<PAGE>
As filed with the Securities and Exchange Commission on September 27, 1999
Registration Statement No. 333-85719
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 2 TO
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------
INDEPENDENT ENERGY HOLDINGS PLC
(Exact name of Registrant as specified in the charter)
----------------
England 4911 Not Applicable
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number)Identification Number)
corporation or
organization) ----------------
Radcliffe House
Blenheim Court
Solihull, West Midlands
United Kingdom B91 2AA
011-44-121-705-1111
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
----------------
CT Corporation System
1633 Broadway
New York, NY 10019
(212) 664-1666
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies of communications to:
Richard J. Wilkie Keith Kearney
Akin, Gump, Strauss, Hauer & Feld, L.L.P. Davis Polk & Wardwell
711 Louisiana, Suite 1900 One Fredrick's Place
Houston, Texas 77002 London EC2R 8AB
(713) 220-5800 United Kingdom
44-171-418-1300
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this 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, please 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, 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 made pursuant to Rule 434,
please check the following box: [_]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
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>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS.
Item 13. Other Expenses of Issuance and Distribution
The following are estimated expenses, other than underwriting commissions,
expected to be incurred by Independent Energy in connection with the issuance
and distribution of the securities registered under this Registration
Statement.
TO BE PAID BY REGISTRANT
<TABLE>
<S> <C> <C>
Securities and Exchange Commission
registration fee........................ $ 41,920
NASD fees and expenses................... $ 15,580
Printing and engraving expenses.......... $ 200,000
Legal fees and expenses.................. $ 200,000
Accounting fees and expenses............. $ 95,000
Nasdaq listing fees...................... $ 17,500
Engineering fees......................... $ 75,000
Stamp duty expenses...................... $1,425,000
Miscellaneous............................ $ 30,000
----------
Total................................... $2,100,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers
Except as hereinafter set forth, there is no provision of Independent
Energy's Memorandum and Articles of Association or any contract, arrangement or
statute under which any director or officer of Independent Energy is insured or
indemnified in any manner against any liability that he may incur in his
capacity as such.
The Memorandum and Articles of Association of Independent Energy provide
that, subject to the provisions of the Companies Act 1985, but without
prejudice to any indemnity to which a director or officer might otherwise be
entitled, every director or officer of Independent Energy shall be indemnified
out of the assets of Independent Energy against any liability, loss or
expenditure incurred by him in defending any proceedings, whether civil or
criminal, which relate to anything done or omitted to be done or alleged to
have been done or omitted to be done by him as an officer or auditor of
Independent Energy and in which judgment is given in his favor or in which he
is acquitted, or incurred in connection with any application in which relief is
granted to him by the court from liability in respect of any such act or
omission or from liability to pay any amount in respect of any such act or
omission or from liability to pay any amount in respect of shares acquired by a
nominee of Independent Energy.
II-1
<PAGE>
Section 310 of the Companies Act 1985 (as amended by the Companies Act
1989) provides as follows:
"310. Provisions Exempting Officers and Auditors from Liability
This section applies to any provision, whether contained in a company's
articles or in any contract with the Company or otherwise, for exempting any
officer of the Company or any person (whether an officer or not) employed by
the Company as auditor from, or indemnifying him against any liability which
by virtue of any rule of law would otherwise attach to him in respect of any
negligence, default, breach of duty or breach of trust of which he may be
guilty in relation to the Company.
I. Except as provided by the following subsection, any such provision is
void.
II. This section does not prevent a company--
A. from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
B. from indemnifying any such officer or auditor against any liability
incurred by him--
1. in defending any proceedings (whether civil or criminal) in which
judgment is given in his favor or he is acquitted, or
2. in connection with any application under Section 144(3) or (4)
(acquisition of shares by innocent nominee) or Section 727 (general
power to grant relief in case of honest and reasonable conduct) in
which relief is granted to him by the court."
The Underwriters will each agree, severally, to indemnify Independent
Energy's directors, Independent Energy's officers who sign the Registration
Statement and Independent Energy's authorized representative in the U.S. from
and against certain liabilities based on information relating to such
Underwriter furnished in writing by such Underwriter expressly for use herein.
Independent Energy has obtained directors' and officers' insurance
coverage, which, subject to policy terms and limitations, includes coverage to
reimburse Independent Energy for amounts that it may be required or permitted
by law to pay directors or officers of Independent Energy.
Item 15. Recent Sales of Unregistered Securities
In June 1997, Independent Energy sold 1,866,648 ordinary shares in the U.S.
at a price of 75p per share and 140,000 ordinary shares issuable upon the
exercise of warrants in the U.K. at a price of 75p per share. In September
1997, Independent Energy sold 1,437,329 ordinary shares in the U.S. and
1,194,329 ordinary shares in the U.K. at a price of 95p per Share. All
ordinary shares sold in the U.S. were offered and sold pursuant to an
exemption for registration under Section 4(2) of the Securities Act and all
ordinary shares sold in the U.K. were offered and sold pursuant to an
exemption under Regulation S under the Securities Act.
In November 1998, Independent Energy agreed to issue options to purchase
250,000 ordinary shares at the then market price of $9.50 per share to
Donaldson, Lufkin & Jenrette International in exchange for financial advisory
services. Such options were issued pursuant to an exemption for registration
under Section 4(2) of the Securities Act.
II-2
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
<S> <C>
1* Form of Underwriting Agreement.
3** Memorandum and Articles of Association, as amended, of Independent Energy.
4.1** Form of Deposit Agreement among Independent Energy Holdings plc, The Bank of New
York, as Depositary, and the holders from time to time of American Depositary
Receipts evidencing American Depositary Shares representing Ordinary Shares.
4.2** Form of American Depositary Receipt evidencing American Depositary Shares
representing Ordinary Shares (included in Exhibit 4.1).
5* Opinion of Masons as to the legality of the Ordinary Shares.
8.1* Opinion of Masons as to U.K. tax matters relative to the Ordinary Shares (included
in the Prospectus relating to the Ordinary Shares under "Taxation" with a
confirmation included in Exhibit 5).
8.2* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to U.S. tax matters relative
to the Ordinary Shares (included in the Prospectus relating to the Ordinary Shares
under "Taxation" with a confirmation included in this Exhibit).
10.1** Accession Agreement to the Pooling an Settlement Agreement.
10.2** Carried Interest Agreement between Independent Energy UK Limited and Altwood
Petroleum Limited dated May 21, 1996.
10.3** Hive-up Agreement dated May 14, 1996 between Eukan Energy Limited and Independent
Energy UK Limited.
10.4** Hive-up Agreement dated May 14, 1996 between Elswick Petroleum Limited and
Independent Energy UK Limited.
10.5** Second Tier License to Supply Electricity for Independent Energy UK Limited dated
March 7, 1996.
10.6** Loan Note Instrument dated June 30, 1997 by Independent Energy Holdings plc with
respect to (Pounds)1,400,000 10% unsecured Notes due 2002.
10.7** Warrant Instrument dated June 30, 1997 by Independent Energy Holdings PLC with
respect to 140,000 Warrants to purchase ordinary shares.
10.8** Credit Agreement dated September 5, 1997 between Independent Energy Holdings PLC,
Independent Energy UK Limited Barclays Bank PLC and several lenders (incorporated by
reference to Registration Statement No. 333-56223).
10.9*** Letter Agreement regarding Amendment to Credit Agreement dated June 4, 1998 between
Independent Energy Holdings PLC, Independent Energy UK Limited, Barclays Bank PLC
and several lenders (incorporated by reference to Registration Statement No. 333-
56223).
</TABLE>
- ---------------------
* Filed previously.
** Incorporated by reference from the Registration Statement on Form 20-F
(File No. 0-23451) filed by Independent Energy with the Commission.
*** Incorporated by reference from the Registration Statement on Form F-1 (File
No. 333-56223) filed by Independent Energy with the Commission.
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
<C> <S>
10.10*** Letter of Variation dated July 15, 1998 between Independent Energy
Holdings PLC, Independent Energy UK Limited and Barclays Bank PLC
(incorporated by reference to Registration Statement No. 333-56223).
10.11** Master Equipment Lease Agreement dated April 19, 1996 between
Machinery Acceptance Corporation and Independent Energy UK Limited
(incorporated by reference to Registration Statement No. 333-56223).
10.12*** Master Finance Lease Agreement dated June 17, 1997 between Debis
Financial Services Limited and Independent Energy UK Limited
(incorporated by reference to Registration Statement No. 333-56223).
10.13*** Lease Master Agreement dated October 30, 1997 between ING Lease (UK)
Limited and Independent Energy UK Limited (incorporated by reference
to Registration Statement No. 333-56223).
10.14 Agreement, dated July 8, 1999, for a Revolving Advance and Letter of
Credit Facility between Independent Energy UK Limited, Independent
Energy Holdings plc, Barclays Capital, Barclays Bank PLC and the
financial institutions party thereto.
10.15* License Farmout Agreement, dated January 11, 1999, between
Independent Energy UK Limited, ISO (U.K.) Limited, Archean Energy
(U.K.) Limited and Altwood Petroleum Limited.
10.16* License Buy-in Agreement, dated February 23, 1999, between
Independent Energy UK Limited and Vulcan Energy Limited.
21* List of Subsidiaries
23.1* Consent of Masons (included in Exhibit 5).
23.2* Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
Exhibit 8.2).
23.3* Consent of Pannell Kerr Forster.
23.4* Consent of Gaffney, Cline & Associates Ltd.
24* Powers of Attorney (included on the signature pages hereof)
99* Reserve Report of Gaffney, Cline & Associates Ltd., dated August 10,
1999.
</TABLE>
- ---------------------
* Filed previously.
** Incorporated by reference from the Registration Statement on Form 20-F
(File No. 0-23451) filed by Independent Energy with the Commission.
*** Incorporated by reference from the Registration Statement on Form F-1 (File
No. 333-56223) filed by Independent Energy with the Commission.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) 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.
II-4
<PAGE>
(2) Insofar as indemnifications for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant 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 registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(3) 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 registrant 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.
(4) 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
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to this Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized on September
27, 1999.
INDEPENDENT ENERGY HOLDINGS PLC
(Registrant)
/s/ Burt H. Keenan
By:___________________________________
Burt H. Keenan
Chairman
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on the dates indicated.
<TABLE>
<S> <C> <C>
</TABLE>
Signature Title Date
/s/ Burt H. Kennan Chairman
- ---------------------------------- September 27,
Burt H. Keenan 1999
*
Chief Executive
- ---------------------------------- Officer and September 27,
John L. Sulley Director 1999
(Principal
Executive Officer)
*
Executive Director--
- ---------------------------------- Finance (Principal September 27,
Ian Stewart Financial and 1999
Accounting Officer)
*
Executive Director--
- ---------------------------------- Resources September 27,
1999
William E. Evans
*
Executive
- ---------------------------------- Director-- September 27,
Robert E. Jones Operations 1999
*
Non-executive
- ---------------------------------- Director September 27,
Roy W. Deakin 1999
*
Non-executive
- ---------------------------------- Director and September 27,
Jerry W. Jarrell Authorized 1999
Representative in
the United States
*
Non-executive
- ---------------------------------- Director September 27,
David O. May 1999
*
Non-executive
- ---------------------------------- Director September 27,
Herbert L. Oakes 1999
*By: /s/ Burt H. Keenan
__________________________________
Burt H. Keenan
Attorney-in-Fact
II-6
<PAGE>
CONFORMED COPY
AGREEMENT
DATED 8th July, 1999
(Pounds)80,000,000
REVOLVING ADVANCE AND LETTER OF CREDIT FACILITY
FOR
INDEPENDENT ENERGY UK LIMITED
ARRANGED BY
BARCLAYS CAPITAL
ALLEN & OVERY
London
PG:69794.14
<PAGE>
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<CAPTION>
CLAUSE PAGE
<S> <C> <C>
1. Interpretation............................... 1
2. Facility..................................... 13
3. Purpose...................................... 15
4. Conditions Precedent......................... 16
5. Drawdown of Advances......................... 17
6. Repayment of Advances........................ 18
7. Issue of LCs................................. 18
8. Claims under, and repayment of, LCs.......... 21
9. Borrower's counter-indemnity for LCs......... 22
10. Prepayment and Cancellation.................. 23
11. Interest Periods............................. 24
12. Interest and LC Fees......................... 25
13. Payments..................................... 26
14. Taxes........................................ 28
15. Market Disruption............................ 29
16. Increased Costs.............................. 30
17. Illegality................................... 31
18. Guarantee.................................... 32
19. Representations and Warranties............... 34
20. undertakings................................. 37
21. Default...................................... 47
22. The Agent and the Arranger................... 52
23. Fees......................................... 57
24. Expenses..................................... 58
25. Stamp Duties................................. 58
26. Indemnities.................................. 58
27. Evidence and Calculations.................... 59
28. Amendments and Waivers....................... 60
29. Changes to the Parties....................... 61
30. Disclosure of Information.................... 63
31. Set-Off...................................... 64
32. Pro Rata Sharing............................. 64
33. Severability................................. 65
34. Counterparts................................. 65
35. Notices...................................... 66
36. Governing Law................................ 67
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCHEDULES PAGE
<S> <C> <C>
1. Banks and Commitments.......................... 68
2. Conditions Precedent Documents................. 69
3. Calculation of the Mandatory Cost.............. 72
4. Forms of Request............................... 74
5. Form of Novation Certificate................... 76
6. Forms of LC.................................... 77
7. Form of Withdrawal Notice...................... 84
8. Leases Requiring Guarantees from the Guarantor.. 86
Signatories........................................... 87
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THIS AGREEMENT is dated 8th July, 1999 between:
(1) INDEPENDENT ENERGY UK LIMITED (Registered No. 3033406) (the "BORROWER");
(2) INDEPENDENT ENERGY HOLDINGS PLC (Registered No. 3170807) (the "GUARANTOR");
(3) BARCLAYS CAPITAL as arranger (in this capacity the "ARRANGER");
(4) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks (in their capacity
as providers of the Facility, the "BANKS");
(5) BARCLAYS BANK PLC as ancillary bank (in its capacity as provider of the
Ancillary Facility, the "ANCILLARY BANK"); and
(6) BARCLAYS BANK PLC as agent (in this capacity the "AGENT").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ADVANCE"
means an advance made by a Bank under the Facility or (to the extent that
the context so requires) the principal amount of such an advance
outstanding for the time being (and includes, for the avoidance of doubt, a
Rollover Advance and an LC Substitute Advance).
"AFFILIATE"
means, in respect of a person, any of its Subsidiaries or Holding Companies
or any other Subsidiary of any such Holding Company (and for these purposes
a person is a "HOLDING COMPANY" of another person if that other person is
its Subsidiary).
"ANCILLARY FACILITY"
means any uncommitted facility or facilities (including, without
limitation, any facility for or permitting the issue of any letter of
credit or other contingent instrument) made available to the Borrower by
the Ancillary Bank on the terms set out in any Ancillary Facility Letter.
"ANCILLARY FACILITY LETTER"
means any document setting out terms on which any Ancillary Facility is
made available.
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open for
business in London.
- --------------------------------------------------------------------------------
<PAGE>
2
- --------------------------------------------------------------------------------
"COFACE INSURANCE"
means the insurance policy number 69401/00 GB1 dated 16th December, 1998
issued by Coface LBF or such other equivalent policy as is agreed with the
Agent.
"COMMITMENT"
means:
(a) in respect of a Bank that is a bank on the date of this Agreement, the
amount in Sterling set opposite its name in Schedule 1; and
(b) in respect of a Bank that becomes a Bank after the date of this
Agreement, the amount of any other Bank's Commitment acquired by it
under Clause 29 (Changes to Parties),
to the extent not cancelled, reduced or transferred under this agreement.
"COMMITMENT PERIOD"
means the period from the date of this Agreement to the Term Date (both
dates inclusive).
"CONTRACTS FOR DIFFERENCES"
means those contracts for differences to which the Borrower is a party as
at the date of this Agreement or any other contract entered into by the
Borrower on substantially similar terms (other than purely commercial terms
as to such matters as price, term and volumes).
"COVERED DEBT AMOUNT"
means, on any day, the amount equal to 80% of the aggregate (without
double-counting) of all of the following amounts as at opening of business
on that day (the "RELEVANT TIME"):
(a) all amounts owing to the Borrower at the relevant time pursuant to
invoices that have already been properly issued and despatched to the
extent that those invoices are for the price of electricity (and
related services) that have already been supplied;
(b) the aggregate amount that is projected to be payable to the Borrower
for electricity that, as at the relevant time, has already been
supplied to half-hourly customers but has not yet been invoiced for,
calculated on the assumptions that:
(i) the only such electricity so supplied is that for which the
Borrower has, at the relevant time, already received meter
readings and entered them into its accounting system; and
(ii) the per-unit selling price of that electricity will be equal to
the weighted average price of all sales of electricity by the
Borrower to half-hourly customers during the calendar month
preceding the current one;
- --------------------------------------------------------------------------------
<PAGE>
3
- --------------------------------------------------------------------------------
(c) the aggregate amount that is projected to be payable to the Borrower
for electricity that, as at the relevant time, has already been
supplied to customers (other than half-hourly customers) but has not
yet been invoiced for, calculated in a manner consistent with that
applied by the Borrower for its internal management purposes as at the
date of this Agreement and described in the letter dated 28th May,
1999 from the Borrower to the Arranger and consistent with normal
industry practice (and in the event of any dispute as to the
methodology or result of any such calculation, the views of the
Majority Banks, acting in good faith, shall prevail and be conclusive
and binding on all of the Parties); and
(d) all amounts that have, at the relevant time, already fallen due under
any Contract for Differences for payment to the Borrower within 28
days after the relevant time,
but excluding or (as appropriate) deducting any amount that would otherwise
be included in the above:
(i) that is or will become payable by another member of the Group;
(ii) in respect of which the due date for payment is 45 days or more
after the date of invoice;
(iii) that fell due for payment more than 60 days before the relevant
time;
(iv) payable by way of, or attributable to, value added tax;
(v) that is, or that the Borrower expects is likely to be, subject to
any dispute, set-off, counterclaim or Security Interest; and
(vi) to the extent that if it were not excluded or deducted, the
aggregate amount falling within paragraphs (a)-(d) inclusive
above that is, or will become, owing by the debtor in question
and its Affiliates would exceed 3.5% of the aggregate of all
amounts falling within paragraphs (a)-(d) (inclusive) above at
the relevant time (taking due account, for the avoidance of
doubt, of paragraphs (i)-(v) (inclusive) above and this paragraph
(vi)),
and for the purposes of this definition a "HALF-HOURLY CUSTOMER" is one
whose consumption of electricity is measured on a half-hourly basis and
reported to the Borrower in electronic form.
"CREDIT"
means an Advance or an LC or (to the extent that the context so requires)
the principal amount of any of the above outstanding for the time being.
