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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ......................to.....................
Registrant, State or other Jurisdiction
Commission of Incorporation or Organization, I.R.S. Employer
File Number Address and Telephone Number Identification
No.
333-47925 Yorkshire Power Group Limited 84-1393785
Wetherby Road
Scarcroft
Leeds LS14 3HS
United Kingdom
011-44-113-289-2123
======================================================
Securities registered pursuant to Section 12(b) of the Act: 8.08% Trust
Securities *
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( X )
* Issued by Yorkshire Capital Trust I and guaranteed by Yorkshire Power Group
Limited
Aggregate market value of voting and non-voting common equity held by non-
affiliates: None
A description of the registrant's common stock follows:
Description of Shares Outstanding
Registrant Common Stock at May 31, 1998
Yorkshire Power Group Par Value (POUND)1 Per Share 440,000,002
Limited
Table of Contents
PART I
Item 1 Business
Yorkshire Group and its US Parents
Yorkshire's Businesses
The Electric Utility Industry in Great Britain
UK Environmental Legislation
UK and EU Competition Law
Employees
Presentation of Certain Information and Exchange Rates
Item 2 Properties
Item 3 Legal Proceedings
Item 4 Submission of Matters to a Vote of Security Holders
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder
Matters
Item 6 Selected Financial Data
Item 7 Management's Discussion and Analysis of Results of Operations
and Financial Condition
Item 8 Financial Statements and Supplementary Data
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
PART III
Item 10 Directors and Executive Officers of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management
Item 13 Certain Relationships and Related Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Signatures
<PAGE>
FORWARD LOOKING STATEMENTS
Certain statements in this Form 10-K under the captions "Management's
Discussion and Analysis of Results of Operations and Financial Condition",
"Business" and elsewhere constitute forward looking statements. Such forward
looking statements involve known and unknown risks, uncertainties and other
important factors that could cause the actual results, performance or
achievements of the Yorkshire Group or any of its subsidiaries or industry
results, to differ materially from any future results, performance or achieve
ments expressed or implied by such forward looking statements. Such risks,
uncertainties and other important factors include, among others: general
economic and business conditions in the UK, the Franchise Area (as defined
under Yorkshire Business - Distribution Business) and elsewhere; currency
fluctuations; governmental, statutory, regulatory or administrative initiatives
affecting Yorkshire Group, Yorkshire or the UK electric and gas utilities
industries; general industry trends; competition; the cost and availability of
electricity, gas and other alternative energy sources; hedging costs; changes in
business strategy, development plans or vendor relationships; availability,
terms and deployment of capital; availability of qualified personnel;
increased rates of taxes or other changes in tax law; changes in, or the
failure or inability to comply with, governmental regulation, including,
without limitation, environmental regulations; and other factors
referenced in this Form 10-K. These forward looking statements
speak only as of the date of this Form 10-K.
<PAGE>
SELECTED DEFINITIONS
When used in this report, the following terms will have the meanings
indicated.
"1935 Act" means Public Utility Holding Company Act of 1935, as
amended
"Acquisition" means acquisition of Yorkshire, indirectly, by Yorkshire
Group, effective April 1, 1997
"AEP" means American Electric Power Company, Inc.
"AEP Resources" means AEP Resources, Inc.
"British Energy" means British Energy plc
"Calendar Year" means a year ended December 31
"CCGT" means combined cycle gas turbine
"Centrica" means Centrica plc, the former supply business of British
Gas plc
"CFDs" means contracts for differences
"CHP" means combined heat and power
"Control Party" means a wholly owned subsidiary of Yorkshire Power
Group Limited which holds the Control Certificate of Yorkshire Trust
"CSW" means Central and South West Corporation
"DAMS" means Distribution Asset Management System
"Electricity Act" means the Electricity Act 1989
"EMFs" means electromagnetic fields
"Energy Group" means The Energy Group plc
"ESPS" means Electricity Supply Pension Scheme
"EU" means European Union
"Fiscal Year" means a year ended March 31
"Fossil Fuel Levy" means a levy system instituted to reimburse the
generators and the RECs for the extra costs involved in generating
electricity from non-fossil fuel plants as compared to generating
electricity from fossil fuel plants
"Franchise Area" means Yorkshire's service area as determined by its
PES license
<PAGE>
"Franchise Supply Customers" means customers within the Franchise
Area, who within the most recent twelve month period have an average
peak demand ("Peak Demand") of not more than 100 kW in the three
months of highest demand during such period
"Grid" means the UK's national grid transmission system
''GWh'' means gigawatt hours
"Hydro Electric" means Scottish Hydro Electric plc
"km" means kilometers
"kV" means kilovolts
"kW" means kilowatts
"kWh" means kilowatt hours
"Lv" means low volts
"March Green Paper'' means the UK Government's Green Paper of
March 1998 entitled ''A Fair Deal For Consumers: Modernizing the
Framework for Utility Regulation"
"MMC" means the UK Monopolies and Mergers Commission
''MW'' means megawatt
"National Power" means National Power plc
"NCE" means New Century Energies, Inc.
"NFFOs" means the obligations of the RECs to obtain a specified
amount of generating capacity from non-fossil fuel sources
"NGC" means the National Grid Company plc, which is wholly-owned
by NGG
"NGG" means the National Grid Group plc
"Non-Franchise Supply Customers" means customers who within the
most recent twelve month period have an average peak demand (''Peak
Demand'') of more than 100 kW in the three months of the highest
maximum demand during such period
"OFFER" means the Office of Electricity Regulation, the body
appointed by the Government of the UK to regulate the electricity
industry in Great Britain
"OFGAS" means the Office of Gas Regulation, the body appointed by
the Government of the UK to regulate the gas industry in Great Britain
"Outage" means a disruption to the supply of electricity
<PAGE>
"Own-generation limits" means the limit imposed by the PES license
on the extent of generation capacity in which a REC may hold an
interest
"PES" means public electricity supplier
"Pool" means the wholesale trading market for electricity in England
and Wales
"Pooling and Settlement Agreement" means the agreement which
governs the constitution and operation of the Pool and the
calculation of payments to and from generators and suppliers
"PowerGen" means PowerGen plc
"Predecessor Company" means Yorkshire prior to its acquisition,
indirectly, by Yorkshire Group
"Pro Forma Fiscal Year 1997" means unaudited pro forma information
for the fiscal year ended March 31, 1997
"PSB" means NGG's pumped storage electricity generation business
"REC" means one of the 12 regional electricity companies in England
and Wales licensed to distribute and supply electricity
"Regulator" means The Director General of Electricity Supply in Great
Britain
"RPG" means Regional Power Generators Limited, a 75% owned
subsidiary of Yorkshire
"Scottish Power" means Scottish Power plc
"SEC" means the Securities and Exchange Commission
"SFAS" means US Statement of Financial Accounting Standards
"Successor Company" means Yorkshire Power Group Limited and its
subsidiaries
"UK" means the United Kingdom
"UK GAAP" means accounting principles generally accepted in the UK
"Unit'' means kWh
"US" means the United States of America
<PAGE>
"US GAAP" means accounting principles generally accepted in the US
"US Parents" means AEP and NCE
"YCL" means Yorkshire CoGen Limited, a subsidiary of Yorkshire
"YEPL" means Yorkshire Electric Power Limited, a subsidiary of
Yorkshire
"Yorkshire" means Yorkshire Electricity Group plc and its subsidiaries
"Yorkshire Finance" means Yorkshire Power Finance Limited, a
subsidiary of Yorkshire Group
"Yorkshire Group" means Yorkshire Power Group Limited and its
subsidiaries
"Yorkshire Holdings" means Yorkshire Holdings plc, a subsidiary of
Yorkshire Group
"Yorkshire Trust" means Yorkshire Capital Trust I
<PAGE>
PART I
Item 1. BUSINESS
YORKSHIRE GROUP AND THE US PARENTS
Yorkshire Group
Yorkshire Group was incorporated as a private company with limited
liability under the laws of England and Wales in July 1996. In 1997, Yorkshire
Group was utilized in connection with the joint acquisition by the US Parents of
Yorkshire, one of the twelve RECs in England and Wales. Yorkshire Group
gained effective control of Yorkshire on April 1, 1997. Yorkshire Group's
primary asset is the outstanding shares of Yorkshire Holdings, a public limited
company incorporated under the laws of England and Wales, which in turn
beneficially owns all of the outstanding shares of Yorkshire. Yorkshire Holdings
was organized as a wholly-owned subsidiary of Yorkshire Group solely for
holding the share capital of Yorkshire and has no other significant operations.
Each of the US Parents holds an indirect 50% interest in Yorkshire Group.
AEP holds such interest through its wholly-owned subsidiary, AEP Resources.
NCE holds its 50% indirect interest in Yorkshire Group through its wholly-
owned subsidiary, NC Enterprises, Inc., a Delaware corporation, which in turn
wholly-owns New Century International.
Yorkshire Finance
Yorkshire Finance was incorporated under the laws of the Cayman Islands
in August 1997. Yorkshire Finance exists solely for the purpose of operating as
a financing vehicle for Yorkshire Group and its affiliates.
Yorkshire
Yorkshire's principal businesses are the distribution of electricity to
approximately two million customers in its Franchise Area and the supply of
electricity primarily within its Franchise Area. As discussed below under ''
---Business Restructuring'', beginning in Fiscal Year 1999, Yorkshire
will operate the distribution and supply businesses as self-sufficient
businesses.
<PAGE>
Yorkshire Trust
The Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
February 4, 1998. The Trust will terminate in 2043, but may dissolve earlier, as
provided in the agreement. The Trust exists exclusively to act as a financing
vehicle for Yorkshire Group, through its holding certain debt instruments issued
by Yorkshire Finance and the issuance of its Trust Securities.
The US Parents
AEP
AEP is an electric utility holding company registered under the 1935 Act.
AEP owns all of the outstanding common stock of AEP Generating Company,
Appalachian Power Company, Columbus Southern Power Company, Indiana
Michigan Power Company, Kentucky Power Company, Kingsport Power
Company, Ohio Power Company and Wheeling Power Company. These eight
utility subsidiaries are engaged in the generation, purchase, transmission,
distribution and sale of electricity to over 2.9 million retail customers in
portions of the states of Indiana, Kentucky, Michigan, Ohio, Tennessee,
Virginia and West Virginia. AEP also owns all the outstanding common
stock of AEP Resources and AEP Resources International Limited, whose
primary businesses are the development of, and investment in,
exempt wholesale generators, foreign utility companies, qualifying
cogeneration facilities and other power projects. In
the year ended December 31, 1997, AEP generated consolidated operating
revenues of $6.2 billion and had consolidated assets of approximately $16.6
billion.
On December 22, 1997, AEP announced the signing of a merger agreement
with CSW, a Dallas, Texas based electric utility holding company that is
registered under the 1935 Act. CSW owns four electric operating subsidiaries
serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas.
CSW also owns SEEBOARD plc, a REC which serves the southeast coast of
England. Under the merger agreement, each share of CSW common stock will
be converted into 0.6 share of AEP common stock. Based on the price of AEP's
common stock on December 19, 1997, the transaction would be valued at $6.6
billion. The combined company will be named American Electric Power
Company, Inc. and will be based in Columbus, Ohio. The merger is conditioned
upon, among other things, the approvals of the shareholders of AEP and CSW
and various state and federal regulatory agencies. Assuming the receipt of all
required approvals, the merger is currently expected to be consummated within
twelve to eighteen months of its announcement.
<PAGE>
NCE
NCE is also an electric utility holding company registered under the 1935
Act. NCE owns all the outstanding common stock of Public Service Company
of Colorado, Cheyenne Light, Fuel and Power Company and Southwestern
Public Service Company, which serve approximately 1.6 million retail electric
customers in portions of the states of Colorado, Texas, New Mexico, Oklahoma,
Kansas and Wyoming and approximately 1 million retail gas customers in
portions of the states of Colorado and Wyoming. These three electric and gas
utility subsidiaries are principally engaged in the generation, purchase,
transmission, distribution and sale of electricity and in the purchase,
transmission, distribution, sale and transportation of natural gas. In the year
ended December 31, 1997, NCE generated consolidated operating revenues of
$3.3 billion and had consolidated assets of approximately $7.3 billion.
YORKSHIRE'S BUSINESSES
Yorkshire's principal businesses are the distribution of electricity and the
supply of electricity to approximately two million customers. Yorkshire also
conducts ancillary business activities apart from the distribution and supply
businesses that are not subject to price regulation, such as owning an interest
in an off-shore gas field, supplying gas in the competitive market and holding
interests in power generation. See '' ---Business Restructuring''.
Distribution Business
Yorkshire's distribution business consists of the ownership, management
and operation of the electricity distribution network within Yorkshire's
Franchise Area. The primary activity of the distribution business is the receipt
of electricity from the Grid and the distribution of electricity to end users
connected to Yorkshire's power lines. Because Yorkshire's distribution business
is substantially a regulated monopoly, virtually all electricity supplied
(whether by Yorkshire's supply business or by other suppliers) to consumers
in the Franchise Area is transported through its distribution network, thus
providing Yorkshire with a stable distribution volume unaffected by customer
choice of supplier. As a holder of a PES License, Yorkshire is subject to a
price cap regulatory framework providing economic incentives to operate in
a cost effective manner and, to a limited extent, to increase the volume of
electricity distributed. See ''The Electric Utility Industry in Great
Britain''.
Distribution Business Customers, Units Distributed, Revenues and Operating
Profit
Yorkshire's Franchise Area covers approximately 10,000 square km (3,860
square miles) from the Pennine uplands in the west, and the cities of Leeds,
Bradford and Sheffield, to the City of Hull, the ports of the Humber estuary and
the eastern coastline. It encompasses the counties of West Yorkshire, East
Yorkshire and almost all of South Yorkshire, together with parts of North
Yorkshire, Derbyshire, Nottinghamshire, Lincolnshire and Lancashire. The
regional economy is diverse. The traditional heavy industries of iron and steel,
coal mining, textiles and engineering continue to contribute to the regional
economy, but their overall significance has declined, particularly in the last
decade. During this period, other industries, such as chemicals and food and
drink, have expanded, as have service sector activities such as finance,
retailing and leisure. The region is well served by road and rail networks,
has three regional airports, and the ports of the Humber estuary provide
access to European markets.
The following table sets out details of Yorkshire's distribution customers
and the volume of electricity distributed, as well as distribution operating
revenues and operating income at the dates and for the periods presented:
At March 31,
1996 1997 1998
Number of customers connected
Residential . . . . . . . . 1,896,470 1,910,752 1,930,719
Commercial . . . . . . . . 125,827 126,003 126,812
Industrial . . . . . . . . 21,924 21,889 21,455
Total . . . . . . . . 2,044,221 2,058,644 2,078,986
Fiscal Year
1996 1997 1998
Electricity distributed (GWh)
Residential . . . . . . . . 7,110 7,196 7,149
Commercial . . . . . . . . 5,383 5,580 5,800
Industrial . . . . . . . . 10,729 10,566 10,484
Total . . . . . . . . 23,222 23,342 23,433
(In Millions)
Distribution operating revenues . . (POUND)334 (POUND)308 (POUND)305
Distribution operating income . . (POUND)164 (POUND)127 (POUND)115
Competition in the Distribution Business
Yorkshire has not experienced significant competition in its distribution
business. Yorkshire believes that the cost of providing a duplicate distribution
network connected to the Grid would be prohibitive. To the extent a customer
may invest in its own on-site electric generating plants, however, such
customers would no longer require distribution and related services from
Yorkshire except for standby connection to the Grid. The distribution business
is subject to marginal loss of income from related services, such as
metering. For a discussion of certain recently announced proposals
impacting metering, see ''The Electric Utility Industry in Great
Britain ---Distribution of Electricity ---Price Control''.
<PAGE>
Strategy for the Distribution Business
Yorkshire's distribution strategy consists of maintaining a reliable and safe
distribution system which meets customer expectations while maximizing its
operating efficiencies and fulfilling its regulatory obligations.
To implement its strategy, Yorkshire is taking a number of steps. Yorkshire
intends to maintain a sufficient level of investment in the distribution system
to ensure its continued reliability and safety. In Fiscal Year 1998, Yorkshire
invested (POUND)196 million in the distribution system, of which (POUND)133
million represented capital improvements in new substations, cables and
overhead lines and (POUND)63 million represented expenditures related
to the operation, repair and maintenance of the distribution system.
Yorkshire is currently investing in DAMS that centralizes information
currently stored in over sixty computerized
and paper-based systems into one integrated computerized system. The
centralization of such information is intended to improve both access to and
quality of information which is vital to the operation of an efficient
distribution system.
Yorkshire is also concentrating on maintaining and improving its responses
to system faults. In Fiscal Year 1998, Yorkshire restored services to 93.9% of
all customers affected by faults within three hours and on average a Yorkshire
customer was without power for only 59.1 minutes. Furthermore, Yorkshire has
introduced a new toll-free phone number available for customers who have lost
power. Such direct access is intended to permit Yorkshire to respond more
effectively and rapidly to power loss situations. Finally, Yorkshire publishes
a Quality of Supply Report which details the manner in which Yorkshire intends
to improve both the availability and quality of electricity supply in its region
in order to inform both its customers and OFFER as to its plans for the
period to April 2000.
Distribution Facilities
Electricity is transported across the Grid at 400 kV or 275 kV to 21 grid
supply points within Yorkshire's distribution network, where NGC transforms
the voltage to 132 kV, 66 kV and 33 kV for entry into Yorkshire's distribution
system.
At March 31, 1998, Yorkshire's distribution system consisted of:
Lv 11 kV Above 11 kV
Number of metered supplies. . . . . 2,077,306 1,655 25
Total length of circuits . . . . . 29,854 km 20,175 km 4,914 km
Percentage underground . . . . . 91% 51% 29%
The primary distribution system consists of 21 grid supply points from the
Grid, an additional 68 supply points and 357 primary substations. At March 31,
1998, the installed transformer capacity with a secondary voltage higher than
650 volts at these substations was 22,480,000 kVA. Remote control facilities
enable the real time monitoring and operation of most of these larger
substations from one central control room.
Yorkshire's distribution substations amount to 12,928 indoor substations,
2,611 outdoor substations and 16,336 pole mounted substations. At March 31,
1998, the installed transformer capacity with a secondary voltage less than 650
v was 9,548,940 kVA.
Supply Business
Yorkshire's supply business consists of selling electricity to end users,
purchasing such electricity and arranging for its distribution to those end
users. Under its PES License, Yorkshire has an exclusive right to supply
electricity to Franchise Supply Customers. This exclusive right is
currently scheduled to continue until September 1998. The supply business
to Non-Franchise Supply Customers, both inside and outside Yorkshire's
Franchise Area, is open to competition.
The following table sets forth the volume of electricity sold, by Non-
Franchise Supply Customer and Franchise Supply Customer, as well as supply
operating revenues and operating income (loss):
Fiscal Year
1996 1997 1998
Volume (GWh):
Non-Franchise Supply Customers 12,046 10,627 9,747
Franchise Supply Customers . . . 10,345 10,489 10,489
Total . . . . . . . . . . . . 22,391 21,116 20,236
(In Millions)
Supply operating revenues . . .(POUND)1,309 (POUND)1,178 (POUND)1,118
Supply operating income (loss) . (POUND)30 (POUND)(132) (POUND)25
Competition in the Supply Business
The supply business is currently divided between Franchise Supply
Customers within the Franchise Area, and Non-Franchise Supply Customers,
inside and outside the Franchise Area. The non-franchise threshold was lowered
to 100 kW in April 1994 allowing competition in supply for these customers
while Franchise Supply Customers remained subject to regulation. Competition
in supply to Franchise Supply Customers is currently scheduled to be phased in
over a six-month period commencing in September 1998, at which time the
exclusive right of Yorkshire to supply the Franchise Area will cease. The
Regulator, however, proposed transitional price regulation for smaller
consumption Franchise Supply Customers for an initial period of two years until
an adequate level of competition is established. Yorkshire subsequently
indicated its acceptance of such proposals. The proposals (when taken together
with the reduction in the Fossil Fuel Levy which became effective on April 1,
1998) have resulted in the implementation of small reductions, effective April
1, 1998, in the tariffs for Yorkshire's residential and small business
customers in its Franchise Area compared to the corresponding tariffs in
effect in August 1997.
The proposals also require an additional 3% below inflation reduction effective
April 1, 1999. See ''The Electric Utility Industry in Great Britain ---
Industry Structure'' and '' ---Supply of Electricity''.
Strategy for the Supply Business
Yorkshire's supply strategy consists of (i) protecting and sustaining
Yorkshire's electricity market position within the Franchise Area, (ii) cross-
selling gas to its existing customer base, (iii) securing market share for gas
and electricity supply outside the Franchise Area to the extent that such
contracts are profitable and (iv) seeking marketing and strategic alliances
in the supply business.
To implement its strategy, Yorkshire is taking a number of steps. Yorkshire
is endeavoring to retain its existing Non-Franchise Supply Customers in the
Franchise Area by purchasing electricity at competitive rates from power
generators in the UK and providing high quality customer service. In doing so,
in Fiscal Year 1998, Yorkshire maintained a significant portion of its existing
business. Yorkshire has also applied this strategy to Non-Franchise Supply
Customers outside of its Franchise Area and to gas customers. For example, in
Fiscal Year 1998, Yorkshire was awarded new contracts with such entities as
Booker plc, William Cook Cast Products, NHS, Asda and Staffordshire County
Council. Furthermore, in addition to marketing gas and electricity under the
Yorkshire brand name, Yorkshire intends to enter into channel partnerships with
various business and commercial entities (a "channel partner") whereby
Yorkshire markets energy to customers outside of its Franchise Area under the
name of the channel partner or in the joint name of Yorkshire and the channel
partner. Yorkshire has negotiated to establish a channel partnership with a
chain of retail appliance stores. Yorkshire expects to maintain this strategy
for all business customers and potential business customers after competition
commences for both gas and electricity and to extend this approach to the
residential market. There is no assurance that Yorkshire will be able to
enter into such channel partnerships and, if it does, that they will be
successful.
As discussed under '' ---Affiliate Businesses and Other Investments ---
Gas Sourcing and Supply'', Yorkshire has taken significant steps toward
developing its gas supply capabilities. Currently, gas may be sold to
residential customers in selected regional markets that have been opened to
competition. By retaining its existing customer base and, eventually, expanding
into new markets which will be open to competition, Yorkshire intends to be
in a position to offer those customers both electricity and gas. In offering
such flexibility, Yorkshire intends to solidify its relationship with these
customers and provide an established market base for its developing gas
supply business.
In a joint statement issued in January 1998, the Regulator and OFGAS
asked each of the PESs and Centrica to give undertakings to stop ''dual fuel''
offers to supply gas and electricity. In addition, OFGAS asked the PESs to
undertake not to market gas to residential customers in areas where their
respective markets are not open to competition except where contracts have
already been signed. The regulators also made proposals concerning competition
in meter reading. Following discussions with the regulators, it was announced
that the PESs had agreed only to provide additional dual fuel benefits to
customers once their individual franchise area is opened to electricity
competition and that OFGAS had agreed that PESs' gas supply businesses
should be permitted to continue to compete in the gas market both within and
outside their franchise areas on the basis that there are no undue restrictions
or distortions in the gas market in those areas. The PESs also agreed to
work with the Regulator and OFGAS to ensure measures to limit distortion of
the meter reading market.
Affiliate Businesses and Other Investments
Yorkshire's ancillary business activities have primarily included, among
other things, gas sourcing and supply and holding interests in power generation.
Gas Sourcing and Supply
Recognizing the long-term opportunities in the competitive gas supply
market, in April 1994, Yorkshire acquired a 6.97% equity stake in the Armada
off-shore gas field (the ''Armada Field'') for approximately
(POUND)27.8 million. As of March 31, 1998, the Armada Field, which has a
production life of approximately 15 years, had proven resources of
approximately 1.2 trillion cubic feet (84 billion cubic feet net to
Yorkshire) of gas and 68 million barrels of oil and oil
equivalents (4.8 million barrels net to Yorkshire). Delivery of such gas from
the Armada Field to Yorkshire began, on schedule, in October 1997. The
development costs associated with the Armada Field have been lower than
originally anticipated. As of March 31, 1998, Yorkshire had invested (POUND)60
million in the Armada Field.
Yorkshire markets gas to industrial and commercial customers and, with
the gradual removal of the residential franchise of Centrica, has recently
started marketing gas to residential customers. By the end of March 1998,
Yorkshire had entered into contracts for the supply of gas to more than 200,000
residential customers. Gas is sourced from Yorkshire's interest in the
Armada Field and through swing contracts and purchases on the spot markets
which are designed to give Yorkshire a balanced purchase portfolio.
Yorkshire utilizes risk management methods, in relation to gas purchasing
and supply, similar to electricity purchasing and supply, which are
designed to maximize its return consistent with an acceptable level of risk.
The Regulator and OFGAS recently proposed to restrict the ability of the
PESs, including Yorkshire, to provide ''dual fuel'' offers to supply gas and
electricity to residential customers in areas which are not open to
competition. See '' ---Supply Business ---Strategy for the Supply
Business''.
Power Generation
Through its wholly-owned subsidiary, YEPL, Yorkshire has invested in
various power generation projects. Yorkshire's PES License currently enables it
and its affiliates to make investments in up to 800 MW of electricity
generation. Currently, Yorkshire and its subsidiaries own, or have committed
to, investments in 519 MW of power generation assets. See '' ---Business
Restructuring'' for a discussion of the proposed transfer of Yorkshire's
current ownership interests in generation assets.
The centerpiece of Yorkshire's generation activities is a 272 MW CCGT
generating station at Brigg in north Lincolnshire developed and operated by
RPG. YEPL owns a 75% interest in RPG with IVO Energy Limited holding the
remaining 25%. Yorkshire holds a power purchase agreement for 100% of the
output of the station.
YCL, a YEPL subsidiary, constructed and currently operates CHP plants at
St. James's Hospital, Leeds (4.5 MW), A.H. Marks, a chemical company based
in Bradford (4.5 MW) and Queen's Medical Centre, Nottingham (4.9 MW).
YCL is also constructing a 56 MW CHP plant at the premises of Hays
Chemicals, a Cheshire based company, and is nearing completion of a 50 MW
CCGT plant at Thornhill. YCL also owns and operates 52.6 MW of diesel fired
peaking plants. All of the above plants provide an opportunity for Yorkshire's
electricity supply business to purchase the power offtake and a partial
strategic hedge in the event that electricity prices rise and reduce profit
margins of Yorkshire's supply business.
In addition, YEPL owns a 50% interest in a company which owns two
windfarms at Ovenden Moor (9.2 MW) and at Royd Moor (6.5 MW). All of the
output from these windfarms is sold to The Non-Fossil Fuel Purchasing Agency
under an agreement which expires on December 31, 1998.
YCL's generation portfolio has concentrated on smaller scale projects
which export less than 50 MW, principally because in doing so YCL is not
required to obtain a generation license and such smaller scale projects are not
required to trade in the Pool. Trading outside the Pool means that the export
power has a higher value and provides YCL with increased operational
flexibility.
Business Restructuring
In December 1997, Yorkshire announced a planned business restructuring
intended to enable it to meet increased competition and react to potential
regulatory developments in the energy markets in the UK. The restructuring will
result in the distribution and supply businesses of Yorkshire becoming self-
sufficient businesses. As part of the restructuring, Yorkshire currently
contemplates transferring its generating assets to an entity or entities other
than Yorkshire Group or its subsidiaries. It is expected that proceeds from
the transfer of these assets will be used to reduce debt of Yorkshire Group.
See ''Item 13. Certain Relationships and Related Transactions''.
Total assets less current liabilities employed by the generation business at
March 31, 1998 were (POUND)136 million. Operating income attributable to the
generation business in Fiscal Year 1998 was (POUND)16 million.
As a result of this restructuring, approximately 160 positions will be
eliminated. A provision of approximately (POUND)10 million was recorded in
Fiscal Year 1998, to reflect the cost of these work force reductions.
Customer Service
As part of Yorkshire's commitment to delivering high levels of customer
service, Yorkshire launched its Customer Service Initiative in 1995.
Virtually all of its employees have attended training sessions aimed at
developing a company culture consistent with Yorkshire's corporate mission
to be a leader in the market of electricity distribution and electricity
and gas supply, while consistently providing high levels of customer
service. These employees have been trained in the values and behavior
which need to be adopted to achieve this corporate mission.
Improvements to customer service which have been implemented as a
result of this initiative include the provision of a toll-free service for
account
inquiries and fault reporting, as described under '' ---
Distribution Business ---
Strategy for the Distribution Business'', and an increase in the number of bill
payment outlets for the convenience of customers.
Yorkshire continues to seek to improve the service it provides to its
customers and, to do so, continues to train employees further. A customer
service tracking system has been put in place to ensure that directors and
managers of Yorkshire gain regular feedback from customers on the service they
receive.
Risk Management
Yorkshire's risk management efforts are primarily focused on the supply
business and intended to hedge the risks associated with the purchase and
sale of electricity resulting from Pool price volatility. Virtually all
electricity generated in England and Wales is sold by generators and bought
by suppliers through the
Pool. The most common contracts for supply to Non-Franchise Supply
customers are for twelve-month terms and contain fixed rates. Yorkshire is
exposed to purchase price risk (the risk associated with fluctuations in the
cost of purchased electricity relative to the price received from the supply
customer) to the extent that it has not hedged such risk. Yorkshire
substantially hedges purchasing price risk by employing a variety of risk
management tools, Including management of its supply contract portfolio,
hedging contracts and
other means which mitigate the risk of Pool price volatility. Yorkshire employs
risk management methods to maximize its return consistent with an acceptable
level of risk.
Until March 31, 1998 regulations governing the franchise supply market
permitted the pass-through to customers of prudent purchase costs which
included the cost of arrangements such as CFDs to hedge against Pool price
volatility. Under the supply price restraint proposals published by the
Regulator in October 1997, and accepted by Yorkshire, effective April 1, 1998,
such
purchase costs are no longer automatically passed through to such customers.
CFDs are contracts predominantly between generators and suppliers which fix
the major elements of the price of electricity for a contracted quantity of
electricity over a specific time period. Differences between the actual price
set
by the Pool and the agreed prices give rise to difference payments between the
parties to the particular CFD. At the present time, Yorkshire expects its
supply
demand for the calendar year 1998 to be substantially hedged through various
types of agreements, including CFDs.
Yorkshire's ability to manage its purchase price risk depends, in part, on the
continuing availability of properly priced risk management mechanisms such as
CFDs. No assurance can be given that an adequate, transparent market for such
products will in fact be available.
THE ELECTRIC UTILITY INDUSTRY IN GREAT BRITAIN
Summary
The electric utility industry in England and Wales is divided into various
functions, with different companies participating in the respective functions.
This is in contrast to the US utility industry, in which vertically integrated
companies generally participate in all functions.
Industry Structure
Great Britain has two separate but connected electricity markets, each with
a different commercial framework. In England and Wales electricity is produced
by generators, the largest of which are National Power, PowerGen and Nuclear
Electric plc, a subsidiary of British Energy. Electricity is transmitted through
the
Grid by NGC and distributed by the twelve RECs in their respective franchise
areas. Most customers are currently supplied with electricity by their local
REC, although there are other suppliers holding second-tier supply licenses,
including other generators and RECs, who can compete to supply customers
with higher Peak Demand in each REC's franchise area.
In Scotland there are two vertically integrated companies, Scottish Power
and Hydro Electric, each generating, transmitting, distributing and supplying
electricity within their respective franchise areas as well as competing to
supply
electricity elsewhere. Scottish Nuclear, another subsidiary of British Energy,
sells all the electricity it generates to Scottish Power and Hydro Electric.
The interconnection between the two transmission systems, owned by
Scottish Power and NGC, is capable of transferring electricity between Scotland
and England. There is also an interconnection with France, owned by NGC and
Electricite de France, through which electricity can be transferred between
France and England and Wales.
Virtually all electricity generated in England and Wales is sold by
generators and bought by suppliers through the Pool. A generator which is also
a licensed supplier must nevertheless sell all the electricity it generates
into the Pool and purchase all the electricity which it supplies from the
Pool. Because Pool prices fluctuate, generators and suppliers may enter into
bilateral arrangements, such as CFDs, to provide a degree of protection
against such fluctuations.
There is no equivalent to the Pool in Scotland, but Scottish Power and
Hydro Electric are obligated by their licenses to offer electricity for sale to
second-tier suppliers. They are also required to provide access to their
transmission and distribution systems on a non-discriminatory basis to
competing suppliers and generators.
Industry Background
The industry structure described above was put in place in March 1990 in
order to introduce competition into the generation and supply of electricity. At
the same time, a licensing regime was introduced for the electricity industry
both in England and Wales as well as in Scotland.
The RECs, which at that time collectively owned NGG, NGC's holding
company, were privatized in December 1990. National Power and PowerGen
were partly privatized in March 1991 (with the balance of the UK government's
holdings being sold to investors in March 1995). Scottish Power and Hydro
Electric were privatized in June 1991 and British Energy was privatized in July
1996. By December 1995, most of the RECs' ownership of NGG had been
publicly sold, and NGG was listed on the London Stock Exchange. Since the
summer of 1995, 11 of the RECs have been acquired by other companies.
Yorkshire was indirectly acquired by Yorkshire Group in April 1997.
In 1990, the vast majority of generating capacity in England and Wales was
owned by three generators. However, since that time competition in generation
has increased as RECs and other new entrant generators have constructed new
plants and as imports through the interconnections with Scotland and France
have grown. In addition, pursuant to undertakings given to the Regulator,
National Power and PowerGen have disposed of an aggregate of 6,000 MW of
generating capacity to Energy Group.
Competition in supply has been progressively introduced both in England
and Wales and in Scotland. The RECs in England and Wales, and Scottish
Power and Hydro Electric in Scotland, are subject to competition from second-
tier suppliers for the supply of electricity to larger customers in their
respective franchise areas. In April 1990, electricity users with a Peak
Demand in excess of 1 MW became Non-Franchise Customers of a REC and
therefore were allowed to choose their electricity supplier. In April 1994,
the Non-Franchise Customer class was expanded to include users with a Peak
Demand in excess of 100 kW.
Currently, all electricity customers in Great Britain are scheduled to be
able to choose their electricity supplier over a six month phase in period
beginning in September 1998, according to customers' designated postal codes.
Distribution of Electricity
Accessibility Requirements
Each of the RECs is required to offer terms for connection to its
distribution system to any person, for use of its distribution system to any
authorized electricity operator and for the provision of supplemental and backup
supplies to any person. In providing use of its distribution system, a REC must
not discriminate between its own supply business and that of any other
authorized electricity operator, or between those of other authorized
electricity operators; nor may its charges differ except where justified by
differences in cost. Similar principles apply to the provision of
supplemental and backup supplies of electricity, and in the carrying out
of connection works. Disputes over the terms of offers may be determined
by the Regulator.
Price Control
Revenue from the distribution business is controlled by a formula
principally based on P x (1+(RPI-Xd)) where Xd is currently 3% (the
"Distribution Price Control Formula"). P is the previous year's maximum
average price per unit of electricity distributed. Because the maximum average
price in any year is therefore based in part on the maximum average price in the
preceding year, a price reduction in any given year has an ongoing effect on
the maximum average price for all subsequent years. RPI is a measure of
inflation, and equals the percentage change in the UK Retail Price Index
between the six month period July to December of the two previous years.
Because RPI is based on a weighted average of the prices of goods and
services purchased by a typical household, which bear little resemblance
to the inputs contributing to Yorkshire's business costs,
the RPI calculation may not accurately reflect the
price changes affecting Yorkshire. The Xd factor is established by the
Regulator following review. This formula determines the maximum average
price per unit of electricity distributed (in pence per kilowatt hour) which
a REC is entitled to charge. This price, when multiplied by the expected
number of units to be distributed, determines the expected distribution
revenues of the REC for the relevant year. The current Distribution Price
Control Formula permits RECs to partially retain additional revenues due to
increased distributions of units and allows for a pound for pound increase
in operating profit for efficient operations and reduction of expenses within
a review period. However, during the next Distribution Price Control Formula
review, the Regulator may reduce any such increase in operating profit to
the extent he determines it not to be a function of efficiency savings or,
if genuine efficiency savings have been made, he determines that customers
should benefit through lower prices in the future.
Upon privatization, the Regulator set different Xd factors for each of the
RECs to permit annual price increases by the RECs of between 0% and 2.5%
(1.3% for Yorkshire) greater than RPI for the five year period ending on March
31, 1995. Following a scheduled distribution price review by the Regulator of
all twelve RECs in August 1994, the Regulator required an overall real
reduction in regulated distribution prices for Fiscal Year 1996 of between
11% and 17% (14% for Yorkshire) from the previous year, and set the Xd factor
for the subsequent four year period ending on March 31, 2000 to subtract 2%
from RPI in each such year. Also in connection with the August 1994
distribution price review, the Regulator, (i) halved from 100% to 50% the
extent to which distribution revenues would be allowed to vary with the
number of units of electricity distributed and (ii) determined numbers of
Franchise Area customers based on REC forecasts for each year through and
including Fiscal Year 2000, allowing distribution revenues to vary by 50%
of the predetermined annual change in such forecast numbers. The stated
intention of the Regulator in introducing this change was "to remove any
artificial incentive on the companies to sell more electricity, while
retaining a general incentive for companies to seek out and meet the needs
of their customers". In light of information concerning
the financial position of the RECs that emerged during the unsuccessful bid by
Trafalgar House plc for Northern Electric plc (one of the RECs) and
representations by Consumers' Committees and others, the Regulator conducted
an unscheduled distribution price review of all twelve RECs in July 1995. As a
result of this unscheduled review, the Regulator revised regulated distribution
prices for the four year period ending on March 31, 2000, requiring an overall
real reduction in regulated distribution prices for Fiscal Year 1997 of between
10% and 13% (13% for Yorkshire) from the previous year, and resetting the Xd
factor for the remaining three year period ending on March 31, 2000 to subtract
3% from RPI in each such year.
The Distribution Price Control Formula is expected to be further reviewed
with effect from April 1, 2000. Following the review, the Regulator will make a
proposal for a revised formula to apply from that date. If a REC does not agree
with the proposal the Regulator may refer the proposal to the MMC and,
following the publication of the report of the MMC, the Regulator may make
appropriate modifications to the REC's PES License.
In setting the distribution charges each year, each REC must project the
permitted maximum average charge per unit to be distributed in that year. The
projection will have to take account of forecasts of units distributed,
distribution line losses, the actual change in RPI and NGC exit charges. Failure
to forecast accurately may result in overcharging or undercharging, which is
taken into account in the following year through a correction factor in the
Distribution Price Control Formula. If a REC has overcharged in the previous
year, the maximum average charge per unit distributed is reduced by an amount
to reflect the excess income received, to which is added interest. In the
event of undercharging, the Distribution Price Control Formula allows
the licensee to recover the shortfall in income plus interest.
In certain instances, however, overcharging or undercharging by a REC
above specific percentage thresholds may result in adjustments by the Regulator.
If, in any year, the average charge per unit distributed exceeds the permitted
maximum average charge per unit distributed by more than 3%, then, in the next
following year, the REC may not increase distribution charges unless it has
satisfied the Regulator that the average charge per unit in that next following
year is not likely to exceed the permitted maximum average charge. If, with
respect to any two successive years, the sum of the amounts by which the
average charge per unit distributed has exceeded the permitted maximum
average charge per unit distributed in the second of those years is more than 4%
of that permitted maximum average charge, then, in the next following year, the
REC may be required by the Regulator to adjust its charges so that they fall
within the maximum permitted average charge. If, with respect to two
successive years, the licensee undercharges by more than 10% of the maximum
average charge, the Regulator may, by directions to the licensee, limit the
amount by which such undercharging may be recovered.
Since April 1995, the Distribution Price Control Formula has been
notionally divided into metering and non-metering components, with the
metering component equal to about 10% of each REC's allowed revenue.
However, the Regulator indicated when making these proposals that there
should be no presumption that this sum would be assigned to a metering
business.
Operations related to the metering of network connections to non half-
hourly metered customers (generally residential and other small customers) are
subject to the metering component of the Distribution Price Control Formula.
Such price controls are scheduled to be disapplied from April 1, 2000, at which
time competitive market pricing is scheduled to be introduced. In a joint
statement issued in January 1998, the Regulator and OFGAS made proposals
concerning competition in meter reading. See ''Business ---
Supply Business --- Strategy for the Supply Business''. Competitive market
pricing already exists for operations related to the metering of network
connections to half-hourly metered customers.
Connection charges are levied when a customer first connects to a REC's
distribution system or makes a material change in electricity supply
requirements. These charges are excluded from the Distribution Price Control
Formula. In the August 1994 distribution review, the Regulator introduced the
concept of competition in providing connections to new customers and limited
the extent to which, and the circumstances in which, customers wishing to be
connected would be required to pay for the costs of reinforcement of the
distribution system.
Data Management Services
Beginning in September 1998, the electricity supply market for Franchise
Supply Customers is currently scheduled to be opened to competition and
customers will be able to select the supplier of their choice. Significant
additional costs have been, and will be, incurred by the distribution business
to develop new systems to facilitate competition. The new services, termed
"data management services" include meter operation, data retrieval, processing
and aggregation, meter point administration and distribution use of system
billing. Assuming that competition in supply starts as currently scheduled in
September 1998 for Franchise Supply Customers, Yorkshire Group presently
estimates that costs totaling (POUND)72 million will have been incurred for re-
engineering and information technology work. Of such amount, approximately
(POUND)19 million was expensed in Fiscal Year 1997 and (POUND)2 million in
Fiscal Year 1998. The Regulator has made proposals (which have been accepted by
Yorkshire) to allow Yorkshire recovery of (POUND)23 million over a five year
period ending March 31, 2003. A further (POUND)7 million is expected to be
recovered through Pool cost recovery and other national mechanisms and (POUND)8
million is expected to be capitalized as such amount is expected to provide
future benefits to the supply business. As a result of the above, the residual
amount of approximately (POUND)13 million, which will not be recovered or
capitalized, will be expensed in Fiscal Year 1999 as incurred.
The Regulator has also made proposals (which have been accepted by
Yorkshire) to provide an annual allowance of (POUND)3 million for the period
1998 through 2000 to cover operating costs. This allowance will be reviewed
at the time of the Distribution Price Control Formula Review in 2000.
Such proposals therefore will allow Yorkshire to recover up to 52% of its
forecasted set-up and operating costs over a five year period. The shortfall
could be higher if: (i) operating costs are higher than anticipated (e.g.,
there is a higher level of customer activity); (ii) recovery of operating costs
is disallowed or reduced when the Distribution Price Control Formula is
reviewed for the period beginning April 1, 2000; or (iii) the integrated
national systems do not work as contemplated or require substantial
redevelopment.
Supply of Electricity
Licensed Suppliers
Subject to minor exceptions, all electricity customers in Great Britain must
be supplied by a licensed supplier. Licensed suppliers purchase electricity and
make open access use of the transmission and distribution networks to achieve
delivery to customers' premises.
There are two types of licensed suppliers: public electricity (or first-tier)
suppliers, also known as PESs, and second-tier suppliers. PESs include the
RECs, Scottish Power and Hydro Electric each supplying in its respective
franchise area. Second-tier suppliers include National Power, PowerGen,
Nuclear Electric, Scottish Power, Hydro Electric and other PESs (including
RECs supplying outside their respective franchise areas) and a number of
independent second-tier suppliers.
At present, a Franchise Supply Customer can only buy electricity from the
REC authorized to supply the relevant franchise area. Franchise Supply
Customers typically include residential and small commercial and industrial
customers. Non-Franchise Supply Customers are not limited to buying
electricity from the local REC and can choose to buy from a second-tier
supplier. Such customers are typically larger commercial and industrial
electricity users. Second-tier suppliers compete with one another and with the
local REC to supply customers in this competitive (or "non-franchise") sector of
the market.
Price Regulation
The supply of electricity to Franchise Supply Customers currently remains
subject to price control. The maximum average charge per unit of electricity
supplied (in pence per kilowatt hour) was controlled by a formula principally
based upon (P x (1 + (RPI-Xs)) + Y) (the "Supply Price Control Formula")
where Xs was 2%. The initial value of Xs was set at 0 for all the RECs on
March 31, 1990. The Supply Price Control Formula was reviewed by the
Regulator with effect from April 1, 1994, when the Xs factor was set at 2% for
all the RECs. This applied until March 31, 1998. P was the previous year's
maximum average price per unit of electricity supplied (in pence per kilowatt
hour) that relates to the REC supply business's own costs and margin. RPI was a
measure of inflation, equaling the percentage change in the UK Retail Price
Index between the six month period July to December of the two previous years.
Because RPI is based on a weighted average of the prices of goods and services
purchased by a typical household, which bear little resemblance to the inputs
contributing to Yorkshire's business costs, the RPI calculation may not
accurately reflect the price changes affecting Yorkshire. The Y factor was a
pass-through of certain costs which are either largely outside the management
control of the REC or have been regulated elsewhere. The Y factor thus covered
the REC's electricity purchase costs, including both direct Pool purchase costs
and costs of hedging, transmission charges made by NGC, REC distribution
charges and the Fossil Fuel Levy (described below) or amounts equivalent
thereto in respect of the purchase of non-leviable electricity which are
attributable to Franchise Supply Customers. The Supply Price Control Formula
was therefore designed to focus downward pressure on costs and working
capital, which are viewed as being within suppliers' direct control.
As with the Distribution Price Control Formula, there was a correction
factor in the Supply Price Control Formula in the event of overcharging or
undercharging. If a REC had overcharged in the previous year, the maximum
average charge per unit supplied is reduced by an amount to reflect the excess
income received, to which was added interest. In the event of undercharging, the
Supply Price Control Formula allowed the licensee to recover the shortfall in
income plus interest.
Under the current licensing regime, over a six-month period currently
scheduled to commence in September 1998 all customers, including those who
are currently Franchise Supply Customers, will be permitted to choose their
electricity supplier. The Regulator indicated in his supply price restraint
proposals published in October 1997, which proposals Yorkshire accepted, that
price regulation for supply to all residential and smaller business customers
within Yorkshire's Franchise Area, whose annual consumption is under 12,000
kWh, would be extended beyond March 31, 1998 until an adequate level of
competition is established, and at least until March 31, 2000. The Regulator has
indicated that the nature and extent of possible restraints after that date will
be reviewed in the light of experience and prospects and that such review would
take place concurrently with the ongoing review of the Distribution Price
Control Formula.
The license modifications that have been implemented to effect the new
controls take the form of a series of price caps on the tariffs applicable to
residential and small business customers. The new controls (when taken together
with the reduction in the Fossil Fuel Levy which became effective on April 1,
1998) have resulted in the implementation of small reductions, effective April
1, 1998, in the tariffs for Yorkshire's residential and small business
customers compared to the corresponding tariffs in effect in August 1997.
See "Fossil Fuel Levy". The new controls also require an additional 3% below
inflation reduction effective April 1, 1999. The license modifications also
discontinued the automatic pass-through of costs previously passed through to
residential and small business customers, consisting primarily of purchased
power costs.
In addition, the license modifications provide for an allowable charge to
cover the additional cost of providing data management services that will be
required to be provided by each REC. For a discussion of the costs associated
with these data management services, see'' ---Distribution of Electricity
---Data Management Services''. The duration and level of the allowances
for operating costs are likely to be reviewed at the time of the next
Distribution Price Control Formula review in 2000. The license modifications
also provide for restraints on pre-payment meter charges.
Further, the license modifications stipulated that a REC should be
penalized: (i) where it starts to open its market more than three months
after the market opening by the first REC; (ii) where it opens successive
tranches of its market more than three months after the opening of the
corresponding tranche by the first REC; and (iii) where the market opening
of the first REC has been delayed beyond April 1998. The penalties will be
calculated at 1% of the operating revenues of the supply business for
Franchise Supply Customers per month of delay, weighted by the proportion of
customers affected and applied as a reduction in allowed distribution
business revenue. If Yorkshire does not open its market to competition
until after April 1999, it would incur a penalty of approximately
(POUND)6 million. It is now apparent that some penalty will be incurred
due to the delay in the opening up of the competitive market and a
provision of (POUND)3 million has been included by Yorkshire Group in the
results for Fiscal Year 1998. Yorkshire Group expects that Yorkshire will
be prepared to open its Franchise Area to such competition in September 1998.
The Pool
The Pool was established in April 1990 for bulk trading of electricity in
England and Wales between generators and suppliers. The Pool reflects two
principal characteristics of the physical generation and supply of
electricity from a particular generator to a particular supplier. First, it is
not possible to trace electricity from a particular generator to a
particular supplier. Second, it is not practicable to store electricity in
significant quantities, creating the need for a constant matching of supply
and demand. Subject to certain exceptions, all electricity generated in
England and Wales must be sold andpurchased through the Pool.
All licensed generators and suppliers must become signatories to the
Pooling and Settlement Agreement, which governs the constitution and
operation of the Pool and the calculation of payments due to and from
generators and suppliers. The Pool also provides centralized
settlement of accounts and clearing. The Pool does not itself buy or sell
electricity.
Prices for electricity are set by the Pool daily for each half hour of the
following day based on the bids of the generators and a complex set of
calculations matching supply and demand and taking account of system
stability, security and other costs. Each day, generators inform NGC of the
amount of electricity which each of their generating units will be able to
provide the next day and the price at which they are willing to operate each
such unit. NGC uses this information to construct a "merit order" which ranks
each generating unit in order of increasing price. NGC then schedules the
stations to operate according to such merit order, calling into service the
least expensive generating units first and continuing to call generating units
into service until enough are operating to meet the demand of all suppliers.
Factors which may constrain NGC's ability to order stations into operation
in strict observance of the merit order include transmission system
constraints and the inflexibility of some generating units. A computerized
system (the settlement system) is used to calculate prices and to process
metered, operational and other data and to carry out the other procedures
necessary to calculate the payments due under the Pool trading arrangements.
The settlement system is administered on a day to day basis by NGC
Settlements Limited, a subsidiary of NGC, as settlement system administrator.
The UK government recently invited the Regulator to review these
electricity wholesale trading arrangements, trading arrangements outside the
Pool and price setting mechanisms. The review was launched in January 1998
with an announcement that the Regulator and an independent panel had been
asked to report to the Energy Minister by July 1998.
Fossil Fuel Levy
All the RECs are obligated to obtain a specified amount of generating
capacity from NFFOs. Because electricity generated from non-fossil fuel plants
is generally more expensive than electricity from fossil fuel plants, the
Fossil Fuel Levy has been instituted. The Regulator sets the rate of the
Fossil Fuel Levy annually. The current Fossil Fuel Levy is 0.9% of the value
of sales of electricity made in England and Wales and 0.8% of the value of
sales of electricity made in Scotland.
Regulation under the Electricity Act
The Regulator
The principal legislation governing the structure and regulation of the
electricity industry in Great Britain is the Electricity Act. The Electricity
Act established the industry structure described above so as to enable
privatization to take place. The Electricity Act also created the
institutional framework under which the industry is currently regulated,
including the office of the Regulator, who is appointed by the Secretary of
State. The present Regulator, Professor Stephen Littlechild, was appointed for
a five year term commencing September 1, 1989 and he was reappointed in 1994
for a further five year term ending on August 31, 1999, but has agreed to leave
following the proposed appointment of an energy regulator with responsibilities
for gas and electricity later this year. Professor Littlechild holds the formal
title of Director General of Electricity Supply and is head of OFFER.
The Regulator's functions under the Electricity Act include granting
licenses to generate, transmit or supply electricity (a function which he
exercises under a general authority from the Secretary of State); proposing
modifications to licenses and, in case of non-acceptance of such proposals by
licensees, making license modification references to the MMC; enforcing
compliance with license conditions; advising the Secretary of State in respect
of the setting of each NFFO round; calculating the Fossil Fuel Levy rate and
collecting the levy; determining certain disputes between electricity licensees
and customers; and setting standards of performance for electricity licensees.
The term "supply" as used in the context of the Electricity Act and the PES
License covers both distribution and supply activities.
The Regulator exercises concurrently with the Director General of Fair
Trading certain functions relating to monopoly situations under the Fair
Trading Act 1973 and certain functions relating to courses of conduct which
have, or are intended or likely to have, the effect of restricting,
distorting or preventing competition in the generation, transmission or
supply of electricity under the Competition Act 1980.
The Electricity Act requires the Regulator and the Secretary of State to
exercise their functions in the manner each considers is best calculated to
ensure that all reasonable demands for electricity are satisfied, secure that
license holders are able to finance their licensed activities and promote
competition in the generation and supply of electricity.
Subject to these duties, the Secretary of State and the Regulator are
required to exercise their functions in the manner which each considers is best
calculated: to protect the interests of consumers of electricity supplied by
licensed suppliers in respect of price, continuity of supply, and the quality
of electricity supply services; to promote efficiency and economy on the part
of licensed electricity suppliers and the efficient use of electricity
supplied to consumers; to promote research and development by persons
authorized by license to generate, transmit or supply electricity; to
protect the public from the dangers arising from the generation, transmission
or supply of electricity; and to secure the establishment and maintenance of
machinery for promoting the health and safety of workers in the electricity
industry. The Secretary of State and the Regulator also have a duty to take
into account the effect on the physical environment of activities connected
with the generation, transmission or supply of electricity.
In performing their duties to protect the interests of consumers in respect of
prices and other terms of supply, the Secretary of State and the Regulator are
required to take into account in particular the interests of consumers in rural
areas. In performing their duties to protect the interests of consumers in
respect of the quality of electricity supply services, they are required to take
into account in particular the interests of those who are disabled or of
pensionable age.
On June 30, 1997, the UK government announced its intention to conduct a
comprehensive review of the regulatory framework governing the electricity
distribution and supply businesses in England and Wales, as well as the
regulatory framework applicable to other privatized utilities. The review
culminated in the March Green Paper which sets forth a number of proposals of
the UK government designated to re-examine utility regulation in the UK.
Among the main proposals contained within the March Green Paper are the
retention of the "RPI-X" as the fundamental basis for price regulation;
increased transparency and consistency of regulation; the merger of OFFER and
OFGAS; the separate licensing of the distribution and supply businesses of the
PESs;the amendment of the statutory duties of utility regulators to provide a
new primary duty to exercise their functions in the manner best calculated to
protect the interests of the consumers in the short and long term, wherever
possible through promoting competition; and adapting price regulation to
distinguish between income earned through companies' own efforts and income
which results from other factors. Some of these proposals would require
primary legislation. Responses to the March Green Paper by interested
parties were to be submitted by May 31, 1998.
Yorkshire submitted comments on the March Green Paper on May 29,
1998. In summary, Yorkshire welcomed the review of regulation and supported
the objectives of fairness and efficiency as the key to promoting customer
interests and allowing the industry to develop, but suggested that the existing
regulatory system had delivered significant benefits to customers and that any
changes should not undermine such benefits. Yorkshire also supported the
creation of a single energy regulator and procedural changes to foster greater
consistency in decision making. Furthermore while agreeing with the need to
consider the separation of the supply and distribution businesses, Yorkshire
suggested that the licenses could be separated without forcing divestiture of
such businesses and that the costs and overheads in putting in place any new
arrangements should be minimized.
On May 13, 1998 the Regulator issued a consultation paper on the
separation of the distribution and supply businesses of PESs and the future
treatment of metering and meter reading. The material proposals and
recommendations set out in the consultation paper are as follows:
1. Full separation of the ownership of the supply and distribution
businesses is recommended and appropriate interim arrangements
should be contemplated for separate companies to comprise the
distribution and supply activities, each acting independently of each
other.
2. Measures should be introduced to ensure that each PES supply
subsidiary operates at arm's length from the distribution subsidiary.
These measures would include separate contracts between the supply
and distribution businesses, avoiding the sharing of facilities between
the businesses, including requiring separate management teams for the
two businesses and minimizing corporate headquarters activities.
3. The distribution company should be responsible for the maintenance
and operation of the network and have a statutory duty to develop and
maintain an efficient, co-ordinated and economical system of electricity
distribution to facilitate competition in generation and supply. It should
connect any person to the network on reasonable terms and act as a ''last
resort'' meter reading service, bought in from meter reading companies,
for those suppliers not wishing to provide the service themselves.
4. All suppliers should be placed on the same legislative footing and tariff
supply should be replaced by supply under contract. License conditions
would be introduced to protect customers and competitors against
dominant suppliers.
5. Metering services should be open to competition and arrangements for
transmission in Scotland should be brought into line with those in
England and Wales.
Responses to the consultation paper have been requested by June 15, 1998.
The Regulator intends to issue a further consultation paper in July 1998. By
September 1998, the Regulator anticipates having outline proposals on the
separation of businesses, which outline will be considered in a consultation
paper relating to revised price controls that is scheduled to be released in
the Spring of 1999.
In October 1997, the UK government invited the Regulator to consider
parameters for a review of electricity trading arrangements. Such a review
would focus on the wholesale electricity market in England and Wales and
would likely cover existing trading within the Pool, trading arrangements
outside the Pool and price setting mechanisms. The impact on, and possible need
for change to, the framework of regulatory controls could also be considered,
including Pool governance, regulation of and access to the Grid, licenses, the
Electricity Act and the implications of European Union law. A review of certain
of these issues was launched in January 1998 with an announcement that the
Regulator and an independent panel had been asked to report to the Energy
Minister by July 1998.
In December 1997, the UK government announced a review of energy
sources for power generation, including fuel diversity, sustainable development
and the role of coal. Representations of interested parties were to be
submitted by mid-February 1998. While the review is underway, the Secretary
of State has deferred decisions on most outstanding or new applications for
the construction of generating stations. An Energy Select Committee Report on
the Coal Industry issued in April 1998 recommended that such deferral, as it
relates to the construction of gas fired generating stations, be lifted as
soon as possible. The Trade and Industry Select Committee is also undertaking
an inquiry into a number of aspects of UK energy policy.
Consumers' Committee
The Regulator is required under the Electricity Act to establish a
consumers' committee for the franchise area of each PES License holder (or, if
the Secretary of State so determines, for the franchise areas of two or more
such suppliers). Each committee comprises a chairman appointed by the Regulator
after consultation with the Secretary of State and between 10 and 20 other
members appointed by the Regulator after consultation with the committee
chairman. The duties of each committee are to make representations to, and
consult with, their allocated PES License holders about matters affecting the
interests of customers or potential customers of such supplier(s), to review
matters affecting the interests of electricity consumers in such committee's
area, and to advise the Regulator on any other matter which warrants discussion
or which is referred to it by the Regulator.
Licenses
Generation Licenses
Unless covered by an exemption, all electricity generators engaging in the
construction, expansion or operation of a power station in Great Britain are
required to have a generation license. There are currently 51 generation license
holders, including RPG, in Great Britain. Although generation is not subject to
price control, generators are not permitted to discriminate between customers or
cross subsidize their licensed activities. The conditions attached to a
generation license in England and Wales require the holder, among other things,
to comply with the Grid Code, to comply with any REC's distribution code to the
extent applicable, to be a member of the Pool and to submit relevant generating
sets for central dispatch. The conditions attached to a generation license in
Scotland require the holder, among other things, to comply with the Scottish
Grid Code. Failure to comply with any of the generation license conditions may
subject the licensee to a variety of sanctions, including enforcement orders by
the Regulator or license revocation if the license holder is not in compliance
with an enforcement order.
PES Licenses
Each of the RECs, Scottish Power and Scottish Hydro Electric has a PES
License for its Franchise Area and is required, under the Electricity Act, to
supply electricity upon request to any premises in that area, except in
specified circumstances. Each PES is also required not to discriminate
between its own supply business and other users of its distribution system and
the PES License prohibits cross subsidy between the various regulated
businesses. As described above, PESs are subject to separate price controls on
the amounts they may charge for the use of their distribution system by all
customers in their Franchise Area and for the supply of electricity to
Franchise Supply Customers. The PES Licenses also require the licensee to
procure electricity at the best price reasonably obtainable having regard to
the sources available.
As part of his continued monitoring of the electric utility industry, the
Regulator published on August 15, 1996 comparative information relating to the
RECs' economic purchasing performance. The publication, entitled "Yardstick
of Electricity Purchase Costs", compared in yardstick value terms, the
generation costs which RECs passed through to Franchise Supply Customers in
Fiscal Years 1995 and 1996 under the Supply Price Control Formula. The
Regulator has reviewed the supply price controls applicable to PES License
holders and published in October 1997 proposals for new controls to take effect
on April 1, 1998. He issued a consultation paper on this matter on September 5,
1996 entitled "The Competitive Electricity Market from 1998: Price Restraints".
He subsequently issued four further consultation papers in January, May, July
and August, 1997. The October 1997 proposals were for maximum price
restraints in respect of supply to residential and small business customers
for a period of at least two years beginning April 1, 1998, which would
eliminate the pass-through of costs to such customers, consisting primarily
of purchased power costs. Yorkshire accepted these proposals. See '' ---
Supply of Electricity ---Price Regulation''.
In England and Wales, each PES License limits the extent of the generation
capacity in which the relevant REC may hold an interest without the prior
consent of the Regulator (''own-generation limits''). These own-generation
limits, expressed in megawatts, currently restrict the participation of a REC
in generation to a level of approximately 15% of the simultaneous maximum
electricity consumption in that REC's franchise area at the time of
privatization. In the case of Yorkshire, the own-generation limit is fixed
at 800 MW.
The Regulator has stated that it would be reasonable to consider a REC's
request to increase its own-generation limit on the condition that it accepted
explicit restrictions on the contracts it signed with its supply business, and
that at a minimum the REC would be prohibited from entering into additional
own-generation contracts in its franchise market. The Regulator considers that
an increase in own-generation limits subject to such restrictions could allow a
REC to contribute more fully to the development of competition in generation
without the allegation that it was exploiting its captive market and local
monopoly position. In June 1996, the Regulator stated that he had indicated to
Energy Group, in the context of its acquisition of 6,000 MW of generating
capacity from National Power and PowerGen, that he would be favorably
inclined to relax the own-generation limits of Energy Group subject to the
Regulator and Energy Group agreeing to license modifications as set out in a
consultation paper which he had published in August 1995.
The Regulator has made modifications to 14 PES Licenses in connection
with the introduction of competition for Franchise Supply Customers currently
scheduled to begin in September 1998. These modifications comprise a number
of new obligations to offer services to all competing suppliers. These services
are generally known as data management services, including registration, data
collection and aggregation, meter operation and provision of prepayment meter
infrastructure. These proposals have been accepted by Yorkshire. The Regulator
has issued full modifications to the first-tier and second-tier licenses to
encompass the changes. In response to respective individual requirements, the
PESs are providing collectively a data transfer service. Preparations are being
made to provide these services as part of a program of work and in October
1997 the Regulator made final proposals for the recovery of the costs of this
program which were accepted by Yorkshire in November 1997.
The RECs are also contributing to a program of work by the Pool to adopt
settlement arrangements for the competitive market in 1998. It has been agreed
that these costs, subject to a cap above which recovery would be partial, will
be recovered from charges to be made to suppliers by the Pool over a five year
period.
Second-Tier Supply Licenses
Other than a PES in its Franchise Area and subject to certain other
exceptions, a supplier of electricity to premises in Great Britain must possess
a second-tier supply license. Subject to the restrictions described in '' ---
Supply of Electricity'' above, second-tier licensees may compete for the supply
of electricity with one another and with the PES for the relevant area. There
are currently 40 second-tier supply license holders for England and Wales,
including Yorkshire, and 27 for Scotland.
Transmission Licenses
In England and Wales, NGC is the only transmission license holder. The
transmission license imposes on NGC the obligation to operate the merit order
system for the central dispatch of generating units and gives NGC
responsibility for the economic purchasing of ancillary services from
generators and suppliers. The transmission license requires NGC to offer terms
on a non-discriminatory basis for the carrying out of works for connection to,
and use of, the transmission system.
Modifications to Licenses
Subject to a power of veto by the Secretary of State, the Regulator may
modify license conditions with the agreement of the license holder. He must
first publish the proposed modifications and consider representations or
objections made. If the Regulator fails to agree to modifications with a
license holder, he may refer a matter relating to generation, transmission
or supply of electricity under a license to the MMC. If the MMC finds that the
matter referred to it has, or may be expected to have, specified effects
adverse to the public interest which could be remedied or prevented by a
license modification, the Regulator is required to make modifications that
appear to him requisite for the purpose of remedying or preventing the adverse
effects identified by the MMC. Modifications to License conditions may also be
made by the Secretary of State as a consequence of monopoly, merger or other
competition references under general UK competition law.
Following the acquisition of Yorkshire by Yorkshire Group, the Regulator
proposed that Yorkshire's PES License be modified, by agreement, to take into
account the fact that the PES License is now held by a subsidiary company. In
particular, the Regulator proposed that the license be modified to provide
that, with few exceptions, the only business activities which Yorkshire is
permitted to undertake directly are its franchise and second-tier supply
businesses and its distribution business. The license modifications also
require Yorkshire to ensure that it has sufficient management resources and
financial resources and facilities to conduct its supply and distribution
businesses and to comply with its statutory and license obligations. Yorkshire
is required to provide an annual certificate to the Regulator approved by the
Yorkshire Board of Directors and signed by a Director to that effect and in the
interim to notify the Regulator immediately of any changes threatening the
validity of such certificates. Additionally, the license modifications require
Yorkshire to obtain from AEP and NCE legally enforceable undertakings in favor
of Yorkshire that they and their subsidiaries will refrain from any action
which would be likely to cause Yorkshire to breach any of its obligations under
the Electricity Act or the PES License. Further, the consent of the Regulator is
required for Yorkshire to create security over its assets, to incur
indebtedness or to give guarantees, unless the transaction is on normal
commercial and arm's length terms and for a "permitted purpose" (which refers to
the supply, distribution or generation business, or any business conducted by
Yorkshire or its affiliates or subsidiaries on March 31, 1997) or the
transaction involves any businesses whose aggregate revenues in any financial
year do not exceed 5% of the aggregate turnover of the supply, second-tier
supply and distribution businesses in the previous financial year. The consent
of the Regulator also is required before Yorkshire may transfer assets or make
loans to affiliates or subsidiaries except for certain specified purposes,
including payment of dividends out of distributable reserves, repayments of
capital, and payments on normal commercial and arm's length terms for goods,
services or assets supplied. These provisions are subject to an overriding
provision in the PES License which prevents any REC from disposing of (which
would include creating a security interest in) distribution assets without the
Regulator's express prior consent. Additionally, the license modifications
require Yorkshire to use reasonable efforts to maintain the investment grade
credit ratings of its debt. Finally, because Yorkshire is now owned by
Yorkshire Group, the Regulator required Yorkshire to obtain from AEP and
NCE legally enforceable undertakings to provide information to Yorkshire, as
licensee, in order to comply with requirements of the Regulator. These
modifications to the PES License have been agreed to by Yorkshire and took
effect on December 15, 1997 and the required undertakings were also provided
on December 15, 1997.
In February 1998, the Regulator issued, for public consultation, proposals
for further modifications to the licenses of PESs that have been subject to
takeovers. The main proposals are:
(1) to allow for a PES generation business to be carried on in an
affiliate which is not a subsidiary and in such cases for the generation
business to be conducted outside the scope of the modifications to the PES
license which have been brought into effect to ensure that the Regulator can
regulate a company effectively after it has been taken over and to help ensure
the financial stability of the PES (the "Ring-Fencing Conditions");
(2) to restrict further the provisions of existing PES licenses allowing
PESs to carry out certain otherwise restricted activities provided they do
not exceed 5 percent of the revenues of the supply, second-tier supply and
distribution businesses, by introducing an additional test based on
cumulative investment;
(3) to extend to all PESs that have been acquired the condition contained
in the licenses of London Electricity plc, Northern Electric plc and
Yorkshire to use reasonable endeavors to maintain an investment grade rating
of corporate debt;
(4) to prohibit PESs from accepting "cross default" provisions in borrowing
agreements; and
(5) to make the payment of dividends and other distributions by a PES
expressly conditional on compliance with the Ring-Fencing Conditions in
the license.
Comments were due with respect to the proposals in the consultation paper
by March 27, 1998. Yorkshire provided comments on the consultation paper on
March 25, 1998. Yorkshire indicated that it did not consider the proposed
modifications described in paragraphs (1), (4), and (5) immediately above to be
necessary. Further proposals are expected to be made by the Regulator in the
light of this consultation paper that may result in further modifications to
PES licenses. There can be no assurance that any such modifications to
Yorkshire's PES license that result from such proposals will not have a
material adverse effect on Yorkshire.
Term and Revocation of Licenses
Yorkshire's PES License will continue in effect until at least 2025
unless revoked. Under ordinary circumstances, the license may not be revoked
except on 25 years' prior notice, which notice may not be given until 2000.
Otherwise, the Secretary of State may revoke a PES License by not less than 30
days' notice in writing to the licensee in certain specified circumstances
including any failure to comply with a final order of the Regulator requiring
the license holder to comply with its license conditions or requirements, or
insolvency of the licensee.
UK ENVIRONMENTAL LEGISLATION
Yorkshire's businesses are subject to numerous regulatory requirements
with respect to the protection of the environment. The principal laws which
have environmental implications for Yorkshire are the Electricity Act, the
Environmental Protection Act 1990, the New Road and Street Works Act 1991
and the Environment Act 1995.
The Electricity Act requires Yorkshire to consider the preservation of
natural beauty and the conservation of natural and man-made features of
particular interest when it formulates proposals for development in connection
with certain of its activities. Environmental assessments are required to be
carried out in certain cases including overhead line constructions at higher
voltages and generating station developments. Yorkshire has produced a
Corporate Environmental Policy Statement and an Electricity Act Schedule 9
Statement which sets out the manner in which it intends to comply with its
environmental obligations.
Possible adverse effects of EMFs from various sources, including
transmission and distribution lines, have been the subject of a number of
studies and increasing public discussion. The current scientific research is
inconclusive as to whether EMFs may cause adverse health effects. There is the
possibility that the passage of legislation and changing regulatory standards
would require measures to mitigate EMFs, with resulting increases in capital
and operational costs. In addition, the potential exists for public liability
with respect to lawsuits brought by plaintiffs alleging damages caused by EMFs.
The only UK standards for exposure to power frequency EMFs are those
promulgated by the National Radiological Protection Board and relate to the
levels above which physiological effects have been observed. Yorkshire fully
complies with these standards.
Yorkshire believes that it has taken, and intends to continue taking,
measures to comply with the applicable law and government regulations for the
protection of the environment. There are no material legal or administrative
proceedings pending against Yorkshire with respect to any environmental
matter. Yorkshire spent (POUND)7 million on environmental compliance in Fiscal
Year 1998, approximately half of which was of a capital nature. This level of
expenditures is expected to continue in future Fiscal Years.
UK AND EU COMPETITION LAW
Yorkshire's businesses are subject to the competition rules of both the UK
and the European Community.
The UK Restrictive Trade Practices Act 1976 stipulates that failure to
furnish to the Office of Fair Trading an agreement that is registrable under
such Act renders unenforceable certain restrictions contained in such
agreement. Briefly stated, the Fair Trading Act 1973 and the Competition Act
1980 both regulate the activities of companies with market power. UK
competition law, particularly the law relating to restrictive agreements, is in
the process of reform and is likely to follow the approach of European
Community law.
The Treaty of Rome contains provisions which prohibit anti-competitive
agreements and practices, including the abuse of a dominant position within the
EU or a substantial part of it. Penalties for violation of these provisions
include fines, third party damages and infringing contractual provisions being
unenforceable.
A new Competition Bill has been introduced to bring the UK law into line
with EU Competition Rules. It is prohibition legislation and also gives
stronger powers to the Regulator.
In January 1993, the UK implemented the EU Utilities Directive on the
procedures to be followed for the award of supply and works contracts by
utility companies, including electricity utilities. This directive was replaced
by EU Directive 93/36, which was implemented by the UK in December 1996 and
which covers service contracts as well as supply and work contracts. Those
contracts that exceed the relevant financial thresholds have to be advertised
in the Official Journal of the European Communities. Suppliers and contractors
who believe they have suffered harm from failure to implement the correct
procedure in awarding the contract are able to institute proceedings in the
English High Court. The European Commission also has the power to intervene
prior to the award of a contract. Yorkshire Group believes that Yorkshire has
complied with any obligations it may have under those regulations but the
interpretation and application of those regulations and of the European Union
directives which they implement is not free from doubt and no assurance can be
given that any claim for damages against Yorkshire for breach of the rules
would be unsuccessful.
EMPLOYEES
Yorkshire had approximately 4,147 employees (approximately 4,025 full-
time equivalent) at the end of Fiscal Year 1998. Yorkshire Group has no
employees because it is a holding company with no operations. Approximately
61% of Yorkshire's employees are represented by labor unions. All Yorkshire
employees who are not party to a personal employment contract are subject to a
collective bargaining agreement called The Electricity Business Agreement.
This Agreement may be amended by agreement between Yorkshire and the
unions and is terminable with 12 months' notice by either side. Yorkshire
believes that its relations with its employees are favorable. See '' ---
Business Restructuring'' for a discussion of planned staffing reductions.
PRESENTATION OF CERTAIN INFORMATION AND EXCHANGE
RATES
Solely for the convenience of the reader, this document contains
translations of certain pounds sterling amounts into US dollars amounts at the
Noon Buying Rate in New York City for cable transfers in pounds sterling as
certified for customs purposes by the Federal Reserve Bank of New York on
March 31, 1998 of $1.6765 = (POUND)1. See note 1 ''Summary of Significant
Accounting Policies'', to Yorkshire Group's consolidated financial statements
for Fiscal Year 1998 included elsewhere in this document.
Item 2. PROPERTIES
Yorkshire owns the freehold of its principal offices north of Leeds.
Yorkshire has both network and non-network land and buildings.
Network Land and Buildings
At March 31, 1998, Yorkshire had interests in approximately 15,000
network properties, comprising principally sub-station sites.
Non-Network Land and Buildings
At March 31, 1998, Yorkshire had freehold and leasehold interests in non-
network properties comprising chiefly offices, depots, warehouses, workshops
and a number of former retail outlets. The net book value of total non-network
land and buildings at March 31, 1998 was (POUND)37 million.
Item 3. LEGAL PROCEEDINGS
Yorkshire Group is routinely a party to legal proceedings arising in the
ordinary course of business which are not material, either individually or in
the aggregate. Yorkshire Group currently is not a party to any material legal
proceedings nor is it aware of any threatened material legal proceedings.
On May 18, 1998, Optimum Solutions Limited (''Optimum''), a company
that conducts research and development in the UK electric industry, entered a
claim in the UK High Court of Justice, Chancery Division, against Yorkshire,
Eastern Electricity plc, which is also a REC, NGC (as defined herein) and
Logica plc alleging, in the case of Yorkshire, that Yorkshire breached a
confidentiality agreement with Optimum regarding the use of confidential
information in Yorkshire's preparation for the competitive changes to the
electricity supply market in and after 1998. Optimum requests an injunction
against the continued use of, and the return of, such confidential information,
an unspecified amount of damages relating to breach of contract and equitable
compensation for misuse of such confidential information. Yorkshire is
currently assessing its response to this claim. The final outcome of this
matter cannot now be determined.
Litigation is ongoing with respect to another corporation's use of actuarial
surpluses declared in the ESPS. The Pension Ombudsman (a UK arbitrator
appointed by statute) has issued a "final determination" in favor of complaints
made by members of the ESPS relating to another corporation's use of the ESPS
surplus to offset such corporation's additional costs of early payment of
pensions as a result of reorganization or redundancy, together with additional
contributions required after a valuation. Under that determination, the Pension
Ombudsman directed such corporation to pay into ESPS the amount of that use
of the surplus plus interest. The Pension Ombudsman's final determination has
been successfully challenged in the courts. At the same time, the courts also
considered other areas of uncertainty relating to the uses made of actuarial
surpluses arising in the ESPS, including the ability to reduce or suspend
standard employer contributions to reduce such surpluses. The courts ruled that
such reductions were permissible. The final decisions of the courts are subject
to appeal. If any of the decisions are reversed on appeal they may have an
adverse effect on Yorkshire, which has made similar use of its actuarial
surplus, but no assurance can be given as to the extent of that effect.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
There is no established public trading market for Yorkshire Group's
common stock, all of which is owned indirectly by AEP and NCE.
Item 6. SELECTED FINANCIAL DATA
The consolidated income statement data and other consolidated data of the
Predecessor Company for each of the four Fiscal Years ended March 31, 1997
and the consolidated balance sheet data and certain business segment data of
the Predecessor Company at the end of each such Fiscal Year presented below
have been derived from the audited consolidated financial statements of the
Predecessor Company. The consolidated income statement data and other
consolidated data of the Successor Company for Fiscal Year 1998 and the
consolidated balance sheet data of the Successor Company at the end of such
Fiscal Year presented below have been derived from the audited consolidated
financial statements of the Successor Company. The consolidated balance sheet
data and certain business segment data of the Successor Company as of April 1,
1997 presented below have been derived from the audited consolidated balance
sheet of the Successor Company. The selected consolidated financial data
presented below was derived from the audited consolidated financial statements
of the Predecessor Company and the Successor Company that have been
prepared in accordance with US GAAP. See ''Item 7. Management's Discussion
and Analysis of Results of Operations and Financial Condition'' and the
consolidated financial statements and notes thereto of the Predecessor Company
and the Successor Company included elsewhere in this document.
The unaudited pro forma consolidated data for the Successor Company for
Fiscal Year 1997 presented below reflect the Acquisition as if it had
occurred as of April 1, 1996. Such data has been prepared by the Successor
Company based upon assumptions deemed proper in accordance with the purchase
method of accounting for business combinations and have been adjusted to
reflect (i) interest expense of (POUND)74 million incurred as a result of the
financingof the Acquisition, (ii) amortization of (POUND)24 million related to
goodwill recorded in connection with the Acquisition, (iii) additional
depreciation expense of (POUND)6 million as a result of the revaluation of
certain fixed assets in connection with the Acquisition and (iv) removal of
the effect of recording the provision of (POUND)78 million for certain
uneconomic gas and electricity contracts, the loss of (POUND)7 million on
certain interest rate swap agreements and the write-down of (POUND)6 million
relating to non-operational property. Such data are shown for illustrative
purposes only and are not necessarily indicative of the future results of
operations of the Successor Company or of the results of operations of the
Successor Company that would have actually occurred had the Acquisition
occurred at the beginning of the period presented. Such data should be read in
conjunction with the unaudited pro forma consolidated statement of income and
notes thereto of the Successor Company included elsewhere in this document.
<PAGE>
Predecessor Company
Fiscal Year
1994 1995 1996 1997
(POUND) (POUND) (POUND) (POUND)
(Amounts in Millions)
Consolidated Income Statement Data:
Operating revenues 1,308 1,464 1,431 1,331
Operating income (1) 156 215 214 52
Other income (loss), net (2) (8) 16 313 20
Interest expense, net (5) (12) (20) (33)
Provision for income taxes (3) (50) (78) (114) (13)
Net income 93 141 393 26
March 31,
1994 1995 1996 1997
(POUND) (POUND) (POUND) (POUND)
(Amounts in Millions)
Consolidated Balance Sheet Data:
Fixed assets 701 747 769 796
Total assets 1,241 1,367 1,408 1,375
Total shareholders' equity 612 517 399 359
Long-term debt 126 305 424 419
Short-term debt and current
portion of long-term debt 99 91 90 87
Fiscal Year
1994 1995 1996 1997
(POUND) (POUND) (POUND) (POUND)
(Amounts in Millions, Except Ratios)
Other Consolidated Data:
EBIT (4) 148 231 527 72
EBITDA (4) 182 272 569 122
Cash flow from operations 237 201 222 96
Cash used in investing
activities (201) (101) (8) (51)
Cash used in financing
activities (139) (67) (114) (76)
Ratio of earnings
to fixed charges (5) 6.8 10.5 12.0 1.8
<PAGE>
Successor Company
Successor Successor
Pro Forma
Fiscal Year Fiscal Year
1997 1998
(POUND) (POUND) $(6)
(Amounts in Millions)
Consolidated Income
Statement Data:
Operating revenues . . . . . 1,331 1,285 2,154
Operating income (1) . . . . 106 161 270
Other income (loss)
net (2) . . . . . . . . . . . 20 (39) (66)
Interest expense, net . . . . .(100) (106) (178)
Provision for income taxes . . .(17) 1 2
Income before extraordinary item . 9 17 28
Extraordinary loss (7) . . . . . . - (134) (225)
Net income (loss) . . . . . . 9 (117) (197)
Successor Successor
April 1, 1997 March 31, 1998
(POUND) (POUND) $(6)
(Amounts in Millions)
Consolidated Balance
Sheet Data:
Fixed assets . . . . . 939 1,060 1,777
Total assets . 2,591 2,462 4,126
Total shareholders' equity . - 323 541
Long-term debt . . . . . . . 433 1,026 1,720
Accrued liability
to purchase Yorkshire . . . . 1,496 - -
Short-term debt and
current portion of
long-term debt. . . . . . . . 87 324 542
Short-term debt
refinanced June 1998.. - 164 275
Successor
Successor Year
Pro Forma Ended
Fiscal Year March 31,
1997 1998
(POUND) (POUND) $(6)
(Amounts in Millions, Except Ratios)
Other Consolidated
Data:
EBIT before
extraordinary
item (4) / (7) . . . . . . . . . 126 122 204
EBITDA before
extraordinary item
(4)/(7) . . . . . . . . . . . . . . 206 200 335
Cash flow from
operations . . . . . . . . . . 62 103
Cash used in
investing activities . . . . (1,639) (2,747)
Cash provided by
financing activities . . . . 1,391 2,332
Ratio of earnings to
fixed charges (5) . . . . . 1.2 1.1
(1) Notable operating expenses include:
Fiscal Year 1998 --- provision of (POUND)5 million for committed costs arising
from delays in opening up the competitive market and (POUND)10 million
restructuring charges.
Fiscal Year 1997 --- (i) a provision of (POUND)78 million for uneconomic
gas and
electricity contracts (the effect of which is removed from the Successor
Company's unaudited pro forma consolidated statement of income for
Fiscal Year 1997), which resulted in a charge of (POUND)125 million to the
supply business offset by an intrabusiness elimination of (POUND)47 million and
(ii) a charge of (POUND)50 million for information system development costs to
prepare for the opening of the competitive electricity market in 1998 for
Franchise Supply Customers, of which (POUND)37 million was charged to the
supply business and (POUND)13 million was charged to the distribution business.
Fiscal Years 1994 and 1995 ---reorganization costs of (POUND)44 million and
(POUND)8 million, respectively.
(2) Other income (loss) principally represents income from Yorkshire's
investment in NGG and, in Fiscal Year 1996, a gain resulting from the
NGG Transaction and earnings and losses from Yorkshire's investments in
joint ventures and minority holdings. Notable items include:
Fiscal Year 1998 ---an unrealized loss (POUND)41 million before taxes was
charged following the reduction in fair value of Yorkshire Group's investment
in Ionica Group plc (Ionica).
Fiscal Year 1997 ---gain on sale of Yorkshire's investment in Torch
Telecom of (POUND)15 million.
Fiscal Year 1996 ---income from investment in NGG and gain in respect of
the NGG Transaction as described under ''Item 7. Management's
Discussion and Analysis of Results of Operations and Financial Condition
- ---Introduction ---NGG Transaction''.
Fiscal Year 1995 ---one-time termination payment received from Stockholm
Stadshus AB of (POUND)17 million.
Fiscal Year 1994 ---loss on sale of Yorkshire's investment in Homepower
Retail Limited of (POUND)18 million.
(3) Fiscal Year 1996 includes a tax charge of (POUND)38 million relating to
the NGG Transaction.
(4) EBIT represents income before the sum of net interest expense and
income taxes. EBITDA represents income before the sum of net interest expense,
income taxes, depreciation and amortization. EBIT and EBITDA are
provided for informational purposes only and such measures should not be
construed as alternatives to operating income (as determined in accordance
with US GAAP) as indicators of operating performance, or as alternatives
to cash flows from operating activities (as determined in accordance with
US GAAP) as measures of liquidity. EBIT and EBITDA are widely
accepted financial indicators of a company's ability to incur and service
debt. However, the measures of EBIT and EBITDA presented herein may
not be comparable to similar measures presented by other companies.
(5) The ratio of earnings to fixed charges is computed as the sum of
pre-tax income (before extraordinary item) plus fixed charges divided by fixed
charges. Fixed charges consist of interest expense and amortization of debt
expense.
(6) Solely for the convenience of the reader, pounds sterling amounts have
been translated into US dollar amounts at the Noon Buying Rate on March
31, 1998 of $1.6765= (POUND)1. See ''Note 1. Summary of Significant Accounting
Policies'' to the Consolidated Financial Statements of the Successor for
Year Ended March 31, 1998.
(7) Represents the windfall tax imposed by the UK government, which was not
deductible for UK corporation tax purposes.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the
consolidated financial statements and the notes thereto of the Successor
Company and with the consolidated financial statements and the notes thereto
of the Predecessor Company and ''Selected Consolidated Financial Data''
included elsewhere in this document. The consolidated financial statements of
the Successor Company and the Predecessor Company discussed herein are
presented in accordance with US GAAP.
Introduction
Background
Yorkshire Group is indirectly equally owned by AEP and NCE. Yorkshire
Group was incorporated as a limited company under the laws of England and
Wales in July 1996. Effective April 1, 1997, Yorkshire Group, through its
wholly owned subsidiary Yorkshire Holdings, gained effective control of
Yorkshire. Yorkshire Group's primary asset is the stock of Yorkshire Holdings.
Yorkshire Holdings, which owns all the outstanding stock of Yorkshire, has no
significant operations outside of its investment in Yorkshire.
Financing the Acquisition
Yorkshire Group indirectly acquired ownership of Yorkshire by means of a
cash offer commenced on February 24, 1997 and declared wholly unconditional
on April 1, 1997. The Acquisition was completed through the payment of cash
consideration of (POUND)1,457 million and the issuance of loan notes in the
amount of (POUND)22 million. The total consideration, including acquisition
costs, was (POUND)1,496 million. The Acquisition was financed by cash
contributions of (POUND)220 million from each of AEP and NCE and from
borrowings under a (POUND)1,140 million five year term loan and revolving
facility agreement dated February 24, 1997. On July 31, 1997, this term loan
and revolving facility agreement was replaced by a new credit facility
(the ''1997 Credit Facility'').
Accounting for the Acquisition
The recorded assets and liabilities of Yorkshire at March 31, 1997 were
(POUND)1,375 million and (POUND)1,016 million, respectively. In accordance
with the purchase method of accounting, the assets and liabilities acquired
have been recorded based on an allocation of the purchase price. Effective
April 1, 1997, Yorkshire's assets were increased by (POUND)222 million to their
fair value of (POUND)1,597 million, reflecting principally: (a) an increase of
(POUND)138 million in the value of Yorkshire's distribution network in excess of
its depreciated cost basis; (b) an increase in the pension asset for the defined
benefit pension plan of (POUND)55 million; and (c) an increase in the value of
an equity investment in Ionica Group plc (''Ionica'') of (POUND)23 million.
Yorkshire's liabilities were increased by (POUND)79 million to their fair value
of (POUND)1,095 million, reflecting principally: (a) an increase in the
deferred tax liability of (POUND)67 million; and (b) an increase of (POUND)14
million in the market value of long-term borrowings. The excess of the purchase
price plus Acquisition costs, totaling (POUND)1,496 million, over the fair
value of assets acquired net of liabilities assumed, totaling (POUND)502
million, resulted in goodwill of (POUND)994 million which is being amortized
over a 40 year period. The consolidated financial statements of the Predecessor
Company discussed below do not reflect the foregoing adjustments.
NGG Transaction
During Fiscal Year 1996, Yorkshire, together with the other 11 RECs in the
UK, distributed the majority of its shares in NGG to its shareholders. This
transaction, together with certain related transactions (collectively, the
''NGG Transaction''), had a material impact on Yorkshire's financial results
for that year. The related transactions included: (a) Yorkshire's receipt of
special and ordinary dividends; (b) the receipt by each Yorkshire
residential customer of a one-time discount pursuant to an agreement among
the shareholders of NGG; and (c) Yorkshire's receipt of an in-kind dividend of
approximately 9.2% of the shares of PSB which shares were subsequently
converted to cash upon PSB's liquidation.
Significant Factors and Known Trends
Competition and Industry Challenges
On April 1, 1995 and 1996, certain reductions in allowed distribution
revenues were made by the Regulator. Yorkshire's allowed distribution revenues
were impacted by a 14% below inflation reduction and a 13% below inflation
reduction on April 1, 1995 and 1996, respectively, following reviews by the
Regulator. On April 1, 1997 and April 1, 1998, Yorkshire's allowed distribution
revenues were decreased by another 3% below inflation reduction, and there will
be a further 3% below inflation reduction on April 1, 1999.
The potential exists for additional distribution price reductions based upon
further review by the Regulator. The next scheduled Distribution Price Control
Formula review will be in 2000. Future cost efficiency initiatives may not
result in sufficient savings to offset price reductions. Price reductions are
mitigated by the inclusion of the UK Retail Price Index in the determination of
the Distribution Price Control Formula. Because the maximum average price in
any year is based in part on the maximum average price in the preceding year,
a price reduction in any given year has an ongoing effect on the maximum
average price for all subsequent years. See ''The Electric Utility Industry in
Great Britain ---Distribution of Electricity ---Price Control''.
Yorkshire currently has an exclusive right to supply electricity to its
Franchise Supply Customers. Competition in supply to such customers was
scheduled to be phased in over a six month period commencing on April 1,
1998. In October 1997, the Regulator published proposals for new transitional
supply price restraints to apply from April 1, 1998 to residential and small
business customers for an initial period of two years and until an adequate
level of competition is established. Yorkshire subsequently indicated its
acceptance of such proposals. The proposals (when taken together with the
reduction in the Fossil Fuel Levy, which became effective on April 1, 1998)
resulted in the implementation of small reductions, effective April 1, 1998, in
the tariffs for Yorkshire's residential and small business customers in its
Franchise Area
compared to the corresponding tariffs in effect in August 1997. The proposals
also require an additional 3% below inflation reduction effective April 1, 1999.
See ''The Electric Utility Industry in Great Britain ---Supply of Electricity
---Price Regulation''.
Following an announcement in January 1998 by the Regulator, competition
in supply to Franchise Supply Customers has been delayed until September
1998. Assuming that such competition starts as currently scheduled in
September 1998 for Franchise Supply Customers, Yorkshire Group presently
estimates that costs totaling (POUND)72 million will have been incurred for re-
engineering and information technology work. Of such amount, approximately
(POUND)19 million was expensed in Fiscal Year 1997 and (POUND)2 million in
Fiscal Year 1998. The Regulator has made proposals (which have been accepted by
Yorkshire) to allow Yorkshire recovery of (POUND)23 million over a five year
period ending March 31, 2003. A further (POUND)7 million is expected to be
recovered through Pool cost recovery and other national mechanisms and
(POUND)8 million is expected to be capitalized as such amount is expected to
provide future benefits to the supply business. As a result of the above, the
residual amount of approximately (POUND)13 million, which will not be recovered
or capitalized, will be expensed in Fiscal Year 1999 as incurred.
The Regulator has also made proposals (which have been accepted by
Yorkshire) to provide an annual cost recovery of (POUND)3 million for the
period 1998 through 2000 to cover operating costs. The allowance will be
reviewed at the time of the Distribution Price Control Formula review in 2000.
The October 1997 proposals therefore will allow Yorkshire to recover up to
52% of its forecasted set-up and operating costs over a five year period. The
shortfall could be higher if: (i) operating costs are higher than anticipated
(e.g., there is a higher level of customer activity); (ii) recovery of operating
costs is disallowed or reduced when the Distribution Price Control Formula is
reviewed for the period beginning April 1, 2000; or (iii) the integrated
national systems do not work as contemplated or require substantial
redevelopment.
The Regulator's proposals also provided that a REC should be penalized: (i)
where it starts to open its market more than three months after the market
opening by the first REC; (ii) where it opens successive tranches of its market
more than three months after the opening of the corresponding tranche by the
first REC; and (iii) where the market opening of the first REC has been delayed
beyond April 1, 1998. The penalties will be calculated at 1% of the operating
revenues of the supply business for Franchise Supply Customers per month of
delay, weighted by the proportion of customers affected and applied as a
reduction in allowed distribution business revenues. If Yorkshire does not open
its market for Franchise Supply Customers to competition until after April 1,
1999, it would incur a penalty of approximately (POUND)6 million. It is now
apparent that some penalty will be incurred due to the delay in the opening
of the competitive market for Franchise Supply Customers until September 1998
and a provision of (POUND)3 million has been included in the results for
Fiscal Year 1998. Yorkshire Group expects that Yorkshire will be prepared to
open its Franchise Area to such competition in September 1998.
Factors Affecting Revenues
Two principal factors determine the amount of revenues produced by the
distribution business: the unit price of electricity distributed (which is
controlled by the Distribution Price Control Formula) and the number of
electricity units distributed (which depends upon customer demands as
influenced in part by economic activity and weather conditions).
Two principal factors determine the amount of revenues produced by the
supply business: the unit price of the electricity supplied (which, in the case
of the Franchise Supply Customers, is controlled by the Supply Price Control
Formula) and the number of electricity units supplied. Yorkshire is currently
expected to have the exclusive right to supply all Franchise Supply Customers
in its Franchise Area until September 1998.
UK Tax Law Changes
On July 2, 1997, the UK government enacted certain changes in tax law,
including a one-time windfall tax on privatized industries and a reduction in
rates of corporation tax on income from 33% to 31%. The windfall tax on
Yorkshire is (POUND)134 million and is not deductible for UK corporation tax
purposes. The windfall tax has been recorded as an extraordinary charge in
Fiscal Year 1998. The tax is payable in two equal installments on December 1,
1997 and 1998. During Fiscal Year 1998, Yorkshire Group estimated the impact
of the reduction in corporation tax rates, which resulted in a one-time
reduction in deferred income tax liabilities and a corresponding reduction in
income tax expense of approximately (POUND)12 million.
Business Restructuring
In December 1997, Yorkshire announced a planned business restructuring
intended to enable it to meet increased competition and react to potential
regulatory developments in the energy markets in the UK. The restructuring will
result in the distribution and supply businesses becoming self-sufficient
businesses. As part of the restructuring, an alternative ownership structure
will be pursued for the generation business. Yorkshire currently contemplates
transferring such assets to an entity or entities other than Yorkshire Group
or its subsidiaries. It is expected that proceeds from the transfer of these
assets will be used to reduce debt of Yorkshire Group. See ''Certain
Relationships and Related Transactions''.
Total assets less current liabilities employed by the generation business at
March 31, 1998 were (POUND)136 million. Operating income attributable to the
generation business in Fiscal Year 1998 was (POUND)16 million.
As a result of this restructuring, approximately 160 positions will be
eliminated. A provision of approximately (POUND)10 million was recorded in
Fiscal Year 1998 to reflect the cost of these workforce reductions.
Investment in Ionica
Yorkshire Group's investment in Ionica was initially included in its
consolidated balance sheet at its fair value at acquisition on April 1, 1997 of
(POUND)54 million plus a subsequent additional investment of (POUND)1 million.
Management have written down the book value of the investment to their
estimate of fair value by charging an unrealized loss of (POUND)41 million
before taxes in Fiscal Year 1998. The reduction in fair value of the investment
was recognized by management as '' other than temporary '' following an
announcement by Ionica on May 22, 1998 that Ionica had been unsuccessful in
negotiating release of credit lines from existing providers of bank finance and
had been advised to obtain further equity investment prior to seeking further
bank funding. Management expects to take an additional charge of (POUND)6
million before taxes in the first quarter of Fiscal Year 1999.
Derivative Financial Instruments and Interest Rates
Derivative financial instruments are used by Yorkshire on a limited basis
and are utilized only to mitigate business risks and not for speculative
purposes.
Yorkshire Group maintains its cash balances in pounds sterling. However,
Yorkshire Group's obligations related to the issuance of the Senior Notes is
payable in US dollars. Upon issuance of the Senior Notes, cross currency swap
agreements were taken out to hedge a portion of the currency risk exposure.
Changes in interest rates have not had a significant impact on Yorkshire in
the last three years. However, Yorkshire has entered into debt facilities which
bear interest at variable rates. As part of its risk management policy and to
mitigate the effects of interest rate changes, Yorkshire Group enters into
interest rate swap agreements under which counterparties have agreed to pay
amounts to Yorkshire Group equal to variable interest obligations in
consideration of amounts payable by Yorkshire Group equivalent to fixed rates
of interest. If the counterparty to the interest rate swap was to default on
contractual payments, Yorkshire Group could be exposed to increased costs
related to replacing the original agreement.
See Note 7, ''Financial Instruments'', to Yorkshire's consolidated financial
statement for Fiscal Year 1997 and Note 9, ''Financial Instruments'' to
Yorkshire Group's consolidated financial statements for Fiscal Year 1998
included elsewhere in this document for additional information on such
agreements.
Environmental Factors
Yorkshire's businesses are subject to numerous regulatory requirements
with respect to the protection of the environment. The principal laws which
have environmental implications for Yorkshire are the Electricity Act, the
Environmental Protection Act 1990, the New Road and Street Works Act 1991
and the Environment Act 1995. Yorkshire believes that it has taken, and intends
to continue taking, measures to comply with the applicable law and government
regulations for the protection of the environment. There are no material
legal or administrative proceedings pending against Yorkshire with respect to
any environmental matter.
Inflation
Inflation neither has had a significant impact on Yorkshire in the last three
years, nor is expected to do so in the foreseeable future. Yorkshire's revenues
from regulated activities are adjusted based on factors which include an index
for inflation in costs of operations.
Year 2000 Issues
Yorkshire Group is currently evaluating its business systems to determine
the extent to which modifications are required to prevent problems related to
the year 2000, and the resources which will be required to make such
modifications. Yorkshire Group has established a dedicated team to coordinate
and control all date conformity work within a structured program framework.
Yorkshire Group estimates that the costs associated with year 2000
modifications will be approximately (POUND)26 million, of which
(POUND)17 million will be expensed as incurred, and (POUND)9 million will be
capitalized. The amount expensed in the Fiscal Year 1998 was (POUND)2m.
Results of Operations
Fiscal Year 1998 for the Successor Company Compared with Fiscal Year
1997 for the Predecessor Company
Earnings
Income from operations increased by (POUND)109 million (210%) from (POUND)52
million for Fiscal Year 1997 to (POUND)161 million for Fiscal Year 1998.
The increase was largely due to the effect of the following items included in
income from operations for Fiscal year 1997: (i) a (POUND)78 million
provision for uneconomic gas and electricity contracts, which resulted in a
charge of (POUND)125 million to the supply business offset by an intrabusiness
elimination of (POUND)47 million; (ii) a (POUND)50 million charge for
information system development costs to prepare for the opening of the
competitive electricity market in 1998 and to replace billing and collection
systems, of which (POUND)37 million was charged to the supply business and
(POUND)13 million was charged to the distribution business; (iii) a (POUND)8
million charge incurred for advisers' fees in respect of the Acquisition; and
(iv) a (POUND)6 million write-down of the value of non-operational property.
The favorable effect on the comparative income from operations was partly
offset by the following items included in income from operations for Fiscal
Year 1998: (i) a provision of (POUND)10 million for restructuring costs; (ii)
a provision of (POUND)5 million for committed costs arising from delays in
opening up the competitive market, (iii) amortization of goodwill of (POUND)25
million; (iv) additional marketing costs of (POUND)8 million; and (v)
additional depreciation of (POUND)7 million arising from the revaluation of
distribution network assets in connection with the Acquisition. These
additional costs were mitigated by a decrease in net periodic pension costs of
(POUND)13 million, due to an increase in the market value of the pension fund
and a change in respect of identifying the element of costs to be capitalized
within the distribution network reducing operating expenses by (POUND)15
million.
Income from operations by segments for Fiscal Year 1998 was (POUND)115
million, (POUND)25 million and (POUND)24 million for the distribution, supply
and other segments, respectively. Income (loss) from those segments in Fiscal
Year 1997 was (POUND)127 million, (POUND)(132) million and (POUND)10
million, respectively.
An unrealized loss of (POUND)41 million before taxes was charged in Fiscal Year
1998 following the reduction in fair value of Yorkshire Group's investment in
Ionica Group plc.
Net interest expense rose from (POUND)33 million for Fiscal Year 1997 to
(POUND)106 million for Fiscal Year 1998 principally as a result of the financing
costs associated with the increased amount of debt incurred in connection with
the Acquisition.
Net income decreased by (POUND)143 million, from (POUND)26 million in Fiscal
Year 1997 to a loss of (POUND)117 million in Fiscal Year 1998. In addition to
the variances discussed above, the net loss for Fiscal Year 1998 includes an
extraordinary charge of (POUND)134 million for the windfall tax enacted by
the UK government in July 1997. The windfall tax is not deductible for UK
corporation tax purposes. Net income before this extraordinary charge for Fiscal
Year 1998 was (POUND)17 million.
Revenues
Operating revenues decreased by (POUND)46 million (3%) from
(POUND)1,331 million in Fiscal Year 1997 to (POUND)1,285 million during
Fiscal Year 1998 as follows:
Operating Revenues
Increase (Decrease)
from Fiscal Year 1997
to Fiscal Year 1998
(POUND) millions
Distribution . . . . . . . . . . . . ..(3)
Supply . . . . . . . . . . . . . . . . .(60)
Other.. . . . . . . . . . . . . . . . . . .17
Total operating revenues . . . . . (46)
Revenues from the distribution business decreased by (POUND)3 million from
(POUND)308 million for Fiscal Year 1997 to (POUND)305 million for Fiscal
Year 1998 due to a decrease in the maximum allowable average price of units
distributed as a result of the application of the revised Distribution Price
Control Formula. Units distributed increased by 0.4% in Fiscal Year 1998
partially offsetting such decrease.
Franchise Supply Customers, who are generally residential and small
commercial customers, comprised 52% of total sales volume for Fiscal Year
1998. The volume of unit sales of electricity for Franchise Supply Customers is
influenced largely by the number of customers in the Franchise Area, weather
conditions and prevailing economic conditions. Unit sales to Non-Franchise
Supply Customers, who are typically large commercial and industrial
businesses, constituted 48% of total sales volume for Fiscal Year 1998. Sales
to Non-Franchise Supply Customers are determined primarily by the success of
the supply business in contracting to supply electricity to customers who
are located both inside and outside the Franchise Area.
During Fiscal Year 1998, the number of electricity units supplied decreased
by 4% and total revenues produced by the supply business decreased by (POUND)60
million (5%) to (POUND)1,118 million from (POUND)1,178 million for Fiscal Year
1997. Revenues decreased partly due to a reduction of 8% in sales volume to
Non-Franchise Supply Customers as a result of increased competition and partly
due to reduced cost of sales, the benefits of which are passed on to customers.
Other revenues increased by (POUND)17 million mainly as a result of increased
gas revenues.
Cost of Sales
Cost of sales decreased by (POUND)50 million (5%) from (POUND)932 million in
Fiscal Year 1997 to (POUND)882 million in Fiscal Year 1998. This decrease was
due principally to the reduction in units supplied and reductions in the Fossil
Fuel Levy.
Operating Expenses
Operating expenses decreased by (POUND)105 million (30%) from (POUND)347
million in Fiscal Year 1997 to (POUND)242 million in Fiscal Year 1998. The
reduction in operating expenses was mostly as a result of the following expenses
included in Fiscal Year 1997: (i) a (POUND)78 million provision for uneconomic
gas and electricity contracts made for the net present value of expected future
payments in excess of anticipated recoverable amounts, reflecting expectations
of market prices for electricity following the opening of the competitive
electricity market in 1998 and future gas prices; (ii) a (POUND)50 million
charge for information system development costs, including (POUND)19 million
relating to the opening of the competitive electricity market in 1998 and a
(POUND)31 million charge relating to the replacement of billing and collection
systems; (iii) a (POUND)8 million charge incurred for advisers' fees in respect
of the Acquisition; and (iv) a (POUND)6 million write-down of the value of
non-operational property. The comparative decrease in operating expenses was
lessened by the following operating expenses included in Fiscal Year 1998:
(i) a provision of (POUND)10 million for restructuring costs; (ii) a
provision of (POUND)5 million for committed costs arising from delays
in opening up the competitive market; (iii) amortization of goodwill of
(POUND)25 million; (iv) additional marketing costs of (POUND)8 million; and
(v) additional depreciation of (POUND)7 million arising from the revaluation
of distribution network assets in connection with the Acquisition. The
decrease in net periodic pension costs of (POUND)13 million and the increase
in capitalized distribution costs of (POUND)15 million partly offset the above
increases in operating expenses for Fiscal Year 1998.
Other Income Expense - Loss on Investment in Ionica
An unrealized loss of (POUND)41 million before taxes was charged in Fiscal
Year 1998 following the reduction in fair value of Yorkshire Group's
investment in Ionica Group plc. See Significant Factors and Known
Trends - Investment in Ionica.
Net Interest Expense
Net interest expense increased by (POUND)73 million from (POUND)33 million
during Fiscal Year 1997 to (POUND)106 million in Fiscal Year 1998, principally
as a result of the financing costs associated with the 1997 Credit Facility
entered into to finance the Acquisition. To partially refinance the
Acquisition, Yorkshire entered into short-term borrowing arrangements
totaling (POUND)1,034 million, a portion of which was replaced by
(POUND)593 million of long-term debt issued in January and February 1998.
Income Taxes
Yorkshire Group's effective income tax rate, excluding the windfall tax,
decreased from 33% for Fiscal Year 1997 to (6)% for Fiscal Year 1998. The
effective rate in Fiscal Year 1998 was affected by the (POUND)12 million
favorable impact of the reduction in the UK corporation tax rate from 33%
to 31% as discussed above, partially offset by the amortization of goodwill,
which is not deductible for UK income tax purposes.
Windfall Tax
Yorkshire Group recorded an extraordinary charge of (POUND)134 million during
Fiscal Year 1998 for the windfall tax enacted by the UK government in July
1997. This windfall tax is not deductible for UK corporation tax purposes.
Fiscal Year 1997 Compared with Fiscal Year 1996
Earnings
Income from operations was (POUND)52 million in Fiscal Year 1997, a decrease
of (POUND)162 million from (POUND)214 million in Fiscal Year 1996. The following
items reduced Fiscal Year 1997 income from operations: (i) a (POUND)78 million
provision for uneconomic gas and electricity contracts, which resulted in a
charge of (POUND)125 million to the supply business offset by an intrabusiness
elimination of (POUND)47 million; (ii) a (POUND)50 million charge for
information system development costs to prepare for the opening of the
competitive electricity market in 1998 for Franchise Supply Customers and to
replace billing and collection systems, of which (POUND)37 million was charged
to the supply business and (POUND)13 million was charged to the distribution
business; (iii) a (POUND)26 million decrease in distribution revenues as a
consequence of price reductions imposed by the Regulator; (iv) a (POUND)8
million charge incurred for advisers' fees in respect of the Acquisition; and
(v) a (POUND)6 million write-down of the value of non-operational property.
Income (loss) from operations by segments for Fiscal Year 1997 were (POUND)127
million, (POUND)(132) million and (POUND)10 million for the distribution, supply
and other segments, respectively. Income from operations from those segments
in Fiscal Year 1996 were (POUND)164 million, (POUND)30 million and
(POUND)20 million, respectively.
Net income was (POUND)26 million in Fiscal Year 1997, a decrease of (POUND)367
million from (POUND)393 million in Fiscal Year 1996, principally due to the NGG
Transaction in Fiscal Year 1996 and the charges recorded in Fiscal Year 1997
discussed above.
Revenues
Operating revenues decreased by (POUND)100 million (7%) from
(POUND)1,431 million in Fiscal Year 1996 to (POUND)1,331 million in Fiscal
Year 1997 as follows:
Operating Revenues
Increase (Decrease)
from Fiscal Year 1996
to Fiscal Year 1997
(POUND) millions
Distribution . . . . . . . . . . . . . . . . . (26)
Supply . . . . . . . . . . . . . . . . . . . . . (131)
Other . . . . . . . . . . . . . . . . . . . . . . 57
Total operating revenues . . . . . . . . . . . .(100)
Revenues from the distribution business decreased by (POUND)26 million (8%)
from (POUND)334 million for Fiscal Year 1996 to (POUND)308 million for Fiscal
Year 1997, principally due to a decrease in the maximum allowable average price
of units distributed as a result of the application of the revised Distribution
Price Control Formula. Units distributed increased by 0.5% in Fiscal Year 1997
partially offsetting such decrease.
During Fiscal Year 1997, the number of electricity units supplied decreased
by 6% while total revenues produced by the supply business decreased by
(POUND)131 million (10%) to (POUND)1,178 million from (POUND)1,309 million
for Fiscal Year 1996. The reduction was partly due to a decrease of 12% in
units supplied to Non-Franchise Supply Customers, which was largely offset by a
corresponding reduction in cost of sales, and partly due to reduced charges
from the distribution business, the benefits of which are passed on to
customers, resulting in lower average unit prices. Franchise Supply Customers
and Non-Franchise Supply Customers each comprised 50% of total sales volume
in Fiscal Year 1997.
Cost of Sales
Cost of sales decreased by (POUND)81 million (8%) from (POUND)1,013 million
in Fiscal Year 1996 to (POUND)932 million in Fiscal Year 1997. This reduction
was the result of a decrease in supply business sales volumes and reduced
charges from the distribution business.
Operating Expenses
Operating expenses increased by (POUND)143 million (70%) from (POUND)204
million in Fiscal Year 1996 to (POUND)347 million in Fiscal Year 1997.
Operating costs in Fiscal Year 1997 included: (i) a (POUND)78 million
provision for uneconomic gas and electricity contracts made for the net
present value of expected future payments in excess of anticipated
recoverable amounts, reflecting expectations of market prices for electricity
following the opening of the competitive electricity market in 1998 for
Franchise Supply Customers and future gas prices; (ii) a (POUND)50 million
charge for information system development costs, including (POUND)19 million
relating to the opening of the competitive electricity market in 1998 for
Franchise Supply Customers and a (POUND)31 million charge relating to the
replacement of billing and debt collection systems; (iii) a (POUND)8 million
charge incurred for advisers' fees in respect of the Acquisition; and (iv) a
(POUND)6 million write-down of the value of non-operational property.
Other Income
Other income was (POUND)20 million in Fiscal Year 1997, a decrease of
(POUND)293 million from (POUND)313 million in Fiscal Year 1996. During
Fiscal Year 1996, Yorkshire, together with the other 11 RECs in the UK,
distributed the majority of its shares in NGG to its shareholders in connection
with the NGG Transaction. The NGG Transaction had a material impact on
Yorkshire's financial results for that year and included the following:
(a) Yorkshire received special dividends totaling (POUND)118 million;
(b) at April 1, 1995, Yorkshire held 9.2% of the issued share capital
of NGG, which was recorded on its balance sheet at (POUND)72 million.
Additional share capital of NGG totaling (POUND)16 million, was subscribed for
by Yorkshire during Fiscal Year 1996. In December 1995, when NGG
became a company listed on the London Stock Exchange, Yorkshire
revalued its interest in NGG to its market value of (POUND)321 million.
Also in December 1995, Yorkshire made a distribution in-kind to its
shareholders of approximately 90% of its interest in NGG. A further 2%
approximately was distributed to Yorkshire's optionholders. The aggregate gain
arising from these distributions totaled (POUND)215 million;
(c) each Yorkshire residential customer received a one-time discount
as part of an agreement among the shareholders of NGG, which stipulated
that each REC would provide such discount. The net cost of such discount
was (POUND)85 million;
(d) Yorkshire received an in-kind dividend of approximately 9.2% of
the shares of PSB, which shares were subsequently converted to cash upon
PSB's liquidation, resulting in a gain of (POUND)56 million; and
(e) legal and other expenses related to these transactions totaled
(POUND)4 million.
Following the NGG Transaction, ordinary dividends received from NGG
decreased from (POUND)21 million in Fiscal Year 1996 to (POUND)2 million in
Fiscal Year 1997. Other income for Fiscal Year 1997 also includes the effect of
the (POUND)15 million gain on disposal by Yorkshire of its share of a joint
venture investment.
Net Interest Expense
Net interest expense increased by (POUND)13 million from (POUND)20 million in
Fiscal Year 1996 to (POUND)33 million in Fiscal Year 1997, including a (POUND)7
million charge in relation to the termination of interest rate swap agreements.
Increased financing costs arising from the payment of a special dividend of
(POUND)185 million in January 1996 were partly mitigated by the effects of
asset sales.
Income Taxes
The effective income tax rate of 22% in Fiscal Year 1996 increased to 33%
for Fiscal Year 1997. The effective income tax rate in Fiscal Year 1996 was
reduced principally due to the lower tax rate on gains arising from the NGG
Transaction. See Note 6, "Income Taxes", to Yorkshire's consolidated financial
statements for the two years ended March 31, 1997 included elsewhere in this
document for additional information.
Liquidity and Capital Resources
Yorkshire Group's sole investment and only significant asset is the entire
share capital of Yorkshire Holdings, which, in turn, owns the entire share
capital of Yorkshire. Yorkshire Group is therefore dependent upon dividends
from Yorkshire for its cash flow.
At March 31, 1998, in addition to cash flow from Yorkshire's operations
available for distribution indirectly to Yorkshire Group, Yorkshire Group had
(POUND)300 million available under existing bank facilities, including
(POUND)50 million under the 1997 Credit Facility, as its primary source of
liquidity.
Yorkshire Group will be required to refinance the 1997 Credit Facility,
which matures on July 30, 1998. For a discussion of the 1997 Credit Facility,
see Note 13, ''Short-term Debt'', to Yorkshire Group's consolidated financial
statements included elsewhere in this document. The 1997 Credit Facility has
been refinanced through a series of transactions including the February 1998
issuance of (POUND)197 million guaranteed Eurobonds, the February 1998
issuance of (POUND)400 million of senior notes, the June 1998 issuance of
(POUND)164 million Trust Securities and the planned entering into of
additional credit facilities. Yorkshire Group expects that the proceeds of
the currently contemplated transfer of Yorkshire Group's generation assets to
an entity or entities other than Yorkshire Group or its subsidiaries will
be used to reduce the additional credit facilities. Yorkshire Group is
currently in negotiations with respect to the replacement of the 1997 Credit
Facility.
Yorkshire Group also will be required to fund its ongoing capital
expenditures, fund its debt service and the final windfall tax payment and
cover its seasonal working capital needs. Yorkshire Group expects to fund these
ongoing cash requirements through a combination of available cash flow from
Yorkshire's operations and amounts available under the committed bank
facilities of (POUND)300 million.
The principal sources of funds of the Successor Company during Fiscal
Year 1998 were (POUND)62 million from operations, which reflects interest paid
of (POUND)132 million and tax paid of (POUND)77 million, including the first
installment of the windfall tax of (POUND)67 million. Yorkshire Group raised
(POUND)1,034 million from the 1997 Credit Facility and (POUND)440 million in
equity. During this period, Yorkshire Group utilized (POUND)1,474 million to
acquire Yorkshire, (POUND)191 million for capital expenditures and raised
(POUND)593 million from the issue of bonds. Proceeds from asset sales
totaled (POUND)20 million.
The principal sources of funds of Yorkshire during Fiscal Year 1997 were
(POUND)96 million from operations, which reflects interest paid of (POUND)42
million and tax paid of (POUND)30 million. During Fiscal Year 1997, Yorkshire
invested (POUND)121 million in capital expenditures and long-term investments
and paid dividends of (POUND)71 million. Proceeds from asset sales totaled
(POUND)73 million.
The principal sources of funds of Yorkshire during Fiscal Year 1996 were
(POUND)222 million from operations, which reflects interest paid of
(POUND)46 million and tax paid of (POUND)98 million. During Fiscal Year 1996,
Yorkshire invested (POUND)126 million in capital expenditures and long-term
investments and paid dividends of (POUND)243 million, including a special
dividend of (POUND)185 million. Proceeds from asset sales, including PSB,
totaled (POUND)119 million. Yorkshire raised (POUND)150 million from the
issuance of Eurobonds.
At March 31, 1998 the Successor Company had net current liabilities of
(POUND)538 million, primarily as a result of the initial financing structure
of the Acquisition. To meet short-term cash needs, the Successor Company had
(POUND)35 million of cash and cash equivalents at March 31, 1998.
Yorkshire's capital expenditures are primarily related to the distribution
business and include expenditures for load-related, non-load-related and non-
operational capital assets. Load-related capital expenditures are largely
required by new business growth. Customer contributions are normally
received where capital expenditures are made to extend or upgrade service to
customers (except to the extent that such capital expenditures are made to
enhance Yorkshire's distribution network generally). Non-load-related capital
expenditures include asset replacement which is expected to continue until at
least the next decade. Other non-load-related expenditures include system
upgrade work that provides for load growth and has the additional benefit of
improving network security and reliability. Non-operational capital
expenditures are for assets such as fixtures and equipment. For Fiscal Years
1997 and 1998 capital expenditures, net of customer contributions, were
(POUND)126 million and (POUND)191 million, respectively. Yorkshire is required
to file five year projections with the Regulator for gross capital
expenditures related to its regulated distribution network and updates of
such projections annually. The most recent projection was for the
five year period ended March 31, 2000 and was filed in July 1997. This filing
indicated Yorkshire's current projection of approximately (POUND)575 million
in capital expenditures for the five year period. Approximately
(POUND)308 million has already been spent in Fiscal Years 1996, 1997 and
1998 related to this five year projection.
Demand for electricity in the UK, including the Franchise Area, is seasonal,
with demand being higher in the winter months and lower in the summer
months. Yorkshire bills its Franchise Supply Customers on a staggered quarterly
basis while it is generally required to pay related expenses (principally the
cost of purchased electricity) on 28-day terms. However, approximately 50%
of the Franchise Supply Customers settle their accounts using regular
payment plans based on prepayment or spreading of the cost of their annual
bill evenly throughout the year. A majority of Yorkshire's supply revenues
are based on a fixed price per unit. The cost of supply to Yorkshire from the
Pool, if not covered by hedging mechanisms, varies throughout the year,
generally being higher in winter months and lower in summer months.
Yorkshire balances the effect of these influences on its working capital
needs with drawings under its available credit facilities.
Yorkshire's supply business to Non-Franchise Supply Customers generally
involves entering into fixed price contracts to supply electricity to its
customers. The electricity is obtained primarily by purchases from the Pool.
Because the price of electricity purchased from the Pool can be volatile due
to the fact that the price is set every half hour, Yorkshire is exposed to
risk arising from differences between the fixed price at which it sells
electricity and the fluctuating prices at which it purchases electricity
unless it can effectively hedge such exposure. To mitigate its exposure to
volatility, Yorkshire utilizes CFDs with major UK power generators to fix
the price of electricity. Yorkshire had entered into CFDs and power purchase
contracts for 20,010 GWh of electricity at March 31, 1998. Yorkshire's
electricity sales volumes were 21,116 GWh and 20,236 GWh for Fiscal Year
1997 and Fiscal Year 1998, respectively.
Management believes that cash flow from operations, together with its
existing sources of credit and the refinancing of the 1997 Credit Facility,
will provide sufficient financial resources to meet Yorkshire Group's projected
capital needs and other expenditure requirements for the foreseeable future.
Following the Acquisition, Yorkshire agreed to an amendment to its PES
License to the effect that it will use all reasonable endeavors to ensure
that it maintains an investment grade credit rating on its long-term debt.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Yorkshire Power Group Limited and Subsidiaries (Successor Company)
and Yorkshire Electricity plc and Subsidiaries (Predecessor Company)
Index to Consolidated Financial Statements
Yorkshire Electricity Group plc and Subsidiaries
Independent Auditors' Report
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Changes in Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Yorkshire Power Group Limited and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Income
Yorkshire Power Group Limited and Subsidiaries
Independent Auditors' Report
Consolidated Statement of Income
Consolidated Balance Sheets
Consolidated Statement of Changes in Shareholders' Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF
DIRECTORS
OF YORKSHIRE ELECTRICITY GROUP PLC
We have audited the accompanying consolidated balance sheets of Yorkshire
Electricity Group plc and its subsidiaries (the "Company") as of March 31,
1997, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for each of the two years in the period
ended March 31, 1997 (all expressed in pounds sterling). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Yorkshire Electricity Group plc
and its subsidiaries as of March 31, 1997, and the results of their operations
and their cash flows for each of the two years in the period ended March 31,
1997 in conformity with generally accepted accounting principles in the
United States of America.
Deloitte & Touche
Leeds
United Kingdom
July 15, 1997
(December 31, 1997 as to note 14
(PAGE)
YORKSHIRE ELECTRICITY GROUP PLC AND
SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
(In Millions)
Year Ended March 31,
1997 1996
(POUND) (POUND)
OPERATING REVENUES 1,331 1,431
COST OF SALES 932 1,013
GROSS MARGIN 399 418
OPERATING EXPENSES
Maintenance 76 77
Depreciation 50 42
Provision for uneconomic
gas and electricity contracts 78 -
Selling, general and
administrative 93 85
Systems development costs (Note 9) 50 -
Income from operations 52 214
OTHER INCOME (EXPENSE)
National Grid transaction (Note 12):
Realized gain on sale of
National Grid Group plc 1 215
Realized gain on sale of
PSB Holdings Limited 6 56
Special dividend - 118
Customer discounts awarded - (85)
Administrative costs - (4)
Dividend income 2 21
Equity in loss of associates (4) (6)
Gain on sale of associate 15 -
Loss on sale of subsidiary - (2)
Total other income, net 20 313
Interest expense (55) (46)
Interest income 22 26
Net interest expense (33) (20)
INCOME BEFORE INCOME TAXES 39 507
PROVISION FOR INCOME TAXES 13 114
NET INCOME 26 393
The accompanying notes are an integral part of these consolidated financial
statements.
(PAGE)
YORKSHIRE ELECTRICITY GROUP PLC AND
SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED BALANCE SHEET
(In Millions, Except Share and Per Share Amounts)
ASSETS March 31,
1997
(POUND)
FIXED ASSETS
Property, plant and equipment, net of
accumulated depreciation of (POUND)500 765
Construction work in progress 31
Total fixed assets 796
CURRENT ASSETS
Cash and cash equivalents 221
Investments 29
Customer receivables, less provision for uncollectible accounts
of (POUND)6 90
Unbilled revenue 84
Other receivables 21
Other 19
Total current assets 464
OTHER ASSETS
Investments, long term 109
Prepaid pension asset 6
Total other assets 115
Total assets 1,375
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND
SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED BALANCE SHEET
(In Millions, Except Share and Per Share Amounts)
SHAREHOLDERS' EQUITY AND
LIABILITIES March 31,
1997
(POUND)
SHAREHOLDERS' EQUITY
Share capital, 68 2/11 pence par value
common shares, 220,000,000 shares,
authorized, 159,131,326 in 1997 issued and
outstanding 108
Additional paid-in capital 92
Unrealized gain on available-for-sale
investments 13
Retained earnings 146
Total shareholders' equity 359
LONG-TERM DEBT 419
OTHER NON-CURRENT LIABILITIES
Deferred income taxes 136
Provision for uneconomic electricity and gas contracts 78
Other 15
Total other non-current liabilities 229
CURRENT LIABILITIES
Current portion of long-term debt 5
Short-term debt 82
Accounts payable 15
Electricity purchaSes payable 64
Payments received in advance 14
Accrued liabilities and deferred income 69
Income taxes payable 51
Other current liabilities 68
Total current liabilities 368
Total liabilities 1,016
COMMITMENTS AND
CONTINGENCIES (NOTE 4)
Total shareholders' equity and liabilities 1,375
The accompanying notes are an integral part of these consolidated financial
statements.
(PAGE)
<TABLE>
YORKSHIRE ELECTRICITY GROUP PLC AND
SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
(In Millions, Except Shares and Per Share Amounts)
(CAPTION)
Unrealized
Gain on
Additional Available
Share Capital Paid-in Retained for Sale
Shares Amount Capital Earnings Investments Total
<C> <S> <S> <S> <S> <S> <S>
(POUND) (POUND) (POUND) (POUND) (POUND)
Balance, April
1, 1995 183,898,175 104 77 336 - 517
Common shares
issued 5,537,644 4 12 - - 16
Reduction in
shares from
reverse shares
split (1) (30,880,719) - - - - -
Revaluation of
NGG shares
to fair
market value - - - - 233 233
Realization of
gain on
distribution
of NGG shares - - - - (215) (215)
Deferred tax on
revaluation
of NGG shares - - - - (4) (4)
Revaluation of
PSB shares to
fair market value - - - - 56 56
Realization of
gain on sale of PSB - - - - (56) (56)
Net income - - - 393 - 393
NGG special dividend - - - (298) - (298)
Dividends declared - - - (243) - (243)
Balance, March
31, 1996 158,555,100 108 89 188 14 399
Common shares
issued 576,226 - 3 - - 3
Gain on sale of
NGG shares - - - - (1) (1)
Revaluation of
PSB shares to
fair market value - - - - 6 6
Realization of
gain on sale of PSB - - - - (6) (6)
Net income - - - 26 - 26
Dividends declared - - - (68) - (68)
Balance, March
31, 1997 159,131,326 108 92 146 13 359
(1) In January 1996 the share capital was consolidated on the basis of 5
new 68 2/11 pence ordinary shares for every 6 existing 56 9/11 pence shares.
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
(PAGE)
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
(In Millions)
Year Ended March 31,
1997 1996
(POUND) (POUND)
Cash flows from operating
activities:
Net income 26 393
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 50 42
Write off of capitalized system
costs 22 -
Deferred income taxes (24) 23
Gain on disposal of
investments (7) (271)
Equity in loss of associates 4 6
Gain on sale of associate (15) -
Changes in assets and liabilities:
Receivables 14 21
Provisions for uneconomic
electricity and gas contracts 78 -
Electricity purchases (11) 15
Payments received in advance (41) 25
Other - (32)
Net cash provided by operating activities 96 222
Cash flows from investing activities:
Capital expenditures (103) (101)
Proceeds from sale of fixed assets 29 33
Proceeds from sale of subsidiary - 33
Proceeds from sale of associate 26 -
Loans (advanced to) repaid by associate (3) 2
Purchases of long-term investments (18) (25)
Proceeds from sale of PSB 10 53
Sale (purchases) of short-term investments 8 (3)
Net cash used in investing activities (51) (8)
Cash flows from financing activities:
Proceeds from issuance of long-term debt - 163
Proceeds from issuance of common stock 3 11
Repayments of long-term debt (5) (47)
Net change in short-term debt (3) 2
Dividends paid (71) (243)
Net cash used in financing activities (76) (114)
(Decrease) increase in cash and cash equivalents (31) 100
Beginning of period cash and cash equivalents 252 152
End of period cash and cash equivalents 221 252
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND
SUBSIDIARIES
(Predecessor Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
(In Millions)
Year Ended March 31,
1997 1996
(POUND) (POUND)
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest 42 46
Cash paid for income taxes 30 98
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Yorkshire Electricity Group plc ("YEG" or the "Company")
is one of the twelve regional electricity companies
("RECs") in England and Wales licensed to supply,
distribute, and to a limited extent, generate electricity. The
RECs were created as a result of the privatization of the UK
electricity industry in 1990 after the state owned low
voltage distribution networks were allocated to the then
existing twelve regional boards. The Company's main
business, the distribution and supply of electricity to
customers in its franchise area (the "Franchise Area") in the
North of England, is regulated under the terms of a Public
Electricity Supply License ("PES License") by the Office of
Electricity Regulation (''OFFER'').
The Company operates primarily in its Franchise Area in
Northern England. The Franchise Area covers
approximately 10,000 square kilometers, encompassing
parts of the counties of West Yorkshire, Humberside, South
Yorkshire, Derbyshire, Nottinghamshire, Lincolnshire and
Lancashire. The Franchise Area has a resident population
of approximately 4.4 million.
The Company purchases power primarily from the
wholesale trading market for electricity in England and
Wales (the ''Pool''). The Pool monitors supply and demand
between generators and suppliers, sets prices for generation
and provides for centralized settlement of accounts due
between generators and suppliers.
Basis of presentation
The consolidated financial statements of the Company are
presented in pounds sterling ((POUND)) and in conformity with
accounting principles generally accepted in the United
States of America. The Company is not subject to rate
regulation but rather, is subject to price cap regulation and,
therefore, the provisions of Statement of Financial
Accounting Standards No. 71, ''Accounting for the Effects
of Certain Types of Regulation'' do not apply.
Principles of consolidation
The consolidated financial statements include the accounts
of the Company and its wholly-owned and majority-owned
subsidiaries and have been prepared from records
maintained by the Company in the UK. Significant
intercompany items are eliminated in consolidation.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Unbilled revenue
The Company records revenue net of value added tax
("VAT") and accrues revenues for service provided but
unbilled at the end of each reporting period.
Recovery of Regulated Income
Charges for distribution of electricity and supply to
customers with a maximum demand under 100 kW are
subject to a price control formula set out in the Company's
PES license which allows a maximum charge per unit of
electricity. Differences in the charges, or in the purchase
cost of electricity, can result in the under or overrecovery of
revenues in a particular period.
Where there is an overrecovery of supply or distribution
business revenues against the regulated maximum
allowable amount, revenues are deferred in an amount
equivalent to the overrecorded amount. The deferred
amount is deducted from operating revenues and included
in other current liabilities.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Financial instruments
The Company enters into contracts for differences
("CFDs") primarily to hedge its supply business against the
price risk of electricity purchases from the Pool. Use of
these CFDs is carried out within the framework of the
Company's purchasing strategy and hedging guidelines.
CFDs are accounted for as hedges and consequently, gains
and losses are deferred and recognized over the same
period as the item hedged. The Company recognizes gains
(losses) on CFDs when settlement is made, which is
generally monthly. Gains (losses) on CFDs are recognized
as a decrease (increase) to cost of sales based upon the
difference between fixed prices in the CFD compared to
variable prices paid to the Pool for the period. Gains
(losses) based upon the difference between fixed prices in
the CFD compared to variable prices paid to the Pool for
future electricity purchases are not recognized until the
period of such settlements.
The Company enters into interest rate swaps as a part of its
overall risk management strategy and does not hold or issue
material amounts of derivative financial instruments for
trading purposes. The Company accounts for its interest
rate swaps in accordance with Statement of Financial
Accounting Standards No. 80, ''Accounting for Futures
Contracts'' and various Emerging Issues Task Force
pronouncements. If the interest rate swaps were to be sold
or terminated, any gain or loss would be deferred and
amortized over the remaining life of the debt instrument
being hedged by the interest rate swap. If the debt
instrument being hedged by the interest rate swaps were to
be extinguished, any gain or loss attributable to the swap
would be recognized in the period of the transaction.
The Company considers the carrying amounts of financial
instruments classified as current assets and liabilities to be a
reasonable estimate of their fair value because of the short
maturity of these instruments.
Cash and cash equivalents
The Company considers all short-term investments with an
original maturity of three months or less to be cash
equivalents.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Property, plant and equipment
Property, plant and equipment is stated at original cost,
which includes materials, labor and appropriate overhead
costs, and the estimated cost of borrowed funds used
during construction. The cost of maintenance, repairs and
replacement of minor items of property is charged to
maintenance expense.
The Company records book depreciation expense on a
straight-line basis, except for distribution network assets
which are charged at 3% for 20 years and 2% for the
remaining 20 years. Assets are depreciated using the
following estimated useful lives:
Years
Distribution network 40
Generation 20
Buildings Up to 60
Fixtures and equipment Up to 10
Vehicles and mobile plant Up to 10
Investments
The Company accounts for investments in debt and equity
securities in accordance with Statement of Financial
Accounting Standards No. 115, "Investments in Certain
Debt and Equity Securities'' (''SFAS 115''). The Company's
investments are classified as available-for-sale under SFAS
115. Securities whose fair market values are readily
determinable are reported at fair value. Securities whose
fair market values are not readily determinable are recorded
at the lower of cost or net realizable value.
Income taxes
The Company accounts for income taxes in accordance
with Statement of Financial Accounting Standards No. 109,
''Accounting for Income Taxes''. This standard requires that
deferred income taxes be recorded for temporary
differences between the financial statement basis and the
tax basis of assets and liabilities and loss carryforwards and
that deferred tax balances be based on enacted tax laws at
rates that are expected to be in effect when the temporary
differences reverse.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. RETIREMENT BENEFITS
Pension plans
The Company operates two schemes, one based on defined
contributions and a second based on defined benefits.
Defined contribution
The defined contribution plan was established on December
1, 1991. From April 1, 1995 new employees are only
eligible to join this plan. The assets of the defined
contribution plan are held and administered by an
independent trustee. The cost recognized for this plan was
less than (POUND)1 million for each of the two Fiscal Years ended
March 31, 1997.
Defined benefits
The Company participates in the Electricity Supply Pension
Scheme, which provides pension and other related defined
benefits, based on final pensionable pay, to substantially all
employees throughout the electricity supply industry in the
UK.
The Company uses the projected unit credit actuarial
method for accounting purposes. Amounts funded to the
pension are primarily invested in equity and fixed income
securities.
Statement of Financial Accounting Standards No. 87
''Employers' Accounting For Pensions'' (''SFAS 87'') was
effective for fiscal years beginning after December 15,
1988. The provisions of SFAS No. 87 were initially
adopted by the Company on April 1, 1992. The amount of
the unrecognized net transition obligation on April 1, 1992
was (POUND)51 million.
The following table sets forth the plan's funded status and
amounts recognized in the Company's consolidated balance
sheet (in millions):
March 31,1997
(POUND)
Accumulated benefit obligation:
Vested benefits 590
Non-vested benefits 35
625
Fair value of plan assets 725
Projected benefit obligation (664)
Assets in excess of projected benefit obligation 61
Unrecognized net transition obligation 37
Unrecognized prior service cost 10
Other unrecognized net gain (102)
Prepaid pension asset 6
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. RETIREMENT BENEFITS (continued)
The weighted average rates assumed in the actuarial
calculations as of the following dates were:
March 31,
1997 1996
% %
Discount rate 8.0 8.5
Annual salary rate increase 6.0 6.5
Long-term rate of return on plan assets 9.0 9.0
The components of the plan's net periodic pension cost during the
periods are shown below (in millions):
Year Ended March 31,
1997 1996
(POUND) (POUND)
Service cost (benefits earned during the period) 10 9
Interest cost on projected benefit obligation 52 49
Actual return on plan assets (89) (113)
Net amortization and deferral 33 65
Net periodic pension cost 6 10
3. REGULATORY MATTERS
The distribution business of the Company is regulated under
its PES license, pursuant to which revenue of the distribution
business is controlled by the Distribution Price Control
Formula ("DPCF"). The DPCF determines the maximum
average price per unit of electricity (expressed in kilowatt
hours) that the Company can charge. The DPCF is usually
set for a five-year period, subject to more frequent
adjustments as determined necessary by the Director General
of Electricity Supply (the "Regulator"). At each review, the
Regulator can adjust the value of certain elements in the
DPCF. The Company's allowed distribution revenues were
reduced by a 14% below inflation reduction and a 13%
below inflation reduction on April 1, 1995 and 1996,
respectively, following a review by the Regulator. On April
1, 1997, the Company's allowed distribution revenues were
decreased by a 3% below inflation reduction, and there will
be further annual 3% below inflation reductions on April 1,
1998 and April 1, 1999.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. REGULATORY MATTERS (continued)
The Company's supply business is also regulated by the
Regulator, and prices are established based upon the Supply
Price Control Formula which is similar to the DPCF;
however, it currently allows full pass through for all
properly incurred costs.
The non-franchise supply market, which typically includes
larger commercial and industrial customers was opened to
competition for all customers with usage above 1MW upon
privatization of the industry in 1990. The non-franchise
supply markets of 100 kW or more were opened to full
competition in April 1994.
Currently, the Company, under its PES license, has the
exclusive right to supply residential and small commercial
and industrial customers within its Franchise Area.
However, it is anticipated that the supply market will
become fully competitive over a several month period
beginning September 1998.
4. COMMITMENTS AND CONTINGENCIES
Electricity and Gas Purchase Agreements
The Company and its subsidiaries have entered into
contracts for purchases of electricity and gas for a period of
up to 2009. A provision of (POUND)78 million has been made for
the net present value of expected future payments in excess
of anticipated recoverable amounts, reflecting
management's current expectations of market prices for
electricity following the opening of the competitive market
for franchise supply customers and future gas prices. The
actual net costs are highly sensitive to movements in future
prices. The Company's provision includes amounts in
respect of contracts with a non wholly-owned subsidiary.
The Company has additional contracts with unaffiliated
parties relating to the purchase of gas which expire by
October 2005, the terms of which are immaterial with
respect to quantity and price, both annually and in the
aggregate.
Legal proceedings
The Company is a party to legal proceedings arising in the
ordinary course of business which are not material, either
individually or in the aggregate, nor is it currently aware of
any threatened material legal proceedings.
Operating leases
The Company has commitments under operating leases
with various terms and expiration dates. At March 31,
1997 estimated minimum rental commitments for
noncancelable operating leases were (POUND)2 million and (POUND)1
million for Fiscal Years 1998 and 1999, respectively.
Rental expenses incurred for operating leases were (POUND)4
million and (POUND)5 million, during Fiscal Years 1997 and 1996
respectively.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. COMMITMENTS AND CONTINGENCIES (continued)
Labor subject to collective bargaining agreements
The majority of the Company's employees are subject to one
of three collective bargaining agreements. Such agreements
are ongoing in nature, and the Company's employees'
participation level is consistent with that of the electric utility
industry in the UK.
5. SEGMENT REPORTING
The Company is primarily engaged in two electric industry
segments; distribution, which involves the transmission of
electricity across its network to its customers, and supply,
which involves bulk purchase of electricity from the Pool for
delivery to the distribution networks. Included in ''Other'' are
insignificant operating subsidiaries of the Company as well as
various corporate activities, and non-allocated corporate
assets. Intersegment sales primarily represent sales from
distribution to supply for use of the distribution networks. A
summary of information about the Company's operations by
segments follows (in millions):
Year Ended March 31, 1997
Distribution Supply Other Eliminations Consolidated
(POUND) (POUND) (POUND) (POUND) (POUND)
Operating revenues 308 1,178 172 (327) 1,331
Operating income 127 (132) 10 47 52
Depreciation 30 1 19 - 50
Total assets employed
at period end 643 178 554 - 1,375
Capital expenditures 87 8 31 - 126
Year Ended March 31, 1996
Distribution Supply Other Eliminations Consolidated
(POUND) (POUND) (POUND) (POUND) (POUND)
Operating revenues 334 1,309 163 (375) 1,431
Operating income 164 30 20 - 214
Depreciation 28 1 13 - 42
Total assets
employed at
period end 589 212 607 - 1,408
Capital expenditures 70 8 13 - 91
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. INCOME TAXES
The Company's income tax expense consists of the
following (in millions):
Year Ended March 31,
1997 1996
(POUND) (POUND)
Current 37 91
Deferred (24) 23
Total 13 114
The following is a reconciliation of the difference between
the amount of income taxes computed by multiplying book
income before income taxes by the statutory rate, and the
amount of income taxes reported (in millions):
Year Ended March 31,
1997 1996
(POUND) (POUND)
Pre-tax income 39 507
Income taxes computed at statutory rate 13 167
National Grid transactions:
Gain on sale of PSB excluded from taxable income (2) (19)
Effect of difference between statutory rate (33%)
and rate on dividends received (20%) - (21)
Permanent differences 6 (11)
Other (4) (2)
Total income tax expense 13 114
The tax effect of temporary differences between the carrying
amounts of assets and liabilities in the consolidated balance
sheets and their respective tax bases, which give rise to
deferred tax assets and liabilities are as follows (in millions):
March 31, 1997
(POUND)
Deferred tax liabilities:
Property related temporary differences 172
Provision for uneconomic electricity and gas contracts (26)
Other (6)
Net deferred tax liability 140
Portion included in current liabilities (4)
Long term deferred tax liability 136
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. INCOME TAXES (continued)
The tax years since Fiscal Year 1993 are currently under
review by the Inland Revenue in the UK. In the opinion of
management, the final settlement of open years will not
have a material effect on the financial position or results of
operations.
7. FINANCIAL INSTRUMENTS
The Company utilizes CFDs to mitigate its exposure to
volatility in the prices of electricity purchased through the
Pool. Such contracts allow the Company to effectively
convert the majority of its anticipated Pool purchases from
market prices to fixed prices. CFDs are in place to hedge a
portion of electricity purchases on approximately 30,662
GWh through the year 2009. Accordingly, the gains and
losses on such contracts are deferred and recognized as
electricity is purchased. Management's estimate of the fair
value of CFDs outstanding at March 31, 1997 is a net
liability of (POUND)22 million. This estimate is based on
management's projections of future prices of electricity.
The net liability will be recovered through electricity costs
passed through to franchise customers during Fiscal Year
1998.
The Company is exposed to losses in the event of non-
performance by counterparties to its CFDs. To manage this
credit risk, the Company selects counterparties based on
their credit ratings, limits its exposure to any one
counterparty under defined guidelines, and monitors the
market position of the programs and its relative market
position with each counterparty.
As part of its risk management policy, the Company enters
into interest rate swap agreements under which
counterparties have agreed to pay amounts to the Company
equal to variable interest obligations in consideration of
amounts payable by the Company equivalent to fixed rates
of interest. If the counterparty to the interest rate swap was
to default on contractual payments, the Company could be
exposed to increased costs related to replacing the original
agreement. At March 31, 1996, the Company was party to
interest rate swap agreements with a notional value of (POUND)89
million which were at fixed interest rates varying between
6.64% and 10.98%. During Fiscal Year 1997, the Company
terminated these agreements at a cost of (POUND)7 million.
The estimated fair value of the Company's financial
instruments are as follows (in millions):
March 31, 1997
Carrying Amount Fair Value
(POUND) (POUND)
Long-term debt 424 438
The fair value of long-term debt is estimated based on
quoted market prices for the same or similar issues or the
current rates offered to the Company for debt of the same
maturities.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at cost, consisted of the
following (in millions):
March 31, 1997
(POUND)
Distribution network 1,163
Generation 132
Non-network land and buildings 72
Other 154
Consumer contributions (256)
1,265
Accumulated depreciation (500)
Property, plant and equipment, net 765
Arrangements have been put in place to entitle the British
Government to a proportion of any property gain (above
certain thresholds) accruing as a result of disposals, or
events treated as disposals for these purposes, occurring
after March 31, 1990 in relation to land in which the
Company had an interest at that date (and, in certain
circumstances, land in which the Company acquires an
interest thereafter from other members of the electricity
industry) and any buildings on that land. These
arrangements will last until March 31, 2000.
A provision in respect of these property disposals is made
only to the extent that it is probable that a liability will be
incurred.
9. SYSTEMS DEVELOPMENT COSTS
During the Fiscal Year 1997, a (POUND)50 million charge to
earnings was recorded for costs incurred related to
information systems development costs pertaining to the
opening up of the competitive electricity market in 1998. It
is management's opinion that, at this stage in the
development of the future commercial and regulatory
environment, it would not be prudent to capitalize these
costs.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT
Long-term debt consisted of the following (in millions):
March 31,1997
(POUND)
8.625% Eurobonds, due 2005 149
9.25% Eurobonds, due 2020 197
European Investment Bank:
7.52% credit facility, due 1999-2002 15
6.55% credit facility, due 1997-2000 15
8.05% amortizing term loan, due 2009 48
Total 424
Less current maturities (5)
Long-term debt, net of current maturities 419
Long-term debt outstanding at March 31, 1997 is payable as
follows (in millions):
For the Fiscal Years (POUND)
1998 5
1999 6
2000 11
2001 12
2002 7
Thereafter 383
Total 424
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. SHORT-TERM DEBT
Short-term debt consisted of the following (in millions):
March 31,1997
(POUND)
Commercial paper 81
Bank loans and overdrafts 1
Total 82
Year-end weighted average interest rate 6.2%
At March 31, 1997 unused committed bank facilities were
available to the Company in the amount of (POUND)250 million.
Commitment fees of approximately 1/10 of 1% of the
unused committed bank facilities are required to maintain the
facilities which have expiration dates between 2000 and
2002. In addition, the Company has commercial paper
programs (denominated in US dollars) which provide for the
issuance of up to $550 million in commercial paper with
short-term maturities (up to 364 days) issued at a discount to
face value.
12. DISTRIBUTION OF NATIONAL GRID INVESTMENT
At April 1, 1995, the Company's investment in the issued share capital of
National Grid Group plc (''NGG''), formerly National Grid Holdings plc,
was recorded at (POUND)72 million, the estimated fair value at privatization.
During December 1995 the following transactions relating to the
Company's NGG investment occurred:
a) Special dividends of (POUND)118 million (pre-tax) were paid by NGG to the
Company and recognized in other income. The Company reinvested
(POUND)16 million of this dividend in additional NGG shares.
b) NGG became listed on the London Stock Exchange and therefore,
the Company revalued its investment in NGG to its fair market value
of (POUND)321 million.
c) The Company distributed, in kind, approximately 90% of its NGG
shares to its shareholders and recognized a gain of (POUND)210 million
within other income.
d) A (POUND)50 discount to each of the Company's residential customers was
provided. The net effect of the customer discount in the amount of
(POUND)85 million has been recorded as other expense during the year
ended March 31, 1996.
In November 1995, NGG also distributed to the RECs its ownership
shares in PSB Holdings Limited ("PSB") based on their respective
ownership percentages of NGG. The PSB shares were revalued at their
estimated market value of (POUND)56 million. In December 1995 this investment
was sold and a gain on sale of (POUND)56 million was recognized. In the year to
March 31, 1997 further consideration of (POUND)6 million was received.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. DISTRIBUTION OF NATIONAL GRID INVESTMENT
(continued)
In order that holders of options in the Company's shares were not
disadvantaged by the NGG transactions, the Company's Directors
established a new employee share trust. The Company contributed (POUND)9
million to the trust which was used to purchase NGG shares from the
Company. This contribution was recorded as a dividend. A corresponding
gain of (POUND)5 million was recognized upon distribution of NGG shares from
the trust to option holders during Fiscal Year 1996.
13. EMPLOYEE OPTION AND SHARE PLANS
The Company operates various employee option and share plans. During
Fiscal Year 1995, an Executive Long Term Share Incentive Scheme for
certain eligible Executive Directors was introduced. Under the scheme
amounts (as determined by the earnings per share and market value
growth of YEG) were paid to a trust to be utilized to purchase Company
shares. After the final determination of the amounts in the first cycle of
1998, the shares were to have been released to participants. Amounts
transferred were expensed. 54,025 shares were held in trust at March 31,
1997.
On July 1, 1996 a trust related to the Company's Profit Sharing Scheme
purchased 243,356 ordinary shares of the Company for (POUND)1,769,198 or
(POUND)7.27 per share. 64 shares were allocated to each eligible employee. The
net cost of acquiring the shares and maintaining the trust were borne by
the Company.
In connection with the acquisition (note 14), all shares held in the above
trusts were transferred to employees in accordance with the provisions of
the schemes.
The Company had two option plans, the Executive Share Option Scheme
and the Savings-Related Share Option Scheme. The Executive Share
Option Scheme provides for the granting of stock options to purchase
ordinary shares to certain key executives of the Company at the discretion
of the Remuneration Committee of the Company. The options vest three
years from the date of grant and expire ten years after the date of grant.
Options to purchase ordinary shares of the Company have been granted to
employees under the Savings-Related Share Option Schemes adopted in
1996 and 1997. The options vest five years from date of grant and expire
five and a half years after the date of grant.
The following table summarizes the transactions of the share option
scheme for the two year period ended March 31, 1997:
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. EMPLOYEE OPTION AND SHARE PLANS (continued)
Weighted
Number of Average
Share Exercise
Price
(POUND)
Unexercised options outstanding
- March 31, 1995 6,444,151 2.26
Granted 1,650,259 5.58
Exercised 5,536,659 1.99
Forfeited 105,934 1.75
Unexercised options outstanding
- March 31, 1996 2,451,817 5.13
Granted 1,059,218 5.97
Exercised 576,226 4.05
Forfeited 118,865 4.01
Expired 642 1.75
Unexercised options outstanding
- March 31, 1997 2,815,302 5.72
Exercisable options
- March 31, 1997 129,781 4.78
Exercisable options
- March 31, 1996 590,379 4.64
In connection with the acquisition, holders of any outstanding options
were given the opportunity to exercise their options and sell their shares
to Yorkshire Holdings plc at a price of (POUND)9.27 per share. If the holders of
the options did not exercise their options, such options were cash
canceled and the holders were paid (POUND)9.27 per share less the option's
exercise price.
The Company accounts for its stock-based compensation schemes in
accordance with Accounting Principles Board Opinion No. 25,
''Accounting for Stock Issued to Employees''. Compensation expense of
(POUND)1 million was recognized in 1997 and 1996. Because of the change in
control of the Company and the immaterial impact on net income of
applying the fair value method, the disclosures required by Statement of
Financial Accounting Standard No 123, ''Accounting for Stock-Based
Compensation, '' have not been presented.
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC AND SUBSIDIARIES
(Predecessor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. SUBSEQUENT EVENTS
On February 24, 1997 the Boards of American Electric
Power Company, Inc. ("AEP") and Public Service Company
of Colorado ("PS Colorado") announced the terms of a cash
offer for Yorkshire Electricity Group plc to be made by
Yorkshire Holdings plc, a subsidiary of Yorkshire Power
Group Limited. The offer was declared wholly unconditional
on April 1, 1997. On April 16, 1997 notices were issued by
Yorkshire Holdings plc in accordance with section 429 of the
Companies Act 1985 to acquire all those Yorkshire
Electricity Group plc shares outstanding at the end of the
requisite notice period. Yorkshire Holdings plc completed its
purchase of the shares of YEG during April and May 1997
through payment of cash consideration of (POUND)1.457 billion and
the issuance of loan notes to former YEG shareholders in the
amount of (POUND)22 million.
Windfall tax
On July 2, 1997 the British Government announced a
'windfall tax' to be applied at that date to companies
privatized by flotation and regulated by relevant privatization
statutes. A decrease in the UK statutory income tax rate from
33% to 31% was also included in the legislation. The
Company will record a charge to income of (POUND)134 million for
the windfall tax and an income tax benefit as a result of the
change in the UK statutory income tax rate of approximately
(POUND)12 million during the quarter ending September 30, 1997.
The windfall tax is not deductible for UK income tax
purposes and is payable in two equal installments on or
before December 1, 1997 and 1998.
Business restructuring
On December 4, 1997 a planned business restructuring was
announced. The restructuring will result in the company's
main divisions (electricity distribution and energy supply)
becoming self sufficient businesses within the group
structure. A separate ownership structure will be pursued for
the generation business. As a result of the restructuring
approximately 160 positions will no longer be required. The
estimated cost of this restructuring is (POUND)10 million.
Ionica
Following a profits warning issued by Ionica Group plc (''Ionica'') in
November 1997, the fair value of the Company's investment in Ionica
decreased from (POUND)54 million at April 1, 1997 to (POUND)30 million at
December 31, 1997. The reduction is not regarded by management as a permanent
diminution in value.
15. UNAUDITED QUARTERLY FINANCIAL INFORMATION
Quarterly Periods Ended 1996/97
(in (POUND) millions) June 30 September 30 December 31 March 31
Operating revenues 307 298 369 357
Operating income (loss) 46 49 25 (68)
Net income (loss) 25 28 24 (51)
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR
THE YEAR ENDED MARCH 31, 1997
The following unaudited pro forma consolidated statement of income is based
upon the consolidated statement of income for the year ended March 31, 1997 of
Yorkshire Electricity Group plc (the "Predecessor Company") adjusted to reflect
the items described in notes (1) through (4) below as if the indirect
acquisition of the Predecessor Company (the "Acquisition") by Yorkshire
Power Group Limited (the "Successor Company") had occurred at April 1, 1996.
<TABLE>
<CAPTION>
(In Millions)
Predecessor Pro Forma for
Period the Year Ended
April 1, 1996 Adjustments March 31, 1997
to March 31, 1997
(POUND) (1) (2) (3) (4) (POUND) $(5)
<C> <S> <S> <S> <S> <S> <S> <S>
Operating revenues . . . . . 1,331 - - - - 1,331 2,231
Income from operations . 52 - (24) (6) 84 106 178
Other income
Gain on sale of associate . 15 - - - - 15 25
Other . . . . . . . . .. 5 - - - - 5 8
Total other income . . . . 20 - - - - 20 33
Interest expense . . . (55) (74) - - 7 (122) (205)
Interest income . . . . . . 22 - - - - 22 37
Net interest expense . . . (33) (74) - - 7 (100) 168
Income before income taxes . 39 (74) (24) (6) 91 26 43
Provision for income taxes . (13) 24 - 2 (30) (17) (28)
Net income . . . . . . . . 26 (50) (24) (4) 61 9 15
(1) To reflect the interest expense recorded in connection with the
Acquisition financed by (POUND)22 million loan notes issued by Yorkshire
Holdings plc (''Yorkshire Holdings'') and (POUND)1,034 million in
short-term debt incurred by the Successor Company and share capitalization
of (POUND)440 million. The loan notes issued by Yorkshire Holdings are
redeemable at the option of the bond holder until 2000. An interest rate of
7% has been assumed for both types of debt. The impact of a 1/8% change in
the assumed interest rate would affect net income by (POUND)1 million.
(2) Amortization of goodwill recorded in connection with the Acquisition.
(3) Additional depreciation expense that would have been recorded in
connection with the Acquisition.
(4) To remove the effect of recording the provision for uneconomic gas
and electricity contracts ((POUND)78 million), loss on interest rate swap
agreements ((POUND)7 million) and write-down of non-operational properties
((POUND)6 million). If the Acquisition had occurred on April 1, 1996, these
items would have been accounted for as fair value adjustments at that date.
(5) Solely for convenience of the reader, UK pound sterling amounts have
been translated into US dollars at the Noon Buying Rate on March 31, 1998 of
$1.6765.=(POUND)1. See Note 1 ''Summary of Significant Accounting Policies'' to
Yorkshire Group's consolidated financial statements for the year ended March
31, 1998 included elsewhere in this document .
During the pro forma Fiscal Year 1997, the Predecessor Company incurred
expenses of (POUND)8.0 million relating to the Acquisition.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF
DIRECTORS
OF YORKSHIRE POWER GROUP LIMITED
We have audited the accompanying consolidated balance sheets of Yorkshire
Power Group Limited and its subsidiaries (the "Company") as of March 31,
1998 and April 1, 1997, and the related consolidated statements of income,
changes in shareholders' equity and cash flows for the year ended March 31,
1998 (all expressed in pounds sterling). These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Yorkshire Power Group Limited
and its subsidiaries as of March 31, 1998 and April 1, 1997, and the results
of their operations and their cash flows for the Fiscal Year 1998 in
conformity with generally accepted accounting principles.
Our audit also comprehended the translation of the pounds sterling amounts
into US dollar amounts and, in our opinion, such translation has been made
in conformity with the basis stated in Note 1. The translation of the financial
statement amounts into US dollars has been made solely for the convenience
of readers in the United States of America.
Deloitte & Touche LLP
Columbus, Ohio
June 10, 1998
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
CONSOLIDATED STATEMENT OF INCOME
(In Millions, except shares and per share amounts)
Year Ended March 31,1998
(POUND) $ (See Note 1)
OPERATING REVENUES 1,285 2,154
COST OF SALES 882 1,479
GROSS MARGIN 403 675
OPERATING EXPENSES
Maintenance 64 107
Depreciation and amortization 78 131
Selling, general and administrative 90 150
Restructuring charges 10 17
Income from operations 161 270
OTHER INCOME EXPENSE
Loss on investment in Ionica (41) (69)
Other income, net 2 3
(39) (66)
NET INTEREST EXPENSE
Interest expense (121) (203)
Interest income 15 25
Net interest expense (106) (178)
INCOME BEFORE INCOME TAXES 16 26
PROVISION FOR INCOME TAXES (1) (2)
INCOME BEFORE EXTRAORDINARY ITEM 17 28
Extraordinary loss - UK windfall tax (134) (225)
NET LOSS (117) (197)
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND
SUBSIDIARIES
(Successor Company)
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Shares and Per Share Amounts)
April 1,
ASSETS March 31, 1998 1997
(POUND) $ (POUND)
(See Note 1)
FIXED ASSETS
Property, plant and equipment,
net of accumulated depreciation
of (POUND)53 ($89) and (POUND)0 992 1,663 908
Construction work in progress 68 114 31
Total fixed assets 1,060 1,777 939
CURRENT ASSETS
Cash and cash equivalents 35 59 221
Investments 41 69 29
Accounts receivable, less provision for
uncollectibles of (POUND)6 ($10)
and (POUND)6 62 104 90
Unbilled revenue 78 130 84
Other 50 84 40
Total current assets 266 446 464
OTHER ASSETS
Goodwill, net of accumulated amortization
of (POUND)25 ($42) and (POUND)0 969 1,625 994
Investments, long-term 73 121 133
Prepaid pension asset 75 126 61
Other non-current assets 19 31 -
Total other assets 1,136 1,903 1,188
Total assets 2,462 4,126 2,591
The accompanying notes are an integral part of this consolidated balance
sheet.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Shares and Per Share Amounts)
SHAREHOLDERS' EQUITY AND LIABILITIES
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
(See Note 1)
SHAREHOLDERS' EQUITY
Share capital, (POUND)1 par
value common shares,
440,000,100 in 1998 and 436,000,100 in
1997, authorized, 440,000,002 in
1998 and 2 in 1997 issued
and outstanding 440 738 -
Retained deficit (117) (197) -
Total shareholders' equity 323 541 -
LONG-TERM DEBT 1,026 1,720 433
SHORT-TERM DEBT REFINANCED
JUNE 1998 164 275 -
OTHER NON-CURRENT LIABILITIES
Deferred income taxes 208 348 204
Provision for uneconomic
electricity and gas contracts 84 141 78
Other 15 26 13
Total other non-current liabilities 307 515 295
CURRENT LIABILITIES
Current portion of long-term debt 5 8 5
Short-term debt 319 534 82
Accounts payable 82 137 79
Accrued liabilities and deferred
income 63 106 69
Income taxes payable 40 67 51
Windfall tax payable 67 112 -
Accrued liability to purchase
Yorkshire Electricity Group plc - - 1,496
Other current liabilities 66 111 81
Total current liabilities 642 1,075 1,863
Total liabilities 2,139 3,585 2,591
COMMITMENTS AND CONTINGENCIES (NOTE 5)
Total shareholders' equity and
liabilities 2,462 4,126 2,591
The accompanying notes are an integral part of this consolidated balance
sheet.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED MARCH 31, 1998
(In Millions, Except Shares and Per Share Amounts)
Share Capital Retained
Shares Amount Deficit Total
(POUND) (POUND) (POUND)
Balance, April 1, 1997 2 - - -
Issuance of ordinary shares 440,000,000 440 - 440
Net loss - - (117) (117)
Balance, March 31, 1998 440,000,002 440 (117) 323
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEAR ENDED MARCH 31, 1998
(In Millions)
Year Ended March 31, 1998
(POUND) $
Cash flows from operating activities:
Net loss (117) (197)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 53 89
Amortization 25 42
Gain on sale of fixed assets (3) (5)
Loss on investment in Ionica 41 69
Deferred income taxes 4 6
Changes in assets and liabilities:
Receivables and unbilled revenue 34 57
Prepaid pension asset (14) (23)
Provisions for uneconomic
electricity and gas contracts 6 10
Accounts payable 3 5
Windfall tax payable 67 112
Other current assets (10) (17)
Other (27) (45)
Net cash provided by operating
activities 62 103
Cash flows from investing activities:
Capital expenditures (191) (320)
Proceeds from sale of property,plant and equipment 20 34
Purchase of Yorkshire Electricity Group plc (1,474) (2,471)
Other 6 10
Net cash used in investing activities (1,639) (2,747)
Cash flows from financing
activities:
Proceeds from issuance of long-term debt 593 994
Proceeds from issuance of common stock 440 738
Payments to terminate interest rate swap agreements (14) (24)
Repayments of long-term debt (5) (8)
Net change in short-term debt 377 632
Net cash provided by financing activities 1,391 2,332
Decrease in cash and cash equivalents (186) (312)
Beginning of year cash and cash equivalents 221 371
End of year cash and cash equivalents 35 59
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEAR ENDED MARCH 31, 1998
(In Millions)
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Year Ended March 31, 1998
(POUND) $
Cash paid for interest 132 221
Cash paid for income taxes 77 129
Supplemental schedule of non-cash investing and financing activities
The Company issued (POUND)22 million ($37 million) of loan notes during the
year to former shareholders of Yorkshire Electricity Group plc (''YEG'')
(see notes 12 & 13).
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Yorkshire Power Group Limited ("YPG" or the "Company")
is a joint venture formed by subsidiaries of American
Electric Power Company, Inc. and Public Service Company
of Colorado for the purpose of acquiring the entire issued
share capital of Yorkshire Electricty Group plc ("YEG"). The
acquisition of YEG was made effective as of April 1, 1997
by Yorkshire Holdings plc, a wholly-owned subsidiary of
YPG.
YEG is one of the twelve regional electricity companies
("RECs") in England and Wales licensed to supply,
distribute, and to a limited extent, generate electricity. The
RECs were created as a result of the privatization of the UK
electricity industry in 1990 after the state owned low voltage
distribution networks were allocated to the then existing
twelve regional boards. YEG's main business, the
distribution and supply of electricity to customers in its
franchise area (the ''Franchise Area''), is regulated under the
terms of YEG's Public Electricity Supply License (''PES
License'') by the Office of Electricity Regulation (''OFFER'').
YEG operates primarily in its Franchise Area in Northern
England. YEG's Franchise Area covers approximately
10,000 square kilometers, encompassing parts of the
counties of West Yorkshire, Humberside, South Yorkshire,
Derbyshire, Nottinghamshire, Lincolnshire and Lancashire.
The Franchise Area has a resident population of
approximately 4.4 million.
The Company purchases power primarily from the wholesale
trading market for electricity in England and Wales (the
''Pool''). The Pool monitors supply and demand between
generators and suppliers, sets prices for generation and
provides for centralized settlement of accounts due between
generators and suppliers.
Basis of presentation
On February 24, 1997, the joint venture partners of the
Company announced the terms of a cash tender offer for
Yorkshire Electricity Group plc to be made by Yorkshire
Holdings plc, a subsidiary of the Company. The offer was
declared wholly unconditional on April 1, 1997. On April 16,
1997 notices were issued by Yorkshire Holdings plc in
accordance with section 429 of the Companies Act 1985 to
acquire all YEG shares outstanding at the end of the requisite
notice period.
The acquisition was accounted for using the purchase
method of accounting in accordance with Accounting
Principles Board Opinion No. 16, ''Accounting for Business
Combinations'' (''APB 16''). The purchase price of YEG has
been allocated to the underlying assets and liabilities based
on estimated fair values at the acquisition date (April 1,
1997).
The Company is not subject to rate regulation but rather, is
subject to price cap regulation and, therefore, the provisions
of Statement of Financial Accounting Standards No. 71,
''Accounting for the Effects of Certain Types of Regulation''
(''SFAS 71'') do not apply.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The consolidated financial statements of the Company are
presented in pounds sterling ((POUND)) and in conformity with
accounting principles generally accepted in the United States
of America.
The consolidated balance sheet, income statement, statement
of cashflows and certain information in the notes to the
consolidated financial statements are presented in pounds
sterling ((POUND)) and in US dollars ($) solely for the convenience
of the reader, at the exchange rate of (POUND)1= $1.6765, the Noon
Buying Rate in New York City for cable transfers in pounds
sterling as certified for customs purposes by the Federal
Reserve Bank of New York on March 31, 1998. This
presentation has not been translated in accordance with
Statement of Financial Accounting Standards No. 52,
''Foreign Currency Translation.'' No representation is made
that the pounds sterling amounts have been, could have been,
or could be converted into US dollars at that or any other rate
of exchange.
The following table sets out, for the periods indicated, certain
information concerning the exchange rates between UK pounds sterling
and US dollars based on the Noon Buying Rates:
Fiscal Year Period End Average(1) High Low
($ per (POUND)1.00)
1994 . . . . . . . 1.49 1.50 1.59 1.46
1995 . . . . . . . 1.62 1.56 1.65 1.49
1996 . . . . . . . 1.53 1.56 1.62 1.50
1997 . . . . . . . 1.65 1.60 1.71 1.50
1998 . . . . . . . 1.68 1.65 1.70 1.58
(1) The average of the Noon Buying Rates in effect on the last business
day of each month during the relevant period.
On June 10, 1998, the Noon Buying Rate was $1.6277 = (POUND)1.
Principles of consolidation
The consolidated balance sheet includes the accounts of the
Company and its wholly-owned and majority-owned
subsidiaries and has been prepared from records maintained
by the Company in the UK. Significant intercompany items
are eliminated in consolidation.
Use of estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Unbilled revenue
The Company records revenue net of value added tax
("VAT") and accrues revenues for service provided but
unbilled at the end of each reporting period.
Recovery of regulated income
Charges for distribution and supply of electricity are
subject to a price control formula set out in the Company's
PES license which allows a maximum charge per unit of
electricity. Differences in the charges, or in the purchase
cost of electricity, can result in the under or overrecovery of
revenues in a particular period.
Where there is an overrecovery of supply or distribution
business revenues against the regulated maximum
allowable amount, revenues are deferred in an amount
equivalent to the overrecorded amount and included in
other current liabilities.
Financial instruments
YEG enters into contracts for differences (''CFDs'')
primarily to hedge its supply business against the price risk
of electricity purchases from the Pool. Use of these CFDs is
carried out within the framework of YEG's purchasing
strategy and hedging guidelines. CFDs are accounted for as
hedges and consequently, gains and losses are deferred and
recognized over the same period as the item hedged. YEG
recognizes gains (losses) on CFDs when settlement is
made, which is generally monthly. Gains (losses) on CFDs
are recognized as a decrease (increase) to cost of sales
based upon the difference between fixed prices in the CFD
compared to variable prices paid to the Pool for the period.
Gains (losses) based upon the difference between fixed
prices in the CFD compared to variable prices paid to the
Pool for future electricity purchases are not recognized
until the period of such settlements.
The Company enters into interest rate and cross currency
swaps as a part of its overall risk management strategy and
does not hold or issue material amounts of derivative
financial instruments for trading purposes. The Company
accounts for these derivative financial instruments in
accordance with Statements of Financial Accounting
Standards No. 80, ''Accounting for Futures Contracts'' and
various Emerging Issues Task Force pronouncements. If
the interest rate and cross currency swaps were to be sold or
terminated, any gain or loss would be deferred and
amortized over the remaining life of the debt instrument
being hedged by the swaps. If the debt instrument being
hedged by the swaps were to be extinguished, any gain or
loss attributable to the swap would be recognized in the
period of the transaction.
(PAGE)
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company considers the carrying amounts of financial
instruments classified as current assets and liabilities to be a
reasonable estimate of their fair value because of the short
maturity of these instruments.
Cash and cash equivalents
The Company considers all short-term investments with an
original maturity of three months or less to be cash
equivalents.
Property, plant and equipment
Property, plant and equipment is recorded at fair market
value as adjusted at the acquisition date in accordance with
APB 16. Items capitalized subsequent to the acquisition are
recorded at original cost, which includes materials, labor
and appropriate overhead costs, and the estimated cost of
borrowed funds used during construction.
During the year the Group changed its estimates in respect
of identifying the element of costs to be capitalized within
the distribution network. This change in estimate increased
the amount capitalized by (POUND)15m.
The Company's policy is to record depreciation on a
straight-line basis, except for distribution network assets
which are charged at 3% for 20 years and 2% for the
remaining 20 years. Assets are depreciated using the
following estimated useful lives:
Years
Distribution network 40
Generation 20
Buildings Up to 60
Fixtures and equipment Up to 10
Vehicles and mobile plant Up to 10
Goodwill
The Company's policy is to amortize costs in excess of fair
value of net assets of the business acquired using the
straight-line method over a period of 40 years.
Recoverability (evaluated on the basis of undiscounted
operating cash flow analysis) is reviewed annually
commencing March 31, 1999 or sooner if events or changes
in circumstances indicate that the carrying amount may
exceed fair value, in accordance with the provisions of
Statement of Financial Accounting Standards No. 121,
''Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of". Goodwill
shown in the accompanying consolidated balance sheet
relates to the acquisition of YEG (Note 14).
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Investments
The Company accounts for investments in debt and equity
securities in accordance with Statement of Financial
Accounting Standards No. 115, "Investments in Certain
Debt and Equity Securities'' (''SFAS 115''). The Company's
investments are classified as available-for-sale under SFAS
115. Securities whose fair market values are readily
determinable are reported at fair value. Securities whose
fair market values are not readily determinable are recorded
at the lower of cost or net realizable value.
Income taxes
The Company accounts for income taxes in accordance
with Statement of Financial Accounting Standards No. 109,
''Accounting for Income Taxes''. This standard requires that
deferred income taxes be recorded for temporary
differences between the financial statement basis and the
tax basis of assets and liabilities and loss carryforwards and
that deferred tax balances be based on enacted tax laws at
rates that are expected to be in effect when the temporary
differences reverse.
2. EXTRAORDINARY LOSS
In July 1997, the British Government announced a
''windfall tax'' to be applied at that date to companies
privatized by flotation and regulated by relevant
privatization statutes. The Company recorded an
extraordinary loss of (POUND)134 million ($225 million) for this
tax. The windfall tax is not deductible for UK corporation
tax purposes. Half of the tax was paid on December 1, 1997
with the final installment due on or before December 1,
1998.
3. RETIREMENT BENEFITS
Pension plans
The Company operates two plans, one based on defined
contributions and a second based on defined benefits.
Defined contribution
The defined contribution plan was established on December
1, 1991. From April 1, 1995 new employees are only
eligible to join this plan. The assets of the defined
contribution plan are held and administered by an
independent trustee. The cost recognized for this plan for
the Fiscal Year 1998 was less than (POUND)1 million.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND
SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
3. RETIREMENT BENEFITS (continued)
Defined benefit
The Company participates in the Electricity Supply Pension
Scheme, which provides pension and other related defined
benefits, based on final pensionable pay, to substantially all
employees throughout the electricity supply industry in the
UK.
The Company uses the projected unit credit actuarial
method for accounting purposes. Amounts funded to the
pension are primarily invested in equity and fixed income
securities.
The following table sets forth the plan's funded status and
amounts recognized in the Company's consolidated balance
sheet (in millions):
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
Actuarial present value of
benefit obligation:
Accumulated benefit obligation:
Vested benefits 690 1,157 590
Non-vested benefits 25 42 35
715 1,199 625
Fair value of plan assets 855 1,433 725
Projected benefit obligation for
service rendered to date (740) (1,240) (664)
Assets in excess of projected
benefit obligation 115 193 61
Other unrecognized net gain (40) (67) -
Prepaid pension asset 75 126 61
The weighted average rates assumed in the actuarial
calculations as of the following dates were:
March 31, 1998 April 1, 1997
% %
Discount rate 6.0 8.0
Annual salary rate increase 5.25 6.0
Long-term rate of return on plan assets 8.75 9.0
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. RETIREMENT BENEFITS (continued)
The components of the plan's net periodic pension cost during the period
is shown below (in millions):
Year Ended March 31, 1998
(POUND) $
Service cost (benefits earned during the period) 9 15
Interest cost on projected benefit obligation 50 84
Actual return on plan assets (150) (252)
Net amortization and deferra l84 141
Net periodic pension credit (7) (12)
4. REGULATORY MATTERS
The distribution business of the Company is regulated under
its PES license, pursuant to which revenue of the distribution
business is controlled by the Distribution Price Control
Formula ("DPCF"). The DPCF determines the maximum
average price per unit of electricity (expressed in pence per
kilowatt hour) that YEG can charge. The DPCF is usually set
for a five-year period, subject to more frequent adjustments
as determined necessary by the Director General of
Electricity Supply (the "Regulator"). At each review, the
Regulator can adjust the value of certain elements in the
DPCF. YEG's allowed distribution revenues were reduced
by a 14% below inflation reduction and a 13% below
inflation reduction on April 1, 1995 and 1996, respectively,
following a review by the Regulator. On April 1, 1997 and
April 1, 1998, YEG's allowed distribution revenues were
decreased by an additional 3% below inflation reduction, and
there will be a further 3% below inflation reduction on April
1, 1999.
The Company's supply business is also regulated by the
Regulator. Until March 31, 1998 prices were established
based upon the Supply Price Control Formula which was
similar to the DPCF. New Price controls took effect from
April 1,1998. These new controls apply to the supply to all
residential and small business customers within the
Yorkshire Franchise Area whose annual consumption is
under 12,000 kWh. They will apply until an adequate level
of competition is established and at least until March 31,
2000. The new controls (when taken together with the
reduction in the Fossil Fuel Levy which became effective on
April 1, 1998) have resulted in the implementation of small
reductions effective April 1, 1998 in the tariffs for the
Company's residential and small business customers
compared to the corresponding tariffs in effect at August
1997. These new controls also require an additional 3%
below inflation reduction effective April 1, 1999 and they
have discontinued the automatic pass-through of costs to
residential and small business customers, consisting
primarily of purchased power costs. The Fossil Fuel Levy is
a levy instituted to reimburse generators and RECs for the
extra costs involved in obtaining a specified portion of
generation from non-fossil fuel plants.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. REGULATORY MATTERS (continued)
Within the Franchise Area, the Company has an exclusive
right to supply electricity to Franchise Supply Customers.
This exclusive right will continue until September 1998
when the supply market for these customers is currently
scheduled to become competitive over a six month phase-in
period. To facilitate competition the distribution business has
incurred significant additional costs to develop "data
management service" systems. The Regulator has made
proposals, which the Company has accepted, whereby (POUND)23
million of these costs shall be recovered over a 5 year period
ending March 31, 2003.
The supply of electricity to Non-Franchise Supply
Customers is currently open to competition and YEG is able
to competitively bid or negotiate to supply electricity to such
customers.
5. COMMITMENTS AND CONTINGENCIES
Electricity and gas purchase agreements
The Company and its subsidiaries have entered into contracts
for purchases of electricity and gas for a period of up to 2009.
At March 31, 1998 and April 1, 1997, respectively,
provisions of (POUND)84 million ($141 million) and (POUND)78 million
have been made for the estimated net present value of
expected future payments in excess of anticipated
recoverable amounts, reflecting management's current
expectations of market prices for electricity following the
opening of the competitive market to Franchise Supply
Customers and future gas prices.
The Company has additional contracts with unaffiliated
parties relating to the purchase of gas which expire by
October 2005, the terms of which are immaterial with respect
to quantity and price, both annually and in the aggregate.
Legal proceedings
The Company is a party to legal proceedings arising in the
ordinary course of business which are not material, either
individually or in the aggregate, nor is it currently aware of
any threatened material legal proceedings.
Operating leases
The Company has commitments under operating leases with
various terms and expiration dates. At March 31, 1998
estimated minimum rental commitments for noncancelable
operating leases were (POUND)3 million ($5 million) for the fiscal
year ending March 31, 1999. Rental expenses incurred for
operating leases in the Fiscal Year 1998 were (POUND)3 million ($5
million).
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. COMMITMENTS AND CONTINGENCIES (continued)
Labor subject to Collective Bargaining Agreements
A majority of the Company's employees are subject to one
of three collective bargaining agreements. Such agreements
are ongoing in nature, and the Company's employees
participation level is consistent with that of the electric utility
industry in the UK.
6. SEGMENT REPORTING
The Company is primarily engaged in two electric industry
segments; distribution, which involves the transmission of
electricity across its network to its customers, and supply,
which involves bulk purchase of electricity from the Pool for
delivery to the distribution networks. Included in ''Other'' are
insignificant operating subsidiaries of the Company as well
as various corporate activities, and non-allocated corporate
assets. Intersegment sales primarily represent sales from
distribution to supply for use of the distribution networks. A
summary of information about the Company's operations by
segments follows (in millions):
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31, 1998
Distribution Supply Other Eliminations Consolidated
(POUND) $ (POUND) $ (POUND) $ (POUND) $ (POUND) $
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S> <S>
Operating revenues 305 511 1,118 1,874 203 340 (341) (571) 1,285 2,154
Operating income 115 193 25 42 24 40 (3) (5) 161 270
Depreciation and
amortization 63 106 2 3 13 22 - - 78 131
Total assets employed
at period end 1,903 3,190 157 263 402 673 - - 2,462 4,126
Capital expenditures 121 203 9 15 61 102 - - 191 320
The Company's assets in the individual segments as of April 1,
1997 are as follows (in millions):
(POUND)
Distribution 1,802
Supply 187
Other 602
Total 2,591
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. LOSS ON INVESTMENT IN IONICA
Yorkshire Group's investment in Ionica was initially included in its
consolidated balance sheet at its fair value at acquisition on April 1, 1997
of (POUND)54 million plus a subsequent additional investment of
(POUND)1 million.
Management have written down the book value of the investment to their
estimate of fair value by charging an unrealized loss of (POUND)41 million ($69
million) to the income statement during the year. The reduction in fair
value of the investment was recognized by management as '' other than
temporary '' following announcement by Ionica on May 22, 1998 that
Ionica had been unsuccessful in negotiating release of credit lines from
existing providers of bank finance and had been advised to obtain further
equity investment prior to seeking further bank funding. Management
expects to take an additional charge of (POUND)6 million ($10 million) before
taxes in the first quarter of Fiscal Year 1999.
8. INCOME TAXES
The Company's income tax expense consists of the
following (in millions):
Year Ended March 31,1998
(POUND) $
Current (5) (8)
Deferred 4 6
Total (1) (2)
The following is a reconciliation of the difference between
the amount of income taxes computed by multiplying book
income before income taxes by the statutory rate, and the
amount of income taxes reported (in millions):
Year Ended March 31, 1998
(POUND) $
Income before taxes and extraordinary loss 16 26
Income taxes computed at statutory rate (31%) 5 8
Effect of change in tax rate on
deferred taxes (12) (20)
Permanent differences 10 17
Other (4) (7)
Total income tax (1) (2)
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES (continued)
The tax effect of temporary differences between the
carrying amounts of assets and liabilities in the
consolidated balance sheet and their respective tax bases,
which give rise to deferred tax assets and liabilities, are as
follows (in millions):
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
Deferred tax liabilities:
Property related temporary differences 230 386 217
Pension 22 37 20
Provision for electricity and
gas contracts (26) (44) (26)
Other (18) (31) (3)
Net deferred tax liability 208 348 208
Portion included in current liabilities - - (4)
Long-term deferred tax liability 208 348 204
The tax years since 1993 are currently under review by the
Inland Revenue in the UK. In the opinion of management,
the settlement of open years will not have a material
adverse effect on results of operations, financial position or
cash flows of the Company.
9. FINANCIAL INSTRUMENTS
YEG utilizes CFDs to mitigate its exposure to volatility in
the prices of electricity purchased through the Pool. Such
contracts allow YEG to effectively convert the majority of
its anticipated Pool purchases from market prices to fixed
prices. CFDs are in place to hedge a portion of electricity
purchases on approximately 20,010 GWh through the year
2009. Accordingly, the gains and losses on such contracts
are deferred and recognized as electricity is purchased.
Management's estimate of the fair value of CFDs
outstanding at March 31, 1998 and April 1, 1997 is a net
liability of (POUND)6 million ($10 million) and (POUND)22 million,
respectively. This estimate is based on management's
projections of future prices of electricity. The net liability
will be recovered from franchise customers during Fiscal
Year 1999.
The Company is exposed to losses in the event of non-
performance by counterparties to its CFDs. To manage this
credit risk, the Company selects counterparties based on
their credit ratings, limits its exposure to any one
counterparty under defined guidelines, and monitors the
market position of the programs and its relative market
position with each counterparty.
As part of its risk management policy, the Company enters
into interest rate swap agreements under which
counterparties have agreed to pay amounts to the Company
equal to variable interest obligations in consideration of
amounts payable by the Company equivalent to fixed rates
of interest. If the counterparty to the interest rate swap was
to default on contractual payments, the Company could be
exposed to increased costs related to replacing the original
agreement. At March 31, 1998, the Company was party to
interest rate swap agreements with a notional value of
(POUND)150
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. FINANCIAL INSTRUMENTS (continued)
million which were at fixed interest rates varying between
7.275% and 7.335%. At April 1, 1997 the Company was
not party to any interest rate swaps.
In February 1998, the Company issued $350 million
aggregate principal amount of 6.154% Senior Notes due
2003 and $300 million aggregate principal amount of
6.496% Senior Notes due 2008. Upon issuance of these
notes, to hedge the currency exposure related to having
sterling cash flows and dollar interest payments, cross
currency swaps were taken out, maturing in 2003 and 2008.
At March 31, 1998 the Company was party to cross
currency swap agreements with a notional value of (POUND)400
million. At April 1, 1997 the Company was not party to any
cross currency swaps.
