
Transaction.
20.12 Unlawfulness
It is or becomes unlawful for any Borrower to perform any
of its material obligations under the Finance Documents.
20.13 Ownership of the Target
At any time after the Clean-Up Date, less than 75 per
cent. of the issued share capital of the Target is
beneficially owned by the Company.
20.14 Ownership of the Company
(a) The Parent transfers any of the shares legally and
beneficially owned by it to an entity other than:
(i) to Entergy Corporation or any of its Subsidiaries;
or
(ii) to an entity, which has (or has an Affiliate which
has) a credit rating of at least BBB- with Standard
& Poor's rating group or a comparable rating with
any other rating agency.
(b) The issued share capital of the Company ceases to be
legally and beneficially owned as to at least 50 per
cent. by Entergy Corporation and/or any of its
Subsidiaries.
(c) The issued share capital of the Company at any time is
owned by more than three persons and, for this purpose,
"person" includes any group of persons which are
Affiliates.
20.15 Licence
(a) The Licence is revoked or surrendered or ceases to be
held by the Target or a wholly-owned Subsidiary of the
Target or the Company, other than in circumstances which
permit the Target or one of its wholly-owned Subsidiaries
to carry on the distribution business of the Target
substantially as envisaged at the date of this Agreement
either without the Licence as a result of any change in
the Act or with a new public electricity supply licence
issued to such person under the Act whose terms are not
materially less favourable than those of the Licence; or
(b) the Licence or any substitute licence contemplated by
paragraph (b) above is materially modified in any manner
which, in the reasonable opinion of the Majority Banks,
has (whether immediately or in the course of time) a
Material Adverse Effect.
20.16 Compliance with the Act
The Licenceholder fails to comply with:
(a) a final order (within the meaning of Section 25 of
the Act); or
(b) a provisional order (within the meaning of that
section) which has been confirmed under that
section,
and, in either case, the order has not been revoked under
that section or the validity of the order has not been
questioned under Section 27 of the Act.
20.17 Pooling and Settlement Agreement
(a) Any notice requiring the Target to cease to be a party to
the Pooling and Settlement Agreement is given to the
Target under the Pooling and Settlement Agreement.
(b) The Target ceases to be a party to the Pooling and
Settlement Agreement.
20.18 Expropriation
The authority or ability of the Company or the Target or
the Licenceholder to conduct its business is wholly or
substantially curtailed by any expropriation or
renationalisation by or on behalf of any governmental
authority.
20.19 Security
The Debenture or the guarantee of the Company or any
Subordination Agreement is ineffective or is alleged by a
Borrower or (in the case of a Subordination Agreement)
the relevant junior creditor to be ineffective for any
reason.
20.20 Material adverse change
Any event or series of events occurs which, in the
reasonable opinion of the Majority Banks, has or is
reasonably likely to have a material adverse effect on
the ability of a Borrower to comply with:
(a) its payment obligations under any Finance Document;
or
(b) its obligations under Clause 19.28 (Financial
covenants).
20.21 Acceleration
On and at any time after the occurrence of an Event of
Default the Agent may, and shall if so directed by the
Majority Banks, by notice to the Company:-
(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Loans, together with
accrued interest, and all other amounts accrued
under this Agreement be immediately due and payable,
whereupon they shall become immediately due and
payable; and/or
(c) demand that all or part of the Loans be payable on
demand, whereupon they shall immediately become
payable on demand by the Agent (acting on the
instructions of the Majority Banks); and/or
(d) demand immediate full cash cover in respect of the
Guarantee whereupon the Company shall immediately
provide to the Agent by way of payment into a
Security Account cash cover in an amount equal to
the Banks' maximum aggregate actual and contingent
liability under the Guarantee.
20.22 Limited rights of rescission
Prior to the end of the Certain Funds Period, no Bank has
or may seek to exercise any right of rescission or other
remedy (including under Clauses 4.2 (Further conditions
precedent) and 20.21 (Acceleration)) in consequence of:
(a) any of the representations or warranties of any
Borrower in the Finance Documents (other than those
made by the Company in respect of itself and
contained in Clauses 18.2(a) (Status), 18.3 (Powers
and authority), 18.4 (Legal validity) and 18.5 (Non-
conflict)) being or being proved to have been
incorrect in any respect; or
(b) the occurrence of a Default other than a Major
Default.
21. THE AGENT AND THE ARRANGERS
21.1 Appointment and duties of the Agent
(a) Each Finance Party (other than the Agent) irrevocably
appoints the Agent to act as its agent under and in
connection with the Finance Documents, and irrevocably
authorises the Agent on its behalf to perform the duties
and to exercise the rights, powers and discretions that
are specifically delegated to it under or in connection
with the Finance Documents, together with any other
incidental rights, powers and discretions. The Agent
shall have only those duties which are expressly
specified in this Agreement. Those duties are solely of a
mechanical and administrative nature.
(b) The Agent agrees to execute a Subordination Agreement,
duly executed by the Company and the relevant junior
creditor, promptly on request by the Company.
21.2 Role of the Arrangers
Except as otherwise provided in this Agreement, no
Arranger has any obligations of any kind to any other
Party under or in connection with any Finance Document.
21.3 Relationship
The relationship between the Agent and the other Finance
Parties is that of agent and principal only. Nothing in
this Agreement constitutes the Agent as trustee or
fiduciary for any other Party or any other person and the
Agent need not hold in trust any moneys paid to it for a
Party or be liable to account for interest on those
moneys.
21.4 Majority Banks' directions
The Agent will be fully protected if it acts in
accordance with the instructions of the Majority Banks in
connection with the exercise of any right, power or
discretion or any matter not expressly provided for in
the Finance Documents. Any such instructions given by the
Majority Banks will be binding on all the Banks. In the
absence of such instructions the Agent may act as it
considers to be in the best interests of all the Banks.
21.5 Delegation
The Agent may act under the Finance Documents through its
personnel and agents.
21.6 Responsibility for documentation
None of the Agent and the Arrangers is responsible to any
other Party for:-
(a) the execution, genuineness, validity, enforceability
or sufficiency of any Finance Document or any other
document;
(b) the collectability of amounts payable under any
Finance Document; or
(c) the accuracy of any statements (whether written or
oral) made in or in connection with any Finance
Document (including the Information Memorandum).
21.7 Default
(a) The Agent is not obliged to monitor or enquire as to
whether or not a Default has occurred. The Agent will not
be deemed to have knowledge of the occurrence of a
Default. However, if the Agent receives notice from a
Party referring to this Agreement, describing the Default
and stating that the event is a Default, it shall
promptly notify the Banks.
(b) The Agent may require from the Banks the receipt of
security satisfactory to it whether by way of payment in
advance or otherwise, against any liability or loss which
it will or may incur in taking any proceedings or action
arising out of or in connection with any Finance Document
before it commences those proceedings or takes that
action.
21.8 Exoneration
(a) Without limiting paragraph (b) below, the Agent will not
be liable to any other Party for any action taken or not
taken by it under or in connection with any Finance
Document, unless directly caused by its gross negligence
or wilful misconduct.
(b) No Party may take any proceedings against any officer,
employee or agent of the Agent in respect of any claim it
might have against the Agent or in respect of any act or
omission of any kind (including negligence or wilful
misconduct) by that officer, employee or agent in
relation to any Finance Document.
21.9 Reliance
The Agent may:-
(a) rely on any notice or document believed by it to be
genuine and correct and to have been signed by, or
with the authority of, the proper person;
(b) rely on any statement made by a director or employee
of any person regarding any matters which may
reasonably be assumed to be within his knowledge or
within his power to verify; and
(c) engage, pay for and rely on legal or other
professional advisers selected by it (including
those in the Agent's employment and those
representing a Party other than the Agent).
21.10 Credit approval and appraisal
Without affecting the responsibility of any Borrower for
information supplied by it or on its behalf in connection
with any Finance Document, each Bank confirms that it:-
(a) has made its own independent investigation and
assessment of the financial condition and affairs of
each Borrower and its related entities in connection
with its participation in this Agreement and has not
relied exclusively on any information provided to it
by the Agent or an Arranger in connection with any
Finance Document; and
(b) will continue to make its own independent appraisal
of the creditworthiness of each Borrower and its
related entities while any amount is or may be
outstanding under the Finance Documents or any
Commitment is in force.
21.11 Information
(a) The Agent shall promptly forward to the person concerned
the original or a copy of any document which is delivered
to the Agent by a Party for that person.
(b) The Agent shall promptly supply a Bank with a copy of
each document received by the Agent under Clause 4
(Conditions precedent) or 28.4 (Target as Borrower) upon
the request and at the expense of that Bank.
(c) Except where this Agreement specifically provides
otherwise, the Agent is not obliged to review or check
the accuracy or completeness of any document it forwards
to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide
any Bank with any credit or other information
concerning the financial condition or affairs of any
Borrower or any related entity of any Borrower
whether coming into its possession or that of any of
its related entities before, on or after the date of
this Agreement; or
(ii) unless specifically requested to do so by a Bank in
accordance with this Agreement, to request any
certificates or other documents from any Borrower.
21.12 The Agent and the Arrangers individually
(a) If it is also a Bank, each of the Agent and the Arrangers
has the same rights and powers under the Finance
Documents as any other Bank and may exercise those rights
and powers as though it were not the Agent or an
Arranger.
(b) Each of the Agent and the Arrangers may:-
(i) carry on any business with a Borrower or its related
entities;
(ii) act as agent or trustee for, or in relation to any
financing involving, a Borrower or its related
entities; and
(iii) retain any profits or remuneration in connection
with its activities under this Agreement or in
relation to any of the foregoing.
(c) In acting as Agent for the Banks, the Agent's agency
division shall be treated as a separate entity from any
other of its divisions or departments and,
notwithstanding the foregoing provisions of this
Clause 21, if the Agent should act for any member of the
Group in any capacity in relation to any other matter,
any information given by that member of the Group to the
Agent in such other capacity may be treated as
confidential by the Agent.
21.13 Indemnities
(a) Without limiting the liability of any Borrower under the
Finance Documents, each Bank shall forthwith on demand
indemnify the Agent for its proportion of any liability
or loss incurred by the Agent in any way relating to or
arising out of its acting as the Agent, except to the
extent that the liability or loss arises directly from
the Agent's gross negligence or wilful misconduct.
(b) A Bank's proportion of the liability or loss set out in
paragraph (a) above is the proportion which its
participation in the Utilisations (if any) bear to all
the Utilisations on the date of the demand. If, however,
there are no Utilisations outstanding on the date of
demand, then the proportion will be the proportion which
its Commitments bears to the Total Commitments at the
date of demand or, if the Total Commitments have been
cancelled, bore to the Total Commitments immediately
before being cancelled.
21.14 Compliance
(a) The Agent may refrain from doing anything which might, in
its opinion, constitute a breach of any law or regulation
or be otherwise actionable at the suit of any person, and
may do anything which, in its opinion, is necessary or
desirable to comply with any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not
disclose any information relating to any Borrower or any
of its related entities if the disclosure might, in the
opinion of the Agent, constitute a breach of any law or
regulation or any duty of secrecy or confidentiality or
be otherwise actionable at the suit of any person.
21.15 Resignation of Agent
(a) Notwithstanding its irrevocable appointment, the Agent
may resign by giving notice to the Banks and the Company,
in which case the Agent may forthwith appoint one of its
Affiliates as successor Agent or, failing that, the
Majority Banks may (after consultation with the Company)
appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by
the Majority Banks but they have not, within 30 days
after notice of resignation, appointed a successor Agent
which accepts the appointment, the retiring Agent may
appoint a successor Agent.
(c) The resignation of the retiring Agent and the appointment
of any successor Agent will both become effective only
upon the successor Agent notifying all the Parties that
it accepts the appointment. On giving the notification,
the successor Agent will succeed to the position of the
retiring Agent and the term "Agent" will mean the
successor Agent.
(d) The retiring Agent shall, at its own cost, make available
to the successor Agent such documents and records and
provide such assistance as the successor Agent may
reasonably request for the purposes of performing its
functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 21
(The Agent and the Arrangers) shall continue to benefit
the retiring Agent in respect of any action taken or not
taken by it under or in connection with the Finance
Documents while it was the Agent, and, subject to
paragraph (d) above, it shall have no further obligation
under any Finance Document.
(f) If so instructed by the Majority Banks, the Agent shall
resign in accordance with paragraph (a) above. However,
in this event the Agent may not appoint a successor
Agent.
21.16 Banks
The Agent may treat each Bank as a Bank, entitled to
payments under this Agreement and as acting through its
Facility Office(s) until it has received notice from the
Bank to the contrary not less than 5 Business Days prior
to the relevant payment.
21.17 Agent as Trustee
(a) The Agent in its capacity as trustee or otherwise under
the Debenture:-
(i) is not liable for any failure, omission or defect in
perfecting or registering the security constituted
or created by any Finance Document;
(ii) may accept without enquiry such title as the Company
may have to any asset secured by the Debenture; and
(iii) is not under any obligation to hold any Finance
Document or any other document in connection with
the Finance Documents or the assets secured by any
Finance Document (including title deeds) in its own
possession or to take any steps to protect or
preserve the same. The Agent may permit any member
of the Group to retain any Finance Document or other
document in its possession.
(b) Save as otherwise provided in the Finance Documents, all
moneys which under the trusts contained in the Finance
Documents are received by the Agent in its capacity as
trustee or otherwise may be invested in the name of or
under the control of the Agent in any investment
authorised by English law for the investment by trustees
of trust money or in any other investments which may be
selected by the Agent. Additionally, the same may be
placed on deposit in the name of or under the control of
the Agent at such bank or institution (including the
Agent) and upon such terms as the Agent may think fit.
22. FEES
22.1 Front-end fee
The Company shall pay (or procure the payment) to the
Agent for the Arrangers a front-end fee in the amounts
and on the dates agreed in the Fee Letter between the
Company and the Arrangers.
22.2 Commitment fee
(a) The Company shall pay to the Agent for each Bank a
commitment fee computed at the rate of:
(i) (A) during the period from the date of this
Agreement up to (but excluding) the
Unconditional Acceptances Date, 0.15 per cent.
per annum; and
(B) subsequently up to (and including) the
Facility A Final Repayment Date, 50 per cent.
of the applicable Margin,
on the undrawn, uncancelled amount of that Bank's
Facility A Commitment; any change to the commitment
fee under this sub-paragraph takes effect from the
Business Day following receipt of the relevant
compliance certificate providing for a change to the
applicable Margin, even though the applicable Margin
may only apply to Facility A Loans made after that
date, or, in any other case, the relevant Margin
Adjustment Date;
(ii) during the period from the date of this Agreement up
to (and including) the Facility B Term Date, 50 per
cent. of the applicable Margin on the undrawn,
uncancelled amount of that Bank's Facility B
Commitment; and
(iii) (A) during the period from the date of this
Agreement up to (but excluding) the
Unconditional Acceptances Date, 0.15 per cent.
per annum; and
(B) subsequently up to (and including) the
Facility C Final Repayment Date, 50 per cent.
of the applicable Margin,
on the undrawn, uncancelled amount of that Bank's
Facility C Commitment.
(b) Accrued commitment fee is payable quarterly in arrear.
Accrued commitment fee is also payable to the Agent for
the relevant Bank(s) on the cancelled amount of its
Commitment at the time the cancellation takes effect.
22.3 Guarantee fee
(a) The Company shall pay to the Agent for the Banks a
guarantee fee computed at the rate equivalent to the
Margin applicable to Facility A Loans on the Guarantee
Outstandings from the Issue Date of the Guarantee up to
and including the Expiry Date. Any change to the
guarantee fee takes effect from the next date an
instalment of guarantee fee is payable which falls after
the Business Day following receipt of the relevant
compliance certificate providing for a change to the
applicable Margin.
(b) Guarantee fee is payable quarterly in advance from the
Issue Date of the Guarantee, and on the Expiry Date of
the Guarantee.
22.4 Agent's fee
The Company shall pay (or procure the payment) to the
Agent for its own account an agency fee in the amount
agreed in the Fee Letter between the Company and the
Agent. The agency fee is payable annually in advance.
The first payment of this fee is payable on the date of
this Agreement and each subsequent payment is payable on
each anniversary of the date of this Agreement for so
long as any amount is or may be outstanding under this
Agreement or any Commitment is in force.
22.5 Issuing Bank's fee
The Company shall pay to the Issuing Bank for its own
account a fronting fee in the amount and on the dates
agreed in the Fee Letter between the Company and the
Agent.