"DANGEROUS SUBSTANCE"
means any radioactive emissions and any natural or artificial substance
(whether in solid or liquid form or in the form of a gas or vapour and
whether alone or in combination with any other substance) which, by virtue
of its use in connection with an Obligor's business or its discovery,
presence or emission at any site in which an Obligor has an interest or at
which an
- --------------------------------------------------------------------------------
<PAGE>
4
- --------------------------------------------------------------------------------
Obligor carries on business, gives rise to a material risk of
causing harm to man or any other living organism or damaging the
environment or public health or welfare (and including any controlled,
special, hazardous, toxic, radioactive or dangerous waste).
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would
constitute an Event of Default.
"DRAWDOWN DATE"
means the date on which a Credit is borrowed or issued (as appropriate).
"ENVIRONMENTAL LAW"
means any applicable law or regulation concerning the protection of human
health or the environment or the conditions of the workplace or concerning
Dangerous Substances.
"ENVIRONMENTAL LICENCE"
means any authorisation required by any Environmental Law.
"EVENT OF DEFAULT"
means an event specified as such in Clause 21.1 (Events of Default).
"FACILITY"
means the credit facility (comprising Tranche A, Tranche B and Tranche C)
the terms of which are set out in this Agreement.
"FACILITY OFFICE"
means the office(s) notified by a Bank to the Agent:
(a) on or before the date it becomes a Bank; or
(b) by not less than five Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"FEE LETTER"
means the letter of the same date as this Agreement between the Agent and
the Borrower setting out the amount of various fees referred to in Clause
23 (Fees).
"FINAL MATURITY DATE"
means the second anniversary of the date of this Agreement.
- --------------------------------------------------------------------------------
<PAGE>
5
- --------------------------------------------------------------------------------
"FINANCE DOCUMENT"
means this Agreement, the Ancillary Facility Letter, a Security Document,
the Fee Letter, a Novation Certificate or any other document designated as
such by the Agent and the Borrower.
"FINANCE PARTY"
means the Arranger, a Bank, the Ancillary Bank or the Agent.
"FINANCIAL INDEBTEDNESS"
means any indebtedness in respect of:
(a) moneys borrowed;
(b) any debenture, bond, note, loan stock or other security;
(c) any acceptance credit;
(d) receivables sold or discounted (otherwise than on a non-recourse
basis);
(e) the acquisition cost of any asset to the extent payable before or
after the time of acquisition or possession by the party liable where
the advance or deferred payment is arranged primarily as a method of
raising finance or financing the acquisition of that asset;
(f) any lease entered into primarily as a method of raising finance or
financing the acquisition of the asset leased;
(g) any currency, interest or commodity swap, cap or collar arrangement or
any other derivative instrument (including, without limitation, any
Contract for Differences and any other contract for differences);
(h) any amount raised under any other transaction having the commercial
effect of a borrowing or raising of money; or
(i) any guarantee in respect of any of the above.
"FRONTED PARTICIPATION"
means an additional participation in an LC assumed by one Bank instead of
another Bank as a result of the application of Clause 7.4 (Fronting of
LCs).
"GENERAL CASH COLLATERAL ACCOUNT"
means account number 20509027 maintained by the Borrower with Barclays Bank
PLC and designated "General Cash Collateral Account".
- --------------------------------------------------------------------------------
<PAGE>
6
- --------------------------------------------------------------------------------
"GENERATION"
means Independent Energy Generation Limited (Registered No. 3276984).
"GROUP"
means the Guarantor and all of its Subsidiaries for the time being.
"INFORMATION MEMORANDUM"
means the information memorandum dated February 1999 (including all its
appendices).
"INTEREST PERIOD"
means each period determined in accordance with Clause 11 (Interest
Periods).
"LC"
means a standby letter of credit issued, or to be issued, by the Banks
under the Facility in accordance with Clause 7 (Issue of LCs).
"LC CASH COLLATERAL ACCOUNT"
means account number 70170720 maintained by the Borrower with Barclays Bank
PLC and designated "LC Cash Collateral Account".
"LC SUBSTITUTE ADVANCE"
means:
(a) an Advance made by a Bank under Clause 7.4 (Fronting of LCs); or
(b) a Rollover Advance, the whole of the proceeds of which are or were
applied in repaying principal of another LC Substitute Advance.
"LEASE"
means the leases listed in Schedule 8, which require (or may require) a
guarantee from the Guarantor;
"LIBOR"
means:
(a) the rate per annum that appears on page 3750 on the Telerate Screen;
or
(b) if no such rate appears on the Telerate Screen, the arithmetic mean
(rounded upward to 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,
- --------------------------------------------------------------------------------
<PAGE>
7
- --------------------------------------------------------------------------------
at or about 11.00 a.m. on the Drawdown Date for the offering of Sterling
deposits for a period comparable to the Interest Period of the relevant
Advance.
"MAJORITY BANKS"
means, at any time, Banks:
(a) whose participations in the Credits then outstanding aggregate more
than 662/3% of all the Credits then outstanding; or
(b) if there are no Credits then outstanding, whose Commitments then
aggregate more than 662/3% of the Total Commitments; or
(c) if there are no Credits then outstanding and the Total Commitments
have been reduced to nil, whose Commitments aggregated more than
662/3% of the Total Commitments immediately before the reduction,
provided that:
(i) any outstanding Fronted Participation shall be ignored, and deemed not
to exist, for the purposes of paragraph (a) above; and
(ii) for the purpose only of any decision as to whether or how to enforce
any of the Security Interests created or evidenced by the Security
Documents, the Ancillary Bank shall be treated as if it were a Bank
with a Commitment, and participations in Credits, each of an amount
equal to the amount of its exposure under the Ancillary Facility
(determined on its usual basis for calculating the amount of such
exposures).
"MANDATORY COST"
means the cost imputed to the Bank(s) of compliance with:
(a) the mandatory liquid assets requirements of the Bank of England and/or
the banking supervision or other costs imposed by the Financial
Services Authority, as determined in accordance with Schedule 3; and
(b) any other applicable regulatory or central bank requirement relating
to any Credit made through a branch in the jurisdiction of the
currency of the Credit.
"MARGIN"
means:
(a) at any time up to (and including) the Term Date, 1.2% per annum; and
(b) at any time after the Term Date, 1.5% per annum,
and any change in the Margin shall take effect on the day after the Term
Date regardless of the duration of any Interest Period or fee period in
respect of any LC.
- --------------------------------------------------------------------------------
<PAGE>
8
- --------------------------------------------------------------------------------
"NET RELEVANT OUTSTANDINGS"
means, at any time, the amount by which the aggregate principal amount then
outstanding under the Facility and the Ancillary Facility exceeds the
amount standing to the credit of the General Cash Collateral Account.
"NOVATION CERTIFICATE"
has the meaning given to it in Clause 29.3 (Procedure for novations).
"OBLIGOR"
means the Borrower or the Guarantor.
"PARTY"
means a party to this Agreement.
"POOL AGREEMENTS"
means:
(a) the Master Connection and Use of System Agreement dated 30th March,
1990;
(b) the Pooling and Settlement Agreement for the Electricity Industry of
England and Wales dated 30th March, 1990;
(c) the Accession Agreement dated 3rd May, 1996 between the Borrower and
The National Grid Company PLC;
(d) the Accession Agreement to the Pooling and Settlement Agreement dated
21st August, 1997 between the Borrower and JD Worth; and
(e) any equivalent document entered into by any Obligor after the date of
this Agreement.
"QUALIFYING BANK"
means a bank as defined in section 840A of the Income and Corporation Taxes
Act 1988 and which is within the charge to U.K. corporation tax as regards
any interest received by it under this Agreement.
"QUARTER DATE"
means 31st March, 30th June, 30th September and 31st December in each
calendar year.
"RECEIPTS ACCOUNT"
means any of the following accounts maintained by the Borrower with
Barclays Bank PLC:
- --------------------------------------------------------------------------------
<PAGE>
9
- --------------------------------------------------------------------------------
(i) account number 90724076 designated "Independent Energy UK Limited";
(ii) account number 40425311 designated "Independent Energy UK Limited - DD
Account";
(iii) account number 60271314 designated "Independent Energy UK Limited -
Postal Remittances Account";
(iv) account number 00265012 designated "Independent Energy UK Limited -
Giro Bank and Post Office Payments Account";
(v) account number 70288217 designated "Independent Energy UK Limited - Bk
coun";
(vi) account number 80983179 designated "Independent Energy UK Limited -
Business Premium Account";
(vii) account number 00334073 designated "Independent Energy UK Limited -
Investment Account";
(viii) account number 20839515 designated "Independent Energy UK Limited -
Refund Cheques Account";
(ix) account number 60775215 designated "Independent Energy UK Limited -
Sweep Account"; and
(x) account number 5096644 designated "Independent Energy UK Limited -
Prepayments Account",
at the Account Bank and any other bank account that the Borrower and the
Agent may from time to time designate as a Receipts Account.
"REFERENCE BANKS"
means, subject to Clause 29.4 (Reference Banks), Barclays Bank PLC, The
Royal Bank of Scotland plc, Bank of Scotland and The First National Bank of
Chicago.
"REQUEST"
means a request made by the Borrower for a Credit substantially in the form
of, in the case of an Advance, Part I of Schedule 4 or, in the case of an
LC, Part II of Schedule 4.
"RESOURCES"
means Independent Energy Resources Limited (Registered No. 3418196).
"ROLLOVER ADVANCE"
means an Advance made under Tranche B or Tranche C, the whole of the
proceeds of which are applied directly in repaying (in accordance with
Clause 13.3(c) (Distribution)) another
- --------------------------------------------------------------------------------
<PAGE>
10
- --------------------------------------------------------------------------------
Advance under the same Tranche that falls due for repayment on the Drawdown
Date for the Advance in question.
"SECURITY AGREEMENT"
means the security agreement to be entered into between the Borrower and
the Agent in the form agreed between the Borrower and the Agent.
"SECURITY DOCUMENT"
means the Security Agreement and any other document creating or evidencing
a Security Interest over any asset of a person to secure any obligations of
any Obligor to a Finance Party under the Finance Documents (including,
without limitation, any Security Interest contemplated by Clause 7.4
(Fronting of LCs)).
"SECURITY INTEREST"
means any mortgage, pledge, lien, charge, assignment, hypothecation or
security interest or any other agreement or arrangement (such as a blocked
account or "flawed asset" arrangement) having a commercial effect analogous
to the conferring of security.
"STERLING"
means the lawful currency for the time being of the U.K.
"SUBSIDIARY"
means:
(a) a subsidiary within the meaning of Section 736 of the Companies Act
1985; and
(b) unless the context otherwise requires, a subsidiary undertaking within
the meaning of Section 258 of the Companies Act 1985.
"SUPPLY LICENCE"
means the Second-Tier Licence to Supply Electricity (dated 7th March, 1996)
issued by the Director General of Electricity Supply to the Borrower.
"TERM DATE"
means the date falling 364 days after the date of this Agreement.
"TOTAL COMMITMENTS"
means the aggregate for the time being of the Commitments, being
(Pounds)80,000,000 at the date of this Agreement.
- --------------------------------------------------------------------------------
<PAGE>
11
- --------------------------------------------------------------------------------
"TRANCHE"
means Tranche A, Tranche B or Tranche C.
"TRANCHE A"
means the part of the Facility referred to in Clause 2.1(a) (The Facility).
"TRANCHE B"
means the part of the Facility referred to in Clause 2.1(b) (The Facility).
"TRANCHE C"
means the part of the Facility referred to in Clause 2.1(c) (The Facility).
"U.K."
means the United Kingdom.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a reference to:
(i) an "AMENDMENT" includes a supplement, novation, re-enactment,
variation or waiver (other than an unconditional waiver by a person
other than an Obligor, without consideration, of a past breach) (and
any grammatical variation of the term or the corresponding verb shall
be construed accordingly);
"ASSETS" includes present and future properties, revenues and rights
of every description;
an "AUTHORISATION" includes an authorisation, consent, approval,
resolution, permit, licence, exemption, filing, registration and
notarisation;
a "DISPOSAL" or "ACQUISITION" includes any disposal, grant or licence
or (as appropriate) any acquisition or receipt of, or of any interest
in or rights under or in respect of, the relevant asset, whether or
not for value (and "DISPOSE", "ACQUIRE" and related terms shall be
construed accordingly);
the "EXPIRY DATE" of an LC is the date that is expressed on its face
to be the last date on which any demand may be made under it;
the "FACE AMOUNT" of an LC at any time is to the amount that is
expressed on its face to be the maximum aggregate amount that may be
drawn under it at, or at any time after, that time;
a "GUARANTEE" includes any form of indemnity or other assurance
against financial loss (including, without limitation, any obligation
to pay, purchase or provide funds for the purchase of any liability)
(and the verb to "GUARANTEE" shall be construed accordingly);
- --------------------------------------------------------------------------------
<PAGE>
12
- --------------------------------------------------------------------------------
a "MATERIAL ADVERSE EFFECT" means a material adverse effect on:
(A) the business or financial condition of either Obligor or the
Group as a whole;
(B) the ability of either Obligor to perform the obligations
expressed to be assumed by it under the Finance Documents; or
(C) the validity or enforceability of a Finance Document or any
Security Interest purported to be created by a Finance Document;
a period of one or more "MONTHS" is a reference to a period starting
on one day in a calendar month and ending on the numerically
corresponding day in the relevant later calendar month, except that:
(A) 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
(B) 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;
an amount "OUTSTANDING" at any time under or in respect of an LC is
its face amount less:
(A) the aggregate amount of cash cover held in the LC Cash Collateral
Account relation to that LC at that time; and
(B) (save to the extent that this is taken into account in the
express provisions of that LC) the aggregate amount of all
payments made by the Banks pursuant to demands made under that LC
that have been unconditionally and irrevocably reimbursed by the
Borrower on or prior to that time,
and each provision of this Agreement which requires reference to the
concept contained in this paragraph shall be construed accordingly;
the amount "OUTSTANDING" under the Ancillary Facility shall be the
amount calculated and notified as such by the Ancillary Bank in
accordance with its usual practices;
a "PERSON" includes any person, firm, company, partnership,
association, government, state, agency or other entity (in each case,
whether or not having separate legal personality);
the "PRINCIPAL AMOUNT" of an LC is to its face amount;
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 kind that is normally complied
with by the persons to whom it applies) of any governmental, inter-
governmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;
- --------------------------------------------------------------------------------
<PAGE>
13
- --------------------------------------------------------------------------------
a "SCREEN" or "PAGE" on a "Screen" in the definition of "LIBOR"
includes any replacement screen or page nominated by the British
Bankers Association as the information vendor for the purpose of
displaying British Bankers Association Interest Settlement Rates for
deposits in various currencies;
(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, transferees and assigns;
(v) a Finance Document or another document is a reference to that Finance
Document or that other document as amended; and
(vi) a time of day (including, without limitation opening and close of
business) 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. FACILITY
2.1 THE FACILITY
Subject to the terms of this Agreement, the Banks grant to the Borrower a
Sterling credit facility comprising three separate tranches, namely:
(a) Tranche A, under which each Bank shall make Advances in Sterling to
the Borrower for the purposes set out in Clause 3.1 (Tranche A
purpose);
(b) Tranche B, under which each Bank shall participate in LCs (denominated
in Sterling) issued for the Borrower's account, or make Advances in
Sterling to the Borrower, for the purposes set out in Clause 3.2
(Tranche B purpose); and
(c) Tranche C, under which each Bank shall participate in LCs (denominated
in Sterling) issued for the Borrower's account, or make Advances in
Sterling to the Borrower, for the purposes set out in Clause 3.3
(Tranche C purpose),
in each case, when so requested by the Borrower during the Commitment
Period (or, in the case only of Rollover Advances, before the Final
Maturity Date) and subject to the limits set out in Clause 2.2 (Facility
and Tranche limits).
2.2 FACILITY AND TRANCHE LIMITS
(a) Subject to paragraph (b) below, but otherwise notwithstanding any other
provision of this Agreement:
- --------------------------------------------------------------------------------
<PAGE>
14
- --------------------------------------------------------------------------------
(i) the aggregate principal amount of all outstanding Credits under the
Facility shall not at any time exceed the Total Commitments for the
time being;
(ii) Net Relevant Outstandings shall not, at the end of any Business Day,
exceed the Covered Debt Amount for the time being;
(iii) the aggregate principal amount of all Credits outstanding under
Tranche A and Tranche B shall not at any time exceed
(Pounds)45,000,000;
(iv) the aggregate principal amount of all Credits outstanding under
Tranche C shall not at any time exceed (Pounds)35,000,000; and
(v) no Bank shall be obliged to make any Credit available to the extent
that doing so would cause:
(A) the aggregate principal amount of its participations in all
outstanding Credits to exceed its Commitment for the time being;
(B) the aggregate principal amount of its participations in all
Credits outstanding under Tranche A and Tranche B to exceed its
proportion of (Pounds)45,000,000; or
(C) the aggregate principal amount of its participations in all
Credits outstanding under Tranche C to exceed its proportion of
(Pounds)35,000,000,
and for these purposes a Bank's "PROPORTION" is the proportion that
its Commitment for the time being bears to the Total Commitments for
the time being,
and the Borrower shall repay and/or prepay Credits, and/or (subject to
other provisions of the Finance Documents) pay moneys into the General Cash
Collateral Account, whenever necessary so as to ensure that the limits set
out in paragraphs (i) - (iv) (inclusive) above are complied with at all
times.
(b) Any outstanding Fronted Participation(s) shall be ignored, and deemed not
to exist, for the purpose of determining whether or not any of the limits
set out in paragraph (a) above is complied with or contravened at any time.
2.3 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.
- --------------------------------------------------------------------------------
<PAGE>
15
- --------------------------------------------------------------------------------
2.4 CHANGE OF CURRENCY
(a) If more than one currency or currency unit denomination are at the same
time recognised by the central bank 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 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 or conversion rate 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 reasonably.
(b) If a change in any currency of a country occurs, the Finance Documents will
be amended to the extent the Agent specifies to be necessary to reflect the
change in currency and to put the Banks in the same position, so far as
possible, that they would have been in if no change in currency had
occurred.
2.5 ANCILLARY FACILITY
The Parties acknowledge and agree that:
(a) the maximum amount of the Ancillary Facility as at the date of this
agreement is (Pounds)58,000,000;
(b) following the first Drawdown Date, the Ancillary Bank proposes to
continue to make available to the Borrower an Ancillary Facility under
which the facility limit shall not at any time exceed
(Pounds)2,000,000;
(c) the terms and conditions applicable to the Ancillary Facility shall be
set out in the Ancillary Facility Letter and (to the extent not
inconsistent with the Ancillary Facility Letter as in force at the
first Drawdown Date) the other Finance Documents; and
(d) nothing in this Agreement or any of the other Finance Documents shall
in any way limit or affect any of the Ancillary Bank's rights under or
in respect of the Ancillary Facility or the Ancillary Facility Letter
(including, without limitation, the right to amend, waive, extend
and/or renew it) except to the extent expressly stated in this
Agreement or any of the other Finance Documents (including, for the
avoidance of doubt, by virtue of the inclusion of the Ancillary Bank
as a Finance Party and the Ancillary Facility Letter as a Finance
Document).