The estimated fair value of the Company's financial
instruments are as follows (in millions):
March 31, 1998 April 1, 1997
Carrying Amount Fair Value Carrying Amount Fair Value
(POUND) $ (POUND) $ (POUND) (POUND)
Long-term debt (1,031) (1,728) (1,074) (1,801) (438) (438)
Cross currency
swap agreements - - (38) (64) - -
Interest rate
swap agreements - - (11) (18) - -
The fair value of long-term debt is estimated based on
quoted market prices for the same or similar issues or the
current rates offered to the Company for debt of the same
remaining maturities. The fair values of interest rate and
cross currency swap agreements are estimated by obtaining
quotes from brokers.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in
millions):
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
Distribution network 1,009 1,691 882
Generation 115 193 112
Non-network land and buildings 38 64 57
Other 112 188 57
Consumer contributions (229) (384) (200)
1,045 1,752 908
Accumulated depreciation (53) (89) -
Property, plant and equipment, net 992 1,663 908
Arrangements have been put in place to entitle the British
Government to a proportion of any property gain (above
certain thresholds) accruing as a result of disposals, or events
treated as disposals for these purposes, occurring after March
31, 1990 in relation to land in which the Company had an
interest at that date (and, in certain circumstances, land in
which the Company acquires an interest thereafter from other
members of the electricity industry) and any buildings on
that land. These arrangements will last until March 31,
2000.
11. LONG-TERM DEBT
Long-term debt consisted of the following (in millions):
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
7.25% Guaranteed Eurobonds, due 2028 197 330 -
8.625% Eurobonds, due 2005 152 255 152
9.25% Eurobonds, due 2020 208 349 208
6.154% Senior Notes, due 2003 215 360 -
6.496% Senior Notes, due 2008 185 310 -
European Investment Bank:
7.52% credit facility, due 1999-2002 15 25 15
6.55% credit facility, due 1997-2000 13 22 15
8.05% amortizing term loan, due 2009 46 77 48
Total 1,031 1,728 438
Less current maturities (5) (8) (5)
Long-term debt , net of
current maturities 1,026 1,720 433
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. LONG-TERM DEBT (continued)
Long-term debt outstanding at March 31, 1998 is payable as
follows (in millions):
(POUND) $
For the Fiscal Years
1999 5 8
2000 11 18
2001 12 20
2002 7 12
2003 223 374
Thereafter 773 1,296
Total 1,031 1,728
12. SHORT-TERM DEBT REFINANCED JUNE 1998
Yorkshire Capital Trust I, (the "Trust"), is a statutory
business trust created for the sole purpose of issuing trust
securities and investing the proceeds in an equivalent amount
of Junior Subordinated Deferrable Interest Debentures,
Series A due 2038 issued by Yorkshire Power Finance
Limited (YPF), a subsidiary of YPG. On June 9, 1998 the
Trust issued 11,000,000 8.08% Trust Securities at
the liquidation amount of $25 per Trust Security. The Trust
invested the $275 million proceeds in an equivalent amount
of 8.08% Junior Subordinated Deferrable Interest
Debentures, Series A due 2038 of YPF. YPF in turn loaned
the net proceeds to YPG. Substantially all of the Trust's
assets will consist of the Junior Subordinated Deferrable
Interest Debentures. YPG considers that the mechanisms
and obligations relating to the Trust Securities issued for its
benefit, taken together, constitute a full and unconditional
guarantee by it of the Trust's payment obligations with
respect to the Trust Securities.
The issue raised net proceeds of (POUND)162 million which will be
used for the repayment of short term debt.
13. SHORT-TERM DEBT
Short-term debt consisted of the following (in millions):
March 31, 1998 April 1, 1997
(POUND) $ (POUND)
Commercial paper - - 81
Term loan and revolving
credit facility 303 508 1
Loan notes 16 26 -
Total 319 534 82
At March 31, 1998 and April 1, 1997 the weighted average
interest rate was 7.9% and 6.2%, respectively.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. SHORT-TERM DEBT (continued)
The term loan and revolving credit facility agreement is a
(POUND)1.085 billion ($1.819 billion) credit facility. This credit
facility consists of two parts which are Facility A (term loan
facility) for (POUND)1.035 billion ($1.735 billion) and Facility B
(revolving credit facility) for (POUND)50 million ($84 million), both
repayable on July 30, 1998. The interest rates on the
facilities are based on LIBOR plus a margin which ranges
from 0.125% to 0.5% dependent on the time elapsed since
the Facility became available, plus a defined margin which is
based on a bank cost of funds. The Facilities contain certain
restrictive covenants which include a maximum consolidated
net debt to capitalization ratio and minimum earnings to
interest ratio.
The acquisition of YEG was financed in part by the issuance
of (POUND)22 million ($37 million) of loan notes to former YEG
shareholders. These notes are redeemable at the option of the
holder, on March 31, 1998 and thereafter on each March 31
prior to March 31, 2002. (POUND)6 million of notes were redeemed
at March 31, 1998. Any loan notes outstanding at March 31,
2002 shall be repaid in full at that date. The interest rate on
the notes is 1% below the rate at which National
Westminster Bank plc is offering six month sterling deposits
of (POUND)5 million in the London inter-bank market. At March 31,
1998, the interest rate was 6.6%.
At March 31, 1998 and April 1, 1997 unused committed
bank facilities were available to the Company in the amount
of (POUND)275 million ($461 million) and (POUND)250 million ($419
million), respectively. Commitment fees of approximately
1/10 of 1% of the unused committed bank facilities are
required to maintain the facilities which have expiration
dates between 2000 and 2002. In addition, the Company has
commercial paper programs (denominated in US dollars)
which provide for the issuance of up to $550 million in
commercial paper with short-term maturities (up to 364
days) issued at a discount to face value.
14. ACQUISITION
On February 24, 1997 the joint venture partners of the
Company announced the terms of a cash offer for YEG to be
made by Yorkshire Holdings plc, a subsidiary of the
Company. The offer was declared wholly unconditional on
April 1, 1997. On April 16, 1997 notices were issued by
Yorkshire Holdings plc in accordance with section 429 of the
Companies Act 1985 to acquire all those YEG shares
outstanding at the end of the requisite notice period.
Yorkshire Holdings plc completed its purchase of the shares
of YEG during April and May 1997 through payment of cash
consideration of (POUND)1.457 billion ($2.442 billion) and the
issuance of loan notes to former YEG shareholders in the
amount of (POUND)22 million ($37 million).
The acquisition was financed by cash contributions of (POUND)220
million ($369 million) from each of the joint venture
partners, against which shares in the Company were
subsequently allotted, and short term borrowings.
The purchase price of YEG has been allocated to the
underlying assets and liabilities based on fair values at the
acquisition date. The acquisition cost exceeded the fair
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. ACQUISITION (continued)
market value of net assets acquired, including (POUND)17 million
($29 million) of acquisition related costs, by (POUND)994 million
($1.666 billion) and is considered goodwill.
The net purchase price of (POUND)1.496 billion ($2.508 billion) was
allocated as follows at April 1, 1997 (in millions):
(POUND) $
Property, plant and equipment 939 1,574
Prepaid pension asset 61 102
Current assets 464 778
Investments 133 223
Goodwill 994 1,666
Current liabilities (367) (615)
Other liabilities (728) (1,220)
Purchase price 1,496 2,508
The unaudited pro forma consolidated historical result is
based upon the consolidated statements of income of YEG,
as if YEG had been acquired at the beginning of Fiscal Year
1997, and estimated to be (in millions):
Year ended
March 31, 1997
Actual Pro forma
(POUND) (POUND)
Operating revenues 1,331 1,331
Net income 26 15
The pro forma results include amortization of goodwill,
additional depreciation expense and interest expense on debt
issued to finance the company, as well as the reversal of
certain provisions made by YEG which would have been
accounted for as fair value adjustments at the date of
acquisition. The pro forma result is not necessarily indicative
of what actually would have occurred if the acquisition had
been completed as of the beginning of the fiscal year, nor is
it necessarily indicative of future consolidated results.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
(Successor Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. EMPLOYEE OPTION AND SHARE PLANS
Prior to the acquisition of YEG by the Company, employees of YEG
were eligible to participate in the 1997 and 1996 Savings-Related Share
Option Schemes, Executive Share Option Scheme, Profit Sharing
Scheme and/or the Long Term Incentive Scheme. In connection with the
acquisition, employees were given the opportunity to exercise their
options granted under the Savings-Related Share Option Schemes and the
Executive Share Option Scheme and sell their shares to Yorkshire
Holdings plc at a price of (POUND)9.27 ($15.54) per share. If the holders
of the
options did not exercise their options, such options were cash canceled,
that is the holders were paid (POUND)9.27 ($15.54) per share less the option's
exercise price. There were 2,815,302 options outstanding, at April 1,
1997. During the year ended March 31, 1998, 2,675,674 options were
cash canceled and 139,628 options were exercised. At March 31, 1998
there are no outstanding options.
Prior to April 1, 1997, the following shares of YEG's stock were held in
trust on behalf of employees:
Shares
Profit Sharing Scheme 236,525
Long Term Incentive Scheme 54,025
In connection with the acquisition, all shares of YEG issued under the
Long Term Incentive Scheme, as well as the National Grid Group plc
shares held in trust for the benefit of certain option holders, were
transferred to employees in accordance with vesting rights as previously
established and the related schemes and trusts were terminated.
16. UNAUDITED QUARTERLY FINANCIAL INFORMATION
Quarterly Periods Ended 1997/98
(in (POUND) millions) June 30 September 30 December 31 March 31
Operating revenues 268 295 347 375
Operating income 32 44 47 38
Net income (loss) before
extraordinary item 5 21 16 (25)
Net income (loss) 5 (113) 16 (25)
The quarter ended September 30, 1997 includes an extraordinary loss of
(POUND)134 million for windfall tax. The quarter ended March 31, 1998
includes an unrealized loss following the reduction in fair value of
Yorkshire Group's investment in Ionica Group plc of (POUND)41 million.
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Management of Yorkshire Group
The following table sets forth certain information with respect to the
executive officers and directors of Yorkshire Group as of March 31, 1998:
Name Age Position
Dr. E. Linn Draper, Jr. 56 Chairman and Director
Donald M. Clements, Jr. 48 Director
Armando A. Pena 53 Chief Financial Officer and Director
Wayne H. Brunetti 55 Director
Richard C. Kelly 51 Director
Teresa S. Madden 42 Director
Dr. E. Linn Draper, Jr. Has been a Director and Chairman of Yorkshire
Group since February 1997. Since April 1993 has been Chairman of the Board
of Directors of AEP and all of its major subsidiaries. In March 1992, appointed
President of AEP and President and Chief Operating Officer of American
Electric Power Service Corporation. Serves as a Director of BCP Management,
Inc. and CellNet Data Systems, Inc.
Donald M. Clements, Jr. Has been a Director of Yorkshire Group since
February 1997. Since October 1995, has been President of AEP Resources, Inc.
Joined American Electric Power Service Corporation in September 1994 as
Senior Vice President and became Executive Vice President in December 1996.
From 1978 to 1994, was employed with Gulf States Utilities Company.
Armando A. Pena. Since February 1997, has been a Director, and, since
July 1997, has been Chief Financial Officer of Yorkshire Group. Since January
1998, has been Chief Financial Officer, and, since March 1996, Senior Vice
President and Treasurer of American Electric Power Service Corporation. Since
November 1995, has been Treasurer of AEP and all of AEP's major subsidiaries.
From 1989 to March 1996, was Vice President-Finance of American Electric
Power Service Corporation.
Wayne H. Brunetti. Has been a Director of Yorkshire Group since
February 1997. Since August 1997, has been President and Chief Operating
Officer of NCE. Since January 1996, has been the President and Chief Executive
Officer of Public Service Company of Colorado. Joined Public Service
Company of Colorado in July 1994 as President and Chief Operating Officer.
From 1991 to July 1994, was President and Chief Executive Officer of
Management Systems International, a management consulting firm. Serves as a
Director of e prime, YGSC and Natural Fuels.
Richard C. Kelly. Has been a Director of Yorkshire Group since February
1997. Since August 1997, has been Executive Vice President, Finance and
Support Services and Chief Financial Officer of NCE. From 1990 to August
1997, was Chief Financial Officer of Public Service Company of Colorado.
Teresa S. Madden. Has been a Director of Yorkshire Group since
February 1997. Since September 1997, has been Controller and Secretary of
NCE. From 1990 to August 1997, was Director of Corporate Accounting and
Assistant Secretary of Public Service Company of Colorado.
Management of Yorkshire Finance
The following table sets forth certain information with respect to the Board
of Directors of Yorkshire Finance as of March 31, 1998:
Name Age Position
Graham J. Hall..............54 Director
Roger Dickinson............ 51 Director
Andrew G. Donnelly..... 42 Director
Graham J. Hall. Has been a Director of Yorkshire Finance since August
1997. Since January 1998, has been the Chief Executive of Yorkshire. From
April 1997 to December 1997, was the Group Operations Director of Yorkshire.
From 1990 through 1997, was the Group Executive Director, Distribution of
Yorkshire.
Roger Dickinson. Has been a Director of Yorkshire Finance since August
1997. Since 1989, has been Group Company Secretary and Solicitor of
Yorkshire.
Andrew G. Donnelly. Has been a Director of Yorkshire Finance since
December 1997. Since January 1998, has been Finance Director of Yorkshire.
From January 1996 through December 1997, was Group Financial Controller of
Yorkshire. From 1993 to 1996, was Financial Controller, System Division of
Yorkshire.
Item 11. EXECUTIVE COMPENSATION
Management Compensation of Yorkshire Group
The officers and directors of Yorkshire Group listed above (each an
"AEP/NCE Officer or Director", as applicable) receive no cash or non-cash
compensation as a result of their services performed for Yorkshire Group. The
salaries of all AEP/NCE Officers and Directors are paid by either AEP or NCE,
as applicable, solely for the services performed by them for either AEP or NCE,
as applicable.
Management Compensation of Yorkshire Finance
The directors of Yorkshire Finance listed above receive no cash or non-
cash compensation as a result of their services performed for Yorkshire Finance.
The salaries of all directors listed immediately above are paid by Yorkshire
solely for their services performed for Yorkshire.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Yorkshire Group is wholly owned indirectly by AEP and NCE. Yorkshire
Finance is wholly owned by Yorkshire Group. The following table shows the
number of shares of common stock of AEP and NCE, respectively, owned by
the directors and executive officers of Yorkshire Group and Yorkshire Finance
as of March 31, 1998:
Name Title of Security Number of Shares
Beneficially Owned(1)
Dr. E. Linn Draper, Jr. .AEP Common Stock 7,632(2)(3)
Donald M. Clements, Jr. .AEP Common Stock 1,052(2)
Armando A. Pena . AEP Common Stock 4,666(2)
Wayne H. Brunetti .NCE Common Stock 371,504(4)(5)(6)
Richard C. Kelly .NCE Common Stock 128,607(4)(6)(7)
Teresa S. Madden .NCE Common Stock 30,080(4)(6)
Directors and executive officers
of Yorkshire Group as a group
(6 persons) AEP Common Stock 13,350(8)
NCE Common Stock 530,191(8)
(1) "Beneficial ownership" means the sole or shared power to vote, or to
direct the voting of, a security and/or investment power with respect to
a security.
(2) Includes shares of AEP common stock held in the AEP Savings Plan as
follows: Dr. Draper 2,917 shares, Mr. Clements 1,052 shares and Mr. Pena
3,298 shares.
(3) Includes 4,715 shares of AEP common stock held in joint tenancy with
Dr. Draper's wife.
(4) Includes shares of NCE common stock in the form of unexercised stock
options awarded pursuant to the Omnibus Incentive Plan as follows: Mr.
Brunetti 352,334, Mr. Kelly 118,050 and Ms. Madden 28,550 shares.
(5) Includes 18,700 shares of NCE common stock held in joint tenancy.
(6) Includes shares of NCE stock held in the NCE's Employee Savings and
Stock Option Plan as follows: Mr. Brunetti 470, Mr. Kelly 2,718 and Ms
Madden 1,125.
(7) Includes 263 shares of NCE common stock held by Mr. Kelly's wife in the
NCE Savings Plan.
(8) Represents less than 1% of outstanding common stock of AEP or NCE, as
applicable.
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
As described under ''Yorkshire's Businesses---Business Restructuring'',
Yorkshire currently contemplates that its generation assets may be transferred
to an entity or to entities other than Yorkshire Group or its subsidiaries.
Such entity or entities may be an indirect subsidiary or may be indirect
subsidiaries of a US Parent. It is expected that proceeds from the transfer
of these assets will be used to reduce debt of Yorkshire.
Total assets less current liabilities employed by the generation business at
March 31, 1998 were (POUND)136 million. Operating income attributable to the
generation business in Fiscal Year 1998 was (POUND)16 million.
See ''Yorkshire's Businesses---Business Restructuring''.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report on this Form
10-K:
(1) Financial Statements:
The financial statements and the related reports of independent
public accountants and auditors filed as a part of this annual report
are listed under Item 8 herein.
(2) Financial Statement Schedules:
Consolidated Valuation and Qualifying Accounts (Schedule II)
All other schedules are omitted because they are not applicable or
the required information is contained in the financial statements or
notes thereto.
(3) Exhibits:
Exhibits are listed in the Exhibit Index on pages 111 and 112.
(b) Reports on Form 8-K:
The registrant has not filed any reports on Form 8-K during the last
quarter of Fiscal Year 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Sections 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant, Yorkshire Power Group
Limited, certifies that it has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Leeds,
West Yorkshire, England on the June 10, 1998.
YORKSHIRE POWER
GROUP LIMITED
By: /s/ Armando A. Pena
______________________
Director and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
Signature Title Date
(i) Principal Executive Officer:
*Dr. E. Linn Draper, Jr. Chairman of the Board
and Director
(ii) Principal Financial Officer
and Principal Accounting Officer:
/s/ Armando A. Pena
____________________ Chief Financial Officer June 10, 1998
(Armando A. Pena) and Director
(iii) A Majority of the Directors
*Donald M Clements, Jr.
*Wayne H Brunetti
*Richard C Kelly
*Teresa S Madden
/s/ Armando A. Pena
*BY ___________________ Authorized Representative June 10, 1998
(Armando A. Pena, in the United States
Attorney-in-Fact)
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Shareholders and Board of Directors
of Yorkshire Electricity Group plc and Subsidiaries
We have audited the consolidated financial statements of Yorkshire
Electricity Group plc and its subsidiaries (the "Company") as of March 31, 1997
and 1996, for each of the two years in the period ended March 31, 1997, and
have issued our report thereon dated July 15, 1997. Our audits also included
the financial statement schedule of the Company, listed in Item 14. This
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respect the information set forth therein.
Deloitte & Touche
Leeds
United Kingdom
July 15, 1997
<PAGE>
YORKSHIRE ELECTRICITY GROUP PLC
(Predecessor Company)
SCHEDULE II ---VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
</TABLE>
<TABLE>
<CAPTION>
(In Millions)
Column A Column B Column C Column D Column E
Additions
Description Balance at Charge to Charges to
Beginning of Costs and Other Balance at End
Period Expenses Accounts Deductions of Period
(POUND) (POUND) (POUND) (POUND) (POUND)
<C> <S> <S> <S> <S> <S>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts . 7 5 6(b) 6
Investment Provision . 2 2
Year Ended March 31, 1997 . 7 7 6 8
Accumulated Provision for
Uncollectible Accounts .10 4 7(b) 7
Investment Provision . 9 (8)(a) 1(c)
Year Ended March 31, 1996 .19 4 (8) 8 7
(a) Provision transferred to a liability account for liabilities assumed in
connection with the sale of retailing joint venture
(b) Uncollectible accounts written-off
(c) Write-off investment
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Shareholders and Board of Directors
of Yorkshire Power Group Limited and Subsidiaries
We have audited the consolidated financial statements of Yorkshire Power
Group Limited and its subsidiaries (the "Company") as of March 31, 1998 and,
for the year ended March 31, 1998, and have issued our report thereon dated
June 10, 1998. Our audit also included the financial statement schedule of the
Company, listed in Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respect the information
set forth therein.
Deloitte & Touche LLP
Columbus, Ohio
June 10, 1998
<PAGE>
YORKSHIRE POWER GROUP LIMITED
(Successor Company)
<TABLE>
<CAPTION>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In Millions)
Column A Column B Column C Column D Column E
Additions
Description Balance at Charged to Charged to
Beginning Cost and Other Balance at
of Period Expenses Accounts Deductions End of Period
(POUND) (POUND) (POUND) (POUND) (POUND)
Year ended March 31, 1998
Deducted from Assets:
<C> <S> <S> <S> <S> <S>
Accumulated Provision for:
Uncollectible Accounts 6 6 - 6 (a) 6
6 6 - 6 6
(a) Uncollectible accounts written-off
</TABLE>
<PAGE>
EXHIBIT INDEX
Certain of the following exhibits, designated with an asterisk (*), are filed
herewith. The exhibits not so designated have heretofore been filed with the
Commission and, pursuant to 17 C.F.R. H229.10(d) and H240.12b-32, are
incorporated herein by reference to the documents indicated in parentheses
following the descriptions of such exhibits.
Exhibit
Number Description
3.1 Memorandum and Articles of Association of Yorkshire Power
Group Limited (Designated in Registration 333-47925 as Exhibit
3.1).
3.2 Certificate of Incorporation of Yorkshire Power Group Limited
(Designated in Registration 333-47925 as Exhibit 3.2).
*4.1 Subordinated Indenture dated as of June 1, 1998 among Yorkshire
Power Group Limited, Yorkshire Power Finance Limited, Banque
Generale du Luxembourg, and The Bank of New York.
*4.2 First Supplemental Indenture dated as of June 1, 1998 among
Yorkshire Power Group Limited, Yorkshire Power Finance Limited,
Banque Generale du Luxembourg and The Bank of New York.
4.3 Certificate of Trust of Yorkshire Capital Trust I (Designated in
Registration 333-47925 as Exhibit 4.4).
4.4 Trust Agreement of Yorkshire Capital Trust I (Designated in
Registration 333-47925 as Exhibit 4.5).
*4.5 Amended and Restated Trust Agreement of Yorkshire Capital Trust
I dated as of June 1, 1998.
*4.6 Trust Securities Guarantee Agreement dated as of June 1, 1998
between Yorkshire Power Group Limited and the the Bank of
New York.
*4.7 Deposit Agreement dated as of June 1, 1998 between Yorkshire
Power Finance Limited and The Bank of New York.
*4.8 Indenture, dated as of February 1,1998,among Yorkshire Power
Finance Limited, Yorkshire Power Group Limited, The Bank of
New York and Banque Generale du Luxembourg.
*4.9 First Supplemental Indenture, dated as of February 25, 1998, among
Yorkshire Power Finance Limited, Yorkshire Power Group Limited,
The Bank of New York and Banque Generale du Luxembourg.
*4.10 Second Supplemental Indenture, dated as of February 25, 1998,
among Yorkshire Power Finance Limited, Yorkshire Power Group
Limited, The Bank of New York and Banque Generale du
Luxembourg.
*4.11 Deposit Agreement, dated as of February 1, 1998,between the Bank
of New York and Yorkshire Power Finance Limited.
*4.12 Trust Deed, Dated January 17, 1995 between Yorkshire Electric
group PLC and Bankers trust Company Limited.
*4.13 First Supplement, Dated July 27, 1995, between Yosrhshire
Electric group PLC and Bankers Trust Company Limited.
10.1 Yorkshire Electricity Group plc Public Electricity Supply License
dated March 26, 1990 as modified by modifications dated March
30, 1994, March 31, 1995, September 25, 1995, December 11,
1997, December 30, 1997 and March 31, 1998 (Designated in
Registration 333-47925 as Exhibit 10.1).
10.2 Second Tier License to Supply Electricity for England and Wales
for Yorkshire Electricity Group plc dated June 8, 1990 (Designated
in Registration 333-47925 as Exhibit 10.2).
10.3 Modifications to Yorkshire Electricity Group plc Second Tier
License to Supply Electricity for England and Wales dated October
24, 1990, April 22, 1992, March 11, 1994, April 29, 1994 and
January 19, 1998 (Designated in Registration 333-47925 as Exhibit
10.3).
10.4 Second Tier License to Supply Electricity for Scotland for
Yorkshire Electricity Group plc dated March 25, 1991 (Designated
in Registration 333-47925 as Exhibit 10.4).
10.5 Modifications to Yorkshire Electricity Group Second Tier License
to Supply Electricity for Scotland dated June 15, 1992, June 30,
1993, March 11, 1994 and January 20, 1998 (Designated in
Registration 333-47925 as Exhibit 10.5).
10.6 Pooling and Settlement Agreement dated March 30, 1990 among
Yorkshire Electricity Group plc, National Grid Company plc and
other parties (Designated in Registration 333-47925 as Exhibit
10.6).
10.7 Master Connection and Use of System Agreement dated as of
March 30, 1990 among The National Grid Company plc and its
users (including Yorkshire Electricity Group plc) (Designated in
Registration 333-47925 as Exhibit 10.7).
10.8 Master Agreement dated as of October 25, 1995 among The
National Grid Holding plc, The National Grid Company plc,
Yorkshire Electricity Group plc and the other RECs (Designated in
Registration 333-47925 as Exhibit 10.8).
10.9 Memorandum of Understanding among the National Grid Group
plc, Yorkshire Electricity Group plc and the other RECs, dated
November 17, 1995 (Designated in Registration 333-47925 as
Exhibit 10.9).
10.10 Agreement for (POUND)1,085,000,000 Credit Facility for Yorkshire Power
Group Limited between Yorkshire Power Group Limited and the
Union Bank of Switzerland (Designated in Registration 333-47925
as Exhibit 10.10).
*10.11 Master Registration Agreement dated as of June 1, 1998 among
Yorkshire Electricity Group plc, Energy Pool Funds Administration
Limited and other parties.
*12.1 Computation of ratios of earnings to fixed charges.
21.1 List of subsidiaries of Yorkshire Power Group Limited - Designated
in Registration 333-47925 as Exhibit 21.1.
*24.1 Power of Attorney of certain officers and directors of Yorkshire
Power Group.
*27.1 Financial Data Schedule.
- --------------
Certain instruments defining the rights of holders of long-term debt of
Yorkshire Electric Group plc have been omitted because the
total amount of securities authorized thereunder does not exceed
10% of the total assets of Yorkshire Power Group Limited.
Yorkshire Power Group Limited hereby agress to furnish
a copy of any such ommitted instrument to the SEC
upon request.
EXHIBIT 4.1
YORKSHIRE POWER FINANCE LIMITED
AND
YORKSHIRE POWER GROUP LIMITED
AND
THE BANK OF NEW YORK, AS TRUSTEE,
PRINCIPAL PAYING AGENT,
REGISTRAR AND TRANSFER AGENT
AND
BANQUE GENERALE DU LUXEMBOURG S.A.,
AS PAYING AGENT AND TRANSFER AGENT
SUBORDINATED DEBENTURE INDENTURE
Dated as of June 1, 1998
____________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
SECTION 1.01. Definitions. 1
SECTION 1.02. Compliance Certificates and Opinions. 11
SECTION 1.03. Form of Documents Delivered to Trustee. 11
SECTION 1.04. Notices, Etc., to Trustee and Company. 12
SECTION 1.05. Notice to Holders; Waiver. 12
SECTION 1.06. Conflict with Trust Indenture Act. 13
SECTION 1.07. Effect of Headings and Table of Contents. 14
SECTION 1.08. Successors and Assigns. 14
SECTION 1.09. Separability Clause. 14
SECTION 1.10. Benefits of Indenture. 14
SECTION 1.11. Governing Law. 14
SECTION 1.12. Legal Holidays. 14
ARTICLE II SECURITIES 15
SECTION 2.01. Forms Generally. 15
SECTION 2.02. Form of Trustee's Certificate of
Authentication. 15
SECTION 2.03. Form of Trustee's Certificate of
Authentication by an Authenticating Agent. 16
SECTION 2.04. Form of Guarantee. 16
SECTION 2.05. Amount Unlimited; Issuable in Series. 17
SECTION 2.06. Denominations. 20
SECTION 2.07. Execution, Authentication, Delivery and
Dating. 21
SECTION 2.08. Transfer Agent and Paying Agent. 22
SECTION 2.09. Temporary Securities. 23
SECTION 2.10. Registration, Registration of Transfer and
Exchange. 23
SECTION 2.11. Mutilated, Destroyed, Lost and Stolen
Securities. 25
SECTION 2.12. Payment of Interest; Interest Rights
Reserved. 26
SECTION 2.13. Persons Deemed Owners. 27
SECTION 2.14. Cancellation. 28
SECTION 2.15. Computation of Interest. 28
SECTION 2.16. Global Securities. 29
SECTION 2.17. Extension of Interest Payment Period;
Deferral of Interest Payment. 29
SECTION 2.18. CUSIP Numbers. 30
ARTICLE III COVENANTS 30
SECTION 3.01. Payment of Principal, Premium and Interest. 30
SECTION 3.02. Maintenance of Office or Agency. 31
SECTION 3.03. Money for Securities Payments to Be Held in
Trust. 31
SECTION 3.04. Appointments to Fill Vacancies in Trustee's
Office. 32
SECTION 3.05. Certificate to Trustee. 33
SECTION 3.06. Compliance with Consolidation Provisions. 33
SECTION 3.07. Limitation on Dividends. 33
SECTION 3.08. Covenants as to the Related Business Trust. 34
SECTION 3.09. Covenants as to Treatment of Securities. 34
SECTION 3.10. Additional Interest. 34
SECTION 3.11. Waiver of Certain Covenants. 34
SECTION 3.12. Payment of Additional Amounts. 35
SECTION 3.13. Copies Available to Holders. 37
SECTION 3.14. Company Covenants. 37
SECTION 3.15. Demand Share Covenant. 37
ARTICLE IV HOLDERS, LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE 38
SECTION 4.01. Holders' Lists 38
SECTION 4.02. Preservation and Disclosure of Lists. 38
SECTION 4.03. Reports of the Company and the Guarantor. 39
SECTION 4.04. Reports by the Trustee. 40
ARTICLE V REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT 41
SECTION 5.01. Events of Default. 41
SECTION 5.02. Payment of Securities on Default; Suit
Therefor. 43
SECTION 5.03. Application of Moneys Collected by Trustee. 45
SECTION 5.04. Proceedings by Holders. 46
SECTION 5.05. Remedies Cumulative and Continuing. 47
SECTION 5.06. Direction of Proceedings and Waiver of
Defaults by Majority of Holders. 47
SECTION 5.07. Undertaking to Pay Costs. 48
ARTICLE VI CONCERNING THE TRUSTEE 49
SECTION 6.01. Certain Duties and Responsibilities. 49
SECTION 6.02. Notice of Defaults. 50
SECTION 6.03. Certain Rights of Trustee. 50
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. 51
SECTION 6.05. May Hold Securities. 51
SECTION 6.06. Money Held in Trust. 51
SECTION 6.07. Compensation and Reimbursement. 52
SECTION 6.08. Disqualification; Conflicting Interests. 52
SECTION 6.09. Corporate Trustee Required; Eligibility. 52
SECTION 6.10. Resignation and Removal; Appointment of
Successor Trustee. 53
SECTION 6.11. Acceptance of Appointment by Successor. 54
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business. 55
SECTION 6.13. Preferential Collecting of Claims Against
Company. 55
SECTION 6.14. Authenticating Agents. 59
ARTICLE VII CONCERNING THE HOLDERS 61
SECTION 7.01. Acts of Holders. 61
SECTION 7.02. Proof of Execution by Holders. 63
SECTION 7.03. Securities Owned by Company Deemed Not
Outstanding. 64
SECTION 7.04. Revocation of Consents; Future Holders
Bound. 64
ARTICLE VIII HOLDERS' MEETINGS 65
SECTION 8.01. Purposes of Meetings 65
SECTION 8.02. Call of Meetings by Trustee. 65
SECTION 8.03. Call of Meetings by Company or Holders. 65
SECTION 8.04. Qualifications for Voting; Quorum; Action. 66
SECTION 8.05. Regulations. 67
SECTION 8.06. Voting. 67
ARTICLE IX SUPPLEMENTAL INDENTURES 68
SECTION 9.01. Supplemental Indentures Without Consent of
Holders. 68
SECTION 9.02. Supplemental Indentures With Consent of
Holders. 70
SECTION 9.03. Compliance with Trust Indenture Act; Effect
of Supplemental Indentures. 71
SECTION 9.04. Notation on Securities. 72
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee. 72
ARTICLE X CONSOLIDATION, CONVERSION, MERGER,
SALE, CONVEYANCE AND LEASE 72
SECTION 10.01. Company and Guarantor May Consolidate,
etc., on Certain Terms. 72
SECTION 10.02. Successor Corporation Substituted. 74
ARTICLE XI SATISFACTION AND DISCHARGE 74
SECTION 11.01. Satisfaction and Discharge of Indenture 74
SECTION 11.02. Application of Trust Money 76
SECTION 11.03. Satisfaction, Discharge and Defeasance of
Securities of any Series 76
ARTICLE XII IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND
DIRECTORS 78
SECTION 12.01. Indenture and Securities Solely Corporate
Obligations. 78
ARTICLE XIII REDEMPTION OF SECURITIES 78
SECTION 13.01. Applicability of Article. 78
SECTION 13.02. Optional Tax Redemption. 78
SECTION 13.03. Notice of Redemption; Selection of
Securities. 79
SECTION 13.04. Securities Payable on Redemption Date. 80
SECTION 13.05. Securities Redeemed in Part. 80
ARTICLE XIV SUBORDINATION OF SECURITIES 81
SECTION 14.01. Agreement to Subordinate. 81
SECTION 14.02. Default on Senior Debt. 81
SECTION 14.03. Liquidation; Dissolution; Bankruptcy. 82
SECTION 14.04. Subrogation. 83
SECTION 14.05. Trustee to Effectuate Subordination. 84
SECTION 14.06. Notice by the Company. 84
SECTION 14.07. Rights of the Trustee; Holders of Senior
Debt. 85
SECTION 14.08. Subordination May Not Be Impaired. 86
ARTICLE XV GUARANTEE OF SECURITIES 86
SECTION 15.01. Applicability of Article; Unconditional
Guarantee. 86
SECTION 15.02. Waiver of Notice and Demand. 87
SECTION 15.03. Guarantor Obligations Not Affected. 87
SECTION 15.04. Execution of Guarantee. 88
SECTION 15.05. Subrogation. 89
SECTION 15.06. Independent Obligations. 89
SECTION 15.07. Subordination. 89
ARTICLE XVI SINKING FUNDS 89
SECTION 16.01. Applicability of Article. 89
SECTION 16.02. Satisfaction of Sinking Fund Payments with
Securities. 90
SECTION 16.03. Redemption of Securities for Sinking Fund. 90
ARTICLE XVII MISCELLANEOUS PROVISIONS 91
SECTION 17.01. Consent to Jurisdiction; Appointment of
Agent to Accept Service of Process 91
SECTION 17.02. Successors. 93
SECTION 17.03. Official Acts by Successor Corporation. 93
SECTION 17.04. Execution in Counterparts. 93
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as
of June 1, 1998 between Yorkshire Power Finance Limited,
Yorkshire Power Group Limited, The Bank of New York, Trustee,
and Banque Generale du Luxembourg S.A., paying agent and transfer
agent:
ACT SECTION INDENTURE SECTION
310(a)(1) 6.09
(a)(2) 6.09
310(a)(3) N/A
(a)(4) N/A
310(a)(5) 6.10, 6.11
310(b) 6.08
311(a) and (b) 6.13, 4.04
312(a) 4.01
312(b) and (c) 4.02
313(a) 4.04
313(b)(1) N/A
313(b)(2) 4.04
313(c) 4.04
313(d) 4.04
314(a) 4.03
314(b) N/A
314(c)(1) and (2) 1.02
314(c)(3) N/A
314(d) N/A
314(e) 1.02
314(f) N/A
315(a)(c) and (d) 6.01
315(b) 6.02
315(e) 5.07
316(a)(1) 5.02, 5.06
316(a)(2) N/A
316(b) 5.04
317(a) 5.02, 5.03
317(b) 6.05
318(a) 1.07
___________________________________
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS
EXECUTED
THIS SUBORDINATED DEBENTURE
INDENTURE, dated as of June 1, 1998, among Yorkshire Power
Finance Limited, a private company with limited liability
incorporated under the laws of the Cayman Islands (the "Company"),
having its registered office at P.O. Box 309, Georgetown, Grand
Cayman, Cayman Islands, British West Indies, as issuer, Yorkshire
Power Group Limited, a private company with limited liability
incorporated under the laws of England and Wales, having its
principal office at Wetherby Road, Scarcroft, Leeds, England, as
guarantor ("Yorkshire Group" or the "Guarantor"), The Bank of
New York, a New York banking corporation, as trustee, principal
paying agent, registrar and transfer agent (the "Trustee"), and
Banque Generale du Luxembourg S.A., as paying agent and
transfer agent.
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the
execution and delivery of this Indenture to provide for the issuance
from time to time of its unsecured subordinated debentures, notes or
other evidences of indebtedness (herein called the "Securities") in an
unlimited aggregate principal amount to be issued in one or more
series as provided in this Indenture; and
WHEREAS, the Guarantor has duly authorized the
execution and delivery of this Indenture to provide for the Guarantee
(as defined herein) as herein provided; and
WHEREAS, all things necessary to make this
Indenture a valid agreement of the Company and the Guarantor, in
accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
For all purposes of this Indenture, all indentures
supplemental hereto and any document or instrument delivered
pursuant to the provisions hereof, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article shall have the
respective meanings specified in this Article.
(2) All other terms used in this Indenture which
are defined in the Trust Indenture Act (as defined herein), or which
are by reference therein defined in the Securities Act (as defined
herein), shall (except as herein otherwise expressly provided or unless
the context otherwise requires) have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in
force at the date of this Indenture as originally executed.
(3) All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles in the
United States and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted in the
United States at the time of any computation.
(4) The words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.
Headings are used for convenience of reference only and do not
affect interpretation. The singular includes the plural and vice versa.
"Additional Amounts" shall have the meaning set forth
in Section 3.12.
"Additional Interest" means such additional amounts
as may be required so that the net amounts received and retained by
the Holder after paying taxes, duties, assessments or governmental
charges of whatever nature imposed by a Taxing Jurisdiction or any
other taxing authority will not be less than the amounts the Holder
would have received had no such taxes, duties, assessments or
governmental charges been imposed.
"Administrative Trustees" when used with respect to
the Trust Securities related to a particular series of Securities means
the Persons designated as such in the Trust Agreement of the related
Business Trust.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For
the purposes of this definition, "control", when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall mean any agent or agents
of the Trustee which at the time shall be appointed and acting
pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or
any similar federal or state law for the relief of debtors.
"Bearer Security" means any Security that is payable
to bearer.
"Board of Directors" shall mean the Board of
Directors of the Company or any duly authorized committee of the
officers and/or directors of the Company appointed by that board.
"Board Resolution" shall mean a copy of a resolution
certified by a Director of the Company to have been duly adopted by
its Board of Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Book-Entry Depositary" means, with respect to the
Securities of any series issuable or issued in whole or in part in the
form of one or more Global Securities, the Person designated as
Book-Entry Depositary (or a nominee thereof) by the Company
pursuant to Section 2.05 and, if so provided pursuant to Section 2.05
with respect to the Securities of a series, any successor to such
Person. If at any time there is more than one such Person, "Book-
Entry Depositary" shall mean, with respect to any series of Securities,
the qualifying entity which has been appointed with respect to the
Securities of that series.
"Book-Entry Interests" means certificateless
depositary interests (representing in the aggregate a 100% beneficial
interest in a Global Bearer Security) to be issued by the Book-Entry
Depositary to a Business Trust or DTC.
"Business Day" shall mean, with respect to the Place
of Payment with respect to any series of Securities, any day other
than a Saturday, a Sunday or a day on which banking institutions in
any Place of Payment are authorized or required by law or executive
order to close or on which the Corporate Trust Office is closed for
business.
"Business Trust" means any Delaware statutory
business trust formed by the Company, the Guarantor or an Affiliate
thereof to issue its Trust Securities, the proceeds of which will be
used to purchase Securities of one or more series.
"Commission" shall mean the United States Securities
and Exchange Commission, as from time to time constituted, created
under the Exchange Act, or if at any time after the execution of this
Indenture such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" shall mean Yorkshire Power Finance
Limited, a limited liability company incorporated under the laws of
the Cayman Islands, and, subject to the provisions of Article X, shall
include its successors and assigns.
"Company Request" or "Company Order" shall mean
a written request or order signed in the name of the Company by any
Director and by any other Director or the Treasurer, the Secretary or
an Assistant Secretary or Assistant Treasurer of the Company or any
other officer so authorized, and delivered to the Trustee.
"Control Certificate" means a certificate evidencing
certain administrative and appointment powers with respect to a
Business Trust.
"corporation" includes corporations, associations,
companies, partnerships and business trusts.
"Corporate Trust Office" means the principal office of
the Trustee in The City of New York, at which at any particular time
in its corporate trust business shall be administered, which at the date
hereof is 101 Barclay Street, New York, New York 10286.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Default" shall mean any event, act or condition that
with notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulted Interest" shall have the meaning set forth
in Section 2.12.
"Delaware Trustee" when used with respect to the
Trust Securities related to a particular series of Securities means the
Person designated as such in the Trust Agreement of the related
Business Trust.
"Deposit Agreement" means any deposit agreement
among the Company, a Book-Entry Depositary and the holders and
beneficial owners from time to time of interests in Book-Entry
Interests.
"Director" means any member of the Board of
Directors of the Company or the Guarantor, as applicable, at the time
of determination.
"Dollar" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as of the time shall be
legal tender for the payment of public and private debt in the United
States.
"DTC" shall mean The Depository Trust Company (or
a nominee thereof) or its successors.
"Event of Default" shall mean any event specified in
Section 5.01.
"Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended.
"Global Bearer Security" means a Bearer Security,
evidencing all or part of a series of Securities, issued to the Book-
Entry Depositary for such series.
"Global Registered Security" means a Registered
Security, evidencing all or part of a series of Securities, issued to the
Book-Entry Depositary for such series.
"Global Security" means a Global Registered Security
or a Global Bearer Security.
"Government Obligations" shall mean securities that
are (i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case under clause (i) or
(ii) are not callable or redeemable at the option of the issuer thereof,
and shall also include a certificate, depository receipt or other
instrument which evidences a direct ownership interest in such
obligations with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government
Obligation held by such custodian for the account of the holder of a
certificate, depository receipt or other instrument, provided that
(except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such
instrument from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such
instrument.
"Gross-Up Taxes" shall have the meaning set forth in
Section 3.12.
"Guarantee" means the guarantee set forth in Article
XV by the Guarantor of any Security of any series authenticated and
delivered pursuant to this Indenture either (i) if specified, as
contemplated by Section 15.01, to be applicable to Securities of such
series and not endorsed on such securities pursuant to Article XV
hereof, or (ii) in all other cases, endorsed on such Securities.
"Guarantor" shall mean Yorkshire Power Group
Limited, a limited liability company incorporated under the laws of
England and Wales, and, subject to the provisions of Article X, shall
include its successors and assigns.
"Holder", "holder of Securities", or other similar
terms, means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in
the case of a Global Bearer Security, the Book-Entry Depositary
therefor.
"Indenture" shall mean this instrument as originally
executed or, as it may from time to time be supplemented or amended
by a Board Resolution and an Officers' Certificate issued pursuant
thereto or by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the
terms of a particular series of Securities established as contemplated
by Section 2.05.
"Intercompany Notes" means promissory notes issued,
from time to time, by the Guarantor or certain of its Affiliates which
the Company purchases with the proceeds from the issuance of a
particular series of Securities.
"Interest Payment Date", when used with respect to
any Security, means the Stated Maturity of an installment of interest
on such Security.
"Investment Company Act" means the United States
Investment Company Act of 1940, as amended.
"Investment Company Act Event" shall mean that the
Guarantor or the Company shall have received an opinion of
independent counsel (which may be counsel to the Guarantor or its
affiliates) experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (an
"Investment Company Act Change"), there is more than an
insubstantial risk that the Guarantor or the Company is or will be
considered an "investment company" that is required to be registered
under the Investment Company Act which Investment Company Act
Change becomes effective on or after the date of the prospectus for
Trust Securities related to a particular series of Securities.
"Maturity" means, when used with respect to any
Security, the date on which the principal of such Security or an
installment of principal becomes due and payable as therein or herein
provided, whether at Stated Maturity or by the declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" shall have the meaning set forth in
Section 5.01(c).
"Officers" shall mean any Director or the Treasurer,
the Secretary or an Assistant Secretary or an Assistant Treasurer of
the Company or the Guarantor, as applicable, or any other officer or
signatory of the Company or the Guarantor, as applicable, so
authorized.
"Officers' Certificate" shall mean a certificate of the
Company or the Guarantor, as applicable, signed by two Officers and
delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of
counsel, who may be counsel for the Company or the Guarantor.
"Outstanding", when used with respect to Securities
of any series, shall, subject to the provisions of Section 7.03, mean, as
of any particular time, all Securities of such series authenticated and
delivered by the Trustee or an Authenticating Agent under this
Indenture, except
(a) Securities theretofore cancelled by the Trustee
or an Authenticating Agent or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary
amount shall have been deposited in trust with
the Trustee or with any Paying Agent (other
than the Company) or shall have been set aside
and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if
such Securities, or portions thereof, are to be
redeemed prior to maturity thereof, notice of
such redemption shall have been given as in
Article XIII provided or provision satisfactory to
the Trustee shall have been made for giving such
notice; and
(c) Securities in lieu of or in substitution for which
other Securities shall have been authenticated
and delivered pursuant to the terms of Section
2.10 unless proof satisfactory to the Company
and the Trustee is presented that any such
Securities are held by bona fide holders in due
course.
"Paying Agent" means Banque Generale du
Luxembourg S.A. and any other Person, authorized by the Company
to pay the principal of and premium, if any, or interest, if any, on any
Securities on behalf of the Company, including, without limitation,
the Principal Paying Agent.
"Person" shall mean a legal person, including any
individual, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places, specified as
contemplated by Section 2.05, at which, subject to Section 3.02,
principal of and premium, if any, and interest, if any, on the Securities
of such series are payable.
"Predecessor Security" of any particular Security shall
mean every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, for the
purposes of this definition, any Security authenticated and delivered
under Section 2.11 in lieu of a lost, destroyed or stolen Security shall
be deemed to evidence the same debt as the lost, destroyed or stolen
Security.
"Principal Paying Agent" means The Bank of New
York until a successor Principal Paying Agent shall have become such
pursuant to the applicable provisions of this Indenture and, thereafter,
"Principal Paying Agent" shall mean such successor Principal Paying
Agent.
"Property Trustee" when used with respect to the
Trust Securities related to a particular series of Securities means the
Person designated as such in the Trust Agreement of the related
Business Trust.
"Redemption Price" means, when used with respect to
any Security to be redeemed, the price at which it is to be redeemed
pursuant to this Indenture.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such redemption by
or pursuant to this Indenture.
"Registered Security", means any Security that is
payable to a registered owner or registered assigns thereof as
registered in the Security Register.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 2.05.
"Relevant Date" means whichever is the later of (i) the
date on which payment first becomes due and (ii) if the full amount
payable has not been received in The City of New York by the Book-
Entry Depositary or the Trustee on or prior to such due date, the date
on which, the full amount having been so received, notice to that
effect shall have been given to the holders in accordance with this
Indenture.
"Responsible Officer", when used with respect to the
Trustee, shall mean any officer of the Trustee including any vice-
president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer or any other officer
within the Corporate Trust Office of the Trustee customarily
performing functions similar to those performed by any of the above-
designated officers and also means, with respect to a particular
matter, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Security Register" and "Security Registrar" shall
have the respective meanings set forth in Section 2.10.
"Senior Debt" shall mean with respect to any Person:
(i) any payment due in respect of indebtedness of such Person,
whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed, (a) in respect of money
borrowed (including any financial derivative, hedging or futures
contract or similar instrument) and (b) evidenced by securities, bonds,
debentures, notes or other similar instruments issued by such person
that, by their terms, are senior or senior subordinated debt securities,
(ii) all capital lease obligations of such Person, (iii) all obligations
issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations of such Person under
any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business and long-term purchase
obligations), (iv) all obligations of such Person for the reimbursement
of any letter of credit, banker's acceptance, security purchase facility
or similar credit transaction, (v) all obligations of the type referred to
in clauses (i) through (iv) above of other Persons the payment of
which such Person is responsible or liable as obligor, guarantor or
otherwise, and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other Persons secured by any lien on any
property or asset of such Person (whether or not such obligation is
assumed by such Person); provided, however, that Senior Debt shall
not include (1) in the case of the Company, the Securities or any such
indebtedness that is by its terms subordinated to or pari passu with
(A) the Securities or (B) any other such indebtedness that is
subordinated to or pari passu with the Securities and (2) any
unsecured indebtedness between or among such person or its
Affiliates. Such Senior Debt shall continue to be Senior Debt and be
entitled to the benefits of the subordination provisions contained in
this Indenture irrespective of any amendment, modification or waiver
of any term of such Senior Debt.
"Special Event" means the occurrence of a Tax Event
or an Investment Company Act Event.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to
Section 2.12.
"Stated Maturity", when used with respect to any
obligation or any installment of principal thereof or interest thereon,
means the date, if any, on which the principal of such obligation or
such installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, declaration of acceleration, purchase or extension);
provided that, with regard to any installment of interest, Stated
Maturity shall not include any date as to which the Company shall
have elected to extend the interest payment period in accordance with
Section 2.05.
"Subsidiary" means a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly,
by the Guarantor, an affiliate thereof or by one or more other
Subsidiaries. For the purposes of this definition, "voting stock"
means shares, interests, participations or other equivalents in the
equity interest (however designated) in such corporation having
ordinary voting power for the election of a majority of the directors
(or the equivalent) of such corporation, other than shares, interests,
participations or other equivalents having such power only by reason
of the occurrence of a contingency.
"Tax Event" means the receipt by the Guarantor or
the Company of an opinion of independent counsel (which may be
counsel to the Guarantor or its affiliates) experienced in such matters
to the effect that there has been (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of any supranational federation to which the
United Kingdom belongs or the jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the
Company or the Guarantor is incorporated or created, as applicable,
or in which the Company or the Guarantor is managed and controlled
or has a place of business (each, a "Taxing Jurisdiction"), (b) any
official administrative pronouncement or judicial decision
interpreting, clarifying or applying such laws or regulations or (c) a
threatened challenge asserted by a government or taxing authority
with respect to the Guarantor or any of its subsidiaries, or a
threatened challenge asserted in writing by a government or taxing
authority against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to any
particular series of Securities or Trust Securities, which amendment
or change is effective or which pronouncement clarification, challenge
or decision is announced on or after the date of the prospectus for
such Trust Securities, and that results in their being more than an
insubstantial risk that (i) the Company is, or will be within 90 days of
the date thereof, subject to income tax within a Taxing Jurisdiction
(other than the United Kingdom corporation income tax) with respect
to interest received or accrued on the Intercompany Notes, (ii) the
Company is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other tax, duties or other
governmental charges, (iii) interest payable by the Company on such
series of Securities is not, or within 90 days of the date thereof will
not be, deductible, in whole or in part for (as appropriate) United
States Federal or United Kingdom corporation income tax purposes,
as such interest accrues by the Company or by a member of any tax
group to which the Guarantor belongs or (iv) interest payable with
respect to the Intercompany Notes by the Guarantor or its affiliates is
not, or within 90 days of the date thereof, will not be, deductible, in
whole or in part, for (as appropriate) United States Federal or United
Kingdom corporation income tax purposes, as it accrues by one of
(as appropriate) the Guarantor, its shareholders or a member of any
tax group to which the Guarantor belongs.
"Tax Payments" means any direct or indirect payment
by the Guarantor to governmental authorities in respect of United
Kingdom, United States or Cayman Islands taxes arising from the
operations of the Guarantor, the Company, a Business Trust or
Yorkshire Electricity Group plc as and when such taxes become due
and payable.
"Trustee" shall mean the Person identified as
"Trustee" in the first paragraph hereof, and, subject to the provisions
of Article VI hereof, shall also include its successors and assigns as
Trustee hereunder.
"Trust Agreement" when used with respect to a
Business Trust shall mean the agreement or instrument, as it may be
amended, that governs the affairs of such Business Trust.
"Trust Indenture Act" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture
except as provided in Section 9.03; provided, however, that, in the
event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" shall mean, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Securities" shall mean the securities issued by a
Business Trust evidencing undivided beneficial interests in the assets
of the Business Trust. Trust Securities related to a particular series of
Securities means Trust Securities the proceeds of the sale of which
were loaned to the Company in exchange for such series of
Securities.
"Trust Securities Guarantee" shall mean any guarantee
agreement executed and delivered by the Guarantor for the benefit of
the holders from time to time of all or a portion of Trust Securities
related to a particular series of Securities pursuant to which the
Guarantor has guaranteed, to the extent stated therein, the payment
of distributions and certain other amounts with respect to such Trust
Securities.
"United Kingdom" means the United Kingdom of
Great Britain and Northern Ireland, its territories, its possessions and
other areas subject to its jurisdiction.
"United States" means the United States of America
(including the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
SECTION 1.02. Compliance Certificates and
Opinions.
Except as otherwise expressly provided by this
Indenture, upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that each individual signing
such certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion
are based;
(3) a statement that, in the opinion of each
such individual, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the
opinion of each such individual, such condition or covenant
has been complied with.
SECTION 1.03. Form of Documents Delivered to
Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer or Director
may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer or
Director knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous.
Any such certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers or Director or Directors
stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
SECTION 1.04. Notices, Etc., to Trustee and
Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to,
or filed with,
(1) the Trustee by any Holder or by the
Company or the Guarantor shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its corporate trust office, or
(2) the Company by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at
the address of its registered office, with a copy addressed to
the Guarantor at the address of its registered office, each as
specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by
the Company.
SECTION 1.05. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, (i) in the case of a
Holder of Registered Securities, at his address as it appears in the
Security Register, and (ii) in the case of a Holder of Global Bearer
Securities, at the address provided in or pursuant to the relevant
Deposit Agreement of the relevant Book-Entry Depositary, not later
than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
If Securities of any series are listed on the
Luxembourg Stock Exchange and the rules of such Stock Exchange
so require, notice to Holders of such Securities shall be published in a
leading newspaper having general circulation in Luxembourg in
addition to notifying the Book-Entry Depositary.
If, by reason of the suspension of regular mail service
or by reason of any other cause, it shall be impracticable to give such
notice by mail, then such notification as shall be made at the direction
of the Company in a manner reasonably calculated, to the extent
practicable under the circumstances, to provide prompt notice shall
constitute a sufficient notification for every purpose hereunder.
Except as otherwise expressly provided herein or
otherwise specified with respect to any Securities pursuant to Section
2.05, where this Indenture provides for notice to Holders of Bearer
Securities of any event and the rules of any securities exchange on
which such Bearer Securities are listed so require, such notice shall be
sufficiently given to Holders of such Bearer Securities if published in
such newspaper or newspapers as may be specified in such Securities
on a Business Day at least twice, the first such publication to be not
earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice. Any such notice by
publication shall be deemed to have been given on the date of the first
such publication. In addition, notice to the Holder of any Global
Bearer Security shall be given by mail in the manner provided above.
If by reason of any cause it shall be impracticable to
publish any notice to Holders of Bearer Securities as provided above,
then such notification to Holders of Bearer Securities as shall be
given with the approval of the Trustee shall constitute sufficient
notice to such Holders for every purpose hereunder. Neither the
failure to give notice by publication to Holders of Bearer Securities as
provided above, nor any defect in any notice so published, shall affect
the sufficiency of such notice with respect to other Holders of Bearer
Securities or the sufficiency of any notice to Holders of Registered
Securities given as provided herein.
Any request, demand, authorization, direction, notice,
consent, waiver or Act required or permitted under this Indenture
shall be in the English language, except that any published notice may
be in an official language of the country of publication.
Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled
to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance
upon such waiver.
SECTION 1.06. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with any provision of the Trust Indenture Act or another provision
which is required or deemed to be included in this Indenture by any of
the provisions of the Trust Indenture Act, the provision or
requirement of the Trust Indenture Act shall control. If any provision
of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, such provision of
the Trust Indenture Act shall be deemed to apply to this Indenture as
so modified or excluded, as the case may be.
SECTION 1.07. Effect of Headings and Table of
Contents.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company or the Guarantor shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Indenture, in the
Securities or in any Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby, to the extent permitted by relevant law.
SECTION 1.10. Benefits of Indenture.
Nothing in this Indenture, in the Securities or in any
Guarantee, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 1.11. Governing Law.
This Indenture, the Securities and any Guarantee shall
be governed by and construed in accordance with the laws of the
State of New York.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of
principal, premium, if any, or interest, if any, need not be made at
such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment, except that, if
such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, and no
interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally.
The Securities of each series shall be in substantially
the form appended to the supplemental indenture establishing such
series, or in such other form as shall be established by or pursuant to
a Board Resolution (or Officers' Certificate delivered pursuant
thereto) or in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, a Board Resolution or one or more indentures
supplemental hereto, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the
Director or Directors executing such Securities, as evidenced by the
Director's or Directors' execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a
Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized Director or officer of the Company
and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 2.07 for the authentication
and delivery of such Securities.
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 2.02 or 2.03 or in a Board
Resolution (or Officers' Certificate delivered pursuant thereto) or an
indenture supplemental hereto.
If Article XV and the other provisions of the
Indenture relating to the Guarantee of the Securities of any series are
applicable to such series, the Guarantor's Guarantee shall be in
substantially the form set forth in Section 2.04 or in a Board
Resolution (or Officers' Certificate delivered pursuant thereto) or an
indenture supplemental hereto.
The definitive Securities shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the Director or Directors
executing such Securities, as evidenced by the Director's or
Directors' execution of such Securities.
SECTION 2.02. Form of Trustee's Certificate of
Authentication.
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
Dated:
______________________ as Trustee
By:
Authorized
Signatory
SECTION 2.03. Form of Trustee's Certificate of
Authentication by an Authenticating Agent.
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Trustee's
Certificate of Authentication by such Authenticating Agent to be
borne by the Securities of each such series shall be substantially as
follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
Dated: ______________________ as
Trustee
By: [NAME OF
AUTHENTICATING AGENT]
Authenticating Agent
By:
Authorized Signatory
SECTION 2.04. Form of Guarantee.
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a private company with limited liability
incorporated and existing under the laws of England and Wales (the
"Guarantor", which term includes any successor Person under the
Indenture referred to in the Security on which this notation is
endorsed), hereby fully and unconditionally guarantees to the Holder
of the accompanying Security issued by Yorkshire Power Finance
Limited (the "Company"), pursuant to the terms of the Guarantee
contained in Article XV of the Indenture, the due and punctual
payment of the principal of and premium, if any, and interest, if any,
on this Security (and any Additional Amounts or Additional Interest
payable in respect thereof), when and as the same shall become due
and payable, whether at Stated Maturity, by declaration of
acceleration, call for redemption or otherwise, in accordance with the
terms of this Security and the Indenture. In case of the failure of the
Company punctually to pay any such principal, premium, if any, or
interest, if any, the Guarantor hereby agrees to cause any such
payment to be made punctually when and as the same shall become
due and payable as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Article XV of the Indenture, and
reference is hereby made to such Article and Indenture for the precise
terms of the Guarantee.
THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon
which this notation of the Guarantee is endorsed shall have been
executed by the Trustee under the Indenture by the manual signature
of one of its authorized officers.
YORKSHIRE POWER
GROUP LIMITED
By:
Authorized
Signatory
SECTION 2.05. Amount Unlimited; Issuable in
Series.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series.
Prior to the authentication, issuance and delivery of Securities of any
series there may be established by specification in a supplemental
indenture or in a Board Resolution, or in an Officers' Certificate
pursuant to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from Securities
of all other series);
(b) any limit upon the aggregate principal amount
of the Securities of such series which may be authenticated
and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of such series
pursuant to Section 2.09, 2.10, 2.11, 9.04 or 13.05 and
except for any Securities which, pursuant to Section 2.07, are
deemed never to have been authenticated and delivered
hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series
shall be payable on any Interest Payment Date, if other than
the bearer (in the case of a Bearer Security) or the Persons in
whose names such Securities (or one or more Predecessor
Securities) are registered at the close of business on the
Regular Record Date for such interest (in the case of a
Registered Security);
(d) the date or dates, if any, on which the principal
of the Securities of such series is payable or any formulary or
other method or other means by which such date or dates
shall be determined, by reference to an index or other fact or
event ascertainable outside this Indenture or otherwise
(without regard to any provisions for redemption,
prepayment, declaration of acceleration, purchase or
extension);
(e) the rate or rates at which the Securities of such
series shall bear interest, if any (including the rate or rates at
which overdue principal shall bear interest, if different from
the rate or rates at which such Securities shall bear interest
prior to the Stated Maturity, if any, and, if applicable, the rate
or rates at which overdue premium or interest shall bear
interest, if any), or any formulary or other method or other
means by which such rate or rates shall be determined, by
reference to an index or other fact or event ascertainable
outside this Indenture or otherwise; the date or dates from
which such interest shall accrue; the Interest Payment Dates
on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on such
Securities on any Interest Payment Date; the right of the
Company, if any, to extend the interest payment periods and
the duration of any such extension or to defer the payment of
interest as contemplated by Section 2.17; the obligation of the
Company to pay Additional Interest as contemplated by
Section 3.10; and the right, if any, to extend or advance the
Stated Maturity of the Securities and the conditions to such
extension or advancement;
(f) the place or places at which or methods by
which (1) the principal of and premium, if any, and interest, if
any, on Securities of such series shall be payable, if any, in
addition to or in place of the Corporate Trust Office, (2)
registration of transfer of Securities of such series may be
effected (in the case of Registered Securities), (3) exchanges
of Securities of such series may be effected and (4) notices
and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served; the
Security Registrar and Paying Agent or Agents for such
series; and if such is the case, and if acceptable to the Trustee,
that the principal of such Securities shall be payable without
presentment or surrender thereof;
(g) the period or periods within which, or the date
or dates on which, the price or prices at which and the terms
and conditions upon which the Securities of such series may
be redeemed, in whole or in part, at the option of the
Company and any restrictions on such redemptions, including
but not limited to a restriction on a partial redemption by the
Company of the Securities of any series, resulting in delisting
of such Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series
pursuant to any sinking fund or other analogous mandatory
redemption provisions or at the option of a Holder thereof
and the period or periods within which or the date or dates on
which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(i) the denominations in which Securities of such
series shall be issuable if other than denominations of $25 and
any integral multiple thereof;
(j) the currency or currencies, including
composite currencies, in which payment of the principal of
and premium, if any, and interest, if any, on the Securities of
such series shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or
interest, if any, on the Securities of such series are to be
payable, at the election of the Company or a Holder thereof,
in a coin or currency other than that in which the Securities
are stated to be payable, the period or periods within which
and the terms and conditions upon which, such election may
be made;
(l) if the principal of or premium, if any, or
interest, if any, on the Securities of such series are to be
payable, or are to be payable at the election of the Company
or a Holder thereof, in securities or other property, the type
and amount of such securities or other property, or the
formulary or other method or other means by which such
amount shall be determined, and the period or periods within
which, and the terms and conditions upon which, any such
election may be made;
(m) any restriction or condition on the
transferability of a series of Securities;
(n) if the amount payable in respect of principal of
or premium, if any, or interest, if any, on the Securities of
such series may be determined with reference to an index or
other fact or event ascertainable outside this Indenture, the
manner in which such amounts shall be determined to the
extent not established pursuant to clause (e) of this paragraph;
(o) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series
which shall be payable upon declaration of immediate
payability pursuant to Section 5.01;
(p) any Events of Default, in addition to those
specified in Section 5.01 with respect to the Securities of such
series, and any covenants of the Company or Guarantor for
the benefit of the Holders of the Securities of such series in
addition to those set forth in Article III;
(q) the terms, if any, pursuant to which the
Securities of such series may be converted into or exchanged
for shares of capital stock or other securities of the Company
or any other Person;
(r) the obligations or instruments, if any, which
shall be considered to be Government Obligations in respect
of the Securities of such series denominated in a currency
other than Dollars or in a composite currency, and any
additional or alternative provisions for the reinstatement of
the Company's indebtedness in respect of such Securities after
the satisfaction and discharge thereof as provided in Section
11.01;
(s) if the Securities of such series are to be issued
in whole or in part in the form of one of more Global
Securities, (i) whether beneficial owners of interests in any
such Global Security or Securities may exchange such
interests for definitive Registered Securities, of such series of
like tenor and of authorized form and denomination and the
circumstances under which any such exchanges may occur, if
other than in the manner provided in Section 2.10 and (ii) the
Book-Entry Depositary for such Global Security or
Securities;
(t) if the Securities of such series are to be
issuable as definitive Bearer Securities, any and all matters
incidental thereto which are not specifically addressed in a
supplemental indenture as contemplated by clause (h) of
Section 9.01;
(u) to the extent not established pursuant to clause
(s) of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series to transfer or
exchange such Securities or to obtain the registration of
transfer thereof; and if a service charge will be made for the
registration of transfer or exchange of Securities of such
series, the amount or terms thereof;
(v) any exceptions to Section 1.01, or variation in
the definition of Business Day, with respect to the Securities
of such series;
(w) if applicable to such series, the designation of
the Business Trust to which Securities of such series are to be
initially issued;
(x) if Article XV and the other provisions of this
Indenture relating to the Guarantee of the Securities are
applicable to such series; and
(y) any other terms of the Securities of such series
not inconsistent with the provisions of this Indenture.
The Securities of each series shall be subordinated in
right of payment to Senior Debt of the Company as provided in
Article XIV and if Article XV and the other provisions of the
Indenture relating to the Guarantee of the Securities of any series are
applicable to such series, such Guarantee shall be subordinated in
right of payment to Senior Debt of the Guarantor as provided in
Section 15.07.
SECTION 2.06. Denominations.
The Securities of each series shall be issuable in bearer
form or in registered form without coupons, except as otherwise
expressly provided in a supplemental indenture hereto, in such
denominations as shall be specified as contemplated by Section 2.05.
In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in
denominations of $25 and any integral multiple thereof.
SECTION 2.07. Execution, Authentication,
Delivery and Dating.
The Securities shall be executed on behalf of the
Company by any Director, the Secretary or any other signatory of the
Company so authorized and need not be attested. Definitive
Registered Securities of any series may have the Company's seal
reproduced thereon which need not be attested. The Securities of
any series shall be executed by such additional Director or authorized
signatory, if any, as shall be specified pursuant to Section 2.05. The
signature of any of these authorized signatories on the Securities may
be manual or facsimile.
Securities bearing the manual or facsimile signature of
any individual who was at any time the proper Director or authorized
signatory of the Company shall bind the Company, notwithstanding
that such individual has ceased to hold such office prior to the
authentication and delivery of such Securities or did not hold such
office at the date of authentication of such Securities.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with
such Company Order shall manually authenticate and deliver such
Securities. If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.01 and 2.05, in authenticating such
Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been
established by or pursuant to Board Resolution as permitted
by Section 2.01, that such form has been established in
conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been
established by or pursuant to Board Resolution as permitted
by Section 2.05, that such terms have been established in
conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such
Opinion of Counsel, together with, if applicable to such
Securities, the Guarantee, will constitute valid and legally
binding obligations of the Company and the Guarantor, as the
case may be, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting the
enforcement of creditors' rights and to general principles of
equity.
Notwithstanding the provisions of Section 2.05 and of
the preceding paragraph, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver the
Officers' Certificate otherwise required pursuant to Section 2.05 or
the Company Order and Opinion of Counsel otherwise required
pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are
delivered at or prior to the time of authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee or an
Authenticating Agent by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.14 together with a written statement (which
need not be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
SECTION 2.08. Transfer Agent and Paying Agent.
For so long as the Securities are listed on the
Luxembourg Stock Exchange and such Stock Exchange shall so
require, the Company shall maintain a Paying Agent and Transfer
Agent in Luxembourg.
The Company shall enter into an appropriate agency
agreement with any Registrar, Transfer Agent or Paying Agent not a
party to this Indenture, which shall implement the provisions of this
Indenture that relate to such Person. The Company shall notify the
Trustee of the name and address of any such Person. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation therefor
pursuant to Section 6.06. The Company initially appoints the Trustee
as Registrar, Transfer Agent and Principal Paying Agent in The City
of New York and Banque Generale du Luxembourg S.A. as Paying
Agent and Transfer Agent in Luxembourg in connection with the
Securities.
Banque Generale du Luxembourg S.A. shall be
responsible for only those duties that are described in the provisions
of this Indenture that relate to the Paying Agent and Transfer Agent.
No implied duties or obligations shall be read into this Indenture
against Banque Generale du Luxembourg S.A. It is understood and
agreed that the actions taken by Banque Generale du Luxembourg
S.A. as Paying Agent and Transfer Agent shall be limited to actions
including definitive Registered Securities.
SECTION 2.09. Temporary Securities.
Pending the preparation of a permanent Global
Security or definitive Securities of any series, the Company may
execute, and upon receipt of a Company Order the Trustee or the
Authenticating Agent shall authenticate, and deliver, temporary
Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in
lieu of which they are issued, in registered form or, if authorized, in
bearer form, and with such appropriate insertions, omissions,
substitutions and other variations as the officer or officers executing
such Securities may determine, as evidenced by their execution of
such Securities.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall
be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment for that series, without
charge to the Holder except as provided in Section 2.10 in connection
with a transfer and except that a Person receiving definitive Bearer
Securities shall bear the cost of insurance, postage, transportation and
the like. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the
Trustee or the Authenticating Agent shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of
the same series and of like tenor of authorized denominations.
Upon any exchange of a portion of a temporary
Global Security for a definitive Global Security for the individual
Securities represented thereby pursuant to this Section 2.09 or
Section 2.10, the temporary Global Security shall be endorsed by the
Trustee to reflect the reduction of the principal amount of such
temporary Global Security, and such principal amount shall be
reduced for all purposes by the amount so exchanged and endorsed.
SECTION 2.10. Registration, Registration of
Transfer and Exchange.
The Company shall cause to be kept at the corporate
trust office a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being
herein sometimes collectively referred to as the "Security Register")
in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein
provided. The Company may have one or more co-registrars and the
term "Security Registrar" includes any co-registrar.
Upon surrender for registration of transfer of any
Registered Security of any series at the office or agency in a Place of
Payment for that series, the Company shall execute, and the Trustee
or the Authenticating Agent shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new
Registered Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, any Registered Security
or Registered Securities of any series, other than a Global Security,
may be exchanged for other Registered Securities of the same series,
of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Registered Securities to be
exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and upon
receipt of a Company Order the Trustee or the Authenticating Agent
shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Bearer Securities
may not be delivered by the Trustee, the Authenticating Agent or the
Security Registrar in exchange for Registered Securities.
All Securities issued upon any registration of transfer
or exchange of Registered Securities shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Registered Securities surrendered
upon such registration of transfer or exchange.
Every Registered Security presented or surrendered
for registration of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
Interests in a Global Security or Securities may be
exchanged for definitive Registered Securities of the same series in
whole or in part only under the circumstances provided in this
Indenture, in an Officers' Certificate (pursuant to a Board
Resolution) or in an indenture supplemental hereto pursuant to which
Securities of that series are issued or in the Securities of that series.
In such event the Company will execute, and the Trustee or the
Authenticating Agent, upon receipt of a Company Order for the
authentication and delivery of definitive Registered Securities of such
series, will authenticate and deliver such definitive Registered
Securities. Any such definitive Registered Securities so issued shall
be registered in the name of such Person or Persons as the
Book-Entry Depositary shall instruct the Trustee and the Security
Registrar in writing. The Trustee or the Security Registrar shall
deliver such definitive Registered Securities to the Persons in whose
names such definitive Registered Securities are so registered. Upon
the exchange (i) in whole of a Global Security or Securities for
definitive Registered Securities in equal aggregate principal amount,
such Global Security or Securities shall be delivered to the Trustee
for cancellation or (ii) in part of a Global Security or Securities for
definitive Registered Securities, then the principal amount of such
Global Security or Securities shall be reduced by an endorsement on
such Global Security or Securities in an amount equal to the
aggregate principal amount of such definitive Registered Securities.
Interests in a Global Security or Securities may not be exchanged for
definitive Bearer Securities. Notwithstanding the foregoing, interests
in a Global Security may not be exchanged for definitive Registered
Securities during the sixteen day period immediately prior to and
including each Interest Payment Date.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than
exchanges pursuant to Sections 2.09, 9.04 or 13.05 not involving any
transfer.
The Company shall not be required (i) to issue,
register the transfer of or exchange Securities of any series during a
period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption under Section 13.03 and ending
at the close of business on the day of such mailing, (ii) to register the
transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of the series
(but only if and under the circumstances for which the Securities of
such series are issuable as Registered Securities), provided that such
Registered Security shall be immediately surrendered for redemption
with written instructions for payment consistent with the provisions
of this Indenture.
The provisions of this Section 2.10 are, with respect
to any Global Security, subject to Section 2.16 hereof.
SECTION 2.11. Mutilated, Destroyed, Lost and
Stolen Securities.
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series and of
like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security and (ii) such Security or indemnity as may be
required by them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request
the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this
Section 2.11, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to
this Section 2.11 in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Securities of that series duly issued hereunder.
The provisions of this Section 2.11 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities.
SECTION 2.12. Payment of Interest; Interest Rights
Reserved.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date
shall be paid (in the case of a Bearer Security) to the bearer thereof
and (in the case of a Registered Security) to the Person in whose
name that Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest.
Payment of interest, if any, in respect of any
Registered Security other than at Stated Maturity will be made by
check mailed to the address of the Person entitled thereto as such
Person's address appearing in the Security Register. Payment of
interest, if any, in respect of any Registered Security may also be
made, in the case of a Holder of at least $1,000,000 aggregate
principal amount of Registered Securities, and payment of interest, if
any, in respect of a Global Registered Security shall be made, by wire
transfer to a Dollar account maintained by the Holder with a bank in
the United States; provided that such Holder elects payment by wire
transfer by giving written notice to the Trustee or a Paying Agent to
such effect designating such account no later than 15 days
immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
Any interest on any Security of any series which is
payable but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall, in
the case of Registered Securities, forthwith cease to be payable to the
Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (1) or
(2) below:
(1) The Company may elect to make
payment of any Defaulted Interest to the Persons in whose
names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close
of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. Unless the Trustee is acting
as the Security Registrar, promptly after such Special Record
Date, the Company shall furnish the Trustee with a list, or
shall make arrangements satisfactory to the Trustee with
respect thereto, of the names and addresses of, and respective
principal amounts of such Registered Securities held by, the
Holders appearing on the Security Register at the close of
business on such Special Record Date. The Trustee shall
promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of
any Defaulted Interest on the Registered Securities of any
series or any Global Registered Security in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Registered Securities may
be listed, and upon such notice as may be required by such
exchange.
Defaulted Interest on Bearer Securities shall be
payable to the bearer thereof at the time of payment of such
Defaulted Interest by the Company.
Subject to the foregoing provisions of this Section
2.12, each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other Security, shall
carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Security.
SECTION 2.13. Persons Deemed Owners.
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name
such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of principal
of and premium, if any, and (subject to Section 2.12) interest, if any,
on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary. All such payments so
made to any such person, or upon such person's order, shall be valid,
and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Security.
The Company, the Trustee and any agent of the
Company or the Trustee may treat the Book-Entry Depositary for a
Global Bearer Security as the absolute owner of such Global Bearer
Security for the purpose of receiving payment thereof or on account
thereof and for all other purposes whatsoever, whether or not such
Global Bearer Security or coupon be overdue, and neither the
Company or the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global
Security held on its behalf by a Book-Entry Depositary shall have any
rights under this Indenture with respect to such Global Security, and
such Book-Entry Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall impair, as
between a Book-Entry Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise
of the rights of the Book-Entry Depositary as holder of any Security.
SECTION 2.14. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking
fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled
by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled
by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section 2.14,
except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a
Company Order, provided, however, the Trustee shall not be required
to destroy such canceled Securities.
SECTION 2.15. Computation of Interest.
Except as otherwise specified as contemplated by
Section 2.05 for Securities of any series, interest, if any, on the
Securities of each series for any full period shall be computed on the
basis of a 360-day year of twelve 30-day months and for any partial
period shall be computed on the basis of the number of days elapsed
in a 360-day year of twelve 30-day months.
SECTION 2.16. Global Securities.
If the Company shall establish pursuant to Section
2.05 that the Securities of a particular series are to be issued in the
form of a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.07, authenticate and
deliver, a Global Security or Securities which (i) shall represent, and
shall be denominated in an aggregate amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series,
(ii) shall be in bearer form or, if in registered form, registered in the
name of the Book-Entry Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Book-Entry Depositary or pursuant to
the Book-Entry Depositary's instruction and (iv) shall bear a legend
substantially to the following effect:
"This Security is a Global Security within the meaning
of the Indenture hereinafter referred to and if this Security is in bearer
form, is held by a Book-Entry Depositary or, if this Security is in
registered form, is registered in the name of a Book-Entry Depositary
or a nominee of a Book-Entry Depositary. This Security is
exchangeable for Securities, if this Security is in bearer form, held by,
or if this Security is in registered form, registered in the name of, a
person other than the Book-Entry Depositary or its nominee only in
the limited circumstances described in the Indenture.
Unless this Global Security is presented by an
authorized representative of the Book-Entry Depositary to the
Company or its agent for registration of transfer, if this Security is in
registered form, exchange or payment, and any definitive Registered
Security is issued in the name or names as directed in writing by the
Book-Entry Depositary, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL in as much as the bearer or the registered
owner hereof, as the case may be, the Book-Entry Depositary, has an
interest herein."
Unless and until definitive Registered Securities of a
series are issued in exchange for the Global Security of a series as
permitted by this Indenture, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in
Section 2.10, only to another nominee of the Book-Entry Depositary
for such series, or to a successor Book-Entry Depositary for such
series selected or approved by the Company or to a nominee of such
successor Book-Entry Depositary.
No Security that is not a Global Bearer Security may
be payable to bearer (except as otherwise provided in an indenture
supplemental hereto or in an Officers' Certificate (pursuant to a
Board Resolution) pursuant to Section 2.05(s)).
SECTION 2.17. Extension of Interest Payment
Period; Deferral of Interest Payment.
The Company shall have the right at any time, so long
as no Event of Default shall have occurred and be continuing with
respect to the Securities of any series hereunder, to extend interest
payment periods, or to defer the payment of interest, on all Securities
of one or more series, if so specified as contemplated by Section 2.05
with respect to such Securities and upon such terms as may be
specified as contemplated by Section 2.05 with respect to such
Securities.
SECTION 2.18. CUSIP Numbers.
The Company in issuing the Securities of any series
may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that
no representation is made as to the correctness of such numbers
either as printed on the Securities of such series or as contained in
any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities of such
series, and any such prepayment shall not be affected by any defect in
or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP numbers.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Premium and
Interest.
The Company covenants and agrees for the benefit of
each series of Securities that it will duly and punctually pay the
principal of and premium, if any, and interest and Additional Amounts
and Additional Interest, if any, on the Securities of that series in
accordance with the terms of the Securities and this Indenture. An
installment of principal of or interest on the Securities of a series shall
be considered paid on the date it is due if the Trustee or Paying Agent
holds at 11:00 a.m. New York City time on that date money
deposited by the Company in immediately available funds and
designated for, and sufficient to pay, the installment in full.
When Securities of a series or Book-Entry Interests
are held by or on behalf of a Business Trust, neither the Company,
the Guarantor, nor any agent of the Company or the Guarantor will
have any responsibility or liability for any aspect relating to payments
made or to be made by the Book-Entry Depositary to such Business
Trust in respect of the Securities of such series or such Book-Entry
Interests. When Securities of such series or such Book-Entry
Interests are held by DTC, neither the Company, the Guarantor, nor
any agent of the Company or the Guarantor will have any
responsibility or liability for any aspect relating to payments made or
to be made by the Book-Entry Depositary to DTC in respect of the
Securities of such series or such Book-Entry Interests. None of the
Company, the Trustee, the Book-Entry Depositary or any agent of
any of the foregoing will have any responsibility or liability for any
aspect relating to payments made or to be made by DTC on account
of a participant's or indirect participant's ownership of an interest in
such Book-Entry Interests or for maintaining, supervising or
reviewing any records relating to a participant's interests in such
Book-Entry Interests.
SECTION 3.02. Maintenance of Office or Agency.
The Company will maintain (i) in the Borough of
Manhattan, The City of New York, an office or agency where
Securities of any series may be presented or surrendered for payment,
and where notices and demands to or upon the Company in respect of
the Securities of such series and this Indenture may be served and if
definitive Registered Securities have been issued, an office or agency
of a Transfer Agent where Securities may be surrendered for
registration of transfer or exchange, and (ii) an office or agency of a
Paying Agent where the Securities may be paid in Luxembourg so
long as the Securities are listed on the Luxembourg Stock Exchange
and the rules of such exchange so require. The Company will give
prompt written notice to the Trustee of the location, and any change
in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series pursuant to Section 3.01 may be
presented at the place specified for the purpose pursuant to Section
2.05, and the Company hereby appoints the Paying Agent as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate
one or more other offices or agencies (in or outside of such Place of
Payment) where the Securities of one or more series and any
appurtenant coupons (subject to Section 3.01) may be presented or
surrendered for any or all of such purposes, and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of
its obligation to maintain an office or agency in each Place of
Payment for any series of Securities for such purposes. The
Company will give prompt written notice to the Trustee of any such
designation and any change in the location of any such other office or
agency. The Company will at all times maintain at least one Paying
Agent which is located outside the United Kingdom for each series of
Securities.
SECTION 3.03. Money for Securities Payments to
Be Held in Trust.
If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before
each due date of the principal of and premium, if any, or interest, if
any, on any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal, premium, if any, or interest, if any, so becoming due
until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, no later than 11:00 a.m.,
New York City time, on or prior to each due date of the principal of
or premium, if any, or interest, if any, on any Securities of that series,
deposit with a Paying Agent a sum in immediately available funds
sufficient to pay the principal, premium, if any, or interest so
becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest.
The Company will cause each Paying Agent for any
series of Securities other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 3.03, that
such Paying Agent will:
(1) hold all sums held by it for the payment
of the principal of or premium, if any, or interest, if any, on
Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default
by the Company (or any other obligor upon the Securities of
that series) in the making of any payment of principal of or
premium, if any, or interest, if any, on the Securities of that
series; and
(3) at any time during the continuance of
any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or by Company Order direct any Paying Agent to
pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or by
any Paying Agent to the Trustee, the Company or such Paying Agent,
as the case may be, shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the
principal of or premium, if any, or interest, if any, on any Security of
any series and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 3.04. Appointments to Fill Vacancies in
Trustee's Office.
The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided
in Section 6.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
SECTION 3.05. Certificate to Trustee.
The Guarantor will deliver to the Trustee on or before
120 days after the end of each fiscal year in each year, commencing
with the first fiscal year ending after the date hereof, so long as
Securities of any series are outstanding hereunder, an Officers'
Certificate, stating that in the course of the performance by the
signers of their duties as officers of the Guarantor they would
normally have knowledge of any default by the Guarantor in the
performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying
each such default of which the signers have knowledge and the nature
thereof.
SECTION 3.06. Compliance with Consolidation
Provisions.
Neither the Company nor the Guarantor will, while
any of the Securities of any series remain outstanding, consolidate
with, or merge or convert into, or merge or convert into itself, or sell
or convey all or substantially all of its property to, any other Person
unless the provisions of Article X hereof are complied with.
SECTION 3.07. Limitation on Dividends.
Except as may be provided in a supplemental
indenture or an Officers' Certificate with respect to a series of
Securities, neither the Company nor the Guarantor shall, directly or
indirectly, (i) declare or pay any cash dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock (which includes common and
preferred stock), (ii) make any payments on or repay, repurchase or
redeem, any debt securities (including any other Securities or other
junior subordinated securities issued by the Company) that rank pari
passu with or junior in interest to the Securities or the Guarantee,
respectively, (iii) make any payments with respect to any guarantee
that ranks pari passu with or junior to the Securities or the
Guarantee, respectively, or (iv) make any payments on, or repay,
repurchase or redeem, any of its debt securities held by, make any
loans or advances to, or make any payments with respect to any
guarantee of the debt of, any affiliate, in each case other than (a)
dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, the common stock of the
Company or the Guarantor and exchanges or conversions of common
stock of one class for common stock of another class; (b) payments
by the Guarantor under the Trust Securities Guarantee (or any other
guarantee by the Guarantor with respect to any securities issued by its
direct or indirect subsidiaries, provided that the proceeds from the
issuance of such securities were used to purchase other Securities or
other junior subordinated securities issued by the Company); (c)
payments by the Guarantor under the Guarantee; (d) any dividend or
payment by the Guarantor which is applied, directly or indirectly, to
any Tax Payments; (e) payments by the Guarantor, directly or
indirectly, on the Intercompany Notes or any other promissory notes
held by the Company (or any other direct or indirect wholly-owned
subsidiary of the Guarantor) evidencing loans made with the proceeds
from the issuance by the Company (or any other direct or indirect
wholly-owned subsidiary of the Guarantor) of securities guaranteed
by the Guarantor; or (f) the reinvestment of any proceeds received
under clause (e) above by the Company (or any other direct or
indirect wholly-owned subsidiary of the Guarantor) in additional debt
securities of the Guarantor or any of its other direct or indirect
wholly-owned subsidiaries, if at such time (i) there shall have
occurred and be continuing a payment default pursuant to Section
5.01(a) or 5.01(b) (whether before or after any period of grace and
whether before or after the giving of notice) or an Event of Default
hereunder with respect to any series of Securities, (ii) the Guarantor
shall be in default with respect to its payment obligations under the
Trust Securities Guarantee or the Guarantee or any other such
guarantee as described above or (iii) the Company shall have given
notice of its election of the exercise of its right to defer payment of
interest as provided in Sections 2.05 and 2.17 with respect to any
series of Securities, shall not have rescinded such notice and any such
deferral shall be continuing until of all such deferred interest, together
with interest accrued thereon, shall have been paid in full.
SECTION 3.08. Covenants as to the Related
Business Trust.
(a) In the event Securities of any series are issued
to or for the benefit of a Business Trust in connection with the
issuance of Trust Securities by such Business Trust, for so long as
such Trust Securities remain outstanding, Yorkshire Group shall
(i) ensure that a wholly-owned subsidiary of Yorkshire Group will
retain the Control Certificate with respect to such Business Trust,
provided that certain successors which are permitted pursuant to the
Trust Agreement may succeed to the ownership of such Control
Certificate, and (ii) use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement of such Business Trust,
to cause (a) such Business Trust to not be classified as anything other
than a grantor trust for United States Federal income tax purposes,
(b) the beneficiaries of such Business Trust to be fully entitled to the
underlying income of such Business Trust as it arises and for such
Business Trust not to be treated as a company for purposes of United
Kingdom tax law and (c) each of the Guarantor, the Company and
such Business Trust not to be required to register as an "investment
company" under the Investment Company Act.
SECTION 3.09. Covenants as to Treatment of
Securities.
The Guarantor and the Company covenant to treat
each series of Securities as indebtedness of the Company for all
United States Federal income tax purposes.
SECTION 3.10. Additional Interest.
If the Securities of a series provide for the payment of
Additional Interest to the holders of such Securities, then the
Guarantor or the Company, as the case may be, shall pay to each
holder of such Securities the Additional Interest as provided therein.
References to principal, interest, discount or premium in respect of
the Securities of any such series (or any payments pursuant to any
Guarantee) shall be deemed also to refer to any Additional Interest
which may be payable as set forth in this Indenture or such series.
SECTION 3.11. Waiver of Certain Covenants.
The Company or the Guarantor may omit in any
particular instance to comply with any term, provision or condition
set forth in this Indenture with respect to the Securities of any series
if before the time for such compliance the Holders of a majority in
aggregate principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in
such instance or generally waive compliance with such term,
provision or condition, provided that no such waiver shall without the
consent of each Holder affected thereby (a) change the Stated
Maturity, if any, upon which the principal of or the interest on the
Securities is due and payable, (b) reduce the principal amount thereof
or the rate of interest thereon or extend the time of payment of
interest thereon (except pursuant to Section 2.17), (c) change any
obligation of the Company to pay Additional Amounts, (d) change
any Place of Payment or the currency in which the Securities or any
premium or the interest thereon is payable, (e) reduce any amount
payable under, delay or defer the required time of payment under, or
impair the right to institute suit to enforce any payment under the
Guarantee or (f) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose Holders is
required with respect to supplemental indentures and for any waiver
of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this
Indenture; provided, however, so long as any of Trust Securities
related to any particular series of Securities remain outstanding, no
such waiver of compliance with any covenant under this Indenture
may be effective, without the prior consent of the holders of a
majority of the aggregate liquidation amount of such Trust Securities
unless and until the principal of the series of Securities relating to
such Trust Securities and all accrued and unpaid interest or other
amounts thereon have been paid in full; and, provided further, that if
the prior consent of the holder of each outstanding Security is
required, such waiver shall not be effective until each holder of such
Trust Securities shall have consented to such waiver.
SECTION 3.12. Payment of Additional Amounts.
Unless the Securities of a particular series otherwise
provide, all payments of principal and interest (including payments of
discount and premium, if any) with respect to the Securities of a
particular series and all payments made pursuant to the Guarantee
shall be made free and clear of, and without withholding or deduction
for or on account of, any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within a Taxing Jurisdiction or
by or within any political subdivision thereof or any authority therein
or thereof having power to tax ("Gross-Up Taxes"), unless such
withholding or deduction is required by law. In the event of any such
withholding or deduction, the Company or the Guarantor, as the case
may be, shall pay to the Holder of such Securities the amount that
would otherwise have been due to such Holder in the absence of such
withholding or deduction ("Additional Amounts"), except that no
such Additional Amounts shall be payable:
(a) to, or to a Person on behalf of, a Holder who
is liable for such Gross-Up Taxes with respect to the Securities or the
Guarantee, by reason of such Holder having some connection with
the relevant Taxing Jurisdiction (including being a citizen or resident
or national of, or carrying on a business or maintaining a permanent
establishment in, or being physically present in, such Taxing
Jurisdiction) other than the mere holding of a Security or the receipt
of principal and interest (including payments of discount and
premium, if any) in respect thereof or in respect of the Guarantee;
(b) to, or to a Person on behalf of, a Holder who
presents a Security (whenever presentation is required) for payment
more than 30 days after the Relevant Date except to the extent that
such Holder would have been entitled to such Additional Amounts on
presenting such Security for payment on the last day of such period
of 30 days;
(c) to, or to a Person on behalf of, a Holder who
presents a Security (where presentation is required) in the United
Kingdom or Cayman Islands;
(d) to, or to a Person on behalf of, a Holder who
would not be liable or subject to the withholding or deduction by
making a declaration of non-residence or similar claim for exemption
to the relevant tax authority; or
(e) to, or to a Person on behalf of, a Holder of a
Registered Security that is not a Global Security issued pursuant to
the written request of any beneficial owner of interests in such
Securities (an "Optional Definitive Security Request") following and
during the continuance of an Event of Default if such Holder (or any
predecessor Holder) was an owner requesting that such Registered
Securities be so issued.
Such Additional Amounts will also not be payable
where, had the beneficial owner of the Security (or any interest
therein) been the Holder of the Security, he would not have been
entitled to payment of Additional Amounts by reason of any one or
more of clauses (a) through (e) above. If the Company or the
Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence,
the Company or the Guarantor, as applicable, will inform such Holder
promptly after making such determination setting forth the reason(s)
therefor.
At least 30 Business Days prior to the first Interest
Payment Date (and at least 10 Business Days prior to each
succeeding Interest Payment Date if there has been any change with
respect to the matters set forth in the below-mentioned Officers'
Certificate) the Company will furnish to the Trustee and any Paying
Agent an Officers' Certificate instructing the Trustee and any Paying
Agent whether payments of principal of or interest on the Securities
due on such Interest Payment Date shall be without deduction or
withholding for or on account of any Gross-Up Taxes. If any such
deduction or withholding shall be required, prior to such Interest
Payment Date the Company will furnish the Trustee and any Paying
Agent with an Officers' Certificate which specifies the amount, if any,
required to be deducted or withheld on such payment to Holders and
certifies that the Company shall pay such deduction or withholding.
The Company covenants to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense reasonably
incurred without negligence, willful misconduct or bad faith on their
part, arising out or in connection with actions taken or omitted by the
Trustee in reliance on any Officers' Certificate furnished pursuant to
this paragraph. Any Officers' Certificate required by this Section 3.12
to be provided to the Trustee and any Paying Agent shall be deemed
to be duly provided if telecopied to the Trustee and such Paying
Agent.
References to principal, interest, discount or premium
in respect of the Securities of any such series (or any payments
pursuant to any Guarantee) shall be deemed also to refer to any
Additional Amounts which may be payable as set forth in this
Indenture or such series.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing
payment of Gross-Up Taxes. Copies of such receipts shall be made
available to the Holders of the Securities upon request.
SECTION 3.13. Copies Available to Holders.
Copies of this Indenture shall be available for
inspection by the Holders on a Business Day during normal business
hours at the principal office of the Company and at the corporate
trust office. In addition, if the Securities of any series are listed on
the London Stock Exchange, the Luxembourg Stock Exchange or
any other stock exchange located outside the United States and such
stock exchange shall so require, copies of this Indenture, the Deposit
Agreement, the memorandum and articles of association of the
Company and the most recent publicly available annual report of the
Guarantor shall be made available for inspection by the Holders of
such Securities on a Business Day during normal business hours at
the offices of the paying agents and at the office of the listing agent
required to be maintained by such exchange for so long as the
Securities of such series are outstanding and are listed on such stock
exchange.
SECTION 3.14. Company Covenants.
The Company covenants (i) to not, at any time, be
engaged in a United States trade or business for United States
Federal income tax purposes and (ii) to remain a partnership and not
to be classified as an association or publicly traded partnership
taxable as a corporation for United States Federal income tax
purposes.
SECTION 3.15. Demand Share Covenant.
The Guarantor and the Company covenant, so long as
a series of Securities remains outstanding, to keep effective and
comply with the terms and conditions of the Demand Share Issue and
Purchase Agreement, dated February 24, 1999, between the
Guarantor and the Company.
ARTICLE IV
HOLDERS, LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Holders' Lists
The Company covenants and agrees that it will furnish
or cause to be furnished to the Trustee:
(a) on a semi-annual basis, not later than
December 31 and June 30 in each year, commencing
December 31, 1998, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders
of such series as of the preceding November 15 or May 15, as
the case may be; and
(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Company of
any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is
furnished;
except that no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security Registrar.
SECTION 4.02. Preservation and Disclosure of
Lists.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, all information as to the names and
addresses of the Holders of the Securities of a series (1) contained in
the most recent list furnished to it as provided in Section 4.01 or (2)
received by it in the capacity of Securities Registrar (if so acting)
hereunder. The Trustee may destroy any list furnished to it as
provided in Section 4.01 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities of
a series (hereinafter referred to as "applicants") apply in writing to the
Trustee and furnish to the Trustee reasonable proof that each such
applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders of
Securities of such series or with Holders of all Securities with respect
to their rights under this Indenture and is accompanied by a copy of
the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall within 5 Business Days
after the receipt of such application, at its election, either:
(1) afford such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 4.02; or
(2) inform such applicants as to the
approximate number of Holders of all Securities, whose
names and addresses appear in the information preserved at
the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, and as to the approximate
cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Holder whose name and
address appear in the information preserved at the time by the Trustee
in accordance with the provisions of subsection (a) of this Section
4.02 a copy of the form of proxy or other communication which is
specified in such request with reasonable promptness after a tender to
the Trustee of the material to be mailed and of payment, or provision
for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such applicants
and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the
Holders of all Securities or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by
receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any Paying
Agent shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders of
Securities in accordance with the provisions of subsection (b) of this
Section 4.02, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said
subsection (b).
SECTION 4.03. Reports of the Company and the
Guarantor.
The Company and the Guarantor covenant and agree:
(a) to file with the Trustee, within 30 days after
the date on which the Guarantor are required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Guarantor may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Guarantor is not required to file information,
documents or reports pursuant to either of such sections, and one or
more series of the Securities is listed on a United States national
securities exchange, then to file with the Trustee and the
Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
(c) to transmit by mail to all Holders of Securities,
as the names and addresses of such holders appear upon the Security
Register, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section 4.03 as may be required by rules and regulations prescribed
from time to time by the Commission.
(d) to notify the Trustee when and as the
Securities of any series become admitted to trading on any
United States national securities exchange.
Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information
contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled, in the
absence of bad faith on its part, to rely exclusively on Officers'
Certificates).
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant thereto. If required by Section
313(a) of the Trust Indenture Act, the Trustee shall, not later than
June 30 in each year, commencing June 30, 1999, deliver to Holders
a brief report, dated as of such June 30, which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the
Commission and with the Company. The Company will promptly
notify the Trustee when and if the Securities are listed on any stock
exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.
One or more of the following events with respect to
Securities of any series which has occurred and is continuing shall
constitute an Event of Default hereunder with respect to such series:
(a) failure to pay interest, if any, including any
Additional Interest, on any Security of such series within 60 days
after the same becomes due and payable (whether or not payment is
prohibited by the provisions of Article XIV hereof); provided,
however, that a valid extension of the interest payment period or
deferral of interest payment by the Company as contemplated in
Section 2.17 of this Indenture shall not constitute a failure to pay
interest for this purpose; or
(b) failure to pay the principal of or premium, if
any, on any Security of such series (whether or not payment is
prohibited by the provisions of Article XIV hereof) when due and
payable; or
(c) failure to perform or breach of any covenant or
warranty of the Company or the Guarantor contained in this
Indenture (other than a covenant or warranty a default in the
performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities
other than such series) for a period of 60 days after there has been
given, by registered or certified mail, to the Company or the
Guarantor by the Trustee or to the Company or the Guarantor and
the Trustee by the Holders of at least 33% in aggregate principal
amount of the outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the Company
or the Guarantor in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or (2) a decree or order adjudging the Company or
the Guarantor a bankrupt or insolvent, or approving as properly filed
a petition by one or more Persons other than the Company or the
Guarantor seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or the Guarantor under
any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or the Guarantor or for any substantial part
of its property, or ordering the winding-up or liquidation of its affairs,
and any such decree or order for relief or any such other decree or
order shall have remain unstayed and in effect for a period of 90
consecutive days; or
(e) the commencement by the Company or the
Guarantor of a voluntary case or proceeding under any applicable
Federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company or the Guarantor in a case
or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state law, or
the consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or the
Guarantor or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due, or the authorization of such action by such entity's board of
directors; or
(f) the Guarantee shall be held in a judicial
proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect; or
(g) any other Event of Default specified with
respect to the terms of the Securities of such series as contemplated
herein.
If an Event of Default due to the default in payment of
principal of, or interest or similar payment on, any series of Securities
or due to the default in the performance or breach of any other
covenant or warranty of the Company or the Guarantor applicable to
the Securities of such series but not applicable to all series occurs and
is continuing, then either the Trustee or the Holders of not less than
33% in aggregate principal amount of the outstanding Securities of
such series may then declare the principal of all Securities of such
series and interest or other amounts accrued or accumulated thereon
to be due and payable immediately (provided that the payment of
principal and interest or other amounts on such Securities shall
remain subordinated to the extent provided in Article XIV hereof). If
the Trustee or the Holders of not less than 33% in aggregate principal
amount of the Securities of such series fail to make such declaration,
and Trust Securities related to a particular series of Securities issued
by the Business Trust to which such series of Securities relate are still
outstanding, then the holders of at least 33% in aggregate liquidation
amount of such Trust Securities may make such declaration. If an
Event of Default due to the default in the performance of any of the
covenants or agreements herein applicable to all outstanding
Securities or an Event of Default specified in Section 5.01(d) or (e)
shall have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in aggregate principal amount of all
Securities then outstanding (or Trust Securities), considered as one
class, and not the Holders of the Securities (or Trust Securities) of
any one of such series, may declare the principal of all Securities and
interest or other amounts accrued or accumulated thereon to be due
and payable immediately (provided that the payment of principal and
interest or other amounts on such Securities shall remain
subordinated to the extent provided in Article XIV).
If an Event of Default shall occur and be continuing
with respect to the Securities of any series issued to or for the benefit
of a Business Trust, the Property Trustee will have the right to
declare the principal of and premium, if any, and interest on such
Securities and any other amounts payable under this Indenture to be
immediately due and payable and to enforce its other rights as a
creditor with respect to such Securities.
At any time after such a declaration of acceleration
with respect to the Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall have
been obtained by the Trustee as hereinafter in this Article provided,
the Event or Events of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been
waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if (a) the
Company or the Guarantor shall have paid or deposited with the
Trustee a sum sufficient to pay (1) all overdue interest and similar
payments on all Securities of such series, (2) the principal of and
premium, if any, on any Securities of such series which shall have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities, (3) to the extent that payment of such interest is lawful,
interest upon overdue interest, if any, or other amounts at the rate or
rates prescribed therefor in such Securities, and (4) all amounts due
to the Trustee under Section 6.06, and (b) any other Event or Events
of Default with respect to Securities of such series, other than the
nonpayment of the principal of Securities of such series which shall
have become due solely by such declaration of acceleration, shall
have been cured or waived as provided in Section 5.06.
No such rescission shall affect any subsequent Event
of Default or impair any right consequent thereon. In case the
Trustee or any Holder shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then and in every such case the
Company, the Guarantor, the Trustee and the Holders of the
Securities shall be restored respectively to their several positions and
rights hereunder, and all rights, remedies and powers of the
Company, the Guarantor, the Trustee and the Holders of the
Securities shall continue as though no such proceeding had been
taken.
SECTION 5.02. Payment of Securities on Default;
Suit Therefor.
If an Event of Default described in clause (a) or (b) of
Section 5.01 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of the
Holders of the Securities of the series with respect to which such
Event of Default shall have occurred, the whole amount then due and
payable on such Securities for principal and premium, if any, and
interest, if any, or other amounts and, to the extent permitted by law,
interest on premium, if any, and on any overdue principal and interest,
at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover
any amounts due to the Trustee under Section 6.06.
If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of
the Holders of Securities of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of
any power granted herein, or to enforce any other proper remedy.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor (including, for purposes of this Indenture, the Guarantor) on
the Securities of such series under Title 11, United States Code, or
any other applicable law, or in case a receiver or trustee shall have
been appointed for the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities of such
series, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the
Securities of such series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of
this Section 5.02, shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for
the whole amount of principal, premium, if any, and interest owing
and unpaid in respect of the Securities of such series and, in case of
any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for all amounts payable
pursuant to Section 6.06 to the Trustee and each predecessor
Trustee) and of the Holders allowed in such judicial proceedings
relative to the Company or any other obligor on the Securities of such
series, or to the creditors or property of the Company or such other
obligor, unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities of such series in any election
of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings, and to
collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by each
of the Holders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee such amounts as shall be
sufficient to pay to the Trustee and each predecessor Trustee all
amounts payable pursuant to Section 6.06.
Nothing herein contained shall be construed to
authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of such series or
the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities of such series, may be
enforced by the Trustee without the possession of any of the
Securities of such series, or the production thereof in any trial or
other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Securities of such series.
In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee shall be
held to represent all the Holders of the Securities of such series, and
it shall not be necessary to make any Holders of the Securities of such
series parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected
by Trustee.
Any moneys collected by the Trustee with respect to a
particular series of Securities pursuant to this Article V shall be
applied in the order following, at the date or dates fixed by the
Trustee for the distribution of such moneys, upon presentation of the
Securities in respect of which moneys have been collected, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee
under Section 6.06, including the costs and expenses of collection
applicable to the Securities and reasonable compensation to the
Trustee, its agents, attorneys and counsel, and of all other expenses
and liabilities incurred, and all advances made, by the Trustee except
as a result of its negligence or bad faith;
Second: To the payment of all Senior Debt of the
Company if and to the extent required by Article XIV;
Third: In case the principal or premium, if any, of the
Securities of such series in respect of which moneys have been
collected shall have become and shall be then due and payable, to the
payment of the whole amount then owing and unpaid upon all the
Securities of such series for principal of, premium, if any, and
interest, if any, with interest upon the overdue principal of, premium,
if any, and (to the extent that such interest has been collected by the
Trustee and to the extent permitted by law) upon overdue
installments of interest at the rate prescribed therefor in the Securities
of such series; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Securities of such
series, then to the payment of such principal and any premium and
interest, without preference or priority of principal over interest, or of
interest over principal or premium, or any installment of interest over
any other installment of interest, or of any Security of such series
over any other Security of such series, ratably to the aggregate of
such principal and any premium and accrued and unpaid interest; and
Fourth: To the Company or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
SECTION 5.04. Proceedings by Holders.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing,
considered as one class, shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to
the Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any
such proceeding; and
(e) no direction inconsistent with such written
request shall have been given to the Trustee during such 60-day
period by the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which an Event
of Default shall have occurred and be continuing, considered as one
class;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders or to obtain or to
seek to obtain priority or preferences over any other of such Holders
or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such
Holders.
Notwithstanding any other provision in this Indenture,
but subject to Article XIV, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the
principal of and premium, if any, and (subject to extension pursuant
to Section 2.17) interest, if any, or other amounts on such Security on
or after the same shall have become due and payable and to institute
suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder. So long as the
Securities of any series are issued to or for the benefit of a Business
Trust, a registered holder of Trust Securities related to the Securities
of such series issued by such Business Trust may institute a
proceeding directly against the Guarantor pursuant to the Guarantee,
without first instituting a legal proceeding directly against or
requesting or directing that action be taken by the Property Trustee
of such Business Trust or any other Person, for enforcement of
payment to such registered holder of principal of or interest or other
amounts on Securities of such series having a principal amount equal
to the aggregate stated liquidation amount of such Trust Securities of
such registered holder on or after the due dates therefor specified or
provided for in the Securities of such series.
SECTION 5.05. Remedies Cumulative and Continuing.
All powers and remedies given by this Article V to the
Trustee or to the Holders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and
remedies available to the Trustee or the holders of the Securities of
any series, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements
contained in this Indenture or otherwise established with respect to
the Securities of such series, and no delay or omission of the Trustee
or of any holder of any of the Securities of such series to exercise any
right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall
be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 5.04, every power
and remedy given by this Article V or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Holders.
SECTION 5.06. Direction of Proceedings and
Waiver of Defaults by Majority of Holders.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in aggregate principal amount of the Outstanding Securities
of such series shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the Securities of such series; provided, however, that
if an Event of Default shall have occurred and be continuing with
respect to more than one series of Securities, the Holders of a
majority in aggregate principal amount of the Outstanding Securities
of all such series, considered as one class, shall have the right to make
such direction, and not the Holders of the Securities of any one of
such series; and provided, further, that
(a) such direction shall not be in conflict with any
rule of law or with this Indenture, and could not involve the Trustee
in personal liability, in circumstances where indemnity would not, in
the Trustee's sole discretion, be adequate; and
(b) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
The Holders of a majority in aggregate principal
amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a
default
(a) in the payment of principal of or premium, if
any, or interest or other amounts, if any, on any Security of such
series (unless such default has been cured and a sum sufficient to pay
all matured installments of interest, principal and such other amounts
due otherwise than by declaration of acceleration has been deposited
with the Trustee), or
(b) in respect of a covenant or provision hereof
which under Section 9.02 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series
affected;
provided, however, if the Securities of any series are issued to or for
the benefit of a Business Trust, such Business Trust may not waive
compliance by the Company or the Guarantor with any past default
without the consent of a majority in aggregate liquidation amount of
the outstanding Trust Securities related to the Securities of such
series issued by such Business Trust affected, obtained as provided in
the Trust Agreement pertaining to such Business Trust, and, if the
prior consent of the holder of each Outstanding Security of such
series affected is required, the consent of each holder of such Trust
Securities.
Upon any such waiver, such default shall cease to
exist, and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 5.07. Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.07 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder,
or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Securities outstanding, or to any
suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest or other amounts on
any Security against the Company on or after the date the same shall
have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of a default
with respect to the Securities of any series,
(1) the Trustee undertakes to perform,
such duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the same to determine
whether or not they conform to the requirements of this
Indenture.
(b) In case a default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless the Trustee was negligent in ascertaining the
pertinent facts;
(2) no provision of this Indenture shall
require the Trustee to spend or risk its own funds or
otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its
rights or powers, if repayment of such funds or adequate
indemnity against such risk or liability satisfactory to the
Trustee has not been assured to it; and
(3) the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a majority in principal amount of the outstanding
Securities of any series, determined as provided in Section
5.04, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series.
(d) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject
to the provisions of this Section 6.01.
SECTION 6.02. Notice of Defaults.
Within 90 days after the occurrence of any default
hereunder with respect to the Securities of any series, the Trustee
shall transmit by mail to all Holders of Securities of such series notice
of such default hereunder known to the Trustee, unless such default
shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series or in the
payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a
trust committee of directors or a Responsible Officer of the Trustee
in good faith determine that the withholding of such notice is in the
interest of the Holders of Securities of such series; and provided,
further, that in the case of any default of the character specified in
Section 5.01(c) with respect to Securities of such series, no such
notice to Holders shall be given until at least 60 days after the
occurrence thereof. For the purpose of this Section 6.02, the term
"default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of
such series.
SECTION 6.03. Certain Rights of Trustee.
Subject to the provisions of Section 6.01:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order or as otherwise expressly provided herein
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel, and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to
expend or risk its own funds or to exercise, at the request or direction
of any of the Holders, any of the rights or powers vested in it by this
Indenture pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled upon
reasonable prior request and during normal business hours to examine
the books, records and premises of the Company, personally or by
agent or attorney; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and shall not be liable for the
actions or omissions of such agents appointed and supervised by it
with due care.
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication, shall be taken as
the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may
otherwise deal with the Company with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 6.06. Money Held in Trust.
Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the
Company.
SECTION 6.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time
such compensation as is agreed upon in writing;
(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel, which
compensation, expenses and disbursements shall be set forth
in sufficient written detail to the satisfaction of the Company),
except any such expense, disbursement or advance as may be
attributable to its or their negligence or bad faith; and
(3) to indemnify the Trustee, its officers,
directors and employees for, and to hold it harmless against,
any loss, liability or expense incurred without negligence, bad
faith, or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or
duties hereunder. Obligations under this Section 6.07(3) will
survive the satisfaction and discharge of this Indenture
pursuant to Article XI hereof.
SECTION 6.08. Disqualification; Conflicting
Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall
either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required;
Eligibility.
There shall at all times be a Trustee hereunder which
shall be eligible to act as trustee under the Trust Indenture Act and
which shall have a combined capital and surplus of at least
U.S.$50,000,000. If the Trustee does not have an office in The City
of New York, the Trustee may appoint an agent in The City of New
York reasonably acceptable to the Company to conduct any activities
which the Trustee may be required under this Indenture to conduct in
The City of New York. If the Trustee does not have an office in The
City of New York or has not appointed an agent in The City of New
York, the Trustee shall be a participant in The Depository Trust
Company and FAST distribution systems. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of a United States federal, state, territorial or
District of Columbia supervising or examining authority, then for the
purposes of this Section 6.09, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 6.10. Resignation and Removal;
Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of
Section 6.11.
(b) The Trustee may resign at any time with
respect to the Securities of one or more series by giving written
notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities
of such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with
section 310(b) of the Trust Indenture Act pursuant to Section
6.08 with respect to any series of Securities after written
request therefor by the Company or by any Holder who has
been a bona fide holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible
under Section 6.09 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to
Section 5.07, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or
those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply
with the applicable requirements of Section 6.11. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each
resignation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor Trustee
with respect to the Securities of any series by mailing written notice
of such event by first-class mail, postage prepaid, to all Holders of
Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its corporate trust office.
SECTION 6.11. Acceptance of Appointment by
Successor.
(a) In case of the appointment hereunder of a
successor Trustee with respect to all Securities, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of one or more (but
not all) series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee, and (3) shall add to
or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective
to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but on request of the
Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of this
Section 6.11, as the case may be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Article.
SECTION 6.12. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding
to all or substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder; provided such
corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall
have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collecting of Claims
Against Company.
(a) Subject to subsection (b) of this Section 6.13,
if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within three months
prior to a default, as defined in subsection (c) of this Section 6.13, or
subsequent to such a default, then, unless and until such default shall
be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities
and the holders of other indenture securities, as defined in subsection
(c) of this Section 6.13:
(1) an amount equal to any and all
reductions in the amount due and owing upon any claim as
such creditor in respect of principal or interest effected after
the beginning of such three months' period and valid as
against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or
from the exercise of any right of setoff which the Trustee
could have exercised if a petition in bankruptcy had been
applied by or against the Company upon the date of such
default; and
(2) all property received by the Trustee in
respect of any claims as such creditor, either as security
therefor, or in satisfaction or composition thereof, or
otherwise, after the beginning of such three months' period,
or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the
Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the
right of the Trustee:
(A) to retain for its own account (i) payments
made on account of any such claim by any Person (other than
the Company) who is liable thereon, and (ii) the proceeds of
the bona fide sale of any such claim by the Trustee to a third
Person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such three
months' period;
(C) to realize, for its own account, but only to
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such three months' period and
such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause
to believe that a default, as defined in subsection (c) of this
Section 6.13, would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held
as security for such claim as provided in paragraph (B) or (C)
, as the case may be, to the extent of the fair value of such
property.
For the purposes of paragraphs (B), (C) and (D),
property substituted after the beginning of such three months' period
for property held as security at the time of such substitution shall, to
the extent of the fair value of the property released, have the same
status as the property released, and, to the extent that any claim
referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-
existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account for the
funds and property held in such special account, the proceeds thereof
shall be apportioned among the Trustee, the Holders and the holders
of other indenture securities in such manner that the Trustee, the
Holders and the holders of other indenture securities realize, as a
result of payments from such special account and payments of
dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law or winding up or
administration pursuant to the insolvency laws of the Cayman Islands
or the United Kingdom, as applicable, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of
other indenture securities dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law or winding up or administration pursuant to the insolvency
laws of the Cayman Islands or the United Kingdom, as applicable, but
after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to
such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law or winding up or administration pursuant to the insolvency
laws of the Cayman Islands or the United Kingdom, as applicable,
whether such distribution is made in cash, securities or other
property, but shall not include any such distribution with respect to
the secured portion, if any, of such claim.
Any Trustee which has resigned or been removed after
the beginning of such three months' period shall be subject to the
provisions of this subsection as though such resignation or removal
had not occurred. If any Trustee has resigned or been removed prior
to the beginning of such three months' period, it shall be subject to
the provisions of this subsection if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after
the beginning of such three months' period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or
removal.
(b) There shall be excluded from the operation of
subsection (a) of this Section 6.13 a creditor relationship arising
from:
(1) the ownership or acquisition of
securities issued under any indenture, or any security or
securities having a maturity of one year or more at the time of
acquisition by the Trustee;
(2) advances authorized by a receivership
or bankruptcy court of competent jurisdiction or by this
Indenture, for the purpose of preserving any property which
shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Holders at the
time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary
course of business in the capacity of trustee under an
indenture, transfer agent, registrar, custodian, paying agent,
fiscal agent or depository, or other similar capacity;
(4) an indebtedness created as a result of
services rendered or premises rented; or an indebtedness
created as a result of goods or securities sold in a cash
transaction, as defined in subsection (c) of this Section 6.13;
(5) the ownership of stock or of other
securities of a corporation organized under the provisions of
Section 25 (a) of the Federal Reserve Act, as amended, which
is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance
or negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of self-
liquidating paper, as defined in Subsection (c) of this Section
6.13.
(c) For the purposes of this Section 6.13 only:
(1) the term "default" means any failure to
make payment in full of the principal of or interest on any of
the Securities or upon the other indenture securities when and
as such principal or interest becomes due and payable;
(2) the term "other indenture securities"
means securities upon which the Company is an obligor (as
defined in the Trust Indenture Act) outstanding under any
other indenture (i) under which the Trustee is also trustee, (ii)
which contains provisions substantially similar to the
provisions of this Section 6.13, and (iii) under which a default
exists at the time of the apportionment of the funds and
property held in such special account;
(3) the term "cash transaction" means any
transaction in which full payment for goods or securities sold
is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means
any draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange,
acceptance or obligation;
(5) the term "Company" means any obligor
upon the Securities; and
(6) the term "Federal Bankruptcy Act"
means the Bankruptcy Code or Title 11 of the United States
Code.
SECTION 6.14. Authenticating Agents.
From time to time the Trustee, with the prior written
approval of the Company, may appoint one or more Authenticating
Agents with respect to one or more series of Securities with power to
act on the Trustee's behalf and subject to its direction in the
authentication and delivery of Securities of such series or in
connection with transfers and exchanges under Sections 2.07, 2.09,
2.10, 2.11, 9.04 and 13.05 as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by
those Sections of this Indenture to authenticate and deliver Securities
of such series. For all purposes of this Indenture, the authentication
and delivery of Securities by an Authenticating Agent pursuant to this
Section 6.14 shall be deemed to be authentication and delivery of
such Securities "by the Trustee". Each such Authenticating Agent
shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the
United States, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least U.S.$50,000,000
and subject to supervision or examination by Federal, State or
District of Columbia authority. If such corporation publishes reports
of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 6.14 the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of
this Section 6.14, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section 6.14.
Any corporation into which any Authenticating Agent
may be merged or with which it may be consolidated, or any
corporation resulting from, any merger or consolidation or to which
any Authenticating Agent shall be a party, or any corporation
succeeding to the corporate trust business of any Authenticating
Agent, shall be the successor of the Authenticating Agent hereunder,
if such successor corporation is otherwise eligible under this Section
6.14, without the execution or filing of any paper or any further act
on the part of the parties hereto or the Authenticating Agent or such
successor corporation.
An Authenticating Agent may resign at any time by
giving written notice of resignation to the Trustee and to the
Company. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any
time any Authenticating Agent shall cease to be eligible under this
Section 6.14, the Trustee may appoint a successor Authenticating
Agent with the prior written approval of the Company and shall mail
notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve, as the
names and addresses of such Holders appear on the Security
Register. Any successor Authenticating Agent, upon acceptance of
its appointment hereunder, shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.14.
The Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services
under this Section 6.14 as may be agreed in a separate writing among
the Company, the Trustee and such Authenticating Agent, and the
Trustee shall be entitled to be reimbursed for such payments pursuant
to Section 6.07.
If an appointment with respect to one or more series
of Securities is made pursuant to this Section 6.14, the Securities of
such series may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication
in the following form:
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
Dated: THE BANK OF NEW
YORK
As Trustee
By: [NAME OF
AUTHENTICATI
NG AGENT]
Authenticating Agent
By:
Authorized Signatory
ARTICLE VII
CONCERNING THE HOLDERS
SECTION 7.01. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Holders in Person or by agent duly appointed in writing, and, except
as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments.
Without limiting the generality of the foregoing, unless
otherwise established in or pursuant to a Board Resolution or set
forth or determined in an Officers' Certificate, or established in one
or more indentures supplemental hereto, pursuant to Section 2.05, a
Holder, including a Book-Entry Depositary that is a Holder of a
Global Security, may make, give or take, by a proxy, or proxies, duly
appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to
be made, given or taken by Holders, and a Book-Entry Depositary
that is a Holder of a Global Security may provide its proxy or proxies
to the beneficial owners of interests in any such Global Security
through such Book-Entry Depositary's standing instructions and
customary practices.
(b) The fact and date of the execution by any
Person of any such instrument, writing or proxy may be proved by
the affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument, writing or proxy acknowledged to him the execution
thereof.
Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument, writing or proxy, or the
authority of the Person executing the same, may also be proved in
any other manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall
be proved by the Security Register.
(d) The principal or face amount and serial
numbers of Bearer Securities of any series held by any Person, and
the date of holding the same, may be proved by the production of
such Bearer Securities or, if such Bearer Securities are Global Bearer
Securities, by a certificate executed by the Book-Entry Depositary for
such Global Bearer Securities.
(e) If the Company shall solicit from the Holders
of Securities of any series any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at
its option, by Board Resolution, fix in advance a record date for
purposes of determining the identity of Holders of Securities entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no
obligation to do so. Any such record date shall be fixed at the
Company's discretion. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act
may be sought or given before or after the record date, but only the
Holders of Securities of record at the close of business on such
record date shall be deemed to be Holders of Securities for the
purpose of determining whether Holders of the requisite proportion
of Securities of such series Outstanding have authorized or agreed or
consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Securities of
such series Outstanding shall be computed as of such record date.
With regard to any record date set pursuant to this
subsection, the Holders of Outstanding Securities of the relevant
series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to take relevant action, whether or not
such Holders remain Holders after such record date. With regard to
any action that may be taken hereunder only by Holders of a requisite
principal amount of Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this
subsection, the Company may, at its option, set an expiration date
after which no such action purported to be taken by any Holder shall
be effective hereunder unless taken on or prior to such expiration
date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed
agents).
On or prior to any expiration date set pursuant to this
subsection, the Company may, on one or more occasions at its
option, extend such expiration date to any later date. Nothing in this
subsection shall prevent any Holder (or any duly appointed agent
thereof) from taking, at any time, any action contrary to or different
from, any action previously taken, or purported to have been taken,
hereunder by such Holder, in which event the Company may set a
record date in respect thereof pursuant to this subsection.
Notwithstanding the foregoing or the Trust Indenture Act, the
Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any action to be taken by
Holders pursuant to Section 5.01 or 5.06.
Upon receipt by the Trustee of written notice of any
default described in Section 5.01, any declaration of acceleration, or
any rescission and annulment of any such declaration, pursuant to
Section 5.01 or of any direction in accordance with Section 5.06, a
record date shall automatically and without any other action by any
Person be set for the purpose of determining the Holders of
Outstanding Securities of the series entitled to join in such notice,
declaration, or rescission and annulment, or direction, as the case may
be, which record date shall be the close of business on the day the
Trustee receives such notice, declaration, rescission and annulment or
direction, as the case may be. The Holders of Outstanding Securities
of such series on such record date (or their duly appointed agent),
and only such Persons, shall be entitled to join in such notice,
declaration, rescission and annulment, or direction, as the case may
be, whether or not such Holders remain Holders after such record
date; provided that, unless such notice, declaration, rescission and
annulment, or direction, as the case may be, shall have become
effective by virtue of Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their
duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such notice of default, declaration,
rescission and annulment, or direction, as the case may be, given or
made by the Holders, as the case may be, shall automatically and
without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall prevent a Holder (or a duly
appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a notice of default, a declaration of acceleration,
a rescission and annulment of a declaration of acceleration or a
direction in accordance with Section 5.06, contrary to or different
from, or, after the expiration of such period, identical to, a previously
given notice, declaration, rescission and annulment, or direction, as
the case may be, that has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date in respect
thereof shall be set pursuant to this paragraph.
SECTION 7.02. Proof of Execution by Holders.
Subject to the provisions of Sections 6.01 and 8.05,
proof of the execution of any instrument by a Holder or his agent or
proxy shall be sufficient if made in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The Trustee may
require such additional proof of any matter referred to in this Section
as it shall deem necessary.
The record of any Holders' meeting shall be proved in
the manner provided in Section 8.06.
SECTION 7.03. Securities Owned by Company
Deemed Not Outstanding.
In determining whether the holders of the requisite
aggregate principal amount of Securities of one or more, or all, series
have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Company or any other
obligor on the Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company, except for the Securities owned by or on
behalf of a Business Trust, or any other obligor on the Securities shall
be disregarded and deemed not to be outstanding for the purpose of
any such determination; provided that for the purposes of determining
whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section
7.03 if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right to vote such Securities and that the pledgee is not the
Company or any such other obligor or Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
SECTION 7.04. Revocation of Consents; Future
Holders Bound.
At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 7.01, of the taking of any action
by the Holders of the percentage in aggregate principal amount of the
Securities of one or more, or all, series specified in this Indenture in
connection with such action, any Holder of such a Security (or any
Security issued in whole or in part in exchange or substitution
therefor) the serial number of which is shown by the evidence to be
included in the Securities the Holders of which have consented to
such action may, by filing written notice with the Trustee at its
principal office and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Security (or so far as
concerns the principal amount represented by any exchanged or
substituted Security). Except as aforesaid, any such action taken by
the Holder of any Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Security, and
of any Security issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange or substitution
therefor. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of one or more, or all,
series specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the
Holders of such Securities.
ARTICLE VIII
HOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings
A meeting of Holders of one or more, or all, series
may be called at any time and from time to time pursuant to the
provisions of this Article VIII for any of the following purposes:
(a) to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee, or to consent to the
waiving of any Default hereunder and its consequences, or to take
any other action authorized to be taken by such Holders pursuant to
any of the provisions of Article V;
(b) to remove the Trustee of such series and
nominate a successor trustee pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
9.02; or
(d) to take any other action authorized to be taken
by or on behalf of the Holders of any specified aggregate principal
amount of such Securities under any other provision of this Indenture
or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Holders
of one or more, or all, series to take any action specified in Section
8.01, to be held at such time and at such place in the Borough of
Manhattan, The City of New York, as the Trustee shall determine or,
with the approval of the Company, at any other place. Notice of
every such meeting, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed to Holders of such Securities at their
addresses as they shall appear on the Security Register. Such notice
shall be mailed not less than 20 nor more than 180 days prior to the
date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or
Holders.
In case at any time the Trustee shall have been
requested to call a meeting of Holders of one or more, or all, series
by the Company, pursuant to a resolution of the Board of Directors,
or by the Holders of at least 33% in aggregate principal amount of all
of such series, considered as one class, by written request setting
forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the
Company or such Holders may determine the time and the place in
the Borough of Manhattan, The City of New York, for such meeting
and may call such meeting to take any action authorized in Section
8.01, by mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting; Quorum;
Action.
To be entitled to vote at any meeting of Holders of
one or more, or all, series, a Person shall be (a) a Holder of one or
more outstanding Securities of such series or (b) a Person appointed
by an instrument in writing as proxy by a holder of one or more
Securities of such series. The only Persons who shall be entitled to
be present or to speak at any meeting of Holders of any series shall be
the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives
of the Company and its counsel.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series with
respect to which a meeting shall have been called as hereinbefore
provided, considered as one class, shall constitute a quorum for a
meeting of Holders of Securities of such series; provided, however,
that if any action is to be taken at such meeting which this Indenture
expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority in aggregate principal
amount of the Outstanding Securities of such series, considered as
one class, the Persons entitled to vote such specified percentage in
principal amount of the Outstanding Securities of such series,
considered as one class, shall constitute a quorum. In the absence of
a quorum within one hour of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting
may be adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such meeting. In
the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for such period as may
be determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided by
Section 8.05, notice of the reconvening of any meeting adjourned for
more than 30 days shall be given as provided in Section 8.02 not less
than 20 days prior to the date on which the meeting is scheduled to
be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
aggregate principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of the series with respect to
which such meeting shall have been called, considered as one class;
provided, however, that, except as so limited, any resolution with
respect to any action which this Indenture expressly provides may be
taken by the Holders of a specified percentage, which is less than a
majority in aggregate principal amount of the Outstanding Securities
of such series, considered as one class, may be adopted at a meeting
or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities
of such series, considered as one class.
Any resolution passed or decision taken at any
meeting of Holders of Securities duly held in accordance with this
Section shall be binding on all the Holders of Securities of the series
with respect to which such meeting shall have been held, whether or
not present or represented at the meeting.
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it
may deem advisable for any meeting of Holders, in regard to proof of
the holding of such Securities and of the appointment of proxies, and
in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint
a temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Holders as provided in Section
8.03, in which case the Company or the Holders of the series calling
the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.04, at any
meeting each Holder of Securities of such series or proxy therefor
shall be entitled to one vote for each $25 principal amount of
Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall
have no right to vote other than by virtue of Securities held by him or
instruments in writing as aforesaid duly designating him as the person
to vote on behalf of other Holders. Any meeting of Holders duly
called pursuant to the provisions of Section 8.02 or 8.03 may be
adjourned from time to time by a majority in aggregate principal
amount of the outstanding Securities of all series represented at the
meeting, considered as one class, and the meeting may be held as so
adjourned without further notice.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any
meeting of Holders of Securities shall be by written ballots on which
shall be subscribed the signatures of such Holders or of their
representatives by proxy and the serial number or numbers of the
Securities of the series with respect to which the meeting shall have
been called, held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all
votes cast at the meeting for or against any resolution and who shall
make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Holders shall be
prepared by the secretary of the meeting and there shall be attached
to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in
Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without
Consent of Holders.
Without the consent of any Holders, the Company, the
Guarantor and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person
to the Company or the Guarantor and the assumption by any such
successor of the covenants of the Company or the Guarantor herein
and in the Securities, all as provided in Article X; or
(b) to add one or more covenants of the Company
or the Guarantor or other provisions for the benefit of all Holders or
for the benefit of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more specified series,
or to surrender any right or power herein conferred upon the
Company or the Guarantor; or
(c) to add any additional Events of Default with
respect to all or any series of Securities Outstanding hereunder; or
(d) to modify, eliminate or add provisions hereto
to such extent as shall be necessary to ensure that (1) the Company
will not be classified as an association or a publicly traded partnership
taxable as a corporation for United States federal income tax
purposes or (2) the Company or the Guarantor will not be required to
register as an "investment company" under the Investment Company
Act; or
(e) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture; provided
that such change, elimination or addition shall become effective only
as to the Securities of any series created by such supplemental
indenture and Securities of any series subsequently created to which
such change or elimination is made applicable by the subsequent
supplemental indenture creating such series; or
(f) to provide collateral security for the Securities;
or
(g) to establish the form or terms of Securities of
any series as contemplated by Sections 2.01 and 2.05; or
(h) to provide for the authentication and delivery
of Bearer Securities and coupons appertaining thereto representing
interest, if any, thereon and for the procedures for the registration,
exchange and replacement thereof and for the giving of notice to, and
the solicitation of the vote or consent of, the holders thereof, and for
any and all other matters incidental thereto; or
(i) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee or co-
trustee with respect to the Securities of one or more series and to add
to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements
herein; or
(j) to provide for the procedures required to
permit the Company to utilize, at its option, a non-certificated system
of registration for all, or any series of, the Securities; or
(k) to change any place or places where (1) the
principal of and premium, if any, and interest or other payments, if
any, on all or any series of Securities shall be payable, (2) all or any
series of Securities may be surrendered for registration of transfer,
(3) all or any series of Securities may be surrendered for exchange
and (4) notices and demands to or upon the Company or the
Guarantor in respect of all or any series of Securities and this
Indenture may be served; or
(l) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any other
changes to the provisions hereof or to add other provisions with
respect to matters or questions arising under this Indenture; provided
that, except in the case of clause (d) above, such other changes or
additions shall not adversely affect the interests of the Holders of
securities of any series in any material respect.
The Trustee is hereby authorized to join with the
Company and the Guarantor in the execution of any supplemental
indenture to effect such amendment, to make any further appropriate
agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any amendment to this Indenture authorized by the
provisions of this Section 9.01 may be executed by the Company, the
Guarantor and the Trustee without the consent of the Holders of any
of the Securities at the time outstanding, notwithstanding any of the
provisions of Section 9.02.
Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be amended
and (x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended so as to
conform to such amendment to the Trust Indenture Act, and the
Company, the Guarantor and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental hereto to effect or
evidence such changes or additional provisions; or (y) if any such
amendment shall permit one or more changes to, or the elimination
of, any provisions hereof which, at the date of the execution and
delivery hereof or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture shall be deemed
to have been amended to effect such changes or elimination, and the
Company, the Guarantor and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental hereto to evidence
such amendment hereof.
SECTION 9.02. Supplemental Indentures With
Consent of Holders.
With the consent (evidenced as provided in Section
7.01) of the Holders of a majority in aggregate principal amount of
each series of the Securities then outstanding under this Indenture
that is directly affected thereby, the Company, when authorized by a
Board Resolution, the Guarantor and the Trustee may from time to
time and at any time modify this Indenture for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or modifying in any manner the rights of
the Holders of such series of the Securities under this Indenture;
provided, however, that no such modification shall without the
consent of the Holder of each Security of such series then
outstanding and affected thereby (i) change the Stated Maturity, if
any, of the principal of, or any installment of or interest on (except as
contemplated by Article XV), any series of Securities, or reduce the
principal amount thereof, or reduce the rate of interest thereon (or the
amount of any installment of interest thereon) or change the method
of calculating such rate or reduce any premium payable upon the
redemption thereof, or change the coin or currency (or other
property), in which any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment, (ii) reduce the percentage of
principal amount of outstanding Securities of any series (or, if
applicable, in liquidation amount of any Trust Securities related to the
Securities of such series), the holders of which are required to
consent to any such modification of this Indenture, (iii) reduce any
amount payable under, delay or defer the required time of payment
under, or impair the right to institute suit to enforce any payment
under the Guarantee, (iv) modify the provisions of this Indenture with
respect to the subordination of the Securities of any series or the
applicable Guarantee or (v) modify any of the provisions of this
Section 9.02, Section 5.06 or Section 3.11, except to increase the
percentage in aggregate principal amount required or to provide that
certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each outstanding
Security affected thereby; provided, however, that so long as Trust
Securities related to Securities of such series remain outstanding, if
such modification adversely affects the holders of such Trust
Securities, such modification shall not be effective, and no
termination of this Indenture may occur, and no waiver of any Event
of Default or compliance with any covenant under this Indenture may
be effective, until the holders of a majority in aggregate liquidation
amount of such Trust Securities shall have given their prior consent,
obtained as provided in the Trust Agreement pertaining to the
Business Trust that issued such Trust Securities, to such
modification, termination or waiver unless and until the principal of
the Securities of such series and all accrued and unpaid interest or
other amounts thereon have been paid in full; provided, further, that if
the prior consent of the holder of each outstanding Security of such
series is required, such amendment or waiver shall not be effective
until each holder of such Trust Securities shall have so consented to
such amendment or waiver.
Notwithstanding the foregoing, no amendment or
modification may be made to this Indenture if such amendment or
modification would cause (i) the Company to be classified as an
association or a publicly traded partnership taxable as a corporation
for United States Federal income tax purposes or (ii) the Company or
the Guarantor to be required to register as an "investment company"
under the Investment Company Act.
Upon the request of the Company accompanied by a
copy of a resolution of the Board of Directors certified by an
authorized signatory of the Company authorizing the execution of
any supplemental indenture affecting such amendment, and upon the
filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company and the Guarantor
in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into
such supplemental indenture.
Promptly after the execution by the Company, the
Guarantor and the Trustee of any supplemental indenture pursuant to
the provisions of this Section, the Trustee shall transmit by mail, first
class postage prepaid, a notice, prepared by the Company, setting
forth in general terms the substance of such supplemental indenture,
to the affected Holders as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
It shall not be necessary for the consent of such
Holders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 9.03. Compliance with Trust Indenture
Act; Effect of Supplemental Indentures.
Any supplemental indenture executed pursuant to the
provisions of this Article IX shall comply with the Trust Indenture
Act. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article IX, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company, the
Guarantor and the holders of Securities shall thereafter be
determined, exercised and enforced hereunder subject in all respects
to such modifications and amendments and all the terms and
conditions of any such supplemental indenture shall be and be deemed
to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.04. Notation on Securities.
Securities of any series authenticated and delivered
after the execution of any supplemental indenture affecting such
series pursuant to the provisions of this Article IX may bear a
notation in form approved by the Trustee as to any matter provided
for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental
indenture may be prepared and executed by the Company, the
Guarantor, authenticated by the Trustee or the Authenticating Agent
and delivered in exchange for such Securities then outstanding.
SECTION 9.05. Evidence of Compliance of
Supplemental Indenture to be Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01
and 6.02, may receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and
conforms to, the terms of this Article and that it is proper for the
Trustee under the provisions of this Article to join in the execution
thereof.
ARTICLE X
CONSOLIDATION, CONVERSION, MERGER,
SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company and Guarantor May
Consolidate, etc., on Certain Terms.
(a) The Guarantor shall not consolidate with or
merge into any other corporation, or convey or otherwise transfer or
lease its properties and assets substantially as an entirety to any
Person, unless (a) the corporation formed by such consolidation or
into which the Guarantor is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of
the Guarantor substantially as an entirety (a "successor corporation")
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, the performance of every covenant of
this Indenture on the part of the Guarantor to be performed or
observed, including the obligations of the Guarantor under the
Guarantee if applicable to a particular series of Securities, (b)
immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing and (c) the Guarantor shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, or other transfer or lease
and such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transactions
have been complied with.
(b) The Company may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety
to, any corporation or other entity, except as provided in this Section
10.01. The Company may, without the consent of the holders of the
Securities or any series, consolidate, amalgamate, merge with or into,
or be replaced by a limited partnership, limited liability company or
trust organized under the laws of any state of the United States;
provided, that (i) such successor entity either (a) expressly assumes
all of the obligations of the Company under the Securities of such
series or (b) substitutes for the Securities of such series other
securities having substantially the same terms as the Securities of such
series (the "Successor Securities"), so long as the Successor
Securities are not junior to any other equity securities of the
successor entity with respect to participation in the profits and
distributions, and in the assets, of the successor entity, (ii) if the
Securities of such series are then so listed, the Securities of such
series continue to be listed, or any Successor Securities are or will be
listed upon notification of issuance, on any national securities
exchange or with another organization on which the Securities of
such series are then listed or quoted, (iii) such merger, consolidation,
amalgamation or replacement does not cause the Trust Securities
related to such series of Securities (or, in the event that the Business
Trust is liquidated, the Securities of such series (including any
Successor Securities)) to be downgraded by any nationally
recognized statistical securities rating organization, (iv) such merger,
consolidation, amalgamation or replacement does not adversely affect
the powers, preferences and other special rights of the holders of such
Trust Securities or Securities of such series (including any Successor
Securities) in any material respect (other than, in the case of the
Securities of such series or Successor Securities, with respect to any
dilution of the holders' interest in the new resulting entity), (v) such
successor entity has a purpose substantially identical to that of the
Company, (vi) the Guarantor guarantees the obligations of such
successor entity under the Successor Securities to the same extent as
provided by the Guarantee if applicable to such series of Securities
and (vii) prior to such merger, consolidation, amalgamation or
replacement, the Guarantor and the Company have received an
Opinion of Counsel experienced in such matters to the effect that (A)
such successor entity will be treated as a partnership and not as an
association or publicly traded partnership taxable as a corporation for
United States federal income tax purposes, (B) such merger,
consolidation, amalgamation or replacement will not adversely affect
the limited liability of the holders of the Securities of such series (or
the Successor Securities), (C) following such merger, consolidation,
amalgamation or replacement, neither the Guarantor, the Company
nor such successor entity will be required to register as an
"investment company" under the Investment Company Act and (D)
such merger, consolidation, amalgamation or replacement would not
cause (x) the Business Trust that issued such Trust Securities to be
classified as other than as a grantor trust for United States federal
income tax purposes and (y) the beneficiaries of such Business Trust
to not be fully entitled to the underlying income of such Business
Trust as it arises for purposes of United Kingdom tax law.
In the event that any such successor entity is
organized under the laws of a country located outside of a Taxing
Jurisdiction and withholding or deduction is required by law for or on
account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected,
withheld or assessed by or within such country in which the successor
entity is organized or by or within any political subdivision thereof or
any authority therein or thereof having power to tax, the successor
entity shall pay to the relevant holder of the Securities, such
additional amounts, under the same circumstances and subject to the
same limitations as are specified for "Gross-Up Taxes" as is set forth
in Section 3.12 hereof, but substituting for the applicable Taxing
Jurisdiction in each place the name of the country under the laws of
which such successor entity is organized, managed and controlled or
has a place of business. In addition, such successor entity shall be
entitled to effect an optional tax redemption of the Securities under
the same circumstances and subject to the same limitations as are set
forth in Section 13.02 hereof, but substituting for the applicable
Taxing Jurisdiction in each place the name of the country under the
laws of which such successor entity is organized, managed and
controlled or has a place of business and substituting the date of
succession for the date of the relevant prospectus for the Securities of
such series.
SECTION 10.02. Successor Corporation Substituted.
Upon any consolidation by the Company or the
Guarantor with or merger by the Company or the Guarantor into any
other corporation or any conveyance, transfer, lease or other
disposition of the properties and assets of the Company or the
Guarantor substantially as an entirety in accordance with Section
10.01, the successor corporation formed by such consolidation or
into which the Company or the Guarantor is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company or the Guarantor under this Indenture with the same effect
as if such successor corporation had been named as the Company or
the Guarantor herein, and thereafter the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and
the Securities.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of
Indenture
This Indenture shall upon Company Request cease to
be of further effect (except as to any surviving rights of registration
of transfer or exchange of Securities of any series herein expressly
provided for and rights to receive payments of any principal, premium
or interest in respect thereof and any right to receive any Additional
Amounts or Additional Interest as provided herein), and the Trustee
shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either (A) all Securities theretofore
authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.11 and (ii) Securities
for whose payment money has theretofore been deposited in
trust with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in
Section 3.03) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements for the giving of notice
of redemption by the Trustee in the name, and at the
expense, of the Company, or
(iv) are deemed paid and discharged
pursuant to Section 11.03, as applicable.
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount of (a) money in the currency or units of
currency in which such Securities are payable, or (b) Government
Obligations (denominated in the same currency or units of currency in
which such Securities are payable) which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide not later than one day before the Stated Maturity or
Redemption Date, as the case may be, money in an amount, or (c) a
combination of money or Government Obligations as provided in (b)
above, in each case, sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest, if any, to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and
(3) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under
Section 6.07, the obligations of the Trustee to any Authenticating
Agent under Section 6.14 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of clause (1) of this
Section 11.01 or if money or Government Obligations shall have been
deposited with or received by the Trustee pursuant to Section 11.03,
the obligations of the Trustee under Section 11.02 and the last
paragraph of Section 3.03 shall survive.
SECTION 11.02. Application of Trust Money
(a) Subject to the provisions of the last paragraph
of Section 3.03, all money or Government Obligations deposited
with the Trustee pursuant to Sections 11.01 or 11.03 and all money
received by the Trustee in respect of Government Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.03, shall
be held in trust and applied by it, in accordance with the provisions of
the Securities of any series and this Indenture, to the payment, to the
persons entitled thereto, of the principal of, premium, if any, and
interest, if any, on the Securities of any series for whose payment
such money has been deposited with or received by the Trustee or to
make mandatory sinking fund payments or analogous payments as
provided by Sections 11.01 or 11.03.
(b) The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed
against Government Obligations deposited pursuant to Sections
11.01 or 11.03 or the interest and principal received in respect of
such obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the
Company from time to time upon Company Request any Government
Obligations or money held by it as provided in Sections 11.01 or
11.03 which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of the
amount thereof which then would have been required to be deposited
for the purpose for which such Government Obligations or money
was deposited or received. This provision shall not authorize the sale
by the Trustee of any Government Obligations held under this
Indenture.
(d) Any monies paid by the Company to the
Trustee or any Paying Agent, or held by the Company in trust, for the
payment of the principal of, premium, if any, interest, if any, or
Additional Amounts, if any, or Additional Interest, if any, on
Securities of any series and remaining unclaimed at the end of two
years after such principal, premium, interest, Additional Interest or
Additional Amounts become due and payable will be repaid to the
Company, or released from the trust, upon its written request, and
upon such repayment or release all liability of the Company, the
Trustee and such Paying Agent with respect thereto will cease.
SECTION 11.03. Satisfaction, Discharge and
Defeasance of Securities of any Series
The Company, at its option, may elect (a) to be
discharged from any and all obligations in respect of the Securities of
a series (except in each case for the obligations to register the transfer
or exchange of the Securities of that series, replace stolen, lost or
mutilated Securities of that series, maintain paying agencies and hold
moneys for payment in trust); or (b) not to comply with any term,
provision or condition set forth in Section 10.01(b) with respect to
the Securities of any series, provided that the following conditions
shall have been satisfied:
The Company has deposited or caused to be
irrevocably deposited (except as provided in Section 6.07, 11.02(d),
and the last paragraph of Section 3.03) with the Trustee (specifying
that each deposit is pursuant to this Section 11.03) as trust funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series, (i) money or
(ii) Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will
provide money in an amount, or (iii) a combination thereof, in each
case, in an amount sufficient, in the opinion of a nationally recognized
firm of independent accountants, to pay and discharge the principal
of, premium, if any, and interest, if any (including any Additional
Amounts or Additional Interest then known), if any, on the
outstanding Securities of such series on the dates such payments are
due in accordance with the terms of the Securities of such series (or if
the Company has designated a Redemption Date pursuant to the final
sentence of this paragraph, to and including the Redemption Date so
designated by the Company), and no Event of Default or event which
with notice or lapse of time would become an Event of Default
(including by reason of such deposit) with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit or, insofar as Sections 5.01(d) and 5.01(e) are concerned, at
any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
satisfied until the expiration of such period), and the Securities of
such series will not be delisted by any securities exchange on which
they are traded as a result of the deposit of trust funds in trust. To
exercise any such option, the Company is required to deliver to the
Trustee (i) an opinion of independent counsel of recognized standing
to the effect that (x) the Holders of the Securities of such series will
not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit, and will be subject to United
States federal income tax on the same amounts, in the same manner
and at the same times as would have been the case absent such
deposit, which in the case of clause (a) above must be based on a
change in law or a published ruling by the United States Internal
Revenue Service, and (y) the deposit shall not result in the Company
being deemed to be an "investment company" required to be
registered under the Investment Company Act and (ii) an Officers'
Certificate certifying (x) as to compliance with all conditions
precedent provided for in this Indenture relating to the satisfaction
and discharge of the Securities of such series and (y) that there does
not exist a default in the payment of all or any portion of any Senior
Debt or any other default affecting Senior Debt permitting its
acceleration as the result of which the maturity of Senior Debt has
been accelerated. If the Company shall wish to deposit or cause to be
deposited money or Government Obligations to pay or discharge the
principal of, premium, if any and interest, if any, (including any
Additional Amounts or Additional Interest then known), if any, on
the outstanding Securities of such series to and including a
Redemption Date on which all of the outstanding Securities of such
series are to be redeemed, such Redemption Date shall be irrevocably
designated by a Board Resolution delivered to the Trustee on or prior
to the date of deposit of such money or Government Obligations, and
such Board Resolution shall be accompanied by an irrevocable
Company Request that the Trustee give notice of such redemption in
the name and at the expense of the Company not less than 30 nor
more than 60 days prior to such Redemption Date in accordance with
this Indenture.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely
Corporate Obligations.
No recourse for the payment of the principal of or
premium, if any, or interest on any Security, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company or the
Guarantor in this Indenture, or in any Security, or because of the
creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or the Guarantor or of any
successor Person to the Company or the Guarantor, either directly or
through the Company or any successor Person to the Company or the
Guarantor, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly
waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Securities.
ARTICLE XIII
REDEMPTION OF SECURITIES
SECTION 13.01. Applicability of Article.
Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with their
terms and (except as otherwise specified in or contemplated by
Section 2.05 for Securities of any series) in accordance with this
Article XIII.
SECTION 13.02. Optional Tax Redemption.
If (a) the Company or Yorkshire Group satisfies the
Trustee prior to the giving of a notice as provided below that it has or
will become obligated to pay Additional Amounts with respect to the
Securities of any series or the Guarantee applicable to such series as a
result of either (x) any change in, or amendment to, the laws or
regulations of a Taxing Jurisdiction or any political subdivision or any
authority or agency thereof or therein having power to tax or levy
duties, or any change in the application or interpretation of such laws
or regulations, which change or amendment becomes effective on or
after the date of the prospectus for such series of Securities or (y) the
issuance of definitive Registered Securities pursuant to either (i) an
Optional Definitive Security Request, (ii) the unwillingness or
inability of DTC to continue to hold the Book-Entry Interests relating
to such series or DTC's ceasing to be a "clearing agency" registered
under the Exchange Act and, in either case, a successor is not
appointed by the Company within 120 days, or (iii) the unwillingness
or inability of the Book-Entry Depositary to continue to serve as the
book-entry depositary with respect to the Global Security or
Securities and a successor is not appointed by the Company within
120 days and (b) such obligation cannot be avoided by the Company
or Yorkshire Group taking reasonable measures available to it, then
the Company shall have the right, at its option, upon not less than 30
days nor more than 60 days' written notice to the Holders of such
series, to redeem such Securities, in whole but not in part, at 100% of
the principal amount thereof plus accrued and unpaid interest thereon,
and Additional Amounts, if any, provided that no such notice of
redemption shall be given earlier than 90 days prior to the earliest
date on which the Guarantor or the Company would be obligated to
pay such Additional Amounts were a payment in respect of such
Securities then due. Prior to the publication of any notice of
redemption pursuant to this Section 13.02, the Company shall deliver
to the Trustee a certificate signed by a director of the Company
stating that the obligation referred to in clause (a) above cannot be
avoided by Yorkshire Group or the Company taking reasonable
measures available to it, and the Trustee shall accept such certificate
as sufficient evidence of the condition precedent set out in clause (b)
above, in which event it shall be conclusive and binding on the
Holders.
SECTION 13.03. Notice of Redemption; Selection of
Securities.
In case the Company shall desire to exercise the right
to redeem all, or, as the case may be, any part of the Securities of any
series in accordance with their terms, it shall fix a date for redemption
and shall mail a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the Holders of
such Securities so to be redeemed as a whole or in part at their last
addresses as the same appear on the Security Register. Such mailing
shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of
any Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other
Security.
Each such notice of redemption shall specify the
CUSIP number of the Securities to be redeemed, the date fixed for
redemption, the Redemption Price at which the Securities are to be
redeemed (or the method by which such Redemption Price is to be
calculated), the place or places of payment, that payment will be
made upon presentation and surrender of the Securities, that interest
accrued to the date fixed for redemption will be paid as specified in
said notice, that the redemption is for a sinking or other fund, if such
is the case, and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. If less than all
the Securities of a series are to be redeemed the notice of redemption
shall specify the numbers of the Securities to be redeemed. In case
any Security is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed
and shall state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued. The
Company may not redeem less than all of the Securities of any series
unless all accrued and unpaid interest, if any, has been paid in full on
all outstanding Securities of such series for all interest periods
terminating on or prior to the Redemption Date.
The Redemption Price shall be paid prior to 12:00
noon, New York City time, on the redemption date specified in the
notice of redemption given as provided in this Section, or such earlier
time as the Company determines; provided that, prior to 10:00 a.m.,
New York City time, on such date of redemption, the Company shall
deposit with the Trustee or with one or more Paying Agents an
amount of money sufficient to redeem all the Securities so called for
redemption at the appropriate Redemption Price, together with
accrued interest to the date fixed for redemption.
The Company will give the Trustee notice in writing
not less than 45 days prior to the redemption date as to the aggregate
principal amount of Securities of such series to be redeemed and the
Trustee shall select, in such manner as in its sole discretion it shall
deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $25, except as otherwise set forth in the
applicable form of Security) to be redeemed.
SECTION 13.04. Securities Payable on Redemption
Date.
Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified,
and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued and unpaid interest
thereon) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice,
and Security shall be paid by the Company at the Redemption Price,
together with accrued and unpaid interest to the Redemption Date;
provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities,
and in the case of the Registered Securities, registered as such at the
close of business on the relevant Record Dates according to their
terms and the provisions of Section 2.11.
In any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and
premium, if any) shall, until paid, bear interest from the Redemption
Date at the rate prescribed therefor in the Security.
SECTION 13.05. Securities Redeemed in Part.
Any Security (including any Global Security) which is
to be redeemed only in part shall be surrendered at a Place of
Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee upon written direction shall
authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of any
authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the security so surrendered; provided, that
if a Global Security is so surrendered, the new Global Security shall
be in a denomination equal to the unredeemed portion of the principal
of the Global Security so surrendered.
ARTICLE XIV
SUBORDINATION OF SECURITIES
SECTION 14.01. Agreement to Subordinate.
The Company covenants and agrees, and each Holder
of Securities of each series issued hereunder by his acceptance of
such Security or Securities likewise shall be deemed to have
covenanted and agreed, that the Securities shall be issued subject to
the provisions of this Article XIV; and each Holder of the Securities
of each series, whether upon original issue or upon transfer or
assignment thereof, so accepts and agrees to be bound by such
provisions.
The payment by the Company of the principal of and
premium, if any, and interest on all Securities issued hereunder shall,
to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to the prior payment in full of all
amounts with respect to Senior Debt of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XIV shall prevent the
occurrence of any Default or Event of Default hereunder.
SECTION 14.02. Default on Senior Debt.
In the event and during the continuation of (1) any
default in any payment of principal, premium, interest or any other
payment with respect to any Senior Debt of the Company, or (2) an
event of default with respect to any Senior Debt of the Company
resulting in the declaration of acceleration thereof which remains
uncured, then, in either case, no payments with respect to the
principal of or premium, if any, or interest or other amounts, if any,
on any Securities shall be made.
In the event of the declaration of acceleration of any
Securities of any series, the holders of all Senior Debt of the
Company outstanding at the time of such declaration shall be entitled
to receive payment in full of all amounts due in respect of such Senior
Debt (including any amounts due upon such declaration) before the
Holders of Securities will be entitled to receive any payment upon the
principal of or premium, if any, or interest, if any, on any of the
Securities.
In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is
prohibited by the preceding paragraphs of this Section 14.02, such
payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt of the Company or their
respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, but only to the extent
of the amounts due in respect of such Senior Debt and only to the
extent that the holders of such Senior Debt (or their representative or
representatives or a trustee) notify the Trustee in writing, within 90
days of such payment, of the amounts then due and owing on such
Senior Debt and only the amounts specified in such notice to the
Trustee shall be paid to the holders of such Senior Debt.
SECTION 14.03. Liquidation; Dissolution;
Bankruptcy.
Upon any payment by the Company or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, or
marshaling of assets of the Company, whether voluntary or
involuntary or any bankruptcy, insolvency, debt restructuring or
similar proceedings in connection with any insolvency or bankruptcy
proceeding of the Company, the holders of Senior Debt of the
Company shall first be entitled to receive payment in full of principal
of and premium, if any, and interest, if any, on such Senior Debt
before the Holders of Securities will be entitled to receive or retain
any payment in respect of the principal of or premium, if any, or
interest or other amounts, if any, on the Securities; and upon any such
dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
which the Holders or the Trustee would be entitled to receive from
the Company, except for the provisions of this Article XIV, shall be
paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Debt of the
Company (pro rata to such holders on the basis of the respective
amounts of Senior Debt of the Company held by such holders, as
calculated by the Company) or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which
any instruments evidencing such Senior Debt may have been issued,
as their respective interests may appear, to the extent necessary to
pay such Senior Debt in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders
of such Senior Debt, before any payment or distribution is made to
the Holders or to the Trustee.
In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee before all Senior Debt of
the Company is paid in full, or provision is made for such payment in
money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of such Senior Debt or their representative or
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing such Senior Debt may
have been issued, and their respective interests may appear, as
calculated by the Company, for application to the payment of all
Senior Debt of the Company remaining unpaid to the extent
necessary to pay such Senior Debt in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution
to or for the benefit of the holders of such Senior Debt.
For purposes of this Article XIV, the words "cash,
property or securities" shall not be deemed to include shares of stock
of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated
at least to the extent provided in this Article XIV with respect to the
Securities to the payment of Senior Debt of the Company that may at
the time be outstanding, provided that (i) such Senior Debt is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
such Senior Debt are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another Person or
the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and
conditions provided for in Article X of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 14.03 if such other Person shall, as a part
of such consolidation, merger, sale, conveyance, transfer or lease,
comply with the conditions stated in Article X of this Indenture.
Nothing in Section 14.02 or in this Section 14.03 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.06 of
this Indenture.
SECTION 14.04. Subrogation.
Subject to the payment in full of all amounts due in
respect of Senior Debt of the Company, the rights of the Holders
shall be subrogated to the rights of the holders of such Senior Debt to
receive payments or distributions of cash, property or securities of the
Company, as the case may be, applicable to such Senior Debt until
the principal of (and premium, if any) and interest on the Securities
shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Debt of any
cash, property or securities to which the Holders or the Trustee
would be entitled except for the provisions of this Article XIV, and
no payment over pursuant to the provisions of this Article XIV to or
for the benefit of the holders of such Senior Debt by Holders or the
Trustee, shall, as between the Company, its creditors other than
holders of Senior Debt of the Company, and the Holders of the
Securities, be deemed to be a payment by the Company to or on
account of such Senior Debt. It is understood that the provisions of
this Article XIV are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one
hand, and the holders of such Senior Debt, on the other hand.
Nothing contained in this Article XIV or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior
Debt of the Company, and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to
pay to the Holders of the Securities the principal of (and premium, if
any) and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and
creditors of the Company, as the case may be, other than the holders
of Senior Debt of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights,
if any, under this Article XIV of the holders of such Senior Debt in
respect of cash, property or securities of the Company, as the case
may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the
Company referred to in this Article XIV, the Trustee, subject to the
provisions of Article VI of this Indenture, and the Holders shall be
entitled to conclusively rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding-
up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of
Senior Debt of the Company and other indebtedness of the Company,
as the case may be, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XIV.
SECTION 14.05. Trustee to Effectuate
Subordination.
Each Holder by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XIV and appoints the Trustee
such Holder's attorney-in-fact for any and all such purposes.
SECTION 14.06. Notice by the Company.
The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Securities pursuant to the provisions of this
Article XIV. Notwithstanding the provisions of this Article XIV or
any other provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of
the Securities pursuant to the provisions of this Article XIV, unless
and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder or holders of
Senior Debt of the Company or from any trustee therefor; and before
the receipt of any such written notice, the Trustee, subject to the
provisions of Article VI of this Indenture, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this
Section 14.06 at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of
(or premium, if any) or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the
same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled to conclusively rely on the delivery to
it of a written notice by a Person representing himself to be a holder
of Senior Debt of the Company, as the case may be (or a trustee on
behalf of such holder), to establish that such notice has been given by
a holder of such Senior Debt or a trustee on behalf of any such holder
or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as
a holder of such Senior Debt to participate in any payment or
distribution pursuant to this Article XIV, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Debt held by such Person,
the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of
such Person under this Article XIV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such
payment.
Upon any payment or distribution of assets of the
Company referred to in this Article XIV, the Trustee and the Holders
shall be entitled to rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or
similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders, for the
purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XIV.
SECTION 14.07. Rights of the Trustee; Holders of
Senior Debt.
The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article XIV in respect of any Senior
Debt of the Company at any time held by it, to the same extent as any
other holder of Senior Debt of the Company, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt of the
Company, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in this
Article XIV, and no implied covenants or obligations with respect to
the holders of such Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be
liable to any holder of such Senior Debt if it shall pay over or deliver
to Holders, the Company or any other Person money or assets to
which any holder of such Senior Debt shall be entitled by virtue of
this Article XIV or otherwise.
Nothing in this Article XIV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
SECTION 14.08. Subordination May Not Be
Impaired.
No right of any present or future holder of any Senior
Debt of the Company to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder
may have or otherwise be charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Debt of the Company
may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders, without incurring responsibility
to the Holders and without impairing or releasing the subordination
provided in this Article XIV or the obligations hereunder of the
Holders of the Securities to the holders of such Senior Debt, do any
one or more of the following: (i) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, such
Senior Debt, or otherwise amend or supplement in any manner such
Senior Debt or any instrument evidencing the same or any agreement
under which such Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Debt; (iii) release any Person liable in
any manner for the collection of such Senior Debt; and (iv) exercise
or refrain from exercising any rights against the Company and any
other Person.
ARTICLE XV
GUARANTEE OF SECURITIES
SECTION 15.01. Applicability of Article;
Unconditional Guarantee.
If, pursuant to Section 2.05, provision is made for the
Guarantee of the Securities of any series by the Guarantor, then the
provisions of this Article XV, with such modifications thereto as may
be specified pursuant to Section 2.05 with respect to any Securities,
shall apply to such Securities. The Guarantor hereby fully and
unconditionally guarantees, on a subordinated basis as described
herein, to each Holder of a Security of each series authenticated and
delivered by the Trustee the due and punctual payment of the
principal (including any amount due in respect of original issue
discount), premium, if any, and interest in respect of such Security
(and any Additional Amounts and Additional Interest payable in
respect thereof) (subject to any extension of an interest payment
period pursuant to Section 2.05), and the due and punctual payment
of any sinking fund payments provided for pursuant to terms of such
Security, when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of such
Security and of this Indenture, regardless of any defense, right of set-
off or counterclaim that the Guarantor may have or assert, except the
defense of payment. The Guarantor's obligation to make a payment
under this Article XV may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the
Company to pay such amounts to the Holders.
To the extent permitted under applicable law, if any
Holder or the Trustee is required by a final non-appealable judgment
of any court or otherwise to return to either the Company or the
Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or the Guarantor, any
amount paid by either the Company or the Guarantor to such Holder
or the Trustee, any Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. To the extent permitted
under applicable law, the Guarantor further agrees that, as between
the Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article V for the purpose of any
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any acceleration of such obligations as
provided in Article V, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for
the purpose of any Guarantee.
No past, present or future stockholder, officer,
director, employee or incorporator of the Guarantor shall have any
personal liability under the Guarantee set forth in this Section 15.01
by reason of his or its status as such stockholder, officer, director,
employee or incorporator.
The Guarantee set forth in this Section 15.01 shall not
be valid or become obligatory for any purpose with respect to a
Security until the certificate of authentication on such Security shall
have been authenticated by or on behalf of the Trustee by manual
signature.
SECTION 15.02. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of
this guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, the Trustee or any
other Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 15.03. Guarantor Obligations Not
Affected.
The obligations, covenants, agreements and duties of
the Guarantor under this Article XV shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Company of any
express or implied agreement, covenant, term or condition relating to
the Securities to be performed or observed by the Company;
(b) the extension of time for the payment by the
Company of all or any portion of the interest on the Securities, the
Redemption Price of any other sums payable under the terms of the
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Securities, or any action on the part of the Company
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Company or any of the assets of the Company;
(e) any invalidity of, or defect or deficiency in, the
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a
guarantor (other than payment of the underlying obligation), it being
the intent of this Article XV that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 15.04. Execution of Guarantee.
To evidence its guarantee to the Holders specified in
Section 15.01, the Guarantor hereby agrees to execute the notation of
the Guarantee in substantially the form set forth in Section 2.04 to be
endorsed on each Security authenticated and delivered by the
Trustee. The Guarantor hereby agrees that its Guarantee set forth in
Section 15.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Guarantee.
Each such notation of the Guarantee shall be signed on behalf of the
Guarantor, by a director or officer, prior to the authentication of the
Security on which it is endorsed, and the delivery of such Security by
the Trustee, after the due authentication thereof by the Trustee
hereunder, shall constitute due delivery of the Guarantee on behalf of
the Guarantor. Such signature upon the notation of the Guarantee
may be a manual or facsimile signature of any present, past or future
such director or officer and may be imprinted or otherwise
reproduced below the notation of the Guarantee, and in case any such
director or officer who shall have signed the notation of the
Guarantee shall cease to be such director or officer before the
Security on which such notation is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed the
notation of the Guarantee had not ceased to be such director or
officer of the Guarantor.
SECTION 15.05. Subrogation.
The Guarantor shall be subrogated to all rights (if any)
of the Holders against the Company in respect of any amounts paid to
the Holders by the Guarantor under this Article XV with respect to
any series of Securities; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Article XV with respect
to a series of Securities, if, at any time of such payment, any amounts
are due and unpaid under such series of Securities. If any amount
shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.
SECTION 15.06. Independent Obligations.
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Company with
respect to the Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make payments pursuant to the
terms of the Securities notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 15.03
hereof.
SECTION 15.07. Subordination.
The Guarantor covenants and agrees, and each Holder
of Securities of each series issued hereunder, by his acceptance
thereof, likewise covenants and agrees, that, to the extent that this
Article XV is applicable to such series of Securities, all payments in
respect of the Guarantee are hereby expressly made subordinate and
subject in right of payment to the prior payment in full in cash of all
Senior Debt of the Guarantor to the same extent and in the same
manner set forth in Article XIV with respect to subordination and
relative rights of such series of Securities.
ARTICLE XVI
SINKING FUNDS
SECTION 16.01. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as
otherwise specified as contemplated by Section 2.05 for Securities of
such series.
The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred
to as a "mandatory sinking fund payment", and any payment in excess
of such minimum amount provided for by the terms of Securities of
any series is herein referred to as an "optional sinking fund payment".
If provided for by the terms of Securities of any series, the cash
amount of any sinking fund payment may be subject to reduction as
provided in Section 16.02. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 16.02. Satisfaction of Sinking Fund
Payments with Securities.
In lieu of making all or any part of any mandatory
sinking fund payment with respect to any series of Securities in cash,
the Company may at its option (a) deliver to the Trustee Securities of
such series theretofore purchased or otherwise acquired (except upon
redemption pursuant to the mandatory sinking fund) by the Company
or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.14, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to
this Section 16.02, or (c) receive credit for Securities of such series
(not previously so credited) redeemed by the Company through any
optional redemption provision contained in the terms of the Securities
of such series. Securities so delivered or credited shall be received or
credited by the Trustee at the sinking fund Redemption Price
specified in the Securities of such series.
SECTION 16.03. Redemption of Securities for
Sinking Fund.
Not less than 30 days prior to each sinking fund
payment date of any series, the Company will deliver to the Trustee
an Officers' Certificate specifying (a) the amount of the next ensuing
sinking fund payment for the Securities of that series pursuant to the
terms of the Securities of that series, (b) whether or not the Company
intends to exercise its right, if any, to make an optional sinking fund
payment with respect to the Securities of such series on the next
ensuing sinking fund payment date and, if so, the amount of such
optional sinking fund payment, and (c) the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of
that series pursuant to Section 16.02, and will also deliver to the
Trustee any Securities to be so delivered. Such written statement
shall be irrevocable and upon its receipt by the Trustee the Company
shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Company, on
or before any such 30th day, to deliver such written statement and
Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute, on and as of such date, the irrevocable
election of the Company (i) that the mandatory sinking fund payment
for the Securities of such series due on the next succeeding sinking
fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect therefor and (ii)
that the Company will make no optional sinking fund payment with
respect to the Securities of such series as provided in this Section
16.03.
Not less than 30 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in
Section 13.03 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner
provided in Section 13.03. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the
manner stated in Section 13.04.
The Trustee shall not redeem or cause to be redeemed
any Security of a series with sinking fund moneys or mail any notice
of redemption of Securities of such series by operation of the sinking
fund during the continuance of a default in payment of interest with
respect to Securities of that series or an Event of Default with respect
to the Securities of that series except that, where the mailing of notice
of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities,
provided that it shall have received from the Company a sum
sufficient for such redemption. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such default or
Event of Default, shall occur, and any moneys thereafter paid into the
sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and
held for the payment of all such Securities. In case such Event of
Default shall have been waived as provided in Section 5.06 or the
default or Event of Default cured on or before the 30th day preceding
the sinking fund payment date, such moneys shall thereafter be
applied on the next succeeding sinking fund payment date in
accordance with this Section 16.03 to the redemption of such
Securities.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
SECTION 17.01. Consent to Jurisdiction; Appointment of Agent
to Accept Service of Process
(a) Each of the Company and the Guarantor
irrevocably consents and agrees, for the benefit of the Holders from
time to time of the Securities and the Trustee, that any civil legal
action, suit or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection with this
Indenture, the Securities or any Guarantee may be brought in the
Supreme Court of New York, New York County or the United
States District Court for the Southern District of New York and any
appellate court from either thereof and, until amounts due and to
become due in respect of the Securities or any Guarantee have been
paid, hereby irrevocably consents and submits to the non-exclusive
jurisdiction of each such court in person and generally and
unconditionally with respect to any legal action, suit or proceeding
for itself and in respect of its properties, assets and revenues and
agrees to file such consents with such authorities as may be required
to irrevocably evidence such agreement.
(b) Each of the Company and the Guarantor has
irrevocably designated, appointed, and empowered CT Corporation
System, acting through its office at 1633 Broadway, New York, New
York 10019, as its designee, appointee and agent to receive, accept
and acknowledge for and on its behalf, and its properties, assets and
revenues, service of any and all legal process, summons, notices and
documents which may be served in any legal action, suit or
proceeding brought against the Company or the Guarantor in any
United States or state court. If for any reason such designee,
appointee and agent hereunder shall cease to be available to act as
such, each of the Company and the Guarantor agrees to designate a
new designee, appointee and agent in the Borough of Manhattan, The
City of New York on the terms and for the purposes of this Section
17.01 satisfactory to the Trustee. Each of the Company and the
Guarantor further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents
in any legal action, suit or proceeding against the Company or the
Guarantor by serving a copy thereof upon the relevant agent for
service of process referred to in this Section 17.01 (whether or not
the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such service) or
by mailing copies thereof by registered or certified air mail, postage
prepaid, to each of the Company or the Guarantor at its address
specified in or designated pursuant to this Indenture. Each of the
Company and the Guarantor agrees that the failure of any such
designee, appointee and agent to give any notice of such service to it
shall not impair or affect in any way the validity of such service or any
judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the
holders of the Securities and the Trustee, to serve any such legal
process, summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction over the
Company or the Guarantor or bring legal actions, suits or
proceedings against the Company or the Guarantor in such other
jurisdictions, and in such manner, as may be permitted by applicable
law. Each of the Company and the Guarantor irrevocably and
unconditionally waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions, suits or proceedings arising out of or
in connection with this Indenture brought in the Supreme Court of
New York, New York County or the United States District Court for
the Southern District of New York and any appellate court from
either thereof and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) To the extent that the Company or the
Guarantor may in any jurisdiction claim for itself or its assets
immunity (to the extent such immunity may now or hereafter exist,
whether on the grounds of sovereign immunity or otherwise) from
suit, execution, attachment (whether in aid of execution, before
judgment or otherwise) or other legal process (whether through
service or notice or otherwise), and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such
immunity (whether or not claimed), the Company and the Guarantor
irrevocably agrees with respect to any matter arising under this
Indenture for the benefit of the Holders from time to time of the
Securities, not to claim, and irrevocably waives, such immunity to the
full extent permitted by the laws of such jurisdiction.
(d) If for the purpose of obtaining a judgment or
order in any court it is necessary to convert a sum due hereunder to
the holder of any Security from Dollars into another currency, each of
the Company and the Guarantor has agreed, and each holder by
holding such Security will be deemed to have agreed, to the fullest
extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures
such Holder could purchase Dollars with such other currency in The
City of New York on the Business Day preceding the day on which
final judgment is given.
(e) The obligation of the Company and the
Guarantor in respect of any sum payable by it to the holder of a
Security shall, notwithstanding any judgment or order in a currency
(the "judgment currency") other than Dollars, be discharged only to
the extent that on the Business Day following receipt by the Holder
of such security of any sum, adjudged to be so due in the judgment
currency, the Holder of such Security may in accordance with normal
banking procedures purchase Dollars with the judgment currency; if
the amount of Dollars so purchased is less than the sum originally due
to the holder of such Security in the judgment currency (determined
in the manner set forth in the preceding paragraph), each of the
Company and the Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Holder of such
Security against such loss, and if the amount of the Dollars so
purchased exceeds the sum originally due to the Holder of such
Security, such Holder agrees to remit to the Company or the
Guarantor such excess, provided that such Holder shall have no
obligation to remit any such excess as long as the Company or the
Guarantor shall have failed to pay such Holder any obligations due
and payable under such Security, in which case such excess may be
applied to such obligations of the Company or the Guarantor under
such Security in accordance with the terms thereof. The foregoing
indemnity shall constitute a separate and independent obligation of
the Company and the Guarantor and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid.
SECTION 17.02. Successors.
All the covenants, stipulations, promises and
agreements in this Indenture contained by the Company and the
Guarantor shall bind their successors and assigns whether so
expressed or not.
SECTION 17.03. Official Acts by Successor
Corporation.
Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any
board, committee or officer of the Company shall and may be done
and performed with like force and effect by the like board, committee
or officer of any corporation that shall at the time be the lawful sole
successor of the Company.
SECTION 17.04. Execution in Counterparts.
This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed by their respective officers,
directors or signatories duly authorized thereto, as of the day and
year first above written.
YORKSHIRE POWER
FINANCE LIMITED
By
Name: Armando A.
Pena
Title: Authorized
Signatory
YORKSHIRE POWER
GROUP LIMITED
By
Name: Armando A.
Pena
Title: Authorized
Signatory
THE BANK OF NEW
YORK,
as Trustee, Principal
Paying, Security
Registrar and Transfer
Agent
By
Name:
Title:
BANQUE GENERALE
DU LUXEMBOURG
S.A.,
as Paying Agent and
Transfer Agent
By
Name:
Title:
2NY-112556.1
118NY-112556.15
iNY-112556.15
EXHIBIT 4.2
YORKSHIRE POWER FINANCE LIMITED, as Issuer
and
YORKSHIRE POWER GROUP LIMITED, as Guarantor
and
THE BANK OF NEW YORK,
as Trustee, Principal Paying Agent,
Registrar and Transfer Agent
and
BANQUE GENERALE DU LUXEMBOURG S.A.,
as Paying Agent and Transfer Agent
$275,000,000
8.08% Junior Subordinated Deferrable Interest
Debentures, Series A due June 30, 2038
First Supplemental Indenture
Dated as of June 1, 1998
FIRST SUPPLEMENTAL INDENTURE, dated as of
June 1, 1998 (this "First Supplemental Indenture"), among
YORKSHIRE POWER FINANCE LIMITED, a private company
with limited liability incorporated under the laws of the Cayman
Islands, as issuer (the "Company"), YORKSHIRE POWER GROUP
LIMITED, a private company with limited liability incorporated
under the laws of England and Wales, as guarantor (the
"Guarantor"), THE BANK OF NEW YORK, as Trustee, Principal
Paying Agent, Registrar and Transfer Agent under the Original
Indenture referred to below (the "Trustee"), and BANQUE
GENERALE DU LUXEMBOURG S.A., as Paying and Transfer
Agent under the Original Indenture.
WITNESSETH:
WHEREAS, each of the Company and the Guarantor
has heretofore executed and delivered to the Trustee an indenture
dated as of June 1, 1998 (hereinafter called the "Original Indenture"),
to provide for the issuance from time to time of certain of its
unsecured subordinated debentures, notes or other evidences of
indebtedness (herein called the "Securities"), the form and terms of
which are to be established as set forth in Sections 2.01 and 2.05 of
the Original Indenture;
WHEREAS, Section 9.01 of the Original Indenture
provides, among other things, that the Company, the Guarantor and
the Trustee may enter into indentures supplemental to the Original
Indenture for, among other things, the purpose of establishing the
form and terms of the Securities of any series as permitted by
Sections 2.01 and 2.05 of the Original Indenture and of appointing an
Authenticating Agent with respect to the Securities of any series;
WHEREAS, the Company desires to create a series of
the Securities in an aggregate principal amount of $275,000,000 to be
designated "8.08% Junior Subordinated Deferrable Interest
Debentures, Series A due June 30, 2038", and all action on the part
of the Company necessary to authorize the issuance of these
Securities under the Original Indenture and this First Supplemental
Indenture has been duly taken; and
WHEREAS, all acts and things necessary to make
such Securities, when executed by the Company and the Guarantor
and authenticated and delivered by the Trustee as in the Original
Indenture provided, the valid and binding obligations of the Company
and the Guarantor and to constitute these presents a valid and binding
supplemental indenture and agreement according to its terms, have
been done and performed;
NOW, THEREFORE, THIS FIRST
SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises and of the
acceptance and purchase of the Series A Debentures (hereinafter
defined) by the holders thereof and of the acceptance of this trust by
the Trustee, each of the Company and the Guarantor covenants and
agrees with the Trustee, for the equal benefit of holders of the Series
A Debentures, as follows:
ARTICLE ONE
DEFINITIONS
The use of the terms and expressions herein is in
accordance with the definitions, uses and constructions contained in
the Original Indenture and the forms of Securities attached hereto as
Exhibits A and B, respectively. In addition, for all purposes of this
First Supplemental Indenture, except as otherwise expressly provided
herein or in the Original Indenture or unless the context otherwise
expressly requires, the following terms shall have the respective
meanings assigned to them as follows and shall be construed as if
defined in Article One of the Original Indenture:
"Book-Entry Depositary" means The Bank of New
York as designated by the Company in the Deposit Agreement until a
successor shall have become such pursuant to the applicable
provisions of the Deposit Agreement, and thereafter "Book-Entry
Depositary" shall mean such successor Book-Entry Depositary or its
nominee or the custodian of either.
"Deferred Interest" means each installment of interest
not paid during any Extension Period and interest thereon. Deferred
Interest shall bear interest at the rate of 8.08% per annum from the
applicable Interest Payment Date to the date of payment,
compounded quarterly, to the extent permitted by applicable law.
"Definitive Registered Series A Debentures" means
Series A Debentures substantially in the form of Exhibit B to this
First Supplemental Indenture.
"Deposit Agreement" means the Deposit Agreement,
dated as of June 1, 1998, among the Company, the Book-Entry
Depositary and the holders and beneficial owners from time to time of
interests in the Book-Entry Interests issued thereunder.
"DTC" means The Depository Trust Company, New
York, New York, or its successors.
"Extension Period" means any period during which the
Company has elected to defer payments of interest, which deferral
may be for a period of up to twenty (20) consecutive quarters but, in
no event, beyond the Stated Maturity.
"Global Series A Debentures" means Global Bearer
Securities, evidencing the Series A Debentures issued to the Book-
Entry Depositary substantially in the form of Exhibit A to this First
Supplemental Indenture.
"Series A Debentures" means the Company's 8.08%
Junior Subordinated Deferrable Interest Debenture, Series A due
June 30, 2038, as authenticated and issued under this First
Supplemental Indenture.
"Stated Maturity" means, with respect to the Series A
Debentures, June 30, 2038.
"Trust" means Yorkshire Capital Trust I, a statutory
business trust created under Delaware law to issue 11,000,000 8.08%
Trust Securities (the "Trust Securities"), the proceeds of which will
be used to purchase the Series A Debentures.
ARTICLE TWO
TERMS AND ISSUANCE OF THE SERIES A DEBENTURES
SECTION 201. Issue of Securities. A series of
Securities which shall be designated "8.08% Junior Subordinated
Deferrable Interest Debentures, Series A due June 30, 2038" shall be
executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, the terms,
conditions and covenants of the Original Indenture and this First
Supplemental Indenture (including the forms of Series A Debentures
set forth in Exhibits A and B hereto). The aggregate principal
amount of the Series A Debentures which may be authenticated and
delivered under this First Supplemental Indenture shall not, except as
permitted by the provisions of the Original Indenture, exceed
$275,000,000.
SECTION 202. Form of Series A Debentures;
Incorporation of Terms. The forms of the Global Series A
Debentures and the Definitive Registered Series A Debentures shall
be substantially in the forms of Exhibits A and B, respectively,
attached hereto, the terms of which are herein incorporated by
reference and which are part of this First Supplemental Indenture.
SECTION 203. Additional Interest. So long as
any Trust Securities remain outstanding, if the Trust shall be required
to pay, with respect to its income derived from payments of principal
of or interest on the Series A Debentures or pursuant to the
Guarantee, any amounts for or on an account of any taxes, duties,
assessments or governmental charges of whatever nature imposed by
a Taxing Jurisdiction or any other taxing authority, then, in any such
case, the Company or the Guarantor, as the case may be, will pay
Additional Interest on the Series A Debentures.
SECTION 204. Deferral of Interest Payments.
So long as no Event of Default has occurred and is continuing, the
Company has the right to defer interest payments on the Series A
Debentures, at any time and from time to time during the term of the
Series A Debentures, for up to twenty (20) consecutive quarters, but
not beyond the Stated Maturity. Until all Deferred Interest has been
paid in full, interest on the Series A Debentures will continue to
accrue, together with interest thereon, at 8.08%, to the extent
permitted by applicable law. Prior to the termination of any
Extension Period, the Company may further extend the interest
payment period, provided that such Extension Period, together with
all such previous and further extensions of that Extension Period,
shall not exceed twenty (20) consecutive quarters or the Stated
Maturity.
Upon the termination of any Extension Period, which
termination shall be on an Interest Payment Date, the Company shall
pay all Deferred Interest on such Interest Payment Date (in the case
of a Global Series A Debenture) to the bearer thereof and (in the case
of a Definitive Registered Series A Debenture) to the Person in
whose name the Definitive Registered Series A Debentures (or one or
more Predecessor Securities thereto) are registered on the Regular
Record Date for such Interest Payment Date; provided, that Deferred
Interest payable at the Stated Maturity or on any Redemption Date
will be paid to the Person to whom principal is payable.