22.6 VAT
Any fee referred to in this Clause 22 (Fees) is exclusive
of any value added tax or any other tax which might be
chargeable in connection with that fee. If any value
added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant
fee.
23. EXPENSES
23.1 Initial and special costs
The Company shall forthwith on demand pay (or procure the
payment) to the Agent and the Arrangers the amount of all
reasonable costs and expenses (including legal fees)
reasonably incurred by them in connection with:-
(a) Syndication and the negotiation, preparation,
printing and execution of this Agreement and any
other documents referred to in this Agreement but,
subject to the maximum limit agreed in respect of
legal fees in the Fee Letter referred to in
Clause 22.1 (Front-end fee);
(b) the negotiation, preparation, printing and execution
of any other Finance Document (other than a Novation
Certificate or the Syndication Agreement) executed
after the date of this Agreement; and
(c) any amendment, waiver, consent or suspension of
rights (or any proposal for any of the foregoing)
requested by or on behalf of a Borrower or, in the
case of Clause 2.3 (Change of currency), the Agent
and relating to a Finance Document or a document
referred to in any Finance Document.
23.2 Enforcement costs
The Company shall forthwith on demand pay to each Finance
Party the amount of all reasonable costs and expenses
(including, without limitation, legal fees) incurred by
it in connection with the enforcement of, or the
preservation of any rights under, any Finance Document.
24. STAMP DUTIES
The Company shall pay and forthwith on demand indemnify
each Finance Party against any liability it incurs in
respect of any stamp, registration and similar tax which
is or becomes payable in connection with the entry into,
performance or enforcement of any Finance Document.
25. INDEMNITIES
25.1 Currency indemnity
(a) If a Finance Party receives an amount in respect of a
Borrower's liability under the Finance Documents or if
that liability is converted into a claim, proof,
judgement or order in a currency other than the currency
(the "contractual currency") in which the amount is
expressed to be payable under the relevant Finance
Document:-
(i) that Borrower shall indemnify that Finance Party as
an independent obligation against any loss or
liability arising out of or as a result of the
conversion;
(ii) if the amount received by that Finance Party, when
converted into the contractual currency at a market
rate in the usual course of its business, is less
than the amount owed in the contractual currency,
the Borrower concerned shall forthwith on demand pay
to that Finance Party an amount in the contractual
currency equal to the deficit; and
(iii) the Borrower shall pay to the Finance Party
concerned on demand any exchange costs and taxes
payable in connection with any such conversion.
(b) Each Borrower waives any right it may have in any
jurisdiction to pay any amount under the Finance
Documents in a currency other than that in which it is
expressed to be payable.
25.2 Other indemnities
The Company shall forthwith on demand indemnify each
Finance Party against any loss or liability which that
Finance Party incurs as a consequence of:-
(a) the occurrence of any Default;
(b) a change in currency of a country or the operation
of Clause 2.3 (Change of currency), the operation of
Clause 20.21 (Acceleration) or Clause 31 (Pro rata
sharing);
(c) any payment of principal or an overdue amount being
received from any source otherwise than on its due
date and, for the purposes of this paragraph (c),
the Repayment Date of an overdue amount is the last
day of each Designated Term (as defined in
Clause 11.3 (Default interest));
(d) (other than by reason of negligence or default by
that Finance Party) a Loan not being made after the
Borrower has delivered a Request for that Loan; or
(e) any failure by a member of the Group to comply with
the Environmental Laws applicable to it or any
Environmental Licence held by it.
The Company's liability in each case includes any loss of
margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount
payable under any Finance Document, any amount repaid or
prepaid or any Loan.
25.3 Acquisition financing indemnity
(a) The Company shall within 5 Business Days of demand
indemnify each Finance Party against any loss or
liability which that Finance Party suffers or incurs as a
consequence of any litigation proceeding arising, pending
or threatened against that Finance Party as a result of
the Offer (whether or not made) or of it agreeing to
finance or refinance any acquisition by the Company or
any person acting in concert with the Company of any
Shares or arising out of the use of proceeds of any
Utilisation ("relevant litigation") except to the extent
caused by its gross negligence or wilful misconduct.
(b) A Finance Party shall notify the Company promptly upon
becoming aware, and in reasonable detail, of any relevant
litigation and shall keep the Company informed of its
progress.
(c) A Finance Party shall conduct any relevant litigation in
good faith and will give careful consideration to the
views of the Company in relation to the appointment of
professional advisers and the conduct of the litigation
taking into account (to the extent practicable) both its
interests and the interests of the Company.
(d) A Finance Party may only concede or compromise any claim
in respect of any relevant litigation if it is acting
reasonably and has consulted the Company before so doing.
(e) Notwithstanding paragraphs (a) to (d) above, a Finance
Party is not required to disclose to the Company any
matter in respect of which it is under a duty of non-
disclosure or which is subject to any attorney/client
privilege, or which relates to a Finance Party's policy
or other extrinsic matters. Any information disclosed by
a Finance Party to the Company under this Clause 25.3
shall be subject to the same conditions of
confidentiality as those set out in Clause 29 (Disclosure
of information) in relation to disclosure to potential
transferees.
26. EVIDENCE AND CALCULATIONS
26.1 Accounts
Accounts maintained by a Finance Party in connection with
this Agreement are prima facie evidence of the matters to
which they relate.
26.2 Certificates and determinations
Any certification or determination by a Finance Party of
a rate or amount under the Finance Documents is prima
facie evidence of the matters to which it relates. Any
determination by a Finance Party of an amount under a
Finance Document shall contain a calculation of the
amount in reasonable detail.
26.3 Calculations
Interest (including any applicable MLA Cost) and the fee
payable under Clause 22.2 (Commitment fee) accrue from
day to day and are calculated on the basis of the actual
number of days elapsed and a year of 365 days or (in the
case of Commitment fee or where market practice so
dictates) 360 days. Guarantee fee is calculated on the
basis of the actual number of days in the relevant period
and a year of 365 days.
27. AMENDMENTS AND WAIVERS
27.1 Procedure
(a) Subject to Clause 27.2 (Exceptions), any term of the
Finance Documents may be amended or waived with the
agreement of the Company, the Majority Banks and the
Agent. The Agent may effect, on behalf of the Banks, an
amendment to which they or the Majority Banks have
agreed.
(b) The Agent shall promptly notify the other Parties of any
amendment or waiver effected under paragraph (a) above,
and any such amendment or waiver shall be binding on all
the Parties.
27.2 Exceptions
An amendment or waiver which relates to:-
(a) the definition of "Majority Banks" in Clause 1.1
(Definitions);
(b) an extension of the date for, or a decrease in an
amount or a change in the currency of, any payment
(including the Margin or any other amount of
interest or any fee) under the Finance Documents;
(c) an increase in a Bank's Commitment;
(d) the release of any security the subject of the
Debenture;
(e) a term of a Finance Document which expressly
requires the consent of each Bank; or
(f) Clause 31 (Pro rata sharing) or this Clause 27
(Amendments and waivers),
may not be effected without the consent of each Bank.
27.3 Waivers and remedies cumulative
The rights of each Finance Party under the Finance
Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under
the general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is
not a waiver of that right.
28. CHANGES TO THE PARTIES
28.1 Transfers by Borrowers
No Borrower may assign, transfer, novate or dispose of
any of, or any interest in, its rights and/or obligations
under this Agreement.
28.2 Transfers by Banks
(a) Subject to paragraph (b) below, a Bank (the "Existing
Bank") may at any time assign, transfer or novate any of
its Commitments and/or rights and/or obligations in whole
or in part under this Agreement to a Qualifying Bank (the
"New Bank"). A partial assignment, transfer or novation
is only permitted in minimum amounts of 10,000,000 pounds
and if the Bank concerned assigns, transfers or novates a
pro rata portion of all its rights and obligations under
Facilities A, B and C.
(b) (i) The prior consent of the Company is required
for any such assignment, transfer or novation
referred to in paragraph (a) above, unless:-
(A) the New Bank is another Bank or an Affiliate of
a Bank; or
(B) a Default is outstanding.
However, the prior consent of the Company must not
be unreasonably withheld or delayed and will be
deemed to have been given if, within 14 days of
receipt by the Company of an application for
consent, it has not been expressly refused.
(ii) If the Guarantee has been, or is scheduled to be,
issued, the prior consent (not to be unreasonably
withheld or delayed) of the Issuing Bank is also
required.
(b) A transfer of obligations will be effective only if
either:-
(i) the obligations are novated in accordance with
Clause 28.3 (Procedure for novations); or
(ii) the New Bank confirms to the Agent and the Company
that it undertakes to be bound by the terms of this
Agreement as a Bank in form and substance
satisfactory to the Agent. On the transfer becoming
effective in this manner the Existing Bank shall be
relieved of its obligations under this Agreement to
the extent that they are transferred to the New
Bank.
(c) Nothing in this Agreement restricts the ability of a Bank
to sub-contract an obligation if that Bank remains liable
under this Agreement for that obligation.
(d) On each occasion (other than pursuant to the Syndication
Agreement) an Existing Bank assigns, transfers or novates
any of its rights and/or obligations under this
Agreement, the New Bank shall, on the date the
assignment, transfer and/or novation takes effect, pay to
the Agent for its own account a fee of 750 pounds.
(e) An Existing Bank is not responsible to a New Bank for:-
(i) the execution, genuineness, validity, enforceability
or sufficiency of any Finance Document or any other
document;
(ii) the collectability of amounts payable under any
Finance Document; or
(iii)the accuracy of any statements (whether written or
oral) made in or in connection with any Finance
Document.
(f) Each New Bank confirms to the Existing Bank and the other
Finance Parties that it:-
(i) has made its own independent investigation and
assessment of the financial condition and affairs of
each Borrower and its related entities in connection
with its participation in this Agreement and has not
relied exclusively on any information provided to it
by the Existing Bank in connection with any Finance
Document; and
(ii) will continue to make its own independent appraisal
of the creditworthiness of each Borrower and its
related entities while any amount is or may be
outstanding under this Agreement or any Commitment
is in force.
(g) Nothing in any Finance Document obliges an Existing Bank
to:-
(i) accept a re-transfer from a New Bank of any of the
rights and/or obligations assigned, transferred or
novated under this Clause; or
(ii) support any losses incurred by the New Bank by
reason of the non-performance by any Borrower of its
obligations under this Agreement or otherwise.
(h) Any reference in this Agreement to a Bank includes a New
Bank, but excludes a Bank if no amount is or may be owed
to or by that Bank under this Agreement and its
Commitment has been cancelled or reduced to nil.
28.3 Procedure for novations
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the
Agent a duly completed certificate, substantially in
the form of Part I of Schedule 5 (a "Novation
Certificate"); and
(ii) the Agent executes it.
(b) Each Party (other than the Existing Bank and the New
Bank) irrevocably authorises the Agent to execute any
duly completed Novation Certificate on its behalf.
(c) To the extent that they are expressed to be the subject
of the novation in the Novation Certificate:-
(i) the Existing Bank and the other Parties (the
"existing Parties") will be released from their
obligations to each other (the "discharged
obligations");
(ii) the New Bank and the existing Parties will assume
obligations towards each other which differ from the
discharged obligations only insofar as they are owed
to or assumed by the New Bank instead of the
Existing Bank;
(iii)the rights of the Existing Bank against the existing
Parties and vice versa (the "discharged rights")
will be cancelled; and
(iv) the New Bank and the existing Parties will acquire
rights against each other which differ from the
discharged rights only insofar as they are execrable
by or against the New Bank instead of the Existing
Bank,
all on the date of execution of the Novation Certificate
by the Agent or, if later, the date specified in the
Novation Certificate.
28.4 Target as Borrower
(a) If the Company wishes the Target to become a Borrower,
then it may deliver to the Agent the documents listed in
Part II of Schedule 2.
(b) On delivery of a Borrower Accession Agreement executed by
the Target and the Company, the Target will become a
Borrower. However, it may not utilise Facility C until
the Agent confirms to the other Finance Parties and the
Company that it has received all the documents referred
to in paragraph (a) above in form and substance
satisfactory to it. The Agent shall notify the Company
promptly upon receipt.
(c) Delivery of a Borrower Accession Agreement, executed by
the Target, constitutes confirmation by the Target that
the representations and warranties set out in Clause 18
(Representations and warranties) and to be made by the
Target on the date of the Borrower Accession Agreement
are correct, in respect of itself and its Subsidiaries,
as if made with reference to the facts and circumstances
then existing.
28.5 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a
Bank, the Bank of which it is an Affiliate) ceases to be
one of the Banks, the Agent shall (in consultation with
the Company) appoint another Bank or an Affiliate of a
Bank to replace that Reference Bank.
28.6 Increased costs etc.
If:-
(a) a Bank assigns, transfers or novates any of its
Commitments and/or rights and/or obligations under
the Finance Documents or changes its Facility Office
without the prior consent of the Company; and
(b) as a result of circumstances existing at the date
the assignment, transfer, novation or change occurs,
a Borrower would be obliged to make a payment to the
New Bank or Bank acting through its new Facility
Office under Clause 13 (Taxes) or Clause 15
(Increased costs),
then, notwithstanding the provisions of Clause 13 (Taxes)
or Clause 15 (Increased costs), the relevant New Bank or
Bank acting through its new Facility Office is only
entitled to receive payment under those Clauses from a
Borrower to the same extent as the relevant Existing Bank
or Bank acting through its previous Facility Office would
have been if the assignment, transfer, novation or change
had not occurred
28.7 Register
The Agent shall keep a register of all the Parties and
shall supply any other Party (at that Party's expense)
with a copy of the register on request.
29. DISCLOSURE OF INFORMATION
(a) A Finance Party may disclose to one of its Affiliates or
any person (a "participant") with whom it is proposing to
enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this
Agreement:-
(i) a copy of any Finance Document; and
(ii) any information which that Finance Party has
acquired under or in connection with any Finance
Document,
so long as disclosure of confidential information under
sub-paragraph (ii) above may only be disclosed to a
participant if the participant has agreed in writing with
the relevant Finance Party to keep the information
confidential on the same terms (with consequential
changes) as are set out in paragraph (b) below.
(b) Each Finance Party shall keep confidential and not,
without the prior consent of the Company, use any
information (other than information which is publicly
available other than as a result of a breach of this
paragraph (b)) supplied by or on behalf of any Borrower
under the Finance Documents otherwise than in connection
with the Finance Documents. However, each Finance Party
is entitled to disclose information:
(i) in connection with any legal or arbitration
proceedings arising out of or in connection with a
Finance Document; or
(ii) if required to do so by an order of a court of
competent jurisdiction whether under any procedure
for discovering documents or otherwise; or
(iii)pursuant to any law or regulation in accordance with
which that Bank is required or accustomed to act; or
(iv) to a governmental, banking, taxation or other
regulatory authority of any competent jurisdiction;
or
(v) to its accountants or legal advisers or any other
professional advisers.
30. SET-OFF
A Finance Party may set off any matured obligation owed
by a Borrower under this Agreement (to the extent
beneficially owned by that Finance Party) against any
obligation (whether or not matured) owed by that Finance
Party to that Borrower, regardless of the place of
payment, booking branch or currency of either obligation.
If the obligations are in different currencies, the
Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the
purpose of the set-off. If either obligation is
unliquidated or unascertained, the Finance Party may set
off in an amount estimated by it in good faith to be the
amount of that obligation. Nothing in this Clause 30
will be effective to create a charge.
31. PRO RATA SHARING
31.1 Redistribution
If any amount owing by a Borrower under this Agreement to
a Finance Party (the "recovering Finance Party") is
discharged by payment, set-off or any other manner other
than through the Agent in accordance with Clause 12
(Payments) (a "recovery"), then:-
(a) the recovering Finance Party shall, within 3
Business Days, notify details of the recovery to the
Agent;
(b) the Agent shall determine whether the recovery is in
excess of the amount which the recovering Finance
Party would have received had the recovery been
received by the Agent and distributed in accordance
with Clause 12 (Payments);
(c) subject to Clause 31.3 (Exceptions), the recovering
Finance Party shall, within 3 Business Days of
demand by the Agent, pay to the Agent an amount (the
"redistribution") equal to the excess;
(d) the Agent shall treat the redistribution as if it
were a payment by the Borrower concerned under
Clause 12 (Payments) and shall pay the
redistribution to the Finance Parties (other than
the recovering Finance Party) in accordance with
Clause 12.6 (Partial payments); and
(e) after payment of the full redistribution, the
recovering Finance Party will be subrogated to the
portion of the claims paid under paragraph (d)
above, and that Borrower will owe the recovering
Finance Party a debt which is equal to the
redistribution, immediately payable and of the type
originally discharged.