3. PURPOSE
3.1 TRANCHE A PURPOSE
The Borrower shall use the proceeds of Advances made under Tranche A only
for its lawful working capital purposes.
- --------------------------------------------------------------------------------
<PAGE>
16
- --------------------------------------------------------------------------------
3.2 TRANCHE B PURPOSE
(a) LCs may only be issued under Tranche B to guarantee:
(i) the Borrower's contingent liabilities under Contracts for Differences
or under any other hedging instrument(s) used for hedging the price
paid for electricity and which are entered into in accordance with the
hedging policy set out in the letter referred to in paragraph 4(c) of
Schedule 2; and/or
(ii) the Borrower's trade obligations to suppliers of electricity and gas
except for any such obligations that are incurred otherwise than in
the ordinary course of trading.
(b) The proceeds of Advances made under Tranche B shall only be used to:
(i) cash-collateralise liabilities and obligations of the kinds referred
to in paragraphs (a)(i) and (ii) above or, in case only of an LC
Substitute Advance, for the purposes contemplated by Clause 7.4
(Fronting of LCs); and/or
(ii) repaying principal of any other Advance made under Tranche B.
3.3 TRANCHE C PURPOSE
(a) LCs may only be issued under Tranche C to Energy Pool Funds Administration
Limited in respect of the Borrower's obligations under the Pooling and
Settlement Agreement for the Electricity Industry in England and Wales
dated 30th March, 1990.
(b) The proceeds of Advances made under Tranche C shall only be used to:
(i) cash-collateralise obligations of any kind referred to in paragraph
(a) above or, in case only of an LC Substitute Advance, for the
purposes contemplated by Clause 7.4 (Fronting of LCs); and/or
(ii) repaying principal of any other Advance made under Tranche C.
3.4 NO DUTY TO MONITOR
Without affecting the obligations of either Obligor in any way, no Finance
Party is bound to monitor or verify the application of any Credit.
3.5 FINANCIAL ASSISTANCE
No Credit nor the proceeds of any Credit may be used in any way that
infringes Section 151 of the Companies Act 1985 or any similar law of any
applicable jurisdiction having the effect of prohibiting or restricting the
giving of financial assistance by a person in the circumstances in which
that section applies.
- --------------------------------------------------------------------------------
<PAGE>
17
- --------------------------------------------------------------------------------
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The Borrower may not deliver the first Request until the Agent has notified
the Borrower and the Banks that it has received all of the documents set
out in Schedule 2 in form and substance satisfactory to the Agent.
4.2 FURTHER CONDITIONS PRECEDENT
The obligation of each Bank to participate in any Advance under Clause 5.1
(Requests for Advances) or issue any LC under Clause 7 (Issue of LCs) is
subject to the further conditions precedent that on both the date of the
Request and the Drawdown Date:
(a) (except in the case of a Rollover Advance and an LC Substitute
Advance) the representations and warranties in Clause 19
(Representations and warranties) to be repeated on those dates are
correct and will be correct immediately after the Credit is made
available;
(b) (except in the case of a Rollover Advance and an LC Substitute
Advance) no Default is outstanding or might result from the making
available of the Credit (other than any Default which has been waived
in accordance with Clause 28 (Amendments and waivers));
(c) none of the limits and restrictions in Clause 2.2 (Facility and
Tranche limits) is exceeded or would be exceeded either immediately
after the Credit is made available or at close of business on the
Drawdown Date; and
(d) in the case only of an LC Substitute Advance, the relative LC is
issued on the relevant Drawdown Date.
5. DRAWDOWN OF ADVANCES
5.1 REQUESTS FOR ADVANCES
(a) Subject to paragraph (b) below and the other terms of this Agreement, the
Borrower may borrow an Advance under any Tranche if the Agent receives, not
later than 11.00 a.m. three Business Days before the proposed date of the
Advance, a duly-completed Request. Each Request is irrevocable.
(b) The Borrower may not borrow an LC Substitute Advance except in accordance
with Clause 7.4 (Fronting of LCs). This Clause 5 (Drawdown of Advances)
shall accordingly not apply in respect of any LC Substitute Advance.
5.2 COMPLETION OF REQUESTS
(a) A Request will not be regarded as having been duly-completed unless:
(i) it specifies the Tranche under which the Advance is to be made;
(ii) the Drawdown Date is a Business Day falling before the Term Date or,
in the case only of a Rollover Advance, the Final Maturity Date;
(iii) the amount of the Advance is:
- --------------------------------------------------------------------------------
<PAGE>
18
- --------------------------------------------------------------------------------
(A) a minimum of (Pounds)2,000,000 and an integral multiple of
(Pounds)500,000; or
(B) such other amount as the Agent may agree;
(iv) the Interest Period selected complies with Clause 11 (Interest
Periods) and does not overrun the Term Date or, in the case only of a
Rollover Advance, the Final Maturity Date; and
(v) the payment instructions specify one of the Borrower's accounts with a
bank in London.
(b) Each Request must specify one Advance only, but the Borrower may, subject
to the other terms of this Agreement, deliver more than one Request on any
one day. Unless otherwise agreed by the Agent, no more than six Advances
may be outstanding at any time.
5.3 MAKING OF ADVANCES
(a) The Agent shall promptly notify each Bank of the details of the requested
Advance and the amount of its participation in the Advance.
(b) Subject to the terms of this Agreement, each Bank shall make its
participation in the Advance available to the Agent for the Borrower on the
relevant Drawdown Date.
(c) The amount of each Bank's participation in the Advance will be the
proportion of the Advance which its Commitment bears to the Total
Commitments at close of business on the date of receipt by the Agent of the
relevant Request.
6. REPAYMENT OF ADVANCES
6.1 REPAYMENT OF ADVANCES
The Borrower shall repay each Advance in full to the Agent for the relevant
Bank(s) at the end of the Interest Period applicable to that Advance.
6.2 RE-BORROWING
Subject to the other terms of this Agreement, any amounts repaid under
Clause 6.1 (Repayment of Advances) may be re-borrowed.
7. ISSUE OF LCS
7.1 RECEIPT OF REQUESTS FOR LCS
The Borrower may request the issue of an LC under Tranche B or Tranche C by
giving a duly-completed Request to the Agent not later than:
(a) if the form of the requested LC is as set out in Part I or II of
Schedule 6, 3 Business Days; or
(b) otherwise, 15 Business Days,
- --------------------------------------------------------------------------------
<PAGE>
19
- --------------------------------------------------------------------------------
before the proposed Drawdown Date.
7.2 COMPLETION OF REQUESTS FOR LCS
A Request for an LC will not be regarded as being duly-completed unless:
(a) it specifies the Tranche under which the LC is to be issued;
(b) the Drawdown Date is a Business Day falling on or before the Term
Date;
(c) the face amount of the LC is expressed in Sterling and is a minimum of
(Pounds)1,000,000;
(d) it specifies the beneficiary of the LC;
(e) the expiry date of the LC falls before the Final Maturity Date;
(f) it contains instructions (acceptable to the Agent) as to the manner in
which the LC is to be made available on the Drawdown Date; and
(g) either:
(i) the requested LC is to be in a form set out in Part I or II of
Schedule 6; or
(ii) the form of the requested LC is attached to the Request and each
of the Banks confirms (or has confirmed) to the Agent in writing
that the form is acceptable to it.
7.3 ISSUE OF LCS
(a) The Agent shall promptly notify each Bank of the details of a Request for
an LC.
(b) Subject to the provisions of this Agreement, the Agent will execute and
issue each LC, and make it available in accordance with the relevant
Request, on the Drawdown Date, all as agent for and on behalf of each Bank
which is to have any liability under the relevant LC in accordance with
paragraph (c) below.
(c) Each Bank:
(i) agrees that if any LC is to be issued under this Agreement, it will
(upon and by its execution and issue in accordance with paragraph (b)
above) assume a several obligation to make payment under that LC in
the proportion which its Commitment bears to the Total Commitments at
close of business on the Drawdown Date for that LC (subject to any
adjustments resulting from the application of Clause 7.4 (Fronting of
LCs)); and
(ii) irrevocably authorises the Agent to prepare and complete any LC in
accordance with paragraph (i) above and execute and issue any such LC
on its behalf.
(d) Each Bank acknowledges that:
- --------------------------------------------------------------------------------
<PAGE>
20
- --------------------------------------------------------------------------------
(i) paragraph (c)(i) above shall apply in respect of each LC executed by
the Agent regardless of whether or not all applicable conditions
contained in Clause 4.2 (Further conditions precedent) are satisfied
in respect of that LC; and
(ii) without limiting any provision of Clause 22 (The Agent and the
Arranger), the Agent shall not incur any liability whatsoever to any
Bank by virtue of its executing an LC in the form requested by a
Request unless it is specifically instructed by the Majority Banks not
to issue that LC not later than 11.00 a.m. on the second Business Day
before the proposed Drawdown Date and considers that it will not incur
any liability to the Borrower by virtue of not issuing that LC.
7.4 FRONTING OF LCS
(a) If, prior to the delivery to the Agent of a Request for an LC:
(i) the Borrower notifies a Bank (the "RELEVANT BANK") that it wishes this
Clause 7.4 (Fronting of LCs) to apply to the Relevant Bank and that
LC; and
(ii) the Borrower and another Bank acceptable to the Borrower (the
"FRONTING BANK") agree in writing that this Clause 7.4 (Fronting of
LCs) shall apply,
then:
(A) the respective participations of the Relevant Bank and the Fronting
Bank (that would apply but for this Clause 7.4 (Fronting of LCs))
shall be adjusted so that the Fronting Bank has (instead of the
Relevant Bank) an additional participation in the relevant LC (the
"ADDITIONAL PARTICIPATION") of such amount as the Borrower and the
Fronting Bank may jointly notify to the Agent and the Relevant Bank at
or before delivery of the relevant Request to the Agent; and
(B) the Relevant Bank shall, on or before the date of issue of the LC but
subject to the other provisions of this Agreement, make an LC
Substitute Advance to the Borrower, under the same Tranche as the LC,
of an amount equal to the amount of the additional participation by
paying its proceeds directly to such bank account of or with the
Fronting Bank as the Fronting Bank may specify for this purpose.
(b) The Fronting Bank shall hold any amount paid to it under paragraph (a)(B)
above as security (on such terms as may be agreed between the Fronting Bank
and the Borrower) for the Borrower's obligations under Clause 9 (Borrower's
counter-indemnity for LCs) in respect of the LC in connection with which
the relevant amount was paid (but only to the extent attributable to the
additional participation in that LC and not further or otherwise and not
for any other obligations of any person). The Fronting Bank shall from
time to time apply any amount so held by it in discharging such obligations
as soon as it is lawfully able to do so.
(c) The Borrower:
(i) shall repay and/or prepay LC Substitute Advances whenever necessary so
as to ensure that the outstanding principal amount of each LC
Substitute Advance does not
- --------------------------------------------------------------------------------
<PAGE>
21
- --------------------------------------------------------------------------------
at any time exceed the amount of the additional participation for the
time being in the LC in connection with which the LC Substitute
Advance was made; and
(ii) shall not at any time repay or prepay any LC Substitute Advance except
to the extent required to do so by paragraph (i) above or to the
extent that it would have been permitted or required to prepay the
Relevant Bank's participation in the relevant LC if the Relevant Bank
had taken a participation in it rather than making an LC Substitute
Advance.
(d) For the purposes of paragraphs (b) and (c) above, any repayment,
prepayment or drawing of a Fronting Bank's participation in an LC in which
it has an additional participation shall be deemed to be applied or (as
appropriate) made pro rata as between that additional participation and the
remainder of the Fronting Bank's participation.
8. CLAIMS UNDER, AND REPAYMENT OF, LCS
8.1 NOTIFICATION AND PAYMENT OF DEMAND
If the beneficiary of an LC makes a demand under that LC in accordance with
its terms, the Agent shall promptly notify the Borrower and each of the
Banks, specifying:
(a) the final date on or before which payment is to be made; and
(b) the aggregate amount of the demand and the amount of each Bank's
liability under the LC in respect of the demand.
8.2 REPAYMENT AND PREPAYMENT OF LCS
(a) The Borrower may, subject to the other provisions of the Finance Documents,
effect any repayment or prepayment of an LC which it is required or
permitted to make under the Finance Documents in any one or more of the
following ways (but no other):
(i) by providing cash cover for the LC by paying an amount in Sterling to
the Agent to be credited to the LC Cash Collateral Account;
(ii) by procuring a reduction of the LC's face amount (in accordance with
its terms and those of the Finance Documents) or by the face amount
automatically reducing under the LC's terms (including upon its
termination or expiry); and
(iii) by cancelling the LC by returning the original to the Agent together
with the beneficiary's written confirmation (satisfactory to the Agent
in form and substance) that none of the Banks has any further liability
under the LC.
Any such repayment or prepayment shall take effect to the extent of the
amount of cash credited to the LC Cash Collateral Account or by the amount
of the reduction or cancellation, as appropriate.
(b) Nothing in this Clause 8.2 (Repayment and prepayment of LCs) limits or
affects any of the Finance Parties' rights under Clause 21.18 (Acceleration
etc). No provision of cash cover in respect of an LC or reduction of an
LC's face amount as contemplated by paragraphs (a)(i) and (ii) above
- --------------------------------------------------------------------------------
<PAGE>
22
- --------------------------------------------------------------------------------
shall limit or affect the Borrower's obligations under Clause 9 (Borrower's
counter-indemnity for LCs).
(c) The Agent shall promptly notify each Bank of any reduction of an LC's face
amount (other than any such reduction occurring automatically under the
terms of the relevant LC) or cancellation of any LC as contemplated by
paragraphs (a)(ii) and (iii) above respectively or of any provision of cash
collateral as contemplated by paragraph (a)(i) above.
9. BORROWER'S COUNTER-INDEMNITY FOR LCS
9.1 INDEMNITY
(a) The Borrower shall on demand:
(i) indemnify and hold harmless each Finance Party from and against all
liabilities, costs, losses, damages and expenses which the Finance
Party incurs or sustains by reason of, or arising in any way
whatsoever in connection with, or by reference to, the issue of any LC
or the Finance Party's performance of the obligations expressed to be
assumed by it under or in respect of any LC; and
(ii) without limiting paragraph (i) above, reimburse each Bank any amount
demanded of, or paid by, it under any LC.
(b) The Borrower unconditionally and irrevocably:
(i) authorises and directs each Finance Party to pay any demand under and
in accordance with any LC without requiring proof of the Borrower's
agreement that the amounts so demanded or paid are or were due and
notwithstanding that the Borrower may dispute the validity of any such
request, demand or payment;
(ii) confirms that the Finance Parties deal 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
Borrower and the beneficiary of the LC; and
(iii) agrees that no Finance Party need have any regard to the sufficiency,
accuracy or genuineness of any such demand or any certificate or
statement in connection with any such demand or any incapacity of or
limitation upon the powers of any person signing or issuing any such
demand, certificate or statement which appears on its face to be in
order and each Finance Party may assume that any such demand,
certificate or statement which appears on its face to be in order is
correct and properly made.
9.2 RIGHTS OF CONTRIBUTION AND SUBROGATION
The Borrower shall not, by virtue of any payment made by it under or in
connection with or referable to this Clause 9 (Borrower's counter-indemnity
for LCs) or otherwise, be subrogated to any rights, security or moneys held
or received or receivable by a Finance Party or be entitled at any time to
exercise, claim or have the benefit of any right of contribution or
subrogation or indemnity or similar right against any Obligor unless and
until no Credit or amount is or may be outstanding under this Agreement and
no Commitment is
- --------------------------------------------------------------------------------
<PAGE>
23
- --------------------------------------------------------------------------------
in force. The Borrower irrevocably waives all rights of contribution or
similar rights against any Finance Party.
9.3 WAIVER OF DEFENCES
The Borrower's obligations under this Clause 9 (Borrower's counter-
indemnity for LCs) shall not be affected by any act, omission, matter or
thing which, but for this provision, might reduce, release or prejudice any
of its obligations under this Clause 9 (Borrower's counter-indemnity for
LCs) in whole or in part, including without limitation and whether or not
known to it:
(a) any time or waiver granted to or composition with the beneficiary of
any LC or any other person;
(b) any taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights,
remedies or securities available to any Finance Party or other person
or arising under any LC; and
(c) any unenforceability, illegality or invalidity of any LC (so that the
Borrower's obligations under this Clause 9 (Borrower's counter-
indemnity for LCs) shall remain in full force and be construed as if
there were no such defect).
9.4 CONTINUING INDEMNITY
This is a continuing indemnity, extends to the ultimate balance of the
Borrower's obligations and liabilities under this Clause 9 (Borrower's
counter-indemnity for LCs) and shall continue in force withstanding any
intermediate payment in whole or in part of those obligations or
liabilities.
9.5 ADDITIONAL SECURITY
The Borrower's obligations under this Clause 9 (Borrower's counter-
indemnity for LCs) are in addition to and are not in any way prejudiced by
any collateral or other security now or subsequently held by any Finance
Party or any Security Interest to which any Finance Party may be entitled.
9.6 PRESERVATION OF RIGHTS
No invalidity or unenforceability of all or any part of this Clause 9
(Borrower's counter-indemnity for LCs) 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 9 (Borrower's counter-indemnity for LCs).
10. PREPAYMENT AND CANCELLATION
10.1 AUTOMATIC CANCELLATION
The Commitment of each Bank shall be automatically cancelled:
- --------------------------------------------------------------------------------
<PAGE>
24
- --------------------------------------------------------------------------------
(a) at close of business on the Term Date in such amount as is required to
ensure that the relevant Bank's Commitment does not exceed the
aggregate principal amount of its participations in all Advances
outstanding under Tranche B or Tranche C;
(b) on each subsequent date when that Bank's participation in any Advance
made under Tranche B or Tranche C is repaid or prepaid in an amount
equal to that repayment or prepayment (to the extent made otherwise
than directly from the proceeds of a Rollover Advance) (and each such
cancellation shall take effect as of opening of business on the day in
question); and
(c) in full at close of business on the Final Maturity Date.
10.2 VOLUNTARY CANCELLATION
(a) The Borrower may, by giving not less than 10 Business Days' prior written
notice (or such shorter period as the Majority Banks may agree) to the
Agent, cancel the unutilised portion of the Total Commitments in whole or
in part (but, if in part, in a minimum of (Pounds)10,000,000 and an
integral multiple of (Pounds)2,000,000).