The Company shall give the Holder or Holders of the
Series A Debentures and the Trustee (and, so long as the Series A
Debentures are held by or for the benefit of the Trust, the Property
Trustee thereof) notice of its intention to defer interest payments at
least one Business Day prior to the earlier of (i) the next succeeding
Interest Payment Date and (ii) the date the Company is required to
give notice to the New York Stock Exchange or other applicable self-
regulatory organization or to the Holders of the Series A Debentures
of any Regular Record Date or such Interest Payment Date, but, in
any event, not less than one Business Day prior to such Regular
Record Date. For purposes of calculating an Extension Period, the
month in which any notice is given pursuant to the immediately
preceding sentence of this Section shall constitute the first month of
the first quarter of such Extension Period.
At any time any of the foregoing notices are given to
the Trustee, the Company shall give to the Paying Agent for the
Series A Debentures such information as said Paying Agent shall
reasonably require to order to fulfill its tax reporting obligations with
respect to such Series A Debentures.
SECTION 205. Guarantee. The Guarantee
provided by Article XV of the Original Indenture shall be applicable
to the Series A Debentures.
SECTION 206. Place of Payment. The Place of
Payment in respect of the Series A Debentures will be in The City of
New York, initially the Corporate Trust Office, and, for so long as
the Series A Debentures are listed on the Luxembourg Stock
Exchange, in Luxembourg, initially the corporate trust office of
Banque Generale du Luxembourg S.A., which at the date hereof, is
located at 50 Avenue J. F. Kennedy, L-2951 Luxembourg.
SECTION 207. Issuance of Global Series A
Debentures. The Series A Debentures shall be initially issued in the
form of one or more Global Series A Debentures and delivered by the
Trustee to the Book-Entry Depositary, as the Holder thereof, or a
nominee or custodian therefor, to be held by the Book-Entry
Depositary pursuant to the Deposit Agreement initially for the benefit
of the Trust. Definitive Registered Series A Debentures shall only be
issued by the Company in exchange for the Global Series A
Debentures in the circumstances set forth in the Global Series A
Debentures.
SECTION 208. Regular Record Date for the
Definitive Registered Series A Debentures. The Regular Record
Date for the Definitive Registered Series A Debentures shall be 15
calendar days immediately prior to each Interest Payment Date.
SECTION 209. Redemption. The Series A
Debentures shall be redeemable prior to the Stated Maturity at the
option of the Company, in whole or in part, without premium or
penalty, at any time or from time to time on or after June 9, 2003, at
a Redemption Price equal to 100% of the principal amount thereof
plus any accrued but unpaid interest thereon, including Additional
Interest and Additional Amounts, if any, to the Redemption Date;
provided, however, that if a redemption in part shall result in the
delisting of the Trust Securities, the Company may only redeem the
Series A Debentures in whole. In addition, following the occurrence
of a Special Event at any time, the Company may, within ninety (90)
days following the occurrence thereof and subject to the terms and
conditions of the Indenture, elect to redeem the Series A Debentures,
in whole (but not in part), at a price equal to 100% of the principal
amount thereof plus any accrued but unpaid interest thereon
(including Additional Interest and Additional Amounts, if any) to the
Redemption Date.
The Series A Debentures shall also be redeemable
pursuant to Section 13.02 of the Original Indenture.
The Company shall not redeem less than all of the
Series A Debentures unless all accrued and unpaid interest, if any, has
been paid in full on all Outstanding Series A Debentures for all
interest periods terminating on or prior to the Redemption Date.
In the event of redemption of the Series A Debentures
in part only, a new Series A Debenture or Debentures for the
unredeemed portion will be issued in the name or names of the
Holders thereof upon the surrender thereof.
The Series A Debentures shall not have a sinking fund.
Notice of redemption shall be given as provided in
Section 13.03 of the Original Indenture.
Any redemption of less than all of the Series A
Debentures shall, with respect to the principal thereof, be divisible by
$25.
SECTION 210. Listing of Series A Debentures.
If the Trust is dissolved and liquidated and the Series A Debentures
are distributed to the holders of the Trust Securities, the Company
will use its best efforts to list the Series A Debentures on the New
York Stock Exchange or such other stock exchange or other
organization, if any, on which the Trust Securities are then listed.
ARTICLE THREE
AUTHENTICATING AGENT; BOOK-ENTRY DEPOSITARY
SECTION 301. Authenticating Agent; Book-
Entry Depositary. The Bank of New York, a New York banking
corporation, and its successors are hereby appointed Authenticating
Agent and Book-Entry Depositary with respect to the Series A
Debentures.
ARTICLE FOUR
MISCELLANEOUS
SECTION 401. Execution of Supplemental
Indenture. This First Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Original Indenture and,
as provided in the Original Indenture, this First Supplemental
Indenture forms a part thereof.
SECTION 402. Conflict with Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this First
Supplemental Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
SECTION 403. Effect of Headings. The Article
and Section headings herein are for convenience only and shall not
affect the construction hereof.
SECTION 404. Successors and Assigns. All
covenants and agreements in this First Supplemental Indenture by
each of the Company or the Guarantor shall bind its successors and
assigns, whether so expressed or not.
SECTION 405. Separability Clause. In case
any provision in this First Supplemental Indenture or in the Series A
Debentures shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
SECTION 406. Benefits of First Supplemental
Indenture. Nothing in this First Supplemental Indenture or in the
Series A Debentures, express or implied, shall give to any person,
other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim
under this First Supplemental Indenture.
SECTION 407. Execution and Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same
instrument
IN WITNESS WHEREOF, the parties hereof have
caused this First Supplemental Indenture to be duly executed by their
respective officers, directors or signatories duly authorized thereto,
all as of the day and year first above written.
YORKSHIRE POWER
FINANCE LIMITED
By
Title:
YORKSHIRE POWER
GROUP LIMITED
By
Title:
THE BANK OF NEW
YORK,
as Trustee, Principal
Paying Agent, Security
Registrar and Transfer
Agent
By
Title:
BANQUE GENERALE
DU LUXEMBOURG
S.A., as Paying Agent
and Transfer Agent
By
Title:
EXHIBIT A
[FORM OF FACE OF GLOBAL SERIES A DEBENTURE]
THE INDEBTEDNESS EVIDENCED BY THIS
SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE HEREINAFTER REFERRED TO, SUBORDINATE
AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR
PAYMENT IN FULL OF ALL SENIOR DEBT OF THE
COMPANY AND THIS SECURITY IS ISSUED SUBJECT TO
THE PROVISIONS OF THE INDENTURE WITH RESPECT
THERETO.
THIS SECURITY IS A GLOBAL BEARER
SECURITY WITHIN THE MEANING OF THE INDENTURE.
THIS SECURITY IS EXCHANGEABLE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED HEREIN AND IN
THE INDENTURE.
UNLESS THIS GLOBAL BEARER SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE BEARER HEREOF, WHICH SHALL INITIALLY BE THE
BOOK-ENTRY DEPOSITARY, TO THE COMPANY OR ITS
AGENT FOR EXCHANGE OR PAYMENT, AND ANY
DEFINITIVE REGISTERED SERIES A DEBENTURE IS ISSUED
IN THE NAME OR NAMES AS DIRECTED IN WRITING BY
THE BEARER HEREOF, WHICH SHALL INITIALLY BE THE
BOOK-ENTRY DEPOSITARY, ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE
BEARER HEREOF, WHICH INITIALLY SHALL BE THE
BOOK-ENTRY DEPOSITARY, HAS AN INTEREST HEREIN.
YORKSHIRE POWER FINANCE LIMITED
____% Junior Subordinated Deferrable Interest Debenture, Series A
due ______, 2038
No. $
CUSIP No.:________
YORKSHIRE POWER FINANCE LIMITED, a
private company with limited liability incorporated under the laws of
the Cayman Islands (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to the bearer
upon surrender hereof, the principal sum of __________ Dollars? on
________________, and to pay interest thereon from
_____________, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, quarterly in arrears
on ____________, ____________, ____________ and
____________ in each year, commencing ________________, 1998,
at the rate per annum provided in the title hereof, until the principal
hereto is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the bearer on such
Interest Payment Date. The term "interest" as used herein shall be
deemed to include interest on quarterly interest payments in arrears,
Additional Interest and Additional Amounts, as applicable. So long
as an Extension Period is not occurring, any such interest not so
punctually paid or duly provided for will forthwith cease to be
payable to the bearer on such Interest Payment Date and may be paid
to the bearer hereof at the time of payment of such Defaulted Interest
or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture.
All payments in respect of this Security and all
payments made pursuant to the Guarantee of this Security shall be
made in immediately available funds at or through the office or
agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, and, for so long as this
Security shall be listed on the Luxembourg Stock Exchange, in
Luxembourg, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of
public and private debt.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right at any time and from
time to time during the term of this Security to defer interest
payments in such Security for up to 20 consecutive quarters but not
beyond the Stated Maturity of this Security (each, an "Extension
Period"), during which unpaid interest (together with interest
thereon) will compound quarterly at the interest rate on this Security
("Deferred Interest"). Upon the termination of each Extension
Period, which shall be an Interest Payment Date, the Company shall
pay all Deferred Interest on such Interest Payment Date to the bearer
thereof, as provided in the Indenture, provided that any Deferred
Interest payable at the Stated Maturity of this Security or on any
Redemption Date will be paid to the Person to whom principal is
payable. Prior to the termination of any such Extension Period, the
Company may extend the interest payment period, provided that such
Extension Period together with all such previous and further
extensions thereof shall not exceed 20 consecutive quarters of the
Stated Maturity of this Security. Upon the termination of any such
Extension Period, and the payment of all accrued and unpaid interest
then due, the Company may commence a new Extension Period,
subject to the above requirements. If the Company shall have given
notice of its election to commence an Extension Period, neither the
Company nor the Guarantor shall, directly or indirectly, (i) declare or
pay any cash dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its
capital stock (which includes common and preferred stock), (ii) make
any payments on, or repay, repurchase or redeem, any of its debt
securities (including any other securities issued under the Indenture or
other junior subordinated securities issued by the Company) that rank
pari passu with or junior in interest to the Securities or the Guarantee,
respectively, (iii) make any payments with respect to any guarantee
that ranks pari passu with or junior in interest to the Securities or the
Guarantee, respectively, or (iv) make any payments on, or repay,
repurchase or redeem, any of its debt securities held by, make any
loans or advances to, or make any payments with respect to any
guarantee of the debt of, any affiliate, in each case other than (a)
dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of the
Company or the Guarantor and exchanges or conversions of common
stock of one class for common stock of another class, (b) payments
by the Guarantor under the Trust Securities Guarantee (or any other
guarantee by the Guarantor with respect to any securities issued by of
its direct or indirect subsidiaries, provided that the proceeds from the
issuance of such securities were used to purchase other securities
issued under the Indenture or other junior subordinated securities
issued by the Company), (c) payments by the Guarantor under the
Guarantee, (d) any dividend or payment by the Guarantor which is
applied, directly or indirectly, to the payment of any Tax Payments,
(e) payments by the Guarantor, directly or indirectly, on the
Intercompany Notes or any other promissory notes held by the
Company (or any other direct or indirect wholly-owned subsidiary of
the Guarantor) evidencing loans made with the proceeds from the
issuance by the Company (or any other direct or indirect wholly-
owned subsidiary of the Guarantor) of securities guaranteed by the
Guarantor or (f) the reinvestment of any proceeds received under
clause (e) above by the Company (or any other direct or indirect
wholly-owned subsidiary of the Guarantor) in additional debt
securities of the Guarantor or any of its other direct or indirect
wholly-owned subsidiaries. The Company shall give the Holder of
this Security and the Trustee notice of its intention to defer interest
payments at least one Business Day prior to the earlier of (i) the next
succeeding Interest Payment Date and (ii) the date the Company is
required to give notice to the New York Stock Exchange or other
applicable self-regulatory organization or to the Holder of this
Security of any Regular Record Date or such Interest Payment Date,
but, in any event, not less than one Business Day prior to such
Regular Record Date.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt (as defined in
the Indenture) of the Company, and this Security is issued subject to
the provisions of the Indenture with respect thereto. Each Holder of
this security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided, and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes. Each Holder
hereof, by his acceptance hereof, waives any notice of the acceptance
of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt of the Company, whether now
outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
All payments of principal of and premium, if any, and
interest on this Security and all payments made pursuant to the
Guarantee of this Security shall be made free and clear of, and
without withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by
or within a Taxing Jurisdiction or by or within any political
subdivision thereof or any authority therein or thereof having power
to tax ("Gross-Up Taxes"), unless such withholding or deduction is
required by law. In the event of any such withholding or deduction,
the Company or the Guarantor, as the case may be, shall pay to the
relevant Holder such additional amounts that would otherwise have
been due to such Holder in the absence of such withholding or
deduction ("Additional Amounts"), except that no such Additional
Amounts shall be payable:
(a) to, or to a Person on behalf of, a Holder who is
liable for such Gross-Up Taxes in respect of this Security or
the Guarantee of this Security by reason of such Holder or
beneficial owner having some connection with the relevant
Taxing Jurisdiction (including being a citizen or resident or
national of, or carrying on a business or maintaining a
permanent establishment in, or being physically present in,
such Taxing Jurisdiction) other than the mere holding of this
Security or the receipt of principal of, and premium, if any and
interest in respect thereof or in respect of the Guarantee of
this Security;
(b) to, or to a Person on behalf of, a Holder who
presents this Security (where presentation is required) for
payment more than 30 days after the Relevant Date except to
the extent that the Holder would have been entitled to such
Additional Amounts on presenting this Security for payment
on the last day of such period of 30 days;
(c) to, or to a Person on behalf of, a Holder who
presents this Security (where presentation is required) in the
United Kingdom or Cayman Islands;
(d) to, or to a Person on behalf of, a Holder who
would not be liable or subject to the withholding or deduction
by making a declaration of non-residence or similar claim for
exemption to the relevant tax authority; or
(e) to, or to a Person on behalf of, a Holder of a
Registered Security that is not a Global Security issued
pursuant to the written request of any beneficial owner of
interests in such Securities (an "Optional Definitive Security
Request") following and during the continuance of an Event
of Default if such Holder (or any predecessor Holder) was an
owner requesting that such Registered Securities be so issued.
Such Additional Amounts will also not be payable
where, had the beneficial owner of the Security (or any interest
therein) been the Holder of the Security, he would not have been
entitled to payment of Additional Amounts by reason of any one or
more of clauses (a) through (e) above. If the Company or the
Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence,
the Company or the Guarantor, as applicable, will inform such Holder
promptly after making such determination setting forth the reason(s)
therefor.
"Relevant Date" means whichever is the later of (i) the
date on which such payment first becomes due and (ii) if the full
amount payable has not been received in The City of New York by
the Book-Entry Depositary or the Trustee on or prior to such due
date, the date on which, the full amount having been so received,
notice to that effect shall have been given to the bearer hereof in
accordance with the Indenture.
References to principal of and premium or interest on
this Security or any payments pursuant to the Guarantee of this
Security shall be deemed to include any Additional Amounts which
may be payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing
payment of the Gross-Up Taxes. Copies of such receipts shall be
made available to the Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series
will be published in a leading newspaper having general circulation in
Luxembourg (which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF
SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed by an authorized signatory of the
Company.
YORKSHIRE POWER
FINANCE
LIMITED
By:
Authorized
Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
THE BANK OF
NEW YORK,
as Trustee
By:_________________________
Authorized
Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
___% Junior Subordinated Deferrable Interest Debenture, Series A
due ____________, 2038
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and
to be issued in one or more series under an Indenture, dated as of
June 1, 1998 (herein called the "Original Indenture"), among the
Company, Yorkshire Power Group Limited, as guarantor (the
"Guarantor"), The Bank of New York, as trustee, principal paying
agent, registrar and transfer agent (herein called the "Trustee", which
term includes any successor trustee under the Indenture), and Banque
Generale du Luxembourg S.A., as paying and transfer agent (the
"Paying and Transfer Agent"), as supplemented by the First
Supplemental Indenture, dated as of June 1, 1998 (together with the
Original Indenture and any other supplements thereto, the
"Indenture"), among the Company, the Guarantor, the Trustee and
the Paying and Transfer Agent to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantor, the Trustee, the Paying
and Transfer Agent and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to $275,000,000.
The Company shall have the right, subject to the terms
and conditions of the Indenture, to redeem this Security at any time
or from time to time on or after ___________, 2003, without
premium or penalty, in whole or in part, at a Redemption Price equal
to 100% of the principal amount thereof plus any accrued and unpaid
interest thereon to the Redemption Date; provided, however, that if a
redemption in part shall result in the delisting of the Trust Securities,
the Company may only redeem this Security in whole. Following the
occurrence of a Special Event (as defined below) at any time, the
Company may, within 90 days following the occurrence thereof and
subject to the terms and conditions of the Indenture, redeem this
Security without premium or penalty, in whole (but not in part), at a
Redemption Price equal to 100% of the principal amount thereof plus
any accrued and unpaid interest thereon to the Redemption Date. A
Special Event may be a Tax Event or an Investment Company Act
Event.
"Tax Event" means the receipt by the Guarantor or the
Company of an opinion of independent counsel (which may be
counsel to the Guarantor or its Affiliates) experienced in such matters
to the effect that there has been (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of any supranational federation to which the
United Kingdom belongs or the jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the
Company or the Guarantor is incorporated or created, as applicable,
or in which the Company or the Guarantor is managed and controlled
or has a place of business (each, a "Taxing Jurisdiction"), (b) any
official administrative pronouncement or judicial decision
interpreting, clarifying or applying such laws or regulations or (c) a
threatened challenge asserted by a government or taxing authority
with respect to the Guarantor or any of its subsidiaries, or a
threatened challenge asserted in writing by a government or taxing
authority against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to the
Securities of this series or the Trust Securities related to the
Securities of this series, which amendment or change is effective or
which pronouncement, clarification, challenge or decision is
announced on or after June __, 1998, and that results in their being
more than an insubstantial risk that (i) the Company is, or will be
within 90 days of the date thereof, subject to income tax within a
Taxing Jurisdiction (other than the United Kingdom corporation
income tax) with respect to interest received or accrued on the
Intercompany Notes with respect to the Securities of this series, (ii)
the Company is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of other tax, duties or other
governmental charges, (iii) interest payable by the Company on the
Securities of this series is not, or within 90 days of the date thereof
will not be, deductible, in whole or in part for (as appropriate) United
States Federal or United Kingdom corporation income tax purposes,
as they accrue by the Company or by a member of any tax group to
which the Guarantor belongs or (iv) interest payable with respect to
the Intercompany Notes with respect to the Securities of this series
by the Guarantor or its Affiliates is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, for (as
appropriate) United States Federal or United Kingdom corporation
income tax purposes, as it accrues by one of (as appropriate) the
Guarantor, its shareholders or a member of any tax group to which
the Guarantor belongs. "Investment Company Act Event" shall mean
that the Guarantor or the Company shall have received an opinion of
independent counsel (which may be counsel to the Guarantor or its
Affiliates) experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (an
"Investment Company Act Change"), there is more than an
insubstantial risk that the Guarantor or the Company is or will be
considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which
Investment Company Act Change becomes effective on or after June
__, 1998.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the
date fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities of this series for redemption will be
made by the Trustee in any manner the Trustee deems fair and
appropriate and that complies with applicable legal and securities
exchange requirements.
Unless the Company defaults in payment of the
redemption price, from and after the redemption date, the Securities
of this series or portions thereof called for redemption will cease to
bear interest, and the Holders thereof will have no right in respect to
such Securities of this series except the right to receive the
redemption price thereof.
In the event of redemption of this Security in part
only, a new Security of this series and of like tenor for the
unredeemed portion hereof will be issued to the Holder hereof upon
the cancellation hereof.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with
the effect provided in the Indenture. At any time after such
declaration of acceleration with respect to Securities of any series has
been made, but before a judgment or decree for payment of money
has been obtained by the Trustee as provided in the Indenture, if all
Events of Default with respect to Securities of this series have been
cured or waived (other than the non-payment of principal of the
Securities which has become due solely by reason of such declaration
of acceleration) then such declaration of acceleration and its
consequences shall be automatically annulled and rescinded.
The Securities of this series are subject to redemption
in whole but not in part upon not less than 30 nor more than 60 days'
notice given as provided in the Indenture, at a price equal to the
outstanding principal amount thereof, together with Additional
Amounts, if any, and accrued and unpaid interest thereon, if any, to
the Redemption Date if (a) the Company or the Guarantor satisfies
the Trustee prior to the giving of such notice that it has or will
become obligated to pay Additional Amounts with respect to the
Securities of this series or the Guarantee as a result of either (i) any
change in, or amendment to, the laws or regulations of a Taxing
Jurisdiction or any political subdivision or any authority or agency
thereof or therein having power to tax or levy duties, or any change
in the application or interpretation of such laws or regulations, which
change or amendment becomes effective on or after June __, 1998 or
(ii) the issuance of Definitive Registered Series A Debentures
pursuant to any of clauses (a), (b) or (d) of the third following
paragraph and (b) such obligation cannot be avoided by the Company
or the Guarantor taking reasonable measures available to it, subject,
as provided in the Indenture, to the delivery by the Company or the
Guarantor of an Officers' Certificate stating that such obligation to
pay Additional Amounts cannot be avoided by the Company or the
Guarantor taking reasonable measures available to it.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the
Indenture or any supplemental indenture or the rights and obligations
of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding of all series to be affected (voting as a class). The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any and interest, if any, on this Security
and all payments made pursuant to the Guarantee of this Security at
the times, place and rate, and in the coin or currency, herein
prescribed.
This Security shall be exchangeable, in whole or, in
the case of clause (d) below, in part as provided in the Indenture, for
Definitive Registered Series A Debentures registered in the names of
Persons other than the Book-Entry Depositary with respect to such
series or its nominee only as provided in this paragraph. This
Security shall be so exchangeable if (a) DTC notifies the Company
and the Book-Entry Depositary that it is unwilling or unable to
continue to hold the Book-Entry Interests or at any time ceases to be
a "clearing agency" registered as such under the Exchange Act and,
in either case, a successor is not appointed by the Company within
120 days, (b) the Book-Entry Depositary for the Securities of this
series notifies the Company that it is unwilling or unable to continue
as Book-Entry Depositary with respect to this Security and no
successor is appointed within 120 days, (c) the Company executes
and delivers to the Trustee an Officers' Certificate providing that this
Security shall be so exchangeable, or (d) there shall have occurred
and be continuing an Event of Default with respect to the Securities
of this series and the Holder makes an Optional Definitive Security
Request. Securities so issued in exchange for this Security shall be of
the same series, having the same interest rate, if any, and maturity and
having the same terms as this Security, in authorized denominations
and in the aggregate having the same principal amount as this
Security and registered in such names as the Book-Entry Depositary
for this Security shall direct.
The bearer of this Security shall be treated as the
owner of it for all purposes, subject to the terms of the Indenture. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such
exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or
any other capacity, may become the owner or pledge of Securities of
this series and may otherwise deal with the Company, the Guarantor
or their respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee,
incorporator or Affiliate of the Company or the Guarantor under the
Securities of this series or the Indenture or for any claim based on, in
respect of or by reason of, such obligations of their creation. Each
Holder of the Securities of this series by accepting Securities this
series waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Securities of this
series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this
Security.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Company will cause CUSIP numbers to be printed on the Securities
of this series as a convenience to the Holders of the Securities of this
series. No representation is made as to the accuracy of such numbers
as printed on the Securities of this series and reliance may be placed
only on the other identification numbers printed hereon.
THIS SECURITY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a private limited company duly incorporated and
existing under the laws of England and Wales (the "Guarantor",
which term includes any successor Person under the Indenture
referred to in the Security on which this notation is endorsed), hereby
fully and unconditionally guarantees to the Holder of the
accompanying Security issued by Yorkshire Power Finance Limited
(the "Company"), pursuant to the terms of the Guarantee contained
in Article XV of the Indenture, the due and punctual payment of the
principal of and premium, if any, and interest on this Security, when
and as the same shall become due and payable, whether at the Stated
Maturity, by declaration of acceleration, call for redemption or
otherwise, in accordance with the terms of this Security and the
Indenture. In case of the failure of the Company punctually to pay
any such principal, premium, if any, or interest, the Guarantor hereby
agrees to cause any such payment to be made punctually when and as
the same shall become due and payable as if such payment were made
by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Article XV of the Indenture, and
reference is hereby made to such Article and Indenture for the precise
terms of the Guarantee.
All payments in respect of this Guarantee are, to the
extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt (as defined in
the Indenture) of the Guarantor, and this Guarantee is issued subject
to the provisions of the Indenture with respect thereto. Each holder
of this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided, and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes. Each holder
hereof, by his acceptance hereof, waives any notice of the acceptance
of the subordination provisions in respect of this Guarantee contained
herein and in the Indenture by each holder of the Senior Debt of the
Guarantor, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon
which this notation of the Guarantee is endorsed shall have been
executed by the Trustee under the Indenture by the manual signature
of one of its authorized officers.
YORKSHIRE POWER
GROUP LIMITED
By:______________________
_________________
Authorized Signatory
SCHEDULE OF ADJUSTMENTS
The initial aggregate principal amount of Securities evidenced
by this Certificate to which this Schedule is attached is $___,000,000.
The notations on the following table evidence decreases and increases
in the aggregate principal amount of Securities evidenced by such
Certificate.
Date of Adjustment
Decrease in Aggregate Principal Amount of Securities
Increase in Aggregate Principal Amount of Securities
Aggregate Principal Amount of Securities Remaining
After Such Decrease or Increase
Notation by Security Registrar
EXHIBIT B
[FORM OF FACE OF DEFINITIVE REGISTERED SERIES A
DEBENTURE]
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS,
TO THE EXTENT PROVIDED IN THE INDENTURE
HEREINAFTER REFERRED TO, SUBORDINATE AND
SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR
PAYMENT IN FULL OF ALL SENIOR DEBT OF THE
COMPANY AND THIS SECURITY IS ISSUED SUBJECT TO
THE PROVISIONS OF THE INDENTURE WITH RESPECT
THERETO.
YORKSHIRE POWER FINANCE LIMITED
___% Junior Subordinated Deferrable Interest Debenture due
_______, 2038
No. _______________
$______
_____________
CUSIP
No.:__________
YORKSHIRE POWER FINANCE LIMITED, a
private company with limited liability incorporated under the laws of
the Cayman Islands (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to [name of
registered owner], or its registered assigns, the principal sum of
_______________ Dollars? on _______________________, and to
pay interest thereon from ____________________, or from the most
recent Interest Payment Date to which interest has been paid or duly
provided for, quarterly in arrears on __________, __________,
__________ and _____________ in each year, commencing
_______________, 1998, at the rate per annum provided in the title
hereof, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the
fifteenth day (whether or not a Business Day) immediately preceding
such Interest Payment Date. The term "interest" as used herein shall
be deemed to include interest on quarterly interest payments in
arrears, Additional Interest and Additional Amounts, as applicable.
So long as an Extension Period is not occurring, any such interest not
so punctually paid or duly provided for will forthwith cease to be
payable to the Person in whose name this Security (or one or more
Predecessor Securities) is registered on such Regular Record Date
and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
All payments in respect of this Security and all
payments made pursuant to the Guarantee of this Security shall be
made in immediately available funds at or through the office or
agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, and for so long as this Security
shall be listed on the Luxembourg Stock Exchange, in Luxembourg,
in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private
debt; provided, however, that at the option of the Company, payment
of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Interest payments on this Security may also be made,
in the case of a holder of at least $1,000,000 aggregate principal
amount, by wire transfer to a United States Dollar account
maintained by the payee with a bank in the United States; provided
that such holder elects payment by wire transfer by giving written
notice to the Trustee or a Paying Agent to such effect designating
such account no later than 15 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may
accept in its discretion).
So long as no Event of Default has occurred and is
continuing, the Company shall have the right at any time and from
time to time during the term of this Security to defer interest
payments in such Security for up to 20 consecutive quarters but not
beyond the Stated Maturity of this Security (each, an "Extension
Period"), during which unpaid interest (together with interest
thereon) will compound quarterly at the interest rate on this Security
("Deferred Interest"). Upon the termination of each Extension
Period, which shall be an Interest Payment Date, the Company shall
pay all Deferred Interest on such Interest Payment Date to the Person
in whose name this Security is registered at the close of business on
the Regular Record Date for such Interest Payment Date, provided
that any Deferred Interest payable at the Stated Maturity of this
Security or on any Redemption Date will be paid to the Person to
whom principal is payable. Prior to the termination of any such
Extension Period, the Company may extend the interest payment
period, provided that such Extension Period together with all such
previous and further extensions thereof shall not exceed 20
consecutive quarters or the Stated Maturity of this Security. Upon
the termination of any such Extension Period, and the payment of all
accrued and unpaid interest then due, the Company may commence a
new Extension Period, subject to the above requirements. If the
Company shall have given notice of its election to commence an
Extension Period, neither the Company nor the Guarantor shall,
directly or indirectly, (i) declare or pay any cash dividends or
distributions on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (which includes
common and preferred stock), (ii) make any payments on, or repay,
repurchase or redeem, any of its debt securities (including any other
securities issued under the Indenture or other junior subordinated
securities issued by the Company) that rank pari passu with or junior
in interest to the Securities or the Guarantee, respectively, (iii) make
any payments with respect to any guarantee that ranks pari passu with
or junior in interest to the Securities or the Guarantee, respectively,
or (iv) make any payments on, or repay, repurchase or redeem, any of
its debt securities held by, make any loans or advances to, or make
any payments with respect to any guarantee of the debt of, any
affiliate, in each case other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Company or the Guarantor and
exchanges or conversions of common stock of one class for common
stock of another class, (b) payments by the Guarantor under the Trust
Securities Guarantee (or any other guarantee by the Guarantor with
respect to any securities issued by its direct or indirect subsidiaries,
provided that the proceeds from the issuance of such securities were
used to purchase other securities issued under the Indenture or other
junior subordinated securities issued by the Company), (c) payments
by the Guarantor under the Guarantee, (d) any dividend or payment
by the Guarantor which is applied, directly or indirectly, to the
payment of any Tax Payments, (e) payments by the Guarantor,
directly or indirectly, on the Intercompany Notes or any other
promissory notes held by the Company (or any other direct or
indirect wholly-owned subsidiary of the Guarantor) evidencing loans
made with the proceeds from the issuance by the Company (or any
other direct or indirect wholly-owned subsidiary of the Guarantor) of
securities guaranteed by the Guarantor or (f) the reinvestment of any
proceeds received under clause (e) above by the Company (or any
other direct or indirect wholly-owned subsidiary of the Guarantor) in
additional debt securities of the Guarantor or any of its other direct or
indirect wholly-owned subsidiaries. The Company shall give the
Holder of this Security and the Trustee notice of its intention to defer
interest payments at least one Business Day prior to the earlier of (i)
the next succeeding Interest Payment Date and (ii) the date the
Company is required to give notice to the New York Stock Exchange
or other applicable self-regulatory organization or to the Holder of
this Security of the Regular Record Date or Interest Payment Date,
but, in any event, not less than one Business Day prior to such
Regular Record Date.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt (as defined in
the Indenture) of the Company, and this Security is issued subject to
the provisions of the Indenture with respect thereto. Each Holder of
this security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided, and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes. Each Holder
hereof, by his acceptance hereof, waives any notice of the acceptance
of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt of the Company, whether now
outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
All payments of principal of and premium, if any, and
interest on this Security and all payments made pursuant to the
Guarantee of this Security shall be made free and clear of, and
without withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by
or within a Taxing Jurisdiction or by or within any political
subdivision thereof or any authority therein or thereof having power
to tax ("Gross-Up Taxes"), unless such withholding or deduction is
required by law. In the event of any such withholding or deduction,
the Company or the Guarantor, as the case may be, shall pay to the
relevant Holder such additional amounts that would otherwise have
been due to such Holder in the absence of such withholding or
deduction ("Additional Amounts"), except that no such Additional
Amounts shall be payable:
(a) to, or to a Person on
behalf of, a Holder who is liable for such Gross-Up Taxes in
respect of this Security or the Guarantee of this Security by
reason of such Holder having some connection with the
relevant Taxing Jurisdiction (including a citizen or resident or
national of, or carrying on a business or maintaining a
permanent establishment in, or being physically present in,
such Taxing Jurisdiction) other than the mere holding of this
Security or the receipt of principal of, premium, if any, and
interest in respect thereof or in respect of the Guarantee of
this Security;
(b) to, or to a Person on
behalf of, a Holder who presents this Security (where
presentation is required) for payment more than 30 days after
the Relevant Date except to the extent that the Holder would
have been entitled to such Additional Amounts on presenting
this Security for payments on the last day of such period of 30
days;
(c) to, or to a Person on
behalf of, a Holder who presents a Security (where
presentation is required) in the United Kingdom or Cayman
Islands;
(d) to, or to a Person on
behalf of, a Holder who would not be liable or subject to the
withholding or deduction by making a declaration of
nonresidence or similar claim for exemption to the relevant
tax authority; or
(e) to, or to a Person on
behalf of, a Holder of a Registered Security that is not a
Global Security issued pursuant to the written request of any
beneficial owner of interests in such Securities (an "Optional
Definitive Security Request") following and during the
continuance of an Event of Default if such Holder (or any
predecessor Holder) was an owner requesting that such
Registered Securities be so issued.
Such Additional Amounts will also not be payable
where, had the beneficial owner of the Security (or any interest
therein) been the Holder of the Security, he would not have been
entitled to payment of Additional Amounts by reason of any one or
more of clauses (a) through (e) above. If the Company or the
Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence,
the Company or the Guarantor, as applicable, will inform such Holder
promptly after making such determination setting forth the reason(s)
therefor.
"Relevant Date" means whichever is the later of (i) the
date on which such payment first becomes due and (ii) if the full
amount payable has not been received in The City of New York by
the Trustee or the Holder on or prior to such due date, the date on
which, the full amount having been so received, notice to that effect
shall have been given to the Holder in accordance with this Indenture.
References to principal of and premium or interest on
this Security or payments under the Guarantee of this Security shall
be deemed to include to any Additional Amounts which may be
payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing
payment of Gross-Up Taxes. Copies of such receipts shall be made
available to the Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series
will be published in a leading newspaper having general circulation in
Luxembourg (which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF
SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed by an authorized signatory of the
Company.
YORKSHIRE POWER
FINANCE
LIMITED
By
Authorized
Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture.
THE BANK OF NEW
YORK,
as Trustee
By:_________________________________
Authorized
Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
___% Junior Subordinated Deferrable Interest Debenture,
Series A due __________, 2038
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and
to be issued in one or more series under an Indenture, dated as of
June 1, 1998 (herein called the "Original Indenture"), among the
Company, Yorkshire Power Group Limited, as guarantor (the
"Guarantor"), The Bank of New York, as trustee principal paying
agent, register and transfer agent (herein called the "Trustee", which
term includes any successor trustee under the Indenture), and Banque
Generale du Luxembourg S.A., as paying and transfer agent (the
"Paying and Transfer Agent"), as supplemented by the First
Supplemental Indenture, dated as of June 1, 1998 (together with the
Original Indenture and any other supplements thereto, the
"Indenture") among the Company, the Guarantor, the Trustee and the
Paying and Transfer Agent to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantor, the Trustee, the Paying
and Transfer Agent and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to $275,000,000.
The Company shall have the right, subject to the terms
and conditions of the Indenture, to redeem this Security at any time
or from time to time on or after ___________, 2003, without
premium or penalty, in whole or in part, at a Redemption Price equal
to 100% of the principal amount thereof plus any accrued and unpaid
interest, thereon to the Redemption Date; provided, however, that if a
redemption in part shall result in the delisting of the Trust Securities,
the Company may only redeem this Security in whole. Following the
occurrence of a Special Event (as defined below) at any time, the
Company may, within 90 days following the occurrence thereof and
subject to the terms and conditions of the Indenture, redeem this
Security without premium or penalty, in whole (but not in part), at a
Redemption Price equal to 100% of the principal amount thereof plus
any accrued and unpaid interest thereon, to the Redemption Date. A
Special Event may be a Tax Event or an Investment Company Act
Event.
"Tax Event" means the receipt by the Guarantor or
the Company of an opinion of independent counsel (which may be
counsel to the Guarantor or its Affiliates) experienced in such matters
to the effect that there has been (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of any supranational federation to which the
United Kingdom belongs or the jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the
Company or the Guarantor is incorporated or created, as applicable,
or in which the Company or the Guarantor is managed and controlled
or has a place of business (each, a "Taxing Jurisdiction"), (b) any
official administrative pronouncement or judicial decision
interpreting, clarifying or applying such laws or regulations or (c) a
threatened challenge asserted by a government or taxing authority
with respect to the Guarantor or any of its subsidiaries, or a
threatened challenge asserted in writing by a government or taxing
authority against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to the
Securities of this series or the Trust Securities related to the
Securities of this series, which amendment or change is effective or
which pronouncement clarification, challenge or decision is
announced on or after June __, 1998, and that results in their being
more than an insubstantial risk that (i) the Company is, or will be
within 90 days of the date thereof , subject to income tax within a
Taxing Jurisdiction (other than the United Kingdom corporation
income tax) with respect to interest received or accrued on the
Intercompany Notes with respect to the Securities of this series, (ii)
the Company is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of other tax, duties or other
governmental charges, (iii) interest payable by the Company on the
Securities of this series is not, or within 90 days of the date thereof
will not be, deductible, in whole or in part for (as appropriate) United
States Federal or United Kingdom corporation income tax purposes,
as they accrue by the Company or by a member of any tax group to
which the Guarantor belongs or (iv) interest payable with respect to
the Intercompany Notes with respect to the Securities of this series
by the Guarantor or its Affiliates is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, for (as
appropriate) United States Federal or United Kingdom corporation
income tax purposes, as it accrues by one of (as appropriate) the
Guarantor, its shareholders or a member of any tax group to which
the Guarantor belongs. "Investment Company Act Event" shall mean
that the Guarantor or the Company shall have received an opinion of
independent counsel (which may be counsel to the Guarantor or its
Affiliates) experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (an
"Investment Company Act Change"), there is more than an
insubstantial risk that the Guarantor or the Company is or will be
considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which
Investment Company Act Change becomes effective on or after June
__, 1998.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the
date fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities for redemption will be made by the
Trustee in any manner the Trustee deems fair and appropriate and
that complies with applicable legal and securities exchange
requirements.
Unless the Company defaults in payment of the
redemption price, from and after the redemption date, the Securities
of this series or portions thereof called for redemption will cease to
bear interest, and the Holders thereof will have no right in respect to
such Securities of this series except the right to receive the
redemption price thereof.
In the event of redemption of this security in part only,
a new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with
the effect provided in the Indenture. At any time after such
declaration of acceleration with respect to Securities of any series has
been made, but before a judgment or decree for payment of money
has been obtained by the Trustee as provided in the Indenture, if all
Events of Default with respect to Securities of this series have been
cured or waived (other than the nonpayment of principal of the
Securities which has become due solely by reason of such declaration
of acceleration) then such declaration of acceleration and its
consequences shall be automatically annulled and rescinded.
The Securities of this series are subject to redemption
in whole but not in part upon not less than 30 nor more than 60 days'
notice given as provided in the Indenture, at a price equal to the
outstanding principal amount thereof, together with Additional
Amounts, if any, and accrued and unpaid interest thereon, if any, to
the Redemption Date if (a) the Company or the Guarantor satisfies
the Trustee prior to the giving of such notice that it has or will
become obligated to pay Additional Amounts with respect to the
Securities of this series or the Guarantee as a result of either (i) any
change in, or amendment to, the laws or regulations of a Taxing
Jurisdiction or any political subdivision or any authority or agency
thereof or therein having power to tax or levy duties, or any change
in the application or interpretation of such laws or regulations, which
change or amendment becomes effective on or after June __, 1998 or
(ii) the issuance of Definitive Registered Series A Debentures as a
result of (A) DTC having notified the Company and the Book-Entry
Depositary that it was unwilling or unable to continue to hold the
Book-Entry Interests or at any time ceasing to be a "clearing agency"
registered as such under the Securities Exchange Act of 1934 and, in
either case, a successor has not been appointed by the Company
within 120 days; (B) the Book-Entry Depositary for the securities of
this series having notified the Company that it was unwilling or
unable to continue as Book-Entry Depositary with respect to a
Global Security of this series and no successor Book-Entry
Depositary has been appointed by the Company within 120 days or
(C) any Event of Default with respect to the Securities of this series
having occurred and is continuing and a Holder has made an Optional
Definitive Security Request and (b) such obligation cannot be avoided
by the Company or the Guarantor taking reasonable measures
available to it, subject, as provided in the Indenture, to the delivery by
the Company or the Guarantor of an Officers' Certificate stating that
such obligation to pay Additional Amounts cannot be avoided by the
Company or the Guarantor taking reasonable measures available to it.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the
Indenture or any supplemental indenture or the rights and obligations
of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding of all series to be affected (voting as a class). The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest, if any, on this Security and
all payments made pursuant to the Guarantee of the Security at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in any
place where the principal of, premium, if any, and interest, if any, on
this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25 and any
integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of
this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or
not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or
any other capacity, may become the owner or pledge of Securities of
this series and may otherwise deal with the Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee,
incorporator or Affiliate of the Company shall have any liability for
any obligation of the Company under the Securities of this series or
the Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation. Each Holder of the Securities of
this series by accepting a Security of this series waives and releases all
such liability. The waiver and release are part of the consideration for
the issuance of the Securities of this series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this
Security.
Customary abbreviations may be used in the name of a
Holder of a Securities of this series or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants
in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Company will cause CUSIP numbers to be printed on the Securities
of this series as a convenience to the Holders of the Securities of this
series. No representation is made as to the accuracy of such numbers
as printed on the Securities of this series and reliance may be placed
only on the other identification numbers printed hereon.
THIS SECURITY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a company duly incorporated and existing under
the laws of England and Wales (the "Guarantor", which term includes
any successor Person under the Indenture referred to in the Security
on which this notation is endorsed), hereby fully and unconditionally
guarantees to the Holder of the accompanying Security issued by
Yorkshire Power Finance Limited (the "Company"), pursuant to the
terms of the Guarantee contained in Article XV of the Indenture, the
due and punctual payment of the principal of and premium, if any,
and interest on this Security, when and as the same shall become due
and payable, whether at the Stated Maturity, by declaration of
acceleration, call for redemption or otherwise, in accordance with the
terms of this Security and the Indenture. In case of the failure of the
Company punctually to pay any such principal, premium, if any, or
interest, the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and
payable as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Article XV of the Indenture, and
reference is hereby made to such Article and Indenture for the precise
terms of the Guarantee.
All payments in respect of this Guarantee are, to the
extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt (as defined in
the Indenture) of the Guarantor, and this Guarantee is issued subject
to the provisions of the Indenture with respect thereto. Each holder
of this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided, and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes. Each holder
hereof, by his acceptance hereof, waives any notice of the acceptance
of the subordination provisions in respect of this Guarantee contained
herein and in the Indenture by each holder of the Senior Debt of the
Guarantor, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon
which this notation of the Guarantee is endorsed shall have been
executed by the Trustee under the Indenture by the manual signature
of one of its authorized officers.
YORKSHIRE POWER
GROUP LIMITED
By:______________________
_________________
Authorized Signatory
SCHEDULE OF ADJUSTMENTS
The initial aggregate principal amount of Securities evidenced
by this Certificate to which this Schedule is attached is $___,000,000.
The notations on the following table evidence decreases and increases
in the aggregate principal amount of Securities evidenced by such
Certificate.
Date of Adjustment
Decrease in Aggregate Principal Amount of Securities
Increase in Aggregate Principal Amount of Securities
Aggregate Principal Amount of Securities Remaining
After Such Decrease or Increase
Notation by Security Registrar
? Reference is made to Schedule A attached hereto with respect to
decreases and increases in the aggregate principal amount of Securities
evidenced by this Certificate.
? Reference is made to Schedule A attached hereto with respect to
decreases and increases in the aggregate principal amount of Securities
evidenced by this Certificate.
2035
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continued on the following page-
8 179628
A - 17
179628.5
A - 1
179628.5
B - 20
179628.5
B - 1
179628.5
EXHIBIT 4.5
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST
AGREEMENT is made as of June 1, 1998, by and among (i) AEP
Resources, Inc., an Ohio company (the "Depositor"), (ii) Yorkshire
Cayman Holding Limited, a private company with limited liability
incorporated under the laws of the Cayman Islands ("Yorkshire Cayman"),
as holder of the Control Certificate (as herein defined) (the "Control
Party"), (iii) The Bank of New York, a banking corporation duly
organized and existing under the laws of New York, as trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iv) The Bank of New York
(Delaware), a banking corporation duly organized under the laws of
Delaware, as Delaware trustee (the "Delaware Trustee" and, in its
separate corporate capacity and not in its capacity as Delaware Trustee,
the "Delaware Bank"), (v) Jeffrey D. Cross, an individual, Stephan T.
Haynes, an individual, Brian P. Jackson, an individual, and Teresa S.
Madden, an individual, as administrative trustees (each an "Administrative
Trustee" and together the "Administrative Trustees") (the Property
Trustee, the Delaware Trustee and the Administrative Trustees referred to
collectively as the "Trustees"), and (vi) the several Holders, as hereinafter
defined.
WITNESSETH:
WHEREAS, the Depositor, Stephan T. Haynes, as initial
Administrative Trustee, the Property Trustee and the Delaware Trustee
have heretofore duly declared and established a business trust, to be
known as Yorkshire Capital Trust I (the "Trust"), pursuant to the
Delaware Business Trust Act ( as defined herein) by the entering into of
that certain Trust Agreement, dated as of February 1, 1998 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware
Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, dated February 4, 1998; and
WHEREAS, pursuant to the terms of the Original Trust
Agreement, subsequent to the establishment of the Trust, (i) the Trust
established and issued to the Depositor a control certificate which
bestowed to the holder thereof certain administrative and appointment
powers in the Trust (the "Control Certificate"); (ii) the Depositor
transferred the Control Certificate to Yorkshire Power Group Limited, a
private company with limited liability incorporated under the laws of
England and Wales ("Yorkshire Group"); and (iii) Yorkshire Group, in
turn, transferred the Control Certificate to the Control Party; and
WHEREAS, the parties hereto desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the addition of Jeffrey D. Cross, Brian
P. Jackson, and Teresa S. Madden as administrative trustees of the Trust,
(ii) the acquisition by the Trust of all of the right, title and interest in
theJunior Subordinated Debentures (as defined herein) issued by Yorkshire
Power Finance Limited, a private company with limited liability
incorporated under the laws of the Cayman Islands ("Yorkshire Finance"),
and (iii) the issuance and sale of the Trust Securities (as defined herein) by
the Trust pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the agreements
and obligations set forth herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, each
party, for the benefit of the other parties and for the benefit of the
Securityholders, hereby amends and restates the Original Trust Agreement
in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference
to an "Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 7.08.
"Additional Sums" means, with respect to Trust Securities
of a given Liquidation Amount and/or a given period, an amount equal to
Additional Amounts and Additional Interest (each as defined in the
Subordinated Indenture) paid by Yorkshire Finance on a Like Amount of
Junior Subordinated Debentures for such period.
"Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this Trust
Agreement solely in their capacities as Administrative Trustees of the
Trust and not in their individual capacities, or such trustee's successor(s)
in interest in such capacity, or any successor "Administrative Trustee"
appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Bank" has the meaning specified in the preamble to this
Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under federal bankruptcy law or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of such
Person or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of such
decree or order unstayed and in effect for a period of 60
consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under federal bankruptcy law or any other
applicable federal or state law, or the consent by it to the filing of
such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or similar official of such Person or
of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become
due, or the taking of action by such Person in furtherance of any
such action.
"Bankruptcy Laws" has the meaning specified in Section
11.09.
"Board Resolution" means, with respect to any Person
(who is not an individual), a copy of a resolution certified by a Director or
the Secretary or an Assistant Secretary of such Person to have been duly
adopted by such Person's Board of Directors or a duly authorized
committee thereof and to be in full force and effect on the date of such
certification, and delivered to the Trustees.
"Book-Entry Trust Securities Certificates" means
certificates representing Trust Securities issued in global, fully registered
form to the Clearing Agency (or its nominee) as provided in Section 5.10.
"Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in The City of New York
are authorized or required by law or executive order to remain closed or
(iii) a day on which the Corporate Trust Office or the Indenture Trustee's
principal corporate trust office is closed for business.
"Certificate Depository Agreement" means the agreement
among the Trust, the Property Trustee and The Depository Trust
Company, as the initial Clearing Agency, dated June 9, 1998, relating to
the Book-Entry Trust Securities Certificates, as the same may be amended
and supplemented from time to time.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from time to
time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at
such time.
"Control Certificate" has the meaning specified in the
preamble to this Trust Agreement and a form of which is attached hereto
as Exhibit A.
"Control Party" means the holder from time to time of the
Control Certificate, which shall be a direct or indirect wholly owned
subsidiary of Yorkshire Group (or successor thereto as permitted pursuant
to the Subordinated Indenture) that is not resident in the United Kingdom
for purposes of United Kingdom taxation. As of the date of this Trust
Agreement, the Control Party is Yorkshire Cayman.
"Corporate Trust Office" means the office of the Property
Trustee at which its corporate trust business shall be principally
administered.
"Debentures Guarantee" means the guarantee of Yorkshire
Group of the Junior Subordinated Debentures pursuant to Article XV of
the Subordinated Indenture and Section 2.05 of the Supplemental
Indenture.
"Definitive Trust Securities Certificates" means Trust
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.12.
"Delaware Bank" has the meaning specified in the preamble
to this Trust Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title
12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be
amended from time to time.
"Delaware Trustee" means the commercial bank or trust
company or any other Person identified as the "Delaware Trustee" and has
the meaning specified in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor
Delaware Trustee appointed as herein provided.
"Depositor" means AEP Resources, Inc., an Ohio
corporation, in its capacity as "Depositor" under this Trust Agreement, its
successors and assigns.
"Distribution Date" has the meaning specified in Section
4.01(a).
"Distributions" means amounts payable in respect of the
Trust Securities as provided in Section 4.01.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of an Indenture Event of Default; or
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable (subject to an
Extension Period) and the continuation of such default for a period
of 60 days; or
(iii) default by the Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, of any
covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance of
which is covered by clause (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Trustees by the
Holders of at least 33% in aggregate Liquidation Amount of the
Outstanding Trust Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect
to the Trust.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor legislation.
"Expense Agreement" means the Agreement as to
Expenses and Liabilities among the US Affiliates and the Trust,
substantially in the form attached as Exhibit B, as amended from time to
time.
"Extension Period" has the meaning set forth in Section
4.01(b).
"Guarantee" means the Trust Securities Guarantee Agreement
dated as of June 1, 1998 executed and delivered by Yorkshire Group and The
Bank of New York, as Guarantee Trustee, contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit of the Holders
of the Trust Securities, as amended from time to time.
"Indenture Event of Default" means an "Event of Default" as
defined in the Subordinated Indenture.
"Indenture Redemption Date" means "Redemption Date," as
defined in the Subordinated Indenture.
"Indenture Trustee" means the trustee under the
Subordinated Indenture.
"Investment Company Act" means the Investment
Company Act of 1940, as amended from time to time, or any successor
legislation.
"Issue Date" means the date of the delivery of the Trust
Securities.
"Junior Subordinated Debentures" means $275,000,000
aggregate principal amount of Yorkshire Finance's 8.08% Junior
Subordinated Deferrable Interest Debentures, Series A due June 30, 2038,
issued pursuant to the Subordinated Indenture.
"Lien" means any lien, pledge, charge, encumbrance,
mortgage, deed of trust, adverse ownership interest, hypothecation,
assignment, security interest or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (i) with respect to a repayment or
redemption of Trust Securities, Trust Securities having a Liquidation
Amount equal to that portion of the principal amount of Junior
Subordinated Debentures to be contemporaneously repaid or redeemed in
accordance with the Subordinated Indenture and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities and (ii)
with respect to a distribution of Junior Subordinated Debentures to
Holders of the Trust Securities in connection with a dissolution and
liquidation of the Trust or a payment of any Additional Sums on Trust
Securities, Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the Holder to
whom such Junior Subordinated Debentures are distributed or such
payment is being made.
"Liquidation Amount" means the stated amount of $25 per
Trust Security.
"Liquidation Date" means the date on which Junior
Subordinated Debentures are to be distributed to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust
pursuant to Section 10.04.
"Liquidation Distribution" has the meaning specified in
Section 10.05.
"Officers' Certificate" means, with respect to any Person
(who is not an individual), a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, a Director, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of such Person, and delivered to the appropriate
Trustee. An Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as is necessary, in such officer's
opinion, to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of
independent counsel experienced in the matters to be opined on, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee, the
Control Party or Yorkshire Finance, but not an employee of any thereof,
who shall be reasonably acceptable to the Property Trustee. Any Opinion
of Counsel pertaining to United States federal income tax matters may rely
on published rulings of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in
the recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities,
means, as of the date of determination, all Trust Securities theretofore
authenticated and delivered under this Trust Agreement, except:
(i) Trust Securities theretofore canceled by the
Securities Registrar or delivered to the Securities Registrar for
cancellation;
(ii) Trust Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited
with the Property Trustee or any Paying Agent for the Holders of
such Trust Securities; provided that if such Trust Securities are to
be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(iii) Trust Securities in exchange for or in lieu of which
other Trust Securities have been authenticated and delivered
pursuant to this Trust Agreement;
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Trust Securities have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Trust Securities owned by Yorkshire Group, Yorkshire
Finance, the Control Party, the US Affiliates, any Administrative Trustee
or any Affiliate of Yorkshire Group, Yorkshire Finance, the Control Party,
the US Affiliates or any Administrative Trustee shall be disregarded and
deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Trust Securities
which such Trustee actually knows to be so owned shall be so disregarded
and (b) the foregoing shall not apply at any time when all of the
Outstanding Trust Securities are owned by Yorkshire Group, Yorkshire
Finance, the Control Party, the US Affiliates, one or more Administrative
Trustees and/or any such Affiliate. Trust Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act as pledgee with respect to such Trust Securities and that
the pledgee is not Yorkshire Group, Yorkshire Finance, the Control Party,
a US Affiliate, or any Affiliate of Yorkshire Group, Yorkshire Finance, the
Control Party or a US Affiliate.
"Owner" means each Person who is the beneficial owner of
a Book-Entry Trust Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner,
then as reflected in the records of a Person maintaining an account with
such Clearing Agency (directly or indirectly, in accordance with the rules
of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and shall initially be the Property
Trustee.
"Payment Account" means a segregated non-interest-
bearing corporate trust account maintained by the Property Trustee with
the Bank in its trust department for the benefit of the Securityholders in
which all amounts paid in respect of the Junior Subordinated Debentures
will be held and from which the Property Trustee shall make payments to
the Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means an individual, corporation, partnership,
joint venture, trust, limited liability company or corporation,
unincorporated organization or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee or as Paying Agent
and not in its individual capacity, or its successor in interest in such
capacity, or any successor "Property Trustee" as herein provided.
"Redemption Date" means, with respect to any Trust
Security to be redeemed, the date fixed for such redemption by or
pursuant to this Trust Agreement; provided that each Indenture
Redemption Date shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any
Redemption Date of any Trust Security, the Liquidation Amount of such
Trust Security, plus accumulated and unpaid Distributions to such
Redemption Date.
"Relevant Trustee" has the meaning specified in Section
9.10.
"Responsible Officer" means, with respect to the Property
Trustee, any managing director, any vice president, any assistant vice
president, any assistant secretary, any assistant treasurer, or any other
officer of the Corporate Trust and Agency group of the Property Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Securities Register" and "Securities Registrar" are
described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose
name a Trust Security or Securities is registered in the Securities Register;
any such Person is a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Subordinated Indenture" means the Subordinated
Debenture Indenture, dated as of June 1, 1998, among Yorkshire Finance,
Yorkshire Group, the Indenture Trustee and Banque Generale du
Luxembourg S.A., as paying agent and transfer agent (the "Debenture
Paying Agent"), as supplemented by the Supplemental Indenture.
"Supplemental Indenture" means the First Supplemental
Indenture, dated as of June 1, 1998, by and among Yorkshire Finance,
Yorkshire Group, the Indenture Trustee and the Debenture Paying Agent.
"Trust" means the Delaware business trust continued
hereby and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated
Trust Agreement, as the same may be modified, amended or supplemented
in accordance with the applicable provisions hereof, including all exhibits
hereto, including, for all purposes of this Amended and Restated Trust
Agreement and any modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trust Property" means (i) the Junior Subordinated
Debentures, (ii) any cash on deposit in, or owing to, the Payment
Account, and (iii) all proceeds and rights in respect of the foregoing for
the time being held or deemed to be held by the Property Trustee pursuant
to this Trust Agreement.
"Trust Security" means a vested, undivided and concurrent
beneficial ownership interest in the underlying income and assets of the
Trust having a Liquidation Amount of $25 and having rights provided
therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Trust Securities Certificate" means a certificate evidencing
ownership of a Trust Security or Securities, either as Book-Entry Trust
Securities Certificates or Definitive Trust Securities Certificates,
substantially in the form attached as Exhibit C.
"Trustees" means the Persons identified as "Trustees" in
the preamble to this Trust Agreement solely in their capacities as trustees
and not in their individual capacities, or their successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Underwriting Agreement" means the Underwriting
Agreement, dated June 3, 1998, relating to the Trust Securities, among
Yorkshire Group, Yorkshire Finance, the Trust and the Underwriters
named therein.
"US Affiliates" means AEP Resources, Inc., an Ohio
corporation, and New Century International, Inc., a Delaware
corporation, and their successors and assigns.
ARTICLE II
Establishment of the Trust
Section 2.01 Name. The Trust continued hereby shall be
known as "Yorkshire Capital Trust I", in which name the Trustees may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued. The
Administrative Trustees may change the name of the Trust from time to
time following written notice to the Holders and the other Trustees.
Section 2.02 Offices of the Trustees; Principal Place of
Business. The address of the Property Trustee is 101 Barclay Street, New
York, New York 10286, or at such other address as the Property Trustee
may designate by written notice to the Securityholders, Yorkshire Group
and Yorkshire Finance. The principal place of business of the Delaware
Trustee is White Clay Center, Route 273, Newark, Delaware 19711, or at
such other address in Delaware as the Delaware Trustee may designate by
notice to Yorkshire Group and Yorkshire Finance. The address of the
Administrative Trustees is c/o American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215. The principal
place of business of the Trust is c/o American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215. The Depositor
may change the principal place of business of the Trust at any time by
giving notice thereof to the Trustees.
Section 2.03 Initial Contribution of Trust Property;
Organizational Expenses. The Delaware Trustee acknowledges receipt in
trust from the Depositor in connection with the Original Trust Agreement
of the sum of $10, which constituted the initial Trust Property. Pursuant
to the Expense Agreement, the US Affiliates shall pay organizational
expenses of the Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the
Trustees. The US Affiliates shall make no claim upon the Trust Property
for the payment of such expenses.
Section 2.04 Issuance of the Trust Securities.
Contemporaneously with the execution and delivery of this Trust
Agreement, at least one Administrative Trustee, on behalf of the Trust,
shall execute, in accordance with Section 5.02, and cause to be
authenticated pursuant to Section 5.03 and delivered in accordance with
the Underwriting Agreement, Book-Entry Trust Securities Certificates,
registered in the name of the nominee of the initial Clearing Agency, in an
aggregate amount of 11,000,000 Trust Securities having an aggregate
Liquidation Amount of $275,000,000, against receipt of the aggregate
purchase price of such Trust Securities of $275,000,000, which amount
shall be delivered to the Property Trustee.
Section 2.05 Subscription and Purchase of Junior
Subordinated Debentures. Contemporaneously with the execution and
delivery of this Trust Agreement, the Administrative Trustees, on behalf
of the Trust, shall subscribe to and purchase the Junior Subordinated
Debentures, to be held by or on behalf of the Property Trustee, from
Yorkshire Finance on behalf of the Trust and the Holders, and having an
aggregate principal amount equal to $275,000,000, and, in satisfaction of
the purchase price for such Junior Subordinated Debentures, the Property
Trustee, on behalf of the Trust, shall deliver to Yorkshire Finance the sum
of $275,000,000.
Section 2.06 Declaration of Trust. The exclusive
purposes and functions of the Trust are (i) to issue and sell the Trust
Securities and use the proceeds from such sale to acquire the Junior
Subordinated Debentures, and (ii) to engage in only those other activities
necessary, incidental, appropriate or convenient thereto. The Control
Party hereby appoints each of the Bank, the Delaware Bank, Jeffrey D.
Cross, Stephan T. Haynes, Brian P. Jackson and Teresa S. Madden as
trustees of the Trust, to have all the rights, powers and duties to the extent
set forth herein. The Property Trustee hereby declares that it will hold the
Trust Property in trust upon and subject to the conditions set forth herein
for the benefit of the Securityholders. The Trustees shall have all rights,
powers and duties set forth herein and in accordance with applicable law
with respect to accomplishing the purposes of the Trust. The Delaware
Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the
Property Trustee or the Administrative Trustees set forth herein. The
Delaware Trustee shall be one of the Trustees for the sole and limited
purpose of fulfilling the requirements of the Delaware Business Trust Act.
Section 2.07 Authorization to Enter into Certain
Transactions. The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph C of this Section and Article IX, and in
accordance with the following paragraphs A and B, the Trustees shall
have the authority to enter into all transactions and agreements determined
by the Trustees to be appropriate in exercising the authority, express (in
the case of the Property Trustee) or implied, otherwise granted to the
Trustees under this Trust Agreement, and to perform all acts in
furtherance thereof, including, without limitation, the following:
A. As among the Trustees, the Administrative
Trustees, acting singly or collectively, shall have the exclusive power, duty
and authority to act on behalf of the Trust with respect to the following
matters:
(i) to acquire the Junior Subordinated Debentures with
the proceeds of the issuance and sale of the Trust Securities;
provided, however, the Administrative Trustees shall cause legal
title to all of the Junior Subordinated Debentures to be vested in,
and the Junior Subordinated Debentures to be held by or on behalf
of, the Property Trustee for the benefit of the Holders of the Trust
Securities;
(ii) to give Yorkshire Group, the Control Party and the
Property Trustee prompt written notice of the occurrence of any
Special Event (as defined in the Supplemental Indenture) and to
take any ministerial actions in connection therewith; provided, that
the Administrative Trustees shall consult with Yorkshire Group,
the Control Party and the Property Trustee before taking or
refraining to take any ministerial action in relation to a Special
Event;
(iii) to establish a record date with respect to all actions
to be taken hereunder that require a record date be established,
including for the purposes of Section 316(c) of the Trust Indenture
Act and with respect to Distributions, voting rights, redemptions,
and exchanges, and to issue relevant notices to Holders of the
Trust Securities and the Control Party as to such actions and
applicable record dates;
(iv) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant
to Section 2.07(B)(iii) the Property Trustee has the power to bring
such Legal Action;
(v) to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and
managers, contractors, advisors, and consultants and pay
reasonable compensation for such services;
(vi) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(vii) to give the certificate to the Property Trustee
required by Section 314(a)(4) of the Trust Indenture Act;
(viii) to take all actions and perform such duties as may
be required of the Administrative Trustees pursuant to the terms of
this Trust Agreement;
(ix) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware
and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Trust Securities
or to enable the Trust to effect the purposes for which the Trust
has been created;
(x) to take all action necessary to cause all applicable
tax returns and tax information reports that are required to be filed
with respect to the Trust to be duly prepared and filed by the
Administrative Trustees, on behalf of the Trust;
(xi) to issue and sell the Trust Securities and perform
the Underwriting Agreement on behalf of the Trust;
(xii) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense
Agreement and the Certificate Depository Agreement and such
other agreements as may be necessary or desirable in connection
with the consummation hereof;
(xiii) to assist in the registration of the Trust Securities
under the Securities Act and under state securities or blue sky
laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(xiv) to assist in the listing of the Trust Securities upon
such securities exchange or exchanges or other organizations, if
any, as shall be determined by the Depositor and, if required, the
registration of the Trust Securities under the Exchange Act, and
the preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(xv) to send notices (other than notices of default) and
other information regarding the Trust Securities and the Junior
Subordinated Debentures to the Securityholders and the Control
Party in accordance with this Trust Agreement;
(xvi) to appoint a Paying Agent (subject to Section
5.09), any authenticating agent and the Securities Registrar in
accordance with this Trust Agreement;
(xvii) to register transfers of the Trust Securities in
accordance with this Trust Agreement;
(xviii) to assist in, to the extent provided in this Trust
Agreement, the winding up of the affairs of and termination of the
Trust and the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(xix) to take any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is
necessary, appropriate, convenient or advisable to give effect to
the terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(xx) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq Stock Market's National Market for the
listing upon notice of issuance of the Trust Securities; and
(xxi) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the Trust Securities under Section 12(b) of the
Exchange Act, including any amendments thereto.
Any expenses incurred by the Administrative Trustees
pursuant to this Section 2.07(A) shall be paid by the US Affiliates
pursuant to the Expense Agreement.
B. As among the Trustees, the Property Trustee shall
have the exclusive power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(i) to engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust
Securities to the extent the Junior Subordinated Debentures are
redeemed or mature;
(ii) upon notice of distribution issued by the
Administrative Trustees in accordance with the terms of this Trust
Agreement, to engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution pursuant to the
terms of this Trust Agreement of Junior Subordinated Debentures
to Holders of Trust Securities;
(iii) subject to the terms hereof, to take any legal action
which arises out of or in connection with (a) an Event of Default
of which a Responsible Officer of the Property Trustee has actual
knowledge or (b) the Property Trustee's duties and obligations
under this Trust Agreement or the Trust Indenture Act;
(iv) to collect interest, principal and other payments
made in respect of, and exercise all of the rights, powers and
privileges of a holder of, the Junior Subordinated Debentures;
(v) to distribute amounts owed to the Securityholders
in respect of the Trust Securities in accordance with the terms of
this Trust Agreement (but only if at such time the entity which is
the Property Trustee is also the entity which is the Paying Agent);
(vi) to register transfers of the Trust Securities in
accordance with the terms of this Trust Agreement (but only if at
such time the entity which is the Property Trustee is also the entity
which is the Securities Registrar);
(vii) after such an Event of Default, to take any action
incidental to the foregoing as the Property Trustee may from time
to time determine is necessary, appropriate, convenient or
advisable to effect the terms of this Trust Agreement and protect
and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder); and
(viii) to take all actions and perform such duties as may
be specifically required of the Property Trustee pursuant to the
terms of this Trust Agreement.
Any expenses incurred by the Property Trustee pursuant to
this Section 2.07(B) shall be paid by the US Affiliates pursuant to the
Expense Agreement.
C. So long as this Trust Agreement remains in effect,
the Trust (or the Trustees acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, the Trustees shall
not (i) acquire any investments or engage in any activities not authorized
by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-
off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would (x) cause the Trust to fail or cease to qualify as a
grantor trust for United States federal income tax purposes, (y) cause the
Trust to be treated as a company or treated as a trust under which the
beneficiaries are not fully entitled to the underlying income of the trust as
it arises, in either case, for purposes of United Kingdom tax law or (z)
cause Yorkshire Finance to be classified as an association or publicly
traded partnership taxable as a corporation for United States federal
income tax purposes, (iv) incur any indebtedness for borrowed money or
issue any other debt, (v) take or consent to any action that would result in
the placement of a Lien on any of the Trust Property, (vi) permit to be
issued any securities other than the Trust Securities or the Control
Certificate, or (vii) have any power to, or agree to any action by the
Control Party that would, vary the investment (within the meaning of
Treasury Regulation Section 301.7701-4(c)) of the Trust or of the
Securityholders. The Trustees shall defend against all claims and demands
of all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their capacity
as Securityholders.
D. In connection with the issue and sale of the Trust
Securities, the Control Party shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust, the
following (and any actions taken by the Control Party in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) to prepare for filing by the Trust with the
Commission a registration statement under the Securities Act in
relation to the Trust Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Trust
Securities and to do any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and advise the Trustees
of actions they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and filed by the
Trust or on behalf of the Trust, as shall in all circumstances be
necessary or advisable in order to comply with the applicable laws
of any such States;
(iii) to negotiate the terms of the Underwriting
Agreement providing for the issuance and sale of the Trust
Securities; and
(iv) any other actions necessary, incidental, appropriate
or convenient to carry out any of the foregoing activities.
Any expenses incurred by the Control Party pursuant to
this Section 2.07(D) shall be paid by the US Affiliates pursuant to the
Expense Agreement.
E. Notwithstanding anything herein to the contrary,
the Administrative Trustees are authorized and directed to conduct the
affairs of the Trust and to operate the Trust in such a way that (i) neither
the Control Party, Yorkshire Finance nor the Trust will be deemed to be
an "investment company" required to be registered under the Investment
Company Act, (ii) the Trust will not be classified as other than a grantor
trust for United States federal income tax purposes, (iii) the Junior
Subordinated Debentures will be treated as indebtedness for United States
federal income tax purposes, (iv) the Trust will not be treated as a
company for purposes of United Kingdom tax law, (v) the Trust will be
classified as a trust under which the beneficiaries are fully entitled to the
underlying income of the Trust as it arises, for purposes of United
Kingdom tax law and (vi) Yorkshire Finance will not be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes. In this connection, the
Control Party and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that each of the Control Party and the Administrative
Trustees determines in their discretion to be necessary or desirable for
such purposes, as long as such action does not materially and adversely
affect the interests of the Holders of the Trust Securities.
Section 2.08 Assets of Trust. The assets of the Trust
shall consist of the Trust Property.
Section 2.09 Title to Trust Property. Legal title to all
Trust Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and administered by the Property
Trustee for the benefit of the Securityholders and the Trust in accordance
with this Trust Agreement. The Securityholders shall be entitled to vested
undivided concurrent ownership interests in the underlying income and
assets of the Trust with such interests to be represented by the Trust
Securities. The right, title and interest of the Property Trustee to the
Junior Subordinated Debentures shall, to the greatest extent possible, vest
automatically in each Person who may thereafter be appointed as Property
Trustee in accordance with the terms hereof. Such vesting and cessation
of title shall be effective, to the greatest extent possible, whether or not
any necessary conveyancing documents have been executed and delivered.
Section 2.10 Mergers and Consolidations of the Trust.
The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other Person,
except as described below or otherwise described in this Trust Agreement.
The Trust may, at the request of the Control Party, with the consent of the
Administrative Trustees and without the consent of the Holders of the
Trust Securities, merge with or into, convert into consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to a trust organized as such under
the laws of any jurisdiction; provided, that (i) such successor entity either
(x) expressly assumes all of the obligations of the Trust with respect to the
Trust Securities or (y) substitutes for the Trust Securities other securities
having substantially the same terms as the Trust Securities (herein referred
to as the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise,
(ii) such successor entity transfers to the Control Party, directly or
indirectly, a control certificate (or similar instrument) or common
securities relating to such successor entity, (iii) the Control Party
expressly appoints a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder, directly or
indirectly, of the Junior Subordinated Debentures, (iv) Successor
Securities are listed or traded, or any Successor Securities will be listed or
traded upon notification of issuance, on any national securities exchange
or other organization on which the Trust Securities are then listed,
(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Trust Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization, (vi) such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the
Holders of the Trust Securities (including any Successor Securities) in any
material respect, (vii) such successor entity has a purpose substantially
identical to that of the Trust, (viii) prior to such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Control Party has received an Opinion of Counsel to the effect that
(A) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Securities (including
any Successor Securities) in any material respect, and (B) following such
merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease, none of the Trust, the Control Party,
Yorkshire Finance nor such successor entity will be required to register as
an "investment company" under the Investment Company Act and
(ix) Yorkshire Group or any permitted successor or assignee guarantees
the obligations of such successor entity under the Successor Securities at
least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of
100% of the Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, convert into, or replace it, if such
consolidation, amalgamation, merger, conversion or replacement would
cause (A) the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes, (B) the Trust
or the successor entity to be classified as a company or as a trust under
which the beneficiaries are not fully entitled to the underlying income of
the Trust as it arises, in either case, for purposes of United Kingdom tax
law, (C) the Control Party, Yorkshire Finance, the Trust or the successor
entity to be required to register as an "investment company" under the
Investment Company Act or (D) Yorkshire Finance to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
Section 2.11 Ratification of Certain Actions. Upon the
execution and delivery of this Trust Agreement, the parties hereto hereby
ratify the following actions: (i) the issuance of the Control Certificate by
the Trust to the Depositor, (ii) the transfer of the Control Certificate by
the Depositor to Yorkshire Group, (iii) the transfer of the Control
Certificate by Yorkshire Group to the Control Party and (iv) the execution
by the Depositor of the registration statement, as amended, relating to the
Trust Securities, and the Underwriting Agreement.
ARTICLE III
Payment Account
Section 3.01 Payment Account.
(a) On or prior to the Issue Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and an agent
of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account (which shall
be a separate and segregated account) shall be held by the Property
Trustee in the Payment Account for the exclusive benefit of the
Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or interest
on, and any other payments or proceeds with respect to, the Junior
Subordinated Debentures. Amounts held in the Payment Account shall
not be invested by the Property Trustee pending distribution thereof.
(c) Any money deposited by the Property Trustee in
the Payment Account in trust for payment on the Trust Securities and
remaining unclaimed for a period of two years after such payment has
become due and payable shall be paid to the Depositor upon written
request from the Depositor to the Property Trustee to hold as nominee for
the relevant Securityholders. The relevant Securityholder shall thereafter
look only to the Depositor for payment thereof and all liability of the
Property Trustee with respect to such money shall thereupon cease.
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be
cumulative and accumulate from the Issue Date and, except in the event
that Yorkshire Finance exercises its right to defer the interest payments on
the Junior Subordinated Debentures pursuant to Section 204 of the
Supplemental Indenture, shall be fixed at a rate of 8.08% per annum of the
Liquidation Amount of the Trust Securities payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year,
commencing on June 30, 1998. If any date on which Distributions are
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day
which is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are
payable in accordance with the foregoing, a "Distribution Date").
(b) The amount of Distributions payable for any full
quarterly period shall be computed on the basis of twelve 30-day months
and a 360-day year and for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day
months. If Yorkshire Finance exercises its right to defer interest payments
on the Junior Subordinated Debentures pursuant to Section 204 of the
Supplemental Indenture (an "Extension Period"), then the rate per annum
at which Distributions on the Trust Securities accumulate shall be
increased by an amount such that the aggregate amount of Distributions
that accumulate on all Trust Securities during any such Extension Period
is equal to the Deferred Interest (as defined in the Supplemental
Indenture) that accrues during any such Extension Period on the Junior
Subordinated Debentures. The payment of Deferred Interest will be
distributed to the Holders of the Trust Securities as received at the end of
any Extension Period. Additional Sums received by the Trust for any
period shall be distributed to the Holders of Trust Securities in respect of
such period in order that the entire amount payable for such period under
this Section 4.01 shall be distributed when payable and, for purposes of
this Agreement, the term "Distributions" shall be deemed to include any
such Additional Sums.
(c) Distributions on the Trust Securities shall be made
and shall be deemed payable on each Distribution Date only to the extent
that the Trust has sufficient funds available in the Payment Account for
the payment of such Distributions.
(d) Distributions, if any, on the Trust Securities on
each Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the relevant
record date, which, as long as the Trust Securities are represented by
Book-Entry Trust Securities Certificates, shall be one Business Day prior
to the relevant Distribution Date. In the event that any Trust Securities
are not so represented, the relevant record date for such Trust Securities
shall be the close of business on the fifteenth calendar day prior to the
relevant Distribution Date.
Each Trust Security upon registration of transfer of or in
exchange for or in lieu of any other Trust Security shall carry the rights of
Distributions accumulated and unpaid, and to accumulate, which were
carried by such other Trust Security.
Section 4.02 Redemption.
(a) On each Indenture Redemption Date with respect
to, and on the Stated Maturity (as defined in the Supplemental Indenture)
of, the Junior Subordinated Debentures, the Trust will be required to
redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Provided that the Property Trustee has received a
written direction from the Control Party to effect such redemption at least
45 days prior to the Redemption Date, notice of redemption shall be given
by the Property Trustee by first-class mail, postage prepaid, mailed not
less than 30 nor more than 60 days' prior to the Redemption Date to each
Holder of Trust Securities to be redeemed, at such Holder's address
appearing in the Securities Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are
to be redeemed, the identification of the total Liquidation Amount
of the particular Trust Securities selected by the Property Trustee
to be redeemed; and
(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon will cease to accumulate
on and after such date.
(c) The Trust Securities redeemed on each Redemption
Date shall be redeemed at the Redemption Price with the applicable
proceeds from the contemporaneous repayment or redemption of Junior
Subordinated Debentures. Redemptions of the Trust Securities shall be
made, and the Redemption Price shall be deemed payable, on each
Redemption Date only to the extent that the Trust has sufficient funds
available in the Payment Account at 10:00 AM, New York City time, on
the Redemption Date for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of
redemption in respect of any Trust Securities, then, by 12:00 noon, New
York City time, on the Redemption Date, subject to Section 4.02(c), the
Property Trustee will, so long as the Trust Securities are represented by
Book-Entry Trust Securities Certificates, irrevocably deposit with the
Clearing Agency funds sufficient to pay the applicable Redemption Price
and will give the Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof. If the Trust Securities
are not represented by Book-Entry Trust Securities Certificates, the
Property Trustee, subject to Section 4.02(c), will irrevocably deposit with
the Paying Agent funds sufficient to pay the applicable Redemption Price
and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof upon surrender of their
Trust Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the
right of such Securityholders to receive the Redemption Price, but without
interest, and such Trust Securities will cease to be Outstanding. In the
event that any Redemption Date is not a Business Day, then payment of
the Redemption Price payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day
falls in the next succeeding calendar year, such payment will be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. In the event that payment of the
Redemption Price in respect of Trust Securities is improperly withheld or
refused and not paid either by the Trust or by Yorkshire Group pursuant
to the Guarantee or the Debentures Guarantee, Distributions on such
Trust Securities will continue to accumulate at the then applicable rate
from such Redemption Date originally established by the Trust for such
Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption
for purposes of calculating the Redemption Price.
(e) If less than all of the Trust Securities are to be
redeemed on a Redemption Date, the particular Trust Securities to be
redeemed shall be selected on a pro rata basis not more than 60 days prior
to the Redemption Date by the Property Trustee from the Outstanding
Trust Securities not previously called for redemption, and which shall
provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the aggregate Liquidation
Amount of Trust Securities of a denomination larger than $25. The
Property Trustee shall promptly notify the Securities Registrar in writing
of the Trust Securities selected for redemption and, in the case of any
Trust Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless
the context otherwise requires, all provisions relating to the redemption of
Trust Securities shall relate, in the case of any Trust Securities redeemed
or to be redeemed only in part, to the portion of the Liquidation Amount
of Trust Securities which has been or is to be redeemed.
(f) Subject to the foregoing provisions of this Section
4.02 and to applicable law (including, without limitation, applicable United
States federal securities laws), the Control Party, Yorkshire Finance, the
US Affiliates or their Affiliates may, at any time and from time to time,
purchase Outstanding Trust Securities by tender, in the open market or by
private agreement, subject to receiving an Opinion of Counsel that any
purchase as aforementioned will not have any material adverse effect
under the laws of the United Kingdom on Yorkshire Finance, Yorkshire
Group, the US Affiliates or their respective Affiliates.
Section 4.03 Payment Procedures. Payments in respect
of the Trust Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities
Register or, if the Trust Securities are held by a Clearing Agency, such
Distributions shall be made in immediately available funds to the Clearing
Agency, which shall credit the relevant Persons' accounts at such Clearing
Agency on the applicable Distribution Dates.
Section 4.04 Tax Returns and Reports. The
Administrative Trustees shall prepare (or cause to be prepared), at the
expense of the US Affiliates pursuant to the Expense Agreement, and file
all United States federal, state and local tax and information returns and
reports required to be filed by or in respect of the Trust. The
Administrative Trustees shall provide or cause to be provided on a timely
basis to each Holder any Internal Revenue Service form required to be so
provided in respect of the Trust Securities. The Property Trustee shall
comply with United States federal withholding and back-up withholding
tax laws and information reporting requirements with respect to any
payments to Securityholders.
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership. Upon the creation of the
Trust by the contribution by the Depositor pursuant to Section 2.03 and
until the issuance of the Trust Securities, and at any time during which no
Trust Securities are outstanding, the Depositor shall be the sole beneficial
owner of the Trust.
Section 5.02 The Trust Securities Certificates. Each of
the Trust Securities Certificates shall be issued in minimum denominations
of $25 and integral multiples in excess thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trust, shall be validly issued and entitled to the
benefits of this Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Trust Securities Certificates or did not
hold such offices at the date of authentication and delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to
the obligations of a Securityholder hereunder, upon due registration of
such Trust Securities Certificate in such transferee's name pursuant to
Section 5.04, 5.10 or 5.12.
Section 5.03 Authentication of Trust Securities
Certificates. On the Issue Date, the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Section 2.04, to be executed on behalf of the Trust, by at least
one Administrative Trustee, authenticated, as provided herein, and
delivered in accordance with the Underwriting Agreement without further
corporate action by the Control Party, in authorized denominations
pursuant to Section 2.04. No Trust Securities Certificate shall entitle its
holder to any benefit under this Trust Agreement, or shall be valid for any
purpose, unless there shall appear on such Trust Securities Certificate a
certificate of authentication substantially in the form set forth in Exhibit C
executed by the Property Trustee by manual or facsimile signature; such
authentication shall constitute conclusive evidence that such Trust
Securities Certificate shall have been duly authenticated and delivered
hereunder. All Trust Securities Certificates shall be dated the date of their
authentication.
Section 5.04 Registration of Transfer and Exchange of
Trust Securities Certificates. The Securities Registrar shall keep or cause
to be kept, at the office or agency maintained pursuant to Section 5.08, a
Securities Register in which, subject to such reasonable regulations as it
may prescribe, the Securities Registrar shall provide for the registration of
Trust Securities Certificates and registration of transfers and exchanges of
Trust Securities Certificates as herein provided. The Property Trustee
shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Trust
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, at least one of the Administrative Trustees shall execute and
deliver in the name of the designated transferee or transferees one or more
new Trust Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of authentication by the
Property Trustee. The Securities Registrar shall not be required to
register the transfer of any Trust Securities that have been called for
redemption. At the option of a Holder, Trust Securities Certificates may
be exchanged for other Trust Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation
Amount upon surrender of the Trust Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section 5.08.
Every Trust Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees
and the Securities Registrar duly executed by the Holder or his attorney
duly authorized in writing. Each Trust Securities Certificate surrendered
for registration of transfer or exchange shall be canceled and subsequently
disposed of by the Securities Registrar in accordance with its customary
practice. The Trust shall not be required to register the transfer of or
exchange any Trust Securities after the date such Trust Securities have
been called for redemption.
No service charge shall be made for any registration of
transfer or exchange of Trust Securities Certificates, but the Securities
Registrar or the Administrative Trustees may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Securities Certificates.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates. If (a) any mutilated Trust Securities Certificate
shall be surrendered to the Securities Registrar, or if the Securities
Registrar shall receive evidence to its satisfaction of the destruction, loss
or theft of any Trust Securities Certificate and (b) there shall be delivered
to the Securities Registrar and the Administrative Trustees such security
or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Securities Certificate shall
have been acquired by a bona fide purchaser, the Administrative Trustees
or any one of them on behalf of the Trust shall execute and cause to be
authenticated and make available for delivery, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under
this Section, the Administrative Trustees or the Securities Registrar may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
Section 5.06 Persons Deemed Securityholders. Prior to
due presentation of a Trust Securities Certificate for registration of
transfer, the Trustees or the Securities Registrar shall treat the Person in
whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving Distributions (subject to Section 4.01(d)) and for
all other purposes whatsoever, and neither the Trustees nor the Securities
Registrar shall be bound by any notice to the contrary.
Section 5.07 Access to List of Securityholders' Names
and Addresses. The Administrative Trustees shall furnish or cause to be
furnished to (i) the Control Party and the Property Trustee semi-annually,
not later than June 1 and December 1 in each year, and (ii) the Control
Party or the Property Trustee, as the case may be, within 30 days after
receipt by any Administrative Trustee of a request therefor from the
Control Party or the Property Trustee, as the case may be, in writing, a
list, in such form as the Control Party or the Property Trustee, as the case
may be, may reasonably require, of the names and addresses of the
Securityholders as of a date not more than 15 days prior to the time such
list is furnished; provided, that the Administrative Trustees shall not be
obligated to provide such list at any time such list does not differ from the
most recent list given to the Control Party and the Property Trustee by the
Administrative Trustees or at any time the Property Trustee is the
Securities Registrar. If one or more Holders of Trust Securities
Certificates evidencing not less than 25% of the Outstanding Liquidation
Amount apply in writing to the Administrative Trustees, and such
application states that the applicants desire to communicate with other
Securityholders with respect to their rights under this Trust Agreement or
under the Trust Securities Certificates and such application is
accompanied by a copy of the communication that such applicants
propose to transmit, then the Administrative Trustees shall, within five
Business Days after the receipt of such application, afford such applicants
access during normal business hours to the current list of Securityholders.
Each Holder, by receiving and holding a Trust Securities Certificate, and
each Owner shall be deemed to have agreed not to hold either the Control
Party or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which
such information was derived.
Section 5.08 Maintenance of Office or Agency. The
Administrative Trustees shall maintain in the Borough of Manhattan, New
York, an office or offices or agency or agencies where Trust Securities
Certificates and the Control Certificate may be surrendered for
registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate The Bank of
New York, 101 Barclay Street, New York, New York, Attn: Corporate
Trust Trustee Administration, as its principal agency for such purposes.
The Administrative Trustees shall give prompt written notice to the
Control Party and to the Securityholders of any change in the location of
the Securities Register or any such office or agency.
Section 5.09 Appointment of Paying Agent. The Paying
Agent shall make Distributions and other payments provided hereby to
Securityholders from the Payment Account and shall report the amounts
of such Distributions and payments to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable
power to withdraw funds from the Payment Account for the purpose of
making the Distributions and payments provided hereby. The
Administrative Trustees may revoke such power and remove the Paying
Agent if such Trustees determine in their sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in
any material respect. The entity constituting the Paying Agent shall
initially act as the Property Trustee, and it may choose any co-paying
agent that is acceptable to the Administrative Trustees and the Control
Party. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees
and the Control Party. In the event that a Paying Agent shall resign or be
removed, the Administrative Trustees shall appoint a successor that is
acceptable to the Control Party to act as Paying Agent (which shall be a
bank or trust company). The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an
instrument in which such successor Paying Agent or additional Paying
Agent shall agree with the Trustees that as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any, held by
it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 9.01, 9.03 and 9.06 shall apply to the entity acting
as the Property Trustee also in its role as Paying Agent, for so long as that
entity shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 5.10 Book-Entry Trust Securities Certificates.
The Trust Securities, upon original issuance, will be issued in the form of
typewritten Book-Entry Trust Securities Certificates, to be delivered to or
held on behalf of The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Trust in accordance with the
Underwriting Agreement. Such Book-Entry Trust Securities Certificate
or Certificates shall initially be registered on the Securities Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no
Owner or other beneficial owner will receive a Definitive Trust Securities
Certificate representing such beneficial owner's interest in such Trust
Securities, except as provided in Section 5.12. Unless and until Definitive
Trust Securities Certificates have been issued to Owners pursuant to
Section 5.12:
(i) the provisions of this Section 5.10 shall be in full
force and effect;
(ii) the Securities Registrar and the Trustees shall be
entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Trust Securities
Certificates (including the payment of the Liquidation Amount of
and Distributions on the Book-Entry Trust Securities and the
giving of instructions or directions to Owners of Book-Entry Trust
Securities) as the sole Holder of Book-Entry Trust Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Trust Agreement, the
provisions of this Section shall control; and
(iv) the rights of the Owners of the Book-Entry Trust
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and
agreements between such Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Certificate
Depository Agreement, unless and until Definitive Trust Securities
Certificates are issued pursuant to Section 5.12, the Clearing
Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the
Trust Securities to such Clearing Agency Participants.
Section 5.11 Notices to Clearing Agency. To the extent
a notice or other communication to the Owners is required under this
Trust Agreement, unless and until Definitive Trust Securities Certificates
shall have been issued to Owners pursuant to Section 5.12, the Trustees
shall give all such notices and communications specified herein to be given
to Owners to the Clearing Agency, and shall have no obligations to the
Owners.
Section 5.12 Definitive Trust Securities Certificates If (i)
the Clearing Agency discontinues providing its services as securities
depositary with respect to the Trust Securities at any time by giving
reasonable notice to the Trust or Property Trustee, (ii) the Trust or the
Control Party decides to discontinue use of the system of book-entry
transfers through the Clearing Agency (or a successor depositary) and a
successor securities depositary is not obtained or (iii) the Trust fails to pay
any amounts due and payable in respect of the Trust Securities or
Yorkshire Group fails to pay any amounts due and payable in respect of
the Trust Securities or Yorkshire Group fails to pay any amounts payable
in respect of the Guarantee or the Debentures Guarantee, as required by
their respective terms, upon surrender to the Administrative Trustees of
the Book-Entry Trust Securities Certificates representing the Trust
Securities by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees or any one of them shall execute
and cause to be authenticated Definitive Trust Securities Certificates
representing the Trust Securities in accordance with the instructions of the
Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Trust Securities Certificates,
the Trustees shall recognize the Holders of the Definitive Trust Securities
Certificates as Securityholders. The Definitive Trust Securities
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative
Trustees or any one of them.
Section 5.13 Rights of Securityholders. The legal title to
the Trust Property is vested exclusively in the Property Trustee (in its
capacity as such) in accordance with Section 2.09. The Securityholders
shall be entitled to vested, undivided beneficial ownership interests in the
underlying income and assets of the Trust, as conferred by their Trust
Securities. The Securityholders shall have no right to call for any partition
or division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or other similar rights and when issued
and delivered to Securityholders against payment of the purchase price
therefor will be fully paid and nonassessable by the Trust. The Control
Party and the Holders of the Trust Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware.
ARTICLE VI
Control Certificate
Section 6.01 Ownership of Control Certificate. The
Control Party has acquired, and will continue to retain, except as
described below, ownership of the Control Certificate. To the fullest
extent permitted by law, any attempted transfer of the Control Certificate,
except for transfers by operation of law or to a successor Control Party at
the request of Yorkshire Group pursuant to Section 6.02, shall be void.
The Control Certificate shall contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED
IN THE TRUST AGREEMENT REFERRED TO HEREIN".
Section 6.02 Transfer of Control Certificate. Upon a
transfer of the Control Certificate in accordance with Section 6.01:
(a) The Control Party surrendering the Control
Certificate (the "Surrendering Party") (or its duly authorized attorney)
shall surrender such certificate at the office or agency of the Trust
maintained pursuant to Section 5.08 along with a written instrument of
surrender, in form satisfactory to at least one Administrative Trustee and
the Securities Registrar, duly executed by the Surrendering Party.
Thereupon, the Surrendering Party shall cease to be the Control Party.
The surrendered Control Certificate shall be canceled and subsequently
disposed of by the Securities Registrar in accordance with its customary
practice; and
(b) Immediately upon such surrender, (i) the Depositor, on
behalf of the Trust, shall execute and deliver in the name of the successor
Control Party a new Control Certificate dated the date of delivery and (ii)
the successor Control Party shall evidence its acceptance by executing the
new Control Certificate and taking possession thereof. Thereupon, such
entity shall be deemed to be the Control Party.
No service charge shall be made for any registration of
transfer or surrender of the Control Certificate.
Section 6.03 No Economic Interest in the Trust.(a)
The Control Party, by virtue of its possession of the Control
Certificate, has a beneficial interest in the Trust; provided, however, that
the Control Party, solely by virtue of its possession of the Control
Certificate, shall not be a trustee of the Trust nor shall it have an
undivided beneficial interest in the property of the Trust nor shall it be
entitled to any financial or monetary interest in the Trust, including, but
not limited to, any Distribution, any amounts paid on liquidation or
termination of the Trust, or any entitlement to the Junior Subordinated
Debentures or payments thereon.
(b) Possession of the Control Certificate does not:
(i) entitle the Control Party to income or assets of the
Trust;
(ii) impose upon the Control Party any obligation as
trustee with respect to the Trust; or
(iii) impose upon the Control Party any obligation to act
as a fiduciary (to the fullest extent of the law) with respect to the
Trust or the Trust Securities.
Section 6.04 Certain Duties and Responsibilities. The
rights, duties and responsibilities of the Control Party shall be only as
provided by the Control Certificate and this Trust Agreement.
Notwithstanding the foregoing, no provision of the Original Trust
Agreement, the Control Certificate and this Trust Agreement shall require
the Control Party to incur any of its own funds in the performance of its
duties as Control Party. Whether or not therein expressly so provided,
every provision of the Control Certificate and this Trust Agreement
relating to the conduct of the Control Party shall be subject to the
provisions of this Section.
ARTICLE VII
Acts of Securityholders; Meetings; Voting
Section 7.01 Limitations on Voting Rights.
(a) Except as provided in this Section, in Section 9.10,
Section 9.19 or Section 11.03 of this Trust Agreement, in the
Subordinated Indenture, in the Guarantee and as otherwise required by
law, no Holder of Trust Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Trust Securities
Certificates and the Control Certificate, be construed so as to constitute
the Securityholders and the Control Party, respectively, from time to time
as partners or members of an association.
(b) So long as any Junior Subordinated Debentures are
held by or for the benefit of the Property Trustee, the Trustees shall not (i)
direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or executing any trust or power
conferred on the Indenture Trustee with respect to such Junior
Subordinated Debentures or the Debentures Guarantee, (ii) waive any past
default which is waivable under Section 5.06 of the Subordinated
Indenture, (iii) exercise any right to rescind or annul a declaration that any
interest payment or other payment with respect to the Junior Subordinated
Debentures or the Debentures Guarantee shall be due and payable or (iv)
consent to any amendment, modification or termination of the
Subordinated Indenture or the Junior Subordinated Debentures, where
such consent shall be required, or to any other action, under the
Subordinated Indenture, without, in each case, obtaining the prior
approval of the Holders of at least a majority in aggregate Liquidation
Amount of all Outstanding Trust Securities; provided, however, that
where a consent under the Subordinated Indenture would require the
consent of each holder of Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Trustees without the prior
written consent of each Holder of Trust Securities. The Trustees shall not
revoke any action previously authorized or approved by a vote of the
Holders of Trust Securities except by subsequent vote of the Holders of
Trust Securities. The Property Trustee shall notify all Holders of the
Trust Securities of any notice of default with respect to the Junior
Subordinated Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Trust Securities, prior to taking any of the
foregoing actions, the Trustees shall, at the expense of the US Affiliates
pursuant to the Expense Agreement, obtain an Opinion of Counsel
designated by the Control Party who is experienced in such matters to the
effect that (A) the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes on account of such action,
(B) the beneficiaries of the Trust will not cease to be fully entitled to the
income of the Trust as it arises nor will the Trust be classified as a
company, in either case, for purposes of United Kingdom tax law, on
account of such action, (C) neither the Trust, Yorkshire Finance nor the
Control Party will be required to register as an "investment company"
under the Investment Company Act on account of such action and (D)
Yorkshire Finance will not be classified as an association or a publicly
traded partnership taxable as a corporation for United States federal
income tax purposes on account of such action.
Section 7.02 Notice of Meetings. Notice of all meetings
of the Securityholders, stating the time, place and purpose of the meeting,
or of any matter upon which action by written consent of such
Securityholders is to be taken, shall be given by the Administrative
Trustees pursuant to Section 11.08 to each Securityholder of record, at
his registered address, at least 15 days and not more than 90 days before
the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without
further notice.
Section 7.03 Meetings of Securityholders. No annual
meeting of Securityholders is required to be held. The Administrative
Trustees, however, shall call a meeting of Securityholders to vote on any
matter upon the written request of the Securityholders of record of 25%
of the Outstanding Trust Securities (based upon their aggregate
Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of
Securityholders to vote on any matters as to which Securityholders are
entitled to vote.
Securityholders of record of 50% of the Outstanding Trust
Securities (based upon their aggregate Liquidation Amount), present in
person or by proxy, shall constitute a quorum at any meeting of
Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Securityholders of record present, in person or by proxy, holding more
than 66-2/3% of the Securities (based upon their aggregate Liquidation
Amount) held by the Trust Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater or lesser
number of affirmative votes.
Section 7.04 Voting Rights. In respect of any matter as
to which Securityholders are entitled to vote, Securityholders shall be
entitled to one vote for each $25 of Liquidation Amount represented by
their Trust Securities.
Section 7.05 Proxies, etc. At any meeting of
Securityholders, any Securityholder entitled to vote may vote by proxy,
provided that no proxy shall be voted at any meeting unless it shall have
been placed on file with the Administrative Trustees, or with such other
officer or agent of the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the
name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When
Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting in
person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in
respect of such Trust Securities. A proxy purporting to be executed by or
on behalf of a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
Section 7.06 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding at least 66-2/3% of all
Outstanding Trust Securities entitled to vote in respect of such action (or
such other proportion thereof as shall be required by any express provision
of this Trust Agreement) shall consent to the action in writing (based upon
their aggregate Liquidation Amount).
Section 7.07 Record Date for Voting and Other
Purposes. For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written consent, or
to participate in any Distribution on the Trust Securities in respect of
which a record date is not otherwise provided for in this Trust Agreement,
or for the purpose of any other action, the Administrative Trustees may
from time to time fix a date, not more than 90 days prior to the date of
any meeting of Securityholders or the payment of a Distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Securityholders of record for such purposes.
Section 7.08 Acts of Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Trust Agreement to be given, made or taken
by Securityholders or the Control Party may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed
by such Securityholders or the Control Party in person or by an agent
appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments
are delivered to the Administrative Trustees. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Securityholders or the
Control Party signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section
9.01) conclusive in favor of the Trustees, if made in the manner provided
in this Section.
The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which
the Trustees deem sufficient.
The ownership of Trust Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust Security
shall bind every future Securityholder of the same Trust Security and the
Securityholder of every Trust Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustees or the Trust
in reliance thereon, whether or not notation of such action is made upon
such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation
Amount of such Trust Security or by one or more duly appointed agents
each of which may do so pursuant to such appointment with regard to all
or any part of such Liquidation Amount.
Section 7.09 Inspection of Records. Upon reasonable
notice to the Trustees, the records of the Trust shall be open to inspection
by Securityholders during normal business hours for any purpose
reasonably related to such Securityholder's interest as a Securityholder.
ARTICLE VIII
Representations and Warranties of the
Property Trustee and Delaware Trustee
Section 8.01 Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Control Party at the date of this Trust
Agreement, and each successor Property Trustee represents and warrants
to the Trust and the Control Party at the time of the successor Property
Trustee's acceptance of its appointment as Property Trustee, that:
(a) the Property Trustee is a New York banking
corporation with trust powers and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Trust
Agreement;
(b) The execution, delivery and performance by the
Property Trustee of this Trust Agreement has been duly authorized by all
necessary corporate action on the part of the Property Trustee. This Trust
Agreement has been duly executed and delivered by the Property Trustee
and constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles
of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at
law);
(c) The execution, delivery and performance of this
Trust Agreement by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or
registration with or notice to, any New York State or federal banking
authority is required for the execution, delivery or performance by the
Property Trustee of this Trust Agreement.
Section 8.02 Representations and Warranties of
Delaware Trustee. The Trustee that acts as initial Delaware Trustee
represents and warrants to the Trust and to the Control Party at the date
of this Trust Agreement, and each successor Delaware Trustee represents
and warrants to the Trust and the Control Party at the time of the
successor Delaware Trustee's acceptance of its appointment as Delaware
Trustee that:
(a) The Delaware Trustee is duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with trust power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the
Delaware Trustee of this Trust Agreement has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee. This
Trust Agreement has been duly executed and delivered by the Delaware
Trustee and constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency,
and other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) No consent, approval or authorization of, or
registration with or notice to, any federal banking authority is required for
the execution, delivery or performance by the Delaware Trustee of this
Trust Agreement; and
(d) The Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity
which has its principal place of business in the State of Delaware.
(e) The Delaware Trustee is not, and shall not be,
resident in the United Kingdom for United Kingdom tax purposes.
ARTICLE IX
The Trustees
Section 9.01 Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the
Trustees shall be as provided by this Trust Agreement and, in the case of
the Property Trustee, the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the Trustees
to expend or risk their own funds or otherwise incur any financial liability
in the performance of any of their duties hereunder, or in the exercise of
any of their rights or powers, if they shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to them. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to
the conduct or affecting the liability of or affording protection to the
Trustees shall be subject to the provisions of this Section.
(b) All payments made by the Property Trustee in
respect of the Trust Securities shall be made only from the income and
proceeds from the Trust Property and only to the extent that there shall be
sufficient income or proceeds from the Trust Property to enable the
Property Trustee to make payments in accordance with the terms hereof.
Each Securityholder, by its acceptance of a Trust Security, agrees that it
will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in respect of any
Trust Security. This Section 9.01(b) does not limit the liability of the
Trustees expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
(c) The Property Trustee shall use all reasonable
efforts to ensure that neither it nor the Trust is resident in the
United Kingdom for United Kingdom tax purposes.
Section 9.02 Notice of Defaults and Extension Periods.
(a) Within 90 days after the occurrence of any Event of Default, the
Property Trustee shall transmit, in the manner and to the extent provided
in Section 11.08, notice of any Event of Default actually known to a
Responsible Officer of the Property Trustee to the Securityholders, the
Administrative Trustees, the Control Party and Yorkshire Finance, unless
such Event of Default shall have been cured or waived. For purposes of
this Section, the term "Event of Default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default.
(b) The Property Trustee shall transmit to the
Securityholders, in the manner and to the extent provided in Section
11.08, notice of Yorkshire Finance's election to begin or further extend an
Extension Period on the Junior Subordinated Debentures (unless such
election shall have been revoked) within five Business Days of the receipt
of notice thereof.
Section 9.03 Certain Rights of Property Trustee. Subject
to the provisions of Section 9.01 and except as provided by law:
(i) the Property Trustee may conclusively rely and
shall be protected in acting or refraining from acting in good faith
upon any resolution, Opinion of Counsel, certificate, written
representation of a Holder or transferee, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) if (A) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action, or (B) in construing any of the
provisions in this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with any other provisions
contained herein, or (C) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except
as to any matter as to which the Trust Securityholders are entitled
to vote under the terms of this Trust Agreement, the Property
Trustee shall deliver a notice to the Control Party requesting
written instructions of the Control Party as to the course of action
to be taken. The Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Control Party; provided, however, that if the Property Trustee
does not receive such instructions of the Control Party within ten
Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which to
the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking
such action not inconsistent with this Trust Agreement as it shall
deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for
its own bad faith, negligence or willful misconduct;
(iii) the Property Trustee may consult with counsel of
its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(iv) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders
shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(v) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other document, unless
requested in writing to do so by one or more Securityholders; and
(vi) the Property Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through its agents or attorneys, provided that the
Property Trustee shall be responsible for its own negligence or
recklessness with respect to selection of any agent or attorney
appointed by it hereunder.
Section 9.04 Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the Trustees
do not assume any responsibility for their correctness. The Trustees shall
not be accountable for the use or application by the Trust of the proceeds
of the Trust Securities in accordance with Section 2.05.
The Property Trustee may conclusively assume that any
funds held by it hereunder are legally available unless a Responsible
Officer shall have received written notice from the Company, any Holder
or any other Trustee that such funds are not legally available.
Section 9.05 May Hold Securities. Any Trustee or any
other agent of the Trustees or the Trust, in its individual or any other
capacity, may become the owner or pledgee of Trust Securities and,
except as provided in the definition of the term "Outstanding" in Article I
and subject to Sections 9.08 and 9.13, may otherwise deal with the Trust
with the same rights it would have if it were not a Trustee or such other
agent.
Section 9.06 Compensation; Fees; Indemnity.
The following expenses will be paid by the US Affiliates
pursuant to the Expense Agreement:
(1) the payment to the Trustees from time to time of
reasonable compensation, as agreed to in writing from time to time, for all
services rendered by the Trustees hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, the
reimbursement of the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of their
agents and counsel), except any such expense, disbursement or advance as
may be attributable to their willful misconduct, negligence or bad faith;
and
(3) the indemnification of the Trustees for any and all
loss, damage, claims, liability or expense incurred without willful
misconduct, negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of
their powers or duties hereunder.
The provisions of this Section 9.06 shall survive the
termination of this Trust Agreement.
Section 9.07 Trustees Required; Eligibility.
(a) There shall at all times be a Property Trustee
hereunder with respect to the Trust Securities. The Property Trustee shall
be a Person that has a combined capital and surplus of at least
$50,000,000. The Property Trustee shall not be resident in the
United Kingdom for United Kingdom tax purposes. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the Property
Trustee with respect to the Trust Securities shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
(b) There shall at all times be one or more
Administrative Trustees hereunder with respect to the Trust Securities.
Each Administrative Trustee shall be either a natural person who is at least
21 years of age or a legal entity that shall act through one or more persons
authorized to bind such entity. No Administrative Trustee shall be
resident in the United Kingdom for United Kingdom tax purposes.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State of
Delaware or (ii) a legal entity authorized to conduct a trust business and
with its principal place of business in the State of Delaware that shall act
through one or more persons authorized to bind such entity.
Section 9.08 Conflicting Interests. If the Property
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Property Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Trust Agreement.
To the extent permitted by the Trust Indenture Act, the Property Trustee
shall not be deemed to have a conflicting interest by virtue of being trustee
under the Guarantee or the Subordinated Indenture.
Section 9.09 Co-Trustees and Separate Trustee. Unless
an Indenture Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Control Party and the Property
Trustee shall have power to appoint, and upon the written request of the
Property Trustee, the Control Party shall for such purpose join with the
Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust Property,
or to act as separate trustee of any such Trust Property, in either case with
such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property,
title, right or power deemed necessary or desirable, subject to the other
provisions of this Section. If the Control Party does not join in such
appointment within 15 days after the receipt by it of a request so to do, or
in case an Indenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section must
satisfy the requirements of Section 9.07.
Should any written instrument from the Depositor be
required by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property, title,
right, or power, any and all such instruments shall, on request, be
executed, acknowledged, and delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(i) The Trust Securities shall be executed,
authenticated and delivered and all rights, powers, duties, and
obligations hereunder in respect of the custody of securities, cash
and other personal property held by, or required to be deposited or
pledged with, the Trustees hereunder, shall be exercised, solely by
the Trustees and not by such co-trustee or separate trustee.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed by the Property Trustee
or by the Property Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed,
the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties, and
obligations shall be exercised and performed by such co-trustee or
separate trustee.
(iii) The Property Trustee at any time, by an instrument
in writing executed by it, with the written concurrence of the
Control Party, may accept the resignation of or remove any co-
trustee or separate trustee appointed under this Section, and, in
case an Indenture Event of Default has occurred and is continuing,
the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the
concurrence of the Control Party. Upon the written request of the
Property Trustee, the Control Party shall join with the Property
Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner
provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee, or any other such trustee hereunder.
(v) The Trustees shall not be liable by reason of any act
of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property
Trustee shall be deemed to have been delivered to each such co-
trustee and separate trustee.
Section 9.10 Resignation and Removal; Appointment of
Successor. No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Relevant Trustee pursuant to
this Article shall become effective until the acceptance of appointment by
the successor Relevant Trustee in accordance with the applicable
requirements of Section 9.11.
Subject to the immediately preceding paragraph, the
Relevant Trustee may resign at any time by giving written notice thereof
to the Securityholders. If the instrument of acceptance by a successor
Relevant Trustee required by Section 9.11 shall not have been delivered to
the Relevant Trustee within 30 days after the giving of such notice of
resignation, the resigning Relevant Trustee may petition any court of
competent jurisdiction for the appointment of a successor Relevant
Trustee.
Unless an Indenture Event of Default shall have occurred
and be continuing, the Property Trustee or Delaware Trustee may be
removed at any time by Act of the Control Party. If an Indenture Event of
Default shall have occurred and be continuing, the Property Trustee or
Delaware Trustee may be removed at such time by Act of the
Securityholders of a majority in aggregate Liquidation Amount of the
Trust Securities, delivered to the Property Trustee (in its individual
capacity and on behalf of the Trust).
An Administrative Trustee may be removed by the Control
Party at any time. In no event will the Securityholders have the right to
vote, appoint, remove or replace the Administrative Trustees, which rights
are vested exclusively with the Control Party, as holder of the Control
Certificate.
If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as Trustee, or if a vacancy shall occur in the
office of the Relevant Trustee for any cause, at a time when no Indenture
Event of Default shall have occurred and be continuing, the Control Party
shall promptly appoint a successor Relevant Trustee or Trustees, and the
retiring Relevant Trustee shall comply with the applicable requirements of
Section 9.11. If the Property Trustee or Delaware Trustee shall resign, be
removed or become incapable of continuing to act as the Property Trustee
or Delaware Trustee at a time when an Indenture Event of Default shall
have occurred and be continuing, the Holders of Trust Securities, by Act
of the Securityholders of a majority in Liquidation Amount of the Trust
Securities then Outstanding delivered to the retiring Property Trustee or
Delaware Trustee, shall promptly appoint a successor Property Trustee or
Delaware Trustee, and such appointee must comply with the applicable
requirements of Section 9.11. If no successor Relevant Trustee shall have
been so appointed in accordance with this Section 9.10 and accepted
appointment in the manner required by Section 9.11, any Securityholder
who has been a Securityholder of Trust Securities for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee, and each
appointment of a successor Trustee to all Securityholders in the manner
provided in Section 11.08 and shall give notice to the Control Party. Each
notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or a
Delaware Trustee who is a natural person dies or becomes incompetent or
incapacitated or resigns, the vacancy created by such death, incompetence
or incapacity or resignation may be filled by (i) the unanimous act of the
remaining Administrative Trustee or Trustees or (ii) otherwise by the
Control Party (with the successor in each case being an individual who
satisfies the eligibility requirement for Administrative Trustees set forth in
Section 9.07).
Section 9.11 Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
every such successor Relevant Trustee so appointed shall execute,
acknowledge and deliver to the Trust and to the retiring Relevant Trustee
an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Relevant Trustee shall become effective and
such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on the request of the Control
Party or the successor Relevant Trustee, such retiring Relevant Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Relevant Trustee all the rights, powers and
trusts of the retiring Relevant Trustee and shall duly assign, transfer and
deliver to such successor Relevant Trustee all property and money held by
such retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the
Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant Trustee
shall be qualified and eligible under this Article.
Section 9.12 Merger, Conversion, Consolidation or
Succession to Business. Any Person into which the Property Trustee,
Delaware Trustee or any Administrative Trustee which is not a natural
person may be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or consolidation to
which such Relevant Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of such Relevant
Trustee, shall be the successor of such Relevant Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
Section 9.13 Preferential Collection of Claims Against
Certain Entities. If and when the Property Trustee shall be or become a
creditor of the Control Party, Yorkshire Finance, Yorkshire Group or the
Trust (or any other obligor upon the Junior Subordinated Debentures or
the Trust Securities), the Property Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Depositor or Trust (or any such other obligor). For purposes
of Sections 311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Control Party, Yorkshire Finance, Yorkshire Group or the
Trust (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Property Trustee simultaneously with the creation of the
creditor relationship with the Control Party, Yorkshire Finance, Yorkshire
Group or the Trust (or any such obligor) arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange, acceptance
or obligation.
Section 9.14 Reports by Property Trustee.
(a) Within 60 days after May 15 of each year
commencing with May 15, 1998, if required by Section 313(a) of the
Trust Indenture Act, the Property Trustee shall transmit a brief report
dated as of such May 15 with respect to any of the events specified in
such Section 313(a) that may have occurred since the later of (i) the date
of this Trust Agreement and (ii) the preceding May 15.
(b) The Property Trustee shall transmit to
Securityholders the reports required by Section 313(b) of the Trust
Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be
transmitted in the manner and to the Persons required by Sections 313(c)
and (d) of the Trust Indenture Act.
Section 9.15 Reports to the Property Trustee. The
Control Party and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information
as required by Section 314 of the Trust Indenture Act (if any) and, within
120 days after the end of each fiscal year of the Control Party, the
compliance certificate required by Section 314(a)(4) of the Trust
Indenture Act in the form and in the manner required by Section 314 of
the Trust Indenture Act.
Section 9.16 Evidence of Compliance with Conditions
Precedent. Each of the Control Party and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Trust Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given pursuant to Section 314(c)(1) of the Trust Indenture Act shall
comply with Section 314(e) of the Trust Indenture Act.
Section 9.17 Number of Trustees.
(a) The number of Trustees shall initially be six,
provided that the Control Party by written instrument may increase or
decrease the number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and
the number of Administrative Trustees is not reduced pursuant to Section
9.17(a), or if the number of Trustees is increased pursuant to Section
9.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee
appointed in accordance with Section 9.10.
(c) The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a Trustee
shall not operate to dissolve, terminate or annul the Trust. Whenever a
vacancy in the number of Administrative Trustees shall occur, until such
vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 9.10, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of
this Trust Agreement), shall have all powers granted to the Administrative
Trustees and shall discharge the duties imposed upon the Administrative
Trustees by this Trust Agreement.
Section 9.18 Delegation of Power.
(a) Any Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 2.07(A) or making any other
governmental filing; and
(b) The Administrative Trustees shall have power to
delegate from time to time to such of their number the doing of such
things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions
of the Trust, as set forth herein.
(c) Any delegation pursuant to clauses (a) and (b) of
this Section shall be made in such a manner as to reasonably ensure that
neither the Trust nor any trustee hereunder is resident in the
United Kingdom for United Kingdom tax purposes.
Section 9.19 Enforcement of Rights of Property Trustee
by Securityholders. If an Event of Default occurs and is continuing, then
the Holders of Trust Securities will rely on the enforcement by the
Property Trustee, as the indirect holder of the Junior Subordinated
Debentures and as direct beneficiary of the Debentures Guarantee, of its
rights against Yorkshire Finance and Yorkshire Group. In addition, the
Holders of a majority in aggregate Liquidation Amount of the Trust
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Trust Agreement, including the right to direct
the Property Trustee to exercise the remedies available to it as the indirect
holder of the Junior Subordinated Debentures and as direct beneficiary of
the Debentures Guarantee, provided that such direction shall not be in
conflict with any rule of law or with this Trust Agreement, and could not
involve the Property Trustee in personal liability in circumstances where
reasonable indemnity would not be adequate. If the Property Trustee fails
to enforce its rights under the Debentures Guarantee, a Holder of Trust
Securities may, to the fullest extent permitted by applicable law, institute a
legal proceeding against Yorkshire Group to enforce the Property
Trustee's rights with respect to the Debentures Guarantee without first
instituting any legal proceeding against or directing that action be taken by
the Property Trustee or any other Person, including the Trust; it being
understood and intended that no one or more of such Holders shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Trust Agreement to affect, disturb or prejudice the rights
of any other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Trust Agreement, except in the manner herein provided and for the
equal and ratable benefit of all such Holders. Notwithstanding the
foregoing, a Holder of Trust Securities may institute a legal proceeding
directly against Yorkshire Group, without first instituting a legal
proceeding against or requesting or directing that action be taken by the
Property Trustee or any other Person, for enforcement of payment to such
Holder under the Debentures Guarantee with respect to principal of or
interest or other amounts due on the Junior Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of
the Trust Securities of such Holder on or after the due dates therefor
specified in the Junior Subordinated Debentures. Yorkshire Group shall
be subrogated to all rights of the Holders of Trust Securities in respect of
any amounts paid to such Holders by Yorkshire Group pursuant to this
Section. Any amount received by a Holder or any related owner from
Yorkshire Group under the Subordinated Indenture shall reduce by such
amount the Trust's obligations to such Holder thereunder in respect of
which such amount was paid under the Subordinated Indenture.
ARTICLE X
Dissolution and Liquidation
Section 10.01 Dissolution Upon Expiration Date.
The Trust shall automatically dissolve on June 30, 2043 (the "Expiration
Date") or earlier pursuant to Section 10.02.
Section 10.02 Early Termination. Upon the first to
occur of any of the following events (such first occurrence, an "Early
Termination Event"), the Trust shall be dissolved in accordance with the
terms hereof:
(i) the occurrence of a Bankruptcy Event in respect of
Yorkshire Finance, dissolution or liquidation of Yorkshire Finance,
or the dissolution of the Trust pursuant to a judicial decree;
(ii) the delivery of written direction to the Property
Trustee by the Control Party at any time to dissolve the Trust
(which direction is optional and wholly within the discretion of the
Control Party) and to distribute the Junior Subordinated
Debentures to Securityholders in liquidation of the Trust as
provided in Section 10.04; and
(iii) the payment at maturity or redemption of all of the
Junior Subordinated Debentures and the consequent redemption of
all of the Trust Securities.
Section 10.03 Termination. The respective
obligations and responsibilities of the Trust and the Trustees created
hereby shall terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Securityholders upon the
liquidation of the Trust pursuant to Section 10.04, or upon the redemption
of all of the Trust Securities pursuant to Section 4.02, of all amounts or
instruments required to be distributed hereunder upon the final payment of
the Trust Securities; (b) the payment of any expenses owed by the Trust;
and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
Section 10.04 Liquidation.
(a) If any Early Termination Event specified in clause
(i) or (ii) of Section 10.02 occurs, the Trust shall be liquidated, and the
Property Trustee shall distribute the Junior Subordinated Debentures to
the Securityholders as provided in this Section 10.04.
(b) In connection with a distribution of the Junior
Subordinated Debentures, each Holder of Trust Securities shall be entitled
to receive, after the satisfaction (whether by payment or reasonable
provision for payment) of liabilities to creditors of the Trust (as evidenced
by a certificate of the Administrative Trustees), a Like Amount of Junior
Subordinated Debentures. Notice of liquidation shall be given by the
Trustees by first-class mail, postage prepaid, mailed not later than 30 nor
more than 60 days prior to the Liquidation Date to the Holders thereof as
they appear on the Securities Register on the relevant record date which,
as long as the Trust Securities are represented by Book-Entry Trust
Securities Certificates, shall be one Business Day prior to the Liquidation
Date or, in the event that the Trust Securities are not so represented, such
relevant record date shall be the close of business on the fifteenth calendar
day prior to the Liquidation Date. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and
any Trust Securities Certificates not surrendered for exchange will
be deemed to represent a Like Amount of Junior Subordinated
Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Junior Subordinated Debentures as the
Administrative Trustees or the Property Trustee shall deem
appropriate.
(c) In order to effect the liquidation of the Trust and
distribution of the Junior Subordinated Debentures to Securityholders, the
Property Trustee shall establish such procedures as it shall deem
appropriate to effect the distribution of Junior Subordinated Debentures in
exchange for the Outstanding Trust Securities Certificates.
(d) After the Liquidation Date, (i) the Trust Securities
will no longer be deemed to be Outstanding and the Guarantee will be
discharged, (ii) certificates representing a Like Amount of Junior
Subordinated Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of such certificates to the Administrative
Trustees or their agent for exchange, (iii) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like
Amount of Junior Subordinated Debentures, accruing interest at the rate
provided for in the Junior Subordinated Debentures from the last
Distribution Date on which a Distribution was made on such Trust
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Trust Securities Certificates with respect to such
Junior Subordinated Debentures) and (iv) all rights of Securityholders
holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Subordinated Debentures upon
surrender of Trust Securities Certificates.
(e) Yorkshire Group will use its reasonable efforts to
cause the Junior Subordinated Debentures that are distributed in exchange
for the Trust Securities to be listed on such securities exchange as the
Trust Securities are then listed. The Clearing Agency, as the initial record
holder of the Trust Securities, will receive global book-entry interests
representing a 100% beneficial interest in the Junior Subordinated
Debentures to be delivered upon such distribution, or, if any Trust
Securities are not held by the Clearing Agency, the Definitive Trust
Securities Certificates representing the Trust Securities will be deemed to
represent book-entry interests representing the Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of
such Trust Securities, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on the Trust
Securities until such certificates are presented to Yorkshire Finance or its
agent for transfer or reissuance.
Section 10.05 Bankruptcy. If an Early
Termination Event specified in clause (i) of Section 10.02 has occurred,
the Trust shall be dissolved and liquidated. The Property Trustee shall
distribute a Like Amount of the Junior Subordinated Debentures to the
Securityholders as provided in Section 10.04, unless such distribution is
determined by the Administrative Trustees not to be practical, in which
event the Holders will be entitled to receive, out of the assets of the Trust
available for distribution to Securityholders after satisfaction of liabilities
to creditors, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Trust
Securities shall be paid on a pro rata basis in proportion to the full
Liquidated Distribution for which the Trust Securities would be entitled.
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Expense Agreement. The US
Affiliates, contemporaneously with the execution and delivery of this
Trust Agreement, shall execute and deliver the Expense Agreement.
Section 11.02 Limitation of Rights of
Securityholders. The death, incapacity, dissolution, bankruptcy or
termination of any Person having an interest, beneficial or otherwise, in a
Trust Security shall not operate to terminate this Trust Agreement, nor
dissolve, terminate or annul the Trust (other than as contemplated by
Section 10.02), nor entitle the legal representatives or heirs of such Person
or any Securityholder for such Person, to claim an accounting, take any
action or bring any proceeding in and for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
Section 11.03 Amendment.
(a) This Trust Agreement may be amended from time
to time by the Trustees, the Control Party and the Depositor, without the
consent of any Securityholders, (i) to cure any ambiguity, correct or
supplement any provision herein that may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Trust Agreement that shall not be
inconsistent with the other provisions of this Trust Agreement; (ii) to
modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that (A) the Trust will be
classified for United States federal income tax purposes as a grantor trust
at all times that any Trust Securities are Outstanding, (B) the beneficiaries
of the Trust will be fully entitled to the underlying income of the Trust as
it arises and the Trust will not be classified as a company, in either case,
for purposes of United Kingdom tax law, (C) neither the Trust, the
Control Party nor Yorkshire Finance will be required to register as an
"investment company" under the Investment Company Act or (D)
Yorkshire Finance will not be classified as an association or a publicly
traded partnership taxable as a corporation for United States federal
income tax purposes; or (iii) to effect the acceptance of appointment by a
successor Property Trustee provided, however, that, except in the case of
clause (ii), such action shall not adversely affect in any material respect the
interests of any Securityholder, and, in the case of clause (i), any such
amendment of this Trust Agreement shall become effective when notice
thereof is given to the Securityholders.
(b) Except as provided in Section 11.03(c) hereof, any
provision in this Trust Agreement may be amended by the Trust or the
Trustees with (i) the consent of Trust Securityholders representing not
less than 66-2/3% in aggregate Liquidation Amount of the Trust
Securities then Outstanding and (ii) receipt by the Trustees of an Opinion
of Counsel to the effect that such amendment or the exercise of any power
granted to the Trustees in accordance with such amendment will not (A)
affect the Trust's status as a grantor trust for United States federal income
tax purposes, (B) affect the Trust's, Yorkshire Finance's or the Control
Party's exemption from the Investment Company Act, (C) cause the Trust
to be treated as a company or the beneficiaries of the Trust not to be fully
entitled to the underlying income of the Trust as it arises, in either case,
for purposes of United Kingdom tax law or (D) affect Yorkshire Finance's
status as a partnership for United States federal income tax purposes.
(c) In addition to and notwithstanding any other
provision in this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with Section
7.03 or 7.06 hereof), this Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be
made in respect of the Trust Securities as of a specified date, (ii) restrict
the right of a Securityholder to institute suit for the enforcement of any
such payment on or after such date or (iii) change the consent required
pursuant to this Section 11.03.
(d) Notwithstanding any other provisions of this Trust
Agreement, the Trustees shall not enter into or consent to any amendment
or modification to this Trust Agreement which would cause (i) the Trust
to be classified as other than a grantor trust for United States federal
income tax purposes, (ii) the Trust to be classified as a company or the
beneficiaries of the Trust not to be fully entitled to the underlying income
of the Trust as it arises, in either case, for purposes of United Kingdom
tax law, (iii) the Trust, Yorkshire Finance or the Control Party to be
required to register as an "investment company" under the Investment
Company Act or (iv) Yorkshire Finance to be classified as an association
or a publicly traded partnership taxable as a corporation for United States
federal income tax purposes.
(e) Without the consent of the Depositor or the
Control Party, this Trust Agreement may not be amended in a manner
which imposes any additional obligation on the Depositor or the Control
Party, respectively. In executing any amendment permitted by this Trust
Agreement, the Trustees shall be entitled to receive, and (subject to
Section 9.01) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or
permitted by this Trust Agreement. Any Trustee may, but shall not be
obligated to, enter into any such amendment which affects such Trustee's
own rights, duties, immunities or liabilities under this Trust Agreement or
otherwise.
(f) In the event that any amendment to this Trust
Agreement is made, the Administrative Trustees shall promptly provide to
the Depositor and the Control Party a copy of such amendment.
Section 11.04 Separability. In case any provision
in this Trust Agreement or in the Trust Securities Certificates shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby.
Section 11.05 Governing Law. THIS TRUST
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH
OF THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR,
THE CONTROL PARTY AND THE TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST SECURITIES AND
THE CONTROL CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF DELAWARE.
Section 11.06 Successors
. This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to both the Trust and the Trustees, including any
successor by operation of law.
Section 11.07 Headings. The Article and Section
headings are for convenience only and shall not affect the construction of this
Trust Agreement.
Section 11.08 Notice and Demand. Any notice,
demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon any
Securityholder, the Control Party, or the Depositor may be given or
served in writing by deposit thereof, first-class postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Trust Securityholder, to such Trust
Securityholder as such Securityholder's name and address appear on the
Securities Register, (ii) in the case of the Control Party, to Yorkshire
Cayman, c/o AEP Resources, Inc., 1 Riverside Plaza, Columbus, Ohio
43215, and (iii) in the case of the Depositor, to AEP Resources, Inc., 1
Riverside Plaza, Columbus, Ohio 43215. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon the Trust or the Trustees shall be given in writing
addressed (until another address is published by the Trust) as follows: (i)
with respect to the Property Trustee and the Delaware Trustee, The Bank
of New York, 101 Barclay Street, New York, New York 10286; and (ii)
with respect to the Administrative Trustees, to them at the address above
for notices to the Control Party, marked Attention: Administrative
Trustees of Yorkshire Capital Trust I c/o Secretary. Such notice, demand
or other communication to or upon the Trust or the Trustees shall be
deemed to have been sufficiently given or made only upon actual receipt
of the writing by the applicable Trustee.
Section 11.09 Agreement Not to Petition. Each of
the Trustees, the Control Party and the Depositor agrees for the benefit of
the Securityholders that, until at least one year and one day after the Trust
has been terminated in accordance with Article X, it shall not file, or join
in the filing of, a petition against the Trust under any bankruptcy,
reorganization, arrangement, insolvency, liquidation or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement
of any proceeding against the Trust under any Bankruptcy Law. In the
event the Depositor or the Control Party takes action in violation of this
Section 11.09, the Property Trustee agrees, for the benefit of
Securityholders, that it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor or
the Control Party against the Trust or the commencement of such action
and raise the defense that the Depositor or the Control Party has agreed in
writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustees or
the Trust may assert. The provisions of this Section 11.09 shall survive
the termination of this Trust Agreement.
Section 11.10 Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Trustee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which
is a Trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control.
(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Trust Securities as equity
securities representing vested, concurrent undivided beneficial interests in
the underlying income and assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR
ANY INTEREST THEREIN BY OR ON BEHALF OF A
SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT
ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT,
SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY
THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE
TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE
SUBORDINATED INDENTURE AND THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT
THOSE TERMS AND PROVISIONS SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
Section 11.11 Agreed Upon Tax Treatment. The
Trust and, by acceptance of a beneficial interest in a Trust Security, the
Securityholders agree to treat the Junior Subordinated Debentures as
indebtedness of Yorkshire Finance for all United States federal income tax
purposes.
IN WITNESS WHEREOF, the parties hereto have
executed this Trust Agreement or have caused this Trust Agreement to be
executed on their behalf, all as of the day and year first above written.
YORKSHIRE CAYMAN
HOLDING LIMITED,
as Control Party
By:
Title:
AEP RESOURCES, INC.,
as Depositor
By:
Title:
THE BANK OF NEW
YORK,
as Property Trustee
By:
Title:
THE BANK OF NEW
YORK (DELAWARE),
as Delaware Trustee
By:
Title:
_______________________________
________________________
____________
Jeffrey D. Cross, Stephan T. Haynes,
as Administrative Trustee as Administrative Trustee
_______________________________
________________________
____________
Brian P. Jackson, Teresa S. Madden,
as Administrative Trustee as Administrative Truste
EXHIBIT A
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN
Control Certificate
of
Yorkshire Capital Trust I
With respect to Yorkshire Capital Trust I, a statutory
business trust created under the laws of the State of Delaware (the
"Trust"), by the execution of that certain Trust Agreement, dated as of
February 1, 1998, as the same may be amended and restated from time to
time (the "Trust Agreement") among AEP Resources, Inc., as Depositor,
Stephan T. Haynes, as Administrative Trustee, The Bank of New York, as
Property Trustee, and The Bank of New York (Delaware), as Delaware
Trustee, the Trust hereby issues this Control Certificate to
________________________. The designations, rights, privileges,
restrictions, preferences of the holder of this Control Certificate and other
terms and provisions of the Control Certificate are set forth in, and shall in
all respects be subject to the terms and provisions of, the Trust
Agreement. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this Control Certificate, the holder hereof is
bound by the Trust Agreement and is entitled to the benefits thereunder.
Receipt of this Control Certificate will not bestow on the holder hereof any
economic or financial interest or obligation with respect to the Trust.
IN WITNESS WHEREOF, the Trust has executed this
Control Certificate this ____ day of ________, 19__.
YORKSHIRE CAPITAL TRUST I
By: AEP RESOURCES, INC.,
as Depositor
By: _________________________
___________
Title:
AGREED AND ACCEPTED:
_____________________________
as holder of the Control Certificate
By:_____________________________
Title:____________________________
EXHIBIT B
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND
LIABILITIES (this "Agreement") is made as of June 1, 1998, among AEP
Resources, Inc., an Ohio Company ("AEP"), and New Century
International, Inc., a Delaware Company ("NCI" and together with AEP,
the "U.S. Affiliates"), and Yorkshire Capital Trust I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to purchase Junior
Subordinated Debentures from Yorkshire Power Finance Limited, a
company with limited liability incorporated under the laws of the Cayman
Islands and an indirect, wholly-owned subsidiary of the U.S. Affiliates,
and to issue and sell Yorkshire Capital Trust I ___% Trust Securities (the
"Trust Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement
dated as of June 1, 1998 as the same may be amended from time to time
(the "Trust Agreement"); and
WHEREAS, Yorkshire Power Group Limited, a private
limited company incorporated under the laws of England and Wales and a
wholly-owned subsidiary of the U.S. Affiliates ("Yorkshire Group") is the
guarantor of the Junior Subordinated Debentures.
NOW, THEREFORE, in consideration of the purchase by
each holder of the Trust Securities, which purchase the U.S. Affiliates
hereby agree shall benefit the U.S. Affiliates and which purchase the U.S.
Affiliates acknowledge will be made in reliance upon the execution and
delivery of this Agreement, the U.S. Affiliates and the Trust hereby agree
as follows:
ARTICLE I
Section 1.01. Guarantee by the U.S. Affiliates. Subject to
the terms and conditions hereof, the U.S. Affiliates hereby irrevocably and
unconditionally guarantee to each person or entity to whom the Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations (as hereinafter
defined) to such Beneficiaries. As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than obligations of
the Trust to pay to holders of any Trust Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms
of the Trust Securities or such other similar interests, as the case may be.
Further, the term "Obligations" includes, but is not limited to, certain
expenses which are described under Sections 2.03, 2.07(A), 2.07(B),
2.07(D), 4.04, 7.01(b) and 9.06 of the Trust Agreement and Section 3.03
of the Guarantee (as defined in the Trust Agreement). This Agreement is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice
hereof. The U.S. Affiliates shall make no claim and shall not be entitled to
any claim upon the Trust Property (as defined in the Trust Agreement) for
the payment of the Obligations.
Section 1.02. Term of Agreement. This Agreement shall
terminate and be of no further force and effect upon the date on which
there are no Beneficiaries remaining; provided, however, that this
Agreement shall continue to be effective or shall be reinstated, as the case
may be, if at any time any holder of Trust Securities or any Beneficiary
must restore payment of any sums paid under the Trust Securities, under
any Obligation, under the Trust Securities Guarantee Agreement dated the
date hereof by Yorkshire Group and The Bank of New York, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. The U.S. Affiliates
hereby waive notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and the U.S. Affiliates hereby
waive presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and
demands.
Section 1.04. No Impairment. The obligations,
covenants, agreements and duties of the U.S. Affiliates under this
Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on
the part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect to
the Obligations or any action on the part of the Trust granting indulgence
or extension of any kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, the U.S. Affiliates with respect to the happening of
any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
this Agreement directly against the U.S. Affiliates and the U.S. Affiliates
waive any right or remedy to require that any action be brought against
the Trust or any other person or entity before proceeding against the U.S.
Affiliates.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
agreements contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the U.S. Affiliates and shall inure
to the benefit of the Beneficiaries.
Section 2.02. Amendment; Assignment; Consolidation,
etc. So long as there remains any Beneficiary or any Trust Securities of
any series are Outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the holders of
the Trust Securities Upon any consolidation by Yorkshire Group with or
merger of Yorkshire Group into any other corporation, or conveyance or
other transfer or lease of properties and assets of Yorkshire Group
substantially as an entirety to any Person, within the meaning of and as
permitted by the Subordinated Indenture (as defined in the Trust
Agreement), the U.S. Affiliates shall assign all of their rights and
obligations under this Agreement to such successor corporation or any
other Person or Persons (as defined in the Trust Agreement) that owns,
directly or indirectly, all of the outstanding ownership interests in such
successor corporation, provided that such successor corporation or
Person or Persons expressly assumes, pursuant to an appropriate
instrument executed and delivered by such successor corporation or
Person or Persons, such rights and obligations. Neither of the U.S.
Affiliates shall consolidate with or merge into any other corporation, or
convey or otherwise transfer or lease its properties and assets substantially
as an entirety to any Person, unless (a) the corporation formed by such
consolidation or into which such U.S. Affiliate is merged or the Person
that acquires by conveyance or transfer, or that leases, the properties and
assets of such U.S. Affiliate substantially as an entirety (a "successor
corporation") shall expressly assume, pursuant to an appropriate
instrument executed and delivered by such successor corporation, the full
payment, when and as due, of any and all Obligations and (b) immediately
after giving effect to such transaction, no default on the payment of
Obligations hereunder shall have happened and be continuing.
Section 2.03. Apportionment of Obligations. AEP and
NCI shall each be liable for 50% of the Obligations which are incurred by
the Trust. The Trust shall promptly submit copies of all invoices received
to both AEP and NCI at their respective addresses listed in Section 2.04
hereof.
Section 2.04. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be given
in writing by delivering the same against receipt therefor by facsimile
transmission (confirmed by mail), telex or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed
or upon receipt of an answer-back, if sent by telex), to-wit:
Yorkshire Capital Trust I:
c/o The Bank of New York
101 Barclay Street
New York, New York 10286
Facsimile No.: (212) 815-4701
Attention: Corporate Trust Department
The U.S. Affiliates:
AEP Resources, Inc.
c/o American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
Facsimile No.: (614) 223-2807
Attention: Corporate Finance Director
and
New Century International, Inc.
c/o New Century Energies, Inc.
1225 Seventeenth Street
Denver, Colorado 80502
Facsimile No.: (303) 294-2976
Attention: Controller
Section 2.05. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT is executed as of the date and year
first above written.
AEP RESOURCES, INC.
By:
Title:
NEW CENTURY
INTERNATIONAL, INC.
By:
Title:
YORKSHIRE CAPITAL
TRUST I
By:
_________________
________, as
Administrative
Trustee
EXHIBIT C
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO
YORKSHIRE CAPITAL TRUST I OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER THEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
Certificate Number
P-1
Number of Trust Securities
_________
CUSIP NO. ____________
Certificate Evidencing Trust Securities
of
Yorkshire Capital Trust I
___% Trust Securities
(Liquidation Amount $25 Per Trust Security)
Yorkshire Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Cede & Co. (the "Holder") is the registered owner of _______ MILLION
(_______) Trust Securities of the Trust representing vested, concurrent
undivided beneficial interests in the income and assets of the Trust and
designated Yorkshire Capital Trust I ___% Trust Securities (liquidation
amount $25 per Trust Security) (the "Trust Securities"). The Trust
Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer as provided in Section 5.04
of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Trust Securities are set forth in, and this certificate and the Trust
Securities represented hereby are issued and shall in all respects be subject
to the terms and provisions of, the Amended and Restated Trust
Agreement of the Trust, dated as of June 1, 1998, as the same may be
amended from time to time (the "Trust Agreement"), including the
designation of the terms of Trust Securities as set forth therein. The
holder of this certificate is entitled to the benefits of a guarantee by
Yorkshire Power Group Limited, a private limited company incorporated
under the laws of England and Wales ("Yorkshire Group"), pursuant to a
Trust Securities Guarantee Agreement between Yorkshire Group and The
Bank of New York, as guarantee trustee, dated as of June 1, 1998, as the
same may be amended from time to time (the "Guarantee"), to the extent
provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the holder of this certificate without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the holder of this certificate
is bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Administrative Trustees of
the Trust have executed this certificate this ____ day of _____________,
19__.
YORKSHIRE CAPITAL
TRUST I
By:
as Administrative
Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Trust Securities referred to in the within-mentioned
Trust Agreement.
as Property Trustee
Dated: _______________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Trust Securities Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Trust Securities
Certificate)
Signature Guaranty
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Securities Registrar, which requirements
include membership or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Securities Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
EXHIBIT 4.6
YORKSHIRE CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
among
AEP RESOURCES, INC., as Depositor,
YORKSHIRE CAYMAN HOLDING LIMITED, as Control Party,
THE BANK OF NEW YORK, as Property Trustee,
THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee,
and
JEFFREY D. CROSS, STEPHAN T. HAYNES, BRIAN P. JACKSON AND
TERESA S. MADDEN,
as Administrative Trustees
Dated as of June 1, 1998
YORKSHIRE CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318(a) of the Trust Indenture Act of 1939:
Trust Indenture Act Section Trust Agreement Section
Section 310(a)(1) 9.07
(a)(2) 9.07
(a)(3) 9.09
(a)(4) 2.07(b)
(b) 9.08
Section 311(a) 9.13
(b) 9.13
Section 312(a) 5.07
(b) 5.07
(c) 5.07
Section 313(a) 9.14(a)
(a)(4) 9.14(b)
(b) 9.14(b)
(c) 9.14(c)
(d) 9.14(c)
Section 314(a) 9.15
(b) Not Applicable
(c)(1) 9.15, 9.16
(c)(2) 9.16
(c)(3) 9.16
(d) Not Applicable
(e) 9.16
Section 315(a) 9.01(a), 9.03(i)
(b) 9.02, 9.14(b)
(c) 9.01(a)
(d) 9.01, 9.03
(e) Not Applicable
Section 316(a) Not Applicable
(a)(1)(A) 9.19
(a)(1)(B) 9.19
(a)(2) Not Applicable
(b) Not Applicable
(c) Not Applicable
Section 317(a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.09
Section 318(a) 11.10
Note: This Cross-Reference Table does not constitute part of the
Trust Agreement and shall not affect the interpretation of any of its terms
and provisions
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS 2
Section 1.01 Definitions 2
ARTICLE II ESTABLISHMENT OF THE TRUST 10
Section 2.01 Name 10
Section 2.02 Offices of the Trustees; Principal Place of Business 10
Section 2.03 Initial Contribution of Trust Property;
Organizational Expenses 11
Section 2.04 Issuance of the Trust Securities 11
Section 2.05 Subscription and Purchase of Junior Subordinated
Debentures 11
Section 2.06 Declaration of Trust 11
Section 2.07 Authorization to Enter into Certain Transactions 12
Section 2.08 Assets of Trust 16
Section 2.09 Title to Trust Property 16
Section 2.10 Mergers and Consolidations of the Trust 17
Section 2.11 Ratification of Certain Actions.. 18
ARTICLE III PAYMENT ACCOUNT 18
Section 3.01 Payment Account. 18
ARTICLE IV DISTRIBUTIONS; REDEMPTION 19
Section 4.01 Distributions. 19
Section 4.02 Redemption. 20
Section 4.03 Payment Procedures 22
Section 4.04 Tax Returns and Reports 22
ARTICLE V TRUST SECURITIES CERTIFICATES 22
Section 5.01 Initial Ownership 22
Section 5.02 The Trust Securities Certificates 22
Section 5.03 Authentication of Trust Securities Certificates 23
Section 5.04 Registration of Transfer and Exchange of Trust
Securities Certificates 23
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates 24
Section 5.06 Persons Deemed Securityholders 24
Section 5.07 Access to List of Securityholders' Names and
Addresses 24
Section 5.08 Maintenance of Office or Agency 25
Section 5.09 Appointment of Paying Agent 25
Section 5.10 Book-Entry Trust Securities Certificates 26
Section 5.11 Notices to Clearing Agency 26
Section 5.12 Definitive Trust Securities Certificates 27
Section 5.13 Rights of Securityholders 27
ARTICLE VI CONTROL CERTIFICATE 28
Section 6.01 Ownership of Control Certificate 28
Section 6.02 Transfer of Control Certificate. Upon a transfer of
the Control Certificate in accordance with
Section 6.01: 28
Section 6.03 No Economic Interest in the Trust. 28
Section 6.04 Certain Duties and Responsibilities 29
ARTICLE VII ACTS OF SECURITYHOLDERS; MEETINGS;
VOTING 29
Section 7.01 Limitations on Voting Rights. 29
Section 7.02 Notice of Meetings 30
Section 7.03 Meetings of Securityholders 30
Section 7.04 Voting Rights 31
Section 7.05 Proxies, etc. 31
Section 7.06 Securityholder Action by Written Consent. 31
Section 7.07 Record Date for Voting and Other Purposes 31
Section 7.08 Acts of Securityholders 31
Section 7.09 Inspection of Records 32
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF THE
PROPERTY TRUSTEE AND DELAWARE
TRUSTEE 32
Section 8.01 Representations and Warranties of Property Trustee 32
Section 8.02 Representations and Warranties of Delaware
Trustee 33
ARTICLE IX THE TRUSTEES 34
Section 9.01 Certain Duties and Responsibilities. 34
Section 9.02 Notice of Defaults and Extension Periods 34
Section 9.03 Certain Rights of Property Trustee 35
Section 9.04 Not Responsible for Recitals or Issuance of
Securities 36
Section 9.05 May Hold Securities 36
Section 9.06 Compensation; Fees; Indemnity. 36
Section 9.07 Trustees Required; Eligibility. 37
Section 9.08 Conflicting Interests 37
Section 9.09 Co-Trustees and Separate Trustee 37
Section 9.10 Resignation and Removal; Appointment of
Successor 39
Section 9.11 Acceptance of Appointment by Successor 40
Section 9.12 Merger, Conversion, Consolidation or Succession
to Business 41
Section 9.13 Preferential Collection of Claims Against Certain
Entities 41
Section 9.14 Reports by Property Trustee. 41
Section 9.15 Reports to the Property Trustee 42
Section 9.16 Evidence of Compliance with Conditions Precedent 42
Section 9.17 Number of Trustees. 42
Section 9.18 Delegation of Power. 42
Section 9.19 Enforcement of Rights of Property Trustee by
Securityholders 43
ARTICLE X DISSOLUTION AND LIQUIDATION 44
Section 10.01 Dissolution Upon Expiration Date 44
Section 10.02 Early Termination 44
Section 10.03 Termination 44
Section 10.04 Liquidation. 44
Section 10.05 Bankruptcy 46
ARTICLE XI MISCELLANEOUS PROVISIONS 46
Section 11.01 Expense Agreement 46
Section 11.02 Limitation of Rights of Securityholders 46
Section 11.03 Amendment. 46
Section 11.04 Separability 48
Section 11.05 Governing Law 48
Section 11.06 Successors 48
Section 11.07 Headings 48
Section 11.08 Notice and Demand 48
Section 11.09 Agreement Not to Petition 49
Section 11.10 Conflict with Trust Indenture Act. 49
Section 11.11 Agreed Upon Tax Treatment. 50
EXHIBIT A Form of Control Certificate
EXHIBIT B Form of Expense Agreement
EXHIBIT C Form of Trust Securities Certificate
60
131027.9
C-2
129699.2
EXHIBIT A - PAGE 1
131027.9
B-6
131027.9
EXHIBIT B - PAGE 1
131027.9
C-4
131027.9
EXHIBIT C - PAGE 1
131027.9
129699.2
iii
131027.9
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131027.9
TRUST SECURITIES GUARANTEE AGREEMENT
Between
Yorkshire Power Group Limited
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
June 1, 1998
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act
of 1939, as amended
Section of
Guarantee
Agreement
310(a) 4.01(a)
310(b) 4.01(c), 2.08
310(c) Inapplicable
311(a) 2.02(b)
311(b) 2.02(b)
311(c) Inapplicable
312(a) 2.02(a)
312(b) 2.02(b)
313 2.03
314(a) 2.04
314(b) Inapplicable
314(c) 2.05
314(d) Inapplicable
314(e) 1.01, 2.05, 3.02
314(f) 2.01, 3.02
315(a) 3.01(d)
315(b) 2.07
315(c) 3.01
315(d) 3.01(d)
315(e) Inapplicable
316(a) 5.04(i), 2.06
316(b) 5.03
316(c) 2.02
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.01(b)
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 1
SECTION 1.01 Definitions 1
ARTICLE II. TRUST INDENTURE ACT 3
SECTION 2.01 Trust Indenture Act; Application. 3
SECTION 2.02 Lists of Holders of Securities. 4
SECTION 2.03 Reports by the Trustee 4
SECTION 2.04 Periodic Reports to Trustee 4
SECTION 2.05 Evidence of Compliance with Conditions Precedent 4
SECTION 2.06 Events of Default; Waiver 4
SECTION 2.07 Event of Default; Notice. 5
SECTION 2.08 Conflicting Interests 5
ARTICLE III. POWERS DUTIES AND RIGHTS OF TRUSTEE 5
SECTION 3.01 Powers and Duties of the Trustee. 5
SECTION 3.02 Certain Rights of Trustee. 6
SECTION 3.03 Compensation; Fees; Indemnity. 8
ARTICLE IV. TRUSTEE 8
SECTION 4.01 Trustee; Eligibility. 8
SECTION 4.02 Appointment, Removal and Resignation of Trustee. 9
ARTICLE V. GUARANTEE 9
SECTION 5.01 Guarantee 9
SECTION 5.02 Waiver of Notice and Demand 10
SECTION 5.03 Obligations Not Affected 10
SECTION 5.04 Rights of Holders 11
SECTION 5.05 Guarantee of Payment 11
SECTION 5.06 Subrogation 11
SECTION 5.07 Independent Obligations 11
ARTICLE VI. SUBORDINATION 12
SECTION 6.01 Subordination 12
ARTICLE VII. TERMINATION 12
SECTION 7.01 Termination 12
ARTICLE VIII. MISCELLANEOUS 12
SECTION 8.01 Successors and Assigns 12
SECTION 8.02 Amendments 12
SECTION 8.03 Notices 12
SECTION 8.04 Benefit 14
SECTION 8.05 Interpretation 14
SECTION 8.06 Governing Law 15
SECTION 8.07 Consent to Jurisdiction; Appointment of Agent to
Accept Service of Process 15
TRUST SECURITIES GUARANTEE AGREEMENT
This TRUST SECURITIES GUARANTEE AGREEMENT (this
"Guarantee Agreement"), dated as of June 1, 1998, between
YORKSHIRE POWER GROUP LIMITED, a private company with
limited liability incorporated under the laws of England and Wales (the
"Guarantor"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Trust Securities (as defined
herein) of YORKSHIRE CAPITAL TRUST I, a Delaware statutory
business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of June 1, 1998, among the
Trustee, as property trustee, the other Trustees named therein, AEP
Resources, Inc., an Ohio company, as Depositor, Yorkshire Cayman
Holding Limited, in its capacity as holder of the Control Certificate and
the Holders (as defined herein), the Trust is issuing 11,000,000 8.08%
Trust Securities ($275,000,000 in aggregate liquidation amount) (the
"Trust Securities") representing undivided beneficial interests in the assets
of the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Trust Securities will be issued by the Trust and
the proceeds thereof will be used to purchase the Junior Subordinated
Debentures (as defined in the Trust Agreement) issued by Yorkshire
Power Finance Limited, a private company with limited liability
incorporated under the laws of the Cayman Islands ("Yorkshire Finance"),
and such Junior Subordinated Debentures will be held by or on behalf of
the Trust as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Trust
Securities, the Guarantor desires to irrevocably, fully and unconditionally
agree, to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the payment for the
Trust Securities by each Holder (as defined herein) thereof, which
payment the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit
of the Holders from time to time of the Trust Securities.
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise defined
terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Event of Default" means a failure by the Guarantor to perform
any of its payment obligations under this Guarantee Agreement.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities, dated as of June 1, 1998, among the US Affiliates and the
Trust.
"Guarantee Payments" mean the following payments or
distributions, without duplication, with respect to the Trust Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any
accumulated and unpaid distributions that are required to be paid on the
Trust Securities but if and only if and to the extent the Trust has sufficient
funds available therefor to make such payment; (ii) the redemption price,
including all accumulated and unpaid distributions to the date of
redemption (the "Redemption Price"), with respect to any Trust Securities
called for redemption by the Trust but if and only if and to the extent that
the Trust has sufficient funds available therefor to make such payment;
and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
the Junior Subordinated Debentures to the holders of Trust Securities or
the redemption of all of the Trust Securities), the lesser of (a) the
aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions on the Trust Securities to the date of payment, to the extent
the Trust has sufficient funds available therefor, and (b) the amount of
assets of the Trust remaining available for distribution to Holders in
liquidation of the Trust (in either case, the "Liquidation Distribution").
"Holder" means any holder, as registered on the books and records
of the Trust, of any Trust Securities; provided, however, that in
determining whether the holders of the requisite percentage of Trust
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor, Yorkshire Finance, the Control
Party or the US Affiliates or any Affiliate of the Guarantor, Yorkshire
Finance, the Control Party or the US Affiliates.
"Indenture" means the Subordinated Debenture Indenture dated as
of June 1, 1998, among Yorkshire Finance, as Issuer, the Guarantor, as
guarantor, The Bank of New York, as trustee, principal paying agent,
registrar and transfer agent and Banque Generale du Luxembourg, as
paying agent and transfer agent, as supplemented by the First
Supplemental Indenture thereto dated as of June 1, 1998, among
Yorkshire Finance, the Guarantor and The Bank of New York, as trustee,
principal paying agent, registrar and transfer agent and Banque Generale
du Luxembourg S.A., as paying agent and transfer agent.
"Majority in liquidation amount of Trust Securities" means a vote
by Holder(s) of Trust Securities, voting separately as a class, of more than
50% of the aggregate Liquidation Amount of all Trust Securities
outstanding at the time of determination.
"Officers' Certificate" means, with respect to any Person (who is
not an individual), a certificate signed by the Chairman of the Board, the
President or a Vice President, a Director, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of such Person, and
delivered to the Trustee. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Guarantee
Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other
entity of whatever nature.
"Responsible Officer" means, with respect to the Trustee, any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, or any other officer of the
Corporate Trust Department of the Trustee customarily performing
functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means The Bank of New York until a Successor Trustee
has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each such
Successor Trustee.
"US Affiliates" mean AEP Resources, Inc. and New Century
International, Inc. as parties to the Expense Agreement.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.01 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.02 Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the
Trustee (a) semiannually, not later than June 1 and December 1 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the time such list is furnished, and (b) at such
other times as the Trustee may request in writing, within 30 days after the
receipt by the Guarantor of any such request, a List of Holders as of a
date not more than 15 days prior to the time such list is furnished;
provided that, the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Trustee by the Guarantor or at any
time the Trustee is the Securities Registrar under the Trust Agreement.
The Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03 Reports by the Trustee. Within 60 days
after May 15 of each year commencing May 15, 1999, the Trustee shall
provide to the Holders of the Trust Securities such reports as are required
by Section 313(a) of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act.
SECTION 2.04 Periodic Reports to Trustee. The
Guarantor shall provide to the Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any)
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act, and shall provide, within 120 days after the end of
each of its fiscal years, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form and in the manner
required by such Section.
SECTION 2.05 Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officers' Certificate.
SECTION 2.06 Events of Default; Waiver. The Holders of
a Majority in liquidation amount of Trust Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.07 Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Trustee, unless
such defaults have been cured before the giving of such notice, provided
that the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Trustee shall not be deemed to have knowledge of any
Event of Default unless the Trustee shall have received written notice, or a
Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08 Conflicting Interests. The Trust Agreement
shall be deemed to be specifically described in this Guarantee Agreement
for the purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01 Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for
the benefit of the Holders, and the Trustee shall not transfer this
Guarantee Agreement to any Person except the Trustee shall assign rights
hereunder to a Holder to the extent such assignment is necessary to
exercise such Holder's rights pursuant to Section 5.04 or to a Successor
Trustee upon acceptance by such Successor Trustee of its appointment to
act as Successor Trustee. The right, title and interest of the Trustee shall
automatically vest in any Successor Trustee, and such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment
of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the
Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Trustee, before the occurrence of any Event of Default
and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Guarantee Agreement, and no implied covenants shall be
read into this Guarantee Agreement against the Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to
Section 2.06), the Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care
and skill in its exercise thereof as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Trustee shall not be liable
except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement;
and
(B) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a Majority in liquidation amount of
the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if the Trustee shall
have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of
this Guarantee Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it.
SECTION 3.02 Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper
party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt
of such request, shall be promptly delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and
the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion; such counsel
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees; the Trustee shall have the right at any
time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall
have provided to the Trustee reasonable security and indemnity
satisfactory to the Trustee against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such
reasonable advances as may be requested by the Trustee; provided
that nothing contained in this Section 3.02(a)(v) shall be taken to
relieve the Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement;
(vi) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(vii) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Trustee (i) may request
instructions from the Holders, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in acting in accordance
with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Trustee shall
be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Trustee
shall be construed to be a duty.
SECTION 3.03 Compensation; Fees; Indemnity.
The following expenses will be covered pursuant to the Expense
Agreement:
(a) the payment to the Trustee from time to time of such
compensation as the Guarantor and the Trustee may agree for all services
rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, the
reimbursement of the Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Guarantee Agreement (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
(c) the indemnification of the Trustee for any and all loss,
damage, claims, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.
ARTICLE IV.
TRUSTEE
SECTION 4.01 Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor;
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000) and meeting the requirements of Section 310(a) of
the Trust Indenture Act, and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of
this Section 4.01(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published; and
(iii) act, for the purposes of this Guarantee Agreement,
other than through an office, branch or agency in the United
Kingdom.
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.01(a), the Trustee shall immediately resign in the manner
and with the effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act, subject to the rights of the
Trustee under the penultimate paragraph thereof.
SECTION 4.02 Appointment, Removal and Resignation of
Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee
has been appointed and has accepted such appointment by written
instrument executed by such Successor Trustee and delivered to the
Guarantor.
(c) The Trustee appointed to office shall hold office until a
Successor Trustee shall have been appointed or until its removal or
resignation. The Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing executed by the
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Trustee
and delivered to the Guarantor and the resigning Trustee.
(d) If no Successor Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Trustee may petition any court of competent jurisdiction for appointment
of a Successor Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Trustee.
ARTICLE V.
GUARANTEE
SECTION 5.01 Guarantee. The Guarantor irrevocably,
fully and unconditionally agrees to pay in full to the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by or on
behalf of the Trust), as and when due, regardless of any defense, right of
set-off or counterclaim that the Guarantor may have or assert against any
Person, other than the defense of payment. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Trust
to pay such amounts to the Holders.
SECTION 5.02 Waiver of Notice and Demand. The
Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03 Obligations Not Affected. The obligation
of the Guarantor to make the Guarantee Payments under this Guarantee
Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Trust Securities to
be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or
any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Trust
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Trust Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the
deferral of any interest payment on the Junior Subordinated Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Trust
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Trust
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.03 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.04 Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with
the Trustee to be held for the benefit of the Holders; (ii) the Trustee has
the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) the Holders of a Majority in liquidation amount of the Trust Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred upon the
Trustee under this Guarantee Agreement, provided that such direction
shall not be in conflict with any rule of law or with this Guarantee
Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; and
(iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against or requesting or directing that
action be taken by the Trust, the Trustee or any other Person; it being
understood and intended that no one or more of such Holders shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Guarantee Agreement to affect, disturb or prejudice the
rights of any other of such Holders or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein
provided and for the equal and ratable benefit of all of such Holders.
SECTION 5.05 Guarantee of Payment. This Guarantee
Agreement creates a guarantee of payment and not of collection. This
Guarantee Agreement will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by or on behalf of the
Trust (without duplication) or upon the distribution of Junior
Subordinated Debentures to the Holders in exchange for all of the Trust
Securities.
SECTION 5.06 Subrogation. The Guarantor shall be
subrogated to all (if any) rights of the Holders against the Trust in respect
of any amounts paid to the Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts of Guarantee Payments are due and unpaid under
this Guarantee Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.07 Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the
obligations of the Trust with respect to the Trust Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI.
SUBORDINATION
SECTION 6.01 Subordination. This Guarantee Agreement
will constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all Senior Debt (as defined in
the Indenture) of the Guarantor, except those obligations or liabilities
made pari passu or subordinate by their terms, (ii) pari passu with the
most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference securities of any
Affiliate of the Guarantor, and (iii) senior to all common stock of the
Guarantor.
ARTICLE VII.
TERMINATION
SECTION 7.01 Termination. This Guarantee Agreement
shall terminate and be of no further force and effect upon: (i) full payment
of the Redemption Price of the Trust Securities, (ii) the distribution of
Junior Subordinated Debentures to the Holders in exchange for all of the
Trust Securities, or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Trust.
Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Trust
Securities or under this Guarantee Agreement.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01 Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Trust
Securities then outstanding. Except in connection with a consolidation,
merger, conveyance, transfer, or lease involving the Guarantor that is
permitted under Article X of the Indenture, the Guarantor shall not assign
its obligations hereunder.
SECTION 8.02 Amendments. Except with respect to any
changes that do not materially and adversely affect the rights of Holders
(in which case no consent of Holders will be required), this Guarantee
Agreement may only be amended with the prior approval of the Holders
of a majority in Liquidation Amount of all the outstanding Trust
Securities. The provisions of Article VII of the Trust Agreement
concerning meetings of Holders shall apply to the giving of such approval.
SECTION 8.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Trustee and
the Holders:
Yorkshire Power Group Limited
Wetherby Road
Scarcroft, Leeds LS14 3HS, England
Facsimile No.: 011-44-113-289-5926
Attn: Roger Dickinson
with a copy to:
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
Facsimile No: 614-223-2807
Attn: Director, Corporate Finance
and
New Century Energies, Inc.
1225 Seventeenth Street
Denver, Colorado 80502
Facsimile No: 303-294-2976
Attn: Controller
(b) if given to the Trust, in care of the Trustee, or to the
Trustee at the Trust's (and the Trustee's) address set forth below or such
other address as the Trustee on behalf of the Trust may give notice to the
Holders:
Yorkshire Capital Trust I
c/o The Bank of New York
101 Barclay Street, fl. 21 West
New York, New York 10286
Attn: Corporate Trust Department
with a copy, in the case of a notice to the Trust (other than a
notice from the Guarantor), to the Guarantor;
(c) if given to any Holder, at the address set forth on the
books and records of the Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
SECTION 8.04 Benefit. This Guarantee Agreement is
solely for the benefit of the Holders and, subject to Section 3.01(a), is not
separately transferable from the Trust Securities.
SECTION 8.05 Interpretation. In this Guarantee
Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 Governing Law. THIS GUARANTEE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
SECTION 8.07 Consent to Jurisdiction; Appointment of
Agent to Accept Service of Process
(a) The Guarantor irrevocably consents and agrees, for the benefit
of the Holders from time to time and the Trustee, that any civil legal
action, suit or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection with this
Guarantee Agreement may be brought in the Supreme Court of New
York, New York County or the United States District Court for the
Southern District of New York and any appellate court from either thereof
and, until amounts due and to become due in respect of the Trust
Securities or this Guarantee Agreement have been paid, hereby
irrevocably consents and submits to the non-exclusive jurisdiction of each
such court in personam, generally and unconditionally with respect to any
legal action, suit or proceeding for itself and in respect of its properties,
assets and revenues and agrees to file such consents with such authorities
as may be required to irrevocably evidence such agreement.
(b) The Guarantor has irrevocably designated, appointed, and
empowered CT Corporation System, acting through its office at 1633
Broadway, New York, New York 10019, as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and its
properties, assets and revenues, service of any and all legal process,
summons, notices and documents which may be served in any legal action,
suit or proceeding brought against the Guarantor in any United States or
state court. If for any reason such designee, appointee and agent
hereunder shall cease to be available to act as such, the Guarantor agrees
to designate a new designee, appointee and agent in the Borough of
Manhattan, The City of New York on the terms and for the purposes of
this Section 8.07 satisfactory to the Trustee. The Guarantor further
hereby irrevocably consents and agrees to the service of any and all legal
process, summons, notices and documents in any legal action, suit or
proceeding against the Guarantor by serving a copy thereof upon the
relevant agent for service of process referred to in this Section 8.07
(whether or not the appointment of such agent shall for any reason prove
to be ineffective or such agent shall accept or acknowledge such service)
or by mailing copies thereof by registered or certified air mail, postage
prepaid, to the Guarantor at its address specified in or designated pursuant
to this Guarantee Agreement. The Guarantor agrees that the failure of
any such designee, appointee and agent to give any notice of such service
to it shall not impair or affect in any way the validity of such service or
any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the
holders of the Trust Securities and the Trustee, to serve any such legal
process, summons, notices and documents in any other manner permitted
by applicable law or to obtain jurisdiction over the Guarantor or bring
legal actions, suits or proceedings against the Guarantor in such other
jurisdictions, and in such manner, as may be permitted by applicable law.
The Guarantor irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have
to the laying of venue of any of the aforesaid actions, suits or proceedings
arising out of or in connection with this Guarantee Agreement brought in
the Supreme Court of New York, New York County or the United States
District Court for the Southern District of New York and any appellate
court from either thereof and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) To the extent that the Guarantor may in any jurisdiction
claim for itself or its assets immunity (to the extent such immunity may
now or hereafter exist, whether on the grounds of sovereign immunity or
otherwise) from suit, execution, attachment (whether in aid of execution,
before judgment or otherwise) or other legal process (whether through
service or notice or otherwise), and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Guarantor irrevocably agrees with respect to
any matter arising under this Guarantee for the benefit of the Holders from
time to time of the Trust Securities, not to claim, and irrevocably waives,
such immunity to the full extent permitted by the laws of such jurisdiction.
(d) If for the purpose of obtaining a judgment or order in
any court it is necessary to convert a sum due hereunder to the holder of
any Trust Security from U.S. dollars into another currency, the Guarantor
has agreed, and each Holder by holding such Trust Security will be
deemed to have agreed, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in accordance
with normal banking procedures such Holder could purchase U.S. dollars
with such other currency in The City of New York on the Business Day
preceding the day on which final judgment is given.
(e) The obligation of the Guarantor in respect of any sum payable
by it to the holder of a Trust Security shall, notwithstanding any judgment
or order in a currency (the "judgment currency") other than U.S. dollars,
be discharged only to the extent that on the Business Day following
receipt by the Holder of such Trust Security of any sum, adjudged to be
so due in the judgment currency, the Holder of such Trust Security may in
accordance with normal banking procedures purchase U.S. dollars with
the judgment currency; if the amount of U.S. dollars so purchased is less
than the sum originally due to the holder of such Trust Security in the
judgment currency (determined in the manner set forth in the preceding
paragraph), the Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Holder of such Trust
Security against such loss, and if the amount of the U.S. dollars so
purchased exceeds the sum originally due to the Holder of such Trust
Security, such Holder agrees to remit to the Guarantor such excess,
provided that such Holder shall have no obligation to remit any such
excess as long as the Guarantor shall have failed to pay such Holder any
obligations due and payable under such Trust Security, in which case such
excess may be applied to such obligations of the Guarantor under such
Trust Security in accordance with the terms thereof. The foregoing
indemnity shall constitute a separate and independent obligation of the
Guarantor and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day
and year first above written.
YORKSHIRE POWER GROUP LIMITED
By:
Name: Armando A. Pena
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Trustee
By:
Name:
Title:
This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
Preferred Securities Guarantee Agreement
20
130120.4
i
i
1
130120.4
EXHIBIT 4.7
DEPOSIT AGREEMENT
BETWEEN
THE BANK OF NEW YORK,
as Book-Entry Depositary
and
YORKSHIRE POWER FINANCE LIMITED
Dated as of June 1, 1998
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Other General Provisions 1
Section 1.01. Definitions. 1
Section 1.02. Rules of Construction. 4
ARTICLE II Book-Entry Interests 4
Section 2.01. Deposit of the Global Debentures; Issuance of the Book-
Entry Interests. 4
Section 2.02. Receipt of Book-Entry Interests. 5
Section 2.03. Registration of Transfer of the Book-Entry Interests. 5
Section 2.04. Transfer or Exchange of Global Debentures. 6
Section 2.05. Issuance of Definitive Registered Debentures in Respect of
the Debentures. 6
Section 2.06. Redemption of the Debentures. 7
Section 2.07. Cancellation. 8
Section 2.08. Payments in Respect of the Book-Entry Interests and the
Global Debentures. 8
Section 2.09. Change in Principal Amount of Global Debentures. 9
Section 2.10. Record Date. 9
Section 2.11. Action in Respect of the Book-Entry Interests or the
Global Debentures. 9
Section 2.12. Reports. 10
Section 2.13. Additional Amounts. 10
Section 2.14. Changes Affecting Global Debentures. 11
ARTICLE III The Book-Entry Depositary 11
Section 3.01. Certain Duties and Responsibilities. 11
Section 3.02. Events of Default. 12
Section 3.03. Certain Rights of Book-Entry Depositary. 12
Section 3.04. Not Responsible for Recitals or Issuance of Debentures. 13
Section 3.05. Money Held in Trust. 13
Section 3.06. Compensation and Reimbursement. 14
Section 3.07. Book-Entry Depositary Required; Eligibility. 15
Section 3.08. Resignation and Removal; Appointment of Successor. 15
Section 3.09. Acceptance of Appointment by Successor. 17
Section 3.10. Merger, Conversion, Consolidation or Succession to
Business. 17
Section 3.11. Letter of Representations. 18
ARTICLE IV Miscellaneous Provisions 18
Section 4.01. Notices to Book-Entry Depositary or Issuer. 18
Section 4.02. Notice to the Depositary; Waiver. 18
Section 4.03. Effect of Headings and Table of Contents. 19
Section 4.04. Successors and Assign. 19
Section 4.05. Separability Clause. 19
Section 4.06. Benefits of Agreement. 19
Section 4.07. GOVERNING LAW. 19
Section 4.08. Jurisdiction. 20
Section 4.09. Counterparts. 20
Section 4.10. Inspection of Agreement. 20
Section 4.11. Satisfaction and Discharge. 21
Section 4.12. Amendments. 21
Section 4.13. Book-Entry Depositary To Sign Amendments. 21
DEPOSIT AGREEMENT
This Deposit Agreement (as the same may be amended
from time to time in accordance with the provisions hereof, this
"Agreement" or this "Deposit Agreement"), dated as of June 1, 1998, is
among The Bank of New York, a New York banking corporation, as
book-entry depositary hereunder (the "Book-Entry Depositary"),
Yorkshire Power Finance Limited, a private company with limited liability
incorporated under the laws of the Cayman Islands (the "Issuer"), and the
holders and beneficial owners from time to time of interests in the Book-
Entry Interests (as defined below).
ARTICLE I
Definitions and Other General Provisions
Section 1.01. Definitions.
Terms not defined herein have the meanings ascribed to
them in the Indenture. The following terms, as used herein, have the
following meanings:
"Book-Entry Depositary" means the party named as such
in this Agreement and acting as such or its nominee or the custodian of
either until a successor shall have become such pursuant to Section 3.08
hereof, and thereafter "Book-Entry Depositary" shall mean such successor
or its nominee or the custodian of either.
"Book-Entry Interests" means the certificateless depositary
interests that shall at all times, prior to any issuance of Definitive
Registered Debentures in respect thereof, represent the right to receive
from the bearer of the Global Debentures 100% of the principal, premium
(if any), interest (including Additional Interest, if any, and Additional
Amounts, if any) payable with respect to the underlying Global
Debentures and that are issued to the Depositary by the Book-Entry
Depositary.
"Book-Entry Register" has the meaning ascribed thereto in
Section 2.03 hereof.
"Corporate Trust Office" means the office of the Book-
Entry Depositary in The City of New York, at which any particular time
its corporate trust business shall be principally administered, which at the
date hereof is located at 101 Barclay Street, New York, NY 10286, Attn:
Corporate Trust Department, International Finance Unit.
"Debentures" means the Issuer's 8.08% Junior
Subordinated Deferrable Interest Debentures, Series A due June 30, 2038.
"Definitive Registered Debentures" means Debentures
issued by the Issuer pursuant to the Indenture substantially in the form
included as Exhibit B to the Supplemental Indenture and registered in the
names of the beneficial owners thereof.
"Depositary" means the Property Trustee (or DTC
(including any nominee of DTC), in the event that the Trust is liquidated
pursuant to the terms of the Trust Agreement) as the Registered Holder.
"DTC" means The Depository Trust Company, New York,
New York or its successors.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Global Debentures" means Debentures in bearer form
issued by the Issuer to the Book-Entry Depositary pursuant to the
Indenture substantially in the form included as Exhibit A to the
Supplemental Indenture.
"Guarantor" means Yorkshire Power Group Limited, a
private company with limited liability incorporated under the laws of
England and Wales.
"Indenture" means the Indenture dated as of June 1, 1998,
among the Issuer, the Guarantor, The Bank of New York, as trustee,
principal paying agent, registrar and transfer agent, and Banque Generale
du Luxembourg S.A., as paying agent and transfer agent, relating to the
Debentures as originally executed or as it may from time to time be
supplemented or amended including by the Supplemental Indenture and
for all purposes to the extent applicable, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern such instrument.
"Indirect Participant" means a Person that holds Interests
through Participants.
"Interests" means beneficial interests in the Book-Entry
Interests that will be represented by Trust Securities unless and until the
Trust is liquidated pursuant to the terms of the Trust Agreement,
whereafter such interests will be shown on records maintained in book-
entry form by DTC.
"Issuer" means the party named as such in this Agreement
until a successor replaces it pursuant to the applicable provisions of the
Indenture and, thereafter, means such successor.
"Issuer Order" means a written request or order signed in
the name of the Issuer by any Director of the Issuer and by any officer or
other person duly authorized by the Board of Directors, and delivered to
the Book-Entry Depositary.
"Letter of Representations" means the Letter of
Representations to DTC relating to the Debentures and the related Book-
Entry Interests, which would be entered into by the Book-Entry
Depositary and the Issuer upon the liquidation of the Trust unless
Definitive Registered Debentures are issued in connection with such
liquidation.
"Officers' Certificate" means a certificate signed in the
name of the Issuer by any Director of the Issuer or by any officer or other
person duly so authorized by the Board of Directors of the Issuer and
delivered to the Book-Entry Depositary.
"Opinion of Counsel" means a written opinion from legal
counsel, who may be an employee of or regular counsel for the Issuer or
may be other counsel reasonably acceptable to the Book-Entry
Depositary.
"Participant" has the meaning specified in Section 2.02(b)
herein.
"Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee" in the preamble to the Trust
Agreement, or any successor as therein provided.
"Registered Holder" means, with respect to any Book-
Entry Interest, the Person in whose name such Book-Entry Interest is
registered on the Book-Entry Register maintained by the Book-Entry
Depositary.
"Responsible Officer", when used with respect to the
Book-Entry Depositary, means any authorized officer of the Book-Entry
Depositary including any vice president, assistant vice president, assistant
secretary, treasurer, assistant treasurer, or any other officer of the Book-
Entry Depositary who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers,
respectively, or to whom any depositary matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Supplemental Indenture" mean the First Supplemental
Indenture to the Indenture dated as of June 1, 1998, among the Issuer, the
Guarantor, The Bank of New York, as trustee, principal paying agent,
registrar and transfer agent, and Banque Generale du Luxembourg S.A.,
as paying agent and transfer agent, relating to the Debentures.
"Taxing Jurisdiction" means (i) any supranational
federation to which the United Kingdom belongs or (ii) the jurisdiction (or
any political subdivision or taxing authority thereof or therein) in which
the Issuer or the Guarantor is incorporated or created, as applicable, or in
which the Issuer or the Guarantor is managed and controlled or has a
place of business.
"Trust" means Yorkshire Capital Trust I, a Delaware
statutory business trust.
"Trust Agreement" means the Amended and Restated
Trust Agreement, dated as of June 1, 1998, among AEP Resources, Inc.,
as Depositor, Yorkshire Cayman Holding Limited, as Control Party, The
Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, the administrative trustees named
therein and the several Holders (as defined therein).
"Trust Securities" means 11,000,000 8.08% Trust
Securities of the Trust.
"Trustee" means The Bank of New York and its successors
and assigns, as trustee under the Indenture.
Section 1.02. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is not exclusive;
(c) "including" means including without limitation; and
(d) words in the singular include the plural and words
in the plural include the singular.
ARTICLE II
Book-Entry Interests
Section 2.01. Deposit of the Global Debentures; Issuance
of the Book-Entry Interests.
(a) The Book-Entry Depositary hereby accepts custody of
the Global Debentures from the Trustee and shall act as Book-Entry
Depositary in accordance with the terms of this Agreement. The Book-
Entry Depositary shall hold such Global Debentures for the benefit of the
Trust at its Corporate Trust Office in The City of New York, at the office
of the paying agent in Luxembourg or at such place outside the United
Kingdom as it shall determine with the consent of the Issuer and shall
initially issue the Book-Entry Interests to the Property Trustee to hold,
pursuant to the Trust Agreement, for the benefit of the Trust. The Book-
Entry Depositary will segregate the Global Debentures and any amounts
received or receivable by it in respect thereof in accordance with this
Agreement and keep them separate and distinct from its other income and
assets and, in particular, from any amounts which it receives or to which it
is entitled in any other capacity, including its capacity under the Indenture.
(b) If, pursuant to the Trust Agreement, the Trust is
liquidated and Book-Entry Interests are distributed to holders of Trust
Securities in liquidation of such holders' interests in the Trust, the Global
Debentures, held by the Book-Entry Depositary and representing all of the
Debentures will cease to be held for the benefit of the Trust and will, for
all purposes under this Deposit Agreement, be held by the Book-Entry
Depositary for the benefit of DTC and its Participants, subject to Section
2.02, and all of the Book-Entry Interests in the Global Debentures, will,
pursuant to the Trust Agreement, be transferred by the Property Trustee
to DTC, which will operate a book-entry settlement system for Interests in
the Book-Entry Interests in global form in accordance with Section
2.02(b).
Section 2.02. Receipt of Book-Entry Interests.
(a) Prior to the liquidation of the Trust pursuant to the
Trust Agreement, upon issuance of the Book-Entry Interests by the Book-
Entry Depositary pursuant to Section 2.01(a), the Book-Entry Interests
shall be held by the Property Trustee for the benefit of the Trust.
(b) To the extent the Book-Entry Interests are
transferred to DTC by the Property Trustee as contemplated by Section
2.01(b):
1. Upon acceptance by DTC of the Book-Entry
Interests for entry into its book-entry settlement
system in accordance with the terms of the Letter
of Representations, Interests in the Book-Entry
Interests will be recorded on and traded through
DTC's book-entry system, and ownership of such
Interests shall be shown in, and the transfer of such
ownership shall be effected only through, records
maintained by (i) DTC or (ii) institutions that have
accounts with DTC ("Participants"). Interests shall
be transferable only as units representing authorized
denominations of the Debentures.
2. The Book-Entry Interests shall be issuable only to
DTC or successors of DTC or their respective
nominees. Except as provided in Section 2.05, no
beneficial owner of Interests shall be entitled to
receive a Definitive Registered Debenture, and such
beneficial owner's Interests shall be reflected only in
accordance with the procedures of DTC as set forth
in the Letter of Representations.
(c) Transfers of the Book-Entry Interests and Interests
shall be subject to the restrictions on transfer provided in the legend set
forth on the face of the Global Debentures relating thereto.
Section 2.03. Registration of Transfer of the Book-Entry
Interests.
The Book-Entry Depositary agrees to maintain at the
Book-Entry Depositary's Corporate Trust Office the Book-Entry Register
in which the Book-Entry Depositary shall (x) prior to the liquidation of
the Trust, record the Property Trustee, as holder for the benefit of the
Trust, as the initial registered owner of the Book-Entry Interests and (y)
upon the liquidation of the Trust and the transfer of the Book-Entry
Interests to DTC as contemplated by Section 2.01(b), (i) record Cede &
Co., as nominee of DTC as the registered owner of the Book-Entry
Interests and (ii) record the registration and transfer of the Book-Entry
Interests. Notwithstanding anything contained herein to the contrary, the
Book-Entry Interests shall be transferred only pursuant to the Trust
Agreement for so long as the Trust is the owner of the Debentures. The
Book-Entry Interests cannot be transferred unless such transfer is
recorded on the Book-Entry Register. The Book-Entry Depositary shall
not constitute the agent of the Issuer for any other purpose other than that
of maintaining the Book-Entry Register and, in particular, it shall not
constitute the agent of the Issuer in relation to any payments it may
receive in respect of the Global Debentures and may make to the
Depositary in accordance with its obligations contained herein nor shall it
be authorized to undertake any obligations on behalf of the Issuer.
The foregoing paragraph shall not (i) impose an obligation
on the Book-Entry Depositary to record the ownership interests in or
transfers of Interests held by Participants or its successors or Indirect
Participants or (ii) restrict transfers of such Interests held by Participants
or Indirect Participants. The Book-Entry Depositary shall treat the
Depositary as the absolute owner of the Book-Entry Interests for all
purposes whatsoever and shall not be bound or affected by any notice to
the contrary, other than an order of a court having jurisdiction over the
Book-Entry Depositary.
Unless and until Global Debentures are exchanged in whole
or in part for Definitive Registered Debentures pursuant to Section 2.05,
the Book-Entry Depositary may not register the transfer of the Book-
Entry Interests except as a whole: (x) prior to the liquidation of the Trust,
by the Property Trustee to a successor trustee as duly appointed under the
Trust Agreement and (y) upon liquidation of the Trust and transfer of the
Book-Entry Interests to DTC as contemplated by Section 2.01(b), (i) by
DTC to its nominee; (ii) by a nominee of DTC to DTC or to another
nominee of DTC; or (iii) by DTC or any nominee to a successor
depositary or a nominee of such successor depositary.
Section 1.04. Transfer or Exchange of Global Debentures.
The Book-Entry Depositary shall hold the Global
Debentures in custody for the benefit of the Depositary. Subject to
Section 3.08, the Book-Entry Depositary shall not transfer or lend the
Global Debentures or any interest therein, except that the Global
Debentures, as a whole and with the Issuer's consent, may be transferred
(i) by the Book-Entry Depositary to a nominee of the Book-Entry
Depositary; (ii) by a nominee of the Book-Entry Depositary to the Book-
Entry Depositary or another nominee of the Book-Entry Depositary; or
(iii) by the Book-Entry Depositary or any such nominee to a successor
Book-Entry Depositary or a nominee of such successor Book-Entry
Depositary. Notwithstanding the foregoing, the Book-Entry Depositary
may not under any circumstances surrender or deliver the Global
Debentures to the Depositary.
Section 1.05. Issuance of Definitive Registered
Debentures in Respect of the Debentures.
Except as provided in this Section 2.05, no beneficial
owner of Interests shall be entitled to receive Definitive Registered
Debentures.
The Book-Entry Depositary will promptly notify the
Trustee and request in writing that the Issuer issue and the Trustee
authenticate and deliver Definitive Registered Debentures in exchange for
the Global Debentures, as a whole but not in part, in such names and
authorized denominations as the Book-Entry Depositary shall specify, if:
(i) after liquidation of the Trust and transfer of the Book-Entry Interests
to DTC as contemplated by Section 2.01(b), DTC notifies the Issuer and
the Book-Entry Depositary that it is unwilling or unable to continue to
hold the Book-Entry Interests related to the Global Debentures or DTC at
any time ceases to be a "clearing agency" registered as such under the
Exchange Act and, in either case, a successor is not appointed by the
Issuer within 120 days; (ii) the Book-Entry Depositary notifies the Issuer
under Section 3.08 that it is unwilling or unable to continue as Book-
Entry Depositary and no successor Book-Entry Depositary is appointed
within 120 days; or (iii) the Issuer in its sole discretion, executes and
delivers to the Trustee an Officers' Certificate providing that the Global
Debentures shall be so exchangeable. The Book-Entry Depositary agrees
that in such event it will promptly surrender the Global Debentures held by
it to the Trustee in connection with such exchange and request in writing
that the Issuer execute and the Trustee authenticate and deliver without
charge Definitive Registered Debentures having the same interest rate, if
any, and maturity and having the same terms as the Interests of the
requesting owner, in authorized denominations of $25 and integral
multiples thereof and of an aggregate principal amount equal to such
owner's Interests and that such Global Debentures will be canceled upon
issuance of such Definitive Registered Debentures, whereupon this
Agreement will then terminate.