31.2 Reversal of redistribution
If under Clause 31.1 (Redistribution):-
(a) a recovering Finance Party must subsequently return
a recovery, or an amount measured by reference to a
recovery, to a Borrower; and
(b) the recovering Finance Party has paid a
redistribution in relation to that recovery,
each Finance Party shall, within 3 Business Days of
demand by the recovering Finance Party through the Agent,
reimburse the recovering Finance Party all or the
appropriate portion of the redistribution paid to that
Finance Party. Thereupon, the subrogation in
Clause 31.1(e) (Redistribution) will operate in reverse
to the extent of the reimbursement.
31.3 Exceptions
(a) A recovering Finance Party need not pay a redistribution
to the extent that it would not, after the payment, have
a valid claim against the Borrower concerned in the
amount of the redistribution pursuant to Clause 31.1(e)
(Redistribution).
(b) A recovering Finance Party is not obliged to share with
any other Finance Party any amount which the recovering
Finance Party has received or recovered as a result of
taking legal proceedings, if that other Finance Party had
an opportunity to participate in those legal proceedings,
but did not do so and did not take separate legal
proceedings.
32. SEVERABILITY
If a provision of any Finance Document is or becomes
illegal, invalid or unenforceable in any jurisdiction,
that shall not affect:-
(a) the legality, validity or enforceability in that
jurisdiction of any other provision of the Finance
Documents; or
(b) the legality, validity or enforceability in other
jurisdictions of that or any other provision of the
Finance Documents.
33. COUNTERPARTS
A Finance Document may be executed in any number of
counterparts, and this has the same effect as if the
signatures on the counterparts were on a single copy of
the Finance Document.
34. NOTICES
34.1 Giving of notices
All notices or other communications under or in
connection with the Finance Documents shall be given in
writing or by telex or facsimile. Any such notice will be
deemed to be given as follows:-
(a) if in writing, when delivered;
(b) if by telex, when despatched, but only if, at the
time of transmission, the correct answerback appears
at the start and at the end of the sender's copy of
the notice; and
(c) if by facsimile, when received.
However, a notice given in accordance with the above but
received on a non-working day or after business hours in
the place of receipt will only be deemed to be given on
the next working day in that place.
34.2 Addresses for notices
(a) The address, telex number and facsimile number of each
Party (other than the Agent) for all notices under or in
connection with the Finance Documents are:-
(i) that notified by that Party for this purpose to the
Agent on or before it becomes a Party; or
(ii) any other notified by that Party for this purpose to
the Agent by not less than five Business Days'
notice.
(b) The address, telex number and facsimile number of the
Agent is:-
101 Moorgate
London EC2M 6SB
Telex No: 887139 ABN ALG
Facsimile No: 0171 588 2975
Attention: Credit Administration
or such other as the Agent may notify to the other
Parties by not less than 5 Business Days' notice.
(c) The Agent shall, promptly upon request from any Party,
give to that Party the address, telex number or facsimile
number of any other Party applicable at the time for the
purposes of this Clause.
34.3 Facsimile notices
Each Borrower shall indemnify the Agent against any loss
or liability which the Agent incurs as a result of the
Agent accepting and/or acting upon any instructions under
the Finance Documents received by the Agent from that
Borrower by facsimile and which may not have been
incurred if, at the time of receipt, the Agent had been
given the instructions other than by facsimile.
35. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
<PAGE>
SCHEDULE 1
BANKS AND COMMITMENTS
Banks Commitments
ABN AMRO BANK N.V. )
BANK OF AMERICA NATIONAL TRUST AND ) AS PER
SAVINGS ASSOCIATION )
SYNDICATION
UNION BANK OF SWITZERLAND ) LETTER
<PAGE>
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
PART I
TO BE DELIVERED BEFORE THE FIRST LOAN
1. A copy of the memorandum and articles of association and
certificate of incorporation of the Company.
2. A copy of a resolution of the board of directors of the
Company:-
(a) approving the terms of, and the transactions
(including the Acquisition) contemplated by, this
Agreement and resolving that it execute this
Agreement, the Debenture and the Fee Letters;
(b) authorising a specified person or persons to execute
this Agreement and the Fee Letters on its behalf and
its seal be affixed to the Debenture; and
(c) authorising a specified person or persons, on its
behalf, to sign and/or despatch all other documents
and notices to be signed and/or despatched by it
under or in connection with this Agreement.
3. A specimen of the signature of each person authorised by
the resolution referred to in paragraph 2 above.
4. A copy of the Press Release and a copy of the Offer
Document.
5. The Debenture, duly executed by the Company.
6. A certificate of an authorised signatory of the Company
certifying that each copy document specified in
paragraphs 1 and 2 of Part I of this Schedule 2 is
correct, complete and in full force and effect as at a
date no earlier than the date of this Agreement.
7. Written confirmation from the Company that, as at the
date on which the Press Release is issued, the board of
directors of the Target has recommended to the
shareholders of the Target acceptance of the Offer.
8. Written confirmation from the Parent and the Company that
equity and/or capital contributions of a minimum amount
agreed in the Syndication Letter has been subscribed for
in, or on lent to, the Company and confirmation from the
Company that that amount has been or, together with the
proceeds of the drawdown of the first Loan will be,
applied in full on or prior to the first Drawdown Date in
accordance with the terms of this Agreement.
9. A report from Coopers & Lybrand on the financial model
(and its assumptions) in relation to the Acquisition,
prepared by the Company or its advisers and addressed to
the Finance Parties.
10. A legal opinion of Allen & Overy, legal advisers to the
Arrangers, addressed to the Finance Parties,
substantially in the form of Part I of Schedule 8.
PART II
TO BE DELIVERED BY THE TARGET
1. A Borrower Accession Agreement, duly executed by the
Target and the Company.
2. A copy of the memorandum and articles of association and
certificate of incorporation of the Target.
3. A copy of a resolution of the board of directors of the
Target:-
(a) approving the terms of, and the transactions
contemplated by, the Borrower Accession Agreement
and resolving that it execute the Borrower Accession
Agreement;
(b) authorising a specified person or persons to execute
the Borrower Accession Agreement on its behalf; and
(c) authorising a specified person or persons, on its
behalf, to sign and/or despatch all other documents
and notices to be signed and/or despatched by it
under or in connection with this Agreement.
4. A certificate of a director of the Target confirming that
utilisation of Facility C in full would not cause any
borrowing limit binding on it to be exceeded.
5. A specimen of the signature of each person authorised by
the resolution referred to in paragraph (3) above.
6. The latest audited consolidated accounts of the Target.
7. If not already received by the Agent, copies of:
(a) the Licence; and
(b) the Pooling and Settlement Agreement.
8. A certificate of an authorised signatory of the Target
certifying that each copy document specified in Part II
of this Schedule 2 is correct, complete and in full force
and effect as at a date no earlier than the date of the
Borrower Accession Agreement.
9. A legal opinion of Allen & Overy, legal advisers to the
Agent, addressed to the Finance Parties, substantially in
the form of Part II of Schedule 8.
<PAGE>
SCHEDULE 3
CALCULATION OF THE MLA COST
(a) The MLA Cost for a Loan for its Interest Period(s) is
calculated in accordance with the following formula:-
BY + L(Y-X) + S(Y-Z)
-------------------- % per annum = MLA Cost
100-(B+S)
where on the day of application of the formula:-
B is the percentage of the Agent's eligible
liabilities which the Bank of England requires the
Agent to hold on a non-interest-bearing deposit
account in accordance with its cash ratio
requirements;
Y is the rate at which Sterling deposits are offered
by the Agent to leading banks in the London
interbank market at or about 11.00 a.m. on that day
for the relevant period;
L is the percentage of eligible liabilities which the
Bank of England requires the Agent to maintain as
secured money with members of the London Discount
Market Association and/or as secured call money with
certain money brokers and gilt-edged primary market
makers;
X is the rate at which secured Sterling deposits in
the relevant amount may be placed by the Agent with
members of the London Discount Market Association
and/or as secured call money with certain money
brokers and gilt-edged primary market makers at or
about 11.00 a.m. on that day for the relevant
period;
S is the percentage of the Agent's eligible
liabilities which the Bank of England requires the
Agent to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank
of England on special deposits.
(b) For the purposes of this Schedule 3:-
(i) "eligible liabilities" and "special deposits" have
the meanings given to them at the time of
application of the formula by the Bank of England;
(ii) "relevant period" in relation to a Loan, means:-
(A) if the relevant Interest Period is 3 months or
less, that Interest Period; or
(B) if the relevant Interest Period is more than 3
months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z
are included in the formula as figures and not as
percentages, e.g. if B = 0.5% and Y = 15%, BY is
calculated as 0.5 x 15.
(d) (i) The formula is applied on the first day of the
relevant Interest Period.
(ii) Each rate calculated in accordance with the formula
is, if necessary, rounded upward to the nearest four
decimal places.
(e) If the Agent determines that a change in circumstances
has rendered, or will render, the formula inappropriate,
the Agent (after consultation with the Banks) shall
notify the Company of the manner in which the MLA Cost
will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the
absence of manifest error, be binding on all the Parties.
<PAGE>
SCHEDULE 4
FORM OF REQUEST
To: ABN AMRO BANK N.V. as Agent
From: [ENTERGY POWER UK PLC/LONDON ELECTRICITY plc]
Date: [ ]
ENTERGY POWER UK PLC - 1,250,000,000 Pounds Revolving Credit
Agreement
dated 17th December, 1996
1. [We wish to borrow a Facility A/Facility B/Facility C*
Loan as follows:-
(a) Drawdown Date:
[ ]
(b) Purpose: [ ]
(c) Amount: [ ]
(d) [First]** Interest Period:
[ ]
(e) Payment instructions:
[ ].]*
[We wish the Issuing Bank to issue the Guarantee as
follows:-
(a) Amount: [ ]
(b) Issue Date:
[ ]
(c) Expiry Date:
[ ]
(d) Delivery instructions:
[ ]]*
2. We confirm that each condition specified in [Clause 4.2
(Further conditions precedent)/Clause 4.3 (Conditions
precedent during the Certain Funds Period]* is satisfied
on the date of this Request.
By:
[ENTERGY POWER UK PLC/LONDON ELECTRICITY plc]
Authorised Signatory
SCHEDULE 5
FORMS OF ACCESSION DOCUMENTS
PART I
NOVATION CERTIFICATE
To: ABN AMRO BANK N.V. as Agent
From: [THE EXISTING
BANK] and [THE NEW BANK] Date:
[ ]
ENTERGY POWER UK PLC - 1,250,000,000 pounds Revolving Credit
Agreement
dated 17th December, 1996
We refer to Clause 28.3 (Procedure for novations).
1. We [ ] (the
"Existing Bank") and
[ ] (the "New Bank")
agree to the Existing Bank and the New Bank novating all
the Existing Bank's Commitment(s) and/or rights and
obligations referred to in the Schedule in accordance
with Clause 28.3 (Procedure for novations).
2. The specified date for the purposes of Clause 28.3(c) is
[date of novation].
3. The Facility Office and address for notices of the New
Bank for the purposes of Clause 34.2 (Addresses for
notices) are set out in the Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
Commitments/Rights and obligations to be novated
[Details of the Commitments/rights and obligations of the
Existing Bank to be novated].
[New Bank]
[Facility Office Address for notices]
[Existing Bank] [New Bank] ABN AMRO BANK
N.V.
By: By: By:
Date: Date: Date:
<PAGE>
PART II
BORROWER ACCESSION AGREEMENT
To: ABN AMRO BANK N.V. as Agent
From: LONDON ELECTRICITY plc and ENTERGY POWER UK PLC
[ ], 199[ ]
ENTERGY POWER UK PLC - 1,250,000,000 pounds Revolving Credit
Agreement
dated 17th December, 1996 (the "Credit Agreement")
We refer to Clause 28.4 (Target as Borrower).
London Electricity plc of Templar House, 81-87 High Holborn,
London WC1V 6NU (Registered no. 2366852) (the "Proposed
Borrower") agrees to become a Borrower and to be bound by the
terms of the Credit Agreement as a Borrower in accordance with
Clause 28.4 (Target as Borrower).
The address for notices of the Proposed Borrower for the
purposes of Clause 34.2 (Addresses for notices) is:-
[
]
This Agreement is governed by English law.
By:
LONDON ELECTRICITY plc
Authorised Signatory
By:
ENTERGY POWER UK PLC
Authorised Signatory
<PAGE>
PART III
FORM OF SYNDICATION AGREEMENT
SUPPLEMENTAL AGREEMENT
DATED [ ]
relating to a 1,250,000,000 pounds Credit
Agreement dated 17th December, 1996
for
ENTERGY POWER UK PLC
arranged by
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
UNION BANK OF SWITZERLAND
with
ABN AMRO BANK N.V.
as Agent
ALLEN & OVERY
London
<PAGE>
THIS AGREEMENT is dated
[ ] between:
(1) ENTERGY POWER UK PLC (Registered No. 3261188) (the
"Company");
(2) LONDON ELECTRICITY plc (Registered No. 2366852) (the
"Target")* ;
(3) ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED
and UNION BANK OF SWITZERLAND as arrangers (in this
capacity the "Arrangers");
(4) ABN AMRO BANK N.V., BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION and UNION BANK OF SWITZERLAND as the
banks party to the Credit Agreement (as defined below) as
at today's date (the "Existing Banks");
(5) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as the
banks who wish to accede to the Credit Agreement as Banks
(the "New Banks"); and
(6) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the contrary intention appears
or the context otherwise requires:
"Credit Agreement"
means the Original Credit Agreement as amended pursuant
to Clause 4 (Nature of this Agreement) of this Agreement.
"Effective Date"
means
[
].
"Original Credit Agreement"
means the Credit Agreement dated 17th December, 1996
between the Company, the Arrangers, the Existing Banks
and the Agent.
1.2 Incorporation of Original Credit Agreement
interpretations
(a) Terms defined in the Original Credit Agreement shall,
unless the contrary intention appears or the context
otherwise requires, have the same meaning in this
Agreement.
(b) Clauses 1.2 (Construction), 32 (Severability) and 33
(Counterparts) of the Original Credit Agreement shall
apply to this Agreement, as though they were set out in
full in this Agreement but as if references to the
Original Credit Agreement are to be construed as
references to this Agreement.
2. CONSENT AND CONFIRMATION
[(a)]1 The Company, [the Target]2 the Arrangers, the
Existing Banks and the Agent each consent to the New
Banks becoming Banks and confirm that, except as
expressly provided by the terms of this Agreement, each
of the Finance Documents shall continue in full force and
effect.
[(b) It is acknowledged that the Guarantee will not be
issued.]1.
3. NOVATION
3.1 Novation of Commitments and related rights and
obligations
On the Effective Date (regardless of whether a Default is
then continuing):
(a) each New Bank will become a Bank under the Credit
Agreement with a Facility A Commitment, Facility B
Commitment and Facility C Commitment as set out
opposite its name in Schedule 2;
(b) each Existing Bank's Facility A Commitment,
Facility B Commitment and Facility C Commitment
shall be and be deemed to be reduced down to, the
respective amounts set out opposite its name in
Schedule 2; and
(c) each New Bank will automatically obtain and assume,
and undertakes to perform, all of the rights and
obligations of a Bank under and in respect of each
of the Finance Documents in respect of the rights
and obligations transferred to it under
paragraphs (a) and (b) above[, including, without
limitation, its corresponding proportion of the
rights and obligations of the Existing Banks in
respect of:]
[List outstanding term loans and Guarantee, if
issued.]
3.2 Amounts due on or before the Effective Date
(a) All amounts (if any) payable to an Existing Bank by the
Borrowers on or before the Effective Date (including,
without limitation, all interest and fees payable on the
Effective Date) in respect of any period ending prior to
the Effective Date shall be for the account of the
Existing Banks, and none of the New Banks shall have any
interest in, or any rights in respect of, any such
amounts.