(b) Any cancellation in part shall be applied against the Commitment of each
Bank pro rata.
10.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
(a) If:
(i) either Obligor is required to pay to a Bank any additional amounts
under Clause 14 (Taxes); or
(ii) either Obligor is required to pay to a Bank any amount under Clause 16
(Increased costs),
then, without prejudice to the obligations of either Obligor under those
clauses, the Borrower may, whilst the circumstances continue, give a notice
of prepayment and cancellation to that Bank through the Agent.
(b) If the Borrower gives a notice under paragraph (a) above in respect of a
Bank:
(i) that Bank's Commitment shall automatically be cancelled in full on the
notice being given; and
(ii) the Borrower shall prepay that Bank's participation in all outstanding
Credits on the date falling five Business Days after the date the
notice is given.
10.4 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 and, without limiting Clause 26.2 (Other
indemnities), without premium or penalty.
- --------------------------------------------------------------------------------
<PAGE>
25
- --------------------------------------------------------------------------------
(c) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(d) No amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.
11. INTEREST PERIODS
11.1 GENERAL
Each Advance shall have only one Interest Period.
11.2 SELECTION
(a) The Borrower shall select the Interest Period for an Advance in the
relevant Request (or, in the case of an LC Substitute Advance, in a notice
given to the relevant Banks and the Agent at the same time as the Request
for the relevant LC). Each Interest Period for an Advance will commence on
its Drawdown Date.
(b) Subject to the following provisions of this Clause 11 (Interest Periods),
each Interest Period will be of one, three or six months' duration or any
other period agreed by the Borrower and the Banks.
11.3 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period shall instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if
there is not).
11.4 COINCIDENCE WITH THE TERM DATE/FINAL MATURITY DATE
If an Interest Period would otherwise overrun the Term Date (or, in the
case only of a Rollover Advance, the Final Maturity Date), it shall be
shortened so that it ends on the Term Date (or, as appropriate, the Final
Maturity Date).
12. INTEREST AND LC FEES
12.1 INTEREST RATE
The rate of interest on each Advance for its Interest Period is the rate
per annum determined by the Agent to be the aggregate of the applicable:
(a) Margin for the time being;
(b) LIBOR; and
(c) Mandatory Cost.
- --------------------------------------------------------------------------------
<PAGE>
26
- --------------------------------------------------------------------------------
12.2 DUE DATES
Except as otherwise provided in this Agreement, accrued interest on each
Advance is payable by the Borrower on the last day of the Interest Period
for the relevant Advance and also, if that Interest Period is longer than
three months, on the date falling three months after the Drawdown Date of
the relevant Advance.
12.3 LC FEES
(a) The Borrower shall, in respect of each LC, pay to the Agent (for the Banks
pro rata to their respective maximum liabilities under the relevant LC,
ignoring any Fronted Participation) an LC fee computed at the rate equal to
the Margin for the time being on the amount determined by the Agent at the
start of each successive fee period for the relevant LC to be the face
amount of that LC (less the amount of any Fronted Participation in that LC)
from day to day during that fee period.
(b) The LC fee in respect of each LC is payable in advance on the first day of
each fee period for that LC. The first fee period for an LC shall run from
its Drawdown Date to the next Quarter Date (both dates inclusive) and each
succeeding fee period for that LC shall run from the day after the last day
of the immediately preceding fee period to the next Quarter Date (both
dates inclusive).
12.4 DEFAULT INTEREST
(a) If an Obligor fails to pay when due any amount payable by it under the
Finance Documents (other than the Ancillary Facility Letter), 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
judgment, at a rate (the "DEFAULT RATE") determined by the Agent to be 1%
per annum above the higher of:
(i) the rate on the overdue amount under Clause 12.1 (Interest rate)
immediately before the due date (if of principal); and
(ii) the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted an Advance for such
successive Interest Periods of such duration as the Agent may
determine (each a "DESIGNATED INTEREST PERIOD").
(b) The default rate will be determined by the Agent on each Business Day or
the first day of, or two Business Days before the first day of, the
relevant Designated Interest Period, as appropriate.
(c) If the Agent determines that deposits in Sterling 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 Agent from whatever sources it may select.
(d) Default interest will be compounded at the end of each Designated Interest
Period.
- --------------------------------------------------------------------------------
<PAGE>
27
- -------------------------------------------------------------------------------
12.5 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify each relevant Party of the determination of
a rate of interest under this Agreement.
13. PAYMENTS
13.1 PLACE OF PAYMENTS
(a) All payments by an Obligor or a Bank:
(i) under the Finance Documents (other than the Ancillary Facility Letter)
at any time; or
(ii) under the Ancillary Facility Letter at any time after the Agent has
notified the payer that it has exercised any of its rights under
Clause 21.18 (Acceleration etc),
shall be made to the Agent to its account at such office or bank in the
United Kingdom as it may notify to that Obligor or Bank for this purpose.
Notwithstanding the above, all payments by the Borrower to the Arranger
under Clause 23 (Fees) and 24 (Expenses) shall be made direct to the
Arranger in the manner agreed by the Arranger and the Borrower and any LC
Substitute Advance shall be made by one Bank making a payment directly to
another as contemplated by Clause 7.4 (Fronting of LCs).
(b) For the avoidance of doubt, all payments under the Ancillary Facility
Letter shall be made directly between the relevant Obligor and the
Ancillary Bank, except to the extent otherwise required by paragraph (a)
above.
13.2 FUNDS
Payments under the Finance Documents to the Agent shall be made for value
on the due date at such times and in such funds as the Agent may specify to
the Party concerned as being customary at the time for the settlement of
transactions in Sterling.
13.3 DISTRIBUTION
(a) Each payment received by the Agent under the Finance Documents for another
Party shall, subject to paragraphs (b) and (d) below, be made available by
the Agent to that Party by payment (on the date and in the currency and
funds of receipt) to its account with such bank in London as it may notify
to the Agent for this purpose by not less than five Business Days' prior
notice.
(b) Each payment received by the Agent under Clause 5.3(b) (Making of Advances)
shall, subject to the terms of this Agreement, be made available by the
Agent to the Borrower by payment (on the date and in the currency and funds
of receipt) to the account specified in the relevant Request.
(c) The Agent may apply any amount received by it for an Obligor in or towards
payment (on the date and in the currency and funds of receipt) of any
amount due from an Obligor under the Finance Documents or in or towards the
purchase of any amount of any currency to be so applied.
- --------------------------------------------------------------------------------
<PAGE>
28
- --------------------------------------------------------------------------------
(d) Where a sum is to be paid to the Agent under the Finance Documents for
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 the
relevant Finance Document(s) 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 by the Agent refund the
corresponding amount 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.
13.4 CURRENCY
(a) Amounts payable in respect of costs, expenses, taxes and the like are
payable in the currency in which they are incurred.
(b) Any other amount payable under the Finance Documents is, except as
otherwise provided in the Finance Documents, payable in Sterling.
13.5 SET-OFF AND COUNTERCLAIM
All payments made by an Obligor under the Finance Documents shall be made
without set-off or counterclaim.
13.6 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 shall accrue on that principal at the rate at which
it was accruing on the original due date.
13.7 PARTIAL PAYMENTS
(a) If the Agent (in its capacity as such) receives a payment insufficient to
discharge all the amounts then due and payable by the Obligors under the
Finance Documents, the Agent shall apply that payment towards the
obligations of the Obligors 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 or the Arranger or the Ancillary Bank under the
Finance Documents;
(ii) SECONDLY, in or towards payment pro rata of any amounts due but unpaid
under Clauses 12 (Interest and LC fees) and 23 (Fees) or under Clause
4 of the Ancillary Facility Letter;
(iii) THIRDLY, in or towards payment pro rata of any principal due but
unpaid under this Agreement or the Ancillary Facility Letter, any
amount due but unpaid under Clause 9 (Borrower's counter-indemnity for
LCs) and any amount payable to the Ancillary Bank in reimbursement of
any amount paid under any letter of credit or similar instrument
issued under the Ancillary Facility; and
- --------------------------------------------------------------------------------
<PAGE>
29
- --------------------------------------------------------------------------------
(iv) FOURTHLY, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.
(b) The Agent shall, if so directed by all the Banks and the Ancillary Bank (if
any amount is outstanding, actually or contingently, under the Ancillary
Facility Letter), vary the order set out in paragraphs (a)(ii) to (iv)
above.
(c) Paragraphs (a) and (b) above will override any appropriation made by an
Obligor.
14. TAXES
14.1 GROSS-UP
All payments by an Obligor under the Finance Documents shall be made
without any deduction and free and clear of and without any deduction for
or on account of any taxes, except to the extent that the Obligor 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 an Obligor, or paid or payable by
the Agent to a Bank, under the Finance Documents (other than the Ancillary
Facility Letter), the Obligor 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 any other deduction.
14.2 TAX RECEIPTS
All taxes required by law to be deducted or withheld by an Obligor from any
amounts paid or payable under the Finance Documents shall be paid by the
relevant Obligor when due and the Obligor shall, within 15 days of the
payment being made, deliver to the Agent for the relevant Finance Party
evidence satisfactory to that Finance Party (including all relevant tax
receipts) that the payment has been duly remitted to the appropriate
authority.
14.3 QUALIFYING BANKS
(a) Subject to paragraph (b) below, if a Bank is not or ceases to be a
Qualifying Bank, no Obligor will be liable to pay to that Bank under Clause
14.1 (Gross-up) any amount in respect of taxes levied or imposed by the
U.K. or any taxing authority of or in the U.K. 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.
(b) Paragraph (a) above does not apply if a Bank ceases to be a Qualifying Bank
as a result of the introduction of, or any change in, or any change in the
interpretation, administration or application of, any law or regulation or
any practice or concession of the U.K. Inland Revenue occurring after the
date of this Agreement.
14.4 TAX CREDITS
If an Obligor pays an additional amount under Clause 14.1 (Gross-up) (a
"TAX PAYMENT") and a Finance Party effectively obtains a refund of tax or
credit against tax by reason of that Tax Payment (a "TAX CREDIT") and
- --------------------------------------------------------------------------------
<PAGE>
30
- --------------------------------------------------------------------------------
is able to identify the Tax Credit as being attributable to the Tax
Payment, then the Finance Party concerned shall reimburse to the Obligor
concerned the amount which that Finance Party reasonably determines to be
the proportion of the Tax Credit that will leave it (after that
reimbursement) in no better or worse position than it would have been in if
the Tax Payment had not been required. Each Finance Party 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. No Finance Party
is obliged to disclose any information regarding its tax affairs or
computations to any Obligor.
15. MARKET DISRUPTION
15.1 ABSENCE OF QUOTATIONS
If LIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply an offered rate by 11.30 a.m. on the
Drawdown Date, the applicable LIBOR shall, subject to Clause 15.2 (Market
disruption), be determined on the basis of the quotations of the remaining
Reference Banks.
15.2 MARKET DISRUPTION
If:
(a) LIBOR is to be determined by reference to the Reference Banks but no,
or only one, Reference Bank supplies a rate by 11.30 a.m. on the
Drawdown Date or the Agent otherwise determines that adequate and fair
means do not exist for ascertaining LIBOR; or
(b) the Agent receives notification from Banks whose participations in an
Advance exceed 30% of that Advance that, in their opinion:
(i) 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 Advance for the relevant Interest Period;
or
(ii) the cost to them of matching deposits in the London interbank
market would be in excess of LIBOR for the relevant Interest
Period,
the Agent shall promptly notify the Borrower and the relevant Banks of the
fact and that this Clause 15 (Market disruption) is in operation.
15.3 SUSPENSION OF DRAWDOWNS
After any notification under Clause 15.2 (Market disruption) the relevant
Advance shall not be made. However, within five Business Days of receipt
of the notification, the Borrower and the Agent shall enter into
negotiations for a period of not more than 30 days with a view to agreeing
an alternative basis for determining the rate of interest and/or funding
applicable to that and (to the extent required) any future Advance. Any
alternative basis agreed with the prior consent of all the Banks shall be
binding on all the Parties.
- --------------------------------------------------------------------------------
<PAGE>
31
- -------------------------------------------------------------------------------
16. INCREASED COSTS
16.1 INCREASED COSTS
(a) Subject to Clause 16.2 (Exceptions), the Borrower shall forthwith on demand
by a Finance Party pay to that Finance Party the amount of any increased
cost incurred by it or any of its Affiliates as a result of:
(i) the introduction of, or any change in, or any change in the
interpretation, administration or application of, any law, regulation
or treaty; or
(ii) compliance with any law or regulation made after the date of this
Agreement,
including, without limitation, any law or regulation relating to taxation,
change in currency of a country, European monetary and economic union, 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 any of its
Affiliates as a result of it having entered into, or performing,
maintaining or funding its obligations under, any Finance Document
(other than the Ancillary Facility Letter) or LC; or
(ii) that portion of an additional cost incurred by a Finance Party or any
of its Affiliates in making, funding or maintaining all or any
advances or credits comprised in a class of advances or credits formed
by or including that Finance Party's participations in the Credits
made or to be made available under this Agreement as is attributable
to that Finance Party making, funding or maintaining those
participations; or
(iii) a reduction in any amount payable to a Finance Party or any of its
Affiliates or in the effective return to a Finance Party or any of its
Affiliates under this Agreement or (to the extent that it is
attributable to this Agreement or any Credit or Commitment) on its
capital; or
(iv) the amount of any payment made by a Finance Party or any of its
Affiliates, or the amount of any interest or other return foregone by
a Finance Party or any of its Affiliates, calculated by reference to
any amount received or receivable by a Finance Party or any of its
Affiliates from any other Party under the Finance Documents (other
than the Ancillary Facility Letter).
16.2 EXCEPTIONS
Clause 16.1 (Increased costs) does not apply to any increased cost:
(a) compensated for by the operation of Clause 14 (Taxes); or
(b) attributable to any change in the rate of, or change in the basis of
calculating, tax on the overall net income of a Bank (or the overall
net income of a division or branch of a Bank) imposed in the
jurisdiction in which its principal office or Facility Office is
located.
- --------------------------------------------------------------------------------
<PAGE>
32
- --------------------------------------------------------------------------------
17. ILLEGALITY
If the introduction of, or any change in, or any change in the
interpretation, administration or application of any law, regulation or
treaty shall make it unlawful for any Finance Party to comply with any of
its obligations as contemplated by the Finance Documents or to fund or
maintain its participation in any Credit, then that Finance Party may, by
written notice to the Agent, declare that its obligations towards the
Obligors shall be terminated. If a Finance Party gives such a notice:
(a) the Borrower shall prepay that Finance Party's participation in all
outstanding Credits on the latest day which will enable that Finance
Party to comply with the relevant law, regulation or treaty, together
with accrued interest and all other amounts due to that Finance Party
under the Finance Documents; and
(b) that Finance Party's obligations towards the Obligors under the
Finance Documents shall automatically and immediately be cancelled in
full.
8. GUARANTEE
18.1 GUARANTEE
The Guarantor irrevocably and unconditionally:
(a) as principal obligor, guarantees to each Finance Party prompt
performance by the Borrower of all its obligations under and in
respect of the Finance Documents and the payment when due of all sums
from time to time payable by the Borrower;
(b) undertakes with each Finance Party that whenever the Borrower does not
pay any amount when due under or in connection with any Finance
Document, the Guarantor shall forthwith on demand by the Agent pay
that amount as if the Guarantor instead of the Borrower were expressed
to be the principal obligor; and
(c) indemnifies each Finance Party on demand against any loss or liability
suffered by such Finance Party if any obligation guaranteed by the
Guarantor is or becomes unenforceable, invalid or illegal.
18.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the ultimate
balance of all sums payable by the Borrower under the Finance Documents,
regardless of any intermediate payment or discharge in whole or in part.
18.3 REINSTATEMENT
(a) Where any discharge (whether in respect of the obligations of either
Obligor 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 Guarantor under this Clause 18 (Guarantee) shall continue as if the
discharge or arrangement had not occurred.
- --------------------------------------------------------------------------------
<PAGE>
33
- --------------------------------------------------------------------------------
(b) Each Finance Party may concede or compromise any claim that any payment,
security or other disposition is liable to avoidance or restoration.
18.4 WAIVER OF DEFENCES
The obligations of the Guarantor under this Clause 18 (Guarantee) will not
be affected by any act, omission, matter or thing which, but for this
provision, would reduce, release or prejudice any of its obligations under
this Clause 18 (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, indulgence or waiver granted to, or composition with, any
Obligor or other person;
(b) the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against,
or security over assets of, any Obligor 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 any Obligor or any
other person;
(d) any variation (however fundamental and whether or not involving an
increase in liability of any Obligor) or replacement of a Finance
Document or any other document or security so that references to that
Finance Document in this Clause 18 (Guarantee) shall include each
variation or replacement;
(e) any unenforceability, illegality, invalidity or frustration of any
obligation of any person under any Finance Document or any other
document or security, or any failure of any Obligor to become bound by
the terms of any Finance Document; and
(f) any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any obligation of any Obligor under a
Finance Document resulting from any insolvency, liquidation or
dissolution proceedings or from any law, regulation or order,
so that each such obligation shall, for the purposes of the Guarantor's
obligations under this Clause 18 (Guarantee), remain in full force and be
construed as if there were no such act, circumstance variation, omission,
matter or thing.
18.5 IMMEDIATE RECOURSE
The Guarantor waives any right it may have of first requiring any Finance
Party (or any trustee or agent on its behalf) to proceed against or enforce
any other rights or security or claim payment from or file any proof or
claim any insolvency proceedings of any person before claiming from the
Guarantor under this Clause 18 (Guarantee).
- --------------------------------------------------------------------------------
<PAGE>
34
- --------------------------------------------------------------------------------
18.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in full
and no Credit is outstanding and no Commitment is in force, 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 Guarantor shall not be entitled to the
benefit of the same; and
(b) hold in a suspense account (bearing interest at a market rate) any
moneys received from the Guarantor or on account of the Guarantor's
liability under this Clause 18 (Guarantee).
18.7 NON-COMPETITION
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in full
and no Credit is outstanding and no Commitment is in force, the Guarantor
shall not, after a claim has been made or by virtue of any payment or
performance by it under this Clause 18 (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
Guarantor's liability under this Clause 18 (Guarantee);
(b) claim, rank, prove or vote as a creditor of the Borrower 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 either Obligor, or exercise any right
of set-off as against either Obligor,
unless the Agent otherwise directs. The Guarantor shall hold in trust for
and forthwith pay or transfer to the Agent for the Finance Parties (or as
directed by the Agent) any payment or distribution or benefit of security
received by it contrary to this Clause 18.7 (Non-competition).