The Global Debentures shall also be exchangeable, in
whole or in part, for Definitive Registered Debentures if there shall have
occurred and be continuing an Event of Default with respect to the
Debentures. In such circumstances, beneficial owners of Interests relating
to the Global Debentures may request in writing that their Interests be
exchanged for one or more Definitive Registered Debentures (an
"Optional Definitive Security Request"). Upon receipt of an Optional
Definitive Security Request, the Book-Entry Depositary shall (i) promptly
surrender the Global Debentures to the Trustee and request in writing that
the Issuer execute and the Trustee authenticate and deliver without charge
Definitive Registered Debentures, having the same interest rate, if any,
and maturity and having the same terms as the Interests of the requesting
owner, in authorized denominations of $25 and integral multiples thereof
and of an aggregate principal amount equal to such owner's Interests; and
(ii) if the Global Debentures are being exchanged (x) as a whole, then the
surrendered Global Debentures shall be canceled by the Trustee, or (y) in
part, then the principal amount of the surrendered Global Debentures shall
be reduced by an endorsement on Schedule A thereto in the appropriate
amount.
All costs (taxes, governmental charges or otherwise)
related to the issuance of Definitive Registered Debentures will be borne
by the Issuer subject to any exceptions set forth in the Indenture.
Section 1.06. Redemption of the Debentures.
In the event that the Issuer exercises any right to redeem
the Debentures in whole or in part, the Book-Entry Depositary, as holder
of the Global Debentures, shall (i) deliver all amounts received by it in
respect of the redemption of the Global Debentures to the Depositary and
(ii) upon notice from the Issuer or the Trustee, as the case may be,
surrender the Global Debentures at a place of payment or such other place
as the Issuer may designate, and deliver such Global Debentures to the
Trustee for cancellation or for reduction of principal amount by an
endorsement on Schedule A thereto, as the case may be.
Section 1.07. Cancellation.
If the Global Debentures are surrendered for payment, for
redemption in whole or for exchange in whole for Definitive Registered
Debentures to any Person other than the Trustee, such Global Debentures
shall be surrendered to the Trustee for cancellation.
Section 1.08. Payments in Respect of the Book-Entry
Interests and the Global Debentures.
( ) Whenever the Book-Entry Depositary, as holder of
the Global Debentures, shall receive from the Trustee (or other paying
agent under the Indenture) any payment on the Global Debentures, such
payments shall be distributed promptly to the Depositary on the payment
date for the Global Debentures. So long as the Property Trustee is the
Depositary, such payments shall be distributed to the Property Trustee in
accordance with the Trust Agreement. So long as DTC is the Depositary,
such payments shall be made in accordance with the Letter of
Representations. The payment date for the Book-Entry Interests for
payment of any principal or interest shall be the same date as the payment
date for the Global Debentures.
(b) The Book-Entry Depositary will forward to the
Issuer or its agents such information from its records as the Issuer may
reasonably request in writing to enable the Issuer or its agents to file
necessary reports with governmental agencies, and the Book-Entry
Depositary, the Issuer or their agents may (but shall not be required to)
file any such reports necessary to obtain benefits under any applicable tax
treaties for the Depositary or the beneficial owners of Interests.
(c) Notwithstanding any other provisions of this
Agreement, the Book-Entry Depositary shall be required to pay to the
Depositary only amounts (including Additional Interest, if any, and
Additional Amounts, if any) received by the Book-Entry Depositary from
the Issuer under the Global Debentures or the Guarantor pursuant to the
Guarantee.
(d) Neither the Issuer, the Guarantor nor any agent of
the Issuer or the Guarantor (including but not limited to any paying agent)
will have any responsibility or liability for any aspect relating to payments
(including payments of Additional Interest, if any, and Additional
Amounts, if any) made or to be made by the Book-Entry Depositary to
the Depositary in respect of the Global Debentures or the Book-Entry
Interests. None of the Issuer, the Guarantor, the Trustee, the Book-Entry
Depositary or any agent of any of the foregoing will have any
responsibility or liability for any aspect relating to payments (including
payments of Additional Interest, if any, and Additional Amounts, if any)
made or to be made by DTC on account of a Participant's or Indirect
Participant's ownership of an Interest or for maintaining, supervising or
reviewing any records relating to a Participant's Interests.
Section 1.09. Change in Principal Amount of Global
Debentures.
Whenever the principal amount at maturity of the Global
Debentures held by the Book-Entry Depositary is changed by the Trustee
as a result of partial redemption or otherwise, the Book-Entry Depositary
shall record on the Book-Entry Register a corresponding change in the
principal amount of the related Book-Entry Interests and notify the
Depositary of such corresponding change.
Section 1.10. Record Date.
Whenever any payment is to be made in respect of the
Global Debentures or the Book-Entry Depositary shall receive notice of
any action to be taken in respect of the Book-Entry Interests or Global
Debentures, or whenever the Book-Entry Depositary otherwise deems it
appropriate in respect of any other matter, the Book-Entry Depositary
shall fix a record date to determine who shall be entitled to receive
payment in respect of the Book-Entry Interests corresponding to the
Global Debentures or to take any such action or to act in respect of any
such matter. Subject to the provisions of this Agreement, only the
Depositary shall be entitled to receive any such payment, to give
instructions as to such action or to act in respect of any such matter.
Section 1.11. Action in Respect of the Book-Entry
Interests or the Global Debentures.
(a) As soon as practicable after receipt by the Book-
Entry Depositary of notice of any solicitation of consents or request for a
waiver or other action with respect to the Book-Entry Interests or the
Global Debentures under this Agreement or the Indenture, the Book-
Entry Depositary shall mail to the Depositary a notice containing (i) such
information as is contained in such notice, (ii) a statement of the record
date with respect to such consent, waiver or other action, (iii) a statement
that, on or prior to a specified date (which specified date may be set no
later than 180 days after the record date) (the "Expiration Date"), the
Depositary will be entitled, subject to the provisions of or governing the
Book-Entry Interests or Global Debentures, as the case may be, to
instruct the Book-Entry Depositary as to such consent, waiver or such
action, and (iv) a statement specifying the manner in which such
instructions may be given. Upon receipt by the Book-Entry Depositary of
instructions from the Depositary on or prior to the Expiration Date and in
the specified manner, the Book-Entry Depositary shall endeavor (insofar
as practicable and permitted under the provisions of or governing the
Book-Entry Interests or Global Debentures, as the case may be) to take
such measures regarding the requested consent, waiver or other action in
respect of such Book-Entry Interests or Global Debentures, as the case
may be, as shall be in accordance with such instructions. The Book-Entry
Depositary shall not itself exercise any discretion in the granting of
consents or waivers or the taking of any other action in respect of the
Book-Entry Interests or Global Debentures, as the case may be.
(b) The Depositary may direct the time, method and
place of conducting any proceeding for any remedy available to the Book-
Entry Depositary or of exercising any trust or power conferred on the
Book-Entry Depositary. However, the Book-Entry Depositary may
refuse to follow any direction that conflicts with law or this Agreement or
the Indenture or, subject to Section 3.01 hereof, that the Book-Entry
Depositary determines would involve it in personal liability.
Section 1.12. Reports.
The Book-Entry Depositary shall immediately (and in no
event later than 10 days from receipt) send to the Depositary a copy of
any notices, reports and other communications received by it relating to
the Issuer, the Debentures or the Book-Entry Interests.
Section 1.13. Additional Amounts.
All payments in respect of Book-Entry Interests made by
the Book-Entry Depositary pursuant to this Agreement shall be made free
and clear of, and without deduction or withholding for, or on account of,
any present or future taxes, duties, assessments or governmental charges
of whatever nature imposed, levied, collected, withheld or assessed by or
within a Taxing Jurisdiction or by or within any political subdivision
thereof or any authority therein or thereof having power to tax ("Gross-
Up Taxes"), unless the withholding or deduction is then required by law.
In the event that such withholding or deduction is required to be made, the
Book-Entry Depositary shall pay to the Depositary such Additional
Amounts that have been paid by the Issuer or the Guarantor to the Book-
Entry Depositary as will result in the payment to the Depositary of the
amount that would otherwise have been receivable by the Depositary, in
the absence of such withholding or deduction; provided, that Additional
Amounts need only be paid to the Depositary to the extent that payments
of Additional Amounts from the Issuer or the Guarantor are required
under Section 3.12 of the Indenture.
At least 10 days prior to the first interest payment date, and
at least 10 days prior to each succeeding interest payment date if there has
been any change with respect to the matters set forth in the below-
mentioned Officers' Certificate, the Issuer will furnish the Book-Entry
Depositary with an Officers' Certificate instructing the Book-Entry
Depositary whether such payment of principal of or interest on such
Book-Entry Interests shall be made to the Depositary without deduction
or withholding for or on account of any Gross-Up Taxes. If any such
deduction or withholding shall be required, prior to such interest payment
date the Issuer will furnish the Book-Entry Depositary with an Officers'
Certificate that specifies the amount required to be deducted or withheld
on such payment. The Issuer shall indemnify the Book-Entry Depositary,
its officers, directors and employees for, and hold it harmless against, any
loss, liability or expense reasonably incurred without negligence, willful
misconduct or bad faith on its part arising out of or in connection with
actions taken or omitted by it in reliance on any Officers' Certificate
furnished to it pursuant to this Section 2.13.
Section 1.14. Changes Affecting Global Debentures.
Upon any reclassification of the Global Debentures, or
upon any recapitalization, reorganization, merger or consolidation or sale
of assets affecting the Issuer or to which it is a party, or upon an exchange
of the Global Debentures pursuant to the Indenture, any securities that
shall be received by the Book-Entry Depositary in exchange for, in
conversion of or in respect of the Global Debentures shall be treated as
new Global Debentures under this Agreement and the Book-Entry
Interests shall thenceforth represent beneficial interests in such new Global
Debentures so received.
ARTICLE III
The Book-Entry Depositary
Section 3.01. Certain Duties and Responsibilities.
(a) The Book-Entry Depositary undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Book-Entry Depositary.
(b) In the absence of bad faith on its part, the Book-
Entry Depositary may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Book-Entry Depositary and conforming to the
requirements of this Agreement, but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Book-Entry Depositary, the Book-Entry Depositary shall
examine the same to determine whether or not they conform to the
requirements of this Agreement.
(c) No provision of this Agreement shall be construed
to relieve the Book-Entry Depositary from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
(i) the Book-Entry Depositary shall not be
liable for any error of judgment made in good faith by a
Responsible Officer of the Book-Entry Depositary, unless
the Book-Entry Depositary was negligent in ascertaining
the pertinent facts; and
(ii) the Book-Entry Depositary shall not be
liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of
the Depositary relating to the time, method and place of
conducting any proceeding for any remedy available to the
Book-Entry Depositary, or exercising any power conferred
upon the Book-Entry Depositary, under this Agreement or
the Indenture.
(d) No provision of this Agreement shall require the
Book-Entry Depositary to spend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability satisfactory to the Book-Entry Depositary has
not been reasonably assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Book-Entry Depositary shall be
subject to the provisions of this Section 3.01.
Section 3.02. Events of Default.
(a) Within 90 days after the occurrence of any Event of
Default of which a Responsible Officer of the Book-Entry Depositary
assigned to its corporate trust department has actual knowledge, the
Book-Entry Depositary shall transmit by mail to the Depositary in the
manner provided in Section 4.02 hereof, notice of such Event of Default,
unless such Event of Default shall have been cured or waived.
(b) Upon the occurrence of any Event of Default or in
connection with any other right of the holder of the Global Debentures
under the Indenture, and if requested by notice in writing by the
Registered Holder, the Book-Entry Depositary shall take such action as
shall be requested in such notice in respect of the Global Debentures.
Section 3.03. Certain Rights of Book-Entry Depositary.
Subject to the provisions of Section 3.01 hereof:
(a) the Book-Entry Depositary may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order or as otherwise expressly provided herein and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Book-Entry Depositary may consult with
counsel, and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(d) the Book-Entry Depositary shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Book-Entry Depositary,
in its discretion, may make further inquiry or investigation into such facts
or matters as it may see fit, and, if the Book-Entry Depositary shall
determine to make such further inquiry or investigation, it shall be entitled
upon reasonable prior request and during normal business hours to
examine the books, records and premises of the Issuer, personally or by
agent or attorney;
(e) the Book-Entry Depositary may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, but the Book-Entry Depositary shall
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it hereunder;
(f) the Book-Entry Depositary shall be under no
obligation to expend or risk its own funds or to exercise, at the request or
direction of the Depositary, any of the rights or powers vested in it by this
Agreement or the Indenture unless the Depositary shall have offered to the
Book-Entry Depositary security or indemnity satisfactory to the Book-
Entry Depositary against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction;
(g) whenever in the administration of its duties under
this Agreement the Book-Entry Depositary shall deem it desirable that a
matter be proved or established prior to taking or suffering or omitting
any action hereunder, the Book-Entry Depositary (unless other evidence
be herein specifically prescribed) may, in the absence of negligence or bad
faith on its part, rely upon an Officers' Certificate.
Section 3.04. Not Responsible for Recitals or Issuance of
Debentures.
The recitals contained in the Indenture and in the
Debentures, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Book-Entry Depositary
assumes no responsibility for their correctness. The Book-Entry
Depositary makes no representations as to the validity or sufficiency of
this Agreement or of the Debentures. The Book-Entry Depositary shall
not be accountable for the use or application by the Issuer of the proceeds
with respect to the Debentures.
Section 3.05. Money Held in Trust.
Money held by the Book-Entry Depositary in trust
hereunder shall be segregated from other funds held by the Book-Entry
Depositary, pursuant to Section 2.01(a). The Book-Entry Depositary
shall be under no obligation to invest or pay interest on any money
received by it hereunder, except as otherwise agreed in writing with the
Issuer. Any interest accrued on funds deposited with the Book-Entry
Depositary under this Agreement shall be paid by the Book-Entry
Depositary, as principal and not as agent, to the Issuer from time to time
and the Depositary shall have no claim to any such interest.
Section 3.06. Compensation and Reimbursement.
The Issuer agrees:
(a) to pay to the Book-Entry Depositary from time to
time such compensation as is agreed upon in writing for services rendered
by it hereunder, whether or not as agent of the Issuer;
(b) except as otherwise expressly provided herein, to
reimburse the Book-Entry Depositary upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Book-
Entry Depositary in accordance with any provision of this Agreement,
whether or not as agent of the Issuer (including the reasonable
compensation and the reasonable expenses and disbursements of its agents
and counsel, which compensation, expenses and disbursements shall be set
forth in sufficient written detail to the satisfaction of the Issuer), except
any such expense, disbursement or advance as may be attributable to its or
their negligence, willful misconduct or bad faith; and
(c) to indemnify the Book-Entry Depositary for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on its part arising out of or in
connection with the acceptance or administration of this Agreement and
its duties hereunder, whether or not as agent of the Issuer, including the
costs and expenses of defending itself against any claim of liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The indemnity provided by this Section 3.06(c) shall survive
the satisfaction and discharge of this Agreement pursuant to Section 4.11
hereof.
In case any claim shall be made or action brought against
the Book-Entry Depositary for any reason for which indemnity may be
sought against the Issuer in accordance with paragraph (c) above, the
Book-Entry Depositary shall promptly notify the Issuer in writing setting
forth the particulars of such claim or action and the Issuer may assume the
defense thereof. In the event that the Issuer elects to assume such defense
and select such counsel, the Book-Entry Depositary shall have the rights
to employ its own counsel, but, in any such case, the fees and expenses of
such counsel shall be at the expense of the Book-Entry Depositary, unless
(i) the Issuer agreed in writing to pay such fees and expenses or (ii) the
named parties to any such action (including any impleaded parties) include
both the Book-Entry Depositary and the Issuer and the Book-Entry
Depositary shall have been advised by its counsel that a conflict of interest
between the Book-Entry Depositary and the Issuer may arise (and Issuer's
counsel shall have concurred with such advise) and for this reason it is not
desirable for the Issuer's counsel to represent both the Book-Entry
Depositary and the Issuer (it being understood, however, that the Issuer
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for reasonable
fees and expenses of more than one separate firm of attorneys for the
Book-Entry Depositary (plus any local counsel retained by the Book-
Entry Depositary in its reasonable judgement), which firm shall be
designated in writing by the Book-Entry Depositary). The Book-Entry
Depositary agrees to give all assistance reasonably required in connection
with the conduct of any such claim or action.
Section 3.07. Book-Entry Depositary Required;
Eligibility.
At all times when there is a Book-Entry Depositary
hereunder, such Book-Entry Depositary shall be a corporation organized
and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, having, together with its parents,
a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by Federal, state or District of Columbia
authority and willing to act on reasonable terms. Such corporation shall
have its principal place of business in the Borough of Manhattan, The City
of New York, if there be such a corporation in such location willing to act
upon reasonable and customary terms and conditions and shall, in any
case, not perform its duties as Book-Entry Depositary through an office,
branch or agency in the United Kingdom. If such corporation, or its
parent, publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 3.07, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Book-Entry Depositary hereunder shall at all times be the entity
acting as the Trustee under the Indenture, subject to receipt of an Opinion
of Counsel that the same Person is precluded by law from acting in such
capacities. If at any time the Book-Entry Depositary shall cease to be
eligible in accordance with the provisions of this Section 3.07, it shall
resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 1.08. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Book-Entry
Depositary and no appointment of a successor Book-Entry Depositary
pursuant to this Article shall become effective until (i) the acceptance of
appointment by the successor Book-Entry Depositary in accordance with
the applicable requirements of Section 3.09 or (ii) the issuance of
Definitive Registered Debentures for all Global Debentures in accordance
with Section 2.05 and the Indenture.
(b) The Book-Entry Depositary may at any time resign
as Book-Entry Depositary with respect to the Global Debentures by
giving written notice thereof to the Issuer and the Depositary, in
accordance with Section 4.01 and Section 4.02, 60 calendar days prior to
the effective date of such resignation. The Book-Entry Depositary may be
removed at any time upon 90 calendar days' notice by the filing with it of
an instrument in writing signed on behalf of the Issuer and specifying such
removal and the date when it is intended to become effective. If the
instrument of acceptance by a successor Book-Entry Depositary required
by Section 3.09 hereof shall not have been delivered to the Book-Entry
Depositary within 30 calendar days after the giving of such notice of
resignation or removal, the resigning Book-Entry Depositary may petition
any court of competent jurisdiction for the appointment of a successor
Book-Entry Depositary.
(c) If at any time:
(i) the Book-Entry Depositary shall cease to be
eligible under Section 3.07 hereof, or shall cease to be
eligible as Trustee under the Indenture, and shall fail to
resign after written request therefor by the Issuer or by the
Depositary, or
(ii) the Book-Entry Depositary shall become
incapable of acting with respect to the Book-Entry
Interests or shall be adjudged a bankrupt or insolvent, or a
receiver or liquidator of the Book-Entry Depositary or of
its property shall be appointed or any public officer shall
take charge or control of the Book-Entry Depositary or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation.
then, in any such case, (i) the Issuer, by Board Resolution, may remove
the Book-Entry Depositary and appoint a successor Book-Entry
Depositary, and (ii) if the Issuer shall fail to remove such Book-Entry
Depositary and appoint a successor Book-Entry Depositary within 30
calendar days of any such event, then the Depositary may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Book-Entry Depositary or Book-Entry
Depositaries and the appointment of a successor Book-Entry Depositary,
unless Definitive Registered Debentures have been issued in accordance
with Section 2.05 and the Indenture.
(d) If the Book-Entry Depositary shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of Book-Entry Depositary for any cause, the Issuer, by Board
Resolution, shall promptly appoint a successor Book-Entry Depositary
(other than the Issuer) and shall comply with the applicable requirements
of Section 3.09 hereof. If no successor Book-Entry Depositary with
respect to the Global Debentures shall have been so appointed by the
Issuer and accepted appointment in the manner required by Section 3.09
within 120 calendar days of any such resignation, removal, incapacity or
vacancy, then the Depositary may request that Definitive Registered
Debentures in such names and denominations as the Depositary shall
instruct in writing with respect to such Global Debentures be issued. The
Book-Entry Depositary will thereupon surrender such Global Debentures
to the Trustee for cancellation and the Trustee shall distribute such
Definitive Registered Debentures in accordance with the instructions of
the Depositary, whereupon this Agreement will then terminate.
(e) The Issuer shall give, or shall cause such successor
Book-Entry Depositary to give, notice of each resignation and each
removal of a Book-Entry Depositary and each appointment of a successor
Book-Entry Depositary to the Depositary in accordance with Section 4.02
hereof. Each notice shall include the name of the successor Book-Entry
Depositary and the address of its Corporate Trust Office.
Section 1.09. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Book-Entry Depositary, every such successor Book-Entry Depositary so
appointed shall execute, acknowledge and deliver to the Issuer and to the
retiring Book-Entry Depositary an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Book-Entry Depositary shall become effective and such successor Book-
Entry Depositary, without any further act, deed or conveyance, shall
become vested with all the rights, powers, agencies and duties of the
retiring Book-Entry Depositary, with like effect as if originally named as
Book-Entry Depositary hereunder; but, on the request of the Issuer or the
successor Book-Entry Depositary, such retiring Book-Entry Depositary
shall (i) execute and deliver an instrument transferring to such successor
Book-Entry Depositary all the rights and powers of the retiring Book-
Entry Depositary and (ii) duly assign, transfer and deliver to such
successor Book-Entry Depositary, the Global Debentures and all other
property and money held by such retiring Book-Entry Depositary
hereunder. Any retiring Book-Entry Depositary shall, nonetheless, retain
a prior claim upon all property or funds held or collected by such Book-
Entry Depositary to secure any amounts then due it pursuant to Section
3.06 hereof except to the extent that such prior claim and security would
breach or constitute a default under the Indenture or Debentures.
(b) Upon request of any such successor Book-Entry
Depositary, the Issuer shall execute any and all instruments for more fully
and certainly vesting in and confirming to such successor Book-Entry
Depositary all such rights, powers and agencies referred to in paragraph
(a) of this Section 3.09.
(c) No successor Book-Entry Depositary shall accept
its appointment unless at the time of such acceptance such successor
Book-Entry Depositary shall be eligible under this Article.
(d) Upon acceptance of appointment by any successor
Book-Entry Depositary as provided in this Section 3.09, the Issuer shall
give notice thereof to the Depositary in accordance with Section 4.02
hereof. If the acceptance of appointment is substantially
contemporaneous with the resignation of the Book-Entry Depositary, then
the notice called for by the preceding sentence may be combined with the
notice called for by Section 3.08(b) hereof. If the Issuer fails to give such
notice within 10 days after acceptance of appointment by the successor
Book-Entry Depositary, the successor Book-Entry Depositary shall cause
such notice to be given at the expense of the Issuer.
Section 1.10. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Book-Entry Depositary
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Book-Entry Depositary shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Book-Entry Depositary, shall be the successor of the Book-Entry
Depositary hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, but subject to Section
3.07.
Section 1.11. Letter of Representations.
The Book-Entry Depositary agrees to enter into and comply with all of
the provisions set forth in the Letter of Representations so long as DTC is
the holder of the Book-Entry Interests.
ARTICLE IV
Miscellaneous Provisions
Section 4.01. Notices to Book-Entry Depositary or
Issuer.
Any request, demand, authorization, direction, notice,
consent, or waiver or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
the Book-Entry Depositary, by the Depositary, by the
Trustee or by the Issuer shall be sufficient for every
purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid,
to the Book-Entry Depositary at its Corporate Trust
Office, Attention: Corporate Trust Trustee Administration
Department, or at any other address previously furnished in
writing by the Book-Entry Depositary to the Depositary,
the Trustee and the Issuer, or
the Issuer, by the Book-Entry Depositary or by DTC
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid to Yorkshire Power
Finance Limited, c/o Yorkshire Power Group Limited,
Wetherby Road, Scarcroft, Leeds LS14 3HS, England,
Attention: Finance Director, or at any other address in the
United Kingdom previously furnished in writing to the
Book-Entry Depositary by the Issuer.
Section 1.02. Notice to the Depositary; Waiver.
Where this Agreement provides for notice to the
Depositary of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided or, if the Book-Entry Interests have
been issued to DTC (or a nominee thereof), as provided in the Letter of
Representations) if in writing and mailed, first-class postage prepaid, to
the Depositary at the address outside the United Kingdom notified to the
Book-Entry Depositary, in each case not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice.
Where this Agreement provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by the Depositary shall be filed with the Book-
Entry Depositary, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of
the Book-Entry Depositary shall constitute a sufficient notification for
every purpose hereunder.
Section 1.03. Effect of Headings and Table of Contents.
The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 1.04. Successors and Assign.
All covenants and agreements in this Agreement and the
Debentures by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 1.05. Separability Clause.
In case any provision in this Agreement or in the
Debentures shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof and thereof shall not
in any way be affected or impaired thereby.
Section 1.06. Benefits of Agreement.
Nothing in this Agreement, the Debentures or the
Indenture, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefits or any legal or
equitable right, remedy or claim under this Agreement; provided, that the
Depositary and the beneficial owners of Interests shall be intended third-
party beneficiaries of this Agreement. The Depositary and beneficial
owners from time to time of Interests shall be parties to this Agreement
and shall be bound by all of the terms and conditions hereof and of the
Indenture and the Debentures, by their acceptance of delivery of the
Book-Entry Interests and Interests or beneficial interests therein, as the
case may be.
Section 1.07. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
Section 1.08. Jurisdiction.
(a) The Issuer agrees that any legal suit, action or
proceeding against the Issuer brought by the Book-Entry Depositary
arising out of or based upon this Agreement may be instituted in any state
or Federal court in the Borough of Manhattan, The City of New York,
and waives any objection which it may now or hereafter have to the laying
of venue of any such proceeding and, until the satisfaction and discharge
of this Agreement pursuant to Section 4.11 hereof, irrevocably submits to
the nonexclusive jurisdiction of such courts in any suit, action or
proceeding.
(b) The Issuer has appointed CT Corporation System
at 1633 Broadway, New York, New York 10019, as its authorized agent
(the "Authorized Agent") upon whom process may be served in any legal
suit, action or proceeding arising out of or based upon this Agreement
which may be instituted in the Supreme Court of New York, New York
County or the United States District Court for the Southern District of
New York by the Depositary or the Book-Entry Depositary, and expressly
accepts the nonexclusive jurisdiction of any such court in respect of any
such action. Such appointment shall be irrevocable. Service of process
upon the Authorized Agent shall be deemed, in every respect, effective
service of process upon the Issuer. Notwithstanding the foregoing, any
action based on this Agreement may be instituted by the Book-Entry
Depositary in any competent court in England or the Cayman Islands.
(c) To the extent that the Issuer may in any jurisdiction
claim for itself or its assets immunity (to the extent such immunity may
now or hereafter exist, whether on the grounds of sovereign immunity or
otherwise) from suit, execution, attachment (whether in aid of execution,
before judgment or otherwise) or other legal process (whether through
service or notice or otherwise), and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Issuer irrevocably agrees with respect to any
matter arising under this Deposit Agreement for the benefit of the
Registered Holder from time to time of the Book-Entry Interests, not to
claim, and irrevocably waives, such immunity to the full extent permitted
by the laws of such jurisdiction.
Section 1.09. Counterparts.
This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be deemed an original, but
all such counterparts shall together constitute one and the same
instrument.
Section 1.10. Inspection of Agreement.
A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate Trust
Office of the Book-Entry Depositary for inspection by the Depositary.
Section 1.11. Satisfaction and Discharge.
This Agreement upon Issuer Order shall cease to be of
further effect, and the Book-Entry Depositary, at the expense of the Issuer
shall execute proper instruments acknowledging satisfaction and discharge
of this Agreement, when (i) either (a) the Indenture has been satisfied and
discharged pursuant to the provisions thereof or (b) Definitive Registered
Debentures have been issued and the Global Debentures have been
canceled in accordance with the provisions of Section 2.07 and the
Indenture, (ii) the Issuer has paid or caused to be paid all sums payable
hereunder by the Issuer and (iii) the Issuer has delivered to the Book-
Entry Depositary an Officers' Certificate and an Opinion of Counsel,
stating that all conditions precedent herein provided relating to the
satisfaction and discharge of this Agreement have been complied with.
Section 1.12. Amendments.
The Issuer and the Book-Entry Depositary may amend this
Agreement without the consent of the Depositary:
(a) to cure any formal defect, omission, inconsistency
or ambiguity herein;
(b) to add to the covenants and agreements of the
Issuer or the Book-Entry Depositary ;
(c) to effect the assignment of the Book-Entry
Depositary's rights and duties to a qualified successor as provided herein;
(d) to comply with any requirements of the Securities
Act, the Exchange Act, the Investment Company Act, the Trust Indenture
Act or any other applicable securities laws;
(e) to modify this Agreement in connection with an
amendment to the Indenture that does not require the consent of holders
of the Debenture; or
(f) to modify, alter, amend or supplement this
Agreement in any other respect not inconsistent with this Agreement
which, in the opinion of counsel acceptable to the Issuer, is not materially
adverse to the Depositary or the beneficial owners of Interests.
Except as set forth in this Section 4.12, no amendment
which materially adversely affects the Depositary or beneficial owners of
Interests may be made to this Agreement without the consent of the
Depositary or such beneficial owner.
Section 1.13. Book-Entry Depositary To Sign
Amendments.
The Book-Entry Depositary shall sign any amendment
authorized pursuant to Section 4.12 hereof if the amendment does not
materially adversely affect the rights, duties, liabilities or immunities of
the Book-Entry Depositary. If it does, the Book-Entry Depositary may, but
need not, sign it.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first written above.
YORKSHIRE POWER
FINANCE LIMITED
By:
Name: Armando A.
Pena
Title: Authorized
Signatory
THE BANK OF NEW
YORK, as
Book-Entry Depositary
By:
Name:
Title:
.continued from the preceding page
continued on the following page.
ii
NY-180450.3
i
NY-180450.3
22
NY-180450.3
NY-180450.3
EXHIBIT 4.8
YORKSHIRE POWER FINANCE LIMITED, AS ISSUER
AND
YORKSHIRE POWER GROUP LIMITED, AS GUARANTOR
AND
THE BANK OF NEW YORK, AS TRUSTEE,
PRINCIPAL PAYING AGENT, REGISTRAR AND TRANSFER
AGENT
AND
BANQUE GENERALE DU LUXEMBOURG S.A.,
AS PAYING AND TRANSFER AGENT
INDENTURE
DATED AS OF FEBRUARY 1, 1998
_________________________________________
DEBT SECURITIES
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of February 1, 1998
Trust Indenture Act Section Indenture Section
(S) 310(a)(1) 609
(a)(2) 609
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 608
610
(S) 311(a) 613(a)
(b) 613(b)
(b)(2) 703(a)(2)
703(b)
(S) 312(a) 701
702(a)
(b) 702(b)
(c) 702(c)
(S) 313(a) 703(a)
(b)(1) Not Applicable
(b)(2) 703(b)
(c) 703(a), 703(b)
(d) 703(c)
(S) 314(a) 704
(a)(4) 704
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
(S) 315(a) 601(a)
(b) 602 703(a)(7)
(c) 601(b)
(d) 601(c)
(d)(1) 601(a)(1)
(d)(2) 601(c)(1)
(d)(3) 601(c)(3)
(e) 514
(S) 316(a)(1)(A) 502
512
(a) 513
(a)(2) Not Applicable
(b) 508
(c) 105
(S) 317(a)(1) 503
(a)(2) 504
(b) 100
(S) 318(a) 107
_____________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture
INDENTURE, dated as of February 1, 1998, among
YORKSHIRE POWER FINANCE LIMITED, a limited liability company
organized under the laws of the Cayman Islands, as issuer (the
"Company"), having its registered office at P.O. Box 309, George Town,
Grand Cayman, Cayman Islands, British West Indies, YORKSHIRE
POWER GROUP LIMITED, a private limited company incorporated
under the laws of England and Wales, having its registered office at
Wetherby Road, Scarcroft, Leeds, England, as guarantor (the
"Guarantor"), THE BANK OF NEW YORK, as trustee, principal paying
agent, registrar and transfer agent (the "Trustee"), and BANQUE
GENERALE DU LUXEMBOURG S.A., as paying and transfer agent.
RECITALS OF THE COMPANY AND THE GUARANTOR
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of
certain of its unsecured debentures, notes or other evidences of
indebtedness (herein called the "Securities") to be issued in one or more
series as provided in this Indenture.
All things necessary to make this Indenture a valid
agreement of the Company, and the Guarantor, in accordance with its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities, or
of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 101. Definitions
For all purposes of this Indenture, all indentures
supplemental hereto and any document or instrument delivered pursuant to
the provisions hereof, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the respective
meanings assigned to them in this Article and include the plural as
well as the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles", with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States at the date of such
computation; and
(4) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in
that Article.
"Act", when used with respect to any Holder, has the
meaning specified in Section 104.
"Additional Amounts" has the meaning specified in Section
1009.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling", and "controlled" have meanings
correlative to the foregoing.
"Attributable Debt" means, in respect of a Sale and Lease-
Back Transaction, as at the time of determination, the present value
(discounted at the rate borne by the applicable series of Securities) of the
total obligations of the lessee for rental payments during the remaining term
of the lease included in such Sale and Lease-Back Transaction (including
any period for which such lease has been extended).
"Authenticating Agent" means any Person authorized to
authenticate and deliver Securities on behalf of the Trustee pursuant to
Section 614.
"Bearer Security" means any Security that is payable to
bearer.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified
by a Director of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification.
"Book-Entry Depositary" means, with respect to the
Securities of any series issuable or issued in whole or in part in the form of
one or more Global Securities, the Person designated as Book-Entry
Depositary (or a nominee thereof) by the Company pursuant to Section
301, and, if so provided pursuant to Section 301 with respect to the
Securities of a series, any successor to such Person. If at any time there is
more than one such Person, "Book-Entry Depositary" shall mean, with
respect to any series of Securities, the qualifying entity which has been
appointed with respect to the Securities of that series.
"Book-Entry Interests" means certificateless depositary
interests to be issued by the Book-Entry Depositary to DTC representing in
the aggregate a 100% beneficial interest in a Global Bearer Security.
"Business Day", when used with respect to the Place of
Payment of the Securities of any series, means each day which is not a
Saturday, a Sunday or a day on which banking institutions in any Place of
Payment for the Securities of that series are authorized or obligated by law
to remain closed.
"Commission" means the United States Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at
such time.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor company shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor company.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any Director and by
any other Director or the Treasurer, Secretary, any Assistant Treasurer or
Assistant Secretary or any other officer so authorized and delivered to the
Trustee.
"Consolidated Net Tangible Assets" shall mean the total of
all assets (including revaluations thereof as a result of commercial
appraisals, price level restatement or otherwise) appearing on a
consolidated balance sheet of the Guarantor, net of applicable reserves and
deductions, but excluding goodwill, trade names, trademarks, patents,
unamortized debt discount and all other like intangible assets (which term
shall not be construed to include such revaluations), less the aggregate of
the consolidated current liabilities of the Guarantor appearing on such
balance sheet.
"Corporate Trust Office" means the principal office of the
Trustee in The City of New York, at which at any particular time its
corporate trust business shall be administered, which at the date hereof is
101 Barclay Street, New York, New York, 10286.
"corporation" includes corporations, associations,
companies and business trusts.
"Debt" has the meaning specified in Section 1004.
"default" for purposes of Section 601 of this Indenture is
defined to mean an "Event of Default" as specified in Section 501 hereof,
and for purposes of Section 310(b) of the Trust Indenture Act, "default"
shall mean an "Event of Default" as specified in Section 501 hereof but
exclusive of any period of grace or requirement of notice.
"Defaulted Interest" has the meaning specified in Section
308.
"Deposit Agreement" means any deposit agreement among
the Company, a Book-Entry Depositary and the holders and beneficial
owners from time to time of interests in the Book-Entry Interests.
"Director" means any member of the Board of Directors at
the time of determination.
"discharged" means, with respect to the Securities of any
series, the discharge of the entire indebtedness represented by, and
obligations of the Company under, the Securities of such series and the
satisfaction of all the obligations of the Company under this Indenture
relating to the Securities of such series, except (A) the rights of Holders of
the Securities of such series to receive, from the trust fund described in
Section 403 hereof, payment of the principal of, premium, if any, and
interest, if any, on the Securities of such series when such payments are
due, (B) the Company's obligations with respect to the Securities of such
series with respect to registration, transfer, exchange and maintenance of a
Place of Payment and (C) the rights, powers, trusts, duties, protections and
immunities of the Trustee under this Indenture.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debt in the United States.
"DTC" means The Depository Trust Company (or a
nominee thereof) or its successors.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Global Bearer Security" means a Bearer Security,
evidencing all or part of a series of Securities, issued to the Book-Entry
Depositary for such series.
"Global Registered Security" means a Registered Security,
evidencing all or part of a series of Securities, issued to the Book-Entry
Depository for such series.
"Global Security" means a Global Registered Security or a
Global Bearer Security.
"Gross-Up Taxes" has the meaning specified in Section
1009.
"Guarantee" means the guarantee set forth in Article
Fourteen by the Guarantor of any Security of any series authenticated and
delivered pursuant to this Indenture either (i) if specified, as contemplated
by Section 301, to be applicable to Securities of such series and not
endorsed on such Securities pursuant to Article Fourteen hereof, or (ii) in
all other cases, endorsed on such Securities.
"Guarantor" means the Person named as the "Guarantor" in
the first paragraph of this instrument, until a successor company shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Guarantor" shall mean such successor company.
"Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and,
in the case of a Global Bearer Security, the Book-Entry Depositary
therefor.
"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by a Board
Resolution and an Officers' Certificate issued pursuant thereto or by one or
more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series
of Securities established as contemplated by Section 301.
"Indirect Participant" means a Person that holds an interest
in the Book-Entry Interests through a Participant.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity,
means interest payable after Maturity at the rate prescribed In such Original
Issue Discount Security.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Letter of Representations" means, with respect to the
Securities of any series, the letter of representations from the Company and
the Trustee to DTC with respect to the Securities of that series that are
represented by Global Registered Securities issued to DTC or the letter of
representations from the Company and the Book-Entry Depositary to DTC
with respect to the Securities of that series that are represented by Global
Bearer Securities issued to such Book-Entry Depositary.
"Lien" means any mortgage, lien, pledge, security interest or
other encumbrance; provided, however, that the term "Lien" shall not mean
any easements, rights-of-way, restrictions and other similar encumbrances
and encumbrances consisting of zoning restrictions, leases, subleases,
licenses, sublicenses, restrictions on the use of property or defects in title
thereto.
"Maturity", when used with respect to any Security, means
the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether
at the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise.
"Officers' Certificate" means a certificate signed by any
Director or the Treasurer, Secretary, any Assistant Treasurer or Assistant
Secretary of the Company or any other officer of the Company so
authorized and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel,
who, unless otherwise required by the Trust Indenture Act, may be an
employee of, or regular counsel for, the Company, or may be other counsel
reasonably acceptable to the Trustee.
"Original Issue Discount Security" means any Security
which provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502.
"Outstanding", when used with respect to Securities of any
series, means, as of the date of determination, all Securities of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money or U.S. Government Obligations in the
necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to the terms
hereof or thereof or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
Section 306 of this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of
the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, (a)
the principal amount of an Original Issue Discount Security that shall be
deemed to be outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, and (b) Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned as
described in clause (b) above which have been pledged in good faith may
be regarded as Outstanding if the pledgee certifies to the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Participant" means a Person that has an account with DTC.
"Paying Agent" means Banque Generale du Luxembourg
S.A. and any other Person authorized by the Company to pay the principal
of, premium, if any, or interest on any Securities on behalf of the Company
hereunder, including, without limitation, the Principal Paying Agent.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the principal of,
premium, if any, and interest, if any, on the Securities of that series are
payable as specified in or as contemplated by Section 301.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purpose of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen security.
"Principal Paying Agent" means The Bank of New York
until a successor Principal Paying Agent shall have become such pursuant
to the applicable provisions of this Indenture and, thereafter, "Principal
Paying Agent" shall mean such successor Principal Paying Agent.
"Redemption Date", when used with respect to any Security
to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.
"Redemption Price", when used with respect to any Security
to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture, exclusive of accrued and unpaid interest.
"Registered Security" means any Security that is payable to
a registered owner or registered assigns thereof as registered in the
Security Register.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.
"Relevant Date" for any payment made with respect to the
Securities of any series means whichever is the later of (i) the date on
which the relevant payment first becomes due and (ii) if the full amount
payable has not been received in The City of New York by the Book-Entry
Depositary or the Trustee on or prior to such due date, the date on which,
the full amount having been so received, notice to that effect shall have
been given to the Holders in accordance with this Indenture.
"Responsible Officer", when used with respect to the
Trustee, means any officer within the Corporate Trust Office including any
vice president, managing director, the secretary, assistant vice president,
assistant secretary, or any other officer of the Trustee, customarily
performing functions similar to those performed by any of the
above-designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Sale and Lease-Back Transaction" has the meaning
specified in Section 1005.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 306.
"Significant Subsidiary" means, at any particular time, any
Subsidiary whose gross assets or gross revenues (having regard to the
Guarantor's direct and/or indirect beneficial interest in the shares, or the
like, of that Subsidiary) represent at least 25% of the consolidated gross
assets or consolidated gross revenues, as the case may be, of the
Guarantor.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 308.
"Stated Maturity", when used with respect to any Security
or any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by the
Guarantor or by one or more other Subsidiaries, or by the Guarantor and
one or more other Subsidiaries.
"Taxing Jurisdiction" means (i) any supranational federation
to which the United Kingdom belongs or (ii) the jurisdiction (or any
political subdivision or taxing authority thereof) in which the Company or
the Guarantor, is incorporated or in which the Company or the Guarantor
is managed and controlled or has a place of business.
"Transfer Agent" means any Person authorized by the
Company to effectuate the exchange or transfer of any Security on behalf
of the Company hereunder, including, initially pursuant to Section 304, The
Bank of New York and Banque Generale du Luxembourg S.A.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of that series.
"Trust Indenture Act" means the United States Trust
Indenture Act of 1939 as in force at the date as of which this instrument
was executed, except as provided in Section 905.
"United Kingdom" means the United Kingdom of Great
Britain and Northern Ireland, its territories, its possessions and other areas
subject to its jurisdiction.
"United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"U.S. Government Obligations" means direct obligations of
the United States for the payment of which its full faith and credit is
pledged, or obligations of a person controlled or supervised by and acting
as an agency or instrumentality of the United States and the payment of
which is unconditionally guaranteed by the United States, and shall also
include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of a holder of a
depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government obligation or the
specific payment of interest on or principal of the U.S. Government
Obligation evidenced by such depository receipt.
"Voting Stock" of any corporation means stock of the class
or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors of a corporation
(irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening
of any contingency).
SECTION 102. Compliance Certificates and Opinions
Except as otherwise expressly provided by this Indenture,
upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion
of such counsel all such conditions precedent, if any, have been complied
with, except that in the case of any such application or request as to which
the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in
one or several documents.
Any certificate or opinion of an officer or Director may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer or Director knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers or Director or
Directors stating that the information with respect to such factual matters is
in the possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in
Person or by agent duly appointed in writing, and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section
104.
Without limiting the generality of the foregoing, unless
otherwise established in or pursuant to a Board Resolution or set forth or
determined in an Officers' Certificate, or established in one or more
indentures supplemental hereto, pursuant to Section 301, a Holder,
including a Book-Entry Depositary that is a Holder of a Global Security,
may make, give or take, by a proxy, or proxies, duly appointed in writing,
any request, demand, authorization, direction, notice, consent, waiver or
other action provided in this Indenture to be made, given or taken by
Holders, and a Book-Entry Depositary that is a Holder of a Global Security
may provide its proxy or proxies to the beneficial owners of interests in any
such Global Security through such Book-Entry Depositary's standing
instructions and customary practices.
(b) The fact and date of the execution by any Person of
any such instrument, writing or proxy may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument, writing or proxy acknowledged to
him the execution thereof.
Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument, writing or proxy, or the authority of the
Person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be
proved by the Security Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
(e) The principal or face amount and serial numbers of
Bearer Securities of any series held by any Person, and the date of holding
the same, may be proved by the production of such Bearer Securities or by
a certificate executed by the Book-Entry Depositary for such Bearer
Securities.
(f) If the Company shall solicit from the Holders of
Securities of any series any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may, at its option, by
Board Resolution, fix in advance a record date for purposes of determining
the identity of Holders of Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Any such record date shall be
fixed at the Company's discretion. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
Act may be sought or given before or after the record date, but only the
Holders of Securities of record at the close of business on such record date
shall be deemed to be Holders of Securities for the purpose of determining
whether Holders of the requisite proportion of Securities of such series
Outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and
for that purpose the Securities of such series Outstanding shall be
computed as of such record date.
With regard to any record date set pursuant to this
subsection, the Holders of Outstanding Securities of the relevant series on
such record date (or their duly appointed agents), and only such Persons,
shall be entitled to take relevant action, whether or not such Holders
remain Holders after such record date. With regard to any action that may
be taken hereunder only by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed agents) and
for which a record date is set pursuant to this subsection, the Company
may, at its option, set an expiration date after which no such action
purported to be taken by any Holder shall be effective hereunder unless
taken on or prior to such expiration date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record
date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this
subsection, the Company may, on one or more occasions at its option,
extend such expiration date to any later date. Nothing in this subsection
shall prevent any Holder (or any duly appointed agent thereof) from taking,
at any time, any action contrary to or different from, any action previously
taken, or purported to have been taken, hereunder by such Holder, in
which event the Company may set a record date in respect thereof pursuant
to this subsection. Notwithstanding the foregoing or the Trust Indenture
Act, the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any action to be taken by
Holders pursuant to Section 501, 502 or 512.
Upon receipt by the Trustee of written notice of any default
described in Section 501, any declaration of acceleration, or any rescission
and annulment of any such declaration, pursuant to Section 502 or of any
direction in accordance with Section 512, a record date shall automatically
and without any other action by any Person be set for the purpose of
determining the Holders of Outstanding Securities of the series entitled to
join in such notice, declaration, or rescission and annulment, or direction,
as the case may be, which record date shall be the close of business on the
day the Trustee receives such notice, declaration, rescission and annulment
or direction, as the case may be. The Holders of Outstanding Securities of
such series on such record date (or their duly appointed agent), and only
such Persons, shall be entitled to join in such notice, declaration, rescission
and annulment, or direction, as the case may be, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration, rescission and annulment, or direction, as the case may
be, shall have become effective by virtue of Holders of the requisite
principal amount of Outstanding Securities of such series on such record
date (or their duly appointed agents) having joined therein on or prior to
the 90th day after such record date, such notice of default, declaration,
rescission and annulment, or direction, as the case may be, given or made
by the Holders, as the case may be, shall automatically and without any
action by any Person be canceled and of no further effect. Nothing in this
paragraph shall prevent a Holder (or a duly appointed agent thereof) from
giving, before or after the expiration of such 90-day period, a notice of
default, a declaration of acceleration, a rescission and annulment of a
declaration of acceleration or a direction in accordance with Section 512,
contrary to or different from, or, after the expiration of such period,
identical to, a previously given notice, declaration, rescission and
annulment, or direction, as the case may be, that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new
record date in respect thereof shall be set pursuant to this paragraph.
SECTION 105. Notices, Etc., to Trustee and Company
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Holder or by the Company or the
Guarantor shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
registered office, with a copy addressed to the Guarantor at the
address of its registered office, each as specified in the first
paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, (i) in the case of a Holder of
Registered Securities, at his address as it appears in the Security Register,
and (ii) in the case of a Holder of Global Bearer Securities, at the address
provided in or pursuant to the relevant Deposit Agreement of the relevant
Book-Entry Depositary, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
If Securities of any series are listed on the Luxembourg
Stock Exchange and the rules of such Stock Exchange so require, notice to
Holders of such Securities shall be published in a leading newspaper having
general circulation in Luxembourg.
If, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to give such notice by
mail, then such notification as shall be made at the direction of the
Company in a manner reasonably calculated, to the extent practicable under
the circumstances, to provide prompt notice shall constitute a sufficient
notification for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301, where this
Indenture provides for notice to Holders of Bearer Securities of any event
and the rules of any securities exchange on which such Bearer Securities
are listed so require, such notice shall be sufficiently given to Holders of
such Bearer Securities if published in such newspaper or newspapers as
may be specified in such Securities on a Business Day at least twice, the
first such publication to be not earlier than the earliest date, and not later
than the latest date, prescribed for the giving of such notice. Any such
notice by publication shall be deemed to have been given on the date of the
first such publication. In addition, notice to the Holder of any Global
Bearer Security shall be given by mail in the manner provided above.
If by reason of any cause it shall be impracticable to publish
any notice to Holders of Bearer Securities as provided above, then such
notification to Holders of Bearer Securities as shall be given with the
approval of the Trustee shall constitute sufficient notice to such Holders
for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any
defect in any notice so published, shall affect the sufficiency of such notice
with respect to other Holders of Bearer Securities or the sufficiency of any
notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice,
consent, waiver or Act required or permitted under this Indenture shall be
in the English language, except that any published notice may be in an
official language of the country of publication.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the
Trust Indenture Act, the provision or requirement of the Trust Indenture
Act shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or
excluded, such provision of the Trust Indenture Act shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 109. Successors and Assigns
All covenants and agreements in this Indenture by the
Company or the Guarantor shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. Separability Clause
In case any provision in this Indenture, in the Securities or
in any Guarantee shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 111. Benefits of Indenture
Nothing in this Indenture, in the Securities or in any
Guarantee, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law
This Indenture, the Securities and any Guarantee shall be
governed by and construed in accordance with the laws of the State of
New York.
SECTION 113. Legal Holidays
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of principal, premium, if any, or
interest, if any, need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, and no interest shall
accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
*****
SECTION 201. Forms Generally
The Securities of each series shall be in substantially the
form appended to the supplemental indenture establishing such series, or in
such other form as shall be established by or pursuant to a Board
Resolution (or Officers' Certificate delivered pursuant thereto) or in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, a Board
Resolution or one or more indentures supplemental hereto, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules
of any securities exchange or as may, consistently herewith, be determined
by the Director or Directors executing such Securities, as evidenced by the
Director's or Directors' execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified
by an authorized Director or officer of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in
substantially the form set forth in this Article or in a Board Resolution (or
Officers' Certificate delivered pursuant thereto) or an indenture
supplemental hereto.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other
manner, all as determined by the Director or Directors executing such
Securities, as evidenced by the Director's or Directors' execution of such
Securities.
SECTION 202. Form of Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
Dated: ______________________
as Trustee
By:
Authorized Signatory
SECTION 203. Form of Trustee's Certificate of Authentication by an
Authenticating Agent
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Trustee's
Certificate of Authentication by such Authenticating Agent to be borne by
the Securities of each such series shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
Dated: ______________________
as Trustee
By: [NAME OF
AUTHENTICATING
AGENT]
Authenticating Agent
By:
Authorized Signatory
SECTION 204. Form of Guarantee
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a private limited company duly incorporated and
existing under the laws of England and Wales (the "Guarantor", which term
includes any successor Person under the Indenture referred to in the
Security on which this notation is endorsed), hereby fully and
unconditionally guarantees to the Holder of the accompanying Security
issued by Yorkshire Power Finance Limited (the "Company"), pursuant to
the terms of the Guarantee contained in Article Fourteen of the Indenture,
the due and punctual payment of the principal of, premium, if any, and
interest, if any, on this Security (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable,
whether at Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of this Security and
the Indenture. In case of the failure of the Company punctually to pay any
such principal, premium, if any, or interest, if any, the Guarantor hereby
agrees to cause any such payment to be made punctually when and as the
same shall become due and payable as if such payment were made by the
Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.
THIS GURANTEE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this notation of the Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its
authorized officers.
YORKSHIRE POWER
GROUP LIMITED
By:_____________________
__________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth or determined in the manner provided in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series, the terms of such series,
which may include the following:
(1) title of the Securities of the series (which shall
distinguish the Securities series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Sections 305, 306,
307 or 906, and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the bearer (in the case of a
Bearer Security) or the Person in whose name the Security (or one
or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest (in the case
of a Registered Security);
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date for the interest
payable on any Interest Payment Date;
(6) the place or places, if any, in addition to or in the
place of the Corporate Trust Office, where the principal of,
premium, if any, and interest, if any, on Securities of the series shall
be payable and (in the case of the Registered Securities) where such
Securities may be registered or transferred;
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option of
the Company;
(8) the obligation, if any, of the Company to redeem,
repay or purchase Securities of the series pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof,
and the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series
shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(10) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(11) if other than such coin or currency of the United
States as at the time of payment is legal tender for payment of
public or private debts, the coin or currency, including composite
currencies such as the European Currency Unit, in which payment
of the principal of, premium, if any, and interest, if any, on the
Securities of the series shall be payable;
(12) if the principal of, premium, if any, or interest, if
any, on the Securities of the series are to be payable, at the election
of the Company or a Holder thereof, in a coin or currency other
than that in which the Securities are stated to be payable, the period
or periods within which, and the terms and conditions upon which,
such election may be made;
(13) if the amount of payments of principal of, premium,
if any, or interest, if any, on the Securities of the series may be
determined with reference to an index based on a coin or currency
other than that in which the Securities are stated to be payable, the
manner in which such amounts shall be determined;
(14) any provisions permitted by this Indenture relating
to Events of Default or covenants of the Company or the Guarantor
with respect to such series of Securities;
(15) if the Securities of the series shall be issued in whole
or in part in the form of one or more Global Securities, (i) whether
beneficial owners of interests in any such Global Security or
Securities may exchange such interests for definitive Registered
Securities of such series of like tenor and of authorized form and
denomination and the circumstances under which any such changes
may occur, if other than in the manner provided in Section 306, and
(ii) the Book-Entry Depositary for such Global Security or
Securities;
(16) if the Company ever wishes to issue definitive
Bearer Securities then all provisions relating to or governing such
Bearer Securities will be set forth in an indenture supplemental
hereto;
(17) if Article Fourteen and the other provisions of this
Indenture relating to the Guarantee of the Securities are applicable
to such series; and
(18) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and set
forth in the Officers' Certificate referred to above or in any indenture
supplemental hereto referred to above.
If any of the terms of the Securities of a series, including the
form of Security of such series, are established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary or other authorized
officer or Director, and delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 303 for the authentication
and delivery of such series of Securities.
SECTION 302. Denominations
The Securities of each series shall be issuable in bearer form
or in registered form without coupons, except as otherwise expressly
provided in a supplemental indenture hereto, in such denominations as shall
be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating
The Securities shall be executed on behalf of the Company
by any Director, the Secretary or any other officer of the Company so
authorized and need not be attested. Definitive Registered Securities of
any series may have the Company's seal reproduced thereon which need
not be attested. The Securities of any series shall be executed by such
additional Director or officer, if any, as shall be specified pursuant to
Section 301. The signature of any of these officers on the Securities may
be manual or facsimile.
Securities bearing the manual or facsimile signature of any
individual who was at any time the proper Director or officer of the
Company shall bind the Company, notwithstanding that such individual has
ceased to hold such office prior to the authentication and delivery of such
Securities or did not hold such office at the date of authentication of such
Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and
the Trustee in accordance with the Company Order shall authenticate and
deliver such Securities. If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(a) if the form of such Securities has been established by
or pursuant to Board Resolution as permitted by Section 201, that
such form has been established in conformity with the provisions of
this Indenture;
(b) if the terms of such Securities have been established
by or pursuant to Board Resolution as permitted by Section 301,
that such terms have been established in conformity with the
provisions of this Indenture; and
(c) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner
and subject to any conditions specified in such opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors' rights and to
general principles of equity.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company
Order and Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the time of authentication of each
Security of such series if such documents are delivered at or prior to the
time of authentication upon original issuance of the first Security of such
series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating Agent by
manual signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 310 together with a written statement
(which need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
SECTION 304. Transfer Agent and Paying Agent
For so long as the Securities are listed on the Luxembourg
Stock Exchange and such stock exchange shall so require, the Company
shall maintain a Paying Agent and Transfer Agent in Luxembourg.
The Company shall enter into an appropriate agency
agreement with any Registrar, Transfer Agent or Paying Agent not a party
to this Indenture, which shall implement the provisions of this Indenture
that relate to such Person. The Company shall notify the Trustee of the
name and address of any such Person. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 607.
The Company initially appoints the Trustee as Registrar, Transfer Agent
and Principal Paying Agent in The City of New York and Banque Generale
du Luxembourg S.A. as Paying Agent and Transfer Agent in Luxembourg
in connection with the Securities.
Banque Generale du Luxembourg S.A. shall be responsible
for only those duties that are described in the provisions of this Indenture
that relate to the Paying Agent and Transfer Agent. No implied duties or
obligations shall be read into this Indenture against Banque Generale du
Luxembourg S.A. It is understood and agreed that the actions taken by
Banque Generale du Luxembourg S.A. as Paying Agent and Transfer
Agent shall be limited to actions including definitive Registered Securities.
SECTION 305. Temporary Securities
Pending the preparation of a permanent Global Security or
definitive Securities of any series, the Company may execute, and upon
Company Order the Trustee or the Authenticating Agent shall authenticate,
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued, in registered form or, if authorized, in bearer
form, and with such appropriate insertions, omissions, substitutions and
other variations as the officer or officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of definitive Securities
of such series, the temporary Securities of such series shall be exchangeable
for definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Company in a Place
of Payment for that series, without charge to the Holder except as provided
in Section 306 in connection with a transfer and except that a Person
receiving definitive Bearer Securities shall bear the cost of insurance,
postage, transportation and the like. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall
execute and the Trustee or the Authenticating Agent shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of the same series and of like tenor of authorized denominations.
Upon any exchange of a portion of a temporary Global
Security for a definitive Global Security for the individual Securities
represented thereby pursuant to this Section 305 or Section 306, the
temporary Global Security shall be endorsed by the Trustee to reflect the
reduction of the principal amount of such temporary Global Security, and
such principal amount shall be reduced for all purposes by the amount so
exchanged and endorsed.
SECTION 306. Registration, Registration of Transfer and Exchange
The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Registered Securities and transfers
of Registered Securities as herein provided. The Company may have one
or more coregistrars and the term "Security Registrar" includes any co-
registrar.
Upon surrender for registration of transfer of any
Registered Security of any series at the office or agency in a Place of
Payment for that series, the Company shall execute, and the Trustee or the
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, any Registered Security or
Registered Securities of any series, other than a Global Security, may be
exchanged for other Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and
tenor, upon surrender of the Registered Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and upon receipt of a Company
Order the Trustee or the Authenticating Agent shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive. Bearer Securities may not be delivered by the Trustee,
the Authenticating Agent or the Security Registrar in exchange for
Registered Securities.
All Securities issued upon any registration of transfer or
exchange of Registered Securities shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Registered Securities surrendered upon such
registration of transfer or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly
authorized In writing.
Interests in a Global Security or Securities may be
exchanged for definitive Registered Securities of the same series in whole
or in part only under the circumstances provided in this Indenture, in an
Officers' Certificate (pursuant to a Board Resolution) or in an indenture
supplemental hereto pursuant to which Securities of that series are issued
or in the Securities of that series. In such event the Company will execute,
and the Trustee or the Authenticating Agent, upon receipt of a Company
Order for the authentication and delivery of definitive Registered Securities
of such series, will authenticate and deliver such definitive Registered
Securities. Any such definitive Registered Securities so issued shall be
registered in the name of such Person or Persons as the Book-Entry
Depositary shall instruct the Trustee and the Security Registrar in writing.
The Trustee or the Security Registrar shall deliver such definitive
Registered Securities to the Persons in whose names such definitive
Registered Securities are so registered. Upon the exchange (i) in whole of
a Global Security or Securities for definitive Registered Securities in equal
aggregate principal amount, such Global Security or Securities shall be
delivered to the Trustee for cancellation or (ii) in part of a Global Security
or Securities for definitive Registered Securities, then the principal amount
of such Global Security or Securities shall be reduced by an endorsement
on such Global Security or Securities in an amount equal to the aggregate
principal amount of such definitive Registered Securities. Interests in a
Global Security or Securities may not be exchanged for definitive Bearer
Securities. Notwithstanding the foregoing, interests in a Global Security
may not be exchanged for definitive Registered Securities during the
sixteen day period immediately prior to and including each Interest
Payment Date.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer
or exchange of Securities, other than exchanges pursuant to Sections 305,
906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption under Section 1103 and ending at the close of business on the
day of such mailing, (ii) to register the transfer of or exchange any Security
so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to exchange any
Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of the series (but only
if and under the circumstances for which the Securities of such series are
issuable as Registered Securities), provided that such Registered Security
shall be immediately surrendered for redemption with written instructions
for payment consistent with the provisions of this Indenture.
The provisions of this Section 306 are, with respect to any
Global Security, subject to Section 312 hereof.
SECTION 307. Mutilated, Destroyed, Lost and Stolen Securities
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such Security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute and
upon its written request the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security, a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section
307, the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section 307 in lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.
The provisions of this Section 307 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 308. Payment of Interest; Interest Rights Reserved
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid (in
the case of a Bearer Security) to the bearer thereof and (in the case of a
Registered Security) to the Person in whose name that Registered Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Payment of interest, if any, in respect of any Registered
Security will be made by check mailed to the address of the Person entitled
thereto as such person's address appearing in the Security Register.
Payment of interest, if any, in respect of any Registered Security may also
be made, in the case of a Holder of at least U.S. $1,000,000 aggregate
principal amount of Registered Securities, and payment of interest, if any,
in respect of a Global Registered Security shall be made, by wire transfer to
a U.S. Dollar account maintained by the Holder with a bank in the United
States; provided that such Holder elects payment by wire transfer by giving
written notice to the Trustee or a Paying Agent to such effect designating
such account no later than 15 days immediately preceding the relevant due
date for payment (or such other date as the Trustee may accept in its
discretion).
Any interest on any Security of any series which is payable
but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall, in the case of Registered
Securities, forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. Unless the Trustee is acting as the Security
Registrar, promptly after such Special Record Date, the Company
shall furnish the Trustee with a list, or shall make arrangements
satisfactory to the Trustee with respect thereto, of the names and
addresses of, and respective principal amounts of such Registered
Securities held by, the Holders appearing on the Security Register
at the close of business on such Special Record Date. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities of such series at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant
to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Registered Securities of any series or any Global
Registered Security in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Registered Securities may be listed, and upon such notice as may be
required by such exchange.
Defaulted Interest on Bearer Securities shall be payable to
the bearer thereof at the time of payment of such Defaulted Interest by the
Company.
Subject to the foregoing provisions of this Section 308,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security, shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 309. Persons Deemed Owners
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Registered Security
for the purpose of receiving payment of principal of, premium, if any, and
(subject to Section 308) interest, if any, on such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security
be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary. All
such payments so made to any such person, or upon such person's order,
shall be valid, and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Security.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Book-Entry Depositary for a Global Bearer
Security as the absolute owner of such Global Bearer Security for the
purpose of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Global Bearer Security or
coupon be overdue, and neither the Company or the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security
held on its behalf by a Book-Entry Depositary shall have any rights under
this Indenture with respect to such Global Security, and such Book-Entry
Depositary may be treated by the Company, the Trustee, and any agent of
the Company or the Trustee as the owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
impair, as between a Book-Entry Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of
the rights of the Book-Entry Depositary as holder of any Security.
SECTION 310. Cancellation
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall
be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section 310, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of
as directed by a Company Order.
SECTION 311. Computation of Interest
Except as otherwise specified as contemplated by Section
301 for Securities of any series, interest, if any, on the Securities of each
series shall be computed on the basis of a 360-day year of twelve 30-day
months.
SECTION 312. Global Securities
If the Company shall establish pursuant to Section 301 that
the Securities of a particular series are to be issued in the form of a Global
Security, then the Company shall execute and the Trustee shall, in
accordance with Section 303, authenticate and deliver, a Global Security or
Securities which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Securities of such series, (ii) shall be in bearer form or, if in
registered form, registered in the name of the Book-Entry Depositary or its
nominee, (iii) shall be delivered by the Trustee to the Book-Entry
Depositary or pursuant to the Book-Entry Depositary's instruction and (iv)
shall bear a legend substantially to the following effect:
"This Security is a Global Security within the meaning of
the Indenture hereinafter referred to and if this Security is in bearer form, is
held by a Book-Entry Depositary or, if this Security is in registered form, is
registered in the name of a Book-Entry Depositary or a nominee of a
Book-Entry Depositary. This Security is exchangeable for Securities, if
this Security is in bearer form, held by, or if this Security is in registered
form, registered in the name of, a person other than the Book-Entry
Depositary or its nominee only in the limited circumstances described in the
Indenture.
Unless this Global Security is presented by an authorized
representative of the Book-Entry Depositary to the Company or its agent
for registration of transfer, if this Security is in registered form, exchange
or payment, and any definitive Registered Security is issued in the name or
names as directed in writing by the Book-Entry Depositary, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as
the bearer or the registered owner hereof, as the case may be, the
Book-Entry Depositary, has an interest herein."
Unless and until definitive Registered Securities of a series
are issued in exchange for the Global Security of a series as permitted by
this Indenture, the Global Security of a series may be transferred, in whole
but not in part and in the manner provided in Section 306, only to another
nominee of the Book-Entry Depositary for such series, or to a successor
Book-Entry Depositary for such series selected or approved by the
Company or to a nominee of such successor Book-Entry Depositary.
No Security that is not a Global Bearer Security may be
payable to bearer (except as otherwise provided in an indenture
supplemental hereto or in an Officers' Certificate (pursuant to a Board
Resolution) pursuant to Section 301(16)).
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and rights to receive
payments of any principal, premium or interest in respect thereof and any
right to receive any Additional Amount as provided in Section 1009), and
the Trustee shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
(1) either (A) all Securities theretofore authenticated
and delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 307 and (ii) Securities for whose payment money has
theretofore been deposited in trust with the Trustee or any paying
agent or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements for the giving of notice of
redemption by the Trustee in the name, and at the expense,
of the Company, or
(iv) are deemed paid and discharged pursuant to
Section 403, as applicable.
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount of (a) money in the currency or units of currency in
which such Securities are payable, or (b) U.S. Government Obligations
(denominated in the same currency or units of currency in which such
Securities are payable) which through the payment of interest and principal
in respect thereof in accordance with their terms will provide not later than
one day before the Stated Maturity or Redemption Date, as the case may
be, money in an amount, or (c) a combination of money or U.S.
Government Obligations as provided in (b) above, in each case, sufficient
to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest, if any, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under
Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of clause (1) of this Section 401 or if money or
U.S. Government Obligations shall have been deposited with or received
by the Trustee pursuant to Section 403, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money
(a) Subject to the provisions of the last paragraph of
Section 1003, all money or U.S. Government Obligations deposited with
the Trustee pursuant to Sections 401 or 403 and all money received by the
Trustee in respect of U.S. Government Obligations deposited with the
Trustee pursuant to Sections 401 or 403, shall be held in trust and applied
by it, in accordance with the provisions of the Securities and this Indenture,
to the payment, to the persons entitled thereto, of the principal of,
premium, if any, and interest, if any, on the Securities for whose payment
such money has been deposited with or received by the Trustee or to make
mandatory sinking fund payments or analogous payments as provided by
Sections 401 or 403.
(b) The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
U.S. Government Obligations deposited pursuant to Sections 401 or 403
or the interest and principal received in respect of such obligations other
than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company
from time to time upon Company Request any U.S. Government
Obligations or money held by it as provided in Sections 401 or 403 which,
in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to
the Trustee, are then in excess of the amount thereof which then would
have been required to be deposited for the purpose for which such U.S.
Government Obligations or money was deposited or received. This
provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations held under this Indenture.
(d) Any monies paid by the Company to the Trustee or
any Paying Agent, or held by the Company in trust, for the payment of the
principal of, premium, if any, or interest, if any, or Additional Amounts on
any Securities and remaining unclaimed at the end of two years after such
principal, premium, interest or Additional Amounts become due and
payable will be repaid to the Company, or released from the trust, upon its
written request, and upon such repayment or release all liability of the
Company, the Trustee and such Paying Agent with respect thereto will
cease.
SECTION 403. Satisfaction, Discharge and Defeasance of Securities of
any Series
The Company, at its option, may elect (a) to be discharged
from any and all obligations in respect of the Securities of a series (except
in each case for the obligations to register the transfer or exchange of the
Securities of that series, replace stolen, lost or mutilated Securities of that
series, maintain paying agencies and hold moneys for payment in trust); or
(b) not to comply with any term, provision or condition set forth in
Sections 801, 1004 and 1005 with respect to the Securities of any series,
provided that the following conditions shall have been satisfied:
The Company has deposited or caused to be irrevocably
deposited (except as provided in Section 607, 402(d) and the last
paragraph of Section 1003) with the Trustee (specifying that each deposit
is pursuant to this Section 403) as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series, (i) money or (ii) U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount, or (iii) a
combination thereof, in each case, in an amount sufficient, in the opinion of
a nationally recognized firm of independent accountants, to pay and
discharge the principal of, premium, if any, and interest, if any (including
any Additional Amounts then known), if any, on the outstanding Securities
of such series on the dates such payments are due in accordance with the
terms of the Securities of such series, (or if the Company has designated a
redemption date pursuant to the final sentence of this paragraph, to and
including the redemption date so designated by the Company), and no
Event of Default or event which with notice or lapse of time would become
an Event of Default (including by reason of such deposit) with respect to
the Securities of such series shall have occurred and be continuing on the
date of such deposit or, insofar as Section 501(7) is concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be satisfied until the
expiration of such period), and the Securities of such series will not be
delisted by any securities exchange on which they are traded as a result of
the deposit of trust funds in trust. To exercise any such option, the
Company is required to deliver to the Trustee (i) an opinion of independent
counsel of recognized standing to the effect that (x) the Holders of the
Securities of such series will not recognize income, gain or loss for United
States federal income tax purposes as a result of such deposit, and will be
subject to United States federal income tax on the same amounts, in the
same manner and at the same times as would have been the case absent
such deposit and (y) the deposit shall not result in the Company being
deemed to be an "investment company" required to be registered under the
Investment Company Act of 1940, as amended, which in the case of clause
(a) must be based on a change in law or a published ruling by the United
States Internal Revenue Service and (ii) an Officers' Certificate as to
compliance with all conditions precedent provided for in the Indenture
relating to the satisfaction and discharge of the Securities of such series. If
the Company shall wish to deposit or cause to be deposited money or U.S.
Government Obligations to pay or discharge the principal of, premium, if
any and interest, if any, (including any Additional Amounts then known), if
any, on the outstanding Securities of such series to and including a
Redemption Date on which all of the outstanding Securities of such series
are to be redeemed, such Redemption Date shall be irrevocably designated
by a Board Resolution delivered to the Trustee on or prior to the date of
deposit of such money or U.S. Government Obligations, and such Board
Resolution shall be accompanied by an irrevocable Company Request that
the Trustee give notice of such redemption in the name and at the expense
of the Company not less than 30 nor more than 60 days prior to such
Redemption Date in accordance with this Indenture.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(1) default in the payment of any interest or any
Additional Amounts upon any Security of that series when it
becomes due and payable and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity; or
(3) default in the payment of any installment of any
sinking fund provided with respect to such series, when and as due
by the terms of a Security of that series; or
(4) material default in the performance, or material
breach, of any covenant or obligation of the Company or the
Guarantor in this Indenture (other than a covenant a default in
whose performance or whose breach is elsewhere in this Section
501 specifically dealt with or which has expressly been included in
this Indenture solely for the benefit of a series of Securities other
than that series) and continuance of such material default or breach
for a period of 90 days after there has been given, by registered or
certified mail, to the Company or the Guarantor by the Trustee or
to the Company or the Guarantor and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Outstanding
Securities of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) a default in the payment of the principal of any bond,
debenture, note or other evidence of indebtedness, in each case for
money borrowed, or in the payment of principal under any
mortgage, indenture (including this Indenture) or instrument under
which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed, of the Company,
the Guarantor or any Significant Subsidiary, which default for
payment of principal is in an aggregate principal amount exceeding
U. S. $50,000,000 (or its equivalent in any other currency or
currencies) when such indebtedness becomes due and payable
(whether at maturity, upon redemption or acceleration or
otherwise), if such default shall continue unremedied or unwaived
for more than 30 Business Days and the time for payment of such
amount has not been expressly extended; provided, however, that,
subject to the provisions of Sections 601 and 602, the Trustee shall
not be deemed to have knowledge of such default unless either (A)
a Responsible Officer of the Trustee shall have actual knowledge of
such default or (B) the Trustee shall have received written notice
thereof from the Company or the Guarantor, from any Holder, from
the holder of any such indebtedness or from the trustee under any
such mortgage, indenture or other instrument; and provided,
further, that if such default under such indenture or instrument shall
be remedied or cured by the Company, the Guarantor or such
Significant Subsidiary or waived by the holders of such
indebtedness, then the Event of Default hereunder by reason thereof
shall be deemed likewise to have been remedied, cured or waived
without further action upon the part of the Trustee or any of the
Holders; or
(6) any Guarantee shall be held in a judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in
full force and effect; or
(7) the failure of the Company, the Guarantor, or a
Significant Subsidiary generally to pay its debts as they become
due, or the admission in writing of its inability to pay its debts
generally, or the making of a general assignment for the benefit of
its creditors, or the institution of any proceeding by or against the
Company, the Guarantor or a Significant Subsidiary (other than any
such proceeding brought against the Company, the Guarantor or a
Significant Subsidiary that is dismissed within 180 days from the
commencement thereof) seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition (in each
case, other than a solvent liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition) of it or
its debts under any law relating to bankruptcy, insolvency,
reorganization, moratorium or relief of debtors, or seeking the entry
of an order for relief or appointment of an administrator, receiver,
trustee, intervenor or other similar official for it or for any
substantial part of its property, or the taking of any action by the
Company, the Guarantor or a Significant Subsidiary to authorize
any of the actions set forth in this subparagraph (7); or
(8) any other Event of Default provided in the
supplemental indenture or provided in or pursuant to the Board
Resolution under which such series of Securities is issued or in the
form of Security for such series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or,
if any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified
in the terms thereof) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.
At any time after such declaration of acceleration with
respect to Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee as
hereinafter in this Article provided, if all Events of Default with respect to
Securities of that series have been cured or waived (other than the non-
payment of principal of the Securities which has become due solely by
reason of such declaration of acceleration) then such declaration of
acceleration and its consequences shall be automatically annulled and
rescinded.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been
accelerated and declared due and payable pursuant to the provisions
hereof, then, from and after such declaration, unless such declaration has
been rescinded and annulled, the principal amount of such Original Issue
Discount Securities shall be deemed, for all purposes hereunder, to be such
portion of the principal thereof as shall be due and payable as a result of
such acceleration, and payment of such portion of the principal thereof as
shall be due and payable as a result of such acceleration, together with
interest, if any, thereon and all other amounts owing thereunder, shall
constitute payment in full of such Original Issue Discount Securities.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee
The Company covenants that if
(1) default is made in the payment of any interest on any
Security of a series when such interest becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of,
premium, if any, on any Security of a series at the Stated Maturity
thereof,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities of such series, the whole amount
then due and payable on such Securities of such series for principal of,
premium, if any, and interest, if any, and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
of, premium, if any, and any overdue interest, at the rate or rates prescribed
therefor in such Securities of such series, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor
upon such Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company
or any other obligor upon such Securities, wherever situated.
If any Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights.
SECTION 504. Trustee May File Proofs of Claim
In case of the pendency of any receivership, insolvency,
liquidation (other than a solvent liquidation), bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative
to the Company or any other obligor upon the Securities or the property of
the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for
the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal of,
premium, if any, and interest owing and unpaid in respect of
the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order with respect to the Securities of any
series, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal of, premium, if any, or
interest, if any, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully
paid:
FIRST: To the payment of all amounts due to the
Trustee under Section 607;
SECOND: In case the principal and premium, if any, of the
Securities of such series in respect of which moneys have been
collected shall not have become and be then due and payable, to the
payment of interest, if any, on the Securities of such a series in
default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee and to the extent permitted by law) upon
the overdue installments of interest at the rate prescribed therefor in
such Securities, such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
THIRD: In case the principal or premium, if any, of the
Securities of such series in respect of which moneys have been
collected shall have become and shall be then due and payable, to
the payment of the whole amount then owing and unpaid upon all
the Securities of such series for principal of, premium, if any, and
interest, if any, with interest upon the overdue principal of,
premium, if any, and (to the extent that such interest has been
collected by the Trustee and to the extent permitted by law) upon
overdue installments of interest at the rate prescribed therefor in the
Securities of such series; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon
the Securities of such series, then to the payment of such principal
and any premium and interest, without preference or priority of
principal over interest, or of interest over principal or premium, or
of any installment of interest over any other installment of interest,
or of any Security of such series over any other Security of such
series, ratably to the aggregate of such principal and any premium
and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
SECTION 507. Limitation on Suits
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to the Trustee against the costs, expenses
and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the outstanding
Securities of that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest
Notwithstanding Section 507, the Holder of any Security
shall have the right, which is absolute and unconditional, to receive
payment of the principal of, premium, if any, or (subject to Section 307)
interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Company,
the Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 510. Rights and Remedies Cumulative
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of Section 306, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient by
the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the Securities of such series; provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction,
and
(3) the Trustee shall not determine that the action so
directed would be prejudicial to Holders not taking part in such
action.
SECTION 513. Waiver of Past Defaults
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of, premium, if any,
or interest, if any, on any Security of such series, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series
affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant in such suit, but the provisions of this Section 514 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any series, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of,
premium, if any, or interest, if any, on any Security on or after the Stated
Maturity or Maturities expressed in such Security.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities
(a) Except during the continuance of a default with
respect to the Securities of any series,
(1) the Trustee undertakes to perform, such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case a default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless the
Trustee was negligent in ascertaining the pertinent facts;
(2) no provision of this Indenture shall require the
Trustee to spend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if repayment of
such funds or adequate indemnity against such risk or liability
satisfactory to the Trustee has not been assured to it; and
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
principal amount of the outstanding Securities of any series,
determined as provided in Section 512, relating to the time, method
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such
series.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of this Section 601.
SECTION 602. Notice of Defaults
Within 90 days after the occurrence of any default
hereunder with respect to the Securities of any series, the Trustee shall
transmit by mail to all Holders of Securities of such series notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in
the payment of the principal of, premium, if any, or interest, if any, on any
Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or a Responsible
Officer of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
provided, further, that in the case of any default of the character specified
in Section 501(4) with respect to Securities of such series, no such notice
to Holders shall be given until at least 30 days after the occurrence thereof.
For the purpose of this Section 602, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event
of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order or as otherwise expressly provided herein and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel, and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to expend
or risk its own funds or to exercise, at the request or direction of any of the
Holders, any of the rights or powers vested in it by this Indenture pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled upon reasonable prior request and during normal business
hours to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and shall not be liable for the actions or omissions of
such agents appointed and supervised by it with due care.
SECTION 604. Not Responsible for Recitals or Issuance of Securities
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 605. May Hold Securities
The Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement
The Company agrees
(1) to pay to the Trustee from time to time such
compensation as is agreed upon in writing;
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel, which compensation, expenses and
disbursements shall be set forth in sufficient written detail to the
satisfaction of the Company), except any such expense,
disbursement or advance as may be attributable to its or their
negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors and
employees for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith, or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. Obligations under this
Section 607(3) will survive the satisfaction and discharge of this
Indenture pursuant to Section 401 hereof.
SECTION 608. Disqualification; Conflicting Interests
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
SECTION 609. Corporate Trustee Required; Eligibility
There shall at all times be a Trustee hereunder which shall
be eligible to act as trustee under the Trust Indenture Act and which shall
have a combined capital and surplus of at least U.S.$50,000,000. If the
Trustee does not have an office in The City of New York, the Trustee may
appoint an agent in The City of New York reasonably acceptable to the
Company to conduct any activities which the Trustee may be required
under this Indenture to conduct in The City of New York. If the Trustee
does not have an office in The City of New York or has not appointed an
agent in The City of New York, the Trustee shall be a participant in The
Depository Trust Company and FAST distribution systems. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of a United States federal, state, territorial or
District of Columbia supervising or examining authority, then for the
purposes of this Section 609, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 609, the Trustee shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor
Trustee
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required
by Section 611 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with section 310(b)
of the Trust Indenture Act pursuant to Section 608 with respect to
any series of Securities after written request therefor by the
Company or by any Holder who has been a bona fide holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of
Section 611. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company and accepted
appointment in the manner required by Section 611, any Holder who has
been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation
and each removal of the Trustee with respect to the Securities of any series
and each appointment of a successor Trustee with respect to the Securities
of any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities of such series as their names
and addresses appear in the Security Register. Each notice shall include
the name of the successor Trustee with respect to the Securities of such
series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect
to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and
each such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but on request of
the company or any successor trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts referred to in paragraph (a) or (b) of this Section 611, as the
case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder; provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collecting of Claims Against Company
(a) Subject to Subsection (b) of this Section 613, if the
Trustee shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company within three months prior to a default, as
defined in Subsection (c) of this Section 613, or subsequent to such a
default, then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Securities and the holders of other
indenture securities, as defined in Subsection (c) of this Section 613:
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect
of principal or interest effected after the beginning of such three
months' period and valid as against the Company and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in paragraph (2) of this
Subsection, or from the exercise of any right of setoff which the
Trustee could have exercised if a petition in bankruptcy had been
applied by or against the Company upon the date of such default;
and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such
three months' period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if any,
of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company)
who is liable thereon, and (ii) the proceeds of the bona fide sale of
any such claim by the Trustee to a third Person, and (iii)
distributions made in cash, securities or other property in respect of
claims filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy
Act or applicable State law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such three months' period;
(C) to realize, for its own account, but only to extent of the
claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was
received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee had no
reasonable cause to believe that a default, as defined in Subsection
(c) of this Section 613, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C) , against the release of any property held as security for
such claim as provided in paragraph (B) or (C) , as the case may be,
to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months' period for property
held as security at the time of such substitution shall, to the extent of the
fair value of the property released, have the same status as the property
released, and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for the purpose
of repaying or refunding any pre-existing claim of the Trustee as such
creditor, such claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account for the funds and
property held in such specia1 account, the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other
indenture securities in such manner that the Trustee, the Holders and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State
law or winding up or administration pursuant to the insolvency laws of the
Cayman Islands or the United Kingdom, as applicable, the same percentage
of their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of other
indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law or winding up or
administration pursuant to the insolvency laws of the Cayman Islands or
the United Kingdom, as applicable, but after crediting thereon receipts on
account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so
held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to
such claim, in bankruptcy or receivership or proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law or winding
up or administration pursuant to the insolvency laws of the Cayman Islands
or the United Kingdom, as applicable, whether such distribution is made in
cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim.
Any Trustee which has resigned or been removed after the
beginning of such three months' period shall be subject to the provisions of
this Subsection as though such resignation or removal had not occurred. If
any Trustee has resigned or been removed prior to the beginning of such
three months' period, it shall be subject to the provisions of this Subsection
if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of
such three months' period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of
Subsection (a) of this Section 613 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a maturity
of one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the purpose
of preserving any property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens or other prior liens
or encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Holders at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture, transfer
agent, registrar, custodian, paying agent, fiscal agent or depository,
or other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a result
of goods or securities sold in a cash transaction, as defined in
Subsection (c) of this Section 613;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25 (a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of self-liquidating
paper, as defined in Subsection (c) of this Section 613.
(c) For the purposes of this Section 613 only:
(1) the term "default" means any failure to make
payment in full of the principal of or interest on any of the
Securities or upon the other indenture securities when and as such
principal or interest becomes due and payable;
(2) the term "other indenture securities" means
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act) outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section 613,
and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special
account;
(3) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable
upon demand;
(4) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale
of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with
the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the
Securities; and
(6) the term "Federal Bankruptcy Act" means the
Bankruptcy Code or Title 11 of the United States Code.
SECTION 614. Authenticating Agents
From time to time the Trustee, with the prior written
approval of the Company, may appoint one or more Authenticating Agents
with respect to one or more series of Securities with power to act on the
Trustee's behalf and subject to its direction in the authentication and
delivery of Securities of such series or in connection with transfers and
exchanges under Sections 304, 305, 306, and 1104 as fully to all intents
and purposes as though the Authenticating Agent had been expressly
authorized by those Sections of this Indenture to authenticate and deliver
Securities of such series. For all purposes of this Indenture, the
authentication and delivery of Securities by an Authenticating Agent
pursuant to this Section 614 shall be deemed to be authentication and
delivery of such Securities "by the Trustee". Each such Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United
States, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least U.S.$50,000,000 and subject to supervision or
examination by Federal, State or District of Columbia authority. If such
corporation publishes reports of condition at least annually pursuant to law
or the requirements of such authority, then for the purposes of this Section
614 the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section 614,
such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 614.
Any corporation into which any Authenticating Agent may
be merged or with which it may be consolidated, or any corporation
resulting from, any merger or consolidation or to which any Authenticating
Agent shall be a party, or any corporation succeeding to the corporate trust
business of any Authenticating Agent, shall be the successor of the
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 614, without the execution or filing of any paper
or any further act on the part of the parties hereto or the Authenticating
Agent or such successor corporation.
An Authenticating Agent may resign at any time by giving
written notice of resignation to the Trustee and to the Company. The
Trustee may at any time terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating Agent and to
the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible under this Section 614, the Trustee may appoint a successor
Authenticating Agent with the prior written approval of the Company and
shall mail notice of such appointment to all Holders of Securities of the
series with respect to which such Authenticating Agent will serve, as the
names and addresses of such Holders appear on the Security Register. Any
successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 614.
The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this
Section 614 as may be agreed in a separate writing among the Company,
the Trustee and such Authenticating Agent, and the Trustee shall be
entitled to be reimbursed for such payments pursuant to Section 607.
If an appointment with respect to one or more series of
Securities is made pursuant to this Section 614, the Securities of such
series may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
Dated: _____________________________
As Trustee
{NAME OF AUTHENTICATING
AGENT}
______________________________
______
Authenticating
Agent
By:
______________________________
______
Authorized
Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders
The Company will furnish or cause to be furnished to the
Trustee with respect to the Registered Securities of each series
(a) semi-annually, not later than 15 days after each
Regular Record Date, or, in the case of any series of Registered Securities
on which semiannual interest is not payable, not more than 15 days after
such semi-annual dates as may be specified by the Trustee, a list, in such
form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such Regular Record Date or semi-annual date, as the
case may be, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee is Security Registrar
for any series of Registered Securities, no such list shall be required to be
furnished with respect to any such series.
SECTION 702. Preservation of Information; Communications to
Holders
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section 701 and
the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the
information preserved at the time by the Trustee in
accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee in accordance with
Section 702(a) a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a tender to
the Trustee of the material to be mailed and of payment, or provision for
the payment, of the reasonable expenses of mailing, unless within five days
after such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing
would be contrary to the beat interest of the Holders or would be in
violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness
after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable, by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 702(b),
regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee
(a) Within 60 days after July 1 of each year,
commencing July 1, 1998, the Trustee shall transmit by mail to all Holders
of Securities a brief report dated as of such July 1, of such year with
respect to any of the following events which may have occurred within the
previous 12 months (but if no such event has occurred within such period
no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a
relationship specified in Section 608;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee (as such) which remain unpaid
on the date of such report, and for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Securities,
on any property or funds held or collected by it as Trustee, except
that the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more
than one-half of one percentum of the principal amount of the
Securities outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity
date of all other indebtedness owing by the Company (or by any
other obligor on the Securities) to the Trustee in its individual
capacity, on the date of such report, with a brief description of any
property held as collateral security therefor, except an indebtedness
based upon a creditor relationship arising in any manner described
in Sections 613(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the date of
such report;
(6) any additional issue of Securities which the Trustee
has not previously reported; and
(7) any action taken by the Trustee in the performance
of its duties hereunder which it has not previously reported and
which in its opinion materially affects the Securities, except action
in respect of a default, notice of which has been or is to be withheld
by the Trustee in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders of
Securities a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the
date of the last report transmitted pursuant to Subsection (a) of this
Section 703 (or if no such report has yet been so transmitted, since the date
of execution of this instrument) for the reimbursement of which it claims or
may claim a lien or charge, prior to that of the Securities, on property or
funds held or collected by it as Trustee and which it has not previously
reported pursuant to this Subsection, except that the Trustee shall not be
required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount
of the securities outstanding at such time, such report to be transmitted
within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each United States
national securities exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee
when any Securities are listed on any United States national securities
exchange.
SECTION 704. Reports
The Company and the Guarantor shall:
(1) file with the Trustee, within 30 days after the
Guarantor is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations
prescribe) which the Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Guarantor is not
required to file information, documents or reports pursuant to
either of said Sections and one or more series of the Securities is
listed on a United States national securities exchange, then it shall
file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission,
such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a
United States national securities exchange as may be prescribed
from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(3) transmit by mail to all Holders of Securities within
30 days after the filing thereof with the Trustee, such summaries of
any information, documents and reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this Section 704 as
may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE
SECTION 801. Company or Guarantor May Consolidate Etc., Only on
Certain Terms
Nothing contained in this Indenture or in the Securities of
any series shall prevent the Company or the Guarantor from consolidating
with or merging into another corporation or corporations, or successive
consolidations or mergers or conveying, transferring, leasing or otherwise
disposing of its properties and assets substantially as an entirety to any
person, provided that (a) the successor entity expressly assumes all of the
Company's applicable obligations on the Securities or the Guarantor's
applicable obligations under the Guarantee, as the case may be, and (b)
immediately after giving effect to such transaction no Event of Default and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing. In addition, each
of the Company and the Guarantor may assign and delegate all of its rights
and obligations on the Securities of any series, under this Indenture, on the
Guarantee and all other documents, agreements and instruments related
thereto, as applicable, to any Person that owns all of the ordinary shares of
the Company or the Guarantor or to any Person that owns all of the
ordinary shares of a Person that owns all of the ordinary shares of the
Company or the Guarantor, and upon any such Person assuming such
rights and obligations the Company or the Guarantor shall be automatically
released from such obligations, provided that immediately after giving
effect to such transaction no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default shall
have happened and be continuing.
In the event that any such successor entity is organized
under the laws of a country located outside of a Taxing Jurisdiction and
withholding or deduction is required by law for or on account of any
present or future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by or
within such country in which the successor entity is organized or by or
within any political subdivision thereof or any authority therein or thereof
having power to tax, the successor entity shall pay to the relevant Holder
of the Securities of such series such Additional Amounts, under the same
circumstances and subject to the same limitations as are specified for in
Section 1009 hereof, but substituting for the applicable Taxing Jurisdiction
in each place the name of the country under the laws of which such
successor entity is organized, managed and controlled or has a place of
business. In addition, such successor entity shall be entitled to effect an
optional tax redemption under the same circumstances and subject to the
same limitations as are set forth in Section 1108 hereof, but substituting for
the applicable Taxing Jurisdiction in each place the name of the country
under the laws of which such successor entity is organized, managed and
controlled or has a place of business and substituting the date of such
succession for the date of the relevant underwriting agreement for the
Securities of such series.
SECTION 802. Successor Corporation to be Substituted
Upon any consolidation by the Company or the Guarantor
with or merger by the Company or the Guarantor into any other
corporation or any conveyance, transfer, lease or other disposition of the
properties and assets of the Company or the Guarantor substantially as an
entirety in accordance with Section 801, the successor corporation formed
by such consolidation or into which the Company or the Guarantor is
merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Company or the Guarantor under this Indenture with the same
effect as if such successor corporation had been named as the Company or
the Guarantor herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders
Without the consent of any Holders, the Company, the
Guarantor and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another company to
the Company or the Guarantor and the assumption by any such
successor of the covenants of the Company or the Guarantor herein
and in the Securities or any Guarantee;
(2) to add to the covenants of the Company or the
Guarantor for the benefit of the Holders of all or any series of
Securities (and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company
or the Guarantor;
(3) to add any additional Events of Default (and if such
Events of Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series);
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Bearer Securities, registrable or not registrable as to
principal, and with or without interest coupons, or to facilitate the
issuance of Securities in uncertificated form, or to permit or
facilitate the issuance of extendible Securities;
(5) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination shall
become effective only as to the Securities of any series created by
such supplemental indenture and Securities of any series
subsequently created to which such change or elimination is made
applicable by the subsequent supplemental indenture creating such
series;
(6) to secure the Securities;
(7) to establish the form and terms of the Securities of
any series as permitted by Sections 201 and 301;
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than
one Trustee, pursuant to the requirements of Section 611(b);
(9) to provide for any rights of the Holders of Securities
of any series to require the repurchase of Securities of such series
by the Company; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, to evidence the merger of the Company or the replacement
of the Trustee, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided such
action shall not materially and adversely affect the interests of the
Holders of Securities of any series.
SECTION 902. Supplemental Indentures with Consent of Holders
With the consent of the Holders of a majority in aggregate
principal amount of the outstanding Securities of all series affected by such
supplemental indenture (voting as one class), by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, the Guarantor and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of
the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest, if any, on, any Security,
or reduce the principal amount thereof or the rate of interest
thereon (including Additional Amounts) or any premium payable
upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder
and their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section 902 or
Section 513, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding
Security affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant changes
in this Section 902, or the deletion of this proviso, in accordance
with the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect
to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section 902 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act
Every supplemental indenture executed pursuant to this
Article shall, if so required by the Trust Indenture Act, conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities of any series so modified
as to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest and Additional Amounts, if any, on the
Securities of that series in accordance with the terms of the Securities and
this Indenture. An installment of principal of or interest on the Securities
of a series shall be considered paid on the date it is due if the Trustee or
Paying Agent holds at 11:00 a.m. New York City time on that date money
deposited by the Company in immediately available funds and designated
for, and sufficient to pay, the installment in full.
Neither the Company, the Guarantor, nor any agent of the
Company or the Guarantor will have any responsibility or liability for any
aspect relating to payments made or to be made by the Book-Entry
Depositary to DTC in respect of the Securities of a series or the Book-
Entry Interests. None of the Company, the Trustee, the Book-Entry
Depositary or any agent of any of the foregoing will have any responsibility
or liability for any aspect relating to payments made or to be made by DTC
on account of a Participant's or Indirect Participant's ownership of an
interest in the Book-Entry Interests or for maintaining, supervising or
reviewing any records relating to a Participant's interests in the Book-
Entry Interests.
SECTION 1002. Maintenance of Office or Agency
The Company will maintain (i) in the Borough of
Manhattan, The City of New York, an office or agency where Securities of
any series may be presented or surrendered for payment, and where notices
and demands to or upon the Company in respect of the Securities of such
series and this Indenture may be served and if definitive Registered
Securities have been issued, an office or agency of a Transfer Agent where
Securities may be surrendered for registration of transfer or exchange, and
(ii) an office or agency of a Paying Agent where the Securities may be paid
in Luxembourg so long as the Securities are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, except that Bearer Securities of that series
pursuant to Section 1001 may be presented at the place specified for the
purpose pursuant to Section 301, and the Company hereby appoints the
Paying Agent as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or
more other offices or agencies (in or outside of such Place of Payment)
where the Securities of one or more series and any appurtenant coupons
(subject to Section 1001) may be presented or surrendered for any or all of
such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for any series of Securities for such
purposes. The Company will give prompt written notice to the Trustee of
any such designation and any change in the location of any such other
office or agency. The Company will at all times maintain at least one
Paying Agent which is located outside the United Kingdom for each series
of Securities.
SECTION 1003. Money for Securities Payments to Be Held in Trust
If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of, premium, if any, or interest, if any, on any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest, if any, so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, no later than 11:00 a.m., New
York City time, on or prior to each due date of the principal of, premium, if
any, or interest, if any, on any Securities of that series, deposit with a
Paying Agent a sum in immediately available funds sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal,
premium or interest.
The Company will cause each Paying Agent for any series
of Securities other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 1003, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of, premium, if any, or interest, if any, on Securities of that
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities of that series) in
the making of any payment of principal of, premium, if any, or
interest, if any, on the Securities of that series; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment
by the Company or by any Paying Agent to the Trustee, the Company or
such Paying Agent, as the case may be, shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, or interest, if any, on any Security of any
series and remaining unclaimed for two years after such principal, premium,
if any, or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
SECTION 1004. Limitation on Liens
If this covenant shall be made applicable to the Securities of
a particular series as contemplated by Section 301 hereof, the Company
and the Guarantor shall not, and shall not cause or permit any Significant
Subsidiary to, issue, assume or guarantee any notes, bonds, debentures or
other similar evidences of indebtedness, in each case for money borrowed
("Debt"), secured by a Lien upon any property or assets (other than cash)
of the Company, the Guarantor or such Significant Subsidiary, as
applicable, without effectively providing that the outstanding Securities
(together with, if the Guarantor so determines, any other indebtedness or
obligation then existing or thereafter created ranking equally with such
Securities) shall be secured equally and ratably with (or prior to) such Debt
so long as such Debt shall be so secured. The foregoing restriction on
Liens will not, however, apply to:
(a) Liens in existence on the date of original issue of
such Securities;
(b) (i) any Lien created or arising over any property
which is acquired, constructed or created by the Company, the Guarantor
or any of its Significant Subsidiaries, but only if (A) such Lien secures only
principal amounts (not exceeding the cost of such acquisition, construction
or creation) raised for the purposes of such acquisition, construction or
creation, together with any costs, expenses, interest and fees incurred in
relation thereto or a guarantee given in respect thereof, (B) such Lien is
created or arises on or before 90 days after the completion of such
acquisition, construction or creation and (C) such Lien is confined solely to
the property so acquired, constructed or created; or (ii) any Lien to secure
Debt of the Company, the Guarantor or a Significant Subsidiary incurred in
connection with a specifically identifiable project where the Lien relates to
and is confined to a property or properties (including, without limitation,
shares or other rights of ownership in the entities which own such property
or project) involved in such project and acquired by the Company, the
Guarantor or a Significant Subsidiary after the date of original issue of the
Securities of any series and the recourse of the creditors in respect of such
Debt is limited to any or all of such project and property (including as
aforesaid);
(c) any Lien securing amounts not more than 90 days
overdue or otherwise being contested in good faith;
(d) (i) rights of financial institutions to offset credit
balances in connection with the operation of cash management programs
established for the benefit of the Company, the Guarantor or a Significant
Subsidiary or in connection with the issuance of letters of credit for the
benefit of the Company, the Guarantor or a Significant Subsidiary; (ii) any
Lien securing Debt of the Company, the Guarantor or a Significant
Subsidiary incurred in connection with the financing of accounts receivable;
(iii) any Lien incurred or deposits made in the ordinary course of business,
including, but not limited to, (A) any mechanics', materialmens', carriers',
workmens', vendors' or other like Liens and (B) any Liens securing
amounts in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) any Lien upon specific
items of inventory or other goods and proceeds of the Company, the
Guarantor or a Significant Subsidiary securing obligations of the Company,
the Guarantor or a Significant Subsidiary in respect of bankers'
acceptances issued or created for the account of such person to facilitate
the purchase, shipment or storage of such inventory or other goods; (v) any
Lien incurred or deposits made securing the performance of tenders, bids,
leases, trade contracts (other than for borrowed money), statutory
obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like
nature incurred in the ordinary course of business; (vi) any Lien created by
the Company, the Guarantor or a Significant Subsidiary under or in
connection with or arising out of any pooling and settlement agreements or
pooling and settlement arrangements of the United Kingdom electricity
industry including, without limitation, the Pooling and Settlement
Agreement dated March 30, 1990, as amended, modified or supplemented
from time to time, or any transactions or arrangements entered into in
connection with hedging or management of risks relating to the electricity
industry in the United Kingdom; (vii) any Lien constituted by a right of set
off or right over a margin call account or any form of cash or cash
collateral or any similar arrangement for obligations incurred in respect of
the hedging or management of risks under transactions involving any
currency or interest rate swap, cap or collar arrangements, forward
exchange transaction, option, warrant, forward rate agreement, futures
contract or other derivative instrument of any kind; (viii) any Lien arising
out of title retention or like provisions in connection with the purchase of
goods and equipment in the ordinary course of business; and (ix) any Lien
securing reimbursement obligations under letters of credit, guaranties and
other forms of credit enhancement given in connection with the purchase of
goods and equipment in the ordinary course of business;
(e) Liens in favor of the Company, the Guarantor or a
Significant Subsidiary;
(f) (i) Liens on any property or assets acquired from a
corporation which is merged with or into the Company, the Guarantor or a
Significant Subsidiary, or any Liens on the property or assets of any
corporation or other entity existing at the time such corporation or other
entity becomes a Subsidiary of the Guarantor and, in either such case, is
not created in anticipation of any such transaction (unless such Lien is
created to secure or provide for the payment of any part of the purchase
price of such corporation); (ii) any Lien on any property or assets existing
at the time of acquisition thereof and which is not created in anticipation of
such acquisition (unless such Lien was created to secure or provide for the
payment of any part of the purchase price of such property or assets); and
(iii) any Lien created or outstanding on or over any asset of any Person
which becomes a Significant Subsidiary on or after the date of the issuance
of such Securities when such Lien is created prior to the date on which
such Person becomes a Significant Subsidiary;
(g) (i) Liens required by any contract or statute in order
to permit the Company, the Guarantor or a Significant Subsidiary to
perform any contract or subcontract made by it with or at the request of a
governmental entity or any department, agency or instrumentality thereof,
or to secure partial, progress, advance or any other payments by the
Company, the Guarantor or a Significant Subsidiary to such governmental
unit pursuant to the provisions of any contract or statute; (ii) any Lien
securing industrial revenue, development or similar bonds issued by or for
the benefit of the Company, the Guarantor or a Significant Subsidiary,
provided that such industrial revenue, development or similar bonds are
nonrecourse to the Company, the Guarantor or such Significant Subsidiary;
and (iii) any Lien securing taxes or assessments or other applicable
governmental charges or levies;
(h) (i) any Lien which arises pursuant to any order of
attachment, distraint or similar legal process arising in connection with
court proceedings and any Lien which secures the reimbursement
obligation for any bond obtained in connection with an appeal taken in any
court proceeding, so long as the execution or other enforcement of such
Lien arising pursuant to such legal process is effectively stayed and the
claims secured thereby are being contested in good faith and, if
appropriate, by appropriate legal proceedings, or any Lien in favor of a
plaintiff or defendant in any action before a court or tribunal as security for
costs and/or other expenses; or (ii) any Lien arising by operation of law or
by order of a court or tribuna1 or any Lien arising by an agreement of
similar effect, including, without limitation, judgment liens; or
(i) any extension, renewal or replacement (or
successive extensions, renewals or replacements), as a whole or in part, of
any Liens referred to in the foregoing clauses, for amounts not exceeding
the principal amount of the Debt secured by the Lien so extended, renewed
or replaced, provided that such extension, renewal or replacement Lien is
limited to all or a part of the same property or assets that were covered by
the Lien extended, renewed or replaced (plus improvements on such
property or assets).
Notwithstanding the foregoing, the Company, the
Guarantor or a Significant Subsidiary may create or permit to subsist Liens
over any property or assets, so long as the aggregate amount of Debt
secured by all such Liens (excluding therefrom the amount of Debt secured
by Liens set forth in clauses (a) through (i), inclusive, above) does not
exceed 10% of Consolidated Net Tangible Assets.
Nothing contained in this Indenture in any way restricts or
prevents the Company or any Subsidiary from incurring any Debt.
SECTION 1005. Limitation on Sale and Lease-Back Transactions
If this covenant shall be made applicable to the Securities of
a particular series as contemplated by Section 301 hereof, each of the
Company and the Guarantor covenants and agrees that so long as any
Securities of such series remains outstanding, each will not, and the
Guarantor will not permit any Significant Subsidiary to, enter into any
arrangement with any person (other than the Company, the Guarantor or a
Significant Subsidiary), providing for the leasing to the Company, the
Guarantor or a Significant Subsidiary of any assets which have been or are
to be sold or transferred by the Company, the Guarantor or such
Significant Subsidiary to such person (a "Sale and Lease-Back
Transaction") unless; (i) such transaction involves a lease for a temporary
period not to exceed three years; (ii) such transaction is between the
Company, the Guarantor or a Significant Subsidiary and an affiliate of the
Guarantor; (iii) the Company or the Guarantor would be entitled to incur
debt secured by a Lien on the assets or property involved in such
transaction at least equal in amount to the Attributable Debt with respect to
such Sale and Lease-Back Transaction, without equally and ratably
securing the Securities, pursuant to the limitation on Liens described above
other than pursuant to the penultimate paragraph thereof; (iv) such
transaction is entered into within 90 days after the initial acquisition by the
Company or the Guarantor of the assets or property subject to such
transaction; (v) after giving effect thereto, the aggregate amount of all
Attributable Debt with respect to all such Sale and Lease-Back
Transactions does not exceed 10% of Consolidated Net Tangible Assets;
or (vi) the Company, the Guarantor or a Significant Subsidiary within the
twelve months preceding the sale or transfer or the twelve months
following the sale or transfer, regardless of whether such sale or transfer
may have been made by the Company, the Guarantor or such Significant
Subsidiary, applies in the case of a sale or transfer for cash, an amount
equal to the net proceeds thereof and, in the case of a sale or transfer
otherwise than for cash, an amount equal to the fair value of the assets so
leased at the time of entering into such arrangement (as determined by the
Board of Directors of the Company, the Guarantor or such Significant
Subsidiary), (a) to the retirement of debt, incurred or assumed by the
Company, the Guarantor or a Significant Subsidiary, which by its terms
matures at, or is extendible or renewable at the option of the obligor to, a
date more than twelve months after the date of incurring, assuming or
guaranteeing such debt or (b) to investment in any assets of the Company,
the Guarantor or any Significant Subsidiary.
SECTION 1006. Statement by Officers as to Default
The Guarantor will deliver to the Trustee within 120 days
after the end of each fiscal year of the Guarantor a certificate from the
principal executive, financial or accounting officer of the Guarantor, stating
that in the course of the performance by such signer of his duties as an
officer of the Guarantor he would normally have knowledge of any default
by the Company or the Guarantor in the performance and observance of
any of the covenants contained in Sections 1001 to 1008, stating whether
or not he has knowledge of any such default without regard to any period
of grace or requirement of notice and, if so, specifying each such default of
which such signer has knowledge and the nature thereof.
SECTION 1007. Waiver of Certain Covenants
The Company or the Guarantor may omit in any particular
instance to comply with any term, provision or condition set forth in this
Indenture with respect to the Securities of any series if before the time for
such compliance the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, provided that no such
waiver shall without the consent of each Holder (a) change the Stated
Maturity upon which the principal of or the interest on the Securities is due
and payable, (b) reduce the principal amount thereof or the rate of interest
thereon, (c) change any obligation of the Company to pay Additional
Amounts, (d) change any Place of Payment or the currency in which, the
Securities or any premium or the interest thereon is payable, (e) impair the
right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date) or (f) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose Holders is
required for any waiver of compliance with certain provisions of the
Indenture or certain defaults hereunder and their consequences provided
for in the Indenture. The Securities owned by the Company, the Guarantor
or any of its Affiliates shall be deemed not to be outstanding for, among
other purposes, consenting to any such waiver.
SECTION 1008. Further Assurances
The Company, the Guarantor and the Trustee shall execute
and deliver all such other documents, instruments and agreements and do
all such other acts and things as may be reasonably required to enable the
Trustee to exercise and enforce its rights under this Indenture and under
the documents, instruments and agreements required under this Indenture
and to carry out the intent of this Indenture.
SECTION 1009. Payment of Additional Amounts
Unless the Securities of a particular series otherwise
provide, all payments of principal and interest (including payments of
discount and premium, if any) with respect to the Securities of a particular
series shall be made free and clear of, and without withholding or
deduction for or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within a Taxing Jurisdiction or by or
within any political subdivision thereof or any authority therein or thereof
having power to tax ("Gross-Up Taxes"), unless such withholding or
deduction is required by law. In the event of any such withholding or
deductions, the Company or the Guarantor, as the case may be, shall pay to
the Holder of such securities such additional amounts ("Additional
Amounts") as will result in the payment to such Holder of the amount that
would otherwise have been due to such Holder in the absence of such
withholding or deduction, except that no such Additional Amounts shall be
payable:
(a) to, or to a Person on behalf of, a Holder who is
liable for such Gross-Up Taxes with respect to the Securities or any
Guarantee, by reason of such Holder having some connection with the
relevant Taxing Jurisdiction (including being a citizen or resident or
national of, or carrying on a business or maintaining a permanent
establishment in, or being physically present in, such Taxing Jurisdiction)
other than the mere holding of a Security or the receipt of principal and
interest (including payments of discount and premium, if any) in respect
thereof or in respect of the Guarantee; or
(b) to, or to a Person on behalf of, a Holder who
presents a Security (where presentation is required) for payment more than
30 days after the Relevant Date except to the extent that such Holder
would have been entitled to such Additional Amounts on presenting such
Security for payment on the last day of such period of 30 days;
(c) to, or to a Person on behalf of, a Holder who
presents a Security (where presentation is required) in a Taxing
Jurisdiction;
(d) to, or to a Person on behalf of, a Holder who would
not be liable or subject to the withholding or deduction by making a
declaration of non-residence or similar claim for exemption to the relevant
tax authority; or
(e) to, or to a Person on behalf of, a Holder of a
Registered Security that is not a Global Security issued pursuant to the
request of owners representing a majority in Outstanding principal amount
of such Securities following and during the continuance of an Event of
Default if such Holder (or any predecessor Holder) was one of such
owners requesting that such Registered Securities be so issued.
Such Additional Amounts will also not be payable where,
had the beneficial owner of the Security (or any interest therein) been the
Holder of the Security, he would not have been entitled to payment of
Additional Amounts by reason of any one or more of clauses (a) through
(e) above. If the Company or the Guarantor, as applicable, shall determine
that Additional Amounts will not be payable because of the immediately
preceding sentence, the Company or the Guarantor, as applicable, will
inform such Holder promptly after making such determination setting forth
the reason(s) therefor.
Reference to principal, interest, discount or premium in
respect of the Securities (or any payments pursuant to any Guarantee) shall
be deemed also to refer to any Additional Amounts which may be payable
as set forth in this Indenture or in the Securities.
At least 10 Business Days prior to the first Interest Payment
Date (and at least 10 Business Days prior to each succeeding Interest
Payment Date if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate) the Company will
furnish to the Trustee and any Paying Agent an Officers' Certificate
instructing the Trustee and any Paying Agent whether payments of
principal of or interest on the Securities due on such Interest Payment Date
shall be without deduction or withholding for or on account of any Gross-
Up Taxes. If any such deduction or withholding shall be required, prior to
such Interest Payment Date the Company will furnish the Trustee and any
Paying Agent with an Officers' Certificate which specifies the amount, if
any, required to be withheld on such payment to Holders and certifies that
the Company shall pay such withholding or deduction. The Company
covenants to indemnify the Trustee for, and to hold the Trustee harmless
against, any loss, liability or expense reasonably incurred without
negligence, willful misconduct or bad faith on their part, arising out of or in
connection with actions taken or omitted by the Trustee in reliance on any
Officers' Certificate furnished pursuant to this paragraph. Any Officers'
Certificate required by this Section 1009 to be provided to the Trustee and
any Paying Agent shall be deemed to be duly provided if telecopied to the
Trustee and such Paying Agent.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing payment of
Gross-Up Taxes. Copies of such receipts shall be made available to the
Holders of the Securities upon request.
SECTION 1010. Copies Available to Holders
Copies of this Indenture shall be available for inspection by
the Holders on a Business Day during normal business hours at the
principal office of the Company and at the Corporate Trust Office. In
addition, if the Securities of any series are listed on the London Stock
Exchange, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require,
copies of this Indenture, the Deposit Agreement, the Letter of
Representations, the memorandum and articles of association of the
Company and the most recent publicly available annual report of the
Guarantor shall be made available for inspection by the Holders of such
Securities on a Business Day during normal business hours at the offices of
the paying agents and at the office of the listing agent required to be
maintained by such exchange for so long as the Securities of such series are
outstanding and are listed on such stock exchange.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified in or contemplated by Section 301 for
Securities of any series) in accordance with this Article Eleven.
SECTION 1102. Election to Redeem; Notice to Trustee
The election of the Company to redeem any Securities shall
be authorized by a Board of Directors resolution and evidenced by an
Officers' Certificate. In case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such
series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms
of such Securities or elsewhere in this Indenture, or pursuant to an election
by the Company which is subject to a condition specified in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed
If less than all the Securities of any series are to be
redeemed, the particular securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions equal to the
minimum authorized denomination for Securities of that series (or any
integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination
for Securities of that series.
Securities shall be excluded from eligibility for selection for
redemption if they are identified by certificate number in a written
statement signed by an authorized officer of the Company and delivered to
the Security Registrar at least 30 days prior to the Redemption Date as
being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Company or (b) an entity specifically
identified in such written statement which is an Affiliate of the Company.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only
in part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1104. Notice of Redemption
Notice of redemption shall be given not less than 30 days
nor more than 60 days prior to the Redemption Date to each Holder of
Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security to be
redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company.
SECTION 1105. Deposit of Redemption Price
On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Principal Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities which are to
be redeemed on that date (to the extent that such amounts are not already
on deposit at such time in accordance with the provisions of Sections 401,
403 or 1007).
SECTION 1106. Securities Payable on Redemption Date
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified, and from and after
such date (unless the Company shall default in the payment of the
Redemption Price and accrued and unpaid interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security shall be paid by the Company
at the Redemption Price, together with accrued and unpaid interest to the
Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities, and
in the case of Registered Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 1107. Securities Redeemed in Part
Any Security (including any Global Security) which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee
upon written direction shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the security so surrendered; provided, that if a
Global Security is so surrendered, the new Global Security shall be in a
denomination equal to the unredeemed portion of the principal of the
Global Security so surrendered.
SECTION 1108. Optional Redemption in the Event of Change in Taxing
Jurisdiction Tax Treatment
The Securities of any series may be redeemed at the election
of the Company, as a whole, but not in part, by the giving of notice as
provided in Section 1104, at a price equal to the outstanding principal
amount thereof, together with Additional Amounts, if any, and accrued
interest, if any, to the Redemption Date, if (a) the Company or the
Guarantor satisfies the Trustee that it has or will become obligated to pay
Additional Amounts on the Securities of such series, as a result of either
(x) any change in, or amendment to, the laws or regulations of a Taxing
Jurisdiction, or any change in the application or interpretation of such laws
or regulations, which change or amendment becomes effective on or after
the date of the relevant underwriting agreement for the Securities of such
series, or (y) (i) the issuance of definitive Registered Securities as the
result
of DTC having notified the Company and the Book-Entry Depositary that
it is unable or unwilling to continue to hold the Book-Entry Interests or at
any time ceases to be a "clearing agency" registered as such under the
Exchange Act and, in either case, a successor is not appointed by the
Company within 120 days, (ii) the Book-Entry Depositary notifies the
Company that it is unwilling or unable to continue as Book-Entry
Depositary with respect to the Global Securities of such series and a
successor Book-Entry Depositary is not appointed within 120 days or (iii)
there has occurred and is continuing an Event of Default with respect to
the Securities of such series and the Holder, in such circumstances, has
requested in writing a definitive Registered Security, and (b) such
obligation cannot be avoided by the Company or the Guarantor taking
reasonable measures available to it; provided, however, that no such notice
of redemption shall be given earlier than 90 days prior to the earliest date
on which the Company or the Guarantor would be obligated to pay such
Additional Amounts were a payment in respect of the Securities then due.
Prior to the publication of any notice of redemption of such Securities
pursuant to this Indenture, the Company or the Guarantor will deliver to
the Trustee an Officers' Certificate stating that the obligation to pay such
Additional Amounts cannot be avoided by the Company or the Guarantor
taking reasonable measures available to it, and the Trustee shall accept
such certificate as sufficient evidence of the condition precedent set forth in
clause (b) above, and such certificate shall be conclusive and binding on the
Holders of the Securities of such series.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such
minimum amount provided for by the terms of Securities of any series is
herein referred to as an "optional sinking fund payment". If provided for
by the terms of Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities
of any series as provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Company
may at its option (a) deliver to the Trustee Securities of such series
theretofore purchased or otherwise acquired (except upon redemption
pursuant to the mandatory sinking fund) by the Company or receive credit
for Securities of such series (not previously so credited) theretofore
purchased or otherwise acquired (except as aforesaid) by the Company and
delivered to the Trustee for cancellation pursuant to Section 310, (b)
receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section 1202, or (c) receive credit for
Securities of such series (not previously so credited) redeemed by the
Company through any optional redemption provision contained in the
terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund Redemption Price specified in
such Securities.
SECTION 1203. Redemption of Securities for Sinking Fund
Not less than 30 days prior to each sinking fund payment
date for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying (a) the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, (b)
whether or not the Company intends to exercise its right, if any, to make an
optional sinking fund payment with respect to such series on the next
ensuing sinking fund payment date and, if so, the amount of such optional
sinking fund payment, and (c) the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202, and will also deliver to the Trustee any Securities to be so
delivered. Such written statement shall be irrevocable and upon its receipt
by the Trustee the Company shall become unconditionally obligated to
make all the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the
Company, on or before any such 30th day, to deliver such written
statement and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Company (i) that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment
date shall be paid entirely in cash without the option to deliver or credit
Securities of such series in respect therefor and (ii) that the Company will
make no optional sinking fund payment with respect to such series as
provided in this Section 1203.
Not less than 30 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103
and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104.
Such notice having been duly given, the redemption of such Securities shall
be made upon the terms and in the manner stated in Sections 1105, 1106
and 1107.
The Trustee shall not redeem or cause to be redeemed any
Security of a series with sinking fund moneys or mail any notice of
redemption of Securities of such series by operation of the sinking fund
during the continuance of a default in payment of interest with respect to
Securities of that series or an Event of Default with respect to the
Securities of that series except that, where the mailing of notice of
redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall
have received from the Company a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the
time when any such default or Event of Default, shall occur, and any
moneys thereafter paid into the sinking fund, shall, during the continuance
of such default or Event of Default, be deemed to have been collected
under Article Five and held for the payment of all such Securities. In case
such Event of Default shall have been waived as provided in Section 513 or
the default or Event of Default cured on or before the 30th day preceding
the sinking fund payment date, such moneys shall thereafter be applied on
the next succeeding sinking fund payment date in accordance with this
Section 1203 to the redemption of such Securities.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. Purposes of Meetings
A meeting of the Holders may be called at any time from
time to time pursuant to this Article Thirteen for any of the following
purposes.
(1) to give any notice to the Company or to the Trustee,
or to consent to the waiving of any Default hereunder and its
consequence, or to take any other action authorized to be taken by
Holders pursuant to Article Nine hereof;
(2) to remove the Trustee and appoint a successor
trustee pursuant to Article Six hereof;
(3) to consent to the execution of an indenture
supplemental hereto pursuant to Section 902 hereof.
SECTION 1302. Place of Meetings
(a) The Trustee may at any time (upon not less than 21
days' notice) call a meeting of Holders to be held at such time and at such
place in the location determined by the Trustee pursuant to Section 1302
hereof. Notice of every meeting of Holders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be mailed to each Holder and published in the
manner contemplated by Section 106 hereof.
(b) In case at any time the Company, pursuant to a
Board Resolution, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding, shall have requested the Trustee
to call a meeting of the Holders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first giving of the notice of such meeting
within 20 days after receipt of such request, then the Company or the
Holders in the amount above specified may determine the time (not less
than 21 days after notice is given) and the place in the location determined
by the Company or the Holders pursuant to this Section 1302 for such
meeting and may call such meeting to take any action authorized in Section
1301 hereof by giving notice thereof as provided in Section 1302(a) hereof.
SECTION 1303. Voting at Meetings
To be entitled to vote at any meeting of Holders, a Person
shall be (i) a Holder or (ii) a Person appointed by an instrument in writing
as proxy for a Holder or Holders by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons so entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel, any
representatives of the Company and its counsel.
SECTION 1304. Voting Rights, Conduct and Adjournment
(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Holders in regard to proof of the
holding of Securities of a series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities of a series shall be proved in the
manner specified in Article Two hereof and the appointment of any proxy
shall be proved in such manner as is deemed appropriate by the Trustee or
by having the signature of the person executing the proxy witnessed or
guaranteed by any bank, banker or trust company customarily authorized
to certify to the holding of a security such as a Global Note.
(b) At any meeting of Holders, the representative of
Persons holding or representing Securities of a series in an aggregate
principal amount sufficient under the appropriate provision of this
Indenture to take action upon the business for the transaction of which
such meeting was called shall constitute a quorum. Except as otherwise
provided with respect to any required aggregate principal amount of
Securities of a series required for the taking of any action pursuant to
Article Nine hereof, in no event shall less than 75% of the votes given by
Persons holding or representing Securities of such series at any meeting of
Holders be sufficient to approve an action. Any meetings of Holders duly
called pursuant to Section 1303 hereof may be adjourned from time to time
by vote of the Holders (or proxies for the Holders) of a majority of the
Securities of a series represented at the meeting and entitled to vote,
whether or not a quorum shall be present; and the meeting may be held as
so adjourned without further notice. No action at a meeting of Holders
shall be effective unless approved by Persons holding or representing
Securities of a series in the aggregate principal amount required by the
provision of this Indenture pursuant to which such action is being taken.
(c) At any meeting of Holders, each Holder or proxy
shall be entitled to one vote for each $1,000 principal amount of
outstanding Securities of a series held or represented.
SECTION 1305. Revocation of Consent by Holders
At any time prior to (but not after) the evidencing the
Trustee of the taking of any action at a meeting of Holders by the Holders
of the percentage in aggregate principal amount of the Securities specified
in this Indenture in connection with such action, any Holder of a Security
the serial number of which is included in the Securities the Holders of
which have consented to such action may, by filing written notice with the
Trustee at its principal Corporate Trust Office and upon proof of holding
as provided herein, revoke such consent so far as concerns such Securities.
Except as aforesaid any such consent given by the Holder of any Securities
shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Securities and of any Securities issued in
exchange therefore, in lieu thereof or upon transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon such Securities.
Any action taken by the Holders of the percentage in aggregate principal
amount of the Holders specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Securities.
ARTICLE FOURTEEN
GUARANTEE OF SECURITIES
SECTION 1401. Applicability of Article; Unconditional Guarantee
If, pursuant to Section 301, provision is made for the
Guarantee of the Securities of any series by the Guarantor, then the
provisions of this Article Fourteen, with such modifications thereto as may
be specified pursuant to Section 301 with respect to any Securities, shall
apply to such Securities. The Guarantor hereby fully and unconditionally
guarantees to each Holder of a Security of each series authenticated and
delivered by the Trustee the due and punctual payment of the principal of
(including any amount due in respect of original issue discount), premium,
if any, and interest in respect of such Security (and any Additional
Amounts payable in respect thereof), and the due and punctual payment of
any sinking fund payments provided for pursuant to terms of such Security,
when and as the same shall become due and payable, whether at the Stated
Maturity, by declaration of acceleration, call for redemption or otherwise,
in accordance with the terms of such Security and of this Indenture,
regardless of any defense, right of set-off or counterclaim that the
Guarantor may have or assert, except the defense of payment. The
Guarantor's obligation to make a payment under this Article Fourteen may
be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Company to pay such amounts to the
Holders.
To the extent permitted under applicable law, if any Holder
or the Trustee is required by a final non-appealable judgment of any court
or otherwise to return to either the Company or the Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or the Guarantor, any amount paid by either the Company or
the Guarantor to such Holder or the Trustee, any Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. To the
extent permitted under applicable law, the Guarantor further agrees that, as
between the Guarantor, on the one hand, and the Holders and the Trustee,
on the other hand, (x) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Five for the purpose of any
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any acceleration of such obligations as
provided in Article Five, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantor for the purpose
of any Guarantee.
No past, present or future stockholder, officer, director,
employee or incorporator of the Guarantor shall have any personal liability
under the Guarantee set forth in this Section 1401 by reason of his or its
status as such stockholder, officer, director, employee or incorporator.
The Guarantee set forth in this Section 1401 shall not be
valid or become obligatory for any purpose with respect to a Security until
the certificate of authentication on such Security shall have been
authenticated by or on behalf of the Trustee by manual signature.
SECTION 1402. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Company, any right to require a proceeding first
against the Company, the Trustee or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 1403. Guarantor Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Article Fourteen shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Company of any
express or implied agreement, covenant, term or condition relating to the
Securities to be performed or observed by the Company;
(b) the extension of time for the payment by the
Company of all or any portion of the interest on the Securities, the
Redemption Price of any other sums payable under the terms of the
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Securities, or any action on the part of the Company granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Company or any of the
assets of the Company;
(e) any invalidity of, or defect or deficiency in, the
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a
guarantor (other than payment of the underlying obligation), it being the
intent of this Article Fourteen that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 1404. Execution of Guarantee
To evidence its guarantee to the Holders specified in
Section 1401, the Guarantor hereby agrees to execute the notation of the
Guarantee in substantially the form set forth in Section 204 to be endorsed
on each Security authenticated and delivered by the Trustee. The
Guarantor hereby agrees that its Guarantee set forth in Section 1401 shall
remain in full force and effect notwithstanding any failure to endorse on
each Security a notation of such Guarantee. Each such notation of the
Guarantee shall be signed on behalf of the Guarantor, by a director or
officer, prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the due
authentication thereof by the Trustee hereunder, shall constitute due
delivery of the Guarantee on behalf of the Guarantor. Such signature upon
the notation of the Guarantee may be a manual or facsimile signature of any
present, past or future such director or officer and may be imprinted or
otherwise reproduced below the notation of the Guarantee, and in case any
such director or officer who shall have signed the notation of the Guarantee
shall cease to be such director or officer before the Security on which such
notation is endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who
signed the notation of the Guarantee had not ceased to be such director or
officer of the Guarantor.
SECTION 1405. Subrogation
The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Company in respect of any amounts paid to the
Holders by the Guarantor under this Article Fourteen with respect to any
series of Securities; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Article Fourteen with respect to a
series of Securities if, at any time of such payment, any amounts are due
and unpaid under such series of Securities. If any amount shall be paid to
the Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 1406. Independent Obligations
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Company with respect to the
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make payments pursuant to the terms of the Securities
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 1403 hereof.
ARTICLE FIFTEEN
MISCELLANEOUS
SECTION 1501. Consent to Jurisdiction; Appointment of Agent to
Accept Service of Process
(a) Each of the Company and the Guarantor irrevocably
consents and agrees, for the benefit of the Holders from time to time of the
Securities and the Trustee, that any civil legal action, suit or proceeding
against it with respect to its obligations, liabilities or any other matter
arising out of or in connection with this Indenture, the Securities or any
Guarantee may be brought in the Supreme Court of New York, New York
County or the United States District Court for the Southern District of
New York and any appellate court from either thereof and, until amounts
due and to become due in respect of the Securities or any Guarantee have
been paid, hereby irrevocably consents and submits to the non-exclusive
jurisdiction of each such court in personam, generally and unconditionally
with respect to any legal action, suit or proceeding for itself and in respect
of its properties, assets and revenues and agrees to file such consents with
such authorities as may be required to irrevocably evidence such
agreement.
(b) Each of the Company and the Guarantor has
irrevocably designated, appointed, and empowered CT Corporation
System, acting through its office at 1633 Broadway, New York, New York
10019, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and its properties, assets and revenues,
service of any and all legal process, summons, notices and documents
which may be served in any legal action, suit or proceeding brought against
the Company or the Guarantor in any United States or state court. If for
any reason such designee, appointee and agent hereunder shall cease to be
available to act as such, each of the Company and the Guarantor agrees to
designate a new designee, appointee and agent in the Borough of
Manhattan, The City of New York on the terms and for the purposes of
this Section 1501 satisfactory to the Trustee. Each of the Company and
the Guarantor further hereby irrevocably consents and agrees to the service
of any and all legal process, summons, notices and documents in any legal
action, suit or proceeding against the Company or the Guarantor by serving
a copy thereof upon the relevant agent for service of process referred to in
this Section 1501 (whether or not the appointment of such agent shall for
any reason prove to be ineffective or such agent shall accept or
acknowledge such service) or by mailing copies thereof by registered or
certified air mail, postage prepaid, to each of the Company or the
Guarantor at its address specified in or designated pursuant to this
Indenture. Each of the Company and the Guarantor agrees that the failure
of any such designee, appointee and agent to give any notice of such
service to it shall not impair or affect in any way the validity of such service
or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the holders
of the Securities and the Trustee, to serve any such legal process,
summons, notices and documents in any other manner permitted by
applicable law or to obtain jurisdiction over the Company or the Guarantor
or bring legal actions, suits or proceedings against the Company or the
Guarantor in such other jurisdictions, and in such manner, as may be
permitted by applicable law. Each of the Company and the Guarantor
irrevocably and unconditionally waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions, suits or proceedings arising out of or
in connection with this Indenture brought in the Supreme Court of New
York, New York County or the United States District Court for the
Southern District of New York and any appellate court from either thereof
and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) To the extent that the Company or the Guarantor may in
any jurisdiction claim for itself or its assets immunity (to the extent such
immunity may now or hereafter exist, whether on the grounds of sovereign
immunity or otherwise) from suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or other legal process (whether
through service or notice or otherwise), and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Company and the Guarantor irrevocably
agrees with respect to any matter arising under the Indenture for the benefit
of the Holders from time to time of the Securities, not to claim, and
irrevocably waives, such immunity to the full extent permitted by the laws
of such jurisdiction.
(d) If for the purpose of obtaining a judgment or order in
any court it is necessary to convert a sum due hereunder to the holder of
any Security from U.S. dollars into another currency, each of the Company
and the Guarantor has agreed, and each holder by holding such Security
will be deemed to have agreed, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures such Holder could purchase
U.S. dollars with such other currency in The City of New York on the
Business Day preceding the day on which final judgment is given.
(e) The obligation of the Company and the Guarantor in
respect of any sum payable by it to the holder of a Security shall,
notwithstanding any judgment or order in a currency (the "judgment
currency") other than U.S. dollars, be discharged only to the extent that on
the Business Day following receipt by the Holder of such security of any
sum, adjudged to be so due in the judgment currency, the Holder of such
Security may in accordance with normal banking procedures purchase U.S.
dollars with the judgment currency; if the amount of U.S. dollars so
purchased is less than the sum originally due to the holder of such Security
in the judgment currency (determined in the manner set forth in the
preceding paragraph), each of the Company and the Guarantor agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify
the Holder of such Security against such loss, and if the amount of the U.S.
dollars so purchased exceeds the sum originally due to the Holder of such
Security, such Holder agrees to remit to the Company or the Guarantor
such excess, provided that such Holder shall have no obligation to remit
any such excess as long as the Company or the Guarantor shall have failed
to pay such Holder any obligations due and payable under such Security, in
which case such excess may be applied to such obligations of the Company
or the Guarantor under such Security in accordance with the terms thereof.
The foregoing indemnity shall constitute a separate and independent
obligation of the Company and the Guarantor and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid.
SECTION 1502. Counterparts
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed by their respective officers, directors or
signatories duly authorized thereto, all as of the day and year first above
written.
YORKSHIRE POWER FINANCE
LIMITED
By:_________________________________
Authorized Signatory
YORKSHIRE POWER GROUP
LIMITED
By:___________________________
______
Authorized Signatory
THE BANK OF NEW YORK, as
Trustee, Principal Paying Agent,
Security Registrar and Transfer
Agent
By:___________________________
____
Title:
BANQUE GENERALE DU
LUXEMBOURG S.A., as Paying
Agent and Transfer Agent
By:________________________________
Title:
TABLE OF CONTENTS?
PAGE
RECITALS OF THE COMPANY 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION 1
SECTION 101. Definitions 1
SECTION 102. Compliance Certificates and Opinions 9
SECTION 103. Form of Documents Delivered to Trustee 10
SECTION 104. Acts of Holders 10
SECTION 105. Notices, Etc., to Trustee and Company 13
SECTION 106. Notice to Holders; Waiver 13
SECTION 107. Conflict with Trust Indenture Act 14
SECTION 108. Effect of Headings and Table of Contents 14
SECTION 109. Successors and Assigns 15
SECTION 110. Separability Clause 15
SECTION 111. Benefits of Indenture 15
SECTION 112. Governing Law 15
SECTION 113. Legal Holidays 15
ARTICLE TWO SECURITY FORMS 15
SECTION 201. Forms Generally 15
SECTION 202. Form of Trustee's Certificate of Authentication 16
SECTION 203. Form of Trustee's Certificate of Authentication
by an Authenticating Agent 16
SECTION 204. Form of Guarantee 17
ARTICLE THREE THE SECURITIES 18
SECTION 301. Amount Unlimited; Issuable in Series 18
SECTION 302. Denominations 20
SECTION 303. Execution, Authentication, Delivery and Dating 20
SECTION 304. Transfer Agent and Paying Agent 21
SECTION 305. Temporary Securities 22
SECTION 306. Registration, Registration of Transfer and
Exchange 23
SECTION 307. Mutilated, Destroyed, Lost and Stolen
Securities 24
SECTION 308. Payment of Interest; Interest Rights Reserved 25
SECTION 309. Persons Deemed Owners 27
SECTION 310. Cancellation 27
SECTION 311. Computation of Interest 27
SECTION 312. Global Securities 28
ARTICLE FOUR SATISFACTION AND DISCHARGE 28
SECTION 401. Satisfaction and Discharge of Indenture 28
SECTION 402. Application of Trust Money 30
SECTION 403. Satisfaction, Discharge and Defeasance of
Securities of any Series 30
ARTICLE FIVE REMEDIES 32
SECTION 501. Events of Default 32
SECTION 502. Acceleration of Maturity; Rescission and
Annulment 33
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee 34
SECTION 504. Trustee May File Proofs of Claim 35
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities 35
SECTION 506. Application of Money Collected 35
SECTION 507. Limitation on Suits 36
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest 37
SECTION 509. Restoration of Rights and Remedies 37
SECTION 510. Rights and Remedies Cumulative 37
SECTION 511. Delay or Omission Not Waiver 38
SECTION 512. Control by Holders 38
SECTION 513. Waiver of Past Defaults 38
SECTION 514. Undertaking for Costs 38
ARTICLE SIX THE TRUSTEE 39
SECTION 601. Certain Duties and Responsibilities 39
SECTION 602. Notice of Defaults 40
SECTION 603. Certain Rights of Trustee 40
SECTION 604. Not Responsible for Recitals or Issuance of
Securities 41
SECTION 605. May Hold Securities 41
SECTION 606. Money Held in Trust 42
SECTION 607. Compensation and Reimbursement 42
SECTION 608. Disqualification; Conflicting Interests 42
SECTION 609. Corporate Trustee Required; Eligibility 42
SECTION 610. Resignation and Removal; Appointment of
Successor Trustee 43
SECTION 611. Acceptance of Appointment by Successor 44
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business 45
SECTION 613. Preferential Collecting of Claims Against
Company 45
SECTION 614. Authenticating Agents 49
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY 50
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders 50
SECTION 702. Preservation of Information; Communications
to Holders 51
SECTION 703. Reports by Trustee 52
SECTION 704. Reports 53
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
SALE OR LEASE 54
SECTION 801. Company or Guarantor May Consolidate Etc.,
Only on Certain Terms 54
SECTION 802. Successor Corporation to be Substituted 55
ARTICLE NINE SUPPLEMENTAL INDENTURES 55
SECTION 901. Supplemental Indentures without Consent of
Holders 55
SECTION 902. Supplemental Indentures with Consent of
Holders 56
SECTION 903. Execution of Supplemental Indentures 57
SECTION 904. Effect of Supplemental Indentures 57
SECTION 905. Conformity with Trust Indenture Act 57
SECTION 906. Reference in Securities to Supplemental
Indentures 58
ARTICLE TEN COVENANTS 58
SECTION 1001. Payment of Principal, Premium, if any, and
Interest 58
SECTION 1002. Maintenance of Office or Agency 58
SECTION 1003. Money for Securities Payments to Be Held in
Trust 59
SECTION 1004. Limitation on Liens 60
SECTION 1005. Limitation on Sale and Lease-Back
Transactions 63
SECTION 1006. Statement by Officers as to Default 63
SECTION 1007. Waiver of Certain Covenants 63
SECTION 1008. Further Assurances 64
SECTION 1009. Payment of Additional Amounts 64
SECTION 1010. Copies Available to Holders 66
ARTICLE ELEVEN REDEMPTION OF SECURITIES 66
SECTION 1101. Applicability of Article 66
SECTION 1102. Election to Redeem; Notice to Trustee 66
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed 66
SECTION 1104. Notice of Redemption 67
SECTION 1105. Deposit of Redemption Price 68
SECTION 1106. Securities Payable on Redemption Date 68
SECTION 1107. Securities Redeemed in Part 68
SECTION 1108. Optional Redemption in the Event of Change in
Taxing Jurisdiction Tax Treatment 69
ARTICLE TWELVE SINKING FUNDS 69
SECTION 1201. Applicability of Article 69
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities 70
SECTION 1203. Redemption of Securities for Sinking Fund 70
ARTICLE THIRTEEN MEETINGS OF HOLDERS OF SECURITIES 71
SECTION 1301. Purposes of Meetings 71
SECTION 1302. Place of Meetings 71
SECTION 1303. Voting at Meetings 72
SECTION 1304. Voting Rights, Conduct and Adjournment 72
SECTION 1305. Revocation of Consent by Holders 73
ARTICLE FOURTEEN GUARANTEE OF SECURITIES 73
SECTION 1401. Applicability of Article; Unconditional
Guarantee 73
SECTION 1402. Waiver of Notice and Demand 74
SECTION 1403. Guarantor Obligations Not Affected 74
SECTION 1404. Execution of Guarantee 75
SECTION 1405. Subrogation 75
SECTION 1406. Independent Obligations 76
ARTICLE FIFTEEN MISCELLANEOUS 76
SECTION 1501. Consent to Jurisdiction; Appointment of Agent
to Accept Service of Process 76
SECTION 1502. Counterparts 78
? NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE,
BE DEEMED TO BE A PART OF THE INDENTURE.
105689.1
49 6 iv
EXHIBIT 4.9
YORKSHIRE POWER FINANCE LIMITED, as Issuer
and
YORKSHIRE POWER GROUP LIMITED, as Guarantor
and
THE BANK OF NEW YORK,
as Trustee, Principal Paying Agent,
Registrar and Transfer Agent
and
BANQUE GENERALE DU LUXEMBOURG S.A.,
as Paying Agent and Transfer Agent
6.154% Series A Senior Notes due 2003
6.154% Series B Senior Notes due 2003
First Supplemental Indenture
Dated as of February 25, 1998
FIRST SUPPLEMENTAL INDENTURE, dated as of
February 25, 1998 (this "First Supplemental Indenture"), among
YORKSHIRE POWER FINANCE LIMITED, a limited liability company
organized under the laws of the Cayman Islands, as issuer (the
"Company"), YORKSHIRE POWER GROUP LIMITED, a private limited
company incorporated under the laws of England and Wales, as guarantor
(the "Guarantor"), THE BANK OF NEW YORK, as Trustee, Principal
Paying Agent, Registrar and Transfer Agent under the Original Indenture
referred to below (the "Trustee"), and BANQUE GENERALE DU
LUXEMBOURG S.A., as Paying and Transfer Agent under the Original
Indenture.
WITNESSETH:
WHEREAS, each of the Company and the Guarantor has
heretofore executed and delivered to the Trustee an indenture dated as of
February 1, 1998 (hereinafter called the "Original Indenture"), to provide
for the issuance from time to time of certain of its unsecured debentures,
notes or other evidences of indebtedness (herein called the "Securities"),
the form and terms of which are to be established as set forth in Sections
201 and 301 of the Original Indenture;
WHEREAS, Section 901 of the Original Indenture
provides, among other things, that the Company, the Guarantor and the
Trustee may enter into indentures supplemental to the Original Indenture
for, among other things, the purpose of establishing the form and terms of
the Securities of any series as permitted by Sections 201 and 301 of the
Original Indenture and of appointing an Authenticating Agent with respect
to the Securities of any series;
WHEREAS, the Company desires to create a series of the
Securities in an aggregate principal amount of $350,000,000 to be
designated the "6.154% Series A Senior Notes due 2003" and a series of
the Securities in an aggregate principal amount of $350,000,000 to be
designated the "6.154% Series B Senior Notes due 2003", and all action on
the part of the Company necessary to authorize the issuance of these
Securities under the Original Indenture and this First Supplemental
Indenture has been duly taken; and
WHEREAS, all acts and things necessary to make such
Securities, when executed by the Company and authenticated and delivered
by the Trustee as in the Original Indenture provided, the valid and binding
obligations of the Company and to constitute these presents a valid and
binding supplemental indenture and agreement according to its terms, have
been done and performed;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL
INDENTURE WITNESSETH:
That in consideration of the premises and of the acceptance
and purchase of the 2003 Securities (hereinafter defined) by the holders
thereof and of the acceptance of this trust by the Trustee, each of the
Company and the Guarantor covenants and agrees with the Trustee, for the
equal benefit of holders of the 2003 Securities, as follows:
ARTICLE ONE
Definitions
The use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture and the forms of Securities attached hereto as Exhibits A and B,
respectively. In addition, for all purposes of this First Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise expressly requires, the following terms shall have the respective
meanings assigned to them as follows and shall be construed as if defined in
Article One of the Original Indenture:
"Book-Entry Depositary" means The Bank of New York as
designated by the Company in the Deposit Agreement until a successor
shall have become such pursuant to the applicable provisions of the Deposit
Agreement, and thereafter "Book-Entry Depositary" shall mean such
successor Book-Entry Depositary or its nominee or the custodian of either.
"Definitive Registered 2003 Securities" means 2003
Securities substantially in the form of Exhibit B to this First Supplemental
Indenture.
"Deposit Agreement" means the Deposit Agreement, dated
as of February 1, 1998, among the Company, the Book-Entry Depositary
and the holders and beneficial owners from time to time of interests in the
Book-Entry Interests issued thereunder.
"DTC" means The Depository Trust Company, New York,
New York, or its successors.
"Exchange Offer" means the offer that may be made
pursuant to the Registration Rights Agreement by the Company to
exchange Series B Securities and the Guarantee of the Series B Securities
for the Series A Securities and the Guarantee of the Series A Securities.
"Global 2003 Securities" means Global Bearer Securities,
evidencing the 2003 Securities, issued to the Book-Entry Depositary
substantially in the form of Exhibit A to this First Supplemental Indenture.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated February 25, 1998 among the Company, the
Guarantor and the Initial Purchasers named therein as such agreement may
be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities
Act, as such Regulation may be amended from time to time, or under any
similar rules or regulations hereafter adopted by the Commission.
"Restricted Securities Legend" means a legend substantially
in the form of the legend contained in the form of Global 2003 Securities
set forth in Exhibit A hereto.
"Restricted Security" means 2003 Securities that bear or are
required to bear the Restricted Securities Legend.
"Rule 144A" means Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or under any similar rules or
regulation hereafter adopted by the Commission.
"Series A Securities" means the Company's 6.154% Series
A Senior Notes due 2003, as authenticated and issued under this Indenture.
"Series B Securities" means the Company's 6.154% Series
B Senior Notes due 2003, as authenticated and issued under this Indenture.
"2003 Securities" means, collectively, the Series A
Securities and the Series B Securities.
ARTICLE TWO
Terms and Issuance of the 2003 Securities
SECTION 201. Issue of Securities. A series of
Securities which shall be designated the "6.154% Series A Senior Notes
due 2003" and a series of Securities shall be designated the "6.154% Series
B Senior Notes due 2003" each shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture
and this First Supplemental Indenture (including the forms of 2003
Securities set forth in Exhibits A and B hereto). The aggregate principal
amount of the 2003 Securities which may be authenticated and delivered
under the First Supplemental Indenture shall not, except as permitted by
the provisions of the Original Indenture, exceed $350,000,000.
SECTION 202. Form of 2003 Securities;
Incorporation of Terms. The forms of the Global 2003 Securities and the
Definitive Registered 2003 Securities shall be substantially in the forms of
Exhibits A and B, respectively, attached hereto, the terms of which are
herein incorporated by reference and which are part of this First
Supplemental Indenture. Series A Securities offered and sold in their initial
distribution in reliance on Rule 144A shall initially be issued in the form of
one or more separate Global 2003 Securities (each, a "Rule 144A Global
Security"). Series A Securities offered and sold in their initial
distribution in
reliance on Regulation S shall initially be issued in the form of one or more
separate Global 2003 Securities (each, a "Regulation S Global Security").
SECTION 203. Limitation on Liens. The covenant
provided by Section 1004 of the Original Indenture shall be applicable to
the 2003 Securities.
SECTION 204. Limitation on Sale and Lease-Back
Transactions. The covenant provided by Section 1005 of the Original
Indenture shall be applicable to the 2003 Securities.
SECTION 205. Guarantee. The Guarantee provided
by Article Fourteen of the Original Indenture shall be applicable to the
2003 Securities.
SECTION 206. Place of Payment. The Place of
Payment in respect of the 2003 Securities will be in The City of New York,
initially the Corporate Trust Office of The Bank of New York, and, for so
long as the 2003 Securities are listed on the Luxembourg Stock Exchange,
in Luxembourg, initially the corporate trust office of Banque Generale du
Luxembourg S.A., which at the date hereof, is located at 50 Avenue J. F.
Kennedy, L-2951 Luxembourg.
SECTION 207. Issuance of Global 2003 Securities.
Each of the Series A Securities and the Series B Securities shall be issued
as one or more Global 2003 Securities and delivered by the Trustee to the
Book-Entry Depositary, as the Holder thereof, or a nominee or custodian
therefor, to be held by the Book-Entry Depositary pursuant to the Deposit
Agreement. Definitive Registered 2003 Securities shall only be issued by
the Company in exchange for the Global 2003 Securities in the
circumstances set forth in the Global 2003 Securities.
SECTION 208. Transfer Restrictions; Exchange
Offer.
(a) Transfer Restrictions. Except as permitted by
subsection (b) of this Section 208 or as otherwise determined by the
Company as set forth below in this subsection (a), the 2003 Securities shall
bear the Restricted Securities Legend and may not be transferred except in
compliance with the Restricted Securities Legend unless otherwise
determined by the Company in accordance with applicable law. Unless
with respect to the whole or any portion of any Restricted Security the
Company determines otherwise in accordance with applicable law, the
Restricted Securities Legend borne by such Restricted Security shall be
removed by the Company (i) in the case of any Rule 144A Global Security
or any Definitive Registered 2003 Security issued in exchange for an
interest therein, upon presentation to the Trustee of such Restricted
Security by the Holder thereof at any time on or after the occurrence of the
"Resale Restriction Termination Date" on such Legend and (ii) in the case
of any Regulation S Global Security or any Definitive Registered 2003
Security issued in exchange for an interest therein, upon presentation to the
Trustee of such Restricted Security by the Holder thereof at any time on or
after the expiration of the "restricted period" (within the meaning of
Regulation S) with respect to any such Security shall have occurred.
If a holder of a beneficial interest in a Rule 144A Global
Security wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a
Regulation S Global Security, or if a holder of a beneficial interest in a
Regulation S Global Security wishes at any time to transfer such interest to
a Person who wishes to take delivery thereof in the form of a beneficial
interest in a Rule 144A Global Security, upon receipt by the Trustee of (A)
written instructions given in accordance with the rules and procedures of
DTC (together with, as applicable, the rules and procedures of The
Euroclear System and Cedel Bank, the "Applicable Procedures") from the
applicable Participant directing the Book-Entry Depositary to cause to be
credited to another account of a Participant a beneficial interest in such
Regulation S Global Security or Rule 144A Global Security (as the case
may be) equal to that of the beneficial interest in such Rule 144A Global
Security or Regulation S Global Security (as the case may be) to be so
transferred, (B) a written order given in accordance with the Applicable
Procedures containing information regarding such other account, as well as
the account of The Euroclear System or Cedel Bank (as the case may be)
for which such other account is held, to be credited with, and the account
of such applicable Participant to be debited for, such beneficial interest and
(C) a certificate satisfactory to the Company, the Guarantor and the
Trustee, as to such transfer's compliance with the registration requirements
of the Securities Act, given by the transferor of such beneficial interest, the
Trustee shall (1) reduce or increase (as the case may be) the principal
amount of such Rule 144A Global Security, and increase or reduce (as the
case may be) the principal amount of such Regulation S Global Security, in
each case by an amount equal to the principal amount of the beneficial
interest in such Rule 144A Global Security or Regulation S Global Security
(as the case may be) to be so transferred, as evidenced by appropriate
endorsements on Schedule A to each such Global Security, (2) instruct the
Book-Entry Depositary to make a corresponding reduction or increase (as
the case may be) to the Book-Entry Interests relating to such Global
Security and (3) cause the Book-Entry Depositary to instruct DTC to
credit and debit such beneficial interests to the respective accounts
specified in the instructions referred to above.
(b) Exchange of Series A Securities for Series B
Securities. The Company shall issue and the Trustee shall authenticate
Series B Securities in exchange for Series A Securities accepted for
exchange in the Exchange Offer as follows:
The Company shall present the Trustee with an Officers'
Certificate certifying (i) that, upon issuance of the Series B
Securities, the transactions contemplated by the Exchange
Offer have been consummated and (ii) the aggregate
principal amount of Series A Securities properly tendered in
the Exchange Offer.
The Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (A) to the effect that the Series B Securities
have been registered under the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (B) with respect to the matters
set forth in Section 3(m) of the Registration Rights Agreement and (iii) a
Company Order, shall (A) authenticate 2003 Global Securities representing
the Series B Securities in an aggregate principal amount equal to the
aggregate principal amount of Series A Securities represented by a 2003
Global Security indicated in such Officers' Certificate as having been
properly tendered with terms substantially identical to such Series A
Securities, and substantially in the form of Exhibit A hereto, except that
such Series B Securities (x) shall not contain the Restricted Securities
Legend and (y) will not provide for any increase in the interest rate thereon
under the circumstances set forth in such Series A Securities and (B)
deliver such Global 2003 Securities representing such Series B Securities
to the Book-Entry Depositary in exchange for such Global 2003 Security
representing such Series A Securities pursuant to the terms of the Deposit
Agreement.
Notwithstanding anything contained in the Indenture, the
Series A Securities and the Series B Securities will vote and consent
together on all matters as one class and will not have the right to vote or
consent as a separate class on any matter.
SECTION 209. Regular Record Date for the 2003
Securities. The Regular Record Date for the 2003 Securities shall be 15
calendar days immediately prior to each Interest Payment Date.
ARTICLE THREE
Authenticating Agent; Book-Entry Depositary
SECTION 301. Authenticating Agent; Book-Entry
Depositary. The Bank of New York, a New York banking corporation, and
its successors are hereby appointed Authenticating Agent and Book-Entry
Depositary with respect to the 2003 Securities.
ARTICLE FOUR
Miscellaneous
SECTION 401. Execution of Supplemental
Indenture. This First Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this First Supplemental Indenture forms
a part thereof.
SECTION 402. Conflict with Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this First Supplemental Indenture
by any of the provisions of the Trust Indenture Act, such required
provision shall control.
SECTION 403. Effect of Headings. The Article and
Section headings herein are for convenience only and shall not affect the
construction hereof.
SECTION 404. Successors and Assigns. All
covenants and agreements in this First Supplemental Indenture by each of
the Company or the Guarantor shall bind its successors and assigns,
whether so expressed or not.
SECTION 405. Separability Clause. In case any
provision in this First Supplemental Indenture or in the 2003 Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 406. Benefits of First Supplemental
Indenture. Nothing in this First Supplemental Indenture or in the 2003
Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this First
Supplemental Indenture.
SECTION 407. Execution and Counterparts. This
First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereof have caused
this First Supplemental Indenture to be duly executed by their respective
officers, directors or signatories duly authorized thereto, all as of the day
and year first above written.
YORKSHIRE POWER
FINANCE LIMITED
By
Title:
YORKSHIRE POWER
GROUP LIMITED
By
Title:
THE BANK OF NEW
YORK,
as Trustee, Principal Paying
Agent, Security Registrar and
Transfer Agent
By
Title:
BANQUE GENERALE DU
LUXEMBOURG S.A., as
Paying Agent and Transfer
Agent
By
Title:
EXHIBIT A
{FORM OF FACE OF GLOBAL 2003 SECURITY}
[If the Global 2003 Security is a Restricted Security,
insert the following legend---THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH YORKSHIRE POWER
GROUP LIMITED (THE "GUARANTOR"), YORKSHIRE POWER
FINANCE LIMITED (THE "ISSUER") OR ANY AFFILIATE OF
THE GUARANTOR OR THE ISSUER WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
(OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY
RULE 144(k), OR ANY SUCCESSOR PROVISION THEREOF,
UNDER THE SECURITIES ACT) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE GUARANTOR OR
THE ISSUER, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-US
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
GUARANTOR'S, THE ISSUER'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AS TO
COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE OR SUCH EARLIER TIME AS DETERMINED BY THE
ISSUER IN ACCORDANCE WTH APPLICABLE LAW.
EACH HOLDER BY ITS ACCEPTANCE OF THIS
SECURITY SHALL BE DEEMED TO HAVE AGREED TO BE
BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT.]
THIS SECURITY IS A GLOBAL BEARER SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS HELD BY A BOOK-ENTRY DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES HELD BY
A PERSON OTHER THAN THE BOOK-ENTRY DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS GLOBAL BEARER SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
BOOK-ENTRY DEPOSITARY TO THE ISSUER OR ITS AGENT FOR
EXCHANGE OR PAYMENT, AND ANY DEFINITIVE REGISTERED
SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY THE BOOK-ENTRY DEPOSITARY, ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
BEARER HEREOF, THE BOOK-ENTRY DEPOSITARY, HAS AN
INTEREST HEREIN.
YORKSHIRE POWER FINANCE LIMITED
6.154% [Series A] [Series B] Senior Notes due 2003
No. $ ?
CUSIP
No.:________
YORKSHIRE POWER FINANCE LIMITED, a limited
liability company incorporated under the laws of the Cayman Islands
(herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to the bearer upon surrender hereof, the principal
sum of __________ Dollars* on ________________, and to pay interest
thereon from _____________, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
____________ and ____________ in each year, commencing
________________, 199__, at the rate per annum provided in the title
hereof, until the principal hereto is paid or made available for payment[;
provided, however, that if an Event Date (as defined in the Registration
Rights Agreement) occurs, interest will accrue on this Security at a rate of
___% per annum from and including the day following the applicable Event
Date to and including the date on which the event that has resulted in
Additional Interest (as defined in the Registration Rights Agreement) being
required to be paid has been cured pursuant to the terms of the
Registration Rights Agreement]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided
in such Indenture, be paid to the bearer on such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the bearer on such Interest Payment Date and may
be paid to the bearer hereof at the time of payment of such Defaulted
Interest or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of
this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
All payments in respect of this Security and all payments
made pursuant to the Guarantee of this Security shall be made in
immediately available funds at or through the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The
City of New York, and for so long as this Security shall be listed on the
Luxembourg Stock Exchange, in Luxembourg, in such coin or currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debt.
All payments of principal of, and premium, if any, and
interest in respect of this Security and all payments made pursuant to the
Guarantee of this Security shall be made free and clear of, and without
withholding or deduction for or on account of any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by or within a Taxing Jurisdiction or
by or within any political subdivision thereof or any authority therein or
thereof having power to tax ("Gross-Up Taxes"), unless such withholding
or deduction is required by law. In the event of any such withholding or
deduction, the Company shall pay to the Holder such additional amounts
("Additional Amounts") as will result in the payment to such Holder of the
amount that would otherwise have been due to such Holder in the absence
of such withholding or deduction, except that no such Additional Amounts
shall be payable:
(a) to, or to a Person on behalf of, a Holder who is liable
for such Gross-Up Taxes in respect of this Security or the
Guarantee of this Security by reason of such Holder or beneficial
owner having some connection with the relevant Taxing
Jurisdiction (including being a citizen or resident or national of, or
carrying on a business or maintaining a permanent establishment in,
or being physically present in, such Taxing Jurisdiction) other than
the mere holding of this Security or the receipt of principal of, and
premium, if any and interest in respect thereof or in respect of the
Guarantee of this Security;
(b) to, or to a Person on behalf of, a Holder who presents
this Security (where presentation is required) for payment more
than 30 days after the Relevant Date except to the extent that the
Holder would have been entitled to such Additional Amounts on
presenting this Security for payment on the last day of such period
of 30 days;
(c) to, or to a Person on behalf of, a Holder who presents
this Security (where presentation is required) in a Taxing
Jurisdiction;
(d) to, or to a Person on behalf of, a Holder who would not
be liable or subject to the withholding or deduction by making a
declaration of nonresidence or similar claim for exemption to the
relevant tax authority; or
(e) to, or to a Person on behalf of, a Holder of a Registered
Security that is not a Global Security issued pursuant to the request
of owners of interests representing a majority in Outstanding
principal amount of such Securities following and during the
continuance of an Event of Default if such Holder (or any
predecessor Holder) was one of such owners requesting that such
Registered Securities be so issued.
Such Additional Amounts will also not be payable where,
had the beneficial owner of the Security (or any interest therein) been the
Holder of the Security, he would not have been entitled to payment of
Additional Amounts by reason of any one or more of clauses (a) through
(e) above. If the Company or the Guarantor, as applicable, shall determine
that Additional Amounts will not be payable because of the immediately
preceding sentence, the Company or the Guarantor, as applicable, will
inform such Holder promptly after making such determination setting forth
the reason(s) therefor.
"Relevant Date" means whichever is the later of (i) the date
on which such payment first becomes due and (ii) if the full amount payable
has not been received in The City of New York by the Book-Entry
Depositary of the Trustee on or prior to such due date, the date on which,
the full amount having been so received, notice to that effect shall have
been given to the bearer hereof in accordance with the Indenture.
References to principal of, and premium or interest in
respect of, this Security or any payments pursuant to the Guarantee of this
Security shall be deemed to include any Additional Amounts which may be
payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing payment of
the Gross-Up Taxes. Copies of such receipts shall be made available to the
Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed authorized signatory of the Company duly
authorized.
YORKSHIRE POWER
FINANCE
LIMITED
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
THE BANKOF NEW
YORK,
as Trustee
By:_________________________
Authorized
Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
6.154% [Series A] [Series B] Senior Notes due 2003
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of February 1, 1998
(herein called the "Original Indenture"), among the Company, Yorkshire
Power Group Limited, as guarantor (the "Guarantor"), The Bank of New
York, as trustee, principal paying agent, registrar and transfer agent (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and Banque Generale du Luxembourg S.A., as paying and
transfer agent (the "Paying and Transfer Agent"), as supplemented by the
First Supplemental Indenture, dated as of February 25, 1998 (together with
the Original Indenture and any other supplements thereto, the "Indenture"),
among the Company, the Guarantor, the Trustee and the Paying and
Transfer Agent to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee, the Paying and Transfer Agent and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount to $350,000,000.
The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Securities of
this series being redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal of and interest on the Securities
of this series being redeemed (excluding the portion of any such interest
accrued to the date of redemption) discounted (for the purpose of
determining present value) to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at a
discount rate equal to the Treasury Yield plus ten (10) basis points, plus, in
either case, accrued interest thereon to the date of redemption.
"Treasury Yield" means, with respect to any redemption
date, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of such Securities of this
series to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Securities of this series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption
date, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for US Government Securities" or (ii) if
such release (or any successor release) is not published or does not contain
such prices on such business day, the Reference Treasury Dealer Quotation
for such redemption date.
"Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect
to the Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Company by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date).
"Reference Treasury Dealer" means a primary United States
government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date
fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities of this series for redemption will be made
by the Trustee in any manner the Trustee deems fair and appropriate and
that complies with applicable legal and securities exchange requirements.
Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof called for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.
In the event of redemption of this Security in part only, a
new Security of this series and of like tenor for the unredeemed portion
hereof will be issued to the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after such declaration of
acceleration with respect to Securities of any series has been made, but
before a judgment or decree for payment of money has been obtained by
the Trustee as provided in the Indenture, if all Events of Default with
respect to Securities of this series have been cured or waived (other than
the non-payment of principal of the Securities which has become due solely
by reason of such declaration of acceleration) then such declaration of
acceleration and its consequences shall be automatically annulled and
rescinded.
The Securities of this Series are subject to redemption in
whole but not in part upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at a price equal to the outstanding
principal amount thereof, together with Additional Amounts, if any, and
accrued interest, if any, to the Redemption Date if, (a) the Company or the
Guarantor satisfies the Trustee prior to the giving of such notice that it has
or will become obligated to pay Additional Amounts as a result of either (i)
any change in, or amendment to, the laws or regulations of a Taxing
Jurisdiction, or any change in the application or interpretation of such laws
or regulations, which change or amendment becomes effective on or after
February 19, 1998 or (ii) the issuance of Definitive Registered 2003
Securities pursuant to any of clauses (a), (b) or (d) of the third following
paragraph and (b) such obligation cannot be avoided by the Company or
the Guarantor taking reasonable measures available to it, subject, as
provided in the Indenture, to the delivery by the Company or the Guarantor
of an Officers' Certificate stating that such obligation to pay Additional
Amounts cannot be avoided by the Company or the Guarantor taking
reasonable measures available to it.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or
any supplemental indenture or the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
premium, if any and interest in respect of this Security and all payments
made pursuant to the Guarantee of this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
This Security shall be exchangeable, in whole or, in the case
of clause (d) below, in part as provided in the Indenture, for Definitive
Registered 2003 Securities registered in the names of Persons other than
the Book-Entry Depositary with respect to such series or its nominee only
as provided in this paragraph. This Security shall be so exchangeable if (a)
DTC notifies the Company and the Book-Entry Depositary that it is
unwilling or unable to continue to hold the Book-Entry Interests or at any
time ceases to be a "clearing agency" registered as such under the
Exchange Act and in either case, a successor is not appointed by the
Company within 120 days, (b) the Book-Entry Depositary for the
Securities of this series notifies the Company that it is unwilling or unable
to continue as Book-Entry Depositary with respect to this Security and no
successor is appointed within 120 days, (c) the Company executes and
delivers to the Trustee an Officers' Certificate providing that this Security
shall be so exchangeable, (d) there shall have occurred and be continuing
an Event of Default with respect to the Securities of this series and the
Holder, in such circumstance, shall have requested in writing that this
Security be exchanged for one or more Definitive Registered 2003
Securities of this series or (e) while this Security is subject to the transfer
restrictions set forth in the Restricted Securities Legend hereon, the Book-
Entry Interests cease to be eligible for DTC services because this Security
is neither (i) rated in one of the top four categories by a nationally
recognized statistical rating organization nor (ii) included within a self-
regulatory organization system approved by the Commission for the
reporting of quotations and trade information of securities eligible for trade
pursuant to Rule 144A, such as the PORTAL system. Securities so issued
in exchange for this Security shall be of the same series, having the same
interest rate, if any, and maturity and having the same terms as this
Security, in authorized denominations and in the aggregate having the same
principal amount as this security and registered in such names as the Book-
Entry Depositary for this Security shall direct.
The bearer of this Security shall be treated as the owner of it
for all purposes, subject to the terms of the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such exchange, but
the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series
and may otherwise deal with the Company, the Guarantor or their
respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee, incorporator or
Affiliate of the Company or the Guarantor under the Securities of this
series or the Indenture or for any claim based on, in respect of or by reason
of, such obligations of their creation. Each Holder of the Securities of this
series by accepting Securities this series waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities of this series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
will cause CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No
representation is made as to the accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.
This Security shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a private limited company duly incorporated and
existing under the laws of England and Wales (the "Guarantor", which term
includes any successor Person under the Indenture referred to in the
Security on which this notation is endorsed), hereby fully and
unconditionally guarantees to the Holder of the accompanying Security
issued by Yorkshire Power Finance Limited (the "Company"), pursuant to
the terms of the Guarantee contained in Article Fourteen of the Indenture,
the due and punctual payment of the principal of, and premium, if any, and
interest in respect of this Security (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable,
whether at Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of this Security and
the Indenture. In case of the failure of the Company punctually to pay any
such principal, premium, if any, or interest, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the same shall
become due and payable as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.
THIS GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this notation of the Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its
authorized officers.
YORKSHIRE POWER GROUP
LIMITED
By:___________________________
____________
Authorized Signatory
SCHEDULE A
SCHEDULE OF ADJUSTMENTS
The initial aggregate principal amount of Securities
evidenced by the Certificate to which this Schedule is attached is
__________. The notations on the following table evidence decreases and
increases in the aggregate principal amount of Securities evidenced by
such Certificate.
Date of Decrease in Increase in Aggregate Principal
Notation by
Adjustment Aggregate Aggregate Amount of Securities
Security Registrar
Principal Principal Remaining After Such
Amount of Amount of Decrease or Increase
Securities Securities
EXHIBIT B
[FORM OF FACE OF DEFINITIVE REGISTERED 2003 SECURITY]
[If the Definitive Registered 2003 Security is a Restricted Security,
insert the Restricted Securities Legend set forth in Exhibit A hereto.]
YORKSHIRE POWER FINANCE LIMITED
6.154% [Series A] [Series B] Senior Notes due 2003
No. _______________
$___________
________
CUSIP
No.:__________
YORKSHIRE POWER FINANCE LIMITED, a limited
liability company incorporated under the laws of the Cayman Islands
(herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to[name of registered owner], or its registered
assigns, the principal sum of _______________ Dollars on
_______________________________, and to pay interest thereon from
____________________, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on
__________ and _____________ in each year, commencing
_______________, 199_, at the rate per annum provided in the title
hereof, until the principal hereof is paid or made available for payment;
[provided, however, that if an Event Date (as defined in the Registration
Rights Agreement) occurs, interest will accrue on this Security at a rate of
___% per annum from and including the day following the applicable Event
Date to and including the date on which the event that has resulted in
Additional Interest (as defined in the Registration Rights Agreement) being
required to be paid has been cured pursuant to the terms of the
Registration Rights Agreement]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided
in such Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the fifteenth
day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Person in whose name this
Security (or one or more Predecessor Securities) is registered on such
Regular Record Date and may be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
All payments in respect of this Security and all payments
made pursuant to the Guarantee of this Security shall be made in
immediately available funds at or through the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The
City of New York, and for so long as this Security shall be listed on the
Luxembourg Stock Exchange, in Luxembourg, in such coin or currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debt; provided, however, that at the
option of the Company, payment of interest may be made by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Security Register.
All payments of principal of, premium, if any, and interest in
respect of this Security and all payments made pursuant to the Guarantee
of this Security shall be made free and clear of, and without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within a Taxing Jurisdiction or by or
within any political subdivision thereof or any authority therein or thereof
having power to tax ("Gross-Up Taxes"), unless such withholding or
deduction is required by law. In the event of any such withholding or
deduction, the Company shall pay to the Holder such additional amounts
("Additional Amounts") as will result in the payment to such Holder of the
amount that would otherwise have been due to such Holder in the absence
of such withholding or deduction, except that no such Additional Amounts
shall be payable:
(a) to, or to a Person on
behalf of, a Holder who is liable for such Gross-Up Taxes in respect
of this Security or the Guarantee of this Security by reason of such
Holder having some connection with the relevant Taxing
Jurisdiction (including a citizen or resident or national of, or
carrying on a business or maintaining a permanent establishment in,
or being physically present in, such Taxing Jurisdiction) other than
the mere holding of this Security or the receipt of principal of,
premium, if any, and interest in respect thereof or in respect of the
Guarantee of this Security;
(b) to, or to a Person on
behalf of, a Holder who presents this Security (where presentation
is required) for payment more than 30 days after the Relevant Date
except to the extent that the Holder would have been entitled to
such Additional Amounts on presenting this Security for payments
on the last day of such period of 30 days;
(c) to, or to a Person on
behalf of, a Holder who presents a Security (where presentation is
required) in a Taxing Jurisdiction;
(d) to, or to a Person on
behalf of, a Holder who would not be liable or subject to the
withholding or deduction by making a declaration of nonresidence
or similar claim for exemption to the relevant tax authority; or
(e) to, or to a Person on
behalf of, a Holder of a definitive Registered Security issued
pursuant to the request of owners of interests representing a
majority in outstanding principal amount in the Book-Entry Interest
following and during the continuance of an Event of Default if such
Holder (or any predecessor Holder) was one of such owners
requesting that definitive Registered Securities be so issued.
Such Additional Amounts will also not be payable where,
had the beneficial owner of the Security (or any interest therein) been the
Holder of the Security, he would not have been entitled to payment of
Additional Amounts by reason of any one or more of clauses (a) through
(e) above. If the Company or the Guarantor, as applicable, shall determine
that Additional Amounts will not be payable because of the immediately
preceding sentence, the Company or the Guarantor, as applicable, will
inform such Holder promptly after making such determination setting forth
the reason(s) therefor.
"Relevant Date" means whichever is the later of (i) the date
on which such payment first becomes due and (ii) if the full amount payable
has not been received in The City of New York by the Trustee or the
Holder on or prior to such due date, the date on which, the full amount
having been so received, notice to that effect shall have been given to the
Holder in accordance with this Indenture.
References to principal of, and premium or interest in
respect of, this Security or payments under the Guarantee of this Security
shall be deemed to include to any Additional Amounts which may be
payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing payment of
Gross-Up Taxes. Copies of such receipts shall be made available to the
Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed by an officer or director of the Company
duly authorized.
YORKSHIRE POWER
FINANCE
LIMITED
By
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
THE BANK OF NEW
YORK,
as Trustee
By:__________________________
Authorized Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
___% [Series A] [Series B] Senior Notes due 2003
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of February 1, 1998
(herein called the "Original Indenture"), among the Company, Yorkshire
Power Group Limited, as guarantor (the "Guarantor"), The Bank of New
York, as trustee principal paying agent, register and transfer agent (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and Banque Generale du Luxembourg S.A., as paying and
transfer agent (the "Paying and Transfer Agent"), as supplemented by the
First Supplemental Indenture, dated as of February 25, 1998 (together with
the Original Indenture and any other supplements thereto, the "Indenture")
among the Company, the Guarantor, the Trustee and the Paying and
Transfer Agent to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee, the Paying and Transfer Agent and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount to $350,000,000.
The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Securities of
this series being redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal of and interest on the Securities
of this series being redeemed (excluding the portion of any such interest
accrued to the date of redemption) discounted (for the purpose of
determining present value) to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at a
discount rate equal to the Treasury Yield plus ten (10) basis points, plus, in
either case, accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption
date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of such Securities of this
series to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Securities of this series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption
date, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for US Government Securities" or (ii) if
such release (or any successor release) is not published or does not contain
such prices on such business day, the Reference Treasury Dealer Quotation
for such redemption date.
"Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with
respect to the Reference Treasury Dealer and any redemption date, the
average, as determined by the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date).
"Reference Treasury Dealer" means a primary US
government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date
fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities for redemption will be made by the
Trustee in any manner the Trustee deems fair and appropriate and that
complies with applicable legal and securities exchange requirements.
Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof called for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.
In the event of redemption of this security in part only, a
new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after such declaration of
acceleration with respect to Securities of any series has been made, but
before a judgment or decree for payment of money has been obtained by
the Trustee as provided in the Indenture, if all Events of Default with
respect to Securities of this series have been cured or waived (other than
the nonpayment of principal of the Securities which has become due solely
by reason of such declaration of acceleration) then such declaration of
acceleration and its consequences shall be automatically annulled and
rescinded.
The Securities of this series are subject to redemption upon
not less than 30 nor more than 60 days' notice to the Holders of Securities
by first-class mail, at a price equal to the outstanding principal amount
thereof, together with Additional Amounts, if any, and accrued interest, if
any, to the Redemption Date if (a) the Company or the Guarantor satisfies
the Trustee prior to the giving of such notice that it has or will become
obligated to pay Additional Amounts as a result of either (i) any change in,
or amendment to, the laws or regulations of a Taxing Jurisdiction, or any
change in the application or interpretation of such laws or regulations,
which change or amendment becomes effective on or after February 19,
1998 or (ii) the issuance of definitive Registered Securities as a result of:
(A) DTC having notified the Company and the Book-Entry Depositary that
it was unwilling or unable to continue to hold the Book-Entry Interest or at
any time ceasing to be a "clearing agency" registered as such under the
Securities Exchange Act of 1934 and, in either case, a successor is not
being appointed by the Company within 120 days; (B) the Book-Entry
Depositary for the Securities of this series having notified the Company
that it was unwilling or unable to continue as Book-Entry Depositary with
respect to a Global security of this series and no successor Book-Entry
Depositary having been appointed by the Company within 120 days or (C)
an Event of Default with respect to the Securities of this series having
occurred and being continuing and a Holder, in such circumstance, having
requested in writing that a Global Bearer Security of this series be
exchanged for one or more definitive Registered Securities and (b) such
obligation cannot be avoided by the Company and the Guarantor taking
reasonable measures available to it, subject, as provided in the Indenture, to
the delivery by the Company or the Guarantor of an Officers Certificate
that such obligation referred to in (a) cannot be avoided by the Company or
the Guarantor taking reasonable measures available to it.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or
any supplemental indenture or the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest, if any, on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of, premium, if any, and interest, if any, on this Security are
payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series
and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee, incorporator or
Affiliate of the Company shall have any liability for any obligation of the
Company under the Securities of this series or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of the Securities of this series by accepting a
Security of this series waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities of
this series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
Customary abbreviations may be used in the name of a
Holder of a Securities of this series or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
will cause CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No
representation is made as to the accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.
This Security shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a company duly incorporated and existing under the
laws of England and Wales (the "Guarantor", which term includes any
successor Person under the Indenture referred to in the Security on which
this notation is endorsed), hereby fully and unconditionally guarantees to
the Holder of the accompanying Security issued by Yorkshire Power
Finance Limited (the "Company"), pursuant to the terms of the Guarantee
contained in Article Fourteen of the Indenture, the due and punctual
payment of the principal of, premium, if any, and interest in respect of this
Security (and any Additional Amounts payable in respect thereof), when
and as the same shall become due and payable, whether at Stated Maturity,
by declaration of acceleration, call for redemption or otherwise, in
accordance with the terms of this Security and the Indenture. In case of
the failure of the Company punctually to pay any such principal, premium,
if any, or interest, the Guarantor hereby agrees to cause any such payment
to be made punctually when and as the same shall become due and payable
as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.
THIS GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this notation of the Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its
authorized officers.
YORKSHIRE POWER GROUP
LIMITED
By:___________________________
____________
Authorized Signatory
? Reference is made to Schedule A attached hereto with respect to
decreases and increases in the aggregate principal amount of Securities
evidenced by this
Certificate.
1232
.continued from the preceding page
continued on the following page.
10
9
A - 15
A - 1
102978.6
B - 12
B - 1
102978.6
EXHIBIT 4.10
YORKSHIRE POWER FINANCE LIMITED, as Issuer
and
YORKSHIRE POWER GROUP LIMITED, as Guarantor
and
THE BANK OF NEW YORK,
as Trustee, Principal Paying Agent,
Registrar and Transfer Agent
and
BANQUE GENERALE DU LUXEMBOURG S.A.,
as Paying Agent and Transfer Agent
6.496% Series A Senior Notes due 2008
6.496% Series B Senior Notes due 2008
Second Supplemental Indenture
Dated as of February 25, 1998
SECOND SUPPLEMENTAL INDENTURE, dated as of
February 25, 1998 (this "Second Supplemental Indenture"), among
YORKSHIRE POWER FINANCE LIMITED, a limited liability company
organized under the laws of the Cayman Islands, as issuer (the
"Company"), YORKSHIRE POWER GROUP LIMITED, a private limited
company incorporated under the laws of England and Wales, as guarantor
(the "Guarantor"), THE BANK OF NEW YORK, as Trustee, Principal
Paying Agent, Registrar and Transfer Agent under the Original Indenture
referred to below (the "Trustee") and BANQUE GENERALE DU
LUXEMBOURG S.A., as Paying and Transfer Agent under the Original
Indenture.
WITNESSETH:
WHEREAS, each of the Company and the Guarantor has
heretofore executed and delivered to the Trustee an indenture dated as of
February 1, 1998, as supplemented (hereinafter called the "Original
Indenture"), to provide for the issuance from time to time of certain of its
unsecured debentures, notes or other evidences of indebtedness (herein
called the "Securities"), the form and terms of which are to be established
as set forth in Sections 201 and 301 of the Original Indenture;
WHEREAS, Section 901 of the Original Indenture
provides, among other things, that the Company, the Guarantor and the
Trustee may enter into indentures supplemental to the Original Indenture
for, among other things, the purpose of establishing the form and terms of
the Securities of any series as permitted by Sections 201 and 301 of the
Original Indenture and of appointing an Authenticating Agent with respect
to the Securities of any series;
WHEREAS, the Company desires to create a series of the
Securities in an aggregate principal amount of $300,000,000 to be
designated the "6.496% Series A Senior Notes due 2008" and a series of
the Securities in an aggregate principal amount of $300,000,000 to be
designated the "6.496% Series B Senior Notes due 2008", and all action on
the part of the Company necessary to authorize the issuance of these
Securities under the Original Indenture and this Second Supplemental
Indenture has been duly taken; and
WHEREAS, all acts and things necessary to make such
Securities, when executed by the Company and authenticated and delivered
by the Trustee as in the Original Indenture provided, the valid and binding
obligations of the Company and to constitute these presents a valid and
binding supplemental indenture and agreement according to its terms, have
been done and performed;
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL
INDENTURE WITNESSETH:
That in consideration of the premises and of the acceptance
and purchase of the 2008 Securities (hereinafter defined) by the holders
thereof and of the acceptance of this trust by the Trustee, each of the
Company and the Guarantor covenants and agrees with the Trustee, for the
equal benefit of holders of the 2008 Securities, as follows:
ARTICLE ONE
Definitions
The use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original
Indenture and the forms of Securities attached hereto as Exhibits A and B,
respectively. In addition, for all purposes of this Second Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise expressly requires, the following terms shall have the respective
meanings assigned to them as follows and shall be construed as if defined in
Article One of the Original Indenture:
"Book-Entry Depositary" means The Bank of New York as
designated by the Company in the Deposit Agreement until a successor
shall have become such pursuant to the applicable provisions of the Deposit
Agreement, and thereafter "Book-Entry Depositary" shall mean such
successor Book-Entry Depositary or its nominee or the custodian of either.
"Definitive Registered 2008 Securities" means 2008
Securities substantially in the form of Exhibit B to this Second
Supplemental Indenture.
"Deposit Agreement" means the Deposit Agreement, dated
as of February 1, 1998, among the Company, the Book-Entry Depositary
and the holders and beneficial owners from time to time of interests in the
Book-Entry Interests issued thereunder.
"DTC" means The Depository Trust Company, New York,
New York, or its successors.
"Exchange Offer" means the offer that may be made
pursuant to the Registration Rights Agreement by the Company to
exchange Series B Securities and the Guarantee of the Series B Securities
for the Series A Securities and the Guarantee of the Series A Securities.
"Global 2008 Securities" means Global Bearer Securities,
evidencing the 2008 Securities, issued to the Book-Entry Depositary
substantially in the form of Exhibit A to this Second Supplemental
Indenture.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated February 25, 1998 among the Company, the
Guarantor and the Initial Purchasers named therein as such agreement may
be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities
Act, as such Regulation may be amended from time to time, or under any
similar rules or regulations hereafter adopted by the Commission.
"Restricted Securities Legend" means a legend substantially
in the form of the legend contained in the form of Global 2008 Securities
set forth in Exhibit A hereto.
"Restricted Security" means 2008 Securities that bear or are
required to bear the Restricted Securities Legend.
"Rule 144A" means Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or under any similar rules or
regulation hereafter adopted by the Commission.
"Series A Securities" means the Company's 6.496% Series
A Senior Notes due 2008, as authenticated and issued under this Indenture.
"Series B Securities" means the Company's 6.496% Series
B Senior Notes due 2008, as authenticated and issued under this Indenture.
"2008 Securities" means, collectively, the Series A
Securities and the Series B Securities.