(b) If any Facility A Loan or Facility C Loan falls to be
made on the Effective Date:
(i) the Agent will promptly notify each of the New Banks
of that fact (and the amount of its participation in
that Facility A Loan or Facility C Loan in
accordance with sub-paragraph (ii) below); and
(ii) each Existing Bank and each New Bank shall
participate in that Facility A Loan or Facility C
Loan (subject to the terms of the Credit Agreement)
as if the novation of the Facility A Commitments and
the Facility C Commitments under Clauses 3.1(a) and
(b) (Novation of Commitments and related rights and
obligations) of this Agreement had taken effect
prior to opening of business on the Business Day
before the Effective Date,
and the Company acknowledges that no Existing Bank will
be obliged to participate in any such Loan to any greater
extent.
3.3 Administrative details
Each New Bank has delivered to the Agent its initial
details for the purposes of Clause 34 (Notices) of the
Credit Agreement.
4. NATURE OF THIS AGREEMENT
The novation of Commitments and rights and obligations
contemplated by this Agreement shall take effect (in
accordance with its terms) as a novation so that:
(a) Schedule 1 to this Agreement is substituted for
Schedule 1 to the Credit Agreement on the Effective
Date; and
(b) Clause 28.3 (Procedure for novations) of the Credit
Agreement shall apply to the Commitments, rights and
obligations transferred, assumed and released under
Clause 3.1 (Novation of Commitments and related
rights and obligations) of this Agreement and to the
associated rights and obligations under the Finance
Documents, as if this Agreement were a Novation
Certificate.
5. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
<PAGE>
SCHEDULE 1
BANKS AND COMMITMENTS
Banks Facility A Facility B Facility C
Commitment Commitment Commitment
Pounds Pounds Pounds
[
<PAGE>
SIGNATORIES
(to the Syndication Agreement)
Company
ENTERGY POWER UK PLC
By:
Target
LONDON ELECTRICITY plc
By:
Arrangers and Existing Banks
ABN AMRO BANK N.V.
By:
BANK OF AMERICA INTERNATIONAL LIMITED
By:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
UNION BANK OF SWITZERLAND
By:
New Banks
[ ]
Agent
ABN AMRO BANK N.V.
By:
<PAGE>
SCHEDULE 6
FORM OF GUARANTEE
THIS DEED is dated [ ] 199[ ] and made
by ABN AMRO BANK N.V. (the "Guarantor" which expression
includes its successors and assigns).
BACKGROUND
(A) ENTERGY POWER UK PLC (Registered No: 3261188) (the
"Company") has issued loan notes of an aggregate
principal amount of pounds[ ] (the
"Loan Notes") in connection with the offer for the shares
in London Electricity plc.
(B) The Guarantor has agreed to guarantee payments due from
the Company to holders of the Loan Notes (the
"Noteholders") subject to the terms of this Deed.
IT IS AGREED as follows:
1. (a) Subject to the other terms of this Deed, the
Guarantor irrevocably and unconditionally guarantees
to each Noteholder for the time being and within
five business days of a written demand by that
Noteholder, the payment of the principal amount of
each Loan Note held by it and the payment of any
interest in respect of that principal amount;
(b) the aggregate liability of the Guarantor under this
Deed in respect of the principal amount of the Loan
Notes is limited to
pounds[ ]; and
(c) the aggregate liability of the Guarantor under this
Deed in respect of interest on the Loan Notes is
limited to pounds[ ].
In this Guarantee a "business day" is a day on which
banks are open for business (other than a Saturday or a
Sunday) in London.
2. To be valid, any demand by a Noteholder under Clause 1
above must:
(a) be in writing signed by the Noteholder with such
signature being confirmed by the Noteholder's
bankers or solicitors;
(b) state that the Company has defaulted in payment of
sums due in respect of the Loan Notes specifying the
date of the default, the applicable period of grace
(if any), the amount claimed from the Guarantor and
the amount of principal and interest in respect of
which the default by the Company has been made; and
(c) be delivered to the Guarantor at its address at
[
] within 30 days of the due date of the
relevant payment.
3. This guarantee is to be a continuing guarantee and
(subject to Clause 5 below) shall remain in force until
the date on which all moneys expressed to be payable by
the Company under the terms of the Loan Notes shall have
been paid.
4. (a) The obligations of the Guarantor under this
guarantee shall not be affected by any concession or
arrangement granted or made to or with the Company
or by the liquidation of the Company;
(b) the liability of the Guarantor is not to be
increased or extended in any way by any compromise
or arrangement but if the effect of any such
compromise or arrangement is to extend the time of
payment by the Company of any principal or interest
secured by the Loan Notes and which the Guarantor is
for the time being or may become liable to pay in
respect thereof, and, without prejudice to Clause 5
below, the Guarantor shall have the benefit of that
extension of time; and
(c) the Guarantor will not be bound by any
variation of the rights of the Noteholders unless
that variation shall have been made with the prior
written consent of the Guarantor.
5. Unless otherwise agreed by the Guarantor, the liability
of the Guarantor under this guarantee shall terminate on
the date falling
[ ] or (if
earlier) on the date on which all moneys expressed to be
payable by the Company under the terms of the Loan Notes
shall have been paid, except that the Guarantor shall
remain liable in respect of any claims or demands validly
made prior to that date to the extent not satisfied or
withdrawn by that date.
6. This Deed is governed by English Law.
The Guarantor has executed this Deed on the day and year first
above written.
[Executed as a Deed by ABN AMRO BANK N.V. )
acting by: )
[ ] )
and [ ]] )
<PAGE>
SCHEDULE 7
FORM OF DEBENTURE
DEBENTURE
DATED 17th December, 1996
BETWEEN
ENTERGY POWER UK PLC
- and -
ABN AMRO BANK N.V.
London
<PAGE>
TABLE OF CONTENTS
Clause Page
1. Interpretation 111
2. Fixed Security 113
3. Floating charge 113
4. Representations and warranties 114
5. Undertakings 114
7. When security becomes enforceable 116
8. Enforcement of security 116
9. Receiver 117
10. Powers of Receiver 118
12. Application of proceeds 120
13. Expenses and indemnity 120
14. Delegation 121
15. Further assurances 121
16. Power of attorney 121
17. Miscellaneous 121
18. Release 122
19. Governing law 122
Schedules
1. Form of notice of the Account Bank 123
2. Form of acknowledgement of the bank operating the
Security Accounts 124
Signatories 125
<PAGE>
THIS DEED is dated 17th December, 1996 between:
(1) ENTERGY POWER UK PLC (Registered number 3261188) (the
"Chargor"); and
(2) ABN AMRO BANK N.V. (the "Agent") as agent and trustee for
the Finance Parties (as defined in the Credit Agreement
defined below).
BACKGROUND:
(A) The Chargor enters into this Deed in connection with the
Credit Agreement (as defined below).
(B) It is intended that this document takes effect as a deed
notwithstanding the fact that a party may only execute
this document under hand.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Deed:
"Account Bank"
means a person with whom a Security Account is maintained
under Clause 6 (Security Accounts).
"Credit Agreement"
means the 1,250,000,000 pounds credit agreement dated 17th
December, 1996 between (among others) the parties to this
Deed.
"Group Shares"
means any shares in any member of the Group from time to
time held by the Chargor or a nominee on its behalf,
including the shares of the Chargor in the Target.
"Receiver"
means a receiver and manager or (if the Agent so
specifies in the relevant appointment) a receiver, in
either case, appointed under this Deed.
"Related Rights"
means:
(a) any dividend or interest paid or payable in relation
to any Shares;
(b) any stocks, shares, securities, rights, moneys or
property accruing or offered at any time in relation
to any Shares by way of redemption, substitution,
exchange, bonus or preference, under option rights
or otherwise; and
(c) all dividends, interest or other income in respect
of any such asset as is referred to in paragraph (b)
above.
"Secured Liabilities"
means all present and future obligations and liabilities
(whether actual or contingent and whether owed jointly or
severally or in any other capacity whatsoever) of the
Borrowers to any Finance Party under the Finance
Documents except for any obligation which, if it were so
included, would result in this Deed contravening Section
151 of the Companies Act 1985. The term "Finance
Document" includes all amendments and supplements.
"Security Account"
means an account of the Chargor established under
Clause 6 (Security accounts).
"Security Assets"
means all assets of the Chargor the subject of any
security created by this Deed.
"Security Period"
means the period beginning on the date of this Deed and
ending on the date on which the Agent is satisfied that
all the Secured Liabilities have been unconditionally and
irrevocably paid and discharged in full.
"Shares"
means the Group Shares, and any other stocks, shares,
debentures, bonds or other securities and investments
held by the Chargor.
1.2 Construction
(a) Capitalised terms defined in the Credit Agreement have,
unless expressly defined in this Deed, the same meaning
in this Deed.
(b) The provisions of Clause 1.2 of the Credit Agreement
apply to this Deed as though they were set out in full in
this Deed except that references to the Credit Agreement
are to be construed as references to this Deed.
(c) If the Agent (acting reasonably) considers that an amount
paid by any Borrower to a Finance Party under a Finance
Document is capable of being avoided or otherwise set
aside on the liquidation or administration of that
Borrower or otherwise, then that amount shall not be
considered to have been irrevocably paid for the purposes
of this Deed.
(d) A reference in this Deed to any assets includes, unless
the context otherwise requires, present and future
assets.
2. FIXED SECURITY
The Chargor, as beneficial owner and as security for the
payment of all the Secured Liabilities, charges in favour
of the Agent:-
(a) by way of a first equitable mortgage all Shares held
by it and/or any nominee on its behalf and all
Related Rights accruing to the Shares; and
(b) by way of first fixed charge:-
(i) (to the extent not effectively mortgaged under
paragraph (a) above) its interest in all the
Shares and their Related Rights;
(ii) to the fullest extent permitted by law, all
moneys standing to the credit of any account
(including the Security Accounts) with any
person and the debts represented by them;
(iii) all of the Chargor's book and other debts,
the proceeds of the same and all other moneys
due and owing to the Chargor and the benefit of
all rights, securities and guarantees of any
nature enjoyed or held by it in relation to any
of the foregoing; and
(iv) to the extent that they are able to be the
subject of any Security Interest, the benefit
of all licences, consents and authorisations
(statutory or otherwise) held in connection
with its business or the use of any Security
Asset specified in any other sub-paragraph in
this Clause and the right to recover and
receive all compensation which may be payable
to it in respect of them.
The Agent may convert the equitable mortgage created in
paragraph (a) above into a legal mortgage if a Default is
outstanding. The mortgages and charges created by this
Clause 2 are made with full title guarantee.
3. FLOATING CHARGE
3.1 Creation of floating charge
The Chargor, as beneficial owner and as security for the
payment of all of the Secured Liabilities, charges in
favour of the Agent by way of a first floating charge all
its assets not otherwise effectively mortgaged or charged
by way of fixed mortgage or charge by Clause 2 (Fixed
Security).
3.2 Conversion
The Agent may by notice to the Chargor convert the
floating charge created by this Deed into a fixed charge
as regards all or any of the Chargor's assets specified
in the notice if:
(a) an Event of Default is outstanding; or
(b) the Agent considers those assets to be in danger of
being seized or sold under any form of distress,
attachment, execution or other legal process or to
be otherwise in jeopardy.
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and warranties
The Chargor makes the representations and warranties set
out in this Clause 4 to each Finance Party.
4.2 Security
This Deed creates those Security Interests it purports to
create and is not liable to be avoided or otherwise set
aside on the liquidation or administration of the Chargor
or otherwise.
4.3 Shares
The Shares are fully paid and the Chargor is the sole
beneficial owner of them, free from any Security Interest
or option.
4.4 Times for making representations and warranties
The representations and warranties set out in this
Clause 4 are made on the date of this Deed and are deemed
to be repeated by the Chargor on each date during the
Security Period with reference to the facts and
circumstances then existing.
5. UNDERTAKINGS
5.1 Duration
The undertakings in this Clause 5 remain in force
throughout the Security Period.
5.2 Restrictions on dealing
The Chargor shall not (except as permitted under the
Credit Agreement):-
(a) create or permit to subsist any Security Interest on
any Security Asset other than any Security Interest
created by this Deed; or
(b) sell, transfer, grant, or lease or otherwise dispose
of any Security Asset, except for the disposal in
the ordinary course of trade of any Security Asset
subject to the floating charge created under
Clause 3.1 (Creation of floating charge).
5.3 Book debts and receipts
The Chargor shall:-
(a) get in and realise the Chargor's:
(i) securities to the extent held by way of
temporary investment; and
(ii) book and other debts and other moneys,
in the ordinary course of its business and hold the
proceeds of the getting in and realisation (until
payment into a Security Account if required in
accordance with paragraph (b) below) upon trust for
the Agent; and
(b) save to the extent that the Agent otherwise agrees,
pay the proceeds of the getting in and realisation
into a Security Account.
5.4 Notice to bank operating an account
The Chargor will give notice to any bank (other than the
Agent) operating an account of the Chargor on the date of
this Deed or (if later) the date the account is opened,
substantially in the form of Schedule 1, and shall use
its reasonable endeavours to procure that the relevant
bank acknowledges the notice substantially in the form of
Schedule 2.
5.5 Deposit of Shares
The Chargor shall:-
(a) deposit with the Agent, or as the Agent may direct,
all certificates, bearer instruments, and other
documents of title or evidence of ownership in
relation to the Shares and their Related Rights; and
(b) execute and deliver to the Agent all share transfers
and other documents which may be requested by the
Agent in order to enable the Agent or its nominees
to be registered as the owner or otherwise obtain a
legal title to the Shares and their Related Rights.
6. SECURITY ACCOUNTS
6.1 Accounts
All Security Accounts must be maintained at a branch of
the Account Bank approved by the Agent. The initial
Account Bank is the Agent.
6.2 Change of Account Bank
(a) The Account Bank may be changed to another bank or
financial institution if the Agent so requires.
(b) A change only becomes effective upon the proposed new
Account Bank agreeing with the Agent and the Chargor, in
a manner satisfactory to the Agent, to fulfil the role of
the Account Bank under this Deed.
(c) In the event of a change of Account Bank, the amount (if
any) standing to the credit of the Security Accounts
maintained with the old Account Bank shall be transferred
to the corresponding Security Accounts maintained with
the new Account Bank forthwith upon the appointment
taking effect. The Chargor shall take any action which
the Agent may require to facilitate a change of Account
Bank and any transfer of credit balances (including the
execution of bank mandate forms).
6.3 Interest
Amounts standing to the credit of each Security Account
shall bear interest at a rate considered by the Account
Bank to be a fair market rate.
6.4 Withdrawals
(a) Except with the prior consent of the Agent, the Chargor
shall not withdraw any moneys standing to the credit of a
Security Account except for a purpose not prohibited by
the Credit Agreement at a time when the security
constituted by this Deed is not enforceable or has not
been enforced.
(b) The Agent (or a Receiver) may (subject to the payment of
any claims having priority to this security) withdraw
amounts standing to the credit of a Security Account to
meet an amount due and payable under the Finance
Documents when it is due and payable.
7. WHEN SECURITY BECOMES ENFORCEABLE
The security constituted by this Deed shall become
immediately enforceable upon the occurrence of an Event
of Default and the power of sale, shall be immediately
exerciseable upon and at any time after the occurrence of
any Event of Default. After the security constituted by
this Deed has become enforceable, the Agent may in its
absolute discretion enforce all or any part of the
security in any manner it sees fit or as the Majority
Banks direct.
8. ENFORCEMENT OF SECURITY
8.1 General
For the purposes of all powers implied by statute, the
Secured Liabilities are deemed to have become due and
payable on the date of this Deed and section 103 and
section 93 of the Law of Property Act 1925 shall not
apply to the security constituted by this Deed.
8.2 Shares
After the security constituted by this Deed has become
enforceable, the Agent may exercise (in the name of the
Chargor and without any further consent or authority on
the part of the Chargor) any voting rights and any powers
or rights which may be exercised by the person or persons
in whose name any Share and its Related Rights are
registered or who is the holder of any of them or
otherwise (including all the powers given to trustees by
Section 10(3) and (4) of the Trustee Act, 1925 as amended
by Section 9 of the Trustee Investment Act, 1961 in
respect of securities or property subject to a trust).
Until that time, the voting rights, powers and other
rights in respect of the Shares shall (if exercisable by
the Agent) be exercised in any manner which the Chargor
may direct in writing.
8.3 Contingencies
If the Agent enforces the security constituted by this
Deed at a time when no amounts are due under the Finance
Documents but at a time when amounts may or will become
so due, the Agent (or the Receiver) may pay the proceeds
of any recoveries effected by it into a Security Account.