18.8 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by any
other security held by any Finance Party at any time.
19. REPRESENTATIONS AND WARRANTIES
19.1 MATTERS REPRESENTED
Each Obligor makes the representations and warranties set out in this
Clause 19 (Representations and Warranties) to each Finance Party.
- --------------------------------------------------------------------------------
<PAGE>
35
- --------------------------------------------------------------------------------
19.2 STATUS
It is a limited liability company, duly incorporated and validly existing
under the laws of England and Wales.
19.3 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.
19.4 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 and binding obligation enforceable in accordance with its terms.
19.5 NON-CONFLICT
The entry into and performance by it of, and the transactions contemplated
by, the Finance Documents do not and will not conflict with:
(a) any law or regulation or judicial or official order; or
(b) its constitutional documents; or
(c) any provision of any agreement to which it is a party or which is
binding on it or any of its assets.
19.6 NO DEFAULT
(a) No Default is outstanding or might result from any Credit being made
available; and
(b) no other event is outstanding which constitutes (or, with the giving of
notice, lapse of time, determination of materiality or the fulfilment of
any other applicable condition or any combination of the foregoing, might
constitute) a default under, or entitles any person to terminate, any
document which is binding on it or any of its assets where such default or
termination might have a material adverse effect.
19.7 AUTHORISATIONS
All authorisations required or desirable 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.
19.8 ACCOUNTS
Its accounts most recently delivered to the Agent:
- --------------------------------------------------------------------------------
<PAGE>
36
- --------------------------------------------------------------------------------
(a) if audited, give a true and fair view of, or (if unaudited) fairly
represent, its financial condition as at the date as of which they
were prepared; and
(b) have been prepared in accordance with accounting principles and
practices generally accepted in the United Kingdom,
and there has been no material adverse change in its business or financial
condition since the date of those accounts.
19.9 LITIGATION
No litigation, arbitration or administrative proceedings are current,
pending or, to its knowledge, threatened, which might, if adversely
determined, have a material adverse effect.
19.10 INFORMATION MEMORANDUM
(a) The information contained in the Information Memorandum was true in all
material respects as at its date;
(b) the Information Memorandum did not omit as at its date any information
which, if disclosed, might adversely affect the decision of a person
considering whether to enter into this Agreement; and
(c) as at the date of this Agreement, nothing has occurred since the date of
the Information Memorandum which renders the information contained in it
untrue or misleading in any material respect and which, if disclosed,
might adversely affect the decision of a person considering whether to
enter into this Agreement.
19.11 ENVIRONMENTAL MATTERS
(a) It has obtained all Environmental Licences required in connection with its
business and operations and has at all times complied in all material
respects with the terms of those Environmental Licences and all applicable
Environmental Laws; and
(b) no Dangerous Substance has been used, disposed of, generated, stored,
transported, dumped, deposited, buried or emitted at, on, from or under
any premises (whether or not owned, leased, occupied or controlled by it)
in circumstances where this might result in a material liability on it.
19.12 THE MILLENNIUM
The occurrence of the year 2000 will not affect the capacity of any
computer system, software or other equipment owned or used by the Borrower
(or any system with which any such computer system, software or other
equipment is interfaced) to perform correctly, efficiently and without
interruption any function capable of being performed by that computer
system, software or other equipment prior to the year 2000.
19.13 INSURANCES
All insurances which are required to be maintained by or effected by the
Borrower have been placed and are in full force and effect and no event or
circumstance has occurred, nor has
- --------------------------------------------------------------------------------
<PAGE>
37
- --------------------------------------------------------------------------------
there been any omission to disclose a fact, which would in either case
entitle any insurer to avoid or otherwise reduce its liability under any
policy relating to any such insurances.
19.14 SECURITY DOCUMENTS
Each Security Document creates the Security Interests it purports to
create and none of those Security Interests is liable to avoidance
(whether on liquidation, bankruptcy, composition or other similar
insolvency proceedings or otherwise).
19.15 COMPLIANCE WITH LAWS
It is currently complying in all material respects with all applicable
laws and regulations and, so far as it is aware, there are no
circumstances which would be likely to cause it to cease to comply with
any such laws and regulations.
19.16 COVERED DEBT AMOUNT STATEMENTS
Each statement delivered under Clause 20.13(d) (Receivables) is accurate
and (without limiting the foregoing) all of the amounts included in any
such statement for any particular day properly fell to be taken into
account for that day in accordance with the definition of "Covered Debt
Amount" in Clause 1.1 (Definitions).
19.17 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this Clause 19
(Representations and Warranties):
(a) are made by each Obligor on the date of this Agreement; and
(b) with the exception of Clause 19.10 (Information Memorandum), are
deemed to be repeated by each Obligor on:
(i) the date of each Request and each Drawdown Date with reference
to the facts and circumstances then existing; and
(ii) each date falling 6, or an integral multiple of 6, months
after the Drawdown Date of each LC.
20. UNDERTAKINGS
20.1 DURATION
The undertakings in this Clause 20 (Undertakings) remain in force from the
date of this Agreement for so long as any Credit or amount is or may be
outstanding under this Agreement or any Commitment is in force. All of
those undertakings (and any undertakings or restrictions in any other
provision of the Finance Documents) are cumulative, and accordingly none of
them shall (except to the extent expressly stated) be limited by any
exception to any other undertaking or by implication from the terms of any
other undertaking.
- --------------------------------------------------------------------------------
<PAGE>
38
- --------------------------------------------------------------------------------
20.2 FINANCIAL INFORMATION
Each Obligor shall supply to the Agent in sufficient copies for all the
Banks:
(a) as soon as they are available and in any event within 120 days of the
end of each of its financial years:
(i) its audited accounts for that financial year; and
(ii) in the case of the Guarantor, its audited consolidated accounts
for that financial year;
(b) as soon as they are available and in any event within 60 days of the
end of each quarter of its financial years:
(i) its unaudited accounts for that quarter; and
(ii) in the case of the Guarantor, its unaudited consolidated accounts
for that quarter;
(c) as soon as they are available and in any event within 30 days of the
end of each calendar month, its management accounts for that month;
(d) together with the accounts specified in paragraph (a)(ii) above, a
certificate signed by its auditors setting out in reasonable detail
computations establishing compliance with Clause 20.22 (Financial
covenant) as at the date to which those accounts were drawn up; and
(e) together with the accounts specified in paragraph (b)(ii) above, a
certificate signed by two of its senior officers on its behalf setting
out in reasonable detail computations establishing compliance with
Clause 20.22 (Financial covenant) as at the date to which those
accounts were drawn-up.
20.3 INFORMATION - MISCELLANEOUS
Each Obligor shall supply to the Agent:
(a) all documents despatched by it or on its behalf to its shareholders
(or any class of them) or its creditors (or any class of them) or any
stock exchange at the same time as they are despatched;
(b) copies of any Pool Agreements or Contracts for Differences entered
into after the date of this Agreement;
(c) copies of any policies that replace the Coface Insurance;
(d) promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current,
threatened or pending, and which might, if adversely determined, have
a material adverse effect; and
- --------------------------------------------------------------------------------
<PAGE>
39
- --------------------------------------------------------------------------------
(e) 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,
in sufficient copies for all of the Banks, if the Agent so requests.
20.4 NOTIFICATION OF DEFAULT ETC
Each Obligor shall notify the Agent of:
(a) any Default (and the steps, if any, being taken to remedy it); and
(b) any event or circumstance that might have a material adverse effect,
promptly upon becoming aware of it.
20.5 COMPLIANCE CERTIFICATES
Each Obligor shall supply to the Agent:
(a) together with the accounts to be delivered by it under Clause 20.2(a)
or (b) (Financial information); and
(b) 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.
20.6 AUTHORISATIONS
Each Obligor 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 or any Security Interest created or evidenced by any
Finance Document.
20.7 PARI PASSU RANKING
Each Obligor shall procure that its obligations under the Finance Documents
do and will rank at least pari passu with all its other present and future
unsecured obligations, except for obligations mandatorily preferred by law
applying to companies generally.
20.8 NEGATIVE PLEDGE
(a) Subject to paragraph (b) below, neither Obligor shall create or permit to
subsist any Security Interest on any of its assets.
- --------------------------------------------------------------------------------
<PAGE>
40
- --------------------------------------------------------------------------------
(b) Paragraph (a) above does not apply to:
(i) any Security Interest created or evidenced by the Finance Documents;
(ii) any lien arising by operation of law in the ordinary course of the
relevant Obligor's trading securing amounts not more than 30 days
overdue;
(iii) any cash deposit in favour of Universities Superannuation Scheme
Limited in respect of the lease of the property at Radcliffe House,
6th Floor, Blenheim Court, Solihull, West Midlands B91 2AA in an
amount not exceeding (Pounds)170,000;
(iv) any cash deposit in favour of London Electricity Plc in an amount not
exceeding (Pounds)80,000;
(v) any cash deposit in favour of the issuer of any letter of credit
issued to Vertex Data Systems Limited provided that the aggregate
amount of all such cash deposits does not at any time exceed
(Pounds)6,800,000; or
(vi) until the first Drawdown Date only:
(A) Security Interests created under the Debenture dated 5th
September, 1997 between the Borrower and the Agent; and
(B) Security Interests created under the Charge to be entered into
between the Borrower and Medina Finance Limited.
20.9 TRANSACTIONS SIMILAR TO SECURITY
Neither Obligor shall:
(a) 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
(b) dispose of any of its receivables on recourse terms except (in the
case only of receivables other than Eligible Receivables) 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.
20.10 DISPOSALS
(a) Unless the Majority Banks otherwise agree in writing, and subject to
paragraph (b) below, neither Obligor shall either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, dispose of:
(i) any amount or receivable owing to it for, or in respect of, the
supply of electricity or under any Contract for Differences or
that is otherwise capable of falling within
- --------------------------------------------------------------------------------
<PAGE>
41
- --------------------------------------------------------------------------------
paragraphs (a)-(d) (inclusive) of the definition of "Covered
Debt Amount" in Clause 1.1 (Definitions);
(ii) any interest in any of its bank accounts; or
(iii) all or any part of its other assets.
(b) Paragraph (a)(iii) above does not apply to:
(i) disposals made in the ordinary course of trading of the disposing
entity;
(ii) disposals of assets in exchange for other assets comparable or
superior as to type, value and quality; or
(iii) disposals solely for cash consideration payable in full at the time
of disposal where the net proceeds, and in the case of a series of
transactions the aggregate net proceeds, are less than (Pounds)50,000
(or its equivalent in other currencies).
20.11 CHANGE OF BUSINESS ETC
(a) Each Obligor shall procure that no substantial change is made to the
general nature or scope of the business of the Borrower from that carried
on at the date of this Agreement.
(b) The Borrower shall procure that it, at all times:
(i) continues to be a party to, and have the benefit of, the Pool
Agreements; and
(ii) continues to have the benefit of the Supply Licence.
20.12 MERGERS AND ACQUISITIONS
Unless the Majority Banks otherwise agree in writing, neither Obligor
shall:
(a) enter into any amalgamation, demerger, merger or reconstruction; or
(b) acquire any assets or business or make any investment to the extent
that doing so would cause the aggregate cost of all assets,
businesses and investments acquired by the Obligors during any of the
Guarantor's financial years (otherwise than in the ordinary course of
trading) to exceed (Pounds)500,000 (and for these purposes any
deferred, contingent or non-cash consideration shall be valued on
such basis as the Agent may specify).
20.13 RECEIVABLES
The Borrower shall at all times:
(a) invoice each person to whom it supplies any goods or services
(including, without limitation, electricity) promptly in accordance
with the practices and procedures applied by it immediately before
the date of this Agreement;
- --------------------------------------------------------------------------------
<PAGE>
42
- --------------------------------------------------------------------------------
(b) get in and realise all of its book and other debts in the ordinary
course of its business and hold the proceeds of such getting in and
realisation upon trust for the Finance Parties until they are paid
into the bank account referred to in paragraph (c) below;
(c) except to the extent that the Agent agrees otherwise, pay the proceeds
of such getting and realisation into a Receipts Account;
(d) within 8 Business Days after the end of each calendar month, deliver
to the Agent a statement (in such format and level of detail as the
Agent may from time to time require) setting out details, for each day
during that month, of:
(i) the Covered Debt Amounts on that day; and
(ii) Net Relevant Outstandings at close of business on that day.
(e) if the Agent so requires at any time:
(i) provide to the Agent such evidence as it may reasonably require
that any statement delivered under paragraph (d) above is
accurate (including, without limitation, that all of the amounts
included in it properly fall within the definition of "Covered
Debt Amount" in Clause 1.1 (Definitions)); and
(ii) within such period as the Agent may reasonably specify, procure
an audit by an independent auditor (acceptable to the Majority
Banks) of its accounts and any statements delivered under
paragraph (d) above.
20.14 INSURANCE
(a) The Borrower shall insure and keep insured all its property and other
assets of an insurable nature and which are customarily insured (either
generally or by companies carrying on a similar business) against:
(i) loss or damage by fire;
(ii) other risks normally insured against by persons carrying on the same
class of business as that carried on by it; and
(iii) any other risks which the Agent may reasonably require.
Any such insurance must be:
(A) in a sum or sums not less than the replacement value of the property
or assets (meaning the total cost of entirely rebuilding, reinstating
or replacing such property and assets in the event of them being
completely destroyed); and
(B) maintained with an insurance company or underwriters acceptable to the
Agent.
- --------------------------------------------------------------------------------
<PAGE>
43
- --------------------------------------------------------------------------------
(b) The Borrower shall:
(i) at all times maintain and from time to time renew, on similar terms,
the Coface Insurance;
(ii) procure that the Agent is irrevocably named as sole loss payee in
respect of all insurances maintained pursuant to this paragraph (b);
and
(iii) procure that its rights, title and interest in all insurances
maintained pursuant to this paragraph (b) (including, without
limitation, the Coface Insurance) are assigned to, or charged in
favour of, the Agent, as agent and trustee for the Finance Parties.
(c) The Borrower shall procure that all moneys received or receivable under any
insurance in respect of its property or assets of an insurable nature are
applied:
(i) in replacing, restoring or reinstating the property or assets
destroyed or damaged or in any other manner which the Agent may
agree; or
(ii) after a Default has occurred, if the Agent so directs and the terms
of the relevant insurances so permit, in or towards satisfaction of
amounts owing or outstanding under the Finance Documents.
(d) In respect of any insurance maintained by the Borrower or any person on its
behalf in accordance with paragraphs (a) and (b) above, the Borrower shall:
(i) procure that a note of each Finance Party's interest is endorsed upon
the policy, certificate or cover note relating to it;
(ii) not do or permit anything to be done which may make it void or
voidable;
(iii) promptly pay all premiums and do all other things necessary to keep
it maintained in full force; and
(iv) on demand by the Agent, produce to the Agent the policy, certificate
or cover note relating to it and the receipt for the payment of any
premium for it as the Agent may request.
20.15 TAXES
Each Obligor shall:
(a) maintain its tax residence in the United Kingdom;
(b) procure that all taxes payable by, or assessed upon, it are paid when
due unless the payment of such taxes is being contested in good faith
and by all appropriate means;
(c) file all tax returns promptly; and
(d) claim all available tax credits, reliefs and refunds promptly.
- --------------------------------------------------------------------------------
<PAGE>
44
- --------------------------------------------------------------------------------
20.16 LOANS ETC
(a) Subject to paragraph (b) below, neither Obligor shall at any time make or
have owing to it any loan or otherwise be a creditor (actually or
contingently) in respect of any Financial Indebtedness.
(b) Paragraph (a) above does not apply to:
(i) any Financial Indebtedness arising under any Contract for Differences
or any hedging transaction permitted by Clause 20.19 (Hedging);
(ii) any loans made by the Guarantor to the Borrower, Generation or
Resources; or
(iii) any other loans if (but only if) the aggregate outstanding principal
amount of all such loans (whether owing to the Borrower, the
Guarantor or both of them) does not at any time exceed (Pounds)50,000
(translating any amount owing in a currency other than Sterling into
Sterling on a basis acceptable to the Agent).
20.17 OTHER FINANCIAL INDEBTEDNESS
Neither Obligor shall at any time incur or have outstanding (actually or
contingently) any Financial Indebtedness except for:
(a) any Financial Indebtedness arising under any Contract for Differences
or any hedging transactions permitted by Clause 20.19 (Hedging);
(b) Financial Indebtedness arising under the Ancillary Facility Letter;
(c) any Financial Indebtedness owing by the Borrower to the Guarantor;
(d) any Financial Indebtedness under any guarantee given by the Guarantor
in respect of any Lease provided that obligations of the Guarantor
under any such guarantee are not increased above the maximum amounts
set out in Schedule 8; and
(e) until the first Drawdown Date:
(i) any Financial Indebtedness under any Lease provided that the
obligations of the Obligors under any such Lease are not
increased above the maximum amounts set out in Schedule 8; and
(ii) any Financial Indebtedness arising under the Master Hire
Agreement to be entered into between Medina Finance Limited, the
Borrower, various financial institutions and BHF-Bank AG.
20.18 OTHER INDEBTEDNESS AND LIABILITIES
Neither Obligor shall have or incur any actual or contingent liability of
any kind (whether in favour of trade creditors or otherwise but excluding
Financial Indebtedness) except for the following liabilities to the extent
they arise in the ordinary course of the Obligors' trading:
- --------------------------------------------------------------------------------
<PAGE>
45
- --------------------------------------------------------------------------------
(a) liabilities under the Pool Agreements;
(b) liabilities in favour of any regional electricity company or The
National Grid Company plc;
(c) liabilities in respect of the supply of electricity or gas to the
person supplying it;
(d) any guarantee by the Guarantor under any electricity supply contract
between the Borrower and Generation in respect of electricity invoiced
but not paid for;
(e) any other actual or contingent liabilities that, when aggregated
together for both Obligors (taking any contingent liability at its
greatest potential amount), do not at any time exceed (Pounds)100,000;
(f) any liability of the Borrower towards the issuer of any letter of
credit issued to Vertex Data Services Limited provided that aggregate
amount of all such liabilities (whether actual or contingent) does not
at any time exceed (Pounds)6,800,000;
(g) until the first Drawdown Date, liabilities under any Lease provided
that the obligations of the Obligors under any such Lease are not
increased above the maximum amounts set out in Schedule 8;
(h) liabilities under any guarantee given by the Guarantor in respect of
any Lease provided that the obligations of the Guarantor under any
such guarantee are not increased above the maximum amounts set out in
Schedule 8;
(i) remuneration owed to its employees;
(j) indebtedness in respect of the lease of the property at Radcliffe
House, 6th Floor, Blenheim Court, Solihull, West Midlands B91 2AA; and
(k) indebtedness in respect of taxation.