ARTICLE TWO
Terms and Issuance of the 2008 Securities
SECTION 201. Issue of Securities. A series of
Securities which shall be designated the "6.496% Series A Senior Notes
due 2008" and a series of Securities shall be designated the "6.496% Series
B Senior Notes due 2008" each shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture
and this Second Supplemental Indenture (including the forms of 2008
Securities set forth in Exhibits A and B hereto). The aggregate principal
amount of the 2008 Securities which may be authenticated and delivered
under the Second Supplemental Indenture shall not, except as permitted by
the provisions of the Original Indenture, exceed $300,000,000.
SECTION 202. Form of 2008 Securities;
Incorporation of Terms. The forms of the Global 2008 Securities and the
Definitive Registered 2008 Securities shall be substantially in the forms of
Exhibits A and B, respectively, attached hereto, the terms of which are
herein incorporated by reference and which are part of this Second
Supplemental Indenture. Series A Securities offered and sold in their initial
distribution in reliance on Rule 144A shall initially be issued in the form of
one or more separate Global 2008 Securities (each, a "Rule 144A Global
Security"). Series A Securities offered and sold in their initial distribution
in reliance on Regulation S shall initially be issued in the form of one or
more separate Global 2008 Securities (each, a "Regulation S Global
Security").
SECTION 203. Limitation on Liens. The covenant
provided by Section 1004 of the Original Indenture shall be applicable to
the 2008 Securities.
SECTION 204. Limitation on Sale and Lease-Back
Transactions. The covenant provided by Section 1005 of the Original
Indenture shall be applicable to the 2008 Securities.
SECTION 205. Guarantee. The Guarantee provided
by Article Fourteen of the Original Indenture shall be applicable to the
2008 Securities.
SECTION 206. Place of Payment. The Place of
Payment in respect of the 2008 Securities will be in The City of New York,
initially the Corporate Trust Office of The Bank of New York, and, for so
long as the 2008 Securities are listed on the Luxembourg Stock Exchange,
in Luxembourg, initially the corporate trust office of Banque Generale du
Luxembourg S.A., which at the date hereof, is located at 50 Avenue J. F.
Kennedy, L-2951 Luxembourg.
SECTION 207. Issuance of Global 2008 Securities.
Each of the Series A Securities and the Series B Securities shall be issued
as one or more Global 2008 Securities and delivered by the Trustee to the
Book-Entry Depositary, as the Holder thereof, or a nominee or custodian
therefor, to be held by the Book-Entry Depositary pursuant to the Deposit
Agreement. Definitive Registered 2008 Securities shall only be issued by
the Company in exchange for the Global 2008 Securities in the
circumstances set forth in the Global 2008 Securities.
SECTION 208. Transfer Restrictions; Exchange
Offer.
(a) Transfer Restrictions. Except as permitted by
subsection (b) of this Section 208 or as otherwise determined by the
Company as set forth below in this subsection (a), the 2008 Securities shall
bear the Restricted Securities Legend and may not be transferred except in
compliance with the Restricted Securities Legend unless otherwise
determined by the Company in accordance with applicable law. Unless
with respect to the whole or any portion of any Restricted Security the
Company determines otherwise in accordance with applicable law, the
Restricted Securities Legend borne by such Restricted Security shall be
removed by the Company (i) in the case of any Rule 144A Global Security
or any Definitive Registered 2008 Security issued in exchange for an
interest therein, upon presentation to the Trustee of such Restricted
Security by the Holder thereof at any time on or after the occurrence of the
"Resale Restriction Termination Date" on such Legend and (ii) in the case
of any Regulation S Global Security or any Definitive Registered 2008
Security issued in exchange for an interest therein, upon presentation to the
Trustee of such Restricted Security by the Holder thereof at any time on or
after the expiration of the "restricted period" (within the meaning of
Regulation S) with respect to any such Security shall have occurred.
If a holder of a beneficial interest in a Rule 144A Global
Security wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a
Regulation S Global Security, or if a holder of a beneficial interest in a
Regulation S Global Security wishes at any time to transfer such interest to
a Person who wishes to take delivery thereof in the form of a beneficial
interest in a Rule 144A Global Security, upon receipt by the Trustee of (A)
written instructions given in accordance with the rules and procedures of
DTC (together with, as applicable, the rules and procedures of The
Euroclear System and Cedel Bank, the "Applicable Procedures") from the
applicable Participant directing the Book-Entry Depositary to cause to be
credited to another account of a Participant a beneficial interest in such
Regulation S Global Security or Rule 144A Global Security (as the case
may be) equal to that of the beneficial interest in such Rule 144A Global
Security or Regulation S Global Security (as the case may be) to be so
transferred, (B) a written order given in accordance with the Applicable
Procedures containing information regarding such other account, as well as
the account of The Euroclear System or Cedel Bank (as the case may be)
for which such other account is held, to be credited with, and the account
of such applicable Participant to be debited for, such beneficial interest and
(C) a certificate satisfactory to the Company, the Guarantor and the
Trustee, as to such transfer's compliance with the registration requirements
of the Securities Act, given by the transferor of such beneficial interest, the
Trustee shall (1) reduce or increase (as the case may be) the principal
amount of such Rule 144A Global Security, and increase or reduce (as the
case may be) the principal amount of such Regulation S Global Security, in
each case by an amount equal to the principal amount of the beneficial
interest in such Rule 144A Global Security or Regulation S Global Security
(as the case may be) to be so transferred, as evidenced by appropriate
endorsements on Schedule A to each such Global Security, (2) instruct the
Book-Entry Depositary to make a corresponding reduction or increase (as
the case may be) to the Book-Entry Interests relating to such Global
Security and (3) cause the Book-Entry Depositary to instruct DTC to
credit and debit such beneficial interests to the respective accounts
specified in the instructions referred to above.
(b) Exchange of Series A Securities for Series B
Securities. The Company shall issue and the Trustee shall authenticate
Series B Securities in exchange for Series A Securities accepted for
exchange in the Exchange Offer as follows:
The Company shall present the Trustee with an Officers'
Certificate certifying (i) that, upon issuance of the Series B
Securities, the transactions contemplated by the Exchange
Offer have been consummated and (ii) the aggregate
principal amount of Series A Securities properly tendered in
the Exchange Offer.
The Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (A) to the effect that the Series B Securities
have been registered under the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (B) with respect to the matters
set forth in Section 3(m) of the Registration Rights Agreement and (iii) a
Company Order, shall (A) authenticate 2008 Global Securities representing
the Series B Securities in an aggregate principal amount equal to the
aggregate principal amount of Series A Securities represented by a 2008
Global Security indicated in such Officers' Certificate as having been
properly tendered with terms substantially identical to such Series A
Securities, and substantially in the form of Exhibit A hereto, except that
such Series B Securities (x) shall not contain the Restricted Securities
Legend and (y) will not provide for any increase in the interest rate thereon
under the circumstances set forth in such Series A Securities and (B)
deliver such Global 2008 Securities representing such Series B Securities
to the Book-Entry Depositary in exchange for such Global 2008 Security
representing such Series A Securities pursuant to the terms of the Deposit
Agreement.
Notwithstanding anything, contained in the Indenture, the
Series A Securities and the Series B Securities will vote and consent
together on all matters as one class and will not have the right to vote or
consent as a separate class in any matter.
SECTION 209. Regular Record Date for the 2008
Securities. The Regular Record Date for the 2008 Securities shall be 15
calendar days immediately prior to each Interest Payment Date.
ARTICLE THREE
Authenticating Agent; Book-Entry Depositary
SECTION 301. Authenticating Agent; Book-Entry
Depositary. The Bank of New York, a New York banking corporation, and
its successors are hereby appointed Authenticating Agent and Book-Entry
Depositary with respect to the 2008 Securities.
ARTICLE FOUR
Miscellaneous
SECTION 401. Execution of Supplemental
Indenture. This Second Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this Second Supplemental Indenture
forms a part thereof.
SECTION 402. Conflict with Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Second Supplemental
Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
SECTION 403. Effect of Headings. The Article and
Section headings herein are for convenience only and shall not affect the
construction hereof.
SECTION 404. Successors and Assigns. All
covenants and agreements in this Second Supplemental Indenture by each
of the Company or the Guarantor shall bind its successors and assigns,
whether so expressed or not.
SECTION 405. Separability Clause. In case any
provision in this Second Supplemental Indenture or in the 2008 Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 406. Benefits of Second Supplemental
Indenture. Nothing in this Second Supplemental Indenture or in the 2008
Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Second
Supplemental Indenture.
SECTION 407. Execution and Counterparts. This
Second Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereof have caused
this Second Supplemental Indenture to be duly executed by their respective
officers, directors or signatories duly authorized thereto, all as of the day
and year first above written.
YORKSHIRE POWER
FINANCE LIMITED
By
Title:
YORKSHIRE POWER
GROUP LIMITED
By
Tile:
THE BANK OF NEW
YORK,
as Trustee, Principal Paying
Agent, Security Registrar and
Transfer Agent
By
Title:
BANQUE GENERALE DU
LUXEMBOURG S.A., as
Paying Agent and Transfer
Agent
By
Title:
EXHIBIT A
{FORM OF FACE OF GLOBAL 2008 SECURITY}
[If the Global 2008 Security is a Restricted Security,
insert the following legend---THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH YORKSHIRE POWER
GROUP LIMITED (THE "GUARANTOR"), YORKSHIRE POWER
FINANCE LIMITED (THE "ISSUER") OR ANY AFFILIATE OF
THE GUARANTOR OR THE ISSUER WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
(OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY
RULE 144(k), OR ANY SUCCESSOR PROVISION THEREOF,
UNDER THE SECURITIES ACT) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE GUARANTOR OR
THE ISSUER, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-US
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
GUARANTOR'S, THE ISSUER'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AS TO
COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE OR SUCH EARLIER TIME AS DETERMINED BY THE
ISSUER IN ACCORDANCE WITH APPLICABLE LAW.
EACH HOLDER BY ITS ACCEPTANCE OF THIS
SECURITY SHALL BE DEEMED TO HAVE AGREED TO BE
BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT.]
THIS SECURITY IS A GLOBAL BEARER SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS HELD BY A BOOK-ENTRY DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES HELD BY
A PERSON OTHER THAN THE BOOK-ENTRY DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS GLOBAL BEARER SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
BOOK-ENTRY DEPOSITARY TO THE ISSUER OR ITS AGENT FOR
EXCHANGE OR PAYMENT, AND ANY DEFINITIVE REGISTERED
SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY THE BOOK-ENTRY DEPOSITARY, ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
BEARER HEREOF, THE BOOK-ENTRY DEPOSITARY, HAS AN
INTEREST HEREIN.
YORKSHIRE POWER FINANCE LIMITED
6.496% [Series A] [Series B] Senior Notes due 2008
No. $ ?
CUSIP
No.________
YORKSHIRE POWER FINANCE LIMITED, a limited
liability company incorporated under the laws of the Cayman Islands
(herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to the bearer upon surrender hereof, the principal
sum of __________ Dollars* on ________________, and to pay interest
thereon from _____________, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
____________ and ____________ in each year, commencing
________________, 199_, at the rate per annum provided in the title
hereof, until the principal hereto is paid or made available for payment;
[provided, however, that if an Event Date (as defined in the Registration
Rights Agreement) occurs, interest will accrue on this Security at a rate of
6.746% per annum from and including the day following the applicable
Event Date to and including the date on which the event that has resulted
in Additional Interest (as defined in the Registration Rights Agreement)
being required to be paid has been cured pursuant to the terms of the
Registration Rights Agreement.] The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided
in such Indenture, be paid to the bearer on such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the bearer on such Interest Payment Date and may
be paid to the bearer hereof at the time of payment of such Defaulted
Interest or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of
this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
All payments in respect of this Security and all payments
made pursuant to the Guarantee of this Security shall be made in
immediately available funds at or through the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The
City of New York, and for so long as this Security shall be listed on the
Luxembourg Stock Exchange, in Luxembourg, in such coin or currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debt.
All payments of principal of, and premium, if any, and
interest in respect of this Security and all payments made pursuant to the
Guarantee of this Security shall be made free and clear of, and without
withholding or deduction for or on account of any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by or within a Taxing Jurisdiction or
by or within any political subdivision thereof or any authority therein or
thereof having power to tax ("Gross-Up Taxes"), unless such withholding
or deduction is required by law. In the event of any such withholding or
deduction, the Company shall pay to the Holder such additional amounts
("Additional Amounts") as will result in the payment to such Holder of the
amount that would otherwise have been due to such Holder in the absence
of such withholding or deduction, except that no such Additional Amounts
shall be payable:
(a) to, or to a Person on behalf of, a Holder who is liable
for such Gross-Up Taxes in respect of this Security or the
Guarantee of this Security by reason of such Holder or beneficial
owner having some connection with the relevant Taxing
Jurisdiction (including being a citizen or resident or national of, or
carrying on a business or maintaining a permanent establishment in,
or being physically present in, such Taxing Jurisdiction) other than
the mere holding of this Security or the receipt of principal of, and
premium, if any, and interest in respect thereof or in respect of the
Guarantee of this Security;
(b) to, or to a Person on behalf of, a Holder who presents
this Security (where presentation is required) for payment more
than 30 days after the Relevant Date except to the extent that the
Holder would have been entitled to such Additional Amounts on
presenting this Security for payment on the last day of such period
of 30 days;
(c) to, or to a Person on behalf of, a Holder who presents
this Security (where presentation is required) in a Taxing
Jurisdiction;
(d) to, or to a Person on behalf of, a Holder who would not
be liable or subject to the withholding or deduction by making a
declaration of nonresidence or similar claim for exemption to the
relevant tax authority; or
(e) to, or to a Person on behalf of, a Holder of a Registered
Security that is not a Global Security issued pursuant to the request
of owners of interests representing a majority in Outstanding
principal amount of such Securities following and during the
continuance of an Event of Default if such Holder (or any
predecessor Holder) was one of such owners requesting that such
Registered Securities be so issued.
Such Additional Amounts will also not be payable where,
had the beneficial owner of the Security (or any interest therein) been the
Holder of the Security, he would not have been entitled to payment of
Additional Amounts by reason of any one or more of clauses (a) through
(e) above. If the Company or the Guarantor, as applicable, shall determine
that Additional Amounts will not be payable because of the immediately
preceding sentence, the Company or the Guarantor, as applicable, will
inform such Holder promptly after making such determination setting forth
the reason(s) therefor.
"Relevant Date" means whichever is the later of (i) the date
on which such payment first becomes due and (ii) if the full amount payable
has not been received in The City of New York by the Book-Entry
Depositary of the Trustee on or prior to such due date, the date on which,
the full amount having been so received, notice to that effect shall have
been given to the bearer hereof in accordance with the Indenture.
References to principal of, and premium or interest in
respect of, this Security or any payments pursuant to the Guarantee of this
Security shall be deemed to include any Additional Amounts which may be
payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing payment of
the Gross-Up Taxes. Copies of such receipts shall be made available to the
Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed by an authorized signatory of the Company.
YORKSHIRE POWER FINANCE
LIMITED
By
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
THE BANK OF NEW
YORK,
as Trustee
By_______________________
Authorized Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
6.496% [Series A] [Series B] Senior Notes due 2008
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of February 1, 1998
(herein called the "Original Indenture"), among the Company, Yorkshire
Power Group Limited, as guarantor (the "Guarantor"), The Bank of New
York, as trustee, principal paying agent, registrar and transfer agent (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and Banque Generale du Luxembourg S.A., as paying and
transfer agent (the "Paying and Transfer Agent"), as supplemented by the
Second Supplemental Indenture, dated as of February 25, 1998 (together
with the Original Indenture and any other supplements thereto, the
"Indenture"), among the Company, the Guarantor, the Trustee and the
Paying and Transfer Agent to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee, the Paying and Transfer Agent
and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate
principal amount to $300,000,000.
The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Securities of
this series being redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal of and interest on the Securities
of this series being redeemed (excluding the portion of any such interest
accrued to the date of redemption) discounted (for the purpose of
determining present value) to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at a
discount rate equal to the Treasury Yield plus twenty (20) basis points,
plus, in either case, accrued interest thereon to the date of redemption.
"Treasury Yield" means, with respect to any redemption
date, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of such Securities of this
series to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Securities of this series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption
date, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for US Government Securities" or (ii) if
such release (or any successor release) is not published or does not contain
such prices on such business day, the Reference Treasury Dealer Quotation
for such redemption date.
"Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect
to the Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Company by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date).
"Reference Treasury Dealer" means a primary United States
government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date
fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities of this series for redemption will be made
by the Trustee in any manner the Trustee deems fair and appropriate and
that complies with applicable legal and securities exchange requirements.
Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof called for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.
In the event of redemption of this Security in part only, a
new Security of this series and of like tenor for the unredeemed portion
hereof will be issued to the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after such declaration of
acceleration with respect to Securities of any series has been made, but
before a judgment or decree for payment of money has been obtained by
the Trustee as provided in the Indenture, if all Events of Default with
respect to Securities of this series have been cured or waived (other than
the non-payment of principal of the Securities which has become due solely
by reason of such declaration of acceleration) then such declaration of
acceleration and its consequences shall be automatically annulled and
rescinded.
The Securities of this Series are subject to redemption in
whole but not in part upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at a price equal to the outstanding
principal amount thereof, together with Additional Amounts, if any, and
accrued interest, if any, to the Redemption Date if, (a) the Company or the
Guarantor satisfies the Trustee prior to the giving of such notice that it has
or will become obligated to pay Additional Amounts as a result of either (i)
any change in, or amendment to, the laws or regulations of a Taxing
Jurisdiction, or any change in the application or interpretation of such laws
or regulations, which change or amendment becomes effective on or after
February 19, 1998 or (ii) the issuance of Definitive Registered 2008
Securities pursuant to any of clauses (a), (b) or (d) of the third following
paragraph and (b) such obligation cannot be avoided by the Company or
the Guarantor taking reasonable measures available to it, subject, as
provided in the Indenture, to the delivery by the Company or the Guarantor
of an Officers' Certificate stating that such obligation to pay Additional
Amounts cannot be avoided by the Company or the Guarantor taking
reasonable measures available to it.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or
any supplemental indenture or the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest in respect of this Security and all payments
made pursuant to the Guarantee of this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
This Security shall be exchangeable, in whole or in the case
of clause (d) below, in part as provided in the Indenture, for Definitive
Registered 2008 Securities registered in the names of Persons other than
the Book-Entry Depositary with respect to such series or its nominee only
as provided in this paragraph. This Security shall be so exchangeable if (a)
DTC notifies the Company and the Book-Entry Depositary that it is
unwilling or unable to continue to hold the Book-Entry Interests or at any
time ceases to be a "clearing agency" registered as such under the
Exchange Act and in either case, a successor is not appointed by the
Company within 120 days, (b) the Book-Entry Depositary for the
Securities of this series notifies the Company that it is unwilling or unable
to continue as Book-Entry Depositary with respect to this Security and no
successor is appointed within 120 days, (c) the Company executes and
delivers to the Trustee an Officers' Certificate providing that this Security
shall be so exchangeable, (d) there shall have occurred and be continuing
an Event of Default with respect to the Securities of this series and the
Holder, in such circumstance, shall have requested in writing that this
Security be exchanged for one or more Definitive Registered 2008
Securities of this series or (e) while this Security is subject to the transfer
restrictions set forth in the Restricted Securities Legend hereon, the Book-
Entry Interests cease to be eligible for DTC services because this Security
is neither (i) rated in one of the top four categories by a nationally
recognized statistical rating organization nor (ii) included within a self-
regulatory organization system approved by the Commission for the
reporting of quotations and trade information of securities eligible for trade
pursuant to Rule 144A, such as the PORTAL system. Securities so issued
in exchange for this Security shall be of the same series, having the same
interest rate, if any, and maturity and having the same terms as this
Security, in authorized denominations and in the aggregate having the same
principal amount as this security and registered in such names as the Book-
Entry Depositary for this Security shall direct.
The bearer of this Security shall be treated as the owner of it
for all purposes, subject to the terms of the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such exchange, but
the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series
and may otherwise deal with the Company, the Guarantor or their
respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee, incorporator or
Affiliate of the Company or the Guarantor under the Securities of this
series or the Indenture or for any claim based on, in respect of or by reason
of, such obligations of their creation. Each Holder of the Securities of this
series by accepting Securities this series waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities of this series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
will cause CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No
representation is made as to the accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.
This Security shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a private limited company duly incorporated and
existing under the laws of England and Wales (the "Guarantor", which term
includes any successor Person under the Indenture referred to in the
Security on which this notation is endorsed), hereby fully and
unconditionally guarantees to the Holder of the accompanying Security
issued by Yorkshire Power Finance Limited (the "Company"), pursuant to
the terms of the Guarantee contained in Article Fourteen of the Indenture,
the due and punctual payment of the principal of, and premium, if any, and
interest in respect of this Security (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable,
whether at Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of this Security and
the Indenture. In case of the failure of the Company punctually to pay any
such principal, premium, if any, or interest, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the same shall
become due and payable as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.
THIS GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this notation of the Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its
authorized officers.
YORKSHIRE POWER GROUP
LIMITED
By:___________________________
____________
Authorized Signatory
SCHEDULE A
SCHEDULE OF ADJUSTMENTS
The initial aggregate principal amount of Securities
evidenced by the Certificate to which this Schedule is attached is
__________. The notations on the following table evidence decreases and
increases in the aggregate principal amount of Securities evidenced by
such Certificate.
Date of Decrease in Increase in Aggregate Principal
Notation by
Adjustment Aggregate Aggregate Amount of Securities
Security Registrar
Principal Principal Remaining After Such
Amount of Amount of Decrease or Increase
Securities Securities
EXHIBIT B
[FORM OF FACE OF DEFINITIVE REGISTERED 2008 SECURITY]
[If the Definitive Registered 2008 Security is a Restricted Security,
insert the Restricted Securities Legend set forth in Exhibit A hereto.]
YORKSHIRE POWER FINANCE LIMITED
6.496% [Series A] [Series B] Senior Notes due 2008
No. _______________
$___________
________
CUSIP
No.:__________
YORKSHIRE POWER FINANCE LIMITED, a limited
liability company incorporated under the laws of the Cayman Islands
(herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to[name of registered owner], or its registered
assigns, the principal sum of _______________ Dollars on
______________________, and to pay interest thereon from
____________________, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on
__________ and _____________ in each year, commencing
_______________, 199_, at the rate per annum provided in the title
hereof, until the principal hereof is paid or made available for payment;
[provided, however, that if an Event Date (as defined in the Registration
Rights Agreement) occurs, interest will accrue on this Security at a rate of
___% per annum from and including the day following the applicable Event
Date to and including the date on which the event that has resulted in
Additional Interest (as defined in the Registration Rights Agreement) being
required to be paid has been cured pursuant to the terms of the
Registration Rights Agreement.] The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided
in such Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the fifteenth
day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Person in whose name this
Security (or one or more Predecessor Securities) is registered on such
Regular Record Date and may be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
All payments in respect of this Security and all payments
made pursuant to the Guarantee of this Security shall be made at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, and for so long as this Security shall be
listed on the Luxembourg Stock Exchange, in Luxembourg, in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debt; provided, however, that
at the option of the Company, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
All payments of principal of, premium, if any, and interest in
respect of this Security and all payments made pursuant to the Guarantee
of this Security shall be made free and clear of, and without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within a Taxing Jurisdiction or by or
within any political subdivision thereof or any authority therein or thereof
having power to tax ("Gross-Up Taxes"), unless such withholding or
deduction is required by law. In the event of any such withholding or
deduction, the Company shall pay to the Holder such additional amounts
("Additional Amounts") as will result in the payment to such Holder of the
amount that would otherwise have been due to such Holder in the absence
of such withholding or deduction, except that no such Additional Amounts
shall be payable:
(a) to, or to a Person on
behalf of, a Holder who is liable for such Gross-Up Taxes in respect
of this Security or the Guarantee of this Security by reason of such
Holder having some connection with the relevant Taxing
Jurisdiction (including a citizen or resident or national of, or
carrying on a business or maintaining a permanent establishment in,
or being physically present in, such Taxing Jurisdiction) other than
the mere holding of this Security or the receipt of principal of,
premium, if any, and interest in respect thereof or in respect of the
Guarantee of this Security;
(b) to, or to a Person on
behalf of, a Holder who presents this Security (where presentation
is required) for payment more than 30 days after the Relevant Date
except to the extent that the Holder would have been entitled to
such Additional Amounts on presenting this Security for payments
on the last day of such period of 30 days;
(c) to, or to a Person on
behalf of, a Holder who presents a Security (where presentation is
required) in a Taxing Jurisdiction;
(d) to, or to a Person on
behalf of, a Holder who would not be liable or subject to the
withholding or deduction by making a declaration of nonresidence
or similar claim for exemption to the relevant tax authority; or
(e) to, or to a Person on
behalf of, a Holder of a definitive Registered Security issued
pursuant to the request of owners of interests representing a
majority in outstanding principal amount in the Book-Entry Interest
following and during the continuance of an Event of Default if such
Holder (or any predecessor Holder) was one of such owners
requesting that definitive Registered Securities be so issued.
Such Additional Amounts will also not be payable where,
had the beneficial owner of the Security (or any interest therein) been the
Holder of the Security, he would not have been entitled to payment of
Additional Amounts by reason of any one or more of clauses (a) through
(e) above. If the Company or the Guarantor, as applicable, shall determine
that Additional Amounts will not be payable because of the immediately
preceding sentence, the Company or the Guarantor, as applicable, will
inform such Holder promptly after making such determination setting forth
the reason(s) therefor.
"Relevant Date" means whichever is the later of (i) the date
on which such payment first becomes due and (ii) if the full amount payable
has not been received in The City of New York by the Trustee or the
Holder on or prior to such due date, the date on which, the full amount
having been so received, notice to that effect shall have been given to the
Holder in accordance with this Indenture.
References to principal of, and premium or interest in
respect of, this Security or payments under the Guarantee of this Security
shall be deemed to include to any Additional Amounts which may be
payable as set forth in the Indenture or in this Security.
The Company shall furnish to the Trustee the official
receipts (or a certified copy of the official receipts) evidencing payment of
Gross-Up Taxes. Copies of such receipts shall be made available to the
Holder of this Security upon request.
So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, notices to Holders of Securities of this series will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger Wort).
REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed by an authorized signatory of the Company.
YORKSHIRE POWER
FINANCE
LIMITED
By
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
THE BANK OF NEW
YORK,
as Trustee
By__________________________
Authorized Signatory
Dated:
[Form of Reverse of Security]
YORKSHIRE POWER FINANCE LIMITED
___% [Series A] [Series B] Senior Notes due 2008
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of February 1, 1998
(herein called the "Original Indenture"), among the Company, Yorkshire
Power Group Limited, as guarantor (the "Guarantor"), The Bank of New
York, as trustee, principal paying agent, registrar and transfer agent (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and Banque Generale du Luxembourg S.A., as paying and
transfer agent (the "Paying and Transfer Agent"), as supplemented by the
Second Supplemental Indenture, dated as of February 25, 1998 (together
with the Original Indenture and any other supplements thereto, the
"Indenture") among the Company, the Guarantor, the Trustee and the
Paying and Transfer Agent to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee, the Paying and Transfer Agent
and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate
principal amount to $300,000,000.
The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Securities of
this series being redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal of and interest on the Securities
of this series being redeemed (excluding the portion of any such interest
accrued to the date of redemption) discounted (for the purpose of
determining present value) to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at a
discount rate equal to the Treasury Yield plus twenty (20) basis points,
plus, in either case, accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption
date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of such Securities of this
series to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Securities of this series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption
date, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for US Government Securities" or (ii) if
such release (or any successor release) is not published or does not contain
such prices on such Business Day, the Reference Treasury Dealer
Quotation for such redemption date.
"Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with
respect to the Reference Treasury Dealer and any redemption date, the
average, as determined by the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date).
"Reference Treasury Dealer" means a primary US
government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date
fixed for redemption.
If fewer than all the Securities of this series are to be
redeemed, selection of Securities for redemption will be made by the
Trustee in any manner the Trustee deems fair and appropriate and that
complies with applicable legal and securities exchange requirements.
Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof called for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.
In the event of redemption of this security in part only, a
new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after such declaration of
acceleration with respect to Securities of any series has been made, but
before a judgment or decree for payment of money has been obtained by
the Trustee as provided in the Indenture, if all Events of Default with
respect to Securities of this series have been cured or waived (other than
the nonpayment of principal of the Securities which has become due solely
by reason of such declaration of acceleration) then such declaration of
acceleration and its consequences shall be automatically annulled and
rescinded.
The Securities of this series are subject to redemption upon
not less than 30 nor more than 60 days' notice to the Holders of Securities
by first-class mail, at a price equal to the outstanding principal amount
thereof, together with Additional Amounts, if any, and accrued interest, if
any, to the redemption date if (a) the Company satisfies the Trustee prior
to the giving of such notice that it has or will become obligated to pay
Additional Amounts as a result of either (i) any change in, or amendment
to, the laws or regulations of a Taxing Jurisdiction, or any change in the
application or interpretation of such laws or regulations, which change or
amendment becomes effective on or after February 19, 1998, or (ii) the
issuance of definitive Registered Securities as a result of: (A) DTC having
notified the Company and the Book-Entry Depositary that it was unwilling
or unable to continue to hold the Book-Entry Interest or at any time
ceasing to be a "clearing agency" registered as such under the Securities
Exchange Act of 1934 and, in either case, a successor is not being
appointed by the Company within 120 days; (B) the Book-Entry
Depositary for the Securities of this series having notified the Company
that it was unwilling or unable to continue as Book-Entry Depositary with
respect to a Global security of this series and no successor Book-Entry
Depositary having been appointed by the Company within 120 days or (C)
an Event of Default with respect to the Securities of this series having
occurred and being continuing and a Holder, in such circumstance, having
requested in writing that a Global Bearer Security of this series be
exchanged for one or more definitive Registered Securities and (b) such
obligation cannot be avoided by the Company taking reasonable measures
available to it, subject, as provided in the Indenture, to the delivery by the
Company of an Officers Certificate that such obligation referred to in (a)
cannot be avoided by the Company taking reasonable measures available to
it.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or
any supplemental indenture or the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest, in respect of this Security and all payments
made pursuant to the Guarantee of this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of, premium, if any, and interest, if any, on this Security are
payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in
accordance with the terms of the Indenture, the predecessor will be
released from those obligations.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series
and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
No stockholder, director, officer, employee, incorporator or
Affiliate of the Company shall have any liability for any obligation of the
Company under the Securities of this series or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of the Securities of this series by accepting a
Security of this series waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities of
this series.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
Customary abbreviations may be used in the name of a
Holder of a Securities of this series or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
will cause CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No
representation is made as to the accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.
This Security shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
GUARANTEE
FOR VALUE RECEIVED, YORKSHIRE POWER
GROUP LIMITED, a company duly incorporated and existing under the
laws of England and Wales (the "Guarantor", which term includes any
successor Person under the Indenture referred to in the Security on which
this notation is endorsed), hereby fully and unconditionally guarantees to
the Holder of the accompanying Security issued by Yorkshire Power
Finance Limited (the "Company"), pursuant to the terms of the Guarantee
contained in Article Fourteen of the Indenture, the due and punctual
payment of the principal of, premium, if any, and interest in respect of this
Security (and any Additional Amounts payable in respect thereof), when
and as the same shall become due and payable, whether at Stated Maturity,
by declaration of acceleration, call for redemption or otherwise, in
accordance with the terms of this Security and the Indenture. In case of
the failure of the Company punctually to pay any such principal, premium,
if any, or interest, the Guarantor hereby agrees to cause any such payment
to be made punctually when and as the same shall become due and payable
as if such payment were made by the Company.
The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.
THIS GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this notation of the Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its
authorized officers.
YORKSHIRE POWER GROUP
LIMITED
By:___________________________
__________
Authorized Signatory
? Reference is made to Schedule A attached hereto with respect to
decreases and increases in the aggregate principal amount of Securities
evidenced by this certificate.
532
.continued from the preceding page
continued on the following page.
10
5
A - 13
A - 1
B - 7
B - 1
EXHIBIT 4.11
DEPOSIT AGREEMENT
BETWEEN
THE BANK OF NEW YORK,
as Book-Entry Depositary
and
YORKSHIRE POWER FINANCE LIMITED
Dated as of February 1, 1998
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Other General Provisions 1
Section 1.01. Definitions 1
Section 1.02. Rules of Construction 3
ARTICLE II Book-Entry Interests 4
Section 2.01. Deposit of the Global Senior Notes 4
Section 2.02. Book-Entry System 4
Section 2.03. Registration of Transfer of the Book-Entry Interests 4
Section 2.04. Transfer or Exchange of Global Senior Notes 5
Section 2.05. Issuance of Definitive Registered Senior Notes in Respect
of the Senior Notes 5
Section 2.06. Redemption of the Senior Notes 7
Section 2.07. Cancellation 7
Section 2.08. Payments in Respect of the Book-Entry Interests and the
Global Senior Notes 7
Section 2.09. Change in Principal Amount of Global Senior Notes 8
Section 2.10. Record Date 8
Section 2.11. Action in Respect of the Book-Entry Interests or the Global
Senior Notes 8
Section 2.12. Reports 9
Section 2.13. Additional Amounts 9
Section 2.14. Changes Affecting Global Senior Notes 10
ARTICLE III The Book-Entry Depositary 10
Section 3.01. Certain Duties and Responsibilities 10
Section 3.02. Events of Default 11
Section 3.03. Certain Rights of Book-Entry Depositary 11
Section 3.04. Not Responsible for Recitals or Issuance of Senior Notes 12
Section 3.05. Money Held in Trust 12
Section 3.06. Compensation and Reimbursement 13
Section 3.07. Book-Entry Depositary Required; Eligibility 14
Section 3.08. Resignation and Removal; Appointment of Successor 14
Section 3.09. Acceptance of Appointment by Successor 15
Section 3.10. Merger, Conversion, Consolidation or Succession to
Business 16
Section 3.11. Letter of Representations 16
ARTICLE IV Miscellaneous Provisions 17
Section 4.01. Notices to Book-Entry Depositary or Issuer 17
Section 4.02. Notice to DTC; Waiver 17
Section 4.03. Effect of Headings and Table of Contents 18
Section 4.04. Successors and Assign 18
Section 4.05. Separability Clause 18
Section 4.06. Benefits of Agreement 18
Section 4.07. GOVERNING LAW 18
Section 4.08. Jurisdiction 18
Section 4.09. Counterparts 19
Section 4.10. Inspection of Agreement 19
Section 4.11. Satisfaction and Discharge 19
Section 4.12. Amendments 20
Section 4.13. Book-Entry Depositary To Sign Amendments 20
DEPOSIT AGREEMENT
This Deposit Agreement (as the same may be amended from
time to time in accordance with the provisions hereof, the "Deposit
Agreement"), dated as of February 1, 1998, is among The Bank of New
York, a New York banking corporation, as book-entry depositary
hereunder (the "Book-Entry Depositary"), Yorkshire Power Finance
Limited, a company with limited liability incorporated under the laws of the
Cayman Islands (the "Issuer"), and the holders and beneficial owners from
time to time of interests in the Book-Entry Interests.
ARTICLE I
Definitions and Other General Provisions
Section 1.01. Definitions.
Terms not defined herein have the meanings ascribed to
them in the Indenture. The following terms, as used herein, have the
following meanings:
"2003 Senior Notes" mean a series of 6.154% Senior Notes
due 2003 of the Issuer in the aggregate principal amount of $350,000,000
issued under the Indenture.
"2008 Senior Notes" mean a series of 6.496% Senior Notes
due 2008 of the Issuer in the aggregate principal amount of $300,000,000
issued under the Indenture.
"Book-Entry Depositary" means the party named as such in
this Agreement or its nominee or the custodian of either until a successor
shall have become such pursuant to Section 3.08 hereof, and thereafter
"Book-Entry Depositary" shall mean such successor or its nominee or the
custodian of either.
"Book-Entry Interests" means the certificateless depositary
interests that shall at all times, prior to any issuance of Definitive
Registered Senior Notes in respect thereof, represent the right to receive
100% of the principal, premium (if any), interest and Additional Amounts
(if any) with respect to the underlying Global Senior Notes and that are
issued to DTC or its nominee by the Book-Entry Depositary.
"Book-Entry Register" has the meaning ascribed thereto in
Section 2.03 hereof.
"Corporate Trust Office" means the office of the Book-
Entry Depositary in the City of New York, at which any particular time its
corporate trust business shall be principally administered, which at the date
hereof is located at 101 Barclay Street, New York, NY 10286, Attn:
Corporate Trust Department, International Finance Unit.
"Definitive Registered Senior Notes" means Senior Notes
issued by the Issuer pursuant to the Indenture substantially in the form
included as exhibits to the Supplemental Indentures and registered in the
names of the beneficial owners thereof.
"DTC" means The Depository Trust Company, New York,
New York or its successors as the depositary of the Book-Entry Interests
as recorded on the Book-Entry Register.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Global Senior Notes" means Senior Notes in bearer form
issued by the Issuer to the Book-Entry Depositary pursuant to the
Indenture substantially in the form included as exhibits to the Supplemental
Indentures.
"Guarantor" means Yorkshire Power Group Limited, a
private limited company incorporated under the laws of England and
Wales.
"Indenture" means the Indenture dated as of February 1,
1998, among the Issuer, the Guarantor, and The Bank of New York, as
trustee, principal paying agent, registrar and transfer agent and Banque
Generale du Luxembourg S.A., as paying agent and transfer agent, relating
to the Senior Notes as originally executed or as it may from time to time be
supplemented or amended including by the Supplemental Indentures and
for all purposes to the extent applicable, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern such instrument.
"Indirect Participant" means a Person that holds Interests
through Participants.
"Interests" means beneficial interests in the Book-Entry
Interests that will be shown on records maintained in book-entry form by
DTC.
"Issuer" means the party named as such in this Agreement
until a successor replaces it pursuant to the applicable provisions of the
Indenture and, thereafter, means such successor.
"Issuer Order" means a written request or order signed in
the name of the Issuer by any Director of the Issuer and by any officer or
other person duly authorized by the Board of Directors, and delivered to
the Book-Entry Depositary.
"Letters of Representations" means the Letters of
Representations to DTC relating to the 2003 Senior Notes and the 2008
Senior Notes, each dated February 25, 1998, from the Book-Entry
Depositary and the Issuer.
"Participant" has the meaning specified in Section 2.02
herein.
"Officers' Certificate" means a certificate signed in the name
of the Issuer by any Director of the Issuer or by any officer or other person
duly so authorized by the Board of Directors and delivered to the Book-
Entry Depositary.
"Opinion of Counsel" means a written opinion from legal
counsel, who may be an employee of or regular counsel for the Issuer or
may be other counsel reasonably acceptable to the Book-Entry Depositary.
"Registered Holder" means, with respect to any Book-Entry
Interest, the Person in whose name such Book-Entry Interest is registered
on the Book-Entry Register maintained by the Book-Entry Depositary.
"Registration Rights Agreement" means the agreement,
dated February 25, 1998, among the Guarantor, the Issuer and the initial
purchasers of the Senior Notes whereby, among other things, the
Guarantor and the Issuer have agreed to file a registration statement with
the Commission relating to an exchange offer pursuant to which another
series of Senior Notes would be offered in exchange for each series of
Senior Notes.
"Responsible Officer", when used with respect to the Book-
Entry Depositary, means any authorized officer of the Book-Entry
Depositary including any vice president, assistant vice president, assistant
secretary, treasurer, assistant treasurer, or any other officer of the Book-
Entry Depositary who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers,
respectively, or to whom any depositary matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Senior Notes" means the 2003 Senior Notes and the 2008
Senior Notes.
"Supplemental Indentures" mean the First Supplemental
Indenture and Second Supplemental Indenture each dated as of February
25, 1998, among the Issuer, the Guarantor, The Bank of New York, as
trustee, principal paying agent, registrar and transfer agent, and Banque
Generale du Luxembourg S.A., as paying agent and transfer agent, relating
to the 2003 Senior Notes and the 2008 Senior Notes, respectively.
"Taxing Jurisdiction" means (i) any supranational federation
to which the United Kingdom belongs or (ii) the jurisdiction (or any
political subdivision or taxing authority thereof or therein) in which the
Issuer or the Guarantor is incorporated or in which the Issuer or the
Guarantor is managed and controlled or has a place of business.
"Trustee" means The Bank of New York and its successors
and assigns, as trustee under the Indenture.
Section 1.02. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is not exclusive;
(c) "including" means including without limitation; and
(d) words in the singular include the plural and words in
the plural include the singular.
ARTICLE II
Book-Entry Interests
Section 2.01. Deposit of the Global Senior Notes.
The Book-Entry Depositary hereby accepts custody of the
Global Senior Notes from the Trustee and shall act as Book-Entry
Depositary in accordance with the terms of this Agreement. The Book-
Entry Depositary shall hold such Global Senior Notes at its Corporate
Trust Office in the City of New York, at the office of the paying agent in
Luxembourg or at such place as it shall determine with the consent of the
Issuer and shall issue the Book-Entry Interests to DTC or its nominee in
accordance with the Letters of Representations.
Section 2.02. Book-Entry System.
(a) Upon acceptance by DTC of the Book-Entry
Interests for entry into its book-entry settlement system in accordance with
the terms of the Letters of Representations, Interests in the Book-Entry
Interests will be recorded on and traded through DTC's book-entry system,
and ownership of such Interests shall be shown in, and the transfer of such
ownership shall be effected only through, records maintained by (i) DTC or
(ii) institutions that have accounts with DTC ("Participants"). Interests
shall be transferable only as units representing authorized denominations of
the Senior Notes.
(b) The Book-Entry Interests shall be issuable only to
DTC or successors of DTC or their respective nominees. Except as
provided in Section 2.05, no beneficial owner of Interests shall be entitled
to receive a Definitive Registered Senior Note, and such beneficial owner's
Interests shall be reflected only in accordance with the procedures of DTC
as set forth in the Letters of Representations.
(c) Unless and until the Senior Notes are, pursuant to
the Registration Rights Agreement, registered under the Securities Act or
exchanged for similar securities registered under the Securities Act,
transfers of the Book-Entry Interests and Interests shall be subject to the
restrictions on transfer provided in the legend set forth on the face of the
Global Senior Notes relating thereto.
Section 2.03. Registration of Transfer of the Book-Entry
Interests.
The Book-Entry Depositary agrees to maintain at the Book-
Entry Depositary's Corporate Trust Office the Book-Entry Register in
which the Book-Entry Depositary shall (i) record Cede & Co., as nominee
of DTC, as the initial registered owner of the Book-Entry Interests and (ii)
record the registration and transfer of the Book-Entry Interests. The
Book-Entry Interests cannot be transferred unless such transfer is recorded
on the Book-Entry Register. The Book-Entry Depositary shall not
constitute the agent of the Issuer for any other purpose and, in particular, it
shall not constitute the agent of the Issuer in relation to any payments it
may make to DTC in respect of the Book-Entry Interests or be authorized
to undertake any obligations on behalf of the Issuer.
The foregoing paragraph shall not (i) impose an obligation
on the Book-Entry Depositary to record the ownership interests in or
transfers of Interests held by Participants or its successors or Indirect
Participants or (ii) restrict transfers of such Interests held by
Participants or
Indirect Participants. The Book-Entry Depositary shall treat DTC or its
nominee as the absolute owner of the Book-Entry Interests for all purposes
whatsoever and shall not be bound or affected by any notice to the
contrary, other than an order of a court having jurisdiction over the Book-
Entry Depositary.
Unless and until Global Senior Notes are exchanged in
whole for Definitive Registered Senior Notes pursuant to Section 2.05, the
Book-Entry Depositary may not register the transfer of the Book-Entry
Interests except as a whole: (i) by DTC to its nominee; (ii) by a nominee of
DTC to DTC or to another nominee of DTC; or (iii) by DTC or any
nominee to a successor depositary or a nominee of such successor
depositary.
Section 2.04. Transfer or Exchange of Global Senior
Notes.
(a) The Book-Entry Depositary shall hold the Global
Senior Notes in custody for the benefit of DTC. Subject to Section 3.08,
the Book-Entry Depositary shall not transfer or lend the Global Senior
Notes or any interest therein, except that the Global Senior Notes, as a
whole and with the Issuer's consent, may be transferred (i) by the Book-
Entry Depositary to a nominee of the Book-Entry Depositary; (ii) by a
nominee of the Book-Entry Depositary to the Book-Entry Depositary or
another nominee of the Book-Entry Depositary; or (iii) by the Book-Entry
Depositary or any such nominee to a successor Book-Entry Depositary or
a nominee of such successor Book-Entry Depositary. Notwithstanding the
foregoing, the Book-Entry Depositary may not under any circumstances
surrender or deliver the Global Senior Notes to DTC.
(b) The Book-Entry Depositary shall, upon the request
of the Issuer or the Trustee, exchange a series of Global Senior Notes for
another series of Global Senior Notes consistent with the terms of the
Supplemental Indentures upon consummation of the transactions
contemplated by the Registration Rights Agreement.
Section 2.05. Issuance of Definitive Registered Senior
Notes in Respect of the Senior Notes.
Except as provided in this Section 2.05, no beneficial owner
of Interests shall be entitled to receive Definitive Registered Senior Notes.
The Book-Entry Depositary will promptly notify the
Trustee and request in writing that the Issuer issue and the Trustee
authenticate and deliver Definitive Registered Senior Notes in exchange for
a series of Global Senior Notes, as a whole but not in part, in such names
and authorized denominations as the Depositary shall specify, if: (i) DTC
notifies the Issuer and the Book-Entry Depositary that it is unwilling or
unable to continue to hold the Book-Entry Interests related to the Global
Senior Notes of such series or DTC at any time ceases to be a "clearing
agency" registered as such under the Exchange Act and, in either case, a
successor is not appointed by the Issuer within 120 days; (ii) while the
Global Senior Notes of such series issued pursuant to Rule 144A under the
Securities Act are subject to the transfer restrictions set forth in the legend
thereon, the Book-Entry Interests therein cease to be eligible for DTC
services because the Senior Notes are neither (a) rated in one of the top
four categories by a nationally recognized statistical rating organization nor
(b) included within a Self-Regulatory Organization system approved by the
Commission for the reporting of quotation and trade information of
securities eligible for transfer pursuant to such Rule 144A, such as the
PORTAL system; (iii) the Book-Entry Depositary notifies the Issuer under
Section 3.08 hereof that it is unwilling or unable to continue as Book-Entry
Depositary and no successor Book-Entry Depositary is appointed within
120 days; or (iv) the Issuer in its sole discretion executes and delivers to
the Trustee an Officers' Certificate providing that the Global Senior Notes
of such series shall be so exchangeable. The Book-Entry Depositary
agrees that in such event it will promptly surrender the Global Senior Notes
of such series held by it to the Trustee in connection with such exchange
and request in writing that the Issuer execute and the Trustee authenticate
and deliver without charge Definitive Registered Senior Notes of the same
series, having the same interest rate, if any, and maturity and having the
same terms as the Interests of the requesting owner, in authorized
denominations of $1,000 and integral multiples thereof and of an aggregate
principal amount equal to such owner's Interests and that such Global
Senior Notes will be canceled upon issuance of such Definitive Registered
Senior Notes.
The Global Senior Notes of a series shall also be
exchangeable, in whole or in part, for Definitive Registered Senior Notes of
such series if there shall have occurred and be continuing an Event of
Default with respect to the Senior Notes of such series. In such
circumstances, beneficial owners of Interests relating to the Global Senior
Notes of such series may request in writing that their Interests be
exchanged for one or more Definitive Registered Senior Notes (an
"Optional Definitive Security Request"). Upon receipt of any such written
request, the Book-Entry Depositary shall (i) promptly surrender the
relevant Global Senior Note to the Trustee and request in writing that the
Issuer execute and the Trustee authenticate and deliver without charge
Definitive Registered Senior Notes of the same series, having the same
interest rate, if any, and maturity and having the same terms as the Interests
of the requesting owner, in authorized denominations of $1,000 and
integral multiples thereof and of an aggregate principal amount equal to
such owner's Interests; and (ii) if the Global Senior Note is being
exchanged (x) as a whole, then the surrendered Global Senior Note shall be
canceled by the Trustee, or (y) in part, then the principal amount of the
surrendered Global Senior Note shall be reduced by an endorsement on
Schedule A thereto in the appropriate amount.
All costs (taxes, governmental charges or otherwise) related
to the issuance of Definitive Registered Senior Notes will be borne by the
Issuer subject to any exceptions set forth in the Indenture.
Section 2.06. Redemption of the Senior Notes.
In the event that the Issuer exercises any right to redeem the
Senior Notes of either series in whole or in part, the Book-Entry
Depositary, as holder of the related series of Global Senior Notes, shall,
upon notice from the Issuer or the Trustee, as the case may be, surrender
the Global Senior Notes representing such series at a place of payment or
such other place as the Issuer may designate, and deliver such Global
Senior Notes to the Trustee for cancellation or for reduction of principal
amount by an endorsement on Schedule A thereto, as the case may be.
Section 2.07. Cancellation.
If the Global Senior Notes of a series are surrendered for
payment, for redemption in whole or for exchange in whole for Definitive
Registered Notes to any Person other than the Trustee, such Global Senior
Notes shall be surrendered to the Trustee for cancellation.
Section 2.08. Payments in Respect of the Book-Entry
Interests and the Global Senior Notes.
(a) Whenever the Book-Entry Depositary, as holder of
the Global Senior Notes, shall receive from the Trustee (or other paying
agent under the Indenture) any payment on the Global Senior Notes, such
payments shall be distributed promptly to DTC on the payment date for the
Global Senior Notes. The payment date for the Book-Entry Interests for
payment of any principal or interest shall be the same date as the payment
date for the related Global Senior Notes. So long as DTC is the depositary
for the Book-Entry Interests, such payments shall be made in accordance
with the Letters of Representations.
(b) The Book-Entry Depositary will forward to the
Issuer or its agents such information from its records as the Issuer may
reasonably request in writing to enable the Issuer or its agents to file
necessary reports with governmental agencies, and the Book-Entry
Depositary, the Issuer or their agents may (but shall not be required to) file
any such reports necessary to obtain benefits under any applicable tax
treaties for DTC or the beneficial owners of Interests.
(c) Notwithstanding any other provisions of this
Agreement, the Book-Entry Depositary shall be required to pay to DTC
only amounts (including Additional Amounts) received by the Book-Entry
Depositary from the Issuer under the Global Senior Notes or the Guarantor
pursuant to the Guarantee.
(d) Neither the Issuer, the Guarantor nor any agent of
the Issuer or the Guarantor (including but not limited to any paying agent)
will have any responsibility or liability for any aspect relating to payments
(including payments of Additional Amounts, if any) made or to be made by
the Book-Entry Depositary to DTC in respect of the Global Senior Notes
or the Book-Entry Interests. None of the Issuer, the Guarantor, the
Trustee, the Book-Entry Depositary or any agent of any of the foregoing
will have any responsibility or liability for any aspect relating to payments
(including payments of Additional Amounts, if any) made or to be made by
DTC on account of a Participant's or Indirect Participant's ownership of an
Interest or for maintaining, supervising or reviewing any records relating to
a Participant's Interests.
Section 2.09. Change in Principal Amount of Global
Senior Notes.
Whenever the principal amount at maturity of the Global
Senior Notes held by the Book-Entry Depositary is changed by the Trustee
as a result of partial redemption or otherwise, the Book-Entry Depositary
shall record on the Book-Entry Register a corresponding change in the
principal amount of the related Book-Entry Interests and notify DTC of
such corresponding change in accordance with the Letters of
Representations.
Section 2.10. Record Date.
Whenever any payment is to be made in respect of the
Global Senior Notes or the Book-Entry Depositary shall receive notice of
any action to be taken in respect of the Book-Entry Interests or Global
Senior Notes, or whenever the Book-Entry Depositary otherwise deems it
appropriate in respect of any other matter, the Book-Entry Depositary shall
fix a record date to determine who shall be entitled to receive payment in
respect of the Book-Entry Interests corresponding to such Global Senior
Notes or to take any such action or to act in respect of any such matter.
Subject to the provisions of this Agreement, only DTC shall be entitled to
receive any such payment, to give instructions as to such action or to act in
respect of any such matter.
Section 2.11. Action in Respect of the Book-Entry
Interests or the Global Senior Notes.
(a) Not later than 10 days from receipt by the Book-
Entry Depositary of notice of any solicitation of consents or request for a
waiver or other action with respect to the Book-Entry Interests or the
Global Senior Notes under this Agreement or the Indenture, the Book-
Entry Depositary shall mail to DTC a notice containing (i) such information
as is contained in such notice, (ii) a statement of the record date with
respect to such consent, waiver or other action, (iii) a statement that, on or
prior to a specified date (which specified date may be set no later than 180
days after the record date) (the "Expiration Date") DTC will be entitled,
subject to the provisions of or governing the Book-Entry Interests or
Global Senior Notes, as the case may be, to instruct the Book-Entry
Depositary as to such consent, waiver or such action, and (iv) a statement
specifying the manner in which such instructions may be given. Upon
receipt by the Book-Entry Depositary of instructions from DTC on or prior
to the Expiration Date and in the specified manner, the Book-Entry
Depositary shall endeavor (insofar as practicable and permitted under the
provisions of or governing the Book-Entry Interests or Global Senior
Notes, as the case may be), to take such measures regarding the requested
consent, waiver or other action in respect of such Book-Entry Interests or
Global Senior Notes, as the case may be, as shall be in accordance with
DTC's instructions subject to Section 3.03(f). The Book-Entry Depositary
shall not itself exercise any discretion in the granting of consents or waivers
or the taking of any other action in respect of the Book-Entry Interests or
Global Senior Notes, as the case may be.
(b) DTC may direct the time, method and place of
conducting any proceeding for any remedy available to the Book-Entry
Depositary or of exercising any trust or power conferred on the Book-
Entry Depositary. However, the Book-Entry Depositary may refuse to
follow any direction that conflicts with law or this Agreement or the
Indenture or, subject to Section 3.01 hereof, that the Book-Entry
Depositary determines would involve it in personal liability.
Section 2.12. Reports.
The Book-Entry Depositary shall immediately (and in no
event later than 10 days from receipt) send to DTC a copy of any notices,
reports and other communications received by it relating to the Issuer, the
Senior Notes or the Book-Entry Interests.
Section 2.13. Additional Amounts.
All payments in respect of Global Senior Notes made by the
Book-Entry Depositary pursuant to this Agreement shall be made free and
clear of, and without deduction or withholding for, or on account of, any
present or future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by or
within a Taxing Jurisdiction or by or within any political subdivision thereof
or any authority therein or thereof having power to tax ("Gross-Up
Taxes"), unless the withholding or deduction is then required by law. In
the event that such withholding or deduction is required to be made, the
Book-Entry Depositary shall pay to DTC such Additional Amounts that
have been paid by the Issuer or the Guarantor to the Book-Entry
Depositary as will result in the payment to DTC of the amount that would
otherwise have been receivable by DTC in the absence of such withholding
or deduction; provided, that Additional Amounts need only be paid to DTC
to the extent that payments of Additional Amounts from the Issuer or the
Guarantor are required under Section 1009 of the Indenture.
At least 10 days prior to the first interest payment date, and
at least 10 days prior to each succeeding interest payment date if there has
been any change with respect to the matters set forth in the below-
mentioned Officers' Certificate, the Issuer will furnish the Book-Entry
Depositary with an Officers' Certificate instructing the Book-Entry
Depositary whether such payment of principal of, premium, if any, or
interest on such Book-Entry Interests shall be made to DTC without
deduction or withholding for or on account of any Gross-Up Taxes. If any
such deduction or withholding shall be required, prior to such interest
payment date the Issuer will furnish the Book-Entry Depositary with an
Officers' Certificate that specifies the amount required to be deducted or
withheld on such payment. The Issuer shall indemnify the Book-Entry
Depositary, its officers, directors and employees for, and hold it harmless
against, any loss, liability or expense reasonably incurred without
negligence, willful misconduct or bad faith on its part arising out of or in
connection with actions taken or omitted by it in reliance on any Officers'
Certificate furnished to it pursuant to this Section 2.14.
Section 2.14. Changes Affecting Global Senior Notes.
Upon any reclassification of the Global Senior Notes, or
upon any recapitalization, reorganization, merger or consolidation or sale
of assets affecting the Issuer or to which it is a party, or upon an exchange
of the Global Senior Notes pursuant to the Indenture, any securities that
shall be received by the Book-Entry Depositary in exchange for, in
conversion of or in respect of the Global Senior Notes shall be treated as
new Global Senior Notes under this Agreement and the Book-Entry
Interests shall thenceforth represent beneficial interests in such new Global
Senior Notes so received.
ARTICLE III
The Book-Entry Depositary
Section 3.01. Certain Duties and Responsibilities.
(a) The Book-Entry Depositary undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Book-Entry Depositary.
(b) In the absence of bad faith on its part, the Book-
Entry Depositary may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Book-Entry Depositary and conforming to the
requirements of this Agreement, but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Book-Entry Depositary, the Book-Entry Depositary shall
examine the same to determine whether or not they conform to the
requirements of this Agreement.
(c) No provision of this Agreement shall be construed
to relieve the Book-Entry Depositary from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) the Book-Entry Depositary shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Book-Entry Depositary, unless
the Book-Entry Depositary was negligent in ascertaining the
pertinent facts; and
(ii) the Book-Entry Depositary shall not be liable
with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the
Depositary relating to the time, method and place of
conducting any proceeding for any remedy available to the
Book-Entry Depositary, or exercising any power conferred
upon the Book-Entry Depositary, under this Agreement or
the Indenture.
(d) No provision of this Agreement shall require the
Book-Entry Depositary to spend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder,
or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability satisfactory to the Book-Entry Depositary has
not been reasonably assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Book-Entry Depositary shall be subject to
the provisions of this Section 3.01.
Section 3.02. Events of Default.
(a) Subject to Section 2.13, within 90 days after the
occurrence of any Event of Default of which a Responsible Officer of the
Book-Entry Depositary assigned to its corporate trust department has
actual knowledge, the Book-Entry Depositary shall transmit by mail to the
Depositary in the manner provided in Section 4.02 hereof, notice of such
Event of Default, unless such Event of Default shall have been cured or
waived.
(b) Upon the occurrence of any Event of Default or in
connection with any other right of the holder of the Global Senior Notes
under the Indenture, and if requested by notice in writing by the Registered
Holder, the Book-Entry Depositary shall take such action as shall be
requested in such notice in respect of the Global Senior Notes.
Section 3.03. Certain Rights of Book-Entry Depositary.
Subject to the provisions of Section 3.01 hereof:
(a) the Book-Entry Depositary may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order or as otherwise expressly provided herein and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Book-Entry Depositary may consult with
counsel, and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(d) the Book-Entry Depositary shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Book-Entry Depositary,
in its discretion, may make further inquiry or investigation into such facts
or matters as it may see fit, and, if the Book-Entry Depositary shall
determine to make such further inquiry or investigation, it shall be entitled
upon reasonable prior request and during normal business hours to examine
the books, records and premises of the Issuer, personally or by agent or
attorney;
(e) the Book-Entry Depositary may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, but the Book-Entry Depositary shall
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it hereunder;
(f) the Book-Entry Depositary shall be under no
obligation to expend or risk its own funds or to exercise, at the request or
direction of DTC, any of the rights or powers vested in it by this
Agreement or the Indenture unless DTC shall have offered to the Book-
Entry Depositary security or indemnity satisfactory to the Book-Entry
Depositary against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction;
(g) whenever in the administration of its duties under
this Agreement the Book-Entry Depositary shall deem it desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, the Book-Entry Depositary (unless other evidence be
herein specifically prescribed) may, in the absence of negligence or bad
faith on its part, rely upon an Officers' Certificate.
Section 3.04. Not Responsible for Recitals or Issuance of
Senior Notes.
The recitals contained in the Indenture and in the Senior
Notes, except the Trustee's certificates of authentication, shall be taken as
the statements of the Issuer and the Book-Entry Depositary assumes no
responsibility for their correctness. The Book-Entry Depositary makes no
representations as to the validity or sufficiency of this Agreement or of the
Senior Notes. The Book-Entry Depositary shall not be accountable for the
use or application by the Issuer of the proceeds with respect to the Senior
Notes.
Section 3.05. Money Held in Trust.
Money held by the Book-Entry Depositary in trust
hereunder need not be segregated from other funds held by the Book-Entry
Depositary, except to the extent required by law. The Book-Entry
Depositary shall be under no obligation to invest or pay interest on any
money received by it hereunder, except as otherwise agreed in writing with
the Issuer. Any interest accrued on funds deposited with the Book-Entry
Depositary under this Agreement shall be paid to the Issuer from time to
time and DTC shall have no claim to any such interest.
Section 3.06. Compensation and Reimbursement.
The Issuer agrees:
(a) to pay to the Book-Entry Depositary from time to
time such compensation as is agreed upon in writing for services rendered
by it hereunder;
(b) except as otherwise expressly provided herein, to
reimburse the Book-Entry Depositary upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Book-Entry
Depositary in accordance with any provision of this Agreement (including
the reasonable compensation and the reasonable expenses and
disbursements of its agents and counsel, which compensation, expenses and
disbursements shall be set forth in sufficient written detail to the
satisfaction of the Issuer), except any such expense, disbursement or
advance as may be attributable to its or their negligence, willful misconduct
or bad faith; and
(c) to indemnify the Book-Entry Depositary for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on its part arising out of or in
connection with the acceptance or administration of this Agreement and its
duties hereunder, including the costs and expenses of defending itself
against any claim of liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Indemnity provided by this
Section 3.06(c) shall survive the satisfaction and discharge of this
Agreement pursuant to Section 4.11 hereof.
In case any claim shall be made or action brought against
the Book-Entry Depositary for any reason for which indemnity may be
sought against the Issuer in accordance with paragraph (c) above, the
Book-Entry Depositary shall promptly notify the Issuer in writing setting
forth the particulars of such claim or action and the Issuer may assume the
defense thereof. In the event that the Issuer elects to assume such defense
and select such counsel, the Book-Entry Depositary shall have the rights to
employ its own counsel, but, in any such case, the fees and expenses of
such counsel shall be at the expense of the Book-Entry Depositary, unless
(i) the Issuer agreed in writing to pay such fees and expenses or (ii) the
named parties to any such action (including any impleaded parties) include
both the Book-Entry Depositary and the Issuer and the Book-Entry
Depositary shall have been advised by its counsel that a conflict of interest
between the Book-Entry Depositary and the Issuer may arise (and Issuer's
counsel shall have concurred with such advise) and for this reason it is not
desirable for the Issuer's counsel to represent both the Book-Entry
Depositary and the Issuer (it being understood, however, that the Issuer
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for reasonable fees
and expenses of more than one separate firm of attorneys for the Book-
Entry Depositary (plus any local counsel retained by the Book-Entry
Depositary in their reasonable judgement), which firm shall be designated
in writing by the Book-Entry Depositary). The Book-Entry Depositary
agrees to give all assistance reasonably required in connection with the
conduct of any such claim or action.
Section 3.07. Book-Entry Depositary Required; Eligibility.
At all times when there is a Book-Entry Depositary
hereunder, such Book-Entry Depositary shall be a corporation organized
and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, having, together with its parents,
a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by Federal, state or District of Columbia
authority and willing to act on reasonable terms. Such corporation shall
have its principal place of business in the Borough of Manhattan, The City
of New York, if there be such a corporation in such location willing to act
upon reasonable and customary terms and conditions. If such corporation,
or its parent, publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 3.07, the combined capital
and surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
The Book-Entry Depositary hereunder shall at all times be the Trustee
under the Indenture, subject to receipt of an Opinion of Counsel that the
same Person is precluded by law from acting in such capacities. If at any
time the Book-Entry Depositary shall cease to be eligible in accordance
with the provisions of this Section 3.07, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
Section 3.08. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Book-Entry
Depositary and no appointment of a successor Book-Entry Depositary
pursuant to this Article shall become effective until (i) the acceptance of
appointment by the successor Book-Entry Depositary in accordance with
the applicable requirements of Section 3.09 hereof or (ii) the issuance of
Definitive Registered Senior Notes for all Global Senior Notes in
accordance with Section 2.05 hereof and the Indenture.
(b) The Book-Entry Depositary may at any time resign
as Book-Entry Depositary with respect to the Global Senior Notes by
giving written notice thereof to the Issuer and DTC, in accordance with
Section 4.01 and Section 4.02 hereof, 60 days prior to the effective date of
such resignation. The Book-Entry Depositary may be removed at any time
upon 90 days' notice by the filing with it of an instrument in writing signed
on behalf of the Issuer and specifying such removal and the date when it is
intended to become effective. If the instrument of acceptance by a
successor Book-Entry Depositary required by Section 3.09 hereof shall not
have been delivered to the Book-Entry Depositary within 30 days after the
giving of such notice of resignation or removal, the resigning Book-Entry
Depositary may petition any court of competent jurisdiction for the
appointment of a successor Book-Entry Depositary.
(c) If at any time:
(i) the Book-Entry Depositary shall cease to be
eligible under Section 3.07 hereof, or shall cease to be
eligible as Trustee under the Indenture, and shall fail to
resign after written request therefor by the Issuer or by
DTC, or
(ii) the Book-Entry Depositary shall become
incapable of acting with respect to the Book-Entry Interests
or shall be adjudged a bankrupt or insolvent, or a receiver
or liquidator of the Book-Entry Depositary or of its
property shall be appointed or any public officer shall take
charge or control of the Book-Entry Depositary or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation.
then, in any such case, (i) the Issuer, by Board Resolution, may remove the
Book-Entry Depositary and appoint a successor Book-Entry Depositary,
and (ii) if the Issuer shall fail to remove such Book-Entry Depositary and
appoint a successor Book-Entry Depositary within 30 days of any such
event, then DTC may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Book-
Entry Depositary or Book-Entry Depositaries and the appointment of a
successor Book-Entry Depositary, unless Definitive Registered Senior
Notes have been issued in accordance with the Indenture.
(d) If the Book-Entry Depositary shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of Book-Entry Depositary for any cause, the Issuer, by Board
Resolution, shall promptly appoint a successor Book-Entry Depositary
(other than the Issuer) and shall comply with the applicable requirements of
Section 3.09 hereof. If no successor Book-Entry Depositary with respect
to the Global Senior Notes shall have been so appointed by the Issuer and
accepted appointment in the manner required by Section 3.09 within 120
days of any such resignation, removal, incapacity or vacancy, then DTC
may request that Definitive Registered Senior Notes in such names and
denominations as DTC shall instruct in writing with respect to such Global
Senior Notes be issued. The Book-Entry Depositary will thereupon
surrender such Global Senior Notes to the Trustee for cancellation and the
Trustee shall distribute such Definitive Registered Senior Notes in
accordance with the instructions of DTC.
(e) The Issuer shall give, or shall cause such successor
Book-Entry Depositary to give, notice of each resignation and each
removal of a Book-Entry Depositary and each appointment of a successor
Book-Entry Depositary to DTC in accordance with Section 4.02 hereof.
Each notice shall include the name of the successor Book-Entry Depositary
and the address of its Corporate Trust Office.
Section 3.09. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Book-Entry Depositary, every such successor Book-Entry Depositary so
appointed shall execute, acknowledge and deliver to the Issuer and to the
retiring Book-Entry Depositary an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Book-Entry
Depositary shall become effective and such successor Book-Entry
Depositary, without any further act, deed or conveyance, shall become
vested with all the rights, powers, agencies and duties of the retiring Book-
Entry Depositary, with like effect as if originally named as Book-Entry
Depositary hereunder; but, on the request of the Issuer or the successor
Book-Entry Depositary, such retiring Book-Entry Depositary shall
(i) execute and deliver an instrument transferring to such successor Book-
Entry Depositary all the rights and powers of the retiring Book-Entry
Depositary and (ii) duly assign, transfer and deliver to such successor
Book-Entry Depositary all property and money held by such retiring Book-
Entry Depositary hereunder. Any retiring Book-Entry Depositary shall,
nonetheless, retain a prior claim upon all property or funds held or
collected by such Book-Entry Depositary to secure any amounts then due
it pursuant to Section 3.06 hereof except to the extent that such prior claim
and security would breach or constitute a default under the Indenture or
Senior Notes.
(b) Upon request of any such successor Book-Entry
Depositary, the Issuer shall execute any and all instruments for more fully
and certainly vesting in and confirming to such successor Book-Entry
Depositary all such rights, powers and agencies referred to in paragraph (a)
of this Section 3.09.
(c) No successor Book-Entry Depositary shall accept its
appointment unless at the time of such acceptance such successor Book-
Entry Depositary shall be eligible under this Article.
(d) Upon acceptance of appointment by any successor
Book-Entry Depositary as provided in this Section 3.09, the Issuer shall
give notice thereof to the Depositary in accordance with Section 4.02
hereof. If the acceptance of appointment is substantially contemporaneous
with the resignation of the Book-Entry Depositary, then the notice called
for by the preceding sentence may be combined with the notice called for
by Section 3.08(b) hereof. If the Issuer fails to give such notice within 10
days after acceptance of appointment by the successor Book-Entry
Depositary, the successor Book-Entry Depositary shall cause such notice
to be given at the expense of the Issuer.
Section 3.10. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Book-Entry Depositary may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Book-Entry Depositary shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Book-Entry Depositary, shall be the successor of the Book-Entry
Depositary hereunder, without the execution of filing of any paper or any
further act on the part of any of the parties hereto.
Section 3.11. Letters of Representations.
The Book-Entry Depositary agrees to comply with all of the provisions
set forth in the Letters of Representations so long as DTC is the holder of
the Book-Entry Interests.
ARTICLE IV
Miscellaneous Provisions
Section 4.01. Notices to Book-Entry Depositary or Issuer.
Any request, demand, authorization, direction, notice,
consent, or waiver or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
the Book-Entry Depositary by DTC, by the Trustee or
the Issuer shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Book-Entry
Depositary at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration Department, or at
any other address previously furnished in writing by the
Book-Entry Depositary to DTC, the Trustee and the Issuer,
or
the Issuer, by the Book-Entry Depositary or by DTC
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid to Yorkshire Power
Finance Limited, c/o Yorkshire Power Group Limited,
Wetherby Road, Scarcroft, Leeds LS14 3HS, England,
Attention: Finance Director, or at any other address
previously furnished in writing to the Book-Entry
Depositary by the Issuer.
Section 4.02. Notice to DTC; Waiver.
Where this Agreement provides for notice to DTC of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided or as provided in the Letter of Representations) if in
writing and mailed, first-class postage prepaid, to DTC at the address
notified to the Book-Entry Depositary, in each case not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by DTC shall be filed with the
Book-Entry Depositary, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the
Book-Entry Depositary shall constitute a sufficient notification for every
purpose hereunder.
Section 4.03. Effect of Headings and Table of Contents.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
Section 4.04. Successors and Assign.
All covenants and agreements in this Agreement and the
Senior Notes by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 4.05. Separability Clause.
In case any provision in this Agreement or in the Senior
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.
Section 4.06. Benefits of Agreement.
Nothing in this Agreement, the Senior Notes or the
Indenture, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefits or any legal or
equitable right, remedy or claim under this Agreement; provided, that DTC
and the beneficial owners of Interests shall be intended third-party
beneficiaries of this Agreement. DTC and beneficial owners from time to
time of Interests in the Book-Entry Interests shall be parties to this
Agreement and shall be bound by all of the terms and conditions hereof and
of the Indenture and the Senior Notes, by their acceptance of delivery of
the Interests or beneficial interests therein.
Section 4.07. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
Section 4.08. Jurisdiction.
(a) The Issuer agrees that any legal suit, action or
proceeding against the Issuer brought by the Book-Entry Depositary
arising out of or based upon this Agreement may be instituted in any state
or Federal court in the Borough of Manhattan, The City of New York, and
waives any objection which it may now or hereafter have to the laying of
venue of any such proceeding and, until the satisfaction and discharge of
this Agreement pursuant to Section 4.11 hereof, irrevocably submits to the
nonexclusive jurisdiction of such courts in any suit, action or proceeding.
(b) The Issuer has appointed CT Corporation System at
1633 Broadway, New York, New York 10019, as its authorized agent (the
"Authorized Agent") upon whom process may be served in any legal suit,
action or proceeding arising out of or based upon this Agreement which
may be instituted in the Supreme Court of New York, New York County
of the United States District Court for the Southern District of New York
by DTC or the Book-Entry Depositary, and expressly accepts the
nonexclusive jurisdiction of any such court in respect of any such action.
Such appointment shall be irrevocable. Service of process upon the
Authorized Agent shall be deemed, in every respect, effective service of
process upon the Issuer. Notwithstanding the foregoing, any action based
on this Agreement may be instituted by the Book-Entry Depositary in any
competent court in England or the Cayman Islands.
(c) To the extent that the Issuer may in any jurisdiction
claim for itself or its assets immunity (to the extent such immunity may
now or hereafter exist, whether on the grounds of sovereign immunity or
otherwise) from suit, execution, attachment (whether in aid of execution,
before judgment or otherwise) or other legal process (whether through
service or notice or otherwise), and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Issuer irrevocably agrees with respect to any
matter arising under this Deposit Agreement for the benefit of the
Registered Holder from time to time of the Book-Entry Interests, not to
claim, and irrevocably waives, such immunity to the full extent permitted
by the laws of such jurisdiction.
Section 4.09. Counterparts.
This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 4.10. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office of the
Book-Entry Depositary for inspection by DTC.
Section 4.11. Satisfaction and Discharge.
This Agreement upon Issuer Order shall cease to be of
further effect, and the Book-Entry Depositary, at the expense of the Issuer
shall execute proper instruments acknowledging satisfaction and discharge
of this Agreement, when (i) either (a) the Indenture has been satisfied and
discharged pursuant to the provisions thereof or (b) Definitive Registered
Senior Notes have been issued and the Global Senior Notes have been
canceled in accordance with the provisions of Section 2.07 and the
Indenture, (ii) the Issuer has paid or caused to be paid all sums payable
hereunder by the Issuer and (iii) the Issuer has delivered to the Book-Entry
Depositary an Officers' Certificate and an Opinion of Counsel, stating that
all conditions precedent herein provided relating to the satisfaction and
discharge of this Agreement have been complied with.
Section 4.12. Amendments.
The Issuer and the Book-Entry Depositary may amend this
Agreement without the consent of DTC:
(a) to cure any formal defect, omission, inconsistency or
ambiguity herein;
(b) to add to the covenants and agreements of the Issuer
or the Book-Entry Depositary ;
(c) to effect the assignment of the Book-Entry
Depositary's rights and duties to a qualified successor as provided herein;
(d) to comply with any requirements of the Securities
Act, the Exchange Act, the Investment Company Act of 1940, as amended,
the Trust Indenture Act or any other applicable securities laws;
(e) to modify this Agreement in connection with an
amendment to the Indenture that does not require the consent of DTC; or
(f) to modify, alter, amend or supplement this
Agreement in any other respect not inconsistent with this Agreement
which, in the opinion of counsel acceptable to the Issuer, is not materially
adverse to DTC or the beneficial owners of Interests.
Except as set forth in this Section 4.12, no amendment
which materially adversely affects DTC or beneficial owners of Interests
may be made to this Agreement without the consent of DTC or such
beneficial owner.
Section 4.13. Book-Entry Depositary To Sign
Amendments.
The Book-Entry Depositary shall sign any amendment
authorized pursuant to Section 4.12 hereof if the amendment does not
materially adversely affect the rights, duties, liabilities or immunities of
the Book-Entry Depositary. If it does, the Book-Entry Depositary may, but
need not sign it.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first written above.
YORKSHIRE POWER
FINANCE LIMITED
By:
Name:
Title:
THE BANK OF NEW
YORK, as
Book-Entry Depositary
By:
Name:
Title:
.continued from the preceding page
continued on the following page.
ii
NY-115100.6
i
NY-115100.7
6
NY-115100.7
NY-115100.7
EXHIBIT 4.12
THIS TRUST DEED is made on 17th January, 1995 BETWEEN:
(1) YORKSHIRE ELECTRICITY GROUP plc, a company incorporated
under the laws of England, whose registered office is at Wetherby Road,
Scarcroft, Leeds LS14 3HS, England (the "Issuer"); and
(2) BANKERS TRUSTEE COMPANY LIMITED, a company
incorporated under the laws of England, whose registered office is at 1
Appold Street, Broadgate, London EC2A 2HE (the "Trustee", which
expression shall, wherever the context so admits, include such company
and all other persons or companies for the time being the trustee or
trustees of these presents) as trustee for the Holders and Couponholders
(each as defined below).
WHEREAS:
(1) By resolutions of the board of directors of the Issuer passed on 15th
December, 1994 and by resolutions of a duly authorised committee of the
board of directors of the Issuer passed on 4th and 5th January, 1995 the
Issuer has resolved to issue (POUND)200,000,000 9 1/4 per cent. Bonds
due 2020 to be constituted by this Trust Deed.
(2) The said Bonds in definitive form will be either in bearer form with
Coupons attached or in registered form without Coupons but holders of
definitive Bonds in bearer form will have the option to exchange such
Bonds for definitive Bonds in registered form and vice versa, all upon and
subject to the terms and conditions of these presents.
(3) The Trustee has agreed to act as trustee of these presents for the
benefit of
the Holders and Couponholders upon and subject to the terms and
conditions of these presents.
NOW THIS TRUST DEED WITNESSES AND IT IS AGREED AND
DECLARED as follows:
1. DEFINITIONS
(A) In these presents unless there is anything in the subject or context
inconsistent therewith the following expressions shall have the following
meanings:
"Agency Agreement" means, in relation to the Securities of any series,
the agreement appointing the initial Paying Agents and, if applicable,
Registrar and Transfer Agents in relation to such Securities and any other
agreement for the time being in force appointing Successor paying agents
and, if applicable, registrars or transfer agents in relation to such
Securities, or in connection with their duties, the terms of which have
previously been approved in writing by the Trustee, together with any
agreement for the time being in force amending or modifying with the
prior written approval of the Trustee any of the aforesaid agreements in
relation to such Securities;
"Agent Bank" means, in relation to the Securities of any relevant series,
the bank initially appointed as agent bank in relation to such Securities by
the Issuer pursuant to the relative Agent Bank Agreement or, if
applicable, any Successor agent bank in relation to such Securities;
"Agent Bank Agreement" means, in relation to the Securities of any
relevant series, the agreement (which may, but need not, be the relative
Agency Agreement) appointing the initial Agent Bank in relation to such
Securities and any other agreement for the time being in force appointing
any Successor agent bank in relation to such Securities, or in connection
with its duties, the terms of which have previously been approved in
writing by the Trustee, together with any agreement for the time being in
force amending or modifying with the prior written approval of the
Trustee any of the aforesaid agreements in relation to such Securities;
"Appointee" means any attorney, manager, agent, delegate or other
person appointed by the Trustee under these presents;
"Auditors" means the auditors for the time being of the Issuer or, in the
event of their being unable or unwilling promptly to carry out any action
requested of them pursuant to the provisions of these presents, such other
firm of accountants as may be nominated or approved by the Trustee for
the purposes of these presents after consultation with the Issuer where, in
the opinion of the Trustee, such consultation is practicable;
"Capital and Reserves" has the meaning set out in Condition 4;
"Bearer Securities" means those of the Securities which are for the time
being in bearer form;
"Cedel" means Cedel, socie'te' anonyme;
"Conditions" means:
(i) in relation to the Original Bonds, the Conditions to be endorsed on
the Original Bonds in definitive form in the form or substantially
in the form set out in Part III of the Second Schedule as the same
may from time to time be modified in accordance with these
presents and any reference in these presents to a particular
specified Condition or paragraph of a Condition shall in relation
to the Original Bonds be construed accordingly; and
(ii) in relation to the Further Securities of any series, the Conditions
to be endorsed on such Further Securities in definitive form in the
form or substantially in the form set out or referred to in the
supplemental Trust Deed relating thereto as the same may from
time to time be modified in accordance with these presents and
any reference in these presents to a particular specified Condition
or paragraph of a Condition shall in relation to the Further
Securities of any series, unless either referring specifically to a
particular specified Condition or paragraph of a Condition of
such Further Securities or the context otherwise requires, be
construed as a reference to the provisions (if any) in the
Conditions thereof which correspond to the provisions of the
particular specified Condition or paragraph of a Condition of the
Original Bonds;
"Couponholders" means the several persons who are for the time being
holders of the Coupons;
"Coupons" means the bearer interest coupons appertaining to the Bearer
Securities in definitive form or, as the context may require, a specific
number thereof and includes any replacements for Coupons issued
pursuant to Condition 14 and, where the context so permits, the Talons;
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System;
"Event of Default" means any of the conditions, events or acts provided
in Condition 11 to be events upon the happening of which the Securities of
any series would, subject only to notice by the Trustee as therein
provided, become immediately due and repayable;
"Excluded Subsidiary" has the meaning set out in Condition 4;
"Extraordinary Resolution" has the meaning set out in paragraph 20 of
the Fourth Schedule;
"Further Securities" means bonds or notes (whether in bearer or
registered form) of the Issuer constituted by a Trust Deed supplemental to
this Trust Deed pursuant to Clause 2(D) or the principal amount thereof
for the time being outstanding or as the context may require a specific
number thereof and includes any replacements for Further Securities
issued pursuant to Condition 14 and where applicable any Global Security
issued in respect thereof and, where the context requires or admits,
includes the Receipts issued in respect of any Further Securities;
"Global Security" means the Original Global Bond and/or any other
global bond or note issued in respect of the Further Securities of any
series and includes any replacements for Global Securities issued pursuant
to Condition 14;
"Holders" means the several persons who are for the time being holders of
the Securities (being, in the case of Bearer Securities, the bearers thereof
and, in the case of Registered Securities, the several persons whose names
are entered in the register of holders of the Registered Securities as the
holders thereof) and the words "holder" and "holders" and related
expressions shall (where appropriate) be construed accordingly;
"indebtedness for borrowed money" has the meaning set out in
Condition 4;
"Liability" means any loss, damage, cost, charge, claim, demand,
expense, judgment, action, proceeding or other liability whatsoever
(including, without limitation, in respect of taxes, duties, levies, imposts
and other charges) and including any value added tax or similar tax
charged or chargeable in respect thereof and legal fees and expenses on a
full indemnity basis;
"Original Bearer Bonds" means those of the Original Bonds which are
for the time being in bearer form;
"Original Bondholders" means the several persons who are for the time
being holders of the Original Bonds and, where the context so requires or
admits, shall include the Original Receiptholders;
"Original Bonds" means the bonds (whether in bearer or registered form)
comprising the said (POUND)200,000,000 9 1/4 per cent. Bonds due
2020 of the Issuer hereby constituted or the principal amount thereof for
the time being outstanding or, as the context may require, a specific
number thereof and includes any replacements for Original Bonds issued
pursuant to Condition 14, where the context so requires or admits any
Original Receipts and (except for the purposes of Clause 3) the Original
Global Bond;
"Original Couponholders" means the several persons who are for the
time being holders of the Original Coupons;
"Original Coupons" means the Coupons appertaining to the Original
Bearer Bonds;
"Original Global Bond" means the global bond in respect of the Original
Bearer Bonds to be issued pursuant to Clause 3(A) in the form or
substantially in the form set out in the First Schedule;
"Original Receiptholders" means the holders of the Original Receipts;
"Original Receipts" means the Receipts appertaining to the Original
Bonds;
"Original Registered Bonds" means those of the Original Bonds which
are for the time being in registered form;
"Original Talons" means the Talons appertaining to the Original Bearer
Bonds in definitive form;
"outstanding" means in relation to the Securities all the Securities issued
other than:
(a) those Securities which have been redeemed pursuant to these
presents;
(b) those Securities in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption
moneys (including premium (if any) and all interest payable
thereon) have been duly paid to the Trustee or to the Principal
Paying Agent in the manner provided in the Agency Agreement
(and where appropriate notice to that effect has been given to the
relative Holders in accordance with Condition 15) and remain
available for payment against presentation of the relevant
Securities and/or Coupons;
(c) those Securities which have been purchased and cancelled in
accordance with Condition 7;
(d) those Securities which have become void under Condition 10;
(e) those mutilated or defaced Securities which have been surrendered
and cancelled and in respect of which replacements have been
issued pursuant to Condition 14;
(f) (for the purpose only of ascertaining the principal amount of the
Securities outstanding and without prejudice to the status for any
other purpose of the relevant Securities) those Securities which
are alleged to have been lost, stolen or destroyed and in respect of
which replacements have been issued pursuant to Condition 14;
(g) any Global Security to the extent that it shall have been
exchanged for another Global Security in respect of the Securities
of the relevant series or for the Securities of the relevant series in
definitive form pursuant to its provisions; and
(h) those Bearer Securities which have been exchanged for Registered
Securities (and, where applicable, vice versa) and which have
been cancelled or, if permitted by the Conditions of such
Securities, are for the time being retained by or on behalf of the
Issuer, in each case pursuant to the provisions of these presents;
PROVIDED THAT for each of the following purposes, namely:
(i) the right to attend and vote at any meeting of the Holders or any
of them;
(ii) the determination of how many and which Securities are for the
time being outstanding for the purposes of Clause 8(A),
Conditions 11, 12 and 16 and paragraphs 2, 5, 6 and 9 of the
Fourth Schedule;
(iii) any discretion, power or authority (whether contained in these
presents or vested by operation of law) which the Trustee is
required, expressly or impliedly, to exercise in or by reference to
the interests of the Holders or any of them; and
(iv) the determination by the Trustee whether any event, circumstance,
matter or thing is, in its opinion, materially prejudicial to the
interests of the Holders or any of them,
those Securities (if any) which are for the time being held by, for the
benefit of, or on behalf of, the Issuer or any Subsidiary of the Issuer, any
holding company of the Issuer or any other Subsidiary of any such
holding company shall (unless and until ceasing to be so held) be deemed
not to remain outstanding;
"Paying Agents" means, in relation to the Securities of any series, the
several institutions (including where the context permits the Principal
Paying Agent) at their respective specified offices initially appointed as
paying agents in relation to such Securities by the Issuer pursuant to the
relative Agency Agreement and/or, if applicable, any Successor paying
agents in relation to such Securities;
"PES Licence" has the meaning set out in Condition 8(d)(vii)(A)(aa);
"PES Subsidiary" has the meaning set out in Condition 4;
"Potential Event of Default" means any condition, event or act which,
with the lapse of time and/or the issue, making or giving of any notice,
certification, declaration, demand, determination and/or request and/or the
taking of any similar action and/or the fulfilment of any similar condition,
would constitute an Event of Default;
"Principal Paying Agent" means, in relation to the Securities of any
series, the institution at its specified office initially appointed as
principal
paying agent in relation to such Securities by the Issuer pursuant to the
relative Agency Agreement or, if applicable, any Successor principal
paying agent in relation to such Securities;
"Principal Subsidiary" means at any time a Subsidiary of the Issuer (not
being an Excluded Subsidiary or any other Subsidiary of the Issuer whose
only indebtedness for borrowed money is Project Finance Indebtedness):
(a) whose net profits before tax attributable to the Issuer
(consolidated in the case of a Subsidiary which itself has
Subsidiaries and which in the normal course, prepares
consolidated accounts) or whose gross assets (consolidated in the
case of a Subsidiary which itself has Subsidiaries) represent in
each case (or, in the case of a Subsidiary acquired after the end of
the financial period to which the then latest relevant audited
consolidated accounts of the Issuer and its Subsidiaries relate, are
equal to) not less than 20 per cent. of the consolidated net profits
before tax attributable to the shareholders of the Issuer, or, as the
case may be, consolidated gross assets, of the Issuer and its
Subsidiaries taken as a whole, all as calculated respectively by
reference to the then latest audited accounts (consolidated or, as
the case may be, unconsolidated) of such Subsidiary and the then
latest audited consolidated accounts of the Issuer and its
Subsidiaries, provided that:
(i) in the case of a Subsidiary acquired after the end of the
financial period to which the then latest relevant audited
consolidated accounts relate, the reference to the then
latest audited consolidated accounts for the purposes of
the calculation above shall, until consolidated accounts
for the financial period in which the acquisition is made
have been prepared and audited as aforesaid, be deemed
to be a reference to such first-mentioned accounts as if
such Subsidiary had been shown in such accounts by
reference to its then latest relevant audited accounts,
adjusted as deemed appropriate by the Auditors; and
(ii) if, in the case of a Subsidiary which itself has
Subsidiaries, no consolidated accounts are prepared and
audited, its consolidated net profits before tax attributable
to the Issuer and consolidated gross assets shall be
determined on the basis of pro forma consolidated
accounts of the relevant Subsidiary and its Subsidiaries
prepared and audited for this purpose by the Auditors or
the auditors for the time being of the relevant Subsidiary;
or
(b) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Issuer which
immediately prior to such transfer is a Principal Subsidiary,
provided that the transferor Subsidiary shall upon such transfer
forthwith cease to be a Principal Subsidiary and the transferee
Subsidiary shall cease to be a Principal Subsidiary pursuant to
this sub-paragraph (b) on the date on which the consolidated
accounts of the Issuer and its Subsidiaries for the financial period
current at the date of such transfer have been prepared and
audited as aforesaid but so that such transferor Subsidiary or
such transferee Subsidiary may be a Principal Subsidiary on or at
any time after the date on which such consolidated accounts have
been prepared and audited as aforesaid by virtue of the provisions
of sub-paragraph (a) above or before, on or at any time after such
date by virtue of the provisions of this sub-paragraph (b) or sub-
paragraph (c) below; or
(c) to which is transferred a business, an undertaking or assets which,
taken together with the business, undertaking and assets of the
transferee Subsidiary, generated (or, in the case of the transferee
Subsidiary being acquired after the end of the financial period to
which the then latest relevant audited consolidated accounts of the
Issuer and its Subsidiaries relate, generate net profits before tax
attributable to the Issuer equal to) not less than 20 per cent. of the
consolidated net profits before tax attributable to the shareholders
of the Issuer, or represent (or, in the case aforesaid, are equal to)
not less than 20 per cent. of the consolidated gross assets, of the
Issuer and its Subsidiaries taken as a whole, all as calculated as
referred to in sub-paragraph (a) above, provided that the
transferor Subsidiary (if a Principal Subsidiary) shall upon such
transfer forthwith cease to be a Principal Subsidiary unless
immediately following such transfer its business, undertaking and
assets generate (or, in the case aforesaid, generate net profits
before tax attributable to the Issuer equal to) not less than 20 per
cent. of the consolidated net profits before tax attributable to the
shareholders of the Issuer, or its assets represent (or, in the case
aforesaid, are equal to) not less than 20 per cent. of the
consolidated gross assets, of the Issuer and its Subsidiaries taken
as a whole, all as calculated as referred to in sub-paragraph (a)
above, and the transferee Subsidiary shall cease to be a Principal
Subsidiary pursuant to this sub-paragraph (c) on the date on
which the consolidated accounts of the Issuer and its Subsidiaries
for the financial period current at the date of such transfer have
been prepared and audited but so that such transferor Subsidiary
or such transferee Subsidiary may be a Principal Subsidiary on or
at any time after the date on which such consolidated accounts
have been prepared and audited as aforesaid by virtue of the
provisions of sub-paragraph (a) above or before, on or at any
time after such date by virtue of the provisions of this sub-
paragraph (c) or sub-paragraph (b) above,
Provided that, in calculating the consolidated net profits before tax
attributable to the shareholders of the Issuer or consolidated gross assets
of the Issuer and the Subsidiaries taken as a whole, amounts in respect of
minority interests shall only be excluded if and to the extent that such
amounts have not been already excluded in the course of preparation of
the relevant consolidated accounts.
For the purposes of this definition if there shall at any time not be any
relevant audited consolidated accounts of the Issuer and its Subsidiaries,
references thereto herein shall be deemed to refer to a consolidation by the
Auditors of the relevant audited accounts of the Issuer and its
Subsidiaries.
A report by the Auditors that in their opinion a Subsidiary of the Issuer is
or is not or was or was not at any particular time or throughout any
specified period a Principal Subsidiary shall, in the absence of manifest
error, be conclusive and binding on all parties;
"Project Finance Indebtedness" has the meaning set out in Condition 4;
"Receiptholders" means the holders of the Receipts;
"Receipts" means the non-transferable receipts (if any) for Securities to
be issued by Paying Agents to the Holders pursuant to Condition 8(c);
"Reference Banks" means, in relation to the Securities of any relevant
series, the several banks initially appointed as reference banks in relation
to such Securities by the Issuer and referred to in the Conditions of such
Securities and/or, if applicable, any Successor reference banks in relation
to such Securities;
"Registered Securities" means those of the Securities which are for the
time being in registered form;
"Registrar" means, in relation to the Securities of any relevant series
(being, or which are exchangeable for, Registered Securities), the
institution at its specified office initially appointed as registrar in
relation
to such Securities by the Issuer pursuant to the relative Agency
Agreement or, if applicable, any Successor registrar in relation to such
Securities;
"Relevant Date" has the meaning set out in Condition 9;
"Relevant Indebtedness" has the meaning set out in Condition 4;
"repay", "redeem" and "pay" shall each include both the others and
cognate expressions shall be construed accordingly;
"Restructuring Event" has the meaning set out in Condition 8(d)(vii);
"Security Interest" has the meaning set out in Condition 4;
"Securities" means, as the context may require, the Original Bonds and/or
any Further Securities and/or any series thereof;
"Subsidiary" means any company which is for the time being a subsidiary
(within the meaning of Section 736 of the Companies Act 1985 of Great
Britain);
"Successor" means, in relation to the Agent Bank, the Principal Paying
Agent, the other Paying Agents, the Reference Banks, the Registrar and
the Transfer Agents, any successor to any one or more of them in relation
to the Securities of the relevant series which shall become such pursuant
to the provisions of these presents, the relative Agent Bank Agreement
and/or the relative Agency Agreement (as the case may be) and/or such
other or further agent bank, principal paying agent, paying agents,
reference banks, registrar and/or transfer agents (as the case may be) in
relation to such Securities as may (with the prior approval of, and on
terms previously approved by, the Trustee in writing) from time to time be
appointed as such, and/or, if applicable, such other or further specified
offices (in the former case being within the same city as those for which
they are substituted) as may from time to time be nominated, in each case
by the Issuer, and (except in the case of the initial appointments and
specified offices made under and specified in the Conditions, the relative
Agent Bank Agreement and/or the relative Agency Agreement, as the case
may be) notice of whose appointment or, as the case may be, nomination
has been given to the relevant Holders pursuant to Clause 13(xiii) in
accordance with Condition 15;
"Talons" means the talons appertaining to, and exchangeable in
accordance with the provisions therein contained for further Coupons
appertaining to, the Bearer Securities of any relevant series in definitive
form and includes any replacements for Talons issued pursuant to
Condition 14;
"The Stock Exchange" means, in relation to the Securities of any relevant
series, the stock exchange or exchanges (if any) on which such Securities
are quoted or listed on the issue thereof;
"these presents" means this Trust Deed and the Schedules and any Trust
Deed supplemental hereto and the Schedules (if any) thereto and the
Securities, the Coupons and the Conditions, all as from time to time
modified in accordance with the provisions herein or therein contained;
"Transfer Agents" means, in relation to the Securities of any relevant
series (being, or which are exchangeable for, Registered Securities), the
institutions at their respective specified offices initially appointed as
transfer agents in relation to such Securities by the Issuer pursuant to the
relative Agency Agreement and/or, if applicable, any Successor transfer
agents in relation to such Securities;
"Trust Corporation" means a corporation entitled by rules made under
the Public Trustee Act 1906 of Great Britain or entitled pursuant to any
other comparable legislation applicable to a trustee in any other
jurisdiction to carry out the functions of a custodian trustee;
words denoting the singular shall include the plural and vice versa;
words denoting one gender only shall include the other genders; and
words denoting persons only shall include firms and corporations and vice
versa.
(B) (i) All references in these presents to principal and/or premium
and/or interest in respect of the Securities or to any moneys
payable by the Issuer under these presents shall be deemed to
include a reference to any additional amounts which may be
payable under Condition 9 or, if applicable, under any
undertaking or covenant given pursuant to Clause 13(xv) or
Clause 20(A)(2)(ii).
(ii) All references in these presents to principal or principal amount
shall, unless the context otherwise requires, be deemed to include
the Redemption Price (as defined in Condition 7).
(iii) All references in these presents to "pounds", "sterling", "pounds
sterling" or the sign "(POUND)" shall be construed as references
to the lawful currency for the time being of the United Kingdom.
(iv) All references in these presents to any statute or any provision of
any statute shall be deemed also to refer to any statutory
modification or re-enactment thereof or any statutory instrument,
order or regulation made thereunder or under any such
modification or re-enactment.
(v) All references in these presents to guarantees or to an obligation
being guaranteed shall be deemed to include respectively
references to indemnities or to an indemnity being given in respect
thereof.
(vi) All references in these presents to any action, remedy or method
of proceeding for the enforcement of the rights of creditors shall
be deemed to include, in respect of any jurisdiction other than
England, references to such action, remedy or method of
proceeding for the enforcement of the rights of creditors available
or appropriate in such jurisdiction as shall most nearly
approximate to such action, remedy or method of proceeding
described or referred to in these presents.
(vii) All references in these presents to taking proceedings against the
Issuer shall be deemed to include references to proving in the
winding up of the Issuer.
(viii) Wherever in these presents the Issuer is required to give an
opinion or make any determination, the Issuer shall, in so doing,
be entitled to rely on advice from professional advisers but so
that, as between the Issuer, the Trustee, the Holders and the
Couponholders, the Issuer alone shall be liable as to the validity
of such opinion or determination.
(ix) Unless the context otherwise requires words or expressions used
in these presents shall bear the same meanings as in the
Companies Act 1985 of Great Britain.
(x) In this Trust Deed references to Schedules, Clauses, sub-clauses,
paragraphs and sub-paragraphs shall be construed as references
to the Schedules to this Trust Deed and to the Clauses, sub-
clauses, paragraphs and sub-paragraphs of this Trust Deed
respectively.
(xi) In these presents tables of contents and Clause headings are
included for ease of reference and shall not affect the construction
of these presents.
2. COVENANT TO REPAY AND TO PAY INTEREST ON ORIGINAL BONDS
(A) THE aggregate principal amount of the Original Bonds is limited to
(POUND)200,000,000.
(B) The Issuer covenants with the Trustee that it will, in accordance with
these presents, on the due date for the final maturity of the Original Bonds
provided for in the Conditions, or on such earlier date as the same or any
part thereof may become immediately due and repayable thereunder, pay
or procure to be paid unconditionally to or to the order of the Trustee in
pounds sterling in London in immediately available funds the principal
amount of the Original Bonds repayable on that date and shall in the
meantime and until such date (both before and after any judgment or other
order of a court of competent jurisdiction) pay or procure to be paid
unconditionally to or to the order of the Trustee as aforesaid interest
(which shall accrue from day to day) on the principal amount of the
Original Bonds at the rate of 9 1/4 per cent. per annum payable (less tax,
if appropriate) annually in arrear on 17th January, the first such payment
to be made on 17th January , 1996 and to amount to a full year's interest
PROVIDED THAT:
(i) every payment of principal or interest in respect of the Original
Bearer Bonds and every payment of principal in respect of the
Original Registered Bonds to or to the account of the Principal
Paying Agent in the manner provided in the Agency Agreement
shall operate in satisfaction pro tanto of the relative covenant by
the Issuer in this Clause except to the extent that there is default
in the subsequent payment thereof in accordance with the
Conditions to the relevant Original Bondholders or Original
Couponholders (as the case may be);
(ii) every payment of interest in respect of the Original Registered
Bonds to the relevant Original Bondholders as provided in the
Conditions (whether by the Issuer or the Registrar) shall operate
in satisfaction pro tanto of the relative covenant by the Issuer in
this Clause;
(iii) in any case where payment of principal is not made to the Trustee
or the Principal Paying Agent on or before the due date, interest
shall continue to accrue on the principal amount of the Original
Bonds (both before and after any judgment or other order of a
court of competent jurisdiction) at the rate aforesaid (or, if higher,
the rate of interest on judgment debts for the time being provided
by English law) up to and including the date which the Trustee
determines to be the date on and after which payment is to be
made to the Original Bondholders in respect thereof as stated in a
notice given to the Original Bondholders in accordance with
Condition 15 (such date to be not later than 30 days after the day
on which the whole of such principal amount, together with an
amount equal to the interest which has accrued and is to accrue
pursuant to this proviso up to and including that date, has been
received by the Trustee or the Principal Paying Agent);
(iv) in any case where payment of the whole or any part of the
principal amount of any Original Bond is improperly withheld or
refused upon due presentation thereof (other than in
circumstances contemplated by proviso (iii) above) interest shall
accrue on that principal amount payment of which has been so
withheld or refused (both before and after any judgment or other
order of a court of competent jurisdiction) at the rate aforesaid
(or, if higher, the rate of interest on judgment debts for the time
being provided by English law) from and including the date of
such withholding or refusal up to and including the date on which,
upon further presentation of the relevant Original Bond, payment
of the full amount (including interest as aforesaid) in pounds
sterling payable in respect of such Original Bond is made or (if
earlier) the seventh day after notice is given to the relevant
Original Bondholder (either individually or in accordance with
Condition 15) that the full amount (including interest as
aforesaid) in pounds sterling payable in respect of such Original
Bond is available for payment, provided that, upon further
presentation thereof being duly made, such payment is made.
The Trustee will hold the benefit of this covenant on trust for the Original
Bondholders and the Original Couponholders in accordance with these
presents.
TRUSTEE'S REQUIREMENTS REGARDING PAYING AGENTS,
REGISTRAR AND TRANSFER AGENTS
(C) At any time after an Event of Default or a Potential Event of Default shall
have occurred or the Securities shall otherwise have become due and
repayable or the Trustee shall have received any money which it proposes
to pay under Clause 9 to the Holders and/or Couponholders, the Trustee
may:
(i) by notice in writing to the Issuer, the Principal Paying Agent, the
other Paying Agents, the Registrar and the Transfer Agents
require the Principal Paying Agent, the other Paying Agents, the
Registrar and the Transfer Agents pursuant to the Agency
Agreement:
(a) to act thereafter as Principal Paying Agent, Paying
Agents, Registrar and Transfer Agents respectively of the
Trustee in relation to payments to be made by or on
behalf of the Trustee under the provisions of these
presents mutatis mutandis on the terms provided in the
Agency Agreement (save that the Trustee's liability under
any provisions thereof for the indemnification,
remuneration and payment of out-of-pocket expenses of
the Paying Agents, the Registrar and the Transfer Agents
shall be limited to the amounts for the time being held by
the Trustee on the trusts of these presents relating to the
relative Securities) and thereafter to hold all Securities
and Coupons and all sums, documents and records held
by them in respect of Securities and Coupons on behalf of
the Trustee; or
(b) to deliver up all Securities and Coupons and all sums,
documents and records held by them in respect of
Securities and Coupons to the Trustee or as the Trustee
shall direct in such notice provided that such notice shall
be deemed not to apply to any documents or records
which the relative Paying Agent, the Registrar or the
relative Transfer Agent, as the case may be, is obliged
not to release by any law or regulation; and
(ii) by notice in writing to the Issuer require it to make all subsequent
payments in respect of the Securities and Coupons to or to the
order of the Trustee and not to the Principal Paying Agent; with
effect from the issue of any such notice to the Issuer and until
such notice is withdrawn provisos (i) and (ii) to sub-clause (B) of
this Clause relating to the Original Bonds and any similar
provisos relating to any Further Securities shall cease to have
effect.
FURTHER ISSUES
(D) (i) The Issuer shall be at liberty from time to time (but subject
always to the provisions of these presents) without the consent of
the Holders or Couponholders to create and issue further bonds or
notes (whether in bearer or registered form) either (a) ranking pari
passu in all respects (or in all respects save for the first payment
of interest thereon), and so that the same shall be consolidated and
form a single series, with the Original Bonds and/or the Further
Securities of any series or (b) upon such terms as to ranking,
interest, conversion, redemption and otherwise as the Issuer may
at the time of issue thereof determine.
(ii) Any further bonds or notes which are to be created and issued
pursuant to the provisions of paragraph (i) above so as to form a
single series with the Original Bonds and/or the Further Securities
of any series shall be constituted by a trust deed supplemental to
this Trust Deed and any other further bonds or notes which are to
be created and issued pursuant to the provisions of paragraph (i)
above may (subject to the consent of the Trustee) be constituted
by a trust deed supplemental to this Trust Deed. In any such case
the Issuer shall prior to the issue of any further bonds or notes to
be so constituted (being Further Securities) execute and deliver to
the Trustee a trust deed supplemental to this Trust Deed (in
relation to which all applicable stamp duties or other
documentation fees, duties or taxes have been paid and, if
applicable, duly stamped or denoted accordingly) and containing a
covenant by the Issuer in the form mutatis mutandis of
Clause 2(B) in relation to the principal, premium (if any) and
interest in respect of such Further Securities and such other
provisions (whether or not corresponding to any of the provisions
contained in this Trust Deed) as the Trustee shall require.
(iii) A memorandum of every such supplemental Trust Deed shall be
endorsed by the Trustee on this Trust Deed and by the Issuer on
its duplicate of this Trust Deed.
(iv) Whenever it is proposed to create and issue any Further Securities
the Issuer shall give to the Trustee not less than 14 days' notice in
writing of its intention so to do stating the amount of further
bonds or notes proposed to be created and issued.
(E) Any Further Securities not forming a single series with the Original Bonds
or Further Securities of any series shall form a separate series and
accordingly, unless for any purpose the Trustee in its absolute discretion
shall otherwise determine, the provisions of sub-clause (C) of this Clause
and of Clauses 4 to 21 (both inclusive) and 22(B) and the Third and
Fourth Schedules shall apply mutatis mutandis separately and
independently to each series of the Securities and in such Clauses and
Schedules the expressions "Securities", "Holders", "Coupons",
"Couponholders", "Receipts", "Receiptholders" and "Talons" shall be
construed accordingly.
3. FORM AND ISSUE OF ORIGINAL BONDS AND ORIGINAL COUPONS
(A) THE Original Bearer Bonds shall be represented initially by the Original
Global Bond which the Issuer shall issue to a bank depositary common to
both Euroclear and Cedel on terms that such depositary shall hold the
same for the account of the persons who would otherwise be entitled to
receive the Original Bearer Bonds in definitive form ("Definitive Original
Bearer Bonds") (as notified to such depositary by UBS Limited on behalf
of the Managers of the issue of the Original Bonds) and the successors in
title to such persons as appearing in the records of Euroclear and Cedel
for the time being.
(B) The Original Global Bond shall be printed or typed in the form or
substantially in the form set out in the First Schedule. The Original Global
Bond shall be in the aggregate principal amount shown therein and shall
be signed manually by a person duly authorised by the Issuer on behalf of
the Issuer and shall be authenticated by or on behalf of the Principal
Paying Agent. The Original Global Bond so executed and authenticated
shall be a binding and valid obligation of the Issuer.
(C) The Issuer shall issue the Definitive Original Bearer Bonds (together with
the unmatured Original Coupons attached) in exchange for the Original
Global Bond in accordance with the provisions thereof. Pending exchange
of the entire principal amount of the Original Global Bond the holder
thereof shall, subject to the terms thereof, be deemed to be the holder of
the Original Bearer Bonds and the Original Coupons represented thereby
for all purposes.
(D) (i) The Definitive Original Bearer Bonds and the Original Coupons
shall be to bearer in the respective forms or substantially in the
respective forms set out in Part I of the Second Schedule and the
Definitive Original Bearer Bonds shall be issued in the
denominations of (POUND)1,000, (POUND)10,000 and
(POUND)100,000 each (serially numbered) and shall be endorsed
with the Conditions. Title to the Definitive Original Bearer Bonds
and the Original Coupons shall pass by delivery.
(ii) The Original Registered Bonds shall be issued in definitive
registered form, shall be in the form or substantially in the form
set out in Part II of the Second Schedule, shall be in the
denomination and transferable in units of (POUND)1 each or
integral multiples thereof and shall be endorsed with the
Conditions. Title to the Original Registered Bonds shall pass
upon the registration of transfers in respect thereof in accordance
with the provisions of these presents.
(E) The Definitive Original Bearer Bonds and the Original Registered Bonds
shall be signed manually or in facsimile by a Director of the Issuer on
behalf of the Issuer and, in the case of the Definitive Original Bearer
Bonds, shall be authenticated by or on behalf of the Principal Paying
Agent. The Issuer may use the facsimile signature of any person who at
the date such signature is affixed is a Director of the Issuer
notwithstanding that at the time of issue of any of the Definitive Original
Bearer Bonds or the Original Registered Bonds he may have ceased for
any reason to be the holder of such office. The Definitive Original Bearer
Bonds so executed and authenticated, the Original Registered Bonds so
executed, and the Original Coupons, upon execution and authentication of
the relevant Definitive Original Bearer Bonds, shall be binding and valid
obligations of the Issuer. The Original Coupons shall not be signed.
4. FEES, DUTIES AND TAXES
THE Issuer will pay any stamp, issue, registration, documentary and other
fees, duties and taxes, including interest and penalties, payable on or in
connection with (i) the execution and delivery of these presents, (ii) the
constitution and original issue of the Securities and the Coupons and (iii)
any action taken by or on behalf of the Trustee or (where permitted under
these presents so to do) any Holder or Couponholder to enforce, or to
resolve any doubt concerning, or for any other purpose in relation to, these
presents.
5. COVENANT OF COMPLIANCE
THE Issuer covenants with the Trustee that it will comply with and
perform and observe all the provisions of these presents which are
expressed to be binding on it. The Conditions shall be binding on the
Issuer, the Holders and the Couponholders. The Trustee shall be entitled
to enforce the obligations of the Issuer under the Securities and the
Coupons as if the same were set out and contained in the trust deeds
constituting the same, which shall be read and construed as one document
with the Securities and the Coupons.
The Trustee shall hold the benefit of this covenant upon trust for itself and
the Holders according to its and their respective interests.
6. CANCELLATION OF SECURITIES AND RECORDS
(A) THE Issuer shall procure that all Securities (i) redeemed or (ii) purchased
by or on behalf of the Issuer or any Subsidiary of the Issuer and
surrendered for cancellation or (iii) which, being mutilated or defaced,
have been surrendered and replaced pursuant to Condition 14 or
(iv) exchanged as provided in these presents (together in each case with all
unmatured Coupons attached thereto or delivered therewith) and all
Coupons paid in accordance with the Conditions or which, being mutilated
or defaced, have been surrendered and replaced pursuant to Condition 14
and all Talons exchanged in accordance with the Conditions for further
Coupons shall forthwith be cancelled by or on behalf of the Issuer and a
certificate stating:
(a) the aggregate principal amount of Securities which have been
redeemed and the aggregate amounts in respect of Coupons which
have been paid;
(b) the serial numbers of such Bearer Securities in definitive form;
(c) the total numbers (where applicable, of each denomination) by
maturity date of such Coupons;
(d) the aggregate amount of interest paid (and the due dates of such
payments) on Global Securities and/or on Registered Securities;
(e) the aggregate principal amount of Securities (if any) which have
been purchased by or on behalf of the Issuer or any Subsidiary of
the Issuer and cancelled and the serial numbers of such Bearer
Securities in definitive form and the total number (where
applicable, of each denomination) by maturity date of the
Coupons attached thereto or surrendered therewith;
(f) the aggregate principal amounts of Securities and the aggregate
amounts in respect of Coupons which have been so exchanged or
surrendered and replaced and the serial numbers of such Bearer
Securities in definitive form and the total number (where
applicable, of each denomination) by maturity date of such
Coupons;
(g) the total number (where applicable, of each denomination) by
maturity date of unmatured Coupons missing from Securities in
definitive form bearing interest at a fixed rate which have been
redeemed or exchanged or surrendered and replaced and the serial
numbers of the Bearer Securities in definitive form to which such
missing unmatured Coupons appertained; and
(h) the total number (where applicable, of each denomination) by
maturity date of Talons which have been exchanged for further
Coupons
shall be given to the Trustee by or on behalf of the Issuer as soon as
possible and in any event within four months after the date of such
redemption, purchase, payment, exchange or replacement (as the case may
be). The Trustee may accept such certificate as conclusive evidence of
redemption, purchase, exchange or replacement pro tanto of the Securities
or payment of interest thereon or exchange of the Talons respectively and
of cancellation of the relative Securities and Coupons.
(B) The Issuer shall procure (i) that the Principal Paying Agent shall keep a
full and complete record of all Securities and Coupons (other than serial
numbers of Coupons) and of their redemption, purchase by or on behalf of
the Issuer or any Subsidiary of the Issuer, cancellation, payment or
exchange (as the case may be) and of all replacement securities or
coupons or talons issued in substitution for lost, stolen, mutilated, defaced
or destroyed Securities or Coupons (ii) that the Principal Paying Agent
shall in respect of the Coupons of each maturity retain (in the case of
Coupons other than Talons) until the expiry of 10 years from the Relevant
Date in respect of such Coupons and (in the case of Talons) indefinitely
either all paid or exchanged Coupons of that maturity or a list of the serial
numbers of Coupons of that maturity still remaining unpaid or
unexchanged and (iii) that such records and Coupons (if any) shall be
made available to the Trustee at all reasonable times.
7. ENFORCEMENT
(A) THE Trustee may at any time, at its discretion and without notice, take
such proceedings and/or other action as it may think fit against or in
relation to the Issuer to enforce its obligations under these presents.
(B) Proof that as regards any specified Security or Coupon the Issuer has
made default in paying any amount due in respect of such Security or
Coupon shall (unless the contrary be proved) be sufficient evidence that
the same default has been made as regards all other Securities or Coupons
(as the case may be) in respect of which the relevant amount is due and
payable.
(C) References in the provisions of any Trust Deed supplemental to this Trust
Deed corresponding to provisos (iii) and (iv) to Clause 2(B) to "the rate
aforesaid" shall, in respect of any Securities bearing interest at a floating
or variable rate, in the event of such Securities having become due and
repayable, with effect from the expiry of the interest period during which
such Securities become due and repayable, be construed as references to a
rate of interest calculated mutatis mutandis in accordance with the
Conditions except that no notices need be published in respect thereof.
8. PROCEEDINGS, ACTION AND INDEMNIFICATION
(A) THE Trustee shall not be bound to take any proceedings mentioned in
Clause 7(A) or any other action in relation to these presents unless
respectively directed or requested to do so (i) by an Extraordinary
Resolution or (ii) in writing by the holders of at least one-quarter in
principal amount of the Securities then outstanding and in either case then
only if it shall be indemnified to its satisfaction against all Liabilities to
which it may thereby render itself liable or which it may incur by so
doing.
(B) Only the Trustee may enforce the provisions of these presents. No Holder
or Couponholder shall be entitled to proceed directly against the Issuer to
enforce the performance of any of the provisions of these presents unless
the Trustee having become bound as aforesaid to take proceedings fails to
do so within a reasonable period and such failure is continuing.
9. APPLICATION OF MONEYS
ALL moneys received by the Trustee under these presents shall, unless
and to the extent attributable in the opinion of the Trustee to a particular
series of the Securities, be apportioned pari passu and rateably between
each series of the Securities, and all moneys received by the Trustee under
these presents to the extent attributable in the opinion of the Trustee to a
particular series of the Securities or which are apportioned to such series
as aforesaid (including any moneys which represent principal, premium or
interest in respect of Securities or Coupons which have become void under
Condition 10) shall be held by the Trustee upon trust to apply them
(subject to Clause 11):
FIRST in payment or satisfaction of all amounts then due and unpaid
under Clauses 14 and/or 15(J) to the Trustee and/or any Appointee;
SECONDLY in or towards payment pari passu and rateably of all
principal, premium (if any) and interest then due and unpaid in respect of
the Securities of that series;
THIRDLY in or towards payment pari passu and rateably of all
principal, premium (if any) and interest then due and unpaid in respect of
the Securities of each other series; and
FOURTHLY in payment of the balance (if any) to the Issuer (without
prejudice to, or liability in respect of, any question as to how such
payment to the Issuer shall be dealt with as between the Issuer and any
other person).
Without prejudice to this Clause 9, if the Trustee holds any moneys which
represent principal, premium (if any) and interest in respect of the
Securities which have become void or in respect of which claims have
been prescribed under Condition 10, the Trustee will hold such moneys on
the above trusts.
10. NOTICE OF PAYMENTS
THE Trustee shall give notice to the relevant Holders in accordance with
Condition 15 of the day fixed for any payment to them under Clause 9.
Such payment may be made in accordance with Condition 6 and any
payment so made shall be a good discharge to the Trustee.
11. INVESTMENT BY TRUSTEE
(A) IF the amount of the moneys at any time available for the payment of
principal, premium (if any) and interest in respect of the Securities under
Clause 9 shall be less than 10 per cent. of the principal amount of the
Securities then outstanding the Trustee may at its discretion invest such
moneys in some or one of the investments authorised below. The Trustee
at its discretion may vary such investments and may accumulate such
investments and the resulting income until the accumulations, together
with any other funds for the time being under the control of the Trustee
and available for such purpose, amount to at least 10 per cent. of the
principal amount of the Securities then outstanding and then such
accumulations and funds shall be applied under Clause 9.
(B) Any moneys which under the trusts of these presents ought to or may be
invested by the Trustee may be invested in the name or under the control
of the Trustee in any investments or other assets in any part of the world
whether or not they produce income or by placing the same on deposit in
the name or under the control of the Trustee at such bank or other
financial institution and in such currency as the Trustee may think fit. If
such bank or financial institution is the Trustee or a Subsidiary, holding
or associated company of the Trustee it need only account for an amount
of interest equal to the largest amount of interest payable by it on such a
deposit to an independent customer. The Trustee may at any time vary
any such investments for or into other investments or convert any moneys
so deposited into any other currency and shall not be responsible for any
loss resulting from any such investments or deposits, whether due to
depreciation in value, fluctuations in exchange rates or otherwise.
12. PARTIAL PAYMENTS
UPON any payment under Clause 9 (other than payment in full against
surrender of a Security or Coupon) the Security or Coupon in respect of
which such payment is made shall be produced to the Trustee or the
Paying Agent by or through whom such payment is made and the Trustee
shall or shall cause such Paying Agent to enface thereon a memorandum
of the amount and the date of payment but the Trustee may in any
particular case or generally in relation to Registered Securities dispense
with such production and enfacement upon such indemnity being given as
it shall think sufficient.
13. COVENANTS BY THE ISSUER
SO long as any of the Securities remains outstanding (or, in the case of
paragraphs (viii), (ix), (xiii) to (xvi) inclusive and (xviii), so long as any
of the Securities or Coupons remains liable to prescription) the Issuer
covenants with the Trustee that it shall:
(i) at all times carry on and conduct its affairs and procure its
Subsidiaries to carry on and conduct their respective affairs in a
proper and efficient manner;
(ii) give or procure to be given to the Trustee such opinions,
certificates, information and evidence as it shall properly require
and in such form as it shall properly require (including without
limitation the procurement by the Issuer of all such certificates
called for by the Trustee pursuant to Clause 15(C)) for the
purpose of the proper discharge or exercise of the duties, trusts,
powers, authorities and discretions vested in it under these
presents or by operation of law;
(iii) cause to be prepared and certified by the Auditors in respect of
each financial accounting period accounts in such form as will
comply with all relevant legal and accounting requirements and all
applicable requirements for the time being of The Stock
Exchange;
(iv) at all times keep and procure its Subsidiaries to keep proper
books of account and following the occurrence of an Event of
Default or a Potential Event of Default or if the Trustee has
grounds to believe that an Event of Default or a Potential Event of
Default has occurred or is likely to occur allow and procure its
Subsidiaries to allow the Trustee and any person appointed by the
Trustee to whom the Issuer or the relevant Subsidiary (as the case
may be) shall have no reasonable objection free access to such
books of account at all reasonable times during normal business
hours;
(v) send to the Trustee (in addition to any copies to which it may be
entitled as a holder of any securities of the Issuer) two copies in
English of every balance sheet, profit and loss account, report,
circular and notice of general meeting and every other document
issued or sent to its shareholders together with any of the
foregoing, and every document issued or sent to holders of
securities other than its shareholders (including the Holders) as
soon as reasonably practicable after the issue or publication
thereof;
(vi) forthwith give notice in writing to the Trustee of the coming into
existence of any Security Interest which would require any
security to be given to any series of the Securities pursuant to
Condition 4 or of the occurrence of any Event of Default or any
Potential Event of Default or any Restructuring Event;
(vii) give to the Trustee (a) within seven days after demand by the
Trustee therefor and (b) (without the necessity for any such
demand) promptly after the publication of its audited accounts in
respect of each financial period commencing with the financial
period ending 31st March, 1995 and in any event not later than
180 days after the end of each such financial period a certificate
of the Issuer signed by two Directors of the Issuer to the effect
that as at a date not more than seven days before delivering such
certificate (the "relevant date") there did not exist and had not
existed since the relevant date of the previous certificate (or in the
case of the first such certificate the date hereof) any Event of
Default or any Potential Event of Default or any Restructuring
Event (or if such exists or existed specifying the same) and that
during the period from and including the relevant date of the last
such certificate (or in the case of the first such certificate the date
hereof) to and including the relevant date of such certificate the
Issuer has complied with all its obligations contained in these
presents or (if such is not the case) specifying the respects in
which it has not complied;
(viii) at all times execute and do all such further documents, acts and
things as may be necessary at any time or times in the opinion of
the Trustee to give effect to these presents;
(ix) at all times maintain an Agent Bank, Reference Banks, Paying
Agents, a Registrar and Transfer Agents in accordance with the
Conditions;
(x) procure the Principal Paying Agent to notify the Trustee forthwith
in the event that it does not, on or before the due date for any
payment in respect of the Securities or any of them or any of the
Coupons, receive unconditionally pursuant to the Agency
Agreement payment of the full amount in the requisite currency of
the moneys payable on such due date on all such Securities or
Coupons as the case may be;
(xi) in the event of the unconditional payment to the Principal Paying
Agent of any sum due in respect of the Securities or any of them
or any of the Coupons being made after the due date for payment
thereof forthwith give or procure to be given notice to the relevant
Holders in accordance with Condition 15 that such payment has
been made;
(xii) use all reasonable endeavours to maintain the listing of the
Securities on The Stock Exchange or, if it is unable to do so
having used all reasonable endeavours, use all reasonable
endeavours to obtain and maintain a quotation or listing of the
Securities on such other stock exchange or exchanges or securities
market or markets as the Issuer may (with the prior written
approval of the Trustee) decide and shall also upon obtaining a
quotation or listing of the Securities on such other stock exchange
or exchanges or securities market or markets enter into a trust
deed supplemental to this Trust Deed to effect such consequential
amendments to these presents as the Trustee may require or as
shall be requisite to comply with the requirements of any such
stock exchange or securities market;
(xiii) give notice to the Holders in accordance with Condition 15 of any
appointment, resignation or removal of any Agent Bank,
Reference Bank, Paying Agent, Registrar or Transfer Agent
(other than the appointment of the initial Agent Bank, Reference
Banks, Paying Agents, Registrar and Transfer Agents) after
having obtained the prior written approval of the Trustee thereto
or any change of any Paying Agent's, Registrar's or Transfer
Agent's specified office and (except as provided by the Agent
Bank Agreement or the Agency Agreement or the Conditions) at
least 30 days prior to such event taking effect; PROVIDED
ALWAYS THAT so long as any of the Securities remains
outstanding in the case of the termination of the appointment of
the Agent Bank, the Registrar or a Transfer Agent or so long as
any of the Securities or Coupons remains liable to prescription in
the case of the termination of the appointment of the Principal
Paying Agent no such termination shall take effect until a new
Agent Bank, Registrar, Transfer Agent or Principal Paying Agent
(as the case may be) has been appointed on terms previously
approved in writing by the Trustee;
(xiv) obtain the prior written approval of the Trustee to, and promptly
give to the Trustee two copies of, the form of every notice given
to the Holders in accordance with Condition 15 (such approval,
unless so expressed, not to constitute approval for the purposes of
Section 57 of the Financial Services Act 1986 of the United
Kingdom of any such notice which is an investment advertisement
(as therein defined));
(xv) if payments of principal, premium or interest in respect of the
Securities or the Coupons by the Issuer shall become subject
generally to the taxing jurisdiction of any territory or any political
sub-division thereof or any authority therein or thereof having
power to tax other than or in addition to the United Kingdom or
any such political sub-division thereof or any such authority
therein or thereof, as soon as reasonably practicable after having
become aware thereof notify the Trustee of such event and (unless
the Trustee otherwise agrees) enter forthwith into a Trust Deed
supplemental to this Trust Deed, giving to the Trustee an
undertaking or covenant in form and manner satisfactory to the
Trustee in terms corresponding to the terms of Condition 9 with
the substitution for (or, as the case may be, the addition to) the
references therein to the United Kingdom or any political sub-
division thereof or any authority therein or thereof having power
to tax of references to that other or additional territory or any
political sub-division thereof or any authority therein or thereof
having power to tax to whose taxing jurisdiction such payments
shall have become subject as aforesaid such Trust Deed also
(where applicable) to modify Condition 7(c) so that such
Condition shall make reference to the other or additional territory,
any political sub-division thereof and any authority therein or
thereof having power to tax;
(xvi) comply with and perform all its obligations under the Agent Bank
Agreement and the Agency Agreement and use all reasonable
endeavours to procure that the Agent Bank, the Paying Agents,
the Registrar and the Transfer Agents comply with and perform
all their respective obligations thereunder and (in the case of the
Paying Agents) any notice given by the Trustee pursuant to
Clause 2(C)(i) and not make any amendment or modification to
either of such Agreements without the prior written approval of
the Trustee;
(xvii) in order to enable the Trustee to ascertain the principal amount of
Securities of each series for the time being outstanding for any of
the purposes referred to in the proviso to the definition of
"outstanding" in Clause 1, deliver to the Trustee forthwith upon
being so requested in writing by the Trustee a certificate in
writing signed by two Directors of the Issuer setting out the total
number and aggregate principal amount of Securities of each
series which:
(a) up to and including the date of such certificate have been
purchased by the Issuer, any Subsidiary of the Issuer, any
holding company of the Issuer or any other Subsidiary of
any such holding company and cancelled; and
(b) are at the date of such certificate held by, for the benefit
of, or on behalf of, the Issuer, any Subsidiary of the
Issuer, any holding company of the Issuer or any other
Subsidiary of any such holding company;
(xviii) procure its Subsidiaries to comply with all (if any) applicable
provisions of Condition 7(d);
(xix) procure that each of the Paying Agents makes available for
inspection by Holders and Couponholders at its specified office
copies of these presents, the Agency Agreement, the Agent Bank
Agreement and the then latest audited balance sheet and profit and
loss account (consolidated if applicable) of the Issuer;
(xx) if, in accordance with the provisions of the Conditions, interest in
respect of Bearer Securities denominated in U.S. dollars becomes
payable at the specified office of any Paying Agent in the United
States of America promptly give notice thereof to the Holders in
accordance with Condition 15;
(xxi) give to the Trustee at the same time as sending to it the
certificates referred to in paragraph (vii) above and in any event
not later than 180 days after the last day of each financial period
of the Issuer, a certificate by the Auditors listing those
Subsidiaries of the Issuer which as at the relevant date (as defined
in paragraph (vii) above) of the relevant certificate given under
paragraph (vii) above or, as the case may be, as at such last day
were Principal Subsidiaries for the purposes of Condition 11; and
(xxii) give to the Trustee, as soon as reasonably practicable after the
acquisition or disposal of any company which thereby becomes or
ceases to be a Principal Subsidiary or after any transfer is made
to any Subsidiary of the Issuer which thereby becomes a Principal
Subsidiary, a certificate by the Auditors to such effect;
(xxiii) upon due surrender in accordance with the Conditions, pay the
face value of all Coupons (including Coupons issued in exchange
for Talons) appertaining to all Securities purchased by the Issuer,
any Subsidiary of the Issuer, any holding company of the Issuer
or any other Subsidiary of any such holding company;
(xxiv) give to the Trustee a certificate of the Auditors:
(a) specifying the amount of the Capital and Reserves for the
purposes of Condition 4, such certificate to be provided
before the Issuer creates or has outstanding a Security
Interest in respect of any Relevant Indebtedness and/or
guarantees within Condition 4;
(b) specifying that a Subsidiary of the Issuer satisfies the
provisions of Condition 4(B)(i) and (ii), such certificate
to be provided before or at the same time as any written
notice given to the Trustee by the Issuer under
Condition 4(B)(iii) that a Subsidiary of the Issuer is an
Excluded Subsidiary; and
(c) specifying the amount of the Capital and Reserves for the
purposes of Condition 11(c), such certificate to be
provided within 10 days of any request by the Trustee for
its provision;
(xxv) give to the Trustee a certificate of two Directors of the Issuer:
(a) specifying the aggregate amount of any Relevant
Indebtedness of the Issuer or a PES Subsidiary or
guaranteed by the Issuer or a PES Subsidiary and in
respect of which a Security Interest or Security Interests
has or have been created or is or are outstanding, such
certificate to be provided before the Issuer or a PES
Subsidiary creates or has outstanding any new Security
Interest;
(b) specifying details of any modification to the terms and
conditions of the PES Licence, such certificate to be
provided promptly upon any such modification being
made; and
(c) specifying any higher figure determined by the Director
(as defined in the PES Licence) as is mentioned in
Condition 11, such certificate to be provided within
5 days of the Director determining such figure by notice
in writing to the Secretary of State (as defined in the PES
Licence) and the Issuer; and
(xxvi) give notice to the Trustee as soon as practicable after its Directors
or the Directors of any PES Subsidiary have resolved to give any
Security Interest in respect of any Relevant Indebtedness or
guarantee as described in Condition 4.
14. REMUNERATION AND INDEMNIFICATION OF TRUSTEE
(A) THE Issuer shall pay to the Trustee remuneration for its services as
trustee as from the date of this Trust Deed, such remuneration to be at
such rate as may from time to time be agreed between the Issuer and the
Trustee. Such remuneration shall be payable in advance on 17th January
in each year, the first such payment to be made on the date hereof. Upon
the issue of any Further Securities the rate of remuneration in force
immediately prior thereto shall be increased by such amount as shall be
agreed between the Issuer and the Trustee, such increased remuneration to
be calculated from such date as shall be agreed as aforesaid. The rate of
remuneration in force from time to time may upon the final redemption of
the whole of the Securities of any series be reduced by such amount as
shall be agreed between the Issuer and the Trustee, such reduced
remuneration to be calculated from such date as shall be agreed as
aforesaid. Such remuneration shall accrue from day to day and be payable
(in priority to payments to the Holders and Couponholders) up to and
including the date when, all the Securities having become due for
redemption, the redemption moneys and interest thereon to the date of
redemption have been paid to the Principal Paying Agent or the Trustee
PROVIDED THAT if upon due presentation of any Security or Coupon
or any cheque payment of the moneys due in respect thereof is improperly
withheld or refused, remuneration will commence again to accrue.
(B) In the event of the occurrence of an Event of Default or a Potential Event
of Default or the Trustee considering it expedient or necessary or being
requested by the Issuer to undertake duties which the Trustee and the
Issuer agree to be of an exceptional nature or otherwise outside the scope
of the normal duties of the Trustee under these presents the Issuer shall
pay to the Trustee such additional remuneration as shall be agreed
between them.
(C) The Issuer shall in addition pay to the Trustee an amount equal to the
amount of any value added tax or similar tax chargeable in respect of its
remuneration under these presents.
(D) In the event of the Trustee and the Issuer failing to agree:
(1) (in a case to which sub-clause (A) above applies) upon the
amount of the remuneration; or
(2) (in a case to which sub-clause (B) above applies) upon whether
such duties shall be of an exceptional nature or otherwise outside
the scope of the normal duties of the Trustee under these presents,
or upon such additional remuneration,
such matters shall be determined by a merchant bank (acting as an expert
and not as an arbitrator) selected by the Trustee and approved by the
Issuer or, failing such approval, nominated (on the application of the
Trustee) by the President for the time being of The Law Society of
England and Wales (the expenses involved in such nomination and the
fees of such merchant bank being payable by the Issuer) and the
determination of any such merchant bank shall be final and binding upon
the Trustee and the Issuer.
(E) The Issuer shall also pay or discharge all Liabilities incurred by the
Trustee in relation to the preparation and execution of, the exercise of its
powers and the performance of its duties under, and in any other manner
in relation to, these presents, including but not limited to travelling
expenses and any stamp, issue, registration, documentary and other taxes
or duties paid or payable by the Trustee in connection with any action
taken or contemplated by or on behalf of the Trustee for enforcing, or
resolving any doubt concerning, or for any other purpose in relation to,
these presents.
(F) All amounts payable pursuant to sub-clause (E) above and/or
Clause 15(J) shall be payable by the Issuer on the date specified in a
demand by the Trustee and in the case of payments actually made by the
Trustee prior to such demand shall (if not paid within three days after
such demand and the Trustee so requires) carry interest at the rate of two
per cent. per annum above the Base Rate from time to time of National
Westminster Bank Plc from the date specified in such demand, and in all
other cases shall (if not paid on the date specified in such demand or, if
later, within three days after such demand and, in either case, the Trustee
so requires) carry interest at such rate from the date specified in such
demand. All remuneration payable to the Trustee shall carry interest at
such rate from the due date therefor.
(G) Unless otherwise specifically stated in any discharge of these presents the
provisions of this Clause and Clause 15(J) shall continue in full force and
effect notwithstanding such discharge.
(H) The Trustee shall be entitled in its absolute discretion to determine in
respect of which series of Securities any Liabilities incurred under these
presents have been incurred or to allocate any such Liabilities between the
Original Bonds and any Further Securities of any series.
15. SUPPLEMENT TO TRUSTEE ACT 1925
THE Trustee shall have all the powers conferred upon trustees by the
Trustee Act 1925 of England and Wales and by way of supplement
thereto it is expressly declared as follows:
(A) The Trustee may in relation to these presents act on the advice or
opinion of or any information obtained from any lawyer, valuer,
accountant, surveyor, banker, broker, auctioneer or other expert
whether obtained by the Issuer, the Trustee or otherwise and shall
not be responsible for any Liability occasioned by so acting.
(B) Any such advice, opinion or information may be sent or obtained
by letter, telex, telegram, facsimile transmission or cable and the
Trustee shall not be liable for acting on any advice, opinion or
information purporting to be conveyed by any such letter, telex,
telegram, facsimile transmission or cable although the same shall
contain some error or shall not be authentic.
(C) The Trustee may call for and shall be at liberty to accept as
sufficient evidence of any fact or matter or the expediency of any
transaction or thing a certificate signed by any two Directors of
the Issuer and the Trustee shall not be bound in any such case to
call for further evidence or be responsible for any Liability that
may be occasioned by it or any other person acting on such
certificate.
(D) The Trustee shall be at liberty to hold or to place these presents
and any other documents relating thereto in any part of the world
with any banker or banking company or company whose business
includes undertaking the safe custody of documents or lawyer or
firm of lawyers considered by the Trustee to be of good repute
and the Trustee shall not be responsible for or required to insure
against any Liability incurred in connection with any such deposit
and may pay all sums required to be paid on account of or in
respect of any such deposit.
(E) The Trustee shall not be responsible for the receipt or application
of the proceeds of the issue of any of the Securities by the Issuer,
the exchange of any Global Security for another Global Security
or definitive Securities or the delivery of any Global Security or
definitive Securities to the person(s) entitled to it or them.
(F) The Trustee shall not be bound to give notice to any person of the
execution of any documents comprised or referred to in these
presents or to take any steps to ascertain whether any Event of
Default, Potential Event of Default, Negative Rating Event, any
Restructuring Event or any event which could lead to the
occurrence of or could constitute a Restructuring Event has
occurred and, until it shall have actual knowledge or express
notice pursuant to these presents to the contrary, the Trustee shall
be entitled to assume that no Event of Default, Potential Event of
Default, Negative Rating Event, any Restructuring Event or any
other such event has occurred and that the Issuer is observing and
performing all its obligations under these presents.
(G) Save as expressly otherwise provided in these presents, the
Trustee shall have absolute and uncontrolled discretion as to the
exercise of its trusts, powers, authorities and discretions under
these presents (the exercise of which as between the Trustee and
the Holders and Couponholders shall be conclusive and binding
on the Holders and Couponholders) and shall not be responsible
for any Liability which may result from their exercise or non-
exercise.
(H) The Trustee shall not be liable to any person by reason of having
acted upon any resolution purporting to have been passed at any
meeting of the Holders of Securities of all or any series in respect
whereof minutes have been made and signed even though
subsequent to its acting it may be found that there was some
defect in the constitution of the meeting or the passing of the
resolution or that for any reason the resolution was not valid or
binding upon such Holders and the relative Couponholders.
(I) The Trustee shall not be liable to any person by reason of having
accepted as valid or not having rejected any Security or Coupon
purporting to be such and subsequently found to be forged or not
authentic.
(J) Without prejudice to the right of indemnity by law given to
trustees, the Issuer shall indemnify the Trustee and every
Appointee and keep it or him indemnified against all Liabilities to
which it or he may be or become subject or which may be
incurred by it or him in the execution or purported execution of
any of its trusts, powers, authorities and discretions under these
presents or its or his functions under any such appointment or in
respect of any other matter or thing done or omitted in any way
relating to these presents or any such appointment.
(K) Any consent or approval given by the Trustee for the purposes of
these presents may be given on such terms and subject to such
conditions (if any) as the Trustee thinks fit and notwithstanding
anything to the contrary in these presents may be given
retrospectively.
(L) The Trustee shall not (unless and to the extent ordered so to do by
a court of competent jurisdiction) be required to disclose to any
Holder or Couponholder any information (including, without
limitation, information of a confidential, financial or price
sensitive nature) made available to the Trustee by the Issuer or
any other person in connection with these presents and no Holder
or Couponholder shall be entitled to take any action to obtain
from the Trustee any such information.
(M) Where it is necessary or desirable for any purpose in connection
with these presents to convert any sum from one currency to
another it shall (unless otherwise provided by these presents or
required by law) be converted at such rate or rates, in accordance
with such method and as at such date for the determination of
such rate of exchange, as may be agreed by the Trustee in
consultation with the Issuer and any rate, method and date so
agreed shall be binding on the Issuer, the Holders and the
Couponholders.
(N) The Trustee may certify whether or not any of the conditions,
events and acts set out in sub-paragraphs (b), (c), (e), (f), (g) and
(h) (both inclusive) of Condition 11 (each of which conditions,
events and acts shall, unless in any case the Trustee in its absolute
discretion shall otherwise determine, for all the purposes of these
presents be deemed to include the circumstances resulting therein
and the consequences resulting therefrom) is in its opinion
materially prejudicial to the interests of the Holders and any such
certificate shall be conclusive and binding upon the Issuer, the
Holders and the Couponholders.
(O) The Trustee as between itself and the Holders and Couponholders
may determine all questions and doubts arising in relation to any
of the provisions of these presents. Every such determination,
whether or not relating in whole or in part to the acts or
proceedings of the Trustee, shall be conclusive and shall bind the
Trustee and the Holders and Couponholders.
(P) In connection with the exercise by it of any of its trusts, powers,
authorities and discretions under these presents (including,
without limitation, any modification, waiver, authorisation,
determination or substitution), the Trustee shall have regard to the
interests of the Holders as a class and, in particular but without
limitation, shall not have regard to the consequences of such
exercise for individual Holders or Couponholders resulting from
their being for any purpose domiciled or resident in, or otherwise
connected with, or subject to the jurisdiction of, any particular
territory or any political sub-division thereof and the Trustee shall
not be entitled to require, nor shall any Holder or Couponholder
be entitled to claim, from the Issuer, the Trustee or any other
person any indemnification or payment in respect of any tax
consequence of any such exercise upon individual Holders or
Couponholders except to the extent already provided for in
Condition 9 and/or any undertaking given in addition thereto or in
substitution therefor under these presents.
(Q) Any trustee of these presents being a lawyer, accountant, broker
or other person engaged in any profession or business shall be
entitled to charge and be paid all usual professional and other
charges for business transacted and acts done by him or his firm
in connection with the trusts of these presents and also his
reasonable charges in addition to disbursements for all other work
and business done and all time spent by him or his firm in
connection with matters arising in connection with these presents.
(R) The Trustee may whenever it thinks fit delegate by power of
attorney or otherwise to any person or persons or fluctuating body
of persons (whether being a joint trustee of these presents or not)
all or any of its trusts, powers, authorities and discretions under
these presents. Such delegation may be made upon such terms
(including power to sub-delegate) and subject to such conditions
and regulations as the Trustee may in the interests of the Holders
think fit. The Trustee shall not be under any obligation to
supervise the proceedings or acts of any such delegate or sub-
delegate or be in any way responsible for any Liability incurred
by reason of any misconduct or default on the part of any such
delegate or sub-delegate. The Trustee shall within a reasonable
time after any such delegation or any renewal, extension or
termination thereof give notice thereof to the Issuer.
(S) The Trustee may in the conduct of the trusts of these presents
instead of acting personally employ and pay an agent (whether
being a lawyer or other professional person) to transact or
conduct, or concur in transacting or conducting, any business and
to do, or concur in doing, all acts required to be done in
connection with these presents (including the receipt and payment
of money). The Trustee shall not be in any way responsible for
any Liability incurred by reason of any misconduct or default on
the part of any such agent or be bound to supervise the
proceedings or acts of any such agent.
(T) The Trustee shall not be responsible for the execution, delivery,
legality, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of these presents or any
other document relating thereto and shall not be liable for any
failure to obtain any licence, consent or other authority for the
execution, delivery, legality, effectiveness, adequacy, genuineness,
validity, performance, enforceability or admissibility in evidence
of these presents or any other document relating thereto.
16. TRUSTEE'S LIABILITY
NOTHING in these presents shall in any case in which the Trustee has
failed to show the degree of care and diligence required of it as trustee
having regard to the provisions of these presents conferring on it any
trusts, powers, authorities or discretions exempt the Trustee from or
indemnify it against any liability for breach of trust or any Liability which
by virtue of any rule of law would otherwise attach to it in respect of any
negligence, default, breach of duty or breach of trust of which it may be
guilty in relation to its duties under these presents.
17. TRUSTEE CONTRACTING WITH ISSUER
NEITHER the Trustee nor any director or officer of a corporation acting
as a trustee under these presents shall by reason of its or his fiduciary
position be in any way precluded from:
(i) entering into or being interested in any contract or financial or
other transaction or arrangement with the Issuer or any person or
body corporate associated with the Issuer (including without
limitation any contract, transaction or arrangement of a banking
or insurance nature or any contract, transaction or arrangement in
relation to the making of loans or the provision of financial
facilities to, or the purchase, placing or underwriting of or the
subscribing or procuring subscriptions for or otherwise acquiring,
holding or dealing with the Securities or any other bonds, notes,
stocks, shares, debenture stock, debentures or other securities of,
the Issuer or any person or body corporate associated as
aforesaid); or
(ii) accepting or holding the trusteeship of any other trust deed
constituting or securing any other securities issued by or relating
to the Issuer or any such person or body corporate so associated
or any other office of profit under the Issuer or any such person
or body corporate so associated
and shall be entitled to retain and shall not be in any way liable to account
for any profit made or share of brokerage or commission or remuneration
or other benefit received thereby or in connection therewith.
18. WAIVER, AUTHORISATION AND DETERMINATION
(A) THE Trustee may without prejudice to its rights in respect of any
subsequent breach, Event of Default or Potential Event of Default from
time to time and at any time but only if and in so far as in its opinion the
interests of the Holders shall not be materially prejudiced thereby waive or
authorise any breach or proposed breach by the Issuer of any of the
covenants or provisions contained in these presents or determine that any
Event of Default or Potential Event of Default shall not be treated as such
for the purposes of these presents PROVIDED ALWAYS THAT the
Trustee shall not exercise any powers conferred on it by this Clause in
contravention of any express direction given by Extraordinary Resolution
or by a request under Condition 11 but so that no such direction or request
shall affect any waiver, authorisation or determination previously given or
made. Any such waiver, authorisation or determination may be given or
made on such terms and subject to such conditions (if any) as the Trustee
may determine, shall be binding on the Holders and the Couponholders
and, if, but only if, the Trustee shall so require, shall be notified by the
Issuer to the Holders in accordance with Condition 15 as soon as
practicable thereafter.
MODIFICATION
(B) The Trustee may without the consent of the Holders or Couponholders at
any time and from time to time concur with the Issuer in making any
modification (i) to these presents (other than the proviso to paragraph 5 of
the Fourth Schedule or any of the matters referred to in that proviso)
which in the opinion of the Trustee it may be proper to make PROVIDED
THAT the Trustee is of the opinion that such modification will not be
materially prejudicial to the interests of the Holders or (ii) to these
presents if in the opinion of the Trustee such modification is of a formal,
minor or technical nature or to correct a manifest error. Any such
modification may be made on such terms and subject to such conditions
(if any) as the Trustee may determine, shall be binding upon the Holders
and the Couponholders and, unless the Trustee agrees otherwise, shall be
notified by the Issuer to the Holders in accordance with Condition 15 as
soon as practicable thereafter.
19. HOLDER OF DEFINITIVE BEARER SECURITY ASSUMED TO
BE COUPONHOLDER
(A) WHEREVER in these presents the Trustee is required or entitled to
exercise a power, trust, authority or discretion under these presents,
except as ordered by a court of competent jurisdiction or as required by
applicable law, the Trustee shall, notwithstanding that it may have express
notice to the contrary, assume that each Holder is the holder of all
Coupons appertaining to each Bearer Security in definitive form of which
he is the holder.
NO NOTICE TO COUPONHOLDERS
(B) Neither the Trustee nor the Issuer shall be required to give any notice to
the Couponholders for any purpose under these presents and the
Couponholders shall be deemed for all purposes to have notice of the
contents of any notice given to the Holders in accordance with
Condition 15.
ENTITLEMENT TO TREAT HOLDER AS ABSOLUTE OWNER
(C) The Issuer, the Trustee, the Paying Agents, the Registrar and the Transfer
Agents may (to the fullest extent permitted by applicable laws) deem and
treat the holder of any Security and the holder of any Coupon as the
absolute owner of such Security or Coupon, as the case may be, for all
purposes (whether or not such Security or Coupon shall be overdue and
notwithstanding any notice of ownership thereof, any notice of loss or
theft thereof or any writing thereon), and the Issuer, the Trustee, the
Paying Agents, the Registrar and the Transfer Agents shall not be affected
by any notice to the contrary. All payments made to any such holder shall
be valid and, to the extent of the sums so paid, effective to satisfy and
discharge the liability for the moneys payable in respect of such Security
or Coupon, as the case may be.
20. SUBSTITUTION
(A) (1) The Trustee may without the consent of the Holders or
Couponholders at any time agree with the Issuer to the
substitution in place of the Issuer (or of the previous substitute
under this Clause) as the principal debtor under these presents of
any Subsidiary of the Issuer (such substituted company being
hereinafter called the "New Company") provided that a trust deed
is executed or some other form of undertaking is given by the
New Company in form and manner satisfactory to the Trustee,
agreeing to be bound by the provisions of these presents with any
consequential amendments which the Trustee may deem
appropriate as fully as if the New Company had been named in
these presents as the principal debtor in place of the Issuer (or of
the previous substitute under this Clause) and provided further
that the Issuer unconditionally and irrevocably guarantees all
amounts payable under these presents save where the Issuer has
transferred the PES Licence to the New Company.
(2) The following further conditions shall apply to (1) above:
(i) the Issuer and the New Company shall comply with such
other requirements as the Trustee may direct in the
interests of the Holders;
(ii) where the New Company is incorporated, domiciled or
resident in, or subject generally to the taxing jurisdiction
of, a territory other than or in addition to the United
Kingdom or any political sub-division thereof or any
authority therein or thereof having power to tax,
undertakings or covenants shall be given by the New
Company in terms corresponding to the provisions of
Condition 9 with the substitution for (or, as the case may
be, the addition to) the references to the United Kingdom
of references to that other or additional territory in which
the New Company is incorporated, domiciled or resident
or to whose taxing jurisdiction it is subject and (where
applicable) Condition 7(c) shall be modified accordingly;
(iii) without prejudice to the rights of reliance of the Trustee
under the immediately following paragraph (iv), the
Trustee is satisfied that the relevant transaction is not
materially prejudicial to the interests of the Holders; and
(iv) if two Directors of the New Company (or other officers
acceptable to the Trustee) shall certify that the New
Company is solvent at the time at which the relevant
transaction is proposed to be effected (which certificate
the Trustee may rely upon absolutely) the Trustee shall
not be under any duty to have regard to the financial
condition, profits or prospects of the New Company or to
compare the same with those of the Issuer or the previous
substitute under this Clause as applicable.
(B) Any such Trust Deed or undertaking shall, if so expressed, operate to
release the Issuer or the previous substitute as aforesaid from all of its
obligations qua principal debtor under these presents. Not later than 14
days after the execution of such documents and compliance with such
requirements, the New Company shall give notice thereof in a form
previously approved by the Trustee to the Holders in the manner provided
in Condition 15. Upon the execution of such documents and compliance
with such requirements, the New Company shall be deemed to be named
in these presents as the principal debtor in place of the Issuer (or in place
of the previous substitute under this Clause) under these presents and
these presents shall be deemed to be amended in such manner as shall be
necessary to give effect to the above provisions and, without limitation,
references in these presents to the Issuer shall, where the context so
requires, be deemed to be or include references to the New Company.
21. CURRENCY INDEMNITY
THE Issuer shall indemnify the Trustee, every Appointee, the Holders and
the Couponholders and keep them indemnified against:
(a) any Liability incurred by any of them arising from the non-
payment by the Issuer of any amount due to the Trustee or the
Holders or Couponholders under these presents by reason of any
variation in the rates of exchange between those used for the
purposes of calculating the amount due under a judgment or order
in respect thereof and those prevailing at the date of actual
payment by the Issuer; and
(b) any deficiency arising or resulting from any variation in rates of
exchange between (i) the date as of which the local currency
equivalent of the amounts due or contingently due under these
presents (other than this Clause) is calculated for the purposes of
any bankruptcy, insolvency or liquidation of the Issuer and (ii) the
final date for ascertaining the amount of claims in such
bankruptcy, insolvency or liquidation. The amount of such
deficiency shall be deemed not to be reduced by any variation in
rates of exchange occurring between the said final date and the
date of any distribution of assets in connection with any such
bankruptcy, insolvency or liquidation.
The above indemnity shall constitute an obligation of the Issuer separate
and independent from its obligations under the other provisions of these
presents and shall apply irrespective of any indulgence granted by the
Trustee or the Holders or the Couponholders from time to time and shall
continue in full force and effect notwithstanding the judgment or filing of
any proof or proofs in any bankruptcy, insolvency or liquidation of the
Issuer for a liquidated sum or sums in respect of amounts due under these
presents (other than this Clause). Any such deficiency as aforesaid shall
be deemed to constitute a loss suffered by the Holders and Couponholders
and no proof or evidence of any actual loss shall be required by the Issuer
or its liquidator or liquidators.
22. NEW TRUSTEE
(A) THE power to appoint a new trustee of these presents shall be vested in
the Issuer but no person shall be appointed who shall not previously have
been approved by an Extraordinary Resolution. One or more persons may
hold office as trustee or trustees of these presents but such trustee or
trustees shall be or include a Trust Corporation. Whenever there shall be
more than two trustees of these presents the majority of such trustees shall
be competent to execute and exercise all the duties, powers, trusts,
authorities and discretions vested in the Trustee by these presents provided
that a Trust Corporation shall be included in such majority. Any
appointment of a new trustee of these presents shall as soon as practicable
thereafter be notified by the Issuer to the Principal Paying Agent, the
Registrar, the Transfer Agents and the Holders.
SEPARATE AND CO-TRUSTEES
(B) Notwithstanding the provisions of sub-clause (A) above, the Trustee may,
upon giving prior notice to the Issuer (but without the consent of the
Issuer, the Holders or the Couponholders), appoint any person established
or resident in any jurisdiction (whether a Trust Corporation or not) to act
either as a separate trustee or as a co-trustee jointly with the Trustee:
(i) if the Trustee considers such appointment to be in the interests of
the Holders;
(ii) for the purposes of conforming to any legal requirements,
restrictions or conditions in any jurisdiction in which any
particular act or acts is or are to be performed; or
(iii) for the purposes of obtaining a judgment in any jurisdiction or the
enforcement in any jurisdiction of either a judgment already
obtained or any of the provisions of these presents against the
Issuer.
The Issuer irrevocably appoints the Trustee to be its attorney in its name
and on its behalf to execute any such instrument of appointment. Such a
person shall (subject always to the provisions of these presents) have such
trusts, powers, authorities and discretions (not exceeding those conferred
on the Trustee by these presents) and such duties and obligations as shall
be conferred or imposed by the instrument of appointment. The Trustee
shall have power in like manner to remove any such person. Such
reasonable remuneration as the Trustee may pay to any such person,
together with any attributable Liabilities incurred by it in performing its
function as such separate trustee or co-trustee, shall for the purposes of
these presents be treated as Liabilities incurred by the Trustee.
23. TRUSTEE'S RETIREMENT AND REMOVAL
A trustee of these presents may retire at any time on giving not less than
three months' prior written notice to the Issuer without giving any reason
and without being responsible for any Liabilities incurred by reason of
such retirement. The Holders may by Extraordinary Resolution remove
any trustee or trustees for the time being of these presents. The Issuer
undertakes that in the event of the only trustee of these presents which is a
Trust Corporation giving notice under this Clause or being removed by
Extraordinary Resolution it will use its best endeavours to procure that a
new trustee of these presents being a Trust Corporation is appointed as
soon as reasonably practicable thereafter. The retirement or removal of
any such trustee shall not become effective until a successor trustee being
a Trust Corporation is appointed.
24. TRUSTEE'S POWERS TO BE ADDITIONAL
THE powers conferred upon the Trustee by these presents shall be in
addition to any powers which may from time to time be vested in the
Trustee by the general law or as a holder of any of the Securities or
Coupons.
25. NOTICES
ANY notice or demand to the Issuer or the Trustee to be given, made or
served for any purposes under these presents shall be given, made or
served by sending the same by pre-paid post (first class if inland, first
class airmail if overseas), telex or facsimile transmission or by delivering
it by hand as follows:
to the Issuer: Wetherby Road
Scarcroft
Leeds
LS14 3HS
England
(Attention: the Group Company Secretary and
Solicitor)
Telex No. 55128
Facsimile No. 0532 895611
to the Trustee: 1 Appold Street
Broadgate
London EC2A 2HE
England
(Attention: the Managing Director)
Telex No. 883341 BANTR-G
Facsimile No. 0171-982 1149
or to such other address, telex or facsimile number as shall have been
notified (in accordance with this Clause) to the other party hereto and any
notice or demand sent by post as aforesaid shall be deemed to have been
given, made or served three days in the case of inland post or seven days
in the case of overseas post after despatch and any notice or demand sent
by telex or facsimile transmission as aforesaid shall be deemed to have
been given, made or served 24 hours after the time of despatch provided
that in the case of a notice or demand given by telex or facsimile
transmission such notice or demand shall forthwith be confirmed by post.
The failure of the addressee to receive such confirmation shall not
invalidate the relevant notice or demand given by telex or facsimile
transmission.
26. GOVERNING LAW
THESE presents are governed by, and shall be construed in accordance
with, English law.
27. COUNTERPARTS
THIS Trust Deed and any Trust Deed supplemental hereto may be
executed and delivered in any number of counterparts, all of which, taken
together, shall constitute one and the same deed and any party to this
Trust Deed or any Trust Deed supplemental hereto may enter into the
same by executing and delivering a counterpart.
IN WITNESS whereof this Trust Deed has been executed as a deed by the Issuer
and the Trustee and delivered on the date first stated above.
THE FIRST SCHEDULE
- - FORM OF ORIGINAL GLOBAL BOND -
YORKSHIRE ELECTRICITY GROUP plc
(Incorporated in England with limited liability under the Companies Act 1985
with registered number 2366995)
TEMPORARY GLOBAL BOND
representing
(POUND)[ ] in principal amount of an issue of
(POUND)200,000,000 9 1/4 PER CENT. BONDS
DUE 2020
This Bond is a temporary Global Bond without interest coupons in respect of
(POUND)[ ] in principal amount of a duly authorised issue of
Bonds of
Yorkshire Electricity Group plc (the "Issuer"), designated as specified in the
title
hereof (the "Bonds"), limited to the aggregate principal amount of Two Hundred
Million Pounds Sterling ((POUND)200,000,000) and constituted by a Trust Deed
dated 17th January, 1995 (the "Trust Deed") between the Issuer and Bankers
Trustee Company Limited as trustee (the trustee for the time being thereof
being
herein called the "Trustee"). References herein to the Conditions (or to any
particular numbered Condition) shall be to the Conditions (or that particular
one of them) set out in Part III of the Second Schedule to the Trust Deed.
1. Promise to pay
Subject as provided in this temporary Global Bond the Issuer promises to
pay to the bearer the principal amount of this temporary Global Bond
(being at the date hereof [ ]
Pounds Sterling
((POUND)[ ])) on 17th January, 2020 (or on such earlier date
as the said principal amount may become repayable in accordance with
the Conditions or the Trust Deed) and to pay interest annually in arrear on
17th January on the principal amount from time to time of this temporary
Global Bond at the rate of 9 1/4 per cent. per annum together with such
other amounts (if any) as may be payable, all subject to and in accordance
with the Conditions and the provisions of the Trust Deed.
2. Exchange for definitive Bonds and purchases
This temporary Global Bond is exchangeable in whole or in part upon the
request of the bearer for definitive Bonds only on and subject to the terms
and conditions set out below. The definitive Bonds to be issued on such
exchange will be in bearer form ("Definitive Bearer Bonds") in the
denominations of (POUND)1,000, (POUND)10,000 and
(POUND)100,000 each with interest coupons ("Coupons") and one Talon
for further interest coupons ("Talon") attached.
On and after 27th February, 1995 this temporary Global Bond may be
exchanged in whole or in part at the specified office of the Principal
Paying Agent (or such other place as the Trustee may agree) for
Definitive Bearer Bonds and the Issuer shall procure that the Principal
Paying Agent shall issue and deliver, in full or partial exchange for this
temporary Global Bond, Definitive Bearer Bonds (together with the
Coupons and Talons appertaining thereto) in an aggregate principal
amount equal to the principal amount of this temporary Global Bond
submitted for exchange Provided that Definitive Bearer Bonds will be so
issued and delivered only if and to the extent that there shall have been
presented to the Issuer a certificate from Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear
System ("Euroclear") or from Cedel, socie'te' anonyme ("Cedel")
substantially in the form of the certificate attached as Exhibit A.
Any person who would, but for the provisions of this temporary Global
Bond and the Trust Deed, otherwise be entitled to receive a Definitive
Bearer Bond or Bonds shall not be entitled to require the exchange of an
appropriate part of this temporary Global Bond for a Definitive Bearer
Bond or Definitive Bearer Bonds unless and until he shall have delivered
or caused to be delivered to Euroclear or Cedel a certificate substantially
in the form of the certificate attached as Exhibit B (copies of which form
of certificate will be available at the offices of Euroclear in Brussels and
Cedel in Luxembourg and the specified office of each of the Paying
Agents).
Upon (i) any exchange of a part of this temporary Global Bond for a
Definitive Bearer Bond or Definitive Bearer Bonds or (ii) the purchase by
or on behalf of the Issuer or any Subsidiary of the Issuer and cancellation
of a part of this temporary Global Bond in accordance with the
Conditions, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Principal
Paying Agent on behalf of the Issuer on Part II of the Schedule hereto,
whereupon the principal amount hereof shall be reduced for all purposes
by the amount so exchanged or so purchased and cancelled and endorsed.
3. Payments
Until the entire principal amount of this temporary Global Bond has been
extinguished, this temporary Global Bond shall in all respects be entitled
to the same benefits as the Definitive Bearer Bonds and shall be entitled to
the benefit of and be bound by the Trust Deed, except that the holder of
this temporary Global Bond shall not (unless upon due presentation of this
temporary Global Bond for exchange, delivery of the appropriate number
of Definitive Bearer Bonds (together with the Coupons and Talons
appertaining thereto) is improperly withheld or refused and such
withholding or refusal is continuing at the relevant payment date) be
entitled to receive any payment of interest on this temporary Global Bond
except upon certification as hereinafter provided. Upon any payment of
principal or interest on this temporary Global Bond the amount so paid
shall be endorsed by or on behalf of the Principal Paying Agent on behalf
of the Issuer on Part I of the Schedule hereto.
Payments of interest in respect of Bonds for the time being represented by
this temporary Global Bond shall be made to the bearer only upon
presentation to the Issuer or its agent of a certificate from Euroclear or
from Cedel substantially in the form of the certificate attached as
Exhibit A. Any person who would, but for the provisions of this
temporary Global Bond and of the Trust Deed, otherwise be beneficially
entitled to a payment of interest on this temporary Global Bond shall not
be entitled to require such payment unless and until he shall have delivered
or caused to be delivered to Euroclear or Cedel a certificate substantially
in the form of the certificate attached as Exhibit B (copies of which form
of certificate will be available at the offices of Euroclear in Brussels and
Cedel in Luxembourg and the specified office of each of the Paying
Agents).
Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this temporary
Global Bond shall be reduced for all purposes by the principal amount so
paid and endorsed.
All payments of any amounts payable and paid to the bearer of this
temporary Global Bond shall be valid and, to the extent of the sums so
paid, effectual to satisfy and discharge the liability for the moneys payable
hereon and on the relevant Definitive Bearer Bonds and Coupons.
4. Authentication
This temporary Global Bond shall not be or become valid or obligatory
for any purpose unless and until authenticated by or on behalf of the
Principal Paying Agent.
5. Governing law
This temporary Global Bond is governed by, and shall be construed in
accordance with, the laws of England.
IN WITNESS whereof the Issuer has caused this temporary Global Bond to be
signed manually by a person duly authorised on its behalf.
YORKSHIRE
ELECTRICITY
GROUP plc
By: ...................................
Duly authorised
Issued in London, England on 17th January, 1995.
Certificate of authentication
This temporary Global Bond is duly authenticated (without recourse,
warranty or liability).
..................................
Duly authorised
for and on behalf of
Morgan Guaranty Trust Company
of New York, London Office,
as Principal Paying Agent
THE SCHEDULE
PART I
PAYMENTS OF PRINCIPAL AND INTEREST
The following payments on this temporary Global Bond have been made:
Date Interest Principal Remaining principal Notation
made paid paid amount of this made on
temporary Global behalf of
Bond following the Issuer
such payment
(POUND) (POUND) (POUND)
_ _ _ _ _
_ _ _ _ _
PART II
EXCHANGES FOR DEFINITIVE BEARER BONDS AND
PURCHASES AND CANCELLATIONS
The following exchanges of a part of this temporary Global Bond for Definitive
Bearer Bonds and/or purchases and cancellations of a part of this temporary
Global Bond have been made:
Date Part of principal Part of Aggregate principal Notation
made amount of this principal amount of this made on
temporary amount of this temporary behalf of
Global Bond temporary Global Bond the Issuer
exchanged for Global Bond following such
Definitive Bearer purchased and exchange or
purchase
Bonds cancelled and cancellation
(POUND) (POUND) (POUND)
_ _ _ _ _
_ _ _ _ _
_ _ _ _ _
EXHIBIT A
YORKSHIRE ELECTRICITY GROUP plc
(POUND)200,000,000
9 1/4 per cent. Bonds due 2020
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing,
by tested telex or by electronic transmission from member organisations
appearing in our records as persons being entitled to a portion of the
principal amount set
forth below (our "Member Organisations") substantially to the effect set
forth in
the Trust Deed, as of the date hereof, (POUND)[ ] principal amount of
the above-captioned Securities (i) is owned by persons that are not citizens or
residents of the United States, domestic partnerships, domestic corporations or
any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States persons"), (ii) is
owned by United States persons that (a) are foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v))
("financial institutions") purchasing for their own account or for resale, or
(b) acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution has agreed, on its own behalf or through
its agent, that
we may advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder), or (iii) is owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)),
and to the further effect that United States or foreign financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii))
have certified that they have not acquired the Securities for purposes of
resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended, then this is also to
certify with respect to such principal amount of Securities set forth above
that, except as set forth below, we have received in writing, by tested
telex or by electronic transmission, from our Member Organisations entitled
to a portion of such principal amount, certifications with respect to such
portion, substantially to the effect set forth in the Trust Deed.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest)
any portion of the
temporary global Security excepted in such certifications and (ii) that as
of the
date hereof we have not received any notification from any of our Member
Organisations to the effect that the statements made by such Member
Organisations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection
therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be
relevant, we irrevocably
authorise you to produce this certification to any interested party in such
proceedings.
*Dated
[Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the
Euroclear System] [Cedel, socie'te' anonyme]
By ...................................
Authorised Signatory
EXHIBIT B
YORKSHIRE ELECTRICITY GROUP plc
(POUND)200,000,000
9 1/4 per cent. Bonds due 2020
(the "Securities")
This is to certify that as of the date hereof, and except as set forth below,
the
above-captioned Securities held by you for our account (i) are owned by person
(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) are owned by United States person(s) that (a) are foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing
for
their own account or for resale, or (b) acquired the Securities through foreign
branches of United States financial institutions and who hold the Securities
through such United States financial institutions on the date hereof (and in
either
case (a) or (b), each such United States financial institution hereby agrees,
on its
own behalf or through its agent, that you may advise the Issuer or the Issuer's
agent that it will comply with the requirements of Section 165(j)(3)(A), (B)
or (C)
of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s)
for purposes of resale during the restricted period (as defined in U.S.
Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of
the
Securities is a United States or foreign financial institution described in
clause (iii)
above (whether or not also described in clause (i) or (ii)) this is further
to certify
that such financial institution has not acquired the Securities for the purposes
of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act"), then
this is also to certify that, except as set forth below (i) in the case of
debt securities, the Securities are beneficially owned by (a) non-U.S.
person(s) or (b) U.S. person(s)
who purchased the Securities in transactions which did not require registration
under the Act; or (ii) in the case of equity securities, the Securities are
owned by (x) non-U.S. person(s) (and such person(s) are not acquiring the
Securities for the account or benefit of U.S. person(s)) or (y) U.S.
person(s) who purchased the Securities in a transaction which did not require
registration under the Act. If this
certification is being delivered in connection with the exercise of warrants
pursuant to Section 230.902(m) of Regulation S under the Act, then this is
further the certify that, except as set forth below, the Securities are
being exercised by and on behalf of non-U.S. person(s). As used in this
paragraph the term "U.S. person"
has the meaning given to it by Regulation S under the Act.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include
Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held
by you
for our account in accordance with your operating procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certification applies as of such date.
This certification excepts and does not relate to (POUND)[ ] of
such interest in the above Securities in respect of which we are not able to
certify and as to
which we understand exchange and delivery of definitive Securities (or, if
relevant,
exercise of any rights or collection of any interest) cannot be made until
we do so certify.
We understand that this certification is required in connection with certain
tax laws and, if applicable, certain securities laws of the United States.
In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or
would be relevant, we irrevocably authorise you to produce this certification
to any interested party in such proceedings.
* Dated
By ......................
[Name of person giving certification]
(As, or as agent for, the beneficial
owner(s) of those of the Securities
to which this certification relates)
THE SECOND SCHEDULE
Part I
- - FORM OF ORIGINAL BEARER BOND -
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WI
LL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME
TAX
LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 16
5(j)
AND 1287(a) OF THE INTERNAL REVENUE CODE.
(POUND)[1,000] [10,000] [100,000] XS0055251010 [SERIES] [Serial No.]
YORKSHIRE ELECTRICITY GROUP plc
(Incorporated in England with limited liability under the Companies Act 1985
with registered number 2366995)
(POUND)200,000,000 9 1/4 PER CENT. BONDS
DUE 2020
The issue of the Bonds was authorised by resolutions of the Board of Directors
of
Yorkshire Electricity Group plc (the "Issuer") passed on 15th December, 1994
and by resolutions of a duly authorised Committee of the Board of Directors
of the Issuer passed on 4th and 5th January, 1995.
This Bond forms one of a series of Bonds constituted by a Trust Deed (the
"Trust Deed") dated 17th January, 1995 made between the Issuer and
Bankers Trustee
Company Limited as trustee for the holders of the Bonds and issued either as
bearer bonds in the denominations of (POUND)1,000, (POUND)10,000 and
(POUND)100,000 each with Coupons and one Talon attached or as registered
bonds in the denomination of (POUND)1 each or an integral multiple thereof, in
an aggregate principal amount of (POUND)200,000,000.
The Issuer for value received and subject to and in accordance with the
Conditions
endorsed hereon hereby promises to pay to the bearer on 17th January, 2020 (or
on such earlier date as the principal sum hereunder mentioned may become
repayable in accordance with the said Conditions) the principal sum of:
(POUND)[1,000] [10,000] [100,000] ([One] [Ten] [One Hundred] Thousand
Pounds Sterling)
together with interest on the said principal sum at the rate of 9 1/4 per cent.
per
annum payable annually in arrear on 17th January and together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Trust Deed.
Neither this Bond nor the Coupons and Talon appertaining hereto shall be or
become valid or obligatory for any purpose unless and until this Bond has been
authenticated by or on behalf of the Principal Paying Agent.
IN WITNESS whereof this Bond has been executed on behalf of the Issuer.
YORKSHIRE
ELECTRICITY GROUP plc
By: ..............................
Director
Dated as of 17th January, 1995.
Issued in London, England.
Certificate of authentication
This Bond is duly authenticated (without recourse, warranty or liability).
...............................
Duly authorised
for and on behalf of
Morgan Guaranty Trust Company
of New York, London Office,
as Principal Paying Agent
- - FORM OF ORIGINAL COUPON -
On the front:
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION
WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
YORKSHIRE ELECTRICITY GROUP PLC
(POUND)200,000,000 9 1/4 PER CENT. BONDS
DUE 2020
Coupon appertaining to a Bond in the denomination of (POUND)[1,000] [10,000]
[100,000].
This Coupon is separately Coupon for
negotiable, payable to bearer, (POUND)[92.50] [925.00]
[9,250.00]
and subject to the due on
Conditions of the said Bonds. 17th January, [ ]
[No.] (POUND)[1,000] [10,000] [100,000] XS0055251010 [Series] [Serial No.]
- - FORM OF ORIGINAL TALON -
On the front:
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION
WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
YORKSHIRE ELECTRICTY GROUP plc
(POUND)200,000,000 9 1/4 PER CENT. BONDS DUE 2020
Talon appertaining to a Bond in the denomination of
(POUND)[1,000][10,000][100,000]
On and after 17th January, [2005/2015] [ten/five] further Coupons [and a further
Talon] will be issued at the specified office of any of the Paying Agents
set out on the reverse hereof (and /or any other or further Paying Agents
and/or specified
offices as may from time to time be duly appointed and notified to the
Bondholders) upon production and surrender of this Talon.
_________________________________________________________________
_______________
[No.] [1,000][10,000][100,00] XS0055251010 [Series] [Serial No.]
_________________________________________________________________
_______________
On the back of the Original Coupons and the Original Talons:
PRINCIPAL PAYING AGENT
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y 0JP
OTHER PAYING AGENTS
Morgan Guaranty Trust
Company
of New York
Avenue des Arts 35
B-1040 Brussels
Banque Paribas
Luxembourg S.A.
10A Boulevard Royal
L-2093 Luxembourg
Part II
- - FORM OF ORIGINAL REGISTERED BOND -
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION
WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
_________________________________________________________________
______________
Certificate Number Transfer No. Holder Code Registration Amount
Date (POUND)
_________________________________________________________________
______________
YORKSHIRE ELECTRICITY GROUP plc
(Incorporated in England with limited liability
under the Companies Act 1985 with registered number 2366995)
(POUND)200,000,000 9 1/4 PER CENT.
BONDS DUE 2020
Interest at the rate of 9 1/4 per cent. per annum is payable on the
principal amount
of this Registered Bond annually in arrear on 17th January in each year,
subject to
and in accordance with the Conditions endorsed hereon and the provisions of the
Trust Deed dated 17th January, 1995 constituting the Bonds.
THIS IS TO CERTIFY that
is/are the registered holder(s)
of in
principal amount of the above-mentioned Registered Bonds and is/are entitled on
17th January, 2020 (or on such earlier date as such principal amount may become
repayable in accordance with the Conditions) to the repayment of such principal
amount together with such other amounts (if any) as may be payable, all
subject to and in accordance with the said Conditions and the provisions of
the said Trust Deed.
IN WITNESS whereof this Registered Bond has been executed on behalf of the
Issuer.
YORKSHIRE
ELECTRICITY GROUP plc
By: ..............................
Director
This Certificate must be surrendered before any transfer of the whole or
part of the Registered Bonds herein mentioned can be registered.
- FORM OF TRANSFER OF REGISTERED BOND -
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) to
................................................................
.............................................................
...................
..................................................................
...........................................................
...................
.....................................................................
........................................................
...................
(Please print or type name and address (including postal code) of transferee)
(POUND) principal amount of this Registered Bond and all rights
hereunder, hereby irrevocably constituting and appointing
....................... as attorney to transfer such principal amount of
this Bond in the register maintained by YORKSHIRE ELECTRICITY GROUP
plc with full power of substitution.
Signature(s) of transferor(s) ..............................
..............................
Date: ........................
N.B.:
1. This form of transfer must be accompanied by such documents, evidence
and information as may be required pursuant to the Conditions and must
be executed under the hand of the transferor or, if the transferor is a
corporation, either under its common seal or under the hand of two of its
officers duly authorised in writing and, in such latter case, the document
so authorising such officers must be delivered with this form of transfer.
2. In each case the signature(s) must be guaranteed by a commercial bank
with a correspondent bank in New York City, Luxembourg or London or
by an institution which is a member of The New York Stock Exchange or
The American Stock Exchange in New York City or the Luxembourg
Stock Exchange or The Stock Exchange in London.
3. The signature(s) on this form of transfer must correspond with the
name(s) at it/they appear(s) on the face of this Registered Bond in every
particular, without alteration or enlargement or any change whatever.
4. Registered Bonds are only transferable in amounts of (POUND)1 or any
integral multiples thereof.
Part III
- - CONDITIONS OF THE BONDS -
[To be photocopied from final Offering Circular]
PRINCIPAL PAYING AGENT
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y 0JP
OTHER PAYING AGENTS
Morgan Guaranty Trust
Company
of New York
Avenue des Arts 35
B-1040 Brussels
Banque Paribas
Luxembourg S.A.
10A Boulevard Royal
L-2093 Luxembourg
REGISTRAR
For registration of
transfers:
For payments of principal:
The Royal Bank of
Scotland plc
Registrar's Department
P.O. Box 39
Caxton House
Redcliffe Way
Bristol BS99 7XF
The Royal Bank of
Scotland plc
67 Lombard Street
London EC3P 3DL
and/or such other or further Principal Paying Agent, other Paying Agents and
Registrar and/or specified offices as may from time to time be appointed by the
Issuer with the approval of the Trustee and notice of which has been given
to the Bondholders.
THE THIRD SCHEDULE
REGISTER AND TRANSFER OF REGISTERED SECURITIES
1. The Issuer shall at all times ensure that the Registrar maintains
in Bristol, London, or at such other place as the Trustee may agree, a
register showing the amount of the Registered Securities from time to time
outstanding and the dates of issue and all subsequent transfers and
changes of ownership thereof and the names and addresses of the holders
of the Registered Securities. The Trustee and the holders of the Registered
Securities or any of them and any person authorised by it or any of them
may at all reasonable times during office hours inspect the register and
take copies of or extracts from it. The register may be closed by the Issuer
for such periods at such times (not exceeding in total 30 days in any one
year) as it may think fit.
2. Each Registered Security shall have an identifying certificate number
which shall be entered on the register.
3. The Registered Securities are transferable by execution of the form of
transfer endorsed thereon under the hand of the transferor or, where the
transferor is a corporation, under its common seal or under the hand of
two of its officers duly authorised in writing. In each case the signature(s)
must be guaranteed by a commercial bank with a correspondent bank in
New York City, Luxembourg or London or by an institution which is a
member of The New York Stock Exchange or The American Stock
Exchange in New York City or the Luxembourg Stock Exchange or The
International Stock Exchange of the United Kingdom and the Republic of
Ireland Limited.
4. The Registered Securities to be transferred must be delivered for
registration to the specified office of the Registrar or any Transfer Agent
with the form of transfer endorsed thereon duly completed and executed
and must be accompanied by such documents, evidence and information
as may be required pursuant to the Conditions and such other evidence as
the Issuer may reasonably require to prove the title of the transferor or his
right to transfer the Registered Securities and, if the form of transfer is
executed by some other person on his behalf or in the case of the
execution of a form of transfer on behalf of a corporation by its officers,
the authority of that person or those persons to do so.
5. The executors or administrators of a deceased holder of Registered
Securities (not being one of several joint holders) and in the case of the
death of one or more of several joint holders the survivor or survivors of
such joint holders shall be the only person or persons recognised by the
Issuer as having any title to such Registered Securities.
6. Any person becoming entitled to Registered Securities in consequence of
the death or bankruptcy of the holder of such Registered Securities may
upon producing such evidence that he holds the position in respect of
which he proposes to act under this paragraph or of his title as the Issuer
shall require be registered himself as the holder of such Registered
Securities or, subject to the preceding paragraphs as to transfer, may
transfer such Registered Securities. The Issuer shall be at liberty to retain
any amount payable upon the Registered Securities to which any person is
so entitled until such person shall be registered as aforesaid or shall duly
transfer the Registered Securities.
7. Unless otherwise requested by him, the holder of Registered Securities of
any series shall be entitled to receive only one Registered Security in
respect of his entire holding of such series.
8. The joint holders of Registered Securities of any series shall be entitled
to one Registered Security only in respect of their joint holding of
such series
which shall, except where they otherwise direct, be delivered to the joint
holder whose name appears first in the register of the holders of
Registered Securities in respect of such joint holding.
9. Where a holder of Registered Securities has transferred part only of his
holding of any series there shall be delivered to him without charge a
Registered Security in respect of the balance of such holding.
10. The Issuer shall make no charge to the Holders for the registration of any
holding of Registered Securities or any transfer thereof or for the issue
thereof or for the delivery thereof at the specified office of the Registrar or
of any Transfer Agent or by post to the address specified by the Holder. If
any Holder entitled to receive a Registered Security wishes to have the
same delivered to him otherwise than at the specified office of the
Registrar or of any Transfer Agent, such delivery shall be made, upon his
written request to the Registrar or such Transfer Agent, at his risk and
(except where sent by post to the address specified by the Holder) at his
expense.
11. The holder of a Registered Security may (to the fullest extent permitted by
applicable laws) be treated at all times, by all persons and for all purposes
as the absolute owner of such Registered Security notwithstanding any
notice any person may have of the right, title, interest or claim of any
other person thereto. The Issuer and the Trustee shall not be bound to see
to the execution of any trust to which any Registered Security may be
subject and no notice of any trust shall be entered on the register. The
holder of a Registered Security will be recognised by the Issuer as entitled
to his Registered Security free from any equity, set-off or counterclaim on
the part of the Issuer against the original or any intermediate holder of
such Registered Security.