8.4 No liability as mortgagee in possession
Neither the Agent nor any Receiver will be liable, by
reason of entering into possession of a Security Asset,
to account as mortgagee in possession or for any loss on
realisation or for any default or omission for which a
mortgagee in possession might be liable.
8.5 Agent of the Chargor
Each Receiver is deemed to be the agent of the Chargor
for all purposes and accordingly is deemed to be in the
same position as a Receiver duly appointed by a mortgagee
under the Law of Property Act 1925. The Chargor alone
shall be responsible for his contracts, engagements,
acts, omissions, defaults and losses and for liabilities
incurred by him and no Finance Party shall incur any
liability (either to the Chargor or to any other person)
by reason of the Agent making his appointment as a
Receiver or for any other reason.
8.6 Protection of third parties
No person (including a purchaser) dealing with the Agent
or a Receiver or its or his agents will be concerned to
enquire:-
(a) whether the Secured Liabilities have become payable;
or
(b) whether any power which the Agent or the Receiver is
purporting to exercise has become execrable; or
(c) whether any money remains due under the Finance
Documents; or
(d) how any money paid to the Agent or to the Receiver
is to be applied.
8.7 Redemption of prior mortgages
At any time after the security constituted by this Deed
has become enforceable, the Agent may:-
(a) redeem any prior Security Interest against any
Security Asset; and/or
(b) procure the transfer of that Security Interest to
itself; and/or
(c) settle and pass the accounts of the prior mortgagee,
chargee or encumbrancer; any accounts so settled and
passed shall be conclusive and binding on the
Chargor.
All principal moneys, interest, costs, charges and
expenses of and incidental to any such redemption and/or
transfer shall be paid by the Chargor to the Agent on
demand.
9. RECEIVER
9.1 Appointment of Receiver
At any time after the security constituted by this Deed
becomes enforceable or, if the Chargor so requests the
Agent in writing, at any time, the Agent may without
further notice appoint under seal or in writing under its
hand any one or more persons to be a Receiver of all or
any part of the Security Assets in like manner in every
respect as if the Agent had become entitled under the Law
of Property Act 1925 to exercise the power of sale
conferred under the Law of Property Act 1925.
9.2 Removal
The Agent may by writing under its hand (subject to any
requirement for an order of the court in the case of an
administrative receiver) remove any Receiver appointed by
it and may, whenever it deems it expedient, appoint a new
Receiver in the place of any Receiver whose appointment
may for any reason have terminated.
9.3 Remuneration
The Agent may fix the remuneration of any Receiver
appointed by it.
9.4 Relationship with Agent
To the fullest extent permitted by law, any right, power
or discretion conferred by this Deed (either expressly or
impliedly) upon a Receiver of the Security Assets may
after the security created by this Deed becomes
enforceable be exercised by the Agent in relation to any
Security Asset without first appointing a Receiver or
notwithstanding the appointment of a Receiver.
10. POWERS OF RECEIVER
10.1 General
(a) Each Receiver has, and is entitled to exercise, all of
the rights, powers and discretions set out below in this
Clause 10 in addition to those conferred by the Law of
Property Act 1925 on any receiver appointed under the Law
of Property Act 1925.
(b) If there is more than one Receiver holding office at the
same time, each Receiver may (unless the document
appointing him states otherwise) exercise all of the
powers conferred on a Receiver under this Deed
individually and to the exclusion of any other Receivers.
(c) A Receiver who is an administrative receiver of the
Chargor has all the rights, powers and discretions of an
administrative receiver under the Insolvency Act 1986.
10.2 Possession
A Receiver may take immediate possession of, get in and
collect any Security Assets.
10.3 Carry on business
A Receiver may carry on the business of the Chargor as he
thinks fit.
10.4 Protection of assets
A Receiver may do all acts as he may think fit which the
Chargor might do in the ordinary conduct of its business
as well for the protection as for the improvement of the
Security Assets.
10.5 Employees
A Receiver may appoint and discharge managers, officers,
agents, accountants, servants, workmen and others for the
purposes of this Deed upon such terms as to remuneration
or otherwise as he may think proper and discharge any
such persons appointed by the Chargor.
10.6 Borrow money
A Receiver may raise and borrow money either unsecured or
on the security of any Security Asset either in priority
to the security constituted by this Deed or otherwise and
generally on any terms and for whatever purpose which he
thinks fit. No person lending that money is concerned to
enquire as to the propriety or purpose of the exercise of
that power or to check the application of any money so
raised or borrowed.
10.7 Sale of assets
A Receiver may sell, exchange, convert into money and
realise any Security Asset by public auction or private
contract and generally in any manner and on any terms
which he thinks proper. The consideration for any such
transaction may consist of cash, debentures or other
obligations, shares, stock or other valuable
consideration and any such consideration may be payable
in a lump sum or by instalments spread over such period
as he thinks fit.
10.8 Compromise
A Receiver may settle, adjust, refer to arbitration,
compromise and arrange any claims, accounts, disputes,
questions and demands with or by any person who is or
claims to be a creditor of the Chargor or relating in any
way to any Security Asset.
10.9 Legal Actions
A Receiver may bring, prosecute, enforce, defend and
abandon all actions, suits and proceedings in relation to
any Security Asset which may seem to him to be expedient.
10.10 Receipts
A Receiver may give valid receipts for all moneys and
execute all assurances and things which may be proper or
desirable for realising any Security Asset.
10.11 Subsidiaries
A Receiver may form a Subsidiary of the Chargor and
transfer to that Subsidiary any Security Asset.
10.12 Delegation
A Receiver may delegate his powers in accordance with
Clause 14 (Delegation).
10.13 Other powers
A Receiver may:-
(a) do all other acts and things which he may consider
desirable or necessary for realising any Security
Asset or incidental or conducive to any of the
rights, powers or discretions conferred on a
Receiver under or by virtue of this Deed; and
(b) exercise in relation to any Security Asset all the
powers, authorities and things which he would be
capable of exercising if he were the absolute
beneficial owner of the same,
and may use the name of the Chargor for any of the above
purposes.
11. SET OFF
The Agent may, at any time after this Deed has become
enforceable, without notice to or making demand on the
Chargor and whether or not all or any of the Secured
Liabilities have matured:
(a) set off any of the Secured Liabilities against any
liability (whether or not matured) owed by the Agent
to the Chargor in respect of any moneys in the
Security Accounts regardless of the place or
payment, booking branch or currency of either
obligation; and/or
(b) debit any account of the Chargor (whether sole or
joint) with the Agent at any of its offices anywhere
(including an account opened specially for that
purpose) with all or any part of the Secured
Liabilities; and/or
(c) apply any moneys in a Security Account in or towards
the payment or discharge of the Secured Liabilities.
12. APPLICATION OF PROCEEDS
Any moneys received by the Agent or any Receiver after
this Deed has become enforceable shall be applied in the
following order of priority (but without prejudice to the
right of any Finance Party to recover any shortfall from
the Chargor):
(a) in satisfaction of or provision for all costs and
expenses incurred by the Agent or any Receiver and
of all remuneration due to the Receiver under this
Deed;
(b) in or towards payment of the Secured Liabilities or
such part of them as is then due and payable; and
(c) in payment of the surplus (if any) to the Chargor or
other person entitled to it.
13. EXPENSES AND INDEMNITY
The Chargor shall forthwith on demand pay all costs and
expenses (including legal fees) incurred in connection
with this Deed by any Finance Party, Receiver, attorney,
manager, agent or other person appointed by the Agent
under this Deed, and keep each of them indemnified
against any failure or delay in paying the same.
14. DELEGATION
The Agent and any Receiver may delegate by power of
attorney or in any other manner to any person any right,
power or discretion exercisable by them under this Deed.
Any such delegation may be made upon the terms (including
power to sub-delegate) and subject to any regulations
which the Agent or that Receiver (as the case may be) may
think fit. Neither the Agent nor any Receiver will be in
any way liable or responsible to the Chargor for any loss
or liability arising from any act, default, omission or
misconduct on the part of any such delegate or sub-
delegate.
15. FURTHER ASSURANCES
The Chargor shall, at its own expense, take whatever
action the Agent or a Receiver may reasonably require
for:-
(a) perfecting or protecting the security intended to be
created by this Deed over any Security Asset;
(b) facilitating the realisation of any Security Asset,
or the exercise of any right, power or discretion
exercisable, by the Agent or any Receiver or any of
its or their delegates or sub-delegates in respect
of any Security Asset,
including the execution of any transfer, conveyance,
assignment or assurance of any property whether to the
Agent or to its nominees, and the giving of any notice,
order or direction and the making of any registration,
which, in any such case, the Agent may think expedient.
16. POWER OF ATTORNEY
The Chargor, by way of security, irrevocably and
severally appoints the Agent, each Receiver and any of
their delegates or sub-delegates to be its attorney to
take any action which the Chargor is obliged to take
under this Deed, including under Clause 15 (Further
Assurances). The Chargor ratifies and confirms whatever
any attorney does or purports to do pursuant to its
appointment under this Clause.
17. MISCELLANEOUS
17.1 Covenant to pay
The Chargor shall pay or discharge the Secured
Liabilities in the manner provided for in the Finance
Documents.
17.2 Continuing security
The security constituted by this Deed is continuing and
will extend to the ultimate balance of all the Secured
Liabilities, regardless of any intermediate payment or
discharge in whole or in part.
17.3 Additional security
The security constituted by this Deed is in addition to
and is not in any way prejudiced by any other security
now or subsequently held by any Finance Party for any
Secured Liability.
17.4 Tacking
Each Bank shall perform its obligations under the Credit
Agreement (including any obligation to make available
further advances).
17.5 New Accounts
If a Finance Party receives, or is deemed to be affected
by, notice, whether actual or constructive, of any
subsequent charge or other interest affecting any
Security Asset and/or the proceeds of sale of any
Security Asset, the Finance Party may open a new account
with the Chargor. If the Finance Party does not open a
new account, it shall nevertheless be treated as if it
had done so at the time when it received or was deemed to
have received notice. As from that time all payments made
to the Finance Party will be credited or be treated as
having been credited to the new account and will not
operate to reduce any amount for which this Deed is
security.
17.6 Time deposits
Without prejudice to any right of set-off any Finance
Party may have under any other Finance Document or
otherwise, if any time deposit matures on any account the
Chargor has with any Finance Party at a time within the
Security Period when:
(a) this security has become enforceable; and
(b) no amount of the Secured Liabilities is due and
payable,
that time deposit shall automatically be renewed for any
further maturity which that Finance Party considers
appropriate.
18. RELEASE
Upon the expiry of the Security Period (but not
otherwise), the Finance Parties shall, at the request and
cost of the Chargor, take whatever action is necessary to
release the Security Assets from the security constituted
by this Deed.
19. GOVERNING LAW
This Deed is governed by English law.
This Deed has been entered into as a deed on the date stated
at the beginning of this Deed.
<PAGE>
SCHEDULE 1
Form of notice of the Account Bank
To: [ ]
[ ], 199[ ]
Dear Sirs,
We give you notice that, by a Debenture dated 17th December,
1996, Entergy Power UK PLC charged (by way of a first fixed
and floating charge) to ABN AMRO Bank N.V. (as agent and
trustee) (the "Agent") all moneys (including interest) from
time to time standing to the credit of certain bank accounts
(the "Accounts") and the debt or debts represented thereby.
We irrevocably instruct and authorise you to disclose to the
Agent without any reference to or further authority from us
and without any inquiry by you as to the justification for the
disclosure, any information relating to any of the Accounts
maintained with you from time to time as the Agent may, at any
time and from time to time, request you to disclose to it.
This letter is governed by English law.
Would you please confirm your agreement to the above by
sending the enclosed acknowledgement to the Agent with a copy
to ourselves.
Yours faithfully,
................................
(Authorised signatory)
Entergy Power UK PLC
<PAGE>
SCHEDULE 2
Form of acknowledgement of the Account Bank
To: ABN AMRO Bank N.V.
For the attention of: [ ]
[relevant address applying under
Clause 34 (Notices) of the Credit Agreement]
[ ], 199[ ]
Dear Sirs,
We confirm receipt from Entergy Power UK PLC (the "Company")
of a notice dated [ ] of a
charge upon the terms of a Debenture dated 17th December, 1996
of all moneys (including interest) from time to time standing
to the credit of certain bank accounts of the Company (the
"Accounts") and the debt or debts represented thereby.
We confirm that we have not received notice of the interest of
any third party in any of the Accounts maintained with us.
We confirm that until you give us notice in writing that the
assets assigned to you under the Debenture have been released
and reassigned to the Company, we do not have and will not
make or exercise, any claims or demands, any rights of
counterclaim, rights of set-off or any other equities against
the Company in respect of the Accounts maintained with us.
This letter is governed by English law.
Yours faithfully,
.................................
[ ]
<PAGE>
SIGNATORIES TO THE DEBENTURE
THE COMMON SEAL of )
ENTERGY POWER UK PLC was )
affixed to this deed in the )
presence of )
Director
Director/Secretary
The Agent
ABN AMRO BANK N.V.
By:
<PAGE>
SCHEDULE 8
FORM OF LEGAL OPINIONS OF ALLEN & OVERY
PART I
TO BE DELIVERED BEFORE THE FIRST LOAN
To: The Finance Parties
(as defined in the
Credit Agreement defined below)
Dear Sirs,
Entergy Power UK PLC(the "Company") - 1,250,000,000 pounds Credit
Agreement
dated 17th December, 1996 (the "Credit Agreement")
We have received instructions from and participated in
discussions with the Arrangers in connection with the Credit
Agreement.
Terms defined in the Credit Agreement have the same meaning in
this opinion. The Credit Agreement and the Debenture is each
called an "Agreement". "Security Assets" has, in relation to
the Debenture, the meaning given to it in the Debenture
For the purposes of this opinion we have examined the
following documents:-
(a) a signed copy of the Credit Agreement;
(b) an executed copy of the Debenture dated
[ ] between the Company
and the Agent;
(c) a certified copy of the memorandum and articles of
association and certificate of incorporation of the
Company; and
(d) a certified copy of the minutes of a meeting of the board
of directors of the Company dated [ ].
On [ ] December, 1996, we carried out a search of the
Company at the Companies Registry. On [ ] December,
1996 we made a telephone search of the Company at the winding-
up petitions at the Companies court.
The above are the only documents or records we have examined,
and the only searches and enquiries we have carried out, for
the purposes of this opinion.
We assume that:-
(i) the Company is not unable to pay its debts within the
meaning of section 123 of the Insolvency Act, 1986 at the
time it enters into an Agreement and will not as a
consequence of either Agreement be unable to pay its
debts within the meaning of that section;
(ii) no step has been taken to wind up the Company or appoint
a receiver in respect of it or any of its assets,
although the searches referred to above give no
indication that any winding-up order or appointment of a
receiver has been made;
(iii)all signatures and documents are genuine;
(iv) all documents are and remain up-to-date;
(v) the correct procedure was carried out at the board
meeting referred to in paragraph (d) above; for example,
there was a valid quorum, all relevant interests of
directors were declared and the resolutions were duly
passed at the meeting; and
(vi) each Agreement is a legally binding, valid and
enforceable obligation of each party to it other than the
Company.
Subject to the qualifications set out below and to any matters
not disclosed to us, it is our opinion that, so far as the
present laws of England are concerned:-
(1) Status: The Company is a company incorporated with
limited liability under the laws of England and is not in
liquidation.
(2) Powers and authority: The Company has the corporate power
to enter into and perform the Agreements and has taken
all necessary corporate action to authorise the
execution, delivery and performance of the Agreements.
(3) Legal validity: Each Agreement constitutes the Company's
legally binding, valid and enforceable obligation.
(4) Non-conflict: The execution, delivery and performance by
the Company of each Agreement will not violate any
provision of (i) any existing English law applicable to
companies generally, or (ii) the memorandum or articles
of association of the Company.
(5) Consents: No authorizations of governmental, judicial or
public bodies or authorities in England are required by
the Company in connection with the performance, validity
or enforceability of either Agreement.
(6) Taxes: All payments due from the Company under the Credit
Agreement may be made without deduction of any United
Kingdom taxes, if, in the case of any interest, the
person which made the part of the Loan to which the
interest relates was, at the time of the making of the
Loan, a "bank" as defined in section 840A of the Income
and Corporation Taxes Act 1988 and the recipient of the
interest is within the charge to United Kingdom
corporation tax as regards that interest.