20.19 HEDGING
Each Obligor shall enter into transactions of the kind referred to in
paragraph (g) of the definition of "Financial Indebtedness" on a prudent
basis in accordance with the hedging policy set out in the letter referred
to in paragraph 4(c) of Schedule 2 (but not otherwise), and neither
Obligor shall terminate any such transaction except on a prudent basis in
accordance with that policy.
20.20 DISTRIBUTIONS
(a) Subject to paragraph (b) below, neither Obligor shall at any time:
(i) declare, make or pay, or
(ii) claim, receive or be entitled to receive (including, without
limitation, by way of set-off),
- --------------------------------------------------------------------------------
<PAGE>
46
- --------------------------------------------------------------------------------
any Distribution.
(b) Paragraph (a) above does not apply to the declaration, payment or receipt
by either Obligor at any time of a lawful dividend on share capital
provided that no Default is subsisting at the time of, or would result
from, such declaration, payment of receipt.
(c) The Guarantor shall not:
(i) initiate or support any insolvency proceedings or arrangements of any
kind in relation to the Borrower; or
(ii) dispose of any Financial Indebtedness in respect of which the Borrower
is the debtor.
(d) If the Guarantor at any time receives any amount, the payment and/or
receipt of which contravene(s) any provisions of this Clause 20.20
(Distributions), the Guarantor shall hold the amount received on trust for
the Finance Parties and immediately pay it to the Agent (or, if and to the
extent that any such trust would constitute a charge registrable at
Companies House or is for any reason invalid, improperly or imperfectly
constituted or unenforceable, immediately pay to the Agent an amount equal
to the amount received (whether or not the Agent makes demand)). If any
set-off is at any time exercised in contravention of this Clause 20.20
(Distributions), the Guarantor shall immediately pay to the Agent an amount
equal to the amount of the set-off (whether or not the Agent makes demand).
(e) For the purpose of paragraph (a) above, "DISTRIBUTION" means any payment by
an Obligor to any person:
(i) by way of dividend or any other distribution of or in respect of
share capital;
(ii) by way of reduction, redemption or purchase of share capital; or
(iii) that discharges any Financial Indebtedness in respect of which the
Guarantor is the creditor.
20.21 TRANSACTIONS WITH GENERATION
Neither Obligor shall at any time enter into any transaction (or incur any
liability of any kind) with, to or in respect of Generation otherwise than
on normal arm's-length terms in the ordinary course of the relevant
Obligor's trading.
20.22 FINANCIAL COVENANT
(a) The Guarantor shall procure that Consolidated Net Worth is not at any time
less than (Pounds)40,000,000.
(b) For the purposes of paragraph (a) above, "CONSOLIDATED NET WORTH" at any
time is equal to the aggregate of:
(i) the amount paid up or credited as paid up on the issued share capital
of the Guarantor; and
- --------------------------------------------------------------------------------
<PAGE>
47
- --------------------------------------------------------------------------------
(ii) the amount standing to the credit of the consolidated capital and
revenue reserves of the Group,
based on the Guarantor's most recent audited consolidated balance sheet for
the time being (the "BALANCE SHEET") but adjusted by:
(A) adding any amount standing to the credit of the profit and loss
account for the Group for the period ending on the date of the Balance
Sheet, to the extent not included in paragraph (ii) above and to the
extent the amount is not attributable to any dividend or other
distribution declared, recommended or made by any member of the Group;
(B) deducting any amount standing to the debit of the profit and loss
account for the Group for the period ending on the date of the Balance
Sheet, to the extent not deducted in calculating the amount referred
to in paragraph (ii) above;
(C) deducting any amount attributable to goodwill arising from
acquisitions;
(D) deducting any amount attributable to any upward revaluation of assets
after 30th June, 1998 or, in the case of assets of a person that
becomes a member of the Group after that date, the date on which that
person became a member of the Group (unless the Majority Banks approve
the basis of the revaluation and agree that an amount need not be
deducted);
(E) reflecting any variation in the amount of the issued share capital of
the Guarantor and the consolidated capital and revenue reserves of the
Group after the date of the Balance Sheet;
(F) reflecting any variation in the interest of the Guarantor in any other
member of the Group since the date of the Balance Sheet;
(G) excluding any amount attributable to deferred taxation;
(H) excluding any amount attributable to minority interests;
(I) eliminating inconsistencies between the accounting policies,
principles and practices applied in connection with the Balance Sheet
and those applied in connection with the Guarantor's audited
consolidated balance sheet as at 30th June, 1998; and
(J) adding any unrealised foreign exchange gains and deducting any
unrealised foreign exchange losses, in each case to the extent not
taken into account by virtue of any of the preceding paragraphs of
this definition.
20.23 WITHDRAWALS
(a) The Borrower may not, and shall not, withdraw any moneys standing to the
credit of any of:
(i) the Receipts Account;
(ii) the General Cash Collateral Account; and
- --------------------------------------------------------------------------------
<PAGE>
48
- --------------------------------------------------------------------------------
(iii) the LC Cash Collateral Account,
unless:
(A) the withdrawal, and all of the payments against which it is applied,
are incurred and made in the ordinary course of business;
(B) both immediately before, and immediately after, the withdrawal, the
Net Relevant Outstandings do not exceed the Covered Debt Amount; and
(C) no Default is subsisting.
(b) In addition to the requirements of paragraph (a) above, withdrawals may
only be made from the General Cash Collateral Account or the LC Cash
Collateral Account with the prior written consent of the Agent. The Agent
may (but shall not be obliged to) give consent to such a withdrawal,
without reference to any of the Banks and without incurring any liability
to any Bank, if the Agent receives a withdrawal notice addressed to the
Account Bank (substantially in the form of Schedule 7, confirming the
requirements set out in paragraphs (a)(A) to (C) above) from the Borrower
not later than five Business Days before the proposed date of the
withdrawal. Any such consent shall be evidenced by the Agent's
countersignature of the withdrawal notice and if the Agent gives any such
consent it shall forward the countersigned notice to the Account Bank not
later than one Business Day before the proposed date of the withdrawal.
21. DEFAULT
21.1 EVENTS OF DEFAULT
Each of the events set out in this Clause 21 (Default) is an Event of
Default (whether or not caused by any reason whatsoever outside the control
of either Obligor or any other person).
21.2 NON-PAYMENT
An Obligor does not pay on the due date any amount payable by it under the
Finance Documents (other than any amount payable solely under Clause 2.2(a)
(Facility and Tranche limits) but including, for the avoidance of doubt,
any amount payable under Clause 7.4(c)(i) (Fronting of LCs)) at the place
at, and in the currency in, which it is expressed to be payable unless the
Obligor concerned:
(a) demonstrates to the Majority Banks' satisfaction that the non-payment
is due solely to technical or administrative reasons; and
(b) pays the relevant amount in full on or before the third Business Day
after it fell due.
21.3 BREACH OF OTHER OBLIGATIONS
(a) Clause 2.2(a) (Facility and Tranche limits) is contravened on:
(i) any three consecutive Business Days; or
(ii) any two or more non-consecutive Business Days in any calendar
month,
- --------------------------------------------------------------------------------
<PAGE>
49
- --------------------------------------------------------------------------------
and for these purposes any certificate delivered under Clause 20.13(d)
(Receivables) shall be conclusive evidence that such a contravention has
occurred on a particular day if it shows such a contravention, but shall
not be evidence that no such contravention has occurred if it does not; or
(b) an Obligor does not comply with any provision of Clauses 20.7 (Pari passu
ranking) - 20.22 (Financial covenant) (inclusive); or
(c) an Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 21.2 (Non-payment) and paragraphs
(a) and (b) above) unless, if that non-compliance is (in the Majority
Banks' opinion) capable of remedy within 21 days, it is remedied to the
Majority Banks' satisfaction within 21 days of its first occurring; or
(d) the Borrower breaches any of its obligations under any Pool Agreement in
any material respect or any Pool Agreement is terminated; or
(e) the Borrower breaches the Supply Licence in any material respect or the
Supply Licence is terminated, revoked, withheld or not renewed.
21.4 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 either Obligor under or in connection with any Finance Document
is incorrect in any material respect when made or deemed to be made or
repeated.
21.5 CROSS-DEFAULT
(a) Any Financial Indebtedness of a member of the Group is not paid when due
(or within any originally-applicable grace period specified in the
documents relating to that Financial Indebtedness); 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 claim for payment is made under any guarantee given by any Obligor in
respect of any Financial Indebtedness whether or not such payment is
actually made; or
(d) 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
(e) 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
(f) any Security Interest securing Financial Indebtedness over any asset of a
member of the Group becomes enforceable,
- --------------------------------------------------------------------------------
<PAGE>
50
- --------------------------------------------------------------------------------
unless, in any of the above cases, the only Financial Indebtedness in
respect of which the relevant event(s) has/have occurred is Financial
Indebtedness which the Agent agreed in writing, prior to its being
incurred, would not be treated as Financial Indebtedness for the purpose of
this Clause 21.5 (Cross-default).
21.6 INSOLVENCY
(a) A member of the Group 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 member of the Group 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 any of its indebtedness; or
(c) a member of the Group, by reason of financial difficulties, begins
negotiations with one or more of its creditors with a view to the
readjustment or rescheduling of any of its indebtedness.
21.7 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 any member of the Group; or
(b) a meeting of any member of the Group is convened for the purpose of
considering any resolution for (or to petition for) its winding-up or for
its administration or any such resolution is passed; or
(c) any person presents a petition for the winding-up or for the administration
of any member of the Group unless (in the case of a winding-up petition but
not an administration petition):
(i) the Borrower demonstrates to the Majority Banks' satisfaction that the
petition is frivolous, vexatious or an abuse of process and is being
actively contested; and
(ii) the petition is unconditionally dismissed within 21 days after it was
presented; or
(d) any order for the winding-up or administration of any member of the Group
is made; 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 member of the Group or any
other insolvency proceedings involving any member of the Group.
21.8 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 any member of the Group or any part of its
assets; or
- --------------------------------------------------------------------------------
<PAGE>
51
- --------------------------------------------------------------------------------
(b) the directors of a member of the Group request the appointment of a
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like;
or
(c) any other steps are taken to enforce any Security Interest over any
part of the assets of any member of the Group.
21.9 CREDITORS' PROCESS
Any attachment, sequestration, distress or execution affects any asset of
a member of the Group and is not discharged within 14 days.
21.10 ANALOGOUS PROCEEDINGS
There occurs, in relation to a member of the Group, any event anywhere
which, in the opinion of the Majority Banks, appears to correspond with
any of those mentioned in Clauses 21.6 (Insolvency) - 21.9 (Creditors'
process) (inclusive).
21.11 CESSATION OF BUSINESS
A member of the Group ceases, or threatens to cease, to carry on all or a
substantial part of its business.
21.12 UNLAWFULNESS
It is or becomes unlawful for either Obligor to perform any of its
obligations under the Finance Documents.
21.13 EFFECTIVENESS OF THE GUARANTEE
The guarantee of the Guarantor is or becomes ineffective or unlawful or is
alleged by an Obligor to be ineffective for any reason.
21.14 EFFECTIVENESS OF SECURITY
(a) Any of the Security Documents does not, or ceases to, create any of the
Security Interests it purports to create; or
(b) any of those Security Interests is not, or ceases to be, a first-ranking
Security Interest.
21.15 OWNERSHIP OF THE BORROWER
The Borrower is not, or ceases to be, a wholly-owned Subsidiary of the
Guarantor.
21.16 OWNERSHIP OF THE GUARANTOR
Any single person, or group of persons acting in concert (as defined in
the City Code on Take-overs and Mergers), acquires control (as defined in
Section 416 of the Income and Corporation Taxes Act 1988) of the
Guarantor.
- --------------------------------------------------------------------------------
<PAGE>
52
- --------------------------------------------------------------------------------
21.17 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which, in the reasonable opinion of
the Majority Banks, might have a material adverse effect.
21.18 ACCELERATION ETC
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
Borrower:
(a) cancel the Total Commitments in full or in part; and/or
(b) demand that all or part of the Advances, together with accrued
interest and any or all other amounts accrued under the Finance
Documents, be immediately due and payable, whereupon they shall
become immediately due and payable; and/or
(c) demand that all or part of the Advances 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) require the Borrower to pay to the Agent for crediting to the LC Cash
Collateral Account an amount in Sterling equal to the face amount for
the time being of each outstanding LC and the Borrower shall
immediately comply with such requirement, which shall immediately
constitute a liquidated and accrued debt due and payable for the
benefit of the Banks participating in the relevant LC(s); and/or
(e) prepay on behalf of the Borrower all or any part of the amounts which
are the subject of each (or any) outstanding LC and any such payment
shall be treated as a payment made pursuant to a demand under the
relevant LC for the purposes of Clause 8 (Claims under, and repayment
of, LCs); and/or
(f) enter into any arrangement which the Agent may (with the consent of
the Majority Banks) consider fit in respect of the Banks' liabilities
in respect of any LC (including, but not limited to, negotiating any
compromise, release, reduction or retirement of the Banks'
liabilities in respect of any LC then outstanding) and any payment
made pursuant to any such arrangements shall be treated as a payment
made pursuant to a demand under the relevant LC for the purposes of
Clause 8 (Claims under, and repayment of, LCs).
22. THE AGENT AND THE ARRANGER
22.1 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.
(b) Each Party appointing the Agent irrevocably authorises the Agent on its
behalf to:
(i) 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; and
- --------------------------------------------------------------------------------
<PAGE>
53
- --------------------------------------------------------------------------------
(ii) execute each Finance Document expressed to be executed by the Agent on
that Party's behalf.
(c) The Agent shall have only those duties which are expressly specified in the
Finance Documents. Those duties are solely of a mechanical and
administrative nature.
22.2 ROLE OF THE ARRANGER
Except as otherwise provided in the Finance Documents, the Arranger has no
obligations of any kind to any other Party under or in connection with any
Finance Document.
22.3 RELATIONSHIP
The relationship between the Agent and the other Finance Parties is that of
agent and principal only. Except as contemplated by the Security
Documents, 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.
22.4 MAJORITY BANKS' INSTRUCTIONS
(a) 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 and (except to the extent the instructions
discriminate against the Ancillary Bank as against the Banks) the Ancillary
Bank. In the absence of such instructions the Agent may act as it
considers to be in the best interests of all the Banks and the Ancillary
Bank.
(b) The Agent is not authorised to act on behalf of a Bank (without first
obtaining that Bank's consent) in any legal or arbitration proceedings
relating to any Finance Document.
22.5 DELEGATION
The Agent may act under the Finance Documents through its personnel and
agents.
22.6 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor the Arranger 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, without limitation,
the Information Memorandum).
- --------------------------------------------------------------------------------
<PAGE>
54
- --------------------------------------------------------------------------------
22.7 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 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 arising out of or
in connection with any Finance Document before it commences these
proceedings or takes that action.
22.8 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 gross negligence or
wilful misconduct) by that officer, employee or agent in relation to any
Finance Document.
22.9 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 or advising a Party other than the Agent).
22.10 CREDIT APPROVAL AND APPRAISAL
Without affecting the responsibility of either Obligor 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 Obligor 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 the Arranger in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities while any
amount is or may be outstanding under the Finance Documents or any
Commitment is in force.
- --------------------------------------------------------------------------------
<PAGE>
55
- --------------------------------------------------------------------------------
22.11 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) 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 either Obligor or any related entity of either Obligor,
whether coming into its possession before, on or after the date of
this Agreement; or
(ii) unless specifically requested to do so by a Bank in accordance with a
Finance Document, to request any certificates or other documents from
either Obligor.
22.12 THE AGENT AND THE ARRANGER INDIVIDUALLY
(a) If it is also a Bank or the Ancillary Bank, each of the Agent and the
Arranger has the same rights and powers under and in respect of the Finance
Documents as any other Bank or the Ancillary Bank and may exercise those
rights and powers as though it were not the Agent or the Arranger.
(b) Each of the Agent and Arranger may:
(i) carry on any business with an Obligor or its related entities;
(ii) act as agent or trustee for, or in relation to any financing
involving, an Obligor or its related entities; and
(iii) retain any profits or remuneration in connection with its activities
under the Finance Documents or in relation to any of the foregoing.
(c) In acting as the Agent, the agency division of the Agent will be treated as
a separate entity from its other divisions and departments. Any
information acquired by the Agent which, in its opinion, is acquired by it
otherwise than in its capacity as the Agent may be treated as confidential
by the Agent and will not be deemed to be information possessed by the
Agent in its capacity as such.
(d) Each Obligor irrevocably authorises the Agent to disclose to the other
Finance Parties any information which, in its opinion, is received by it in
its capacity as the Agent.
- --------------------------------------------------------------------------------
<PAGE>
56
- --------------------------------------------------------------------------------
(e) The Agent may deduct from any amount received by it for the Banks pro rata
any unpaid fees, costs and expenses of the Agent incurred by it in
connection with the Finance Documents.
22.13 INDEMNITIES
(a) Without limiting the liability of either Obligor under the Finance
Documents, each Bank shall forthwith on demand indemnify the Agent for
that Bank's 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 Credits (if any)
bear to all the Credits outstanding on the date of the demand. However, if
there are no Credits outstanding on the date of demand, then the
proportion will be the proportion which its Commitment 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.
22.14 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 either Obligor 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.
22.15 RESIGNATION OF AGENT
(a) Notwithstanding its irrevocable appointment, the Agent may resign by
giving notice to the Banks and the Borrower, in which case the Agent may
forthwith appoint one of its Affiliates as successor Agent or, failing
that, the Majority Banks may 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 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 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.
- --------------------------------------------------------------------------------
<PAGE>
57
- --------------------------------------------------------------------------------
(e) Upon its resignation becoming effective, this Clause 22 (The Agent and the
Arranger) 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.
22.16 BANKS
(a) The Agent may treat each Bank as a Bank, entitled to payments under the
Finance Documents and as acting through its Facility Office(s), until it
has received not less than five Business Days' notice from the Bank to the
contrary.
(b) The Agent may at any time, and shall if requested to do so by the Majority
Banks, convene a meeting of the Banks. The Ancillary Bank may attend and
speak at any such meeting.
22.17 EXTRAORDINARY MANAGEMENT TIME AND RESOURCES
The Borrower shall forthwith on demand pay the Agent for the cost of
utilising its management time or other resources in connection with:
(a) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of an
Obligor and relating to any Finance Document or any document referred
to in any Finance Document; or
(b) the occurrence of a Default; or
(c) the enforcement of, or the preservation of any rights under, any
Finance Document.
Any amount payable to the Agent under this Clause 22.17 (Extraordinary
Management time and resources) will be calculated on the basis of such
reasonable daily or hourly rates as the Agent may notify to the Borrower,
and is in addition to any fee paid or payable to the Agent under Clause 23
(Fees).