THE FOURTH SCHEDULE
PROVISIONS FOR MEETINGS OF HOLDERS
1. (A) As used in this Schedule the following expressions shall have the
following meanings unless the context otherwise requires:
(i) "voting certificate" shall mean an English language
certificate issued by a Paying Agent and dated in which it
is stated:
(a) that on the date thereof Bearer Securities (not
being Bearer Securities in respect of which a
block voting instruction has been issued and is
outstanding in respect of the meeting specified in
such voting certificate or any adjourned such
meeting) were deposited with such Paying Agent
or (to the satisfaction of such Paying Agent) were
held to its order or under its control and that no
such Bearer Securities will cease to be so
deposited or held until the first to occur of:
(1) the conclusion of the meeting specified in
such certificate or, if later, of any
adjourned such meeting; and
(2) the surrender of the certificate to the
Paying Agent who issued the same; and
(b) that the bearer thereof is entitled to attend and
vote at such meeting and any adjourned such
meeting in respect of the Bearer Securities
represented by such certificate;
(ii) "block voting instruction" shall mean an English language
document issued by a Paying Agent and dated in which:
(a) it is certified that Bearer Securities (not being
Bearer Securities in respect of which a voting
certificate has been issued and is outstanding in
respect of the meeting specified in such block
voting instruction and any adjourned such
meeting) have been deposited with such Paying
Agent or (to the satisfaction of such Paying
Agent) were held to its order or under its control
and that no such Bearer Securities will cease to
be so deposited or held until the first to occur of:
(1) the conclusion of the meeting specified in
such document or, if later, of any
adjourned such meeting; and
(2) the surrender to the Paying Agent not
less than 48 hours before the time for
which such meeting or any adjourned
such meeting is convened of the receipt
issued by such Paying Agent in respect
of each such deposited Bearer Security
which is to be released or (as the case
may require) the Bearer Security or
Bearer Securities ceasing with the
agreement of the Paying Agent to be held
to its order or under its control and the
giving of notice by the Paying Agent to
the Issuer in accordance with
paragraph 17 hereof of the necessary
amendment to the block voting
instruction;
(b) it is certified that each holder of such Bearer
Securities has instructed such Paying Agent that
the vote(s) attributable to the Bearer Security or
Bearer Securities so deposited or held should be
cast in a particular way in relation to the
resolution or resolutions to be put to such
meeting or any adjourned such meeting and that
all such instructions are during the period
commencing 48 hours prior to the time for which
such meeting or any adjourned such meeting is
convened and ending at the conclusion or
adjournment thereof neither revocable nor
capable of amendment;
(c) the aggregate principal amount of the Bearer
Securities so deposited or held are listed
distinguishing with regard to each such resolution
between those in respect of which instructions
have been given as aforesaid that the votes
attributable thereto should be cast in favour of
the resolution and those in respect of which
instructions have been so given that the votes
attributable thereto should be cast against the
resolution; and
(d) one or more persons named in such document
(each hereinafter called a "proxy") is or are
authorised and instructed by such Paying Agent
to cast the votes attributable to the Bearer
Securities so listed in accordance with the
instructions referred to in (c) above as set out in
such document;
(iii) "24 hours" shall mean a period of 24 hours including all
or part of a day upon which banks are open for business
in both the place where the relevant meeting is to be held
and in each of the places where the Paying Agents have
their specified offices (disregarding for this purpose the
day upon which such meeting is to be held) and such
period shall be extended by one period or, to the extent
necessary, more periods of 24 hours until there is
included as aforesaid all or part of a day upon which
banks are open for business in all of the places as
aforesaid; and
(iv) "48 hours" shall mean a period of 48 hours including all
or part of two days upon which banks are open for
business both in the place where the relevant meeting is to
be held and in each of the places where the Paying Agents
have their specified offices (disregarding for this purpose
the day upon which such meeting is to be held) and such
period shall be extended by one period or, to the extent
necessary, more periods of 24 hours until there is
included as aforesaid all or part of two days upon which
banks are open for business in all of the places as
aforesaid.
(B) A holder of a Bearer Security may obtain a voting certificate in
respect of such Bearer Security from a Paying Agent or require a
Paying Agent to issue a block voting instruction in respect of such
Bearer Security by depositing such Bearer Security with such
Paying Agent or (to the satisfaction of such Paying Agent) by
such Bearer Security being held to its order or under its control,
in each case not less than 48 hours before the time fixed for the
relevant meeting and on the terms set out in sub-paragraph (i)(a)
or (ii)(a) above (as the case may be), and (in the case of a block
voting instruction) instructing such Paying Agent to the effect set
out in sub-paragraph (ii)(b) above. The holder of any voting
certificate or the proxies named in any block voting instruction
shall for all purposes in connection with the relevant meeting or
adjourned meeting of Holders be deemed to be the holder of the
Bearer Securities to which such voting certificate or block voting
instruction relates and the Paying Agent with which such Bearer
Securities have been deposited or the person holding the same to
the order or under the control of such Paying Agent shall be
deemed for such purposes not to be the holder of those Bearer
Securities.
(C) (i) A holder of Registered Securities may, by an instrument
in writing in the English language (a "form of proxy")
signed by the holder or, in the case of a corporation,
executed under its common seal or signed on its behalf by
an attorney or a duly authorised officer of the corporation
and delivered to the specified office of the Registrar not
less than 48 hours before the time fixed for the relevant
meeting, appoint any person (a "proxy") to act on his or
its behalf in connection with any meeting of the Holders
and any adjourned such meeting.
(ii) Any holder of Registered Securities which is a
corporation may by resolution of its directors or other
governing body authorise any person to act as its
representative (a "representative") in connection with
any meeting of the Holders and any adjourned such
meeting.
(iii) Any proxy appointed pursuant to sub-paragraph (i) above
or representative appointed pursuant to sub-
paragraph (ii) above shall so long as such appointment
remains in force be deemed, for all purposes in
connection with the relevant meeting or adjourned
meeting of the Holders, to be the holder of the Registered
Securities to which such appointment relates and the
holder of the Registered Securities shall be deemed for
such purposes not to be the holder.
2. The Issuer or the Trustee may at any time and the Issuer shall upon a
requisition in writing signed by the holders of not less than one-tenth in
principal amount of the Securities of any series for the time being
outstanding convene a meeting of the Holders and if the Issuer makes
default for a period of seven days in convening such a meeting the same
may be convened by the Trustee or the requisitionists. Every such meeting
shall be held at such time and place as the Trustee may appoint or
approve.
3. At least 21 days' notice (exclusive of the day on which the notice is given
and the day on which the meeting is to be held) specifying the place, day
and hour of meeting shall be given to the Holders prior to any meeting of
the Holders in the manner provided by Condition 15. Such notice, which
shall be in the English language, shall state generally the nature of the
business to be transacted at the meeting thereby convened but (except for
an Extraordinary Resolution) it shall not be necessary to specify in such
notice the terms of any resolution to be proposed. Such notice shall
include statements, if applicable, to the effect that (i) Bearer Securities
may, not less than 48 hours before the time fixed for the meeting, be
deposited with Paying Agents or (to their satisfaction) held to their order
or under their control for the purpose of obtaining voting certificates or
appointing proxies and (ii) the holders of Registered Securities may
appoint proxies by executing and delivering a form of proxy in the English
language to the specified office of the Registrar not less than 48 hours
before the time fixed for the meeting or, in the case of corporations, may
appoint representatives by resolution of their directors or other governing
body. A copy of the notice shall be sent by post to the Trustee (unless the
meeting is convened by the Trustee) and to the Issuer (unless the meeting
is convened by the Issuer).
4. A person (who may but need not be a Holder) nominated in writing by the
Trustee shall be entitled to take the chair at the relevant meeting or
adjourned meeting but if no such nomination is made or if at any meeting
or adjourned meeting the person nominated shall not be present within 15
minutes after the time appointed for holding the meeting or adjourned
meeting the Holders present shall choose one of their number to be
Chairman. The Chairman of an adjourned meeting need not be the same
person as was Chairman of the meeting from which the adjournment took
place.
5. At any such meeting one or more persons present holding Securities or
voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-twentieth of the principal
amount of the Securities for the time being outstanding shall (except for
the purpose of passing an Extraordinary Resolution) form a quorum for
the transaction of business and no business (other than the choosing of a
Chairman) shall be transacted at any meeting unless the requisite quorum
be present at the commencement of the relevant business. The quorum at
any such meeting for passing an Extraordinary Resolution shall (subject
as provided below) be one or more persons present holding Securities or
voting certificates or being proxies or representatives and holding or
representing in the aggregate a clear majority in principal amount of the
Securities for the time being outstanding PROVIDED THAT at any
meeting the business of which includes any of the following matters (each
of which shall, subject only to Clause 18(B)(ii), only be capable of being
effected after having been approved by Extraordinary Resolution) namely:
(i) reduction or cancellation of the amount payable or, where
applicable, modification (except where such modification is, in
the opinion of the Trustee, bound to result in an increase), of the
method of calculating the amount payable or modification of the
date of payment or, where applicable, of the method of calculating
the date of payment in respect of any principal, premium or
interest in respect of the Securities;
(ii) alteration of the currency in which payments under the Securities
and Coupons are to be made;
(iii) alteration of the majority required to pass an Extraordinary
Resolution;
(iv) the sanctioning of any such scheme or proposal as is described in
paragraph 18(I) below; and
(v) alteration of this proviso or the proviso to paragraph 6 below;
the quorum shall be one or more persons present holding Securities or
voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than two-thirds of the principal
amount of the Securities for the time being outstanding.
6. If within 15 minutes (or such longer period not exceeding 30 minutes as
the Chairman may decide) after the time appointed for any such meeting a
quorum is not present for the transaction of any particular business, then,
subject and without prejudice to the transaction of the business (if any) for
which a quorum is present, the meeting shall if convened upon the
requisition of Holders be dissolved. In any other case it shall stand
adjourned to the same day in the next week (or if such day is a public
holiday the next succeeding business day) at the same time and place
(except in the case of a meeting at which an Extraordinary Resolution is
to be proposed in which case it shall stand adjourned for such period,
being not less than 14 clear days nor more than 42 clear days, and to such
place as may be appointed by the Chairman either at or subsequent to
such meeting and approved by the Trustee). If within 15 minutes (or such
longer period not exceeding 30 minutes as the Chairman may decide) after
the time appointed for any adjourned meeting a quorum is not present for
the transaction of any particular business, then, subject and without
prejudice to the transaction of the business (if any) for which a quorum is
present, the Chairman may either (with the approval of the Trustee)
dissolve such meeting or adjourn the same for such period, being not less
than 14 clear days (but without any maximum number of clear days), and
to such place as may be appointed by the Chairman either at or
subsequent to such adjourned meeting and approved by the Trustee, and
the provisions of this sentence shall apply to all further adjourned such
meetings. At any adjourned meeting one or more persons present holding
Securities or voting certificates or being proxies or representatives
(whatever the principal amount of the Securities so held or represented by
them) shall (subject as provided below) form a quorum and shall (subject
as provided below) have power to pass any Extraordinary Resolution or
other resolution and to decide upon all matters which could properly have
been dealt with at the meeting from which the adjournment took place had
the requisite quorum been present PROVIDED THAT at any adjourned
meeting the quorum for the transaction of business comprising any of the
matters specified in the proviso to paragraph 5 above shall be one or more
persons present holding Securities or voting certificates or being proxies
or representatives and holding or representing in the aggregate not less
than one-third of the principal amount of the Securities for the time being
outstanding.
7. Notice of any adjourned meeting at which an Extraordinary Resolution is
to be submitted shall be given in the same manner as notice of an original
meeting but as if 10 were substituted for 21 in paragraph 3 above and
such notice shall state the relevant quorum. Subject as aforesaid it shall
not be necessary to give any notice of an adjourned meeting.
8. Every question submitted to a meeting shall be decided in the first instance
by a show of hands and in case of equality of votes the Chairman shall
both on a show of hands and on a poll have a casting vote in addition to
the vote or votes (if any) to which he may be entitled as a Holder or as a
holder of a voting certificate or as a proxy or as a representative.
9. At any meeting unless a poll is (before or on the declaration of the result
of the show of hands) demanded by the Chairman, the Issuer, the Trustee
or any person present holding a Security or a voting certificate or being a
proxy or representative (whatever the principal amount of the Securities
so held or represented by him) a declaration by the Chairman that a
resolution has been carried or carried by a particular majority or lost or
not carried by a particular majority shall be conclusive evidence of the
fact without proof of the number or proportion of the votes recorded in
favour of or against such resolution.
10. Subject to paragraph 12 below, if at any such meeting a poll is so
demanded it shall be taken in such manner and subject as hereinafter
provided either at once or after an adjournment as the Chairman directs
and the result of such poll shall be deemed to be the resolution of the
meeting at which the poll was demanded as at the date of the taking of the
poll. The demand for a poll shall not prevent the continuance of the
meeting for the transaction of any business other than the motion on which
the poll has been demanded.
11. The Chairman may with the consent of (and shall if directed by) any such
meeting adjourn the same from time to time and from place to place but
no business shall be transacted at any adjourned meeting except business
which might lawfully (but for lack of required quorum) have been
transacted at the meeting from which the adjournment took place.
12. Any poll demanded at any such meeting on the election of a Chairman or
on any question of adjournment shall be taken at the meeting without
adjournment.
13. The Trustee and its lawyers and financial advisers and any director,
officer or employee of a corporation being a trustee of these presents and
any director or officer of the Issuer and its lawyers and its accountants
and financial advisers and any other person authorised so to do by the
Trustee may attend and speak at any meeting. Save as aforesaid, but
without prejudice to the proviso to the definition of "outstanding" in
Clause 1, no person shall be entitled to attend and speak nor shall any
person be entitled to vote at any meeting of the Holders or join with others
in requesting the convening of such a meeting or to exercise the rights
conferred on the Holders by Conditions 11 and 12 unless he either
produces the Bearer Security or Bearer Securities of which he is the
holder or a voting certificate or is a proxy or a representative or is the
holder of a Registered Security or Registered Securities. No person shall
be entitled to vote at any meeting in respect of Securities held by, for the
benefit of, or on behalf of, the Issuer, any Subsidiary of the Issuer, any
holding company of the Issuer or any other Subsidiary of any such
holding company. Nothing herein shall prevent any of the proxies named
in any block voting instruction or form of proxy or any representative
from being a director, officer or representative of or otherwise connected
with the Issuer.
14. Subject as provided in paragraph 13 hereof at any meeting:
(A) on a show of hands every person who is present in person and
produces a Bearer Security or voting certificate or is a holder of
Registered Securities or is a proxy or representative shall have
one vote; and
(B) on a poll every person who is so present shall have one vote in
respect of each (POUND)1 or such other amount as the Trustee
may in its absolute discretion stipulate (or, in the case of meetings
of holders of Securities denominated in another currency, such
amount in such other currency as the Trustee in its absolute
discretion may stipulate) in principal amount of the Securities so
produced or represented by the voting certificate so produced or
in respect of which he is a proxy or representative or in respect of
which he is the holder.
Without prejudice to the obligations of the proxies named in any block
voting instruction or form of proxy any person entitled to more than one
vote need not use all his votes or cast all the votes to which he is entitled
in the same way.
15. The proxies named in any block voting instruction or form of proxy and
representatives need not be Holders.
16. Each block voting instruction together (if so requested by the Trustee)
with proof satisfactory to the Trustee of its due execution on behalf of the
relevant Paying Agent and each form of proxy shall be deposited by the
relevant Paying Agent or (as the case may be) by the Registrar at such
place as the Trustee shall approve not less than 24 hours before the time
appointed for holding the meeting or adjourned meeting at which the
proxies named in the block voting instruction or form of proxy propose to
vote and in default the block voting instruction or form of proxy shall not
be treated as valid unless the Chairman of the meeting decides otherwise
before such meeting or adjourned meeting proceeds to business. A
notarially certified copy of each block voting instruction and form of
proxy shall be deposited with the Trustee before the commencement of the
meeting or adjourned meeting but the Trustee shall not thereby be obliged
to investigate or be concerned with the validity of or the authority of the
proxies named in any such block voting instruction or form of proxy.
17. Any vote given in accordance with the terms of a block voting instruction
or form of proxy shall be valid notwithstanding the previous revocation or
amendment of the block voting instruction or form of proxy or of any of
the Holders' instructions pursuant to which it was executed provided that
no intimation in writing of such revocation or amendment shall have been
received from the relevant Paying Agent or in the case of a Registered
Security from the holder thereof by the Issuer at its registered office (or
such other place as may have been required or approved by the Trustee
for the purpose) by the time being 24 hours and 48 hours respectively
before the time appointed for holding the meeting or adjourned meeting at
which the block voting instruction or form of proxy is to be used.
18. A meeting of the Holders shall in addition to the powers hereinbefore
given have the following powers exercisable only by Extraordinary
Resolution (subject to the provisions relating to quorum contained in
paragraphs 5 and 6 above) namely:
(A) Power to sanction any compromise or arrangement proposed to be
made between the Issuer, the Trustee, any Appointee and the
Holders and Couponholders or any of them.
(B) Power to sanction any abrogation, modification, compromise or
arrangement in respect of the rights of the Trustee, any
Appointee, the Holders, the Couponholders or the Issuer against
any other or others of them or against any of their property
whether such rights shall arise under these presents or otherwise.
(C) Power to assent to any modification of the provisions of these
presents which shall be proposed by the Issuer, the Trustee or any
Holder.
(D) Power to give any authority or sanction which under the
provisions of these presents is required to be given by
Extraordinary Resolution.
(E) Power to appoint any persons (whether Holders or not) as a
committee or committees to represent the interests of the Holders
and to confer upon such committee or committees any powers or
discretions which the Holders could themselves exercise by
Extraordinary Resolution.
(F) Power to approve of a person to be appointed a trustee and power
to remove any trustee or trustees for the time being of these
presents.
(G) Power to discharge or exonerate the Trustee and/or any Appointee
from all liability in respect of any act or omission for which the
Trustee and/or such Appointee may have become responsible
under these presents.
(H) Power to authorise the Trustee and/or any Appointee to concur in
and execute and do all such deeds, instruments, acts and things as
may be necessary to carry out and give effect to any
Extraordinary Resolution.
(I) Power to sanction any scheme or proposal for the exchange or
sale of the Securities for or the conversion of the Securities into or
the cancellation of the Securities in consideration of shares, stock,
bonds, notes, debentures, debenture stock and/or other obligations
and/or securities of the Issuer or any other company formed or to
be formed, or for or into or in consideration of cash, or partly for
or into or in consideration of such shares, stock, bonds, notes,
debentures, debenture stock and/or other obligations and/or
securities as aforesaid and partly for or into or in consideration of
cash.
19. Any resolution passed at a meeting of the Holders duly convened and held
in accordance with these presents shall be binding upon all the Holders
whether present or not present at such meeting and whether or not voting
and upon all Couponholders and each of them shall be bound to give
effect thereto accordingly and the passing of any such resolution shall be
conclusive evidence that the circumstances justify the passing thereof.
Notice of the result of the voting on any resolution duly considered by the
Holders shall be published in accordance with Condition 15 by the Issuer
within 14 days of such result being known PROVIDED THAT the non-
publication of such notice shall not invalidate such result.
20. The expression "Extraordinary Resolution" when used in these presents
means a resolution passed at a meeting of the Holders duly convened and
held in accordance with these presents by a majority consisting of not less
than three-fourths of the persons voting thereat upon a show of hands or if
a poll is duly demanded by a majority consisting of not less than three-
fourths of the votes cast on such poll.
21. Minutes of all resolutions and proceedings at every meeting of the Holders
shall be made and entered in books to be from time to time provided for
that purpose by the Issuer and any such Minutes as aforesaid if purporting
to be signed by the Chairman of the meeting at which such resolutions
were passed or proceedings transacted shall be conclusive evidence of the
matters therein contained and until the contrary is proved every such
meeting in respect of the proceedings of which Minutes have been made
shall be deemed to have been duly held and convened and all resolutions
passed or proceedings transacted thereat to have been duly passed or
transacted.
22. (A) If and whenever the Issuer shall have issued and have outstanding
Securities of more than one series the foregoing provisions of this
Schedule shall have effect subject to the following modifications:
(i) a resolution which in the opinion of the Trustee affects
the Securities of only one series shall be deemed to have
been duly passed if passed at a separate meeting of the
holders of the Securities of that series;
(ii) a resolution which in the opinion of the Trustee affects
the Securities of more than one series but does not give
rise to a conflict of interest between the holders of
Securities of any of the series so affected shall be deemed
to have been duly passed if passed at a single meeting of
the holders of the Securities of all the series so affected;
(iii) a resolution which in the opinion of the Trustee affects
the Securities of more than one series and gives or may
give rise to a conflict of interest between the holders of
the Securities of one series or group of series so affected
and the holders of the Securities of another series or
group of series so affected shall be deemed to have been
duly passed only if passed at separate meetings of the
holders of the Securities of each series or group of series
so affected; and
(iv) to all such meetings all the preceding provisions of this
Schedule shall mutatis mutandis apply as though
references therein to Securities, Holders and holders were
references to the Securities of the series or group of series
in question or to the holders of such Securities, as the
case may be.
(B) If the Issuer shall have issued and have outstanding Securities
which are not denominated in pounds sterling, in the case of any
meeting of holders of Securities of more than one currency the
principal amount of such Securities shall (i) for the purposes of
paragraph 2 above be the equivalent in pounds sterling at the spot
rate of a bank nominated by the Trustee for the conversion of the
relevant currency or currencies into pounds sterling on the seventh
dealing day prior to the day on which the requisition in writing is
received by the Issuer and (ii) for the purposes of paragraphs 5, 6
and 14 above (whether in respect of the meeting or any adjourned
such meeting or any poll resulting therefrom) be the equivalent at
such spot rate on the seventh dealing day prior to the day of such
meeting. In such circumstances, on any poll each person present
shall have one vote for each (POUND)1 (or such other pound
sterling amount as the Trustee may in its absolute discretion
stipulate) in principal amount of the Securities (converted as
above) which he holds or represents.
23. Subject to all other provisions of these presents the Trustee may without
the consent of the Issuer, the Holders or the Couponholders prescribe such
further regulations regarding the requisitioning and/or the holding of
meetings of Holders and attendance and voting thereat as the Trustee may
in its sole discretion think fit.
THE COMMON SEAL of )
YORKSHIRE ELECTRICITY )
GROUP plc ) SEAL
was affixed to this deed in the )
presence of: )
A.W.J. COLEMAN
Director
R. DICKINSON
Secretary
THE COMMON SEAL of )
BANKERS TRUSTEE )
COMPANY LIMITED was ) SEAL
affixed to this deed in the )
presence of: )
C. STRAKOSCH
Director
MARK P. JONES
Assistant Secretary
ICM:21650.2
DATED 17TH
JANUARY, 1995
YORKSHIRE
ELECTRICITY
GROUP plc
- - and -
BANKERS TRUSTEE
COMPANY LIMITED
__________________________
________
TRUST DEED
constituting
(POUND)200,000,000
9 1/4 per cent. Bonds
due 2020
(with authority to issue further
bonds or notes)
__________________________
________
For the Issuer:
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
For the Trustee:
Allen & Overy
One New Change
London EC4M 9QQ
CONFORMED COPY
DATED 17TH JANUARY, 1995
YORKSHIRE ELECTRICITY GROUP plc
- - and -
BANKERS TRUSTEE COMPANY LIMITED
__________________________________
TRUST DEED
constituting
(POUND)200,000,000
9 1/4 per cent. Bonds
due 2020
(with authority to issue further
bonds or notes)
__________________________________
For the Issuer:
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
For the Trustee:
Allen & Overy
One New Change
London EC4M 9QQ
TABLE OF CONTENTS
Clause Page
1. Definitions 1
2. Covenant to repay and to pay interest on Original Bonds 9
3. Form and issue of Original Bonds and Original Coupons 12
4. Fees, Duties and Taxes 13
5. Covenant of Compliance 13
6. Cancellation of Securities and Records 13
7. Enforcement 14
8 Proceedings, Action and Indemnification 14
9. Application of Moneys 15
10. Notice of Payments 15
11 Investment by Trustee 15
12. Partial Payments 16
13 Covenants by the Issuer 16
14 Remuneration and Indemnification of Trustee 20
15. Supplement to Trustee Act 1925 21
16. Trustee's Liability 24
17. Trustee Contracting with Issuer 24
18. Waiver, Authorisation and Determination 25
19. Holder of Definitive Bearer Security assumed to be Couponholder 25
20. Substitution 26
21. Currency Indemnity 27
22. New Trustee 27
23. Trustee's Retirement and Removal 28
24. Trustee's powers to be additional 28
25. Notices 28
26. Governing Law 29
27. Counterparts 29
Schedules
First Form of Original Global Bond 30
Second Form of Original Bearer Bond 39
Form of Original Coupon 41
Form of Original Talon 42
Form of Original Registered Bond 44
Conditions of the Original Bonds 46
Third Register and transfer of Registered Securities 63
Fourth Provisions for meetings of Holders 65
* To be dated no earlier than the date to which this certification relates,
namely (a) the payment date or (b) the date set for the exchange
of the temporary Global Bond for Definitive Bearer Bonds.
* To be dated no earlier than the fifteenth day before the date to which this
certification relates, namely (a) the payment date or (b) the
date set for the exchange of the temporary Global Bond for Definitive Bearer
Bonds.
75
76
62
EXHIBIT 4-13
YORKSHIRE ELECTRICITY GROUP plc
(POUND)150,000,000
8 5/8 per cent. Bonds due 2005
AGENCY AGREEMENT
THIS AGREEMENT is dated 27th July, 1995 and made BETWEEN:
(1) Yorkshire Electricity Group plc (the "Issuer");
(2) Bankers Trustee Company Limited (the "Trustee");
(3) The Royal Bank of Scotland plc;
(4) Union Bank of Switzerland, London branch; and
(5) Union Bank of Switzerland.
WHEREAS:
(A) The Issuer has agreed to issue (POUND)150,000,000 8 5/8 per cent.
Bonds due 2005 (the "Bonds" which expression shall include, unless the
context otherwise requires, any further Bonds issued pursuant to
Condition 18 and forming a single series with the Bonds).
(B) The Bonds are to be constituted by a First Supplemental Trust Deed (the
"First Supplemental Trust Deed") dated 27th July, 1995 between the
Issuer and the Trustee supplemental to a Trust Deed (the "Principal
Trust Deed" and, together with the First Supplemental Trust Deed, the
"Trust Deed") dated 17th January, 1995 between the same parties.
(C) The Bonds will be issued in bearer form ("Bearer Bonds") in the
denominations of (POUND)1,000, (POUND)10,000 and
(POUND)100,000 each with interest coupons ("Coupons") attached and
in registered form ("Registered Bonds") in amounts of (POUND)1 or
integral multiples thereof without Coupons.
(D) The Bearer Bonds will initially be represented by a temporary Global
Bond (the "Global Bond").
(E) The Global Bond, the definitive Bearer Bonds, the Registered Bonds and
Coupons will be in or substantially in the respective forms set out in the
First and Second Schedules to the First Supplemental Trust Deed. The
Conditions of the Bonds (the "Conditions") will be in or substantially in
the form set out in Part III of the Second Schedule to the First
Supplemental Trust Deed.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
(1) Words and expressions defined in the Conditions and in the Trust Deed
and not otherwise defined in this Agreement shall have the same meanings
when used in this Agreement.
(2) References in this Agreement to principal shall include any premium
payable pursuant to Condition 7(b) and any additional amounts payable
pursuant to Condition 9 or any undertakings given in addition to, or in
substitution for, Condition 9 pursuant to the Trust Deed and references to
interest shall include any additional amounts payable pursuant to
Condition 9 or any undertakings given in addition to, or in substitution
for, Condition 9 pursuant to the Trust Deed.
2. APPOINTMENT OF AGENTS
(1) The Issuer and, for the purposes of clause 7 only, the Trustee hereby
appoint, on the terms and subject to the conditions of this Agreement:
(a) Union Bank of Switzerland, London branch, as principal paying
agent (the "Principal Paying Agent") in respect of the Bonds;
(b) Union Bank of Switzerland as paying agent (together with the
Principal Paying Agent, the "Paying Agents") for the payment of
principal of, and interest on, the Bearer Bonds; and
(c) The Royal Bank of Scotland plc at its specified office in Bristol
as registrar (the "Registrar") in respect of the Registered Bonds.
(2) The Paying Agents and the Registrar are together referred to as the
"Agents".
3. AUTHENTICATION AND DELIVERY OF BONDS
(1) The Issuer undertakes that it will deliver to, or to the order of, the
Principal Paying Agent, not later than the date that is 30 days after the
Issue Date, definitive Bearer Bonds (with Coupons attached) in an
aggregate principal amount equal to the aggregate principal amount of
Bearer Bonds then represented by the Global Bond to be issued in
exchange for the Global Bond. Each definitive Bearer Bond so delivered
shall be duly executed on behalf of the Issuer.
(2) The Issuer undertakes that it will deliver to, or to the order of, the
Registrar, on or before the date hereof such quantity of blank Registered
Bonds as is necessary to enable the Registrar to despatch Registered
Bonds to the persons entitled thereto (as evidenced by the entries on the
Register on the date hereof), provided that such Registered Bonds shall
only be despatched to those persons who have delivered to, or to the order
of, the Issuer on or before the date hereof a certificate as set out in
Schedule 2 hereto.
(3) The Issuer authorises and instructs the Principal Paying Agent to
authenticate the Global Bond and the definitive Bearer Bonds delivered
pursuant to subclause (1).
(4) The Issuer authorises and instructs the Principal Paying Agent to cause
the Global Bond to be exchanged for definitive Bearer Bonds in
accordance with its terms. Following the exchange of the last interest in
the Global Bond, the Principal Paying Agent shall cause such Global
Bond to be cancelled and delivered to the Issuer or as it may direct.
(5) The Principal Paying Agent and the Registrar shall cause all Bonds
delivered to and held by them under this Agreement to be maintained in
safe custody and shall ensure that the definitive Bonds are issued only in
accordance with the terms of the Global Bond, the Trust Deed and this
Agreement.
(6) So long as any of the Bonds is outstanding each of the Principal Paying
Agent and the Registrar shall, within five days of any request by the
Issuer or the Trustee, certify to the Issuer or the Trustee the number of
definitive Bonds held by it under this Agreement.
4. PAYMENT TO THE PRINCIPAL PAYING AGENT
(1) The Issuer shall, not later than 11.00 a.m. (London time) on each date on
which any payment of principal and/or interest in respect of any of the
Bonds becomes due and payable or if the due date is not a Business Day
on the immediately following Business Day, transfer to an account
specified by the Principal Paying Agent such amount of sterling as shall
be sufficient for the purposes of the payment of principal and/or interest
(after deduction of any United Kingdom income tax required to be
withheld at source in the case of payments of interest in respect of
Registered Bonds) in immediately available funds or in such funds and at
such times (being not later than 11.00 a.m. (London time) on the relevant
due date or if the due date is not a Business Day on the immediately
following Business Day) as may be determined by agreement between the
Issuer and the Principal Paying Agent to be customary for the settlement
of similar transactions. For the purposes of this clause 4, "Business Day"
means a day (other than a Saturday or a Sunday) on which commercial
banks are open for business and foreign exchange markets settle payments
in London.
(2) The Issuer shall ensure that, not later than the second Business Day
immediately preceding the date on which any payment is to be made to the
Principal Paying Agent pursuant to subclause (1), the Principal Paying
Agent shall receive a copy of an irrevocable payment instruction to the
bank through which the payment is to be made.
5. NOTIFICATION OF NON-PAYMENT BY THE ISSUER
The Principal Paying Agent shall notify by telex the other Paying Agent,
the Registrar and the Trustee forthwith:
(a) if it has not by the relevant date specified in clause 4(1) received
unconditionally the full amount in sterling required for the
payment; and
(b) if it receives unconditionally the full amount of any sum due in
respect of any of the Bonds or Coupons after such date.
The Principal Paying Agent shall, at the expense of the Issuer, forthwith
upon receipt of any amount as described in subparagraph (b), cause notice
of that receipt to be published under Condition 15.
6. DUTIES OF THE REGISTRAR AND THE PAYING AGENTS
(1) Subject to the provisions of clause 7, the Paying Agents shall act as
paying agents of the Issuer in respect of the Bearer Bonds and pay or
cause to be paid on behalf of the Issuer, on and after each date on which
any payment becomes due and payable, the amounts of principal and/or
interest then payable on surrender or, in the case of the Global Bond,
endorsement, of Bearer Bonds or Coupons under the Conditions and this
Agreement. If any payment provided for by clause 4 is made late but
otherwise under the terms of this Agreement the Paying Agents shall
nevertheless act as paying agents.
(2) Subject as provided above, the Registrar shall pay or cause to be paid on
behalf of the Issuer, on and after each date on which any payment
becomes due and payable, the amounts of principal and/or interest then
payable in respect of each Registered Bond under the Conditions and the
provisions of this Agreement and, in the case of a payment of principal,
following receipt of the Registered Bond at the specified office in London
of the Registrar.
(3) If default is made by the Issuer in respect of any payment, unless and until
the full amount of the payment has been made under the terms of this
Agreement (except as to the time of making the same) or other
arrangements satisfactory to the Principal Paying Agent have been made,
neither the Principal Paying Agent nor the other Paying Agent shall be
bound to act as paying agents under subclause (1) and nor shall the
Registrar be bound to make payments under subclause (2).
(4) If on presentation of a Bond or Coupon the amount payable in respect of
the Bond or Coupon is not paid in full (otherwise than as a result of any
deduction of United Kingdom income tax on payments of interest in
respect of Registered Bonds or as a result of withholding or deduction for
or on account of any Taxes as permitted by the Conditions) the Paying
Agent or the Registrar, as the case may be, to whom the Bond or Coupon
is presented shall procure that the Bond or Coupon is enfaced with a
memorandum of the amount paid and the date of payment.
7. TRUSTEE'S REQUIREMENTS REGARDING THE REGISTRAR
AND THE PAYING AGENTS
At any time after an Event of Default or a Potential Event of Default shall
have occurred or the Bonds shall otherwise have become due and
repayable or the Trustee shall have received any money which it proposes
to pay under clause 9 of the Trust Deed to the Bondholders and/or
Couponholders, the Trustee may:
(i) by notice in writing to the Issuer, the Principal Paying Agent, the
Registrar and the other Paying Agent require the Principal Paying
Agent, the Registrar and the other Paying Agent pursuant to this
Agreement:
(A) to act thereafter as Principal Paying Agent, Registrar and
Paying Agent respectively of the Trustee in relation to
payments to be made by or on behalf of the Trustee under
the provisions of the Trust Deed mutatis mutandis on the
terms provided in this Agreement (save that the Trustee's
liability under any provision hereof for the
indemnification, remuneration and payment of out-of-
pocket expenses of the Agents shall be limited to the
amounts for the time being held by the Trustee on the
trusts of the Trust Deed in relation to the Bonds) and
thereafter to hold all Bonds and Coupons and all sums,
documents and records held by them in respect of Bonds
and Coupons on behalf of the Trustee; or
(B) to deliver up all Bonds and Coupons and all sums,
documents and records held by them in respect of Bonds
and Coupons to the Trustee or as the Trustee shall direct
in such notice provided that such notice shall be deemed
not to apply to any documents or records which the
Registrar or the relative Paying Agent is obliged not to
release by any law or regulation; and
(ii) by notice in writing to the Issuer require it to make all subsequent
payments in respect of the Bonds and the Coupons to or to the
order of the Trustee and not to the Principal Paying Agent.
8.
REIMBURSEMENT OF THE REGISTRAR AND THE PAYING A
GENTS
The Principal Paying Agent will credit or transfer to the respective
accounts of the other Paying Agent and the Registrar the amount of all
payments made by them under this Agreement and the Conditions
immediately upon notification from them, subject in each case to any
applicable laws or regulations.
9. NOTICE OF ANY WITHHOLDING OR DEDUCTION
(1) If the Issuer is, in respect of any payment in respect of the Bonds,
compelled to withhold or deduct any amount for or on account of any
Taxes as contemplated by Condition 9 or any undertaking given in
addition to or in substitution for Condition 9 pursuant to the Trust Deed
(other than any deduction of United Kingdom income tax or payments of
interest in respect of Registered Bonds) the Issuer shall give notice to the
Principal Paying Agent and the Trustee as soon as it becomes aware of
the requirement to make the withholding or deduction and shall give to the
Principal Paying Agent and the Trustee such information as they shall
require to enable each of them to comply with the requirement.
(2) In the event that the Issuer, by reason of a direction from the Inland
Revenue or otherwise, is entitled or required to make any payments in
respect of any particular Registered Bond or Registered Bonds without
deduction of United Kingdom income tax or to deduct tax at a rate other
than the basic rate of United Kingdom income tax, the Issuer shall give
notice to the Principal Paying Agent, the Registrar and the Trustee as
soon as it becomes aware of the entitlement or requirement and shall give
to the Principal Paying Agent, the Registrar and the Trustee such
information as they shall require to enable them to make payments in
respect of the relevant Registered Bond or Registered Bonds either
without deduction or subject to deduction at the appropriate rate.
10. DUTIES OF THE REGISTRAR
(1) The Registrar shall, subject to subclause (2), so long as any Bond is
outstanding:
(a) maintain at its specified office a register (the "Register") of the
holders of the Registered Bonds which shall show (i) the principal
amounts and the serial numbers of the Registered Bonds, (ii) the
dates of issue of all Registered Bonds, (iii) all subsequent
transfers and changes of ownership of Registered Bonds, (iv) the
names and addresses of the holders of the Registered Bonds,
(v) all cancellations of Registered Bonds, whether because of their
purchase and surrender by the Issuer or any Subsidiary of the
Issuer, their replacement or otherwise, and (vi) all replacements of
Registered Bonds (subject, where appropriate, in the case of (v),
to the Registrar having been notified as provided in this
Agreement);
(b) register all transfers of Registered Bonds;
(c) receive any document in relation to or affecting the title to any of
the Registered Bonds including all forms of transfer, forms of
exchange, probates, letters of administration and powers of
attorney;
(d) maintain proper records of the details of all documents received
by it;
(e) prepare all such lists of holders of the Registered Bonds as may
be required by the Issuer, the Principal Paying Agent or the
Trustee or any person authorised by any of them;
(f) subject to applicable laws and regulations at all reasonable times
during office hours make the Register available to the Issuer, the
Trustee or the Principal Paying Agent or any person authorised
by any of them or the holder of any Registered Bond for
inspection and for the taking of copies or extracts;
(g) make or arrange for due payment to the holders of the amounts of
interest payable in respect of the Registered Bonds or, as the case
may be, the amounts required to redeem the Registered Bonds;
(h) comply with the proper and reasonable requests of the Issuer with
respect to the maintenance of the Register and give to the
Principal Paying Agent such information as may be reasonably
required by it for the proper performance of its duties;
(i) furnish any Bondholder who requests a Bearer Request or a
Registration Request with a Bearer Request or a Registration
Request, as appropriate, each substantially in the form set out in
Schedules 3 and 4, hereto, respectively;
(j) not later than two business days after receipt by it of a Bearer
Request, notify by tested telex the Principal Paying Agent of the
principal amount of Registered Bond(s) the subject of the Bearer
Request and the principal amount of Bearer Bonds to be issued in
exchange for such Registered Bond(s) and, if applicable, within
seven business days of receipt of such Bearer Request issue a
duly dated and completed Registered Bond in respect of such part
(if any) of the principal amount of such Registered Bond(s) which
are not to be exchanged and deliver such Registered Bond at its
specified office or (at the risk and, if mailed at the request of the
Bondholder otherwise than by ordinary uninsured mail, at the
expense of the Bondholder) send such Registered Bond to such
address as may be specified to the Bondholder;
(k) issue within three business days of receipt by it of a Registered
Bond for transfer, a duly dated and completed Registered Bond in
the name of the transferee and, if applicable, a duly dated and
completed Registered Bond in the name of the transferor in
respect of that part of such Registered Bond not transferred and
deliver such Registered Bond(s) at its specified office or (at the
risk and, if mailed at the request of the transferor or, as the case
may be, the transferee otherwise than by ordinary uninsured mail,
at the expense of the transferee) send such Registered Bond(s) to
such address as may be requested by the transferee and/or the
transferor; and
(l) upon receipt by it from the Principal Paying Agent of a notice
pursuant to clause 12 (5) within five business days issue a duly
dated and completed Registered Bond in a principal amount equal
to the aggregate principal amount of the Bearer Bonds the subject
of the Registration Request and deliver such Registered Bond at
its specified office or (at the risk and, if mailed at the request of
the Bondholder otherwise than by ordinary uninsured mail, at the
expense of the Bondholder) send such Registered Bond to such
address as may be specified by the Bondholder in the Registration
Request.
(2) The Issuer shall deliver to the Registrar for the performance of its duties
under this Agreement from time to time so long as any Bond is
outstanding, sufficient duly executed Registered Bonds as may be required
for the performance of the Registrar's duties.
(3) Registered Bonds shall be dated:
(a) in the case of a Registered Bond issued on 27th July, 1995, with
that date; or
(b) in the case of a Registered Bond issued in exchange for a Bearer
Bond, or upon transfer, with the date of registration in the
Register of the exchange or transfer; or
(c) in the case of a Registered Bond issued to the transferor upon
transfer in part of a Registered Bond, with the same date as the
date of the Registered Bond transferred; or
(d) in the case of a Registered Bond issued pursuant to clause 15 with
the same date as the date of the lost, stolen, mutilated, defaced or
destroyed Registered Bond in replacement of which it is issued.
(4) The Registrar shall, if appropriate, charge to the holder of a Bearer Bond
or Registered Bond presented for exchange or transfer (i) the costs or
expenses (if any) incurred by it in delivering Registered Bonds or Bearer
Bonds, as appropriate, issued on such exchange or transfer other than by
ordinary uninsured mail and (ii) a sum sufficient to cover any stamp duty,
tax or other governmental charge that may be imposed in relation to the
exchange or transfer.
11. REGULATIONS FOR TRANSFER OF REGISTERED BONDS
AND EXCHANGE OF BONDS
(1) At the option of the holder and subject to the terms of the Trust Deed, the
Conditions and this Agreement and to all applicable laws and regulations,
Bearer Bonds will be exchangeable for an equal aggregate principal
amount of Registered Bonds and (subject to the Registered Bonds in
respect of which exchange is requested having a principal amount which is
an integral multiple of a denomination of the Bearer Bonds) vice versa.
(2) Subject as provided below, the Issuer may from time to time agree with
the Registrar and the Principal Paying Agent reasonable regulations to
govern the transfer and registration of Registered Bonds and the exchange
of Bonds. The initial regulations relating to transfer and registration,
which shall apply until amended in accordance with the Trust Deed, are
set out in the Third Schedule to the Principal Trust Deed. The Registrar
agrees to comply with the regulations as amended from time to time.
12. DUTIES OF THE PRINCIPAL PAYING AGENT IN
CONNECTION WITH EARLY REDEMPTION AND
EXCHANGE
(1) Notice of Redemption: If the Issuer intends to redeem all or any of the
Bonds prior to their stated maturity date it shall, not less than 14 days
prior to the latest date for the publication of the notice of redemption or, in
the case of a partial redemption, the first notice of redemption required to
be given to Bondholders, give notice of such intention to the Principal
Paying Agent and the Trustee stating the date on which such Bonds are to
be redeemed and in the case of a redemption pursuant to Condition 7(b)
the principal amount of Bonds to be redeemed.
(2) Drawings: If some only of the Bonds are to be redeemed on such date
pursuant to Condition 7(b) the Principal Paying Agent shall make the
required drawing in accordance with such Condition but shall give the
Issuer and the Trustee reasonable notice of the time and place proposed
for such drawing and the Issuer and the Trustee shall be entitled to send
representatives to attend such drawing.
(3) Redemption Notices: Not less than 30 days before the due date for
redemption of any of the Bonds the Principal Paying Agent shall publish
the notice required in connection with any such redemption and shall at the
same time also publish a separate list of the serial numbers of any Bonds
previously drawn and not presented for payment. Such notice shall
specify the date fixed for redemption, the applicable Redemption Price,
the manner in which redemption will be effected and, in the case of a
partial redemption, serial numbers of the Bonds drawn for redemption and
the aggregate principal amount of the Bonds to remain outstanding after
the redemption. Such notice will be given in accordance with
Condition 15.
(4) Redemption at the option of the Bondholder: Each Paying Agent will
keep a stock of notices ("Put Notices") substantially in the form set out in
Schedule 1 hereto and will make such notices available on demand to
Bondholders. Upon receipt of any Bond deposited in the exercise of the
Bondholders' option under Condition 8 (against which the Paying Agent
shall issue a non-transferable receipt (an "Optioned Bond Receipt") to
the depositing Bondholder in accordance with the Conditions (which shall
be in the form of a copy of the relevant Put Notice specifying the serial
numbers of the deposited Bonds and, in the case of a Bearer Bond
presented without all unmatured Coupons (determined as specified in
Condition 8) appertaining thereto, the total number and the serial numbers
and the maturity dates of the missing unmatured Coupons and the amount
to be deducted by such Paying Agent (as specified below) in respect
thereof)), the Paying Agent with which such Bond is deposited shall hold
such Bond together, in the case of a Bearer Bond, with any Coupons
relating to it deposited with it on behalf of the depositing Bondholder (but
shall not, save as provided below, release it) until the due date for its
redemption consequent upon the exercise of such option. On such date,
subject as provided below, payment in respect of such Bonds and, in the
case of Bearer Bonds, Coupons (including interest accrued to such date)
shall be made against presentation and surrender or (as the case may be)
endorsement of the Optioned Bond Receipt in accordance with the
Conditions and the relevant Paying Agent shall pay such moneys in
accordance with the directions of the Bondholder contained in the Put
Notice. If, prior to such due date for its redemption, such Bond becomes
immediately due and repayable or, if upon due presentation, payment of
such redemption moneys is improperly withheld or refused, the relevant
Paying Agent shall mail such Bond (together, in the case of Bearer Bonds,
with any such Coupons) by ordinary uninsured post to, and at the risk of,
the relevant Bondholder at such address as may have been given by the
Bondholder in the Put Notice. At the end of the period for the exercise of
such option, each Paying Agent shall promptly notify the Principal Paying
Agent of the principal amount of the Bonds deposited with it together with
their serial numbers and the Principal Paying Agent shall promptly notify
such details to the Issuer.
(5) Not later than two business days after receipt by it of a Registration
Request, notify by tested telex the Registrar of the principal amount of
Bearer Bonds the subject of the Registration Request to be issued in
exchange for such Bearer Bonds, the principal amount of Registered Bond
to be issued in exchange for such Bearer Bonds and such details from the
Registration Request as the Registrar may require in order for it to issue
the relevant Registered Bond in accordance with such Registration
Request.
(6) Upon receipt by it from the Registrar of a notice pursuant to clause 10(j),
within five business days issue Bearer Bonds in an aggregate principal
amount equal to the principal amount of Registered Bonds to be
exchanged and deliver such Bearer Bonds at its specified office or (at the
risk, if mailed otherwise than by ordinary uninsured mail, at the expense
of the Bondholder) send such Bearer Bonds to such address as may be
specified by the Bondholder.
13. NOTICES
On behalf of and at the request and expense of the Issuer, the Principal
Paying Agent shall cause to be given all notices required to be given by
the Issuer under the Conditions.
14. CANCELLATION OF BONDS AND COUPONS
(1) All Bonds which are surrendered in connection with redemption or
exchange (together with all unmatured Coupons attached to or delivered
with Bearer Bonds) and all Coupons which are paid shall be cancelled by
the Agent to which they are surrendered. Each of the Agents shall give to
the Principal Paying Agent details of all payments and exchanges made by
it and shall deliver all cancelled Bonds and Coupons to the Principal
Paying Agent (or as the Principal Paying Agent may specify). Where
Bonds are purchased by or on behalf of the Issuer or any Subsidiary of the
Issuer and are to be cancelled, the Issuer shall procure that the Bonds
(together with all unmatured Coupons appertaining to those of them that
are Bearer Bonds) are promptly cancelled and delivered to the Principal
Paying Agent or its authorised agent (which, in the case of Registered
Bonds, shall include the Registrar). The Registrar shall notify the
Principal Paying Agent of the principal amount of any Bonds so delivered
to it following purchase and cancellation.
(2) The Principal Paying Agent or its authorised agent (which, in the case of
Registered Bonds, shall include the Registrar) shall (unless otherwise
instructed by the Issuer in writing and save as provided in clause 16(1))
destroy all cancelled Bonds and Coupons and furnish the Issuer and, in the
case of destruction by the Registrar, the Principal Paying Agent with a
certificate of destruction containing written particulars of the serial
numbers of the Bonds and the number by maturity date of Coupons so
destroyed.
15. ISSUE OF REPLACEMENT BONDS AND COUPONS
(1) The Issuer shall cause (a) a sufficient quantity of additional forms of
Bearer Bonds and Coupons to be available, upon request, to the Principal
Paying Agent at its specified office for the purpose of issuing replacement
Bearer Bonds or Coupons as provided below and (b) a sufficient quantity
of additional forms of Registered Bonds to be available, upon request, to
the Registrar for the purpose of issuing replacement Registered Bonds as
provided below.
(2) The Principal Paying Agent and the Registrar shall, subject to and in
accordance with Condition 14 and the following provisions of this clause,
cause to be authenticated (in the case only of replacement Bearer Bonds)
and delivered any replacement Bonds or Coupons which the Issuer may
determine to issue in place of Bonds or Coupons which have been lost,
stolen, mutilated, defaced or destroyed.
(3) In the case of a mutilated or defaced Bearer Bond, the Principal Paying
Agent shall ensure that (unless otherwise covered by such indemnity as the
Issuer may reasonably require) any replacement Bearer Bond only has
attached to it Coupons corresponding to those attached to the mutilated or
defaced Bearer Bond which is presented for replacement.
(4) The Principal Paying Agent or, as the case may be, the Registrar shall
obtain verification, in the case of an allegedly lost, stolen or destroyed
Bond or Coupon in respect of which the serial number is known, that the
Bond or Coupon has not previously been redeemed or paid. Neither the
Principal Paying Agent nor the Registrar shall issue a replacement Bond
or Coupon unless and until the applicant has:
(a) paid such expenses and costs as may be incurred in connection
with the replacement;
(b) furnished it with such evidence and indemnity as the Issuer may
reasonably require; and
(c) in the case of a mutilated or defaced Bond or Coupon,
surrendered it to the Principal Paying Agent or, as the case may
be, the Registrar.
(5) The Principal Paying Agent or, as the case may be, the Registrar shall
cancel mutilated or defaced Bonds or Coupons in respect of which
replacement Bonds or Coupons have been issued pursuant to this clause
and all Bonds so cancelled by the Registrar shall be delivered by the
Registrar to the Principal Paying Agent (or as it may specify). The
Principal Paying Agent shall furnish the Issuer with a certificate stating
the serial numbers of the Bonds or Coupons received by it and cancelled
pursuant to this clause and shall, unless otherwise requested by the Issuer,
destroy all those Bonds and Coupons and furnish the Issuer with a
destruction certificate containing the information specified in clause 14(2).
(6) The Principal Paying Agent or, as the case may be, the Registrar shall, on
issuing any replacement Bond or Coupon, forthwith inform the Issuer and
the other Agents of the serial number of the replacement Bond or Coupon
issued and (if known) of the serial number of the Bond or Coupon in place
of which the replacement Bond or Coupon has been issued. Whenever
replacement Coupons are issued under this clause, the Principal Paying
Agent shall also notify the other Agents of the maturity dates of the lost,
stolen, mutilated, defaced or destroyed Coupons and of the replacement
Coupons issued.
(7) Whenever a Bond or Coupon for which a replacement Bearer Bond or
Coupon has been issued and the serial number of which is known is
presented to a Paying Agent for payment or to the Principal Paying Agent
for exchange, or a Registered Bond for which a replacement Registered
Bond has been issued is presented to the Registrar for payment of
principal or transfer or exchange, the relevant Agent shall immediately
send notice to the Issuer and (if it is not itself the Principal Paying Agent)
the Principal Paying Agent.
16. RECORDS AND CERTIFICATES
(1) The Principal Paying Agent shall (a) keep a full and complete record of all
Bearer Bonds and Coupons (other than serial numbers of Coupons) and of
their redemption, purchase by or on behalf of the Issuer or any Subsidiary
of the Issuer, cancellation or payment (as the case may be) and of all
replacement Bearer Bonds or Coupons issued in substitution for lost,
stolen, mutilated, defaced or destroyed Bearer Bonds or Coupons and
(b) in respect of the Coupons of each maturity, retain until the expiry of
ten years from the Relevant Date in respect of such Coupons either all
paid Coupons of that maturity or a list of the serial numbers of Coupons
of that maturity still remaining unpaid. The Principal Paying Agent shall
at all reasonable times make the records and Coupons (if any) available to
the Issuer and the Trustee.
(2) The Principal Paying Agent or, in respect of the Registered Bonds, the
Registrar shall give to the Issuer and the Trustee, as soon as possible and
in any event within four months after the date of redemption, purchase,
payment or replacement of a Bond or Coupon (as the case may be), a
certificate stating (a) the aggregate principal amount of Bonds which have
been redeemed and the aggregate amount in respect of Coupons which
have been paid, (b) the serial numbers of those Bonds, (c) the total
number of each denomination by maturity date of those Coupons, (d) the
aggregate amount of interest paid (and the due dates of the payments) on
the Global Bond and on Registered Bonds, (e) the aggregate principal
amounts of Bonds which have been purchased by or on behalf of the
Issuer or any other Subsidiary of the Issuer and cancelled (subject to
delivery of the Bonds to the Principal Paying Agent or its authorised agent
(including the Registrar)) and the serial numbers of such Bearer Bonds in
definitive form and the total number of each denomination by maturity
date of the Coupons attached to or surrendered with purchased Bearer
Bonds and (f) the aggregate principal amounts of Bonds which have been
surrendered and replaced and the serial numbers of those Bearer Bonds in
definitive form and the total number by maturity date of the Coupons
surrendered therewith.
(3) All records maintained pursuant to this Clause shall distinguish clearly
between the Bonds of each denomination and between Bearer Bonds and
Registered Bonds.
17. COPIES OF THE TRUST DEED AND THIS AGREEMENT
AVAILABLE FOR INSPECTION
The Agents shall hold copies of the Trust Deed and this Agreement
available for inspection by Bondholders and Couponholders. For this
purpose, the Issuer shall furnish the Agents with sufficient copies of each
of the documents.
18. COMMISSIONS AND EXPENSES
(1) The Issuer shall pay to the Principal Paying Agent the commissions in
respect of the services of the Paying Agents under this Agreement
separately agreed between the Issuer and the Principal Paying Agent. The
Issuer shall pay to the Registrar the commissions in respect of its services
under this Agreement separately agreed between the Issuer and the
Registrar. Except as mentioned in this subclause (1), the Issuer shall not
be concerned with the apportionment of payment among the Agents.
(2) The Issuer shall also pay to the Principal Paying Agent and the Registrar
respectively an amount equal to any value added tax which may be
payable in respect of the respective commissions referred to in subclause
(1) together with all expenses (including legal, advertising, telex and
postage expenses) properly incurred by the Paying Agents or, as the case
may be, the Registrar in connection with their respective services under
this Agreement.
(3) The Principal Paying Agent shall arrange for payment of the commissions
due to the other Paying Agents and arrange for the reimbursement of their
expenses promptly after receipt of the relevant moneys from the Issuer.
19. INDEMNITY
(1) The Issuer undertakes to indemnify each of the Agents and its directors,
officers and employees (each an "Indemnified Party") against all losses,
liabilities, costs, claims, actions, damages, expenses or demands which
any Indemnified Party may incur or which may be made against any
Indemnified Party as a result of or in connection with the appointment of
or the exercise of the powers and duties by any Agent under this
Agreement except as may result from that Agent's wilful default,
negligence or bad faith or that of its directors, officers or employees or
any of them, or breach by it of the terms of this Agreement.
(2) Each of the Agents severally undertakes to indemnify the Issuer and its
directors, officers and employees against all losses, liabilities, costs,
claims, actions, damages, expenses or demands which any of them may
incur or which may be made against any of them as a result of its wilful
default, negligence or bad faith or that of its directors, officers or
employees or any of them, or breach by it of the terms of this Agreement.
20. REPAYMENT BY PRINCIPAL PAYING AGENT
Sums paid by or by arrangement with the Issuer to the Principal Paying
Agent pursuant to the terms of this Agreement shall not be required to be
repaid to the Issuer unless and until any Bond or Coupon becomes void
under the provisions of Condition 10 but in that event the Principal Paying
Agent shall forthwith repay to the Issuer sums equivalent to the amounts
which would otherwise have been payable in respect of the relevant Bond
or Coupon.
21. CONDITIONS OF APPOINTMENT
(1) Save as provided in clause 7 and in subclause (3) of this clause, the
Principal Paying Agent shall be entitled to deal with money paid to it by
the Issuer for the purposes of this Agreement in the same manner as other
money paid to a banker by its customers and shall not be liable to account
to the Issuer for any interest or other amounts in respect of the money. No
money held by any Agent need be segregated except as required by law.
(2) Save as provided in clause 7, in acting under this Agreement and in
connection with the Bonds and the Coupons the Agents shall act solely as
agents of the Issuer and will not assume any obligations towards or
relationship of agency or trust for or with any of the owners or holders of
the Bonds or the Coupons.
(3) No Agent shall exercise any right of set-off or lien against the Issuer or
any holders of Bonds or Coupons in respect of any moneys payable to or
by it under the terms of this Agreement.
(4) Except as ordered by a court of competent jurisdiction or required by law
or otherwise instructed by the Issuer with the approval of the Trustee,
each of the Agents shall be entitled to treat the holder of any Bond or
Coupon as the absolute owner for all purposes (whether or not the Bond
or Coupon shall be overdue and notwithstanding any notice of ownership
or other writing on the Bond or Coupon or any notice of previous loss or
theft of the Bond or Coupon).
(5) The Agents shall be obliged to perform such duties and only such duties
as are set out in this Agreement and the Bonds and no implied duties or
obligations shall be read into this Agreement or the Bonds against the
Agents.
(6) The Principal Paying Agent or the Registrar may consult with legal and
other professional advisers and the opinion of the advisers shall be full
and complete protection in respect of action taken, omitted or suffered
under this Agreement in good faith and in accordance with the opinion of
the advisers.
(7) Each of the Agents shall be protected and shall incur no liability for or in
respect of action taken, omitted or suffered in reliance upon any
instruction, request or order from the Issuer, the Trustee or any other
Agent, or any Bond or Coupon, or any notice, resolution, direction,
consent, certificate, affidavit, statement, facsimile, telex or other paper or
document which it reasonably believes to be genuine and to have been
delivered, signed or sent by the proper party or parties or upon written
instructions from the Issuer or the Trustee.
(8) Any of the Agents, their officers, directors or employees may become the
owner of, or acquire any interest in, Bonds or Coupons with the same
rights that it or he would have if the Agent concerned were not appointed
under this Agreement, and may engage or be interested in any financial or
other transaction with the Issuer or the Trustee, and may act on, or as
depositary, trustee or agent for, any committee or body of holders of
Bonds or Coupons or other obligations of the Issuer, as freely as if the
Agent were not appointed under this Agreement.
(9) Neither the Principal Paying Agent nor the Registrar shall be under any
obligation to take any action under this Agreement which it expects will
result in any expense or liability accruing to it, the payment of which
within a reasonable time is not, in its opinion, assured to it.
22. COMMUNICATION WITH AGENTS
A copy of all communications relating to the subject matter of this
Agreement between the Issuer or the Trustee and any of the Agents other
than the Principal Paying Agent shall be sent to the Principal Paying
Agent.
23. TERMINATION OF APPOINTMENT
(1) The Issuer may, with the prior written approval of the Trustee, terminate
the appointment of any Agent at any time and/or appoint additional or
other Agents by giving to the Agent whose appointment is concerned and,
where appropriate, the Principal Paying Agent at least 60 days' prior
written notice to that effect provided that so long as any of the Bonds is
outstanding (a) the notice shall not expire less than 30 days before any due
date for the payment of interest and (b) notice shall be given under
Condition 15 at least 30 days before the removal or appointment of an
Agent.
(2) Notwithstanding the provisions of subclause (1), if at any time an Agent
(a) becomes incapable of acting, or is adjudged bankrupt or insolvent, or
files a voluntary petition in bankruptcy or makes an assignment for the
benefit of its creditors or consents to the appointment of an administrator,
liquidator or administrative or other receiver of all or any substantial part
of its property, or if an administrator, liquidator or administrative or other
receiver of it or of all or a substantial part of its property is appointed, or
it admits in writing its inability to pay or meet its debts as they may
mature or suspends payment of its debts, or if an order of any court is
entered approving any petition filed by or against it under the provisions
of any applicable bankruptcy or insolvency law or if a public officer takes
charge or control of the Agent or of its property or affairs for the purpose
of rehabilitation, administration or liquidation, or (b) fails to perform or
observe any obligation under the terms of this Agreement, then in each
case the Issuer may with the prior written approval of the Trustee
forthwith without notice terminate the appointment of the Agent, in which
event notice shall be given to the Bondholders under Condition 15 as soon
as is practicable.
(3) The termination of the appointment of an Agent under this Agreement
shall not entitle the Agent to any amount by way of compensation but
shall be without prejudice to any amount then accrued due.
(4) All or any of the Agents may resign their respective appointments under
this Agreement at any time by giving to the Issuer and, where appropriate,
the Principal Paying Agent at least 60 days' prior written notice to that
effect provided that, so long as any of the Bonds is outstanding, the notice
shall not expire less than 30 days before any due date for the payment of
interest. Following receipt of a notice of resignation from an Agent, the
Issuer shall promptly, and in any event not less than 30 days before the
resignation takes effect, give notice to the Bondholders under
Condition 15. If the Principal Paying Agent shall resign or be removed
pursuant to subclauses (1) or (2) above or in accordance with this
subclause (4), the Issuer shall promptly and in any event within 30 days
appoint a successor approved by the Trustee. If the Issuer fails to appoint
a successor within such period, the Principal Paying Agent may select a
leading bank approved by the Trustee to act as Principal Paying Agent
hereunder and the Issuer shall appoint that bank as the successor Principal
Paying Agent.
(5) Notwithstanding the provisions of subclauses (1), (2) and (4), so long as
any of the Bonds is outstanding, the termination of the appointment of an
Agent (whether by the Issuer or by the resignation of the Agent) shall not
be effective unless upon the expiry of the relevant notice there is (a) a
Principal Paying Agent, (b) at least two Paying Agents (one of which may
be the Principal Paying Agent) having specified offices in separate
European cities approved by the Trustee, one of which, so long as the
Bonds are listed on the London Stock Exchange, shall be the City of
London or such other place as the London Stock Exchange may approve
and one of which shall be outside the United Kingdom and (c) a Registrar.
(6) Without prejudice to subclauses (1), (2), (4), (5) and (10) but subject
always to subclauses (7) and (9), if the whole or any part (being a part
which includes the services provided by the relevant Agent hereunder) of
the business of any Agent is transferred to another legal entity, that entity
shall, by virtue of such transfer, be deemed by the Issuer, the Trustee and
the other Agents as a duly appointed successor to the Agent concerned.
(7) Any successor Agent shall execute and deliver to its predecessor, the
Issuer and, where appropriate, the Principal Paying Agent an instrument
accepting the appointment under this Agreement, and the successor Agent,
without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
the predecessor with like effect as if originally named as an Agent.
(8) If the appointment of an Agent under this Agreement is terminated
(whether by the Issuer or by the resignation of the Agent), the Agent shall
on the date on which the termination takes effect deliver to its successor
Agent (or, if none, the Principal Paying Agent) all Bonds and Coupons
surrendered to it but not yet destroyed and all records concerning the
Bonds and Coupons maintained by it (except such documents and records
as it is obliged by law or regulation to retain or not to release) and pay to
its successor Agent (or, if none, to the Principal Paying Agent) the
amounts (if any) held by it in respect of Bonds or Coupons which have
become due and payable but which have not been presented for payment,
but shall have no other duties or responsibilities under this Agreement.
(9) If the Principal Paying Agent or any of the other Agents shall change its
specified office, it shall give to the Issuer, the Trustee and, where
appropriate, the Principal Paying Agent not less than 45 days' prior
written notice to that effect giving the address of the new specified office.
As soon as practicable thereafter and in any event at least 30 days before
the change, the Principal Paying Agent shall give to the Bondholders on
behalf of and at the reasonable expense of the Issuer notice of the change
and the address of the new specified office under Condition 15.
(10) A corporation into which any Agent for the time being may be merged or
converted or a corporation with which the Agent may be consolidated or a
corporation resulting from a merger, conversion or consolidation to which
the Agent shall be a party shall, to the extent permitted by applicable law,
be the successor Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to
this Agreement. Notice of any merger, conversion or consolidation shall
forthwith be given to the Issuer, the Trustee and, where appropriate, the
Principal Paying Agent.
24. MEETINGS OF BONDHOLDERS
(1) The provisions of the Fourth Schedule to the Principal Trust Deed shall
apply to meetings of the Bondholders and shall have effect in the same
manner as if set out in this Agreement.
(2) Without prejudice to subclause (1), each of the Agents shall, on the
request of any holder of Bonds, issue voting certificates and block voting
instructions together, if so required by the Trustee, with reasonable proof
satisfactory to the Trustee of their due execution on behalf of the Agent
under the provisions of the Fourth Schedule to the Principal Trust Deed
and shall forthwith give notice to the Issuer and the Trustee under the
Fourth Schedule to the Principal Trust Deed of any revocation or
amendment of a voting certificate or block voting instruction. Each Agent
shall keep a full and complete record of all voting certificates and block
voting instructions issued by it and shall, not less than 24 hours before the
time appointed for holding any meeting or adjourned meeting, deposit at
such place as the Trustee shall designate or approve full particulars of all
voting certificates and block voting instructions issued by it in respect of
any meeting or adjourned meeting.
25. DEFINITIONS
As used herein:
(i) the expression "Trustee" means and includes any trustee or
trustees of the Trust Deed;
(ii) the expressions "Principal Paying Agent", "Paying Agents",
"Registrar" and "Agents" mean and include each Principal
Paying Agent, Paying Agent, Registrar and Agent from time to
time appointed to exercise the powers and undertake the duties
hereby conferred and imposed upon the Principal Paying Agent,
Paying Agents, Registrar and Agents and notified to the
Bondholders in accordance with clause 23;
(iii) the expression "specified office" means the offices specified in
clause 26 or such other specified offices as may from time to time
be duly notified pursuant to that clause; and
(iv) the expression "serial number" shall, in the case of Registered
Bonds, be deemed to refer to the certificate number relating to any
Registered Bond or Bonds.
26. NOTICES
Any notice required to be given under this Agreement to any of the parties
shall be delivered in person, sent by pre-paid post (first class if inland,
first class airmail if overseas) or by facsimile or telex addressed to:
The Issuer: Yorkshire Electricity Group plc
Wetherby Road
Scarcroft
Leeds LS14 3HS
Telex No: 55128
Facsimile No: 01532 895611
(Attention: The Group
Company
Secretary and
Solicitor)
The Trustee: Bankers Trustee Company
Limited
1 Appold Street
Broadgate
London EC2A 2HE
Telex No: 883341
BANTR G
Facsimile No: 0171 982 1149
(Attention: The Managing
Director)
The Paying Agents: Union Bank of Switzerland,
London branch
100 Liverpool Street
London EC2M 2RH
Telex No: 8812800
UBSLTD G
Facsimile No: 0171 901 6118
(Attention: Issuer's
services, seventh floor)
The Registrar: The Royal Bank of Scotland plc
Securities Services - Registrars
Caxton House
Redcliffe Way
Bristol BS99 7ZF
Telex No: 445845
Facsimile No: 0117 976 2290
(Attention: Senior
Registrar)
or such other address of which notice in writing has been given to the
other parties to this Agreement under the provisions of this clause.
Any such notice shall take effect, if delivered in person, at the time of
delivery, if sent by post, three days in the case of inland post or seven
days in the case of overseas post after despatch, and, in the case of telex
or facsimile, at the time of receipt, provided that in the case of a notice
given by telex or facsimile transmission such notice shall forthwith be
confirmed by post.
27. TAXES
The Issuer agrees to pay any and all stamp and other documentary taxes
or duties which may be payable in connection with the execution, delivery,
performance and enforcement of this Agreement.
28. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one and the same agreement and
any party may enter into this Agreement by executing a counterpart.
29. DESCRIPTIVE HEADINGS
The descriptive headings in this Agreement are for convenience of
reference only and shall not define or limit the provisions of this
Agreement.
30. GOVERNING LAW
The provisions of this Agreement are governed by, and shall be construed
in accordance with, English law.
31. AMENDMENTS
This Agreement may be amended by all of the parties, either with the
consent of the Bondholders or Couponholders or without the consent of
any Bondholder or Couponholder, either (i) for the purpose of curing any
ambiguity or of curing, correcting or supplementing any defective
provision contained in this Agreement or (ii) in any manner which the
parties may mutually deem necessary or desirable and which shall not be
inconsistent with the Conditions and shall not, in the opinion of the
Trustee, be materially prejudicial to the interests of the Bondholders.
SIGNED by each of the parties (or their duly authorised representatives) on the
date which appears first on page 1.
YORKSHIRE ELECTRICITY GROUP plc
By: A.W.J. COLEMAN
BANKERS TRUSTEE COMPANY LIMITED
By: A.G. BUCKLAND
THE ROYAL BANK OF SCOTLAND plc
By: B.E. SARLING
UNION BANK OF SWITZERLAND, LONDON BRANCH
By: M. WHELAN
UNION BANK OF SWITZERLAND
By: M. WHELAN
SCHEDULE 1
Form of Put Notice
Put Notice relating to
Yorkshire Electricity Group plc
(POUND)150,000,000 8 5/8 per cent. Bonds due 2005
By depositing this Notice, duly completed, with any Paying Agent for the above-
mentioned Bonds (the "Bonds") the undersigned holder of the such of the Bonds as
are deposited with this Notice and listed below irrevocably exercises its
option to
have such Bonds redeemed on the Put Date (as defined in Condition 8 of the
Bonds) to which this Put Notice relates.
Details of Bonds in respect of which the Put Option is exercised
This Notice relates to Bonds in the aggregate principal amount of:
(POUND)______________________________ bearing the following serial
numbers (in the case of Bearer Bonds) or certificate numbers (in the case of
Registered Bonds):
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_______________________________________________.
Address for the purposes of the put procedures
If the Bonds referred to above fall to be returned to the undersigned under
clause 12(4) of the Agency Agreement relating to the Bonds, they should
be posted to:
_________________________________________________________________
_________________________________________________________________
________________________________.
Payment Instructions
Please make payment in respect of the Bonds referred to above as follows:
* By sterling cheque made out to
_________________________________________ drawn on a bank in
London posted to the address specified above.
* By transfer to the following sterling account with a bank in London:
Bank:
____________________________________________________
Branch Address:
____________________________________________________
Branch Code:
____________________________________________________
Account Name:
____________________________________________________
Account Number:
____________________________________________________
* Complete and delete as appropriate
I, being the holder of the above-mentioned Bonds (or being duly authorised by
such holder), hereby confirm that this Notice has been duly completed on
behalf of such holder.
Signature on behalf of the depositing Bondholder
______________________________________
To be completed by the Paying Agent
Received by:
Name and address of Paying Agent:
______________________________________________
Date of deposit:
______________________________________________
All unmatured Coupons attached: [Yes] [No] [N/A/](if no, enter details of
arrangements made in
[Bearer Bonds only] accordance with Condition 8 and the
Agency Agreement in respect of
unmatured Coupons):
__________________________
_____________________
__________________________
_____________________
Notes:
(1) The Agency Agreement provides the Bonds required to be returned will
be sent by ordinary uninsured mail and at the risk of the Bondholder,
unless the Bondholder otherwise requests, agrees alternative
arrangements with the Paying Agent and pays the cost of any insurance
in advance to the relevant Paying Agent.
(2) This Notice is not valid unless all of the paragraphs requiring
completion are duly completed.
(3) The Paying Agent with whom the Bonds referred to above are deposited
will not in any circumstances be liable to the depositing Bondholder or
any other person for any loss or damage arising from any act, default or
omission of the Paying Agent in relation to the relevant Bonds or any of
them (or, in relation to Bearer Bonds only, any related Coupons) unless
such loss or damage was caused by the fraud or negligence of the
Paying Agent or of its directors, officers or employees.
SCHEDULE 2
CERTIFICATE TO BE GIVEN BY SUBSCRIBERS OF REGISTERED
BONDS AT CLOSING
Yorkshire Electricity Group plc
(POUND)150,000,000
8 5/8 per cent. Bonds due 2005
(the "Bonds")
This is to certify that with effect from the date hereof, (POUND)[ ]
principal amount of the above-captioned Bonds subscribed by us and to be
delivered in
registered form shall initially be owned by (i) person(s) that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income
taxation regardless of its source ("United States person(s)"), (ii) (a)
United States person(s) that are foreign branches of United States financial
institutions (as defined in U.S. Treasury Regulations Section l.l65-12(c)
(l)(v)) ("financial institutions") purchasing for their own account or for
resale, or (b) United States
person(s) who are acquiring the Bonds through foreign branches of United States
financial institutions and who will hold the Bonds through such United States
financial institutions on the date hereof (and in either case (a) or (b), each
such
United States financial institution hereby agrees, on its own behalf or
through its
agent, that it will comply with the requirements of Section 165(j)(3)(A), (B)
or (C)
of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) United States or foreign financial institutions(s) for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section l.163-5(c)(2)(i)(D)(7)), and in addition if the owner of
the Bonds is a United States or foreign financial institution described in
clause (iii) above (whether or not also described in clause (i) or (ii))
this is to further certify that such financial institution is not acquiring
the Bonds for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We understand that this certificate is required in connection with certain
tax laws of the United States. In connection therewith, if administrative or
legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorise you to produce
this certificate to any interested party in such proceedings.
Dated:
By:
[Name of person giving certificate]
As, or as agent for, the beneficial owner(s)
of the Bonds to which this certificate relates
SCHEDULE 3
Yorkshire Electricity Group plc
(POUND)150,000,000
8 5/8 per cent. Bonds due 2005 (the "Bonds")
BEARER REQUEST
in respect of
Exchange of Registered Bonds for Bearer Bonds
To: THE REGISTRAR
1. I/We, the undersigned being the registered holder(s) of those Registered
Bonds of Yorkshire Electricity Group plc attached hereto hereby request
that [the Registered Bonds surrendered herewith]
[(POUND)_____________ in principal amount (being (POUND)1,000 or
an integral multiple thereof) of the Registered Bonds surrendered
herewith] be exchanged for __________ Bearer Bond(s) in the
denomination(s) of (POUND)______________.
2 I/We request that the Bearer Bonds to be issued on exchange together with
all Coupons in respect of all Interest Payment Dates falling after the date
of surrender be [delivered at the specified office of the Principal Paying
Agent] [sent by ordinary uninsured mail to the following address (outside
the United States which term, as used herein, shall mean the
United States and its possessions) _____________________________ ]
and, in the case of exchange of part only of the Bonds represented by a
Registered Bond, a Registered Bond for the balance after such exchange
be [delivered at the specified office of the Registrar]/[sent by ordinary
uninsured mail to the above address].
Dated .................................................. Signature(s)
..........................................................
(See Note 1) PRINT NAME(S)
NOTES
1. To be dated not earlier than the Exchange Date (as defined in Condition
2(b)).
2 The exchange of Bonds shall be effected without service charge (other
than postage and insurance costs where the Bondholder requests
delivery of the Bond(s) other than by ordinary uninsured mail) to the
holder but upon payment by the holder of any taxes, duties and other
governmental charges in respect of such exchange.
3. The exchange of Bonds will be subject to the provisions of all applicable
fiscal and other laws and regulations as provided in the Conditions.
4. Bonds, if mailed, will be mailed to Bondholders at their own risk.
5. (i) the signature to this Bearer Request must correspond with the
name as it appears on the face of the relevant Registered Bond;
(ii) a representative of the Bondholder should state the capacity in
which he signs e.g. executor;
(iii) the signature of the person effecting a request for Bearer Bonds
shall conform to any list of duly authorised specimen signatures
supplied by the registered holder or be certified by a recognised
bank, notary public or in such other manner as the Registrar
may require;
(iv) in the case of joint holders all joint holders must sign this
Bearer Request.
TO BE COMPLETED BY THE REGISTRAR AND NOTIFIED IN
ACCORDANCE WITH THE AGENCY AGREEMENT TO THE
PRINCIPAL PAYING AGENT
1. Date of surrender
....................................................................
............................................
.
2. Number of Bearer Bonds to be issued
..............................................................................
3. Denomination(s) and number of each denomination of Bearer Bonds to be
issued ..................
4. Date on which Bearer Bonds to be delivered/despatched
........................................................
SCHEDULE 4
Yorkshire Electricity Group plc
(POUND)150,000,000
8 5/8 per cent. Bonds due 2005 (the "Bonds")
REGISTRATION REQUEST
in relation to
Exchange of Bearer Bonds for Registered Bonds
To: THE PRINCIPAL PAYING AGENT
1. I/We, the undersigned, being the holder(s) of those Bearer Bonds of
Yorkshire Electricity Group plc attached hereto of which the serial
number(s) is/are detailed in numerical order in the Consolidated Listing
Form below hereby request that such Bearer Bonds be exchanged for a
Registered Bond comprising the same principal amount as the Bearer
Bonds attached hereto.
2. I/We request that the Registered Bond to be issued on exchange be
registered in the name of
__________________________________________________________
____at the following registered address
_________________________________________________________a
nd be [delivered at the specified office of the Registrar]/[sent by ordinary
uninsured mail to the following address (outside the United States which
term, as used herein, shall mean the United States and its possessions)
____________________________________________________].
Dated .................................................. Signature(s)
..........................................................
(See Note 1) PRINT NAME(S)
NOTES
1. To be dated not earlier than the Exchange Date (as defined in Condition
2(b).
2. Each Bearer Bond surrendered for exchange must be accompanied by
all unmatured Coupons appertaining thereto.
3. The holder shall receive only one Registered Bond for all of the Bearer
Bonds which are the subject of a single Registration Request.
4. The exchange of Bonds shall be effected without service charge (other
than postage and insurance costs where the Bondholder requests
delivery of the Bond other than by uninsured mail) to the holder but
upon payment by the holder of any taxes, duties and other governmental
charges in respect of such exchange.
5. The exchange of Bonds will be subject to the provisions of all applicable
fiscal and other laws and regulations as provided in the Conditions.
6. Bonds, if mailed, will be mailed to Bondholders at their own risk.
TO BE COMPLETED BY THE PRINCIPAL PAYING AGENT AND
NOTIFIED WITH OTHER RELEVANT DETAILS TO THE
REGISTRAR IN ACCORDANCE WITH THE AGENCY AGREEMENT
1. Date of surrender
........................................................................
2 Date on which Registered Bond to be delivered/despatched
....................................................
_________________________________________________________________
________________
CONSOLIDATED LISTING FORM FOR BEARER BONDS
_________________________________________________________________
________________
Serial Numbers of Bearer Bonds attached hereto Number and Principal
Amount
of Bearer Bonds
_________________________________________________________________
________________
From To
_________________________________________________________________
________________
Total Number and Principal Amount
of Bearer Bonds attached hereto
_____________________________
ICM:61763.
CONFORMED COPY
Dated 27th July, 1995
YORKSHIRE ELECTRICITY GROUP plc
(POUND)150,000,000
8 5/8 per cent. Bonds due 2005
______________________________
AGENCY AGREEMENT
______________________________
ALLEN & OVERY
London
INDEX
Clause Page
1. Interpretation 1
2. Appointment of Agents 2
3. Authentication and Delivery of Bonds 2
4. Payment to the Principal Paying Agent 3
5. Notification of Non-Payment by the Issuer 3
6. Duties of the Registrar and the Paying Agents 3
7. Trustee's Requirements regarding the Registrar and the Paying Agents 4
8. Reimbursement of the Registrar and the Paying Agents 4
9. Notice of any Withholding or Deduction 5
10. Duties of the Registrar 5
11. Regulations for Transfer of Registered Bonds and Exchange of Bonds 7
12. Duties of the Principal Paying Agent in connection with Early Redemption
and Exchange 7
13. Notices 8
14. Cancellation of Bonds and Coupons 8
15. Issue of Replacement Bonds and Coupons 9
16. Records and Certificates 10
17. Copies of the Trust Deed and this Agreement available for Inspection 11
18. Commissions and Expenses 11
19. Indemnity 11
20. Repayment by Principal Paying Agent 11
21. Conditions of Appointment 11
22. Communication with Agents 12
23. Termination of Appointment 12
24. Meetings of Bondholders 14
25. Definitions 14
26. Notices 15
27. Taxes 16
28. Counterparts 16
29. Descriptive Headings 16
30. Governing Law 16
31. Amendments 16
Schedule
1. Form of Put Notice 18
2. Certificate to be given by Subscribers of Registered Bonds at Closing 20
3. Bearer Request 21
4. Registration Request 23
26
12
28/07/95 14:11
THIS AGREEMENT is made on the day of
1998
BETWEEN:
(1) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part 1 of Schedule 1 in their
capacity as providers of MPAS (the "Host PESs")
(2) THE PERSONS whose names, registered numbers and registered
or principal offices are set out in Part 2 of Schedule 1 (the
"Suppliers")
(3) ENERGY POOL FUNDS ADMINISTRATION LIMITED
(registered no. 2444187) whose registered office is at 185 Park
Street, London SE1 9DY
(4) SCOTTISH ELECTRICITY SETTLEMENTS LIMITED a
company incorporated in Scotland (registered no. SC169212)
whose registered office is at
Plaza Tower, East Kilbride, G74 1LW ("SESL")
(5) MRA SERVICE COMPANY LIMITED, (registered no.
3490321) whose registered office is at Exchange House, Primrose
Street, London EC2A 2HS ("MRASCO")
WHEREAS:
(A) Each Host PES is required to prepare a form of agreement to be
known as the Master Registration Agreement, in conjunction and
co-operation with all other Public Electricity Suppliers, pursuant to
Condition 11A paragraph 4 of the PES Licence in England and
Wales and Condition 8A of Part V, paragraph 5 of the PES Licence
in Scotland.
(B) Paragraph 6 of Condition 11A of the PES Licence for England and
Wales and paragraph 6 of Condition 8A of Part V of the PES
Licence in Scotland set out the requirements relating to the Master
Registration Agreement.
(C) Each Host PES is required to become a party to and comply with
the provisions of the Master Registration Agreement pursuant to
paragraph 7 of Condition 11A of the PES Licence for England and
Wales and paragraph 7 of Condition 8A of Part V of the PES
Licence in Scotland.
(D) Each Supplier that holds a Second Tier Supply Licence is required
to become a party to and comply with the provisions of the Master
Registration Agreement pursuant to Condition 25 of the Second
Tier Supply Licence in England and Wales and the corresponding
provision of the Second Tier Supply Licence in Scotland.
(E) Each Host PES and Supplier has accordingly agreed to enter into
this Agreement on the basis of the terms and conditions set out
below.
(F) The Pool Agent has agreed to enter into this Agreement as trustee
and agent for Pool Members.
(G) SESL has agreed to enter into this Agreement on behalf of the
parties to the Settlement Agreement for Scotland to procure the
fulfilment of those parties' requirements.
PART I: PRELIMINARY
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Accept" means, in relation to a File or
Message, to accept such File
or Message on the grounds
that it complies with the
Validation Procedures of the
relevant Host PES's MPAS
Registration System and
"Acceptance" shall be
construed accordingly. For
the avoidance of doubt
Acceptance shall not involve
any subjective judgement by
the Host PES;
"Act" means the Electricity Act
1989;
"Accession Agreement" means an agreement in the
form set out in Schedule 4;
"Accreditation" has the meaning given to that
term in the Settlement
Agreement and "Accredited"
shall be construed
accordingly;
"Affiliate" in relation to any party, means
any holding company of that
party, any subsidiary of that
party or any subsidiary of a
holding company of that
party, in each case within the
meaning of Sections 736,
736A and 736B of the
Companies Act 1985 save
that, for the purposes of this
Agreement, SESL shall be
deemed not to be an Affiliate
of any Host PES;
"Application for Registration" means an application by a
Supplier to be Registered
against Supply Number core
data;
"Authorised Area" means:
(i) in respect of a Host
PES located in
England and Wales,
the area from time to
time comprised in
schedule 1 to its PES
Licence;
(ii) in respect of a Host
PES located in
Scotland, the
authorised supply area
from time to time
comprised in
paragraph 1 of
schedule 2 to its PES
Licence;
"Authorised Electricity Operator" means any person who is
authorised, by licence granted
under Section 6 or exemption
granted under Section 5 of
the Act, to generate, transmit
or supply electricity and any
person transferring electricity
to or from England and Wales
across an interconnector or
who has made an application
for use of interconnector
which has not been refused;
"Bulk Supply Point Group" has the meaning given to that
term in the Settlement
Agreement for Scotland;
"Central Allocation System" has the meaning given to that
term in the Settlement
Agreement for Scotland;
"Certification" has the meaning given to that
term in the Settlement
Agreement and "Certified"
shall be construed
accordingly;
"Change Proposal" means a notice in writing
from any party or parties
suggesting an amendment to
this Agreement or a
Settlement Agreement or the
Data Transfer Catalogue, it
being recognised that an
amendment may relate
exclusively to the Pool
Requirements or the Scottish
Settlement Requirements;
"Chief Executive's Office" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"Competent Authority" means the Secretary of State,
the Director and any local or
national agency, authority,
department, inspectorate,
minister, ministry, official, or
public or statutory person
(whether autonomous or not)
of, or of the government of,
the United Kingdom or the
European Union;
"Condition 2 Statement" means, in relation to each
Host PES whose Authorised
Area is in Scotland, the
statement in relation to
charges for use of system for
the time being in force
pursuant to Condition 2 of
Part VI of the PES Licence
for Scotland;
"Condition 8 Statement" means, in relation to each
Host PES whose Authorised
Area is in England and Wales,
the statement in relation to
charges for use of system for
the time being in force
pursuant to Condition 8 of
the PES Licence for England
and Wales;
"Condition 8E Statement" means, in relation to each
Host PES whose Authorised
Area is in Scotland, the
statement in relation to
charges for Metering and
Data Services for the time
being in force pursuant to
Condition 8E of Part V of the
PES Licence for Scotland;
"Condition 11E Statement" means, in relation to each
Host PES whose Authorised
Area is in England and
Wales, the statement in
relation to charges for
Metering and Data Services
for the time being in force
pursuant to Condition 11E of
the PES Licence for England
and Wales;
"Confidential Information" means, in relation to a party,
all data or other information
supplied to that party by
another party under or
pursuant to the provisions of
this Agreement and where the
party is a Host PES any
information which is held in
respect of a Customer which
information was previously
acquired by that Host PES
through its Distribution
Business;
"Connection Agreement" has the meaning given to that
term in the relevant
Settlement Agreement;
"Controlled Market Start Up" means the phased
implementation by the
Director, following the
direction given by the
Director in relation to the
relevant Host PES's
Authorised Area, of
arrangements designed to
facilitate competition in the
supply of electricity effected
in accordance with Condition
3 of the Second Tier Supply
Licence for England and
Wales and Condition 3 of
Part V of the Second Tier
Supply Licence for Scotland;
"Customer" means any person supplied or
entitled to be supplied with
electricity by a Supplier or, as
the case may be, by any
Affiliate or Related
Undertaking of a Supplier but
shall not include any
Authorised Electricity
Operator in its capacity as
such;
"Data Aggregator" means a person Accredited
and appointed by a Supplier
to collate and sum meter
reading data (whether actual
or estimated) and to deliver
such data to any relevant
person to whom such Data
Aggregator has an obligation
to deliver such data for
Settlement purposes;
"Data Collector" means a person Accredited
and appointed to:
(i) retrieve and verify
meter reading data
from electricity meters
and to deliver such
data to any relevant
person to whom such
Data Collector has an
obligation to deliver
such data for the
purposes of data
processing; and
(ii) process, validate and
(where necessary)
estimate meter reading
data and to deliver
such data to any
relevant person to
whom such Data
Collector has an
obligation to deliver
such data for the
purposes of data
aggregation;
"Data Protection Act" means the Data Protection
Act 1984;
"Data Transfer Catalogue" means the catalogue of data
flows, data definitions and
data formats in the form
approved under this
Agreement from time to time,
the version of which at the
date of this Agreement shall
be initialled by MEC
Members for the purposes of
identification at the first
meeting of MEC;
"Data Transfer Network" means the electronic network
provided as part of the Data
Transfer Service;
"Data Transfer Service" means the service provided by
the Data Transfer Service
Controller and described in
Condition 11B of the PES
Licence for England and
Wales and Condition 8B of
Part V of the PES Licence for
Scotland;
"Data Transfer Service means the agreement dated
30th July
Agreement" 1997 between the Data
Transfer Service Controller
and users of the Data
Transfer Service;
"Data Transfer Service means the body established by
all Public
Controller" Electricity Suppliers to
provide the Data Transfer
Service;
"De-Registration Notice" means a notice received by
the Host PES from its
Distribution Business
instructing the Host PES to
prevent any further
Registrations being made in
relation to a Metering Point;
"Designated Premises" has the meaning given to that
term in each PES Licence;
"Directed Supplier" has the meaning given to that
term in Clause 26.1;
"Directive" includes any present or future
directive, requirement,
instruction, direction or rule
of any Competent Authority
(but only, if not having the
force of law, if compliance
with the Directive is in
accordance with the general
practice of persons to whom
the Directive is addressed)
and includes any
modification, extension or
replacement thereof then in
force;
"Director" means the Director General of
Electricity Supply appointed
for the time being pursuant to
the Act;
"Disclose" means disclose, reveal, report,
publish or transfer and
"Disclosure" shall be
construed accordingly;
"Dispute" has the meaning given to that
term in Clause 37;
"Disputes Committee" has the meaning given to that
term in Clause 37.3;
"Disputing Party" has the meaning given to that term in
Clause 37.2;
"Distribution Business" in respect of each Host PES,
has the meaning given to that
term in that Host PES's PES
Licence;
"Distribution System" in respect of each Host PES,
has the meaning given to the
phrase "Licensee's
Distribution System" in that
Host PES's PES Licence;
"Domestic Premises" means Premises at which a
supply is taken wholly or
mainly for domestic purposes;
"Energisation Status" means data item 14 of
Schedule 2 for a Metering
Point;
"ERS" means the electronic
registration system operated
by the Settlement System
Administrator in England and
Wales pursuant to the terms
of the Pooling and Settlement
Agreement;
"Export Metering Point" means the point represented
by a single meter installed at
Premises (or any part of
Premises) which is capable of
measuring the quantity of the
electricity delivered to a Host
PES's Distribution System
and/or Transmission System
which has been generated by
a generating set that is
connected to that meter;
"Extra Votes" has the meaning given to that
term in Clause 6.9;
"Event of Default" has the meaning given to that
term in Clause 34.1;
"Files" means one or more Messages;
"Final Reconciliation Run" has the meaning given to that
term in the relevant
Settlement Agreement;
"Financial Year" means the period from and
including the date of this
Agreement to and including
the next following 31st March
and each period from 1st
April to 31st March
thereafter, provided that the
final Financial Year shall, in
the event of termination of
this Agreement otherwise
than on the anniversary of the
last day of the first Financial
Year, be such shorter period
as shall end on the date of
termination;
"Force Majeure" means any event or
circumstance which is beyond
the reasonable control of any
party and which results in or
causes the failure of that party
to perform any of its
obligations under this
Agreement including act of
God, strike, lockout or other
industrial disturbance, act of
the public enemy, war
declared or undeclared, threat
of war, terrorist act,
blockade, revolution, riot,
insurrection, civil commotion,
public demonstration,
sabotage, act of vandalism,
lightning, fire, storm, flood,
earthquake, accumulation of
snow or ice, explosion, fault
or failure of plant or
apparatus which (in each
case) could not have been
prevented by either Good
Industry Practice in England
and Wales or as the case may
be a Reasonable and Prudent
Operator in Scotland,
governmental restraint, Act of
Parliament, other legislation,
bye law and Directive (not
being any order, regulation or
direction under Section 32,
33, 34 or 35 of the Act),
provided that lack of funds
shall not be interpreted as a
cause beyond that party's
reasonable control;
"Forum Chairman" has the meaning given to that
term in Clause 7.22;
"Full Refresh" means the provision of all
data items in Instruction
Format (as defined in the
Data Transfer Catalogue) for
all Metering Points in respect
of which the Supplier or Data
Aggregator requiring the Full
Refresh is or has been either
Registered or appointed, as
the case may be during the
period of two years prior to
the date of production of the
Full Refresh under Clause 22.
The Full Refresh shall include
all data items that have been
held on the MPAS
Registration System in
respect of the relevant
Metering Points for the
period of Registration or
appointment, as the case may
be;
"Gateway" has the meaning given to that
term in the Data Transfer
Service Agreement;
"Good Industry Practice" means the exercise of that
degree of skill, diligence,
prudence and foresight which
would reasonably and
ordinarily be expected from a
skilled and experienced
operator engaged in the same
type of undertaking under the
same or similar
circumstances;
"Grid Supply Point" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"GSP Group" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"Initial Settlement and has the meaning given to that
term in the
Reconciliation Agent" Pooling and Settlement
Agreement;
"Line Loss
Factor (LLF)/
DUoS Code"
means data item 6 of
Schedule 2 for a Metering
Point;
"Market Auditor" has the meaning given to that
term in the Settlement
Agreement for Scotland;
"Market Domain Data" has the meaning given to that
term in the Settlement
Agreement;
"Market Domain ID" has the meaning given to that
term in the Data Transfer
Service Agreement;
"Master Connection and Use of means the agreement of that
name dated 30th
System Agreement" March 1990 governing
connection to and use of
NGC's transmission system;
"Master Registration Agreement means the body constituted
pursuant to the terms
Forum" or "MRA Forum" of Clause 7;
"Measurement Class" has the meaning given to that
term in the Settlement
Agreement;
"MEC Chairman" has the meaning given to that
term in Clauses 6.22 and
6.24;
"MEC Member" has the meaning given to that
term in Clause 6.3;
"Message" means electronic data flows
between Data Transfer
Service users which conform
to the Data Transfer
Catalogue and User File
Design Specification;
"Message Receipt Working Day" has the meaning given to that
term in Clause 14.3;
"Metering and Data Services" has the meaning given to that
term in each PES Licence;
"Metering Point" means the point, determined
according to the principles
and guidance given at
Schedule 9, at which a supply
to (export) or from (import) a
Host PES's Distribution
System and/or Transmission
System:
(a) is or is intended to be
measured; or
(b) where metering
equipment has been
removed, was or was
intended to be
measured; or
(c) in the case of an
Unmetered Supply
under the Unmetered
Supplies Procedure, is
deemed to be
measured,
where in each case such
measurement is for the
purposes of ascertaining the
Supplier's Settlement
liabilities under the Pooling
and Settlement Agreement, or
the volumes allocated to that
Supplier under the Settlement
Agreement for Scotland;
"Metering Point Administration means, in respect of any
Metering Point,
Data (MPAD)" all data items as set out in
Schedule 2;
"Metering Point Administration means the service to be
provided by each Host
Service (MPAS)" PES pursuant to Condition
11A of the PES Licence for
England and Wales or
Condition 8A of Part V of the
PES Licence for Scotland, as
the case may be;
"Meter Operator" means a person Accredited
and appointed by a Supplier,
or, where applicable, a
Customer to:
(i) provide metering
equipment whether by
way of sale, hire or
loan;
(ii) install, commission,
test, repair and
maintain metering
equipment; and
(iii) maintain related
technical information;
"Meter Standing Data" means the data (as specified
in the Data Transfer
Catalogue) relating to the
configuration of any metering
equipment which is required
to operate that equipment in
an effective manner;
"Migrate" means, in relation to a
Metering Point, to enter
values for data items listed in
Schedule 2 for that Metering
Point (apart from data items 1
to 3, 18 and 19) into the
relevant Host PES's MPAS
Registration System and to
set the 1998 Trading
Arrangement Indicator for
that Metering Point to "Y"
and "Migration" shall be
construed accordingly;
"MPAS Registration System" means, in respect of each
Host PES, the information
technology system used by
that Host PES to provide
MPAS;
"MRA Executive Committee" means the body constituted
pursuant to the terms
or "MEC" of Clause 6;
"New Connection" has the meaning given to that
term in Clause 20.1.1;
"New Metering Point" has the meaning given to that
term in Clause 20.1;
"New Party" has the meaning given to that
term in Clause 4.1;
"New Supplier" has the meaning given to that
term in Clause 15.10;
"Nominated Agreements" means:
(i) this Agreement;
(ii) the Settlement Agreements;
(iii) any Connection
Agreement;
(iv) the Data Transfer
Service Agreement;
(v) any other agreement
to provide a Metering
and Data Service;
(vi) any other agreement
specified as such from
time to time by MEC;
and
(vii) any agreement which
the Director from time
to time approves as a
Nominated Agreement;
"Non PES Supplier" has the meaning given to that
term in Clause 6.3.3;
"Non PES Supplier has the meaning given to that
term in Clause 7.4;
Representative"
"Notice of Objection" has the meaning given to that
term in Clause 16.1;
"Objection Raising Period" means the period from and
including the time that the
notification to the Old
Supplier pursuant to Clause
15.10 is sent from the MPAS
Registration System to the
relevant Host PES's Gateway
up to but not including 18:00
hours on the fifth Operational
Working Day thereafter;
"Objection Resolution Period" means the period from and
including the time that the
Message confirming that the
Notice of Objection has been
Accepted is sent from the
relevant MPAS Registration
System to the relevant Host
PES's Gateway up to but not
including 18:00 hours on the
fifth Operational Working
Day thereafter;
"Old Supplier" means, in relation to a
Supplier's Application for
Registration, the Supplier
which was or, as the case may
be, will be Registered in
respect of that Metering Point
immediately prior to the
Supply Start Date included in
the first mentioned Supplier's
Application for Registration;
"Operating Agent" has the meaning given to that
term in the Settlement
Agreement for Scotland;
"Operational Working Day" has the meaning given to the
term 'working day' in Section
64 of the Act as applicable to
the Host PES in whose
Authorised Area the relevant
Metering Point is located;
"party" means each of the Host PESs,
the Suppliers, the Pool Agent
and SESL but, except where
the context requires, shall not
include MRASCO, and
"parties" shall be construed
accordingly;
"Performance Assurance and has the meaning given to that
term in the
Accreditation Panel" Settlement Agreement for
Scotland;
"PES Member" has the meaning given to that
term in Clause 6.3.2;
"PES Supplier Representative" has the meaning given to that
term in Clause 7.3;
"Pool Agent" means Energy Pool Funds
Administration Limited or its
successor as Pool Agent from
time to time appointed
pursuant to the Pooling and
Settlement Agreement;
"Pool Auditor" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"Pool Executive Committee" has the meaning given to the
term "Executive
or "PEC" Committee" in the Pooling
and Settlement Agreement;
"Pool MEC Member" has the meaning given to that
term in Clause 6.3.4;
"Pool Member" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"Pool Representative" has the meaning given to that
term in Clause 7.5;
"Pool Requirements" means:
(i) those provisions of
this Agreement which
are repeated in
Schedule 6, together
with Appendix 1 to
Schedule 6;
(ii) Clauses 6, 7, 9 and
10, and the
administration,
procedures,
constitution and
decision making
powers of MEC, the
MRA Forum and any
sub-committees of
MEC;
(iii) Schedule 10;
(iv) any other provisions,
including the
definitions, which may
have an effect on the
provisions or matters
set out or referred to
in (i), (ii) and/or (iii)
above, or on their
performance or
manner of
performance, or their
interpretation;
(v) paragraphs 2.2.5, 4.2,
5.1.1 and 5.5.5 of
Schedule 13 and the
administration of
MRASCO pursuant to
Schedule 13; and
(vi) any derogations
affecting any of the
provisions or matters
set out or referred to
in (i) to (v) above;
"Pooling and Settlement means the agreement of that
name dated 30th
Agreement" March 1990 (as amended)
including all Service Lines
and Agreed Procedures (as
therein defined) made under
it;
"Premises" has the meaning given in
section 64 of the Act;
"Priority Provisions means:
(i) in relation to the Pool
Requirements, those
items referred to in
paragraphs (i) and (iii)
(and paragraphs (iv)
and (vi) to the extent
referable to
paragraphs (i) and
(iii)) of the definition
of Pool Requirements
(but in the case of
Clause 9.2, means
only those items
referred to in
paragraphs (i) and (iii)
of that definition); and
(ii) in relation to the
Scottish Settlement
Requirements those
items referred to in
paragraphs (i) and (iii)
(and paragraphs (iv)
and (vi) to the extent
referable to
paragraphs (i) and (iii)
of the definition of
Scottish Settlement
Requirements (but in
the case of Clause 9.2,
means only those
items referred to in
paragraphs (i) and (iii)
of that definition);
"Profile Class" has the meaning given to that
term in the Settlement
Agreement;
"Provider Member" has the meaning given to that
term in Clause 6.3.1;
"Public Electricity Supplier" means an electricity supplier
that holds a Public Electricity
Supplier Licence and any of
its Affiliates;
"Public Electricity Supplier means a public electricity
supply licence granted
(PES) Licence" to a Host PES under section
6 of the Act which includes
authorisation pursuant to
Section 6(1)(c) of the Act;
"Quarter" means the period of three
calendar months ending on a
Quarter Day;
"Quarter Day" means each or as the context
may require any or a
particular one of 31st March,
30th June, 30th September
and 31st December or where
the Quarter Day is not an
Operational Working Day,
the next Operational Working
Day thereafter;
"Reasonable and Prudent means a person exercising
that degree of skill,
Operator" diligence, prudence and
foresight which would
reasonably and ordinarily be
expected from a skilled and
experienced operator engaged
in the same type of
undertaking under the same
or similar circumstances;
"Registered" means the recording on the
MPAS Registration System
of a Supplier as being
responsible for a Metering
Point from a particular date
and "Registration" shall be
construed accordingly;
"Registration Transaction means the reference number
generated
Number" upon Registration;
"Reject" means, in relation to a
Message or File, to reject
such Message or File on the
grounds that it does not
comply with the Validation
Procedures of the relevant
Host PES's MPAS
Registration System and
"Rejection" shall be
construed accordingly. For
the avoidance of doubt,
rejection shall not involve any
subjective judgement by the
Host PES;
"Related Metering Points" means, as the context
requires:
(a) two or more Metering
Points (other than
Export Metering
Points) located at the
same (or any part of
the same) Premises; or
(b) two or more Metering
Points (other than
Export Metering
Points) relating to
Unmetered Supplies
the Supply Numbers
attributable to which
are stated within a
single Unmetered
Supplies Certificate
issued by the relevant
Host PES;
in either case in circumstances
where the use of system
charges for electricity
supplied through those
Metering Points are mutually
conditional;
"Related Undertaking" in relation to any party means
any undertaking in which that
party has a participating
interest as defined by section
260 of the Companies Act
1985 save that, for the
purposes of this Agreement,
SESL shall be deemed not to
be a Related Undertaking of
any Host PES;
"Relevant Exempt Supplier" has the meaning given to that
term in the relevant Use of
System Agreement;
"Relevant Instruments" means:
(a) the Act and all
subordinate legislation
made under the Act;
(b) the Data Protection
Act and all
subordinate legislation
made under it;
(c) any PES Licence and
any Second Tier
Supply Licence and
any determination or
notice made or issued
by the Director
pursuant to the terms
thereof;
and whether under any of the
foregoing or otherwise, all
authorisations, approvals,
licences, exemptions, filings,
registrations, notarisations,
consents and other matters
which are required, or which
a Host PES acting in
accordance with Good
Industry Practice in England
and Wales or as a Reasonable
and Prudent Operator in
Scotland would obtain, in
connection with the provision
of the Services, of or from
any Competent Authority;
"Resend" has the meaning given to that
term in Clause 25.1;
"Scottish Settlement means:
Requirements "
(i) those provisions of
this Agreement which
are repeated in
Schedule 7, together
with Appendix 1 to
Schedule 7;
(ii) Clauses 6, 7, 9 and
10, and the
administration,
procedures,
constitution and
decision making
powers of MEC, the
MRA Forum and any
sub-committees of
MEC;
(iii) Schedule 11;
(iv) any other provisions,
including the
definitions, which may
have an effect on the
provisions or matters
set out or referred to
in (i), (ii) and/or (iii)
above, or on their
performance or
manner of
performance, or their
interpretation;
(v) paragraphs 2.2.5, 4.2,
5.1.1 and 5.5.5 of
Schedule 13 and the
administration of
MRASCO pursuant to
Schedule 13; and
(vi) any derogations
affecting the
provisions or matters
set out or referred to
in (i) to (v) above;
"Second Tier Supply Business" has the meaning given to that
term in each PES Licence;
"Second Tier Supply Licence" means, in relation to the
relevant Supplier, the second
tier supply licence granted to
that Supplier to supply
electricity pursuant to Section
6(2) of the Act;
"Secretariat" has the meaning given to that
term in Clause 6.55;
"Secretary" has the meaning given to that
term in Clause 6.26;
"Secretary of State" has the meaning given to that
term in the Interpretation Act
1978;
"Selective Refresh" means the provision of all
data items in Instruction
Format (as defined in the
Data Transfer Catalogue) for
the Metering Point selected
by the relevant Supplier or
Data Aggregator in respect of
which the relevant Supplier or
Data Aggregator is or has
been Registered or appointed,
as the case may be during the
period of two years prior to
the date of production of the
Selective Refresh under
Clause 23. The Selective
Refresh shall include all data
items that have been held on
the MPAS Registration
System in respect of the
relevant Metering Point for
the period of Registration or
appointment, as the case may
be;
"Service Provider Representative" has the meaning given to that
term in Clause 7.3;
"Services" means the services to be
performed by each Host PES
under this Agreement,
described in Clauses 15 to 28
or, as appropriate, one or
more of them and "Service"
shall be construed
accordingly;
"SESL Member" has the meaning given to that
term in Clause 6.3.5;
"SESL Representative" has the meaning given to that
term in Clause 7.5;
"Settlement" has the meaning given to that
term in the relevant
Settlement Agreement;
"Settlement Agreement" means, as appropriate:
(i) in England and Wales,
the Pooling and
Settlement
Agreement; or
(ii) in Scotland, the
Settlement Agreement
for Scotland;
"Settlement Agreement for means the Settlement
Agreement for Scotland
Scotland" to be entered into after the
date of this Agreement,
including all Service
Requirements and Market
Procedures (as therein
defined) made under it;
"Settlement Requirements" means:
(i) in England and Wales,
the Pool
Requirements; or
(ii) in Scotland, the
Scottish Settlement
Requirements;
"Settlement System" has the meaning given to that
term in the Pooling and
Settlement Agreement;
"Settlement System has the meaning given to that
term in the Pooling and
Administrator" Settlement Agreement;
"Shadow MEC" means the Shadow MEC
Members, acting as MEC in a
shadow capacity, prior to the
execution of this Agreement;
"Shadow MEC Members" shall mean those persons
whose names are set out in Clause
6.6, acting in a shadow capacity as
MEC Members prior to the execution of this
Agreement;
"Skeleton Record" means the initial record on the
MPAS Registration System
for a Metering Point which
contains:
(i) the Supply Number
core data;
(ii) data item 9 of
Schedule 2 for the
Metering Point;
(iii) data item 15 of
Schedule 2 for the Metering Point; and
(iv) data item 18 of Schedule 2 for the Metering Point, where
applicable; and may contain data item 6 of Schedule 2 for the
Metering Point;"Standard Terms of Connection" has the meaning given to that
term in each PES Licence;
"Supplier ID" means data item 8 of
Schedule 2;
"Supplier Member" has the meaning given to that
term in Clause 6.3.3;
"Supply Business" in respect of each Host PES,
has the meaning given to that
term in that Host PES's PES
Licence;
"Supply Number" means, in respect of any
Metering Point, the number
attributed to that Metering
Point, consisting of data items
1 to 6 as set out in Schedule
2;
"Supply Number core data" means data items 1 to 3 of
Schedule 2 in relation to a
Metering Point and for
England and Wales has the
same meaning as the term
"Stage 2 Metering System
Number", as defined in the
Pooling and Settlement
Agreement;
"Supply Start Date" means the date specified for
data item 10 of Schedule 2 in
a Supplier's Application for
Registration;
"Total Weighted Vote" has the meaning given to that
term in Clause 6.9;
"Total Daily Processing" has the meaning given to that
term in Clause 14.3;
"1998 Trading Arrangement means, in relation to a
Metering Point in
Indicator" England and Wales, an
indicator that identifies those
Metering Points which are
Registered on MPAS and
which are registered on ERS
for settlement purposes;
"Third Party Claim" has the meaning given to that
term in Clause 37.10;
"Tranche" means each of the phases into
which a Host PES's
Authorised Area is divided, as
directed by the Director, for
the purposes of Controlled
Market Start Up;
"Transmission System" in relation to each Host PES
in Scotland, has the meaning
given to that term in that
Host PES's PES Licence;
"Unmetered Supply" has the meaning given to that
term in the Settlement
Agreement;
"Unmetered Supplies Certificate" means an Unmetered Supplies
Certificate as issued under the
Unmetered Supplies
Procedure;
"Unmetered Supplies means:
Procedure" (i) in England and Wales,
schedule 29 of the
Pooling and
Settlement
Agreement; and
(ii) in Scotland, the
Market Procedure of
that name or other
corresponding
provision made
pursuant to the
Settlement Agreement
for Scotland;
"Use of System Agreement" means the agreement of that
name between a Host PES
and a Supplier pursuant to
which the relevant Host PES
agrees to distribute electricity
to the Customers of the
relevant Supplier through the
relevant Host PES's
Distribution System and in
Scotland through its
Transmission System and
Distribution System;
"User File Design Specification" has the meaning given to that
term in the Data Transfer
Catalogue;
"Valid Application for has the meaning given to that
term in Clauses 15.6 or 20.2,
Registration" as appropriate;
"Valid Notice of Objection" has the meaning given to that
term in Clause 16.3;
"Validation Procedures" has the meaning given to that
term in Clause 28.3;
"VAT" has the meaning given to that
term in the Value Added Tax
Act 1994 and any tax of a
similar nature which may be
substituted for or levied in
addition to it;
"Weighted Votes" has the meaning given to that
term in Clause 6.8; and
"Working Day" has the meaning given to that
term in Section 64 of the Act
for England and Wales.
1.2 In this Agreement, unless the context requires otherwise,
any reference to:
1.2.1 a "person" includes a reference to an individual,
body corporate, association or partnership;
1.2.2 the singular shall include the plural and vice versa;
1.2.3 this "Agreement" shall mean this agreement, the
Schedules and the Annexure;
1.2.4 a Clause, Schedule or Part is a reference to a clause
of or schedule to or part of this Agreement;
1.2.5 writing includes all methods of reproducing words in
a legible and non-transitory form;
1.2.6 any statute or any other subordinate legislation, any
other agreement or instrument shall be construed as
a reference to that statute, subordinate legislation,
other agreement or instrument as amended or re-
enacted from time to time;
1.2.7 references to the masculine gender include the
feminine gender.
1.3 The headings in this Agreement are for the ease of reference
only and shall not affect its interpretation.
1.4 In this Agreement, references to "include" or "including" are
to be construed without limitation to the generality of the
preceding words.
1.5 The parties acknowledge and agree that the Pool Agent
holds the benefit of this Agreement as trustee and agent for
the Pool Members and each of them.
1.6 The Pool Agent shall be entitled to act for any or all
purposes of this Agreement through any person from time
to time nominated in writing by the Pool Agent to MEC as
the Pool Agent's representative. Where more than one
person is so nominated, the capacity or field in which each
nominated person is acting shall be notified to MEC.
1.7 For the avoidance of doubt, nothing in this Agreement shall
prejudice the rights of any Host PES under Schedule 6 of
the Act.
2. CONDITIONS PRECEDENT
2.1 A Host PES shall not be obliged to provide Services using
its MPAS Registration System which require Certification
until:
2.1.1 the Host PES has become Accredited and its MPAS
Registration System has been Certified; and
2.1.2 the Host PES has become a party to the Data
Transfer Service Agreement.
2.2 The obligations on a Host PES to provide Services to a
Supplier in relation to any particular Metering Point in its
Authorised Area are subject to the Host PES having entered
values for the data items (other than data item 19) listed in
Schedule 2 for that Metering Point into its MPAS
Registration System except where:
2.2.1 the Metering Point is registered on ERS in which
case the Host PES shall ensure that data items 1 to
3, 9, 18 (in each case set to "N") and 19 in Schedule
2 have been entered for that Metering Point; or
2.2.2 the Metering Point at a particular time is a New
Metering Point, in which case the provisions of
Clause 20.1 shall apply.
2.3 Subject to Clause 2.4 , the rights of a Supplier to receive
Services in relation to any particular Metering Point are in
each case subject to:
2.3.1 there being a Use of System Agreement in full force
and effect (except for any conditions which require
this Agreement to be in full force and effect)
between the Host PES and Supplier in relation to
that Metering Point;
2.3.2 the Supplier being a party to the Data Transfer
Service Agreement; and
2.3.3 the Host PES having received a valid market
participant ID for the Supplier from the Initial
Settlement and Reconciliation Agent, and having
entered such valid market participant ID in to its
MPAS Registration System.
2.4 Where a Supplier does not have a Use of System
Agreement in full force and effect (except for any conditions
which require this Agreement to be in full force and effect)
with a Host PES from whom it has requested Services, the
terms and conditions for Use of System which the Host PES
would have offered the Supplier at the time the Host PES
starts to provide Services to the Supplier will be deemed to
apply from the point in time when the Host PES starts to
provide Services to the Supplier provided that nothing shall
prevent the Supplier referring the matter to the Director for
a determination pursuant to the PES Licence of the relevant
Host PES as to whether those terms should apply. The
terms and conditions for use of system offered by the Host
PES shall be reasonable and of a kind generally accepted by
participants in the electricity industry, and the Host PES
shall make a copy of those terms and conditions available to
the Supplier. Any terms deemed to apply pursuant to this
Clause shall be without prejudice to the terms and
conditions contained in any Use of System Agreement
subsequently entered into between the Host PES and
Supplier.
2.5 If the conditions precedent set out in Clause 2.1 have not
been fulfilled in relation to any Host PES as at the date of
this Agreement, that Host PES shall use its reasonable
endeavours to procure the fulfilment of those conditions
precedent which have not already been fulfilled as soon as
reasonably practicable. The Host PES shall notify all other
parties to this Agreement of the date the conditions
precedent relevant to it under Clause 2.1 become fulfilled
within 10 Operational Working Days of each such condition
precedent being fulfilled.
2.6 If the conditions precedent set out in Clause 2.2 (except for
Clause 2.2.2) have not been fulfilled in relation to any Host
PES as at the date of this Agreement, that Host PES shall
procure the fulfilment thereof as soon as possible after the
date of this Agreement and before the start of Controlled
Market Start Up for that Host PES.
2.7 Once any of the conditions precedent in Clause 2.1
applicable to a Host PES has been fulfilled, that Host PES
shall use its reasonable endeavours to keep such condition
precedent fulfilled throughout the term of this Agreement.
2.8 Once the condition precedent in Clause 2.2 has been
fulfilled, the Host PES shall keep such condition precedent
fulfilled throughout the term of this Agreement.
3. COMMENCEMENT, DURATION AND CONTROLLED
MARKET START UP
3.1 This Agreement shall take effect on the date hereof, save for
any rights or obligations of a party which are expressed to
be conditional under the terms of Clause 2.
3.2 During the period of Controlled Market Start Up for a
particular Host PES, each Supplier shall only be entitled to
apply for registration in relation to a Metering Point under
Clause 15 within that Host PES's Authorised Area from the
date that is 28 days, or any other such period notified by the
Director, before the date specified by the Director in
relation to the Premises associated with that Metering Point
in his direction issued pursuant to Condition 3 of that
Supplier's Second Tier Supply Licence.
3.3 Subject to Clauses 34.9 and 34.10, this Agreement shall
remain in effect in respect of a party until that party ceases
to be a party in accordance with Clause 34.
3.4 This Agreement shall remain in effect until each party ceases
to be a party in accordance with Clause 34, or there ceases
to be at least one Supplier, one Host PES and the Pool
Agent and SESL (or their respective duly appointed
successors), remaining as party to this Agreement.
4. ADDITIONAL PARTIES
4.1 Subject to the following provisions of this Clause 4, the
parties shall admit as an additional party to this Agreement
any person (a "New Party") who is not at that time already
a party who applies to be admitted in the capacity requested
by the New Party.
4.2 Subject to Clause 4.3, a New Party wishing to be admitted
as an additional party shall apply to MEC for admission on a
form of application issued by MEC from time to time and
shall deliver such form to MEC together with any other
documents referred to in the form. Upon receipt of an
application from a potential New Party, MEC shall consider
the application and shall notify all parties and the Director
of such application. Within 30 Working Days of receipt of
the application MEC shall notify the New Party and
Director that either the New Party shall be admitted as a
party, shall not be admitted as a party or that it requires
further information from the New Party in relation to its
application. Where MEC determines not to admit a New
Party as a party, it shall provide that New Party with the
reasons for its decision.
4.3 MEC shall forthwith admit a New Party which is seeking to
replace the Pool Agent or SESL where MEC has been
notified by the relevant forum under the Pooling and
Settlement Agreement or SESL, as appropriate, that the
New Party has been approved as successor Pool Agent or
SESL, as appropriate, by that forum or SESL, as
appropriate.
4.4 Where MEC notifies the New Party that it requires further
information pursuant to the terms of Clause 4.2, such
requirement being reasonable, the New Party shall within 20
Working Days of receiving MEC's notice either provide the
additional information or refer the matter to the Director
pursuant to Clause 4.5, failing which the New Party's
application shall lapse and be of no effect and the New Party
shall not be, and shall not be entitled to be, admitted as a
party consequent upon such application (but without
prejudice to any new application for admission it may make
thereafter).
4.5 Where MEC determines not to admit a New Party as a party
or fails to notify the New Party within 30 Working Days of
receipt of the New Party's application or requests additional
information from the New Party, the New Party may refer
the matter to the Director for his determination The
determination of the Director shall be final and binding for
all purposes.
4.6 Where:
4.6.1 MEC notifies the New Party and the Director in
accordance with Clause 4.2 that the New Party is to
be admitted as a party or Clause 4.3 applies; or
4.6.2 following a request for further information pursuant
to Clause 4.2, the New Party provides sufficient
additional information satisfactory to MEC within
the time period specified in Clause 4.4; or
4.6.3 the Director determines that the New Party shall
become a party pursuant to Clause 4.5,
MEC shall forthwith prepare an Accession Agreement,
which shall be executed by a delegate authorised by MEC
on behalf of all parties other than the New Party, and the
New Party. Each party hereby authorises and instructs any
delegate authorised by MEC to sign any such Accession
Agreement on its behalf and undertakes not to withdraw,
qualify or revoke any such authority or instruction at any
time. Upon execution of the Accession Agreement, the
New Party shall become a party for all purposes of this
Agreement from the date specified in such Accession
Agreement.
4.7 MEC shall promptly notify all parties and the Director of
the execution and delivery of each Accession Agreement.
5. ENFORCEABILITY OF OBLIGATIONS ON OR BY DATA
AGGREGATORS
Data Aggregators' Obligations
5.1 In this Agreement where there is a reference to an
obligation on a Data Aggregator such obligation shall be
deemed to apply to the Supplier that has appointed the Data
Aggregator in relation to the relevant Metering Point and
that Supplier shall be required to procure compliance by
that Data Aggregator with that obligation and such
obligation may be enforced against the Supplier that has
appointed that Data Aggregator.
5.2 In this Agreement where there is a reference to an
obligation owed to a Data Aggregator from a Host PES,
that obligation shall be deemed to be owed to the Supplier
that has appointed the Data Aggregator in relation to the
relevant Metering Point and that Supplier may enforce that
obligation.
PART II: GOVERNANCE AND CHANGE CONTROL
6. CONSTITUTION OF MEC
6.1 Immediately upon commencement of this Agreement, MEC
shall be established. The objects, membership (including the
first members of the MEC) and procedural rules of the
MEC are as set out in this Clause 6. The parties hereby
delegate to MEC all powers necessary to fulfil its objects
contained in Clause 6.2.
Objects
6.2 MEC shall, subject to and in accordance with the other
provisions of this Agreement, have the powers to:
6.2.1 consider, approve, co-ordinate the implementation
of or, in relation to those provisions set out in
Clause 9.6 where the prior written consent of the
Director is required to any change, recommend to
the Director on behalf of parties to this Agreement,
any proposals to change this Agreement and, as
appropriate, amend this Agreement;
6.2.2 consider, approve and co-ordinate the
implementation of any proposals to change the Data
Transfer Catalogue and, as appropriate, amend the
Data Transfer Catalogue;
6.2.3 consider any applications from potential New Parties
to become a party;
6.2.4 develop budgets in accordance with Clause 8;
6.2.5 hire any professional advisers, including accountants
to audit its costs;
6.2.6 check and notify parties that they are defaulting
parties in accordance with the provisions of Clause
34;
6.2.7 consider and resolve disputes between any parties
arising under this Agreement in accordance with
Clause 37; and
6.2.8 consider and grant derogations in accordance with
Clause 38.
MEC Membership
6.3 MEC shall consist of the following representatives ("MEC
Members") from the following categories:
6.3.1 one MEC Member (the "Provider Member")
appointed by the Host PESs as providers of MPAS;
6.3.2 one MEC Member (the "PES Member") appointed
by those Suppliers that are Public Electricity
Suppliers;
6.3.3 one MEC Member (the "Supplier Member")
appointed by those Suppliers that are not Public
Electricity Suppliers ("Non-PES Suppliers");
6.3.4 one MEC Member (the "Pool MEC Member")
appointed by the Pool Agent; and
6.3.5 one MEC Member (the "SESL Member")
appointed by SESL.
A MEC Member appointed pursuant to Clauses 6.3.1 to
6.3.3 shall be an employee of one of the parties within the
category of parties that is entitled to appoint the relevant
MEC Member. No individual may simultaneously be
appointed as the MEC Member or alternate for more than
one of the categories pursuant to Clauses 6.3.1 to 6.3.5.
6.4 All MEC Members except the Pool MEC Member and
SESL Member shall be appointed in accordance with the
election procedures set out in Clause 6.7.
6.5 The Pool MEC Member and the SESL Member shall be
appointed by the Pool Agent and SESL respectively, who
shall, no later than 10 Working Days before 1st April in
each year, inform the Secretary of the appointment.
6.6 Subject to Clause 6.17, from the date of this Agreement
until 1 April 1999, MEC Members shall be Hugh Spicer as
Provider Member, William Landels as PES Member, Derek
Meacham as Supplier Member, Andrew Claxton as Pool
MEC Member and Douglas Wright as SESL Member.
6.7 No later than 40 Working Days before 1st April in each year
commencing with 1999:
6.7.1 each Host PES may propose to the Secretary one
candidate for election as the Provider Member;
6.7.2 each Supplier that is a Public Electricity Supplier
may propose to the Secretary one candidate for
election as the PES Member; and
6.7.3 each Non-PES Supplier may propose to the
Secretary one candidate for election as the Supplier
Member,
and the Secretary shall no later than 30 Working Days
before the relevant 1st April notify the relevant list of
candidates to each party. Where there is more than one
candidate for election as a representative under Clauses
6.3.1, 6.3.2 or 6.3.3 the parties in the relevant category of
party shall be invited by the Secretary to cast votes for their
favoured candidate by notice to the Secretary within 10
Working Days of being notified of the list of candidates.
Each party in the category of parties which are entitled to
vote for the Provider Member and the PES Member shall
have one vote for each category for which it is eligible to
vote. Each party in the category of parties which are
entitled to vote for the Supplier Member shall have the
number of votes calculated in accordance with Clause 6.8.
6.8 Subject to Clauses 6.9, 6.10 and 6.11 the number of votes
to which each Non-PES Supplier shall be entitled
("Weighted Votes") shall be calculated in accordance with
the following formula:
V =
Where:
V = the number of votes to which that Non-PES Supplier
shall be entitled ;
N = the number of Metering Points for which the Non-
PES Supplier was Registered on all MPAS
Registration Systems in the month preceding the
election which shall be determined from the report
submitted in respect of that month per MPAS
Registration System pursuant to Clause 27.9 over all
MPAS Registration Systems; and
SN = the total number of Metering Points for which all
Non-PES Suppliers were registered, contained on all
MPAS Registration Systems in the month preceding
the election which shall be determined from the
reports submitted in respect of that month per
MPAS Registration System pursuant to Clause 27.8
over all MPAS Registration Systems.
6.9 If, pursuant to the formula set out in Clause 6.8 any Non-
PES Supplier has in excess of 20% of the sum of votes to
which all Non-PES Suppliers are entitled pursuant to Clause
6.8 ("Total Weighted Vote"), the number of Weighted
Votes to which such Non-PES Supplier is entitled shall be
reduced by such number of votes ("Extra Votes") as will
give each of those Non-PES Suppliers as nearly as possible
(but more than) 20% of the Total Weighted Vote, such
Extra Votes to be reallocated to the remaining Non-PES
Suppliers in accordance with Clause 6.10.
6.10 Any Extra Votes shall be reallocated to each of the other
Non-PES Suppliers who have less than 20% of the vote in
accordance with the following formula:
EXV = EV x
Where:
EXV = additional votes which are added to that Non-PES
Supplier's votes calculated in accordance with
Clause 6.8;
EV = the aggregate number of Extra Votes available for
reallocation in accordance with Clause 6.9;
N = the number of Metering Points for which the Non-
PES Supplier was Registered on all MPAS
Registration Systems in the month preceding the
election which shall be determined from the report
submitted in respect of that month per MPAS
Registration System pursuant to Clause 27.9 over all
MPAS Registration Systems; and
XN = the number of Metering Points contained on all
MPAS Registration Systems in the month preceding
the election which shall be determined by summing
the total number of Metering Points for each of the
Non-PES Suppliers whose vote has not been
reduced in accordance with Clause 6.9 or 6.11 and
shall be determined from the report submitted in
respect of that month per MPAS Registration
System pursuant to Clause 27.9 over all MPAS
Registration Systems.
6.11 Where, as a result of the reallocation of Extra Votes in
accordance with Clause 6.10, any Non-PES Supplier has in
excess of 20% of the Total Weighted Vote, the Extra Votes
shall be reallocated in accordance with Clauses 6.9 to 6.11,
mutatis mutandis.
6.12 The candidate that receives the most votes in each category
of party referred to in Clause 6.7 or, where only one
candidate is proposed for a particular category, that
candidate, shall be appointed as the MEC Member for that
category of party from 1st April in the relevant year.
6.13 Subject to Clause 6.6, the Provider Member, the PES
Member and the Supplier Member shall retire on 1st April
next following their appointment as MEC Members, but
each retiree may be a candidate for reappointment in respect
of the following year.
6.14 Each category of party entitled to appoint a MEC Member
pursuant to Clause 6.7 may, where a majority of parties in
that category of party agrees, at any time remove the
relevant MEC Member from office and elect or appoint
another person to be a MEC Member in his place. A
category of parties will only have the right to remove from
office a MEC Member which it or they have elected or
appointed, and will have no right to remove from office any
MEC Member elected or appointed by another category of
party. Any appointment to replace a MEC Member
removed from office pursuant to this Clause 6.14 shall be
made in accordance with the procedure set out in Clause
6.7, but on such timescale as the Secretary shall reasonably
direct. Only parties who are parties at the point in time
when the existing MEC Member is removed pursuant to this
clause shall be entitled to nominate candidates and to vote.
6.15 If at any time a vacancy arises in any category of MEC
Member (other than the Pool MEC Member or SESL
Member) otherwise than as a result of retirement in
accordance with Clause 6.13 or removal in accordance with
Clause 6.14, those parties in the category who are parties at
the point in time when the vacancy arises and entitled to
appoint such MEC Member may elect a replacement. Any
election to replace a MEC Member pursuant to this Clause
shall be conducted in accordance with the procedure set out
in Clause 6.7, but on such timescale as the Secretary shall
reasonably direct.
6.16 If at any time any category of party fails to provide a MEC
Member, the Secretary shall request the Director to make
the relevant appointment and the Director shall have the
power, until the relevant category of party has decided upon
an appointment and notified the Director accordingly, to
appoint a relevant MEC Member on behalf of that category
of party or to remove any such person so appointed by the
Director.
6.17 The Pool Agent and SESL shall have the right at any time
and from time to time to remove from office the Pool MEC
Member and SESL Member respectively and shall be
entitled to appoint another person to be the relevant MEC
Member in his place or to fill any vacancy which arises.
Where the Pool MEC Member or SESL Member is replaced
the relevant party responsible for replacing him shall ensure
that the Secretary is notified of such appointment in writing
within 5 Working Days of such change taking effect.
Alternates
6.18 Each MEC Member other than the Pool MEC Member and
SESL Member shall have the power to appoint any
individual who is an employee of one of the parties from the
category of party that has appointed him, to be his alternate
and may at his discretion remove an alternate so appointed
and shall remove an alternate as soon as that individual
ceases to be in the employment of one of the parties from
the category of parties that appointed his appointor. The
Pool MEC Member and SESL Member shall each have the
power to appoint any individual to be his alternate and may
at his discretion remove an alternate so appointed. Any
appointment or removal of an alternate shall be effected by
notice in writing executed by the appointor and delivered to
the Secretary or tendered at a meeting of MEC. If his
appointor so requests, an alternate shall be entitled to
receive notice of all meetings of MEC which take place
while his appointor is a MEC Member. An alternate shall
also be entitled to attend and vote as the relevant MEC
Member at any such meeting at which the MEC Member
appointing him is not personally present and at the meeting
to exercise and discharge all the functions, powers and
duties of his appointor as if a MEC Member and for the
purpose of the proceedings at the meeting the provisions of
this Clause 6 shall apply as if he were a MEC Member.
6.19 Every person acting as an alternate shall exercise the voting
rights of the MEC Member for whom he acts as alternate.
Execution by an alternate of any resolution in writing of
MEC shall, unless the notice of his appointment provides to
the contrary, be as effective as execution by his appointor.
6.20 An alternate shall automatically cease to be an alternate if
his appointor ceases for any reason to be a MEC Member.
6.21 References in this Clause 6 to a MEC Member shall, unless
the context otherwise requires, include his duly appointed
alternate.
The MEC Chairman
6.22 The MEC Chairman shall be a MEC Member and shall be
appointed by a simple majority of the MEC Members.
6.23 The MEC Chairman may at any time be removed from
office by a simple majority of MEC Members.
6.24 The MEC Chairman shall preside at every meeting of MEC
at which he is present. If the MEC Chairman is unable to be
present at a meeting, he may nominate another MEC
Member (or any alternate appointed pursuant to Clause
6.18) to act as MEC Chairman. If neither the MEC
Chairman nor his alternate is present within half an hour
after the time appointed for holding the meeting, the MEC
Members present may appoint any of their number to be the
MEC Chairman of that meeting.
6.25 The MEC Chairman, or the person appointed to act as the
MEC Chairman in accordance with Clause 6.24, shall be
entitled to vote in his capacity as a MEC Member. The
MEC Chairman shall in no circumstances be entitled to an
extra or casting vote.
The Secretary
6.26 The Secretary shall be appointed to or removed from office
by a resolution of MEC Members. The Secretary shall be
entitled to speak but not to vote on any issue at a MEC
meeting or MRA Forum meeting.
6.27 The Secretary's duties shall be to facilitate MEC and in
particular to:
6.27.1 attend to the requisition of meetings and to serve
requisite notices;
6.27.2 maintain a register of names and addresses of MEC
Members and alternates as appointed from time to
time;
6.27.3 keep minutes of all meetings; and
6.27.4 circulate all relevant papers.
Meetings
6.28 MEC shall hold meetings at such times as it may decide but
in any event shall meet at least once every three months.
The venue for meetings shall be determined by the MEC
Members from time to time.
6.29 Any MEC Member may, by giving notice in writing to the
Secretary, request the Secretary to requisition further
meetings. The notice given to the Secretary shall contain a
list of matters to be included in the agenda of the meeting to
be convened pursuant to this paragraph. The Secretary shall
proceed to convene meetings of MEC within 10 Working
Days of such a notice and shall circulate a copy of the
agenda which shall contain such items as are contained in
the notice of meeting.
6.30 A quorum will be the Provider Member, the PES Member
and the Supplier Member and:
6.30.1 where matters which relate to or affect the Pool
Requirements are to be considered, the Pool MEC
Member; and
6.30.2 where matters which relate to or affect the Scottish
Settlement Requirements are to be considered, the
SESL Member.
Notice of Meetings
6.31 All meetings shall be convened by the Secretary on at least
10 Working Days' notice.
6.32 The notice of each meeting shall contain the time, venue and
confirmation of date of the meetings and an agenda and any
available supporting papers which shall be given to each
MEC Member and to all parties.
6.33 By notice to the Secretary, any MEC Member may request
matters to be considered at a meeting and provided that
such notice is given at least 5 Working Days before the date
of the meeting, those matters will be included in the agenda
for the meeting. If necessary, the Secretary shall circulate a
revised agenda to each MEC Member and all parties as
soon as practicable.
6.34 The accidental omission to give notice of a meeting to, or
the non-receipt of notice of a meeting by, a person entitled
to receive notice shall not invalidate the proceedings of that
meeting.
Proceedings of Meetings
6.35 MEC may meet for the transaction of business, and adjourn
and otherwise regulate its meetings as it thinks fit, but shall
at all times act reasonably and in compliance with the other
provisions of this Clause 6.
Representation and Voting
6.36 Each MEC Member shall be entitled to attend, speak and,
where entitled, vote, at every meeting of MEC. The
Director shall be entitled to send a representative to any
meeting who shall be entitled to speak but not to vote on
any issue. The Data Transfer Service Controller shall be
entitled to send a representative to any meeting that
discusses changes to the Data Transfer Catalogue, such
representative to be entitled to speak but not vote on any
issue. Any MEC Member may from time to time invite
other persons who have relevant technical expertise to any
meeting. Such person shall be entitled to speak but not vote
on any issue.
6.37 Where any MEC Member invites any other person to attend
a MEC Meeting pursuant to Clause 6.36, he or she shall,
prior to the commencement of the meeting, obtain from that
person an appropriate written undertaking to treat the
proceedings of that MEC meeting as confidential.
6.38 All decisions of the MEC shall be by resolution. Subject to
Clause 6.40, for a resolution put to the vote of any meeting
of MEC to be passed, it shall require the unanimous support
of all MEC Members present at the meeting and entitled in
accordance with Clause 6.39 to vote in relation to that
resolution.
6.39 The Pool MEC Member and SESL Member shall be entitled
to vote only in relation to resolutions which (in the case of
the Pool MEC Member) the Pool MEC Member reasonably
considers relate to or affect the Pool Requirements or (in
the case of the SESL Member) the SESL Member
reasonably considers relate to or affect the Scottish
Settlement Requirements. In all cases where the Pool MEC
Member or the SESL Member, as the case may be, votes,
he or she shall state the reasons why he or she considers the
resolution relates to or affects the relevant Settlement
Requirements. All other MEC Members shall be entitled to
vote in all cases.
6.40 A resolution in writing signed by or on behalf of all the
MEC Members entitled to vote in relation to that resolution
shall be as valid and effective as if the same had been passed
at a meeting of MEC duly convened and held, and may
consist of several instruments in like form executed by or on
behalf of one or more MEC Members.
6.41 Any resolution passed by MEC shall have no effect until the
expiry of any period in which a party is entitled to appeal
that decision or such later date as the terms of such
resolution may provide and, if the decision is appealed,
subject as provided in Clause 6.44, 6.45 or 6.46, as the case
may be.
Minutes
6.42 The Secretary shall circulate copies of the minutes of each
meeting of MEC or any sub-committees of MEC to each
MEC Member, all parties and the Director as soon as
practicable (and in any event within 5 Working Days) after
the relevant meeting has been held. If any MEC Member
disagrees with any item of the minutes, he shall, within 5
Working Days of receipt of the minutes, notify the
Secretary of those items with which he disagrees, and the
Secretary shall incorporate those items upon which there is
disagreement into the agenda for the next following meeting
of MEC, as the first item for resolution.
6.43 The Secretary shall maintain a record of all resolutions
voted on by MEC, indicating how each MEC Member
voted on each resolution and shall make such record
available on request to any party.
Appeals
6.44 Without prejudice to Clause 6.30, where any resolution is
passed by any meeting of MEC at which:
6.44.1 the Pool MEC Member is not present and is a
resolution which, in the reasonable opinion of the
Pool MEC Member, affects or relates to the Pool
Requirements, and is not a resolution in favour of
which the Pool MEC Member would have voted; or
6.44.2 the SESL Member is not present and is a resolution
which, in the reasonable opinion of the SESL
Member, affects or relates to the Scottish Settlement
Requirements, and is not a resolution in favour of
which the SESL Member would have voted,
the Pool MEC Member or SESL Member, as the case may
be, may, within 10 Working Days after receipt of minutes of
the MEC meeting setting out such resolution pursuant to
Clause 6.42 :
(A) prior to the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, appeal the MEC decision to the Director for
his determination, whose decision shall be final and
binding; or
(B) on or after the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, appeal the MEC decision to the MRA Forum
for its determination by giving notice in writing to
the Secretary of such appeal.
Pending the outcome of any such appeal, the relevant
decision shall have no effect.
6.45 Where any resolution put to the vote at any meeting of
MEC is not passed, MEC shall, if requested by any MEC
Member who voted in favour of such resolution within 10
Working Days after receipt of the minutes of the MEC
meeting setting out such resolution pursuant to Clause 6.42:
6.45.1 prior to the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, appeal the MEC decision to the Director for
his determination, whose decision shall be final and
binding; or
6.45.2 on and after the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, appeal the MEC decision to the MRA Forum
for its determination.
6.46 Where a party reasonably believes that a resolution passed
by MEC, or MEC's failure to pass any resolution put to the
vote at any meeting of MEC, will or is likely to unfairly
prejudice the interests of that party or will cause that party
to be in breach of this Agreement or of its licence or the
Act, or where the Pool Agent or SESL reasonably believes
or is advised that such decision will or is likely to unfairly
prejudice the interests (which may include the interests
under the relevant Settlement Agreement) of one or more
Pool Members or parties to the Settlement Agreement for
Scotland, as appropriate, that party or the Pool Agent or
SESL, as appropriate, may within 10 Working Days, or
such longer period as MEC may decide in relation to that
resolution, of receiving the minutes of the relevant MEC
meeting pursuant to Clause 6.42:
6.46.1 prior to the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, appeal the MEC decision to the Director for
his determination, whose decision shall be final and
binding; or
6.46.2 on or after the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, refer the MEC decision to the MRA Forum for
its determination.
Pending the outcome of any such appeal, the relevant
decision shall have no effect.
6.47 Where the Pool MEC Member or the Pool Agent appeals a
decision under Clause 6.45 or 6.46, in such appeal the Pool
MEC Member or (as the case may be) the Pool Agent may
be represented by the Pool Member or Pool Members on
whose behalf he or it has raised the appeal. Where the
SESL Member appeals a decision under Clause 6.45 or
6.46, in such appeal the SESL Member or (as the case may
be) SESL may be represented by the party or parties to the
Settlement Agreement for Scotland, on whose behalf it has
raised the appeal.
Vacation of Office
6.48 The office of a MEC Member, other than the Pool MEC
Member or SESL Member with respect to Clauses 6.48.3
and 6.48.4, shall be vacated forthwith if:
6.48.1 he resigns his office by notice delivered to the
Secretary;
6.48.2 he fails, in person or by alternate, to attend 3
consecutive meetings of MEC that have been duly
convened but have not been held as a result of a lack
of quorum due to his (or his alternate's) non-
attendance;
6.48.3 any party who employs him ceases to be a party; or
6.48.4 he ceases to be in the employment of one of the
parties in the category of party that has appointed
him under Clauses 6.3.1 to 6.3.3.
MEC Member Responsibilities and Protections
6.49 In the exercise of his powers and the performance of his
duties and responsibilities as a MEC Member, the Provider
Member, PES Member and Supplier Member shall represent
the interests of the category of party by whom he is for the
time being appointed. Each MEC Member shall exercise
reasonable skill and care to the standard reasonably
expected of a director of a public limited company in the
performance of his duties and responsibilities as a MEC
Member, provided that the Pool MEC Member shall be
entitled to rely on the instructions of the PEC and the SESL
Member shall be entitled to rely on any relevant authority
given to it pursuant to the Settlement Agreement for
Scotland in the performance of his duties and
responsibilities.
6.50 The Provider Member, PES Member and Supplier Member
shall use their reasonable endeavours to consult as many of
the parties that they represent as possible before voting on a
matter and shall have a written note available at each
meeting to demonstrate the level of such consultation.
6.51 All parties other than the Pool Agent and SESL shall jointly
and severally indemnify and keep indemnified:
6.51.1 each MEC Member and his alternate (including in
his capacity as a director or alternate director of
MRASCO);
6.51.2 the Secretary;
6.51.3 the Company Secretary of MRASCO;
6.51.4 each person who serves on a sub-committee
established by MEC or the Board of MRASCO;
6.51.5 each member of the Secretariat who is employed by
a party; and
6.51.6 each party which is the employer of any person
referred to in paragraphs 6.51.1 to 6.51.5 above,
as between each such party rateably in accordance with the
proportions set out in Clauses 8.10 and 8.11 from and
against all and any costs (including legal costs), charges,
expenses, damages or other liabilities properly incurred or
suffered by the relevant person or party in relation to such
function or the due exercise of the relevant person's
powers, duties or responsibilities under this Agreement (in
the case of the Secretariat, as assigned or vested in them by
MEC pursuant to Clause 6.55) including in relation to
negligence and all claims, demands or proceedings arising
out of or in connection with the same except for any costs
and expenses which are recovered in accordance with the
procedures set out in Clause 8 and any such costs, charges,
expenses, damages or other liabilities which are suffered or
incurred or occasioned by the wilful default or bad faith of,
or breach of contract by, the relevant person.
6.52 The parties hereby ratify and confirm the decisions of the
Shadow MEC taken prior to the date of this Agreement and
those parties providing the indemnity under Clause 6.51
confirm that such indemnity set out in Clause 6.51 above
shall extend fully to all costs, charges, expenses, damages or
other liabilities suffered or incurred by Shadow MEC
Members and their alternates before or after the date of this
Agreement in relation to the activities of the Shadow MEC.
Sub-Committees
6.53 MEC may establish such sub-committees from time to time
and consisting of such persons as it considers desirable.
Each sub-committee shall be subject to such written terms
of reference and such procedures as MEC may determine.
A sub-committee's resolution which relates to or affects
Settlement Requirements shall not be effective unless the
relevant Pool MEC Member or SESL Member has voted in
favour of the resolution.
The Director shall be entitled to send a representative to any
meeting of any sub-committee, who shall be entitled to
speak but not to vote on any issue.
6.54 Resolutions of sub-committees shall not have binding effect
unless MEC has formally delegated the relevant decision-
making powers to the sub-committee (and then subject to
Clause 6.53) or has ratified the resolution in question. The
MEC shall be considered as having formally delegated to
the Disputes Committee the decision-making powers set out
in Clause 37.
Secretariat
6.55 MEC may from time to time appoint and remove, or make
arrangements for the appointment and removal of, any such
person as MEC requires to assist it or any sub-committee of
it, the MEC Chairman or Secretary in the proper
performance of its or their duties and responsibilities in each
such case upon such terms and conditions as MEC sees fit
(any such person or persons to be known as the
"Secretariat").
6.56 Any person referred to in Clause 6.55 shall undertake such
administrative duties and responsibilities and exercise such
powers as MEC may from time to time assign to or vest in
any such person.
6.57 MEC may make arrangements for the remuneration of any
such person as is referred to in Clause 6.55 and the payment
of any such person's costs and expenses and the same shall
be recovered in accordance with Clause 8.
7. CONSTITUTION OF THE MRA FORUM
7.1 Immediately upon commencement of this Agreement the
MRA Forum shall be established. The procedural rules of
the MRA Forum are set out in this Clause 7.
Objects
7.2 The purpose of the MRA Forum is to act as a forum for
representing the views of parties or, in the case of the Pool
Agent, the views of Pool Members, or, in the case of SESL,
the views of the parties to the Settlement Agreement for
Scotland on any matter relating to the Services or this
Agreement, for informing the parties generally regarding the
operation of the Services and of this Agreement, and to
determine any matters from time to time referred to it by
MEC.
Membership
7.3 Each Host PES shall be entitled to send one duly authorised
representative to attend any meeting of the MRA Forum on
its behalf to represent it in its capacity as a provider of
MPAS ("Service Provider Representative") and each
Supplier that is a Public Electricity Supplier shall be entitled
to send one duly authorised representative to attend any
meeting of the MRA Forum on its behalf to represent it in
its capacity as a Supplier ("PES Supplier
Representative").
7.4 Each Supplier that is not a Public Electricity Supplier shall
be entitled to send one duly authorised representative to
attend any meeting of the MRA Forum on its behalf ("Non
PES Supplier Representative").
7.5 The Pool Agent and SESL each shall be entitled to send one
duly authorised representative to attend any meeting of the
MRA Forum ("Pool Representative" and "SESL
Representative" respectively).
7.6 Each representative appointed pursuant to Clauses 7.3 to
7.5 shall have the right to speak and to vote at such
meetings, provided that the Pool Representative and the
SESL Representative shall be entitled to vote only in
relation to resolutions which (in the case of the Pool
Representative) the Pool Representative reasonably
considers relates to or affects the Pool Requirements or (in
the case of the SESL Representative) the SESL
Representative reasonably considers relates to or affects the
Scottish Settlement Requirements.
Proxies
7.7 Any representative of a party entitled to attend and vote at
any MRA Forum meeting shall be entitled to appoint
another person as its proxy to attend, speak and vote in its
place, provided that no Service Provider Representative
may appoint a PES Supplier Representative as its proxy,
and no PES Supplier Representative may appoint a Service
Provider Representative as its proxy.
7.8 The instrument appointing a proxy shall be in writing either
under seal or under the hand of an officer or attorney duly
authorised.
7.9 The instrument appointing a proxy and the power of
attorney or other authority, if any, under which it is signed
or a certified copy of that power or authority shall be
deposited at the office of the Secretary or at such other
place within the United Kingdom as is specified for that
purpose in the notice convening the relevant meeting of the
MRA Forum, not less than 24 hours before the time
appointed for the taking of the vote and in default the
instrument of proxy shall not be treated as valid.
7.10 An instrument appointing a proxy shall be in the following
form or a form as near thereto as circumstances admit:
"MASTER REGISTRATION AGREEMENT dated [
];
We, , of , being a
representative of a party to the above mentioned agreement,
hereby appoint of
or, failing him,
of , as our proxy
to vote for us on our behalf at the MRA Forum meeting to
be held on the day of 19 , and at any adjournment
thereof.
Signed this day of 19 ."
7.11 A vote given in accordance with the terms of an instrument
of proxy shall be valid notwithstanding the previous
revocation of the proxy or of the authority under which the
proxy was executed, provided that no notice in writing of
such revocation shall have been received by the Secretary at
his office before the commencement of the meeting or
adjourned meeting at which the proxy is used.
Meetings
7.12 Meetings of the MRA Forum shall be convened:
7.12.1 by the Secretary on the instructions of MEC
pursuant to Clause 6.45 or upon receipt of notice of
an appeal pursuant to Clause 6.44 or 6.46;
7.12.2 by a party if the Secretary fails to convene a meeting
of the MRA Forum to hear an appeal of that party
pursuant to Clause 6.44, 6.45 or 6.46;
7.12.3 by MEC, forthwith upon receipt of a requisition by 4
parties; or
7.12.4 by the Pool MEC Member or SESL Member where
it wishes to have considered matters which it
reasonably believes relate to or affect the relevant
Settlement Requirements; or
7.12.5 by the Secretary in any event, at least once every 6
months if no meeting has been convened pursuant to
Clauses 7.12.1 to 7.12.4.
7.13 Any requisition by parties as referred to in Clause 7.12.3
shall state the objects of the meeting and must be signed by
or on behalf of each of the requisitioners and deposited with
the Secretary, and may consist of several documents in like
form each signed by one or more requisitioners. If MEC
does not within 5 Working Days from the date of the
deposit of the requisition proceed to convene a meeting of
the MRA Forum for a date not later than 15 Working Days
after the date of deposit, the requisitioners may themselves
convene a meeting provided that such meeting is held within
a further 20 Working Days. Any meeting convened in
accordance with this Clause shall be convened in the same
manner, as nearly as possible, as that in which meetings of
the MRA Forum are convened by MEC.
7.14 Notwithstanding the provisions of Clauses 7.12 and 7.13,
until the first meeting of the MRA Forum convened in
accordance with Clause 7.15 the Secretary shall, on the
instructions of MEC, convene meetings of the MRA Forum
not less frequently than once in each Quarter (being the
period of three calendar months ending on a Quarter Day)
to discuss any matter of interest arising in relation to this
Agreement.
7.15 With effect from the last day of the period of Controlled
Market Start-Up for the last Host PES to have commenced
Controlled Market Start-Up, the MRA Forum shall be
empowered to hear appeals from MEC.
Notice of Meetings
7.17 All meetings of the MRA Forum shall be convened on at
least 10 Working Days' notice in writing (or such other
period of notice as MEC may determine) to those entitled to
attend pursuant to Clauses 7.3 to 7.5.
7.18 The notice shall specify the date, time and venue of the
meeting, and an agenda setting out the business to be
transacted. Notice shall be given to all parties, all MEC
Members and the Director.
7.19 The accidental omission to give notice of a meeting to, or
the non-receipt of notice by, any person entitled to receive
notice shall not invalidate the proceedings at the meeting.
Proceedings at Meetings
7.20 All business of the MRA Forum shall be transacted at
meetings of the MRA Forum.
7.22 At the first meeting of the MRA Forum held after 1 April in
each year, the MRA Forum shall elect from its number, by
simple majority of those representatives present (including
by proxy), a person to act as Forum Chairman ("Forum
Chairman"). The Forum Chairman shall preside at each
meeting of the MRA Forum at which he is present. If the
Forum Chairman is unable to be present at a meeting of the
Forum, the parties who are represented at the meeting shall
elect one of their number to act as chairman of that meeting.
The chairman of any meeting of the MRA Forum shall not
be entitled to any casting vote in his capacity as such.
7.23 A quorum at meetings of the MRA Forum shall be:
7.23.1 persons representing (including by proxy) 50 percent
or more of all Service Provider Representatives; and
7.23.2 persons representing (including by proxy) 50 percent
or more of all PES Supplier Representatives; and
7.23.3 persons representing (including by proxy) 50 percent
or more of the Total Weighted Vote for all Non-
PES Supplier Representatives; and
7.23.4 the Pool Representative, where the meeting is to
consider matters which relate to or affect the Pool
Requirements; and
7.23.5 the SESL Representative, where the meeting is to
consider matters which relate to or affect the
Scottish Settlement Requirements.
7.24 If within half an hour from the time appointed for holding
any meeting of the MRA Forum a quorum is not present or
during the course of a meeting the meeting becomes
inquorate, the meeting shall be adjourned to a time and
place reasonably determined by the Chairman and, where
the meeting is adjourned until later the same day,
communicated to those present at the meeting. Where the
meeting is adjourned to another date, notice of the
adjourned meeting shall be given to all parties, as if it were a
new meeting. If, where the meeting is adjourned to another
date, at the adjourned meeting a quorum is not present
within half an hour from the time appointed, those parties
represented at the adjourned meeting shall constitute a
quorum.
7.25 The Forum Chairman at a meeting of the MRA Forum at
which a quorum is present may, with the consent of the
meeting (and shall if so directed by the meeting), adjourn
the meeting from time to time and from place to place,
provided that no business shall be transacted at any
adjourned meeting other than the business left unfinished at
the previous meeting. When a meeting is adjourned to
another date , notice of the adjourned meeting shall be given
as if it were a new meeting, but it shall otherwise not be
necessary to give notice of an adjourned meeting.
Resolutions and Voting
7.26 At any meeting of the MRA Forum, a resolution put to the
vote of the meeting shall be taken in such manner as the
chairman of the meeting directs and the result of the vote
shall be deemed to be the resolution of the relevant meeting
and recorded in the minutes.
7.27 A declaration by the Forum Chairman of the meeting that a
resolution has on a vote been carried or lost and an entry to
that effect in the book containing minutes of the
proceedings of meetings of the MRA Forum shall be
conclusive evidence of the fact.
7.28 A resolution of the MRA Forum will be carried where:
7.28.1 50% or more of Service Provider Representatives
present or represented (including by proxy) at the
meeting; and
7.28.2 50% or more of PES Supplier Representatives
present or represented (including by proxy) at the
meeting; and
7.28.3 50% or more of the Total Weighted Vote held by
Non-PES Supplier Representatives present or
represented (including by proxy) at the meeting; and
7.28.4 the Pool Representative, where, in the Pool
Representative's reasonable opinion, the resolution
relates to or affects the Pool Requirements; and
7.28.5 the SESL Representative, where, in the SESL
Representative's reasonable opinion, the resolution
relates to or affects the SESL Requirements,
all vote in favour of the resolution.
7.29 On a vote, each representative and each proxy at the
meeting other than Non PES Supplier Representatives shall
be entitled to a single vote. Each Non PES Supplier
Representative shall be entitled to the Weighted Votes of
the party whom that person is representing, calculated in
accordance with Clauses 6.8 to 6.11.
7.30 The Director shall be entitled to send a representative to any
meeting who shall be entitled to speak but not to vote on
any issue.
Minutes
7.31 The Secretary shall prepare minutes of all meetings of the
MRA Forum and shall circulate copies of such minutes to
all parties, each MEC Member and the Director as soon as
practicable (and in any event within 10 Working Days) after
the relevant meeting has been held. If any representative
disapproves of the minutes, he shall, within 10 Working
Days of receipt of those minutes, notify the Secretary of
those aspects with which he disagrees and the Secretary
shall incorporate those aspects of the minutes upon which
there is disagreement into the agenda for the next following
meeting of the MRA Forum.
Appeals
7.32 Where a party reasonably believes that a resolution passed
by the MRA Forum pursuant to Clause 7.28 or the MRA
Forum's failure to pass any resolution put to the vote at any
meeting of the MRA Forum, will or is likely to unfairly
prejudice the interests of that party, or will cause that party
to be in breach of this Agreement or of its licence or the
Act, or where the Pool Agent or SESL reasonably believes
or is advised that such a decision will or is likely to unfairly
prejudice the interests (which may include the interests
under the relevant Settlement Agreement) of one or more
Pool Members or parties to the Settlement Agreement for
Scotland, as appropriate, that party or the Pool Agent or
SESL, as appropriate, may within 10 Working Days of
receiving notice of the decision pursuant to Clause 7.31
appeal the matter to the Director whose decision shall be
final and binding. Where the Pool Agent appeals a matter
under this Clause on behalf of one or more Pool Members,
in such appeal the Pool Agent may be represented by the
Pool Member or Pool Members on whose behalf he or it has
raised the appeal. Where SESL appeals a matter under this
Clause on behalf of one or more parties to the Settlement
Agreement for Scotland, SESL may be represented in such
appeal by the party or parties to the Settlement Agreement
for Scotland, on whose behalf it has raised the appeal.
Pending the outcome of any such appeal, the relevant
resolution shall have no effect.
8. COSTS
8.1 MEC shall be entitled to recover all its reasonable costs and
expenses properly incurred in accordance with the
procedures set out in this Clause 8. Such costs and
expenses may include:
8.1.1 any general administration costs associated with
MEC, the MRA Forum and the Secretariat including
any costs incurred in holding any meetings; and
8.1.2 any costs and expenses of any consultant or adviser
retained by MEC in the proper performance of its or
his duties and responsibilities.
Preparation and Approval of Budgets
8.2 The budget setting out the anticipated costs to be incurred
by MEC for the period from the date of this Agreement to
30th June 1998 is attached as the Annexure to this
Agreement.
8.3 Not earlier than 60 nor later than 40 Working Days before
1st July 1998, MEC shall circulate to all MRA Forum
representatives a draft budget for the remainder of that
Financial Year, which shall set out MEC's good faith
estimate of the costs that are anticipated to be incurred
pursuant to Clause 8.1 over the remainder of that Financial
Year.
8.4 Not earlier than 60 nor later than 40 Working Days before
the commencement of each Financial Year other than the
first Financial Year, MEC shall circulate to all
representatives on the MRA Forum a draft budget for that
Financial Year, which shall set out MEC's good faith
estimate of the costs that are anticipated to be incurred
pursuant to Clause 8.1 over that Financial Year.
Approval of budgets
8.5 The draft budget shall be presented to the MRA Forum for
approval by resolution. The MRA Forum may, by
resolution, approve the draft budget, or amend the draft
budget and approve it as amended. In the event of such
MRA Forum resolution not being carried the provisions of
Clause 8.6 shall apply. Where the resolution to approve the
budget is carried by the MRA Forum such budget shall be
the approved budget for that Financial Year and the funding
for the MRA Secretariat in accordance with that budget
shall be approved.
8.6 In the event of a failure of the MRA Forum to approve the
form or content of any draft budget, the following
provisions shall have effect:
8.6.1 pending resolution of the failure to agree, MEC shall
not be entitled to carry out any activities which are
the subject of dispute, except insofar as necessary in
order to comply with legally binding obligations
which it has previously incurred in accordance with
this Agreement or insofar as the carrying out of such
activities falls within the terms of any previous
approved budget; and
8.6.2 the matter shall be referred forthwith to the Director
whose decision as to the contents of the budget shall
be final and binding.
Amendments to budgets
8.7 During the course of any Financial Year MEC may request
any changes to be made to the approved budget. MEC may
approve revisions to the approved budget within limits
defined from time to time by the MRA Forum. The
procedure for the approval of changes greater than those
limits shall be the same as that set out in Clauses 8.5 and 8.6
for the approval of a draft budget.
Payment of Costs Incurred
8.8 MEC shall approve all costs incurred under Clause 8.1
which have been included in the approved budget for the
relevant Financial Year in advance of submitting the same to
the Secretariat for payment.
8.9 Upon receipt of an invoice or other statement relating to
costs which have been approved by or on behalf of MEC in
accordance with Clause 8.8, the Secretariat shall pay the
amount stated in such invoice or other statement (together
with Value Added Tax thereon, if applicable) to such person
or persons as MEC shall direct.
Recovery of Costs
8.10 For the purposes of Clause 8.12, the amount which each
Supplier shall be obliged to pay towards the costs to be
incurred in accordance with the approved budget in respect
of any Quarter shall be calculated as follows:
x
Where:
SP = the amount due from each Supplier;
A= average number of Metering Points for which the
Supplier was Registered on all MPAS Registration
Systems across the last three months for which
reports pursuant to Clause 27.9 have been submitted
per MPAS Registration System which shall be
determined by summing the number contained in
those three reports over all MPAS Registration
Systems and dividing that figure by three;
C = estimated costs for the relevant Quarter included in
the budget approved pursuant to Clause 8.5 or 8.6;
and
T = the average number of Metering Points contained on
all MPAS Registration Systems across the last three
months for which reports pursuant to Clause 27.9
have been submitted per MPAS Registration System
which shall be determined by summing the total
number of Metering Points contained in those three
reports over all MPAS Registration Systems and
dividing that figure by three.
8.11 For the purposes of Clause 8.12, the amount which each
Host PES shall be obliged to pay towards the costs to be
incurred in accordance with the approved budget in any
Quarter shall be calculated as follows:
PP =
Where:
PP = the amount due from Host PES; and
C = estimated costs for the relevant Quarter
included in the budget approved pursuant to
Clause 8.5 or 8.6.
8.12 The Secretariat shall arrange for collection from Host PESs
and Suppliers of their respective proportionate share of the
costs to be incurred in accordance with the approved budget
in any Quarter, calculated in accordance with Clauses 8.10
and 8.11, as appropriate, (together with Value Added Tax
thereon, if applicable) in accordance with such procedures
as may be agreed by MEC from time to time (which may
include collection in advance) and Host PESs and Suppliers
shall comply with such collection procedures and, in
particular, shall pay the amounts which that Host PES or
Supplier is obliged to pay within the time period prescribed
by such procedures, following the receipt of an invoice or
other statement issued by the Secretariat.
8.13 Within 20 Working Days of the 1 April in each Financial
Year the Secretariat shall calculate each Host PES's and
each Supplier's proportionate share, in accordance with the
proportions set out in Clauses 8.10 and 8.11, of the actual
costs incurred during the previous Financial Year and shall
reconcile them against amounts paid by each Host PES and
each Supplier in respect of estimated costs pursuant to
Clause 8.12. Where the aggregate amount paid by the Host
PES or Supplier in accordance with Clause 8.12 in respect
of the previous Financial Year is greater than the aggregate
amount as calculated in accordance with this Clause 8.13 in
respect of that Host PES or Supplier, the Secretariat shall
reimburse that Host PES or Supplier (as appropriate) with
the difference within 20 Working Days.
Audit
8.14 MEC shall arrange for the costs incurred pursuant to Clause
8.1 to be audited by a firm of chartered accountants on an
annual basis. MEC shall copy the auditor's report to all
parties within 15 Working Days of receipt.
Review of Cost Recovery Mechanism
8.15 Each party acknowledges that the cost recovery mechanism
included in this Clause 8 has been agreed to on the basis
that the scope of this Agreement is limited to those activities
that are described in this Agreement excluding the
implementation of those matters set out in Schedule 12 (as
at the date of this Agreement) and, in relation to the period
from the date of this Agreement up to 30th June 1998, to
the extent provided for in the budget set out in the
Annexure . Each party agrees to review the cost recovery
mechanism included in this Clause 8 if the scope of this
Agreement (as so described and provided for) is materially
amended.
9. CHANGE CONTROL
External Inconsistencies and Conflicts with the Settlement
Agreement
9.1 Each of the parties hereby acknowledges and agrees the
desirability of achieving and maintaining consistency and the
absence of conflict between the provisions of this
Agreement, the Pooling and Settlement Agreement and the
Settlement Agreement for Scotland but recognise that it will
not in all circumstances be possible to avoid inconsistency
or conflict.
9.2 If at any time there is any conflict between the Priority
Provisions (as interpreted in the context of this Agreement)
and the equivalent provisions contained in the Pooling and
Settlement Agreement (as interpreted in the context of that
agreement) or the Settlement Agreement for Scotland (as
interpreted in the context of that agreement), as the case
may be, the parties agree that:
9.2.1 if and for so long as a party complies with the
Priority Provisions, it will not be in breach of its
obligations under the relevant Settlement Agreement
in respect of those provisions which are in conflict
with the Priority Provisions; and
9.2.2 until such time as such conflict is resolved through
the procedures set out in this Clause 9 and the
equivalent procedures in the relevant Settlement
Agreement, the Priority Provisions shall prevail over
the equivalent provisions in the relevant Settlement
Agreement with which they are in conflict, provided
that nothing in this Clause 9.2 shall prejudice the
form or content of any proposed change to resolve
the conflict.
Change Co-ordination
9.3 The parties agree that no changes to the Priority Provisions
shall be made under this Agreement without first ensuring
that the relevant procedures to change the corresponding
Priority Provisions under the relevant Settlement Agreement
have been complied with and the change has been approved
under the relevant Settlement Agreement.
9.4 The parties agree that where changes to the Priority
Provisions are agreed to under the terms of this Agreement
and the relevant Settlement Agreement, or the relevant
arrangements in place in Scotland prior to the Settlement
Agreement for Scotland taking effect, they shall use their
reasonable endeavours to ensure that any changes to this
Agreement and the relevant Settlement Agreement are made
with effect from the same date.
9.5 MEC shall be responsible for liaising with the appropriate
forums under (1) the Pooling and Settlement Agreement
and (2) the Settlement Agreement for Scotland or Scottish
Electricity Settlements Limited, as appropriate, to ensure
the co-ordination of the implementation of changes to the
Priority Provisions.
Changes to Director's Requirements and Consideration of the
Director's requests
9.6 The parties acknowledge and agree that, notwithstanding
any other provision of this Agreement, no amendment to or
variation of any of the matters dealt with in any of the
following provisions of this Agreement shall take effect
without the prior written consent of the Director:
9.6.1 Clauses 4.4, 6.1 to 6.17 (inclusive), 6.30, 6.36, 6.38
to 6.41, (inclusive), 6.44 to 6.46 (inclusive), 6.49 to
6.57 (inclusive), 7.1 to 7.6 (inclusive), 7.15, 7.26 to
7.30 (inclusive), 7.32, 8, 9.6, 9.7, 10.8, 10.11,
10.12, 11.1, 13, 14, 15, 16, 24.1, 24.6, 26, 27.1, 29,
34, Schedule 2, Schedule 5 and Schedule 8;
9.6.2 any change to any definitions in Clause 1.1 which
may materially affect the provisions in the Clauses
set out in Clause 9.6.1; or
9.6.3 any provision of this Agreement which requires or
permits any matter to be referred to the Director for
approval, consent, direction or decision or confers
any rights or benefits upon the Director.
9.7 MEC shall:
9.7.1 give due and prompt consideration to any matter
referred to it in writing by the Director;
9.7.2 advise the Director in writing of any decision or
action of MEC and the MRA Forum in relation to
any matter;
9.7.3 if reasonably requested by the Director, give the
Director in writing reasons for such decision or
action; and
9.7.4 if reasonably requested by the Director (having
regard, in particular, to the resources available to
MEC), in relation to any proposal by the Director
for a change to any provision of this Agreement
provide or procure the provision of advice and
assistance to the Director as soon as reasonably
practicable as to the implications of the change and
the actions necessary to implement it (including any
relevant impact assessment).
Changes to Priority Provisions - MRA Led
9.8 Any party that wishes to change the Priority Provisions may
submit a Change Proposal to MEC requesting that such
change be made.
9.9 Where MEC receives a Change Proposal pursuant to Clause
9.8, it shall copy such request to all parties, any other
interested industry participants and the relevant forums
under the Pooling and Settlement Agreement (if the change
relates to or affects the Priority Provisions of the Pool
Requirements) and/or the Settlement Agreement for
Scotland or the relevant arrangements in Scotland prior to
the Settlement Agreement for Scotland taking effect (if the
change relates to or affects the Priority Provisions of the
Scottish Settlement Requirements) for consideration. Such
notification shall indicate the timescale for submitting
comments.
9.10 MEC shall collate all comments received within the
proposed timescale indicated in the notification under
Clause 9.9. MEC shall copy all comments and the results of
any impact assessment received to the relevant forums
under the Pooling and Settlement Agreement (if the change
relates to or affects the Priority Provisions of the Pool
Requirements) and/or the Settlement Agreement for
Scotland or Scottish Electricity Settlements Limited, where
appropriate (if the change relates to or affects the Priority
Provisions of the Scottish Settlement Requirements).
Changes to Priority Provisions - Pool or SESL Led
9.11 Where any Change Proposal to the Priority Provisions is
proposed under the terms of the relevant Settlement
Agreement, SESL or PEC (or the relevant sub-committee
of the Pool Executive Committee which is empowered to
co-ordinate the change control process under the Pooling
and Settlement Agreement) shall ensure that a copy of the
Change Proposal under the terms of the relevant Settlement
Agreement is copied to MEC for its consideration.
9.12 Where MEC receives a copy of a Change Proposal pursuant
to the terms of Clause 9.11, it shall consider the request and
shall provide the relevant forum under the Settlement
Agreement with its comments, if any, on the Change
Proposal.
9.13 The Pool MEC Member or SESL Member, as appropriate,
shall ensure that all comments received in accordance with
the relevant Settlement Agreement on a Change Proposal to
the Priority Provisions proposed under the terms of the
relevant Settlement Agreement, together with any report or
results of an impact assessment conducted under the
relevant Settlement Agreement, if any, on a Change
Proposal to the Priority Provisions are (subject to any
applicable restrictions on disclosure for reasons of
confidentiality) provided to MEC.
Changes to Agreement that are not Priority Provisions
9.14 Any party, apart from the Pool Agent and SESL, may
submit a Change Proposal that is not a change to the
Priority Provisions, to MEC requesting that such change be
made.
9.15 Where MEC receives a Change Proposal pursuant to Clause
9.14, it shall copy such request to all parties and any other
interested industry participants. Such notification shall
indicate the timescale for submitting comments. If either of
the Pool MEC Member or the SESL Member notifies MEC
that it considers that the Change Proposal relates to the
relevant Priority Provisions then the provisions of Clauses
9.9 and 9.10 shall apply to such change and the provisions
of Clauses 9.16 and 9.17 shall not apply.
9.16 MEC shall collate all comments received within the
proposed timescale indicated in the notification under
Clause 9.15.
9.17 MEC shall copy all information referred to in Clause 9.16
within 10 Working Days of such comments or result of an
impact assessment being received by it, to all parties and any
other interested industry participants.
MRA Decision Making Process
9.18 Once the procedures set out in Clauses 9.8 to 9.10, 9.11 to
9.13 or (as the case may be) 9.14 to 9.17 have been
completed, MEC shall consider such Change Proposal and
shall decide whether to accept or reject such Change
Proposal in accordance with Clause 6. Where MEC decides
to accept a Change Proposal, it shall also decide the
appropriate process for agreeing and implementing the
change, including the parameters for:
9.18.1 timing of the process and, subject to clauses 9.3 and
9.4, the timing of the implementation;
9.18.2 the need for any sub-committees and the terms of
reference for any such sub-committee; and
9.18.3 the process for agreeing the final form of the change
and the manner in which the change should be made,
such process to be subject to the provisions of Clauses 6
and 7.
Settlement Requirement Change Proposal Acceptance or
Rejection
9.19 Where a Change Proposal to the Priority Provisions of the
Pool Requirements is accepted pursuant to the procedures
set out in Clause 9.18 and the Change Proposal is accepted
by the relevant forum under the Pooling and Settlement
Agreement (if the change affects the Priority Provisions of
the Pool Requirements), the Priority Provisions of the Pool
Requirements shall be amended according to the Change
Proposal within an appropriate timescale.
9.20 Where a Change Proposal to the Priority Provisions of the
Scottish Settlement Requirements is accepted pursuant to
the procedures set out in Clause 9.18 and the Change
Proposal is accepted by the relevant forum under the
Settlement Agreement for Scotland (if the change affects
the Priority Provisions of the Scottish Settlement
Requirements) the Priority Provisions of the Scottish
Settlement Requirements shall be amended according to the
Change Proposal within an appropriate timescale.
9.21 Where either:
9.21.1 a Change Proposal to the Priority Provisions of the
Pool Requirements has been accepted pursuant to
the procedures set out in Clause 9.18 but the
equivalent Change Proposal to the Pooling and
Settlement Agreement is rejected by the relevant
forum under that Agreement; or
9.21.2 a Change Proposal to the Priority Provisions of the
Pool Requirements has been rejected pursuant to the
procedures set out in Clause 9.18, but the equivalent
Change Proposal to the Pooling and Settlement
Agreement is accepted by the relevant forum under
that Agreement,
the Priority Provisions of the Pool Requirements shall not
be amended pursuant to the Change Proposal.
9.22 Where either:
9.22.1 a Change Proposal to the Priority Provisions of the
Scottish Settlement Requirements has been accepted
pursuant to the procedures set out in Clause 9.18
but the equivalent Change Proposal is rejected by
the relevant forum under the Settlement Agreement
for Scotland; or
9.22.2 a Change Proposal to the Priority Provisions of the
Scottish Settlement Requirements is rejected
pursuant to the procedures set out in Clause 9.18
but the equivalent Change Proposal is accepted by
the relevant forum under the Settlement Agreement
for Scotland,
the Priority Provisions of the Scottish Settlement
Requirements shall not be amended pursuant to the Change
Proposal.
Procedures
9.23 MEC shall agree and issue appropriate procedures in
relation to Change Proposals submitted pursuant to this
Clause 9 (which procedures shall be subordinate to and shall
not be inconsistent with the procedures set out in Clauses 6,
7, 9 and 10), and the parties agree to comply with those
procedures as issued from time to time.
Emergencies
9.24 Where any change is proposed to this Agreement pursuant
to the terms of this Clause 9 which MEC decides:
9.24.1 is of an urgent nature; and
9.24.2 is a change which should be accepted
MEC may decide to reduce the timescales set out in this
Clause 9 accordingly.
10. DATA TRANSFER CATALOGUE
10.1 The Data Transfer Catalogue as at the date of this
Agreement shall be initialled by MEC Members for the
purposes of identification at the first meeting of MEC.
10.2 Where any Change Proposal to change this Agreement will
affect the Data Transfer Catalogue and therefore gives rise
to a proposal to change the Data Transfer Catalogue such
Change Proposal to change the Data Transfer Catalogue
shall be considered as part of the Change Proposal to this
Agreement in accordance with the procedures set out in
Clause 9.
10.3 Any party that wishes to change the Data Transfer
Catalogue may submit a Change Proposal to MEC
requesting that such a change be made to the Data Transfer
Catalogue. Where such a change is proposed, the Secretary
shall notify all parties and any other affected industry
participants including the Data Transfer Service Controller
of the proposal at least 10 Working Days before the meeting
of MEC to consider the Change Proposal.
10.4 Where the proposed change to the Data Transfer Catalogue
would in the reasonable opinion of the Pool MEC Member
or SESL Member, as the case may be, affect items of the
Data Transfer Catalogue which are used under the Pooling
and Settlement Agreement and/or Settlement Agreement for
Scotland, that change shall be dealt with as if it were a
change to the Priority Provisions of the Pool Requirements
or (as the case may be) the Priority Provisions of the
Scottish Settlement Requirements pursuant to Clause 9,
provided that MEC shall, in addition, establish a sub-
committee in accordance with Clause 10.5 and consider its
recommendations and the provisions of Clauses 10.6 to
10.12 shall not apply.
10.5 Where a proposal is made pursuant to Clause 10.3, MEC
shall establish a sub-committee to consider the Change
Proposal, whose members shall be drawn from those likely
to be affected by the Change Proposal and need not be
members of MEC or representatives of parties and shall
include a representative of the Data Transfer Service
Controller. The sub-committee may consider the likely
impact of the proposed change on:
10.5.1 the performance of any agreement between any
party and any third party which requires the
exchange of information by reference to the Data
Transfer Catalogue;
10.5.2 the performance of the Data Transfer Service; and
10.5.3 other affected industry participants and/or the
computer systems of such participants.
The sub-committee shall, taking into account such
assessment and the benefit to industry participants to be
derived from the relevant change, advise MEC as to
whether or not it recommends that any change to the Data
Transfer Catalogue should be made and if it recommends
that a proposal should be adopted the recommended
process for implementing the change.
10.6 Where the sub-committee established in accordance with
Clause 10.5 recommends that any change be made to the
Data Transfer Catalogue, MEC shall consider such
recommendation and, if it sees fit, endorse the relevant
change and decide on an appropriate process for
implementing the change. Where MEC makes a decision on
a proposal, the decision shall be copied by the Secretary
within 5 Working Days of such decision to all parties and all
other affected industry participants that have been involved
in the assessment carried out under Clause 10.5.
10.7 Where MEC accepts a proposal in accordance with Clause
10.6, unless before the expiry of 10 Working Days after
receipt of notification sent in accordance with Clause 10.6
any party gives notice pursuant to Clause 10.8, the
proposed change shall take effect as from the
implementation date agreed to by MEC pursuant to Clause
10.6. The Secretary shall ensure that the Data Transfer
Catalogue is amended accordingly and that a copy of the
amendment to the Data Transfer Catalogue is distributed to
each party, all signatories to the Data Transfer Service
Agreement and any other affected industry participants that
have been involved in the assessment carried out under
Clause 10.5.
10.8 Where any industry participant affected by any decision
made pursuant to Clause 10.6 gives notice to the Secretary
before the expiry of 10 Working Days after receipt of
notification in accordance with Clause 10.6 that it is
dissatisfied with the decision and wishes to appeal the
matter, MEC shall notify all parties, all signatories to the
Data Transfer Service Agreement and any other affected
industry participants that have been involved in the
assessment carried out under Clause 10.5 accordingly and
shall refer the proposed change:
10.8.1 prior to the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, to the Director for his determination whose
decision shall be final and binding; or
10.8.2 on or after the date from which the MRA Forum is
empowered to resolve appeals pursuant to Clause
7.15, to the MRA Forum for its decision.
10.9 Where a Change Proposal is appealed to the MRA Forum
pursuant to Clause 10.8 and it decides to endorse a change
to the Data Transfer Catalogue the MRA Forum shall
determine the appropriate process for implementing the
change. Where the MRA Forum makes a decision on an
issue referred to it the Secretary shall within 5 Working
Days of such decision being made notify all parties and any
other affected industry participants that have been involved
in the assessment carried out under Clause 10.5 of the
decision.
10.10 Unless before the expiry of 10 Working Days of receipt of
notification sent in accordance with Clause 10.9 any
affected industry participant gives notice to the Secretary
that it intends to refer the matter to the Director any
proposed change that is the subject of the MRA Forum's
decision shall take effect as from the implementation date
agreed to by the MRA Forum pursuant to Clause 10.9. The
Secretary shall ensure that the Data Transfer Catalogue is
amended accordingly and that a copy of the amendment to
the Data Transfer Catalogue is distributed to each party and
all other affected industry participants.
10.11 Any industry participant affected by any decision made
pursuant to Clause 10.9 who is dissatisfied with the decision
may, by notice to the Director and the Secretary before the
expiry of 10 Working Days after receipt of notification in
accordance with Clause 10.9, appeal the matter to the
Director for his determination, whose decision shall be final
and binding. Upon receipt of notice of the appeal, the
Secretary shall notify all parties, signatories to the Data
Transfer Service Agreement and any other affected industry
participants that have been involved in the assessment
carried out under Clause 10.5 accordingly.
10.12 Where any matter is referred to the Director pursuant to
Clauses 10.8.1 or 10.11 and the Director considers that the
proposed change to the Data Transfer Catalogue should be
made, such change shall take effect as from an
implementation date decided upon by the Director. The
Secretary shall ensure that the Data Transfer Catalogue is
amended accordingly and that a copy of the amendment to
the Data Transfer Catalogue is distributed to each party and
all other affected industry participants that have been
involved in the assessment carried out under Clause 10.5.
10.13 Each of the parties agrees with each of the other parties that
each party shall be entitled to use the Data Transfer
Catalogue as contemplated by this Agreement, the Data
Transfer Service Agreement, each of the Settlement
Agreements and each other agreement between two or more
parties which requires or permits the use of the Data
Transfer Catalogue.
PART III: MPAS TECHNICAL CONSTRAINT, ERS MIGRATION,
SERVICE AVAILABILITY AND SERVICE LEVELS
11. MPAS TECHNICAL CONSTRAINT
11.1 Each Host PES shall ensure that its MPAS Registration
System enables only one Supplier to be Registered as
responsible for supplying any Metering Point for a particular
day.
11.2 Where a Host PES has become Accredited and its systems
have been Certified, it shall ensure that:
11.2.1 it uses Certified systems and processes to provide
and maintain its MPAS; and
11.2.2 any changes in its Certified systems and processes
are made in accordance with Certified change
procedures.
12. ERS MIGRATION (ENGLAND AND WALES ONLY)
12.1 Subject to Clauses 12.2 and 12.3, where a Host PES
receives an application for Migration in an agreed electronic
format, from the Settlement System Administrator which it
Accepts, it shall Migrate the relevant Metering Point and
shall notify the Settlement System Administrator, the
relevant Supplier and Data Aggregator by 06:00 hours on
the following Operational Working Day that such Metering
Point has Migrated. Where the Host PES Rejects the
application to Migrate, the Host PES shall notify the
Settlement System Administrator by delivering such
notification to that Host PES's Gateway by 06:00 hours on
the following Operational Working Day that the application
has been Rejected and all the reasons for the Rejection.
12.2 Up to the date notified to each Host PES pursuant to
Clause 12.3 where:
12.2.1 the relevant Host PES's MPAS Registration System
is fully operational; and
12.2.2 a business process has been developed pursuant to
the terms of the Pooling and Settlement Agreement
and accepted by the relevant Host PES,
that Host PES shall complete as many Migrations as would
be consistent with the efficient use of resources available to
that Host PES at that time.
12.3 From the date on which the parties are notified by the Pool
Agent that the Pool Executive Committee has resolved,
pursuant to schedule 24 of the Pooling and Settlement
Agreement, that the Migration of Metering Points registered
on ERS to a Host PES's MPAS Registration System shall
commence in respect of one or more Host PESs (such date
to be no earlier than 1st October 1998), each Host PES to
which such notification relates shall use its reasonable
endeavours to complete as many applications for Migration
as possible but shall only be required to complete the first
100 applications for Migrations received by it on any
Operational Working Day where those applications are in an
agreed electronic format. Any extra applications for
Migrations in excess of the first 100 requested in any
Operational Working Day which are not completed on that
Operational Working Day shall be deemed to be received by
it on the following Operational Working Day.
12.4 A Supplier registered on ERS for Related Metering Points
shall use its reasonable endeavours to ensure that those
Related Metering Points are Migrated so that they have the
same Supply Start Date.
13. SERVICE AVAILABILITY
13.1 Each Host PES shall provide, operate and maintain its
MPAS Registration System in accordance with Good
Industry Practice in England and Wales or as a Reasonable
and Prudent Operator in Scotland and, subject to Clause
13.3, shall use its reasonable endeavours to ensure that staff
are available between 09:00 hours and 18:00 hours on all
Operational Working Days to receive requests pursuant to
Clauses 17.4, 19, 20.12, 22.1, 23.1, 25.1 27.5 and 27.6 and
to respond to queries from Suppliers in relation to the
provision of Services.
13.2 Each Host PES shall use its reasonable endeavours to
ensure that any planned suspensions in the operation of its
MPAS Registration System are scheduled so that there is
the minimum amount of disruption to the provision of
MPAS. The relevant Host PES shall provide the relevant
Suppliers and Data Aggregators with as much notice as
possible of any planned suspension in the availability of its
MPAS Registration System.
13.3 In the event of any unplanned suspension in the operation of
its MPAS Registration System, the Host PES shall treat the
suspension as an emergency and shall implement its disaster
recovery procedures, approved as part of its Accreditation,
within 48 hours of the start of the suspension. The Host
PES shall use its reasonable endeavours to make its MPAS
Registration System available again as quickly as possible.