(7) Registration requirements: Except for registration of the
Debenture at Companies House under section 395 of the
Companies Act 1985, it is not necessary or advisable to
file, register or record either Agreement in any public
place or elsewhere in England.
(8) Stamp duties: No stamp, registration or similar tax or
charge is payable in England in respect of either
Agreement.
(9) Security: Subject to due registration where required, the
Debenture creates security interests in the Security
Assets concerned.
This opinion is subject to the following qualifications:-
(i) This opinion is subject to all insolvency and other laws
affecting the rights of creditors or secured creditors
generally.
(ii) No opinion is expressed on matters of fact.
(iii)We assume that no foreign law affects the
conclusions stated above.
(iv) No opinion is expressed as to:
(a) the title of the Company to any Security Asset; or
(b) the priority of any security created or to be
created by the Debenture; or
(c) the nature of the security created by the Debenture
(whether fixed or floating); or
(d) the marketability of, or rights of enforcement over,
the Security Assets.
These matters are too lengthy to cover in this letter.
(v) It may not be possible to create a valid security
interest over a bank account in favour of the bank with
which the account is maintained.
(vi) The term "enforceable" means that a document is of a type
and form enforced by the English courts. It does not
mean that each obligation will be enforced in accordance
with its terms. Certain rights and obligations may be
qualified by the non-conclusivity of certificates,
doctrines of good faith and fair conduct, the
availability of equitable remedies and other matters, but
in our view these qualifications would not defeat your
legitimate expectations in any material respect.
This opinion is given for the sole benefit of the Finance
Parties as at the date of this opinion (and their professional
advisers) and may not be relied upon by or disclosed to any
other person.
Yours faithfully
<PAGE>
PART II
TO BE DELIVERED IN RESPECT OF THE TARGET
To: The Finance Parties
(as defined in the
Credit Agreement defined below)
Dear Sirs,
Entergy Power UK PLC (the "Company")/London Electricity plc
(the "Target") - 1,250,000,000 pounds Credit Agreement dated 17th
December, 1996 (the "Credit Agreement")
We have received instructions from and participated in
discussions with the Agent in connection with the Credit
Agreement.
Terms defined in the Credit Agreement have the same meaning in
this opinion.
For the purposes of this opinion we have examined the
following documents:-
(a) a signed copy of the Credit Agreement;
(b) a copy of the Borrower Accession Agreement dated
[ ] and executed by the
Target;
(c) a certified copy of the memorandum and articles of
association and certificate of incorporation of the
Target; and
(d) a certified copy of the minutes of a meeting of the board
of directors of the Target dated [ ].
On [ ], 199[ ], we carried out a
search of the Target at the Companies Registry. On
[ ], 199[ ] we made a telephone
search of the Target at the winding-up petitions at the
Companies court.
The above are the only documents or records we have examined,
and the only searches and enquiries we have carried out, for
the purposes of this opinion.
We assume that:-
(i) no step has been taken to wind up the Target or appoint a
receiver in respect of it or any of its assets, although
the searches referred to above give no indication that
any winding-up order or appointment of a receiver has
been made;
(ii) all signatures and documents are genuine;
(iii)all documents are and remain up-to-date;
(iv) the correct procedure was carried out at the board
meeting referred to in paragraph (d) above: for example,
there was a valid quorum, all relevant interests of
directors were declared and the resolutions were duly
passed at the meeting; and
(v) the Credit Agreement is a legally binding, valid and
enforceable obligation of each party to it.
Subject to the qualifications set out below and to any matters
not disclosed to us, it is our opinion that, so far as the
present laws of England are concerned:-
(1) Status: The Target is a company incorporated with limited
liability under the laws of England and is not in
liquidation.
(2) Powers and authority: The Target has the corporate power
to enter into and perform the Agreements and has taken
all necessary corporate action to authorise the
execution, delivery and performance of the Credit
Agreement.
(3) Legal validity: The Credit Agreement constitutes the
Target's legally binding, valid and enforceable
obligation.
(4) Non-conflict: The execution, delivery and performance by
the Target of the Borrower Accession Agreement and the
Credit Agreement will not violate any provision of
(i) any existing English law applicable to companies
generally, or (ii) the memorandum or articles of
association of the Target.
(5) Consents: No authorizations of governmental, judicial or
public bodies or authorities in England are required by
the Target in connection with the performance, validity
or enforceability of the Borrower Accession Agreement or
the Credit Agreement.
(6) Taxes: All payments due from the Target under the Credit
Agreement may be made without deduction of any United
Kingdom taxes, if, in the case of any interest, the
person which made the part of the Loan to which the
interest relates was, at the time of the making of the
Loan, a "bank" as defined in section 840A of the Income
and Corporation Taxes Act 1988 and the recipient of the
interest is within the charge to United Kingdom
corporation tax as regards that interest.
(7) Registration requirements: It is not necessary or
advisable to file, register or record the Borrower
Accession Agreement in any public place or elsewhere in
England.
(8) Stamp duties: No stamp, registration or similar tax or
charge is payable in England in respect of the Borrower
Accession Agreement.
This opinion is subject to the following qualifications:-
(i) This opinion is subject to all insolvency and other laws
affecting the rights of creditors generally.
(ii) No opinion is expressed on matters of fact.
(iii)We assume that no foreign law affects the conclusions
stated above.
(iv) The term "enforceable" means that a document is of a type
and form enforced by the English courts. It does not
mean that each obligation will be enforced in accordance
with its terms. Certain rights and obligations may be
qualified by the non-conclusivity of certificates,
doctrines of good faith and fair conduct, the
availability of equitable remedies and other matters, but
in our view these qualifications would not defeat your
legitimate expectations in any material respect.
This opinion is given for the sole benefit of the Finance
Parties as at the date of this opinion (and their professional
advisers) and may not be relied upon by or disclosed to any
other person.
Yours faithfully
<PAGE>
SCHEDULE 9
FORM OF SUBORDINATION AGREEMENT
DATED [ ] , 199[ ]
BETWEEN
ENTERGY POWER UK PLC
-and-
THE JUNIOR CREDITOR
(as defined in this Deed)
-and-
ABN AMRO BANK N.V.
as Security Agent
_________________________________
SUBORDINATION AGREEMENT
relating to a 1,250,000,000 pounds
credit agreement dated 17th December, 1996
between ENTERGY POWER UK PLC and others
__________________________________
London
<PAGE>
TABLE OF CONTENTS
Clause
Page
1. Interpretation 134
2. The Company's undertakings 136
3. Junior Creditor's undertakings 136
4. Turnover of non-permitted recoveries 137
5. Subordination on insolvency 137
6. Consents 138
7. Representations and warranties 138
8. Subrogation by the Junior Creditor 138
9. Protection of subordination 139
10. Preservation of Junior Debt 140
11. Changes to the parties 140
12. Miscellaneous 140
13. Indemnity 141
14. Waivers; remedies cumulative 141
15. Severability 141
16. Governing law 136
Signatories 142
<PAGE>
THIS SUBORDINATION AGREEMENT is dated [ ],
1996 between:
(1) [ ] (the
"Junior Creditor");
(2) ENTERGY POWER UK PLC (Registered No. 3261188)(the
"Company"); and
(3) ABN AMRO BANK N.V. (the "Agent") as agent and trustee for
the Finance Parties.
BACKGROUND:
(A) By the Credit Agreement the Banks have agreed to make
available a credit facility of up to 1,250,000,000 pounds
to the Borrowers.
(B) The Junior Creditor has agreed to subordinate all amounts
payable under the Junior Finance Documents on the terms
of this Deed.
(C) It is intended that this document takes effect as a deed
notwithstanding the fact that a party may only execute
this document under hand.
1. INTERPRETATION
1.1 Definitions
In this Deed:
"Credit Agreement"
means the agreement dated 17th December, 1996 between
(among others) the Borrowers and the Agent for a credit
facility of up to 1,250,000,000 pounds.
"Junior Debt"
means all present and future liabilities (actual or
contingent) payable or owing to the Junior Creditor by
the Company under or in connection with the Junior
Finance Documents relating thereto together with:
(a) any permitted novation, deferral or extension of any
of those liabilities;
(b) any further advances which may be made by the Junior
Creditor to the Company under any agreement
expressed to be supplemental to any Junior Finance
Document plus all interest, fees and costs in
connection therewith;
(c) any claim for damages or restitution in the event of
rescission of any of those liabilities or otherwise
in connection with the Junior Finance Documents;
(d) any claim against the Company flowing from any
recovery by the Company of a payment or discharge in
respect of those liabilities on grounds of
preference or otherwise; and
(e) any amounts (such as post-insolvency interest) which
would be included in any of the above for any
discharge, non-provability, unenforceability or non-
allowability of the same in any insolvency or other
proceedings.
"Junior Finance Documents"
means [specify debt document] and all variations,
replacements, novations of and supplements thereto.
"Majority Banks"
has the meaning given to it in the Credit Agreement.
"Senior Debt"
means all present and future liabilities (actual or
contingent) payable or owing by any Borrower to the
Finance Parties under or in connection with the Finance
Documents together with:
(a) any refinancing, novation, refunding, deferral or
extension of any of those liabilities;
(b) any further advances which may be made by the
Finance Parties to any Borrower under any agreement
expressed to be supplemental to any Finance Document
plus all interest, fees and costs in connection
therewith;
(c) any claim for damages or restitution in the event of
rescission of any of those liabilities or otherwise
in connection with the Finance Documents;
(d) any claim against any Borrower flowing from any
recovery by such Borrower of a payment or discharge
in respect of those liabilities on grounds of
preference or otherwise; and
(e) any amounts (such as post-insolvency interest) which
would be included in any of the above for any
discharge, non-provability, unenforceability or
non-allowability of the same in any insolvency or
other proceedings.
"Senior Liabilities"
means all present and future obligations and liabilities
(whether actual or contingent and whether owned jointly
or severally or in any capacity whatsoever) of each
Borrower to any Finance Party under each Finance Document
to which such Borrower is a party.
1.2 Construction
(a) Capitalised terms defined in the Credit Agreement have,
unless expressly defined in this Deed, the same meaning
in this Deed.
(b) The provisions of Clause 1.2 of the Credit Agreement
apply to this Deed as though they were set out in full in
this Deed except that references to the Credit Agreement
are to be construed as references to this Deed.
(c) Any document, instrument or agreement shall be construed
as to include such document, instrument or agreement as
varied, amended, supplemented or novated from time to
time.
2. THE COMPANY'S UNDERTAKINGS
So long as any Senior Debt is outstanding and until the
Senior Liabilities have been irrevocably paid in full,
the Company will not except as permitted under the
Finance Documents (including, without limitation, Clause
19.15 (Distributions)) or except as the Agent, acting on
the instructions of the Majority Banks, has previously
consented:
(a) subject to Clause 5 (Subordination on Insolvency),
pay or repay or purchase or acquire, any of the
Junior Debt; or
(b) discharge any of the Junior Debt by set-off; or
(c) create or permit to subsist security over any of its
assets for any of the Junior Debt; or
(d) amend, vary, waive or release any term of the Junior
Finance Documents (other than any procedural or
administrative change or any other change which can
reasonably be expected not to prejudice any Senior
Debt or any Finance Party); or
(e) take or omit to take any action whereby the
subordination achieved by this Deed will be
impaired.
3. JUNIOR CREDITOR'S UNDERTAKINGS
So long as any Senior Debt is outstanding and until the
Senior Liabilities have been irrevocably paid in full,
except, as permitted under the Finance Documents or
except as the Agent (acting on the instructions of the
Majority Banks) has previously consented, the Junior
Creditor will:
(a) subject to Clause 5 (Subordination on insolvency),
not demand or receive payment of any of the Junior
Debt from the Company or any other source or apply
any money or assets in discharge of any Junior Debt;
(b) not discharge any of the Junior Debt by set-off;
(c) not permit to subsist or receive any security for
any of the Junior Debt;
(d) not permit to subsist or receive any guarantee or
other assurance against loss in respect of any of
the Junior Debt;
(e) not amend, vary, waive or release any term of the
Junior Finance Documents (other than any procedural
or administrative change or any other change which
can reasonably be expected not to prejudice any
Senior Debt or any Finance Party);
(f) promptly notify the Agent of any default or event of
default in respect of the Junior Debt;
(g) unless Clause 5 (Subordination on insolvency)
applies, not:
(i) declare any of the Junior Debt prematurely due
and payable;
(ii) enforce the Junior Debt by execution or
otherwise; or
(iii)initiate or take any steps with a view to any
insolvency, reorganisation or dissolution
proceedings in respect of the Company; and
(h) not take or omit to take any action whereby the
subordination achieved by this Deed may be impaired.
4. TURNOVER OF NON-PERMITTED RECOVERIES
4.1 Non-permitted payment
If, other than as permitted under the Finance Documents:
(a) the Junior Creditor receives a payment or
distribution in respect of any of the Junior Debt
from the Company or any other source; or
(b) the Junior Creditor receives the proceeds of any
enforcement of any security or any guarantee for any
Junior Debt; or
(c) the Company makes any payment or distribution to the
Junior Creditor on account of the purchase or other
acquisition of any of the Junior Debt,
the Junior Creditor will hold the same in trust for the
Finance Parties and pay and distribute it to the Agent
for application towards the Senior Debt until the Senior
Debt is irrevocably paid in full.
4.2 Non-permitted set-offs
If, other than as permitted under the Finance Documents,
for any reason, any of the Junior Debt is discharged by
set-off, the Junior Creditor will promptly pay an amount
equal to the discharge to the Agent for application
towards the Senior Debt until the Senior Debt is
irrevocably paid in full.
4.3 Failure of trust
If, for any reason, a trust in favour of, or a holding of
property for, the Finance Parties under this Deed is
invalid or unenforceable, the Junior Creditor will pay
and deliver to the Agent an amount equal to the payment,
receipt or recovery which the Junior Creditor would
otherwise have been bound to hold on trust for or as
property of the Finance Parties.
5. SUBORDINATION ON INSOLVENCY
If any of the events set out in Clauses 20.6 (Insolvency)
to 20.10 (Analogous proceedings) (inclusive) of the
Credit Agreement occurs THEN
(a) the Junior Debt will be subordinate in right of
payment to the Senior Debt;
(b) the Agent may, and is irrevocably authorised on
behalf of the Junior Creditor to, (i) claim, enforce
and prove for the Junior Debt, (ii) file claims and
proofs, give receipts and take all such proceedings
and do all such things as the Agent reasonably sees
fit to recover the Junior Debt and (iii) receive all
distributions on the Junior Debt for application
towards the Senior Debt;
(c) if and to the extent that the Agent is not entitled
to do any of the foregoing, the Junior Creditor will
do so in good time as reasonably directed by the
Agent;
(d) the Junior Creditor will hold all distributions in
cash or in kind received or receivable by it in
respect of the Junior Debt from the Company or from
any other source in trust for the Finance Parties
and will (at the Junior Creditor's expense) pay and
transfer the same to the Agent for application
towards the Senior Debt until the Senior Debt is
irrevocably paid in full; and
(e) the trustee in bankruptcy, liquidator, assignee or
other person distributing the assets of the Company
or their proceeds is directed to pay distributions
on the Junior Debt direct to the Agent for
application towards the Senior Debt until the Senior
Debt is irrevocably paid in full. The Junior
Creditor will give all such notices and do all such
things as the Agent may reasonably direct to give
effect to this provision.
6. CONSENTS
The Junior Creditor will not have any remedy against the
Company or other Borrower, the Agent or the Finance
Parties by reason of any transaction entered into between
the Agent and/or the Finance Parties and the Company
which violates any Junior Finance Document and the Junior
Creditor may not object to any such transaction by reason
of any provisions of the Junior Finance Documents.
7. REPRESENTATIONS AND WARRANTIES
The Junior Creditor represents and warrants to the Agent
and each Finance Party that this Deed:
(a) is within its powers and has been duly authorised by
it;
(b) constitutes its legal, valid and binding
obligations; and
(c) does not conflict in any material respect with any
law or regulation or its constitutional documents or
any document binding on it and that it has obtained
all necessary consents for its performance of this
Deed.
8. SUBROGATION BY THE JUNIOR CREDITOR
If any of the Senior Debt is wholly or partially paid out
of any proceeds received in respect of or on account of
the Junior Debt, the Junior Creditor will to that extent
be subrogated to the Senior Debt so paid but not before
all the Senior Debt is paid in full.