22.18 AGENT AS TRUSTEE
(a) The Agent in its capacity as trustee or otherwise under the Security
Documents:
(i) is not liable for any failure, omission or defect in perfecting or
registering the security purported to be created or evidenced by any
Finance Document;
(ii) may accept without enquiry such title as any Obligor may have to any
asset over which security is purported to be created or evidenced by
any Security Document;
(iii) is not under any obligation to hold any Finance Document or any
other document in connection with the Finance Documents or any
assets referred to in paragraph (ii) above (including, without
limitation, any title deeds) in its own possession or to take any
steps to protect or preserve the same; and
(iv) may permit any Obligor to retain any Finance Document or other
document in its possession.
- --------------------------------------------------------------------------------
<PAGE>
58
- --------------------------------------------------------------------------------
(b) Except 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 control of the Agent at such
bank or institution (including the Agent) and upon such terms as the Agent
may think fit.
23. FEES
23.1 ARRANGEMENT FEE
The Borrower shall on the date of this Agreement pay to the Agent for the
Arranger an arrangement fee in the amount agreed in the Fee Letter. This
fee shall be paid by the Agent to the Arranger in accordance with the
arrangements agreed by the Agent with the Arranger.
23.2 AGENT'S FEE
The Borrower shall pay to the Agent for its own account an agency fee in
the amount agreed in the Fee Letter. 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.
23.3 COMMITMENT FEE
(a) The Borrower shall pay to the Agent for each Bank a commitment fee
computed at the rate of 0.45% per annum on the undrawn, uncancelled amount
of that Bank's Commitment during the Commitment Period. A Fronted
Participation shall not be treated as a drawing of any Bank's Commitment
for this purpose (but, for the avoidance of doubt, an LC Substitute
Advance shall be).
(b) Accrued commitment fee is payable quarterly in arrear. Accrued commitment
fee shall also be payable to the Agent for the relevant Bank on the
cancelled amount of its Commitment at the time any cancellation comes into
effect.
23.4 VAT
Any fee referred to in this Clause 23 (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 Borrower at the same time as it pays the relevant fee.
24. EXPENSES
24.1 INITIAL AND SPECIAL COSTS
The Borrower shall forthwith on demand pay the Agent and the Arranger the
amount of all costs and expenses (including, without limitation, legal
fees) incurred by either of them in connection with:
- --------------------------------------------------------------------------------
<PAGE>
59
- --------------------------------------------------------------------------------
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in this
Agreement; and
(ii) any other Finance Document (other than a Novation Certificate)
executed after the date of this Agreement;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of an
Obligor or, in the case of Clause 2.4 (Change of currency), the Agent
and relating to any Finance Document or any document referred to in
any Finance Document;
(c) any audit procured under Clause 20.13(e)(ii); and
(d) the syndication of the Facility.
24.2 ENFORCEMENT COSTS
The Borrower shall forthwith on demand pay to each Finance Party the
amount of all 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.
25. STAMP DUTIES
The Borrower 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.
26. INDEMNITIES
26.1 CURRENCY INDEMNITY
(a) If a Finance Party receives an amount in respect of an Obligor's liability
under the Finance Documents, or if any such liability is converted into a
claim, proof, judgment 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 Obligor 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 Obligor concerned shall forthwith on demand pay to that Finance
Party an amount in the contractual currency equal to the deficit;
and
(iii) the Obligor shall forthwith on demand pay to the Finance Party
concerned any exchange costs and taxes payable in connection with
any such conversion.
- --------------------------------------------------------------------------------
<PAGE>
60
- --------------------------------------------------------------------------------
(b) Each Obligor 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.
26.2 OTHER INDEMNITIES
The Borrower 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) the operation of Clause 2.4 (Change of currency), Clause 21.18
(Acceleration etc) or Clause 32 (Pro rata sharing);
(c) any payment of principal or an overdue amount being received from any
source otherwise than on the last day of a relevant Interest Period or
Designated Interest Period (as defined in Clause 12.4 (Default
interest)) relative to the amount so received; or
(d) a Credit (or part of a Credit) not being prepaid in accordance with a
notice of prepayment or (other than by reason of negligence or default
by that Finance Party) not being made after the Borrower has delivered
a Request.
The Borrower'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 Credit.
27. EVIDENCE AND CALCULATIONS
27.1 ACCOUNTS
Accounts maintained by a Finance Party in connection with the Finance
Documents are prima facie evidence of the matters to which they relate.
27.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount
under the Finance Documents is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
27.3 CALCULATIONS
Interest (including any applicable Mandatory Cost) and the fee payable
under Clause 23.3 (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, and LC fees payable under Clause 12.3 (LC fees) shall be deemed
to accrue, and be calculated, on that same basis for the purpose of
calculating the amount of any particular payment (but not otherwise).
- --------------------------------------------------------------------------------
<PAGE>
61
- --------------------------------------------------------------------------------
28. AMENDMENTS AND WAIVERS
28.1 PROCEDURE
(a) Subject to Clause 28.2 (Exceptions), any term of the Finance Documents may
be amended or waived with the agreement of the Borrower and the Majority
Banks. The Agent may effect, on behalf of any Finance Party, an amendment
or waiver permitted under this Clause 28.1 (Procedure).
(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.
28.2 EXCEPTIONS
(a) An amendment or waiver not agreed by a Bank and which relates to:
(i) an extension of the date for, or a decrease in an amount or a change
in the currency of, any payment to that Bank under the Finance
Documents;
(ii) an increase in that Bank's Commitment;
(iii) a term of a Finance Document which expressly requires the consent of
that Bank; or
(iv) Clause 2.3 (Nature of a Finance Party's rights and obligations),
Clause 29.2 (Transfers by Banks), Clause 32 (Pro rata sharing) or
this Clause 28 (Amendments and waivers),
is not binding on that Bank.
(b) An amendment or waiver which relates to the definitions of "MAJORITY
BANKS" or "COVERED DEBT AMOUNT" in Clause 1.1 (Definitions) may not be
made without the agreement of all the Banks.
(c) An amendment or waiver that relates to the rights and/or obligations of
the Agent may not be effected without the agreement of the Agent.
(d) Any amendment or waiver of the terms of the Ancillary Facility may be made
with the agreement of the Borrower and the Ancillary Bank (and, for the
avoidance of doubt, shall not require the agreement of the Majority Banks)
except where the amendment or waiver has the effect of increasing the
maximum amount that may be made available under the Ancillary Facility
(when the Majority Banks' agreement shall be required).
28.3 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.
- --------------------------------------------------------------------------------
<PAGE>
62
- --------------------------------------------------------------------------------
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
29. CHANGES TO THE PARTIES
29.1 TRANSFERS BY OBLIGORS
Neither Obligor may assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under the Finance Documents.
29.2 TRANSFERS BY BANKS
(a) A Bank (the "EXISTING BANK") may, subject to paragraph (b) below, at any
time assign, transfer or novate any of its Commitment in whole or in part
and/or any of its rights and/or obligations under the Finance Documents to
another bank or financial institution (the "NEW BANK") provided that
(unless the Borrower agrees otherwise) the New Bank's long-term debt is
rated at least A by Standard & Poor's Corporation at the time the
assignment, transfer or novation takes effect.
(b) The prior consent of the Borrower is required for any such assignment,
transfer or novation unless the New Bank is another Bank or an Affiliate of
a Bank. However, the prior consent of the Borrower may not be unreasonably
withheld or delayed and will be deemed to have been given if, within five
days of receipt by the Borrower of an application for consent, it has not
been expressly refused.
(c) An assignment, transfer or novation of obligations will be effective only
if either:
(i) the obligations are novated in accordance with Clause 29.3 (Procedure
for novations); or
(ii) the New Bank confirms to the Agent and the Borrower 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 as contemplated by paragraph (ii) above,
the Existing Bank shall be relieved of its obligations under this Agreement
to the extent that they are transferred to the New Bank.
(d) 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.
(e) On each occasion an Existing Bank assigns, transfers or novates any of its
Commitment and/or 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
(Pounds)750.
(f) 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;
- --------------------------------------------------------------------------------
<PAGE>
63
- --------------------------------------------------------------------------------
(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.
(g) 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 Obligor 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 Obligor and its related entities while any
amount is or may be outstanding under the Finance Documents or any
Commitment is in force.
(h) 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 29
(Changes to the Parties); or
(ii) support any losses incurred by the New Bank by reason of the non-
performance by either Obligor of its obligations under the Finance
Documents or otherwise.
(i) 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 in full or otherwise
reduced to nil.
29.3 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 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
a 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;
- --------------------------------------------------------------------------------
<PAGE>
64
- --------------------------------------------------------------------------------
(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 exercisable 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.
29.4 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 a Bank, the Agent shall (in
consultation with the Borrower) appoint another Bank or an Affiliate of a
Bank to replace that Reference Bank.
29.5 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.
30. DISCLOSURE OF INFORMATION
(a) Subject to paragraph (b) below, each Finance Party undertakes to the
Borrower to keep confidential all confidential information received by it
in relation to the Finance Documents and not disclose it to any third
party except to the extent that:
(i) disclosure is to its directors, officers, employees, servants,
subcontractors (or their professional advisers) or agents to the
extent necessary to enable it to monitor, perform (or to cause to be
performed) or enforce any of its rights or obligations under or in
respect of any Finance Document;
(ii) disclosure is required by or pursuant to any law or regulation or the
rules or any order of any court, tribunal or agency of competent
jurisdiction;
(iii) disclosure is to its legal or other professional advisers;
(iv) the confidential information has, except as a result of breach of
confidentiality by the Finance Party in question, become publicly
available or generally know to the public at the time of such
disclosure;
(v) the confidential information is already lawfully in the possession of
the recipient or lawfully known to him prior to such disclosure;
(vi) disclosure is necessary in order to enforce its rights under or in
respect of a Finance Document; or
(vii) disclosure is to any banking, taxation or other governmental or
regulatory authority which is lawfully entitled to that disclosure or
to which the Finance Party is accustomed to disclose,
- --------------------------------------------------------------------------------
<PAGE>
65
- --------------------------------------------------------------------------------
in all of which cases the Finance Party concerned may disclose the relevant
information.
(b) A Bank may disclose to one of its Affiliates or any person 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 Bank has acquired under or in connection
with any Finance Document,
if the recipient agrees to keep that information confidential in accordance
with paragraph (a) above.
31. SET-OFF
A Finance Party may set off any matured obligation owed by an Obligor under
the Finance Documents (to the extent beneficially owned by that Finance
Party) against any obligation (whether or not matured) owed by that Finance
Party to that Obligor, 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.
32. PRO RATA SHARING
32.1 REDISTRIBUTION
If any amount owing by an Obligor under the Finance Documents to a Finance
Party (the "RECOVERING FINANCE PARTY") is discharged by payment, set-off or
any other manner other than in accordance with Clause 13.1 (Place of
payments) (a "RECOVERY"), then:
(a) the recovering Finance Party shall, within three 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 13.1 (Place of payments);
(c) subject to Clause 32.3 (Exceptions), the recovering Finance Party
shall, within three 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 Obligor concerned under Clause 13 (Payments) and shall pay the
redistribution to the Finance Parties (other than the recovering
Finance Party) in accordance with Clause 13.7 (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 Obligor will owe the recovering Finance Party a
debt which is equal to the redistribution, immediately payable and of
the type originally discharged.
- --------------------------------------------------------------------------------
<PAGE>
66
- --------------------------------------------------------------------------------
Obligor will owe the recovering Finance Party a debt which is equal to
the redistribution, immediately payable and of the type originally
discharged.
32.2 REVERSAL OF REDISTRIBUTION
If under Clause 32.1 (Redistribution):
(a) a recovering Finance Party must subsequently return a recovery, or an
amount measured by reference to a recovery, to an Obligor; and
(b) the recovering Finance Party has paid a redistribution in relation to
that recovery,
each Finance Party shall, within three 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 together with interest on the amount to be returned to
the recovering Finance Party for the period whilst it held the re-
distribution. Thereupon the subrogation in Clause 32.1(e) (Redistribution)
will operate in reverse to the extent of the reimbursement.
32.3 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 Obligor
concerned in the amount of the redistribution pursuant to Clause 32.1(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 the other Finance
Party had an opportunity to participate in those legal proceedings but did
not do so and did not take separate legal proceedings.
33. 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.
34. COUNTERPARTS
Each 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.
- --------------------------------------------------------------------------------
<PAGE>
67
- --------------------------------------------------------------------------------
35. NOTICES
35.1 GIVING OF NOTICES
All notices or other communications under or in connection with the Finance
Documents shall be given in writing and, unless otherwise stated, may be
made by letter or facsimile. Any such notice will be deemed to be given as
follows:
(a) if by letter, when delivered personally or on actual receipt; or
(b) if by facsimile, when received in legible form.
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.
35.2 ADDRESSES FOR NOTICES
(a) The address and facsimile number of each Party (other than the Borrower,
the Guarantor and the Agent) for all notices under or in connection with
the Finance Documents are:
(i) those 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 and facsimile number of the Agent are:
(i) for Requests for Advances:
Global Services Unit
5 The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile No: 0171 773 6807
Attn: Head of Agency
(ii) for all communications other than Requests for Advances:
5 The North Colonnade
Canary Wharf
London
E14 4BB
Facsimile No: 0171 773 1826
Attn: Frank Rogers
- --------------------------------------------------------------------------------
<PAGE>
68
- --------------------------------------------------------------------------------
or such other as the Agent may notify to the other Parties by not less than
five Business Days' notice.
(c) The address and facsimile number of the Borrower and the Guarantor are:
Radcliffe House
6th Floor
Blenheim Court
Solihull
West Midlands
B91 2AA
Facsimile No: 0121 705 2025
Attn: John Sulley
or such other as the Obligor concerned may notify to the other Parties by
not less than five Business Days' notice.
(d) All notices from or to an Obligor shall be sent through the Agent.
(e) The Agent shall, promptly upon request from any Party, give to that Party
the address or facsimile number of any other Party applicable at the time
for the purposes of this Clause 35 (Notices).
36. 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>
69
- --------------------------------------------------------------------------------
SCHEDULE 1
BANKS AND COMMITMENTS
<TABLE>
<CAPTION>
Banks COMMITMENTS
(Pounds)
<S> <C>
Barclays Bank PLC 20,000,000
Bank of Scotland 20,000,000
The First National Bank of Chicago 15,000,000
The Royal Bank of Scotland plc 10,000,000
Singer & Friedlander Limited 10,000,000
The Industrial Bank of Japan, Limited 5,000,000
Total Commitments 80,000,000
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
70
- --------------------------------------------------------------------------------
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
1. OBLIGORS' CONSTITUTIONAL DOCUMENTS
A copy of the constitutional documents of each Obligor.
2. OBLIGORS' CORPORATE AUTHORISATIONS
(a) A copy of a resolution of the board of directors of each Obligor:
(i) approving the terms of, and the transactions contemplated by, the
Finance Documents executed by it;
(ii) authorising a specified person or persons to execute the Finance
Documents on its behalf; and
(iii) authorising a specified person or persons, on its behalf, to sign
and/or despatch all documents and notices to be signed and/or
despatched by it under or in connection with the Finance Documents;
(b) a specimen of the signature of each person authorised by the resolution
referred to in paragraph (a) above;
(c) a certificate of a director of the Borrower and the Guarantor confirming
that the borrowing of the Total Commitments in full would not cause any
borrowing limit binding on any member of the Group to be exceeded; and
(d) a certificate of an authorised signatory of the Borrower certifying that
each copy document specified in this Schedule 2 is correct, complete and in
full force and effect as at such date(s) as may be acceptable to the Agent.
3. FINANCE DOCUMENTS
ORIGINALS OF THE FOLLOWING DULY EXECUTED BY ALL PARTIES TO THEM:
(a) the Ancillary Facility Letter; and
(b) the Security Agreement duly executed by the Borrower.
4. OTHER DOCUMENTS
(a) Evidence that the Group has been restructured and reorganised in a manner
acceptable to the Banks and in particular, without limitation:
(i) all of the assets and liabilities (including, without limitation,
liabilities under the Credit Agreement dated 5th September, 1997
between the Borrower, the Guarantor, the Agent and various financial
institutions as lenders) of the generation business of
- --------------------------------------------------------------------------------
<PAGE>
71
- --------------------------------------------------------------------------------
the Borrower have been transferred to Generation on terms satisfactory
to the Banks, including as to consideration and the satisfaction of the
consideration;
(ii) arrangements satisfactory to the Banks having been entered into
between Generation and the Borrower and Resources;
(iii) all Security Interests over any assets of the Borrower, other than
Security Interests permitted under Clause 20.8 (Negative Pledge) to
exist after the first Drawdown Date, have been discharged to the
extent that the assets have not been transferred to Generation or
Resources; and
(iv) the Group shareholding structure is satisfactory to the Banks.
(b) a letter setting out the Obligors' hedging policy;
(c) a copy of the Supply Licence;
(d) copies of the Pool Agreements;
(e) copies of all Contracts for Differences to which the Borrower is party as
at the date of this Agreement;
(f) a copy of the Coface Insurance and confirmation from Coface that:
(i) it is in force;
(ii) all premiums in respect of it have been paid;
(iii) the Agent is irrevocably named as the loss payee under it; and
(iv) it has been assigned or charged to the Agent;
(g) a statement of the kind required by Clause 20.13(d) (Receivables) for the
day immediately preceding the date of this Agreement and the day
immediately preceding at the first Drawdown Date;
(h) evidence that the following accounts have been opened:
(i) the General Cash Collateral Account;
(ii) the LC Cash Collateral Account; and
(iii) the accounts required to be opened pursuant to the Security
Agreement; and
(i) evidence that the aggregate principal amount of all outstandings under the
Ancillary Facility has been reduced, or will be reduced immediately after
the first Drawdown Date, to (Pounds)2,000,000;
- --------------------------------------------------------------------------------
<PAGE>
72
- --------------------------------------------------------------------------------
(j) the letter dated 28th May, 1999 from the Borrower to the Arranger
describing the method of calculating amounts projected to be payable to the
Borrower for electricity that has been supplied to customers (other than
half-hourly customers) but has not yet been invoiced for;
(k) a certificate of a director of the Borrower confirming that the following
Security Interests have been unconditionally and irrevocably released:
(i) charge over credit balances created on 16th February, 1996 in favour
of the Agent;
(ii) charge over credit balances created on 18th November, 1996 in favour
of the Agent; and
(iii) fixed charge on purchased debts which fail to vest created on 25th
March, 1997 in favour of Barclays Commercial Services Limited.
5. LEGAL OPINION
A legal opinion of Allen & Overy, legal advisers to the Arranger.