13.4 Any failure of the Host PES to comply with the provisions
of Clauses 13.2 and 13.3 shall not relieve that Host PES
from the application of the service levels referred to in
Clause 14 except where such failure is due to a
circumstance of Force Majeure in which case the provisions
of Clause 36 or 45 shall apply.
14. SERVICE LEVELS AND LIQUIDATED DAMAGES
Service Levels
14.1 Save as otherwise provided in this Agreement, each Host
PES shall use its reasonable endeavours to ensure that
notifications of any one type which it receives shall be
processed in the order in which they were received.
14.2 Where a Host PES receives any notification pursuant to any
of Clauses 15.10, 15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10,
20.11, 21.1, 24.1, 24.3, 24.5 or the Objection Resolution
Period has elapsed under Clause 16.13, the Host PES shall
notify the relevant persons listed in those Clauses, or for
notifications received under Clauses 21.1 and 24.3, the
persons listed in Clauses 21.2 and 24.4 respectively (except
for its Distribution Business) in the manner contained in
Clause 14.3.
14.3 Each Host PES shall produce the notifications required
under the Clauses listed in Clause 14.2 in accordance with
the requirement set out in Clause 28.2 in response to any
notifications received by 18:00 hours on an Operational
Working Day or in response to the elapsing of the Objection
Resolution Period on a particular Operational Working Day
("Message Receipt Working Day") and, subject to
Clauses 14.4 and 14.5, shall operate its MPAS Registration
System with the intent to deliver the total number of such
notifications ("Total Daily Processing") to its Gateway by
06:00 hours on the following Operational Working Day or
as soon as reasonably practicable thereafter.
14.4 For the purposes of fulfilling its obligations in respect of the
Settlement Requirements, each Host PES shall ensure that:
14.4.1 the Total Daily Processing will be processed and
delivered to the Host PES's Gateway at a time not
later than 06:00 hours on the first Operational
Working Day following the Message Receipt
Working Day provided that the Host PES shall not
be in breach of this obligation if it fails to meet this
target on not more than six Operational Working
Days during each Quarter;
14.4.2 if the target in Clause 14.4.1 is not met, the Total
Daily Processing will be processed and delivered to
the Host PES's Gateway at a time not later than
06:00 hours on the second Operational Working
Day following the Message Receipt Working Day
provided that the Host PES shall not be in breach of
this obligation if it fails to meet this target on not
more than one Operational Working Day during
each Quarter;
14.4.3 if the target in Clause 14.4.2 is not met, the Total
Daily Processing will be processed and delivered to
the Host PES's Gateway at a time not later than
06:00 hours on the third Operational Working Day
following the Message Receipt Working Day.
14.5 For the purposes of fulfilling its obligations in respect of
Suppliers, each Host PES shall:
14.5.1 use its reasonable endeavours to ensure that on not
more than 4 Operational Working Days during each
Quarter, the Total Daily Processing will be
processed and delivered to the Host PES's Gateway
at a time later than 06:00 on the first Operational
Working Day following the Message Receipt
Working Day;
14.5.2 ensure that on not more than 5 Operational Working
Days during each Quarter, the Total Daily
Processing will be processed and delivered to the
Host PES's Gateway at a time later than 06:00 hours
on the first Operational Working Day following the
Message Receipt Working Day;
14.5.3 ensure that on not more than 1 Operational Working
Day during each Quarter, the Total Daily Processing
will be processed and delivered to the Host PES's
Gateway at a time later than 06:00 hours on the
second Operational Working Day following the
Message Receipt Working Day; and
14.5.4 ensure that on no occasion during each Quarter, the
Total Daily Processing will be processed and
delivered to the Host PES's Gateway at a time later
than 06:00 hours on the third Operational Working
Day following the Message Receipt Working Day.
14.6 In order to determine whether the Host PES has fulfilled the
requirements set out in each of Clauses 14.4 to 14.5, each
Host PES shall note the time on the Operational Working
Day when the Total Daily Processing is delivered to its
Gateway in relation to the Message Receipt Working Day
relevant to that Total Daily Processing.
14.7 Each Host PES shall measure its performance against the
requirements set out in Clauses 14.4 and 14.5 over each
Quarter provided that where a Host PES breaches the
requirements in Clauses 14.5.3 and 14.5.4, the breach shall
be deemed to have occurred in the Quarter in which the
second Operational Working Day following the Message
Receipt Working Day occurred.
14.8 Each Host PES agrees that it is their long term objective to
achieve a service level ensuring the processing and delivery
of the Total Daily Processing by 06:00 hours on the first
Operational Working Day following the Message Receipt
Working Day.
Pool/SESL Liquidated Damages
14.9 Where the number of occasions in any Quarter that a Host
PES fails to deliver the Total Daily Processing to its
Gateway within the timescales indicated in Clauses 14.4.1 to
14.4.3 exceeds the number of allowable failures indicated in
the relevant Clause, that Host PES if in England or Wales
shall pay the Pool Agent and, if in Scotland shall pay SESL
(POUND)125 for each such extra occasion on which it has failed to
deliver the Total Daily Processing to its Gateway, provided
that the Host PES shall have no liability to make such
payment for any failures which occur before the date which
is 15 consecutive weeks following commencement of
Controlled Market Start-Up in its Authorised Area or such
longer period as MEC may determine in accordance with
Clause 14.13.
Supplier Liquidated Damages
14.10 Where the number of occasions in any Quarter that a Host
PES fails to deliver the Total Daily Processing to its
Gateway within the timescales indicated in Clauses 14.5.2 to
14.5.4 exceeds the number of allowable failures indicated in
the relevant Clause, that Host PES shall be liable to pay
Suppliers the following amounts:
14.10.1 (POUND)200 for each extra failure in that Quarter over
and above those allowed in Clause 14.5.2, where
a payment is not made pursuant to Clause 14.10.2
or Clause 14.10.3;
14.10.2 (POUND)250 for each extra failure in that Quarter over
and above those allowed in Clause 14.5.3, where
a payment is not made pursuant to Clause
14.10.3;
14.10.3 (POUND)5,000 for each failure in that Quarter of the type
referred to in Clause 14.5.4,
provided that a Host PES shall have no liability to make
such payment for any failures which occur before the date
which is 15 consecutive weeks following commencement of
Controlled Market Start-Up in its Authorised Area or such
longer period as MEC may determine in accordance with
Clause 14.13.
14.11 Any liquidated damage payment for which a Host PES is
liable under Clause 14.10 shall be apportioned amongst
Suppliers in accordance with the following formula:
SLD = L x Ai
Ai...n
Where:
SLD = liquidated damage payment to be
made to a Supplier in respect of that
Quarter;
L = liquidated damage payment for which
the relevant Host PES is liable in
accordance with Clause 14.10;
Ai = maximum ((x1 - x0), 0) + maximum
((x2 - x1), 0) + maximum ((x3 - x2),
0) for the relevant Supplier;
Ai...n = sum of (maximum ((x1 - x0), 0) +
maximum ((x2 - x1), 0) + maximum
(x3 - x2), 0)) for all Suppliers in the
relevant Host PES's Authorised Area;
x0 = the number of Metering Points in
respect of which the relevant
Supplier was Registered at the 15th
day of the third month in the
preceding Quarter;
x1 = the number of Metering Points in
respect of which the relevant
Supplier was Registered at the 15th
day of the first month in the relevant
Quarter;
x2 = the number of Metering Points in
respect of which the relevant
Supplier was Registered at the 15th
day of the second month in the
relevant Quarter; and
x3 = the number of Metering Points in
respect of which the relevant
Supplier was Registered at the 15th
day of the third month in the relevant
Quarter.
Data Transfer Service Escalation
14.12 Where a Host PES receives a notification from the Data
Transfer Network indicating that a Message sent by that
Host PES pursuant to the terms of this Agreement has not
been received by the relevant Supplier or Data Aggregator,
the Host PES shall contact the Supplier or Data Aggregator
as soon as reasonably practicable. The Host PES and
relevant Supplier or Data Aggregator shall utilise the
Problem Management Procedures under the Data Transfer
Service Agreement which may require the Host PES to
Resend the original Message.
MEC Discretion
14.13 MEC may decide to change the period of suspension of
liquidated damage payments from those set out in Clauses
14.9 and 14.10 in accordance with the procedure set out in
Clause 38 and may do so where the commencement of the
second Tranche of Controlled Market Start-Up for a Host
PES is delayed beyond the expected start date for that
Tranche as at the date of this Agreement.
14.14 MEC may at any time decide to change the time scales
within which Total Daily Processing is to be carried out and
delivered to a Host PESs Gateway pursuant to Clauses
14.3, 14.4 and 14.5 and may do so where the number of
Applications for Registrations received by a Host PES on an
Operational Working Day is materially greater than the
number of Applications for Registration which the Host
PES acting reasonably expected to receive on any particular
Operational Working Day as at the date of this Agreement.
Review
14.15 MEC shall conduct a formal review, to be started no earlier
than 12 months or as MEC otherwise decides and
completed no later than 15 months, after the start of
Controlled Market Start-Up for the Host PES that is the
first Host PES to commence Controlled Market Start-Up.
14.16 The liquidated damage payments referred to in Clauses 14.9
and 14.10 have been based on assumptions relating to
percentages of Application for Registration where the
Supply Start Date for such Application for Registration
would be affected by a failure to comply with the service
levels set out in Clause 14.4 and 14.5 and the corresponding
costs per Total Daily Processing and per Metering Point
incurred by Suppliers in changing the Supply Start Date for
such affected Applications for Registration. The detailed
assumptions made by the parties as at the date of this
Agreement are set out below and shall be taken into account
by MEC in considering the appropriateness of the level of
the liquidated damage payments as part of its review and in
particular whether such assumptions remain valid or the
values ascribed to such assumptions are appropriate. Any
differences shall be taken into account by MEC when
proposing any revised liquidated damage payments to be
applied after the review:
14.16.1 Suppliers will not take any action on a Metering
Point specific basis where the Host PES fails the
service levels set out in 14.5.1, 14.5.2 and 14.5.3;
14.16.2 Applications for Registrations are spread evenly
over the period of 28 calendar days before the
Supply Start Date included in the Applications for
Registration;
14.16.3 an average of 20 Suppliers are affected by a failure
to process and deliver a Total Daily Processing;
14.16.4 Suppliers carry out the following activities where the
Host PES fails the service level set out in Clause
14.5.4:
(A) contact all Customers affected by the failure
of the service level set out in Clause 14.5.4
in writing;
(B) contact each Meter Operator, Data Collector
and Data Aggregator that has been
appointed in relation to Metering Points
which are affected by the failure of the
service level set out in Clause 14.5.4 in
writing to indicate that the Supply Start
Dates for those affected Metering Points are
likely to change;
(C) take or procure the taking of a revised actual
meter read in respect of each Metering Point
that is affected by the failure of the service
level set out in Clause 14.5.4;
(D) undertake manual correction of internal
databases to effect changes to Supply Start
Dates to all Metering Points which are
affected by the failure of the service level set
out in Clause 14.5.4.
14.17 Each party agrees to provide MEC with all reasonable
information that MEC may require for the purposes of
carrying out its review pursuant to this Clause 14. This may
include information relating to the level of market activity,
the average number of Messages within the Total Daily
Processing, the average composition of a Total Daily
Processing and information to verify the assumptions set out
in Clause 14.16 and how the values ascribed to such
assumptions may have changed since the date of this
Agreement.
14.18 Nothing in this Clause shall be construed as restricting the
scope of MEC's review pursuant to Clause 14.15. In
particular, MEC shall consider whether there is a need for
further reviews to be carried out by it after the conclusion of
its review pursuant to this Clause 14.
14.19 MEC shall copy the results of its review to all parties as
soon as reasonably practicable following the conclusion of
its review. Any changes to this Agreement that MEC
reasonably considers should be made as a result of the
review shall be treated as a change request and the
procedures set out in Clause 9 shall be followed.
PART IV: REGISTRATION SERVICES
15. PROCEDURE FOR APPLICATION FOR REGISTRATION
BY A SUPPLIER
15.1 Subject to Clause 3.2, a Supplier that has entered into a
contract to supply or receive electricity through or from a
Metering Point, under which supply or receipt is to
commence on or after the date specified by the Director in
relation to the Premises associated with that Metering Point
as referred to in Clause 3.2 or is supplying or is to supply
from any such Metering Point under a tariff arrangement on
or after that date, shall apply to the Host PES whose MPAS
Registration System has the Metering Point recorded on it,
for Registration in respect of that Metering Point, pursuant
to the provisions of this Clause 15 or Clause 20, as
appropriate except where that Supplier is already Registered
in relation to that Metering Point or where that Metering
Point is registered on ERS.
15.2 Where a Supplier has entered into a contract to supply
electricity, the Supplier shall not apply to the relevant Host
PES for Registration in respect of that Metering Point until
the expiry of any initial period during which the relevant
Customer has the right (whether contractual or statutory) to
terminate the contract.
15.3 Each Supplier shall, to the extent that it is aware of the need
for future submissions of Applications for Registrations, use
its reasonable endeavours to spread its submissions of
Applications for Registration evenly over all Operational
Working Days in the 28 day period prior to the opening of
the competitive supply market in each Tranche in the
relevant Host PES's Authorised Area. For the avoidance of
doubt, this Clause 15.3 shall not require any Supplier to
alter the Supply Start Date relating to any proposed
Application for Registration. If a Host PES believes that a
Supplier is in breach of this Clause 15.3, it shall notify the
Supplier and the Director of the alleged breach, setting out
the reasons for its belief.
15.4 The Supplier shall, prior to applying for Registration in
respect of any Metering Point through which Designated
Premises are to be supplied, establish data item 7 of
Schedule 2 for that Metering Point by satisfying itself
whether its Customer is a new owner or occupier of those
premises.
15.5 The Supplier shall use its reasonable endeavours to apply
for Registration in respect of all Related Metering Points on
the same Operational Working Day for a Supply Start Date
on the same date, except where a new Related Metering
Point is created after the Supplier applies for Registration in
relation to the other Related Metering Point(s). Where a
new Related Metering Point is created the Supplier shall
apply for Registration in relation to it as soon as reasonably
practicable.
15.6 A Valid Application for Registration for the purposes of this
Clause 15 is one that:
15.6.1 contains values that the Supplier has identified as
representing data items 1, 2, 3, 8 and 10 of Schedule
2 for the Metering Point against which it wishes to
Register which are Accepted on the MPAS
Registration System;
15.6.2 is received by the relevant Host PES no later than
the last Operational Working Day before the Supply
Start Date included in the Supplier's application
under Clause 15.6.1 and no more than 28 days in
advance of that date;
15.6.3 is received by the relevant Host PES on or after the
later of:
(A) the eleventh Operational Working Day
following the date when the relevant Host
PES has Registered the Old Supplier for the
relevant Metering Point; and
(B) the Supply Start Date provided by that Old
Supplier.
15.7 The relevant Host PES shall not be obliged to check the
validity or accuracy of any data items contained in a
Supplier's Application for Registration or whether a
Supplier has complied with the provisions of Clauses 15.1
to 15.5 except to the extent that the Host PES Accepts the
application.
15.8 The Supplier may also include in its Application for
Registration data items 4, 5, 7 and 11 to 14, 16 and 17 of
Schedule 2 for the relevant Metering Point. The Supplier
shall use its reasonable endeavours to ensure that data item
7 is set to "T" (True) in its Application for Registration if
the application relates to Designated Premises and the
Customer at those Designated Premises is a new owner or
occupier of those premises. The Host PES shall not be
required to check that data item 7 has been included or is
accurate in an Application for Registration for a Designated
Premises where there is a Customer that is a new owner or
occupier of those premises.
15.9 Where the New Supplier does not include any of the
optional items listed in Clause 15.8 in its Valid Application
for Registration, the data items that are held on the MPAS
Registration System for the relevant Metering Point and are
valid as at the date of receipt of the Valid Application for
Registration that correspond to the optional data items not
provided shall continue to be held on the MPAS
Registration System and it shall be presumed that such data
items shall continue to be valid in respect of the New
Supplier's Registration.
15.10 Where a Host PES receives a Valid Application for
Registration from a Supplier in relation to a Metering Point,
it shall Register that Supplier and shall notify that Supplier
(the "New Supplier"), the New Supplier's Data
Aggregator, the Old Supplier, the Old Supplier's Data
Aggregator, any Data Aggregator the Old Supplier may
have appointed for a future date, and the relevant
Distribution Business for that Metering Point that the
Supplier has been Registered. Subject to Clauses 16.8 and
16.13, the New Supplier shall be deemed responsible for the
supply of electricity through the relevant Metering Point
from 00:00 hours on the Supply Start Date. Subject to
Clauses 16.8 and 16.13, the Old Supplier shall cease to be
responsible for the supply of electricity through the relevant
Metering Point from 00:00 hours on the Supply Start Date.
15.11 Subject to Clauses 15.2 and 15.3, the New Supplier shall
use its reasonable endeavours to submit a Valid Application
for Registration to the Host PES as far in advance of the
Supply Start Date as reasonably possible taking into
account the restrictions set out in Clause 15.6.2. The
relevant Host PES shall not be responsible for ensuring that
the New Supplier complies with the requirements of this
Clause 15.11.
15.12 The New Supplier shall use its reasonable endeavours not to
commence supplying electricity through any Metering Point
or make any material changes to that Metering Point until it
has received from the relevant Host PES a notice
confirming its Registration in respect of the relevant
Metering Point or (if later) the Supply Start Date specified
in the New Supplier's Application for Registration. The
relevant Host PES shall not be responsible for ensuring that
the New Supplier complies with the requirements of this
Clause 15.12. Where the New Supplier is unable to comply
with the provisions of this Clause 15.12 due to the relevant
Host PES's failure to send out a notice confirming its
Registration within the timescales indicated in Clause 14.4
or 14.5, that New Supplier shall be deemed not to be in
breach of the obligation set out in this Clause 15.12.
15.13 Where an Old Supplier makes a change to one of the data
items for which it is stated to be responsible in Schedule 2,
in relation to a Metering Point, and its Message to the
relevant Host PES is Rejected and the reason for such
Rejection is stated to be the New Supplier's Registration,
the Old Supplier shall contact the New Supplier as soon as
possible and inform it of the change, using the contact
notice facility provided under Clause 17, if necessary.
15.14 Where a Host PES receives an Application for Registration
from a Supplier which is not a Valid Application for
Registration, it shall Reject the Application for Registration
and shall notify the Supplier that such application has been
Rejected, setting out all the reasons for the Rejection.
Notwithstanding Clause 15.6.2, the MPAS Registration
Systems of some Host PESs may not Reject an otherwise
Valid Application for Registration even though the
Application for Registration is received after the date that is
the last Operational Working Day before the Supply Start
Date included in the Supplier's Application for Registration.
16. PROCEDURE FOR OBJECTION BY OLD SUPPLIER
16.1 An Old Supplier may issue an objection ("Notice of
Objection") to the relevant Host PES in relation to an
Application for Registration of which it has been notified
pursuant to Clause 15.10 where:
16.1.1 subject to Clause 16.2, the Application for
Registration is in relation to a Metering Point which
is associated with Designated Premises at which the
Customer is being supplied by the Old Supplier
under a contract that will neither expire nor (to the
Old Supplier's knowledge) be terminated by the
New Supplier's Supply Start Date notified to the
Old Supplier pursuant to Clause 15.10; or
16.1.2 subject to Clause 16.2, the Application for
Registration is in relation to a Metering Point which
is associated with Domestic Premises where charges
for electricity supplied to the Customer (at any such
Domestic Premises), having been demanded in
writing by the Old Supplier, prior to the notice of
termination being given remain owing to the Old
Supplier more than 28 days after that demand was
made; or
16.1.3 the Application for Registration for the relevant
Metering Point is received by the Host PES either
before the Director has made a direction in respect
of the Premises with which the Metering Point is
associated, pursuant to Condition 3 of the New
Supplier's Second Tier Supply Licence, or prior to
such date as is specified in that direction.
16.1.4 the New Supplier has contacted the Old Supplier
and both Suppliers have agreed that the New
Supplier's Registration has been made in error; or
16.1.5 the Application for Registration relates to a
Metering Point which is a Related Metering Point
and the relevant New Supplier has not applied to
Register all the relevant Related Metering Points on
the same Operational Working Day for the same
Supply Start Date:
Each ground of objection in Clauses 16.1.1 to 16.1.5 shall
be treated as separate and independent from each of the
other grounds of objection in those Clauses.
16.2 The Old Supplier may not issue an objection to the New
Supplier's Application for Registration on the grounds
indicated in Clauses 16.1.1 and 16.1.2 if the Host PES's
notice to it in Clause 15.10 indicates that data item 7 in
Schedule 2 for the Metering Point in the New Supplier's
Application for Registration has been set to "T" ("True")
unless it has reasonable grounds for believing that
information to be inaccurate.
16.3 A Notice of Objection that complies with the requirements
of Clauses 16.1 and 16.2 shall be a Valid Notice of
Objection ("Valid Notice of Objection").
16.4 The relevant Host PES shall not be responsible for checking
that any Notice of Objection that it receives is a Valid
Notice of Objection.
16.5 Where an Old Supplier wishes to issue a Notice of
Objection to the relevant Host PES in relation to an
Application for Registration of which it has been notified
pursuant to Clause 15.10 it shall issue such notice to the
relevant Host PES so that it is received by the Host PES
within the Objection Raising Period.
16.6 Where the Old Supplier gives a Notice of Objection it shall,
at the same time, send notification to its Customer at the
Premises of the grounds for that objection and of how the
Customer may dispute or resolve such grounds.
16.7 Where the relevant Host PES receives and Accepts a Notice
of Objection in respect of a New Supplier's Registration
within the Objection Raising Period, the Host PES shall
record such notice and shall notify the Old Supplier and
New Supplier, the Old Supplier's Data Aggregator any Data
Aggregator the Old Supplier may have appointed for a
future date, the New Supplier's Data Aggregator, any Data
Aggregator the New Supplier may have appointed for a
future date and, where necessary, the relevant Distribution
Business that such Notice of Objection has been received
and Accepted. All data items relating to the New Supplier's
Registration, including any changes to data items that a
New Supplier has made pursuant to Clause 24.2, shall be
removed. The Old Supplier shall be notified of all changes
to data items made by the New Supplier pursuant to Clause
24.2, or made by the Distribution Business pursuant to
Clause 24.1 which were entered on or after the Operational
Working Day on which the New Supplier's Registration was
Accepted, and which have an effective date which is not
later than the Operational Working Day on which the
Notice of Objection is Accepted. Such notification shall
exclude any items which were provided by the Old Supplier.
The New Supplier shall not be able to make any changes to
data items 4, 5, 7, 11 to 14, 16 or 17 in Schedule 2 for the
relevant Metering Point after the Old Supplier's Notice of
Objection is lodged unless and until the Notice of Objection
is removed by the Host PES in accordance with Clause
16.9. Where the relevant Notice of Objection is not
Accepted or has not been received within the Objection
Raising Period, the relevant Host PES shall Reject such
Notice of Objection and shall notify the Old Supplier that it
has Rejected its Notice of Objection and all the reasons for
the Rejection. Where the Old Supplier's Notice of
Objection has been Rejected the Old Supplier may re-submit
a Notice of Objection within the Objection Raising Period.
16.8 Where the Host PES records a Notice of Objection in
accordance with Clause 16.7 it shall note within its MPAS
Registration System that the Registration of the New
Supplier in relation to the relevant Metering Point has been
objected to and the responsibility for supplying that
Metering Point shall revert to or remain with the Old
Supplier, as relevant, such that the New Supplier's
Registration shall be deemed not to have taken place.
16.9 The Old Supplier may withdraw any Notice of Objection
that has been Accepted by the Host PES within the
Objection Resolution Period and shall do so where the
grounds for its objection have been resolved within the
Objection Resolution Period. Where the Old Supplier
withdraws a Notice of Objection pursuant to this Clause
16.9 it may not re-submit a Notice of Objection in respect
of the same Application for Registration pursuant to Clause
16.5. Where the Host PES Accepts the Old Supplier's
withdrawal of its Notice of Objection the Host PES shall
remove the Notice of Objection and shall notify the Old
Supplier, the New Supplier, the Old Supplier's Data
Aggregator, any Data Aggregator the Old Supplier may
have appointed for a future date, the New Supplier's Data
Aggregator, any Data Aggregator the New Supplier may
have appointed for a future date and, where necessary, the
relevant Distribution Business of the removal of the Notice
of Objection. Where the Old Supplier has made any
changes to the data items pursuant to Clause 24.2, or the
Distribution Business has made any changes to data items
pursuant to Clause 24.1, which were entered on or after the
Operational Working Day on which the Notice of Objection
was Accepted, and such changes have an effective date
which is not later than the Operational Working Day on
which the Notice of Objection is withdrawn, during the
Objection Resolution Period, the Host PES shall notify the
New Supplier that such changes were made. The data items
relevant to the New Supplier's Registration shall be included
in the notification to the New Supplier. Where the relevant
Host PES does not Accept the Old Supplier's request to
withdraw its Notice of Objection it shall Reject such
application and shall notify the Old Supplier that its
application to withdraw its Notice of Objection has been
Rejected and give reasons.
16.10 Where the Old Supplier withdraws a Notice of Objection or
where the grounds of objection are later resolved, it shall
notify the Customer at the relevant Premises as soon as is
reasonably practicable.
16.11 The relevant Host PES shall not be responsible for checking
whether the grounds for objection in the Old Supplier's
Notice of Objection have been resolved within the Objection
Resolution Period, where the Old Supplier indicates that
they have been, in its notice submitted pursuant to Clause
16.9.
16.12 Where the Host PES removes a Notice of Objection in
accordance with Clause 16.9, it shall restore the
Registration of the relevant New Supplier, who shall be
deemed to be responsible for the supply of electricity
through the relevant Metering Point from the Supply Start
Date included in its Valid Application for Registration. If
the Old Supplier made any changes to data items pursuant
to Clause 24.2 during the Objection Resolution Period
which were to be effective from a date on or after the New
Supplier's Start Date, such changes shall be deemed not to
have been made. If the New Supplier made any changes to
data items pursuant to Clause 24.2 before the Host PES
recorded the Old Supplier's Notice of Objection those
changes shall be re-instated on the MPAS Registration
System to be effective from the dates originally specified in
the New Supplier's application.
16.13 Where a Notice of Objection is not withdrawn or the
request to withdraw has been Rejected within the Objection
Resolution Period, the relevant Host PES shall inform the
Old Supplier and the New Supplier that the Objection
Resolution Period has expired and the Old Supplier shall
retain responsibility for the Metering Point.
17. CONTACT NOTICE FACILITY
17.1 After the period of Controlled Market Start-Up for the
relevant Host PES where either:
17.1.1 the Old or New Supplier in relation to the current or
pending Registration for a particular Metering Point
reasonably believes that the New Supplier has been
erroneously Registered for that particular Metering
Point; or
17.1.2 the Old Supplier in relation to the current
Registration wishes to assign to the New Supplier a
debt owing to it by a Customer at Domestic
Premises pursuant to Condition 40 of the Old
Supplier's PES Licence in England and Wales or
Condition 35 of Part V of the Old Supplier's PES
Licence in Scotland or Condition 48 of the Old
Supplier's Second Tier Supply Licence in England
and Wales or Condition 49 of the Old Supplier's
Second Tier Supply Licence in Scotland, as the case
may be;
17.1.3 the Old or New Supplier in relation to the current or
pending Registration reasonably believes that the
New Supplier applied to register a Metering Point
which is a Related Metering Point without applying
to Register all the relevant Related Metering Points
at the same time; or
17.1.4 the Old Supplier is obliged to contact the New
Supplier pursuant to Clause 15.13,
the relevant Supplier may contact the relevant Host PES to
request the identity of the other Supplier using either the
Data Transfer Network if the Host PES can receive a
request on the Data Transfer Network for the provision of
such service or otherwise by facsimile sent to that Host
PES's MPAS management facsimile number.
17.2 Where, during or after Controlled Market Start-Up, a Host
PES who has been unable to receive Messages on the Data
Transfer Network for the provision of the Service requested
under Clause 17.1 subsequently becomes able to do so, that
Host PES shall notify all Suppliers Registered on its MPAS
Registration System of that fact.
17.3 Where the Host PES can receive a Message on the Data
Transfer Network for the provision of the Service requested
under Clause 17.1, the Host PES shall provide both the
Suppliers with the other's identity. Where the Host PES
Rejects the Message it shall notify the Supplier of its
Rejection and all the reasons for so doing.
17.4 Where the Host PES cannot receive a Message on the Data
Transfer Network, (otherwise than as a result of a failure of
the Data Transfer Network) for the provision of the Service
requested under Clause 17.1 and the Host PES receives the
Supplier's manual request pursuant to Clause 17.1 by 15:00
hours on an Operational Working Day, it shall provide both
the Suppliers with the other's identity by 06:00 hours on the
following Operational Working Day provided that where
the total number of manual requests received pursuant to
Clause 17.1 to be responded to by that Host PES would
otherwise exceed 50 in any Operational Working Day the
Host PES shall use its reasonable endeavours to provide as
many responses as possible but shall only be required to
provide the first 50 responses requested on that Operational
Working Day. Such responses shall be provided in the
following manner:
17.4.1 a maximum of 5 responses per Supplier or Data
Aggregator, allocated in the order in which those
requests are received; and
17.4.2 where Clause 17.4.1 has been complied with, any
extra requests which have been received shall be
provided in the order in which they were received.
Any extra requests in excess of 50 requested in any
Operational Working Day or any received after 15:00 hours
on an Operational Working Day which the Host PES has
not provided shall be deemed to have been requested at the
start of the following Operational Working Day.
17.5 Each Host PES shall offer the Services pursuant to Clause
17.1 and 17.3 during the period of Controlled Market Start-
Up for that Host PES where it does not automatically notify
each Supplier of the other relevant Supplier's identity
pursuant to the procedures contained in Clauses 15 and 16.
The Host PES shall cease to automatically notify each
Supplier of the other relevant Supplier's identity after the
end of Controlled Market Start-Up for that Host PES.
17.6 The relevant Host PES shall not be required to check the
validity of any request made in accordance with Clause 17.1
except to check that the Supplier requesting the information
is the New or Old Supplier in relation to the relevant
Metering Point in relation to the relevant Registration.
18. ERROR RECTIFICATION
18.1 Each Supplier shall use its reasonable endeavours to check
any notice it receives from a Host PES pursuant to Clause
15 for errors and in particular where it is a New Supplier to
check data item 5 of Schedule 2 for the relevant Metering
Point. Where data item 5 of Schedule 2 for a Metering
Point indicates that the Metering Point is a Related
Metering Point, the New Supplier shall use its reasonable
endeavours to ensure that all other relevant Related
Metering Points are Registered at the same time either in
accordance with Clause 15 or this Clause 18.
18.2 Where an Old Supplier has raised an objection pursuant to
Clause 16.1.5, the Old Supplier for a particular Metering
Point shall, on request by a New Supplier as soon as
reasonably practical, notify that New Supplier of all Related
Metering Points for that Metering Point for which the Old
Supplier is or has been Registered.
18.3 Where the Old Supplier for a particular Metering Point
reasonably believes that the New Supplier has either
erroneously Registered for a particular Metering Point or
has Registered for a Related Metering Point without
registering all other relevant Related Metering Points it shall
either:
18.3.1 raise an objection if it may pursuant to Clause 16.1
within the time limits set out in Clause 16; or
18.3.2 contact the New Supplier as soon as possible using
the facility provided under Clause 17, if necessary.
Where the Old Supplier raises an objection pursuant to
Clause 18.3.1 it may also contact the New Supplier using
the facility under Clause 17 if necessary.
18.4 Where the New Supplier for a particular Metering Point
reasonably believes that it has either erroneously Registered
for that Metering Point or has Registered for a Related
Metering Point without registering all other relevant Related
Metering Points it shall either:
18.4.1 where it has Registered a Related Metering Point
without its associated Related Metering Point(s) and
the Old Supplier has not objected to its original
registration apply for Registration for the relevant
Related Metering Point(s) as soon as reasonably
practicable. Where the Supplier makes such an
application but does not apply in sufficient time to
ensure that it receives confirmation from the Host
PES before it commences supplying electricity
through the relevant Related Metering Points it shall
contact the Old Supplier as soon as possible using
the facility provided under Clause 17, if necessary;
or
18.4.2 contact the Old Supplier as soon as possible using
the facility provided under Clause 17, if necessary.
18.5 Where either the relevant Old Supplier or New Supplier
contacts the other pursuant to Clause 18.3 or 18.4, these
Suppliers shall agree the appropriate method for rectifying
the error or registering all other relevant Related Metering
Points. This may include:
18.5.1 the Old Supplier objecting to the New Supplier's
application under Clause 16 within the time limits set
out in Clause 16; or
18.5.2 the Old Supplier withdrawing its objection; or
18.5.3 the New Supplier Registering all relevant Related
Metering Points before it commences supplying
electricity through the Related Metering Point(s) and
if necessary the Old Supplier removing its objection
under Clause 16 within the time limits set out in
Clause 16; or
18.5.4 the Old Supplier applying for Registration in relation
to the Metering Point where the New Supplier has
registered the relevant Metering Point in error; or
18.5.5 the New Supplier applying for Registration in
relation to the other associated Related Metering
Points after the time period indicated in Clause
18.5.3.
18.6 The Suppliers shall, as soon as reasonably practicable, settle
any costs incurred as a result of implementing any methods
to correct errors or as a result of those errors including
those outlined in Clause 18.5 between them including any
settlement costs that are incorrectly allocated to the
Suppliers and any costs incurred as a result of registering
any relevant Related Metering Points at a later time to the
associated Related Metering Points.
18.7 Subject to the fulfilment of the conditions in Clauses 19.3
and 19.4, where any costs are incurred by a Host PES in
implementing the method of rectifying an error or
registering all other Related Metering Points agreed by
Suppliers pursuant to Clause 18.5 as a result of the relevant
Host PES having erroneously Registered the New Supplier,
which was on balance, due to the Host PES's fault, the Host
PES shall bear the costs associated with rectifying the error.
In all other cases, the Suppliers concerned shall agree to pay
the Host PES's reasonable additional costs in any such
implementation incurred as a result of the error of either or
both of the Suppliers.
19. RETROSPECTIVE AMENDMENT OF MPAS
REGISTRATION SYSTEM
19.1 Subject to Clause 19.2 and where the procedures detailed in
Clause 18 cannot be used, the Old Supplier and New
Supplier may request the relevant Host PES to amend the
MPAS Registration System manually to rectify an erroneous
Registration. The Host PES shall, where the Host PES has
received a joint written confirmation from the Old Supplier
and the New Supplier agreeing to the amendment to the
MPAS Registration System and any associated charges,
undertake the manual amendment in the limited
circumstances set out in guidelines established by MEC, at a
charge to be agreed between the relevant Host PES and the
relevant Suppliers. Such guidelines shall be established by
MEC in consultation with all parties as soon as practicable
after the date of this Agreement.
19.2 The parties agree to instruct MEC, as soon as reasonably
practicable after the date of this Agreement, to review the
Services to establish what changes would be required to
introduce an electronic retrospective amendment facility and
whether, in the light of all relevant facts and circumstances,
such a facility should be introduced and if so, when and
what that facility should be. The facts and circumstances to
be considered by MEC shall include:
19.2.1 the results of any impact assessment which MEC has
requested any Host PES to carry out on its MPAS
Registration System;
19.2.2 what situations could give rise to the requirements
to amend the MPAS Registration Systems
retrospectively;
19.2.3 whether the procedures set out in Clause 18 in
practice provide adequate solutions to the situations
outlined under Clause 19.2.2;
19.2.4 what effect any enhanced functionality, if needed,
would have on any interfacing systems and what
corresponding changes would be required to those
systems if any enhanced functionality to the MPAS
Registration Systems were to be introduced;
19.2.5 what effect any enhanced functionality, if needed,
would have on Accreditation requirements;
19.2.6 the funding and charging implications of any
enhanced functionality, if needed; and
19.2.7 the appropriate allocation of liability arising from the
implementation of the enhanced functionality, if
needed.
19.3 Where as a result of the review carried out pursuant to
Clause 19.2, MEC decide that enhanced functionality is
required they shall notify the Host PES and indicate an
appropriate timescale for the introduction of the enhanced
functionality into the Host PES MPAS Registration
Systems. Each Host PES shall implement such enhanced
functionality in accordance with the timescale set out by
MEC.
19.4 Prior to any enhanced functionality being introduced into
the Host PES MPAS Registration Systems in accordance
with Clause 19.3, MEC shall develop procedures specifying
when and how the parties can amend retrospectively the
MPAS Registration Systems. Such procedures shall apply
instead of Clause 19.1 in respect of each Host PES from the
date that each Host PES has implemented successfully the
enhanced functionality into its MPAS Registration System.
20. NEW CONNECTIONS, NEW METERING POINTS AND
REGISTRATION OF NEW SUPPLY NUMBERS
20.1 Where a Host PES's Distribution Business:
20.1.1 creates a new connection to Premises from its
Distribution System (a "New Connection") and
hence creates a new Metering Point; or
20.1.2 in circumstances other than those set out in Clause
20.1.1, agrees with a Supplier that a new Metering
Point should be created; or
20.1.3 decides to enter a new Metering Point onto its
MPAS Registration System,
(in each circumstance a "New Metering Point")
it shall ensure that a Skeleton Record for the new Metering
Point is entered on its MPAS Registration System, in the
case of Clause 20.1.1 no later than the end of the second
Operational Working Day following completion of the
works associated with the New Connection and in the case
of Clauses 20.1.2 or 20.1.3 no later than the end of the
second Operational Working Day following its agreement
with the Supplier or its decision to enter a new Metering
Point.
20.2 A Valid Application for Registration in relation to a New
Metering Point is one that:
20.2.1 contains values that the Supplier has identified as
representing data items 1 to 3, 8 and 10 of Schedule
2 for the New Metering Point against which it
wishes to Register which are Accepted on the
relevant MPAS Registration System;
20.2.2 is received by the relevant Host PES no later than
the last Operational Working Day before the Supply
Start Date included in the Supplier's application
under Clause 20.2.1 and no more than 28 days in
advance of that date; and
20.2.3 relates to a New Metering Point that has a Skeleton
Record entered for it in the relevant Host PES's
MPAS Registration System.
20.3 The relevant Host PES shall not be obliged to check the
validity or accuracy of any data items contained in a
Supplier's Application for Registration for a New Metering
Point or whether a Supplier has complied with the
provisions of Clauses 15.1, 15.2 or 15.5 except to the
extent that the Host PES Accepts the Application for
Registration.
20.4 The Supplier may also include in its Application for
Registration for a New Metering Point the values for other
data items that are the Supplier's responsibility in Schedule 2
for that New Metering Point. However, if the Supplier
includes the Energisation Status in its Message and all the
other data items that are the Supplier's responsibility under
Schedule 2 have not been included or data item 6 in
Schedule 2 for that New Metering Point is not included in
the Skeleton Record, the Host PES shall Reject the
Message and shall inform the Supplier that such Message
has been Rejected together with all the reasons for its
Rejection. Each Host PES may also Reject an Application
for Registration which contains values for other data items
in the MPAD for the relevant New Metering Point if they
are not provided in the combinations required under that
Host PES's Validation Procedures.
20.5 Where the Host PES receives a Valid Application for
Registration from a Supplier in relation to a New Metering
Point which it does not Reject in accordance with Clause
20.4, it shall Register the Supplier and shall notify the
Supplier and, where data item 14 has a value other than null
and, where such persons are identified in respect of the New
Metering Point the Data Aggregator that the Supplier has
been Registered for that New Metering Point. The Supplier
shall be deemed responsible for the supply of electricity
through the relevant New Metering Point from the Supply
Start Date included in its Valid Application for Registration.
20.6 Subject to Clauses 15.3 and 20.2, the Supplier shall use its
reasonable endeavours to submit a Valid Application for
Registration to the Host PES as far in advance of the
Supply Start Date as reasonably possible taking into
account the restrictions set out in Clause 20.2.2. The
relevant Host PES shall not be responsible for ensuring that
the Supplier complies with the requirements of this Clause
20.6.
20.7 The Supplier shall use its reasonable endeavours not to
commence supplying electricity through any Metering Point
until it has received from the relevant Host PES a notice
confirming its Registration in respect of the relevant
Metering Point or (if later) the Supply Start Date specified
in the Supplier's Application for Registration. The relevant
Host PES shall not be responsible for ensuring that the
Supplier complies with the requirements of this Clause 20.7.
Where the Supplier is unable to comply with the provisions
of this Clause 20.7 due to the relevant Host PES's failure to
send out a notice confirming its Registration within the
timescale indicated in Clause 14.3, that Supplier shall be
deemed not to be in breach of the obligation set out in this
Clause 20.7.
20.8 Where a Host PES receives an Application for Registration
for a New Metering Point from a Supplier which is not a
Valid Application for Registration, it shall Reject the
Application for Registration and shall notify the Supplier
that the application has been Rejected together with all the
reasons for its Rejection. Notwithstanding Clause 20.2.2,
the MPAS Registration Systems of some Host PESs may
not Reject an otherwise Valid Application for Registration if
the Application for Registration is received after the date
that is the last Operational Working Day before the Supply
Start Date included in the Supplier's Application for
Registration.
20.9 The Host PES shall ensure that, where data item 6 in
Schedule 2 for the relevant New Metering Point has not
been included in the Skeleton Record and the Supplier has
provided the values for data items 4, 5 and 17 in Schedule 2
for the relevant New Metering Point at least 6 Operational
Working Days before the Supply Start Date specified in the
Supplier's Application for Registration, it shall provide and
record data item 6 in Schedule 2 for the relevant New
Metering Point at least 2 Operational Working Days before
the Supply Start Date for the Supplier specified in the
Supplier's Application for Registration.
20.10 The Supplier shall notify the Host PES as soon as
reasonably practical of the other data items for which the
Supplier is identified as being responsible in Schedule 2,
where it has not already done so pursuant to Clause 20.4.
Such data items may be provided at the same time or at
different times provided that where the relevant Host PES's
Validation Procedures require such data items to be
provided in particular combinations, the Supplier shall
provide such combinations of data items at the same time.
On each occasion that the Supplier provides such
information and the Host PES Accepts such information it
shall confirm its Acceptance to the Supplier and, where data
item 14 has a value other than null, where such person is
identified in respect of the New Metering Point, the
Supplier's Data Aggregator. Where the information is not
Accepted, the Host PES shall Reject such information and
shall inform the Supplier that the Message has been
Rejected together with all the reasons for its Rejection.
20.11 If at any time the Supplier attempts to send a Message
including the Energisation Status and all the other data
items that are the Supplier's responsibility under Schedule 2
for the New Metering Point have not yet been provided to
the Host PES or data item 6 in Schedule 2 for the New
Metering Point is not included in the Skeleton Record, the
Host PES shall Reject such Message and shall inform the
Supplier that the Message has been Rejected together with
all the reasons for its Rejection. A Host PES may also
Reject a Message which contains values for other data items
in the MPAD for the New Metering Point if they are not
provided in the combinations required under that Host
PES's Validation Procedures.
20.12 Where the Supplier notifies the Host PES of the other data
items referred to in Clause 20.10 after the Supply Start Date
submitted pursuant to Clause 20.5 and such application is
Rejected the Supplier shall contact the Host PES and the
Supplier and Host PES shall agree on an appropriate means
of enabling the Supplier to register all its other data items
after that Supply Start Date. This may include use of the
procedure provided for under Clause 19.
21. DE-REGISTRATION OF SUPPLY NUMBERS
21.1 Where a Host PES receives a De-Registration Notice from
its Distribution Business and such notification is Accepted
on the Host PES's MPAS Registration System, the Host
PES shall note on its MPAS Registration System that no
further Registrations can be made in respect of the relevant
Metering Point. Where the Host PES does not Accept the
Message, it shall Reject the Message and shall inform its
Distribution Business that the Message has been Rejected
and all the reasons for such Rejection.
21.2 The Host PES shall send the Supplier that is Registered in
respect of that Metering Point at the date included in the
De-Registration Notice sent under Clause 21.1 and that
Supplier's Data Aggregator and any Data Aggregator that
the Supplier may have appointed for a future date and, if
relevant, any New Supplier that has sent a Valid Application
for Registration in respect of the Metering Point for a
Supply Start Date after that date together with that New
Supplier's Data Aggregator a Message stating that the Host
PES has noted that no further Registrations may be made
against the relevant Metering Point, and that from the date
that the Metering Point is De-Registered, the Supplier shall
no longer be liable for supply to that Metering Point
21.3 Each Host PES shall ensure that any record of any details
relating to a Metering Point shall not be removed from its
MPAS Registration System into archiving until at least 2
years after the date of receipt of the De-Registration Notice
received pursuant to Clause 21.1, but such Metering Point
shall not be included in any reports provided by the Host
PES pursuant to Clause 27 after receipt of the De-
Registration Notice.
22. FULL REFRESH
Procedure for Full Refreshes to Suppliers and Data
Aggregators
22.1 A Supplier or Data Aggregator may request a Full Refresh
from a Host PES. The Supplier or Data Aggregator shall
provide any such request using a mode of communication
permitted under Clause 46.
22.2 Where the Host PES receives the Supplier's or Data
Aggregator's request under Clause 22.1, it shall respond
within 1 Operational Working Day of receipt of such
request sent pursuant to Clause 22.1, indicating a scheduled
date for the delivery of the Full Refresh. A Host PES shall
be required to provide such Full Refresh within 15
Operational Working Days of receipt of that request,
provided that where more than 3 requests are received
within a 5 Operational Working Day period, the Host PES
shall use its reasonable endeavours to provide as many Full
Refreshes as possible, but shall only be required to provide
Full Refreshes in response to the first 3 requests received
during that 5 Operational Working Day period within 15
Operational Working Days of the request. Any further
requests received during that 5 Operational Working Day
period shall be deemed to have been received on the fifth
Operational Working Day after the Operational Working
Day on which the first request was received. Where the
request for a Full Refresh is Rejected, the Host PES shall,
within 1 Operational Working Day, inform the relevant
Supplier or Data Aggregator that the request has been
Rejected together with all the reasons for that Rejection.
22.3 The relevant Host PES shall send the Full Refresh requested
pursuant to Clause 22.1 to the relevant Supplier or Data
Aggregator on a CD ROM or by another electronic method
agreed between the Host PES and Supplier or Data
Aggregator, as appropriate, so that it is deemed to be
received by the relevant Supplier or Data Aggregator by the
scheduled date for delivery indicated in Clause 22.2.
23. SELECTIVE REFRESHES
Procedure for Selective Refreshes to Suppliers and Data
Aggregators
23.1 Where a Supplier or Data Aggregator requires a Selective
Refresh of data from a Host PES, it shall submit a request
for a Selective Refresh to the relevant Host PES. The
Supplier or Data Aggregator shall provide such request
using a mode of communication permitted under Clause 46.
23.2 Where the Host PES receives the Supplier's or Data
Aggregator's request pursuant to Clause 23.1 by 15:00
hours on an Operational Working Day , it shall provide the
Supplier or Data Aggregator with the Selective Refresh by
06:00 hours on the following Operational Working Day,
provided that where the total number of Selective Refreshes
to be provided by that Host PES would otherwise exceed
50 in any Operational Working Day, the Host PES shall use
its reasonable endeavours to provide as many Selective
Refreshes as possible but shall only be required to provide
50 Selective Refreshes requested on that Operational
Working Day. Such Selective Refreshes shall be provided
in the following manner:
23.2.1 a maximum of 5 Selective Refreshes per Supplier or
Data Aggregator, allocated in the order in which
those requests are received; and
23.2.2 where Clause 23.2.1 has been complied with, any
extra requests which have been received shall be
provided in the order in which they were received.
Any extra Selective Refreshes in excess of 50 requested in
any Operational Working Day or any received after 15:00
hours on an Operational Working Day in relation to which
the Host PES has not provided responses shall be deemed
to have been requested at the start of the following
Operational Working Day. Where the request for a
Selective Refresh is Rejected, the Host PES shall, within 1
Operational Working Day, inform the relevant Supplier or
Data Aggregator that the request has been Rejected
together with all the reasons for that Rejection.
24. CHANGES AND CONFIRMATIONS OF DATA
Procedure for changes to data items for which the Host PES is
responsible
24.1 Where a Host PES is notified by its Distribution Business of
any changes to data items for which it is stated to be
responsible as Host PES in Schedule 2 (and any
corresponding dates from which those changes will be
effective) in respect of any Metering Points that are
Registered on the Host PES's MPAS Registration System
and such notice is Accepted on the Host PES's MPAS
Registration System, the Host PES shall update its MPAS
Registration System with the information within 1
Operational Working Days of receiving such notification,
and, after updating its MPAS Registration System, shall
notify the Supplier that is Registered for the affected
Metering Point(s) and that Supplier's Data Aggregator
(apart from where the change relates to data item 9 in
Schedule 2) and, if relevant, any New Supplier that has sent
a Valid Application for Registration in respect of the
Metering Point for a Supply Start Date after the date of
amendment together with that New Supplier's Data
Aggregator (apart from where the change relates to data
item 9 in Schedule 2) of such changes. The Host PES shall
acknowledge to its Distribution Business that such change
has taken place. Where the Host PES Rejects such changes
it shall notify its Distribution Business that such changes
have been Rejected and all the reasons for that Rejection.
Procedure for changes to data items for which Supplier is
responsible
24.2 Subject to Clause 16.7, a Supplier may only provide
changes to data items for which it is stated to be responsible
in Schedule 2 (apart from data item 10) for any Metering
Point from the date that the Host PES Registers a Valid
Application for Registration for that Supplier in relation to
that Metering Point, such changes to take effect from the
later of the Supply Start Date for that Supplier or the date
from which such change is to take effect.
24.3 The Supplier shall notify the Host PES of any changes to
data items (and any corresponding dates from which those
changes will be effective) for which it is stated to be
responsible in Schedule 2 (other than data items 7, 8 and
10) in respect of Metering Points for which it is Registered
on the Host PES's MPAS Registration System within 5
Operational Working Days of such changes taking effect, or
becoming aware that such changes are required whichever
is the later. The Host PES validation rules shall not prevent
the Supplier changing data items for which it is responsible
(other than data items 7, 8 and 10) at any time up to Final
Reconciliation Run.
24.4 Where the Host PES Accepts the changes provided by the
Supplier under Clause 24.3, it shall update its MPAS
Registration System to reflect the changes. Where a change
is made to data item 13 of Schedule 2, the Host PES shall
notify the Data Aggregator that was appointed in relation to
the Metering Point before the change, the Data Aggregator
that the Supplier has appointed in its place, the Supplier,
any New Supplier that has sent a Valid Application for
Registration in respect of the Metering Point for a Supply
Start Date after the date of amendment and its Distribution
Business that such change has been made after it has
Accepted the change. Where changes are made to any
other data items for which the Supplier is stated to be
responsible under Schedule 2 (other than data items 7, 8 and
10) the Host PES shall notify the relevant Supplier and that
Supplier's Data Aggregator (apart from where the change
relates to data items 5 or 11) and, if relevant, any New
Supplier that has sent a Valid Application for Registration in
respect of the Metering Point for a Supply Start Date after
the date of amendment together with that New Supplier's
Data Aggregator (apart from where the change relates to
data items 5 or 11) and its Distribution Business that such
changes have been made. Where the Host PES does not
Accept the changes provided by the Supplier under Clause
24.3 it shall Reject such changes and shall notify the
Supplier of such Rejection and all the reasons for such
Rejection.
Procedure for changes and confirmations of Market Domain
Data
24.5 Where the Host PES receives Market Domain Data, it shall
acknowledge receipt of the information to the Initial
Settlement and Reconciliation Agent, within 1 Operational
Working Day of receipt. Where the Host PES receives the
Market Domain Data and such information is in the correct
format and not corrupt it shall update its MPAS
Registration System as soon as reasonably practicable and
no later than within 5 Operational Working Days with the
information. Where the Host PES receives the Market
Domain Data and such information is in the incorrect format
or corrupt or otherwise cannot be entered by that Host PES
into its MPAS Registration System it shall notify the Initial
Settlement and Reconciliation Agent, that it has rejected
the Market Domain Data within 5 Operational Working
Days of receipt. Where the relevant Initial Settlement and
Reconciliation Agent, resends such information such that
the Host PES can enter it into its MPAS Registration
System, the Host PES shall acknowledge receipt of any
such information re-sent within 1 Operational Working Day
of receipt. Acknowledgement of receipt from a Host PES's
Gateway shall be deemed sufficient acknowledgement of
receipt for the purposes of this Clause 24.
Confirmations from Suppliers of Data Items
24.6 The Host PES may, to the extent reasonably required for
the proper operation of the market, request a Supplier to
provide the Host PES with data items for which the
Supplier is stated to be responsible in Schedule 2 in respect
of Metering Points which are Registered to that Supplier on
the Host PES's MPAS Registration System. Where the
Supplier receives the Host PES's reasonable request under
this Clause 24.6, it shall respond within 2 Operational
Working Days of receipt of such request, indicating a
scheduled date for delivery. The Supplier shall set such
date as is reasonably practicable following receipt of the
request taking into account the fact that the Supplier shall
use its reasonable endeavours to provide the data items as
soon as possible. The relevant Supplier shall process such
requests in the order in which they are received.
25. RESENDS
Procedure for Resends to Suppliers and Data Aggregators
25.1 Where a Supplier or Data Aggregator requires the Host
PES to re-transmit one or more Files which was originally
transmitted to the Supplier or Data Aggregator during the
period of 28 days prior to the date on which the Host PES
receives a request for such re-transmission ("Resend"), the
Supplier or Data Aggregator shall provide the relevant Host
PES with a request for a Resend, indicating which Files it
requires to be Re-sent and the reasons for the request. The
Supplier or Data Aggregator shall provide such request
using any mode of communication permitted under Clause
46.
25.2 Where the Host PES receives the Supplier's or Data
Aggregator's request under to Clause 25.1 by 15:00 hours
on an Operational Working Day, it shall provide the
Supplier or Data Aggregator with the Resend by 06:00
hours on the following Operational Working Day, provided
that where the total number of Resends to be provided by
that Host PES would otherwise exceed 50 in any
Operational Working Day, the Host PES shall use its
reasonable endeavours to provide as many Resends as
possible but shall only be required to provide the first 50
Resends requested on that Operational Working Day. Such
Resends shall be provided in the following manner:
25.2.1 a maximum of 5 Resends per Supplier or Data
Aggregator, allocated in the order in which those
requests are received; and
25.2.2 where Clause 25.2.1 has been complied with, any
Resends for which requests have been received on
that Operational Working Day shall be provided in
the order in which they were received.
Any requests for Resends in excess of 50 on any
Operational Working Day, or any requests for Resends
received after 15:00 hours on an Operational Working Day
in relation to which the Host PES has not provided
responses, shall be deemed to have been requested at the
start of the following Operational Working Day.
25.3 For the purposes of Clause 31, each Host PES shall
determine whether the original Message that is required to
be Resent reached and was accepted on the Supplier's or
Data Aggregator's Gateway before the Supplier or Data
Aggregator submitted a request for a Resend pursuant to
Clause 25.1, and shall on request provide its reasons for
such determination. The Host PES shall only levy a charge
pursuant to Clause 31 for Resends where the Host PES
determines that the Message did reach the relevant
Supplier's or Data Aggregator's Gateway.
26. REVOCATION OF LICENCE
26.1 Where a Host PES receives a copy of a direction from the
Director to a Supplier ("Directed Supplier"), which directs
the Directed Supplier to inform the Customers of another
Supplier whose Second Tier Supply Licence or PES
Licence has been or is about to be revoked of such
revocation, the Host PES shall notify the Directed Supplier
as soon as reasonably possible, but within 4 Operational
Working Days of receiving such copy of all data items in
respect of all the Metering Points in respect of which the
Supplier whose Second Tier Supply Licence or PES
Licence has been or is about to be revoked is Registered on
the Host PES's MPAS Registration System. Such details
shall be transmitted using the mode of communication
agreed between the Host PES and Directed Supplier.
27. REPORTING
27.1 Each Host PES shall provide each Supplier with a schedule
within 20 Operational Working Days after each Quarter
Day of all Supply Number core data and Metering Point
addresses held on that Host PES's MPAS Registration
System as at the Quarter Day, unless a Supplier requests the
Host PES not to provide it with such a schedule. Such
schedule shall be provided on CD ROM unless another
appropriate electronic method is agreed with a particular
Supplier.
27.2 Each Host PES in England and Wales shall, until the Pool
Executive Committee resolves that the Migration of the
Metering Points registered on ERS to the Host PES's
MPAS Registration Systems has been completed, provide
the Settlement System Administrator with a report in a
format to be agreed by the affected parties within 5
Operational Working Days of the end of each week
detailing the Supply Number core data and data item 19 in
Schedule 2 for Metering Points Registered on the Host
PES's MPAS Registration System that have the 1998
Trading Arrangement Indicator set to "N".
27.3 Each Host PES in England and Wales shall provide the Pool
Executive Committee and each Host PES in Scotland shall
provide SESL with a report in a format to be agreed by the
affected parties within 10 Operational Working Days after
each Quarter Day, detailing by Supplier the number of
Metering Points divided by measurement class, Registered
on that Host PES's MPAS Registration System that as at
the Quarter Day have the 1998 Trading Arrangement
Indicator set to 'Y' and data item 14 of Schedule 3 set to
energised.
27.4 Each Host PES in Scotland shall provide the secretary to
the Performance and Assurance Accreditation Panel with a
report, in a format to be agreed by the affected parties,
within 10 Operational Working Days after each Quarter
Day, detailing by Supplier the number of Metering Points
Registered on that Host PES's MPAS Registration System
that, as at the Quarter Day have the 1998 Trading
Arrangement Indicator set to 'Y'.
27.5 Each Host PES in England and Wales shall provide the Pool
Executive Committee and each Host PES in Scotland shall
provide the secretary to the Performance Assurance and
Accreditation Panel with a report in a format to be agreed
by the affected parties within 10 Operational Working Days
of receiving a request from the Pool Executive Committee
or Performance Assurance and Accreditation Panel, as
relevant, detailing the Supply Numbers Registered against
each Supplier on that Host PES's MPAS Registration
System as at the date specified by the Pool Executive
Committee or Performance Assurance and Accreditation
Panel, as relevant. Such report shall classify the information
by GSP Group or Bulk Supply Point Group as relevant to
the Host PES. Within each GSP Group or Bulk Supply
Point Group, the information shall be categorised by
Measurement Class. Where there are non-half hourly
Measurement Classes covered by such a report, that
information shall be further categorised and sub-divided by
Profile Class.
27.6 Where the Host PES receives a request from a Data
Aggregator to notify it of the last File sequence number sent
to that Data Aggregator, that Host PES shall within 1
Operational Working Day notify the Data Aggregator by
telephone or facsimile of such number and the date on
which the relevant File was sent.
27.7 Each Host PES shall provide all Suppliers, the Pool
Executive Committee or the secretary to the Performance
Assurance and Accreditation Panel as appropriate and the
Director, within 10 Operational Working Days of the end of
each calendar month, with a report in a format to be agreed
by the affected parties in detailing its performance against
the requirements set out in Clause 14.4 and 14.5 during the
Quarter relevant to that calendar month, unless a party
requests the Host PES not to provide it with such a report.
This report shall also detail the Host PES's performance
against Clauses 17.4, 22.2, 22.3, 23.2, and 25.2.
27.8 Each Host PES shall provide the Director with a report
within 10 Working Days after each Quarter Day detailing by
Supplier the number of Notices of Objection received by
that Host PES in the preceding Quarter.
27.9 Within 10 Operational Working Days after the 15th day of
each calendar month, each Host PES shall provide the
Secretariat with a report detailing, for each Supplier
Registered on that Host PES's MPAS Registration System
during the previous month, the number of Metering Points
for which the 1998 Trading Arrangements Indicator is set to
"Y" and in respect of which that Supplier was Registered at
the 15th day of that month.
27.10 Within 12 Working Days of the end of each calendar month
the Secretariat shall forward copies of each report received
pursuant to Clause 27.9 to the Data Transfer Service
Controller.
27.11 Each Host PES in England and Wales shall make available,
in a format to be agreed by the affected parties, to the Pool
Executive Committee any information collected for the
purpose of compiling the report in Clause 27.7 within 5
Operational Working Days of the request.
28. ACCURACY VALIDATION OF DATA AND MESSAGE
PROCESSING
28.1 Each Supplier shall use its reasonable endeavours to ensure
that any data items, for which it is deemed responsible for
under Schedule 2, that it submits to a Host PES pursuant to
this Agreement are complete and accurately reflect the
circumstances relating to the relevant Metering Point.
28.2 Each Host PES shall use its reasonable endeavours to
ensure that:
28.2.1 any data that it provides under this Agreement are
complete, in the correct format and are consistent
with the information provided to the Host PES, and
are sent to the correct recipient;
28.2.2 in relation to any Metering Point within its
Authorised Area, data items 1, 2, 3, 15 and 20 in
relation to any Metering Point are complete and
accurately reflect the circumstances relating to that
Metering Point; and
28.2.3 any data with which the Host PES initially populates
the relevant data items on the MPAS Registration
System are complete and accurately reflect the
circumstances relating to that Metering Point at the
time at which the Host PES initially populates those
data items.
Validation Procedures
28.3 Each Host PES shall notify each Supplier of the Validation
Procedures which it applies to Messages received and sent
by that Host PES's MPAS Registration System as at the
date of this Agreement on or before the date of this
Agreement ("Validation Procedures").
28.4 Each Host PES in England and Wales shall ensure that its
Validation Procedures comply with the Pool's validation
requirements set out in Schedule 10. Each Host PES in
Scotland shall ensure that its Validation Procedures comply
with the Scottish Settlements validation requirements set
out in Schedule 11.
28.5 Where a Host PES proposes to change its Validation
Procedures which it applies to Supplier Messages, it shall
notify all Suppliers and the Pool Agent or SESL, as
appropriate of any proposed changes to Validation
Procedures at least 15 Operational Working Days before it
proposes that such changes shall take effect.
28.6 Unless before the expiry of 15 Operational Working Days
after receipt of the notification sent in accordance with
Clause 28.5 any party gives notice to MEC that such
changes should be considered as if it were a change to this
Agreement, such change shall take effect (subject to Clause
28.4) from the date indicated in the notice sent pursuant to
Clause 28.5.
28.7 Where a party gives notice in accordance with Clause 28.6,
such proposed change shall be treated as if it were a
proposal to change this Agreement and the procedures set
out in Clause 9 shall be followed. Where, in the opinion of
the relevant Pool MEC Member or SESL Member, the
proposed change relates to or will affect the Priority
Provisions such proposed change shall be treated as a
Change Proposal and the appropriate procedures set out in
Clause 9 shall be followed.
28.8 In the event of any inconsistency between the provisions of
this Agreement and any Host PES's Validation Procedures,
the provisions of this Agreement shall prevail.
Message Processing
28.9 Where transmission of a Message by a Host PES's MPAS
Registration System fails the validation procedures of a
Data Aggregator to whom it was sent, the Data Aggregator
shall attempt to resolve the failure and validate the Message.
If the Data Aggregator is unable to resolve the failure, it
shall notify the Host PES, who shall use its reasonable
endeavours to identify the cause of the failure. If the Host
PES identifies the cause of the failure to be:
28.9.1 a fault on the Data Transfer Network, the Host PES
shall treat the failure as a request for a Resend and
the provisions of Clause 25 shall apply; or
28.9.2 a fault of that Host PES's MPAS Registration
System, the Host PES shall use its reasonable
endeavours to resolve the failure; or
28.9.3 a fault of the Data Aggregator, the Host PES shall
notify the Data Aggregator of that fact.
If the Host PES is unable to resolve the failure, or identifies
the cause of the failure to be the fault of the Data
Aggregator in accordance with Clause 28.9.3, it shall notify
the relevant Supplier who appointed that Data Aggregator,
of that fact, and that Supplier may refer the matter to the
MRA Disputes Committee.
28.10 Where a Message from a Supplier or Data Aggregator is
Rejected by the Host PES's MPAS Registration System to
which it was sent, the relevant Supplier or Data Aggregator
shall attempt to resolve the cause of the Rejection. If the
Supplier or Data Aggregator is unable to resolve the cause
of the Rejection, it shall notify the Host PES, who shall use
its reasonable endeavours to identify the cause of the
Rejection. If the Host PES identifies the cause of the
Rejection to be:
28.10.1 a fault on the Data Transfer Network, the Host PES
shall request the relevant Supplier or Data
Aggregator to resend the Message; or
28.10.2 a fault of that Host PES's MPAS Registration
System, the Host PES shall use its reasonable
endeavours to resolve the fault; or
28.10.3 a fault of the Supplier or Data Aggregator, the Host
PES shall notify the relevant Supplier or Data
Aggregator of that fact.
If the Host PES is unable to resolve the cause of the
Rejection, or identifies the cause of the Rejection to be the
fault of the Data Aggregator in accordance with Clause
28.10.3, it shall notify the Supplier who appointed the
relevant Data Aggregator, of the fact.
PART V: OTHER CHANGE OF SUPPLIER SERVICES
29. CHANGE OF SUPPLIER METER READING
29.1 Within 5 Operational Working Days of receiving
notification from a Host PES pursuant to Clause 15.10 that
a New Supplier has been Registered for a particular
Metering Point and provided that the Old Supplier is not
intending to send a Notice of Objection in relation to the
Registration, the Old Supplier shall serve notice upon each
of its Meter Operator, Data Collector and Data Aggregator
that its appointment as Meter Operator, Data Collector or
Data Aggregator as the case may be, in respect of the
relevant Metering Point shall cease from the time that the
Old Supplier shall cease to be responsible for supplying that
Metering Point in accordance with Clause 15.10.
29.2 The Old Supplier and the New Supplier shall be bound by
the Pool Requirements on change of supplier from an Old
Supplier to a New Supplier set out in the following
provisions, forming part of the Pooling and Settlement
Agreement, as amended from time to time and to the extent
applicable:
29.2.1 clause 1.3.3 and 1.3.2.3 of Service Line SL130;
29.2.2 clauses 2.2.3, 3.2.3, 2.2.7 and 3.2.7 of Agreed
Procedure AP502;
29.2.3 clauses 1.3.3, 1.5.3.5, 1.5.4.1 and 1.5.4.2 of Service
Line SL120;
29.2.4 clauses 2.2.6 ,3.2.6 and 4.4 of Agreed Procedure
AP504;
29.2.5 sections 50.3 and 51.3 of the Pool Rules; and
29.2.6 Schedule 26 of the Pooling and Settlement
Agreement,
and the equivalent provisions of the Settlement Agreement
for Scotland, where appropriate.
29.3 Where a meter reading (which term includes a deemed
meter reading) which has been provided to the Old Data
Collector by the New Data Collector, on a change of
supplier from an Old Supplier to a New Supplier, is
disputed by the Old Supplier under and in accordance with
the Settlement Agreement, and as a result the New Supplier
obtains a further meter reading, the New Supplier may
reclaim from the Old Supplier its reasonable costs of
obtaining such further meter reading if the original meter
reading submitted to the Old Supplier is determined to be
"reasonably accurate". For these purposes an original meter
reading shall be "reasonably accurate" if the meter advance
is within plus or minus 5% of the meter advance
subsequently established.
29.4 On a change of supplier from an Old Supplier to a New
Supplier, the Old Supplier and the New Supplier shall
ensure that any relevant Customer is not charged twice in
respect of its consumption of electricity and shall, where
appropriate, use their reasonable endeavours to ensure that
the same meter reading is used on the opening and closing
accounts issued to any relevant Customer.
29.5 On, or in relation to any change of supplier from an Old
Supplier to a New Supplier, the Old Supplier and the New
Supplier agree to procure that their respective Data
Collector may exchange any relevant information (including
confidential information) that either receives from the
relevant Supplier with the other's Data Collector to the
extent necessary to comply with the provisions of this
Clause 29 or any other provisions applying to either of them
on the relevant change of supplier.
PART VI: RECORDS, AUDIT AND NON-FUNCTIONAL
REQUIREMENTS
30. RECORDS, AUDIT AND NON-FUNCTIONAL
REQUIREMENTS
30.1 Each Host PES shall ensure that it securely maintains a
historical record of all data items that have been held in
respect of a Metering Point on its MPAS Registration
System and that such records are fully auditable, so that a
full historical record is maintained for the 7 years following
initial settlement date in relation to any particular data item,
the two most recent years being held on-line.
30.2 Each Host PES shall ensure that it retains copies of all
Messages sent and received in providing Services for at
least three years after the Messages have been sent or
received.
30.3 Each Host PES in England and Wales shall ensure that the
Pool Auditor, and each Host PES in Scotland shall ensure
that the Market Auditor, has access at reasonable times and
on reasonable notice to:
30.3.1 those records maintained by the Host PES pursuant
to Clause 30.1;
30.3.2 any software, hardware, data or information held by
the Host PES or its agents where reasonably
required by the Pool Auditor or Market Auditor to
fulfil its obligations under the relevant Settlement
Agreement;
30.3.3 the relevant parts of the Host PES's premises; and
30.3.4 relevant staff members of the Host PES, for a
reasonable length of time in any one year.
30.4 On request by the Pool Auditor or Market Auditor, as the
case may be, each Supplier shall ensure that the Pool
Auditor or Market Auditor has access at reasonable times
and on reasonable notice to:
30.4.1 any records, maintained by the Supplier in relation to
any Metering Point for which it is or has been
Registered, in the 7 years prior to the date of that
request;
30.4.2 any software, hardware, data or information held by
the Supplier or its agents where reasonably required
by the Pool Auditor or Market Auditor to fulfil its
obligations under the relevant Settlement
Agreement;
30.4.3 the relevant parts of the Supplier's premises; and
30.4.4 relevant staff members of the Supplier for a
reasonable length of time in each year.
30.5 Each Host PES in England and Wales shall ensure that
during the course of this Agreement its MPAS Registration
System complies with the requirements set out in Appendix
1 to Schedule 6. Each Host PES in Scotland shall ensure
that during the course of this Agreement its MPAS
Registration System complies with the requirements set out
in Appendix 1 to Schedule 7.
30.6 On request by MEC each Host PES and each Supplier shall
ensure that any auditor appointed by MEC has access at
reasonable times and on reasonable notice to:
30.6.1 in the case of a Supplier, any records maintained by
that Supplier in relation to any Metering Point for
which it is or has been Registered in the 7 years
prior to that date;
30.6.2 in the case of a Host PES any records maintained by
that Host PES in relation to any Metering Point in
its Authorised Area in the 7 years prior to that date;
30.6.3 any software, hardware, data or information held by
the Supplier or its agents where reasonably required
by the auditor; and
30.6.4 the Host PES's or Supplier's premises.
PART VII: CHARGING, BILLING AND PAYMENT
31. CHARGING
31.1 Subject to Clause 31.2, in relation to the provision of each
of the Services referred to in Schedule 8, the Supplier, Data
Aggregator, Pool Agent or SESL shall pay the relevant
Host PES the charges set out in the relevant Host PES's
Condition 2 Statement, Condition 8E Statement, Condition
8 Statement, or Condition 11E Statement, as appropriate,
provided that no Host PES shall charge for the provision of
the contact notice facility pursuant to Clause 17 during
Controlled Market Start Up in that Host PES's Authorised
Area.
31.2 A Host PES shall not charge for any of the Services referred
to in Schedule 8 in circumstances where the provision of
that Service arose as a result of the relevant Host PES's
failure to provide the Services in accordance with the
provisions of this Agreement.
31.3 Without prejudice to Clause 31.4, where a Host PES is
intending to revise the charges for Services, it shall serve a
copy of any notice it sends to the Director pursuant to
paragraph 18 of Condition 8 of the PES Licence in England
and Wales or paragraph 21 of Condition 2 of Part VI of the
PES Licence in Scotland on all Suppliers, Data
Aggregators, the Pool Agent and SESL as soon as
reasonably possible after such notice is sent to the Director.
31.4 Each Host PES may vary the charges payable in respect of
those Services listed in Schedule 8 at any time by giving at
least 5 months written notice to all Suppliers, Data
Aggregators, the Pool Agent and SESL. Such charges and
any variations are and will be calculated:
31.4.1 in accordance with the Condition 8 Statement in
England and Wales and Condition 2 Statement in
Scotland in the first year after the date of the
Agreement; and
31.4.2 in accordance with the Condition 8 and Condition
11E Statements in England and Wales and the
Condition 2 and Condition 8E Statements in
Scotland, as appropriate thereafter.
31.5 Charges for the provision of those Services not referred to
in Schedule 8 shall be recovered by each Host PES as an
element of the charges which it levies on Suppliers under
the terms of its Use of System Agreements. Such charges
shall be varied in accordance with the provisions of each
Use of System Agreement for that Host PES. Each Host
PES shall be entitled to recover from each Supplier the
charges relating to those Services not referred to in
Schedule 8 set out in the relevant Host PES's Condition 2
Statement, Condition 8 Statement, Condition 8E Statement
or Condition 11E Statement, as appropriate, even where
there is no express obligation on the relevant Supplier in the
relevant Use of System Agreement to pay those charges.
32. BILLING AND PAYMENT
32.1 Within 15 Operational Working Days after the end of each
calendar month each Host PES shall submit to each
Supplier, each Data Aggregator, the Pool Agent and SESL
a statement specifying:
32.1.1 the Services listed under Schedule 8 provided;
32.1.2 the charges levied with respect to each of those
Services; and
32.1.3 any charges from previous monthly statements
which have not been paid,
in respect of Services as set out in Schedule 8 performed
during that month for that Supplier, Data Aggregator, Pool
Agent or SESL and setting out the total charges incurred,
provided that where the total charges incurred, not
including VAT, are less than or equal to (POUND)100, that payment
shall not then become due and shall be included in the
statement for the following month. Where the aggregate of
any unpaid charges on a monthly statement issued to a
Supplier, the Pool Agent or SESL, pursuant to Clause 32.1,
including any unpaid amounts pursuant to Clause 32.1.3,
exceeds (POUND)100, not including any VAT, the Host PES shall
submit to that Supplier, the Pool Agent or SESL an invoice
setting out the total payment due and any VAT payable
thereon, provided that in the monthly statement for April in
each year, the Host PES shall submit to that Supplier, Pool
Agent or SESL an invoice setting out the total payment due
for that month and any previous months which have not
been paid, irrespective of whether the aggregate of those
amounts exceeds (POUND)100.
32.2 Subject to Clause 32.3, within 20 Operational Working
Days of receipt of an invoice submitted in accordance with
Clause 32.2, the Supplier, Data Aggregator, the Pool Agent
or SESL shall pay to the relevant Host PES all sums due in
respect of such invoice in pounds sterling by electronic
transfer of funds or other agreed means to such bank
account (located in the United Kingdom) as is specified in
the invoice, together with, where appropriate, an associated
remittance advice, quoting the invoice number against which
payment is made.
32.3 Where any sum included in a statement submitted in
accordance with Clause 32.1 is disputed by a Supplier, Data
Aggregator, the Pool Agent or SESL in good faith, that
Supplier, Data Aggregator, the Pool Agent or SESL shall
within 10 Operational Working Days of receipt of such
statement provide the relevant Host PES with a statement
of the amount in dispute. The Supplier, Data Aggregator,
the Pool Agent or SESL shall pay such amount included in
the statement in question as is not in dispute and shall be
entitled to withhold the balance pending resolution of the
dispute.
32.4 If a statement is served by a Supplier, Data Aggregator, the
Pool Agent or SESL under Clause 32.3, the relevant parties
shall use reasonable endeavours to resolve the dispute in
question within 20 Operational Working Days of it being
raised, failing which the provisions of Clause 37 shall apply.
Following resolution of the dispute, any amount agreed or
determined to be payable, together with any VAT payable,
shall be paid within 10 Operational Working Days after such
agreement or determination and interest shall accrue on
such amount, net of any VAT payable, from the date such
amount was originally due until the date of payment at the
rate of 1% per annum above the base rate during such
period of Barclays Bank plc (where the Host PES is located
in England and Wales) or Royal Bank of Scotland plc
(where the Host PES is located in Scotland), as
compounded annually.
32.5 Should a Supplier, Data Aggregator, the Pool Agent or
SESL fail to make payment on or before the due date of any
sum due in accordance with Clause 32.2 (other than any
sum which is the subject of a bona fide dispute in
accordance with Clause 32.3), interest on the amount
unpaid shall accrue from the date such amount was due until
the date of payment at the rate of 3% per annum above the
base rate during such period of Barclays Bank plc (where
the Host PES is located in England and Wales) or Royal
Bank of Scotland plc (where the Host PES is located in
Scotland), compounded annually.
32.6 Subject to Clause 32.3, all payments to be made by a
Supplier, Data Aggregator, the Pool Agent or SESL under
this Agreement shall be made without any set-off or
deduction in respect of any claims or disputes or otherwise
including any liquidated damages paid under Clause 14 but
shall be without prejudice to any claims or rights which a
Supplier, Data Aggregator, the Pool Agent, Pool Members
or any of them or SESL may have against the Host PES.
32.7 If the Director determines or the Host PES otherwise agrees
that the charges (including any variations thereof) payable
by a Supplier, Data Aggregator, the Pool Agent or SESL
under this Agreement have not been calculated strictly in
accordance with the terms of the relevant Host PES's
statement of charges for metering and data services issued
pursuant to either Condition 11E of the PES Licence in
England and Wales or Condition 8E of Part V of the PES
Licence in Scotland, as relevant, the relevant Host PES shall
pay to the Supplier, Data Aggregator, the Pool Agent or
SESL an amount in respect of each charging period equal to
the amount, if any, by which that Supplier, Data
Aggregator, the Pool Agent or SESL has been overcharged
during such charging period as a result together with
interest thereon from the date on which such charges were
paid until the date of payment of such interest. Such
interest shall accrue from day to day at the rate specified in
Clause 32.5.
32.8 Within 15 Operational Working Days after the end of each
Quarter each Host PES shall submit to each relevant
Supplier, Pool Agent or SESL a statement setting out, in
respect of that Quarter, the liquidated damages payments
which it reasonably considers to be payable to the Supplier
or the Pool Agent or SESL pursuant to Clause 14.9 or
14.10 as a result of failure by that Host PES to meet the
relevant service levels in Clause 14.4 or 14.5 during the
relevant Quarter.
32.9 Within 10 Operational Working Days of receiving a Host
PES's statement submitted in accordance with Clause 32.8,
the Supplier, Pool Agent or SESL shall submit to the Host
PES a statement setting out any further liquidated damages
payments which it considers to be payable by the Host PES
as a result of the failure by the Host PES to meet the
relevant service levels in either Clause 14.4 or Clause 14.5,
as relevant during the relevant Quarter over and above
those set out in the Host PES's statement submitted in
accordance with Clause 32.8 together in each case with
reasonable supporting evidence explaining why it considers
that further liquidated damages payments are payable.
32.10 Subject to Clause 32.11, within 10 Operational Working
Days of receipt of a statement submitted in accordance with
Clause 32.9 (or, if no such statement is submitted, within 20
Operational Working Days of dispatching its statement in
accordance with Clause 32.8) the Host PES shall pay to
each relevant Supplier, Pool Agent or SESL all sums due in
respect of:
32.10.1 the liquidated damages payments set out in the Host
PES's statement submitted in accordance with
Clause 32.8;
32.10.2 the undisputed portion of any further liquidated
damages payments set out in the statement of the
relevant Supplier, Pool Agent or SESL submitted in
accordance with Clause 32.9 and
32.10.3 the further liquidated damages payments resulting
from any undisputed further failures by the Host
PES to meet the relevant Service Levels set out in
the statement of a Supplier, the Pool Agent or SESL
submitted in accordance with Clause 32.9.
Any undisputed and unpaid sums from previous Quarters
shall be shown on each statement issued pursuant to Clause
32.8 until those sums are paid provided that such sums shall
only become payable by the Host PES when the aggregate
of the sums set out in Clauses 32.10.1 and 32.10.2 exceeds
(POUND)100. All sums due shall be paid by the Host PES in
pounds sterling by electronic transfer to funds or other
agreed means to such bank account (located in the United
Kingdom) as is specified by the Supplier, Pool Agent or
SESL together with, where appropriate, an associated
remittance advice, stating the period to which the payment
relates.
32.11 Where any sum included in a statement submitted in
accordance with Clause 32.9 is disputed by a Host PES in
good faith, the Host PES shall within 10 Operational
Working Days of receipt of such statement provide the
relevant Supplier, Pool Agent or SESL with a statement of
the amount in dispute. The Host PES shall pay such
amount included in the statement in question as is not in
dispute and shall be entitled to withhold the balance pending
resolution of the dispute.
32.12 If a statement is served by a Host PES under Clause 32.11
the parties shall use reasonable endeavours to resolve the
dispute in question within 20 Operational Working Days of
it being raised, failing which the provisions of Clause 37
shall apply. Following resolution of the dispute, any amount
agreed or determined payable shall be paid within 10
Operational Working Days after such agreement or
determination and interest shall accrue on such amount from
the date such amount was originally due until the date of
payment at the rate of 1% per annum above the base rate
during such period of Barclays Bank plc (where the Host
PES is located in England and Wales) or the Royal Bank of
Scotland plc (whether the Host PES is located in Scotland),
compounded annually.
32.13 Should a Host PES fail to make payment on or before the
due date of any sum due in accordance with Clause 32.10
(other than any sum which is the subject of a bona fide
dispute and which has been notified by the Host PES in
accordance with Clause 32.11), interest on the amount
unpaid shall accrue from the date such amount was due until
the date of payment at the rate of 3% per annum above the
base rate during such period of Barclays Bank plc (where
the Host PES is located in England and Wales) or The
Royal Bank of Scotland plc, (where the Host PES is located
in Scotland) compounded annually.
PART VIII: LIQUIDATED DAMAGES PAYMENTS CAP AND
LIMITATION OF LIABILITY
33. LIQUIDATED DAMAGES PAYMENTS CAP AND
LIMITATION OF LIABILITY
33.1 The maximum aggregate liability of each Host PES to all
Suppliers jointly for liquidated damages pursuant to Clause
14.10 in any Liquidated Damages Year, shall be
(POUND)1,300,000.
For the purposes of this Clause 33.1, "Liquidated Damages
Year" shall mean the period of 12 calendar months
commencing on the first day of the sixteenth week after the
commencement of Controlled Market Start Up in the
relevant Host PES's Authorised Area and each subsequent
period of 12 calendar months commencing on the
anniversary of that date.
33.2 Subject to Clauses 14.9, 14.10, 33.1, 33.4 and 33.6 and
save as provided in this Clause 33.2 and Clause 33.3, no
party (the "party liable") nor any of its officers, employees
or agents shall be liable to any other party for loss arising
from any breach of this Agreement other than for loss
directly resulting from such breach and which at the date
hereof was reasonably foreseeable as not unlikely to occur
in the ordinary course of events from such breach in respect
of:
33.2.1 physical damage to the property of that other party,
its officers, employees or agents; and/or
33.2.2 the liability of such other party to any other person
for loss in respect of physical damage to the
property of any person.
Provided that the liability of any party in respect of claims
for such loss arising from any incident or series of related
incidents shall in no circumstances exceed (POUND)1,000,000.
33.3 Nothing in this Agreement shall exclude or limit the liability
of the party liable for death or personal injury resulting from
the negligence of the party liable or any of its officers,
employees or agents and the party liable shall indemnify and
keep indemnified any other party, its officers, employees or
agents, from and against all such liability which such other
party may suffer or incur by reason of any claim on account
of death or personal injury resulting from the negligence of
the party liable or any of its officers, employees or agents.
33.4 Subject to Clause 14.9, 14.10, 33.1 and 33.6, no party, nor
any of its officers, employees or agents shall in any
circumstances whatsoever be liable to any other party for:
33.4.1 any loss of profit, loss of revenue, loss of use, loss
of contract or loss of goodwill; or
33.4.2 any indirect or consequential loss; or
33.4.3 loss resulting from the liability of such other party to
any other person howsoever and whensoever arising
save as provided in Clauses 33.2 and 33.3.
33.5 The rights and remedies provided by this Agreement to the
parties are exclusive and not cumulative and exclude and are
in place of all substantive (but not procedural) rights or
remedies express or implied and provided by common law
or statute in respect of the subject matter of this Agreement,
including any rights any party may possess in tort or delict
which shall include actions brought in negligence and/or
nuisance. Accordingly, each of the parties hereby waives to
the fullest extent possible all such rights and remedies
provided by common law or statute, and releases the party
liable, its officers, employees and agents to the same extent
from all duties, liabilities, responsibilities or obligations
provided by common law or statute in respect of the matters
dealt with in this Agreement and undertakes not to enforce
any of the same except as expressly provided herein.
33.6 Save as otherwise expressly provided in this Agreement,
this Clause 33 insofar as it excludes or limits liability shall
override any other provision in this Agreement provided
that nothing in this Clause 33 shall exclude or restrict or
otherwise prejudice or affect any of:
33.6.1 the rights, powers, duties and obligations of any
party which are conferred or created by the Act, any
licence granted pursuant to the Act or any
subordinate legislation made under the Act; or
33.6.2 the rights, powers, duties and obligations of the
Director or the Secretary of State under the Act, any
such licence or otherwise howsoever.
33.7 Each of the sub-clauses of this Clause 33 shall:
33.7.1 be construed as a separate and severable contract
term, and if one or more of such sub-clauses is held
to be invalid, unlawful or otherwise unenforceable
the other or others of such Clauses shall remain in
full force and effect and shall continue to bind the
parties; and
33.7.2 survive termination of this Agreement.
33.8 Each party hereby acknowledges and agrees that each of the
other parties holds the benefit of Clauses 33.1, 33.2, 33.3,
and 33.4 for itself and as trustee and agent for its officers,
employees and agents.
33.9 Each party hereby acknowledges and agrees that the
provisions of this Clause 33 have been the subject of
discussion and negotiation and are fair and reasonable
having regard to the circumstances as at the date hereof and
that where any provision of this Agreement provides for a
liquidated damage payment to be payable by a Host PES
upon or in respect of its failure to meet a service level, each
party agrees and acknowledges that such provision has been
the subject of discussion and negotiation, and in the case of
liquidated damages payment that the amount provided to be
payable represents a genuine pre-estimate of the loss of the
party.
33.10 For the avoidance of doubt, nothing in this Clause 33 shall
prevent or restrict any party enforcing any obligation
(including suing for a debt) owed to it under or pursuant to
this Agreement.
PART IX: EVENTS OF DEFAULT AND CONSEQUENCES OF
DEFAULT
34. EVENTS OF DEFAULT AND CONSEQUENCES OF
DEFAULT
34.1 It shall be an Event of Default if:
34.1.1 a party is in material breach of any of the material
terms or conditions of this Agreement and, if the
breach is or was capable of remedy, it fails to
remedy the breach within 20 Working Days of
receipt of a notice from MEC giving full details of
the breach, requiring the party to remedy the breach
and stating that a failure to remedy the breach may
give rise to consequences set out in Clause 34.3;
34.1.2 a party passes a resolution for its winding-up, or a
court of competent jurisdiction makes an order for
the winding-up or dissolution of the party;
34.1.3 an administration order is made in relation to a party
or a receiver is appointed over, or an encumbrancer
takes possession of or sells, any substantial part or
parts of the party's assets, rights, or revenues;
34.1.4 a party makes an arrangement or composition with
its creditors generally or makes an application to a
court for protection from its creditors generally;
34.1.5 a party is unable to pay its debts within the meaning
of Section 123 of the Insolvency Act 1986, but as if
in that Section the sum of (POUND)10,000 was substituted
for the sum of (POUND)750;
34.1.6 without prejudice to Clause 36 a circumstance of
Force Majeure which affects the performance by the
party of substantially all of its obligations under this
Agreement continues for more than 180 days;
34.1.7 any of the conditions precedent set out in Clauses
2.1, 2.2 and 2.3 or any of the conditions precedent
or suspensive conditions, as relevant in the Use of
System Agreement cease to be satisfied in relation to
a relevant party and if the situation is or was capable
of remedy, the relevant party having failed to
remedy the situation within 20 Working Days of
receipt of a notice from MEC giving full details of
the condition(s) precedent and/or suspensive
conditions that have ceased to be satisfied, requiring
the relevant party to remedy the situation and stating
that a failure to remedy the situation may give rise to
the consequences set out in Clause 34.3. (For the
avoidance of doubt, this Clause 34.1.7 shall not
apply to the Pool Agent or SESL.)
34.2 Any party may report any suspected Event of Default to
MEC and upon receiving such report, MEC shall notify the
party to whom the suspected Event of Default relates of the
report.
34.3 Where MEC is notified by another party pursuant to the
terms of Clause 34.2 or otherwise discovers any of the
circumstances referred to in Clauses 34.1.1 to 34.1.7 and
such breach is not remedied within any timeframe indicated
in Clauses 34.1.1 to 34.1.7, MEC may decide that the
relevant defaulting party should not be entitled to receive
any Services or exercise any voting rights pursuant to
Clauses 6 to 9 from a date to be determined by MEC until
MEC determines otherwise.
34.4 A MEC Member other than the Pool MEC Member or the
SESL Member shall be disqualified from acting, and shall
not act in his capacity as a MEC Member in relation to a
resolution pursuant to this Clause 34 where his employer is
the defaulting party, and his alternate shall act in his place in
relation to that resolution. If both a MEC Member and his
alternate are disqualified from acting in relation to a
particular resolution as a result of this Clause 34.4, that
MEC Member shall appoint a further alternate from the
category of party that appointed him, and who is not
disqualified pursuant to this Clause 34.4, to act as his
alternate in relation to that particular resolution.
34.5 Where MEC makes a decision pursuant to Clause 34.3 it
shall:
34.5.1 notify the relevant party of its decision;
34.5.2 notify the Director of its decision; and
34.5.3 notify the Host PESs that the relevant party is a
defaulting party and that such Host PESs may
decide not to provide Services to the defaulting
party from a date to be determined by MEC until
MEC determines otherwise.
34.6 Upon receipt of notification from MEC under Clause
34.5.3, a Host PES shall be entitled to refuse to provide
Services to the defaulting party in accordance with such
notifications, until that Host PES is notified by MEC that
MEC has determined otherwise.
34.7 Any party that is a defaulting party pursuant to the terms of
Clause 34.3 may apply to MEC to have the restrictions
referred to in Clause 34.3 removed. MEC shall consider
such application and may levy a fee on the relevant
defaulting party to remove the relevant restrictions.
34.8 A Supplier may cease to be a party to this Agreement upon
giving MEC 30 Working Days notice of its intention to
cease to be a party to this Agreement, where:
34.8.1 it is no longer Registered for any Metering Point on
any MPAS Registration System; and
34.8.2 it has paid all charges for which it is or will (in
relation to Services already received) become liable
under the terms of this Agreement;
34.8.3 it no longer holds a Second Tier Supply Licence.
34.9 Where a Supplier ceases to be a party pursuant to the terms
of Clause 34.8, Clauses 32, 33, 34, 35, 36, 37 to 47
(inclusive) shall remain in full force and effect as regards
that Supplier.
34.10 A Supplier ceasing to be a party to this Agreement shall be
without prejudice to the accrued rights and liabilities of that
Supplier prior to the date of it ceasing to be a party and
shall not affect any continuing obligations of that Supplier
under this Agreement.
34.11 The Pool Agent or SESL shall cease to be a party upon:
34.11.1 giving MEC 5 Working Days notice of its
intention to cease to be a party to this
Agreement; and
34.11.2 a successor to the Pool Agent or SESL, as
appropriate, entering into an Accession
Agreement;
provided that the Pool Agent or SESL shall continue to be a
party to this Agreement and to perform and discharge its
duties and responsibilities under this Agreement until the
accession under such Accession Agreement comes into
effect, or the notice period in Clause 34.11.1 has expired,
whichever is the later.
34.12 Where a successor to the Pool Agent or SESL enters into
an Accession Agreement, the Pool Agent or SESL, as
appropriate, shall (save as regards any rights and obligations
accrued as at the date the accession under such Accession
Agreement comes into effect) be discharged from any
further obligation and shall have no further rights under this
Agreement from the date on which the accession under the
Accession Agreement comes into effect and its successor
and each of the other parties shall have the same rights and
obligations amongst themselves as they would have had if
such successor had become a party to this Agreement in
place of the Pool Agent or SESL, as appropriate, on the
date that the successor assumes the rights and obligations of
the Pool Agent or SESL, as appropriate, under the relevant
Accession Agreement.
34.13 If the Pool Agent is unable to secure a successor within 30
Working Days of its notice pursuant to Clause 34.11.1, the
Pool Agent may apply to the Director, and the Director may
appoint a successor.
PART X: CONFIDENTIALITY
35. CONFIDENTIALITY
General
35.1 Each party hereby undertakes with each other party that it
shall preserve the confidentiality of and shall not directly or
indirectly Disclose or use for its own purposes Confidential
Information. The exceptions to this obligation are set out in
Clause 35.2.
Exceptions to Confidentiality Obligation
35.2 A party shall be entitled to Disclose or use Confidential
Information if and to the extent that one or more of the
following apply:
35.2.1 the party is required or permitted to Disclose
Confidential Information pursuant to the terms of a
Nominated Agreement, to the extent of such
requirement or permission; or
35.2.2 the party believes, on reasonable grounds, that
market arrangements set out or contemplated by
this Agreement require or permit it to Disclose
Confidential Information to another person or to use
Confidential Information to the extent of such
requirement or permission; or
35.2.3 the person to whose affairs the Confidential
Information relates gives its prior written consent to
the Disclosure or use, to the extent of such consent;
or
35.2.4 the Confidential Information, before it is furnished to
the relevant party is in the public domain; or
35.2.5 the Confidential Information, after it is furnished to
the party:
(A) is acquired by the party in circumstances in
which this Clause does not apply;
(B) is acquired by a party in circumstances in
which this Clause does apply and thereafter
ceases to be subject to the restrictions
imposed by this Clause; or
(C) enters the public domain,
and in any such case otherwise than as a result of (i) a
breach by the party of its obligations in this Clause or (ii) a
breach by the person who disclosed that Confidential
Information of that person's confidentiality obligation and
the party is aware of such breach; or
35.2.6 the party is required or permitted to Disclose
Confidential Information to any person:
(A) in compliance with any provisions of any
Relevant Instrument; or
(B) in compliance with any other requirement of
law or of a Competent Authority; or
(C) in response to a requirement of any stock
exchange or regulatory authority or the
Panel on Take-overs and Mergers; or
(D) pursuant to the arbitration rules for the
Electricity Arbitration Association or
pursuant to any judicial or other arbitral
process or tribunal having jurisdiction in
relation to the party including any disputes
committee set up under the terms of this
Agreement or either of the Settlement
Agreements; or
35.2.7 the party Discloses Confidential Information to its
Affiliates or Related Undertakings, its or its
Affiliates or Related Undertakings employees,
directors, agents, consultants and professional
advisers, or where the party is a Supplier to any
Relevant Exempt Supplier in each case on the basis
set out in Clause 35.6; or
35.2.8 the party Discloses Confidential Information to the
Director; or
35.2.9 the party is a Host PES and the Confidential
Information relates to information in respect of a
Customer which information to Host PES has
previously acquired through its Distribution
Business to the extent that disclosure is made by the
Host PES to the person who supplied electricity to
the relevant Customer at the time such information
was acquired by the Host PES.
35.3 Confidential Information which a party is permitted or
obliged to Disclose or use pursuant to Clause 35.2 shall not
cease to be regarded as Confidential Information in all other
circumstances by virtue of such Disclosure or use.
Host PES Provisions
35.4 Each party agrees that where a Host PES Discloses or uses
Confidential Information in accordance with Clause 35.2,
such information need not be treated as confidential to the
extent of such Disclosure or use for the purposes of
Condition 12 of the PES Licence in England and Wales or
Condition 9 of Part V of the PES Licence in Scotland.
35.5 Each Host PES agrees not to use any Confidential
Information in a manner which may obtain for the Host PES
any commercial advantage in the operation of the Supply
Business or of the Second Tier Supply Business except in
relation to any Confidential Information which it holds in
respect of a Customer which it has previously acquired
through its Distribution Business, where the Host PES
supplied electricity to the relevant Customer at the time the
information was acquired by the Host PES.
Internal Procedures
35.6 With effect from the date of this Agreement each party shall
adopt procedures within its organisation for ensuring the
confidentiality of all Confidential Information which it is
obliged to preserve as confidential under Clause 35.1.
These procedures are:
35.6.1 the Confidential Information will be disseminated
within the party only on a "need to know" basis;
35.6.2 employees, directors, agents, consultants and
professional advisers of the party in receipt of
Confidential Information will be made fully aware of
the party's obligations of confidence in relation
thereto; and
35.6.3 any copies of the Confidential Information, whether
in hard copy or computerised form, will clearly
identify the Confidential Information as confidential.
35.7 Each party shall take all reasonable steps to ensure that any
person referred to in Clause 35.2.6 to whom the party
Discloses Confidential Information does not use that
Confidential Information for any purpose other than that for
which it is provided and does not Disclose that Confidential
Information otherwise than in accordance with this Clause
35.
Affiliate or Related Undertaking
35.8 Each party shall procure that each of its Affiliates and
Related Undertakings observes the restrictions in Clauses
35.1, 35.2, 35.6 and 35.7 and if such Affiliate or Related
Undertaking is a holder of a PES Licence, Clauses 35.4 and
35.5 as if in each Clause there was substituted for the name
of the party the name of the Affiliate or Related
Undertaking.
Data Protection Act
35.9 Each party warrants that it has effected, and undertakes that
it will during the term of this Agreement effect and maintain
all such registrations as it is required to effect and maintain
under the Data Protection Act to enable it lawfully to
perform the obligations imposed on it by this Agreement.
Each party undertakes to comply with the Data Protection
Act in the performance of this Agreement.
35.10 Each party undertakes that, in any case where information
to be disclosed by it under this Agreement may lawfully be
disclosed only with the prior consent of the person to whom
the information relates, it will use its reasonable endeavours
to obtain such prior consents so as to enable it, or the
relevant Host PES as the case may be, promptly to perform
its obligations under this Agreement.
MEC
35.11 The parties acknowledge that, for MEC and each of its sub-
committees properly to carry out its duties and
responsibilities under this Agreement, MEC may decide or
be obliged to keep confidential to it (and may instruct its
sub-committees to keep confidential) matters, reports, data
and other information produced by or for, or made available
to or held by, MEC or the relevant sub-committee and, in
any such case, MEC members shall neither disclose the
same to the category of parties which they represent nor be
required by such parties so to disclose. Each of the parties
agrees to respect the position of MEC, its sub-committees
and the MEC Members accordingly.
35.12 Each of the parties agrees, subject to any relevant
confidentiality provision binding on it, to provide MEC and
the Secretariat with all data and other information
reasonably requested by MEC and necessary for MEC
and/or the Secretariat properly to carry out its duties and
responsibilities under this Agreement.
PART XI: FORCE MAJEURE
36. FORCE MAJEURE
If any party (the "Affected Party") shall be unable to carry out any
of its obligations under this Agreement due to a circumstance of
Force Majeure this Agreement shall remain in effect but:
36.1 the Affected Party's obligations;
36.2 the obligations of each of the other parties owed to the
Affected Party under this Agreement; and
36.3 any other obligations of such other parties under this
Agreement owed between themselves which the relevant
party is unable to carry out directly as a result of the
suspension of the Affected Party's obligations;
shall be suspended without liability for the period during which the
circumstance of Force Majeure prevails provided that:
(i) the Affected Party gives the other parties prompt
notice describing the circumstance of Force Majeure
including the nature of the occurrence and its
expected duration and where reasonably practicable
continues to furnish regular reports with respect
thereto during the period of Force Majeure; and
(ii) the suspension of performance is of no greater scope
and of no longer duration than is required by the
circumstance of Force Majeure; and
(iii) no obligations of any party that arose before the
circumstance of Force Majeure causing the
suspension of performance are excused as a result of
the Force Majeure; and
(iv) the Affected Party uses all reasonable efforts to
mitigate the impact of the circumstance of Force
Majeure and to remedy its inability to perform as
quickly as possible; and
(v) immediately after the end of the circumstance of
Force Majeure the Affected Party notifies the other
parties in writing of the same and resumes
performance of its obligations under this Agreement.
PART XII: DISPUTES
37. DISPUTES
37.1 Save where expressly stated in this Agreement to the
contrary, and subject to any contrary provision of the Act,
any licence issued pursuant to the Act or the Electricity
Supply Regulations 1988 (or any other regulations made
under Section 29 of the Act), or the rights, powers, duties
and obligations of the Director or Secretary of State under
the Act, any such licence or otherwise howsoever, any
dispute or difference of whatever nature and howsoever
arising under, out of or in connection with this Agreement
(a "Dispute") shall be resolved according to the provisions
of this Clause 37.
Contract Management
37.2 Any party shall refer a Dispute to the Contract Managers,
by notice in writing to all other parties to the Agreement
who are party to the Dispute (the party referring the
Dispute and the other parties to the Dispute each being a
"Disputing Party"). The Contract Managers of the
Disputing Parties shall endeavour to resolve the Dispute
between them. The Contract Managers of the Disputing
Parties shall have authority to negotiate in relation to and to
resolve the Dispute including authority to bind the party
nominating them provided that neither the Contract
Manager nominated by the Pool Agent nor the Contract
Manager nominated by SESL shall have any authority to
bind the party nominating them or (in the case of the
Contract Manager nominated by the Pool Agent) the Pool
Members or (in the case of the Contract Manager
nominated by SESL) the parties to the Settlement
Agreement for Scotland. Subject to the foregoing proviso,
the joint and unanimous decision of the Contract Managers
of the Disputing Parties shall be binding upon the parties to
the Dispute.
Disputes Committee
37.3 MEC shall constitute a sub-committee ("the Disputes
Committee") whose rules and procedures:
37.3.1 shall be issued by MEC from time to time;
37.3.2 shall be subject to and in accordance with the
principles set out in Clause 37.6;
37.3.3 shall be binding on the parties so that the parties
shall be obliged to and shall comply with their
obligations under such rules and procedures and,
subject to any subsequent award in any Electricity
Arbitration Association ("EAA") arbitration in
relation to a Dispute or judgment in the event of a
Third Party Claim (as defined below), shall be
obliged to and shall comply with any decision made
by the Disputes Committee pursuant to this Clause
37 and/or such rules and procedures.
37.4 Subject to review by MEC no earlier than 12 months or as
MEC otherwise decides and completed no later than 15
months after the start of Controlled Market Start-Up for the
Host PES that is the first Host PES to commence
Controlled Market Start-Up the costs of constituting and
maintaining the Disputes Committee and the costs of the
Disputes Committee in relation to any particular Dispute
shall be recovered by MEC as costs and expenses of MEC
in accordance with the provisions of Clause 8.
37.5 If the Contract Managers are unable to resolve a Dispute
within 10 Working Days of the reference of a Dispute to
them then any Disputing Party may refer the Dispute to the
Disputes Committee by notice in writing to all Disputing
Parties.
37.6 The rules of the Disputes Committee shall be subject to and
in accordance with the following principles:
37.6.1 The Disputes Committee shall not act as expert or
arbitrator;
37.6.2 decisions of the Disputes Committee shall be binding
upon the Disputing Parties unless and until one of
the Disputing Parties refers the Dispute to
arbitration pursuant to clause 37.7;
37.6.3 the Disputing Parties shall be able to make written
and oral submissions to the Disputes Committee in
relation to all matters of fact and law in relation to
that Dispute, including the interpretation and
application of this Agreement;
37.6.4 the Disputing Parties shall not be entitled to have
legal or other representation before the Disputes
Committee provided that nothing in this Clause
37.6.4 or otherwise shall prevent a Disputing Party
from adducing any evidence, including expert
evidence, before the Disputes Committee, whether
that evidence or expert evidence is from the
Disputing Party's employee, contractor, sub-
contractor, agent or otherwise;
37.6.5 the parties shall be entitled, but not obliged, to take
legal or other advice when preparing submissions or
evidence for the Disputes Committee;
37.6.6 the Disputes Committee shall be entitled to make
such enquiries into matters of fact and law and take
such advice in relation to such matters as it sees fit;
37.6.7 subject to rules and procedures made or amended
from time to time by MEC, the Disputes Committee
shall be entitled to regulate its own procedure and in
particular, subject to Clause 37.6.8 and taking into
account all of the conditions of the Dispute including
its value and the nature, complexity and importance
to the Disputing Parties of the issues raised in the
Dispute, to act by considering documentary
submissions only or by hearing submissions from the
Disputing Parties in relation to the Dispute;
37.6.8 MEC shall, if it sees fit, specify from time to time
classes of Dispute and/or values of Dispute which
are only to be considered by the Disputes
Committee on a documents only basis or which are
to be considered by the Disputes Committee only
after hearing submissions from the parties to the
Dispute;
37.6.9 where the Disputes Committee hears submissions
from the parties to a Dispute, it shall be entitled to
regulate the time taken by the parties in making such
submissions;
37.6.10 all parties to this Agreement, whether Disputing
Parties in relation to a particular Dispute or not,
shall co-operate fully with any enquiry from the
Disputes Committee, which co-operation shall
include attending any hearing of the Disputes
Committee that the Disputes Committee may ask a
party to attend and providing such evidence or
information in relation to a Dispute as a party may
hold pursuant to this Agreement or to its obligations
under this Agreement;
37.6.11 if a Disputing Party fails or refuses to attend a
hearing of the Disputes Committee in relation to the
relevant Dispute or fails or refuses to provide
information as described in Clause 37.6.10 in
relation to the relevant Dispute the Disputes
Committee shall be entitled to proceed with its
consideration of the Dispute and to make its
decision in relation to the Dispute notwithstanding
such failure or refusal and to make such adverse
inferences from such failure or refusal against that
Disputing Party as it sees fit;
37.6.12 all parties shall bear their own costs of and
occasioned by the reference of the Dispute to the
Disputes Committee and for the avoidance of doubt
no charge shall be made by any party for the
attendance of any of its employees at the Disputes
Committee to give evidence or information or to sit
on the Disputes Committee;
37.6.13 any Disputing Party may terminate the proceedings
of the Disputes Committee in relation to a particular
Dispute by notice in writing to all other Disputing
Parties if a Third Party Claim (as defined below)
arises before or during the Disputes Committee's
proceedings, in which case the Dispute shall be
subject to determination by the court and any
Disputing Party may commence proceedings before
the court pursuant to Clause 37.9;
37.6.14 the Disputing Parties may agree, at any time, to
withdraw a Dispute from the Disputes Committee
on such terms as the Disputing Parties may agree,
including the referral of the Dispute to EAA
arbitration;
37.6.15 the Disputes Committee shall have a standing
membership of suitably qualified individuals
including a Chairman and Vice-Chairman who shall
be available to convene the Disputes Committee at
all times;
37.6.16 the members of the Disputes Committee need not be
independent of the parties to this Agreement but the
members of the Disputes Committee for any given
Dispute shall be independent of the Disputing Parties
to that Dispute and shall act impartially in relation to
the Dispute;
37.6.17 the Disputes Committee shall notify the Disputing
Parties and MEC in writing of its decision in relation
to a Dispute, along with its full reasons for that
decision (the decision and the reasons for it together
being a "Decision"), within 25 Working Days of the
reference of a Dispute to it, following which MEC
shall prepare and circulate to all parties to this
Agreement a summary of the Decision, provided
that such summary shall be prepared so that, so far
as is possible, no Disputing Party may be identified
from it and so that it does not include any
commercially sensitive information;
37.6.18 subject to the additional provisions of Clause
37.6.19, and subject to MEC's obligation to circulate
summaries of Decisions pursuant to Clause 37.6.17,
all information relating to the proceedings of the
Disputes Committee shall be Confidential
Information and the members of the Disputes
Committee shall be required to undertake to keep
the proceedings of the Disputes Committee
confidential subject to the exceptions and
restrictions set out in Clause 35; and
37.6.19 the proceedings of the Disputes Committee and, if
the Dispute is referred to arbitration pursuant to
Clause 37.7 or to the court pursuant to Clause 37.9,
the Decision shall be without prejudice and the
parties shall not call any member of the Disputes
Committee to give evidence at any arbitration or in
any litigation before any court of competent
jurisdiction save to enforce a Decision.
Arbitration
37.7 Following notification of the Disputes Committee's Decision
in relation to a Dispute pursuant to clause 37.6.17, or upon
the failure of the Disputes Committee to notify the
Disputing Parties of its Decision pursuant to Clause 37.6.17
within 25 Working Days of the reference of the Dispute to
it, any Disputing Party may refer the Dispute to arbitration
pursuant to the arbitration rules of the EAA within 15
Working Days after the date of notification of the Decision
or within 15 Working Days after the date by which the
Disputes Committee ought to have but failed to notify the
Disputing Parties of its Decision.
37.8 Whatever the nationality residence or domicile of any
Disputing Party and wherever the Dispute or any part
thereof arose the law of England shall be the proper law of
any reference to arbitration hereunder and in particular (but
not so as to derogate from the generality of the foregoing)
the seat of any such arbitration shall be England and Wales
and the provisions of the Arbitration Act 1996 shall apply to
any such arbitration wherever the same or any part of it
shall be conducted.
37.9 Subject always to clause 37.11, if any consumer of
electricity (the "Consumer") brings any legal proceedings in
any court against any party (the "Defendant Party") and the
Defendant Party wishes to make a Third Party Claim (as
defined in clause 37.10) against another party which would
but for this clause 37.9 have been a Dispute referred to
arbitration by virtue of clause 37.7 then, notwithstanding the
provisions of Clause 37.7 which shall not apply and in lieu
of arbitration, the court in which the legal proceedings have
been commenced shall hear and completely determine and
adjudicate upon the legal proceedings and the Third Party
Claim not only between the Consumer and the Defendant
Party but also between either or both of them and the other
party whether by way of third party proceedings or
otherwise as may be ordered by the court.
37.10 For the purposes of this clause 37 "Third Party Claim" shall
mean:
37.10.1 any claim by a Defendant Party against another party
(whether or not already a party to the legal
proceedings) for any contribution or indemnity; or
37.10.2 any claim by a Defendant Party against another party
for any relief or remedy relating to or connected
with the subject matter of the legal proceedings and
substantially the same as some relief or remedy
claimed by the Consumer; or
37.10.3 any requirement by a Defendant Party that any
question or issue relating to or connected with the
subject matter of the legal proceedings should be
determined not only as between the Consumer and
the Defendant Party but also as between either or
both of them and the other party (whether or not
already a party to the legal proceedings).
37.11 Clause 37.9 shall apply notwithstanding the reference of the
Dispute to the Disputes Committee but, subject thereto,
only if at the time the legal proceedings are commenced no
arbitration has been commenced between the Defendant
Party and the other party raising or involving the same or
substantially the same issues as would be raised by or
involved in the Third Party Claim. The tribunal in any
arbitration which has been commenced prior to the
commencement of legal proceedings shall determine the
question, in the event of dispute, whether the issues raised
or involved are the same or substantially the same.
37.12 Notwithstanding the provisions of the rest of this Clause 37,
any party may apply at any time to any court of competent
jurisdiction for any emergency interim interlocutory relief as
may be necessary.
PART XIII: MISCELLANEOUS
38. DEROGATIONS
38.1 Subject to Clause 38.2, MEC may resolve to grant a
derogation to any party or parties in relation to any
obligation contained in this Agreement, which may be
subject to conditions and shall specify the term, scope and
application of such derogation, and may amend or retract
any such derogation, or any such conditions relating thereto,
from time to time as it sees fit.
38.2 Where any derogation granted by MEC pursuant to Clause
38.1 relates to any of the Priority Provisions that derogation
shall not take effect unless and until (and then only to the
extent that):
38.2.1 in England and Wales, a derogation given by the
relevant forum under the Pooling and Settlement
Agreement in relation to the equivalent obligations if
any under the Pooling and Settlement Agreement,
comes into effect;or
38.2.2 in Scotland the derogation granted by MEC is
approved by the relevant forum under the Settlement
Agreement for Scotland or SESL, as appropriate.
38.3 A party may, by notice in writing to the Secretary, apply to
MEC for a derogation pursuant to Clause 38.1
("Application for Derogation"). Where a party makes an
Application for Derogation, it shall, at the same time, send a
copy of such Application for Derogation to the Director.
38.4 Where the Secretary receives an Application for Derogation
from a party pursuant to Clause 38.3, it shall ensure that the
Application for Derogation is added to the agenda for the
next MEC meeting, and shall give notice to all parties, at
least 10 Working Days prior to the MEC meeting at which
the application is to be considered, stating:
38.4.1 that the Application for Derogation has been made,
setting out the terms of the derogation sought, and
the identity of the party making the Application for
Derogation; and
38.4.2 the time (not being less than 10 Working Days from
the date on which notice is provided) within which
parties may make representations or objections with
respect to the derogation which has been applied
for.
Where any comments are received pursuant to Clause
38.4.2, the Secretariat shall ensure that copies of those
comments are provided to all MEC Members and the
Director prior to the relevant MEC meeting at which the
Application for Derogation is to be considered.
38.5 Subject to Clause 38.2 where a party is granted a
derogation by MEC in accordance with this Clause 38, that
party shall be excused from complying with the obligations
specified in the terms of that derogation, and shall be
deemed not to be in breach of this Agreement for failing to
comply with the relevant obligations for the term of the
derogation, but shall be required to comply with any
modified obligations which are specified as a condition of
the derogation.
39. TRANSITIONAL ARRANGEMENTS
39.1 The parties acknowledge and agree that the MRA may
require amendment to deal with the matters described or
referred to in Schedule 12 after the date of this Agreement.
The parties undertake with each other to use all reasonable
endeavours to consider the matters set out in Schedule 12
and to agree any appropriate amendments to this Agreement
as soon as reasonably practicable after the date of this
Agreement.
39.2 For each of the matters listed in Schedule 12, MEC shall
consider or establish a sub-committee to consider the
appropriate method for dealing with such matter. The sub-
committee shall prepare a report setting out its
recommendations for:
39.2.1 appropriate amendments to this Agreement; and
39.2.2 the appropriate means for implementing any
recommended amendment to this Agreement
pursuant to Clause 9. Such recommendations shall
reflect the principles (if any) set out in of Schedule
12 in relation to the relevant matter.
If any member of the sub-committee disagrees with any of
the recommendations made in the report, the report shall set
out the reasons for such disagreement and any alternative
proposals of the relevant sub-committee member.
39.3 MEC shall consider the recommendations of the sub-
committee contained in the report prepared pursuant to
Clause 39.2 and, if they approve the recommendation, such
recommendations shall be deemed to be a Change Proposal
to change this Agreement received by MEC in accordance
with Clause 9.
40. RESTRICTIVE TRADE PRACTICES ACT
To the extent that any provision of this Agreement or of any
arrangement of which it forms part constitutes a restriction or
information provision within the meaning of the Restrictive Trade
Practices Act 1976 (the "RTPA") so as to render this Agreement
or that arrangement (as the case may be) registrable under the
RTPA, no such restriction or information provision shall take effect
until the earlier of:
40.1 the day after particulars of this Agreement or that
arrangement have been furnished to the Director General of
Fair Trading in accordance with the RTPA; or
40.2 the day after the Secretary of State has granted an
exemption pursuant to Section 100 of the Electricity Act
1989 in respect of this Agreement or that arrangement.
41. CONTRACT MANAGEMENT
41.1 Each party shall appoint an appropriate person (each a
"Contract Manager" and together the "Contract
Managers") to manage all matters arising under or in
connection with this Agreement and to monitor the general
operation of this Agreement.
41.2 Each Contract Manager appointed by a party shall ensure
that procedures are in place in respect of that party to
ensure that there is adequate support for operations
provided under this Agreement and timely resolution of
problems that may occur including a point of contact to
process and resolve such problems.
41.3 At times determined by MEC a meeting of Contract
Managers shall be convened to consider each of the reports
contained in Clause 27.7 in relation to:
41.3.1 performance against Service Levels; and
41.3.2 issues arising from those reports and actions to
remedy any problems arising from those reports.
41.4 Each party shall notify the others in accordance with the
provisions of Clause 46 of the name and contact details of
the Contract Manager appointed by it for the purposes of
this Agreement from time to time.
42. ENTIRE AGREEMENT
42.1 This Agreement and any document referred to herein
represents the entire understanding, and constitutes the
whole agreement, in relation to its subject matter and
supersedes any previous agreement between the parties with
respect thereto and without prejudice to the generality of
the foregoing excludes any warranty, condition or other
undertaking implied at law or by custom.
42.2 Each party confirms that, except as provided in this
Agreement and without prejudice to any liability for
fraudulent misrepresentation, no party has relied on any
representation, warranty or undertaking which is not
contained in this Agreement or any document referred to
herein.
43. SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable by a judgment or decision of any court of competent
jurisdiction or any authority (including the Director) whose
decisions shall be binding on the parties, the same shall be deemed
to be severable and the remainder of this Agreement shall remain
valid and enforceable to the fullest extent permitted by law. In any
such case, the parties will negotiate in good faith with a view to
agreeing one or more provisions which may be substituted for such
invalid or unenforceable provision in order to give effect, so far as
practicable, to the spirit of this Agreement.
44. WAIVERS
The failure by any party to exercise, or the delay by any party in
exercising, any right, power, privilege or remedy provided by this
Agreement or by law shall not constitute a waiver thereof nor of
any other right, power, privilege or remedy. No single or partial
exercise of any such right, power, privilege or remedy shall
preclude any further exercise thereof or the exercise of any other
right, power, privilege or remedy.
45. DATA TRANSFER
45.1 Where Schedule 3 specifies a Data Transfer Catalogue
reference number in relation to any notice, request or other
communication, such notice, request or communication shall
be sent in the format and with the content described under
such reference in the Data Transfer Catalogue, as amended
from time to time, and shall be transmitted by the means
specified in Schedule 3.
45.2 Nothing in this Agreement shall prevent any two parties
from agreeing to the use of an alternative method of
transmission for any communication between those two
parties from that set out in Schedule 3, whereupon the
terms of this Clause 45 shall not apply to that notice,
request or other communication.
45.3 Where this Agreement requires any notice, request or other
communication to be sent via the Data Transfer Network,
the relevant Message shall be addressed to the appropriate
Market Domain ID.
45.4 Where this Agreement requires any notice, request or other
communication to be sent via the Data Transfer Network,
the party or Data Aggregator sending the Message shall be
responsible for ensuring that it reaches the relevant Gateway
within any time period laid down in this Agreement for the
provision of such notice, request or communication (and
any such message shall be deemed received by the recipient
at the point in time it is delivered to the recipient's
Gateway). Provided that the party or Data Aggregator
sending a Message shall have no obligation to ensure receipt
where the intended recipient has failed, contrary to the Data
Transfer Service Agreement, to remove or process all
Messages delivered to its Gateway and to ensure that such
Messages are made available to its internal systems as
expeditiously as possible so that the Gateway is able to
continue to process incoming and outgoing Messages.
45.5 Where any provision of this Agreement refers to receipt of a
Message or notification by a Host PES pursuant to Clauses
15.10, 15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10, 20.11,
21.1, 24.1, 24.3 or 24.5 the date of such receipt shall be
deemed to be the date on which it is received where such
Message or notification is received prior to 18:00 hours on
an Operational Working Day. Where such Message or
notification is received at or after 18:00 hours on an
Operational Working Day, the date of receipt of such
Message or notification shall be deemed to be the next
Operational Working Day.
45.6 If the Data Transfer Network or any relevant part of such
network is at any time for any reason unavailable for the
sending of Messages between any affected parties, then
during the period of unavailability:
45.6.1 the parties shall use 8mm DAT tape to send any
notice, request or other communication that this
Agreement would otherwise require to be sent via
the Data Transfer Network and take reasonable
steps to process any notices, requests or other
communications received within their own systems
as promptly as possible;
45.6.2 where other means are used in accordance with
Clause 45.6.1, the parties shall be relieved from any
service levels set out in this Agreement relating to
any affected notice, request or other communication
(except to the extent that this Agreement expressly
provides for alternative levels in such circumstances)
but shall use their reasonable endeavours to send
such notice request or other communication as soon
as reasonably practicable; and
45.6.3 to the extent that no such other means are
practicable given the nature of the communication
and the surrounding circumstances, such
unavailability of the Data Transfer Network shall be
deemed (to the extent not caused by a breach by any
party of the Data Transfer Service Agreement) to
constitute a circumstance of Force Majeure for the
purposes of this Agreement.
45.7 Where any party, in breach of its obligation under Clause
45.1 fails to deliver any notice request or other
communication to the relevant Gateway and such failure
occurs for reasons outside that party's direct control, the
breaching party shall have no liability to the other in respect
of such breach and the parties shall rely instead upon the
provisions of the Data Transfer Service Agreement.
46. NOTICES
46.1 Each Supplier shall notify the Host PES as soon as
reasonably practicable of the address and fax number for
each Data Aggregator that it has appointed in relation to
Metering Points for which it is Registered.
46.2 Save as provided in Clause 45, any notice, request or other
communication to be made by a party or Data Aggregator
to another party or Data Aggregator under or in connection
with this Agreement shall be in writing and shall be
delivered personally or sent by first class post, courier or fax
with a copy to be sent by first class post to that person's
address or fax number as included in Schedule 1 as may be
varied from time to time by notice from a party to all other
parties (marked for the attention of the Contract Managers)
or notified under Clause 46.1.
46.3 Unless otherwise stated in this Agreement, a notice, request
or other communication sent in accordance with Clause
46.2 shall be deemed received:
46.3.1 if delivered personally, when left at the address
referred to above;
46.3.2 if sent by post, 2 Operational Working Days after
the date of posting; and
46.3.3 if sent by fax, upon production by the sender's
equipment of a transmission report indicating that
the fax was sent to the fax number of the recipient in
full without error.
47. ASSIGNMENT AND SUB-CONTRACTING
47.1 Subject to Clause 47.2, and except as provided elsewhere in
this Agreement no party shall assign any of its rights under
this Agreement without the prior written consent of all
other parties to this Agreement, such consent not to be
unreasonably withheld.
47.2 Any party may sub-contract or delegate the performance of
all or any of its obligations under this Agreement to any
appropriately qualified and experienced third party, but shall
at all times remain liable to any other party in relation to all
sub-contracted or delegated obligations.
47.3 Each Supplier shall notify the relevant Host PES, on
request, of any subcontractors appointed by it for the
purposes of this Agreement.
47.4 Each Host PES shall notify the relevant Supplier, on request
of, any subcontractors appointed by it for the purposes of
this Agreement.
48. COUNTERPARTS
This Agreement may be executed in any number of counterparts
each of which when executed and delivered shall be an original, but
all the counterparts together shall constitute the same document
49. GOVERNING LAW
49.1 This Agreement is governed by, and shall be construed in
accordance with, English law.
49.2 Each party agrees that without preventing any other mode
of service, any document in an action (including any writ of
summons or other originating process or any third or other
party notice) may be served on any party by being delivered
to or left for that party at its address for service of notices
under Clause 46 and each party undertakes to maintain such
an address at all times in the United Kingdom and to notify
the other party in advance of any change from time to time
of the details of such address in the manner prescribed in
Clause 46.
SCHEDULE 1
Parties
Part 1
HOST PESs
(a) EAST MIDLANDS ELECTRICITY PLC (Registered No.
2366923) whose registered office is at PO Box 44 Wollaton,
Nottingham, NG8 IE2
(b) EASTERN ELECTRICITY PLC (Registered No. 2366906)
whose registered office is at Wherstead Park, Wherstead, Ipswich,
Suffolk, IP9 2AQ
(c) LONDON ELECTRICITY PLC (Registered No. 2366852)
whose registered office is at Templar House, 81-87 High Holborn,
London, WC1V 6NU
(d) MANWEB PLC (Registered No. 2366937) whose registered
office is at Manweb House, Kingsfield Court, Chester Business
Park, Chester, CH4 9RF
(e) MIDLANDS ELECTRICITY PLC (Registered No. 2366928)
whose registered office is at Mucklow Hill, Halesowen, West
Midlands, B62 8BP
(f) NORTHERN ELECTRIC PLC (Registered No. 2366942) whose
registered office is at Carliol House, Newcastle upon Tyne, NE99
6NE
(g) NORWEB PLC (Registered No. 2366949) whose registered office
is at PO Box 14, 410 Birchwood Boulevard, Warrington WA3 79A
(h) SCOTTISH HYDRO-ELECTRIC PLC (Registered No.
117119) whose registered office is at 10 Dunkeld Road, Perth, PH1
5WA
(i) SCOTTISH POWER PLC (Registered No. 117 120) whose
registered office is at Corporate Offices, 1 Atlantic Quay, Glasgow,
G2 8SP
(j) SEEBOARD PLC (Registered No. 2366867) whose registered
office is at Forest Gate, Brighton Road, Crawley, West Sussex,
RH11 9BH
(k) SOUTH WALES ELECTRICITY PLC (Registered No.
2366985) whose registered office is at Newport Road, St Mellons,
Cardiff, CF3 9XW
(l) SOUTH WESTERN ELECTRICITY PLC (Registered No.
2366894) whose registered office is at 800 Park Avenue, Aztec
Way, Almondsbury, Nr Bristol, BS32 4SE
(m) SOUTHERN ELECTRIC PLC (Registered No. 2366879) whose
registered office is at Westacott Way, Littlewick Green,
Maidenhead, Berkshire, SL6 3QB
(n) YORKSHIRE ELECTRICITY GROUP PLC (Registered No.
2366995) whose registered office is at Wetherby Road, Scarcroft,
Leeds, LS14 3HS
Part 2
SUPPLIERS
(a) BRITISH GAS TRADING LIMITED (Registered No. 3078711)
whose registered office is at Charter Court, 50 Windsor Road,
Slough, Berkshire SL1 2HA
(b) EAST MIDLANDS ELECTRICITY PLC (Registered No.
2366923) whose registered office is at PO Box 44, Wollaton,
Nottingham, NG8 IE2
(c) EASTERN ELECTRICITY PLC (Registered No. 2366906)
whose registered office is at Wherstead Park, Wherstead, Ipswich,
Suffolk, IP9 2AQ
(d) LONDON ELECTRICITY PLC (Registered No. 2366857)
whose registered office is at Templar House, 81-87 High Holborn,
London, WC1V 6NU
(e) MANWEB PLC (Registered No. 2366937) whose registered
office is at Manweb House, Kingsfield Court, Chester Business
Park, Chester, CH4 9RF
(f) MIDLANDS ELECTRICITY PLC (Registered No. 2366928)
whose registered office is at Mucklow Hill, Halesowen, West
Midlands, B62 8BP
(g) NATIONAL POWER PLC (Registered No. 2366963 ) whose
registered office is at Windmill Hill Business Park, Whitehill Way,
Swindon, Wiltshire, SN5 6PB
(h) NORTHERN ELECTRIC PLC (Registered No. 2366942) whose
registered office is at Carliol House, Newcastle upon Tyne, NE99
6NE
(i) NORWEB PLC (Registered No. 2366949) whose registered office
is at PO Box 14, 410 Birchwood Boulevard, Warrington, WA3
79A
(j) NUCLEAR ELECTRIC LTD (Registered No. 3076445) whose
registered office is at Barnett Way, Barnwood, Gloucester, GL4
7RS
(k) POWERGEN PLC (Registered No. 2366970) whose registered
office is at 53 New Broad Street, London EC2M 1JJ
(l) SCOTTISH HYDRO-ELECTRIC PLC (Registered No.
117119) whose registered office is at 10 Dunkeld Road, Perth, PH1
5WA
(m) SCOTTISH POWER PLC (Registered No. 117120) whose
registered office is at Corporate Offices, 1 Atlantic Quay, Glasgow,
G2 8SP
(n) SEEBOARD PLC (Registered No. 2366867) whose registered
office is at Forest Gate, Brighton Road, Crawley, West Sussex,
RH11 9BH
(o) SOUTH WALES ELECTRICITY PLC (Registered No.
2366985) whose registered office is at Newport Road, St Mellons,
Cardiff, CF3 9XW
(p) SOUTH WESTERN ELECTRICITY PLC (Registered No.
2366894) whose registered office is at 800 Park Avenue, Aztec
West, Almondsbury, Bristol, BS32 4SE
(q) SOUTHERN ELECTRIC PLC (Registered No.2366879) whose
registered office is at Westacott Way, Littlewick Green,
Maidenhead, Berkshire, SL6 3QB
(r) YORKSHIRE ELECTRICITY GROUP PLC (Registered
No.2366995) whose registered office is at Wetherby Road,
Scarcroft, Leeds, LS14 3HS
<PAGE>
SCHEDULE 2
Metering Point Administration Data
<TABLE>
<CAPTION>
MPAD Supply Number Supply Number core Data Item DTC Reference Responsibility for
Provision and
Maintenance
<S> <S> <S> <C> <S> <C>
1 1 1 Distribution business Id Host PES Distribution Business
2 2 2 Unique reference J0003 Host PES Distribution Business
3 3 3 Check Digit Host PES Distribution Business
4 4 Profile Class Id J0071 Supplier
4A Effective from Settlement
Date (MSPC) J0308 Supplier
5 5 Meter/Timeswitch Code J0220 Supplier
5A Meter/Timeswitch Class
Effective from Date J0301 Supplier
6 6 Line Loss Factor (LLF)
/DUoS Code J0147 Host PES Distribution Business
6A Effective from Settlement
Date (MSLLFC) J0658 Host PES Distribution Business
7 Change of Tenancy
Indicator J0215 Supplier
8 Supplier Id J0002 Supplier
9 Metering Point Address J1036/J1044 Host PES Distribution Business
9A Metering Point Postcode J0263 Host PES Distribution Business
10 Supply Start Date J0049 Supplier
11 Meter Operator Id J0178 Supplier
11A Meter Operator Type J0675 Supplier
11B Effective from Date (MOA) J0210 Supplier
12 Data Collector Id J0205 Supplier
12A Data Collector Type J0218 Supplier
12B Effective from Date (DCA) J0219 Supplier
13 Data Aggregator Id J0183 Supplier
13A Data Aggregator Type J0163 Supplier
13B Effective from
Settlement Date (DAA) J0334 Supplier
14 Energisation Status J0080 Supplier
14A Effective from
Settlement Date (MSES) J0297 Supplier
15 GSP Group Id (in England
and Wales) or BSP Group
Id (in Scotland) J0066 Host PES Distribution Business
15A Effective from Settlement
Date (MSGG) J0306 Host PES Distribution Business
16 Measurement Class Id J0082 Supplier
16A Effective from
Settlement Date (MSMC) J0307 Supplier
17 Standard Settlement
Configuration Identifier J0076 Supplier
17A Effective from Settlement
Date (SCON) J0300 Supplier
18 1998 Trading Arrangement
Indicator Host PES Distribution Business
19 ERS Metering System Id
(if relevant) Host PES Distribution Business
20 Disconnection Date Host PES Distribution Business
</TABLE>
<PAGE>
SCHEDULE 3
Event Log
In the following table:
(A) "DTC ref" means the relevant reference number in the Data
Transfer Catalogue Version 4.0;
(B) "DTN" means the Data Transfer Network; and
(C) the descriptions of the data flows concerned under "Message" are
for ease of reference only and shall not affect the obligations of any
party under the relevant provisions of this Agreement.
MRA Event Log Notes
ROWS:
Each row represents a distinct information flow between two
parties.
The scope of the event log, in terms of what flows are included, is
as follows:
1) All DTC-defined flows marked in that document as to or from
`MPAS' (or `PRS Agent') are included.
2) Flows from the Distribution Business to the MPAS Registration
System are restricted to include only such logical flows as the
MPAS Registration System requires to correctly maintain that
data which is the responsibility of the Distribution Business. No
constraints are made on the mechanisms and formats for such
flows, and rejection mechanisms are not considered.
3) Flows from the MPAS Registration System to the Distribution
Business are not included. It is assumed that the Distribution
Business will have access to MPAS data as and when required,
by means that are specific to the individual PES concerned.
COLUMNS:
Flow No:
This provides a unique reference to each flow (row) in the event
log. This reference will be maintained across all revisions of the
event log.
MRA ref:
This references the appropriate section(s) in the body of this
Agreement.
The rows are ordered generally by Clause order, but in such a way
that rows related to the same event (see below) are in contiguous
order.
Event:
This identifies a business-level event and allows to group related
information flows.
From/To:
Identifies the parties involved:
CUST = Customer
DA = Data Aggregator
DB = Distribution Business
MDDM = Market Domain Data Management
MPAS = Metering Point Administration Service
SSA = Settlement System Administrator
SUP = Supplier
and, where applicable, the status of the party (for SUP and DA
only):
(old) - qualifies the incumbent party in the context
of Clause 15
(new) - qualifies the prospective new party in the
context of Clause 15
(future) - qualifies parties, if any, whose effective from
dates are greater than the date associated
with the event. There may be more than one
such party.
(next) - is the same as (future), but is restricted to a
single instance.
Note: Both (future) and (next) exclude any Supplier (and
their associated DAs) where the registration status is
`Objected'.
DTC Ref:
Refers to the Data Transfer Catalogue - version 4.0.
Instr Type:
Refers to data item J0723, Instruction Type, in the DTC.
Method:
Indicates the transmission mechanism.
Notes:
Refers to the detailed notes given below:
Note 1 Some MPAS Registration Systems may also accept an SP04
Instruction Type in this instance of the D0055 flow.
Note 2 Some MPAS Registration Systems may also accept an SP01
Instruction Type in this instance of the D0055 flow.
Note 3 Some MPAS Registration Systems do not support the use
of D0171 flows (in these specific scenarios) and so do not
necessarily inform the supplier of every change of LLF
Class and GSP Group (see also note 5).
Note 4 Some MPAS Registration Systems may provide only the
latest change of LLF Class and GSP Group (flows D0089
and D0217).
Note 5 The distinctions between SP28/29 and between SP26/27
(i.e. current and future) Instruction Types in D0171 is
subject to differences between MPAS Registration Systems.
Note 6 Flow D0205 allows a party to simultaneously specify a full
set of events types, each with potentially different 'effective
from' dates. This can give rise to complex situations which
may be handled differently by the different MPAS
Registration Systems.
Note 7 After an 'incomplete' D0055 for a previously non-trading
Supply Number, D0205 may be used to drip-feed the
missing supplier data. Only when an energisation status is
supplied will the Supply Number commence trading, and the
DA will be informed (the DA is never sent incomplete data).
Note 8 Management of transfers from ERS is currently under
discussion between the Pool and the Registration System
developers.
<PAGE>
<TABLE>
<CAPTION>
Flow No MRA ref Event From To DTC Ref. Instr Type Description Method Notes
<S> <S> <C> <C> <C> <S> <S> <C> <C> <S>
0010 15.10 Change of Supplier SUP (new) MPAS D0055 SP04 Registration of Change
of Supplier DTN 2
0020 15.12 Change of Supplier MPAS SUP(new) D0057 SP32 Rejection with Reason Code(s) DTN
0030 15.10 Change of Supplier MPAS SUP(new) D0217 SP40 Acceptance of Change
of Supplier registration DTN
0040 15.10 Change of Supplier MPAS SUP(new) D0260 SP43 Old Supplier's
Registration Details DTN4
0050 15.10 Change of Supplier MPAS SUP(new) D0171 SP28/29 Future Distribution
changes (LLF Class,GSP Group)DTN3,5
0060 15.10 Change of Supplier MPAS SUP(old) D0058 SP45 Notification of
termination of Registration DTN
0070 15.10 Change of Supplier MPAS DA(old) D0209 NH/HH01 Appointment End DTN
0080 15.10 Change of Supplier MPAS DA(new) D0209 NH/HH01 Appointment Start DTN
0090 15.10 Change of Supplier MPAS DA(old)
(future)D0209 NH/HH01 Appointment Cancellation DTN
0100 16.7 CoS Objection SUP (old) MPAS D0064 SP05 Notice of Objection DTN
0110 16.7 CoS Objection MPAS SUP(old) D0066 SP33 Rejection with Reason Code(s) DTN
0120 16.7 CoS Objection MPAS SUP(old) D0065 SP50 Confirmation of Objection DTN
0130 16.7 CoS Objection MPAS SUP(old) D0171 SP29 Distribution changes DTN 3,5
0140 16.7 CoS Objection MPAS SUP(old) D0089 SP51 New Supplier effective
MP changes DTN 4
0150 16.7 CoS Objection MPAS SUP(new) D0067 SP53 Notification of Objection DTN
0160 16.7 CoS Objection MPAS DA(old) D0209 NH/HH01 Appointment (Re)start DTN
0170 16.7 CoS Objection MPAS DA(old)
(future)D0209 NH/HH01 Appointment Start DTN
0180 16.7 CoS Objection MPAS DA (new) D0209 NH/HH01 Appointment Cancellation DTN
0190 16.7 CoS Objection MPAS DA (new)
(future)D0209 NH/HH01 Appointment Cancellation DTN
0200 16.9 CoS Objection
Removal SUP(old) MPAS D0068 SP06 Notice of Objection Removal DTN
0210 16.9 CoS Objection
Removal MPAS SUP (old)D0069 SP34 Rejection with Reason Code(s) DTN
0220 16.9 CoS Objection
Removal MPAS SUP (old)D0090 SP65 Acceptance of
Objection Removal DTN
0230 16.9 CoS Objection
Removal MPAS SUP (new)D0091 SP60 Notification of
Objection Removal DTN
0240 16.9 CoS Objection
Removal MPAS SUP(new) D0089 SP64 Old Supplier effective
MP changes DTN 4
0250 16.9 CoS Objection
Removal MPAS SUP(new) D0259 SP66 Future changes made
by Old Supplier DTN
0260 16.9 CoS Objection
Removal MPAS SUP(new) D0171 SP28/29 Distribution changes
- post Supply
Start Date DTN 3,5
0270 16.9 CoS Objection
Removal MPA SDA(old) D0209 NH/HH01 Appointment End DTN
0280 16.9 CoS Objection
Removal MPA SDA (old)
(future)D0209 NH/HH01 Appointment Cancellation DTN
0290 16.9 CoS Objection
Removal MPAS DA(new) D0209 NH/HH01 Appointment Start DTN
0300 16.9 CoS Objection
Removal MPAS DA(new)
(future)D0209 NH/HH01 Appointment Start DTN
0310 16.13 Expiry of
objection
resolution
period MPAS SUP(old) D0092 SP70 Notification of expiry
of objection resolution periodDTN
0320 16.13 Expiry of
objection
resolution
period MPAS SUP(new) D0093 SP71 Notification of expiry of
objection resolution period DTN
0323 17.1 Contact
Notice SUP(new) MPAS D0271 SP10 Request Contact Notice DTN
0324 17.1 Contact Notice SUP (old) MPAS D0271 SP10 Request Contact Notice DTN
0325 17.1 Contact Notice MPAS SUP(new) D0272 SP14 Rejection with Reason Code(s) DTN
0326 17.1 Contact Notice MPAS SUP(old) D0272 SP14 Rejection with Reason Code(s) DTN
0327 17.1 Contact Notice MPAS SUP(new) D0273 SP15 Contact Notice DTN
0328 17.1 Contact Notice SUP(old) D0273 SP15 Contact Notice DTN
0330 20.1 New Connection DB MPAS none DB01 New MPAN Details internal
0340 20.5 Initial
Registration SUP MPAS D0055 SP01 Initial Registration
- new connection DTN 2
0350 12 Initial
Registration SSA MPAS none SP01 Initial Registration
- ERS transfer manual 7
0360 20.8 Initial
Registration MPAS SUP D0057 SP23 Rejection with Reason Codes DTN
0370 20.5 Initial
Registration MPAS SUP D0217 SP20 Acceptance of initial
registration DTN 4
0380 20.5 Initial
Registration MPAS SUP D0171 SP29 Future Distribution changes
(LLF Class, GSP Group) DTN 5
0390 20.5 Initial
Registration MPAS DA D0209 NH/HH01 Appointment Start DTN
0400 21.1 MPAN Discon-
nection DB MPAS none DB03 MPAN Disconnection internal
0410 21.2 MPAN Discon-
nection MPAS SUP D0171 SP27 MPAN Disconnection DTN 5
0420 21.2 MPAN Discon-
nection MPAS SUP
(future)D0171 SP26 MPAN Disconnection DTN 5
0430 21.2 MPAN Discon-
nection MPAS DA D0209 NH/HH01 Appointment End DTN
0440 21.2 MPAN
Disconnection MPAS DA
(future)D0209 NH/HH01 Appointment Cancellation DTN
0450 22.1 Full Supplier
Refresh SUP MPAS none none Request for Full Refresh manual
0460 22.2 Full Supplier
Refresh MPAS SUP none none Accept + confirmed date,
or reject manual
0470 22.3 Full Supplier
Refresh MPAS SUP D0204 SP84 Full Supplier Refresh CD+
0480 22.1 Full DA
Refresh DA MPAS none none Request for Full Refresh manual
0490 22.2 Full DA
Refresh MPAS DA none none Accept + confirmed date,
or reject manual
0500 22.3 Full DA
Refresh MPAS DA D0209 NH/HH08 Full DA Refresh CD+
0510 23.1 Selective
Supplier
Refresh SUP MPAS none none Request for Selective Refresh manual
0520 23.2 Selective
Supplier
Refresh MPAS SUP none none Accept + confirmed date, or
reject manual
0530 23.2 Selective
Supplier
Refresh MPAS SUP D0204 SP84 Selective Supplier Refresh DTN
0540 23.1 Selective
DA Refresh DA MPAS none none Request for Selective Refresh manual
0550 23.2 Selective
DA Refresh MPAS DA none none Accept + confirmed date, or
reject manual
0560 23.2 Selective
DA Refresh MPAS DA D0209 NH/HH01 Selective DA Refresh DTN
0570 24.1 Upd MP address DB MPAS none DB02 Revisions to MP address
details internal
0580 24.1 Upd MP address MPAS SUP D0171 SP29 Revisions to MP address
details DTN 5
0590 24.1 Upd MP address MPAS SUP
(future) D0171 SP28 Revisions to MP address
details DTN 5
0600 24.1 Upd MP LLF Class DB MPAS none DB02 Revisions to MP LLF Class internal
0610 24.1 Upd MP LLF Class MPAS SUP D0171 SP29 Revisions to MP LLF Class DTN 5
0620 24.1 Upd MP LLF Class MPAS SUP
(future) D0171 SP28 Revisions to MP LLF Class DTN 5
0630 24.1 Upd MP LLF Class MPAS DA D0209 NH/HH07 Revisions to MP LLF Class DTN
0640 24.1 Upd MP LLF Class MPAS DA
(future) D0209 NH/HH07 Revisions to MP LLF Class DTN
0650 24.1 Upd MP GSP Group DB MPAS none DB02 Revisions to MP GSP Group internal
0660 24.1 Upd MP GSP Group MPAS SUP D0171 SP29 Revisions to MP GSP Group DTN 5
0670 24.1 Upd MP GSP Group MPAS SUP
(future) D0171 SP28 Revisions to MP GSP Group DTN 5
0680 24.1 Upd MP GSP Group MPAS DA D0209 NH/HH06 Revisions to MP GSP Group DTN
0690 24.1 Upd MP GSP Group MPAS DA
(future) D0209 NH/HH06 Revisions to MP GSP Group DTN
0700 24.3 Appoint New DA SUP MPAS D0205 SP02DA Appointment DTN6
0710 24.4 Appoint New DA MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0720 24.4 Appoint New DA MPAS SUP(next)D0213 SP24 DA Appointment (to next
Supplier, if existing, for
information) DTN
0730 24.4 Appoint New DA MPAS DA (od) D0209 NH/HH01 Appointment End DTN
0740 24.4 Appoint New DA MPAS DA (old)
(future) D0209 NH/HH01 Appointment Cancellation DTN
0750 24.4 Appoint New DA MPAS DA (new) D0209 NH/HH01 Appointment Start DTN
0760 24.3 Appoint New DC SUP MPAS D0205 SP02 DC Appointment DTN
0770 24.4 Appoint New DC MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0780 24.4 Appoint New DC MPAS SUP(next)D0213 S24 DC Appointment (to next
Supplier, if existing,
for information) DTN
0790 24.4 Appoint New DC MPAS DA D0209 NH/HH02 DC Appointment DTN
0800 24.4 Appoint New DC MPAS DA
(future) D0209 NH/HH02 DC Appointment DTN
0810 24.3 Appoint New MO SUP MPAS D0205 SP02 MO ppointmentDTN6
0820 24.4 Appoint New MO MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0830 24.4 Appoint New MO MPAS SUP(next)D0213 SP24 MO Appointment
(to next Supplier,
if existing, for information) DTN
0840 24.3 Upd Measurement
Class SUP MPAS D0205 SP02 Measurement Class DTN
0850 24.4 Upd Measurement
Class MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0860 24.4 Upd Measurement
Class MPAS SUP(next)D0213 SP24 Measurement Class (to next
Supplier, if existing,
for information) DTN
0870 24.4 Upd Measurement
Class MPAS DA D0209 NH/HH04 Revised Measurement Class DTN
0880 24.4 Upd Measurement
Class MPAS DA
(future) D0209 NH/HH04 Revised Measurement Class DTN
0890 24.3 Upd Profile
Class/ SSC SUP MPAS D0205 SP02 Profile Class/ SSC DTN 6
0900 24.4 Upd Profile
Class/ SSC MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0910 24.4 Upd Profile
Class/ SSC MPAS SUP(next)D0213 SP24 Profile Class/ SSC (to next
Supplier, if existing,
for information) DTN
0920 24.4 Upd Profile
Class/ SSC MPAS DA D0209 NH/HH03 Revised Profile Class/ SSC DTN
0930 24.4 Upd Profile
Class/ SSC MPAS DA
(future) D0209 NH/HH03 Revised Profile Class/ SSC DTN
0940 24.3 Upd
Energisation
Status SUP MPAS D0205 SP02 Energisation Status DTN 6
0950 24.4 Upd Energisation
Status MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
0960 24.4 Upd Energisation
Status MPAS SUP(next)D0213 SP24 Energisation Status (to next
Supplier, if existing,
for information) DTN
0970 24.4 Upd Energisation
Status MPAS DA D0209 NH/HH05 DA Appointment Start (if
initial Energisation) DTN 7
0980 24.4 Upd Energisation
Status MPAS DA D0209 NH/HH05 Revised Energisation Status DTN
0990 24.4 Upd Energisation
Status MPAS DA
(future) D0209 NH/HH05 Revised Energisation Status DTN
1000 24.3 Upd Meter
TSwitch Code SUP MPAS D0205 SP02 Meter TSwitch Code DTN6
1010 24.4 Upd Meter
TSwitch Code MPAS SUP D0203 SP30 Rejection with Reason Code(s) DTN
1020 24.4 Upd Meter
TSwitch Code MPAS SUP(next)D0213 SP24 Meter TSwitch Code (to
next Supplier, if existing,
for information) DTN
1029 24.5 MDDM MPAS D0269 none Update MD data
1030 24.5 MDDM MPAS D0270 none Update MD data
1040 25.1 SUP Resend
Request SUP MPAS none none Resend Request manual
1050 25.2 SUP Resend
Request MPAS SUP as per
original as per
original Requested File Resent DTN
1060 25.1 DA Resend
Request DA MPAS none none Resend Request manual
1070 25.2 DA Resend
Request MPAS DA D0209 as per
original Requested File Resent DTN
1080 25.2 DA Rejection DA SUP D0023 none Details of Failed Messages DTN
1100 xxx Customer/
Supplier
Query MPAS CUST none none Request notification of MPAN manual
1110 xxx Customer/
Supplier
Query MPAS CUST none none Supply Number + MP Details post
1120 xxx File
Confirmation MPAS SUP D172 SP90 Technical Confirmation of File
(sent on completion of processing
for every Supplier File)DTN
SCHEDULE 4
Accession Agreement
THIS AGREEMENT is made on [ ] between:
(1) [ ], a company incorporated under the laws of [
] [( number [ ])] and having its [registered]
[principal] office at
[ ] (the "New Party"); and
(2) [MEC] (the "Nominee") on behalf of all the parties to the Master
Registration Agreement referred to below.
WHEREAS:
(A) The Host PESs named therein (1), the Suppliers named therein (2),
the Pool Agent (3), Scottish Electricity Settlements Limited (4) and
MRASCO (5), have entered into an agreement ("Master
Registration Agreement") on [ ].
(B) The New Party has requested that it be admitted as a party in the
capacity of [Host PES]/[Supplier]/[replacement for Pool
Agent]/[replacement for Scottish Electricity Settlements
Limited]pursuant to Clause 4 of the Master Registration Agreement
and each of the parties hereby agrees to such admission.
NOW IT IS HEREBY AGREED as follows:
1. Unless the context otherwise requires, words and expressions
defined in the Master Registration Agreement shall bear the same
meanings respectively when used herein.
2. The Nominee (acting on behalf of each of the parties) hereby admits
the New Party as an additional party under the Master Registration
Agreement on the terms and conditions hereof and with effect from
[insert effective date of admission].
3. The New Party hereby accepts its admission as a party and
undertakes with the Nominee (acting on behalf of each of the
parties) to perform and to be bound by the terms and conditions of
the Master Registration Agreement as a party as from the [insert
effective date of admission].
4. For all purposes in connection with the Master Registration
Agreement the New Party shall as from the [insert effective date of
admission] be treated as if it had been a signatory of the Master
Registration Agreement as a [Host PES]/[Supplier]/ [replacement
for Pool Agent]/[replacement for Scottish Electricity Settlements
Limited]*, and as if this Agreement were part of the Master
Registration Agreement, and the rights and obligations of the
parties shall be construed accordingly.
5. This Agreement and the Master Registration Agreement shall be
read and construed as one document and references in the Master
Registration Agreement to the Master Registration Agreement
(howsoever expressed) shall be read and construed as references to
the Master Registration Agreement and this Agreement.
6. This Agreement shall be governed by and construed in all respects
in accordance with English law and the provisions of Clause 49 of
the Master Registration Agreement shall apply hereto mutatis
mutandis.
AS WITNESS the hands of the duly authorised representatives of the
parties hereto the day and year first above written.
[New Party]
By:
Notice details (Clause 46 of the Master Registration Agreement)
Address:
Facsimile Number:
Attention:
[Nominee]
(for and on behalf of each of the parties to the Master Registration
Agreement)
By:
* Delete/complete as appropriate.
SCHEDULE 5
Supply Number Format
1. The Supply Number printed on Customers' bills and statements
shall, subject to paragraph 3, or any direction from the Director,
conform to the following requirements:
(a) it shall be printed in an appropriate size and colour at the
foot or in the top right corner of the face of the bill or
statement to ensure easy recognition by the customer;
(b) data items 1 to 3 and data items 4 to 6 of Schedule 2 shall
be represented on separate lines;
(c) data items 1 to 3 of Schedule 2 shall be below data items 4
to 6 of Schedule 2;
(d) both lines shall be preceded by a single capital S; and
(e) each data item containing more than one digit shall be
presented in a separate block subject to a maximum of four
digits in each block.
2. Each Supplier shall comply with the requirements of paragraph 1 by
printing the Supply Number on customers' bills and statements in
the format illustrated below (excluding annotations):
Line
loss factor Class
Meter/timeswitch (LLF)/
Profile class code DUoS
Code
08123456236789
0123 456
Distributor identifier Unique ref.
Check digit number (underlined numbers)
3. Each Supplier need not comply with the requirements of paragraphs
1 and 2 in any case or class of cases in which the Supplier has
obtained the prior approval of the Director to the alternative format
in which the Supply Number is to be represented.
4. Where a number of Supply Numbers need to be printed on one bill,
each Supplier shall agree with the Director the appropriate format
for printing such Supply Numbers on the bill.
SCHEDULE 6
Pool Requirements (England and Wales)
The parties acknowledge that the intellectual property rights in the
Statement of Requirements developed by the parties to the Pooling and
Settlement Agreement are owned by the Pool Members.
2. CONDITIONS PRECEDENT
2.1 A Host PES shall not be obliged to provide Services using its
MPAS Registration System which require Certification until:
2.1.1 the Host PES has become Accredited and its MPAS
Registration System has been Certified; and
2.2 The obligations on a Host PES to provide Services to a Supplier in
relation to any particular Metering Point in its Authorised Area are
subject to the Host PES having entered values for the data items
(other than data item 19) listed in Schedule 2 for that Metering
Point into its MPAS Registration System except where:
2.2.1 the Metering Point is registered on ERS in which case the
Host PES shall ensure that data items 1 to 3, 9, 18 (in each
case set to "N") and 19 in Schedule 2 have been entered for
that Metering Point; or
2.2.2 the Metering Point at a particular time is a New Metering
Point, in which case the provisions of Clause 20.1 shall
apply.
11. MPAS TECHNICAL CONSTRAINT
11.1 Each Host PES shall ensure that its MPAS Registration System
enables only one Supplier to be Registered as responsible for
supplying any Metering Point for a particular day.
11.2 Where a Host PES has become Accredited and its systems have
been Certified, it shall ensure that:
11.2.1 it uses Certified systems and processes to provide and
maintain its MPAS; and
11.2.2 any changes in its Certified systems and processes are made
in accordance with Certified change procedures.
12. ERS MIGRATION (England and Wales only)
12.1 Subject to Clauses 12.2 and 12.3, where a Host PES receives an
application for Migration in an agreed electronic format, from the
Settlement System Administrator which it Accepts, it shall Migrate
the relevant Metering Point and shall notify the Settlement System
Administrator, the relevant Supplier and Data Aggregator by 06:00
hours on the following Operational Working Day that such
Metering Point has Migrated. Where the Host PES Rejects the
application to Migrate, the Host PES shall notify the Settlement
System Administrator by delivering such notification to that Host
PES's Gateway by 06:00 hours on the following Operational
Working Day that the application has been Rejected and all the
reasons for the Rejection.
12.2 Up to the date notified to each Host PES pursuant to Clause 12.3
where:
12.2.1 the relevant Host PES's MPAS Registration System is fully
operational; and
12.2.2 a business process has been developed pursuant to the terms
of the Pooling and Settlement Agreement and accepted by
the relevant Host PES,
that Host PES shall complete as many Migrations as would be
consistent with the efficient use of resources available to that Host
PES at that time.
12.3 From the date on which the parties are notified by the Pool Agent
that the Pool Executive Committee has resolved, pursuant to
schedule 24 of the Pooling and Settlement Agreement, that the
Migration of Metering Points registered on ERS to a Host PES's
MPAS Registration System shall commence in respect of one or
more Host PESs (such date to be no earlier than 1st October 1998),
each Host PES to which such notification relates shall use its
reasonable endeavours to complete as many applications for
Migration as possible but shall only be required to complete the first
100 applications for Migrations received by it on any Operational
Working Day where those applications are in an agreed electronic
format. Any extra applications for Migrations in excess of the first
100 requested in any Operational Working Day which are not
completed on that Operational Working Day shall be deemed to be
received by it on the following Operational Working Day.
12.4 A Supplier registered on ERS for Related Metering Points shall use
its reasonable endeavours to ensure that those Related Metering
Points are Migrated so that they have the same Supply Start Date.
13. SERVICE AVAILABILITY
13.1 Each Host PES shall provide, operate and maintain its MPAS
Registration System in accordance with Good Industry Practice in
England and Wales and, subject to Clause 13.3, shall use its
reasonable endeavours to ensure that staff are available between
09:00 hours and 18:00 hours on all Operational Working Days to
receive requests pursuant to Clauses 17.4, 19, 20.12, 22.1, 23.1,
25.1 27.5 and 27.6 and to respond to queries from Suppliers in
relation to the provision of Services.
13.2 Each Host PES shall use its reasonable endeavours to ensure that
any planned suspensions in the operation of its MPAS Registration
System are scheduled so that there is the minimum amount of
disruption to the provision of MPAS. The relevant Host PES shall
provide the relevant Suppliers and Data Aggregators with as much
notice as possible of any planned suspension in the availability of its
MPAS Registration System.
13.3 In the event of any unplanned suspension in the operation of its
MPAS Registration System, the Host PES shall treat the
suspension as an emergency and shall implement its disaster
recovery procedures, approved as part of its Accreditation, within
48 hours of the start of the suspension. The Host PES shall use its
reasonable endeavours to make its MPAS Registration System
available again as quickly as possible.
13.4 Any failure of the Host PES to comply with the provisions of
Clauses 13.2 and 13.3 shall not relieve that Host PES from the
application of the service levels referred to in Clause 14 except
where such failure is due to a circumstance of Force Majeure in
which case the provisions of Clause 36 or 45 shall apply.
14 SERVICE LEVELS AND LIQUIDATED DAMAGES
Service Levels
14.1 Save as otherwise provided in this Agreement, each Host PES shall
use its reasonable endeavours to ensure that notifications of any one
type which it receives shall be processed in the order in which they
were received.
14.2 Where a Host PES receives any notification pursuant to any of
Clauses 15.10, 15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10, 20.11,
21.1, 24.1, 24.3, 24.5 or the Objection Resolution Period has
elapsed under Clause 16.13, the Host PES shall notify the relevant
persons listed in those Clauses, or for notifications received under
Clauses 21.1 and 24.3, the persons listed in Clauses 21.2 and 24.4
respectively (except for its Distribution Business) in the manner
contained in Clause 14.3.
14.3 Each Host PES shall produce the notifications required under the
Clauses listed in Clause 14.2 in accordance with the requirement set
out in Clause 28.2 in response to any notifications received by
18:00 hours on an Operational Working Day or in response to the
elapsing of the Objection Resolution Period on a particular
Operational Working Day ("Message Receipt Working Day")
and, subject to Clauses 14.4 and 14.5, shall operate its MPAS
Registration System with the intent to deliver the total number of
such notifications ("Total Daily Processing") to its Gateway by
06:00 hours on the following Operational Working Day or as soon
as reasonably practicable thereafter.
14.4 For the purposes of fulfilling its obligations in respect of the
Settlement Requirements, each Host PES shall ensure that:
14.4.1 the Total Daily Processing will be processed and delivered
to the Host PES's Gateway at a time not later than 06:00
hours on the first Operational Working Day following the
Message Receipt Working Day provided that the Host PES
shall not be in breach of this obligation if it fails to meet this
target on not more than six Operational Working Days
during each Quarter;
14.4.2 if the target in Clause 14.4.1 is not met, the Total Daily
Processing will be processed and delivered to the Host
PES's Gateway at a time not later than 06:00 hours on the
second Operational Working Day following the Message
Receipt Working Day provided that the Host PES shall not
be in breach of this obligation if it fails to meet this target on
not more than one Operational Working Day during each
Quarter;
14.4.3 if the target in Clause 14.4.2 is not met, the Total Daily
Processing will be processed and delivered to the Host
PES's Gateway at a time not later than 06:00 hours on the
third Operational Working Day following the Message
Receipt Working Day.
14.6 In order to determine whether the Host PES has fulfilled the
requirements set out in each of Clauses 14.4 to 14.5, each Host
PES shall note the time on the Operational Working Day when the
Total Daily Processing is delivered to its Gateway in relation to the
Message Receipt Working Day relevant to that Total Daily
Processing.
14.7 Each Host PES shall measure its performance against the
requirements set out in Clauses 14.4 and 14.5 over each Quarter
provided that where a Host PES breaches the requirements in
Clauses 14.5.3 and 14.5.4, the breach shall be deemed to have
occurred in the Quarter in which the second Operational Working
Day following the Message Receipt Working Day occurred.
14.8 Each Host PES agrees that it is their long term objective to achieve
a service level ensuring the processing and delivery of the Total
Daily Processing by 06:00 hours on the first Operational Working
Day following the Message Receipt Working Day.
Pool/SESL Liquidated Damages
14.9 Where the number of occasions in any Quarter that a Host PES fails
to deliver the Total Daily Processing to its Gateway within the
timescales indicated in Clauses 14.4.1 to 14.4.3 exceeds the number
of allowable failures indicated in those Clauses, that Host PES if in
England or Wales shall pay the Pool Agent and, if in Scotland shall
pay SESL (POUND)125 for each such extra occasion on which it has failed
to deliver the Total Daily Processing to its Gateway, provided that
the Host PES shall have no liability to make such payment for any
failures which occur before the date which is 15 consecutive weeks
following commencement of Controlled Market Start-Up in its
Authorised Area or such longer period as MEC may determine in
accordance with Clause 14.13.
Data Transfer Service Escalation
14.12 Where a Host PES receives a notification from the Data Transfer
Network indicating that a Message sent by that Host PES pursuant
to the terms of this Agreement has not been received by the
relevant Supplier or Data Aggregator, the Host PES shall contact
the Supplier or Data Aggregator as soon as reasonably practicable.
The Host PES and relevant Supplier or Data Aggregator shall
utilise the Problem Management Procedures under the Data
Transfer Service Agreement which may require the Host PES to
Resend the original Message.
Review
14.15 MEC shall conduct a formal review, to be started no earlier than 12
months or as MEC otherwise decides and completed no later than
15 months, after the start of Controlled Market Start-Up for the
Host PES that is the first Host PES to commence Controlled
Market Start-Up.
14.17 Each party agrees to provide MEC with all reasonable information
that MEC may require for the purposes of carrying out its review
pursuant to this Clause 14. This may include information relating
to the level of market activity, the average number of Messages
within the Total Daily Processing, the average composition of a
Total Daily Processing and information to verify the assumptions
set out in Clause 14.16 and how the values ascribed to such
assumptions may have changed since the date of this Agreement.
14.18 Nothing in this Clause shall be construed as restricting the scope of
MEC's review pursuant to Clause 14.15. In particular, MEC shall
consider whether there is a need for further reviews to be carried
out by it after the conclusion of its review pursuant to this Clause
14.
14.19 MEC shall copy the results of its review to all parties as soon as
reasonably practicable following the conclusion of its review. Any
changes to this Agreement that MEC reasonably considers should
be made as a result of the review shall be treated as a change
request and the procedures set out in Clause 9 shall be followed.
15 PROCEDURE FOR APPLICATION FOR REGISTRATION
BY A SUPPLIER
15.1 Subject to Clause 3.2, a Supplier that has entered into a contract to
supply or receive electricity through or from a Metering Point,
under which supply or receipt is to commence on or after the date
specified by the Director in relation to the Premises associated with
that Metering Point as referred to in Clause 3.2 or is supplying or is
to supply from any such Metering Point under a tariff arrangement
on or after that date, shall apply to the Host PES whose MPAS
Registration System has the Metering Point recorded on it, for
Registration in respect of that Metering Point, pursuant to the
provisions of this Clause 15 or Clause 20, as appropriate except
where that Supplier is already Registered in relation to that
Metering Point or where that Metering Point is registered on ERS.
15.6 A Valid Application for Registration for the purposes of this Clause
15 is one that:
15.6.1 contains values that the Supplier has identified as
representing data items 1, 2, 3, 8 and 10 of Schedule 2 for
the Metering Point against which it wishes to Register
which are Accepted on the MPAS Registration System;
15.6.2 is received by the relevant Host PES no later than the last
Operational Working Day before the Supply Start Date
included in the Supplier's application under Clause 15.6.1
and no more than 28 days in advance of that date.
15.10 Where a Host PES receives a Valid Application for Registration
from a Supplier in relation to a Metering Point, it shall Register that
Supplier and shall notify that Supplier (the "New Supplier"), the
New Supplier's Data Aggregator, the Old Supplier, the Old
Supplier's Data Aggregator, any Data Aggregator the Old Supplier
may have appointed for a future date, and the relevant Distribution
Business for that Metering Point that the Supplier has been
Registered. Subject to Clauses 16.8 and 16.13, the New Supplier
shall be deemed responsible for the supply of electricity through the
relevant Metering Point from 00:00 hours on the Supply Start Date.
Subject to Clauses 16.8 and 16.13, the Old Supplier shall cease to
be responsible for the supply of electricity through the relevant
Metering Point from 00:00 hours on the Supply Start Date.
15.11 Subject to Clauses 15.2 and 15.3, the New Supplier shall use its
reasonable endeavours to submit a Valid Application for
Registration to the Host PES as far in advance of the Supply Start
Date as reasonably possible taking into account the restrictions set
out in Clause 15.6.2. The relevant Host PES shall not be
responsible for ensuring that the New Supplier complies with the
requirements of this Clause 15.11.
15.12 The New Supplier shall use its reasonable endeavours not to
commence supplying electricity through any Metering Point or
make any material changes to that Metering Point until it has
received from the relevant Host PES a notice confirming its
Registration in respect of the relevant Metering Point or (if later)
the Supply Start Date specified in the New Supplier's Application
for Registration. The relevant Host PES shall not be responsible
for ensuring that the New Supplier complies with the requirements
of this Clause 15.12. Where the New Supplier is unable to comply
with the provisions of this Clause 15.12 due to the relevant Host
PES's failure to send out a notice confirming its Registration within
the timescales indicated in Clause 14.4 or 14.5, that New Supplier
shall be deemed not to be in breach of the obligation set out in this
Clause 15.12.
15.13 Where an Old Supplier makes a change to one of the data items for
which it is stated to be responsible in Schedule 2, in relation to a
Metering Point, and its Message to the relevant Host PES is
Rejected and the reason for such Rejection is stated to be the New
Supplier's Registration, the Old Supplier shall contact the New
Supplier as soon as possible and inform it of the change, using the
contact notice facility provided under Clause 17, if necessary.
15.14 Where a Host PES receives an Application for Registration from a
Supplier which is not a Valid Application for Registration, it shall
Reject the Application for Registration and shall notify the Supplier
that such application has been Rejected, setting out all the reasons
for the Rejection. Notwithstanding Clause 15.6.2, the MPAS
Registration Systems of some Host PESs may not Reject an
otherwise Valid Application for Registration even though the
Application for Registration is received after the date that is the last
Operational Working Day before the Supply Start Date included in
the Supplier's Application for Registration.
16 PROCEDURE FOR OBJECTION BY OLD SUPPLIER
16.1 An Old Supplier may issue an objection ("Notice of Objection") to
the relevant Host PES in relation to an Application for Registration
of which it has been notified pursuant to Clause 15.10 where:
16.1.1 subject to Clause 16.2, the Application for Registration is in
relation to a Metering Point which is associated with
Designated Premises at which the Customer is being
supplied by the Old Supplier under a contract that will
neither expire nor (to the Old Supplier's knowledge) be
terminated by the New Supplier's Supply Start Date notified
to the Old Supplier pursuant to Clause 15.10; or
16.1.2 subject to Clause 16.2, the Application for Registration is in
relation to a Metering Point which is associated with
Domestic Premises where charges for electricity supplied to
the Customer (at any such Domestic Premises), having been
demanded in writing by the Old Supplier, prior to the notice
of termination being given remain owing to the Old Supplier
more than 28 days after that demand was made; or
16.1.3 the Application for Registration for the relevant Metering
Point is received by the Host PES either before the Director
has made a direction in respect of the Premises with which
the Metering Point is associated, pursuant to Condition 3 of
the New Supplier's Second Tier Supply Licence, or prior to
such date as is specified in that direction.
16.1.4 the New Supplier has contacted the Old Supplier and both
Suppliers have agreed that the New Supplier's Registration
has been made in error; or
16.1.5 the Application for Registration relates to a Metering Point
which is a Related Metering Point and the relevant New
Supplier has not applied to Register all the relevant Related
Metering Points on the same Operational Working Day for
the same Supply Start Date:
Each ground of objection in Clauses 16.1.1 to 16.1.5 shall be
treated as separate and independent from each of the other grounds
of objection in those Clauses.
16.2 The Old Supplier may not issue an objection to the New Supplier's
Application for Registration on the grounds indicated in Clauses
16.1.1 and 16.1.2 if the Host PES's notice to it in Clause 15.10
indicates that data item 7 in Schedule 2 for the Metering Point in
the New Supplier's Application for Registration has been set to "T"
("True") unless it has reasonable grounds for believing that
information to be inaccurate.
16.3 A Notice of Objection that complies with the requirements of
Clauses 16.1 and 16.2 shall be a Valid Notice of Objection ("Valid
Notice of Objection").
16.4 The relevant Host PES shall not be responsible for checking that
any Notice of Objection that it receives is a Valid Notice of
Objection.
16.5 Where an Old Supplier wishes to issue a Notice of Objection to the
relevant Host PES in relation to an Application for Registration of
which it has been notified pursuant to Clause 15.10 it shall issue
such notice to the relevant Host PES so that it is received by the
Host PES within the Objection Raising Period.
16.6 Where the Old Supplier gives a Notice of Objection it shall, at the
same time, send notification to its Customer at the Premises of the
grounds for that objection and of how the Customer may dispute or
resolve such grounds.
16.7 Where the relevant Host PES receives and Accepts a Notice of
Objection in respect of a New Supplier's Registration within the
Objection Raising Period, the Host PES shall record such notice
and shall notify the Old Supplier and New Supplier, the Old
Supplier's Data Aggregator any Data Aggregator the Old Supplier
may have appointed for a future date, the New Supplier's Data
Aggregator, any Data Aggregator the New Supplier may have
appointed for a future date and, where necessary, the relevant
Distribution Business that such Notice of Objection has been
received and Accepted. All data items relating to the New
Supplier's Registration, including any changes to data items that a
New Supplier has made pursuant to Clause 24.2, shall be removed.
The Old Supplier shall be notified of all changes to data items made
by the New Supplier pursuant to Clause 24.2, or made by the
Distribution Business pursuant to Clause 24.1 which were entered
on or after the Operational Working Day on which the New
Supplier's Registration was Accepted, and which have an effective
date which is not later than the Operational Working Day on which
the Notice of Objection is Accepted. Such notification shall
exclude any items which were provided by the Old Supplier. The
New Supplier shall not be able to make any changes to data items
4, 5, 7, 11 to 14, 16 or 17 in Schedule 2 for the relevant Metering
Point after the Old Supplier's Notice of Objection is lodged unless
and until the Notice of Objection is removed by the Host PES in
accordance with Clause 16.9. Where the relevant Notice of
Objection is not Accepted or has not been received within the
Objection Raising Period, the relevant Host PES shall Reject such
Notice of Objection and shall notify the Old Supplier that it has
Rejected its Notice of Objection and all the reasons for the
Rejection. Where the Old Supplier's Notice of Objection has been
Rejected the Old Supplier may re-submit a Notice of Objection
within the Objection Raising Period.
16.8 Where the Host PES records a Notice of Objection in accordance
with Clause 16.7 it shall note within its MPAS Registration System
that the Registration of the New Supplier in relation to the relevant
Metering Point has been objected to and the responsibility for
supplying that Metering Point shall revert to or remain with the Old
Supplier, as relevant, such that the New Supplier's Registration
shall be deemed not to have taken place.
16.9 The Old Supplier may withdraw any Notice of Objection that has
been Accepted by the Host PES within the Objection Resolution
Period and shall do so where the grounds for its objection have
been resolved within the Objection Resolution Period. Where the
Old Supplier withdraws a Notice of Objection pursuant to this
Clause 16.9 it may not re-submit a Notice of Objection in respect of
the same Application for Registration pursuant to Clause 16.5.
Where the Host PES Accepts the Old Supplier's withdrawal of its
Notice of Objection the Host PES shall remove the Notice of
Objection and shall notify the Old Supplier, the New Supplier, the
Old Supplier's Data Aggregator, any Data Aggregator the Old
Supplier may have appointed for a future date, the New Supplier's
Data Aggregator, any Data Aggregator the New Supplier may have
appointed for a future date and, where necessary, the relevant
Distribution Business of the removal of the Notice of Objection.
Where the Old Supplier has made any changes to the data items
pursuant to Clause 24.2, or the Distribution Business has made any
changes to data items pursuant to Clause 24.1, which were entered
on or after the Operational Working Day on which the Notice of
Objection was Accepted, and such changes have an effective date
which is not later than the Operational Working Day on which the
Notice of Objection is withdrawn, during the Objection Resolution
Period, the Host PES shall notify the New Supplier that such
changes were made. The data items relevant to the New Supplier's
Registration shall be included in the notification to the New
Supplier. Where the relevant Host PES does not Accept the Old
Supplier's request to withdraw its Notice of Objection it shall
Reject such application and shall notify the Old Supplier that its
application to withdraw its Notice of Objection has been Rejected
and give reasons.
16.10 Where the Old Supplier withdraws a Notice of Objection or where
the grounds of objection are later resolved, it shall notify the
Customer at the relevant Premises as soon as is reasonably
practicable.
16.11 The relevant Host PES shall not be responsible for checking
whether the grounds for objection in the Old Supplier's Notice of
Objection have been resolved within the Objection Resolution
Period, where the Old Supplier indicates that they have been, in its
notice submitted pursuant to Clause 16.9.
16.12 Where the Host PES removes a Notice of Objection in accordance
with Clause 16.9, it shall restore the Registration of the relevant
New Supplier, who shall be deemed to be responsible for the supply
of electricity through the relevant Metering Point from the Supply
Start Date included in its Valid Application for Registration. If the
Old Supplier made any changes to data items pursuant to Clause
24.2 during the Objection Resolution Period which were to be
effective from a date on or after the New Supplier's Start Date,
such changes shall be deemed not to have been made. If the New
Supplier made any changes to data items pursuant to Clause 24.2
before the Host PES recorded the Old Supplier's Notice of
Objection those changes shall be re-instated on the MPAS
Registration System to be effective from the dates originally
specified in the New Supplier's application.
16.13 Where a Notice of Objection is not withdrawn or the request to
withdraw has been Rejected within the Objection Resolution
Period, the relevant Host PES shall inform the Old Supplier and the
New Supplier that the Objection Resolution Period has expired and
the Old Supplier shall retain responsibility for the Metering Point.
17. CONTACT NOTICE FACILITY
17.1 After the period of Controlled Market Start-Up for the relevant
Host PES where either:
17.1.1 the Old or New Supplier in relation to the current or
pending Registration for a particular Metering Point
reasonably believes that the New Supplier has been
erroneously Registered for that particular Metering Point;
or
17.1.2 the Old Supplier in relation to the current Registration
wishes to assign to the New Supplier a debt owing to it by a
Customer at Domestic Premises pursuant to Condition 40
of the Old Supplier's PES Licence in England and Wales or
Condition 35 of Part V of the Old Supplier's PES Licence in
Scotland or Condition 48 of the Old Supplier's Second Tier
Supply Licence in England and Wales or Condition 49 of
the Old Supplier's Second Tier Supply Licence in Scotland,
as the case may be;
17.1.3 the Old or New Supplier in relation to the current or
pending Registration reasonably believes that the New
Supplier applied to register a Metering Point which is a
Related Metering Point without applying to Register all the
relevant Related Metering Points at the same time; or
17.1.4 the Old Supplier is obliged to contact the New Supplier
pursuant to Clause 15.13,
the relevant Supplier shall contact the relevant Host PES to request
the identity of the other Supplier using either the Data Transfer
Network if the Host PES can receive a request on the Data
Transfer Network for the provision of such service or otherwise by
facsimile sent to that Host PES's MPAS management facsimile
number.
17.2 Where, during or after Controlled Market Start-Up, a Host PES
who has been unable to receive Messages on the Data Transfer
Network for the provision of the Service requested under Clause
17.1 subsequently becomes able to do so, that Host PES shall
notify all Suppliers Registered on its MPAS Registration System of
that fact.
17.3 Where the Host PES can receive a Message on the Data Transfer
Network for the provision of the Service requested under Clause
17.1, the Host PES shall provide both the Suppliers with the other's
identity. Where the Host PES Rejects the Message it shall notify
the Supplier of its Rejection and all the reasons for so doing.
17.4 Where the Host PES cannot receive a Message on the Data
Transfer Network, (otherwise than as a result of a failure of the
Data Transfer Network) for the provision of the Service requested
under Clause 17.1 and the Host PES receives the Supplier's manual
request pursuant to Clause 17.1 by 15:00 hours on an Operational
Working Day, it shall provide both the Suppliers with the other's
identity by 06:00 hours on the following Operational Working Day
provided that where the total number of manual requests received
pursuant to Clause 17.1 to be responded to by that Host PES
would otherwise exceed 50 in any Operational Working Day the
Host PES shall use its reasonable endeavours to provide as many
responses as possible but shall only be required to provide the first
50 responses requested on that Operational Working Day. Such
responses shall be provided in the following manner:
17.4.1 a maximum of 5 responses per Supplier or Data
Aggregator, allocated in the order in which those requests
are received; and
17.4.2 where Clause 17.4.1 has been complied with, any extra
requests which have been received shall be provided in the
order in which they were received.
Any extra requests in excess of 50 requested in any Operational
Working Day or any received after 15:00 hours on an Operational
Working Day in relation to which the Host PES has not provided
responses shall be deemed to have been requested at the start of the
following Operational Working Day.
17.5 Each Host PES shall offer the Services pursuant to Clause 17.1 and
17.3 during the period of Controlled Market Start-Up for that Host
PES where it does not automatically notify each Supplier of the
other relevant Supplier's identity pursuant to the procedures
contained in Clauses 15 and 16. The Host PES shall cease to
automatically notify each Supplier of the other relevant Supplier's
identity after the end of Controlled Market Start-Up for that Host
PES.
17.6 The relevant Host PES shall not be required to check the validity of
any request made in accordance with Clause 17.1 except to check
that the Supplier requesting the information is the New or Old
Supplier in relation to the relevant Metering Point in relation to the
relevant Registration.
18. ERROR RECTIFICATION
18.1 Each Supplier shall use its reasonable endeavours to check any
notice it receives from a Host PES pursuant to Clause 15 for errors
and in particular where it is a New Supplier to check data item 5 of
Schedule 2 for the relevant Metering Point. Where data item 5 of
Schedule 2 for a Metering Point indicates that the Metering Point is
a Related Metering Point, the New Supplier shall use its reasonable
endeavours to ensure that all other relevant Related Metering
Points are Registered at the same time either in accordance with
Clause 15 or this Clause 18.
18.2 Where an Old Supplier has raised an objection pursuant to Clause
16.1.5, the Old Supplier for a particular Metering Point shall, on
request by a New Supplier as soon as reasonably practical, notify
that New Supplier of all Related Metering Points for that Metering
Point for which the Old Supplier is or has been Registered.
18.3 Where the Old Supplier for a particular Metering Point reasonably
believes that the New Supplier has either erroneously Registered
for a particular Metering Point or has Registered for a Related
Metering Point without registering all other relevant Related
Metering Points it shall either:
18.3.1 raise an objection if it may pursuant to Clause 16.1 within
the time limits set out in Clause 16; or
18.3.2 contact the New Supplier as soon as possible using the
facility provided under Clause 17, if necessary.
Where the Old Supplier raises an objection pursuant to Clause
18.3.1 it may also contact the New Supplier using the facility under
Clause 17 if necessary.
18.4 Where the New Supplier for a particular Metering Point reasonably
believes that it has either erroneously Registered for that Metering
Point or has Registered for a Related Metering Point without
registering all other relevant Related Metering Points it shall either:
18.4.1 where it has Registered a Related Metering Point without its
associated Related Metering Point(s) and the Old Supplier
has not objected to its original registration apply for
Registration for the relevant Related Metering Point(s) as
soon as reasonably practicable. Where the Supplier makes
such an application but does not apply in sufficient time to
ensure that it receives confirmation from the Host PES
before it commences supplying electricity through the
relevant Related Metering Points it shall contact the Old
Supplier as soon as possible using the facility provided
under Clause 17, if necessary; or
18.4.2 contact the Old Supplier as soon as possible using the
facility provided under Clause 17, if necessary.
18.5 Where either the relevant Old Supplier or New Supplier contacts
the other pursuant to Clause 18.3 or 18.4, these Suppliers shall
agree the appropriate method for rectifying the error or registering
all other relevant Related Metering Points. This may include:
18.5.1 the Old Supplier objecting to the New Supplier's application
under Clause 16 within the time limits set out in Clause 16;
or
18.5.2 the Old Supplier withdrawing its objection; or
18.5.3 the New Supplier Registering all relevant Related Metering
Points before it commences supplying electricity through the
Related Metering Point(s) and if necessary the Old Supplier
removing its objection under Clause 16 within the time
limits set out in Clause 16; or
18.5.4 the Old Supplier applying for Registration in relation to the
Metering Point where the New Supplier has registered the
relevant Metering Point in error; or
18.5.5 the New Supplier applying for Registration in relation to the
other associated Related Metering Points after the time
period indicated in Clause 18.5.3.
18.6 The Suppliers shall, as soon as reasonably practicable, settle any
costs incurred as a result of implementing any methods to correct
errors or as a result of those errors including those outlined in
Clause 18.5 between them including any settlement costs that are
incorrectly allocated to the Suppliers and any costs incurred as a
result of registering any relevant Related Metering Points at a later
time to the associated Related Metering Points.
19.1 RETROSPECTIVE AMENDMENT OF MPAS
REGISTRATION SYSTEM
19.1 Subject to Clause 19.2 and where the procedures detailed in Clause
18 cannot be used, the Old Supplier and New Supplier may request
the relevant Host PES to amend the MPAS Registration System
manually to rectify an erroneous Registration. The Host PES shall,
where the Host PES has received a joint written confirmation from
the Old Supplier and the New Supplier agreeing to the amendment
to the MPAS Registration System and any associated charges,
undertake the manual amendment in the limited circumstances set
out in guidelines established by MEC, at a charge to be agreed
between the relevant Host PES and the relevant Suppliers. Such
guidelines shall be established by MEC in consultation with all
parties as soon as practicable after the date of this Agreement.