9. PROTECTION OF SUBORDINATION
9.1 Continuing subordination
The subordination provisions in this Deed constitute a
continuing subordination and benefit the ultimate balance
of the Senior Debt regardless of any intermediate payment
or discharge of the Senior Debt in whole or in part.
9.2 Waiver of defences
The subordination in this Deed and the obligations of the
Junior Creditor under this Deed will not be affected by
any act, omission, matter or thing which, but for this
provision, would reduce, release or prejudice the
subordination or any of those obligations in whole or in
part, including without limitation:
(a) any waiver granted to, or composition with, any
Borrower or other person;
(b) the taking, variation, compromise, exchange, renewal
or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security
over assets of, any Borrower or other person in
respect of the Senior Debt or otherwise or any
failure to realise the full value of any security;
(c) any unenforceability, illegality or invalidity of
any obligation of any Borrower or security in
respect of the Senior Debt or any other document or
security.
9.3 Immediate recourse
The Junior Creditor waives any right it may have of first
requiring any Finance Party (or the Agent or any trustee
or other agent on its behalf) to proceed against or
enforce any other rights or security or claim payment
from any person before claiming the benefit of this Deed.
The Agent may refrain from applying or enforcing any
money, rights or security unless and until instructed by
the Majority Banks. The Majority Banks may give or
refrain from giving instructions to the Agent to enforce
or refrain from enforcing any security as long as they
see fit.
9.4 Appropriations
Until the Senior Liabilities have been irrevocably paid
in full, the Agent may:
(a) apply any moneys or property received under this
Deed or from any Borrower or from any other person
against the Senior Debt in accordance with the terms
of the Credit Agreement;
(b) hold in an interest-bearing suspense account any
moneys or distributions received from the Junior
Creditors under Clause 4 (Turnover of non-permitted
recoveries) or Clause 5 (Subordination on
insolvency) or on account of the liability of the
Junior Creditor under this Deed.
9.5 Non-competition
Until the Senior Liabilities have been irrevocably paid
in full, the Junior Creditor will not by virtue of any
payment or performance by them under this Deed or by
virtue of the operation of Clauses 4 (Turnover of non-
permitted recoveries) or 5 (Subordination on insolvency):-
(a) be subrogated to any rights, security or moneys
held, received or receivable by any Finance Party
(or the Agent or any trustee or other agent on its
behalf) or be entitled to any right of contribution
or indemnity in respect of any payment made or
moneys received on account of the Junior Creditor's
liability under this Deed; or
(b) claim, rank, prove or vote as a creditor of any
Borrower or other person or their respective estates
in competition with any Finance Party (or the Agent
or any trustee or other agent on its behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any
Borrower or other person.
10. PRESERVATION OF JUNIOR DEBT
Notwithstanding any term of this Deed postponing,
subordinating or preventing the payment of any of the
Junior Debt, the Junior Debt concerned shall, solely as
between the Company and the Junior Creditor, remain owing
or due and payable in accordance with the terms of the
Junior Finance Documents, and interest and default
interest will accrue on missed payments accordingly.
11. CHANGES TO THE PARTIES
11.1 Successors and assigns
This Deed is binding on the successors and assigns of the
parties hereto.
11.2 The Company and the Junior Creditor
Neither the Company nor the Junior Creditor may assign or
transfer any of their rights or obligations under this
Deed without the consent of the Majority Banks.
11.3 The Agent and the Finance Parties
The Agent and the Finance Parties may assign or otherwise
dispose of all or any of their rights under this Deed in
accordance with the Senior Finance Documents to which
they are respectively a party.
12. MISCELLANEOUS
12.1 Perpetuity
The perpetuity period for the trusts in this Deed is 80
years.
12.2 Power of attorney
By way of security for the obligations of the Junior
Creditor under this Deed, the Junior Creditor irrevocably
appoints the Agent as its attorney to do anything which
the Junior Creditor is required to do by this Deed but
has failed to do, having been given 10 Business Day's
notice to rectify such non-compliance. The Agent may
delegate this power subject to the approval of the
Majority Banks.
13. INDEMNITY
(a) The Company will indemnify the Agent and every attorney
appointed by it in respect of all liabilities and
expenses reasonably incurred by it or him in good faith
in connection with the enforcement or preservation of any
rights in accordance with this Deed.
(b) The Agent shall not be liable for any losses arising in
connection with the exercise or purported exercise of any
of its rights, powers and discretions in good faith under
this Deed, unless that liability arises as a result of
the Agent's negligence or wilful default and in
particular (but without limitation) the Agent in
possession shall not be liable to account as mortgagee in
possession or for anything except actual receipts.
14. WAIVERS; REMEDIES CUMULATIVE
The rights of the Agent and the Finance Parties under
this Deed:
(a) may be exercised as often as necessary;
(b) are cumulative and are not exclusive of their rights
under the general law; and
(c) may be waived only in writing and specifically and
may be on such terms as the Agent or the Finance
Parties see fit.
15. SEVERABILITY
(a) If a provision of this Deed is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall
not affect:
(i) the validity or enforceability in that jurisdiction
of any other provision of this Deed; or
(ii) the validity or enforceability in other
jurisdictions of that or any other provision of this
Deed.
(b) This Deed may be executed in any number of counterparts,
all of which, taken together, shall constitute one and
the same instrument and any party may enter into this
Deed by executing a counterpart.
16. GOVERNING LAW
This Deed is governed by and shall be construed in
accordance with English law.
This Deed has been entered into on the date stated at the
beginning of this Deed.
<PAGE>
SIGNATORIES TO THE SUBORDINATION AGREEMENT
Senior Creditor
[ ]
By:
Company
ENTERGY POWER UK PLC
By:
Agent
ABN AMRO BANK N.V.
By:
<PAGE>
SIGNATORIES
Company
ENTERGY POWER UK PLC
By: LAWRENCE S. FOLKS
Arrangers and Banks
ABN AMRO BANK N.V.
By: C.M. MACDONALD J.P. CLIFFE
BANK OF AMERICA INTERNATIONAL LIMITED
By: WILLIAM M.F. BISHOP
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: SANJAY GUPTA
UNION BANK OF SWITZERLAND
By: FIONA H. KAPLAN SEAN MALONE
Agent
ABN AMRO BANK N.V.
By: C.M. MACDONALD J.P. CLIFFE
<PAGE>
CONFORMED COPY
SUPPLEMENTAL AGREEMENT
DATED 6th February, 1997
relating to a 1,250,000,000 pounds Credit
Agreement dated 17th December, 1996
for
ENTERGY POWER UK PLC
arranged by
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
UNION BANK OF SWITZERLAND
with
ABN AMRO BANK N.V.
as Agent
ALLEN & OVERY
London
<PAGE>
THIS AGREEMENT is dated 6th February, 1997 between:
(1) ENTERGY POWER UK PLC (Registered No. 3261188) (the
"Company");
(2) ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED
and UNION BANK OF SWITZERLAND as arrangers (in this
capacity the "Arrangers");
(3) ABN AMRO BANK N.V., BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION and UNION BANK OF SWITZERLAND as the
banks party to the Credit Agreement (as defined below) as
at today's date (the "Existing Banks");
(4) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as the
banks who wish to accede to the Credit Agreement as Banks
(the "New Banks"); and
(5) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the contrary intention appears
or the context otherwise requires:
"Credit Agreement"
means the Original Credit Agreement as amended pursuant
to Clause 4 (Nature of this Agreement) of this Agreement.
"Effective Date"
means 6th February, 1997.
"Original Credit Agreement"
means the Credit Agreement dated 17th December, 1996
between the Company, the Arrangers, the Existing Banks
and the Agent.
1.2 Incorporation of Original Credit Agreement
interpretations
(a) Terms defined in the Original Credit Agreement shall,
unless the contrary intention appears or the context
otherwise requires, have the same meaning in this
Agreement.
(b) Clauses 1.2 (Construction), 32 (Severability) and 33
(Counterparts) of the Original Credit Agreement shall
apply to this Agreement, as though they were set out in
full in this Agreement but as if references to the
Original Credit Agreement are to be construed as
references to this Agreement.
2. CONSENT AND CONFIRMATION
(a) The Company, the Arrangers, the Existing Banks and the
Agent each consent to the New Banks becoming Banks and
confirm that, except as expressly provided by the terms
of this Agreement, each of the Finance Documents shall
continue in full force and effect.
(b) It is acknowledged that the Guarantee will not be issued.
3. NOVATION
3.1 Novation of Commitments and related rights and
obligations
On the Effective Date (regardless of whether a Default is
then continuing):
(a) each New Bank will become a Bank under the Credit
Agreement with a Facility A Commitment, Facility B
Commitment and Facility C Commitment as set out
opposite its name in Schedule 2;
(b) each Existing Bank's Facility A Commitment,
Facility B Commitment and Facility C Commitment
shall be and be deemed to be reduced down to, the
respective amounts set out opposite its name in
Schedule 2; and
(c) each New Bank will automatically obtain and assume,
and undertakes to perform, all of the rights and
obligations of a Bank under and in respect of each
of the Finance Documents in respect of the rights
and obligations transferred to it under
paragraphs (a) and (b) above.
3.2 Amounts due on or before the Effective Date
(a) All amounts (if any) payable to an Existing Bank by the
Borrowers on or before the Effective Date (including,
without limitation, all interest and fees payable on the
Effective Date) in respect of any period ending prior to
the Effective Date shall be for the account of the
Existing Banks, and none of the New Banks shall have any
interest in, or any rights in respect of, any such
amounts.
(b) If any Facility A Loan or Facility C Loan falls to be
made on the Effective Date:
(i) the Agent will promptly notify each of the New Banks
of that fact (and the amount of its participation in
that Facility A Loan or Facility C Loan in
accordance with sub-paragraph (ii) below); and
(ii) each Existing Bank and each New Bank shall
participate in that Facility A Loan or Facility C
Loan (subject to the terms of the Credit Agreement)
as if the novation of the Facility A Commitments and
the Facility C Commitments under Clauses 3.1(a) and
(b) (Novation of Commitments and related rights and
obligations) of this Agreement had taken effect
prior to opening of business on the Business Day
before the Effective Date,
and the Company acknowledges that no Existing Bank will
be obliged to participate in any such Loan to any greater
extent.
3.3 Administrative details
Each New Bank has delivered to the Agent its initial
details for the purposes of Clause 34 (Notices) of the
Credit Agreement.
4. NATURE OF THIS AGREEMENT
The novation of Commitments and rights and obligations
contemplated by this Agreement shall take effect (in
accordance with its terms) as a novation so that:
(a) Schedule 2 to this Agreement is substituted for
Schedule 1 to the Credit Agreement on the Effective
Date; and
(b) Clause 28.3 (Procedure for novations) of the Credit
Agreement shall apply to the Commitments, rights and
obligations transferred, assumed and released under
Clause 3.1 (Novation of Commitments and related
rights and obligations) of this Agreement and to the
associated rights and obligations under the Finance
Documents, as if this Agreement were a Novation
Certificate.
5. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
<PAGE>
SCHEDULE 1
NEW BANKS
The Bank of New York
The Bank of Nova Scotia
The Bank of Tokyo-Mitsubishi, Ltd
Bayerische Landesbank Girozentrale, London Branch
CIBC Wood Gundy plc
Credit Lyonnais
The Dai-Ichi Kangyo Bank, Limited
Den Danske Bank Aktieselskab
The Fuji Bank, Limited
The Industrial Bank of Japan, Limited
Midland Bank PLC
Rabobank, London Branch
The Royal Bank of Scotland plc
The Sanwa Bank, Limited
Societe Generale
The Toronto-Dominion Bank
Union Bank of California, N.A.
Westdeutche Landesbank Girozentrale London Branch
<PAGE>
SCHEDULE 2
BANKS AND COMMITMENTS
Banks Facility A Facility B Facility C
Commitment Commitment Commitment
POUNDS POUNDS POUNDS
ABN AMRO Bank N.V. 40,500,000 12,000,000 10,000,000
Bank of America National Trust and 40,500,000 12,000,000 10,000,000
Savings Association
The Bank of New York 40,500,000 12,000,000 10,000,000
The Bank of Nova Scotia 40,500,000 12,000,000 10,000,000
The Bank of Tokyo-Mitsubishi, Ltd 40,500,000 12,000,000 10,000,000
and Union Bank of California, N.A.
Bayerische Landesbank Girozentrale, 40,500,000 12,000,000 10,000,000
London Branch
CIBC Wood Gundy plc 40,500,000 12,000,000 10,000,000
Credit Lyonnais 40,500,000 12,000,000 10,000,000
The Dai-Ichi Kangyo Bank, Limited 40,500,000 12,000,000 10,000,000
Den Danske Bank Aktieselskab 40,500,000 12,000,000 10,000,000
The Fuji Bank, Limited 40,500,000 12,000,000 10,000,000
The Industrial Bank of Japan, Limited 40,500,000 12,000,000 10,000,000
Midland Bank PLC 40,500,000 12,000,000 10,000,000
Rabobank, London Branch 40,500,000 12,000,000 10,000,000
The Royal Bank of Scotland plc 40,500,000 12,000,000 10,000,000
The Sanwa Bank, Limited 40,500,000 12,000,000 10,000,000
Societe Generale 40,500,000 12,000,000 10,000,000
The Toronto-Dominion Bank 40,500,000 12,000,000 10,000,000
Union Bank of Switzerland 40,500,000 12,000,000 10,000,000
Westdeutche Landesbank Girozentrale 40,500,000 12,000,000 10,000,000
London Branch
__________ __________ __________
810,000,000 240,000,000 200,000,000
__________ __________ __________
<PAGE>
SIGNATORIES
Company
ENTERGY POWER UK PLC
By: ROBERT J. CUSHMAN
Arrangers and Existing Banks
ABN AMRO BANK N.V.
By: JUSTIN P. CLIFFE
BANK OF AMERICA INTERNATIONAL LIMITED
By: WILLIAM M.F. BISHOP
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: SANJAY GUPTA
UNION BANK OF SWITZERLAND
By: FIONA KAPLAN SEAN MALONE
New Banks
THE BANK OF NEW YORK
By: MICHAEL MCMORROW
THE BANK OF NOVA SCOTIA
By: RUSSEL C. HAMER
THE BANK OF TOKYO-MITSUBISHI, LTD
By: DAVID J. DALLISON
BAYERISCHE LANDESBANK GIROZENTRALE, LONDON BRANCH
By: SONKE PETERSEN
CIBC WOOD GUNDY plc
By: SHANNON L. ERNST
CREDIT LYONNAIS
By: MARGARET STEWART
THE DAI-ICHI KANGYO BANK, LIMITED
By: COLIN VITTERY
DEN DANSKE BANK AKTIESELSKAB
By: D. RIMMER
Power of Attorney
THE FUJI BANK, LIMITED
By: RICHARD W. ALLEN
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: DENIS RAYEL
MIDLAND BANK PLC
By: ANDREW P. SMITH
RABOBANK, LONDON BRANCH
(COOPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK BA)
By: PAMELA R. GREEN
THE ROYAL BANK OF SCOTLAND plc
By: C.L. SALTER
THE SANWA BANK, LIMITED
By: P.B. LUCAS
SOCIETE GENERALE
By: MARC BERNARD
THE TORONTO-DOMINION BANK
By: GRAEME FRANCIS
UNION BANK OF CALIFORNIA, N.A.
By: DAVID J. DALLISON
Power of Attorney
WESTDEUTCHE LANDESBANK GIROZENTRALE LONDON BRANCH
By: POLLY ADAMS
Agent
ABN AMRO BANK N.V.
By: D. RIMMER
<PAGE>
CONFORMED COPY
SECOND SUPPLEMENTAL AGREEMENT
DATED 18th March, 1997
relating to a 1,250,000,000 Pounds Credit
Agreement dated 17th December, 1996
(as amended by a Supplemental Agreement dated 6th February,
1997)
for
ENTERGY POWER UK PLC
arranged by
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
UNION BANK OF SWITZERLAND
with
ABN AMRO BANK N.V.
as Agent
ALLEN & OVERY
London
<PAGE>
THIS AGREEMENT is dated 18th March, 1997 between:
(1) ENTERGY POWER UK PLC (Registered No. 3261188) (the
"Company");
(2) ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED
and UNION BANK OF SWITZERLAND as arrangers (in this
capacity the "Arrangers");
(3) THE BANKS listed in Schedule 1 as the banks party to the
Credit Agreement (as defined below) as at today's date
(the "Existing Banks");
(4) THE FINANCIAL INSTITUTIONS listed in Schedule 2 as the
banks who wish to accede to the Credit Agreement as Banks
(the "New Banks"); and
(5) ABN AMRO BANK N.V. as agent (in this capacity the
"Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the contrary intention appears
or the context otherwise requires:
"Credit Agreement"
means the Original Credit Agreement as amended pursuant
to Clause 4 (Nature of this Agreement) of this Agreement.