- --------------------------------------------------------------------------------
<PAGE>
73
- --------------------------------------------------------------------------------
SCHEDULE 3
CALCULATION OF THE MANDATORY COST
(a) The Mandatory Cost for an Advance for its Interest Period is the rate
determined by the Agent to be equal to the arithmetic mean (rounded upward,
if necessary, to four decimal places) of the respective rates notified by
each of the Reference Banks to the Agent and calculated in accordance with
the following formula:
BY + S(Y-Z) + F x 0.01 % per annum = Mandatory Cost
----------------------
100-(B + S)
where on the day of application of the formula:
B is the percentage of the Reference Bank's eligible liabilities (in
excess of any stated minimum) which the Bank of England requires the
Reference Bank to hold on a non-interest-bearing deposit account in
accordance with its cash ratio requirements;
Y is LIBOR at or about 11.00 a.m. on that day for the Interest Period;
S is the percentage of the Reference Bank's eligible liabilities which
the Bank of England requires the Reference Bank to place as a special
deposit;
Z is the interest rate per annum allowed by the Bank of England on
special deposits; and
F is the charge payable by the Reference Bank to the Financial Services
Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees
Regulations but where for this purpose, the figure in paragraph 2.02b
and 2.03b will be deemed to be zero expressed in pounds per (Pounds)1
million of the fee base of the Reference Bank.
(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; and
(ii) "FEE BASE" has the meaning given to it in the Fees Regulations;
(iii) "FEES REGULATIONS" means the Banking Supervision (Fees) Regulations
1999 and/or any other regulations governing the payment of fees for
banking supervision.
(c) In the application of the formula, B, Y, 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) If a Reference Bank does not supply a rate to the Agent, the applicable
Mandatory Cost will be determined on the basis of the rate(s) supplied by
the remaining Reference Banks.
(e) The formula is applied on the first day of the Interest Period for each
Advance.
- --------------------------------------------------------------------------------
<PAGE>
74
- --------------------------------------------------------------------------------
(f) 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 Borrower of the manner in which the Mandatory
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>
75
- --------------------------------------------------------------------------------
SCHEDULE 4
FORMS OF REQUEST
PART I
FOR ADVANCES
To: BARCLAYS BANK PLC as Agent
From: INDEPENDENT ENERGY UK LIMITED
[Date]
INDEPENDENT ENERGY UK LIMITED (Pounds)80,000,000 CREDIT AGREEMENT
DATED 8TH JULY, 1999
1. We wish to borrow an Advance as follows:
(a) Tranche: [ ]
(b) Drawdown Date: [ ]
(c) Amount: (Pounds)[ ]
(d) Interest Period: [ ]
(e) Payment Instructions: [ ]
2. We confirm that:
(a) each condition specified in Clause 4.2(a) and (b) (Further conditions
precedent) of the Credit Agreement is satisfied on the date of this
Request; and
(b) none of the limits and restrictions in Clause 2.2 (Facility and Tranche
limits) of the Credit Agreement will be exceeded immediately after the
above Advance is made or at close of business on the above Drawdown
Date.
By:
INDEPENDENT ENERGY UK LIMITED
Authorised Signatory
- --------------------------------------------------------------------------------
<PAGE>
76
- --------------------------------------------------------------------------------
PART II
FOR LCs
To: BARCLAYS BANK PLC as Agent
From: INDEPENDENT ENERGY UK LIMITED
[Date]
INDEPENDENT ENERGY UK LIMITED (Pounds)80,000,000 CREDIT AGREEMENT
DATED 8TH JULY, 1999
1. We request the Banks to issue of an LC as follows:
(a) Tranche: [ ]
(b) Drawdown Date: [ ]
(c) Face amount: (Pounds)[ ]
(d) Beneficiary: [ ]
(e) Expiry date: [ ]
(f) Issue instructions: [ ]
(g) Form of LC: [As set out in Part [ ] of Schedule 6 to the Credit
Agreement/As attached]/*/
2. We confirm that:
(a) each condition specified in Clause 4.2(a) and (b) (Further conditions
precedent) of the Credit Agreement is satisfied on the date of this
Request; and
(b) none of the limits and restrictions in Clause 2.2 (Facility and
Tranche limits) of the Credit Agreement will be exceeded immediately
after the above LC is issued or at close of business on the above
Drawdown Date; and
(c) the purpose for which the LC is requested complies with Clause 3
(Purpose) of the Credit Agreement.
By:
INDEPENDENT ENERGY UK LIMITED
Authorised Signatory
- -----------
/*/ Delete/complete as appropriate. Only one alternative may be selected. If
the form of LC is "As attached" the form will be subject to approval
by all of the Banks.
- --------------------------------------------------------------------------------
<PAGE>
77
- --------------------------------------------------------------------------------
SCHEDULE 5
FORM OF NOVATION CERTIFICATE
To: BARCLAYS BANK PLC as Agent
From: [THE EXISTING BANK] and [THE NEW BANK]
[Date]
INDEPENDENT ENERGY UK LIMITED (Pounds)80,000,000 CREDIT AGREEMENT
DATED 8TH JULY, 1999
We refer to Clause 29.3 (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 (or part), rights and obligations referred to in
the Schedule in accordance with Clause 29.3 (Procedure for novations).
2. The specified date for the purposes of Clause 29.3 (Procedure for
novations) is [date of novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 35 (Notices) are set out in the Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
Commitment/rights and obligations to be novated
[Details of the Commitment, rights and/or obligations of the Existing Bank to be
novated].
[NEW BANK]
[Facility Office Address for notices]
[Existing Bank] [New Bank]
By: By:
Date: Date:
BARCLAYS BANK PLC
By:
Date:
- --------------------------------------------------------------------------------
<PAGE>
78
- --------------------------------------------------------------------------------
SCHEDULE 6
FORMS OF LC
PART I
POOL LC
[ON LETTERHEAD OF BARCLAYS BANK PLC]
To: Energy Pool Funds Administration Limited
[Room 301
185 Park Street
London SE1 9DY]
Date: [ ]
Dear Sirs,
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER ENDC[ ]
1. At the request of the Company (whose registered office is at Radcliffe
House, 6th Floor, Blenheim Court, Solihull, West Midlands, B91 2AA) the
Banks issue this irrevocable Standby Letter of Credit in your favour for an
aggregate amount of (Pounds)[amount in figures] ((Pounds)[amount in
words]).
2. In this Standby Letter of Credit all terms defined in Appendix 1 have the
meaning given to them in Appendix 1.
3. Upon the Agent receiving a written demand from you certifying that either:
(a) the Company owes you, under or in respect of the Agreement, the amount
demanded and has failed to pay that amount to you when due; or
(b) the claim is being made under section 15.5, section 16.2 or section 21
of Schedule 11 to the Agreement,
each of the Banks will, within 4 Business Days, pay its respective
Participation Amount to the account nominated by you in your demand.
4. The cumulative aggregate amount that may be demanded under this Standby
Letter of Credit shall not exceed the amount specified in paragraph 1 above
and the amount payable by each Bank pursuant to any particular demand shall
not exceed its Participation Percentage (as at the time the relevant demand
is received by the Agent) of the amount demanded in that demand.
5. No demand may be presented under this Standby Letter of Credit after 3.00
p.m. (London time) on [ ]. All such demands shall be made in
writing (which shall not include fax, telex, cable or similar forms of
communication) and shall be effective upon actual receipt by
- --------------------------------------------------------------------------------
<PAGE>
79
- --------------------------------------------------------------------------------
the Agent at Global Services Unit, 5 The North Colonnade, Canary Wharf,
London E14 4BB or such other office as the Agent may from time to time
notify to you in writing for this purpose.
6. Partial drawings and multiple drawings are allowed under this Standby
Letter of Credit.
7. The liability of the Banks under this Standby Letter of Credit is several
and not joint and neither we (as Bank or Agent) nor any Bank shall be
liable for the failure of any other Bank to perform its obligations under
this Standby Letter of Credit. We shall have no liability under this
Standby Letter of Credit save in our capacity as a Bank. If a Bank fails to
pay the amount due from it in connection with a demand, then (without
limiting your rights against that Bank) you may not present another demand
under this Standby Letter of Credit in respect of that unpaid amount.
8. Any Bank (the "EXISTING BANK") may at any time transfer all or any part of
its obligations under this Letter of Credit to another bank or financial
institution (the "NEW BANK") by procuring the delivery to you of an
Accession Agreement substantially in the form set out in Appendix 3. Upon
delivery to you of such an Accession Agreement (or, if later, the date
specified in it) the New Bank shall assume a Participation Percentage of
the relevant amount (expressed as a percentage) specified in it as being
transferred, and the Participation Percentage of the Existing Bank shall be
reduced by that amount, but in each case solely in respect of any demand
received by the Agent on or after the delivery to you of the relevant
Accession Agreement (or, as appropriate, on or after the date specified in
it).
9. This Standby Letter of Credit is irrevocable, is not transferable and
constitutes an obligation to make payments against documents. It is
subject to Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce publication No. 500 and shall
be governed by and construed in accordance with English law.
Yours faithfully,
.................................
For and on behalf of
BARCLAYS BANK PLC
as Agent for the Banks
- --------------------------------------------------------------------------------
<PAGE>
80
- --------------------------------------------------------------------------------
APPENDIX 1
DEFINITIONS
"AGENT" Barclays Bank PLC.
"BANK" a bank whose name is set out in the first column of
Appendix 2 to this Standby Letter of Credit.
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks are open for business in London.
"COMPANY" Independent Energy UK Limited.
"AGREEMENT" [Pooling and Settlement Agreement for the Electricity
Industry in England and Wales, dated 30th March,
1990].
"PARTICIPATION AMOUNT" in respect of a Bank and an amount demanded under
this Standby Letter of Credit, the sum which is equal
to that Bank's Participation Percentage of that
amount demanded.
"PARTICIPATION PERCENTAGE" in respect of a Bank, the percentage set opposite its
name in the second column in Appendix 2 to this
Standby Letter of Credit.
APPENDIX 2
BANKS AND PARTICIPATION PERCENTAGES
BANK PARTICIPATION PERCENTAGE
[ ] [ ]
- --------------------------------------------------------------------------------
<PAGE>
81
- --------------------------------------------------------------------------------
APPENDIX 3
FORM OF ACCESSION AGREEMENT
To: Energy Pool Funds
Administration Limited (the "BENEFICIARY")
From: [Existing Bank] and [New Bank]
Date: [ ]
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER ENDC[ ]
We refer to paragraph 8 of the above letter of credit (the "LETTER OF CREDIT").
Terms defined or used in the Letter of Credit have the same meaning in this
Accession Agreement.
We [ ] (the "EXISTING BANK") and [ ]
(the "NEW BANK") confirm that:
(a) the respective current Participation Percentages of the Existing Bank and
the New Bank are:
Existing Bank [ ]%
New Bank [ ]%;
(b) we have agreed that a Participation Percentages of [ ]%
be transferred by the Existing Bank to the New Bank so that following that
transfer the respective Participation Percentages of the Existing Bank and
the New Bank will be:
Existing Bank [ ]%
New Bank [ ]%;
(c) the New Bank hereby agrees to be a Bank for the purpose of the Letter of
Credit and undertakes to the Existing Bank and the Beneficiary to observe
and be bound by the terms of the Letter of Credit and to perform all
obligations expressed to be undertaken under the Letter of Credit by a Bank
in all respects as if it had been an original party to the Letter of Credit
with the Participation Percentage specified in paragraph (b) above; and
(d) the above transfer shall take effect (as contemplated by paragraph 8 of the
Letter of Credit) on [specify date] or, if later, the date of delivery of
this Accession Agreement to the Beneficiary.
This Accession Agreement is governed by English law.
[EXISTING BANK]
By:
[NEW BANK]
By:
- --------------------------------------------------------------------------------
<PAGE>
82
- --------------------------------------------------------------------------------
PART II
CONTRACT FOR DIFFERENCES LC
[ON LETTERHEAD OF BARCLAYS BANK PLC]
To: [ ]
Date: [ ]
Dear Sirs,
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER ENDC[ ]
1. At the request of the Company (whose registered office is at Radcliffe
House, 6th Floor, Blenheim Court, Solihull, West Midlands, B91 2AA) the
Banks issue this irrevocable Standby Letter of Credit in your favour for an
aggregate amount of (Pounds)[amount in figures] ((Pounds)[amount in
words]).
2. In this Standby Letter of Credit all terms defined in Appendix 1 have the
meaning given to them in Appendix 1.
3. Upon the Agent receiving a written demand from you certifying that:
(a) the Company has failed to honour, in whole or in part, its obligations
to you under the Agreement(s); and
(b) the amount of your demand under this Standby Letter of Credit is not
greater than the total amount of sums then due and payable to you by
the Company pursuant to those obligations;
each of the Banks will, within 4 Business Days, pay its respective
Participation Amount to the account nominated by you in your demand.
4. The cumulative aggregate amount that may be demanded under this Standby
Letter of Credit shall not exceed the amount specified in paragraph 1 above
and the amount payable by each Bank pursuant to any particular demand shall
not exceed its Participation Percentage (as at the time the relevant demand
is received by the Agent) of the amount demanded in that demand.
5. No demand may be presented under this Standby Letter of Credit after 3.00
p.m. (London time) on [ ]. All such demands shall be made in
writing (which shall not include fax, telex, cable or similar forms of
communication) and shall be effective upon actual receipt by the Agent at
Global Services Unit, 5 The North Colonnade, Canary Wharf, London E14 4BB
or such other office as the Agent may from time to time notify to you in
writing for this purpose.
6. Partial drawings and multiple drawings are allowed under this Standby
Letter of Credit.
- --------------------------------------------------------------------------------
<PAGE>
83
- --------------------------------------------------------------------------------
7. The liability of the Banks under this Standby Letter of Credit is several
and not joint and neither we (as Bank or Agent) nor any Bank shall be
liable for the failure of any other Bank to perform its obligations under
this Standby Letter of Credit. We shall have no liability under this
Standby Letter of Credit save in our capacity as a Bank. If a Bank fails to
pay the amount due from it in connection with a demand, then (without
limiting your rights against that Bank) you may not present another demand
under this Standby Letter of Credit in respect of that unpaid amount.
8. This Standby Letter of Credit is irrevocable, is not transferable and
constitutes an obligation to make payments against documents. It is
subject to Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce publication No. 500 and shall
be governed by and construed in accordance with English law.
Yours faithfully,
.................................
For and on behalf of
BARCLAYS BANK PLC
as Agent for the Banks
- --------------------------------------------------------------------------------
<PAGE>
84
- --------------------------------------------------------------------------------
APPENDIX 1
DEFINITIONS
"AGENT" BARCLAYS BANK PLC.
"BANK" a bank whose name is set out in the first column of
Appendix 2 to this Standby Letter of Credit.
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks are open for business in London.
"COMPANY" Independent Energy UK Limited.
"AGREEMENTS" [Specify contracts for differences].
"PARTICIPATION AMOUNT" in respect of a Bank and an amount demanded under
this Standby Letter of Credit, the sum which is
equal to that Bank's Participation Percentage of
that amount demanded.
"PARTICIPATION PERCENTAGE" in respect of a Bank, the percentage set
opposite its name in the second column in Appendix 2
to this Standby Letter of Credit.
APPENDIX 2
BANKS AND PARTICIPATION PERCENTAGES
BANK PARTICIPATION PERCENTAGE
[ ] [ ]
- --------------------------------------------------------------------------------
<PAGE>
85
- --------------------------------------------------------------------------------
SCHEDULE 7
FORM OF WITHDRAWAL NOTICE
To: [ACCOUNT BANK]
Copy: BARCLAYS BANK PLC as Agent
From: INDEPENDENT ENERGY UK LIMITED
[Date]
INDEPENDENT ENERGY UK LIMITED (Pounds)80,000,000 CREDIT AGREEMENT
DATED 8TH JULY, 1999
We refer to Clause 20.23 (Withdrawals).
1. We wish to make a withdrawal as follows:
(a) Account: [ ]
(b) Amount: [ ]
(c) Date: [ ]
(d) Payment Instructions: [ ]
2. We confirm that:
(a) we have given the Agent at least 5 Business Days prior written notice
of this withdrawal;
(b) the above account is the [Receipts Account/General Cash Collateral
Account/LC Cash Collateral Account];
(c) we are entitled to make the withdrawal under the terms of the Credit
Agreement;
(d) the withdrawal, and all of the payments against which it is applied,
are incurred and made in the ordinary course of business;
(e) both immediately before, and immediately after, the withdrawal, the
Net Relevant Outstandings do not exceed the Covered Debt Amount;
(f) no Default is subsisting; and
- --------------------------------------------------------------------------------
<PAGE>
86
- --------------------------------------------------------------------------------
(g) no fees payable pursuant to Clause 23 (Fees) are due and payable and
which will not be paid on or before the date of withdrawal.
By:
INDEPENDENT ENERGY UK LIMITED
Authorised Signatory
We consent to the above withdrawal.
By:
For and on behalf of
BARCLAYS BANK PLC
as Agent for the Banks
- --------------------------------------------------------------------------------
<PAGE>
87
- --------------------------------------------------------------------------------
SCHEDULE 8
LEASES REQUIRING GUARANTEES FROM THE GUARANTOR
<TABLE>
<CAPTION>
LESSOR PROJECT Remaining
Contractual Lease
Obligations at 1st
June, 1999
<S> <C> <C>
Finance Leases
Stewart & Stevenson Elswick 946,100
ING Trumfleet 2,300,000
Debis Knypersley 3,800,000
W&G Leasing (Royal Bank Leasing) Holditch 4,282,447
Capital Bank Steetley 3,000,000
BHF Bank White Salads 16,000,000
OPERATING LEASES
First National Bank Car Leases
British Linen Bank Car Leases 253,320
Various lessors Various land lease obligations not
exceeding 300,000
Enron EFA 2,851,632
-------------------
33,733,499
-------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
88
- --------------------------------------------------------------------------------
SIGNATORIES
BORROWER
INDEPENDENT ENERGY UK LIMITED
By: J. Sulley Ian Stewart
GUARANTOR
INDEPENDENT ENERGY HOLDINGS PLC
By: J. Sulley Ian Stewart
ARRANGER
BARCLAYS CAPITAL
By: K. Nolson
BANKS
BARCLAYS BANK PLC
By: C. Bousfield
BANK OF SCOTLAND
By: David Gibson
THE FIRST NATIONAL BANK OF CHICAGO
By: J.P.B. Bennett
- --------------------------------------------------------------------------------
<PAGE>
89
- --------------------------------------------------------------------------------
THE ROYAL BANK OF SCOTLAND plc
By: K. Nolson as attorney
SINGER & FRIEDLANDER LIMITED
By: R.A. Pyman A. Gent
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: I. Kobayashi as attorney
ANCILLARY BANK
BARCLAYS BANK PLC
By: C. Bousfield
AGENT
BARCLAYS BANK PLC
By: K. Nolson
- --------------------------------------------------------------------------------