19.2 The parties agree to instruct MEC, as soon as reasonably
practicable after the date of this Agreement, to review the Services
to establish what changes would be required to introduce an
electronic retrospective amendment facility and whether, in the light
of all relevant facts and circumstances, such a facility should be
introduced and if so, when and what that facility should be. The
facts and circumstances to be considered by MEC shall include:
19.2.1 the results of any impact assessment which MEC has
requested any Host PES to carry out on its MPAS
Registration System;
19.2.2 what situations could give rise to the requirements to amend
the MPAS Registration Systems retrospectively;
19.2.3 whether the procedures set out in Clause 18 in practice
provide adequate solutions to the situations outlined under
Clause 19.2.2;
19.2.4 what effect any enhanced functionality, if needed, would
have on any interfacing systems and what corresponding
changes would be required to those systems if any enhanced
functionality to the MPAS Registration Systems were to be
introduced;
19.2.5 what effect any enhanced functionality, if needed, would
have on Accreditation requirements;
19.2.6 the funding and charging implications of any enhanced
functionality, if needed; and
19.2.7 the appropriate allocation of liability arising from the
implementation of the enhanced functionality, if needed.
19.3 Where as a result of the review carried out pursuant to Clause 19.2,
MEC decide that enhanced functionality is required they shall notify
the Host PES and indicate an appropriate timescale for the
introduction of the enhanced functionality into the Host PES MPAS
Registration Systems. Each Host PES shall implement such
enhanced functionality in accordance with the timescale set out by
MEC.
19.4 Prior to any enhanced functionality being introduced into the Host
PES MPAS Registration Systems in accordance with Clause 19.3,
MEC shall develop procedures specifying when and how the parties
can amend retrospectively the MPAS Registration Systems. Such
procedures shall apply instead of Clause 19.1 in respect of each
Host PES from the date that each Host PES has implemented
successfully the enhanced functionality into its MPAS Registration
System.
20 NEW CONNECTIONS, NEW METERING POINTS AND
REGISTRATION OF NEW SUPPLY NUMBERS
20.1 Where a Host PES's Distribution Business:
20.1.1 creates a new connection to Premises from its Distribution
System (a "New Connection") and hence creates a new
Metering Point; or
20.1.2 in circumstances other than those set out in Clause 20.1.1,
agrees with a Supplier that a new Metering Point should be
created; or
20.1.3 decides to enter a new Metering Point onto its MPAS
Registration System,
(in each circumstance a "New Metering Point")
it shall ensure that a Skeleton Record for the new Metering Point is
entered on its MPAS Registration System, in the case of Clause
20.1.1 no later than the end of the second Operational Working
Day following completion of the works associated with the New
Connection and in the case of Clauses 20.1.2 or 20.1.3 no later than
the end of the second Operational Working Day following its
agreement with the Supplier or its decision to enter a new Metering
Point.
20.2 A Valid Application for Registration in relation to a New Metering
Point is one that:
20.2.1 contains values that the Supplier has identified as
representing data items 1 to 3, 8 and 10 of Schedule 2 for
the New Metering Point against which it wishes to Register
which are Accepted on the relevant MPAS Registration
System;
20.2.2 is received by the relevant Host PES no later than the last
Operational Working Day before the Supply Start Date
included in the Supplier's application under Clause 20.2.1
and no more than 28 days in advance of that date; and
20.2.3 relates to a New Metering Point that has a Skeleton Record
entered for it in the relevant Host PES's MPAS Registration
System.
20.4 The Supplier may also include in its Application for Registration for
a New Metering Point the values for other data items that are the
Supplier's responsibility in Schedule 2 for that New Metering Point.
However, if the Supplier includes the Energisation Status in its
Message and all the other data items that are the Supplier's
responsibility under Schedule 2 have not been included or data item
6 in Schedule 2 for that New Metering Point is not included in the
Skeleton Record, the Host PES shall Reject the Message and shall
inform the Supplier that such Message has been Rejected together
with all the reasons for its Rejection. Each Host PES may also
Reject an Application for Registration which contains values for
other data items in the MPAD for the relevant New Metering Point
if they are not provided in the combinations required under that
Host PES's Validation Procedures.
20.5 Where the Host PES receives a Valid Application for Registration
from a Supplier in relation to a New Metering Point which it does
not Reject in accordance with Clause 20.4, it shall Register the
Supplier and shall notify the Supplier and, where data item 14 has a
value other than null and, where such persons are identified in
respect of the New Metering Point the Data Aggregator that the
Supplier has been Registered for that New Metering Point. The
Supplier shall be deemed responsible for the supply of electricity
through the relevant New Metering Point from the Supply Start
Date included in its Valid Application for Registration.
20.7 The Supplier shall use its reasonable endeavours not to commence
supplying electricity through any Metering Point until it has
received from the relevant Host PES a notice confirming its
Registration in respect of the relevant Metering Point or (if later)
the Supply Start Date specified in the Supplier's Application for
Registration. The relevant Host PES shall not be responsible for
ensuring that the Supplier complies with the requirements of this
Clause 20.7. Where the Supplier is unable to comply with the
provisions of this Clause 20.7 due to the relevant Host PES's failure
to send out a notice confirming its Registration within the timescale
indicated in Clause 14.3, that Supplier shall be deemed not to be in
breach of the obligation set out in this Clause 20.7.
20.8 Where a Host PES receives an Application for Registration for a
New Metering Point from a Supplier which is not a Valid
Application for Registration, it shall Reject the Application for
Registration and shall notify the Supplier that the application has
been Rejected together with all the reasons for its Rejection.
Notwithstanding Clause 20.2.2, the MPAS Registration Systems of
some Host PESs may not Reject an otherwise Valid Application
for Registration if the Application for Registration is received after
the date that is the last Operational Working Day before the Supply
Start Date included in the Supplier's Application for Registration.
20.10 The Supplier shall notify the Host PES as soon as reasonably
practical of the other data items for which the Supplier is identified
as being responsible in Schedule 2, where it has not already done so
pursuant to Clause 20.4. Such data items may be provided at the
same time or at different times provided that where the relevant
Host PES's Validation Procedures require such data items to be
provided in particular combinations, the Supplier shall provide such
combinations of data items at the same time. On each occasion that
the Supplier provides such information and the Host PES Accepts
such information it shall confirm its Acceptance to the Supplier and,
where data item 14 has a value other than null, where such person
is identified in respect of the New Metering Point, the Supplier's
Data Aggregator. Where the information is not Accepted, the Host
PES shall Reject such information and shall inform the Supplier that
the Message has been Rejected together with all the reasons for its
Rejection.
21 DE-REGISTRATION OF SUPPLY NUMBERS
21.1 Where a Host PES receives a De-Registration Notice from its
Distribution Business and such notification is Accepted on the Host
PES's MPAS Registration System, the Host PES shall note on its
MPAS Registration System that no further Registrations can be
made in respect of the relevant Metering Point. Where the Host
PES does not Accept the Message, it shall Reject the Message and
shall inform its Distribution Business that the Message has been
Rejected and all the reasons for such Rejection.
21.2 The Host PES shall send the Supplier that is Registered in respect
of that Metering Point at the date included in the De-Registration
Notice sent under Clause 21.1 and that Supplier's Data Aggregator
and any Data Aggregator that the Supplier may have appointed for
a future date and, if relevant, any New Supplier that has sent a
Valid Application for Registration in respect of the Metering Point
for a Supply Start Date after that date together with that New
Supplier's Data Aggregator a Message stating that the Host PES
has noted that no further Registrations may be made against the
relevant Metering Point, and that from the date that the Metering
Point is De-Registered, the Supplier shall no longer be liable for
supply to that Metering Point
21.3 Each Host PES shall ensure that any record of any details relating
to a Metering Point shall not be removed from its MPAS
Registration System into archiving until at least 2 years after the
date of receipt of the De-Registration Notice received pursuant to
Clause 21.1, but such Metering Point shall not be included in any
reports provided by the Host PES pursuant to Clause 27 after
receipt of the De-Registration Notice.
22 FULL REFRESH
Procedure for Full Refreshes to Suppliers and Data
Aggregators
22.1 A Supplier or Data Aggregator may request a Full Refresh from a
Host PES. The Supplier or Data Aggregator shall provide any such
request using a mode of communication permitted under Clause 46.
22.2 Where the Host PES receives the Supplier's or Data Aggregator's
request under Clause 22.1, it shall respond within 1 Operational
Working Day of receipt of such request sent pursuant to Clause
22.1, indicating a scheduled date for the delivery of the Full
Refresh. A Host PES shall be required to provide such Full Refresh
within 15 Operational Working Days of receipt of that request,
provided that where more than 3 requests are received within a 5
Operational Working Day period, the Host PES shall use its
reasonable endeavours to provide as many Full Refreshes as
possible, but shall only be required to provide Full Refreshes in
response to the first 3 requests received during that 5 Operational
Working Day period within 15 Operational Working Days of the
request. Any further requests received during that 5 Operational
Working Day period shall be deemed to have been received on the
fifth Operational Working Day after the Operational Working Day
on which the first request was received. Where the request for a
Full Refresh is Rejected, the Host PES shall, within 1 Operational
Working Day, inform the relevant Supplier or Data Aggregator that
the request has been Rejected together with all the reasons for that
Rejection.
22.3 The relevant Host PES shall send the Full Refresh requested
pursuant to Clause 22.1 to the relevant Supplier or Data
Aggregator on a CD ROM or by another electronic method agreed
between the Host PES and Supplier or Data Aggregator, as
appropriate, so that it is deemed to be received by the relevant
Supplier or Data Aggregator by the scheduled date for delivery
indicated in Clause 22.2.
23. SELECTIVE REFRESHES
Procedure for Selective Refreshes to Suppliers and Data
Aggregators
23.1 Where a Supplier or Data Aggregator requires a Selective Refresh
of data from a Host PES, it shall submit a request for a Selective
Refresh to the relevant Host PES. The Supplier or Data
Aggregator shall provide such request using a mode of
communication permitted under Clause 46.
23.2 Where the Host PES receives the Supplier's or Data Aggregator's
request pursuant to Clause 23.1 by 15:00 hours on an Operational
Working Day , it shall provide the Supplier or Data Aggregator
with the Selective Refresh by 06:00 hours on the following
Operational Working Day, provided that where the total number of
Selective Refreshes to be provided by that Host PES would
otherwise exceed 50 in any Operational Working Day, the Host
PES shall use its reasonable endeavours to provide as many
Selective Refreshes as possible but shall only be required to provide
50 Selective Refreshes requested on that Operational Working Day.
Such Selective Refreshes shall be provided in the following manner:
23.2.1 a maximum of 5 Selective Refreshes per Supplier or Data
Aggregator, allocated in the order in which those requests
are received; and
23.2.2 where Clause 23.2.1 has been complied with, any extra
requests which have been received shall be provided in the
order in which they were received.
Any extra Selective Refreshes in excess of 50 requested in any
Operational Working Day or any received after 15:00 hours on an
Operational Working Day in relation to which the Host PES has
not provided responses shall be deemed to have been requested at
the start of the following Operational Working Day. Where the
request for a Selective Refresh is Rejected, the Host PES shall,
within 1 Operational Working Day, inform the relevant Supplier or
Data Aggregator that the request has been Rejected together with
all the reasons for that Rejection.
24. CHANGES AND CONFIRMATIONS OF DATA
Procedure for changes to data items for which the Host PES is
responsible
24.1 Where a Host PES is notified by its Distribution Business of any
changes to data items for which it is stated to be responsible as
Host PES in Schedule 2 (and any corresponding dates from which
those changes will be effective) in respect of any Metering Points
that are Registered on the Host PES's MPAS Registration System
and such notice is Accepted on the Host PES's MPAS Registration
System, the Host PES shall update its MPAS Registration System
with the information within 1 Operational Working Days of
receiving such notification, and, after updating its MPAS
Registration System, shall notify the Supplier that is Registered for
the affected Metering Point(s) and that Supplier's Data Aggregator
(apart from where the change relates to data item 9 in Schedule 2)
and, if relevant, any New Supplier that has sent a Valid Application
for Registration in respect of the Metering Point for a Supply Start
Date after the date of amendment together with that New
Supplier's Data Aggregator (apart from where the change relates to
data item 9 in Schedule 2) of such changes. The Host PES shall
acknowledge to its Distribution Business that such change has
taken place. Where the Host PES Rejects such changes it shall
notify its Distribution Business that such changes have been
Rejected and all the reasons for that Rejection.
Procedure for changes to data items for which Supplier is
responsible
24.2 Subject to Clause 16.7, a Supplier may only provide changes to
data items for which it is stated to be responsible in Schedule 2
(apart from data item 10) for any Metering Point from the date that
the Host PES Registers a Valid Application for Registration for
that Supplier in relation to that Metering Point, such changes to
take effect from the later of the Supply Start Date for that Supplier
or the date from which such change is to take effect.
24.3 The Supplier shall notify the Host PES of any changes to data items
(and any corresponding dates from which those changes will be
effective) for which it is stated to be responsible in Schedule 2
(other than data items 7, 8 and 10) in respect of Metering Points for
which it is Registered on the Host PES's MPAS Registration
System within 5 Operational Working Days of such changes taking
effect, or becoming aware that such changes are required
whichever is the later. The Host PES validation rules shall not
prevent the Supplier changing data items for which it is responsible
(other than data items 7, 8 and 10) at any time up to Final
Reconciliation Run.
24.4 Where the Host PES Accepts the changes provided by the Supplier
under Clause 24.3, it shall update its MPAS Registration System to
reflect the changes. Where a change is made to data item 13 of
Schedule 2, the Host PES shall notify the Data Aggregator that was
appointed in relation to the Metering Point before the change, the
Data Aggregator that the Supplier has appointed in its place, the
Supplier, any New Supplier that has sent a Valid Application for
Registration in respect of the Metering Point for a Supply Start
Date after the date of amendment and its Distribution Business that
such change has been made after it has Accepted the change.
Where changes are made to any other data items for which the
Supplier is stated to be responsible under Schedule 2 (other than
data items 7, 8 and 10) the Host PES shall notify the relevant
Supplier and that Supplier's Data Aggregator (apart from where the
change relates to data items 5 or 11) and, if relevant, any New
Supplier that has sent a Valid Application for Registration in
respect of the Metering Point for a Supply Start Date after the date
of amendment together with that New Supplier's Data Aggregator
(apart from where the change relates to data items 5 or 11) and its
Distribution Business that such changes have been made. Where
the Host PES does not Accept the changes provided by the
Supplier under Clause 24.3 it shall Reject such changes and shall
notify the Supplier of such Rejection and all the reasons for such
Rejection.
Procedure for changes and confirmations of Market Domain
Data
24.5 Where the Host PES receives Market Domain Data, it shall
acknowledge receipt of the information to the Initial Settlement and
Reconciliation Agent, within 1 Operational Working Day of
receipt. Where the Host PES receives the Market Domain Data
and such information is in the correct format and not corrupt it shall
update its MPAS Registration System as soon as reasonably
practicable and no later than within 5 Operational Working Days
with the information. Where the Host PES receives the Market
Domain Data and such information is in the incorrect format or
corrupt or otherwise cannot be entered by that Host PES into its
MPAS Registration System it shall notify the Initial Settlement and
Reconciliation Agent, that it has rejected the Market Domain Data
within 5 Operational Working Days of receipt. Where the relevant
Initial Settlement and Reconciliation Agent, resends such
information such that the Host PES can enter it into its MPAS
Registration System, the Host PES shall acknowledge receipt of
any such information re-sent within 1 Operational Working Day of
receipt. Acknowledgement of receipt from a Host PES's Gateway
shall be deemed sufficient acknowledgement of receipt for the
purposes of this Clause 24.
25. RESENDS
Procedure for Resends to Suppliers and Data Aggregators
25.1 Where a Supplier or Data Aggregator requires the Host PES to re-
transmit one or more Files which was originally transmitted to the
Supplier or Data Aggregator during the period of 28 days prior to
the date on which the Host PES receives a request for such re-
transmission ("Resend"), the Supplier or Data Aggregator shall
provide the relevant Host PES with a request for a Resend,
indicating which Files it requires to be Re-sent and the reasons for
the request. The Supplier or Data Aggregator shall provide such
request using any mode of communication permitted under Clause
46.
25.2 Where the Host PES receives the Supplier's or Data Aggregator's
request under to Clause 25.1 by 15:00 hours on an Operational
Working Day, it shall provide the Supplier or Data Aggregator with
the Resend by 06:00 hours on the following Operational Working
Day, provided that where the total number of Resends to be
provided by that Host PES would otherwise exceed 50 in any
Operational Working Day, the Host PES shall use its reasonable
endeavours to provide as many Resends as possible but shall only
be required to provide the first 50 Resends requested on that
Operational Working Day. Such Resends shall be provided in the
following manner:
25.1.1 a maximum of 5 Resends per Supplier or Data Aggregator,
allocated in the order in which those requests are received;
and
25.1.2 where Clause 25.2.1 has been complied with, any Resends
for which requests which have been received on that
Operational Working Day shall be provided in order in
which they were received.
Any requests for Resends in excess of 50 on any Operational
Working Day or any requests for Resends received after 15:00
hours on an Operational Working Day in relation to which the Host
PES has not provided responses, shall be deemed to have been
requested at the start of the following Operational Working Day.
25.3 For the purposes of Clause 31, each Host PES shall determine
whether the original Message that is required to be Resent reached
and was accepted on the Supplier's or Data Aggregator's Gateway
before the Supplier or Data Aggregator submitted a request for a
Resend pursuant to Clause 25.1, and shall on request provide its
reasons for such determination. The Host PES shall only levy a
charge pursuant to Clause 31 for Resends where the Host PES
determines that the Message did reach the relevant Supplier's or
Data Aggregator's Gateway.
27. REPORTING
27.2 Each Host PES in England and Wales shall, until the Pool
Executive Committee resolves that the Migration of the Metering
Points registered on ERS to the Host PES's MPAS Registration
Systems has been completed, provide the Settlement System
Administrator with a report in a format to be agreed by the affected
parties within 5 Operational Working Days of the end of each week
detailing the Supply Number core data and data item 19 in
Schedule 2 for Metering Points Registered on the Host PES's
MPAS Registration System that have the 1998 Trading
Arrangement Indicator set to "N".
27.3 Each Host PES in England and Wales shall provide the Pool
Executive Committee with a report in a format to be agreed by the
affected parties within 10 Operational Working Days after each
Quarter Day, detailing by Supplier the number of Metering Points
divided by measurement class, Registered on that Host PES's
MPAS Registration System that as at the Quarter Day have the
1998 Trading Arrangement Indicator set to 'Y' and data item 14 of
Schedule 3 set to energised.
27.5 Each Host PES in England and Wales shall provide the Pool
Executive Committee with a report in a format to be agreed by the
affected parties within 10 Operational Working Days of receiving a
request from the Pool Executive Committee, detailing the Supply
Numbers Registered against each Supplier on that Host PES's
MPAS Registration System as at the date specified by the Pool
Executive Committee. Such report shall classify the information by
GSP Group to the Host PES. Within each GSP Group, the
information shall be categorised by Measurement Class. Where
there are non-half hourly Measurement Classes covered by such a
report, that information shall be further categorised and sub-divided
by Profile Class.
27.6 Where the Host PES receives a request from a Data Aggregator to
notify it of the last File sequence number sent to that Data
Aggregator, that Host PES shall within 1 Operational Working Day
notify the Data Aggregator by telephone or facsimile of such
number and the date on which the relevant File was sent.
27.7 Each Host PES shall provide all Suppliers, the Pool Executive
Committee or the Performance Assurance and Accreditation Panel
as appropriate and the Director, within 10 Operational Working
Days of the end of each calendar month, with a report in a format
to be agreed by the affected parties in detailing its performance
against the requirements set out in Clauses 14.4 and 14.5 during the
Quarter relevant to that calendar month, unless a party requests the
Host PES not to provide it with such a report. This report shall
also detail the Host PES's performance against Clauses 17.4, 22.2,
22.3, 23.2, and 25.2.
27.11 Each Host PES in England and Wales shall make available, in a
format to be agreed by the affected parties, to the Pool Executive
Committee any information collected for the purpose of compiling
the report in Clause 27.7 within 5 Operational Working Days of the
request.
28. ACCURACY VALIDATION OF DATA AND MESSAGE
PROCESSING
28.1 Each Supplier shall use its reasonable endeavours to ensure that any
data items, for which it is deemed responsible for under Schedule 2,
that it submits to a Host PES pursuant to this Agreement are
complete and accurately reflect the circumstances relating to the
relevant Metering Point.
28.2 Each Host PES shall use its reasonable endeavours to ensure that:
28.2.1 any data that it provides under this Agreement are complete,
in the correct format and are consistent with the information
provided to the Host PES, and are sent to the correct
recipient;
28.2.2 in relation to any Metering Point within its Authorised Area,
data items 1, 2, 3, 15 and 20 in relation to any Metering
Point are complete and accurately reflect the circumstances
relating to that Metering Point; and
28.2.3 any data with which the Host PES initially populates the
relevant data items on the MPAS Registration System are
complete and accurately reflect the circumstances relating to
that Metering Point at the time at which the Host PES
initially populates those data items.
Validation Procedures
28.3 Each Host PES shall notify each Supplier of the Validation
Procedures which it applies to Messages received and sent by that
Host PES's MPAS Registration System as at the date of this
Agreement on or before the date of this Agreement ("Validation
Procedures").
28.4 Each Host PES in England and Wales shall ensure that its
Validation Procedures comply with the Pool's validation
requirements set out in Schedule 10. Each Host PES in Scotland
shall ensure that its Validation Procedures comply with the Scottish
Settlements validation requirements set out in Schedule 11.
28.5 Where a Host PES in England and Wales proposes to change its
Validation Procedures which it applies to Supplier Messages, it
shall notify all Suppliers and the Pool Agent of any proposed
changes to Validation Procedures at least 15 Operational Working
Days before it proposes that such changes shall take effect.
28.6 Unless before the expiry of 15 Operational Working Days after
receipt of the notification sent in accordance with Clause 28.5 any
party gives notice to MEC that such changes should be considered
as if it were a change to this Agreement, such change shall take
effect (subject to Clause 28.4) from the date indicated in the notice
sent pursuant to Clause 28.5.
28.7 Where a party gives notice in accordance with Clause 28.6, such
proposed change shall be treated as if it were a proposal to change
this Agreement and the procedures set out in Clause 9 shall be
followed. Where, in the opinion of the relevant Pool MEC Member
or SESL Member, the proposed change relates to or will affect the
Priority Provisions such proposed change shall be treated as a
Change Proposal and the appropriate procedures set out in Clause
9 shall be followed.
28.8 In the event of any inconsistency between the provisions of this
Agreement and any Host PES's Validation Procedures, the
provisions of this Agreement shall prevail.
Message Processing
28.9 Where transmission of a Message by a Host PES's MPAS
Registration System fails the validation procedures of a Data
Aggregator to whom it was sent, the Data Aggregator shall attempt
to resolve the failure and validate the Message. If the Data
Aggregator is unable to resolve the failure, it shall notify the Host
PES, who shall use its reasonable endeavours to identify the cause
of the failure. If the Host PES identifies the cause of the failure to
be:
28.9.1 a fault on the Data Transfer Network, the Host PES shall
treat the failure as a request for a Resend and the provisions
of Clause 25 shall apply; or
28.9.2 a fault of that Host PES's MPAS Registration System, the
Host PES shall use its reasonable endeavours to resolve the
failure; or
28.9.3 a fault of the Data Aggregator, the Host PES shall notify
the Data Aggregator of that fact.
If the Host PES is unable to resolve the failure, or identifies the
cause of the failure to be the fault of the Data Aggregator in
accordance with Clause 28.9.3, it shall notify the relevant Supplier
who appointed that Data Aggregator, of that fact, and that Supplier
may refer the matter to the MRA Disputes Committee.
29. CHANGE OF SUPPLIER METER READING
29.2 The Old Supplier and the New Supplier shall be bound by the Pool
Requirements on change of supplier from an Old Supplier to a New
Supplier set out in the following provisions, forming part of the
Pooling and Settlement Agreement, as amended from time to time
and to the extent applicable:
29.2.1 clause 1.3.3 and 1.3.2.3 of Service Line SL130;
29.2.2 clauses 2.2.3, 3.2.3, 2.2.7 and 3.2.7 of Agreed Procedure
AP502;
29.2.3 clauses 1.3.3, 1.5.3.5, 1.5.4.1 and 1.5.4.2 of Service Line
SL120;
29.2.4 clauses 2.2.6 ,3.2.6 and 4.4 of Agreed Procedure AP504;
29.2.5 sections 50.3 and 51.3 of the Pool Rules; and
29.2.6 Schedule 26 of the Pooling and Settlement Agreement,
30. RECORDS, AUDIT AND NON-FUNCTIONAL
REQUIREMENTS
30.1 Each Host PES shall ensure that it securely maintains a historical
record of all data items that have been held in respect of a Metering
Point on its MPAS Registration System and that such records are
fully auditable, so that a full historical record is maintained for the 7
years following initial settlement date in relation to any particular
data item, the two most recent years being held on-line.
30.2 Each Host PES shall ensure that it retains copies of all Messages
sent and received in providing Services for at least three years after
the Messages have been sent or received.
30.3 Each Host PES in England and Wales shall ensure that the Pool
Auditor has access at reasonable times and on reasonable notice to:
30.3.1 those records maintained by the Host PES pursuant to
Clause 30.1;
30.3.2 any software, hardware, data or information held by the
Host PES or its agents where reasonably required by the
Pool Auditor or Market Auditor to fulfil its obligations
under the relevant Settlement Agreement;
30.3.3 the relevant parts of the Host PES's premises; and
30.3.4 relevant staff members of the Host PES, for a reasonable
length of time in any one year.
30.4 On request by the Pool Auditor, each Supplier shall ensure that the
Pool Auditor has access at reasonable times and on reasonable
notice to:
30.4.1 any records, maintained by the Supplier in relation to any
Metering Point for which it is or has been Registered, in the
7 years prior to the date of that request;
30.4.2 any software, hardware, data or information held by the
Supplier or its agents where reasonably required by the Pool
Auditor to fulfil its obligations under the relevant Settlement
Agreement;
30.4.3 the relevant parts of the Supplier's premises; and
30.4.4 relevant staff members of the Supplier for a reasonable
length of time in each year.
30.5 Each Host PES in England and Wales shall ensure that during the
course of this Agreement its MPAS Registration System complies
with the requirements set out in Appendix 1 to Schedule 6.
41. CONTRACT MANAGEMENT
41.1 Each party shall appoint an appropriate person (each a "Contract
Manager" and together the "Contract Managers") to manage all
matters arising under or in connection with this Agreement and to
monitor the general operation of this Agreement.
41.2 Each Contract Manager appointed by a party shall ensure that
procedures are in place in respect of that party to ensure that there
is adequate support for operations provided under this Agreement
and timely resolution of problems that may occur including a point
of contact to process and resolve such problems.
41.3 At times determined by MEC a meeting of Contract Managers shall
be convened to consider each of the reports contained in Clause
27.7 in relation to:
41.3.1 performance against Service Levels; and
41.3.2 issues arising from those reports and actions to remedy any
problems arising from those reports.
41.4 Each party shall notify the others in accordance with the provisions
of Clause 46 of the name and contact details of the Contract
Manager appointed by it for the purposes of this Agreement from
time to time.
45. DATA TRANSFER
45.1 Where Schedule 3 specifies a Data Transfer Catalogue reference
number in relation to any notice, request or other communication,
such notice, request or communication shall be sent in the format
and with the content described under such reference in the Data
Transfer Catalogue, as amended from time to time, and shall be
transmitted by the means specified in Schedule 3.
45.2 Nothing in this Agreement shall prevent any two parties from
agreeing to the use of an alternative method of transmission for any
communication between those two parties from that set out in
Schedule 3, whereupon the terms of this Clause 45 shall not apply
to that notice, request or other communication.
45.5 Where any provision of this Agreement refers to receipt of a
Message or notification by a Host PES pursuant to Clauses 15.10,
15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10, 20.11, 21.1, 24.1, 24.3
or 24.5 the date of such receipt shall be deemed to be the date on
which it is received where such Message or notification is received
prior to 18:00 hours on an Operational Working Day. Where such
Message or notification is received at or after 18:00 hours on an
Operational Working Day, the date of receipt of such Message or
notification shall be deemed to be the next Operational Working
Day.
45.6 If the Data Transfer Network or any relevant part of such network
is at any time for any reason unavailable for the sending of
Messages between any affected parties, then during the period of
unavailability:
45.6.1 the parties shall use 8mm DAT tape to send any notice,
request or other communication that this Agreement would
otherwise require to be sent via the Data Transfer Network
and take reasonable steps to process any notices, requests
or other communications received within their own systems
as promptly as possible;
45.6.2 where other means are used in accordance with Clause
45.6.1, the parties shall be relieved from any service levels
set out in this Agreement relating to any affected notice,
request or other communication (except to the extent that
this Agreement expressly provides for alternative levels in
such circumstances) but shall use their reasonable
endeavours to send such notice request or other
communication as soon as reasonably practicable; and
45.6.3 to the extent that no such other means are practicable given
the nature of the communication and the surrounding
circumstances, such unavailability of the Data Transfer
Network shall be deemed (to the extent not caused by a
breach by any party of the Data Transfer Service
Agreement) to constitute a circumstance of Force Majeure
for the purposes of this Agreement.
47. ASSIGNMENT AND SUB-CONTRACTING
47.1 Subject to Clause 47.2, and except as provided elsewhere in this
Agreement no party shall assign any of its rights under this
Agreement without the prior written consent of all other parties to
this Agreement, such consent not to be unreasonably withheld.
APPENDIX 1 TO SCHEDULE 6
Non Functional Requirements
1. ACCESS RESTRICTIONS
Commercial Role Restrictions
1.1 Subject to Clause 35, each Host PES shall implement and
maintain controls to ensure that the data held by its MPAS
Registration System remains confidential.
1.2 Subject to Clause 35, each Host PES shall only permit
access to such data to people whose job responsibilities
include the operation, support or audit of its MPAS
Registration System.
1.3 Each Host PES shall ensure that the operation of its MPAS
Registration System is kept strictly outside that Host PES's
Supply Business activities and management structure
1.4 The provisions of paragraphs 1.1 to 1.3 of this Appendix 1
only relate to the Host PES's obligations in relation to this
Schedule 6.
2. RESTRICTIONS RELATING TO BOTH PHYSICAL AND
SYSTEM ACCESS
2.1 Each Host PES shall implement and maintain controls
within its MPAS Registration System to ensure that risk of
intentional errors or fraud is minimised.
2.2 In order to meet the obligations stated in paragraph 2.1 to
this Appendix 1, each Host PES shall implement and
maintain at least the following controls within its MPAS
Registration System:
2.2.1 access restrictions to computer hardware such as
terminals, cables, tapes and disk drives; and
2.2.2 access restrictions to software and data including
systems level access, application level access, access
to particular programs and the system output.
2.3 Each Host PES shall implement and maintain the controls as
stated in paragraph 2.1 and 2.2 to this Appendix 1
throughout the term of this Agreement, and shall ensure that
these encompass system developers, system users, and any
other relevant parties.
2.4 In order adequately to discharge its obligations under
paragraph 2 to this Appendix 1 each Host PES shall be
expected to implement and maintain at least the following:
2.4.1 a security policy, which shall be communicated to all
relevant parties throughout the organisation and
strongly endorsed by top management
2.4.2 procedures to ensure periodic reviews of security
policy;
2.4.3 controls to ensure the clear ownership of data and
all significant information assets, which include
information, software, and physical assets.
2.5 Any Host PES that complies with BS 7799 on Information
Security Management shall be deemed to have achieved the
required level of security for the purposes of this paragraph
2.
3. PHYSICAL ACCESS RESTRICTIONS
3.1 Each Host PES shall appropriately restrict access to
hardware, including terminals, disk drives, cables, and tapes
relevant to its MPAS Registration System.
3.2 Each Host PES shall monitor the security of hardware
relevant to its MPAS Registration System.
3.3 In order to comply with paragraph 3.1 to this Appendix 1,
each Host PES shall implement and maintain at least the
following controls to its MPAS Registration System:
3.3.1 locking computer rooms containing hardware
relating to its MPAS Registration System;
3.3.2 restricting access to buildings containing computer
equipment relating to its MPAS Registration
System;
3.3.3 restricting access to documentation relating to the
movements of computer hardware relevant to its
MPAS Registration System.
4. SYSTEM ACCESS RESTRICTIONS
4.1 Each Host PES shall appropriately restrict access to
software and data relating to its MPAS Registration
System, including restricting systems level access (both
locally or remotely), application level access, and access to
particular programs using effective passwords.
4.2 Each Host PES shall monitor the security of software
relevant to its MPAS Registration System.
4.3 In order to comply with paragraph 4.1 to this Appendix 1,
each Host PES shall implement and maintain at least the
following controls in respect of its MPAS Registration
system:
4.3.1 password protection at system, application, and
program level, and where appropriate at a more
detailed level;
4.3.2 prevention of users from accessing the operating
system prompt;
4.3.3 monitoring of attempted or actual access violations;
4.3.4 strong controls over access to special system
privileges;
4.3.5 authentication of remote access attempts;
4.3.6 controls to safeguard the confidentiality and integrity
of data passing over public networks;
4.3.7 controls to ensure that information is distributed
only to the correct market participants;
4.3.8 restricted access to documents/systems forming part
of the security system;
4.3.9 hardware/software mechanisms that can be
independently evaluated to provide assurance that
the system enforces the requirements of the security
policy;
4.3.10 audit trails kept and protected so that actions
affecting security can be traced to the responsible
person.
5. SECURITY
Minimising the Risk of an Unwanted Cessation of Processing
5.1 Each Host PES shall implement and maintain controls over
computer operations in order to minimise the risk of an
unwanted cessation of processing.
5.2 In order to comply with paragraph 5.1 to this Appendix 1,
each Host PES shall implement and maintain at least the
following controls in relation to its MPAS Registration
System:
5.2.1 a documented security policy describing measures
intended to prevent cessation of processing, which is
communicated throughout the organisation to all
relevant persons;
5.2.2 procedures to ensure periodic reviews of security
policy;
5.2.3 virus detection and prevention measures, which are
communicated to all users;
5.2.4 controls over computer operations to ensure that
processing is executed in the correct sequence and
that any dependencies between processes (e.g.
waiting for a File to be available before starting a
batch program) are correctly taken into
consideration;
5.2.5 monitoring of the performance of systems with
procedures available to operators to deal with
problems;
5.2.6 formal change control procedures;
5.2.7 adequate training of users, development staff, and
operations staff;
5.2.8 adequate documentation to include at least user,
operational, and system specification documentation;
5.2.9 appropriate maintenance arrangements for hardware
and software;
5.2.10 system housekeeping procedures to maintain the
integrity and availability of services;
5.2.11 support facilities;
5.2.12 clear responsibilities and procedures for systems
operation and maintenance.
5.3 Each Host PES shall implement and maintain controls over
computer operations relevant to its MPAS Registration
System in order to minimise the impact of unwanted
cessation of processing in order to:
5.3.1 ensure that data is correctly recovered and
processing correctly resumed;
5.3.2 ensure that processing is resumed as soon as
possible.
5.4 Each Host PES shall implement and maintain adequate
recovery procedures for both short and long term
interruptions of processing in any or all of the systems.
These procedures shall wherever possible prevent, and
otherwise detect and correct, any loss of transmitted data.
These procedures shall apply to all data, including archived
data.
5.5 Each Host PES in relation to its MPAS Registration System
shall perform any retrospective processing required in order
to catch up with processing requirements after an
interruption to processing.
5.6 Subject to Clause 30.1, each Host PES shall archive data
from its MPAS Registration System in a manner which
allows recovery consistent with the Pool's dispute and audit
requirements.
5.7 In order to comply with paragraph 5.3.1 to this Appendix 1,
each Host PES shall implement and maintain at least the
following controls in relation to its MPAS Registration
System:
5.7.1 a fully documented and tested disaster recovery
plan;
5.7.2 backups of programs and data to ensure that
essential data and software can be restored in the
event of a disaster;
5.7.3 periodic testing of restoration of backed up data;
5.7.4 features within the DBMS software to safeguard
data integrity in the event of a system failure, to
include transaction logging.
6. AUDIT CONTROL
6.1 General Controls
Each Host PES shall ensure that all controls devised to meet the
requirements set out in Schedule 6:
6.1.1 effectively meet the relevant control objective(s);
6.1.2 are operated effectively throughout the period for
which the control is relevant;
6.1.3 are verifiable, that is the control procedure shall be
documented and the operation of the control shall be
recorded.
6.2 Audit Trail
6.2.1 An adequately verifiable control for the purposes of
paragraph 6.1 of Appendix 1 is one where:
(A) Processes are documented so that any party
wishing to verify the processing has a
description of its nature; and
(B) All processing is recorded and these records
contain such cross references as are
necessary to conveniently allow verification
by tracing data through processing, both
forwards and backwards.
6.2.2 In order to comply with paragraph 6.1. to this
Appendix 1, each Host PES shall implement and
maintain an audit trail for its MPAS Registration
System which has at least the following
characteristics:
(A) data shall be traceable from the data held in
the MPAS Registration System to the source
instruction and vice versa.
(B) data shall be stored on magnetic or optical
media in a consistent format;
(C) each MPAS Registration System shall record
the effective date of changes in
responsibilities in accordance with the
procedures set out in Clauses 15, 16 and 24;
(D) the data held on the MPAS Registration
System shall be maintained in order to ensure
completeness, accuracy, and timeliness. The
changes to data held require the following:
(1) changes made shall be easily
identifiable;
(2) the effective date for those changes
made;
(3) the authoriser of the change and their
authority;
(4) an explanation of why the change
was made for any manual changes.
(E) Movement of Metering Points between
different MPAS Registration Systems shall
be traceable;
(F) the MPAS Registration System shall be able
to retrieve values of amended data in
accordance with Clause 30 in order to ensure
that a full transaction history is available.
6.3 Controls over the Development of MPAS
6.3.1 Each Host PES shall implement and maintain
controls over the development of its MPAS
Registration System to ensure that MPAS is
correctly constructed and that the risk of
unintentional errors arising from poor software,
clerical procedures, or other causes, is minimised.
6.3.2 In order to comply with paragraph 6.3.1 to this
Appendix 1, each Host PES shall implement and
maintain at least the following controls to its MPAS
Registration System:
(A) testing of the system prior to going live, with
test plans and results documented;
(B) systems documentation in sufficient detail to
support ongoing operations and future
maintenance;
(C) use of quality management.
6.4 Controls over Unintentional Errors
6.4.1 Each Host PES shall implement and maintain
controls over the processing of its MPAS
Registration System to ensure that the risk of
unintentional errors arising and not being corrected
in a timely fashion is minimised.
6.4.2 In order to comply with paragraph 6.4.1 to this
Appendix 1, each Host PES shall implement and
maintain controls over input, processing and output,
as well as over data and communications, in order to
ensure that the rules for valid processing defined
during system design, including those specified
under the relevant Settlement Agreement, are
adhered to; and that the data held and processed by
its MPAS Registration System is accurate, complete,
valid and not out of date.
6.4.3 In order to comply with paragraph 6.4.1 to this
Appendix 1, each Host PES shall implement and
maintain at least the following controls:
(A) unique Supply Number Cores in order that
the relevant Settlement System can work;
(B) facilitate reconciliations between the ERS
and MPAS in accordance with the
procedures set out in Clause 12;
(C) validation checks to ensure that all
mandatory data fields are present on
Registration, and data is inputted accurately;
(D) controls to ensure that the Distribution
Business disconnects the correct Metering
Point within the MPAS Registration System;
(E) controls to ensure that standing data is
complete, accurate and up-to-date (i.e.
consistent with the most recent valid input);
and that there have not been unauthorised or
erroneous (i.e. invalid) changes;
(F) controls to ensure that Metering Points are
allocated to the correct GSP Group.
6.5 Implementation
6.5.1 Each Host PES shall implement and maintain
controls over the implementation of its MPAS
Registration System to ensure that the risk of
unintentional errors arising from incorrect
implementation is minimised.
6.5.2 Each Host PES shall ensure that Migration of data
onto MPAS is conducted in a controlled manner,
with data validity checks carried out.
6.5.3 In order to comply with paragraph 6.5.1 in this
Appendix 1, each Host PES shall:
(A) ensure that users are adequately trained such
that they are competent in the use of the
system;
(B) use separate test and live environments;
(C) implement and maintain controls over the
authorisation and co-ordination of transfers
of data and programs from the test
environment to the live environment;
(D) use a fully documented and repeatable
system test model.
6.6 Constraints
6.6.1 Each Host PES shall operate its MPAS Registration
System in line with the following constraints:
(A) the MPAS Registration System shall allow
entry of new suppliers to the market and the
exit of suppliers from the market.
(B) each Host PES shall implement and maintain
controls to its MPAS Registration System to
ensure Registration is made against the
correct Metering Point.
(C) the MPAS Registration System shall enable
the unambiguous identification of all
Metering Points and their previous and
current suppliers together with dates of any
changes.
SCHEDULE 7
Scottish Settlement Requirements (Scotland)
2. CONDITIONS PRECEDENT
2.1 A Host PES shall not be obliged to provide Services using its
MPAS Registration System which require Certification until:
2.1.1 the Host PES has become Accredited and its MPAS
Registration System has been Certified.
2.2 The obligations on a Host PES to provide Services to a Supplier in
relation to any particular Metering Point in its Authorised Area are
subject to the Host PES having entered values for the data items
(other than data item 19) listed in Schedule 2 for that Metering
Point into its MPAS Registration System except where:
2.2.2 the Metering Point at a particular time is a New Metering
Point, in which case the provisions of Clause 20.1 shall
apply.
11. MPAS TECHNICAL CONSTRAINT
11.1 Each Host PES shall ensure that its MPAS Registration System
enables only one Supplier to be Registered as responsible for
supplying any Metering Point for a particular day.
11.2 Where a Host PES has become Accredited and its systems have
been Certified, it shall ensure that:
11.2.1 it uses Certified systems and processes to provide and
maintain its MPAS; and
11.2.2 any changes in its Certified systems and processes are made
in accordance with Certified change procedures.
13. SERVICE AVAILABILITY
13.1 Each Host PES shall provide, operate and maintain its MPAS
Registration System as a Reasonable and Prudent Operator and,
subject to Clause 13.3, shall use its reasonable endeavours to
ensure that staff are available between 09:00 hours and 18:00 hours
on all Operational Working Days to receive requests pursuant to
Clauses 17.4, 19, 20.12, 22.1, 23.1, 25.1 27.5 and 27.6 and to
respond to queries from Suppliers in relation to the provision of
Services.
13.2 Each Host PES shall use its reasonable endeavours to ensure that
any planned suspensions in the operation of its MPAS Registration
System are scheduled so that there is the minimum amount of
disruption to the provision of MPAS. The relevant Host PES shall
provide the relevant Suppliers and Data Aggregators with as much
notice as possible of any planned suspension in the availability of its
MPAS Registration System.
13.3 In the event of any unplanned suspension in the operation of its
MPAS Registration System, the Host PES shall treat the
suspension as an emergency and shall implement its disaster
recovery procedures, approved as part of its Accreditation, within
48 hours of the start of the suspension. The Host PES shall use its
reasonable endeavours to make its MPAS Registration System
available again as quickly as possible.
13.4 Any failure of the Host PES to comply with the provisions of
Clauses 13.2 and 13.3 shall not relieve that Host PES from the
application of the service levels referred to in Clause 14 except
where such failure is due to a circumstance of Force Majeure in
which case the provisions of Clause 36 or 45 shall apply.
14 SERVICE LEVELS AND LIQUIDATED DAMAGES
Service Levels
14.1 Save as otherwise provided in this Agreement, each Host PES shall
use its reasonable endeavours to ensure that notifications of any one
type which it receives shall be processed in the order in which they
were received.
14.2 Where a Host PES receives any notification pursuant to any of
Clauses 15.10, 15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10, 20.11,
21.1, 24.1, 24.3, 24.5 or the Objection Resolution Period has
elapsed under Clause 16.13, the Host PES shall notify the relevant
persons listed in those Clauses, or for notifications received under
Clauses 21.1 and 24.3, the persons listed in Clauses 21.2 and 24.4
respectively (except for its Distribution Business) in the manner
contained in Clause 14.3.
14.3 Each Host PES shall produce the notifications required under the
Clauses listed in Clause 14.2 in accordance with the requirement set
out in Clause 28.2 in response to any notifications received by
18:00 hours on an Operational Working Day or in response to the
elapsing of the Objection Resolution Period on a particular
Operational Working Day ("Message Receipt Working Day")
and, subject to Clauses 14.4 and 14.5, shall operate its MPAS
Registration System with the intent to deliver the total number of
such notifications ("Total Daily Processing") to its Gateway by
06:00 hours on the following Operational Working Day or as soon
as reasonably practicable thereafter.
14.4 For the purposes of fulfilling its obligations in respect of the
Settlement Requirements, each Host PES shall ensure that:
14.4.1 the Total Daily Processing will be processed and delivered
to the Host PES's Gateway at a time not later than 06:00
hours on the first Operational Working Day following the
Message Receipt Working Day provided that the Host PES
shall not be in breach of this obligation if it fails to meet this
target on not more than six Operational Working Days
during each Quarter;
14.4.2 if the target in Clause 14.4.1 is not met, the Total Daily
Processing will be processed and delivered to the Host
PES's Gateway at a time not later than 06:00 hours on the
second Operational Working Day following the Message
Receipt Working Day provided that the Host PES shall not
be in breach of this obligation if it fails to meet this target on
not more than one Operational Working Day during each
Quarter;
14.4.3 if the target in Clause 14.4.2 is not met, the Total Daily
Processing will be processed and delivered to the Host
PES's Gateway at a time not later than 06:00 hours on the
third Operational Working Day following the Message
Receipt Working Day.
14.6 In order to determine whether the Host PES has fulfilled the
requirements set out in each of Clauses 14.4 to 14.5, each Host
PES shall note the time on the Operational Working Day when the
Total Daily Processing is delivered to its Gateway in relation to the
Message Receipt Working Day relevant to that Total Daily
Processing.
14.7 Each Host PES shall measure its performance against the
requirements set out in Clauses 14.4 and 14.5 over each Quarter
provided that where a Host PES breaches the requirements in
Clauses 14.5.3 and 14.5.4, the breach shall be deemed to have
occurred in the Quarter in which the second Operational Working
Day following the Message Receipt Working Day occurred.
14.8 Each Host PES agrees that it is their long term objective to achieve
a service level ensuring the processing and delivery of the Total
Daily Processing by 06:00 hours on the first Operational Working
Day following the Message Receipt Working Day.
SESL Liquidated Damages
14.9 Where the number of occasions in any Quarter that a Host PES fails
to deliver the Total Daily Processing to its Gateway within the
timescales indicated in Clauses 14.4.1 to 14.4.3 exceeds the number
of allowable failures indicated in the relevant Clause, that Host PES
if in Scotland shall pay SESL (POUND)125 for each such extra occasion on
which it has failed to deliver the Total Daily Processing to its
Gateway, provided that the Host PES shall have no liability to make
such payment for any failures which occur before the date which is
15 consecutive weeks following commencement of Controlled
Market Start-Up in its Authorised Area or such longer period as
MEC may determine in accordance with Clause 14.13.
Data Transfer Service Escalation
14.12 Where a Host PES receives a notification from the Data Transfer
Network indicating that a Message sent by that Host PES pursuant
to the terms of this Agreement has not been received by the
relevant Supplier or Data Aggregator, the Host PES shall contact
the Supplier or Data Aggregator as soon as reasonably practicable.
The Host PES and relevant Supplier or Data Aggregator shall
utilise the Problem Management Procedures under the Data
Transfer Service Agreement which may require the Host PES to
Resend the original Message.
Review
14.15 MEC shall conduct a formal review, to be started no earlier than 12
months or as MEC otherwise decides and completed no later than
15 months, after the start of Controlled Market Start-Up for the
Host PES that is the first Host PES to commence Controlled
Market Start-Up.
14.17 Each party agrees to provide MEC with all reasonable information
that MEC may require for the purposes of carrying out its review
pursuant to this Clause 14. This may include information relating
to the level of market activity, the average number of Messages
within the Total Daily Processing, the average composition of a
Total Daily Processing and information to verify the assumptions
set out in Clause 14.16 and how the values ascribed to such
assumptions may have changed since the date of this Agreement.
14.18 Nothing in this Clause shall be construed as restricting the scope of
MEC's review pursuant to Clause 14.15. In particular, MEC shall
consider whether there is a need for further reviews to be carried
out by it after the conclusion of its review pursuant to this Clause
14.
14.19 MEC shall copy the results of its review to all parties as soon as
reasonably practicable following the conclusion of its review. Any
changes to this Agreement that MEC reasonably considers should
be made as a result of the review shall be treated as a change
request and the procedures set out in Clause 9 shall be followed.
15 PROCEDURE FOR APPLICATION FOR REGISTRATION
BY A SUPPLIER
15.1 Subject to Clause 3.2, a Supplier that has entered into a contract to
supply or receive electricity through or from a Metering Point,
under which supply or receipt is to commence on or after the date
specified by the Director in relation to the Premises associated with
that Metering Point as referred to in Clause 3.2 or is supplying or is
to supply from any such Metering Point under a tariff arrangement
on or after that date, shall apply to the Host PES whose MPAS
Registration System has the Metering Point recorded on it, for
Registration in respect of that Metering Point, pursuant to the
provisions of this Clause 15 or Clause 20, as appropriate except
where that Supplier is already Registered in relation to that
Metering Point or where that Metering Point is registered on ERS.
15.6 A Valid Application for Registration for the purposes of this Clause
15 is one that:
15.6.1 contains values that the Supplier has identified as
representing data items 1, 2, 3, 8 and 10 of Schedule 2 for
the Metering Point against which it wishes to Register
which are Accepted on the MPAS Registration System;
15.6.2 is received by the relevant Host PES no later than the last
Operational Working Day before the Supply Start Date
included in the Supplier's application under Clause 15.6.1
and no more than 28 days in advance of that date.
15.10 Where a Host PES receives a Valid Application for Registration
from a Supplier in relation to a Metering Point, it shall Register that
Supplier and shall notify that Supplier (the "New Supplier"), the
New Supplier's Data Aggregator, the Old Supplier, the Old
Supplier's Data Aggregator, any Data Aggregator the Old Supplier
may have appointed for a future date, and the relevant Distribution
Business for that Metering Point that the Supplier has been
Registered. Subject to Clauses 16.8 and 16.13, the New Supplier
shall be deemed responsible for the supply of electricity through the
relevant Metering Point from 00:00 hours on the Supply Start Date.
Subject to Clauses 16.8 and 16.13, the Old Supplier shall cease to
be responsible for the supply of electricity through the relevant
Metering Point from 00:00 hours on the Supply Start Date.
15.11 Subject to Clauses 15.2 and 15.3, the New Supplier shall use its
reasonable endeavours to submit a Valid Application for
Registration to the Host PES as far in advance of the Supply Start
Date as reasonably possible taking into account the restrictions set
out in Clause 15.6.2. The relevant Host PES shall not be
responsible for ensuring that the New Supplier complies with the
requirements of this Clause 15.11.
15.12 The New Supplier shall use its reasonable endeavours not to
commence supplying electricity through any Metering Point or
make any material changes to that Metering Point until it has
received from the relevant Host PES a notice confirming its
Registration in respect of the relevant Metering Point or (if later)
the Supply Start Date specified in the New Supplier's Application
for Registration. The relevant Host PES shall not be responsible
for ensuring that the New Supplier complies with the requirements
of this Clause 15.12. Where the New Supplier is unable to comply
with the provisions of this Clause 15.12 due to the relevant Host
PES's failure to send out a notice confirming its Registration within
the timescales indicated in Clause 14.4 or 14.5, that New Supplier
shall be deemed not to be in breach of the obligation set out in this
Clause 15.12.
15.13 Where an Old Supplier makes a change to one of the data items for
which it is stated to be responsible in Schedule 2, in relation to a
Metering Point, and its Message to the relevant Host PES is
Rejected and the reason for such Rejection is stated to be the New
Supplier's Registration, the Old Supplier shall contact the New
Supplier as soon as possible and inform it of the change, using the
contact notice facility provided under Clause 17, if necessary.
15.14 Where a Host PES receives an Application for Registration from a
Supplier which is not a Valid Application for Registration, it shall
Reject the Application for Registration and shall notify the Supplier
that such application has been Rejected, setting out all the reasons
for the Rejection. Notwithstanding Clause 15.6.2, the MPAS
Registration Systems of some Host PESs may not Reject an
otherwise Valid Application for Registration even though the
Application for Registration is received after the date that is the last
Operational Working Day before the Supply Start Date included in
the Supplier's Application for Registration.
16 PROCEDURE FOR OBJECTION BY OLD SUPPLIER
16.1 An Old Supplier may issue an objection ("Notice of Objection") to
the relevant Host PES in relation to an Application for Registration
of which it has been notified pursuant to Clause 15.10 where:
16.1.1 subject to Clause 16.2, the Application for Registration is in
relation to a Metering Point which is associated with
Designated Premises at which the Customer is being
supplied by the Old Supplier under a contract that will
neither expire nor (to the Old Supplier's knowledge) be
terminated by the New Supplier's Supply Start Date notified
to the Old Supplier pursuant to Clause 15.10; or
16.1.2 subject to Clause 16.2, the Application for Registration is in
relation to a Metering Point which is associated with
Domestic Premises where charges for electricity supplied to
the Customer (at any such Domestic Premises), having been
demanded in writing by the Old Supplier, prior to the notice
of termination being given remain owing to the Old Supplier
more than 28 days after that demand was made; or
16.1.3 the Application for Registration for the relevant Metering
Point is received by the Host PES either before the Director
has made a direction in respect of the Premises with which
the Metering Point is associated, pursuant to Condition 3 of
the New Supplier's Second Tier Supply Licence, or prior to
such date as is specified in that direction.
16.1.4 the New Supplier has contacted the Old Supplier and both
Suppliers have agreed that the New Supplier's Registration
has been made in error; or
16.1.5 the Application for Registration relates to a Metering Point
which is a Related Metering Point and the relevant New
Supplier has not applied to Register all the relevant Related
Metering Points on the same Operational Working Day for
the same Supply Start Date:
Each ground of objection in Clauses 16.1.1 to 16.1.5 shall be
treated as separate and independent from each of the other grounds
of objection in those Clauses.
16.2 The Old Supplier may not issue an objection to the New Supplier's
Application for Registration on the grounds indicated in Clauses
16.1.1 and 16.1.2 if the Host PES's notice to it in Clause 15.10
indicates that data item 7 in Schedule 2 for the Metering Point in
the New Supplier's Application for Registration has been set to "T"
("True") unless it has reasonable grounds for believing that
information to be inaccurate.
16.3 A Notice of Objection that complies with the requirements of
Clauses 16.1 and 16.2 shall be a Valid Notice of Objection ("Valid
Notice of Objection").
16.4 The relevant Host PES shall not be responsible for checking that
any Notice of Objection that it receives is a Valid Notice of
Objection.
16.5 Where an Old Supplier wishes to issue a Notice of Objection to the
relevant Host PES in relation to an Application for Registration of
which it has been notified pursuant to Clause 15.10 it shall issue
such notice to the relevant Host PES so that it is received by the
Host PES within the Objection Raising Period.
16.6 Where the Old Supplier gives a Notice of Objection it shall, at the
same time, send notification to its Customer at the Premises of the
grounds for that objection and of how the Customer may dispute or
resolve such grounds.
16.7 Where the relevant Host PES receives and Accepts a Notice of
Objection in respect of a New Supplier's Registration within the
Objection Raising Period, the Host PES shall record such notice
and shall notify the Old Supplier and New Supplier, the Old
Supplier's Data Aggregator any Data Aggregator the Old Supplier
may have appointed for a future date, the New Supplier's Data
Aggregator, any Data Aggregator the New Supplier may have
appointed for a future date and, where necessary, the relevant
Distribution Business that such Notice of Objection has been
received and Accepted. All data items relating to the New
Supplier's Registration, including any changes to data items that a
New Supplier has made pursuant to Clause 24.2, shall be removed.
The Old Supplier shall be notified of all changes to data items made
by the New Supplier pursuant to Clause 24.2, or made by the
Distribution Business pursuant to Clause 24.1 which were entered
on or after the Operational Working Day on which the New
Supplier's Registration was Accepted, and which have an effective
date which is not later than the Operational Working Day on which
the Notice of Objection is Accepted. Such notification shall
exclude any items which were provided by the Old Supplier. The
New Supplier shall not be able to make any changes to data items
4, 5, 7, 11 to 14, 16 or 17 in Schedule 2 for the relevant Metering
Point after the Old Supplier's Notice of Objection is lodged unless
and until the Notice of Objection is removed by the Host PES in
accordance with Clause 16.9. Where the relevant Notice of
Objection is not Accepted or has not been received within the
Objection Raising Period, the relevant Host PES shall Reject such
Notice of Objection and shall notify the Old Supplier that it has
Rejected its Notice of Objection and all the reasons for the
Rejection. Where the Old Supplier's Notice of Objection has been
Rejected the Old Supplier may re-submit a Notice of Objection
within the Objection Raising Period.
16.8 Where the Host PES records a Notice of Objection in accordance
with Clause 16.7 it shall note within its MPAS Registration System
that the Registration of the New Supplier in relation to the relevant
Metering Point has been objected to and the responsibility for
supplying that Metering Point shall revert to or remain with the Old
Supplier, as relevant, such that the New Supplier's Registration
shall be deemed not to have taken place.
16.9 The Old Supplier may withdraw any Notice of Objection that has
been Accepted by the Host PES within the Objection Resolution
Period and shall do so where the grounds for its objection have
been resolved within the Objection Resolution Period. Where the
Old Supplier withdraws a Notice of Objection pursuant to this
Clause 16.9 it may not re-submit a Notice of Objection in respect of
the same Application for Registration pursuant to Clause 16.5.
Where the Host PES Accepts the Old Supplier's withdrawal of its
Notice of Objection the Host PES shall remove the Notice of
Objection and shall notify the Old Supplier, the New Supplier, the
Old Supplier's Data Aggregator, any Data Aggregator the Old
Supplier may have appointed for a future date, the New Supplier's
Data Aggregator, any Data Aggregator the New Supplier may have
appointed for a future date and, where necessary, the relevant
Distribution Business of the removal of the Notice of Objection.
Where the Old Supplier has made any changes to the data items
pursuant to Clause 24.2, or the Distribution Business has made any
changes to data items pursuant to Clause 24.1, which were entered
on or after the Operational Working Day on which the Notice of
Objection was Accepted, and such changes have an effective date
which is not later than the Operational Working Day on which the
Notice of Objection is withdrawn, during the Objection Resolution
Period, the Host PES shall notify the New Supplier that such
changes were made. The data items relevant to the New Supplier's
Registration shall be included in the notification to the New
Supplier. Where the relevant Host PES does not Accept the Old
Supplier's request to withdraw its Notice of Objection it shall
Reject such application and shall notify the Old Supplier that its
application to withdraw its Notice of Objection has been Rejected
and give reasons.
16.10 Where the Old Supplier withdraws a Notice of Objection or where
the grounds of objection are later resolved, it shall notify the
Customer at the relevant Premises as soon as is reasonably
practicable.
16.11 The relevant Host PES shall not be responsible for checking
whether the grounds for objection in the Old Supplier's Notice of
Objection have been resolved within the Objection Resolution
Period, where the Old Supplier indicates that they have been, in its
notice submitted pursuant to Clause 16.9.
16.12 Where the Host PES removes a Notice of Objection in accordance
with Clause 16.9, it shall restore the Registration of the relevant
New Supplier, who shall be deemed to be responsible for the supply
of electricity through the relevant Metering Point from the Supply
Start Date included in its Valid Application for Registration. If the
Old Supplier made any changes to data items pursuant to Clause
24.2 during the Objection Resolution Period which were to be
effective from a date on or after the New Supplier's Start Date,
such changes shall be deemed not to have been made. If the New
Supplier made any changes to data items pursuant to Clause 24.2
before the Host PES recorded the Old Supplier's Notice of
Objection those changes shall be re-instated on the MPAS
Registration System to be effective from the dates originally
specified in the New Supplier's application.
16.13 Where a Notice of Objection is not withdrawn or the request to
withdraw has been Rejected within the Objection Resolution
Period, the relevant Host PES shall inform the Old Supplier and the
New Supplier that the Objection Resolution Period has expired and
the Old Supplier shall retain responsibility for the Metering Point.
17. CONTACT NOTICE FACILITY
17.1 After the period of Controlled Market Start-Up for the relevant
Host PES where either:
17.1.1 the Old or New Supplier in relation to the current or
pending Registration for a particular Metering Point
reasonably believes that the New Supplier has been
erroneously Registered for that particular Metering Point;
or
17.1.2 the Old Supplier in relation to the current Registration
wishes to assign to the New Supplier a debt owing to it by a
Customer at Domestic Premises pursuant to Condition 40
of the Old Supplier's PES Licence in England and Wales or
Condition 35 of Part V of the Old Supplier's PES Licence in
Scotland or Condition 48 of the Old Supplier's Second Tier
Supply Licence in England and Wales or Condition 49 of
the Old Supplier's Second Tier Supply Licence in Scotland,
as the case may be;
17.1.3 the Old or New Supplier in relation to the current or
pending Registration reasonably believes that the New
Supplier applied to register a Metering Point which is a
Related Metering Point without applying to Register all the
relevant Related Metering Points at the same time; or
17.1.4 the Old Supplier is obliged to contact the New Supplier
pursuant to Clause 15.13,
the relevant Supplier shall contact the relevant Host PES to request
the identity of the other Supplier using either the Data Transfer
Network if the Host PES can receive a request on the Data
Transfer Network for the provision of such service or otherwise by
facsimile sent to that Host PES's MPAS management facsimile
number.
17.2 Where, during or after Controlled Market Start-Up, a Host PES
who has been unable to receive Messages on the Data Transfer
Network for the provision of the Service requested under Clause
17.1 subsequently becomes able to do so, that Host PES shall
notify all Suppliers Registered on its MPAS Registration System of
that fact.
17.3 Where the Host PES can receive a Message on the Data Transfer
Network for the provision of the Service requested under Clause
17.1, the Host PES shall provide both the Suppliers with the other's
identity. Where the Host PES Rejects the Message it shall notify
the Supplier of its Rejection and all the reasons for so doing.
17.4 Where the Host PES cannot receive a Message on the Data
Transfer Network, (otherwise than as a result of a failure of the
Data Transfer Network) for the provision of the Service requested
under Clause 17.1 and the Host PES receives the Supplier's manual
request pursuant to Clause 17.1 by 15:00 hours on an Operational
Working Day, it shall provide both the Suppliers with the other's
identity by 06:00 hours on the following Operational Working Day
provided that where the total number of manual requests received
pursuant to Clause 17.1 to be responded to by that Host PES
would otherwise exceed 50 in any Operational Working Day the
Host PES shall use its reasonable endeavours to provide as many
responses as possible but shall only be required to provide the first
50 responses requested on that Operational Working Day. Such
responses shall be provided in the following manner:
17.4.1 a maximum of 5 responses per Supplier or Data
Aggregator, allocated in the order in which those requests
are received; and
17.4.2 where Clause 17.4.1 has been complied with, any extra
requests which have been received shall be provided in the
order in which they were received.
Any extra requests in excess of 50 requested in any Operational
Working Day or any received after 15:00 hours on an Operational
Working Day in relation to which the Host PES has not provided
responses shall be deemed to have been requested at the start of the
following Operational Working Day.
17.5 Each Host PES shall offer the Services pursuant to Clause 17.1 and
17.3 during the period of Controlled Market Start-Up for that Host
PES where it does not automatically notify each Supplier of the
other relevant Supplier's identity pursuant to the procedures
contained in Clauses 15 and 16. The Host PES shall cease to
automatically notify each Supplier of the other relevant Supplier's
identity after the end of Controlled Market Start-Up for that Host
PES.
17.6 The relevant Host PES shall not be required to check the validity of
any request made in accordance with Clause 17.1 except to check
that the Supplier requesting the information is the New or Old
Supplier in relation to the relevant Metering Point in relation to the
relevant Registration.
18. ERROR RECTIFICATION
18.1 Each Supplier shall use its reasonable endeavours to check any
notice it receives from a Host PES pursuant to Clause 15 for errors
and in particular where it is a New Supplier to check data item 5 of
Schedule 2 for the relevant Metering Point. Where data item 5 of
Schedule 2 for a Metering Point indicates that the Metering Point is
a Related Metering Point, the New Supplier shall use its reasonable
endeavours to ensure that all other relevant Related Metering
Points are Registered at the same time either in accordance with
Clause 15 or this Clause 18.
18.2 Where an Old Supplier has raised an objection pursuant to Clause
16.1.5, the Old Supplier for a particular Metering Point shall, on
request by a New Supplier as soon as reasonably practical, notify
that New Supplier of all Related Metering Points for that Metering
Point for which the Old Supplier is or has been Registered.
18.3 Where the Old Supplier for a particular Metering Point reasonably
believes that the New Supplier has either erroneously Registered
for a particular Metering Point or has Registered for a Related
Metering Point without registering all other relevant Related
Metering Points it shall either:
18.3.1 raise an objection if it may pursuant to Clause 16.1 within
the time limits set out in Clause 16; or
18.3.2 contact the New Supplier as soon as possible using the
facility provided under Clause 17, if necessary.
Where the Old Supplier raises an objection pursuant to Clause
18.3.1 it may also contact the New Supplier using the facility under
Clause 17 if necessary.
18.4 Where the New Supplier for a particular Metering Point reasonably
believes that it has either erroneously Registered for that Metering
Point or has Registered for a Related Metering Point without
registering all other relevant Related Metering Points it shall either:
18.4.1 where it has Registered a Related Metering Point without its
associated Related Metering Point(s) and the Old Supplier
has not objected to its original registration apply for
Registration for the relevant Related Metering Point(s) as
soon as reasonably practicable. Where the Supplier makes
such an application but does not apply in sufficient time to
ensure that it receives confirmation from the Host PES
before it commences supplying electricity through the
relevant Related Metering Points it shall contact the Old
Supplier as soon as possible using the facility provided
under Clause 17, if necessary; or
18.4.2 contact the Old Supplier as soon as possible using the
facility provided under Clause 17, if necessary.
18.5 Where either the relevant Old Supplier or New Supplier contacts
the other pursuant to Clause 18.3 or 18.4, these Suppliers shall
agree the appropriate method for rectifying the error or registering
all other relevant Related Metering Points. This may include:
18.5.1 the Old Supplier objecting to the New Supplier's application
under Clause 16 within the time limits set out in Clause 16;
or
18.5.2 the Old Supplier withdrawing its objection; or
18.5.3 the New Supplier Registering all relevant Related Metering
Points before it commences supplying electricity through the
Related Metering Point(s) and if necessary the Old Supplier
removing its objection under Clause 16 within the time
limits set out in Clause 16; or
18.5.4 the Old Supplier applying for Registration in relation to the
Metering Point where the New Supplier has registered the
relevant Metering Point in error; or
18.5.5 the New Supplier applying for Registration in relation to the
other associated Related Metering Points after the time
period indicated in Clause 18.5.3.
18.6 The Suppliers shall, as soon as reasonably practicable, settle any
costs incurred as a result of implementing any methods to correct
errors or as a result of those errors including those outlined in
Clause 18.5 between them including any settlement costs that are
incorrectly allocated to the Suppliers and any costs incurred as a
result of registering any relevant Related Metering Points at a later
time to the associated Related Metering Points.
19.1 RETROSPECTIVE AMENDMENT OF MPAS
REGISTRATION SYSTEM
19.1 Subject to Clause 19.2 and where the procedures detailed in Clause
18 cannot be used, the Old Supplier and New Supplier may request
the relevant Host PES to amend the MPAS Registration System
manually to rectify an erroneous Registration. The Host PES shall,
where the Host PES has received a joint written confirmation from
the Old Supplier and the New Supplier agreeing to the amendment
to the MPAS Registration System and any associated charges,
undertake the manual amendment in the limited circumstances set
out in guidelines established by MEC, at a charge to be agreed
between the relevant Host PES and the relevant Suppliers. Such
guidelines shall be established by MEC in consultation with all
parties as soon as practicable after the date of this Agreement.
19.2 The parties agree to instruct MEC, as soon as reasonably
practicable after the date of this Agreement, to review the Services
to establish what changes would be required to introduce an
electronic retrospective amendment facility and whether, in the light
of all relevant facts and circumstances, such a facility should be
introduced and if so, when and what that facility should be. The
facts and circumstances to be considered by MEC shall include:
19.2.1 the results of any impact assessment which MEC has
requested any Host PES to carry out on its MPAS
Registration System;
19.2.2 what situations could give rise to the requirements to amend
the MPAS Registration Systems retrospectively;
19.2.3 whether the procedures set out in Clause 18 in practice
provide adequate solutions to the situations outlined under
Clause 19.2.2;
19.2.4 what effect any enhanced functionality, if needed, would
have on any interfacing systems and what corresponding
changes would be required to those systems if any enhanced
functionality to the MPAS Registration Systems were to be
introduced;
19.2.5 what effect any enhanced functionality, if needed, would
have on Accreditation requirements;
19.2.6 the funding and charging implications of any enhanced
functionality, if needed; and
19.2.7 the appropriate allocation of liability arising from the
implementation of the enhanced functionality, if needed.
19.3 Where as a result of the review carried out pursuant to Clause 19.2,
MEC decide that enhanced functionality is required they shall notify
the Host PES and indicate an appropriate timescale for the
introduction of the enhanced functionality into the Host PES MPAS
Registration Systems. Each Host PES shall implement such
enhanced functionality in accordance with the timescale set out by
MEC.
19.4 Prior to any enhanced functionality being introduced into the Host
PES MPAS Registration Systems in accordance with Clause 19.3,
MEC shall develop procedures specifying when and how the parties
can amend retrospectively the MPAS Registration Systems. Such
procedures shall apply instead of Clause 19.1 in respect of each
Host PES from the date that each Host PES has implemented
successfully the enhanced functionality into its MPAS Registration
System.
20 NEW CONNECTIONS, NEW METERING POINTS AND
REGISTRATION OF NEW SUPPLY NUMBERS
20.1 Where a Host PES's Distribution Business:
20.1.1 creates a new connection to Premises from its Distribution
System (a "New Connection") and hence creates a new
Metering Point; or
20.1.2 in circumstances other than those set out in Clause 20.1.1,
agrees with a Supplier that a new Metering Point should be
created; or
20.1.3 decides to enter a new Metering Point onto its MPAS
Registration System,
(in each circumstance a "New Metering Point")
it shall ensure that a Skeleton Record for the new Metering Point is
entered on its MPAS Registration System, in the case of Clause
20.1.1 no later than the end of the second Operational Working
Day following completion of the works associated with the New
Connection and in the case of Clauses 20.1.2 or 20.1.3 no later than
the end of the second Operational Working Day following its
agreement with the Supplier or its decision to enter a new Metering
Point.
20.2 A Valid Application for Registration in relation to a New Metering
Point is one that:
20.2.1 contains values that the Supplier has identified as
representing data items 1 to 3, 8 and 10 of Schedule 2 for
the New Metering Point against which it wishes to Register
which are Accepted on the relevant MPAS Registration
System;
20.2.2 is received by the relevant Host PES no later than the last
Operational Working Day before the Supply Start Date
included in the Supplier's application under Clause 20.2.1
and no more than 28 days in advance of that date; and
20.2.3 relates to a New Metering Point that has a Skeleton Record
entered for it in the relevant Host PES's MPAS Registration
System.
20.4 The Supplier may also include in its Application for Registration for
a New Metering Point the values for other data items that are the
Supplier's responsibility in Schedule 2 for that New Metering Point.
However, if the Supplier includes the Energisation Status in its
Message and all the other data items that are the Supplier's
responsibility under Schedule 2 have not been included or data item
6 in Schedule 2 for that New Metering Point is not included in the
Skeleton Record, the Host PES shall Reject the Message and shall
inform the Supplier that such Message has been Rejected together
with all the reasons for its Rejection. Each Host PES may also
Reject an Application for Registration which contains values for
other data items in the MPAD for the relevant New Metering Point
if they are not provided in the combinations required under that
Host PES's Validation Procedures.
20.5 Where the Host PES receives a Valid Application for Registration
from a Supplier in relation to a New Metering Point which it does
not Reject in accordance with Clause 20.4, it shall Register the
Supplier and shall notify the Supplier and, where data item 14 has a
value other than null and, where such persons are identified in
respect of the New Metering Point the Data Aggregator that the
Supplier has been Registered for that New Metering Point. The
Supplier shall be deemed responsible for the supply of electricity
through the relevant New Metering Point from the Supply Start
Date included in its Valid Application for Registration.
20.7 The Supplier shall use its reasonable endeavours not to commence
supplying electricity through any Metering Point until it has
received from the relevant Host PES a notice confirming its
Registration in respect of the relevant Metering Point or (if later)
the Supply Start Date specified in the Supplier's Application for
Registration. The relevant Host PES shall not be responsible for
ensuring that the Supplier complies with the requirements of this
Clause 20.7. Where the Supplier is unable to comply with the
provisions of this Clause 20.7 due to the relevant Host PES's failure
to send out a notice confirming its Registration within the timescale
indicated in Clause 14.3, that Supplier shall be deemed not to be in
breach of the obligation set out in this Clause 20.7.
20.8 Where a Host PES receives an Application for Registration for a
New Metering Point from a Supplier which is not a Valid
Application for Registration, it shall Reject the Application for
Registration and shall notify the Supplier that the application has
been Rejected together with all the reasons for its Rejection.
Notwithstanding Clause 20.2.2, the MPAS Registration Systems of
some Host PESs may not Reject an otherwise Valid Application for
Registration if the Application for Registration is received after the
date that is the last Operational Working Day before the Supply
Start Date included in the Supplier's Application for Registration.
20.10 The Supplier shall notify the Host PES as soon as reasonably
practical of the other data items for which the Supplier is identified
as being responsible in Schedule 2, where it has not already done so
pursuant to Clause 20.4. Such data items may be provided at the
same time or at different times provided that where the relevant
Host PES's Validation Procedures require such data items to be
provided in particular combinations, the Supplier shall provide such
combinations of data items at the same time. On each occasion that
the Supplier provides such information and the Host PES Accepts
such information it shall confirm its Acceptance to the Supplier and,
where data item 14 has a value other than null, where such person
is identified in respect of the New Metering Point, the Supplier's
Data Aggregator. Where the information is not Accepted, the Host
PES shall Reject such information and shall inform the Supplier that
the Message has been Rejected together with all the reasons for its
Rejection.
21 DE-REGISTRATION OF SUPPLY NUMBERS
21.1 Where a Host PES receives a De-Registration Notice from its
Distribution Business and such notification is Accepted on the Host
PES's MPAS Registration System, the Host PES shall note on its
MPAS Registration System that no further Registrations can be
made in respect of the relevant Metering Point. Where the Host
PES does not Accept the Message, it shall Reject the Message and
shall inform its Distribution Business that the Message has been
Rejected and all the reasons for such Rejection.
21.2 The Host PES shall send the Supplier that is Registered in respect
of that Metering Point at the date included in the De-Registration
Notice sent under Clause 21.1 and that Supplier's Data Aggregator
and any Data Aggregator that the Supplier may have appointed for
a future date and, if relevant, any New Supplier that has sent a
Valid Application for Registration in respect of the Metering Point
for a Supply Start Date after that date together with that New
Supplier's Data Aggregator a Message stating that the Host PES
has noted that no further Registrations may be made against the
relevant Metering Point, and that from the date that the Metering
Point is De-Registered, the Supplier shall no longer be liable for
supply to that Metering Point
21.3 Each Host PES shall ensure that any record of any details relating
to a Metering Point shall not be removed from its MPAS
Registration System into archiving until at least 2 years after the
date of receipt of the De-Registration Notice received pursuant to
Clause 21.1, but such Metering Point shall not be included in any
reports provided by the Host PES pursuant to Clause 27 after
receipt of the De-Registration Notice.
22 FULL REFRESH
Procedure for Full Refreshes to Suppliers and Data
Aggregators
22.1 A Supplier or Data Aggregator may request a Full Refresh from a
Host PES. The Supplier or Data Aggregator shall provide any such
request using a mode of communication permitted under Clause 46.
22.2 Where the Host PES receives the Supplier's or Data Aggregator's
request under Clause 22.1, it shall respond within 1 Operational
Working Day of receipt of such request sent pursuant to Clause
22.1, indicating a scheduled date for the delivery of the Full
Refresh. A Host PES shall be required to provide such Full Refresh
within 15 Operational Working Days of receipt of that request,
provided that where more than 3 requests are received within a 5
Operational Working Day period, the Host PES shall use its
reasonable endeavours to provide as many Full Refreshes as
possible, but shall only be required to provide Full Refreshes in
response to the first 3 requests received during that 5 Operational
Working Day period within 15 Operational Working Days of the
request. Any further requests received during that 5 Operational
Working Day period shall be deemed to have been received on the
fifth Operational Working Day after the Operational Working Day
on which the first request was received. Where the request for a
Full Refresh is Rejected, the Host PES shall, within 1 Operational
Working Day, inform the relevant Supplier or Data Aggregator that
the request has been Rejected together with all the reasons for that
Rejection.
22.3 The relevant Host PES shall send the Full Refresh requested
pursuant to Clause 22.1 to the relevant Supplier or Data
Aggregator on a CD ROM or by another electronic method agreed
between the Host PES and Supplier or Data Aggregator, as
appropriate, so that it is deemed to be received by the relevant
Supplier or Data Aggregator by the scheduled date for delivery
indicated in Clause 22.2.
23. SELECTIVE REFRESHES
Procedure for Selective Refreshes to Suppliers and Data
Aggregators
23.1 Where a Supplier or Data Aggregator requires a Selective Refresh
of data from a Host PES, it shall submit a request for a Selective
Refresh to the relevant Host PES. The Supplier or Data
Aggregator shall provide such request using a mode of
communication permitted under Clause 46.
23.2 Where the Host PES receives the Supplier's or Data Aggregator's
request pursuant to Clause 23.1 by 15:00 hours on an Operational
Working Day , it shall provide the Supplier or Data Aggregator
with the Selective Refresh by 06:00 hours on the following
Operational Working Day, provided that where the total number of
Selective Refreshes to be provided by that Host PES would
otherwise exceed 50 in any Operational Working Day, the Host
PES shall use its reasonable endeavours to provide as many
Selective Refreshes as possible but shall only be required to provide
50 Selective Refreshes requested on that Operational Working Day.
Such Selective Refreshes shall be provided in the following manner:
23.2.1 a maximum of 5 Selective Refreshes per Supplier or Data
Aggregator, allocated in the order in which those requests
are received; and
23.2.2 where Clause 23.2.1 has been complied with, any extra
requests which have been received shall be provided in the
order in which they were received.
Any extra Selective Refreshes in excess of 50 requested in any
Operational Working Day or any received after 15:00 hours on an
Operational Working Day in relation to which the Host PES has
not provided responses shall be deemed to have been requested at
the start of the following Operational Working Day. Where the
request for a Selective Refresh is Rejected, the Host PES shall,
within 1 Operational Working Day, inform the relevant Supplier or
Data Aggregator that the request has been Rejected together with
all the reasons for that Rejection.
24. CHANGES AND CONFIRMATIONS OF DATA
Procedure for changes to data items for which the Host PES is
responsible
24.1 Where a Host PES is notified by its Distribution Business of any
changes to data items for which it is stated to be responsible as
Host PES in Schedule 2 (and any corresponding dates from which
those changes will be effective) in respect of any Metering Points
that are Registered on the Host PES's MPAS Registration System
and such notice is Accepted on the Host PES's MPAS Registration
System, the Host PES shall update its MPAS Registration System
with the information within 1 Operational Working Days of
receiving such notification, and, after updating its MPAS
Registration System, shall notify the Supplier that is Registered for
the affected Metering Point(s) and that Supplier's Data Aggregator
(apart from where the change relates to data item 9 in Schedule 2)
and, if relevant, any New Supplier that has sent a Valid Application
for Registration in respect of the Metering Point for a Supply Start
Date after the date of amendment together with that New
Supplier's Data Aggregator (apart from where the change relates to
data item 9 in Schedule 2) of such changes. The Host PES shall
acknowledge to its Distribution Business that such change has
taken place. Where the Host PES Rejects such changes it shall
notify its Distribution Business that such changes have been
Rejected and all the reasons for that Rejection.
Procedure for changes to data items for which Supplier is
responsible
24.2 Subject to Clause 16.7, a Supplier may only provide changes to
data items for which it is stated to be responsible in Schedule 2
(apart from data item 10) for any Metering Point from the date that
the Host PES Registers a Valid Application for Registration for
that Supplier in relation to that Metering Point, such changes to
take effect from the later of the Supply Start Date for that Supplier
or the date from which such change is to take effect.
24.3 The Supplier shall notify the Host PES of any changes to data items
(and any corresponding dates from which those changes will be
effective) for which it is stated to be responsible in Schedule 2
(other than data items 7, 8 and 10) in respect of Metering Points for
which it is Registered on the Host PES's MPAS Registration
System within 5 Operational Working Days of such changes taking
effect, or becoming aware that such changes are required
whichever is the later. The Host PES validation rules shall not
prevent the Supplier changing data items for which it is responsible
(other than data items 7, 8 and 10) at any time up to Final
Reconciliation Run.
24.4 Where the Host PES Accepts the changes provided by the Supplier
under Clause 24.3, it shall update its MPAS Registration System to
reflect the changes. Where a change is made to data item 13 of
Schedule 2, the Host PES shall notify the Data Aggregator that was
appointed in relation to the Metering Point before the change, the
Data Aggregator that the Supplier has appointed in its place, the
Supplier, any New Supplier that has sent a Valid Application for
Registration in respect of the Metering Point for a Supply Start
Date after the date of amendment and its Distribution Business that
such change has been made after it has Accepted the change.
Where changes are made to any other data items for which the
Supplier is stated to be responsible under Schedule 2 (other than
data items 7, 8 and 10) the Host PES shall notify the relevant
Supplier and that Supplier's Data Aggregator (apart from where the
change relates to data items 5 or 11) and, if relevant, any New
Supplier that has sent a Valid Application for Registration in
respect of the Metering Point for a Supply Start Date after the date
of amendment together with that New Supplier's Data Aggregator
(apart from where the change relates to data items 5 or 11) and its
Distribution Business that such changes have been made. Where
the Host PES does not Accept the changes provided by the
Supplier under Clause 24.3 it shall Reject such changes and shall
notify the Supplier of such Rejection and all the reasons for such
Rejection.
Procedure for changes and confirmations of Market Domain
Data
24.5 Where the Host PES receives Market Domain Data, it shall
acknowledge receipt of the information to the Initial Settlement and
Reconciliation Agent, within 1 Operational Working Day of
receipt. Where the Host PES receives the Market Domain Data
and such information is in the correct format and not corrupt it shall
update its MPAS Registration System as soon as reasonably
practicable and no later than within 5 Operational Working Days
with the information. Where the Host PES receives the Market
Domain Data and such information is in the incorrect format or
corrupt or otherwise cannot be entered by that Host PES into its
MPAS Registration System it shall notify the Initial Settlement and
Reconciliation Agent, that it has rejected the Market Domain Data
within 5 Operational Working Days of receipt. Where the relevant
Initial Settlement and Reconciliation Agent, resends such
information such that the Host PES can enter it into its MPAS
Registration System, the Host PES shall acknowledge receipt of
any such information re-sent within 1 Operational Working Day of
receipt. Acknowledgement of receipt from a Host PES's Gateway
shall be deemed sufficient acknowledgement of receipt for the
purposes of this Clause 24.
25. RESENDS
Procedure for Resends to Suppliers and Data Aggregators
25.1 Where a Supplier or Data Aggregator requires the Host PES to re-
transmit one or more Files which was originally transmitted to the
Supplier or Data Aggregator during the period of 28 days prior to
the date on which the Host PES receives a request for such re-
transmission ("Resend"), the Supplier or Data Aggregator shall
provide the relevant Host PES with a request for a Resend,
indicating which Files it requires to be Re-sent and the reasons for
the request. The Supplier or Data Aggregator shall provide such
request using any mode of communication permitted under Clause
46.
25.2 Where the Host PES receives the Supplier's or Data Aggregator's
request under to Clause 25.1 by 15:00 hours on an Operational
Working Day, it shall provide the Supplier or Data Aggregator with
the Resend by 06:00 hours on the following Operational Working
Day, provided that where the total number of Resends to be
provided by that Host PES would otherwise exceed 50 in any
Operational Working Day, the Host PES shall use its reasonable
endeavours to provide as many Resends as possible but shall only
be required to provide the first 50 Resends requested on that
Operational Working Day. Such Resends shall be provided in the
following manner:
25.1 a maximum of 5 Resends per Supplier or Data Aggregator,
allocated in the order in which those requests are received;
and
25.2 where Clause 25.2.1 has been complied with, any Resends
for which requests which have been received on that
Operational Working Day shall be provided in order in
which they were received.
Any requests for Resends in excess of 50 on any Operational
Working Day or any requests for Resends received after 15:00
hours on an Operational Working Day in relation to which the Host
PES has not provided responses, shall be deemed to have been
requested at the start of the Following Operational Working Day.
25.3 For the purposes of Clause 31, each Host PES shall determine
whether the original Message that is required to be Resent reached
and was accepted on the Supplier's or Data Aggregator's Gateway
before the Supplier or Data Aggregator submitted a request for a
Resend pursuant to Clause 25.1, and shall on request provide its
reasons for such determination. The Host PES shall only levy a
charge pursuant to Clause 31 for Resends where the Host PES
determines that the Message did reach the relevant Supplier's or
Data Aggregator's Gateway.
27. REPORTING
27.3 Each Host PES in Scotland shall provide SESL with a report in a
format to be agreed by the affected parties within 10 Operational
Working Days after each Quarter Day, detailing by Supplier the
number of Metering Points divided by measurement class,
Registered on that Host PES's MPAS Registration System that as
at the Quarter Day have the 1998 Trading Arrangement Indicator
set to 'Y' and data item 14 of Schedule 3 set to energised.
27.4 Each Host PES in Scotland shall provide the secretary to the
Performance and Assurance Accreditation Panel with a report, in a
format to be agreed by the affected parties, within 10 Operational
Working Days after each Quarter Day, detailing by Supplier the
number of Metering Points Registered on that Host PES's MPAS
Registration System that, as at the Quarter Day have the 1998
Trading Arrangement Indicator set to 'Y'.
27.5 Each Host PES in Scotland shall provide the secretary to the
Performance Assurance and Accreditation Panel with a report in a
format to be agreed by the affected parties within 10 Operational
Working Days of receiving a request from the Performance
Assurance and Accreditation Panel, , detailing the Supply Numbers
Registered against each Supplier on that Host PES's MPAS
Registration System as at the date specified by the Performance
Assurance and Accreditation Panel. Such report shall classify the
information by Bulk Supply Point Group as relevant to the Host
PES. Within each Bulk Supply Point Group, the information shall
be categorised by Measurement Class. Where there are non-half
hourly Measurement Classes covered by such a report, that
information shall be further categorised and sub-divided by Profile
Class.
27.6 Where the Host PES receives a request from a Data Aggregator to
notify it of the last File sequence number sent to that Data
Aggregator, that Host PES shall within 1 Operational Working Day
notify the Data Aggregator by telephone or facsimile of such
number and the date on which the relevant File was sent.
27.7 Each Host PES shall provide all Suppliers the secretary to the
Performance Assurance and Accreditation Panel and the Director,
within 10 Operational Working Days of the end of each calendar
month, with a report in a format to be agreed by the affected parties
in detailing its performance against the requirements set out in
Clauses 14.4 and 14.5 during the Quarter relevant to that calendar
month, unless a party requests the Host PES not to provide it with
such a report. This report shall also detail the Host PES's
performance against Clauses 17.4, 22.2, 22.3, 23.2, and 25.2.
28. ACCURACY VALIDATION OF DATA AND MESSAGE
PROCESSING
28.1 Each Supplier shall use its reasonable endeavours to ensure that any
data items, for which it is deemed responsible for under Schedule 2,
that it submits to a Host PES pursuant to this Agreement are
complete and accurately reflect the circumstances relating to the
relevant Metering Point.
28.2 Each Host PES shall use its reasonable endeavours to ensure that:
28.2.1 any data that it provides under this Agreement are complete,
in the correct format and are consistent with the information
provided to the Host PES, and are sent to the correct
recipient;
28.2.2 in relation to any Metering Point within its Authorised Area,
data items 1, 2, 3, 15 and 20 in relation to any Metering
Point are complete and accurately reflect the circumstances
relating to that Metering Point; and
28.2.3 any data with which the Host PES initially populates the
relevant data items on the MPAS Registration System are
complete and accurately reflect the circumstances relating to
that Metering Point at the time at which the Host PES
initially populates those data items.
Validation Procedures
28.3 Each Host PES shall notify each Supplier of the Validation
Procedures which it applies to Messages received and sent by that
Host PES's MPAS Registration System as at the date of this
Agreement on or before the date of this Agreement ("Validation
Procedures").
28.4 Each Host PES in Scotland shall ensure that its Validation
Procedures comply with the Scottish Settlements validation
requirements set out in Schedule 11.
28.5 Where a Host PES proposes to change its Validation Procedures
which it applies to Supplier Messages, it shall notify all Suppliers
and SESL of any proposed changes to Validation Procedures at
least 15 Operational Working Days before it proposes that such
changes shall take effect.
28.6 Unless before the expiry of 15 Operational Working Days after
receipt of the notification sent in accordance with Clause 28.5 any
party gives notice to MEC that such changes should be considered
as if it were a change to this Agreement, such change shall take
effect (subject to Clause 28.4) from the date indicated in the notice
sent pursuant to Clause 28.5.
28.7 Where a party gives notice in accordance with Clause 28.6, such
proposed change shall be treated as if it were a proposal to change
this Agreement and the procedures set out in Clause 9 shall be
followed. Where, in the opinion of the relevant Pool MEC Member
or SESL Member, the proposed change relates to or will affect the
Priority Provisions such proposed change shall be treated as a
Change Proposal and the appropriate procedures set out in Clause
9 shall be followed.
28.8 In the event of any inconsistency between the provisions of this
Agreement and any Host PES's Validation Procedures, the
provisions of this Agreement shall prevail.
Message Processing
28.9 Where transmission of a Message by a Host PES's MPAS
Registration System fails the validation procedures of a Data
Aggregator to whom it was sent, the Data Aggregator shall attempt
to resolve the failure and validate the Message. If the Data
Aggregator is unable to resolve the failure, it shall notify the Host
PES, who shall use its reasonable endeavours to identify the cause
of the failure. If the Host PES identifies the cause of the failure to
be:
28.9.1 a fault on the Data Transfer Network, the Host PES shall
treat the failure as a request for a Resend and the provisions
of Clause 25 shall apply; or
28.9.2 a fault of that Host PES's MPAS Registration System, the
Host PES shall use its reasonable endeavours to resolve the
failure; or
28.9.3 a fault of the Data Aggregator, the Host PES shall notify
the Data Aggregator of that fact.
If the Host PES is unable to resolve the failure, or identifies the
cause of the failure to be the fault of the Data Aggregator in
accordance with Clause 28.9.3, it shall notify the relevant Supplier
who appointed that Data Aggregator, of that fact, and that Supplier
may refer the matter to the MRA Disputes Committee.
29. CHANGE OF SUPPLIER METER READING
29.2 The Old Supplier and the New Supplier shall be bound by the
Requirements on change of supplier from an Old Supplier to a New
Supplier set out in the following provisions, forming part of the
Pooling and Settlement Agreement, as amended from time to time
and to the extent applicable:
29.2.1 clause 1.3.3 and 1.3.2.3 of Service Line SL130;
29.2.2 clauses 2.2.3, 3.2.3, 2.2.7 and 3.2.7 of Agreed Procedure
AP502;
29.2.3 clauses 1.3.3, 1.5.3.5, 1.5.4.1 and 1.5.4.2 of Service Line
SL120;
29.2.4 clauses 2.2.6 ,3.2.6 and 4.4 of Agreed Procedure AP504;
29.2.5 sections 50.3 and 51.3 of the Pool Rules; and
29.2.6 Schedule 26 of the Pooling and Settlement Agreement,
and the equivalent provisions of the Settlement Agreement for
Scotland, where appropriate.
30. RECORDS, AUDIT AND NON-FUNCTIONAL
REQUIREMENTS
30.1 Each Host PES shall ensure that it securely maintains a historical
record of all data items that have been held in respect of a Metering
Point on its MPAS Registration System and that such records are
fully auditable, so that a full historical record is maintained for the 7
years following initial settlement date in relation to any particular
data item, the two most recent years being held on-line.
30.2 Each Host PES shall ensure that it retains copies of all Messages
sent and received in providing Services for at least three years after
the Messages have been sent or received.
30.3 Each Host PES in Scotland shall ensure that the Market Auditor
has access at reasonable times and on reasonable notice to:
30.3.1 those records maintained by the Host PES pursuant to
Clause 30.1;
30.3.2 any software, hardware, data or information held by the
Host PES or its agents where reasonably required by the
Market Auditor to fulfil its obligations under the relevant
Settlement Agreement;
30.3.3 the relevant parts of the Host PES's premises; and
30.3.4 relevant staff members of the Host PES, for a reasonable
length of time in any one year.
30.4 On request by the Market Auditor, as the case may be, each
Supplier shall ensure that the Market Auditor has access at
reasonable times and on reasonable notice to:
30.4.1 any records, maintained by the Supplier in relation to any
Metering Point for which it is or has been Registered, in the
7 years prior to the date of that request;
30.4.2 any software, hardware, data or information held by the
Supplier or its agents where reasonably required by the
Market Auditor to fulfil its obligations under the relevant
Settlement Agreement;
30.4.3 the relevant parts of the Supplier's premises; and
30.4.4 relevant staff members of the Supplier for a reasonable
length of time in each year.
30.5 Each Host PES in Scotland shall ensure that during the course of
this Agreement its MPAS Registration System complies with the
requirements set out in Appendix 1 to Schedule 7.
41. CONTRACT MANAGEMENT
41.1 Each party shall appoint an appropriate person (each a "Contract
Manager" and together the "Contract Managers") to manage all
matters arising under or in connection with this Agreement and to
monitor the general operation of this Agreement.
41.2 Each Contract Manager appointed by a party shall ensure that
procedures are in place in respect of that party to ensure that there
is adequate support for operations provided under this Agreement
and timely resolution of problems that may occur including a point
of contact to process and resolve such problems.
41.3 At times determined by MEC a meeting of Contract Managers shall
be convened to consider each of the reports contained in Clause
27.7 in relation to:
41.3.1 performance against Service Levels; and
41.3.2 issues arising from those reports and actions to remedy any
problems arising from those reports.
41.4 Each party shall notify the others in accordance with the provisions
of Clause 46 of the name and contact details of the Contract
Manager appointed by it for the purposes of this Agreement from
time to time.
45. DATA TRANSFER
45.1 Where Schedule 3 specifies a Data Transfer Catalogue reference
number in relation to any notice, request or other communication,
such notice, request or communication shall be sent in the format
and with the content described under such reference in the Data
Transfer Catalogue, as amended from time to time, and shall be
transmitted by the means specified in Schedule 3.
45.2 Nothing in this Agreement shall prevent any two parties from
agreeing to the use of an alternative method of transmission for any
communication between those two parties from that set out in
Schedule 3, whereupon the terms of this Clause 45 shall not apply
to that notice, request or other communication.
45.5 Where any provision of this Agreement refers to receipt of a
Message or notification by a Host PES pursuant to Clauses 15.10,
15.14, 16.7, 16.9, 17.3, 20.5, 20.8, 20.10, 20.11, 21.1, 24.1, 24.3
or 24.5 the date of such receipt shall be deemed to be the date on
which it is received where such Message or notification is received
prior to 18:00 hours on an Operational Working Day. Where such
Message or notification is received at or after 18:00 hours on an
Operational Working Day, the date of receipt of such Message or
notification shall be deemed to be the next Operational Working
Day.
45.6 If the Data Transfer Network or any relevant part of such network
is at any time for any reason unavailable for the sending of
Messages between any affected parties, then during the period of
unavailability:
45.6.1 the parties shall use 8mm DAT tape to send any notice,
request or other communication that this Agreement would
otherwise require to be sent via the Data Transfer Network
and take reasonable steps to process any notices, requests
or other communications received within their own systems
as promptly as possible;
45.6.2 where other means are used in accordance with Clause
45.6.1, the parties shall be relieved from any service levels
set out in this Agreement relating to any affected notice,
request or other communication (except to the extent that
this Agreement expressly provides for alternative levels in
such circumstances) but shall use their reasonable
endeavours to send such notice request or other
communication as soon as reasonably practicable; and
45.6.3 to the extent that no such other means are practicable given
the nature of the communication and the surrounding
circumstances, such unavailability of the Data Transfer
Network shall be deemed (to the extent not caused by a
breach by any party of the Data Transfer Service
Agreement) to constitute a circumstance of Force Majeure
for the purposes of this Agreement.
47. ASSIGNMENT AND SUB-CONTRACTING
47.1 Subject to Clause 47.2, and except as provided elsewhere in this
Agreement no party shall assign any of its rights under this
Agreement without the prior written consent of all other parties to
this Agreement, such consent not to be unreasonably withheld.
APPENDIX 1 TO SCHEDULE 7
Non Functional Requirements
1. ACCESS RESTRICTIONS
Commercial Role Restrictions
1.1 Subject to Clause 35, each Host PES in Scotland shall
implement and maintain controls to ensure that the data held
by its MPAS Registration System remains confidential.
1.2 Subject to Clause 35, each Host PES in Scotland shall only
permit access to such data to people whose job
responsibilities include the operation, support or audit of its
MPAS Registration System.
1.3 Each Host PES in Scotland shall ensure that the operation
of its MPAS Registration System is kept strictly outside that
Host PES in Scotland's Supply Business activities and
management structure.
1.4 The provisions of paragraphs 1.1 to 1.3 of this Appendix 1
only relate to the Host PES in Scotland's obligations in
relation to this Schedule 7.
2. RESTRICTIONS RELATING TO BOTH PHYSICAL AND
SYSTEM ACCESS
2.1 Each Host PES in Scotland shall implement and maintain
controls within its MPAS Registration System to ensure
that risk of intentional errors or fraud is minimised.
2.2 In order to meet the obligations stated in paragraph 2.1 to
this Appendix 1, each Host PES in Scotland shall implement
and maintain at least the following controls within its MPAS
Registration System:
2.2.1 access restrictions to computer hardware such as
terminals, cables, tapes and disk drives; and
2.2.2 access restrictions to software and data including
systems level access, application level access, and
access to particular programs and system output.
2.3 Each Host PES in Scotland shall implement and maintain
the controls as stated in paragraph 2.1 to this Appendix 1
throughout the term of this Agreement, and shall ensure that
these encompass system developers, system users, and any
other relevant parties.
2.4 In order adequately to discharge its obligations under
paragraph 2 to this Appendix 1 each Host PES in Scotland
shall be expected to implement and maintain at least the
following:
2.4.1 a security policy, which shall be communicated to all
relevant parties throughout the organisation and
strongly endorsed by top management;
2.4.2 procedures to ensure periodic reviews of security
policy;
2.4.3 controls to ensure the clear ownership of data and
all significant information assets, which include
information, software, and physical assets.
2.5 Any Host PES in Scotland that complies with BS 7799 on
Information Security Management shall be deemed to have
achieved the required level of security for the purposes of
this paragraph 2.
3. PHYSICAL ACCESS RESTRICTIONS
3.1 Each Host PES in Scotland shall appropriately restrict
access to hardware, including terminals, disk drives, cables,
and tapes relevant to its MPAS Registration System.
3.2 Each Host PES in Scotland shall monitor the security of
hardware relevant to its MPAS Registration System.
3.3 In order to comply with paragraph 3.1 to this Appendix 1,
each Host PES in Scotland shall implement and maintain at
least the following controls to its MPAS Registration
System:
3.3.1 locking computer rooms containing hardware
relating to its MPAS Registration System;
3.3.2 restricting access to buildings containing computer
equipment relating to its MPAS Registration
System;
3.3.3 restricting access to documentation relating to the
movements of computer hardware relevant to its
MPAS Registration System.
4. SYSTEM ACCESS RESTRICTIONS
4.1 Each Host PES in Scotland shall appropriately restrict
access to software and data relating to its MPAS
Registration System, including restricting systems level
access (both locally or remotely), application level access,
and access to particular programs using effective
passwords.
4.2 Each Host PES in Scotland shall monitor the security of
software relevant to its MPAS Registration System.
4.3 In order to comply with paragraph 4.1 to this Appendix 1,
each Host PES in Scotland shall implement and maintain at
least the following controls in respect of its Registration
system:
4.3.1 password protection at system, application, and
program level, and where appropriate at a more
detailed level;
4.3.2 prevention of users from accessing the operating
system prompt;
4.3.3 monitoring of attempted or actual access violations;
4.3.4 strong controls over access to special system
privileges;
4.3.5 authentication of remote access attempts;
4.3.6 controls to safeguard the confidentiality and integrity
of data passing over public networks;
4.3.7 controls to ensure that information is distributed
only to the correct market participants;
4.3.8 restricted access to documents/systems forming part
of the security system;
4.3.9 hardware/software mechanisms that can be
independently evaluated to provide assurance that
the system enforces the requirements of the security
policy;
4.3.10 audit trails kept and protected so that actions
affecting security can be traced to the responsible
person.
5. SECURITY
Minimising the Risk of an Unwanted Cessation of Processing
5.1 Each Host PES in Scotland shall implement and maintain
controls over computer operations in order to minimise the
risk of an unwanted cessation of processing.
5.2 In order to comply with paragraph 5.1 to this Appendix 1,
each Host PES in Scotland shall implement and maintain at
least the following controls in relation to its MPAS
Registration System:
5.2.1 a documented security policy describing measures
intended to prevent cessation of processing, which is
communicated throughout the organisation to all
relevant persons;
5.2.2 procedures to ensure periodic reviews of security
policy;
5.2.3 virus detection and prevention measures, which are
communicated to all users;
5.2.4 controls over computer operations to ensure that
processing is executed in the correct sequence and
that any dependencies between processes (e.g.
waiting for a File to be available before starting a
batch program) are correctly taken into
consideration;
5.2.5 monitoring of the performance of systems with
procedures available to operators to deal with
problems;
5.2.6 formal change control procedures;
5.2.7 adequate training of users, development staff, and
operations staff;
5.2.8 adequate documentation to include at least user,
operational, and system specification documentation;
5.2.9 appropriate maintenance arrangements for hardware
and software;
5.2.10 system housekeeping procedures to maintain the
integrity and availability of services;
5.2.11 support facilities;
5.2.12 clear responsibilities and procedures for systems
operation and maintenance.
Minimising the Impact of an Unwanted Cessation of
Processing
5.3 Each Host PES in Scotland shall implement and maintain
controls over computer operations relevant to its MPAS
Registration System in order to minimise the impact of
unwanted cessation of processing in order to:
5.3.1 ensure that data is correctly recovered and
processing correctly resumed;
5.3.2 ensure that processing is resumed as soon as
possible.
5.4 Each Host PES in Scotland shall implement and maintain
adequate recovery procedures for both short and long term
interruptions of processing in any or all of the systems.
These procedures shall wherever possible prevent, and
otherwise detect and correct, any loss of transmitted data.
These procedures shall apply to all data, including archived
data.
5.5 Each Host PES in Scotland in relation to its MPAS
Registration System shall perform any retrospective
processing required in order to catch up with processing
requirements after an interruption to processing.
5.6 Subject to Clause 30.1, each Host PES in Scotland shall
archive data from its MPAS Registration System in a
manner which will allow SESL or its agent to restore data
should a market participant become unable to restore data.
5.7 In order to comply with paragraph 5.3.1 to this Appendix 1,
each Host PES in Scotland shall implement and maintain at
least the following controls in relation to its MPAS
Registration System:
5.7.1 a fully documented and tested disaster recovery
plan;
5.7.2 backups of programs and data to ensure that
essential data and software can be restored in the
event of a disaster;
5.7.3 periodic testing of restoration of backed up data;
5.7.4 adequate insurance cover for hardware,
communications and all line development and data
including systems software and programs;
5.7.5 features within the DBMS software to safeguard
data integrity in the event of a system failure, to
include transaction logging.
6. AUDIT CONTROL
6.1 General Controls
Each Host PES in Scotland shall ensure that all controls devised to
meet the requirements set out in Schedule 7:
6.1.1 effectively meet the relevant control objective(s);
6.1.2 are operated effectively throughout the period for
which the control is relevant;
6.1.3 are verifiable, that is the control procedure shall be
documented and the operation of the control shall be
recorded.
6.2 Audit Trail
6.2.1 An adequately verifiable control for the purposes of
paragraph 6.1 of Appendix 1 is one where:
(A) Processes are documented so that any party
wishing to verify the processing has a
description of its nature; and
(B) All processing is recorded and these records
contain such cross references as are
necessary to conveniently allow verification
by tracing data through processing, both
forwards and backwards.
6.2.2 In order to comply with paragraph 6.1. to this
Appendix 1, each Host PES in Scotland shall
implement and maintain an audit trail for its MPAS
Registration System which has at least the following
characteristics:
(A) data shall be traceable from the data held in
the MPAS Registration System to the source
instruction and vice versa.
(B) data shall be stored on magnetic or optical
media in a consistent format;
(C) each MPAS Registration System shall record
the effective date of changes in
responsibilities in accordance with the
procedures set out in Clauses 15, 16 and 24;
(D) the data held on the MPAS Registration
System shall be maintained in accordance
with Clause 30.1 in order to ensure
completeness, accuracy, and timeliness. The
changes to data held require the following:
(1) changes made shall be easily
identifiable;
(2) the effective date for those changes
made;
(3) the authoriser of the change and their
authority;
(4) an explanation of why the change
was made.
(E) Movement of Metering Points between
different MPAS Registration Systems shall
be traceable;
(F) the MPAS Registration System shall be able
to retrieve values of amended data in
accordance with Clause 30 in order to ensure
that a full transaction history is available.
6.3 Controls over the Development of MPAS
6.3.1 Each Host PES in Scotland shall implement and
maintain controls over the development of its MPAS
Registration System to ensure that MPAS is
correctly constructed and that the risk of
unintentional errors arising from poor software,
clerical procedures, or other causes, is minimised.
6.3.2 In order to comply with paragraph 6.3.1 to this
Appendix 1, each Host PES in Scotland shall
implement and maintain at least the following
controls to its MPAS Registration System:
(A) testing of the system prior to going live, with
test plans and results documented;
(B) systems documentation in sufficient detail to
support ongoing operations and future
maintenance;
(C) use of quality management.
6.4 Controls over Unintentional Errors
6.4.1 Each Host PES in Scotland shall implement and
maintain controls over the processing of its MPAS
Registration System to ensure that the risk of
unintentional errors arising and not being corrected
in a timely fashion is minimised.
6.4.2 In order to comply with paragraph 6.4.1 to this
Appendix 1, each Host PES in Scotland shall
implement and maintain controls over input,
processing and output, as well as over data and
communications, in order to ensure that the rules for
valid processing defined during system design,
including those specified under the Settlement
Agreement for Scotland, are adhered to; and that the
data held and processed by its MPAS Registration
System is accurate, complete, valid and not out of
date.
6.4.3 In order to comply with paragraph 6.4.1 to this
Appendix 1, each Host PES in Scotland shall
implement and maintain at least the following
controls:
(A) unique Supply Number Cores in order that
the relevant Central Allocation System can
work;
(B) validation checks to ensure that all
mandatory data fields are present on
Registration, and data is inputted accurately;
(C) controls to ensure that the Distribution
Business disconnects the correct Metering
Point within the MPAS Registration System;
(D) controls to ensure that standing data is
complete, accurate and up-to-date (i.e.
consistent with the most recent valid input);
and that there have not been unauthorised or
erroneous (i.e. invalid) changes;
(E) controls to ensure that Metering Points are
allocated to the correct Bulk Supply Point
Group.
6.5 Implementation
6.5.1 Each Host PES in Scotland shall implement and
maintain controls over the implementation of its
MPAS Registration System to ensure that the risk of
unintentional errors arising from incorrect
implementation is minimised.
6.5.2 Each Host PES in Scotland shall ensure that
Migration of data onto MPAS is conducted in a
controlled manner, with data validity checks carried
out.
6.5.3 In order to comply with paragraph 6.5.1 in this
Appendix 1, each Host PES in Scotland shall:
(A) ensure that users are adequately trained such
that they are competent in the use of the
system;
(B) use separate test and live environments;
(C) implement and maintain controls over the
authorisation and co-ordination of transfers
of data and programs from the test
environment to the live environment;
(D) use a fully documented and repeatable
system test model.
6.6 Constraints
6.6.1 Each Host PES in Scotland shall operate its MPAS
Registration System in line with the following
constraints:
(A) the MPAS Registration System shall allow
entry of new suppliers to the market and the
exit of suppliers from the market.
(B) each Host PES in Scotland shall implement
and maintain controls to its MPAS
Registration System to ensure Registration is
made against the correct Metering Point.
(C) the MPAS Registration System shall enable
the unambiguous identification of all
Metering Points and their previous and
current suppliers together with dates of any
changes.
SCHEDULE 8
Services for which Charges are levied under this Agreement
Clause and Description
Clause 17
Contact Notice Facility (other than during Controlled Market Start Up)
Clause 19
Manual Amendment of Database
Clause 22
Full Refreshes (other than 1 per year per Data Aggregator)
Clause 23
Selective Refreshes
Clause 25
Resends when original transmission of data does reach Supplier's or Data
Aggregator's Gateway
Any references in Clauses 7-20 that refer to Rejections
Clause 27.2
For reports provided to the Settlement System Administrator provided that
no charge shall be incurred for reports provided for the 6 month period
commencing on the date of the first report.
Clause 27.5
Reports to Pool Executive Committee/Performance and Assurance
Accreditation Panel
Clause 27.6
Report to Data Aggregator detailing last file sequence number
SCHEDULE 9
Guidance on Metering Points
In the identification of any Metering Point, the following priorities shall
apply:
1. The principles set out in paragraph 5.1 shall be applied, in
accordance with the guidance set out in paragraph 5.2.
2. In the event of any conflict between the principles and the guidance,
or where the guidance does not apply to a particular Metering
Point, the principles shall take precedence over the guidance and
the guidance is not to be taken as any limitation on the principles.
3. If a Supplier and a Host PES dispute the application of the
principles to any Metering Point, the Host PES decision on the
matter shall be final and binding.
4. Nothing in the guidance shall be taken to oblige a Host PES to
support or provide any particular Metering Point configuration in
any particular case.
5. Principles and Guidance
5.1 Principles
A Metering Point shall only exist for each supply of electricity
where it is feasible for the supply to be provided by a separate
supplier and the metering configuration can stand alone in terms of
the accurate recording of consumption except in the case of Related
Metering Points where more than one Metering Point may exist.
5.2 Guidance
The existence of Metering Points will not solely be based on billing
arrangements for suppliers of electricity existing prior to 1 April
1998.
The following examples provide descriptions of 19 metering
configurations and states the number of Metering Points which may
exist in the given circumstances.
Example 1.
The typical Metering Code of Practice 5 installation where a single point of
supply is measured by a single CoP5 device.
No. of Metering Points = 1
Example 2
The typical traditional Metering Code of Practice 3 installation where a
single point is measured by two meters, main and check, feeding a single
CoP 3 data recorder.
No. of Metering Points = 1
Example 3
The typical traditional Metering Code of Practice 3 installation where a
single point of supply is measured by two meters, main and check, these
are separate meter/recorder devices (typically two CoP 5 Devices) which
measure and record the consumption. This is an example of what is
commonly known as "totalising" in the current settlement arrangements.
No. of Metering Points = 1
Example 4
The typical traditional Metering Code of Practice 3 installation with two
(or more) feeders, each feeder is measured by two meters, main and check,
which feed one data recorder.
No. of Metering Points = 1
Example 5
The typical Metering Code of Practice 3 installation where two (or more)
feeders are measured by two meters, main and check, these are separate
meter/recorder devices (typically four CoP 5 devices) which measure and
record consumption. This is an example of what is commonly known as
"totalising" in the current settlement arrangements.
No. of Metering Points = 1
Example 6
This is intended to represent a premise which may have several points of
supply. In some circumstances these have been treated independently, in
others they have been "totalised". These metering arrangements may be
half hourly or non-half hourly.
No. of Metering Points = 2
Example 7
Multiple electro-mechanical meters installed at a meter point measuring
different components of the consumption, for instance a sine meter
(measuring reactive power), a single rate meter (measuring kWh) and an
MDI meter (measuring maximum demand).
No. of Metering Points = 1
Example 8
Multiple electro-mechanical meters, measuring the same overall
consumption of one supply. For instance a single rate meter which acts as
an impulse to a 2-rate MRU (multi rate unit) with MD Indicator.
No. of Metering Points = 1
Example 9
Due to leaving existing metering on-site when installing new electronic
metering, a site may have a CALMU, a sine meter, a single rate meter and
an MDI meter all installed (and all recording).
No. of Metering Points = 1
Example 10
A+B Summators installed at premises where the meter records an overall
maximum demand but two sets of "kWh" chargeable consumption.
No. of Metering Points = 1
Example 11
Data collectors installed as well as CALMU meters; in these circumstances,
the data collectors will have up to 4 recording devices installed, which
relate to different types of half-hourly data (main, check, lag and lead), and
there will be two different types of CALMUs which act as the main and
check meters.
No. of Metering Points = 1
Example 12 - Unrestricted non half hourly meter
Common arrangement where a single unrestricted non-half hourly meter is
installed.
No. of Metering Points = 1
Example 13 - Economy 7: two (or more) rates
Typical Economy 7 meter with "normal" and "low" registers recording
consumption at mutually exclusive time periods. Multi-rate meters are
treated similarly provided that the time periods of each rate do not overlap.
No. of Metering Points = 1
Example 14 - Related Metering Points
a) Economy 9 Registers recording simultaneously:
1 feeder, 1 meter, two separate electrical circuits (one for heating, one for
non-heating) with non-heating consumption "switched" to the low register
for 7 hours and heating consumption measured exclusively by the low
register for 5+2+2 hours. For 2+2 hours, both registers are running
concurrently, although they are measuring separate consumption.
No. of Metering Points = 2
b) Restricted Hours Supply
1 Feeder, 2 meters, 2 separate electrical circuits (one of which has a
restricted hours supply). Registers on each meter can run concurrently
although they are measuring separate consumption.
No. of Metering Points = 2
For Settlement purposes 2 different profiles are needed for the 2 circuits
and therefore 2 Metering Points are required. However it is not feasible
for these 2 Metering Points to be supplied by different Suppliers therefore
they are `related'.
Example 15 (Power Key meters with associated credit meters in series)
There are circumstances when on the re-site of a power meter from an
intake position to within the customers dwelling, that the existing credit
meter is left in situ (e.g. asbestos in the intake position). In these
circumstances label is installed/stuck on the credit meter saying that this
meter is not to be used for billing purposes but recording units.
.
No. of Metering Points = 1
Example 16 - Unmetered Supplies
a) An inventory of streetlamps on one Certificate to which one Standard
Settlement Configuration has been allocated;
No. of Metering Points = 1
b) An inventory of mixed street furniture on one Certificate to which up to
four Standard Settlement Configurations has been allocated.
No. of Metering Points = 1 per SSC
Example 17 - Pseudo meters
An equivalent (pseudo) meter creating one half hourly data stream out of
LAMP in relation to one inventory of street furniture against which one
Certificate of Unmetered Supply has been allocated.
No. of Metering Points = 1
Example 18 - Non-Pooled Generation
.
a) A small generating set which is non-Pooled has one Code 5 meter
recording import and a separate Code 5 meter recording export.
In every case there will be two Metering Points defined. It may also be
possible to define an additional (export) Metering Point to facilitate
trading.
No. of Metering Points = 2 or 3
b) A small generating set which is non-Pooled has one Code 5 meter
recording import and export on different registers.
In every case there will be two Metering Points defined. It may also be
possible to define an additional (export) Metering Point to facilitate
trading.
No. of Metering Points = 2 or 3
Example 19 - Independent Distribution Networks
Supply though an Independent Distribution Network (IDN) will either
a) be metered at the boundary to the IDN
No. of Metering Points = 1
b) every supply point (or UMS Certificate) within the IDN will be
defined to be a Metering Point
No. of Metering Points = 1 per Supply point within the IDN
SCHEDULE 10
Pool Validation Requirements
Each Host PES in England and Wales's Validation Procedures must comply
with the validation requirements set out in this Schedule, in relation to the
Pool Requirements for the relevant MPAS Registration System:
The Host PES shall validate all Pool Required Data submitted to the
MPAS Registration System before accepting or rejecting the data. For the
purpose of this Schedule, "Pool Required Data" is defined as all those
items denoted as used by the Host PES's MPAS Registration System in the
data catalogue provided under the Pooling and Settlement Agreement.
Upon rejection of data, the Host PES shall set out all the reasons for
rejection to the sending market participant.
The Host PES shall ensure that all data for Metering Systems conform with
the rules outlined in the following table.
Property Non Half Hourly
Measurement ClassHalf Hourly Measurement Class
Profile Class Valid Profile Class (as
specified in MDD) required Profile Class not required
Standard
Settlement
Configuration Valid Standard Settlement
Configuration (as specified
in MDD) required Standard Settlement
Configuration not required
ERS MSID ERS MSID not required ERS MSID required if 1998
Trading Arrangement Indicator
initially set to N
ERS MSID not required if
1998 Trading Arrangement
Indicator initially set to Y
1998 Trading
Arrangement
Indicator Required to be set to Y Required to be set to either Y
or N.
Data Aggregator
Appointment Data Aggregator required
to be specified as non
half hourly in MDD Data Aggregator required to be
specified as half hourly in MDD
Data Collector
Appointment Data Collector required
to be specified as non
half hourly in MDD Data Collector required to be
specified as half hourly in
MDD
Line Loss
Factor Class Valid Line Loss Factor
Class (as specified in
MDD) required. Valid Line Loss Factor
Class (as specified in
MDD) required.
For any particular event, the Host PES shall apply one
or more of the following validation criteria as appropriate:
1. The Host PES shall validate that data is sent by the party that is the
source of the data as listed in the relevant flow in the Event Log set
out in Schedule 3.
2. Upon receipt of a change to the data within the MPAS Registration
System the Host PES shall validate that any of the following codes
involved in the change are valid (in accordance with the Market
Domain Data) on the effective date of the change:
2. 1 Data Aggregator ID (data item 13 in Schedule 2);
2.2 Data Collector ID (data item 12 in Schedule 2);
2.3 Energisation Status (data item 14 in Schedule 2);
2.4 GSP Group ID (data item 15 in Schedule 2);
2.5 Line Loss Class ID (data item 6 in Schedule 2);
2.6 Measurement Class ID (data item 16 in Schedule 2);
2.7 Meter Operator ID (data item 11 in Schedule 2);
2.8 Profile Class ID (data item 4 in Schedule 2);
2.9 Supplier ID (data item 8 in Schedule 2);
2.10 Standard Settlement Configuration ID (data item 17
in Schedule 2).
3 Upon receipt from a Supplier of changes to the Metering System
Registration Data, the Host PES shall validate that the Supplier is
Registered for that Metering Point on the effective date of the
change.
For the purposes of this Schedule:
"Metering System Registration Data" means all Pool Required
Dataassociated with Data Collector appointment; Data Aggregator
appointment and Registration, plus Metering System Standing Data.
"Metering System Standing Data" means all Pool Required Data
associated with Meter Standing Data, Energisation Status, GSP Group,
Line Loss Factor Class, Measurement Class, Profile Class, Standard
Settlement Configuration and Measurement Quantity.
4. The Host PES shall validate that the Line Loss Factor Class
provided by the Host PES's Distribution Business for a Metering
Point is a valid Line Loss Factor Class for that Host PES's
Distribution Business as specified in the Market Domain Data
provided by the Initial Settlement and Reconciliation Agent.
5. Upon receipt from a Host PES's Distribution Business of changes
to the Metering System Registration Data, the Host PES shall
validate that the Metering Point is Registered on that Host PES's
MPAS Registration System as specified by the Supply Number.
6. Upon receipt of creation details for a New Metering Point from the
Host PES's Distribution Business, the Host PES shall validate that
the Metering System Standing Data contains the correct Distributor
ID and does not already exist.
7. Upon receipt of a Registration from a Supplier, the Host PES shall
validate that the Supply Number exists.
8. Upon a change to data item 4 or 17 in Schedule 2 in respect of a
Metering Point, the Host PES shall validate that the resulting
combination of Profile Class and Standard Settlement Configuration
are valid on the effective date of change as specified by the Market
Domain Data provided by the ISR Agent.
9. An existing Metering Point may only be Registered if, in respect of
the Metering Point:
9.1 the Host PES's Distribution Business has provided all the
relevant data items for which it is the source; and
9.2 all the data items for which the Supplier is the source have
been provided; and
9.3 data item 18 in Schedule 2 is set to 'Y'.
10. In respect of a New Metering Point, where data item 14 in
Schedule 2 has not yet been provided and data item 18 in Schedule
2 is not set to 'N', the Host PES shall only accept a Registration if:,
10.1 the Host PES's Distribution Business has provided the
Supply Number, Grid Supply Point ID and Metering Point
Address;
10.2 the Supplier has quoted the Supply Number and provided
the Supply Start Date.
10.3 data item 18 in Schedule 2 is set to 'Y'.
Subsequent to Registering such a New Metering Point, the Host
PES shall only accept a change to set data item 14 in Schedule 2 to
energised, if:
10.3 the Host PES's Distribution Business has provided all the
relevant data items for which it is the source; and
10.4 the Supplier has provided all the relevant data items for
which it is the source.
11. Where, in respect of a particular Metering Point, the Host PES's
MPAS Registration System has a value for the Disconnection Date
(data item 20 in Schedule 2), the Host PES shall not accept any
Registrations with a Supply Start Date after the Disconnection
Date.
SCHEDULE 11
Scottish Settlement's Validation Requirements
Each Host PES in Scotland's Validation Procedures must comply
with the SESL's validation requirements set out in this Schedule, in
relation to the Scottish Settlement Requirements for the relevant
MPAS Registration System.
The Host PES shall validate all data required for settlement
purposes submitted to the MPAS Registration System before
accepting or rejecting the data.
Upon rejection of data, the Host PES shall set out all the reasons
for rejection to the sending market participant.
The Host PES shall ensure that all data for Metering Systems
conform with the rules outlined in the following table.
Property Non Half Hourly
Measurement Class Half Hourly Measurement Class
Profile Class Valid Profile Class (as
specified in MDD) required Profile Class not required
Standard Settlement
Configuration Valid Standard Settlement
Configuration (as
specified in MDD) required Standard Settlement
Configuration not required
1998 Trading
Arrangement
Indicator Required to be set to Y Required to be set to
either Y or N.
Data Aggregator
Appointment Data Aggregator required to
be specified as non half
hourly in MDD Data Aggregator required to
be specified as half hourly
in MDD
Data Collector
Appointment Data Collector required to
be specified as non half
hourly in MDD Data Collector required to
be specified as half hourly
in MDD
Line Loss
Factor Class Valid Line Loss Factor
Class (as specified in
MDD) required. Valid Line Loss Factor Class
(as specified in MDD) required.
For any particular event, the relevant Host PES in Scotland shall apply one or more of the following validation criteria as
appropriate:
1. The Host PES shall validate that data is sent by the party that is the
source of the data as listed in the relevant flow in the Event Log set
out in Schedule 3.
2. Upon receipt of a change to the data within the MPAS Registration
System the Host PES shall validate that:
any of the following codes involved in the change are valid
(in accordance with the Market Domain Data) on the
effective date of the change:
2. 1 Data Aggregator ID (data item 13 in Schedule 2);
2.2 Data Collector ID (data item 12 in Schedule 2);
2.3 Energisation Status (data item 14 in Schedule 2);
2.4 Bulk Supply Point Group ID (data item 15 in
Schedule 2);
2.5 Line Loss Class ID (data item 6 in Schedule 2);
2.6 Measurement Class ID (data item 16 in Schedule 2);
2.7 Meter Operator ID (data item 11 in Schedule 2);
2.8 Profile Class ID (data item 4 in Schedule 2);
2.9 Supplier ID (data item 8 in Schedule 2);
2.10 Standard Settlement Configuration ID (data item 17
in Schedule 2).
3 Upon receipt from a Supplier of changes to the Metering System
Registration Data, the Host PES shall validate that the Supplier is
Registered for that Metering Point on the effective date of the
change.
For the purposes of this Schedule:
"Metering System Registration Data" is defined as all data
required for Settlement purposes associated with Data Collector
appointment; Data Aggregator appointment and Registration, plus
Metering System Standing Data.
4. The Host PES shall validate that the Line Loss Factor Class
provided by the Host PES's Distribution Business for a Metering
Point is a valid Line Loss Factor Class for that Host PES's
Distribution Business as specified in the Market Domain Data
provided by the Initial Settlement and Reconciliation Agent.
5. Upon receipt from a Host PES's Distribution Business of changes
to the Metering System Registration Data, the Host PES shall
validate that the Metering Point is Registered on that Host PES's
MPAS Registration System as specified by the Supply Number.
6. Upon receipt of creation details for a New Metering Point from the
Host PES's Distribution Business, the Host PES shall validate that
the Metering System Standing Data contains the correct Distributor
ID and does not already exist.
7. Upon receipt of a Registration from a Supplier, the Host PES shall
validate that the Supply Number exists.
8. Upon a change to data item 4 or 17 in Schedule 2 in respect of a
Metering Point, the Host PES shall validate that the resulting
combination of Profile Class and Standard Settlement Configuration
are valid on the effective date of change as specified by the Market
Domain Data provided by the ISR Agent.
9. An existing Metering Point, unless data item 18 in Schedule 2 is set
to 'N', may only be Registered if, in respect of the Metering Point:
9.1 the Host PES's Distribution Business has provided all the
relevant data items for which it is the source; and
9.2 all the data items for which the Supplier is the source have
been provided.
10. In respect of a New Metering Point, where data item 14 in
Schedule 2 has not yet been provided and data item 18 in Schedule
2 is not set to 'N', the Host PES shall only accept a Registration if:,
10.1 the Host PES's Distribution Business has provided the
Supply Number, Bulk Supply Point Group ID and Metering
Point Address; and
10.2 the Supplier has quoted the Supply Number and provided
the Supply Start Date.
Subsequent to Registering such a New Metering Point, the Host
PES shall only accept a change to set data item 14 in Schedule 2 to
energised, if:
10.3 the Host PES's Distribution Business has provided all the
relevant data items for which it is the source; and
10.4 the Supplier has provided all the relevant data items for
which it is the source.
11. Where, in respect of a particular Metering Point, the Host PES's
MPAS Registration System has a value for the Disconnection Date
(data item 20 in Schedule 2), the Host PES shall not accept any
Registrations with a Supply Start Date after the Disconnection
Date.
SCHEDULE 12
Outstanding Issues
1. Enduring Design Authority
The Issues Resolution Group (IRG) is supporting work to develop
and implement an enduring design authority for non Settlement
provisions arrangements for the post 1998 electricity industry. One
proposal is that enduring design authority arrangements might be
wholly or partially constituted under this Agreement, with the MRA
Secretariat fulfilling the role of the enduring design authority.
In particular, areas of this Agreement that are likely to be affected
by the decision on the scope and role of the enduring design
authority will include:
1. constitution of MEC and the MRA Forum (Clauses 6 and
7);
2. administration cost recovery (Clause 8); and
3. change control of both this Agreement and the Data
Transfer Catalogue (Clauses 9 and 10).
2. Supplier Default
The Director is leading the development of proposals to deal with
the consequences of an electricity supplier defaulting on its
obligations under one or more industry agreements, the most likely
cause being insolvency. Discussions with industry participants are
continuing following a recent consultation exercise. It is probable
that the proposals agreed as a result of this exercise will require
changes to be made to this Agreement to reflect them.
3. Performance Assurance
The Shadow MEC has been developing processes for performance
assurance in relation to parties' obligations under this Agreement
which are not covered by other agreements. This development will
be continued by MEC. The development of the performance
assurance procedures will involve completing the following tasks:
1. agreeing the scope of the MRA performance assurance
criteria;
2. identifying the prioritised risk areas in the MRA that are not
covered elsewhere and those that are required prior to
Controlled Market Start-Up;
3. determining the techniques for enduring MRA performance
assurance;
4. planning the development of the detailed performance
assurance procedures;
5. developing the performance assurance procedures;
6. building up the capability to undertake the agreed
performance assurance processes;
7. developing appropriate reporting and monitoring
arrangements; and
8. developing and implementing the systems to support
performance assurance processes and;
9. developing an appropriate entry process.
4. Millennium Compliance
Negotiations have been taking place in the context of the PES
Standard Agreements on provisions to apply in the event of
millennium related systems failure. The negotiations have failed to
resolve the issue which is now to be referred to the Director for its
view. Once the issue has been resolved, it is the parties intention
that provisions reflecting the agreed position be developed for
insertion into the MRA.
5. Procedure for Objection by Old Supplier
PES s have been in discussion with the Director and with certain
Suppliers in relation to grounds for objection in circumstances
where a customer has outstanding debts relating to electricity
supplied, including in relation to a previous premises. MEC should
consider whether amendments should be made to the existing
provisions of Clause 16 to provide appropriate protections, having
regard to market developments.
SCHEDULE 13
MRA Service Company Limited
1. BACKGROUND
1.1 Establishment of joint venture: The parties (other than the
Pool Agent, SESL and MRASCO) have agreed to establish
a joint venture company to carry on the Business.
1.2 MRASCO: MRASCO was incorporated in England on 8
January 1998 and at the date of this Agreement has an
authorised share capital of (POUND)100 divided into 100 ordinary
shares of (POUND)1 each of which two shares have been issued.
1.3 Shareholders of MRASCO: It is intended that the
shareholders of MRASCO shall be limited to the parties to
the MRA for the time being and from time to time (other
than the Pool Agent, SESL and MRASCO), each of whom
shall hold a single share, and any nominee as referred to in
paragraph 3.2.1 of this Schedule.
1.4 Regulation of rights: The Shareholders have agreed that
their respective rights as shareholders in MRASCO shall be
regulated by the provisions of this Schedule (which, for the
avoidance of doubt, shall include the provisions of the
Annexes hereto) and MRASCO has agreed with the
Shareholders to comply with such of the matters contained
in this Schedule as relate to MRASCO.
2. ADDITIONAL DEFINITIONS AND INTERPRETATION
2.1 Definitions: In this Schedule, except where the context
otherwise requires:
"Articles"
means the Articles of
Association of
MRASCO set out in
Annex 4 to this
Schedule, as the same
may be amended from
time to time;
"Board"
means the board of
directors of
MRASCO;
"Business"
means acting as a
corporate vehicle for
contracting on behalf
of the MRA parties
pursuant to (i) a
resolution of MEC (or
any sub-committee of
it) passed pursuant to
Clause 6 of this
Agreement and
effective by virtue of
the provisions of that
Clause or (ii) a
decision of the
Secretariat acting
within the scope of its
authority which (in
each case) it is
necessary or desirable
to implement by means
of a binding contract
on an arms-length
basis;
"Chairman"
means the chairman of
the Board for the time
being and from time to
time;
"Company Secretary"
means the company
secretary of MRASCO
for the time being and
from time to time;
"Directors"
means the directors of
MRASCO for the time
being and from time to
time;
"Intellectual Property"
means patents, trade
marks, right in
designs, trade or
business names or
signs, copyright
(whether or not any of
these is registered and
including applications
for registration of any
such thing) and all
right or forms of
protection of a similar
nature or having
equivalent or similar
effect to any of these;
"MRASCO"
means MRA Services
Company Limited
(registered number
3490321);
"MRASCO
Completion Date"
means the date falling
14 Working Days after
the date on which this
Schedule takes effect
or such later date as
may be agreed by
MEC;
"Shareholders"
means the persons for
the time being and
from time to time
registered as holders
of Shares; and
"Shares"
means ordinary shares
of (POUND)1 each in the
capital of MRASCO
and any shares issued
in exchange therefor
by way of conversion
or reclassification and
any shares
representing or
deriving from such
shares as a result of
any increase in or
reorganisation or
variation of the capital
of MRASCO.
2.2 Interpretation: The parties and MRASCO acknowledge and
agree that, notwithstanding any other provision of this
Agreement:
2.2.1 MRASCO is a party to this Agreement solely for the
purposes of this Schedule and is bound only to the
extent of those obligations on its part which are
expressly set out or referred to in this Schedule and
not by any other provision of this Agreement;
2.2.2 MRASCO shall have only such rights under or in
respect of this Agreement as are expressly set out or
referred to in this Schedule;
2.2.3 the consent or agreement of MRASCO shall not be
required to any modification, abrogation,
amendment or suspension of any provision of this
Agreement which is not expressly set out in this
Schedule and MRASCO hereby irrevocably waives
any rights which it might be considered or held to
have to consent or agree to any such modification,
abrogation, amendment or suspension;
2.2.4 within this Agreement the rights of the parties as
Shareholders are set out exclusively in this Schedule
and no other provision of this Agreement shall apply
in the regulation of the rights and obligations of
Shareholders inter se in their capacity as
Shareholders or as between the Shareholders (or any
of them) and MRASCO; and
2.2.5 MRASCO shall take no action (and the
Shareholders shall not take any step which could
cause MRASCO to take any such action) which
could prejudice in any way the rights or interests of
any party under this Agreement and, in particular
(but without limitation) MRASCO shall take no
action relating to or affecting the Settlement
Requirements unless the terms of this Schedule (and
in particular of paragraphs 6, 7 and 9 hereof) have
been adhered to in all respects.
3. ESTABLISHMENT OF MRASCO AND NEW PARTIES
3.1 Completion: On the MRASCO Completion Date each of
the parties (other than the Pool Agent and SESL), the
Shareholders and MRASCO shall perform its obligations set
out in, and comply with the provisions of, Annex 1 to this
Schedule and procure that the subscribers and the first
directors of MRASCO shall comply with the provisions of
the same Annex 1.
3.2 New Parties: Upon the accession of a New Party to the
MRA as a Host PES or a Supplier pursuant to an Accession
Agreement the Directors shall either:
3.2.1 transfer to such New Party one Share held by a
nominee in accordance with the provisions of
paragraphs 10.4 and 10.5 of this Schedule; or
3.2.2 allot to such New Party one unissued Share (and the
Shareholders agree that where no Shares are
otherwise available for issue that they will take all
necessary steps to create and/or authorise the issue
of further Shares).
4. MRASCO'S BUSINESS
4.1 Compliance: Each Shareholder agrees with the other
Shareholders to exercise its rights under this Schedule and
as a shareholder in MRASCO so as to ensure that:
4.1.1 MRASCO performs and complies with all its
obligations under this Schedule and complies with
the restrictions (if any) imposed upon it by the
Articles; and
4.1.2 the Business is conducted in accordance with sound
and good business practice with the intention of
breaking even.
4.2 Sole business of MRASCO: The Shareholders and
MRASCO acknowledge and agree that, unless and until the
Shareholders, the Pool Agent and SESL unanimously agree
otherwise in writing, the business of MRASCO shall be
confined to the Business.
4.3 Independence of operations: Each Shareholder
acknowledges and agrees with the other Shareholders and
MRASCO that MRASCO will have complete independence
in its operations and undertakes not to take any action
which obstructs or interferes with, or seeks to obstruct or
interfere with, the Business provided that this paragraph 4.3
shall not affect the manner in which any Shareholder may
exercise its rights in respect of Shares held by it.
5. THE MANAGEMENT OF MRASCO
5.1 Directors:
5.1.1 The Shareholders shall procure that the Directors
shall be all the MEC Members for the time being and
from time to time and each Director shall have as his
alternate for the purposes of this Schedule the
alternate appointed by him pursuant to Clause 6.18
of this Agreement.
5.1.2 The parties shall indemnify MRASCO as set out in
paragraphs 5.1.2.1 to 5.1.2.5 of this Schedule
against all claims, demands, liabilities, losses, costs
and expenses which MRASCO may suffer or incur
by reason of any claim by any Director in connection
with his removal from office as a Director and the
liability to indemnify shall be met:
5.1.2.1 in the case of the removal of the Director who is the
Provider Member, severally and rateably in
accordance with the proportions set out in Clauses
8.10 and 8.11 of this Agreement by the parties
entitled to appoint the Provider Member;
5.1.2.2 in the case of the removal of the Director who is the
PES Member, severally and rateably in accordance
with the proportions set out in Clauses 8.10 and
8.11 of this Agreement by the parties entitled to
appoint the PES Member;
5.1.2.3 in the case of the removal of the Director who is the
Supplier Member, severally and rateably in
accordance with the proportions set out in Clauses
8.10 and 8.11 of this Agreement by the parties
entitled to appoint the Supplier Member;
5.1.2.4 in the case of the removal of the Director who is the
Pool MEC Member, by the Pool Agent; and
5.1.2.5 in the case of the removal of the Director who is the
SESL Member, by SESL.
5.2 Chairman: The Chairman shall be the MEC Chairman for
the time being and from time to time. If the Chairman is
unable to be present at a meeting, he may nominate another
Director (or any Director's alternate) to act as Chairman. If
neither the Chairman nor his nominee is present within half
an hour after the time appointed for holding the meeting, the
Directors present may appoint any of their number to be
chairman of that meeting.
5.3 Committees: The Directors may delegate any of their
powers to committees of the Board consisting of such
persons as the Directors may resolve. Any such committee
shall exercise only powers expressly delegated to it and shall
comply with any regulations imposed on it by the Board.
5.4 Company Secretary: The Company Secretary shall be such
person as may be approved by the unanimous resolution of
the Board from time to time. The Company Secretary shall
be removed by unanimous resolution of the Board.
5.5 Proceedings at Board Meetings:
5.5.1 Voting Rights: Each Director shall have one vote.
The Chairman shall have no vote in his capacity as
Chairman.
5.5.2 Frequency: The Board shall meet at intervals of not
less than once in any period of three months unless
otherwise agreed by the Directors and insofar as
reasonably practicable meetings of the Board shall
follow on immediately from meetings of MEC. A
meeting of the Board may be convened at any
reasonable time at the request of any Director by
written notice to the Company Secretary.
5.5.3 Meetings: Meetings of the Board may be held by
conference telephone call provided that participants
acknowledge that they can speak to and hear each
other.
5.5.4 Notice: Each of the Directors shall be given notice
by the Company Secretary of each meeting of the
Board setting out details of the time, date and place
of meeting at least 5 Working Days prior to the date
of such meeting, provided that such period of notice
may be shortened for particular meetings by
unanimous written consent of all Directors entitled
to attend and vote thereat.
5.5.5 Quorum: The quorum for meetings of the Board
shall be constituted by the attendance of the
Provider Member, the PES Member and the
Supplier Member (or their alternates) and:
5.5.5.1 where matters which relate to or affect the
Pool Requirements are to be considered, the
Pool MEC Member (or his/her alternate);
and
5.5.5.2 where matters which relate to or affect the
Scottish Settlement Requirements are to be
considered, the SESL Member (or his/her
alternate)
in person or participating by conference telephone call
throughout such meeting.
5.5.6 Resolutions: All resolutions of the Board shall be
made by unanimous vote of the Directors present or
participating by conference telephone call.
5.5.7 Written resolutions: A written resolution signed by
all Directors shall be as valid and effective as a
resolution passed unanimously by a meeting of the
Board properly convened and constituted in
accordance with the terms of this Schedule and the
Articles.
5.5.8 Minutes: No later than 5 Working Days after each
Board meeting, the Company Secretary shall
circulate minutes of that meeting to each of the
Directors.
5.6 Exercise of Shareholders' Rights: the Shareholders shall
exercise the rights attaching to their Shares in the manner
best calculated to secure the implementation of decisions
taken by the MEC or MRA Forum (or, on appeal, by the
Director) pursuant to this Agreement, and shall not exercise
their rights in a manner which is inconsistent with any such
decision.
6. RESERVED MATTERS
The Shareholders shall procure, so far as they are able, that no
action shall be taken and no resolution relating to such action shall
be passed by MRASCO in respect of the matters set out in Annex 2
to this Schedule, except pursuant to a decision of MEC or the
MRA Forum (as appropriate) or, on appeal, of the Director, taken
in accordance with this Agreement.
7. MRASCO EXPENDITURE
7.1 Inclusion of expenditure in budgets: Anticipated
expenditure of MRASCO shall be included in any budget
prepared pursuant to Clause 8 of this Agreement, and shall
be subject to approval in accordance with that clause.
7.2 MRASCO obligations: MRASCO shall not incur costs
unless authorised by a budget approved pursuant to Clause
8 of this Agreement, except insofar as necessary in order to
comply with legally binding obligations to which it is
subject.
7.3 Authorisation and reimbursement: Expenditure by
MRASCO shall be authorised by MEC, submitted to the
Secretariat for payment, and reimbursed by the parties
(other than the Pool Agent and SESL) in accordance with
the provisions of Clause 8 of this Agreement and, for the
avoidance of doubt, neither the Pool Agent nor SESL shall
be required to reimburse MRASCO in respect of any such
expenditure.
8. ACCOUNTS
8.1 Annual Accounts: At the end of each of MRASCO's
financial years, or as soon as reasonably practicable
thereafter, MRASCO shall procure that an account shall be
taken of all the assets and liabilities of MRASCO and of all
dealings and transactions of MRASCO during such financial
year and that the Board shall prepare a report and accounts
in accordance with the Companies Act 1985 to be audited
within three months after the end of each financial year.
8.2 Audit: Any party shall have the right at any time to require
MRASCO to instruct the auditors of MRASCO to conduct
a review in respect of the financial affairs of MRASCO. The
cost of such review shall be borne by the party requesting
such review, unless such review is approved by the
Directors in which case it shall be borne by MRASCO. If
any such review is requested, MRASCO shall procure that
MRASCO's auditors are given all reasonable assistance to
complete the review within a reasonable period of time.
9. DISTRIBUTION POLICY
The Shareholders shall take such action as may be necessary to
procure that:
9.1 Annual General Meeting: MRASCO's annual general
meeting at which audited accounts in respect of the
preceding financial year are laid before the Shareholders is
held not later than the date falling six months after the end
of that financial year;
9.2 Auditors' Report: MRASCO's auditors shall at the expense
of MRASCO be instructed to report as to the amount of the
profits available for distribution by MRASCO for each
accounting reference period at the same time as they sign
their report on MRASCO's audited accounts for the
accounting reference period in question; and
9.3 Distribution of Profits: MRASCO distributes to and among
the Shareholders within 30 days of approval of the audited
accounts 100 per cent. of its profits available for distribution
in each year, subject to the appropriation of such reasonable
and proper reserves for working capital or otherwise as the
Board may consider appropriate.
9.4 Shareholder guarantees: If any indemnity, guarantee or
other assurance against loss is given by a Shareholder for
any obligation or liability of MRASCO at the request of
MRASCO, all the other Shareholders shall indemnify such
Shareholder in respect of any liability arising out of such
indemnity, guarantee or other assurance against loss
severally and rateably in accordance with the proportions
set out in Clauses 8.10 and 8.11 of this Agreement.
10. TRANSFER OF SHARES
10.1 Restriction on transfer: Otherwise than in accordance with
the following provisions of this paragraph 10 no
Shareholder shall:
10.1.1 pledge, mortgage (whether by way of fixed or
floating charge) or otherwise encumber its legal or
beneficial interest in its Shares; or
10.1.2 sell, transfer or otherwise dispose of any of such
Shares (or any legal or beneficial interest therein); or
10.1.3 enter into any agreement in respect of the votes
attached to Shares; or
10.1.4 agree, whether or not subject to any condition
precedent or subsequent, to do any of the foregoing.
10.2 Intra-group transfers: A Shareholder may transfer its Share
to its Affiliate in circumstances where such Affiliate
becomes a party at the same time as such Shareholder
ceases to be a party.
10.3 Retiring Shareholders: If any Shareholder ceases to be a
party for any reason (the "Retiring Shareholder"),then
upon written notice to the Retiring Shareholder by any other
Shareholder, the Retiring Shareholder shall transfer at par to
a nominee for all the Shareholders (other than the Retiring
Shareholder) selected by the Directors the Share held by the
Retiring Shareholder. All costs and expenses of such
transfer shall be for the account of the Retiring Shareholder.
10.4 Enforced transfer: If a Retiring Shareholder shall fail or
refuse to transfer any Shares in accordance with its
obligations under paragraph 10.3, the Directors may
authorise MRASCO to execute and deliver a transfer from
the Retiring Shareholder to a nominee on behalf of the
Retiring Shareholder. MRASCO may accept the
consideration for the transfer and hold it on trust for the
Retiring Shareholder, which acceptance shall be a good
discharge to the nominee and may set off such amount
against the costs and expenses of the transfer. The Directors
shall cause the transferee to be registered as the holder of
such Shares and following the registration of the transfer the
validity of the proceedings shall not be questioned by any
person.
10.5 Nominee's holding: The nominee referred to in paragraphs
10.3 and 10.4 shall hold Shares transferred to it until such
time as it is directed by the Directors to transfer them (or
some of them) to one or more parties. For the avoidance of
doubt, wherever in this Schedule a percentage figure of the
number of Shares in issue is referred to, this figure shall be
calculated as if all Shares held by the nominee were not in
issue.
11. DURATION AND TERMINATION
This Schedule shall continue in full force and effect until the first to
occur of the following events:
11.1 the termination of this Agreement pursuant to Clause 3.4;
11.2 all the Shareholders agree in writing to terminate the
arrangements set out in this Schedule;
11.3 an effective resolution is passed or a binding order is made
for the winding up of MRASCO,
provided, however, that this Schedule shall cease to have effect as
regards any party who, having been entitled under the terms of this
Schedule to hold Shares, ceases to hold any Shares.
12. SHAREHOLDERS GENERALLY
The Shareholders shall procure that:
12.1 save for any nominee referred to in paragraph 10.3, only the
parties (other than the Pool Agent or SESL or any
replacement of the Pool Agent or SESL) shall acquire
Shares (whether by transfer or allotment) and that no party
shall be a Shareholder unless and until it has agreed to be
bound by this Schedule in the capacity of a Shareholder
(which a party (other than the Pool Agent or SESL or any
replacement of the Pool Member or SESL) shall be taken to
have done by being a signatory to this Agreement or
executing an Accession Agreement) (save in the case of the
Pool Agent or SESL whose signature of this Agreement or
execution of an Accession Agreement shall indicate
agreement to being bound by this Schedule but not in the
capacity of Shareholder); and
12.2 the Directors shall neither transfer nor allot any Share or
Shares other than as set out in paragraph 3.2 or 10.4 of this
Schedule and that, save in the case of a nominee as referred
to in paragraphs 10.3 and 10.4, no party shall at any point
hold more than one Share.
13. INTELLECTUAL PROPERTY
If and to the extent that any Shareholder discloses any of its
Intellectual Property to MRASCO for use in connection with the
Business, unless it is unable to do so it shall grant, and shall be
deemed to have granted from the date of such disclosure, licences
of such Intellectual Property to MRASCO for use in connection
with the Business and for no other purpose whatsoever. Any such
licence shall be irrevocable, non-exclusive, perpetual and royalty-
free. Such licences shall not be capable of assignment or sub-licence
by MRASCO.
14. CONFLICT WITH THE ARTICLES
In the event of any ambiguity created by or discrepancy between
the provisions of this Schedule and the Articles, then it is the
intention that the provisions of this Schedule shall prevail and
accordingly the Shareholders shall exercise all voting and other
rights and powers available to them so as to give effect to the
provisions of this Schedule and shall further, if necessary, procure
any required amendment to the Articles.
15. FURTHER ASSURANCE
Each Shareholder shall co-operate with the other Shareholders and
execute and deliver to the other Shareholders such other
instruments and documents and take such other actions as may be
reasonably requested from time to time in order to carry out,
evidence and confirm their rights under, and the intended purpose
of, this Schedule.
ANNEX 1
Completion
1. Meeting of the Directors: On the MRASCO Completion Date the
parties shall procure the holding of a meeting of the Board and the
passing thereat of resolutions:
(A) appointing the MEC Members as Directors;
(B) accepting the resignation as Directors of those persons (if
any) who are not MEC Members;
(C) appointing a bank nominated by MEC as MRASCO's
bankers and passing such resolutions relating to such
appointment as the bank may require;
(D) approving the transfer of the two subscriber shares each to a
party other than the Pool Agent, SESL or MRASCO; and
(E) convening an Extraordinary General Meeting of the
Company immediately following the conclusion of the
meeting of the Directors for the purposes referred to in
paragraph 2.
2. Extraordinary General Meeting: Upon the calling of the
Extraordinary General Meeting referred to in paragraph 1 (E), the
Shareholders shall procure the giving of consents to short notice in
respect of such Extraordinary General Meeting and shall vote
thereat in favour of resolutions:
(A) authorising the Directors to issue and allot at par one Share
to each party other than the Pool Agent, SESL, MRASCO
and the two parties to whom the two subscriber shares in
MRASCO have been transferred;
(B) amending Clause 3 of the Memorandum of Association of
MRASCO by insertion of the new sub-clause set out in
Annex 3 to this Schedule as sub-clause 3(1) and
renumbering the remaining sub-clauses accordingly; and
(C) adopting the regulations in the form set out in Annex 4 to
this Schedule as the Articles of Association of MRASCO.
3. Initial Subscription for Shares: Forthwith upon the passing of the
resolutions of MRASCO pursuant to paragraph 2 each party, save
for the Pool Agent, SESL, MRASCO and those two parties to
whom transfers are approved under paragraph 1(D) above, shall
complete, sign and deliver to MRASCO an application for the
allotment to that party of one Share in consideration of the
payment by cash of (POUND)1 on allotment in respect of each such Share.
4. Board Meeting: MRASCO shall procure the holding of a further
meeting of the Board and the passing thereat of resolutions:
(a) approving the application of each party other than the Pool
Agent, SESL, MRASCO and the two parties to whom the
two subscriber shares in MRASCO have been transferred
for a Share; and
(b) authorising the name of each party other than the Pool
Agent, SESL or MRASCO to be entered in the Register of
Members of MRASCO as holder of one Share and directing
the sealing of a certificate in respect thereof.
5. Allotment: Upon receipt of the relevant consideration moneys
referred to in paragraph 3, MRASCO shall allot and issue one
Share to each party whose application has been approved pursuant
to paragraph 4 and shall register each such party as the holder of
that Share and shall prepare, seal and deliver to each party a share
certificate in respect thereof in its name.
ANNEX 2
Limitations on Dealings
(i) The acquisition or disposal by MRASCO of any share capital or
other securities of any person.
(ii) The reduction of MRASCO's share capital, any variation of the
rights attaching to any class of shares in its capital or any
redemption, purchase or other acquisition by MRASCO of any
Shares or other securities of MRASCO.
(iii) The making of decisions relating to material contracts to which
MRASCO is a party or material arrangements between MRASCO
and a third party.
(iv) The making of changes to the pricing or trading terms of
MRASCO.
(v) The making by MRASCO of a material claim, disclaimer, surrender,
election or consent for tax purposes.
(vi) The incurring of costs in respect of any period which are not
envisaged by a budget drawn up and approved pursuant to Clause 8
of this Agreement.
(vii) The making of any contract or guarantee with a Shareholder or an
Affiliate of a Shareholder.
(viii) The making of any contract of a material nature.
(ix) The obtaining by MRASCO of finance from a third party lender.
(x) The making of any change to MRASCO's Memorandum of
Association or the Articles.
(xi) The presentation of any petition for the winding-up of MRASCO or
the making of any application for an administration order in relation
to MRASCO or for the appointment of an administrator or receiver
of MRASCO.
(xii) The commencement, settlement or defence of any litigation,
arbitration or other proceedings brought by or against MRASCO in
an amount in excess of (POUND)25,000.
(xiii) The increase of the amount of debt with a maturity greater than 3
months owed by MRASCO.
(xiv) The entering into of an agreement of a type or length which is
unusual in the context of the Business.
ANNEX 3
Amendment to Objects clause
3(1) To carry on the business of acting as a corporate vehicle for
contracting on behalf of parties to the Master Registration
Agreement dated [ ] 1998 in accordance with the terms
and conditions of that Agreement
ANNEX 4
Form of New Articles
ARTICLES OF ASSOCIATION
THE COMPANIES ACT 1985-1989
ARTICLES OF ASSOCIATION
of
MRA SERVICE COMPANY LIMITED
(Registered No. 349032 )
(adopted by Special Resolution passed on [ ], 1998 )
1. Adoption of Table A
In these articles "Table A" means Table A scheduled to the
Companies (Tables A to F) Regulations 1985 as amended prior to
the date of incorporation of the Company. The regulations
contained in Table A shall, except where they are excluded or
modified by these articles, apply to the Company and, together with
these articles, shall constitute the articles of the company. No other
regulations set out in any statute concerning companies, or in any
statutory instrument or other subordinate legislation made under
any statute, shall apply as the regulations or articles of the
Company.
2. Interpretation
2.1. Words and expressions which bear particular meanings in
Table A shall bear the same meanings in these articles.
2.2. In these articles:
"Affiliate" means, in respect of any body corporate, a body
corporate which is its subsidiary or holding company, or a company
which is a subsidiary of that holding company, and each such
company;
"Director" means the Director-General of Electricity Supply
appointed pursuant to the Electricity Act 1989;
"MEC" means the MRA Executive Committee appointed pursuant
to the MRA;
"MEC Members" means the members of the MEC appointed
pursuant to the MRA;
"MRA" means the Master Registration Agreement dated [ ]
1998;
"MRA Forum" means the body of that name appointed pursuant
to the MRA;
"parties" means parties to the MRA and "party" means a party to
the MRA;
"Retiring Shareholder" has the meaning given to that expression
in Article 10.4; and
"shareholder" means the holder of a share or shares in the
Company.
2.3. References in these articles to writing include references to
any method of representing or reproducing words in a
legible and non-transitory form.
2.4. Headings are for convenience only and shall not affect
construction.
2.5. If, and for so long as, the Company has only one member,
these articles shall (in the absence of any express provision
to the contrary) apply with such modification as may be
necessary in relation to such a company.
3. Share Capital
The authorised share capital of the Company at the date of adoption
of this article is (POUND)100 divided in 100 shares of (POUND)1 each.
4. Restriction on Share Ownership
Save with the prior written consent of the directors, no person
other than a nominee as referred to in Articles 9.4 and 9.5 shall be
the holder of more than one share of the Company at any time.
5. Rights Attaching to Shares
5.1. The right to vote on the matters set out in Article 5.2 shall
constitute rights attaching to the shares. The Shareholders
shall procure, so far as they are able, that no action shall be
taken or resolution passed by the Company in respect of
those matters set out in Article 5.2 except pursuant to a
decision of MEC or the MRA forum (as appropriate) or, on
appeal, by the Director, taken in accordance with the
provisions of the MRA.
5.2. The matters referred to in Article 5.1 are:
5.2.1. the acquisition or disposal by the Company of any
share capital or other securities of any person;
5.2.2. the reduction of the Company's share capital, any
variation of the rights attaching to any class of shares
in its capital or any redemption, purchase or other
acquisition by the Company of any shares or other
securities of the Company.
5.2.3. the making of decisions relating to material contracts
to which the Company is a party or material
arrangements between the Company and a third
party;
5.2.4. the making of changes to the pricing or trading terms
of the Company;
5.2.5. the making by the Company of a material claim,
disclaimer, surrender, election or consent for tax
purposes;
5.2.6. the incurring of costs in respect of any period which
are not envisaged by a budget drawn up and
approved pursuant to Clause 8 of the MRA;
5.2.7. the making of any contract or guarantee with a
member or an Affiliate of a shareholder;
5.2.8. the making of any contract of a material nature;
5.2.9. the obtaining by the Company of finance from a third
party lender;
5.2.10. the making of any change to the Company's
Memorandum of Association or these articles;
5.2.11. the presentation of any petition for the winding-up of
the Company or the making of any application for an
administration order in relation to the Company or
for the appointment of an administrator or receiver
of the Company;
5.2.12. the commencement, settlement or defence of any
litigation, arbitration or other proceedings brought
by or against the Company in an amount in excess of
(POUND)25,000;
5.2.13. the increase of the amount of debt with a maturity
greater than 3 months owed by the Company; and
5.2.14. the entering into of an agreement of a type or length
which is unusual in the context of the business of the
Company.
5.3. Each shareholder shall be entitled to dividends in respect of
its share calculated in the same proportions as are set out in
Clauses 8.10 and 8.11 of the MRA rather than in proportion
to the amounts paid up on the shares. Regulation 104 of
Table A shall be modified accordingly.
5.4. Subject to the provisions of the Act and to any rights
conferred on the holders of any other shares, any share may
be issued with or have attached to it such rights and
restrictions as the Company may by ordinary resolution
decide or, if no such resolution has been passed or so far as
the resolution does not make specific provision, as the
directors may decide. Regulation 2 of Table A shall not
apply.
6. Unissued Shares
Subject to the provisions of the Act and to these articles, any
unissued shares of the company (whether forming part of the
original or any increased capital) shall be at the disposal of the
directors who may (subject to Article 4) offer, allot, grant options
over or otherwise dispose of them to such persons at such times
and for such consideration and upon such terms and conditions as
they may determine.
7. Initial Authority to Issue Relevant Securities
Subject to any direction to the contrary which may be given by the
Company in general meeting and to Article 4, the directors are
unconditionally authorised to exercise all powers of the Company
to allot relevant securities. The maximum nominal amount of
relevant securities that may be allotted under this authority shall be
the nominal amount of the unissued share capital at the date of
incorporation of the Company or such other amount as may from
time to time be authorised by the Company in general meeting, The
authority conferred on the directors by this article shall remain in
force for a period of five years from the date of incorporation of the
Company but may be revoked varied or renewed from time to time
by the Company in general meeting in accordance with the Act.
8. Exclusion of Rights to Offers on a Pre-emptive Basis
Section 89(1) of the Act shall not apply to the allotment by the
Company of any equity security.
9. Transfer of Shares
9.1. The instrument of transfer of a subscriber's share which is
not fully paid need not be executed by or on behalf of the
transferee. Regulation 23 of Table A shall be modified
accordingly.
9.2. Otherwise than in accordance with Articles 9.3 and 9.4 no
shareholder shall:
9.2.1. pledge, mortgage (whether by way of fixed or
floating charge) or otherwise encumber its legal or
beneficial interest in its shares; or
9.2.2. sell, transfer or otherwise dispose of any of such
shares (or any legal or beneficial interest therein); or
9.2.3. enter into any agreement in respect of the votes
attached to shares; or
9.2.4. agree, whether or not subject to any condition
precedent or subsequent, to do any of the foregoing.
9.3. A member may transfer its shares to its Affiliate in
circumstances where such Affiliate becomes a party at the
same time as such member ceases to be a party.
9.4. Retiring Shareholders: If any shareholder ceases to be a
party for any reason (the "Retiring Shareholder"), then
upon written notice to the Retiring Shareholder by any other
shareholder, the Retiring Shareholder shall transfer at par to
a nominee for all the shareholders (other than the Retiring
Shareholder) selected by the Directors the Share held by the
Retiring Shareholder. All costs and expenses of such
transfer shall be for the account of the Retiring Shareholder.
9.5. If a Retiring Shareholder shall fail or refuse to transfer any
Shares in accordance with its obligations under Article 9.4
the directors may authorise the Company to execute and
deliver a transfer from the Retiring Shareholder to a
nominee on behalf of the Retiring Shareholder. The
Company may accept the consideration for the transfer and
hold it on trust for the Retiring Shareholder, which
acceptance shall be a good discharge to the nominee and
may set off such amount against the costs and expenses of
the transfer. The directors shall cause the transferee to be
registered as the holder of such shares and following the
registration of the transfer the validity of the proceedings
shall not be questioned by any person.
9.6. The nominee referred to in Articles 9.3 and 9.4 shall hold
shares transferred to it until such time as it is directed by the
directors to transfer them (or some of them) to one or more
parties. For the avoidance of doubt, wherever in these
Articles a percentage figure of the number of shares in issue
is referred to, this figure shall be calculated as if all shares
held by the nominee were not in issue.
10. Proceedings at General Meetings
10.1. The quorum at any general meeting shall consist of a
majority in number of the Shareholders in person or by
proxy. Regulation 40 of Table A shall be modified
accordingly.
10.2. If, and for so long as, the company has only one member,
that member or the proxy for that member or, where that
member is a corporation, its duly authorised representative
shall be a quorum at any general meeting of the company or
of the holders of any class of shares. Regulation 40 of Table
A shall be modified accordingly.
10.3. The chairman at any general meeting shall not be entitled to
a second or casting vote. Regulation 50 of Table A shall not
apply.
10.4. In the ease of a corporation a resolution in writing may be
signed on its behalf by a director or the secretary of the
corporation or by its duly appointed attorney or duly
authorised representative. Regulation 53 of Table A shall be
extended accordingly.
11. Votes of Members
At a general meeting, but subject to any rights or restrictions
attached to any shares, on a show of hands every member who
(being an individual) is present in person or (being a corporation) is
present by a duly authorised representative and every proxy for any
member (regardless of the number or the holdings of the members
for whom he is a proxy) shall have one vote, and on a poll every
member who is present in person or by proxy shall have one vote
for every share of which he is the holder. Regulation 54 of Table A
shall not apply.
12. Delivery of Proxies
The instrument appointing a proxy and (if required by the directors)
any authority under which it is executed or a copy of the authority,
certified notarially or in some other manner approved by the
directors, may be delivered to the office (or to such other place or
to such person as may be specified or agreed by the directors)
before the time for holding the meeting or adjourned meeting at
which the person named in the instrument proposes to act or, in
case of a poll taken subsequently to the date of the meeting or
adjourned meeting, before the time appointed for the taking of the
poll, and an instrument of proxy which is not so delivered shall be
invalid. The directors may at their discretion treat a faxed or other
machine made copy of an instrument appointing a proxy as such an
instrument for the purpose of this article. Regulation 62 of Table A
shall not apply.
13. Alternate Directors
Each Director shall have as his alternate for the purposes of these
Articles the alternate appointed by him pursuant to Clause 6.18 of
the MRA. Regulation 65 of Table A shall not apply.
14. Delegation of Directors' Powers
The directors may delegate any of their powers (with power to sub-
delegate) to committees consisting of such person or persons
(whether directors or not) as they may resolve. Any such
committee shall exercise only powers expressly delegated to it and
shall comply with any regulations imposed on it by the directors.
Regulation 72 of Table A shall be modified accordingly and
references in Table A to a committee of directors or to a director as
a member of such a committee shall include a committee established
under this article or such person or persons.
15. No Age Limit or Share Qualification
No director shall be required to retire or vacate his office, and no
person shall be ineligible for appointment as a director, by reason of
his having attained any particular age. No shareholding qualification
for directors shall be required.
16. Exclusion of Rotation Requirements and Other Provisions
The directors shall be the MEC Members from time to time.
Regulations 73 to 80 (inclusive) and the last sentence of regulation
84 of Table A shall not apply.
17. Disqualification and Removal of Directors
The office of a director shall be vacated if he ceases to be a MEC
Member. Regulation 81 of Table A shall not apply.
18. Directors' Gratuities and Pensions
Regulation 87 of Table A shall not apply.
19. Notice and Conduct of Board Meetings
Notice of a meeting of the directors shall be deemed to be properly
given to a director if it is given to him personally or sent in writing
to him at his last known address or any other address given by him
to the company for this purpose, or by any other means authorised
in writing by the director concerned. Notice shall be given in this
manner to all directors including any director who is for the time
being absent from the United Kingdom. A director may waive
notice of any meeting either prospectively or retrospectively. All
resolutions of the Board shall be made by unanimous vote of the
directors present or participating by conference telephone. In the
case of an equality of votes, the chairman shall not have a second or
casting vote. Regulation 88 of Table A shall be modified
accordingly.
20. Quorum for Board Meetings
The quorum for meetings of the board shall be constituted by the
attendance of the Provider Member, the PES Member and the
Supplier Member (each as defined in the MRA) (or their alternates)
and:
20.1. where matters which relate to or affect the Pool
Requirements (as defined in the MRA) are to be considered,
the Pool MEC Member (as defined in the MRA) (or his/her
alternate); and
20.2. where matters which relate to or affect the Scottish
Settlement Requirements (as defined in the MRA) or issues
relating to the administration of the board are to be
considered, the SESL Member (as defined in the MRA) (or
his/her alternate),
in person or participating by conference telephone call throughout
such meeting. Regulation 89 of Table A shall not apply.
21. Participation in Board Meetings by Telephone
All or any of the members of the board or any committee of the
board may participate in a meeting of the board or that committee
by means of a conference telephone call provided that participants
acknowledge that they can speak to and hear each other. A person
so participating shall be deemed to be present in person at the
meeting and shall be entitled to vote or be counted in a quorum
accordingly. Such a meeting shall be deemed to take place where
the largest group of those participating is assembled, or, if there is
no such group, where the chairman of the meeting is then situated.
22. Resolution in Writing
A resolution in writing executed by all the directors or by all the
members of a committee for the time being shall be as valid and
effective as a resolution passed unanimously at a meeting of the
board or, as the ease may be, of the committee properly convened
and constituted. The resolution may be contained in one document
or in several documents in like form each executed by one or more
of the directors or members of the committee concerned. A
resolution signed by an alternate director need not also be signed by
his appointor and, if it is signed by a director who has appointed an
alternate director, it need not be signed by the alternate director in
that capacity. Regulation 93 of Table A shall not apply.
23. Directors May Vote When Interested
A director who to his knowledge is in any way, whether directly or
indirectly, interested in a contract or proposed contract with the
company shall declare the nature of his interest at a meeting of the
directors in accordance with the Act. Subject where applicable to
such disclosure, a director shall be entitled to vote in respect of any
contract or proposed contract in which he is interested and if he
shall do so his vote shall be counted and he shall be taken into
account in ascertaining whether a quorum is present. Regulations
94 and 95 of Table A shall not apply.
24. Official Seal
The company may exercise all the powers conferred by the Act with
regard to having any official seal and such powers shall be vested in
the directors. Subject to the provisions of the Act, any instrument
to which an official seal is affixed shall be signed by such persons, if
any, as the directors may from time to time determine.
25. Notices
Any notice or other document may be served on or delivered to any
member by the company either personally, or by sending it by post
addressed to the member at his registered address or by fax or telex
to a number provided by the member for this purpose, or by leaving
it at his registered address addressed to the member, or by any
other means authorised in writing by the member concerned. In the
case of joint holders of a share, service or delivery of any notice or
other document on or to one of the joint holders shall for all
purposes be deemed a sufficient service on or delivery to all the
joint holders. Regulation 112 of Table A shall not apply.
26. Time of Service
Any notice or other document, if sent by the Company by post,
shall be deemed to have been served or delivered twenty four hours
after posting and, in proving such service or delivery, it shall be
sufficient to prove that the notice or document was properly
addressed, stamped and put in the post. Any notice or other
document left by the company at a registered address otherwise
than by post, or sent by fax or telex or other instantaneous means of
transmission, shall be deemed to have been served or delivered
when it was so left or sent. Regulation 115 of Table A shall not
apply.
ANNEXURE
Initial Budget
An initial Budget has been prepared setting out the costs expected to be
incurred in establishing the MRA's Operations for the period 1 April to 30
June 1998. Clause 8.2 of the Agreement states that the Budget for the
period 1 July 1998 to 31 March 1999 (i.e. the remainder of the first
Financial Year) will be determined by MEC and will be presented to the
MRA Forum for approval at least 40 days before it is due to have effect.
The Budget produced at that time will set out the actual cost incurred to
date and hence will comprise a Budget for the first financial year (i.e. 1
April 1998 to 31 March 1999) in full.
The process for producing the Budget for the remainder of the first
financial year and for subsequent years will be set out in a detailed
Procedure approved by the MEC. The Budget will be prepared by the
MRA Secretariat and agreed by the MEC and be subject to approval by the
MRA Forum. The procedure will also set out the process by which actual
costs will be monitored against the Budget.
The initial budget for April to June 1998 has been prepared and submitted
to the Shadow MEC ("ShMEC") for review. A summary of the budget is
attached. This budget is indicative of the likely costs of setting up the
MRA Secretariat and the company (MRA Service Company Limited)
through which it will operate and is based upon Workpackages submitted
to ShMEC for approval.
The budgeted costs embrace the costs of the implementation project,
covering the initial set-up activities of the MRA Secretariat and the
production of detailed procedures and on-going operational costs of the
MRA Secretariat and Data Transfer Catalogue.
For both categories, initially, utilisation of consultants has been assumed,
but ShMEC will be seeking to utilise permanent and contractor resources
as soon as appropriate in order to contain the overall level of costs.
The attached table sets out the respective PES shares for funding the first
quarter's costs (i.e. from 1 April to 30 June 1998), based upon the average
number of MPANs in each PESs Authorised Area in the period December
1997 to February 1998. This calculation is in line with clause 8.10 of the
MRA. On MRA signature, invoices will be raised for these amounts,
adjusted for any funding received for April through the JPW workstream.
The PESs, via the Joint PES Workstream, agreed to fund essential "pre-
signature" work on behalf of the Shadow MEC. OFFER agreed that these
costs could be recovered from all MRA signatories following signature.
Once these costs have been finalised they will be recharged to MRA
signatories liable for such costs over the period 1 April 1998 to 31 March
2000, inclusive of an interest charge of 7% (real). Recovery of these costs
for the first year will be affected in the year end reconciliation at 31 March
1999.
At the end of the first year the reconciliation exercise will reflect the share
of actual costs incurred during the first financial year across all MRA
signatories liable for such costs based upon the actual number of MPANs
supplied and registered in each Authorised Area, with full allowance made
for interim funding during the year.
Detailed Procedures will be developed by MEC setting out the process by
which:
? quarterly charges will be determined and levied on each MRA
signatory liable therefor annually; and
? the means by which retrospective amendments will be
determined in order to take full account of actual expenditures
and the actual number of MPANs in each Authorised Area and
the number registered to each supplier, relative to the amounts
previously budgeted and charged quarterly during the year.
NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS
For and on behalf of
Authorised Signatory
For and on behalf of
Authorised Signatory
DATED the day of 1998
WITNESS to the above signatures:
Exchange House
Primrose Street
London
EC2A 2HS
IN WITNESS whereof the parties have executed this Agreement on the
day and year first hereinbefore mentioned.
SIGNED BY .....................................(print name)
duly authorised on behalf of
BRITISH GAS TRADING LTD
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
EAST MIDLANDS ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
EASTERN ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
LONDON ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
MANWEB PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
MIDLANDS ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
NATIONAL POWER PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
NORTHERN ELECTRIC PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
NORWEB PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
NUCLEAR ELECTRIC LTD
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
POWERGEN PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SCOTTISH HYDRO-ELECTRIC PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SCOTTISH POWER PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SEEBOARD PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SOUTH WALES ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SOUTH WESTERN ELECTRICITY PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SOUTHERN ELECTRIC PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
YORKSHIRE ELECTRICITY GROUP PLC
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
ENERGY POOL FUNDS ADMINISTRATION LIMITED
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
SCOTTISH ELECTRICITY SETTLEMENTS LIMITED
.......................................................
SIGNED BY .....................................(print name)
duly authorised on behalf of
MRA SERVICE COMPANY LIMITED
.......................................................
DATED
1998
The HOST PESs as named herein
- - and -
The SUPPLIERs as named herein
- - and -
Energy Pool Funds Administration Limited
(as the Pool Agent)
- - and -
Scottish Electricity Settlements Limited
- - and -
MRA Service Company Limited
MASTER REGISTRATION AGREEMENT
Herbert
Smith
Exchange
House
Primrose
Street
London EC2A
2HS
Tel: 0171 374-
8000
Fax: 0171
496-0043
Ref:
391/C563/306
14717
INDEX
No. Clause Page
PART I: PRELIMINARY
1. DEFINITIONS AND INTERPRETATION 3
2. CONDITIONS PRECEDENT 22
3. COMMENCEMENT, DURATION AND CONTROLLED
MARKET START UP 23
4. ADDITIONAL PARTIES 24
5. ENFORCEABILITY OF OBLIGATIONS ON OR BY DATA
AGGREGATORS 25
6. CONSTITUTION OF MEC 25
7. CONSTITUTION OF THE MRA FORUM 37
8. COSTS 42
9. CHANGE CONTROL 46
10. DATA TRANSFER CATALOGUE 50
11. MPAS TECHNICAL CONSTRAINT 54
12. ERS MIGRATION (ENGLAND AND WALES ONLY) 54
13. SERVICE AVAILABILITY 55
14. SERVICE LEVELS AND LIQUIDATED DAMAGES 55
15. PROCEDURE FOR APPLICATION FOR REGISTRATION BY
A SUPPLIER 62
16. PROCEDURE FOR OBJECTION BY OLD SUPPLIER 64
17. CONTACT NOTICE FACILITY 67
18. ERROR RECTIFICATION 69
19. RETROSPECTIVE AMENDMENT OF MPAS REGISTRATION
SYSTEM 71
20. NEW CONNECTIONS, NEW METERING POINTS AND
REGISTRATION
OF NEW SUPPLY NUMBERS 72
21. DE-REGISTRATION OF SUPPLY NUMBERS 75
22. FULL REFRESH 75
23. SELECTIVE REFRESHES 76
24. CHANGES AND CONFIRMATIONS OF DATA 76
25. RESENDS 78
26. REVOCATION OF LICENCE 79
27. REPORTING 80
28. ACCURACY VALIDATION OF DATA AND MESSAGE
PROCESSING 81
29. CHANGE OF SUPPLIER METER READING 84
30. RECORDS, AUDIT AND NON-FUNCTIONAL
REQUIREMENTS 86
31. CHARGING 88
32. BILLING AND PAYMENT 89
33. LIQUIDATED DAMAGES PAYMENTS CAP AND
LIMITATION OF LIABILITY 93
34. EVENTS OF DEFAULT AND CONSEQUENCES OF DEFAULT 96
35. CONFIDENTIALITY 99
36. FORCE MAJEURE 103
37. DISPUTES 104
38. DEROGATIONS 109
39. TRANSITIONAL ARRANGEMENTS 110
40. RESTRICTIVE TRADE PRACTICES ACT 110
41. CONTRACT MANAGEMENT 111
42. ENTIRE AGREEMENT 111
43. SEVERABILITY 111
44. WAIVERS 112
45. DATA TRANSFER 112
46. NOTICES 113
47. ASSIGNMENT AND SUB-CONTRACTING 114
48. COUNTERPARTS 114
49. GOVERNING LAW 114
SCHEDULE 1 PARTIES 115
SCHEDULE 2 METERING POINT ADMINISTRATION DATA 119
SCHEDULE 3 EVENT LOG 122
SCHEDULE 4 ACCESSION AGREEMENT 131
SCHEDULE 5 SUPPLY NUMBER FORMAT 133
SCHEDULE 6 POOL REQUIREMENTS (ENGLAND AND WALES) 135
SCHEDULE 7 SCOTTISH SETTLEMENT REQUIREMENTS (SCOTLAND) 166
SCHEDULE 8 SERVICES FOR WHICH CHARGES ARE LEVIED UNDER
THIS AGREEMENT 195
SCHEDULE 9 GUIDANCE ON METERING POINTS 196
SCHEDULE 10 POOL VALIDATION REQUIREMENTS 208
SCHEDULE 11 SCOTTISH SETTLEMENT'S VALIDATION REQUIREMENTS 210
SCHEDULE 12 OUTSTANDING ISSUES 214
SCHEDULE 13 MRA SERVICE COMPANY LIMITED 216
Annexure: Initial Budget
146
148
166
1
182
1
176
246
1
</TABLE>
Exhibit 12.1
CALCULATION OF EARNINGS TO FIXED CHARGES RATIO SUCCESSOR COMPANY
Year ended
March 31, 1998
(POUNDS) $
(Amounts in millions)
Earnings
Pretax income from continuing operations 16 26
Adjustments to include distributed income
of less than 50% owned persons - -
Add: Amortization charge on capitalized interest 1 2
Less: Interest capitalized in the period - -
____ ____
Total earnings before fixed charges 17 28
____ ____
Fixed charges
Interest expense 121 203
Interest capitalized - -
____ ____
Total fixed charges 121 203
____ ____
Total earnings and fixed charges 138 231
Ratio of earnings/fixed charges 1.1
<PAGE>
<TABLE>
CALCULATION OF EARNINGS TO FIXED CHARGES RATIO PREDECESSOR COMPANY
<CAPTION>
Year ended March 31
Proforma
year
ended
March 31
1994 1995 1996 1997 1997
(POUNDS) (POUNDS) (POUNDS) (POUNDS) (POUNDS)
<C> <S> <S> <S> <S> <S>
(Amounts in millions)
Earnings
Pretax income from continuing
operations 143 219 507 39 26
Adjustments to include distributed
income of less than 50%
owned persons 2 (1) - - -
Add: Amortization charge on
capitalized interest - 1 1 1 1
Less: Interest capitalized in
the period (6) - - - -
____ ____ ____ ____ ____
Total earnings before
fixed charges 139 219 508 40 27
____ ____ ____ ____ ____
Fixed charges
Interest expense 18 23 46 48 122
Interest capitalized 6 - - - -
____ ____ ____ ____ ____
Total fixed charges 24 23 46 48 122
____ ____ ____ ____ ___
Total earnings and
fixed charges 163 242 554 88 149
Ratio of earnings/fixed charges 6.8 10.5 12.0 1.8 1.2
</TABLE>
Yorkshire Power Group Limited
Wetherby Road
Scarcroft
Leeds
LS14 3HS
10
June 1998
Mr Armando A Pena
1 Riverside Plaza
Columbus Ohio 43215
Mr Richard C Kelly
1225 17th Street
Denver Colorado 80502
Dear Sirs
Yorkshire Power Group Limited (the "Company") proposes to file its
Annual Report on Form 10-K for the Fiscal Year ended 31 March 1998,
its Quarterly Reports on Form 10-Q for the Quarters ended 30 June
1998, 30 September 1998 and 31 December 1998, and, if necessary,
any Current Reports on Form 8-K (collectively, the "Exchange Act
Reports") with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.
The Company and the undersigned directors and officers of the
Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of you our true and lawful
attorney for each of us and in each of our names, places and steads to
sign and cause to be filed with the Securities and Exchange Commission
the Exchange Act Reports and any appropriate amendments thereto, to
be accompanied by any necessary exhibits.
The Company hereby authorises you or any one of you to execute the
Exchange Act Reports and amendments thereto on its behalf as
attorney-in-fact for it and its authorised officers, and to file the same as
aforesaid.
The undersigned directors and officers of the Company hereby authorise
you or any one of you to sign the Exchange Act Reports on their behalf
as attorney-in-fact and to amend, or remedy any deficiencies with
respect to, the Exchange Act Reports by appropriate amendment or
amendments and to file the same as aforesaid.
Very truly yours
YORKSHIRE POWER GROUP LIMITED
By ...........................................................
Wayne H Brunetti
Chairman and Director
.......................................................
Donald M Clements Jr
Director
............................................................
Armando A Pena
Director and Chief Financial Officer
...........................................................
Dr E Linn Draper Jr
Director
................................................................
Richard C Kelly
Director
...............................................................
Teresa S Madden
Director
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000,000
<CURRENCY> British Pounds Sterling
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.6765
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1060
<OTHER-PROPERTY-AND-INVEST> 73
<TOTAL-CURRENT-ASSETS> 266
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 1063
<TOTAL-ASSETS> 2462
<COMMON> 440
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> (117)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 323
0
0
<LONG-TERM-DEBT-NET> 1026
<SHORT-TERM-NOTES> 483
<LONG-TERM-NOTES-PAYABLE> 1026
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 5
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 625
<TOT-CAPITALIZATION-AND-LIAB> 2462
<GROSS-OPERATING-REVENUE> 1285
<INCOME-TAX-EXPENSE> (1)
<OTHER-OPERATING-EXPENSES> 1124
<TOTAL-OPERATING-EXPENSES> 1124
<OPERATING-INCOME-LOSS> 161
<OTHER-INCOME-NET> (24)
<INCOME-BEFORE-INTEREST-EXPEN> 122
<TOTAL-INTEREST-EXPENSE> 121
<NET-INCOME> (117)
0
<EARNINGS-AVAILABLE-FOR-COMM> (117)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 35
<CASH-FLOW-OPERATIONS> 62
<EPS-PRIMARY> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> NOT AVAILABLE
</FN>
</TABLE>