"Effective Date"
means 21st March, 1997.
"Original Credit Agreement"
means the Credit Agreement dated 17th December, 1996
between the Company, the Arrangers, the Existing Banks
and the Agent, as amended by the Supplemental Agreement
dated 6th February, 1997.
1.2 Incorporation of Original Credit Agreement
interpretations
(a) Terms defined in the Original Credit Agreement shall,
unless the contrary intention appears or the context
otherwise requires, have the same meaning in this
Agreement.
(b) Clauses 1.2 (Construction), 32 (Severability) and 33
(Counterparts) of the Original Credit Agreement shall
apply to this Agreement, as though they were set out in
full in this Agreement but as if references to the
Original Credit Agreement are to be construed as
references to this Agreement.
2. CONSENT AND CONFIRMATION
(a) The Company, the Arrangers, the Existing Banks and the
Agent each consent to the New Banks becoming Banks and
confirm that, except as expressly provided by the terms
of this Agreement, each of the Finance Documents shall
continue in full force and effect.
(b) This Agreement is the Syndication Agreement.
3. NOVATION
3.1 Novation of Commitments and related rights and
obligations
On the Effective Date (regardless of whether a Default is
then continuing):
(a) each New Bank will become a Bank under the Credit
Agreement with a Facility A Commitment, Facility B
Commitment and Facility C Commitment as set out
opposite its name in Schedule 3;
(b) each Existing Bank's Facility A Commitment,
Facility B Commitment and Facility C Commitment
shall be and be deemed to be reduced down to, the
respective amounts set out opposite its name in
Schedule 3; and
(c) each New Bank will automatically obtain and assume,
and undertakes to perform, all of the rights and
obligations of a Bank under and in respect of each
of the Finance Documents in respect of the rights
and obligations transferred to it under
paragraphs (a) and (b) above, including, without
limitation, its corresponding proportion of the
rights and obligations of the Existing Banks in
respect of the current Facility B Loan.
3.2 Amounts due on or before the Effective Date
(a) All amounts (if any) payable to an Existing Bank by the
Borrowers on or before the Effective Date (including,
without limitation, all interest and fees payable on the
Effective Date) in respect of any period ending prior to
the Effective Date shall be for the account of the
Existing Banks, and none of the New Banks shall have any
interest in, or any rights in respect of, any such
amounts.
(b) If any Facility A Loan or Facility C Loan falls to be
made on the Effective Date:
(i) the Agent will promptly notify each of the New Banks
of that fact (and the amount of its participation in
that Facility A Loan or Facility C Loan in
accordance with sub-paragraph (ii) below); and
(ii) each Existing Bank and each New Bank shall
participate in that Facility A Loan or Facility C
Loan (subject to the terms of the Credit Agreement)
as if the novation of the Facility A Commitments and
the Facility C Commitments under Clauses 3.1(a) and
(b) (Novation of Commitments and related rights and
obligations) of this Agreement had taken effect
prior to opening of business on the Business Day
before the Effective Date,
and the Company acknowledges that no Existing Bank will
be obliged to participate in any such Loan to any greater
extent.
(c) On the Effective Date each New Bank shall pay to the
Agent for the Existing Banks pro rata an amount
equal to the principal amount of the Facility B Loan
assumed by it under Clause 3.1(c) (Novation of
Commitments and related rights and obligations) of
this Agreement.
3.3 Administrative details
Each New Bank has delivered to the Agent its initial
details for the purposes of Clause 34 (Notices) of the
Credit Agreement.
4. NATURE OF THIS AGREEMENT
The novation of Commitments and rights and obligations
contemplated by this Agreement shall take effect (in
accordance with its terms) as a novation so that:
(a) Schedule 3 to this Agreement is substituted for
Schedule 1 to the Credit Agreement on the Effective
Date; and
(b) Clause 28.3 (Procedure for novations) of the Credit
Agreement shall apply to the Commitments, rights and
obligations transferred, assumed and released under
Clause 3.1 (Novation of Commitments and related
rights and obligations) of this Agreement and to the
associated rights and obligations under the Finance
Documents, as if this Agreement were a Novation
Certificate.
5. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
<PAGE>
SCHEDULE 1
EXISTING BANKS
ABN AMRO Bank N.V.
Bank of America National Trust and Savings Association
The Bank of New York
The Bank of Nova Scotia
The Bank of Tokyo-Mitsubishi, Ltd
Bayerische Landesbank Girozentrale, London Branch
CIBC Wood Gundy plc
Credit Lyonnais
The Dai-Ichi Kangyo Bank, Limited
Den Danske Bank Aktieselskab
The Fuji Bank, Limited
The Industrial Bank of Japan, Limited
Midland Bank PLC
Rabobank, London Branch
The Royal Bank of Scotland plc
The Sanwa Bank, Limited
Societe Generale
The Toronto-Dominion Bank
Union Bank of California, N.A.
Union Bank of Switzerland
Westdeutsche Landesbank Girozentrale London Branch
<PAGE>
SCHEDULE 2
NEW BANKS
Bayerische Hypotheken- und Wechsel-Bank AG, London Branch
Barclays Bank PLC
Commonwealth Bank of Australia
Deutsche Bank AG London
Dresdner Bank AG London Branch
Kredietbank NV (London Branch)
National Westminster Bank Plc
The Nikko Bank (UK) plc
The Sakura Bank, Limited
The Sumitomo Bank, Limited
SCHEDULE 3
BANKS AND COMMITMENTS
Banks Facility A Facility B Facility C
Commitment Commitment Commitment
POUNDS POUNDS POUNDS
ABN AMRO Bank N.V. 32,400,000 9,600,000 8,000,000
Bank of America National Trust and
Savings Association 32,400,000 9,600,000 8,000,000
The Bank of New York 32,400,000 9,600,000 8,000,000
The Bank of Tokyo-Mitsubishi, Ltd and
Union Bank of California, N.A. 32,400,000 9,600,000 8,000,000
Bayerische Landesbank Girozentrale,
London Branch 32,400,000 9,600,000 8,000,000
CIBC Wood Gundy plc 32,400,000 9,600,000 8,000,000
The Dai-Ichi Kangyo Bank, Limited 32,400,000 9,600,000 8,000,000
Den Danske Bank Aktieselskab 32,400,000 9,600,000 8,000,000
The Industrial Bank of Japan, Limited 32,400,000 9,600,000 8,000,000
Midland Bank PLC 32,400,000 9,600,000 8,000,000
Rabobank, London Branch 32,400,000 9,600,000 8,000,000
The Royal Bank of Scotland plc 32,400,000 9,600,000 8,000,000
The Sanwa Bank, Limited 32,400,000 9,600,000 8,000,000
Union Bank of Switzerland 32,400,000 9,600,000 8,000,000
Westdeutsche Landesbank Girozentrale
London Branch 32,400,000 9,600,000 8,000,000
The Toronto-Dominion Bank 29,160,000 8,640,000 7,200,000
The Bank of Nova Scotia 25,920,000 7,680,000 6,400,000
Credit Lyonnais 25,920,000 7,680,000 6,400,000
Societe Generale 25,920,000 7,680,000 6,400,000
The Fuji Bank, Limited 22,680,000 6,720,000 5,600,000
Bayerische Hypotheken- und Wechsel-
Bank AG, London Branch 19,440,000 5,760,000 4,800,000
Barclays Bank PLC 19,440,000 5,760,000 4,800,000
Commonwealth Bank of Australia 19,440,000 5,760,000 4,800,000
Deutsche Bank AG London 19,440,000 5,760,000 4,800,000
Dresdner Bank AG London Branch 19,440,000 5,760,000 4,800,000
Kredietbank NV (London Branch) 19,440,000 5,760,000 4,800,000
National Westminster Bank Plc 19,440,000 5,760,000 4,800,000
The Nikko Bank (UK) plc 19,440,000 5,760,000 4,800,000
The Sakura Bank, Limited 19,440,000 5,760,000 4,800,000
The Sumitomo Bank, Limited 19,440,000 5,760,000 4,800,000
__________ __________ __________
810,000,000 240,000,000 200,000,000
__________ __________ __________
<PAGE>
SIGNATORIES
Company
ENTERGY POWER UK PLC
By: WILLIAM J. REGAN, JR.
Arrangers and Existing Banks
ABN AMRO BANK N.V.
By: J.P. CLIFFE
BANK OF AMERICA INTERNATIONAL LIMITED
By: WILLIAM M.F. BISHOP
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: WILLIAM M.F. BISHOP
UNION BANK OF SWITZERLAND
By: N. BURNHAM
Existing Banks
THE BANK OF NEW YORK
By: MICHAEL McMORROW
THE BANK OF NOVA SCOTIA
By: RUSSEL C. HAMER
THE BANK OF TOKYO-MITSUBISHI, LTD
By: DAVID J. DALLISON
Existing Banks (Cont.)
BAYERISCHE LANDESBANK GIROZENTRALE, LONDON BRANCH
By: MIRIAM SCUKA
CIBC WOOD GUNDY plc
By: D. RIMMER (Power of Attorney)
CREDIT LYONNAIS
By: M. STEWART
THE DAI-ICHI KANGYO BANK, LIMITED
By: D. RIMMER (Power of Attorney)
DEN DANSKE BANK AKTIESELSKAB
By: D. RIMMER (Power of Attorney)
THE FUJI BANK, LIMITED
By: P. RICHEY
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: ROGER CONCIN
MIDLAND BANK PLC
By: A.P. SMITH
RABOBANK, LONDON BRANCH
(COOPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK BA)
By: D. RAWSON PAMELA R. GREEN
Existing Banks (Cont.)
THE ROYAL BANK OF SCOTLAND plc
By: D. RIMMER (Power of Attorney)
THE SANWA BANK, LIMITED
By: M.J. CURRAN
SOCIETE GENERALE
By: P. FOWLER
THE TORONTO-DOMINION BANK
By: D. RIMMER (Power of Attorney)
UNION BANK OF CALIFORNIA, N.A.
By: DAVID J. DALLISON
WESTDEUTSCHE LANDESBANK GIROZENTRALE LONDON BRANCH
By: RHODERICK HENDERSON
New Banks
BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK AG,
LONDON BRANCH
By: JONATHAN BULLOCK TREVOR PRITCHARD
BARCLAYS BANK PLC
By: DAVID ALLEN
COMMONWEALTH BANK OF AUSTRALIA
By: B. PARKER
DEUTSCHE BANK AG LONDON
By: G. RUTTER D. BUGGE
DRESDNER BANK AG LONDON BRANCH
By: H. WOOLDRIDGE D. BARNES
KREDIETBANK NV (LONDON BRANCH)
By: N. VAN DOREN
NATIONAL WESTMINSTER BANK Plc
By: J.P. KASPEREK
THE NIKKO BANK (UK) plc
By: J.B. SMITH M. MOSELING
THE SAKURA BANK, LIMITED
By: K. ONOE M. GILLARD
THE SUMITOMO BANK, LIMITED
By: D. RIMMER (Power of Attorney)
Agent
ABN AMRO BANK N.V.
By: D. RIMMER
<PAGE>
CONFORMED COPY
THIRD SUPPLEMENTAL AGREEMENT
DATED 30th June, 1997
relating to a 1,250,000,000 Pounds Credit Agreement dated 17th
December, 1996
(as amended by a Supplemental Agreement dated 6th February, 1997
and a Second Supplemental Agreement dated 18th March, 1997)
for
ENTERGY POWER UK PLC
arranged by
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
UNION BANK OF SWITZERLAND
with
ABN AMRO BANK N.V.
as Agent
ALLEN & OVERY
London
<PAGE>
THIS AGREEMENT is dated 30th June, 1997 between:
(1) ENTERGY POWER UK PLC (Registered No. 3261188) (the
"Company");
(2) ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED
and UNION BANK OF SWITZERLAND as arrangers (in this capacity
the "Arrangers"); and
(3) ABN AMRO BANK N.V. as agent for the Banks party to the
Original Credit Agreement (in this capacity the "Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the contrary intention appears or
the context otherwise requires:
"Credit Agreement"
means the Original Credit Agreement as amended pursuant to
Clause 2 (Amendments to the Original Credit Agreement) of
this Agreement.
"Original Credit Agreement"
means the Credit Agreement dated 17th December, 1996 between
the Company, the Arrangers, the Existing Banks and the
Agent, as amended by the Supplemental Agreement dated 6th
February, 1997 and a Second Supplemental Agreement dated
18th March, 1997.
1.2 Incorporation of Original Credit Agreement interpretations
(a) Terms defined in the Original Credit Agreement shall, unless
the contrary intention appears or the context otherwise
requires, have the same meaning in this Agreement.
(b) Clauses 1.2 (Construction), 27 (Amendments and waivers), 32
(Severability) and 33 (Counterparts) of the Original Credit
Agreement shall apply to this Agreement, as though they were
set out in full in this Agreement but as if references to
the Original Credit Agreement are to be construed as
references to this Agreement.
2. AMENDMENTS TO THE ORIGINAL CREDIT AGREEMENT
The Company has requested that the Finance Parties agree to
the following amendments which differ from the arrangments
contemplated by the Original Credit Agreement as follows:-
(a) Clause 18.16 (Times for making representations and
warranties): the words "(with the exception of Clause
18.11 (Information memorandum)" shall be added after
the words "in the case of the Target," in sub-paragraph
(ii) of paragraph (a) of Clause 18.16 (Times for making
representations and warranties);
(b) Clause 19.16 (Lending and borrowing):
(i) sub-paragraph (iv) of paragraph (b) of Clause
19.16 (Lending and borrowing) shall be renumbered
sub-paragraph "(v)" and a new paragraph (iv) shall
be added into as follows:-
"(iv) cash deposits made by a member of the
Group at a bank or other financial
institution; or"; and
(ii) the reference to "(iii)" in the new sub-paragraph
(v) shall be deleted and replaced by "(iv)"; and
(c) Clause 19.28 (Financial covenants): a new paragraph
(vi) and a new paragraph (vii) shall be added into the
definition of "Adjusted Capital and Reserves" in Clause
19.28 (Financial covenants) as follows:-
"(vi) plus any amount deducted from reserves or the
profit and loss account in respect of goodwill
arising upon and in respect of the acquisition of
the Shares;
(vii) plus any amount deducted from reserves or the
profit and loss account as a provision for the
future payment of any exceptional, special or
windfall tax or levy applicable to, inter alia,
privatised regional electricity companies as a
whole;;".
3. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Finance Party
that the representations and warranties to be repeated by
the Company in accordance with Clause 18.16 (b) (Times for
making representations and warranties) of the Original
Credit Agreement are true as if made on the date of this
Agreement and as if references to the Original Credit
Agreement were references to this Agreement.
4. AGREEMENT TO AMENDMENTS TO THE ORIGINAL CREDIT AGREEMENT
Subject to Clauses 3 (Representations and warranties) above,
each of the parties and the Agent on behalf of the Banks, by
its execution of this Agreement, consents to the
arrangements set out in Clause 2 (Amendments to the Original
Credit Agreement) above and agrees that the Original Credit
Agreement shall be amended, with effect from the date of
this Agreement, in order to enable such arrangements to be
effected, to the intent that any carrying out of any such
arrangements shall not constitute a breach of or Default
under the Original Credit Agreement or any other Finance
Document.
5. INCORPORATION
(a) This Agreement is a Finance Document.
(b) This Agreement shall be deemed to be incorporated as part of
the Original Credit Agreement.
(c) Except as otherwise provided in this Agreement, the Finance
Documents remain in full force and effect.
6. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
<PAGE>
SIGNATORIES
Company
ENTERGY POWER UK PLC
By: MICHAEL BEMIS
Arrangers
ABN AMRO BANK N.V.
By: DUNCAN BAILEY KARL PAGE
BANK OF AMERICA INTERNATIONAL LIMITED
By: JOHN LAVERY
UNION BANK OF SWITZERLAND
By: SEAN MALONE NICK BURNHAM
Agent
ABN AMRO BANK N.V.
By: DUNCAN BAILEY KARL PAGE
<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 1, 1997
